-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CrjKUaVZf8qq749yIOGl9hndEShn5lMVEC0IdYlkSDz0vvMUR/TLQDdD00zOAy/o McONUKyUg7uTaIlp9hYeZQ== 0001022408-02-000015.txt : 20020415 0001022408-02-000015.hdr.sgml : 20020415 ACCESSION NUMBER: 0001022408-02-000015 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020329 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020405 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EPLUS INC CENTRAL INDEX KEY: 0001022408 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE LESSORS [6172] IRS NUMBER: 541817218 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-28926 FILM NUMBER: 02603469 BUSINESS ADDRESS: STREET 1: 400 HERNDON PARKWAY CITY: HERNDON STATE: VA ZIP: 20176 BUSINESS PHONE: 7038345710 MAIL ADDRESS: STREET 1: 400 HERNDON PARKWAY STREET 2: SUITE B CITY: HERNDON STATE: VA ZIP: 20170 FORMER COMPANY: FORMER CONFORMED NAME: MLC HOLDINGS INC DATE OF NAME CHANGE: 19960906 8-K 1 f8k_32902.txt ELCOM PURCHASE 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 29, 2002 EPLUS INC. ----------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 000-28926 54-1817218 ------------- ------------- -------------- (State or other jurisdiction of (Commission File Number) (IRS Employer incorporation) Identification No.) 400 Herndon Parkway, Herndon, Virginia 20176 (Address, including zip code, of principal executive office) (703) 834-5710 -------------- (Registrant's telephone number, including area code) Item 5. Other Events ePlus inc. ("ePlus") announced by press release on April 1, 2002 that on March 29, 2002, it had purchased fixed assets, customer lists, and contracts and assumed certain limited liabilities relating to the IT fulfillment and IT professional services business of Elcom International, Inc., a Delaware corporation ("Elcom"). The press release is attached hereto as Exhibit 99 and incorporated by reference herein. ePlus' acquisition was made pursuant to an Asset Purchase and Sale Agreement dated March 25, 2002 by and between ePlus Technology, Inc., a Virginia corporation, and a wholly owned subsidiary of ePlus, Elcom Services Group, Inc., a Delaware corporation, elcom, inc., a Delaware corporation, and Elcom , as amended on March 29, 2002. Total consideration for the acquisition was approximately 2.3 million consisting of cash of $2,150,000 and the assumption of certain liabilities of approximately $113,000. Approximately 98 former Elcom personnel were hired by ePlus as part of the transaction and are located in the established sales offices of Elcom in greater Philadelphia, New York City, Boston and San Diego acquired in the transaction. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits The following exhibits are filed herewith: Exhibit Number Description 2 Asset Purchase and Sale Agreement by and between ePlus Technology, Inc. Elcom Services Group, Inc., elcom, inc., and Elcom International, Inc. dated March 25, 2002. 2.1 Amendment to Asset Purchase and Sale Agreement by and between ePlus Technology, Inc. Elcom Services Group, Inc., elcom, inc., and Elcom International, Inc. dated March 29, 2002. 99 Press Release dated April 1, 2002 regarding the acquisition of certain assets of Elcom by ePlus inc. -2- 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: April 5, 2002 Chief Financial Officer -3- EX-2 3 ex2_32902.txt ASSET PURCHASE AND SALE AGREEMENT ASSET PURCHASE AND SALE AGREEMENT Agreement made this 25th day of March, 2002 by and between ePlus Technology, Inc., a Virginia corporation, with a principal place of business at 400 Herndon Parkway, Herndon, VA 20170 ("Buyer") and Elcom Services Group, Inc., a Delaware corporation, with a principal place of business at 10 Oceana Way, Norwood, MA 02062 (the "Seller"), elcom, inc., a Delaware corporation, with a principal place of business at 10 Oceana Way, Norwood, MA 02062 ("elcom") , and Elcom International, Inc., a Delaware corporation, with a principal place of business at 10 Oceana Way, Norwood, MA 02062 ("EII"). Collectively, the Seller, elcom and EII are referred to herein as the "Elcom Group". RECITALS A. The Elcom Group is a leading provider of e-procurement and e-marketplace software solutions and services. B. The Buyer is a leading reseller of computer information technology products and services, e-procurement, content management, and asset management software, leasing, and IT professional services. C. The Elcom Group desires to sell to Buyer and the Buyer desires to purchase from the Seller the Assets and the Business. D. For a period of five years from the Closing, the Elcom Group shall cease to act directly or indirectly as a reseller of computer information technology products and services, as provided herein. E. EII is a publicly traded company and is in compliance with all applicable SEC and NASD rules and regulations. F. Capitalized terms used in this Agreement are defined in Section 1 hereof. 1. Definitions. 1.1. "Ancillary Documents": The Managed Services Agreement, the Middleware Software License Agreement, the Registration Rights Agreement, the Warrant, the Preferred Supplier Agreement. 1.2. "Assets": the customer lists, the Business, contracts, equipment, vehicles, leases of property and interests in real estates set forth on Schedule 1.2; provided for the avoidance of doubt that the following are expressly excluded from such definition: cash, securities held in any entity, accounts receivable invoiced as of the Closing, as such term is defined in Section 7.1 hereof, and corporate minute books and stock transfer records. 1 1.3. "Business": the information technology hardware products reseller and services activities carried on by the Seller to its information technology hardware products and services customers from and after January 1, 2002 to the date of Closing. 