EXHIBIT 10.45
[IBM
IBM Credit Corporation
X.X. Xxx 000000
Xxxxxxx, XX 00000-0000]
Xxxxx 0, 0000
Xxxxxx Data Systems, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx X
Xxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxx, Xx., President/CEO
Dear Xx. Xxxxx:
The purpose of this letter ("Letter") is to memorialize the agreement
reached during the March 2, 1999 telephone conference between representatives of
Pulsar Data Systems, Inc. ("Pulsar") and IBM Credit Corporation ("IBM Credit").
Pulsar is, as described in subparagraph (c) below, in default (1) under the
Inventory and Working Capital Financing Agreement between Pulsar and IBM Credit
dated October 30, 1997, as amended from time to time (the "Financing
Agreement"), (2) under the conditions to forbearance set forth in the
Forbearance Agreement between Pulsar and IBM Credit darted as of August 31, 1998
as amended from time to time (the "Forbearance Agreement").
Pulsar has indicated that it has significant immediate cash requirements
and that the expected cash infusion resulting from the pending initial public
offering ("IPO") will not occur in a timely enough fashion to meet those
requirements.
At Pulsar's request, IBM Credit has agreed to make certain financial
accommodations based upon the terms and conditions contained herein.
IBM Credit and Pulsar agree that:
(a) Pulsar acknowledges that Pulsar failed to perform certain of its agreements
required to be performed by January 18, 1999 under a letter agreement
("Letter Agreement") dated December 16, 1998 among IBM Credit, Pulsar and
Xxxxxxx X. Xxxxx, Xx. and Xxxxxxx Xxxxx as guarantor of Pulsar's
obligations to IBM Credit.
(b) IBM Credit's agreement under subparagraph (f) of the Letter Agreement to
defer the requirement to further reduce the collateral value of the
Nonstandard Collateral (as defined in the Letter Agreement) monthly,
therefore, terminated on January 18, 1999.
Pulsar Data Systems, Inc. -2- March 8, 1999
(c) Pulsar acknowledges that as a result of the foregoing Pulsar is under
collateralized by approximately $278,000 pursuant to the agreements between
IBM Credit and Pulsar, and such undercollateralization constitutes a
default under the Financing Agreement and the Forbearance Agreement.
(d) IBM Credit will allow Pulsar to include, as Eligible Accounts at a value of
85% of the amount of the invoice, all invoices identified on the attached
Pulsar report titled "PULSAR OVER 120 REPORT AS OF 2/24/98 COLLECTIBLE
VERSUS [SIC] NON-COLLECTIBLE" (the "120 Report") which Pulsar provided to
IBM Credit on February 26, 1999 provided, that (i) Pulsar hereby
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represents and warrants that the date above is a typographical error and
that the date of the 120 Report should read 2/24/99, and (ii) any such
invoices which IBM Credit deems to be not Eligible Accounts as a result of
its verification with the respective Accounts debtors will be, upon
notification by IBM credit to Pulsar, immediately reclassified as
ineligible accounts for purposes of determining the Borrowing Base.
(e) IBM Credit will allow Pulsar to include the value of the Xxxxxxx Xxxxx
accounts assigned to IBM Credit (the "Merrill Nonstandard Collateral") as a
component of the total value of the Nonstandard Collateral (as defined in
the Letter Agreement). Effective with this Letter, the value of the
Merrill Nonstandard Collateral will be $597,000.00 which, when added to the
collateral value allowed by IBM Credit for the personal residence with
respect to which IBM Credit has been granted an interest (the "Real Estate
Nonstandard Collateral"), will immediately increase the total value of the
Nonstandard Collateral to $1,397,000.000 and as such amount may be adjusted
according to subparagraph (i) below. The Merrill Nonstandard Collateral
will be adjusted each calendar month to equal the market value of the
Merrill Nonstandard Collateral as of the last day of the previous calendar
month, as reported by Xxxxxxx Xxxxx to Pulsar. Pulsar will provide such
Xxxxxxx Xxxxx report to IBM Credit by no later than the seventh Business
Day of each calendar month. If a Shortfall Amount results from such
adjustment, Pulsar shall immediately pay such Shortfall Amount to IBM
Credit.
