Document:

EXHIBIT 10.1

 

SECOND AMENDMENT

TO

SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

 

This SECOND AMENDMENT
TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this “Agreement”), is made and entered into as
of February 6, 2014 (the “Effective Date”), by and among James River Coal Company, a corporation organized under
the laws of Virginia (“JRCC”), and certain of JRCC’s Subsidiaries identified on the signature pages hereof,
as borrowers (such Subsidiaries, together with JRCC, are referred to hereinafter each individually as a “Borrower”,
and collectively, jointly and severally, as the “Borrowers”), and the other credit parties party hereto, identified
on the signature pages hereof as Guarantors (together, the Borrowers and Guarantors, the “Credit Parties”),
the Lenders (as hereinafter defined) party hereto, General Electric Capital Corporation (“GECC”), a corporation
formed under the laws of Delaware, as administrative agent for the Lenders (in such capacity, together with its successors and
assigns, if any, the “Administrative Agent”) and as collateral agent for the Lenders (in such capacity, the
“Collateral Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the
Borrowers, the other Credit Parties signatory thereto, the financial institutions from time to time party thereto as lenders (collectively,
the “Lenders”), the L/C Issuers from time to time party thereto, the Administrative Agent, the Collateral Agent,
and the other agents and arrangers from time to time party thereto are parties to that certain Second Amended and Restated Revolving
Credit Agreement, dated as of June 30, 2011 (as amended, restated, supplemented and otherwise modified from time to time, the “Credit
Agreement”), pursuant to which the Lenders and the L/C Issuers have committed to make certain loans and other extensions
of credit to the Borrowers upon the terms and conditions set forth therein; and

 

WHEREAS, the
Borrowers have requested that the undersigned Lenders and the Administrative Agent agree to amend certain of the terms and provisions
of the Credit Agreement as specifically set forth in this Agreement; and

 

WHEREAS, the
undersigned Lenders and the Administrative Agent are prepared to amend the Credit Agreement on the terms, subject to the conditions
and in reliance on the representations set forth herein.

 

NOW, THEREFORE,
in consideration of the premises, the covenants and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.          Defined Terms. Capitalized terms used herein and not otherwise defined herein shall have the meanings given to
such terms in the Credit Agreement (as amended hereby).

 

2.          Amendments to the Credit Agreement.

 

Section 1.01
of the Credit Agreement is hereby amended by deleting the definition of “Trigger Event Period” set forth therein and
substituting in lieu thereof the following new definition:

 

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““Trigger
Event Period” means any period (a) commencing upon the date that the sum of (w) cash received by the Administrative Agent
during the continuance of any Cash Dominion Event that (i) has not been transferred to the Borrowers or applied to pay any Obligations
or cash collateralize any Letter of Credit as of the date of determination thereof and (ii) is in excess of the outstanding Revolving
Advances on such date, (x) Unrestricted Cash, (y) Availability and (z) the Additional Advisor Expenditures is less than the Trigger
Event Amount and (b) ending on the date that the sum of (w) cash received by the Administrative Agent during the continuance of
any Cash Dominion Event that (i) has not been transferred to the Borrowers or applied to pay any Obligations or cash collateralize
any Letter of Credit as of the date of determination thereof and (ii) is in excess of the outstanding Revolving Advances on such
date, (x) Unrestricted Cash, (y) Availability and (z) the Additional Advisor Expenditures for a period of ninety (90) consecutive
calendar days equals or exceeds the Trigger Event Amount. For purposes of this Agreement, “Trigger Event Amount”
shall mean (a) $13,000,000 during the period (i) commencing on January 31, 2014 and (ii) ending on March 31, 2014, and (b) $35,000,000
at all other times and “Additional Advisor Expenditures” shall mean the actual cash payments made by
the Credit Parties to the Additional Advisor (as defined in the Second Amendment to Second Amended and Restated Revolving Credit
Agreement, dated as of February 6, 2014, by and among the Credit Parties, the Lenders, the Administrative Agent and the other parties
thereto) through such date of determination.”

 

3.          Supplemental
Terms, Conditions and Covenants. The Borrowers and the other Credit Parties hereby agree to comply with the following
terms, conditions and covenants notwithstanding any provision to the contrary set forth in this Amendment, the Credit Agreement
or any other Loan Document (failure to comply with any of the terms, conditions and covenants contained in this Section 3 shall
result in an immediate Event of Default).

 

(a)          The Borrowers and the other Credit Parties shall adhere with each of the milestones set forth on Exhibit A attached
hereto (the “Milestones”), in each case, within the time limits specified on such Exhibit (as such time limits
may be extended in writing by the Administrative Agent, the L/C Issuer and the Required Lenders).

 

(b)          Each of the Credit Parties shall cause appropriate representatives of Perella Weinberg Partners and the Additional Advisor
(as defined in the Milestones) (together, the “Advisors”) to meet (telephonically or otherwise) with the Administrative
Agent and the Lenders at such reasonable times during normal business hours and as often as may be reasonably requested by the
Administrative Agent, the L/C Issuer or the Required Lenders, to answer questions, to provide updates and to deliver such written
materials as may be reasonably requested by the Administrative Agent, the L/C Issuer or the Required Lenders relating to (i) the
Borrowers’ efforts to raise new debt and/or equity capital and/or sell some or all of the Credit Parties’ businesses
(any of the foregoing, a “Transaction”), including any proposed Transaction or any indication of interest or other
proposal or offer from any prospective investor or purchaser, (ii) the financial condition or the actual or projected financial
or operating results of the Credit Parties’ businesses and (iii) any other information required to be reported under the
Credit Agreement. Without limiting the foregoing provisions, commencing with the week of February 10, 2014, the Borrowers and the
Advisors shall have weekly status calls with the Administrative Agent and the Lenders regarding the status of the Milestones and/or
the financial condition or the actual or projected financial or operating results of the Credit Parties’ businesses.

 

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(c)          Each of the Credit Parties shall cooperate with and support each Advisor in connection with the scope of its engagement
under its respective engagement letter, including, without limitation, delivery of all information reasonably requested by the
Advisors, access to the Credit Parties’ officers, employees and advisors during normal business hours as the Advisors may
reasonably request and all other cooperation and actions required under the respective engagement letters.

 

(d)          On the Effective Date, the Borrowers shall have delivered to the Administrative Agent and Lenders, in each case, in form
and substance acceptable to the Lenders, (x) a cash flow budget (“Cash Flow Budget”) for the duration
of calendar year 2014 (on a monthly basis), including, without limitation, requirements for any additional financing, and (y) a
13-week cash flow budget (“13-Week Budget”) for the 13 week period commencing on January 31, 2014. The
Borrowers shall provide a weekly roll-forward of the 13-Week Budget, together with a written explanation of any material variances
from the prior week, on each Thursday thereafter. The payment of any amounts under the “Non-Operating Income” section
of the 13-Week Budget that is in excess of the amount set forth in the 13-Week Budget (or otherwise approved by the Administrative
Agent, the L/C Issuer and the Required Lenders) for such line item for such week shall be an immediate Event of Default.

 

(e)          If the absolute value of the “Total Operating Cash Flows” of the Borrowers (calculated in accordance with the
13-Week Budget, which, for the avoidance of doubt, shall include all receipts and disbursements other than those described in the
“Non-Operating Income” section of the 13-Week Budget, but shall exclude any fees and expenses paid to the Administrative
Agent, the Lenders or the Additional Advisor in excess of the amount budgeted for such expenditures) for the 4-week period commencing
with the week ending February 14, 2014 and ending with the week ending March 7, 2014 (the “Test Period”)
is greater than 110% of the absolute value of the aggregate budgeted Total Operating Cash Flows for the Test Period contained in
the 13-Week Budget, then it shall be an immediate Event of Default.

