Document:

ex10_1.htm

    
      

    

    EXHIBIT
10.1

    

    AMENDMENT
NO. 7 TO AMENDED AND RESTATED

    CREDIT
FACILITIES AGREEMENT

    

    This
AMENDMENT NO. 7 TO AMENDED AND RESTATED CREDIT FACILITIES AGREEMENT (this
“Agreement”) is entered into and effective as of November 14, 2008, 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:

    

    
      	
              A.

            	
              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, and as further amended or modified or
      consented to from time to time (the “Loan
  Agreement”).

            

    

    

    
      	
              B.

            	
              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.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    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:

    

    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.

    

    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 “Seventh 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 Seventh Amendment
Fee.

    

    Amendments.  The Loan
Agreement is hereby amended as follows:

    

    Distributions.   Section
14.10 of the Loan Agreement is deleted in its entirety and replaced with the
following (and the parties hereto acknowledge that all of Section 14.10 is being
restated, although only Section 14.10.1 has been modified):

    

    “14.10.  Distributions.  Directly
or indirectly declare or make, or incur any liability to make, any Distribution
to any Person except:

    

    14.10.1.   If
(A) there is no Existing Default and no Default or Event of Default is
reasonably likely to occur from any such Distribution, and (B) the Maximum
Available Amount plus the Dollar amount of all cash on the Borrower’s balance
sheet minus (without duplication) the then-outstanding Revolving Loans, exceeds
(i) Twenty Five Million Dollars ($25,000,000) (both before and after giving
effect to any such Distribution), up to Eighteen Million Dollars ($18,000,000)
in the aggregate per calendar year in one or more series of transactions
(excluding any redemption of Preferred Capital Stock, which is covered
exclusively in Section 14.10.2) of Distributions, and (ii) for the period from
June 25, 2008 through and including June 25, 2009, up to Eighteen Million
Dollars ($18,000,000) in the aggregate for all Distributions (excluding any
redemption of Preferred Capital Stock, which is covered exclusively in Section
14.10.2) during such period.

    

    14.10.2.  If there
is no Existing Default and no Default or Event of Default is reasonably likely
to occur, the redemption of Preferred Capital Stock in one or more series of
transactions, up to the lesser of (A) Ten Million Dollars ($10,000,000) in the
aggregate during the term of this Agreement, and (B) the Dollar amount of all
outstanding Preferred Capital Stock.”

    

    Minimum Tangible Net
Worth.   For all
reporting periods after November 14, 2008, 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 (i) for the fiscal
quarter ending January 5, 2009, Sixty Million Dollars ($60,000,000), and (ii)
for the fiscal quarter ending April 5, 2009, Sixty Million Dollars
($60,000,000).”

    

    Fixed
Charges.   For all
reporting periods after November 14, 2008, 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; provided, however, for the January 5,
2009 calculation, the components of such ratio (other than the payments in
clause (ii) of the definition of Fixed Charges) shall be calculated only for the
two most recent fiscal quarters ended on an annualized basis, and for the April
5, 2009 calculation, the components of such ratio (other than the payments in
clause (ii) of the definition of Fixed Charges) shall be calculated only for the
three most recent fiscal quarters ended on an annualized basis:

    

    
      
        
          
            	
                    Four
      Fiscal Quarter period ending on the following dates (unless another period
      is noted above):

                  	
                    Minimum
      Fixed Charge Coverage Ratio

                  
	
                    January
      5, 2009

                  	
                    0.50:1.00

                  
	
                    April
      5, 2009

                  	
                    0.50:1.00”

                  

          

        

      

    

    

    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, except to the
extent that the enforceability thereof against Borrower may be limited by
bankruptcy, insolvency or other laws affecting the enforceability of creditors
rights generally or by equity principles of general application, (iv) except as
disclosed on the disclosure schedule attached to the Loan Agreement and attached
hereto as Exhibit
B, all of the representations and warranties contained in Section 11 of
the Loan Agreement are true and correct with the same force and effect as if
made on and as of the date of this Agreement, and (v) after giving effect to
this Agreement, there is no Existing Default.

