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): November 17, 2005 (November
14, 2005)
EPLUS INC.
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(Exact name of registrant as specified in its charter)
Delaware 000-28926 54-1817218
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
13595 Dulles Technology Drive, Herndon, Virginia 20171-3413
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(Address, including zip code, of principal executive office)
(703) 984-8400
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2 below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 8.01 Other Events
On November 14, 2005, ePlus Technology, inc., a wholly-owned subsidiary of ePlus
inc., modified the current credit-facility agreements with GE Commercial
Distribution Finance Corporation ("GECDF" - formerly known as Deutsche Financial
Services Corporation) that were executed on August 31, 2000. The changes to the
agreements include the ability to have GECDF provide a total credit facility
limit of up to $75,000,000, provided that at no time will the combined amount
outstanding under the inventory floorplan credit facility and the accounts
receivable facility exceed this total amount. In addition, the accounts
receivable facility contains a sub-limit of $20,000,000. Additionally, ePlus
Technology, inc. must maintain a ratio of debt minus subordinated debt to
tangible net worth and subordinated debt ("TNW") of not more than four and
one-half to one (4.5:1.0), and TNW increases quarterly in the amount of 50% of
ePlus Technology, inc.'s net income for each quarter beginning December 31, 2005
from a base of $17,997,000.
Purpose of the Credit Facility
We use this credit facility to finance our working capital requirements for
inventories and accounts receivable of our reseller business. There are two
components of this lending facility: a floorplan credit facility and an
accounts-receivable facility. Our traditional business as sellers of computer
technology and related peripherals and software products is financed through the
floorplan credit facility, in which the interest expense for the first thirty to
forty-five days, in general, is not charged but is paid for by the
manufacturer/distributor. These floorplan liabilities are recorded as accounts
payable-trade as they are normally repaid within the thirty- to forty-five-day
timeframe and represent an assigned accounts payable originally generated with
the manufacturer/distributor. If the thirty- to forty-five-day obligation is not
paid timely, interest is then assessed at the stated contractual rates.
Principal Terms of the Credit Facility
The agreements provide for various repayment days dependent on the
manufacturer/distributor, but the majority are forty-five days on average. The
facility can be terminated with 90 days' notice by either party. The facility
consists of a total credit facility limit of $75,000,000 and a sub-limit of
$20,000,000 on accounts receivable financing. Interest is assessed at the prime
rate minus one-half of one percent and not less than 5.25% per annum 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 has not paid to
ePlus Technology, inc.
Item 9.01 Financial Statements and Exhibits
(c) The following exhibits are filed as part of this report:
Exhibit Number Exhibit Description
10.1 Text of Business Financing Agreement dated August 31, 2000 between Deutsche Financial
Services Corporation (now known as GE Commercial Distribution Finance Corporation) and
ePlus Technology, inc.
10.2 Text of Agreement for Wholesale Financing dated August 31, 2000 between Deutsche
Financial Services (now known as GE Commercial Distribution Finance Corporation) and
ePlus Technology, inc.
10.3 Text of Paydown Addendum to Business Financing Agreement dated August 31, 2000
between Deutsche Financial Services (now known as GE Commercial Distribution Finance
Corporation) and ePlus Technology, inc.
10.4 Text of Addendum to Business Financing Agreement and Agreement for Wholesale Financing
dated February 12, 2001 between Deutsche Financial Services (now known as GE Commercial
Distribution Finance Corporation) and ePlus Technology, inc.
10.5 Text of Amendment to Business Financing Agreement and Agreement for Wholesale
Financing dated April 3, 2003 between GE Commercial Distribution Finance Corporation
and ePlus Technology, inc.
10.6 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.
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10.7 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.
10.8 Text of Amendment to Business Financing Agreement and Agreement for Wholesale
Financing dated August 13, 2004 between GE Commercial Distribution Finance Corporation
and ePlus Technology, inc.
10.9 Amendment to Business Financing Agreement and Agreement for Wholesale Financing between
ePlus Technology, inc. and GE Commercial Distribution Finance Corporation dated
November 14, 2005
10.10 Text of Limited Guaranty dated June 24, 2004 between GE Commercial Distribution Finance
Corporation and ePlus inc.
10.11 Text of Collateralized Guaranty dated March 30, 2004 between GE Commercial Distribution
Finance Corporation and ePlus Group, inc.
10.12 Amendment to Collateralized Guaranty between ePlus Group, inc. and GE Commercial
Distribution Finance Corporation dated November 14, 2005
10.13 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
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Steven J. Mencarini
Date: November 17, 2005 Chief Financial Officer
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