Document:

<PAGE>
                                                                  EXHIBIT 10(ab)

FIRST AMENDMENT TO UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
12.25% SUBORDINATED DEBENTURE DUE JULY 11, 2002

         This First Amendment to Universal Automotive Industries, Inc. 12.25%
Subordinated Debenture Due July 11, 2002 (this "Amendment") is made and entered
into as of the 30th day of October, 2001, by and between UNIVERSAL AUTOMOTIVE
INDUSTRIES, INC. ("Company"), a Delaware corporation, and FINOVA MEZZANINE
CAPITAL INC. ("Purchaser"), a Tennessee corporation formerly known as Sirrom
Capital Corporation.

                                   WITNESSETH:

         WHEREAS, Purchaser is the holder of that certain Universal Automotive
Industries, Inc. 12.25% Subordinated Debenture Due July 11, 2002 (the
"Debenture") issued by Company and purchased by Purchaser pursuant to that
certain Debenture Purchase Agreement dated July 11, 1997 (the "Purchase
Agreement"), and

         WHEREAS, Purchaser and Company wish to amend the Debenture pursuant to
the terms and conditions- hereof,

         NOW THEREFORE, for valuable consideration, the receipt and sufficiency
of which are acknowledged, it is agreed as follows:

         1. Amendment of Debenture. The Debenture is hereby amended to reduce
the principal amount thereof from $4,500,000.00 to $1,500,000.00-

         2. Amendment of Debenture. The Debenture is hereby amended by deleting
the third (3rd) full paragraph thereof in its entirety and substituting therefor
the following:

         Interest shall accrue on the outstanding- principal balance of this
         Debenture at the rate of seven percent (7%) per annum. Five (5)
         payments of principal in the amount of $100,000.00 each shall be
         payable hereunder with the first such payment due on the date which is
         forty-five (45) days from the date hereof and one payment due every
         forty-five (45) days thereafter. Additionally, interest only on the
         outstanding principal balance hereof shall be due and payable
         quarterly, in arrears, with the first installment being payable on the
         first (1st), day of January, 2002, and subsequent installments being
         payable on the first (1st) day of each succeeding calendar quarter
         thereafter. The entire outstanding principal -balance, together with
         all accrued and unpaid interest, shall be immediately due and payable
         in full on July 11, 2005.

         3. Full Force and Effect. As amended hereby, the Debenture remains in
full force and effect, and all agreements among the parties with respect to the
subject hereof are represented fully in this Amendment and the other written
documents among the parties.

<PAGE>

         4. Governing Law. This Amendment shall be governed by the terms and
conditions of the Debenture and the Purchase Agreement as to choice of law,
dispute resolution procedures and all other respects.

         5. Counterparts. This Amendment may be executed in counterparts, each
of which shall constitute an original hereof.

                                       PURCHASER

                                       FINOVA MEZZANINE CAPITAL INC.

                                       By: /s/ Myles A. MacDonald
                                          --------------------------------------
                                       Title: Vice President
                                             -----------------------------------

                                       COMPANY

                                       UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.

                                       By: /s/ Yehuda Tzur
                                          --------------------------------------
                                       Title: Chairman
                                             -----------------------------------<PAGE>
                                                                  EXHIBIT 10(ac)

                              PREPAYMENT AGREEMENT

         This Prepayment Agreement (this "Agreement") is entered into as of the
30th day of October, 2001, by and between FINOVA MEZZANINE CAPITAL INC.
("Purchaser"), a Tennessee corporation formerly known as Sirrom Capital
Corporation, and UNIVERSAL AUTOMOTIVE INDUSTRIES, INC. ("Company"), a Delaware
corporation.

                                 R E C I T A L S

         WHEREAS, Purchaser is the holder of that certain Universal Automotive
Industries, Inc. 12.25% Subordinated Debenture Due July 11, 2002 (the
"Debenture") purchased pursuant to that certain Debenture Purchase Agreement
dated July 11, 1997 (the "Purchase Agreement"); and

         WHEREAS, Purchaser has agreed to release certain indebtedness evidenced
by the Debenture and amend the Debenture on the terms and conditions set forth
herein.