 

(f)          None of the Credit Parties shall amend, supplement, terminate or otherwise modify an engagement letter with an Advisor,
or terminate the engagement of an Advisor pursuant thereto, in each case without the prior written consent of the Administrative
Agent, the L/C Issuer and the Required Lenders, unless, in case of a termination, within five Business Days of such termination,
the Credit Parties engage a replacement advisor satisfactory to the Administrative Agent, the L/C Issuer and Required Lenders on
terms and conditions (including scope of engagement) satisfactory to the Administrative Agent, the L/C Issuer and the Required
Lenders.

 

(g)          Except for an engagement in accordance with clause (e) above, none of the Credit Parties shall engage any investment advisor,
financial advisor or any other similar advisor (other than the Advisors and Deutsche Bank Securities Inc. on terms and conditions
acceptable to the Administrative Agent, the L/C Issuer and the Required Lenders), unless such engagement is on terms and conditions
(including scope of engagement) satisfactory to the Administrative Agent, the L/C Issuer and the Required Lenders.

 

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(h)          Notwithstanding anything to the contrary contained in the Credit Agreement or any other Loan Document, including any conditions
or events otherwise required and the Limited Waiver below, a Cash Dominion Event shall be deemed to have occurred and be continuing
from the Effective Date through the later of (i) March 31, 2014 and (ii) the termination of all Trigger Event Periods. So long
as no Event of Default shall have occurred and be continuing, any cash received by the Administrative Agent pursuant to the exercise
of full cash dominion pursuant to any Control Agreement shall be applied first, to any Obligations then due and payable,
second, to any outstanding Revolving Advances not yet due and payable, and third, returned to the Borrowers. Any
cash received during the continuance of an Event of Default shall be applied in accordance with Section 2.09(a)(ii) of the Credit
Agreement.

 

4.          Affirmation and Acknowledgment of the Borrowers. The Borrowers hereby ratify and confirm all of their Obligations
to the Lenders, including, without limitation, the Loans, and the Borrowers hereby affirm their absolute and unconditional promise
to pay to the Lenders, the Administrative Agent, the Collateral Agent, each L/C Issuer and the Affiliates of each Lender, as applicable,
all indebtedness, obligations and liabilities in respect of the Loans, the Letters of Credit, and all other amounts due under the
Credit Agreement and the other Loan Documents as amended hereby. The Credit Parties hereby confirm that the Obligations are and
remain secured pursuant to the Loan Documents and pursuant to all other instruments and documents executed and delivered by the
Credit Parties as security for the Obligations.

 

5.          Limited Waiver.
Solely to the extent that any Default or Event of Default has occurred as a result of or related to the occurrence of any Trigger
Event Period (including with respect to Section 10.01 of the Credit Agreement), which would not have occurred had the Effective
Date occurred prior to the occurrence of such Default or Event of Default (the “Waived Defaults”), immediately upon
the Effective Date, the Administrative Agent and the Required Lenders hereby waive the Waived Defaults. Further, to the extent
any Trigger Event Period shall have commenced prior to the Effective Date, which would not have occurred had the Effective Date
occurred prior to the occurrence of such Trigger Event Period, notwithstanding anything to the contrary contained in the Credit
Agreement or any other Loan Document, such Trigger Event Period shall be deemed to have ceased immediately upon the occurrence
of the Effective Date.

 

6.          No Other Waivers,
Amendments or Consents.

 

Except for the amendments
and waivers expressly set forth and referred to in Sections 2 and 5 hereof, the Credit Agreement and the other Loan
Documents shall remain unchanged and in full force and effect. Nothing in this Agreement is intended or shall be construed to be
a novation of any Obligations or any part of the Credit Agreement or any of the other Loan Documents or to affect, modify or impair
the continuity or perfection of the Administrative Agent’s Liens under the Credit Agreement and Loan Documents.

 

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7.          Representations,
Warranties and Covenants. To induce the undersigned Lenders to enter into this Agreement, the Credit Parties hereby warrant,
represent and covenant to and with the Lenders and the Administrative Agent that:  (a) this Agreement has been duly authorized,
executed and delivered by the Credit Parties;  (b) this Agreement and
the Credit Agreement as amended hereby constitute legal, valid and binding obligations of the Credit Parties, enforceable in accordance
with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws, or by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity);  (c) after giving effect to this Agreement, no Default or Event of Default has occurred and is continuing as of this date;  (d) no approval or consent of, or filing with, any governmental agency or
authority is required to make valid and legally binding the execution, delivery or performance by the Credit Parties of this Agreement
or the Credit Agreement or any other Loan Document as amended hereby;  (e) after giving effect to this Agreement, all of the
representations and warranties made by the Credit Parties in the Credit Agreement and the other Loan Documents are true and correct
in all material respects on and as of the date of this Agreement (except to the extent that any such representations or warranties
expressly referred to a specific prior date); and (f) the Credit Parties have
provided the full, correct and complete copy of the engagement letter with Perella Weinberg Partners (as in effect on the Effective
Date) to the Administrative Agent. Any breach by the Credit Parties of any of its representations, warranties and covenants contained
in this Section 7 shall be an Event of Default under the Credit Agreement.

 

8.          Conditions
to Effectiveness. This Agreement shall not become effective unless and until the Administrative Agent has received (a)
one or more counterparts of this Agreement, duly executed, completed and delivered by the Borrowers, the other Credit Parties
and the Required Lenders and (b) a fully executed copy of the engagement letter with Perella Weinberg Partners (including all
exhibits and schedules thereto), together with any amendments, modifications or supplements thereto.

 

9.          Reimbursement
of Expenses. The Borrowers hereby agree to reimburse the Administrative Agent on demand for all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable and actual fees and expenses of its counsel) incurred by the
Administrative Agent in connection with the negotiation, documentation and consummation of this Agreement and the other documents
executed in connection herewith and the transactions contemplated hereby.

 

10.          Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

11.          Severability of Provisions. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. To the extent permitted
by applicable law, the Credit Parties hereby waive any provision of law that renders any provision hereof prohibited or unenforceable
in any respect.

 

12.          Counterparts.
This Agreement may be executed in any number of several counterparts, all of which shall be deemed to constitute but one original
and shall be binding upon all parties, their successors and permitted assigns. Delivery of an executed signature page of this
Agreement by facsimile transmission or other electronic transmission shall be as effective as delivery of a manually executed
counterpart hereof.

 

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13.          Entire Agreement.
The Credit Agreement as amended through this Agreement embodies the entire agreement between the parties hereto relating to the
subject matter thereof and supersedes all prior agreements, representations and understandings, if any, relating to the subject
matter thereof.

 

14.          No Strict
Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event
an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.

 

15.          No Third
Party Beneficiaries. This Agreement is solely for the benefit of the parties signatory hereto, their successors and permitted
assigns, and no other person or entity shall be a third party beneficiary of this Agreement.

