Exhibit
10.1
AMENDMENT NO. 8 TO
AMENDED AND RESTATED CREDIT FACILITIES AGREEMENT
This AMENDMENT NO. 8 TO AMENDED AND
RESTATED CREDIT FACILITIES AGREEMENT (this “Agreement”)
is entered into and effective as of June 24, 2009, by and among (1)
Pomeroy IT Solutions, Inc. (formerly known as, Pomeroy Computer
Resources, Inc., and as successor by merger with Val Tech Computer
Systems, Inc.), (2) Pomeroy Select Integration Solutions, Inc., (3)
Pomeroy Staffing Solutions, LLC (formerly, prior to conversion,
Pomeroy Select Advisory Services, Inc.), (4) Pomeroy IT Solutions
Sales Company, Inc. (formerly known as, Pomeroy Computer Resources
Sales Company, Inc., and as successor by merger with TheLinc, LLC
and as successor by merger with Micrologic Business Systems of
K.C., LLC), (5) Pomeroy Computer Resources Holding Company, Inc.,
(6) Pomeroy Computer Resources Operations, LLP, (7) PCR Holdings,
Inc. (formerly known as, Technology Integration Financial Services,
Inc.), (8) PCR Properties, LLC (formerly, prior to conversion, PCR
Properties, Inc., and prior to such conversion, formerly known as,
T.I.F.S. Advisory Services, Inc.), (9) Alternative Resources
Corporation, a Delaware corporation (as successor by merger with
Pomeroy Acquisition Sub, Inc.), (10) ARC Service, Inc., a Delaware
corporation, (11) ARC Staffing Management LLC, a Delaware limited
liability company, (12) ARC Shared Services LLC, a Delaware limited
liability company, (13) ARC Technology Management LLC, a Delaware
limited liability company, (14) ARC Solutions, Inc., a Delaware
corporation, and (15) ARC Midholding, Inc., a Delaware corporation
(collectively and separately referred to as, “Borrower”
or “Borrowers”), and GE Commercial Distribution Finance
Corporation, formerly known as Deutsche Financial Services
Corporation (“GECDF”), as Administrative Agent, and
GECDF as the sole Lender.
Recitals
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Borrower, Administrative Agent and
Lenders are party to that certain Amended and Restated Credit
Facilities Agreement dated as of June 25, 2004, as amended by
Amendment No. 1 (with Waiver) to Amended and Restated Credit
Facilities Agreement dated as of March 31, 2006, as amended by
Amendment No. 2 (with Waiver) to Amended and Restated Credit
Facilities Agreement dated as of April 13, 2006, as amended by
Amendment No. 3 (with Waiver) to Amended and Restated Credit
Facilities Agreement dated as of June 23, 2006, as amended by
Amendment No. 4 to Amended and Restated Credit Facilities Agreement
dated as of June 25, 2007, as amended by Amendment No. 5 to Amended
and Restated Credit Facilities Agreement dated as of April 15,
2008, as amended by Amendment No. 6 to Amended and Restated Credit
Facilities Agreement dated as of June 25, 2008, as amended by
Amendment No. 7 to Amended and Restated Credit Facilities Agreement
dated as of November 14, 2008, and as further amended or modified
or consented to from time to time (the “Loan
Agreement”).
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GE
Commercial Distribution Finance Corporation, as the sole Lender,
and Borrower have agreed to the provisions set forth herein on the
terms and conditions contained herein.
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Agreement
Therefore, in
consideration of the mutual agreements herein and other sufficient
consideration, the receipt of which is hereby acknowledged,
Borrower, Administrative Agent and Lender hereby agree as
follows:
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1.
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Definitions.
All references to the
“Agreement” or the “Loan Agreement” in the
Loan Agreement and in this Agreement shall be deemed to be
references to the Loan Agreement as it may be amended, restated,
extended, renewed, replaced, or otherwise modified from time to
time. Capitalized terms used and not otherwise defined
herein have the meanings given them in the Loan
Agreement.
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2.
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Effectiveness of
Agreement. This Agreement shall become
effective as of the date first written above, but only if this
Agreement has been executed by Borrower, Administrative Agent and
Lender, and only if all of the documents listed on Exhibit A
to this Agreement have been delivered and, as applicable, executed,
sealed, attested, acknowledged, certified, or authenticated, each
in form and substance satisfactory to Administrative Agent and
Lender, and a “Eighth Amendment Fee” in the amount
of Twenty Five Thousand Dollars ($25,000.00) shall be
paid to Lender. Borrower hereby
irrevocably authorizes the Administrative Agent to make a Revolving
Loan to pay the Eighth Amendment Fee.
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3.
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Amendments.
The Loan Agreement is
hereby amended as follows:
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3.1.
Maturity.
