AMENDMENT TO BUSINESS FINANCING AGREEMENT AND
AGREEMENT FOR WHOLESALE FINANCING
This Amendment is made to (i) that certain Business Financing Agreement
executed on the 31st day August, 2000, between ePlus Technology, inc. ("Dealer")
and GE Commercial Distribution Finance Corporation ("CDF"), as amended ("BFA")
and (ii) that certain Agreement for Wholesale Financing between Dealer and CDF
dated August 31, 2000, as amended ("AWF").
FOR VALUE RECEIVED, CDF and Dealer agree as follows (capitalized terms
shall have the same meaning as defined in the BFA unless otherwise indicated):
1. Section 2.1 of the BFA is hereby amended in its entirety to read as
follows:
"2.1 Accounts Receivable Facility. Subject to the terms of this Agreement,
CDF agrees to provide to Dealer an Accounts Receivable Facility of Twenty
Million Dollars ($20,000,000.00); provided, however, that at no time will
the principal amount outstanding under the Accounts Receivable Facility and
Dealer's inventory floorplan credit facility with CDF exceed, in the
aggregate, Seventy-Five Million Dollars ($75,000,000.00). CDF's decision to
advance funds will not be binding until the funds are actually advanced."
In addition, subject to the terms of the AWF, CDF agrees to provide to
Dealer an inventory floorplan credit facility of Seventy-Five Million Dollars
($75,000,000.00); provided, however, that at no time will the principal amount
outstanding under Dealer's inventory floorplan credit facility with CDF and
Dealer's Accounts Receivable Facility exceed, in the aggregate Seventy-Five
Million Dollars ($75,000,000.00). CDF's decision to advance funds will not be
binding until the funds are actually advanced.
2. As of the date of execution of this Amendment, all prior financial
covenants, including without limitation the terms of paragraph numbered 10 of
that certain Amendment to Business Financing Agreement and Agreement for
Wholesale Financing dated March 31, 2004 between Dealer and CDF, are hereby
deleted in their entirety and restated to read as follows:
"Dealer will:
A. (i) as of the last day of Dealer's fiscal quarter ending September 30,
2005 maintain a Tangible Net Worth and Subordinated Debt (`TNW') in
the combined amount of not less than (a) Seventeen Million Nine
Hundred Ninety Seven Thousand Dollars ($17,997,000.00) plus (b) Fifty
Percent (50%) of Dealer's Net Income for the fiscal quarter
then-ended, and (ii) as of the last day of each fiscal quarter
thereafter, beginning with the fiscal quarter ending December 31,
2005, maintain a TNW in the combined amount of not less than the sum
of (1) Fifty Percent (50%) of Dealer's Net Income for the quarter
then-ended plus (2) the minimum TNW required for the prior fiscal
quarter end (if Net Income is a negative number for any quarter [e.g.,
a loss], such amount shall not reduce Dealer's TNW for that quarter,
and shall be disregarded for all future TNW calculations so that any
such negative number shall not reduce the minimum TNW required
hereunder for any subsequent quarter);
B. as of the last day of Dealer's fiscal quarter ending September 30,
2005 and as of the last day of each fiscal quarter thereafter,
maintain a ratio of Debt minus Subordinated Debt to Tangible Net Worth
and Subordinated Debt of not more than Four and One Half to One
(4.5:1.0).
For purposes of this paragraph: (i) 'Tangible Net Worth' means the book value of
the Dealer's assets less liabilities, excluding from such assets all
Intangibles; (ii) 'Intangibles' means and includes general intangibles; software
(purchased or developed in-house); accounts receivable and advances due from
officers, directors, employees, stockholders, members, owners 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; the capitalized cost of patents, trademarks, service marks and copyrights
net of amortization; and such other similar items as CDF may from time to time
reasonably determine in CDF's sole discretion; (iii) 'Debt' means all of the
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 the
Dealer has pledged assets to secure performance, whether or not direct recourse
liability has been assumed by the Dealer; (iv) 'Subordinated Debt' means all of
the Dealer's Debt which is subordinated to the payment of the Dealer's
liabilities to CDF by an agreement in form and substance satisfactory to CDF;
and (v) 'Net Income' means Dealer's net income or loss after extraordinary items
and after provision for income taxes. The foregoing terms will be determined in
accordance with generally accepted accounting principles consistently applied."
Dealer waives notice of CDF's acceptance of this Amendment.
All other terms and provisions of the AWF and BFA, to the extent not
inconsistent with the foregoing, are ratified and remain unchanged and in full
force and effect.
IN WITNESS WHEREOF, each of Dealer and CDF have executed this Amendment on
this 14th day of November, 2005.
ePlus Technology, inc.
Attest:
/s/ STEVEN J. MENCARINI
/s/ ERICA S. STOECKER ----------------------------
- ----------------------------- Steven J. Mencarini
Erica S. Stoecker, Secretary Chief Financial Officer
GE COMMERCIAL DISTRIBUTION
FINANCE CORPORATION
/s/ KEVIN M. O'HARA
----------------------------
Kevin M. O'Hara
Director of Operations