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties agree as follows:

         1.       Definitions.

                  a. As used herein, "Claims" shall mean any and all accounts,
covenants, agreements, obligations, claims, debts, liabilities, offsets,
demands, costs, expenses, actions or causes of action of every nature, character
and description, without limitation in law, equity or otherwise, of any kind or
character whatsoever, known or unknown, suspected or unsuspected, whether
arising in contract or tort, or at law, in equity or pursuant to administrative
rule or regulation, excepting only those obligations set forth in this
Agreement.

                  b. As used herein, "Purchaser Parties" shall mean Purchaser,
its participants, predecessors, successors and assigns and its present and
previous agents, attorneys, representatives, shareholders, subsidiaries,
affiliates, officers, directors, and each of them.

                  c. As used herein, "Settlement Payment" means the payment of
$1,000,000.00 plus accrued interest to Purchaser by wire transfer.

                  d. As used herein, the "Stock" has the meaning assigned in
Section 5 hereof.

                  e. Capitalized terms not otherwise defined herein shall have
the meanings assigned in the Purchase Agreement.

         2. Settlement Payment. Concurrently with the execution of this
Agreement, Company shall pay the Settlement Payment to Purchaser, with such
payment to be applied by the Purchaser to reduce the principal amount owed by
the Company pursuant to the Debenture.

         3. Source of Settlement Payment. Company warrants and represents that
(a) the Settlement Payment is being made from the proceeds of newly issued
equity and (b) certain proceeds thereof in an amount equal to or greater than
the Settlement Payment were reserved pending (i) the closing of the transaction
described herein, and the payment of the Settlement Payment; or (ii) termination
of negotiations between Purchaser and Company.

<PAGE>

         4. Amendment of Purchase Agreement and Debenture. Concurrently with the
execution hereof, Purchaser and Company shall execute that First Amendment to
Purchase Agreement (the "Purchase Agreement Amendment") in the form attached
hereto as Exhibit A and that First Amendment to Universal Automotive Industries,
Inc. 12.25% Subordinated Debenture Due July 11, 2002 in the form attached hereto
as Exhibit B (the "Debenture Amendment"),

         5. Issuance of Shares. As further consideration for Purchaser's
execution of this Agreement and reduction of indebtedness evidenced by the
Debenture by the sum of $2,000,000.00 to the net amount set forth in Exhibit B,
concurrently with the effectiveness of this Agreement, Company shall issue to
Purchaser one hundred thousand (100,000) shares of the Series B Preferred Stock
of Company (the "Stock"). With respect to the Stock, Company warrants,
represents and Agrees as follows:

                  a. Attached hereto as Exhibit C is a true and complete
capitalization table listing all equity and debt securities of Company (and all
war-rants, options and any other right contingent or otherwise, to acquire debt
or equity securities of Company) that will be outstanding after giving effect to
the transactions described in this Agreement.

                  b. As delivered to Purchaser, the Stock is validly issued and
fully paid and nonassessable. The Stock is subject to no restriction,
encumbrance, option or other agreement except for the ordinary restrictions on
conveyance of unregistered stock that arise under applicable securities laws.

                  c. Purchaser or any other party who may own all of the Stock
shall be entitled to receive all financial statements and financial information
that are currently required under the terms of the Purchase Agreement, and all
such requirements are incorporated herein by this reference.

         6. Purchaser's Representations and Warranties. Purchaser represents and
warrants that:

                  a. it is an "accredited investor" within the meaning of Rule
501(a) under the Securities Act of 1933 (the "Securities Act"); and

                  b. it is purchasing the Stock for its own account for
investment and not with a view to or for the resale, distribution (as the term
"distribution" is used in Section 2(11) of the Securities Act), subdivision or
fractionalization thereof.

         7. Release of Purchaser. Company does hereby release, acquit and
forever discharge the Purchaser Parties from any and all Claims that Company
had, or now has, against such parties, for or by reason of any matter, cause or
thing whatsoever occurring on or prior to the date hereof. Company agrees not to
commence, join in or prosecute any suit or other proceeding in a position which
is adverse to any Purchaser Party arising directly or indirectly from any matter
released herein. Company represents and warrants that Company has not purported
to transfer, assign or otherwise convey any interest in any matter released
herein to any other person or entity and that Company's execution hereof does
not require the consent of or notice to any third party. Company agrees to
indemnify, defend (with counsel satisfactory to Purchaser) and hold the
Purchaser. Parties,-harmless against any and all loss, liability, claim or
expense, including attorneys' fees, that the Purchaser Parties might incur as a
result of any breach of this Agreement by Company or the assertion of any claim
or defense by Company that should not have been raised by virtue of this
Agreement.