    

    Customer
Identification - USA PATRIOT Act Notice.   Administrative
Agent and Lender hereby notifies the Borrowers and each other Covered Person
that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L.
107-56, signed into law October 26, 2001 (as amended from time to time
(including any successor statute) and together with all rules promulgated
thereunder, collectively, the “Act”), it is required to obtain, verify and
record information that identifies the Borrowers and each other Covered Person,
which information includes the name and address of the Borrowers and each other
Covered Person and other information that will allow Administrative Agent and
Lender to identify the Borrowers and each other Covered Person in accordance
with the Act.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Reaffirmation.   Each
Borrower hereby represents, warrants, acknowledges and confirms that (i) except
as specifically modified by the terms of this Agreement, the Loan Agreement and
the other Loan Documents remain in full force and effect as amended by this
Agreement, (ii) such Borrower has no defense to its obligations under the Loan
Agreement and the other Loan Documents, and the Loan Obligations are due and
owing to the Administrative Agent and Lender without setoff or counterclaim,
(iii) the Security Interests of the Administrative Agent (held for the ratable
benefit of the Lenders) under the Security Documents secure all the Loan
Obligations, are reaffirmed in all respects, continue in full force and effect,
have the same priority as before this Agreement, and are not impaired or
extinguished in any respect by this Agreement, and (iv) such Borrower has no
claim against Administrative Agent or any Lender arising from or in connection
with the Loan Agreement or the other Loan Documents and any such claim is hereby
irrevocably waived and released and discharged forever.  Until the
Loan Obligations are paid in full in cash and all obligations and liabilities of
each Borrower under this Agreement and the Loan Documents are performed and paid
in full in cash, each Borrower agrees and covenants that they are respectively
bound by the covenants and agreements set forth in the Loan Agreement, Loan
Document and in this Agreement.  The Borrowers hereby ratify and
confirm the Loan Obligations.  This Agreement does not create or
constitute, and is not, a novation of the Loan Agreement and the other Loan
Documents.

    

    Release.   As a
material part of the consideration for Administrative Agent and Lender entering
into this Agreement, each Borrower, jointly and severally, for themselves and
their officers, directors, employees and agents (collectively “Releasor”) hereby
forever releases, forever waives and forever discharges Administrative Agent,
each Lender, and Administrative Agent’s and Lender’s predecessors, successors,
assigns, officers, managers, directors, shareholders, employees, agents,
attorneys, representatives, parent corporations, subsidiaries, and affiliates
(hereinafter all of the above collectively referred to as “Administrative Agent
and Lender Group”), jointly and severally, from any and all claims,
counterclaims, demands, damages, debts, agreements, covenants, suits, contracts,
obligations, liabilities, accounts, offsets, rights, actions, and causes of
action of any nature whatsoever, including, without limitation, all claims,
demands, and causes of action for contribution and indemnity, whether arising at
law or in equity, and whether arising under, arising in connection with, or
arising from, the Loan Agreement, and the other Loan Documents or otherwise,
whether presently possessed or possessed in the future, whether known or
unknown, whether liability be direct or indirect, liquidated or unliquidated,
whether presently accrued or to accrue hereafter, whether absolute or
contingent, foreseen or unforeseen, and whether or not heretofore asserted,
which Releasor may have or claim to, have against any of Administrative Agent
and Lender Group.

    

    Governing
Law.   This
Agreement has been executed and delivered in St. Louis, Missouri, and shall be
governed by and construed under the laws of the State of Missouri without giving
effect to choice or conflicts of law principles thereunder.

    

    Section
Titles.   The
section titles in this Agreement are for convenience of reference only and
shall not be construed so as to modify any provisions of this
Agreement.

    

    Fees
and Expenses.   Borrower
shall promptly pay to Administrative Agent all fees, expenses and other amounts
owing to Administrative Agent under the Loan Agreement and the other Loan
Documents upon demand, including, without limitation, all reasonable fees, costs
and expenses incurred by Administrative Agent in connection with the
preparation, negotiation, execution, and delivery of this Agreement, but
excluding costs and expenses incurred by Administrative Agent in performing
periodic field exams if such field exams are performed while there is no
Existing Default.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Counterparts;
Facsimile Transmissions.   This
Agreement may be executed in one or more counterparts and on separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Signatures to
this Agreement may be given by facsimile or other electronic transmission, and
such signatures shall be fully binding on the party sending the
same.

    

    Incorporation
By Reference.   Administrative
Agent, Lender and Borrower hereby agree that all of the terms of the Loan
Documents are incorporated in and made a part of this Agreement by this
reference.  This Agreement is a Loan Document.

    

    Notice—Insurance.
  

