ADDENDUM TO AGREEMENT FOR WHOLESALE FINANCING
This Addendum is made to that certain Agreement for Wholesale Financing
entered into by and between ePlus Technology of NC, inc. ("Dealer") and Deutsche
Financial Services Corporation ("DFS") on ______________, 2001, as amended
("Agreement").
FOR VALUE RECEIVED, DFS and Dealer agree as follows (capitalized terms
shall have the same meaning as defined in the Agreement unless otherwise
indicated):
1. The following section is hereby added to the Agreement as if fully and
originally set forth therein:
"Termination Privilege. Despite anything to the contrary in Section 17
of this Agreement, Dealer may terminate this Agreement only upon
payment to DFS of the following sum (in addition to payment of all
obligations, whether or not by their terms then due) which sum
represents liquidated damages for the loss of the bargain and not as a
penalty, and the same is hereby acknowledged by Dealer: (i) if Dealer's
termination occurs at any time from the date hereof up to and including
the date preceding the first anniversary of the date hereof, the sum
shall equal Seventeen Thousand Five Hundred Dollars ($17,500.00); and
(ii) if Dealer's termination occurs at any time from the first
anniversary of the date hereof up to and including the date preceding
the second anniversary of the date hereof, the sum shall equal Eight
Thousand Seven Hundred Fifty Dollars ($8,750.00). This sum will also be
paid by Dealer if the Agreement is terminated by DFS on account of
Dealer's Default, but shall not be payable if the Agreement is
terminated by DFS absent a Default by Dealer."
2. Dealer and DFS agree to amend the Agreement to provide as follows:
Dealer will forward to DFS by the 10th day of each month a Collateral
Report (as defined below) dated as of the last day of the prior month.
Regardless of the SPP terms pertaining to any Collateral financed by
DFS, and notwithstanding any scheduled payments made by Dealer after
the Determination Date (as defined below) or anything contained in the
Agreement to the contrary, if DFS determines, after reviewing the
Collateral Report, after conducting an inspection of the Collateral or
otherwise, that (i) the total current outstanding indebtedness owed by
Dealer to DFS as of the date of the Collateral Report, inspection or
any other date on which a paydown is otherwise required hereunder, as
applicable (the "Determination Date"), exceeds (ii) the Collateral
Liquidation Value (as defined below) as of the Determination Date,
Dealer will immediately upon demand pay DFS the difference between (i)
Dealer's total current outstanding indebtedness owed to DFS as of the
Determination Date, and (ii) the Collateral Liquidation Value as of the
Determination Date.
The term "Collateral Report" is defined herein to mean a report
compiled by Dealer specifying the total outstanding balance owed to
Dealer on Dealer's Eligible Accounts (as defined below) as of the date
of such Report to the extent DFS has a first priority, fully perfected
security interest therein.
The term "Eligible Accounts" is defined herein to include all of
Dealer's accounts receivable except for: (a) accounts created from the
sale of goods and services on non-standard terms and/or that allow for
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payment to be made more than thirty (30) days from the date of sale;
(b) Non-Government Accounts (as defined below) unpaid more than ninety
(90) days from date of invoice and Government Accounts (as defined
below) unpaid more than one-hundred twenty (120) days from date of
invoice; (c) all accounts of any obligor with fifty percent (50%) or
more of the outstanding balance unpaid for more than ninety (90) days
from the date of invoice; (d) accounts which the obligor is an officer,
director, shareholder, partner, member, owner, employee, agent, parent,
subsidiary, affiliate of, or is related or has common shareholders,
officers, directors, owners, partners or members; (e) consignment
sales; (f) accounts for which the payment is or may be conditional; (g)
accounts for which the obligor is not a commercial or institutional
entity or is not a resident of the United States or Canada; (h)
accounts with respect to which any warranty or representation provided
herein is not true and correct; (i) accounts which represent goods or
services purchased for a personal, family or household purpose; (j)
accounts which represent goods used for demonstration purposes or
loaned by Dealer to another party; (k) accounts which are progress
payment, barter or contra accounts; (l) accounts which are discounts,
rebates, bonuses or credits for returned goods owed to Dealer by any
third party; (m) accounts which are being financed by DFS pursuant to a
Business Financing Agreement or other comparable document between
Dealer and DFS; and (n) any and all other accounts which DFS deems to
be ineligible. DFS may, without notice to Dealer and at any time or
times hereafter, verify the validity, amount or any other matter
relating to any account by mail, telephone, or other means, in the name
of Dealer or DFS. "Government Accounts" means accounts due and payable
to a U.S. county, state or federal governmental body, agency or
instrumentality; or body, agency or instrumentality of the District of
Columbia. "Non-Government Accounts" means all accounts other than
Government Accounts.