                  8. Cancellation of Stock and Warrants by Purchaser. Purchaser
represents and warrants that it currently owns 279,260 shares of Company's
common stock" $.0l par value (the "Shares) and warrants

<PAGE>

to purchase a total of 1,125,000 shares of the Company's common stock, $.01 par
value, at an exercise price set forth in such warrants (the "Warrants"), and
that it owns no other securities issued by Company other than the Shares and
Warrants. Purchaser further represents and warrants that (i) Purchaser has the
full power and authority to deliver the Shares and the Warrants to the Company
free and clear of all security interests, liens and encumbrances and (ii) no
further release or consent from any other party is necessary with respect to
such delivery. Additionally, Purchaser shall, following receipt of the
Settlement Payment and the satisfaction of the other conditions to the initial
effectiveness of this Agreement, surrender the Shares and Warrants to the
Company for cancellation Bee and clear of all security interests, liens and
encumbrances.

         9. Release of Indebtedness. Following receipt of the Settlement Payment
and the satisfaction of the other conditions to the initial effectiveness of
this Agreement, including the conversion of debt to equity as set forth in
Section 5 above, Company shall, with no further action of Purchaser necessary,
be deemed released, acquitted and forever discharged from any and all liability
with respect to $2,000,000.00 of the indebtedness of Company to Purchaser
pursuant to the Debenture (the "Released Indebtedness"). The terms of the
Debenture shall be amended to reflect such release pursuant to the Debenture
Amendment. Notwithstanding anything contained herein to the contrary, if the
Settlement Payment or any portion thereof is avoided as an avoidable transfer or
set aside for any reason whatsoever, the release, agreements and covenants
contained in this Section 8 shall be void ab initio and of no force and effect
and the Released Indebtedness shall be immediately due and payable in full.

         10. Closing Expenses. Company shall pay to Purchaser all due diligence,
legal and other expenses of Purchaser associated with this Agreement
(Purchaser's expenses shall not exceed $10,000.00).

         11. Conditions to Purchaser's Obligations at Closing. Company shall
deliver the following to Purchaser, fully executed by all parties and in form
and substance acceptable to Purchaser, as conditions to the Release of
Indebtedness pursuant to Section 9 hereof:

         a. This Agreement.

         b. The Purchase Agreement Amendment.

         c. The Debenture Amendment.

         d. Original stock certificate(s) evidencing the Stock.

         e. The Preferred Stock Agreement addressing certain registration and
co-sale rights in favor of Purchaser with respect to the Stock.

         f. Closing Statement evidencing Company's approval and payment of the
Settlement Payment and all other amounts due at closing hereunder.

         g. Evidence that Company has received $2,799,988.20 in new equity in
the form of convertible preferred stock (in addition to the convertible
preferred stock issued to Purchaser) and converted $562,983.04 of debt owed to
parties other than Purchaser to equity in the form of common stock.

         h. Copies of Company's current financial statements and the most recent
draft of

<PAGE>

Company's business plan, including projections that include the effects
of the transactions contemplated by this Agreement.

         i. Evidence of the waiver and/or cure of all defaults with respect to
Company's indebtedness to LaSalle National Bank (the "Bank") and the Bank's
approval of the transactions contemplated by this Agreement, the Purchase
Agreement Amendment and the Debenture Amendment.

         j. Such other matters as Purchaser may reasonably require.

         12. Conditions to Company's Obligations at Closing. Purchaser shall
deliver the Shares and Warrants to Company for cancellation as conditions to
Company's paying of the Settlement Payment and issuing the Stock.

         13. Voluntary Agreement. The parties hereto are represented by legal
counsel of their choice, have investigated fully their alternatives to the
execution and performance of this Agreement, are fully aware of the terms
contained in this Agreement and have voluntarily and without coercion or duress
of any kind entered into this Agreement.

         14. Further Assurances. The parties hereto agree to execute and
deliver, and to cause their respective counsel to execute and deliver, all such
other instruments and documents, and to take all such other action as any party
hereto may reasonably request from time to time without delay or the payment of
further consideration, to effectuate the respective obligations provided for in
this Agreement. The parties shall cooperate fully with each other and their
respective counsel in connection with any actions required to be taken as part
of their respective obligations under this Agreement.

