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): March 31, 2004
EPLUS INC.
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(Exact name of registrant as specified in its charter)
Delaware 000-28926 54-1817218
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
400 Herndon Parkway, Herndon, Virginia 20170
(Address, including zip code, of principal executive office)
(703) 834-5710
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(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
On March 31, 2004, ePlus Technology, inc., a wholly owned subsidiary of ePlus
inc., modified the current floor planning agreements with GE Commercial
Distribution Finance Corporation ("CDF" - formerly known as Deutsche Financial
Services Corporation) that were originally entered into on September 8, 2000.
The changes to the agreements included the reduction of the floor interest rate
charged to a rate based on the prime rate but no less than a prime rate of
5.25%; the ability to have CDF provide a total inventory floorplan credit
facility limit of up to $33,000,000, provided that at no time will the combined
outstanding inventory floorplan facility and the accounts receivable facility
exceed this total amount; the allowance of up to a maximum of $4,000,000 of
defined intercompany lease receivables; a reduction in the unused line fee rate;
and an increase in the minimum tangible net worth provision from $4,500,000 to
$14,050,000; and a change in the ratio of debt minus subordinated debt to
tangible net worth and subordinated debt of not more than 3.0 to 1.0 to 6.5 to
1.0, which reflects the effects of the consolidating mergers of ePlus Technology
of PA, inc. and ePlus Technology of NC, inc. into ePlus Technology, inc., which
occurred on March 31, 2003.
Purpose of the Credit Facility
ePlus Technology, inc. uses this credit source to finance its working capital
requirements for inventories and accounts receivable. Their 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 are 40 days on average. The facility
can be terminated with 90 days notice by either party. The facility consists of
$26,000,000 for inventory financing and $7,000,000 of accounts receivable
financing. Interest is assessed at the prime rate 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 $6,900,000.
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:
Exhibit
Number Exhibit Description
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.
5.2 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) and ePlus Technology, inc.
5.4 Text of Limited Guaranty dated September 8, 2000 between Deutsche Financial
Services (now known as GE Commercial Distribution Finance Corporation) and
ePlus inc.
5.5 Text of Limited Guaranty for ePlus Technology of PA, inc. (now merged into
ePlus Technology, inc.) to Deutsche Financial Services Corporation (now
known as GE Commercial Distribution Finance Corporation) by ePlus, inc.,
date February 12, 2001.
5.6 Text of Collateral Guaranty dated March 31, 2004 between GE Commercial
Distribution Finance Corporation and ePlus Group, inc.
5.7 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
SIGNATURES
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 thereunto duly authorized.
ePlus inc.
Dated April 1, 2004 By: /s/Steven J. Mencarini
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Steven J. Mencarini
Chief Financial Officer
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