SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 17, 2004
EPLUS INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 000-28926 54-1817218
-------------- -------------- --------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
400 Herndon Parkway, Herndon, Virginia 20170
-----------------------------------------------------
(Address, including zip code, of principal executive office)
(703) 834-5710
--------------
(Registrant's telephone number, including area code)
-1-
Item 5. Other Events
On August 17, 2004, ePlus Technology, inc.(ePlus), a wholly-owned subsidiary of
ePlus inc., modified the current floor planning agreements with GE Commercial
Distribution Finance Corporation ("GECDF") that were originally entered into on
September 8, 2000. In this modification, GECDF agreed to modify the current
Business Finance Agreement and Agreement for Wholesale Financing by modifying
and adding certain contractual provisions as follows:
1. Provide to ePlus an Accounts Receivable Facility of (i) Fifteen Million
Dollars ($15,000,000) at all times and (ii) Twenty Million Dollars
($20,000,000) from the seasonal uplift term defined as from August 1st to
December 31st of each calendar year , however, at no time other than during
the seasonal uplift period will the principal amount outstanding under the
Accounts Receivable Facility and the inventory floorplan credit facility
exceed, in the aggregate, Fifty Million Dollars ($50,000,000) and at no
time during the seasonal uplift period will the principal amount
outstanding under the Accounts Receivable Facility and the inventory
floorplan credit facility exceed, in the aggregate, Seventy Five Million
Dollars $75,000,000). The previous agreement had a total limit of
$50,000,000.
2. Flexibility was added to allow the inventory floorplan credit facility to
be used to a level up to the total facility limit provided that the
combined usage balances of the Accounts Receivable Plan and inventory
floorplan credit facility cannot exceed, at certain defined times, Fifty
Million Dollars ($50,000,000) or Seventy Five Million Dollars $75,000,000
during the seasonal period of August 1 to December 31.
3. The agreement modified and limited to $500,000 the eligibility of certain
accounts receivable that were related to deferred income transactions.
Purpose of the Credit Facility
ePlus Technology, inc. uses this credit source to finance its working capital
requirements for inventories and accounts receivable. Our traditional business
as sellers of computer technology assets and related network equipment and
software products is financed through these arrangements known as floorplan
financing, where the interest expense generally for the first thirty to forty
days is not charged but is paid for by the distributor/manufacturer. These
floorplan liabilities are recorded as accounts payable-trade as they are
normally repaid within the thirty to forty day time frame and represent an
assigned accounts payable originally generated with the supplier/manufacturer.
If the thirty to forty day obligation is not paid timely, interest is then
assessed at the stated contractual rates.
Principal Terms of the Credit Facility
The contracts provide for various repayment days dependent on the
distributor/manufacturer, but the majority is 40 days on average. The facility
can be terminated with 90 days notice by either party. The facility is for
inventory financing and accounts receivable financing, and has an aggregate
limit of $50,000,000 or $75,000,000 from the seasonal period August 1st to
December 31st. Interest is assessed at the prime rate, which will at no time be
lower than 5.25%, minus one-half of one percent on the outstanding principal
debt under the accounts receivable facility.
ePlus inc., the parent of ePlus Technology, inc., has guaranteed this facility
up to $10,500,000.
ePlus Group, inc., with the consent of its credit facility supplier, agreed to
guaranty any items it received from but not paid to ePlus Technology, inc.
EXHIBIT INDEX The following exhibits are filed as part of this report:
5.1 Text of Business Financing Agreement dated September 8, 2000 between Deutsche
Financial Services Corporation (now known as GE Commercial Distribution
Finance Corporation) and ePlus Technology, inc.
5.1A Text of Amendment to Business Financing Agreement and Agreement for Wholesale
Financing dated March 31, 2004 between GE Commercial Distribution Finance
Corporation and ePlus Technology, inc.
5.1B Text of Amendment to Business Financing Agreement and Agreement for Wholesale
Financing dated June 24, 2004 between GE Commercial Distribution Finance
Corporation and ePlus Technology, inc.
-2-
5.1C Text of Amendment to Business Financing Agreement and Agreement for Wholesale
Financing dated August 17, 2004 between GE Commercial Distribution Finance
Corporation and ePlus Technology, inc.
5.2 Text of Agreement for Wholesale Financing dated September 8, 2000 between
Deutsche Financial Services (now known as GE Commercial Distribution Finance
Corporation) and ePlus Technology, inc.
5.3 Text of Paydown Addendum to Business Financing Agreement between Deutsche
Financial Services (now known as GE Commercial Distribution Finance Corporation)
Corporation) and ePlus Technology, inc.
5.4 Text of Limited Guaranty dated June 24, 2004 between GE Commercial Distribution
Finance Corporation and ePlus inc.
5.5 Text of Collateral Guaranty dated March 31, 2004 between GE Commercial
Distribution Finance Corporation and ePlus Group, inc.
5.6 Text of Agreement Regarding Collateral Rights and Waiver between GE Commercial
Distribution Finance Corporation and National City Bank, as Administrative
Agent, dated March 24, 2004
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ePlus inc.
By: /s/ Steven J. Mencarini
------------------------------
Steven J. Mencarini
Date: August 18, 2004 Chief Financial Officer
-3-