         15. Recitals. The parties hereto warrant and represent that all the
Recitals in this Agreement are true and correct in all respects.

         16. Time. Time is of the essence of this Agreement and each provision
of this Agreement.

         17. Entire Agreement. This Agreement constitutes the entire Agreement
and understanding of the parties hereto concerning the subject matter hereof and
supersedes and replaces all prior negotiations, proposed agreements, and all
understandings, inducements or conditions, express or implied, either written or
oral, which are not contained herein concerning the subject matter of this
Agreement.

         18. Binding Effect. This Agreement will inure to the benefit of and
bind the respective heirs, personal representatives, successors and permitted
assigns of the parties hereto.

         19. Severability. If any clause or provision of this Agreement is
determined to be illegal, invalid or unenforceable under any present or future
law by the final judgment of a court of competent jurisdiction, the remainder of
this Agreement will not be affected thereby, except as expressly provided
elsewhere herein. It is the intention of the parties that if any such provision
is held to be illegal, invalid or unenforceable, there will be added in lieu
thereof a provision as similar in terms to such provision as is legal, valid and
enforceable.

         20. Amendment. Neither this Agreement nor any of the provisions hereof
can be changed, waived, discharged or terminated, except by an instrument in
writing signed by the party against whom enforcement of the change waiver,
discharge or termination is sought.

<PAGE>

         21. Expenses. In the event legal action is commenced to enforce or
interpret any part of this Agreement, the prevailing party shall be entitled to
recover as an element of its costs of suit and not as damages, reasonable
attorney's fees to be fixed by the court.

         22. Governing Law. This Agreement will be interpreted and construed
under Me internal laws of the State of Tennessee, regardless of the domicile of
any party.

         23. Consent to Jurisdiction. Purchaser and Company hereby irrevocably
consent to the jurisdiction of the United States District Court for the Middle
District of Tennessee and of all Tennessee state courts sitting in Davidson
County, Tennessee, for the purpose of any litigation to which Purchaser may be a
party and which concerns this Agreement. It is further agreed that venue for any
such action shall lie exclusively with courts sitting in Davidson County,
Tennessee, unless Purchaser agrees to the contrary in writing.

         24. WAIVER OF JURY TRIAL. PURCHASER AND COMPANY HEREBY KNOWINGLY AND
VOLUNTARILY WAIVE ANY RIGHT TO A TRIAL BY JURY WITH REGARD TO ANY ACTIONS,
PROCEEDINGS, CLAIMS OR COUNTERCLAIMS, WHETHER IN CONTRACT OR IN TORT, AT LAW OR
IN EQUITY, OF ANY TYPE OR NATURE WHATSOEVER ARISING UNDER OR CONCERNING THIS
AGREEMENT.

         25. Counterpart Execution. This Agreement may be executed in
counterparts and via facsimile, each of which will be deemed an original
document, but all of which will constitute a single document. This document will
not be binding on or constitute evidence of a contract among the parties until
such time as a counterpart of this document has been executed by each party to
this Agreement

         26. Notices. Any communications concerning this Agreement or the
transactions described shall be addressed as provided in the Purchase Agreement,
except that any notices to Lender shall be addressed as follows:

         FINOVA Mezzanine Capital Inc.
         500 Church Street, Suite 200
         Nashville, Tennessee 37219
         Attention: Drew Smitherman
         Telecopy: 615-726-1208

         With a copy to:

         Boult, Cummings, Conners & Berry, PLC
         414 Union Street, Suite 1600
         Nashville, Tennessee 37219
         Attention: Roger G. Jones
         Telecopy: 615-252-6323

         27. Paragraph or other headings contained in this Agreement are for
reference purposes only and are not intended to affect in any way the meaning or
interpretation of this Agreement.

            [The remainder of this page is intentionally left blank]

<PAGE>

Dated as of the date stated above.

