Exhibit 10.7
AMENDMENT NO. TWO
Amendment No.2 to Accounts Receivable and Inventory Financing Agreement
dated as of _________, 2002, by and between Transamerica Commericial Finance
Corporation ("TCFC") and Pacific Magtron, Inc. ("Dealer 1") and Pacific Magtron
(GA), Inc. ("Dealer 2")(Dealer 1 and Dealer 2 shall hereinafter be individually
referred to as a "Dealer" and collectively as the "Dealer").
Pursuant to that certain Accounts Receivable and Inventory Financing
Agreement dated as of July 13, 2001 by and among TCFC and Dealer and any and all
amendments and riders thereto, (collectively referred to herein as the
"Agreement"), TCFC made certain financing available to Dealer. Dealer has
requested TCFC to modify certain terms and provisions of the Agreement. TCFC has
agreed to do so, upon the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the premises set forth above, the terms
and conditions contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, TCFC and Dealer agree
as follows:
1. DEFINITIONS. Terms defined in the Agreement which are used herein shall have
the same meanings as set forth in the Agreement unless otherwise defined herein.
2. AMENDMENTS.
2.1. Schedule 6.6 is hereby deleted in its entirety and is replaced with the
following:
SCHEDULE 6.6
FINANCIAL COVENANTS MENU
Dealer covenants and agrees that so long as any of the liabilities to TCFC
remain outstanding or this Agreement remains in effect, even if no liabilities
to TCFC are outstanding:
INDEBTEDNESS TO TANGIBLE NET WORTH: Dealer shall maintain a ratio of
indebtedness to Tangible Net Worth not to exceed 3.25 to 1.00. Such
covenant will be measured quarterly.
TANGIBLE NET WORTH: Dealer shall maintain a Tangible Net Worth of not less
than $4,250,000.00. Such covenant will be measure quarterly.
MINIMUM EBIT: Dealer shall maintain a minimum EBIT at:
($68,000.00) as of the quarter ending on March 31, 2002,
$140,000.00 as of the quarter ending on June 30, 2002,
$300,000.00 as of the quarter ending on September 30, 2002 and
$275,000.00 as of the quarter ending on December 31, 2002.
Such covenant will be measured quarterly.
"EBIT" as used herein shall mean earnings before deducting for interest expense
and income taxes in accordance with GAAP.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY. Dealer represents and warrants
that this Amendment and the Agreement, as amended hereby, constitute the legal,
valid and binding obligation of Dealer, enforceable against the Dealer in
accordance with their respective terms.
4. GOVERNING LAW. THIS AMENDMENT HAS BEEN DELIVERED TO, ACCEPTED AT AND SHALL BE
DEEMED TO HAVE BEEN MADE IN ILLINOIS. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
5. Except as specifically modified hereby, all other terms and conditions of the
Agreement remain in full force and effect.
6. The Agreement and this Amendment represent the final agreement of the
parties, and all prior and contemporaneous discussions, understandings and
agreements are merged herein. The Agreement and this Amendment may not be
modified except in writing by both parties.
IN WITNESS WHEREOF, this AMENDMENT NO. TWO has been duly executed this 13th day
of March, 2002.
TRANSAMERICA COMMERCIAL FINANCE CORPORATION
BY:
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TITLE:
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PACIFIC MAGTRON, INC.
BY: /s/ Xxxxxxxx X. Xx
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TITLE: President
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PACIFIC MAGTRON (GA), INC.
BY: /s/ Xxxxxxxx X. Xx
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TITLE: President
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