    The
following notice is given pursuant to Section 427.120 of the Missouri Revised
Statutes; nothing contained in such notice shall be deemed to limit or modify
the terms of the Loan Documents:

    

    UNLESS
YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT WITH
US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOUR
COLLATERAL.  THIS INSURANCE MAY, BUT NEED NOT, PROTECT YOUR
INTERESTS.  THE COVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT
YOU MAKE OR ANY CLAIM THAT IS MADE AGAINST YOU IN CONNECTION WITH THE
COLLATERAL.  YOU MAY LATER CANCEL ANY INSURANCE PURCHASED BY US, BUT
ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED INSURANCE AS REQUIRED BY
OUR AGREEMENT.  IF WE PURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL
BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM,
INTEREST AND ANY OTHER CHARGES WE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF
THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE
INSURANCE.  THE COSTS OF THE INSURANCE MAY BE ADDED TO YOUR TOTAL
OUTSTANDING BALANCE OR OBLIGATION.  THE COSTS OF THE INSURANCE MAY BE
MORE THAN THE COST OF INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR
OWN.

    

    Notice—Oral
Commitments Not Enforceable.   

    The
following notice is given pursuant to Sections 432.045 and 432.047 of the
Missouri Revised Statutes; nothing contained in such notice shall be deemed to
limit or modify the terms of the Loan Documents:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
       

      ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT
IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S)) AND
US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN
WRITING TO MODIFY IT.

       

    

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    IN
WITNESS WHEREOF, this Agreement has been duly executed as of the date first
above written.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  POMEROY
      IT SOLUTIONS, INC.

                                
	
                                  (formerly
      known as, Pomeroy Computer Resources, Inc.,

                                
	
                                  as
      successor by merger with Val Tech Computer Systems,
  Inc.)

                                
	 
      	 
      
	
                                  By:

                                	 
      	 
      
	
                                  Name:

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                  POMEROY
      SELECT INTEGRATION SOLUTIONS, INC.

                                
	 
      	 
      
	
                                  By:

                                	 
      	 
      
	
                                  Name:

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                  POMEROY
      STAFFING SOLUTIONS, LLC

                                
	
                                  (formerly,
      prior to conversion, Pomeroy Select Advisory Services,
    Inc.)

                                
	 
      	 
      
	
                                  By:

                                	 
      	 
      
	
                                  Name:

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                  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)

                                
	 
      	 
      
	
                                  By:

                                	 
      	 
      
	
                                  Name:

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                  POMEROY
      COMPUTER RESOURCES HOLDING COMPANY, INC.

                                	 
      
	 
      	 
      
	
                                  By:

                                	 
      	 
      
	
                                  Name:

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    

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                                    POMEROY
      COMPUTER RESOURCES OPERATIONS, LLP

                                  
	 
      	 
      	 
      
	
                                    By:
      Pomeroy IT Solutions, Inc., its partner

                                  
	 
      	 
      	 
      
	
                                    By:

                                  	 
      	 
      
	
                                    Name:

                                  	 
      	 
      
	
                                    Title:

                                  	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                    PCR
      HOLDINGS, INC.

                                  
	
                                    (formerly
      known as, Technology Integration Financial Services,
  Inc.)

                                  
	 
      	 
      	 
      
	
                                    By:

                                  	 
      	 
      
	
                                    Name:

                                  	 
      	 
      
	
                                    Title:

                                  	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                    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.)

                                  
	 
      	 
      	 
      
	
                                    By:

                                  	 
      	 
      
	
                                    Name:

                                  	 
      	 
      
	
                                    Title:

                                  	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                    ALTERNATIVE
      RESOURCES CORPORATION

                                  
	
                                    (as
      successor by merger with Pomeroy Acquisition Sub, Inc.)

                                  
	 
      	 
      	 
      
	
                                    By:

                                  	 
      	 
      
	
                                    Name:

                                  	 
      	 
      
	
                                    Title:

                                  	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                    ARC
      SERVICE, INC.

                                  
	 
      	 
      	 
      
	
                                    By:

                                  	 
      	 
      
	
                                    Name:

                                  	 
      	 
      
	
                                    Title:

                                  	 
      	 
      

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    

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                ARC
      STAFFING MANAGEMENT LLC

              	 
      
	 
      	 
      	 
      
	
                By:

              	 
      	 
      
	
                Name:

              	 
      	 
      
	
                Title:

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                ARC
      SHARED SERVICES LLC

              	 
      
	 
      	 
      	 
      
	
                By:

              	 
      	 
      
	
                Name:

              	 
      	 
      
	
                Title:

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                ARC
      TECHNOLOGY MANAGEMENT LLC

              	 
      
	 
      	 
      	 
      
	
                By:

              	 
      	 
      
	
                Name:

              	 
      	 
      
	
                Title:

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                ARC
      SOLUTIONS, INC.

              	 
      
	 
      	 
      	 
      
	
                By:

              	 
      	 
      
	
                Name:

              	 
      	 
      
	
                Title:

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                ARC
      MIDHOLDING, INC.