The term "Collateral Liquidation Value" is defined herein to mean: (i)
ninety percent (90%) of the net amount of Eligible Government Accounts;
and (ii) eighty-five percent (85%) of the net amount of Dealer's
Eligible Non-Government Accounts: in each case as of the date of the
Collateral Report and to the extent DFS has a first priority, fully
perfected security interest therein.
If Dealer from time to time is required to make immediate payment to
DFS of any past due obligation discovered during any Collateral review,
upon review of a Collateral Report or at any other time, Dealer agrees
that acceptance of such payment by DFS shall not be construed to have
waived or amended the terms of its financing program.
3. The following paragraph is incorporated into the Agreement as if fully
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 Two Million Five Hundred Thousand Dollars ($2,500,000);
and
(b) a ratio of Debt minus Subordinated Debt to Tangible Net Worth and
Subordinated Debt of not more than three to one (3.0:1).
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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 shall be determined in accordance with generally accepted
accounting principles consistently applied, and, if applicable, on a
consolidated basis."
Dealer waives notice of DFS' acceptance of this addendum.
All other terms and provisions of the Agreement, to the extent not
inconsistent with the foregoing, are ratified and remain unchanged and in full
force and effect.
IN WITNESS WHEREOF, Dealer and DFS have executed this Addendum on this
__ day of ________________, 2001.
ePlus Technology of NC, inc.
ATTEST:
By:_____________________________
_______________________________ Xxxxxx X. Xxxxxxxxx, CFO
Xxxxxxx X. Xxxxxxxxx, Secretary
DEUTSCHE FINANCIAL SERVICES CORPORATION
By:______________________________
Title:___________________________
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SECRETARY'S CERTIFICATE OF RESOLUTION
I certify that I am the Secretary or Assistant Secretary of the
corporation named below, and that the following completely and accurately sets
forth certain resolutions of the Board of Directors of the corporation adopted
at a special meeting thereof held on due notice (and with shareholder approval,
if required by law), at which meeting there was present a quorum authorized to
transact the business described below, and that the proceedings of the meeting
were in accordance with the certificate of incorporation, charter and by-laws of
the corporation, and that they have not been revoked, annulled or amended in any
manner whatsoever.
Upon motion duly made and seconded, the following resolution was
unanimously adopted after full discussion:
"RESOLVED, That the several officers, directors, and agents of this
corporation, or any one or more of them, are hereby authorized and empowered on
behalf of this corporation: to obtain financing from Deutsche Financial Services
Corporation ("DFS") in such amounts and on such terms as such officers,
directors or agents deem proper; to enter into financing, security, pledge and
other agreements with DFS relating to the terms upon which such financing may be
obtained and security and/or other credit support is to be furnished by this
corporation therefor; from time to time to supplement or amend any such
agreements; and from time to time to pledge, assign, mortgage, grant security
interests, and otherwise transfer, to DFS as collateral security for any
obligations of this corporation to DFS, whenever and however arising, any assets
of this corporation, whether now owned or hereafter acquired; the Board of
Directors hereby ratifying, approving and confirming all that any of said
officers, directors or agents have done or may do with respect to the
foregoing."
IN WITNESS WHEREOF, I have executed and affixed the seal of the
corporation on the date stated below.
Dated:_______________________, 2001. __________________________________
Xxxxxxx X. Xxxxxxxxx, Secretary
ePlus Technology of NC, inc.
(SEAL)
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