Section 6.1.2.3 of the
Loan Agreement is deleted in its entirety and replaced with the
following:
“ 6.1.2.3
Maturity. Borrower shall repay the entire amount of the
Aggregate Revolving Loan on October 30, 2009 and Borrower shall
repay the entire amount of the Swingline Loan on demand, or if no
demand is made, on October 30, 2009, and plus at such time, payment
of cash collateral satisfactory to Administrative Agent as security
for Borrower’s obligation to reimburse the Letter of Credit
Issuer for 105% of all draws and expenses under all outstanding
Letters of Credit. Borrower shall repay the entire
amount of the Aggregate Floorplan Loan and the Interim Floorplan
Loan on the date as provided in Section 3.2.7 or specified
elsewhere in this Agreement or if no demand is made as set forth in
Section 3.2.7 or elsewhere in this Agreement, then on October 30,
2009 (such date being, the “Floorplan Loan Maturity
Date”), plus cash collateral equal to 100% of any unfunded
Approvals, in which case such Approvals shall be otherwise paid in
accordance with the applicable Statements of
Transaction.”
3.2.
Minimum Tangible Net
Worth. For all reporting periods after
April 5, 2009, Section 15.2 of the Loan Agreement is deleted in its
entirety and replaced with the following:
“ 15.2. Minimum
Tangible Net Worth. Each Borrower covenants that
Tangible Net Worth on the last day of each fiscal quarter shall be
no less than for (i) the fiscal quarter ending July 5, 2009, Fifty
Million Dollars ($50,000,000), and (ii) the fiscal quarter ending
Oc tober 5, 2009, Fifty Million Dollars
($50,000,000).”
3.3.
Fixed Charges. For all reporting periods after
April 5, 2009, Section 15.4
of the Loan Agreement is deleted in its entirety and replaced with
the following:
“ 15.4. Minimum Fixed
Charge Coverage . Each Borrower covenants that the
ratio of Borrower’s EBITDA calculated as of the day of each
fiscal quarter for the four fiscal quarter periods then ended, to
Fixed Charges, calculated as of the last day of each fiscal quarter
for the four fiscal quarter periods then ended, shall be no less
than the ratio specified below:
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Four Fiscal
Quarter period ending on the following dates:
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Minimum
Fixed Charge Coverage Ratio
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3.4.
Maximum Total Funded Indebtedness
to EBITDA.
For all reporting
periods after April 5, 2009, Section 15.5 of the Loan Agreement is deleted in
its entirety and replaced with the following:
“
15.5. Maximum Total Funded Indebtedness to EBITDA
. Each Borrower covenants that the ratio of Total Funded
Indebtedness as of the last day of any fiscal quarter, to EBITDA,
calculated as of the last day of each fiscal quarter for the four
fiscal quarter period then ended, shall be no greater than the
ratio specified below:
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Four Fiscal
Quarter period ending on the following dates:
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Maximum
Total Funded Indebtedness to EBITDA
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3.5.
Termination
Fee. Section 18.15.1 of the Loan
Agreement is deleted in its entirety and replaced with the
following:
“
18.15.1. Termination Fee. Borrower
may terminate no less than all of the Commitments at any time prior
to the Revolving Loan Maturity Date upon: (a) at
least 60 days written notice to Administrative Agent;
(b) payment to Administrative Agent of all Loan Obligations;
and (c) the one-time payment of an amount as follows, if
applicable, to the Administrative Agent for the pro-rata benefit of
the Lenders (such payment being the “Termination
Fee”):
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Date of
Termination
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Percent of
Aggregate
Commitments
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Revolving Loan
Maturity Date
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$250,000
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Notwithstanding
the foregoing, (i) if the Lenders are replaced and the Loan
Obligations are fully and indefeasibly paid in cash by a new
bank group providing comparable financing (including a similar
floorplan line of credit) and if Pomeroy IT Solutions, Inc.
is no longer publicly-traded, and GE Commercial Distribution
Finance Corporation is the lead agent for any such new bank group,
then the foregoing Termination Fee shall be waived, and (ii)
if the Required Lenders elect to
terminate the Commitments as set forth in Section 3.5, and if the
Borrower fully and indefeasibly pays the Loan Obligations in cash
within 90 days of its receipt of such termination notice, then
the Termination Fee shall be waived.”
4.
Representations and Warranties of
Borrower. Each Borrower hereby represents and
warrants to Administrative Agent and Lender that (i) such
Borrower’s execution of this Agreement has been duly
authorized by all requisite action of such Borrower, (ii) no
consents are necessary from any third parties for such
Borrower’s execution, delivery or performance of this
Agreement, (iii) this Agreement, the Loan Agreement, and each of
the other Loan Documents, constitute the legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance
with their terms, ex
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