 

16.          Release.
The Credit Parties hereby remise, release, acquit, satisfy and forever discharge the Lenders, the Administrative Agent, the Collateral
Agent, the L/C Issuer and the Affiliates of each Lender and their respective agents, employees, officers, directors, predecessors,
attorneys and all others acting or purporting to act on behalf of or at the direction of the Lenders, the Administrative Agent,
the Collateral Agent, the L/C Issuer or the Affiliates of each Lender (collectively, the “Releasees”) of and
from, and agree not to sue any Releasee in respect of, any and all manner of actions, causes of action, suit, debts, accounts,
covenants, contracts, controversies, agreements, variances, damages, judgments, claims, counterclaims and demands whatsoever,
in law or in equity, which any of such parties ever had, now has or may have against the Releasees, for, upon or by reason of
any matter, cause or thing whatsoever arising from, in connection with or in relation to the Credit Agreement or any of the other
Loan Documents (including this Agreement), whether existing on or prior to the date hereof or arising after the date hereof based
on facts, circumstances or events occurring or existing on or prior to the date hereof. Without limiting the generality of the
foregoing, the Credit Parties waive and affirmatively agree not to allege or otherwise pursue any defenses, affirmative defenses,
counterclaims, claims, causes of action, setoffs or other rights they do, shall or may have as of the date hereof or that arise
after the date hereof based on facts, circumstances or events occurring or existing on or prior to the date hereof, including,
but not limited to, the rights to contest any conduct of the Lenders, the Administrative Agent or other Releasees on or prior
to the date hereof. The Credit Parties hereby agree that if any Credit Party shall bring any cause of action, suit, claim, counterclaim,
demand or other action released pursuant to this Section 16, the Credit Parties shall jointly and severally pay on demand,
all fees, costs and expenses (including, without limitation, fees, costs and expenses of counsel) of any Releasee in connection
with or arising out of such Releasee’s defense of such cause of action, suit, claim, counterclaim, demand or other action
released pursuant to this Section 16.

 

[Remainder of page intentionally blank;
next page is signature page]

 

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IN WITNESS WHEREOF,
the parties have caused this Agreement to be duly executed by their respective duly authorized officers, effective as of the date
first above written.

 

BORROWERS:

 

 

JAMES RIVER COAL COMPANY

JAMES RIVER COAL SERVICE COMPANY

LEECO, INC.

TRIAD MINING, INC.

TRIAD UNDERGROUND MINING, LLC

BLEDSOE COAL CORPORATION

JOHNS CREEK ELKHORN COAL CORPORATION

BELL COUNTY COAL CORPORATION

JAMES RIVER COAL SALES, INC.

BLEDSOE COAL LEASING COMPANY

BLUE DIAMOND COAL COMPANY

MCCOY ELKHORN COAL CORPORATION

CHAFIN BRANCH COAL COMPANY, LLC

HAMPDEN COAL COMPANY, LLC

LAUREL MOUNTAIN RESOURCES, LLC

LOGAN & KANAWHA COAL CO., LLC

ROCKHOUSE CREEK DEVELOPMENT, LLC

SNAP CREEK MINING, LLC

 

 

 

By: /s/ Samuel M. Hopkins, II

Name: Samuel M. Hopkins, II

Title: Vice President

 

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GUARANTORS:

 

 

JOHNS CREEK PROCESSING COMPANY

JOHNS CREEK COAL COMPANY

SHAMROCK COAL COMPANY, INCORPORATED

EOLIA RESOURCES, INC.

BDCC HOLDING COMPANY, INC.

INTERNATIONAL RESOURCE PARTNERS LP

BUCK BRANCH RESOURCES LLC

INTERNATIONAL RESOURCES, LLC

INTERNATIONAL RESOURCES HOLDINGS I LLC

INTERNATIONAL RESOURCES HOLDINGS II LLC

IRP KENTUCKY LLC

IRP WV CORP.

JAMES RIVER ESCROW INC.

IRP LP HOLDCO INC.

IRP GP HOLDCO LLC

JELLICO MINING, LLC

 

 

 

By: /s/ Samuel M. Hopkins, II

Name: Samuel M. Hopkins, II

Title: Vice President

 

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LENDER, L/C ISSUER, ADMINISTRATIVE AGENT

AND COLLATERAL
AGENT:

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

 

By: /s/ Aamir
Moinuddin

       Name: Aamir Moinuddin

       Title: Duly Authorized
Signatory    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	9

    	 

    

 

LENDERS:

 

GE CAPITAL COMMERCIAL INC.

 

 

By:
/s/ Paul Sleet

       Name: Paul Sleet

       Title:   Duly Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	10

    	 

    

 

UBS
AG, Stamford Branch

 

By: /s/ Lana
Gifas

       Name: Lana Gifas

       Title: Director

                 Banking
Products Services, US

 

 

By:
/s/ Jennifer Anderson

       Name: Jennifer Anderson

       Title:
Associate Director

                 Banking
Product Services, US

 

 

 

 

 

 

 

 

 

 

 

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L/C ISSUER:

 

 

UBS AG, STAMFORD
BRANCH

 

 

By: /s/ Lana
Gifas

       Name: Lana Gifas

       Title: Director

                 Banking
Products Services, US

 

 

By:
/s/ Jennifer Anderson

       Name: Jennifer Anderson

       Title:
Associate Director

                 Banking
Product Services, US

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	12

    	 

    

 

EXHIBIT A

 

Milestones

 

		1.	On or before February 14, 2014, the Borrowers shall have engaged one additional advisor (the “Additional
Advisor”), which shall be acceptable to the Administrative Agent, the L/C Issuer and the Required Lenders, and such
engagement shall be evidenced by an engagement letter on terms and conditions, including as to scope of engagement, acceptable
to the Administrative Agent, the L/C Issuer and the Required Lenders.

 

		2.	On or before February 21, 2014, the Borrowers shall (a) deliver to the Administrative Agent a list
of all prospective investors and purchasers that the Borrowers and their advisors believe in good faith may be interested in engaging
in a Transaction (each a “Prospective Transaction Party”) and (b) contact each of the Prospective Transaction
Parties regarding a potential Transaction (which shall include, at a minimum, a potential sale of the Credit Parties’ businesses)
and request that each such Prospective Transaction Party execute a customary confidentiality agreement prior to receipt of the
Presentation (as defined below) and access to the Data Room (as defined below).

 

		3.	On or before February 28, 2014, the Borrowers and the other Credit Parties shall deliver a management
presentation (that shall include, at a minimum, all information that would customarily be provided in connection with the sale
of a business, the “Presentation”) acceptable to the Administrative Agent, the L/C Issuer and Required
Lenders, to each Prospective Transaction Party that has executed a customary confidentiality agreement, with a copy to the Administrative
Agent and the Lenders.

 

		4.	On or before March 7, 2014, the Borrowers and the other Credit Parties shall complete the preparation
of the “data room” (the “Data Room”) containing financial, operating and other documentation
for Prospective Transaction Parties to formulate a proposal for a Transaction, which shall include, at a minimum, all information
that would customarily be provided in connection with the sale of a business. Upon the completion of the Data Room, each Prospective
Transaction Party that has executed a customary confidentiality agreement shall have access to the Data Room until such Prospective
Transaction Party shall have had a reasonable opportunity to complete its due diligence. In addition, the Administrative Agent
and its advisors shall have access to the Data Room.

 

		5.	On a weekly basis from and after March 10, 2014, the Borrowers and the other Credit Parties shall
deliver to the Administrative Agent an updated report, in form satisfactory to the Administrative Agent, specifying for each Prospective
Transaction Party, (a) whether and/or when the Presentation was delivered to the Prospective Transaction Party, (b) whether and/or
when the Prospective Transaction Party was initially given access to the Data Room, (c) whether and/or when the Prospective Transaction
Party delivered a written indication of interest, letter of intent, highly confident letter, commitment letter or similar document
(or any revised version thereof), and (d) any other information reasonably requested by the Administrative Agent.

