SECOND AMENDMENT TO CREDIT AGREEMENT
SECOND
AMENDMENT TO CREDIT AGREEMENT
This
SECOND AMENDMENT TO CREDIT AGREEMENT (the “Second Amendment”) dated July 28,
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 (as the same may be
modified and amended from time to time, including by this Second 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 “Delivery Event”), and have advised
the Banks that they will be unable to deliver their 2006 annual financial
statements in the timeframe set forth in the First Amendment.
C. The
Borrowers have requested an extension of the delivery date requirements for
their 2006 annual financial statements and Projections for 2007, as 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:
“Second
Amendment”
means
the Second Amendment to this Agreement dated July 28, 2006.
(c) Amended
Definition.
The
following definition in Article 1 of the Credit Agreement shall be amended
and
restated to read in its entirety as follows:
“EBIT”
means
the sum, for the Parent and its Subsidiaries on a consolidated basis, of (a)
Net
Income, plus
(b)
amounts deducted for interest and taxes, minus
(c)
income from extraordinary items, plus
(d)
losses from extraordinary items.
“EBITDA”
means
the sum of (i) EBIT, plus (ii) for the Parent and its Subsidiaries on a
consolidated basis, of amounts deducted from Net Income for depreciation and
amortization.
2. Representations
and Warranties.
Each
Borrower hereby represents and warrants to the Administrative Agent and each
Bank that, except as to the 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 Second Amendment and any other documents which the Banks require such
Borrower to deliver hereunder (this Second Amendment and any such additional
documents delivered in connection with the Second 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 Second Amendment have been adopted and taken and, upon their
execution, the Credit Agreement, as amended by this Second 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 Second 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
Second Amendment shall be effective upon the Administrative Agent’s receipt of
the following, each in form and substance reasonably satisfactory to the
Banks:
(a) Second
Amendment.
this
Second 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
Second 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 Second Amendment, the Banks and
Administrative Agent hereby waive the Delivery Event (provided that the delivery
of the required Projections for 2007 pursuant to Section 5.1(d) of the Credit
Agreement as amended hereby, occurs not later than August 31, 2006) and consent
to the extension of the delivery date for the 2006 audited financial statements,
pursuant to Section 5.1(a), to a date not later than August 31, 2006. Except
as
stated in the preceding sentence, the execution, delivery and performance of
this Second 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 Second 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 Second Amendment. Nothing
in
this Second 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
Second Amendment shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
7. Governing
Law.
This
Second 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 Second Amendment are inserted for convenience
only and shall not be deemed to constitute a part of this Second
Amendment.
9. Counterparts.
This
Second 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 Second 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/
Xxx Xxxxxxxxxxx
Name:
Xxx
Xxxxxxxxxxx
Title:
Vice
President
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