exv10w43



 





Exhibit 10.43




 ADDENDUM TO BUSINESS FINANCING AGREEMENT AND



AGREEMENT FOR WHOLESALE FINANCING




     This Addendum is made to (i) that certain Business Financing Agreement
executed on the 25 day of June, 2004, between En Pointe Technologies Sales,
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 June 25, 2004 as amended (“AWF”).



     FOR VALUE RECEIVED, CDF and Dealer agree as follows:



     1. Section 2.1 of the BFA is hereby amended to read as follows
(capitalized terms shall have the same meaning as defined in the BFA unless
otherwise indicated):




“2.1 Accounts Receivable Facility. Subject to the terms of this
Agreement, CDF agrees to provide to Dealer an Accounts Receivable
Facility equal to: (i) the total initial one time advance made by
CDF to IBM Credit LLC and Foothill Capital Corporation on Dealer’s
behalf, said advance to liquidate through scheduled payments to CDF
as per existing IBM Credit LLC payment planner subject to the terms
of Section 3.2
 (defined as “Initial Advance”); and (ii) up to a
maximum of Two Million Five Hundred Thousand Dollars ($2,500,000.00)
in additional cash advances; 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,Thirty Million Dollars ($30,000,000.00).
CDF’s decision to advance funds is discretionary, and 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 Thirty Million Dollars
($30,000,000.00); 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 Thirty
Million Dollars ($30,000,000.00). CDF’s decision to advance funds will not
be binding until the funds are actually advanced.”



     2. 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, CDF
will credit Dealer with such amount as CDF may deem advisable, up to
the remainder of seventy percent (70%) of the net amount of eligible
Accounts listed in such Schedule, minus the amount of Dealer’s SPP
Deficit (as defined below) under Dealer’s Agreement for Wholesale
Financing (the ‘AWF’) with CDF, as in effect from time to time, but
in no event will CDF credit Dealer with more than Dealer’s maximum
Accounts Receivable Facility from time to time established by CDF
(the ‘Available Credit’). Upon completion of CDF field exam and
receipt of results satisfactory to CDF, the 70% rate shall be
increased to 85%.




Dealer’s ‘SPP Deficit’ shall mean the amount, if any, by which
Dealer’s total current outstanding indebtedness to CDF 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 CDF of a new Inventory Report. Dealer will forward to
CDF by the 10th



 









 





Exhibit 10.43





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 CDF
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 zero percent
(0%) of the total aggregate wholesale invoice price of all of
Dealer’s inventory financed by CDF 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 CDF has a first priority, fully
perfected security interest therein. Upon completion of CDF field
exam and receipt of results satisfactory to CDF, the 0% Inventory
Value rate shall be increased to 90%.




If, for any reason, Dealer’s outstanding loans under Dealer’s
Accounts Receivable Facility shall at any time exceed Dealer’s
Available Credit, Dealer will immediately repay to CDF the amount of
such excess.




Furthermore, as an amendment to the AWF, in the event Dealer’s SPP
Deficit exceeds at any time (a) seventy percent (70%) of the net
amount of eligible Accounts, minus (b) Dealer’s outstanding loans
under Dealer’s Accounts Receivable Facility, Dealer will immediately
pay to CDF, as a reduction of Dealer’s total current outstanding
indebtedness to CDF under the AWF, such excess. Upon completion of
CDF field exam and receipt of results satisfactory to CDF, the 70%
rate shall be increased to 85%.


No advances or loans need be made by CDF if Dealer is in Default.”



     3. The following paragraph is incorporated into the BFA as if fully and
originally set forth therein:




“Facility Fee. Dealer agrees to pay CDFan annual facility fee
in connection with the Accounts Receivable Facility, payable in
advance, on the execution of this Agreement, and on each
anniversary date thereof through the term of this Agreement,
each in an amount equal to Twenty Five Thousand Dollars
($25,000.00). Once received by CDF an annual facility fee shall
not be refundable by CDF for any reason; provided, however, that
in the event CDF terminates the Agreement on other than the
anniversary date and Dealer is not then in Default then CDF
shall refund to Dealer a portion of the facility fee equal to
the number of whole months remaining in the current annual term
(or renewal term) of this Agreement multiplied by an amount
equal to one twelfth (1/12th) of the facility fee paid by Dealer
for that term.”