 

		6.	The Borrowers and the other Credit Parties (x) shall establish March 31, 2014, or an earlier date,
as the deadline for each Prospective Transaction Party’s submission of a letter of intent to engage in a Transaction, and
(y) shall have delivered to the Administrative Agent on that date one or more of the following: (i) in the case of a Transaction
that is a sale of assets, a letter of intent; and (ii) in the case of a Transaction that is a debt or equity issuance, a commitment
letter, that individually or together provide for Transactions that will close on the same date (which shall in no event, in the
good faith judgment of the Administrative Agent, the L/C Issuer and the Required Lenders, be expected to be later than June 30,
2014 (or if such Transaction is a debt or equity issuance, July 31, 2014) and, in the aggregate, shall provide (or in the good
faith judgment of the Administrative Agent, the L/C Issuer and the Required Lenders, can be expected to provide) net cash proceeds
on that date sufficient to repay all outstanding Obligations in full and otherwise on terms and conditions acceptable to the Administrative
Agent, the L/C Issuer and the Required Lenders.

 

 

    	13ex4_7.htm

Exhibit 4.7

 

EPLUS INC.

AND

__________, AS WARRANT AGENT

FORM OF DEBT SECURITIES

WARRANT AGREEMENT

DATED AS OF                     , 20__

EPLUS INC.

FORM OF DEBT SECURITIES WARRANT AGREEMENT

THIS DEBT SECURITIES WARRANT AGREEMENT (this “Agreement”), dated as of                           , 20__, between ePlus inc., a Delaware corporation (the “Company”) and __________, a [corporation] [national banking association] organized and existing under the laws of __________ and having a corporate trust office in __________, as warrant agent (the “Warrant Agent”).

 

WHEREAS, the Company has entered into an indenture dated as of                   , 20__ (the “Senior Indenture”), with __________, as trustee (such trustee, and any successors to such trustee, herein called the “Senior Trustee”), providing for the issuance from time to time of its unsubordinated debt securities, to be issued in one or more series as provided in the Senior Indenture (the “Debt Securities”);] [                , 20__ (the “Subordinated Indenture”), with __________, as trustee (such trustee, and any successors to such trustee, herein called the “Subordinated Trustee”), providing for the issuance from time to time of its subordinated debt securities, to be issued in one or more series as provided in the Subordinated Indenture (the “Debt Securities”);]

 

WHEREAS, the Company proposes to sell [If Warrants are sold with other securities — title of such other securities being offered] (the “Other Securities”) with] warrant certificates evidencing one or more warrants (the “Warrants” or, individually, a “Warrant”) representing the right to purchase [title of Debt Securities purchasable through exercise of Warrants] (the “Warrant Debt Securities”), such warrant certificates and other warrant certificates issued pursuant to this Agreement being herein called the “Warrant Certificates”; and

 

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance, registration, transfer, exchange, exercise and replacement of the Warrant Certificates, and in this Agreement wishes to set forth, among other things, the form and provisions of the Warrant Certificates and the terms and conditions on which they may be issued, registered, transferred, exchanged, exercised and replaced.

 

NOW THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the parties hereto agree as follows:

ARTICLE 1

ISSUANCE OF WARRANTS AND EXECUTION AND

DELIVERY OF WARRANT CERTIFICATES

1.1               Issuance of Warrants. [If Warrants alone — Upon issuance, each Warrant Certificate shall evidence one or more Warrants.] [If Other Securities and Warrants — Warrant Certificates will be issued in connection with the issuance of the Other Securities but shall be separately transferable and each Warrant Certificate shall evidence one or more Warrants.] Each Warrant evidenced thereby shall represent the right, subject to the provisions contained herein and therein, to purchase one Warrant Debt Security. [If Other Securities and Warrants — Warrant Certificates will be issued with the Other Securities and each Warrant Certificate will evidence __________ Warrants for each [$                principal amount] [__________ shares] of Other Securities issued.]

 

1.2               Execution and Delivery of Warrant Certificates. Each Warrant Certificate, whenever issued, shall be in registered form substantially in the form set forth in Exhibit A hereto, shall be dated the date of its countersignature by the Warrant Agent and may have such letters, numbers, or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the officers of the Company executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange on which the Warrants may be listed, or to conform to usage. The Warrant Certificates shall be signed on behalf of the Company by any of its present or future chief executive officers, presidents, senior vice presidents, vice presidents, chief financial officers, chief legal officers, treasurers, assistant treasurers, controllers, assistant controllers, secretaries or assistant secretaries under its corporate seal reproduced thereon. Such signatures may be manual or facsimile signatures of such authorized officers and may be imprinted or otherwise reproduced on the Warrant Certificates. The seal of the Company may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant Certificates.

 

No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced thereby shall be exercisable, until such Warrant Certificate has been countersigned by the manual signature of the Warrant Agent. Such signature by the Warrant Agent upon any Warrant Certificate executed by the Company shall be conclusive evidence that the Warrant Certificate so countersigned has been duly issued hereunder.

 

In case any officer of the Company who shall have signed any of the Warrant Certificates either manually or by facsimile signature shall cease to be such officer before the Warrant Certificates so signed shall have been countersigned and delivered by the Warrant Agent, such Warrant Certificates may be countersigned and delivered notwithstanding that the person who signed such Warrant Certificates ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Warrant Certificate, shall be the proper officers of the Company, although at the date of the execution of this Agreement any such person was not such officer.

2

The term “holder” or “holder of a Warrant Certificate” as used herein shall mean any person in whose name at the time any Warrant Certificate shall be registered upon the books to be maintained by the Warrant Agent for that purpose.

 

1.3               Issuance of Warrant Certificates. Warrant Certificates evidencing the right to purchase Warrant Debt Securities may be executed by the Company and delivered to the Warrant Agent upon the execution of this Warrant Agreement or from time to time thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly executed on behalf of the Company, countersign such Warrant Certificates and shall deliver such Warrant Certificates to or upon the order of the Company.

ARTICLE 2

WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS

2.1               Warrant Price. During the period specified in Section 2.2, each Warrant shall, subject to the terms of this Warrant Agreement and the applicable Warrant Certificate, entitle the holder thereof, to purchase the principal amount of Warrant Debt Securities specified in the applicable Warrant Certificate at an exercise price of           % of the principal amount thereof [plus accrued amortization, if any, of the original issue discount of the Warrant Debt Securities] [plus accrued interest, if any, from the most recent date from which interest shall have been paid on the Warrant Debt Securities or, if no interest shall have been paid on the Warrant Debt Securities, from the date of their initial issuance.] [The original issue discount ($                for each $          principal amount of Warrant Debt Securities) will be amortized at a         % annual rate, computed on a[n] [semi-]annual basis [using a 360-day year consisting of twelve 30-day months].] Such purchase price for the Warrant Debt Securities is referred to in this Agreement as the “Warrant Price.”

 

2.2               Duration of Warrants. Each Warrant may be exercised in whole or in part at any time, as specified herein, on or after [the date thereof]                 , 20__ and at or before                 [a.m.] [p.m.], [City] time, on                 , 20__ or such later date as the Company may designate by notice to the Warrant Agent and the holders of Warrant Certificates mailed to their addresses as set forth in the record books of the Warrant Agent (the “Expiration Date”). Each Warrant not exercised at or before                 [a.m.][p.m.], [City] time, on the Expiration Date shall become void, and all rights of the holder of the Warrant Certificate evidencing such Warrant under this Agreement shall cease.

