PAYDOWN ADDENDUM TO BUSINESS FINANCING AGREEMENT AND
AGREEMENT FOR WHOLESALE FINANCING
(Credit for Inventory Financed by DFS Only)
This Addendum is made to (i) that certain Business Financing Agreement
executed on the 31st day August, 2000, between ePlus Technology, inc. ("Dealer")
and Deutsche Financial Services Corporation ("DFS"), as amended ("BFA") and (ii)
that certain Agreement for Wholesale Financing between Dealer and DFS dated
September 8, 2000, 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 provision 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 (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) 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 (as defined 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 tenth (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) 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 SPP Deficit,
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."
2. The following paragraph is incorporated into the AWF and BFA as if fully
and originally set forth therein:
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"Dealer will at all times maintain:
(a) a Tangible Net Worth and Subordinated Debt in the combined amount
of not less than Four Million Five Hundred Thousand Dollars
($4,500,000); and
(b) a ratio of Debt minus Subordinated Debt to Tangible Net Worth and
Subordinated Debt of not more than Six and One Half to One
(6.5:1.0).
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 have both read this Paydown
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 August, 2000.
ePlus Technology, inc.
Attest:
By:/s/ XXXXXXX X. XXXXXX
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/s/ XXXXXXX X. XXXXXXXXX Title:_________________________________
------------------------
(Assistant) Secretary
Xxxxxxx X. Xxxxxxxxx DEUTSCHE FINANCIAL SERVICES CORPORATION
Senior Vice President
Secretary and Treasurer By:____________________________________
Title:_________________________________
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