1.4. "Excluded Liabilities": Except for Liabilities, all liabilities, obligations or commitments of Sellers for (i) any state, federal, sales, use, goods and services, excise or custom taxes, (ii) any claim with respect to any "employee benefit plan", as such term is used in section 3(3) of ERISA, and any bonus, incentive, or deferred compensation, severance, retention, change of control, or stock option plan, (iii) the termination of any employee benefits or employee benefit plan on or prior to the Closing, (iv) the termination of employment of any employee of the Seller on or prior to the Closing, (v) any legal, accounting, transactional, consultant, brokerage or other expense relating to the negotiation and consummation of the transactions contemplated by this Agreement by or on behalf of the Seller (except for any accounting expenses Buyer requests the Elcom Group to undertake and which the Elcom Group agrees to undertake), or (vi) any liability, obligation or commitment of any kind caused by or arising from the conduct or operation of the Business prior to the Closing. 1.5 "Liabilities": all liabilities of Seller which are listed on Schedule 1.5, and Seller's liabilities with respect to Transferred Employees as provided in Section 8.1. Buyer assumes no liability of Seller not set forth herein. 1.6 "Managed Services Agreement": the Agreement in substantially the form attached hereto as Schedule 1.6. 1.7. "Purchase Price": Two million three hundred thousand dollars ($2,300,000) to be paid by wire transfer at Closing. 1.8 "Registration Rights Agreement": the Agreement in substantially the form attached hereto as Schedule 1.8. 1.9 "Middleware Software License Agreement": the Agreement in substantially the form attached hereto as Schedule 1.9. 1.10 "Warrant": the Agreement in substantially the form attached hereto as Schedule 1.10. 1.11 "Preferred Supplier Agreement": the Agreement in substantially the form attached hereto as Schedule 1.11. 2. Transaction. 2.1 Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, the Sellers shall sell, transfer, convey, assign and deliver to the Buyer, and the Buyer shall purchase or acquire from the Sellers, 2 all of the right, title and interest in and to the Assets free and clear of all liens and encumbrances, except for the assets subject to leases and the real property. 2.2 The Buyer shall assume and agree to pay, honor and discharge when due all of the Liabilities. 2.3 Upon the terms and subject to the conditions set forth in this Agreement, the Buyer shall not assume any of the Excluded Liabilities. 2.4 EII shall issue to the Buyer a warrant which gives the Buyer the right to purchase, on the terms and conditions set forth in the Warrant, three hundred thousand shares (300,000) of common stock of EII. The resale by the Buyer of the common stock issuable upon exercise of the Warrant shall be subject to the Registration Rights Agreement. 3. Warranties and Representations of the Elcom Group. The Elcom Group jointly and severally warrants and represents to Buyer: 3.1. Each of the Elcom Group is a duly organized and a validly existing Delaware corporation in corporate and tax good standing in every jurisdiction where its business so requires. EII owns all of the equity securities of Seller. Seller owns all of the outstanding equity securities of elcom. Each member of the Elcom Group has obtained all necessary corporate approvals for the execution and performance of each of this Agreement and the Ancillary Documents, as applicable, and has full legal right and power so to do. Each of this Agreement and the Ancillary Documents has been duly executed and delivered by each member of the Elcom Group, as applicable, and is their respective valid and binding obligations, enforceable in accordance with its terms. The execution and performance of each of this Agreement and the Ancillary Documents will not violate or constitute a default under any agreement, charter, by-law, court order, law, rule, regulation, judgment or injunction by which any member of the Elcom Group are bound. 3.2. Except in connection with the filing of a registration statement in connection with the Registration Rights Agreement and except as have been obtained by any member of the Elcom Group, no governmental approval or other consent or EII shareholder approval is required to be obtained or made by any member of the Elcom Group in connection with the execution and delivery of this Agreement or the Ancillary Documents to which it is a party, or the consummation of the transactions contemplated hereby or thereby. 3.3. All the Assets, except for assets subject to leases and the real property, are owned by Seller or elcom with good and marketable title, and are not subject to security interests, liens, encumbrances or claims by third parties. 3.4. No member of the Elcom Group is subject to or threatened by any litigation, investigation, administrative procedure, arbitration or similar 3 proceeding that (i) are not generally in the ordinary course of business, (ii) questions the validity of, or the obligations of any member of the Elcom Group under, this Agreement or any Ancillary Document, (iii) seeks to impede, enjoin or invalidate the transactions contemplated by this Agreement or any Ancillary Document, or (iv) to the knowledge of the members of the Elcom Group, would have or result, in any case or in the aggregate, in a material adverse effect to the Business or the Assets. 3.5. No member of the Elcom Group has any agreement, written or oral, with any broker or finder requiring any payment in connection with this Agreement. 3.6 Sellers own no real property. Schedule 3.6 includes a complete list of the real property leased by Sellers and included as an Asset hereunder ("Leased Real Property"). Seller has a valid leasehold interest in the Leased Real Property and such interest shall be in full force and effect at Closing. 3.7 Except as described in Schedule 3.7, Sellers are not a party to or bound by any lease, agreement, contract or other commitment which involves the payment or receipt of more than $10,000 per year (collectively, the "Contracts"). Each Contract is, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to the enforcement of creditors' rights generally or by principles governing the availability of equitable remedies, (a) a valid and binding obligation of Seller or elcom, (b) is in full force and effect and enforceable against each member of the Elcom Group, as applicable, and (c) there does not exist any violation, breach or default, or any event or condition that would constitute a violation or breach or a default under any such Contract by the Seller or elcom. Seller and elcom has performed all material obligations required to be performed by it to date under the Contracts. All Contracts are in the name of Seller or elcom. 