EXHIBIT 10.45

 

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SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

 

Dated as of July 29, 2002

 

AMONG

 

CITIZENS BANK OF MASSACHUSETTS

(AS LENDER AND AS AGENT)

 

AND

 

THE FINANCIAL INSTITUTIONS PARTY HERETO

FROM TIME TO TIME

(AS LENDERS)

 

WITH

 

PC CONNECTION, INC.

(AS BORROWER)

 

AND

 

COMTEQ FEDERAL OF NEW HAMPSHIRE, INC.

GOVCONNECTION, INC.

MERRIMACK SERVICES CORPORATION

PC CONNECTION SALES CORPORATION

PC CONNECTION SALES OF MASSACHUSETTS, INC.

MOREDIRECT, INC.

(AS GUARANTORS)

 

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SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

 

This SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT is
entered into as of July 29, 2002 by and among PC CONNECTION, INC., a Delaware
corporation (the “Borrower”), as borrower, COMTEQ FEDERAL OF NEW HAMPSHIRE,
INC., a Delaware corporation, GOVCONNECTION, INC., a Maryland corporation,
MERRIMACK SERVICES CORPORATION, a Delaware corporation, PC CONNECTION SALES
CORPORATION, a Delaware corporation, PC CONNECTION SALES OF MASSACHUSETTS, INC.,
a Delaware corporation and MOREDIRECT, INC., a Florida corporation (together,
the “Guarantors” and each, a “Guarantor”), as guarantors, CITIZENS BANK OF
MASSACHUSETTS (the “Agent”), as agent and the lenders’ party thereto (the
“Lenders”), as lenders.

 

Recitals

 

The Borrower, the Lenders, the Guarantors and the Agent are parties to an
Amended and Restated Credit and Security Agreement dated as of May 31, 2002, as
amended (the “Loan Agreement”). The Borrower, the Lenders, the Guarantors and
the Agent desire to amend the Loan Agreement as set forth below. All capitalized
terms used herein and not otherwise defined shall have the meanings set forth in
the Loan Agreement.

 

NOW, THEREFORE, the Borrower, the Lenders, the Guarantors and the Agent hereby
amend the Loan Agreement as follows:

 

Section 1. Definitions. Article I of the Loan Agreement is hereby amended as
follows:

 

(a) Section 1.2 of the Loan Agreement is amended by adding the definition “DFS”
in appropriate alphabetical order thereto:

 

“DFS” shall be Deutsche Financial Services Corporation, a Nevada corporation.

 

(b) Section 1.2 of the Loan Agreement is amended by deleting the definition of
“Maximum Advance Amount” in its entirety and replacing it with the following:

 

“Maximum Advance Amount” shall mean $45,000,000.

 

(c) The definition of “Obligations” in Section 1.2 of the Loan Agreement is
amended by adding the following sentence at the end thereof:

 

Notwithstanding the foregoing, the definition of Obligations shall not include
any loans, advances, debts, liabilities, obligations, covenants or duties owing
by the Borrower or any Guarantor to DFS or any of its affiliates in connection
with any inventory or equipment financing (other than Advances made by DFS
hereunder).

 

(d) The definition of “Permitted Vendor Debt” in Section 1.2 of the Loan
Agreement is amended by deleting the reference to Deutsche Financial Services
Corporation and replacing it with the phrase “DFS (other than Advances made by
DFS hereunder)”

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Section 2. Revolving Advances. Article II of the Loan Agreement is hereby
amended by deleting Section 2.1(c) in its entirety.

 

Section 3. Collateral Audit. Article III of the Loan Agreement is hereby amended
by adding the following sentence at the end of Section 3.4 thereof:

 

Any Lender may accompany the Agent during the performance of a Collateral Audit
at such Lender’s expense.

 

Section 4. Monthly Financial Statements. Article IX of the Loan Agreement is
hereby amended by deleting Section 9.9 in its entirety and replacing it with the
following:

 

9.9 Bi-Monthly Financial Reporting. Furnish Agent within ten (10) days after the
end of the second full week of each month and as of the end of each month,
including the last month of the fiscal year and the second full week of such
last month (a) accounts receivable agings, (b) accounts payable schedules and
(c) a Borrowing Base Certificate in form and substance reasonably satisfactory
to Agent, provided that none of the foregoing reports shall be binding upon
Agent or restrictive of Agent’s rights under this Agreement.