                                    PURCHASER:
                                    ---------

                                    FINOVA MEZZANINE CAPITAL, INC., a Tennessee
                                    corporation

                                    By: /s/ Myles A. MacDonald
                                       -----------------------------------------
                                    Title: Vice President
                                          --------------------------------------

                                    COMPANY:

                                    UNIVERSAL AUTOMOTIVE INDUSTRIES, INC., a
                                    Delaware corporation

                                    By: /s/ Yehuda Tzur
                                       -----------------------------------------
                                    Title: Chairman
                                          --------------------------------------

<PAGE>

                                    EXHIBIT A

                          PURCHASE AGREEMENT AMENDMENT

                 FIRST AMENDMENT TO DEBENTURE PURCHASE AGREEMENT

         This FIRST AMENDMENT TO DEBENTURE PURCHASE AGREEMENT (this "Amendment")
is entered into as of the 30th day of October 2001, by and between UNIVERSAL
AUTOMOTIVE INDUSTRIES, INC. ("Company"), a Delaware corporation, and FINOVA
MEZZANINE CAPITAL INC. ("Purchaser"), a Tennessee corporation formerly known as
Sirrom Capital Corporation.

                                    RECITALS:

         WHEREAS, Purchaser is the holder of that certain Universal Automotive
Industries, Inc. 12.25% Subordinated Debenture Due July 11, 2002 (the
"Debenture") issued by Company and purchased by Purchaser pursuant to that
certain Debenture Purchase Agreement dated July 11, 1997 (the "Purchase
Agreement"); and

         WHEREAS, Purchaser and Company wish to amend the Purchase Agreement
pursuant to the terms and conditions hereof;

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are acknowledged, it is agreed as follows:

         1. Amendment of Purchase Agreement. Pursuant to the certain First
Amendment to Universal Automotive Industries, Inc. 12.25% Subordinated Debenture
Due July 11, 2002 dated of even date herewith (the "Debenture Amendment"),
Purchaser and Company amended certain terms of the Debenture. As used in the
Purchase Agreement, the term "Debentures" is hereby amended to mean the
Debenture, as amended by the Debenture Amendment. Additionally, the Purchase
Agreement is hereby amended such that the terms and conditions of the Debenture,
as amended by the Debenture Amendment, shall supercede any inconsistent terms in
the Purchase Agreement.

         2. Amendment of Purchase Agreement. Pursuant to the Prepayment
Agreement of even date herewith by and between Purchaser and Company, Purchaser
has agreed to surrender the Initial Warrant and all Additional Warrants (each as
defined in the Purchase Agreement and/or all shares of common stock of the
Company received by Purchaser from the exercise of the Initial Warrant or any
Additional Warrants (the Additional Warrant to be issued to Purchaser in August,
2001, has yet to be delivered by the Company). The Purchase Agreement is hereby
amended to reflect the cancellation of all warrants issued pursuant to Sections
1.2 and 1.3 thereof.

         3. Amendment of Purchase Agreement. The following shall be added as an
additional Event of Default to Section 9.1 of the Purchase Agreement:

                  (1) The failure by the Company on or before Friday, November
                  2, 2001, to amend its Articles of Incorporation to (i)
                  increase the Company's authorized common stock, $0.01 par
                  value from 15,000,000 to 30,000,000 shares and (ii) increase
                  the Company's authorized blank check preferred stock, $0.01
                  par value from 1,000,000 to 2,000,000 shares.

<PAGE>

         4. Company's Affirmation. Company acknowledges, warrants and represents
that (i) pursuant to the Debenture, the Purchase Agreement and all other
documents executed or delivered in connection therewith (the Debenture, Purchase
Agreement and such other documents being collectively referred to herein as the
"Purchase Documents"), Company's obligation to repay the Debenture is absolute
and unconditional, and there exists no right of deduction, setoff, recoupment,
counterclaim or defense of any nature whatsoever to payment of the Debenture
that has not been released herein; (ii) the Purchase Documents are valid and
enforceable in accordance with their terms; and (iii) all of the representations
made in Section 2 of the Purchase Agreement are true and correct as of the date
hereof, except as modified or supplemented by Schedule A attached hereto and
incorporated herein by this reference.

         5. Valid Consideration; Binding Agreement. Company warrants, represents
and acknowledges that this Amendment has been executed and delivered by Company
for adequate consideration and value under all applicable laws; and that this
Amendment is valid, binding and enforceable in accordance with its terms.