3.8 Other than as set forth in Schedule 8.1, there are no plans of any member of the Elcom Group in effect for pension, profit sharing, deferred compensation, severance pay, bonuses, stock options, stock purchases, or any other form of retirement or deferred benefit, or for any health, accident or other welfare plan, as to which Buyer will become liable as a result of the transactions contemplated hereby. 3.9 There have been no private or governmental claims, citations, complaints, notices of violation or letters made, issued to or threatened against any member of the Elcom Group by any governmental entity or private or other party for the impairment or diminution of, or damage, injury or other adverse effects to, the environment or public health resulting, in whole or in part, from the use or operation of the Leased Real Property. Seller has duly complied with, and, to the knowledge of each member of the Elcom Group, the Leased Real Property is in compliance with, the provisions of all federal, state and local environmental, health and safety laws, codes and ordinances and all rules and regulations promulgated thereunder. 4 3.10 To the knowledge of each member of the Elcom Group, Seller is not in violation with respect to the Assets of any law, order, ordinance, rule or regulation of any governmental authority. 3.11 From and after the Closing, the Elcom Group's current intention is to concentrate its resources on the development, licensing, maintenance and provision of services relating to its proprietary, self-service electronic procurement and electronic marketplace Internet and intranet-based purchasing systems which enable the conduct of interactive electronic commerce for businesses. 3.12. The Assets sold to Buyer hereunder have a net book value of seventy seven thousand two hundred forty six dollars and fifty cents ($77,246.50) and such net book value represents less than 1% of the total assets of EII and its subsidiaries as of the date immediately preceding the date of this Agreement. 3.13 The Purchase Price represents less than 10% of EII's market capitalization as of the date immediately preceding the date of this Agreement, based on the last sale price of the common stock of EII on the Nasdaq National Market as quoted in The Wall Street Journal. 3.14 The net earnings of EII have been negative for the past three years as disclosed in EII's SEC financial reporting forms. 3.15 To the knowledge of the Elcom Group, the transaction contemplated herein complies with all applicable SEC and NASD rules and regulations. EII specifically represents that the approval of a majority of its shareholders is not required. 4. Warranties and Representations of Buyer. Buyer warrants and represents to the Elcom Group: 4.1. Buyer is a duly organized and a validly existing Virginia corporation in corporate and tax good standing in every jurisdiction where its business so requires. Buyer has obtained all necessary corporate approvals for the execution and performance of each of this Agreement and the Ancillary Documents and has full legal right and power so to do. Each of this Agreement and the Ancillary Documents has been duly executed and delivered by Buyer and is its valid and binding obligation, enforceable in accordance with its terms. The execution and performance of each of this Agreement and the Ancillary Documents does not and will not violate or constitute a default under any agreement, charter, bylaw, court order, judgement or injunction to which Buyer is a party or by which it is bound. 4.2. Each of this Agreement and the Ancillary Documents is the legal, valid and binding obligation of Buyer, enforceable in accordance with its terms. 5 4.3. Buyer has no written or oral agreement with any broker or finder requiring any payment in connection with this Agreement. 4.4. No governmental approval or other consent or corporate action is required to be obtained or made by the Buyer in connection with the execution and delivery of this Agreement or the Ancillary Documents to which it is a party, or the consummation of the transactions contemplated hereby or thereby. 5. Conduct of Business. From this date until Closing: 5.1. Seller shall conduct the Business only in the ordinary course, and in such manner as shall not cause any warranty or representation contained in Section 3 above to become false. 5.2. Seller shall afford full access at all reasonable times, and in a manner so as not to interfere with the normal business operations of Seller, to Buyer and its duly appointed representatives to all information concerning the Assets and personnel of Seller. 6. Buyer Confidentiality Obligation. From the date hereof until Closing, Buyer shall maintain in confidence the nonpublic business secrets and proprietary information of Seller, and disclose same only to its personnel and advisers as it may determine to be reasonably necessary to effect this Agreement. Should Closing not occur, Buyer and Seller agree to be bound by the terms and conditions of the Non-Disclosure Agreement dated February 27, 2002. 7. Closing. 