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Subsequent Event
6 Months Ended
Jun. 30, 2015
Subsequent Events [Abstract]  
Subsequent Event

9. SUBSEQUENT EVENT

Acquisition

On August 5, 2015, the Company and a newly formed subsidiary (the “Buyer”), entered into, and consummated the transactions contemplated by, an asset purchase agreement (the “Purchase Agreement”) dated August 4, 2015 with CrossView, Inc. (“CrossView”) and its shareholders. CrossView is an ecommerce systems integrator and performs a wide range of ecommerce services in the U.S., Canada and India.  Pursuant to the terms of the Purchase Agreement, the Buyer purchased substantially all of the assets and assumed substantially all of the liabilities of CrossView.  

Consideration paid by the Company included an initial cash payment of $30.7 million and will include 553,223 unregistered shares of Company common stock (approximately $7.2 million in value as of the acquisition date).  The Purchase Agreement also provides for (i) adjustment of the initial cash payment based upon a post-closing balance sheet reconciliation and (ii) future earn-out payments (“CrossView Earn-out Payments”) payable in 2016, 2017 and 2018 based on CrossView and the Buyer’s achievement of certain 2015, 2016 and 2017 financial targets.  The CrossView Earn-out Payments have no guaranteed minimum and an aggregate maximum of $18.0 million and are subject to possible offsets for indemnification and other claims arising under the Purchase Agreement.  The Company will pay 20% of the 2015 earn-out and 15% of the 2016 earn-out and 2017 earn-out in restricted shares of Company common stock, based on its then current market value at the time of issuance.  

New and Amended Financing Agreements

On August 5, 2015, the Company and its U.S. subsidiaries entered into a credit agreement (“Credit Agreement”) with Regions Bank, as agent for itself and one or more lenders now or hereafter made a party thereto (the “Lenders”). Under this Credit Agreement, and subject to the terms set forth therein, the Lenders have agreed to provide the Company’s subsidiary, PFS, with an initial $30 million revolving loan facility and an initial $10 million term loan facility. Subject to the terms of the Credit Agreement, PFS has the ability to increase the revolving loan facility to $35 million and the term loan facility to $20 million, as well as the ability to increase the total loan facilities to $75 million.  Availability under the revolving loan facility may not exceed a borrowing base of eligible accounts receivable (as defined). Advances under the Credit Agreement accrue interest at a variable rate, plus an applicable margin, and have a five year maturity, with scheduled amortization payments for term loan advances. The Credit Agreement is secured by a lien on substantially all of the assets of Company and its U.S. subsidiaries and a pledge of 65% of the shares of the Company’s foreign subsidiaries.  The Credit Agreement contains cross default provisions, various restrictions upon the Company’s ability to, among other things, merge, consolidate, sell assets, incur indebtedness, make loans and payments to subsidiaries, affiliates and related parties, make capital expenditures, make investments and loans, pledge assets, make changes to capital stock ownership structure, as well as financial covenants, as defined, of a minimum fixed charge ratio and a maximum leverage ratio.  The Credit Agreement replaces the Company’s prior financing with Comerica and Wells Fargo, which were terminated concurrent with the closing under the Credit Agreement.  

On August 3, 2015, the Company amended the short-term credit facility between Supplies Distributors and IBM Credit LLC to reduce the maximum financing amount to $13.0 million and eliminate the Company’s minimum shareholders' equity requirement of $18.0 million.