ADDENDUM TO BUSINESS FINANCING AGREEMENT AND
AGREEMENT FOR WHOLESALE FINANCING
This Addendum is made to (i) that certain Business Financing Agreement
executed on the ___ day of ________________________, 2001, between ePlus
Technology of PA, inc. ("Dealer") and Deutsche Financial Services Corporation
("DFS"), as amended ("BFA") and (ii) that certain Agreement for Wholesale
Financing between Dealer and DFS dated __________________, 2001, as amended
("AWF").
FOR VALUE RECEIVED, DFS and Dealer agree as follows (capitalized terms
shall have the same meaning as defined in the BFA unless otherwise indicated):
1. Section 3.2 of the BFA is hereby amended to read as follows, and, to
the extent applicable, the following provision shall also amend the AWF:
"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 (a) the sum of (i) Ninety Percent (90%) of the net amount
of the eligible Government Accounts listed in such Schedule plus (ii)
Eighty-five Percent (85%) of the net amount of the eligible
Non-Government Accounts listed in such Schedule (the applicable
percentage set forth in (a)(i) and (a)(ii) is hereinafter referred to
as the "Advance Rate"), minus (b) an amount equal to One Hundred
Percent (100%) of Dealer's outstanding indebtedness under Dealer's
Agreement for Wholesale Financing (the 'AWF') with DFS as in effect
from time to time (the 'Reserve Amount') (the remainder of (a) minus
(b) is referred to herein as the 'Available Credit').
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 Reserve
Amount exceeds at any time (a) the Advance Rate multipled by 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 Reserve Amount,
and (ii) (a) the Advance Rate multipled by 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. DFS will loan Dealer, on request, such amount so credited or
a part thereof as requested provided that at no time will such
outstanding loans exceed Dealer's maximum accounts receivable credit
facility as set forth in Section 2.1 of this Agreement. No advances or
loans need be made by DFS if Dealer is in Default."
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2. 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 Four Million Dollars ($4,000,000); and
(b) a ratio of Debt minus Subordinated Debt to Tangible Net Worth
and Subordinated Debt of not more than Three and One Half to One
(3.5:1.0).
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."
3. The following paragraph is incorporated into the BFA as if fully and
originally set forth therein:
"Unused Line Fee. If, at any time from and after ____________,
2001, the Average Loan Balance (as defined below) for any
calendar month is less than Fifty Percent (50%) of the Accounts
Receivable Facility then Dealer agrees to pay DFS a monthly
unused line fee in an amount equal to fifteen one hundredths of
a percent (0.15%) of the difference between (a) the total
Accounts Receivable Facility minus (b) the Average Loan Balance
for such month. The "Average Loan Balance" is equal to (1) the
sum of the Daily Loan Balances (as defined below) during a
billing period; divided by (2) the actual number of days in such
billing period. The "Daily Loan Balance" is equal to the amount
of the outstanding principal debt which Dealer owes to DFS on
the Accounts Receivable Facility at the end of each day
(including the amount of all Electronic Transfers authorized)
after DFS has credited the payments which it has received on the
Accounts Receivable Facility. The Daily Loan Balance shall not
be subject to Section 3.8 of the Agreement. Such unused line fee
shall be payable monthly in arrears and due pursuant to the
monthly billing statement. Once received by DFS, a line fee
shall not be refundable by DFS for any reason."
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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 have both read this Addendum to the
Business Financing Agreement and Agreement for Wholesale Financing, understand
all the terms and provisions hereof and agree to be bound thereby and subject
thereto as of this ______ day of ______________, 2001.
ePlus Technology of PA, inc.
Attest:
By:_________________________________
_______________________________ Xxxxxx X. Xxxxxxxxx, CFO
Xxxxxxx X. Xxxxxxxxx, Secretary
DEUTSCHE FINANCIAL SERVICES CORPORATION
By:_________________________________
Title:_______________________________
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