7.1 Buyer shall purchase and Seller shall sell all of Seller's right, title and interest in and to the Assets, subject to the Liabilities, at 10:00AM Boston time, Friday, March 29, 2002, at the Sellers' offices (the "Closing"); provided, however, in no event shall Buyer assume any of the Excluded Liabilities. At the Closing, all transactions set forth below shall be effected. No transaction shall be deemed consummated unless all such transactions are consummated. It is a condition of the obligation of Buyer and Seller to consummate the Closing that the obligations of the other at Closing shall have been performed, unless waived. At Closing: 7.1.1. Buyer shall deliver to the Elcom Group, and the Elcom Group shall deliver to Buyer, certificates that all warranties and representations herein are true and correct in all material respects at Closing. The Elcom Group shall specifically include in such certificate a statement that from and after the Closing, the Elcom Group's current intention is to concentrate its resources on the development, licensing, maintenance and provision of services relating of its proprietary, self-service electronic procurement and electronic marketplace Internet and intranet-based purchasing systems which enable the conduct of interactive electronic commerce for businesses. 6 7.1.2. Sellers shall deliver to Buyer certified copies of resolutions of each of the Elcom Group's Board of Directors authorizing the execution and performance of this Agreement. 7.1.3. The Purchase Price shall be paid by Buyer to Sellers by wire transfer in accordance with Sellers' instructions. 7.1.4. Sellers shall have delivered to Buyer all other instruments and documents of transfer reasonably requested by Buyer to pass title and possession of the Assets. 7.1.5. The Buyer and the Seller shall execute and deliver the Managed Services Agreement. 7.1.6. The Buyer and each member of the Elcom Group shall execute and deliver the Middleware Software License Agreement. 7.1.7. The Buyer and EII shall execute and deliver the Warrant and the Registration Rights Agreement. 7.1.8. The Buyer and elcom shall execute and deliver the Preferred Supplier Agreement. 7.1.9 A mututally agreed allocation of the Purchase Price (including the Liabilities) and any other relevant items in accordance with an allocation schedule. 7.1.10 An agreement between Tech Data, Sellers, and Buyer regarding the operation of the Business during the Managed Services Agreement, and/or an agreement between Buyer and Tech Data for the assignment of the outsourcing agreements referred to in Schedule 3.8 hereof. 7.1.11 A Bill of Sale and an Assignment and Assumption executed and delivered by elcom, Seller and Buyer. 8. Post-Closing Matters. 8.1 Immediately prior to the Closing, the Sellers shall terminate the employment of each of the employees named on Schedule 8.1, and effective as of the Closing, the Buyer shall offer employment to each employee named on Schedule 8.1 (i) at a position comparable to such employee's position with the Seller immediately prior to the Closing, (ii) at wage or salary levels and bonus or other incentive compensation amount, as applicable, in compliance with Buyer's compensation schedule with respect to such employee, and (iii) with its standard employee benefits at Closing, with length of service with the Seller, up to the Closing, to be recognized by the Buyer for purposes of Buyer's benefit plans (other than accrual of benefits) as service with the Buyer. The employees named 7 on Schedule 8.1 who accept such offers of employment by the Buyer effective the Closing shall be referred to in this Agreement as the "Transferred Employees". Effective as of the Closing, the Buyer shall assume the liabilities and obligations of the Sellers in respect of the Transferred Employees for vacation and sick pay, but only to the extent such vacation and sick pay relate to services rendered in the ordinary course of business consistent with past practice. The Buyer shall assume and be solely responsible for the severance and other termination payments, and continued health care coverage as described in section 4980B of the Code ("COBRA"), incurred by the Seller in connection with the actual or constructive termination of employment with the Seller (including in connection with the consummation of the transactions contemplated by this Agreement and the Ancillary Documents) of any employee named on Schedule 8.1. The Seller shall remain solely responsible for any and all liabilities in respect of any employees not named on Schedule 8.1. 8.2 The Buyer shall provide the Transferred Employees coverage under any welfare and fringe benefit plans, programs, policies or arrangements established by the Buyer in accordance with Section 8.1 for such Transferred Employees ("Buyer Welfare Plan"); provided that, the Seller shall remain solely responsible for any and all benefit liabilities to or in respect of the Transferred Employees or their beneficiaries or dependents relating to or arising in connection with any claims relating to or based upon an occurrence prior to the Closing for life, disability, accidental death or dismemberment, medical, dental, hospitalization, other health or other welfare or fringe benefits or expense reimbursements. The Buyer shall waive any preexisting condition restrictions for any Transferred Employee and his or her dependents under Buyer's Welfare Plan and shall credit such Transferred Employee with any co-payments and deductible contributions made by such Transferred Employee for the applicable plan year in which the Closing occurs. From and after the Closing, the Seller shall remain solely responsible for any and all benefit liabilities relating to or arising in connection with the requirements of COBRA to provide continuation of health care coverage under any plan in respect of (i) the employees, other than any employee named on Schedule 8.1 and their covered dependents, and (ii) to the extent related to a qualifying event occurring before the Closing, Transferred Employees and their covered dependents. 8.3 To assure to Buyer the full benefit of Business, each member of the Elcom Group undertakes that they shall not disclose to another person or itself use for any purpose, and shall use all reasonable endeavors to prevent the publication or disclosure of, information concerning the Business or affairs of the clients or customers of the Business, of which it has knowledge except for disclosure (i) required by law or applicable regulation or (ii) on a confidential basis to its professional advisers or (iii) of information that has come into the public domain through no breach of this Agreement. 