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2.3               Exercise of Warrants.

 

(a)            During the period specified in Section 2.2, the Warrants may be exercised to purchase a whole number of Warrant Debt Securities in registered form by providing certain information as set forth on the reverse side of the Warrant Certificate and by paying in full, in lawful money of the United States of America, [in cash or by certified check or official bank check in New York Clearing House funds] [by bank wire transfer in immediately available funds] the Warrant Price for each Warrant Debt Security with respect to which a Warrant is being exercised to the Warrant Agent at its corporate trust office, provided that such exercise is subject to receipt within five business days of such payment by the Warrant Agent of the Warrant Certificate with the form of election to purchase Warrant Debt Securities set forth on the reverse side of the Warrant Certificate properly completed and duly executed. The date on which payment in full of the Warrant Price is received by the Warrant Agent shall, subject to receipt of the Warrant Certificate as aforesaid, be deemed to be the date on which the Warrant is exercised; provided, however, that if, at the date of receipt of such Warrant Certificates and payment in full of the Warrant Price, the transfer books for the Warrant Debt Securities purchasable upon the exercise of such Warrants shall be closed, no such receipt of such Warrant Certificates and no such payment of such Warrant Price shall be effective to constitute the person so designated to be named as the holder of record of such Warrant Debt Securities on such date, but shall be effective to constitute such person as the holder of record of such Warrant Debt Securities for all purposes at the opening of business on the next succeeding day on which the transfer books for the Warrant Debt Securities purchasable upon the exercise of such Warrants shall be opened, and the certificates for the Warrant Debt Securities in respect of which such Warrants are then exercised shall be issuable as of the date on such next succeeding day on which the transfer books shall next be opened, and until such date the Company shall be under no duty to deliver any certificate for such Warrant Debt Securities. The Warrant Agent shall deposit all funds received by it in payment of the Warrant Price in an account of the Company maintained with it and shall advise the Company by telephone at the end of each day on which a payment for the exercise of Warrants is received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephone advice to the Company in writing.

 

(b)            The Warrant Agent shall, from time to time, as promptly as practicable, advise the Company of (i) the number of Warrant Debt Securities with respect to which Warrants were exercised, (ii) the instructions of each holder of the Warrant Certificates evidencing such Warrants with respect to delivery of the Warrant Debt Securities to which such holder is entitled upon such exercise, (iii) delivery of Warrant Certificates evidencing the balance, if any, of the Warrants for the remaining Warrant Debt Securities after such exercise, and (iv) such other information as the Company or the [Senior] [Subordinated] Trustee shall reasonably require.

 

(c)            As soon as practicable after the exercise of any Warrant, the Company shall issue, pursuant to the Indenture, in authorized denominations, to or upon the order of the holder of the Warrant Certificate evidencing such Warrant, the Warrant Debt Securities to which such holder is entitled, in fully registered form, registered in such name or names as may be directed by such holder. If fewer than all of the Warrants evidenced by such Warrant Certificate are exercised, the Company shall execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, a new Warrant Certificate evidencing Warrants for the number of Warrant Debt Securities remaining unexercised.

 

(d)            The Company shall not be required to pay any stamp or other tax or other governmental charge required to be paid in connection with any transfer involved in the issue of the Warrant Debt Securities, and in the event that any such transfer is involved, the Company shall not be required to issue or deliver any Warrant Debt Securities until such tax or other charge shall have been paid or it has been established to the Company’s satisfaction that no such tax or other charge is due.

 

(e)            Prior to the issuance of any Warrants there shall have been reserved, and the Company shall at all times through the Expiration Date keep reserved, out of its authorized but unissued Warrant Debt Securities, a number of shares sufficient to provide for the exercise of the Warrants.

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ARTICLE 3

OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF

WARRANT CERTIFICATES

3.1               No Rights as Holders of Warrant Debt Securities Conferred by Warrants or Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby shall entitle the holder thereof to any of the rights of a holder of Warrant Debt Securities, including, without limitation, the right to receive the payment of principal of (or premium, if any) or interest, if any, on the Warrant Debt Securities or to enforce any of the covenants in the Indenture.

 

3.2               Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it and the Company of the ownership of and the loss, theft, destruction or mutilation of any Warrant Certificate and/or indemnity reasonably satisfactory to the Warrant Agent and the Company and, in the case of mutilation, upon surrender of the mutilated Warrant Certificate to the Warrant Agent for cancellation, then, in the absence of notice to the Company or the Warrant Agent that such Warrant Certificate has been acquired by a bona fide purchaser, the Company shall execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, in exchange for or in lieu of the lost, stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the same tenor and evidencing Warrants for a like principal amount of Warrant Debt Securities. Upon the issuance of any new Warrant Certificate under this Section 3.2, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Warrant Agent) in connection therewith. Every substitute Warrant Certificate executed and delivered pursuant to this Section 3.2 in lieu of any lost, stolen or destroyed Warrant Certificate shall represent an additional contractual obligation of the Company, whether or not the lost, stolen or destroyed Warrant Certificate shall be at any time enforceable by anyone, and shall be entitled to the benefits of this Agreement equally and proportionately with any and all other Warrant Certificates duly executed and delivered hereunder. The provisions of this Section 3.2 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement of mutilated, lost, stolen or destroyed Warrant Certificates.

 

3.3               Holder of Warrant Certificate May Enforce Rights. Notwithstanding any of the provisions of this Agreement, any holder of a Warrant Certificate, without the consent of the Warrant Agent, the [Senior] [Subordinated] Trustee, the holder of any Warrant Debt Securities or the holder of any other Warrant Certificate, may, in such holder’s own behalf and for such holder’s own benefit, enforce and may institute and maintain any suit, action or proceeding against the Company suitable to enforce, or otherwise in respect of, such holder’s right to exercise the Warrants evidenced by such holder’s Warrant Certificate in the manner provided in such holder’s Warrant Certificates and in this Agreement.

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3.4               Merger, Sale, Conveyance or Lease. In case of (a) any share exchange, merger or similar transaction of the Company with or into another person or entity (other than a share exchange, merger or similar transaction in which the Company is the acquiring or surviving corporation) or (b) the sale, exchange, lease, transfer or other disposition of all or substantially all of the properties and assets of the Company as an entirety (in any such case, a “Reorganization Event”), then, as a condition of such Reorganization Event, lawful provisions shall be made, and duly executed documents evidencing the same from the Company’s successor shall be delivered to the holders of the Warrants, so that such successor shall succeed to and be substituted for the Company, and assume all the Company’s obligations under, this Agreement and the Warrants. The Company shall thereupon be relieved of any further obligation hereunder or under the Warrants, and the Company as the predecessor corporation may thereupon or at any time thereafter be dissolved, wound up or liquidated. Such successor or assuming entity thereupon may cause to be signed, and may issue either in its own name or in the name of the Company, any or all of the Warrants issuable hereunder which heretofore shall not have been signed by the Company, and may execute and deliver securities in its own name, in fulfillment of its obligations to deliver Warrant Debt Securities upon exercise of the Warrants. All the Warrants so issued shall in all respects have the same legal rank and benefit under this Agreement as the Warrants theretofore or thereafter issued in accordance with the terms of this Agreement as though all of such Warrants had been issued at the date of the execution hereof. In any case of any such Reorganization Event, such changes in phraseology and form (but not in substance) may be made in the Warrants thereafter to be issued as may be appropriate. The Warrant Agent may receive a written opinion of legal counsel as conclusive evidence that any such Reorganization Event complies with the provisions of this Section 3.4.