(f) IBM Credit will temporarily increase Pulsar's credit line under the
Financing Agreement to $9,000,000.00 from $8,000,000.00 (such increase, the
"Temporary Increase") as of March 2, 1999 provided, that, such Temporary
-------- ----
Increase will expire on April 30, 1999, and on April 30, 1999 such credit
line will return to $8,000,000.00.
(g) IBM Credit will defer the requirement to reduce the collateral value of the
Nonstandard Collateral by $100,000.00 per month until the earlier of (i)
the occurrence of any failure by Pulsar to perform any of its agreements
under this Letter, (ii) the occurrence of a further default under the
Financing Agreement or the Forbearance Agreement (iii) the occurrence of
any failure by Pulsar to perform any of its agreements under the Letter
Agreement (other than those failures described in IBM Credit's letter to
Pulsar dated February 2, 1999), (iv) the date any cash equity infusion is
realized by Pulsar as a result of an initial public offering, and (v) June
1, 1999.
Pulsar Data Systems, Inc. -3- March 8, 1999
(h) IBM Credit will defer until June 1, 1999 the payments required on March 1,
1999, April 1, 1999 and May 1, 1999 under the Promissory Note dated October
30, 1998 made by Pulsar in favor of IBM Credit and IBM Credit agrees to
reverse such March 1, 1999 payment already made by Pulsar and credit
Pulsar's outstanding balance under the Financing Agreement by such amount.
(i) Xxxxxxx X. Xxxxx will obtain an independent appraisal, satisfactory to IBM
Credit, of the value (the "Appraised Value") of the personal residence with
respect to which IBM Credit has been granted an interest and, upon IBM
Credit's receipt and review of such appraisal, (i) IBM Credit will adjust
the Real Estate Nonstandard Collateral to the lesser of (a) the Appraised
Value less any prior liens on such personal residence and (b) $1,100,000.00
and (ii) the total value of the Nonstandard Collateral will be adjusted
accordingly.
(j) IBM Credit does not waive any default, but agrees to forebear from
exercising remedies available to it in connection with the default referred
to in subparagraph (c) above and to make the accommodations set forth
herein until the earlier of (i) the occurrence of any failure by Pulsar to
perform any of its agreements under this Letter, (ii) the occurrence of a
further default under the Financing Agreement or the Forbearance Agreement
(iii) the occurrence of any failure by Pulsar to perform any of its
agreements under the Letter Agreement (other than those failures described
in IBM Credit's letter to Pulsar dated February 2, 1999 and for which
action has already been taken by IBM Credit), (iv) the date any cash
infusion is realized by Pulsar as a result of an IPO and (v) June 1, 1999.
Pulsar, Xxxxxxx X. Xxxxx, Xx. and Xxxxxxx Xxxxx each severally waives the
benefit of any statute of limitations that might otherwise bar the recovery
of any amount due IBM Credit from any one of them in connection with this
subparagraph (j).
Nothing in this Letter or any of the other negotiations or actions
undertaken pursuant to this Letter, shall constitute a waiver or modification of
any of IBM Credit's rights and remedies against Pulsar or Xxxxxxx X. Xxxxx, Xx.,
and Xxxxxxx Xxxxx agree that the terms of the Financing Agreement, the
Forbearance Agreement, the Letter Agreement, the letter agreement dated February
2, 1999 among IBM Credit, Pulsar, Xxxxxxx X. Xxxxx, Xx. and Xxxxxxx Xxxxx, and
any guaranty in connection therewith continue in full force and effect and will
be strictly adhered to on and after the date hereof except as expressly set
forth in this Letter. Xxxxxxx X. Xxxxx and Xxxxxxx Xxxxx restate and reaffirm
the validity and legality of each Guaranty. Each party to this letter agreement
agrees and acknowledges that such party is entering into this Letter agreement
freely and voluntarily with the advice of legal counsel of such party's own
choosing.
Pulsar Data Systems, Inc. -4- March 8, 1999
Capitalized terms used herein but not defined herein will have the meanings
set forth in the Financing Agreement.
