FIFTH AMENDMENT TO CREDIT AGREEMENT
FIFTH
AMENDMENT TO CREDIT AGREEMENT
This
FIFTH AMENDMENT TO CREDIT AGREEMENT (the “Fifth Amendment”) dated November 15,
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, a Third Amendment dated August 30, 2006, and a Fourth
Amendment dated September 27, 2006 (as the same may be modified and amended
from
time to time, including by this Fifth 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 the following documents as required by Section 5.1
of
the Credit Agreement (a) their annual audited financial statements prior to
May
31, 2006, (b) their “Projections” for 2007 prior to June 30, 2006, (c) Borrowing
Base Certificates for the monthly periods ending through August 31, 2006; (d)
Compliance Certificate (Annual), for the period ending March 31, 2006; (e)
Compliance Certificate (Quarterly), for the period ending June 30, 2006; (f)
Financial Statements (Quarterly), for the period ending June 30, 2006; (g)
Inventory Report (Annual), for the period ending March 31, 2006; (h) Inventory
Report (Quarterly), for the period ending June 30, 2006; (i) Residual
Realization Report (Annual), for the period ending March 31, 2006; and (j)
Residual Realization Report (Quarterly), for the period ending June 30, 2006
(the “Waived Delivery Event”), which events were waived through November 15,
2006, pursuant to the Fourth Amendment, and have advised the Banks that they
will be unable to deliver such items in the timeframe set forth in the Fourth
Amendment.
C. The
Borrowers will not be able deliver the following documents as required by
Section 5.1 of the Credit Agreement (collectively, the “Ongoing Delivery
Event”): (a) Borrowing Base Certificates for the monthly periods ending through
September 30, 2006, October 31, 2006 and November 30, 2006; (b) Compliance
Certificate (Quarterly), for the period ending September 30, 2006; (c) Financial
Statements (Quarterly), for the period ending September 30, 2006; (d) Inventory
Report (Quarterly), for the period ending September 30, 2006; (e) Residual
Realization Report (Quarterly), for the period ending September 30,
2006.
D. The
Borrowers have requested an extension of the delivery date requirements for
the
Waived Delivery Event and for the Ongoing 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:
“Fifth
Amendment”
means
the Fifth Amendment to this Agreement dated November 15, 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 Ongoing 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 Fifth Amendment and any other documents which the Banks require such
Borrower to deliver hereunder (this Fifth Amendment and any such additional
documents delivered in connection with the Fifth 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 Fifth Amendment have been adopted and taken and, upon their
execution, the Credit Agreement, as amended by this Fifth 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 Fifth 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.
except
as is waived hereby, 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
Fifth Amendment shall be effective upon the Administrative Agent’s receipt of
the following, each in form and substance reasonably satisfactory to the
Banks:
(a) Fifth
Amendment.
this
Fifth 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
Fifth Amendment, if any; and
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(c) Other
Documents and Actions.
such
additional agreements, instruments, documents, writings and actions as the
Banks
may reasonably request.
4. Limited
Consent; Ratification.
Subject
to the terms and conditions of this Fifth Amendment, the Banks and
Administrative Agent hereby consent to Waived Delivery Event and the Ongoing
Delivery Event, to a date not later than January 15, 2007. Except as stated
in
the preceding sentence, the execution, delivery and performance of this Fifth
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 Fifth 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 Fifth Amendment. Nothing
in
this Fifth 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
Fifth Amendment shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
7. Governing
Law.
This
Fifth 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 Fifth Amendment are inserted for convenience
only and shall not be deemed to constitute a part of this Fifth
Amendment.
9. Counterparts.
This
Fifth 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 Fifth 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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