 

3.5               Notice to Warrantholders. In case the Company shall (a) effect any Reorganization Event or (b) make any distribution on or in respect of the [title of Warrant Debt Securities] in connection with the dissolution, liquidation or winding up of the Company, then the Company shall mail to each holder of Warrants at such holder’s address as it shall appear on the books of the Warrant Agent, at least ten days prior to the applicable date hereinafter specified, a notice stating the date on which such Reorganization Event, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of [title of Warrant Debt Securities] of record shall be entitled to exchange their shares of [title of Warrant Debt Securities] for securities or other property deliverable upon such Reorganization Event, dissolution, liquidation or winding up. No failure to mail such notice nor any defect therein or in the mailing thereof shall affect any such transaction.

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ARTICLE 4

EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES

4.1               Exchange and Transfer of Warrant Certificates. Upon surrender at the corporate trust office of the Warrant Agent, Warrant Certificates evidencing Warrants may be exchanged for Warrant Certificates in other denominations evidencing such Warrants or the transfer thereof may be registered in whole or in part; provided that such other Warrant Certificates evidence Warrants for the same aggregate principal amount of Warrant Debt Securities as the Warrant Certificates so surrendered. The Warrant Agent shall keep, at its corporate trust office, books in which, subject to such reasonable regulations as it may prescribe, it shall register Warrant Certificates and exchanges and transfers of outstanding Warrant Certificates, upon surrender of the Warrant Certificates to the Warrant Agent at its corporate trust office for exchange or registration of transfer, properly endorsed or accompanied by appropriate instruments of registration of transfer and written instructions for transfer, all in form satisfactory to the Company and the Warrant Agent. No service charge shall be made for any exchange or registration of transfer of Warrant Certificates, but the Company may require payment of a sum sufficient to cover any stamp or other tax or other governmental charge that may be imposed in connection with any such exchange or registration of transfer. Whenever any Warrant Certificates are so surrendered for exchange or registration of transfer, an authorized officer of the Warrant Agent shall manually countersign and deliver to the person or persons entitled thereto a Warrant Certificate or Warrant Certificates duly authorized and executed by the Company, as so requested. The Warrant Agent shall not be required to effect any exchange or registration of transfer which will result in the issuance of a Warrant Certificate evidencing a Warrant for a fraction of a Warrant Debt Security or a number of Warrants for a whole number of Warrant Debt Securities and a fraction of a Warrant Debt Security. All Warrant Certificates issued upon any exchange or registration of transfer of Warrant Certificates shall be the valid obligations of the Company, evidencing the same obligations and entitled to the same benefits under this Agreement as the Warrant Certificate surrendered for such exchange or registration of transfer.

 

4.2               Treatment of Holders of Warrant Certificates. The Company, the Warrant Agent and all other persons may treat the registered holder of a Warrant Certificate as the absolute owner thereof for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding.

 

4.3               Cancellation of Warrant Certificates. Any Warrant Certificate surrendered for exchange, registration of transfer or exercise of the Warrants evidenced thereby shall, if surrendered to the Company, be delivered to the Warrant Agent and all Warrant Certificates surrendered or so delivered to the Warrant Agent shall be promptly canceled by the Warrant Agent and shall not be reissued and, except as expressly permitted by this Agreement, no Warrant Certificate shall be issued hereunder in exchange therefor or in lieu thereof. The Warrant Agent shall deliver to the Company from time to time or otherwise dispose of canceled Warrant Certificates in a manner satisfactory to the Company.

ARTICLE 5

CONCERNING THE WARRANT AGENT

5.1               Warrant Agent. The Company hereby appoints __________ as Warrant Agent of the Company in respect of the Warrants and the Warrant Certificates upon the terms and subject to the conditions herein set forth, and __________ hereby accepts such appointment. The Warrant Agent shall have the powers and authority granted to and conferred upon it in the Warrant Certificates and hereby and such further powers and authority to act on behalf of the Company as the Company may hereafter grant to or confer upon it. All of the terms and provisions with respect to such powers and authority contained in the Warrant Certificates are subject to and governed by the terms and provisions hereof.

 

5.2                Conditions of Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms and conditions hereof, including the following to all of which the Company agrees and to all of which the rights hereunder of the holders from time to time of the Warrant Certificates shall be subject:

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(a)            Compensation and Indemnification. The Company agrees promptly to pay the Warrant Agent the compensation to be agreed upon with the Company for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable counsel fees) incurred without negligence, bad faith or willful misconduct by the Warrant Agent in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without negligence, bad faith or willful misconduct on the part of the Warrant Agent, arising out of or in connection with its acting as Warrant Agent hereunder, including the reasonable costs and expenses of defending against any claim of such liability.

 

(b)            Agent for the Company. In acting under this Warrant Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not assume any obligations or relationship of agency or trust for or with any of the holders of Warrant Certificates or beneficial owners of Warrants.

 

(c)            Counsel. The Warrant Agent may consult with counsel satisfactory to it, which may include counsel for the Company, and the written advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice of such counsel.

 

(d)            Documents. The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted by it in reliance upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper parties.

 

(e)            Certain Transactions. The Warrant Agent, and its officers, directors and employees, may become the owner of, or acquire any interest in, Warrants, with the same rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of holders of Warrant Debt Securities or other obligations of the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as [Senior][Subordinated] Trustee under the [Senior] [Subordinated] Indenture.

 

(f)            No Liability for Interest. Unless otherwise agreed with the Company, the Warrant Agent shall have no liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates.

 

(g)            No Liability for Invalidity. The Warrant Agent shall have no liability with respect to any invalidity of this Agreement or any of the Warrant Certificates (except as to the Warrant Agent’s countersignature thereon).

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(h)            No Responsibility for Representations. The Warrant Agent shall not be responsible for any of the recitals or representations herein or in the Warrant Certificates (except as to the Warrant Agent’s countersignature thereon), all of which are made solely by the Company.

 

(i)            No Implied Obligations. The Warrant Agent shall be obligated to perform only such duties as are herein and in the Warrant Certificates specifically set forth and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any of the Warrant Certificates authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrant Certificates. The Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein or in the Warrant Certificates or in the case of the receipt of any written demand from a holder of a Warrant Certificate with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or, except as provided in Section 6.2 hereof, to make any demand upon the Company.

 

5.3               Resignation, Removal and Appointment of Successors.

 

(a)            The Company agrees, for the benefit of the holders from time to time of the Warrant Certificates, that there shall at all times be a Warrant Agent hereunder until all the Warrants have been exercised or are no longer exercisable.

 

(b)            The Warrant Agent may at any time resign as agent by giving written notice to the Company of such intention on its part, specifying the date on which its desired resignation shall become effective; provided that such date shall not be less than three months after the date on which such notice is given unless the Company otherwise agrees. The Warrant Agent hereunder may be removed at any time by the filing with it of an instrument in writing signed by or on behalf of the Company and specifying such removal and the intended date when it shall become effective. Such resignation or removal shall take effect upon the appointment by the Company, as hereinafter provided, of a successor Warrant Agent (which shall be a bank or trust company authorized under the laws of the jurisdiction of its organization to exercise corporate trust powers) and the acceptance of such appointment by such successor Warrant Agent. The obligation of the Company under Section 5.2(a) shall continue to the extent set forth therein notwithstanding the resignation or removal of the Warrant Agent.

