Exhibit 10.1


    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.

     

     

     

    
      
        -2-

      

    

    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.

    
 

     

    
      
        -3-

      

    

     

     

    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/
      Kleyton L. Parkhurst

    Name:
      Kleyton
      L. Parkhurst

    Title:
      Senior
      Vice President

     

    ePLUS
      Group, inc.

     

    By:
/s/
      Kleyton L. Parkhurst

    Name:
      Kleyton
      L. Parkhurst

    Title:
      Senior
      Vice President

     

    ePLUS
      Government, inc.

     

    By:
/s/
      Kleyton L. Parkhurst

    Name:
      Kleyton
      L. Parkhurst

    Title:
      Senior
      Vice President

     

    ePLUS
      Capital, inc.

     

    By:
/s/
      Kleyton L. Parkhurst

    Name:
      Kleyton
      L. Parkhurst

    Title:
      President

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

     

     

     

     

     

    
      
        -4-

      

    

    
                       

                                   NATIONAL
      CITY
      BANK

     

    By:
      /s/ Michael
      J. Labrum

    Name: 
Michael
      J. Labrum

    Title:
      Senior
      Vice President

    


     

    BRANCH
      BANKING AND TRUST COMPANY OF 

    VIRGINIA

     

    By:
/s/
      Ron Gudbrandsen       

    Name:
      Ron
      Gudbrandsen

    Title:
      Vice
      President

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    -5-