EXHIBIT 4.7
AMENDMENT TO AGREEMENT FOR WHOLESALE FINANCING
This Amendment to Agreement for Wholesale Financing is made to that
certain Agreement for Wholesale Financing entered into by and between Xxxxxxx
Management Systems Corporation ("Dealer") and Deutsche Financial Services
Corporation ("DFS") on September 17, 1996, as amended ("Agreement").
FOR VALUE RECEIVED, Dealer and DFS agree as follows:
1. Dealer and DFS agree to amend paragraph number 9 of the Agreement to
provide as follows:
"9. PAYMENT TERMS/PAYDOWN. Dealer will immediately pay DFS the principal
indebtedness owed DFS on each item of Collateral financed by DFS (as shown
on the Statement of Transaction identifying such Collateral) on the
earliest occurrence of any of the following events: (a) when such
Collateral is lost, stolen or damaged; (b) for Collateral financed under
Pay-As-Sold ('PAS') terms (as shown on the Statement of Transaction
identifying such Collateral), when such Collateral is sold, transferred,
rented, leased, otherwise disposed of or matured; (c) in strict accordance
with any curtailment schedule for such Collateral (as shown on the
Statement of Transaction identifying such Collateral); (d) for Collateral
financed under Scheduled Payment Program ('SPP") terms (as shown on the
Statement of Transaction identifying such Collateral), in strict accordance
with the installment payment schedule; and (e) when otherwise required
under the terms of any financing program agreed to in writing by the
parties. Dealer will forward to DFS by the 15th day of each month a
Collateral Summary 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) if DFS determines, after
reviewing the Collateral Summary 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 Summary
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 Summary Report' is defined herein to mean a report
compiled by Dealer specifying the following information: (a) the total
aggregate wholesale
invoice price of all of Dealer's inventory financed by DFS that is unsold
and in Dealer's possession and control as of the date of such Report; (b)
the total aggregate wholesale invoice price of all of Dealer's inventory
not financed by DFS that is unsold, and in Dealer's possession and control
as of the date of such Report; and (c) the total outstanding balance owed
to Dealer on Dealer's Eligible Accounts (as defined below) as of the date
of such Report; in each case 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 arising from or related to any sale or lease of any
goods and/or services by Dealer to end users on approved Short Term
Accounts Receivable ("STAR") contracts to the extent DFS has received
documentation satisfactory to it providing for direct payment from such
account debtors to DFS except for (a) accounts created from the sale of
goods and services on non-standard terms and/or that allow for payment to
be made more than thirty (30) days from the date of sale; (b) accounts
unpaid more than ninety (90) 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 compatible document between Dealer and DFS; and (n) any and all
other accounts which DFS deems to be ineligible.
The term 'Collateral Liquidation Value' is defined herein to mean: (i) one
hundred percent (100%) of the total aggregate wholesale invoice price of
all of Dealer's inventory financed by DFS that is unsold and in Dealer's
possession and control; (ii) fifty percent (50%) of the total aggregate
wholesale invoice price of all Dealer's inventory not financed by DFS that
is unsold, and in Dealer's possession and control; and (iii) eighty percent
(80%) of the total outstanding balance of Dealer's Eligible Accounts: in
each case as of the date of the Collateral Summary Report and to the extent
DFS has a first priority, fully perfected security interest
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therein. If Dealer from time to time is required to make immediate payment
to DFS of any past due obligation discovered during any Collateral audit,
upon review of a Collateral Summary 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. The proceeds of
any Collateral received by Dealer will be held by Dealer in trust for DFS'
benefit, for application as provided in this Agreement. Dealer will send
all payments to DFS' branch office(s) responsible for Dealer's account.
DFS may apply: (i) payments to reduce finance charges first and then
principal, regardless of Dealer's instructions; and (ii) principal payments
to the oldest (earliest) invoice for Collateral financed by DFS, but, in
any event, all principal payments will first be applied to such Collateral
which is sold, lost, stolen, damaged, rented, leased, or otherwise disposed
of or unaccounted for. Any third party discount, rebate, bonus or credit
granted to Dealer for any Collateral will not reduce the debt Dealer owes
DFS until DFS has received payment therefor in cash. Dealer will: (1) pay
DFS even if any Collateral is defective or fails to conform to any
warranties extended by any third party; (2) not assert against DFS any
claim or defense Dealer has against any third party; and (3) indemnify and
hold DFS harmless against all claims and defenses asserted by any buyer of
the Collateral relating to the condition of, or any representations
regarding, any of the Collateral. Dealer waives all rights of offset and
counterclaims Dealer may have against DFS."
2. DFS and Dealer agree that the following paragraph is incorporated into the
Agreement as if fully and originally set forth therein:
"Dealer will maintain for the fiscal year ending December 31, 1996 and each
fiscal year thereafter:
(a) a Tangible Net Worth and Subordinated Debt in the combined amount of
not less than Three Million Seven Hundred Fifty Thousand Dollars
($3,750,000.00); and
(b) a ratio of Debt to Tangible Net Worth and Subordinated Debt of not
more than five to one (5.0: 1).
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;
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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 amendment..
All other terms as they appear in the Agreement, to the extent
consistent with the foregoing, are ratified and remain unchanged and in full
force and effect.
IN WITNESS WHEREOF, Deal and DFS have executed this Amendment to
Agreement for Wholesale Financing this 17th day of September, 1996.
XXXXXXX MANAGEMENT SYSTEMS CORPORATION
ATTEST: By: /s/ Xxxx Xxxxxx
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Title: President
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/s/ Xxxxxxx Xxxxxx
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(Assistant) Secretary
DEUTSCHE FINANCIAL SERVICES CORPORATION
By: /s/ Xxxxxxx Guest
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Title: Regional Vice President
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