 

Section 5. Events of Default. Article X of the Loan Agreement is hereby amended
by deleting the reference to “Other Agreement” in Section 10.1(d) and replacing
it with “Other Document.”

 

Section 6. Entire Understanding. Article XV of the Loan Agreement is hereby
amended as follows:

 

(a) Section 15.2(b) of the Loan Agreement is hereby amended by deleting
subparagraphs (i) through (vii) and replacing such provision with the following
subparagraphs (i) through (ix):

 

(i) increase the Commitment Percentage, the maximum dollar commitment of any
Lender or the Maximum Advance Amount;

 

(ii) extend the maturity of any Note or the due date for any amount payable
hereunder, or increase or decrease the rate of interest or reduce any fee or
Indebtedness payable by Borrower to Lenders pursuant to this Agreement;

 

(iii) alter the definition of the term Required Lenders or alter, amend or
modify this Section 15.2(b);

 

(iv) release any Collateral during any calendar year (other than in accordance
with the provisions of this Agreement, including Section 7.1 hereof);

 

(v) change the rights and duties of Agent;

 

(vi) increase or decrease the Advance Rates or reserves above or below the
Advance Rates and reserves in effect on the Closing Date;

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(vii) release any Guarantor;

 

(viii) waive, amend or change any financial covenant or Section 2.1(a)(y)(v)
hereof; or

 

(ix) permit any acquisition by the Borrower or any Guarantor for an aggregate
consideration of greater than $5,000,000.

 

(b) Section 15.2(b) of the Loan Agreement is hereby amended by deleting the last
two paragraphs thereof.

 

Section 7. Commitment Transfer and Waiver of Transfer Fee. Upon the satisfaction
of the conditions set forth in Section 8 hereof, the Commitment Percentage of
Citizens Bank of Massachusetts shall be 55.56%, of Fleet National Bank shall be
22.22% and of Deutsche Financial Services Corporation shall be 22.22%. The
parties hereto hereby agree to waive payment by DFS as Purchasing Lender of the
$3,500 transfer fee required to be paid pursuant to the terms of Section 15.3(d)
of the Loan Agreement.

 

Section 8. Effectiveness; Conditions to Effectiveness. This Second Amendment
shall become effective upon execution hereof by the Borrower and the Lenders and
satisfaction of the following conditions:

 

(a) Execution and delivery to the Agent of a Commitment Transfer Supplement by
and among Citizens Bank of Massachusetts, Deutsche Financial Services
Corporation and the Borrower;

 

(b) Execution and delivery to the Agent of (i) a $10,000,000 Revolving Credit
Note by the Borrower in favor of Deutsche Financial Services Corporation and
(ii) a $25,000,000 Amended and Restated Revolving Credit Note in favor of
Citizens Bank of Massachusetts (collectively, the “Revised Notes”);

 

(c) Receipt by Deutsche Financial Services Corporation of an amendment fee of
$16,666.67 from the Borrower;

 

(d) Copies of resolutions of the Board of Directors of the Borrower and the
Guarantors authorizing the execution, delivery and performance by the Borrower
and the Guarantors under this Second Amendment and by the Borrower under the
Revised Notes and certified by a Secretary or an Assistant Secretary of the
Borrower and the Guarantors, which certificates shall state that the resolutions
are in full force and effect;

 

(e) Certificate of the Secretary or Assistant Secretary of the Borrower and the
Guarantors certifying the name and signatures of the officers of the Borrower
and the Guarantors authorized to sign this Second Amendment, the Revised Notes
and other documents to be delivered in connection therewith, as well as
certifying that the articles of incorporation and by-laws of the Borrower and
the Guarantors have not been amended since the last date that such corporate
documents were delivered to the Agent;

 

(f) Legal Opinions of counsel to the Borrower and the Guarantors in form and
substance satisfactory to Agent;

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(g) Certificates of legal existence and good standing dated as of a recent date
for each of the Borrower and Guarantors issued by the appropriate governmental
authorities.