8.4 Neither Buyer nor any member of the Elcom Group, for twenty four (24) months after Closing, shall interfere with or entice away from the other any employee of such other party, unless either party waives its rights hereunder; provided, however, Buyer shall not be subject to such restriction with respect to any employees identified on Schedule 8.1. For purposes of this Agreement, job postings, newspaper advertisements, and any party's personnel's response to job 8 inquiries unilaterally made by such personnel shall not constitute an interference or enticement. If Buyer notifies Elcom Group that an employee of Elcom Group is critical to the Business, Buyer and Elcom Group agree to negotiate in good faith a consulting arrangement whereby Elcom Group will provide, at cost plus direct expenses, the services of said employee during a transition period not to exceed 6 months nor more than 40 hours per week for the first month, 30 hours per week for the second month, and 20 hours per week thereafter. 8.5 Notwithstanding anything to the contrary in this Agreement: This Agreement shall not constitute an agreement to transfer, convey or assign any Contracts if a transfer, conveyance or assignment, or an attempt to make a transfer, conveyance or assignment, without the consent of a third party (including any governmental authority) would constitute a breach or violation thereof or in any way adversely affect the rights of the transferee, conveyee or assignee thereof until such consent is obtained; and if any such required consent is not obtained on or prior to the Closing, the Seller shall use commercially reasonable efforts to obtain such consent thereafter, and the Seller and the Buyer shall cooperate with each other to effect any reasonable arrangement designed to provide to the Buyer the benefit of, and to permit it to assume the liabilities and obligations under, any such Contracts. In the event any Contract cannot be assigned to Buyer, Seller shall allow Buyer to obtain the benefit of the Contract in Seller's name and each shall serve as the others' agents for such purpose; provided that Buyer shall indemnify, defend and hold Seller harmless from and against any and all claim, demand, action, damage, loss, cost, interest, liability, fee or expense, including without limitation attorney's fees, which the Seller may suffer or incur in connection therewith. 8.6 From the date of Closing until the fifth anniversary thereof, no member of the Elcom Group shall resell information technology hardware products or provide associated services relating thereto to the customers identified in Schedule 8.6. Further no member of the Elcom Group shall receive an agent fee from a reseller of information technology hardware products for the sale by such agent of any information technology hardware products or services to the customers identified in Schedule 8.6, nor shall it enter into any agreement designed to subvert the spirit of this paragraph. Notwithstanding the foregoing, nothing contained herein shall restrict any member of the Elcom Group from selling or licensing any of its technology products, other than SalesTrak, to a reseller of information technology hardware products or services or to any of the customers identified in Schedule 8.6. In addition, no member of the Elcom Group shall be prohibited from receiving fees from an eProcurement marketplace set up by a marketmaker using elcom technology. Elcom Group will keep its list of customers as disclosed on Schedule 8.6 confidential and not disclose customers to such resellers. 8.7 On and after the date of Closing, the Seller shall afford promptly to the Buyer and its representatives access to its books and records, employees and auditors to the extent necessary or useful for the Buyer in connection with any third party audit, investigation, dispute or litigation or any other reasonable business purpose relating to the Business and the Assets. Any such access by the Buyer shall (i) be upon reasonable notice and at reasonable times during the normal business hours of Seller, (ii) shall not unreasonably interfere with the 9 conduct of the business of the Seller, (iii) be at the Buyer's expense and (iv) shall be subject to appropriate restrictions for classified or privileged information. 8.8 Following the Closing, the parties shall at their own expense, execute and deliver, or cause to be executed and delivered, such additional reasonable instruments, documents, conveyances or assurances and take such other actions as may be reasonably necessary, or otherwise reasonably requested by the other party, to render effective the consummation of the transactions contemplated by this Agreement and the Ancillary Documents or otherwise carry out the intent and purposes of this Agreement and the Ancillary Documents. 8.9 The parties agree that the terms and conditions of Section 9 of the Managed Services Agreement shall continue in force after the termination of the Managed Services Agreement. 9. Survival and Indemnity. 9.1. The warranties and representations set forth herein shall survive for twelve (12) months after Closing. 9.2 Each member of the Elcom Group hereby jointly and severally defend, indemnify and hold harmless Buyer, and Buyer hereby defends, indemnifies and holds harmless each member of the Elcom Group jointly and severally, of and from any "Claim" which may be asserted against such indemnified party by reason of any actual or alleged breach of warranty, representation or covenant contained in this Agreement; provided, however, that a party shall only be required to defend, indemnify and hold harmless the other party when the aggregate amount of all Claims (the "Aggregate Claims"), shall exceed fifty thousand dollars ($50,000), in which event the indemnifying party shall be liable for the full amount of the Aggregate Claims, including such fifty thousand dollars ($50,000), subject to the remaining provisions of this section. "Claim" means any claim, demand, action, damage, loss, cost, interest, liability, fee or expense, including without limitation attorney's fees, which the indemnitee may suffer or incur, including without limitation any claim asserted against Buyer for any Excluded Liability. 