Sincerely,
/s/ X. X. Xxxxx
X. X. Xxxxx
Account Executive
ACKNOWLEDGED and AGREED to:
By:
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Name: Xxxxxxx X. Xxxxx, Xx. as Guarantor and as President and CEO
of Pulsar Data Systems, Inc.
Date:
____________________________________
By:
-----------------------------------------------------------
Name: Xxxxxxx Xxxxx, as Guarantor of Pulsar Data Systems, Inc.
Date:
____________________________________
PULSAR OVER 120 REPORT
AS OF 2/24/98
COLLECTIBLE VERSUS [SIC]
NON-COLLECTIBLE
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CUSTOMER CUSTOMER INVOICE INVOICE INVOICE EXPECTED CUSTOMER CONTACT NAME
NAME NUMBER NUMBER DATE AMOUNT PAY DATE AND PHONE NUMBER
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UNIVERSITY OF DC 72UDC008 11036628 22-Sep-98 $ 185.77 15-Mar-99 Xxxxx Xxxx 000-000-0000
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US BANKRUPTCY COURT 57USBC12 11038780 24-Sep-98 $ 4,576.56 00-Xxx-00 Xxx Xxxx 000-000-0000
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AZIMUTH, INC. 67AZ1201 11037409 15-Oct-98 $ 4.912.74 MID 3/99 Xxxx Xxxxxxx 304-292-3700
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BOEING XXXXX.XXXXXXX 53BOEING ALL ALL DATES $ 28,198.90 05-Mar-99 Xxxxx Xxxxx 000-000-0000
INVOICES
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US POSTAL SERVICE 46USPS68 1103684 22-Oct-98 $ 39,840.00 - 4-Mar-99 Xxxx Xxxxxxxx 000-000-0000
-----------
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HOUSTON ASYLUM 46HA0267 11037739 27-Oct-98 $ 58,434.00 05-Mar-99 Xxxxxxx Xxxx 000-000-0000
OFFICE -----------
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XXX 00XXX000 11036829 21-Sep-98 $ 8,218.02 01-Mar-99 Xxxxx Samprey 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
FDIC 46FDIC00 11037676 23-Oct-98 $109,465.86 26-Feb-99 Xxx Xxxxxx 000-000-0000
-----------
-----------------------------------------------------------------------------------------------------------------------
DEPT OF EDUCATION 46DOE202 11038922 29-Sep-98 22,570.08 05-Mar-99 Xxxx Xxxxxxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
DEPT. OF EDUCATION 46DOE202 11037523 20-Oct-98 $ 313.32 05-Mar-99 Xxxx Xxxxxxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
DFAS XXXXXX, XX 00XXX0000 11037474 19-ct-98 $ 4,849.00 25-Feb-98 Anyone 000-000-0000 Paid 2/24/99
-----------------------------------------------------------------------------------------------------------------------
GSA 46BPA001 110366628 21-Sep-98 $ 7,190.94 26-Feb-99 Xxxxxx Xxxxxxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
GSA 46BPA001 110366627 21-Sep-98 $ 18,298.07 26-fEB-99 Xxxxxx Xxxxxxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
NAT'L INST. OF HEALTH 4ONIH336 11037184 07-Oct-98 $ 224.88 15-Mar-99 Xx. Xxxxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
NAT'L INST. OF HEALTH 40NIH336 11037488 16-Oct-98 $ 14,973.12 15-Mar-99 Xxxxx Dance 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
NAT'L INST. Of HEALTH 40NIH336 11037614 10-Oct-98 $ 1,899.61 15-Mar-99 Xxxxx Dance 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
NAT'L INST. OF HEALTH 40NIH336 110375366 10-Oct-98 $ 3,307.36 15-Mar-99 Xxxxx Dance 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
NAT'L INST. OF HEALTH 40NIH336 11037588 21-Oct-98 $ 2,888.566 15-Mar-99 Anyone 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
NAT'L INST. OF HEALTH 40NIH3366 11037591 21-Oct-98 $ 1,300.00 15-Masr-99 Xxxx Xxxxxxx 214-742-8387 ext. 7002
