Exhibit 10.2
ADDENDUM TO BUSINESS FINANCING AGREEMENT AND
AGREEMENT FOR WHOLESALE FINANCING
This Addendum is made to (i) that certain Business Financing Agreement
executed on the 19th day of January , 1999, between Micros-To-Mainframes,
Inc. ("Dealer") and Deutsche Financial Services Corporation ("DFS"), as
amended ("BFA") and (ii) that certain Agreement for Wholesale Financing
between Dealer and DFS dated May 12, 1994, as amended ("AWF").
FOR VALUE RECEIVED, DFS and Dealer agree as follows:
1. Section 3.2 of the BFA is hereby amended to read as follows, and,
to the extent applicable, the following provisions shall also amend the
AWF (capitalized terms shall have the same meaning as defined in the BFA
unless otherwise indicated):
"3.2 Available Credit; Paydown. On receipt of each Schedule, DFS
will credit Dealer with such amount as DFS may deem advisable up to
the remainder of eighty-five percent (85%) of the net amount of
eligible Accounts listed in such Schedule (as determined pursuant to
Section 3.3 hereof), but in no event to exceed the amount, if any,
requested by Dealer, minus the amount of Dealer's SPP Deficit (as
defined below) under Dealer's Agreement for Wholesale Financing (the
'AWF') with DFS as in effect from time to time (the 'Available
Credit').
Dealer's 'SPP Deficit' shall mean the amount, if any, by which
Dealer's total current outstanding indebtedness to DFS under the AWF
as of the date of the Inventory Report (referred to below) exceeds
the Inventory Value (as defined below) as determined by, and as of
the date of, the Inventory Report. Such SPP Deficit, if any, will
remain in effect for purposes of this Agreement until the
preparation and delivery by Dealer to DFS of a new Inventory Report.
Dealer will forward to DFS by the 10th day of every month an
Inventory Report dated as of the last day of the prior month which
specifies the total aggregate wholesale invoice price of all of
Dealer's inventory financed by DFS under the AWF that is unsold and
in Dealer's possession and control as of the date of the Inventory
Report.
The term Inventory Value is defined herein to mean one hundred
percent (100%) of the total aggregate wholesale invoice price of all
of Dealer's inventory financed by DFS under the AWF that is unsold
and in Dealer's possession and control as of the date of the
Inventory Report and to the extent that DFS has a first priority,
fully perfected security interest therein.
In addition, if Dealer's outstanding loans under Dealer's accounts
receivable credit facility as set forth in Section 2.1 of this
Agreement at any time exceed Dealer's Available Credit, Dealer will
immediately pay to DFS an amount not less than the difference
between (i) Dealer's outstanding loans under Dealer's accounts
receivable credit facility as set forth in Section 2.1 of this
Agreement, and (ii) Dealer's Available Credit.
Furthermore, as an amendment to the AWF, in the event Dealer's SPP
Deficit exceeds at any time (a) eighty-five percent (85%) of the net
amount of Dealer's eligible Accounts, minus (b) Dealer's outstanding
loans under Dealer's accounts receivable credit facility as set
forth in Section 2.1 of this Agreement, Dealer will immediately pay
to DFS, as a reduction of Dealer's total current outstanding
indebtedness to DFS under the AWF, the difference between (i)
Dealer's SPP Deficit, and (ii) (a) eighty-five percent (85%) of the
net amount of Dealer's eligible Accounts minus (b) Dealer's
outstanding loans under Dealer's accounts receivable credit facility
as set forth in Section 2.1 of this Agreement. At no time will the
outstanding Loans exceed Dealer's maximum accounts receivable credit
facility as set forth in Section 2.1 of this Agreement. No Loans
shall be made by DFS if Dealer has failed to satisfy any
precondition to the making of an advance hereunder, if there exists
a Default or if there occurs any event which, but for the passage of
time or notice, or both, would be a Default."
2. DFS and Dealer agree that the following paragraph is incorporated
into the AWF and BFA as if fully and originally set forth therein:
"Dealer will at all times maintain:
(a) a Tangible Net Worth and Subordinated Debt in the combined
amount of not less than Eight Million Dollars ($8,000,000); and
(b) a ratio of Debt minus Subordinated Debt to Tangible Net Worth
and Subordinated Debt of not more than Two and One-Half to One
(2.5:1.0).
For purposes of this paragraph: (i) 'Tangible Net Worth' means the
book value of Dealer's assets less liabilities, excluding from such
assets all Intangibles; (ii) 'Intangibles' means and includes
general intangibles (as that term is defined in the Uniform
Commercial Code); accounts receivable and advances due from
officers, directors, employees, stockholders and affiliates;
leasehold improvements net of depreciation; licenses; good will;
prepaid expenses; escrow deposits; covenants not to compete; the
excess of cost over book value of acquired assets; franchise fees;
organizational costs; finance reserves held for recourse
obligations; capitalized research and development costs; and such
other similar items as DFS may from time to time determine in DFS'
sole discretion; (iii) 'Debt' means all of Dealer's liabilities and
indebtedness for borrowed money of any kind and nature whatsoever,
whether direct or indirect, absolute or contingent, and including
obligations under capitalized leases, guaranties, or with respect to
which Dealer has pledged assets to secure performance, whether or
not direct recourse liability has been assumed by Dealer; and (iv)
'Subordinated Debt' means all of Dealer's Debt which is subordinated
to the payment of Dealer's liabilities to DFS by an agreement in
form and substance satisfactory to DFS. The foregoing terms will be
determined in accordance with generally accepted accounting
principles consistently applied, and, if applicable, on a
consolidated basis."
All other terms and provision of the BFA and AWF, to the extent
consistent with the foregoing, are hereby ratified and will remain
unchanged and in full force and effect.
IN WITNESS WHEREOF, Dealer and DFS each have executed this Addendum
as of the 19 th day of January, 1999.
MICROS-TO-MAINFRAMES, INC.
Attest:
By:/s/ Xxxxxx X. Xxxxxxx
Title: President & CEO
/s/ Xxxxx X. Xxxx
(Assistant) Secretary
DEUTSCHE FINANCIAL SERVICES CORPORATION
By :/s/ Xxxx X. Xxxxxxx
Title:Regional Branch Manager