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(c)            In case at any time the Warrant Agent shall resign, or shall be removed, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or shall commence a voluntary case under the Federal bankruptcy laws, as now or hereafter constituted, or under any other applicable Federal or state bankruptcy, insolvency or similar law or shall consent to the appointment of or taking possession by a receiver, custodian, liquidator, assignee, trustee, sequestrator (or other similar official) of the Warrant Agent or its property or affairs, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall take corporate action in furtherance of any such action, or a decree or order for relief by a court having jurisdiction in the premises shall have been entered in respect of the Warrant Agent in an involuntary case under the Federal bankruptcy laws, as now or hereafter constituted, or any other applicable Federal or state bankruptcy, insolvency or similar law, or a decree or order by a court having jurisdiction in the premises shall have been entered for the appointment of a receiver, custodian, liquidator, assignee, trustee, sequestrator (or similar official) of the Warrant Agent or of its property or affairs, or any public officer shall take charge or control of the Warrant Agent or of its property or affairs for the purpose of rehabilitation, conservation, winding up or liquidation, a successor Warrant Agent, qualified as aforesaid, shall be appointed by the Company by an instrument in writing, filed with the successor Warrant Agent. Upon the appointment as aforesaid of a successor Warrant Agent and acceptance by the successor Warrant Agent of such appointment, the Warrant Agent shall cease to be Warrant Agent hereunder.

 

(d)            Any successor Warrant Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the Company an instrument accepting such appointment hereunder, and thereupon such successor Warrant Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of such predecessor with like effect as if originally named as Warrant Agent hereunder, and such predecessor, upon payment of its charges and disbursements then unpaid, shall thereupon become obligated to transfer, deliver and pay over, and such successor Warrant Agent shall be entitled to receive, all monies, securities and other property on deposit with or held by such predecessor, as Warrant Agent hereunder.

 

(e)            Any corporation into which the Warrant Agent hereunder may be merged or converted or any corporation with which the Warrant Agent may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Warrant Agent shall be a party, or any corporation to which the Warrant Agent shall sell or otherwise transfer all or substantially all the assets and business of the Warrant Agent, provided that it shall be qualified as aforesaid, shall be the successor Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto.

 

ARTICLE 6

MISCELLANEOUS

6.1               Amendment. This Agreement may be amended by the parties hereto, without the consent of the holder of any Warrant Certificate, for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein, or making any other provisions with respect to matters or questions arising under this Agreement as the Company and the Warrant Agent may deem necessary or desirable; provided that such action shall not materially adversely affect the interests of the holders of the Warrant Certificates.

6.2               Notices and Demands to the Company and Warrant Agent. If the Warrant Agent shall receive any notice or demand addressed to the Company by the holder of a Warrant Certificate pursuant to the provisions of the Warrant Certificates, the Warrant Agent shall promptly forward such notice or demand to the Company.

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6.3               Addresses. Any communication from the Company to the Warrant Agent with respect to this Agreement shall be addressed to __________, Attention: __________ and any communication from the Warrant Agent to the Company with respect to this Agreement shall be addressed to ePlus inc., 13595 Dulles Technology Drive, Herndon, VA 20171, Attention: General Counsel (or such other address as shall be specified in writing by the Warrant Agent or by the Company).

 

6.4               Governing Law. This Agreement and each Warrant Certificate issued hereunder shall be governed by and construed in accordance with the laws of the State of New York.

 

6.5               Delivery of Prospectus. The Company shall furnish to the Warrant Agent sufficient copies of a prospectus meeting the requirements of the Securities Act of 1933, as amended, relating to the Warrant Debt Securities deliverable upon exercise of the Warrants (the “Prospectus”), and the Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to the holder of the Warrant Certificate evidencing such Warrant, prior to or concurrently with the delivery of the Warrant Debt Securities issued upon such exercise, a Prospectus. The Warrant Agent shall not, by reason of any such delivery, assume any responsibility for the accuracy or adequacy of such Prospectus.

 

6.6               Obtaining of Governmental Approvals. The Company will from time to time take all action which may be necessary to obtain and keep effective any and all permits, consents and approvals of governmental agencies and authorities and securities act filings under United States Federal and state laws (including without limitation a registration statement in respect of the Warrants and Warrant Debt Securities under the Securities Act of 1933, as amended), which may be or become requisite in connection with the issuance, sale, transfer, and delivery of the Warrant Debt Securities issued upon exercise of the Warrants, the issuance, sale, transfer and delivery of the Warrants or upon the expiration of the period during which the Warrants are exercisable.

 

6.7               Persons Having Rights under Warrant Agreement. Nothing in this Agreement shall give to any person other than the Company, the Warrant Agent and the holders of the Warrant Certificates any right, remedy or claim under or by reason of this Agreement.

 

6.8               Headings. The descriptive headings of the several Articles and Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

 

6.9               Counterparts. This Agreement may be executed in any number of counterparts, each of which as so executed shall be deemed to be an original, but such counterparts shall together constitute but one and the same instrument.

 

6.10            Inspection of Agreement. A copy of this Agreement shall be available at all reasonable times at the principal corporate trust office of the Warrant Agent for inspection by the holder of any Warrant Certificate. The Warrant Agent may require such holder to submit his Warrant Certificate for inspection by it.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the day and year first above written.

 

	 	
ePlus inc., as Company

	 	
 

	
 

	 	
By:

	
 

	 	
Name:

	
 

	 	
Title:

	
 

	 	
ATTEST:

	
 

	 	
 

	 	
COUNTERSIGNED

	 	
 

	 	
__________, as Warrant Agent

 

	 	
By:

	
 

	 	
Name:

	
 

	 	
Title:

	
 

	 	
ATTEST:

	
 

[SIGNATURE PAGE TO DEBT SECURITIES WARRANT AGREEMENT]

EXHIBIT A

FORM OF WARRANT CERTIFICATE

[FACE OF WARRANT CERTIFICATE]

[Form of Legend if Warrants are not immediately exercisable.]

 

[Prior to                , 20__ Warrants evidenced by this Warrant Certificate cannot be exercised.]

EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT AGENT AS

PROVIDED HEREIN

VOID AFTER                , 20__ [A.M.][P.M.], [City] time, on                , 20__.

EPLUS INC.

WARRANT CERTIFICATE REPRESENTING

WARRANTS TO PURCHASE

[TITLE OF WARRANT DEBT SECURITIES]

 

	
No. __________

	
 

	
__________ Warrants

This certifies that __________ or registered assigns is the registered owner of the above indicated number of Warrants, each Warrant entitling such owner to purchase, at any time [after                 [a.m.] [p.m.], [City] time, [on                 , 20__ and] on or before                 [a.m.][p.m.], [City] time, on, $                principal amount of [Title of Warrant Debt Securities] (the “Warrant Debt Securities”) of ePlus inc. (the “Company”) issued or to be issued under the Indenture (as hereinafter defined), on the following basis: during the period from                   , 20__, through and including                 , 20__, each Warrant shall entitle the Holder thereof, subject to the provisions of this Agreement, to purchase the principal amount of Warrant Debt Securities stated in the Warrant Certificate at the warrant price (the “Warrant Price”) of        % of the principal amount thereof [plus accrued amortization, if any, of the original issue discount of the Warrant Debt Securities] [plus accrued interest, if any, from the most recent date from which interest shall have been paid on the Warrant Debt Securities or, if no interest shall have been paid on the Warrant Debt Securities, from the date of their original issuance]. [The original issue discount ($        for each $            principal amount of Warrant Debt Securities) will be amortized at a          % annual rate, computed on a[n] [semi-]annual basis [using a 360-day year consisting of twelve 30-day months]. The Holder may exercise the Warrants evidenced hereby by providing certain information set forth on the back hereof and by paying in full, in lawful money of the United States of America, [in cash or by certified check or official bank check in New York Clearing House funds] [by bank wire transfer in immediately available funds], the Warrant Price for each Warrant Debt Security with respect to which this Warrant is exercised to the Warrant Agent (as hereinafter defined) and by surrendering this Warrant Certificate, with the purchase form on the back hereof duly executed, at the corporate trust office of [name of Warrant Agent], or its successor as warrant agent (the “Warrant Agent”), which is, on the date hereof, at the address specified on the reverse hereof, and upon compliance with and subject to the conditions set forth herein and in the Warrant Agreement (as hereinafter defined).

