FOURTH AMENDMENT TO CREDIT AGREEMENT
FOURTH AMENDMENT
TO CREDIT AGREEMENT
This FOURTH
AMENDMENT TO CREDIT AGREEMENT (the “Fourth Amendment”) dated September 27,
2006, is by and among ePlus inc., a Delaware corporation (“ePlus”), the
Subsidiaries of ePlus signatory hereto (including ePlus, each individually
a
“Borrower” and collectively, the “Borrowers”), the Banks signatory hereto (the
“Banks”), and National City Bank, as Administrative Agent for the Banks (the
“Administrative Agent”).
BACKGROUND
A. Pursuant
to that certain Credit Agreement dated
September
23,
2005,
by and
among the Borrowers, the Banks, and the Administrative Agent, as amended by
a
First Amendment to Credit Agreement, dated July 11, 2006, a Second Amendment
dated July 28, 2006, and a Third Amendment dated August 30, 2006 (as the same
may be modified and amended from time to time, including by this Fourth
Amendment, the "Credit Agreement"), the Banks agreed, inter
alia,
to
extend to the Borrowers a revolving credit facility in the maximum aggregate
principal amount of $35,000,000.
B. The
Borrowers did not deliver their annual audited financial statements prior
to May
31, 2006, as required by Section 5.1(a) of the Credit Agreement, which event
was
waived through July 28, 2006, pursuant to the First Amendment, and did not
deliver their “Projections” for 2007 prior to June 30, 2006, as required by
Section 5.1(d) of the Credit Agreement (the “Waived Delivery Event”), which
events were waived through September 30, 2006, pursuant to the Third Amendment,
and have advised the Banks that they will be unable to deliver such items
in the
timeframe set forth in the Third Amendment.
C. The
Borrowers did not deliver the following documents as required by Section
5.1 of
the Credit Agreement (collectively, the “Outstanding Delivery Event”): (a)
Borrowing Base Report for the period ending August 31, 2006; (b) Compliance
Certificate (Annual), for the period ending March 31, 2006; (c) Compliance
Certificate (Quarterly), for the period ending June 30, 2006; (d) Financial
Statements (Quarterly), for the period ending June 30, 2006; (e) Inventory
Report (Annual), for the period ending March 31, 2006; (f) Inventory Report
(Quarterly), for the period ending June 30, 2006; (g) Residual Realization
Report (Annual), for the period ending March 31, 2006; and (h) Residual
Realization Report (Quarterly), for the period ending June 30,
2006.
D. The
Borrowers have requested an extension of the delivery date requirements for
the
Waived Delivery Event, and a waiver and extension as to the delivery date
requirements for the Outstanding Delivery Event, as each is described above,
to
which the Banks are willing to agree, on the terms and subject to the conditions
set forth herein.
NOW,
THEREFORE, in consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
agree
as follows:
1. Definitions.
(a) General
Rule.
Except
as expressly set forth herein, all capitalized terms used and not defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
(b) Additional
Definition.
The
following additional definition shall be added to Article 1 of the Credit
Agreement to read in its entirety as follows:
“Fourth
Amendment”
means
the Fourth Amendment to this Agreement dated September 27,
2006.
2. Representations
and Warranties.
Each
Borrower hereby represents and warrants to the Administrative Agent and each
Bank that, except as to the Waived Delivery Event and the Outstanding Delivery
Event, as to such Borrower:
(a) Representations.
each of
the representations and warranties of such Borrower contained in the Credit
Agreement and/or the other Loan Documents are true, accurate and correct in
all
material respects on and as of the date hereof as if made on and as of the
date
hereof, except to the extent such representation or warranty was made as of
a
specific date;
(b) Power
and Authority.
(i)
such Borrower has the power and authority under the laws of its jurisdiction
of
organization and under its organizational documents to enter into and perform
this Fourth Amendment and any other documents which the Banks require such
Borrower to deliver hereunder (this Fourth Amendment and any such
additional documents delivered in connection with the Fourth Amendment are
herein referred to as the “Amendment Documents”); (ii) such Borrower is in good
standing in its jurisdiction of organization and each additional jurisdiction
in
which it is required to be so qualified; and (iii) all actions, corporate or
otherwise, necessary or appropriate for the due execution and full performance
by the Borrower of the Fourth Amendment have been adopted and taken and,
upon their execution, the Credit Agreement, as amended by this Fourth
Amendment will constitute the valid and binding obligations of the Borrower
enforceable in accordance with their respective terms;
(c) No
Violations of Law or Agreements.
the
making and performance of the Fourth Amendment will not violate any
provisions of any law or regulation, federal, state, local, or foreign, or
the
organizational documents of such Borrower, or result in any breach or violation
of, or constitute a default or require the obtaining of any consent under,
any
agreement or instrument by which such Borrower or its property may be
bound;
(d) No
Default.
no
Default or Event of Default has occurred and is continuing; and
(e) No
Material Adverse Effect.
No
Material Adverse Effect has occurred since September 23, 2005.
3. Conditions
to Effectiveness of Amendment.