9.3 The indemnifying party shall not be liable for indemnification under this section, unless notice of the Claim on which such right to indemnification is based is given in writing pursuant to the notice provisions contained herein reasonably promptly after the indemnitee shall become aware of the Claim, and, in any event, adequate to permit timely defensive action, and if such notice is not so given within a reasonable time after indemnitee becomes aware of such Claim, indemnitee shall have no right of indemnification with respect to such Claim. 9.4 Indemnitee shall permit the indemnifying party to assume the defense of any such Claim or litigation resulting therefrom (and to prosecute by way of counterclaim or third-party complaint any claim against such third party arising out of or relating to such Claim), provided that counsel selected to conduct the defense of such Claim or litigation shall be reasonably satisfactory to 10 indemnitee or its legal counsel. After such assumption of the defense by the indemnifying party, the indemnifying party shall not be liable hereunder for any legal or other expenses subsequently incurred by the indemnitee in connection with such defense, but the indemnitee may participate in such defense at its expense. The refusal so to permit the indemnifying party to assume such defense by such counsel shall relieve the indemnifying party of its indemnification obligations hereunder in respect of such Claim. No settlement of any Claim or litigation by the defending party shall be made without the express written consent of the other party, which consent shall not be unreasonably withheld. The indemnifying party shall not, except with the written consent of the indemnitee, consent to entry of any judgment or enter into any settlement which does not include, as an unconditional term thereof, the giving by the claimant or plaintiff to the indemnitee an unconditional release from all liability in respect of such Claim or litigation. If the indemnifying party shall assume such defense, the indemnitee shall fully cooperate with the indemnifying party and grant the indemnifying party reasonable access to such books, records and information as may be necessary for such defense without charge; provided, however that the indemnifying party shall bear all costs of reviewing and compiling such books, records and information, including duplicating expenses and legal feels. 9.5 The maximum aggregate amount of indemnification to which an indemnitee shall be entitled hereunder shall be the Purchase Price. 10. Conditions Precedent. 10.1 The obligation of the Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, or waiver by the Buyer, on or prior to the Closing of each of the following conditions: 10.1.1 The Buyer shall have received a certificate of an executive officer of the Seller, as of the date of the Closing, certifying that the representations and warranties of the Seller as set forth in Section 3 hereof are true and correct in all material respects. 10.1.2 The Buyer shall have received an opinion of Calfee, Halter & Griswold LLP, substantially in the form of Schedule 10.1.2 or with such changes thereto as are reasonably satisfactory to the Buyer. 10.1.3 The Buyer shall have completed its due diligence of the Seller to its satisfaction in its sole discretion and so certify to Seller in writing. 10.1.4 The parties shall have executed and delivered a version of each of the Managed Services Agreement, the Middleware Software License Agreement, and the Preferred Supplier Agreement satisfactory to the parties. 11 11. Termination. 11.1 If Seller has materially breached any of the warranties and representations contained in Section 3 of this Agreement or if any of the conditions set forth in Section 10 have not been fulfilled or waived on or prior to the Closing, Buyer may terminate this Agreement by delivering written notice thereof to Seller any time prior to Closing. 11.2 If this Agreement is terminated, it shall become null and void and of no further force and effect except that the confidentiality obligations of Buyer set forth herein shall survive. 12. General Provisions. 12.1. Each party shall pay its own legal, accounting and other expenses. 12.2. No waiver, amendment or termination shall be effective unless in writing signed by the party to be charged. No waiver in one instance shall constitute a waiver in any other. All notices shall be in writing and delivered in hand or sent by registered or certified mail, return receipt requested, or by overnight Federal Express at the addresses set forth above (notification to any member of the Elcom Group in care of Seller) to the attention of the persons signing this Agreement below. Copies of all notices sent to any member of the Elcom Group shall be sent to the attention of the General Counsel of Seller at the address set forth above. 12.3. This Agreement shall be governed under the laws of the Commonwealth of Massachusetts without regard to application of conflict of laws principles. 12.4. Any claim or controversy arising out of or relating to this Agreement, or the breach thereof, shall be resolved by non-binding mediation to be conducted in Washington, D.C. by one (1) mediator either selected by agreement of the parties or in accordance with and subject to the Commercial Mediation Rules of the American Arbitration Association then in effect. In the event that the parties are unable to resolve such claim or controversy through mediation, the parties hereby irrevocably agree that any legal suit brought by any party arising from this Agreement may be brought in the courts located in the State of Virginia. 12.5. This Agreement constitutes the entire agreement of the parties with respect to its subject matter and supersedes all prior oral and written communications, proposals and agreements in such regard. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 12 12.6. Headings are for convenience and are not admissible as to construction. 