         6. Notices. Any communications concerning this Amendment or the credit
described herein shall be addressed as provided in the Purchase Agreement,
except that Purchaser's addresses for notices shall be revised as follows:

The address of Purchaser is:        FINOVA Mezzanine Capital Inc.
                                    500 Church Street, Suite 200
                                    Nashville, Tennessee 3 1 7219
                                    Attention: Andrew Smitherman
                                    Telecopy: 615/242-0842

with a copy to:                     Boult, Cummings, Conners & Berry, PLC
                                    414 Union Street, Suite 1600
                                    Nashville, TN 37219
                                    Attention: Roger G. Jones
                                    Telecopier: 615/252-6323

         7. Construction of Amendment. EXCEPT AS EXPRESSLY PROVIDED HEREIN OR IN
THE DEBENTURE AMENDMENT, THE DEBENTURE, PURCHASE AGREEMENT AND OTHER PURCHASE
DOCUMENTS SHALL REMAIN IN FULL FORCE AND EFFECT IN ACCORDANCE WITH THEIR
RESPECTIVE TERMS, AND THIS AMENDMENT SHALL NOT BE CONSTRUED TO (i) WAIVE OR
IMPAIR ANY RIGHTS, POWERS, OR REMEDIES OF PURCHASER THEREUNDER OR (ii) REQUIRE
PURCHASER TO GRANT ADDITIONAL WAIVERS, CONSENTS OR CONCESSIONS WITH RESPECT
THERETO.

         8. Voluntary Agreement. Company represents and warrants that Company is
represented by legal counsel of its choice; has investigated fully its
alternatives to the execution and performance of this Amendment; has had ample
time to review this Amendment and consult with Company's counsel; is fully aware
of the terms contained in this Amendment; and has knowingly, voluntarily and
without coercion or duress of any kind entered into this Amendment and the
documents executed in connection with this Amendment.

         9. No Reliance on Purchaser's Analysis. Company acknowledges, warrants
and represents that, in connection with its business a0vides and As execution of
this Amendment, Company has not

<PAGE>

relied upon any financial projection, budget, assessment or other analysis by
Purchaser or upon any representation by Purchaser as to the risks, benefits or
prospects of Company's business activities or present or future capital needs
incidental thereto, all such considerations having been examined fully and
independently by Company.

         10. CONSENT TO JURISDICTION: VENUE. COMPANY HEREBY IRREVOCABLY CONSENTS
TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT
OF TENNESSEE AND OF ALL TENNESSEE STATE COURTS SITTING IN DAVIDSON COUNTY,
TENNESSEE, FOR THE PURPOSE OF ANY LITIGATION TO WHICH PURCHASER MAY BE A PARTY
AND WHICH ARISES FROM OR RELATES TO THIS AMENDMENT OR THE PURCHASE DOCUMENTS. IT
IS FURTHER AGREED THAT VENUE FOR ANY SUCH ACTION SHALL LIE EXCLUSIVELY WITH
COURTS SITTING IN DAVIDSON COUNTY, TENNESSEE, UNLESS PURCHASER AGREES TO THE
CONTRARY IN WRITING.

         11. Not Partners, No Third Party Beneficiaries. Nothing contained
herein or in any related document shall be deemed to render Purchaser a partner
of Company for any purpose. This Amendment has been executed for the sole
benefit of Purchaser and Company and there are no third party beneficiaries
hereof.

         12. Indulgence Not Waiver. Purchaser's indulgence in any other
departure from the terms of this Amendment shall not prejudice Purchaser's right
to demand strict compliance with this Amendment.

         13. Amendment and Waiver in Writing. No provision of this Amendment can
be amended or waived, except by a statement in writing signed by the party
against which enforcement of the amendment or waiver is sought.

         14. Expenses. Company agrees to pay any and all costs and expenses
(including, without limitation, reasonable attorneys' fees and litigation
expenses) incurred by Purchaser and arising out of or relating to any breach of
any covenant or agreement or the material incorrectness or inaccuracy of any
representation and warranty of Company contained in this Amendment or any
document delivered to Purchaser by Company pursuant to the terms of this
Amendment.

         15. Assignment. This Amendment shall be binding upon and inure to the
benefit of the respective heirs, successors and assigns of Company and
Purchaser, except that Company may not assign any rights or delegate any
obligations arising hereunder without the prior written consent of Purchaser.
Any attempted assignment or delegation without the required prior consent shall
be void.

         16. Entire Agreement. This Amendment and the other written agreements
between Company and Purchaser represent the entire agreement between the parties
concerning the subject matter hereof, and all oral discussions and prior
agreements are merged therein.