              	 
      
	 
      	 
      	 
      
	
                By:

              	 
      	 
      
	
                Name:

              	 
      	 
      
	
                Title:

              	 
      	 
      

      

    

    

    

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    GE
COMMERCIAL DISTRIBUTION FINANCE CORPORATION,

     formerly
known as Deutsche Financial Services Corporation,

     as
Administrative Agent and as Lender

    

    
      
        	
                By:

              	 
      	 
      
	
                Name:

              	 
      	 
      
	
                Title:

              	 
      	 
      

      

    

    

    

    {end
of signatures}

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
A

    

    Documents and
Requirements

    

    

    
      	
              1.

            	
              Amendment
      No. 7 to Amended and Restated Credit Facilities Agreement executed by
      Borrower and Lender.

            

    

    

    
      	
              2.

            	
              Secretary’s
      Certificate (certifying resolutions) for each of the
      following:

            

    

    

    
      	
            	
              a)

            	
              Pomeroy
      IT Solutions, Inc. (formerly known as, Pomeroy Computer Resources, Inc.,
      and as successor by merger with Val Tech Computer Systems,
      Inc.),

            

    

    
      	
            	
              b)

            	
              Pomeroy
      Select Integration Solutions, Inc.,

            

    

    
      	
            	
              c)

            	
              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),

            

    

    
      	
            	
              d)

            	
              Pomeroy
      Computer Resources Holding Company,
Inc.,

            

    

    
      	
            	
              e)

            	
              PCR
      Holdings, Inc. (formerly known as, Technology Integration Financial
      Services, Inc.),

            

    

    
      	
               
      

            	
              f)

            	
              Alternative
      Resources Corporation, a Delaware corporation (as successor by merger with
      Pomeroy Acquisition Sub, Inc.),

            

    

    
      	
            	
              g)

            	
              ARC
      Service, Inc., a Delaware
corporation,

            

    

    
      	
            	
              h)

            	
              ARC
      Solutions, Inc., a Delaware corporation,
and

            

    

    
      	
               
      

            	
              i)

            	
              ARC
      Midholding, Inc., a Delaware
corporation

            

    

    

    
      	
              3.

            	
              Secretary’s
      Certificate (certifying resolutions) for Pomeroy Computer Resources
      Operations, LLP

            

    

    

    
      	
              4.

            	
              Member’s
      Certificate (certifying resolutions)
for:

            

    

    
      	
            	
              a)

            	
              ARC
      Staffing Management LLC, a Delaware limited liability
    company,

            

    

    
      	
            	
              b)

            	
              ARC
      Shared Services LLC, a Delaware limited liability
  company,

            

    

    
      	
            	
              c)

            	
              ARC
      Technology Management LLC, a Delaware limited liability
      company,

            

    

    
      	
            	
              d)

            	
              Pomeroy
      Staffing Solutions, LLC (formerly, prior to conversion, Pomeroy Select
      Advisory Services, Inc., and after conversion, formerly Pomeroy Select
      Advisory Services, LLC), and

            

    

    
      	
            	
              e)

            	
              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.).

            

    

    

    
      	
              5.

            	
              Payment
      of Seventh Amendment Fee.

            

    

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    Exhibit
B

    

    Supplemental Disclosure
Schedule

    

    

    NONEUnassociated Document

    
      

    

    
      Exhibit 10.7

       

       

      
        	
                Dear:

              	
                C.
      Gregory Peters

              

      

      

       

      
        	
                Start
    Date:

              	
                July
      01, 2008

              

      

       

      
        	
                Title:

              	
                President
      and Chief Executive Officer

              

      

       

      
        	
                Reporting
      to:

              	
                Chairman
      of the Board

              

      

       

      Job Description: Broad
responsibilities of the position are listed below which will be reassessed from
time to time and specific responsibilities will be added, amended or changed by
the Board of Directors.

       

      
        	
                 
      

              	
                —

              	
                Implement
      the strategic goals and objectives of the
  organization

              

      

      
        	
                 
      

              	
                —

              	
                Create
      and execute strategies that ensure the company’s future
      success

              

      

      
        	
                 
      

              	
                —

              	
                As
      Chairman of Executive Management Committee (EMC), lead and direct the
      activity of the executive management team to successfully achieve
      profitability and growth; and report to the
BOD

              

      

      
        	
                 
      

              	
                —

              	
                Develop
      a strategic plan to advance the company’s mission and objectives and to
      promote revenue, profitability, and growth as an
    organization.

              

      

      
        	
                 
      

              	
                —

              	
                Oversee
      company operations to insure production efficiency, quality, service, and
      cost-effective management of
resources.