12.7. This Agreement shall bind upon and inure to the benefit of the parties and their respective successors, assigns, heirs and legal representatives; provided no party may assign this Agreement or delegate any obligations hereunder without the prior written consent of the other party except that Buyer may assign its rights and obligations to any affiliated entity established by Buyer in order to effect the within transactions. 12.8 Each of the parties hereto acknowledges that there may be no adequate remedy at law for the failure by such party to comply with the provisions of this Agreement and that such failure would cause immediate harm that would not be adequately compensable in damages. Accordingly, each of the parties hereto agrees that its agreement contained herein may be specifically enforced without the requirement of posting a bond or other security, in addition to all other remedies available to the parties hereto under this Agreement. 12.9 If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to this Agreement to the extent possible. In any event, the invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction. 12.10 This Agreement, including the Schedules hereto, and the Ancillary Documents constitute the full and entire understanding and agreement of the parties with respect to the subject matter hereof and thereof and supersede any and all prior agreements or understandings relating to the subject matter hereof. 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective on the date first set forth above. ELCOM SERVICES GROUP, INC. By: /s/ Peter A. Rendall ----------------------------------- Name: Peter A. Rendall Title: Chief Financial Officer ELCOM INTERNATIONAL, INC. By: /s/ Peter A. Rendall ----------------------------------- Name: Peter A. Rendall Title: Chief Financial Officer elcom, inc. By: /s/ Peter A. Rendall ----------------------------------- Name: Peter A. Rendall Title: Chief Financial Officer ePlus Technology, Inc. By: /s/ Kley Parkhurst ----------------------------------- Name: Kley Parkhurst Title: SVP, Sec. & Treasurer 14 EX-2 4 ex21_32902.txt 2.1 AMENDMENT Amendment to Asset Purchase and Sale Agreement Amendment made this 29th day of March, 2002 by and between ePlus Technology, Inc., a Virginia corporation, with a principal place of business at 400 Herndon Parkway, Herndon, VA 20170 ("Buyer") and Elcom Services Group, Inc., a Delaware corporation, with a principal place of business at 10 Oceana Way, Norwood, MA 02062 (the "Seller"), elcom, inc., a Delaware corporation, with a principal place of business at 10 Oceana Way, Norwood, MA 02062 ("elcom") , and Elcom International, Inc., a Delaware corporation, with a principal place of business at 10 Oceana Way, Norwood, MA 02062 ("EII"). Collectively, the Seller, elcom and EII are referred to herein as the "Elcom Group". Whereas, the parties have entered into an Asset Purchase and Sale Agreement dated March 25, 2002 (the "Agreement") Whereas, the parties desire to amend the Agreement. Now, therefore, for good and valuable consideration, the parties hereto agree as follows: 1. Delete the terms "the Preferred Supplier Agreement" from Section 1.1 of the Agreement. 2. Delete Section 1.1 of the Agreement and insert the following new Section 1.1: 1.1 "Preferred Supplier Agreement": a mutually agreed preferred supplier agreement as described in Section 8.12. 3. Delete Section 1.7 and insert the following new Section 1.7: 1.7. "Purchase Price": Two million one hundred fifty thousand dollars ($2,150,000) to be paid by wire transfer at Closing. 4. Insert the following two new sections in Section 1 of the Agreement: 1.12 "Escrow Amount": such amount to be determined by the parties in accordance with the Managed Services Agreement; provided in no event shall such amount exceed six hundred thousand dollars ($600,000). 1.13 "Payroll Obligation": the Seller's obligation to pay salary to the Transferred Employees for the period from March 25, 2002 to March 31, 2002, which such amount is approximately equal to one hundred sixty nine seven hundred fifty dollars ($169,750). 5. Notwithstanding anything contained in Section 6 of the Agreement, upon the date of Closing all Non-Disclosure Agreements by and between the parties shall terminate. 6. Delete the third sentence of Section 7.1. 7. Delete Section 7.1.3 and insert in its place the following section: 7.1.3 The Purchase Price less the Escrow Amount and the Payroll Obligation shall be paid by Buyer to the Sellers by wire transfer in accordance with Sellers' instructions. 8. Delete Section 7.1.8. 9. Notwithstanding anything contained in Section 8.4, the non-solicitation requirements set forth therein shall not apply with respect to Ken Frade. 10. Delete Section 8.9. 11. Insert the following new Sections: 8.10 All terms and conditions contained in Section 8 shall become effective at midnight on March 31, 2002. 8.11 All restrictions on employees imposed by Seller to the extent assignable are assigned to Buyer and Seller hereby waives the right to enforce said restrictions without Buyer's express direction. 8.12 elcom and Buyer agree that they shall execute and deliver a Preferred Supplier Agreement within ten (10) days of the Closing. Such agreement shall provide that if elcom is requested by a user of its eProcurement solutions to provide recommendations of a provider of information technology products and financing solutions to purchase information technology products, elcom shall offer the Buyer solutions to its users as elcom's preferred provider of IT Products and financing solutions for the purchase of IT products. Buyer shall pay elcom a mutually agreed portion of revenues received by Buyer from such user in consideration of elcom offering the Buyer solutions. elcom shall have no liability if any user decides not to select the Buyer solutions or if it selects the Buyer solutions and Buyer fails to earn any revenue from such arrangement. 