         17. Severability. Should any provision of this Amendment be invalid or
unenforceable for any reason, the remaining provisions hereof shall remain in
full effect.

         18. Counterpart Execution. This Amendment may be executed in
counterparts via facsimile, each of which will be deemed an original document,
but all of which will constitute a single document. This document will not be
binding on or constitute evidence of a contract between the parties until such
time as a counterpart of this document has been executed by each party to this
Amendment.

<PAGE>

         19. Applicable Law. The validity, construction and enforcement of this
Amendment shall be determined according to the substantive laws of Illinois
without regard to conflicts principles.

         20. Gender and Number. Words used herein indicating gender or number
shall be read as context may require.

         21. Captions Not Controlling. Captions and headings have been included
in this Amendment for the convenience of the parties, and shall not be construed
as affecting the content of the respective sections.

         22. Waiver of Jury Trial. COMPANY AND PURCHASER HEREBY KNOWINGLY AND
VOLUNTARILY WAIVE ANY RIGHT TO A TRIAL BY JURY WITH REGARD TO ANY ACTION,
PROCEEDINGS, CLAIMS OR COUNTERCLAIMS, WHETHER IN CONTRACT OR IN TORT, AT LAW OR
IN EQUITY, OF ANY TYPE OR NATURE WHATSOEVER ARISING UNDER OR CONCERNING THIS
AMENDMENT OR THE PURCHASE DOCUMENTS.

<PAGE>

Executed as of the date first written above

                                  FINOVA MEZZANINE CAPITAL, INC., a Tennessee
                                  corporation

                                  By:_______________________________________
                                  Title:____________________________________

                                  UNIVERSAL AUTOMOTIVE INDUSTRIES, INC., a
                                  Delaware corporation

                                  By: ______________________________________
                                  Title:____________________________________

<PAGE>

                                    EXHIBIT B

                               DEBENTURE AMENDMENT

         FIRST AMENDMENT TO UNIVERSAL AUTOMOTIVE INDUSTRIES, INC. 12.25%
                    SUBORDINATED DEBENTURE DUE JULY 11, 2002

         This First Amendment to Universal Automotive Industries, Inc. 12.25%
Subordinated Debenture Due July 11, 2002 (this "Amendment") is made and entered
into as of the 30th day of October, 2001, by and between UNIVERSAL AUTOMOTIVE
INDUSTRIES, INC. ("Company"), a Delaware corporation, and FINOVA MEZZANINE
CAPITAL INC, ("Purchaser"), a Tennessee corporation formerly known as Sirrom
Capital Corporation.

                                   WITNESSETH:

         WHEREAS, Purchaser is the holder of that certain Universal Automotive
Industries, Inc. 12.25% Subordinated Debenture Due July 11, 2002 (the
"Debenture") issued by Company and purchased by Purchaser pursuant to that
certain Debenture Purchase Agreement dated July 11, 1997 (the "Purchase
Agreement"); and

         WHEREAS, Purchaser and Company wish to amend the Debenture pursuant to
the terms and conditions hereof;

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are acknowledged, it is agreed as follows:

         1. Amendment of Debenture. The Debenture is hereby amended to reduce
the principal amount thereof from $4,500,000.00 to $1,500,000.00.

         2. Amendment of Debenture. The Debenture is hereby amended by deleting
the third (3rd) full paragraph thereof in its entirety and substituting therefor
the following:

         Interest shall accrue on the outstanding principal balance of this
         Debenture at the rate of seven percent (7%) per annum. Five (5)
         payments of principal in the amount of $100,000.00 each shall be
         payable hereunder with the first such payment due on the date which is
         forty-five (45) days from the date hereof and one payment due every
         forty-five (45) days thereafter. Additionally, interest only on the
         outstanding principal balance hereof shall be due and payable
         quarterly, in arrears, with the first installment being payable on the
         first (1st) day of January, 2002, and subsequent installments being
         payable on the first (1st) day of each succeeding calendar quarter
         thereafter. The entire outstanding principal balance, together with all
         accrued and unpaid interest, shall be immediately due and payable in
         full on July 11, 2005.

         3. Full Force and Effect. As amended hereby, the Debenture remains in
full force and effect, and all agreements among the parties with respect to the
subject hereof are represented fully in this Amendment and the other written
documents among the parties.

         4. Governing Law. This Amendment shall be governed by the terms and
conditions of the Debenture and the Purchase Agreement as to choice of law,
dispute resolution procedures and all other

<PAGE>

respects.