              

      

      
        	
                 
      

              	
                —

              	
                Plan
      develop, and implement strategies for generating revenues for the
      company.

              

      

      
        	
                 
      

              	
                —

              	
                Represent
      and promote the company to investment and banking community, raise capital
      and finance company operations as
needed.

              

      

      
        	
                 
      

              	
                —

              	
                Identify
      acquisitions and merger opportunities and direct implementation
      activities.

              

      

      
        	
                 
      

              	
                —

              	
                Review
      activity reports and financial statements to determine progress and status
      in attaining
      objectives and revise objectives and plans in accordance with
      current conditions.

              

      

      
        	
                 
      

              	
                —

              	
                Evaluate
      performance of executives for compliance with established policies and
      objectives of the company and contributions in attaining
      objectives.

              

      

      
        	
                 
      

              	
                —

              	
                Present
      company report at Stockholder and Board of Director
    meetings.

              

      

      
        	
                 
      

              	
                —

              	
                Work
      with the board to ensure that the organization fulfills its mission,
      governance and compliance function

              

      

      
        	
                 
      

              	
                —

              	
                Other
      duties as assigned

              

      

       

      Annual Base Salary:
$150,000.00 effective July 1, 2008 to increase to $200,000.00 effective
January 01, 2009 and there after reviewable annually beginning March 15th
2009.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Bonus: Bonus payments may be
offered annually effective April 2009 at the discretion of Board of Directors.
There is no minimum guaranteed bonus, and if offered, it could be paid in cash,
restricted shares and / or stock options as determined by the
Board.

       

      For April
2009 the Board has agreed to consider bonus to cover tax on any restricted stock
grant, payable in April 2009, if expenses for the period 8/15/08 to 12/31/08 are
achieved based on BOD approved budget and first revenue from the sale of a Geo
Mobile Product (GMP) is received by March 31, 2009.

       

      Incentive Compensation:
Incentive restricted stock grant of 1 million common shares, priced at
$0.04 vesting one quarter after first GMP sold; one quarter after 400 GMP units
are sold; one quarter after 800 GMP units re sold; and one quarter one year
after that. During the first year of employment, termination for any reason will
results in loss of all unvested shares. After one year of continuous employment,
all shares will vest immediately if executive is terminated other than for
cause, or if executive leaves voluntarily; or if there is a change of control in
a transaction involving more than 51% of the common shares. The restricted
shares may not be sold for at least six months following vesting and then only
within strict guidelines of the company’s insider trading policy

       

      Non-Compete Agreement: As a
condition of employment, you agree to execute and comply by the Company’s
confidentiality, non-compete and non-solicitation agreement.

       

      Benefits: Standard comp any
group health insurance plan will be offered by November 2008. As a member of the
EMC, you will also receive coverage at two times your salary in group term life
insurance at no cost to you, as well as participate in a company paid Long term
disability benefits plan.

       

      The
Company will reimburse your COBRA payments till you get on Company’s group
health plan or through December 31, 2008, whichever occurs first.

       

      Vacation and Holidays: Four
weeks vacation per year, prorated for 2008 and standard company
holidays.

       

      T&E: The Company will
reimburse you for reasonable T&E expenses incurred in the course of business
subject to Company policy.

       

      Other Benefits: The Company
may deem it necessary to offer you Company owned cell phone, computer or other
devices & tools to perform your job. Such equipment will remain the property
of the Company and must be returned upon request by the company.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Greg, we
are excited to have you join the Company. Initially, you can commute from
Chicago arriving Houston early Monday morning and departing for Chicago Friday
afternoon. The Company will pay for a rented vehicle and furnished apartment
during this period. You are expected to relocate to Houston within 90 days
following first product sale and a signed employment agreement with the Company.
Employment agreement might include salary rising to $250K after reaching certain
milestones, relocation expense and some stock options in lieu of cash bonuses,
tied to Company performance.

      

      Your
employment with the Company is at-will and either party can terminate the
relationship at any time with or without cause and with or without notice. You
agree to abide by the written business policies and procedures of the Company
throughout your employment.

      

      You
acknowledge that this offer letter represents the entire agreement between you
and the Company and that no verbal or written agreements, promises, or
representations that are not specifically stated in this offer, are or will be
binding upon the Company.

       

      If you
are in agreement with the above outline, please sign below and return a copy to
the undersigned.

      

      

      
        
          
            	
                    Agreed
      and Accepted:

                  	 
      
	
                    /s/ C. Gregory Peters

                  	 
      
	 
      	 
      
	 
      	 
      
	
                    Date:

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