SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) January XX, 1999
MLC Holdings, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-28926 54-1817218
(Commission File Number) (I.R.S. Employer Identification No.)
400 Herndon Parkway, Herndon, VA 20170
(Address of Principal Executive Offices) (Zip Code)
(703) 834-5710
(Registrant's Telephone Number, Including Area Code)
ITEM 5. OTHER EVENTS.
On December 28, 1998, MLC Group, Inc., a Virginia corporation, finalized and
executed documents establishing a lease receivables purchase agreement (the "LRP
Facility"), by and among Triple-A One Funding Corporation, as the Purchaser, Key
Corporate Capital, Inc., as the Agent, and MLC Group, Inc. as the Seller and the
Collection Agent. The LRP Facility has no stated maximum amount, and each draw
is subject to the approval of Key Corporate Capital, Inc., however, the agent
has orally indicated the maximum amount will not exceed $50,000,000 in its
current structure. The LRP Facility is evidenced by a Lease Receivables Purchase
Agreement dated December 28, 1998 (the "LRP Agreement").
Purpose and Use of the LRP Facility
MLC intends to use the LRP Facility primarily for the permanent fixed-rate
discounting of rents for commercial leases of information technology assets with
the MLC's middle-market and investment grade customers. On December 29, 1998, an
advance of $5.5MM was made under the facility.
Principal Terms of the LRP Facility
Each advance under the LRP Facility will be related to one or more contracts for
the lease or conditional sale of assets between MLC as lessor or secured party
and the end user of the assets. Each such advance will bear interest at an
annual rate equal to the sum of the weekly average U.S. Treasury Constant
Maturities for a Treasury Note having approximately an equal term as the
weighted average term of the contracts subject to the advance, plus a spread of
1.5-2.25% or more over the average life Treasury Note, depending on the amount
of the advance and the credit rating (if any) of the lessee. Pursuant to the LRP
Agreement, MLC Group, Inc. will act as the servicing and collections agent on
behalf of the purchaser. The LRP Facility contains a number of covenants binding
on MLC requiring, among other things, compliance with servicing obligations, and
limiting, among other things, liens, additional borrowing, mergers,
acquisitions, and asset sales. The LRP Facility is a non-recourse facility,
secured by a first-priority lien in the contracts and chattel paper relating to
each advance, and the equipment subject to such contracts. The servicing
obligations and representations and warranties made by MLC Group, Inc., in the
LRP Facility are guaranteed by MLC Holdings, Inc.
Lending under the LRP Facility is in Key Global's sole discretion, and is
further subject to MLC's compliance with certain conditions and procedures.
1
Incorporation of Exhibits
The foregoing is only a summary of certain terms of the Credit Facility, and is
subject to, and supplemented and qualified by, the copy of the text of the Loan
Agreement, the Security Agreement, and the Pledge Agreement, attached hereto as
Exhibits "5.1" and "5.2" respectively, and incorporated herein by this
reference.
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 hereunto duly authorized.
MLC Holdings, Inc.
(Registrant)
Date January, 1999 By:_____________________________
Phillip G. Norton
Chairman, CEO and President
2
EXHIBIT INDEX
The following exhibits are filed as part of this report:
Exhibit
No. Item
5.1 Text of Lease Receivables Purchase Agreement dated
December 28, 1998 between MLC Group, Inc., a
Virginia corporation, Triple-A One Funding
Corporation, as the Purchaser, Key Corporate
Capital, Inc., as the Agent, and MLC Group, Inc. as
the Seller and the Collection Agent
5.2 Pricing Letter Agreement
3