8.13 Within two (2) business days of delivery to Buyer of evidence that Seller has paid to the Transferred Employees the Payroll Obligation, Buyer shall pay to Seller the Payroll Obligation by wire transfer. In the event that Buyer fails to pay to Seller the Payroll Obligation in accordance herewith, without prejudice to any other remedy, Seller may terminate the Managed Services Agreement by providing written notice of termination to Buyer. 12. Delete Section 10.1.4 and insert the following new Section 10.1.4: 10.1.4 The parties shall have executed and delivered a version of each of the Managed Services Agreement and the Middleware Software License Agreement satisfactory to the parties. 13. Unless otherwise as provided herein, the Agreement shall remain in full force and effect and to the extent of any conflict between the terms and conditions of this Amendment and the Agreement, the terms and conditions of this Amendment shall govern. IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective on the date first set forth above. ELCOM SERVICES GROUP, INC. By: /s/ Peter A. Rendall ----------------------------------- Name: Peter A. Rendall Title: Chief Financial Officer ELCOM INTERNATIONAL, INC. By: /s/ Peter A. Rendall ----------------------------------- Name: Peter A. Rendall Title: Chief Financial Officer elcom, inc. By: /s/ Peter A. Rendall ----------------------------------- Name: Peter A. Rendall Title: Chief Financial Officer ePlus Technology, Inc. By: /s/ Kley Parkhurst ----------------------------------- Name: Kley Parkhurst Title: SVP, Sec. & Treasurer EX-99 5 ex99_32902.txt PRESS RELEASE Press: Investor Relations: Lisa Savino, Dir. of Marketing Kley Parkhurst, SVP ePlus inc. ePlus inc. Tel: (631) 218-9510 Tel: (703) 709-1924 lsavino@eplus.com kparkhurst@eplus.com EPLUS EXPANDS PRESENCE IN BOSTON, SAN DIEGO, NEW JERSEY AND NEW YORK CITY Acquires Fulfillment and Services Business Assets From Elcom HERNDON, VA, April 1, 2002- ePlus inc. (Nasdaq NM: PLUS) announced today it purchased certain fixed assets, customer lists, and contracts, and assumed certain limited liabilities, relating to Elcom International, Inc.'s, (NASD NM: ELCO) IT fulfillment and IT professional services business. The transaction closed on March 29, 2002 for cash consideration of $2.15 Million. Pursuant to the agreement, ePlus hired 98 former Elcom personnel and now has established sales offices in greater Philadelphia, New York City, Boston, and San Diego. Kleyton L. Parkhurst, senior vice president of ePlus stated "This acquisition broadens our reach into key markets and adds valuable customer relationships. As a customer-focused company, we are looking forward to providing the best possible support and services to our new customers, and I believe our acquired customers will quickly realize the benefits of doing business with ePlus. It also creates an excellent opportunity for ePlus to cross-sell our solutions. I would like to welcome all of our new customers and employees to ePlus." The transaction includes Elcom's agreement not to compete and non-solicitation of customers, purchased software and a perpetual software license for fulfillment transaction processing, and 300,000 warrants for Elcom common stock with a strike price of $1.03 per share. To minimize customer disruption, ePlus has retained Elcom for a limited period to provide transitional services. About Elcom International, Inc. Elcom International, Inc. (Nasdaq: ELCO), operates two wholly-owned subsidiaries: elcom, inc., a leading international provider of remotely-hosted eProcurement and Private eMarketplace solutions and Elcom Services Group, Inc., which as of this date will provide managed services to ePlus pursuant to a managed services agreement. elcom, inc.'s innovative remotely-hosted technology establishes the next standard of value and enables enterprises of all sizes to realize the many benefits of eProcurement without the burden of significant infrastructure investment and ongoing content and system management. PECOS Internet Procurement Manager, elcom, inc.'s remotely-hosted eProcurement and eMarketplace enabling platform was the first "live" remotely-hosted eProcurement system in the world. Additional information can be found at www.elcominternational.com. About ePlus inc. A leading provider of Web-based e-procurement, asset management, financing, leasing, sourcing, and eContent technology and services, ePlus delivers comprehensive and high-value business solutions. The ePlusSuite of products and services, including Procure+, Manage+, Finance+, Service+, Content+, and ePlusMarket, helps businesses dynamically streamline, improve and gain management control of spending and fixed assets. ePlus solutions integrate and automate each aspect of the supply chain process: from requisition to approval, fulfillment, financing and asset management, delivering the highest return on investment. ePlus(TM), ePlusSuite(TM),Procure+(TM) , Manage+(TM) , Service+(TM), and MarketBuilder(TM) are trademarks of ePlus Inc. Finance+(SM) is a registered service mark of ePlus inc. ePlus Jumpstart(SM), and ePlus Content Framework(SM), are service marks applied for of ePlus. Founded in 1990, the company is headquartered in Herndon, VA and has more than 30 locations in the US. For more information, visit our website at www.eplus.com, call 800-827-5711 or email to info@eplus.com. "Safe Harbor"Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release which are not historical facts may be deemed to be "forward-looking statements". Actual and anticipated future results may vary due to certain risks and uncertainties, including, without limitation, general economic conditions; the possibility of defects in our products or catalog content data; our ability to hire and retain sufficient personnel; our ability to protect our intellectual property; the creditworthiness of our customers; our ability to raise capital and obtain non-recourse financing for our transactions; our ability to realize our investment in leased equipment; our ability to reserve adequately for credit losses; fluctuations in our operating results; our reliance on our management team; and other risks or uncertainties detailed in our Securities and Exchange Commission filings. -----END PRIVACY-ENHANCED MESSAGE-----