 

(h) All other documents as the Agent and the Lenders may reasonably request.

 

Section 9. Miscellaneous.

 

(a) The Borrower agrees that each of the Documents shall remain in full force
and effect after giving effect to this Second Amendment. The guarantees of the
Borrower’s Subsidiaries guarantee all of the Obligations as may be amended by
this Second Amendment.

 

(b) This Second Amendment represents the entire agreement among the parties
hereto relating to this Second Amendment, and supersedes all prior
understandings and agreements among the parties relating to the subject matter
of this Second Amendment.

 

(c) The Borrower agrees to pay on demand all of the Agent’s reasonable expenses
in preparing, executing and delivering this Second Amendment, and all related
instruments and documents, including, without limitation, the reasonable fees
and out-of-pocket expenses of the Agent’s special counsel.

 

(d) The Borrower hereby confirms to the Agent that the representations and
warranties of the Borrower set forth in Article 5 of the Loan Agreement (as
amended and supplemented hereby) are true and correct as of the date hereof, as
if set forth herein in full.

 

(e) The Borrower has reviewed the provisions of this Second Amendment and all
documents executed in connection therewith or pursuant thereto or incident or
collateral hereto or thereto from time to time and there is no Event of Default
thereunder, and no condition which, with the passage of time or giving of notice
or both, would constitute an Event of Default thereunder.

 

(f) The Borrower represents and warrants that the execution, delivery or
performance by the Borrower of any of the obligations contained in this Second
Amendment or in any other Document do not require the consent, approval or
authorization of any person or governmental authority or any action by or on
account of with respect to any person or governmental authority.

 

(g) This Second Amendment shall be a Document and shall be governed by and
construed and enforced under the laws of The Commonwealth of Massachusetts
without regard to principles relating to choice of law.

 

[Signature page to follow]

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IN WITNESS WHEREOF, the Borrower, the Lenders, the Guarantors and the Agent have
caused this Second Amendment to Amended and Restated Credit and Security
Agreement to be executed by their duly authorized officers as of the date first
set forth above.

 

PC CONNECTION, INC., as Borrower

By:

 

/s/ Mark A Gavin

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Name:

 

Mark A. Gavin

Title:

 

CFO

COMTEQ FEDERAL OF NEW HAMPSHIRE,

INC., as Guarantor

By:

 

/s/ Gary Sorkin

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Name:

 

Gary Sorkin

Title:

 

Treasurer

GOVCONNECTION, INC., as Guarantor

By:

 

/s/ Gary Sorkin

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Name:

 

Gary Sorkin

Title:

 

President

MERRIMACK SERVICES CORPORATION, as

Guarantor

By:

 

/s/ Mark A Gavin

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Name:

 

Mark A. Gavin

Title:

 

CFO

PC CONNECTION SALES CORPORATION,

as Guarantor

By:

 

/s/ Robert Wilkins

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Name:

 

Robert Wilkins

Title:

 

Treasurer

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PC CONNECTION SALES OF

MASSACHUSETTS, INC., as Guarantor

By:

 

/s/ Robert Wilkins

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Name:

 

Robert Wilkins

Title:

 

Treasurer

MOREDIRECT, INC., as Guarantor

By:

 

/s/ Scott Modist

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Name:

 

Scott Modist

Title:

 

CFO

CITIZENS BANK OF MASSACHUSETTS, as

Lender and as Agent

By:

 

/s/ James C. Gregg

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Name:

 

James C. Gregg

Title:

 

Senior Vice President & Managing Director

28 State Street

13th Floor

Boston, Massachusetts 02109

FLEET NATIONAL BANK

By:

 

/s/ Kenneth R. Sheldon

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Name:

 

Kenneth R. Sheldon

Title:

 

Vice President

1155 Elm Street

Manchester, NH 03101

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DEUTSCHE FINANCIAL SERVICES

CORPORATION

By:

 

/s/ Kenneth C. MacDonell

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Name:

 

Kenneth C. MacDonell

Title:

 

Vice President

625 Maryville Center Drive, Suite 200

St Louis, MO 63141