This Fourth Amendment shall be effective upon the Administrative Agent’s
receipt of the following, each in form and substance reasonably satisfactory
to
the Banks:
(a)
Fourth
Amendment.
this Fourth Amendment, duly executed by the Borrowers and the Banks;
(b) Consent
and Waivers.
copies
of any consents or waivers necessary in order for the Borrowers to comply with
or perform any of its covenants, agreements or obligations contained in any
agreement, which are required as a result of the Borrowers’ execution of
this Fourth Amendment, if any; and
(c) Other
Documents and Actions.
such
additional agreements, instruments, documents, writings and actions as the
Banks
may reasonably request.
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4. Limited
Waiver and Consent; Ratification.
Subject
to the terms and conditions of this Fourth Amendment, the Banks and
Administrative Agent hereby waive the Outstanding Delivery Event (provided
that
the deliveries described thein occur not later than November 15, 2006) and
consent to the extension of the delivery date for Waived Delivery Event,
to a
date not later than November 15, 2006. Except
as
stated in the preceding sentence, the execution, delivery and performance
of
this Fourth Amendment shall not operate as a waiver of any right, power or
remedy of the Administrative Agent or the Banks under the Credit Agreement
or
any Loan Document, or constitute a waiver of any provision thereof. Except
as
expressly modified hereby, all terms, conditions and provisions of the Credit
Agreement and the other Loan Documents shall remain in full force and effect
and
are hereby ratified and confirmed by any Borrower. Nothing contained herein
constitutes an agreement or obligation by the Administrative Agent or any
Bank
to grant any further amendments to any of the Loan
Documents.
5. Acknowledgments.
To
induce the Banks to enter into this Fourth Amendment, each Borrower
acknowledges, agrees, warrants, and represents that:
(a) Acknowledgment
of Obligations; Collateral; Waiver of Claims.
(i) the
Loan Documents are valid and enforceable against, and all of the terms and
conditions of the Loan Documents are binding on, the Borrowers; (ii) the liens
and security interests granted to the Administrative Agent by the Borrowers
pursuant to the Loan Documents are valid, legal and binding, properly recorded
or filed and first priority perfected liens and security interests; and (iii)
the Borrowers hereby waive any and all defenses, set-offs and counterclaims
which they, whether jointly or severally, may have or claim to have against
the
Administrative Agent or any Bank as of the date hereof.
(b) No
Waiver of Existing Defaults.
Other
than the Delivery Event, no Default or Event of Default exists immediately
before or immediately after giving effect to this Fourth Amendment. Nothing
in this Fourth Amendment nor any communication between the Administrative
Agent, any Bank, any Borrower or any of their respective officers, agents,
employees or representatives shall be deemed to constitute a waiver of (i)
any
Default or Event of Default arising as a result of the foregoing representation
proving to be false or incorrect in any material respect; or (ii) any rights
or
remedies which the Administrative Agent or any Bank has against any Borrower
under the Credit Agreement or any other Loan Document and/or applicable law,
with respect to any such Default or Event of Default arising as a result of
the
foregoing representation proving to be false or incorrect in any material
respect.
6. Binding
Effect.
This Fourth Amendment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
7. Governing
Law.
This Fourth Amendment and all rights and obligations of the parties
hereunder shall be governed by and be construed and enforced in accordance
with
the laws of the Commonwealth of Pennsylvania without regard to Pennsylvania
or
federal principles of conflict of laws.
8. Headings.
The
headings of the sections of this Fourth Amendment are inserted for
convenience only and shall not be deemed to constitute a part of
this Fourth Amendment.
9. Counterparts.
This Fourth Amendment may be executed in any number of counterparts with
the same affect as if all of the signatures on such counterparts appeared on
one
document and each counterpart shall be deemed an original.
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IN
WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to
Credit Agreement to be executed under seal by their duly authorized officers,
all as of the day and year first written above.
ePLUS
inc.
By:
/s/
Xxxxxxx X. Xxxxxxxxx
Name:
Xxxxxxx
X. Xxxxxxxxx
Title:
Senior
Vice President
ePLUS
Group, inc.
By:
/s/
Xxxxxxx X. Xxxxxxxxx
Name:
Xxxxxxx
X. Xxxxxxxxx
Title:
Senior
Vice President
ePLUS
Government, inc.
By:
/s/
Xxxxxxx X. Xxxxxxxxx
Name:
Xxxxxxx
X. Xxxxxxxxx
Title:
Senior
Vice President
ePLUS
Capital, inc.
By:
/s/
Xxxxxxx X. Xxxxxxxxx
Name:
Xxxxxxx
X. Xxxxxxxxx
Title:
President
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NATIONAL
CITY BANK
By:
/s/
Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx
X. Xxxxxx
Title:
Senior
Vice President
BRANCH
BANKING AND TRUST COMPANY OF
VIRGINIA
By:
/s/
Xxxxxx X. Xxxxxxxxxxx
Name:
Xxxxxx
X. Xxxxxxxxxxx
Title:
Senior
Vice
President
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