     4. The following paragraph is incorporated into the AWF and BFA as if
fully and originally set forth therein:




“En Pointe Technologies, Inc., Guarantor of Dealer’s obligations to
CDF under a Collateralized Guaranty dated June 25, 2004
(“Guarantor”), will as of each quarter end maintain:




	(a)	 	a Tangible Net Worth and Subordinated Debt in the
combined amount of not less than Fourteen Million Dollars
($14,000,000.00);




 









 











Exhibit 10.43





	(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);
	 
	(c)	 	a ratio of Current Tangible Assets to current liabilities
of not less than one and twenty one-hundredths to one (1.20:1);
and
	 
	(d)	 	beginning with the fiscal quarter ending June 30, 2004, a
ratio of EBITDA for the twelve month period ending on the last
day of each such fiscal quarter, to interest expense for the
twelve month period ending on the last day of such fiscal quarter
of not less than one and twenty-five one hundredths to one
(1.25:1).






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; 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 determine in CDF’s 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; (iv) ‘Subordinated
Debt’ means all of Dealer’s Debt which is subordinated to the
payment of Dealer’s liabilities to CDF by an agreement in form and
substance satisfactory to CDF; (v) ‘Current Tangible Assets’ means
Dealer’s current assets less, to the extent otherwise included
therein, all Intangibles and (vi) ‘EBITDA’ means, for any period of
calculation, the net income of Dealer before provision for income
taxes, interest expense (including without limitation, implicit
interest expense on capitalized leases), depreciation and
amortization, excluding therefrom (to the extent included): (A)
non-operating gains (including, without limitation, extraordinary
or nonrecurring gains and losses, gains and losses from
discontinuance of operations and gains and losses arising from the
sale of assets other than inventory) during the applicable period;
(B) net earnings or losses of any business entity in which Dealer
has an ownership interest (other than a wholly owned subsidiary)
unless such net earnings shall have actually been received by
Dealer in the form of cash distributions; (C) any portion of the
net earnings of any subsidiary which for any reason is unavailable
for payment of dividends to Dealer; (D) the earnings of any entity
to which any assets of Dealer shall have been sold, transferred or
disposed of, or into which Dealer shall have merged, or been a
party to any consolidation or other form of reorganization, prior
to the date of such transaction; (E) any gain or loss arising from
the acquisition or disposition of any securities of Dealer; and (F)
non-operating losses arising from the sale of capital assets during
such period. All terms used herein to the extent not defined shall
be used in accordance with generally accepted accounting principles
consistently applied. All amounts, if applicable, shall be
calculated on a consolidated basis.”



 









 





Exhibit 10.43




     5. The following paragraph is incorporated into the BFA as if fully and
originally set forth therein:




 “Upon completion of CDF field exam and receipt of results
satisfactory to CDF, the thirty (30) day termination period set
forth in Section 7 of the BFA and Section 17 of the AWF shall be
increased to sixty (60) days.”




Dealer waives notice of CDF’s acceptance of this Addendum.



     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 CDF have both read this Addendum to the BFA
and AWF , understand all the terms and provisions hereof, and agree to be bound
thereby and subject thereto as of this 25 day of June, 2004.



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	En Pointe Technologies Sales, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	By:	 	/s/ Attiazaz “Bob” Din
	 	 	 	 	 	 	
	 	 
	

	 	 	 	 	 	 	 	Attiazaz “Bob” Din	 	 
	/s/ Robert A. Mercer	 	 	 	 	 	Chief Executive Officer	 	 
	
	 	 	 	 	 	 	 	 
	Robert A. Mercer, Secretary	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	GE COMMERCIAL DISTRIBUTION FINANCE	 	 
	 	 	 	 	CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ David J. Lynch	 	 
	 	 	 	 	 	 	
	 	 
	

	 	 	 	 	 	 	 	David J. Lynch	 	 
	

	 	 	 	 	 	 	 	Vice President of Operations	 	 







ACKNOWLEDGEMENT BY GUARANTOR:




En Pointe Technologies, Inc.




By /s/ Attiazaz
“Bob” Din


        Attiazaz
“Bob” Din

        President