         5. Counterparts. This Amendment may be executed in counterparts, each
of which shall constitute an original hereof.

Executed as of the date stated above.

                                   PURCHASER:

                                   FINOVA MEZZANINE CAPITAL, INC., a Tennessee
                                   corporation

                                   By:______________________________________
                                   Title:___________________________________

                                   COMPANY:

                                   UNIVERSAL AUTOMOTIVE INDUSTRIES, INC., a
                                   Delaware corporation

                                   By: _____________________________________
                                   Title:___________________________________

<PAGE>

                                    Exhibit C

                      Universal Automotive Industries, Inc.
          Capitalization Table and Computation of Fully-Diluted Shares
                                 August 31, 2001

                              CAPITALIZATION TABLE

<TABLE>
<S>                                                                                                     <C>
CURRENT LIABILITIES
         Accounts payable, trade                                                                        $12,996,992
         Revolving loan indebtedness                                                                     20,219,948
         Subordinated debenture                                                                           4,460,625
         Long-term indebtedness, current portion                                                            697,220
         Accrued expenses and other current liabilities                                                   3,526,887
         Net current liabilities of discontinued operations                                                 117,877
         Estimated loss on disposal of discontinued operation                                               860,161
                                                                                                            -------
                                                                                                        $42,879,710

LONG-TERM LIABILITIES
         Long-term indebtedness, non-current portion                                                       $383,425
         Deferred income taxes                                                                              210,617
                                                                                                            -------

MINORITY INTEREST IN SUBSIDIARY                                                                            $100,000
                                                                                                           --------

REDEEMABLE "PREFERRED STOCK, SERIES A                                                                    $2,800,000
                                                                                                         ----------

STOCKHOLDERS' EQUITY
         Common stock                                                                                        77,940
         Additional paid-in capital                                                                       9,623,643
         Retained debt                                                                                 (7,786,912)
         Accumulated other comprehensive losses                                                           (947,289)
                                                                                                          ---------
                                                                                                            967,382

TOTAL CAPITALIZATION                                                                                    $47,741,134
                                                                                                        ===========
</TABLE>

<PAGE>
                       COMPUTATION OF FULLY DILUTED SHARES
                                August 31, 2001

<TABLE>
<CAPTION>
                                                                                        Exercise Price
                                                                                        --------------
<S>                                                           <C>                       <C>
Issued and outstanding common stock, $.01 par value           7,844,059                 N/A

Issued and outstanding Series A Preferred Stock (1)           2,014,380                 N/A

WARRANTS:

First Company Warrant (2)                                       800,000                 $2.00
Second Company Warrant (2)                                      800,000                 Greater of $2.00 or
                                                                                        90% of rolling
                                                                                        average share price

Default Warrant (2)(3)                                        2,500,000                 Greater of 150% of
                                                                                        book value or
                                                                                        600% of EBITDA
IPO warrants (4)                                              1,482,000                 $2.25

FINOVA Warrants (5)                                           1,125,000                 $1.12 to $1.58

Other Warrants                                                  575,000                 $1.38 to $2.75

Warrants of former noteholders                                   37,000                 $2.25 to $5.00

Schneider Securities                                            100,000                 $2.00

Schneider Securities                                            100,000                 $2.50
                                                              ---------

Total Warrants                                                 7,195,000
                                                              ----------

Stock options                                                    590,850                $1.00 to $5.00
                                                              ----------

Fully diluted shares                                          17,968,289
                                                              ==========
</TABLE>

-------------------

(1)      201,438 shares, currently convertible at a rate of ten shares common to
         one share preferred.

(2)      Issued to Venture Equities Management, Inc. ("VEMI") in connection with
         issuance of Series A Preferred Stock.

(3)      Issuable upon occurrence of designated events of default under Purchase
         Agreement dated as of August 28,2001 by and between Company and VEMI.

(4)      Redeemable common stock purchase warrants originally issued in
         December, 1994. Each warrant originally entitled holder to purchase a
         share of Company's common stock at a price of $7.00 per share subject
         to certain adjustments, at any time until December 15, 1999. Company
         subsequently reduced the exercise price to $2.25 and extended the
         expiration date to December 31, 2001.

(5)      Warrants issued to FINOVA in connection with Purchase Agreement.

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