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NAT'L INST. OF HEALTH 40NIH336 11037584 21-Oct-98 $ 247.76 15-Mar-99 Xxxxx Dance 000-000-0000
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US CORP. OF ENGINEER 11DOA179 110345504 16-Jun-98 $ 2,208.00 22-Mar-99 Col. Xxxxxx Xxxxxxx 000-000-0000
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US CORP. OF ENGINEER 11DOA173 11037046 30-Sep-98 $ 53,936.30 22-Mar-98 Col. Xxxxxx Xxxxxxx 000-000-0000
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PG COUNTY SCHOOLS 72000120 11033830 13-May-98 $ 300.00 MD 3/99 Xxxxx Xxxx 000-000-0000
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PG COUNT SCHOOLS 72000120 11034973 08-Jul-98 $ 1,564.61 MD 3/99 Xxxxx Xxxx 000-000-0000
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PG COUNTY SCHOOLS 72000120 11035162 15-Jul-98 $ 760.00 MD 3/99 Xxxxx Xxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
PG COUNTY SCHOOLS 72000120 11035517 31-Jul-98 $ 6,341.36 MD 3/99 Xxxxx Xxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
PG COUNTY SCHOOLS 72000120 11035776 17-Aug-98 $ 164.00 MD 3/99 Xxxxx Xxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
PG COUNTY SCHOOLS 72000120 11036085 31-Aug-98 $ 249.00 MD 3/99 Xxxxx Xxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
PG COUNTY SCHOOLS 72000120 11038086 31-Aug-98 $ 298.00 MD 3/99 Xxxxx Xxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
PG COUNTY SCHOOLS 72000120 11036252 08-Sep-98 $ 466.69 MD 3/99 Xxxxx Xxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
PG COUNTY SCHOOLS 72000120 11036636 22-Sep-98 $ 602.22 MD 3/99 Xxxxx Xxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
PG COUNTY SCHOOLS 72000120 11036736 23-Sep-98 $ 526.65 MD 3/99 Xxxxx Xxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
PG COUNTY SCHOOLS 72000120 11036939 30-Sep-98 $ 2,021.42 MD 3/99 Xxxxx Xxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
PG COUNTY SCHOOLS 72000120 11037014 30-Sep-98 $ 729.79 MD 3/99 Xxxxx Xxxx 000-000-0000
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PG COUNTY SCHOOLS 72000120 11037629 30-Sep-98 $ 280.61 MD 3/99 Xxxxx Xxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
PG COUNTY SCHOOLS 72000120 11037454 16-Oct-98 $ 448.20 MD 3/99 Xxxxx Xxxx 000-000-0000
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PG COUNTY SCHOOLS 72000120 11037526 20-Oct-98 $ 124.66 MD 3/99 Xxxxx Xxxx 000-000-0000
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VA MEDICAL 46220025 11037531 20-Oct-98 $ 8,669.52 22-Mar-99 Xxxxxx 000-000-0000
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FEDERAL BUREAU OF 46000700 11035008 09-Jul-98 $ 27.00 05-Mar-99 Xxxxx Xxxxxx 000-000-0000
PRISONS
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STATE DEPT. 466000510 11037422 15-Oct-98 $ 158.00 18-Mar-99 Xxxxxx Xxxxxx 000-000-0000
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EEOC 46000510 11037839 22-Oct-98 $ 1,305.00 19-Mar-99 Xxxxxx Xxxxx 000-000-0000
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INS 46000175 11034617 22-Jun-99 $ 8,865.75 15-Mar-99 Xxxxxx Xxxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
INS 46000175 11034986 08-Jul-98 $ 7,795.00 15-Mar-99 Xxxxxx Xxxxx 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
INS 46000175 11037860 22-Oct-98 $ 12,313.00 15-Mar-99 Xxxxxx Xxxxx 000-000-0000
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INS 46000175 11037701 23-Oct-98 $ 38,847.00 15-Mar-99 Xxxxxx Xxxxx 000-000-0000
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TOTAL $476,198.07
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