A-1

The term “Holder” as used herein shall mean the person in whose name at the time this Warrant Certificate shall be registered upon the books to be maintained by the Warrant Agent for that purpose pursuant to Section 4 of the Warrant Agreement.

 

The Warrants evidenced by this Warrant Certificate may be exercised to purchase Warrant Debt Securities in the principal amount of $                or any integral multiple thereof in registered form. Upon any exercise of fewer than all of the Warrants evidenced by this Warrant Certificate, there shall be issued to the Holder hereof a new Warrant Certificate evidencing Warrants for the aggregate principal amount of Warrant Debt Securities remaining unexercised.

 

This Warrant Certificate is issued under and in accordance with the Warrant Agreement dated as of                    , 20__ (the “Warrant Agreement”), between the Company and the Warrant Agent and is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the Holder of this Warrant Certificate consents by acceptance hereof. Copies of the Warrant Agreement are on file at the above-mentioned office of the Warrant Agent.

 

The Warrant Debt Securities to be issued and delivered upon the exercise of Warrants evidenced by this Warrant Certificate will be issued under and in accordance with an Indenture, [dated as of                   , 20__ (the “Senior Indenture”), between the Company and __________, as trustee (such trustee, and any successors to such trustee, the “Senior Trustee”)] [dated as of                     , 20__, (the “Subordinated Indenture”), between the Company and __________, as trustee (such trustee, and any successors to such trustee, the “Subordinated Trustee”)] and will be subject to the terms and provisions contained in the Warrant Debt Securities and in the Indenture. Copies of the [Senior] [Subordinated] Indenture, including the form of the Warrant Debt Securities, are on file at the corporate trust office of the [Senior][Subordinated] Trustee.

 

Transfer of this Warrant Certificate may be registered when this Warrant Certificate is surrendered at the corporate trust office of the Warrant Agent by the registered owner or such owner’s assigns, in the manner and subject to the limitations provided in the Warrant Agreement.

 

After countersignature by the Warrant Agent and prior to the expiration of this Warrant Certificate, this Warrant Certificate may be exchanged at the corporate trust office of the Warrant Agent for Warrant Certificates representing Warrants for the same aggregate principal amount of Warrant Debt Securities.

A-2

This Warrant Certificate shall not entitle the Holder hereof to any of the rights of a holder of the Warrant Debt Securities, including, without limitation, the right to receive payments of principal of (and premium, if any) or interest, if any, on the Warrant Debt Securities or to enforce any of the covenants of the Indenture.

 

Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

This Warrant Certificate shall not be valid or obligatory for any purpose until countersigned by the Warrant Agent.

 

In Witness Whereof, the Company has caused this Warrant to be executed in its name and on its behalf by the facsimile signatures of its duly authorized officers.

 

	
Dated:

	 
	 	
ePlus inc., as Company

	 	
 

	
 

	 	
By:

	
 

	 	
Name:

	
 

	 	
Title:

	
 

	 	
ATTEST:

	
 

	 	
 

	 	
COUNTERSIGNED

	 	
 

	 	

__________, as Warrant Agent

 

	 	
By:

	
 

	 	
Name:

	
 

	 	
Title:

	
 

	 	
ATTEST:

	 

A-3

[REVERSE OF WARRANT CERTIFICATE]

(Instructions for Exercise of Warrant)

To exercise any Warrants evidenced hereby for Warrant Debt Securities (as hereinafter defined), the Holder must pay, in lawful money of the United States of America, [in cash or by certified check or official bank check in New York Clearing House funds] [by bank wire transfer in immediately available funds], the Warrant Price in full for Warrants exercised, to __________ [address of Warrant Agent], Attention: __________, which payment must specify the name of the Holder and the number of Warrants exercised by such Holder. In addition, the Holder must complete the information required below and present this Warrant Certificate in person or by mail (certified or registered mail is recommended) to the Warrant Agent at the appropriate address set forth above. This Warrant Certificate, completed and duly executed, must be received by the Warrant Agent within five business days of the payment.

 

(To be executed upon exercise of Warrants)

The undersigned hereby irrevocably elects to exercise __________ Warrants, represented by this Warrant Certificate, to purchase $__________ principal amount of the [Title of Warrant Debt Securities] (the “Warrant Debt Securities”) of ePlus inc. and represents that he has tendered payment for such Warrant Debt Securities, in lawful money of the United States of America, [in cash or by certified check or official bank check in New York Clearing House funds] [by bank wire transfer in immediately available funds], to the order of ePlus inc., c/o [insert name and address of Warrant Agent], in the amount of $ __________ in accordance with the terms hereof. The undersigned requests that said principal amount of Warrant Debt Securities be in fully registered form in the authorized denominations, registered in such names and delivered all as specified in accordance with the instructions set forth below.

 

If the number of Warrants exercised is less than all the Warrants evidenced hereby, the undersigned requests that a new Warrant Certificate evidencing the Warrants for the aggregate principal amount of Warrant Debt Securities remaining unexercised be issued and delivered to the undersigned unless otherwise specified in the instructions below.

 

	
Dated:

	
 

	
 

	
Name:

	
 

	
 

	
 

	
 

	
Please Print

 

	
Address:

	 	 
	 	 	 
	 	 	 

 

	 	 
	(Insert Social Security or Other Identifying  Number of Holder)	 

A-4

	
Signature Guaranteed:

	
 

	
 

	
 

	
Signature

	
 

 

(Signature must conform in all respects to name of holder as specified on the face of this Warrant Certificate and must bear a signature guarantee by a FINRA member firm).

This Warrant may be exercised at the following addresses:

 

	
By hand at:

	 	 
	 	 	 
	By mail at:	 	 
	 	 	 

 

[Instructions as to form and delivery of Warrant Debt Securities and, if applicable, Warrant Certificates evidencing Warrants for the number of Warrant Debt Securities remaining unexercised—complete as appropriate.]

A-5

ASSIGNMENT

[Form of assignment to be executed if Warrant Holder desires to transfer Warrant]

FOR VALUE RECEIVED, __________ hereby sells, assigns and transfers unto:

	
 

	
 

	
 

	
(Please print name and address including zip code)

	
 

	
Please print Social Security or other identifying number

the right represented by the within Warrant to purchase $ __________ aggregate principal amount of shares [Title of Warrant Debt Securities] of ePlus inc. to which the within Warrant relates and appoints attorney to transfer such right on the books of the Warrant Agent with full power of substitution in the premises.

 

	
 

	
 

	
 

	
Dated

	
 

	
Signature

 

(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

	 	 
	Signature Guaranteed	 

 

 

A-6

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