Pomeroy It Solutions (PMRY) SC 13E3 Going private transaction

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13E-3

RULE 13e-3 TRANSACTION STATEMENT

Under Section 13(e) of the Securities Exchange Act of 1934

POMEROY IT SOLUTIONS, INC.

(Name of Issuer)

POMEROY IT SOLUTIONS, INC.

HEBRON LLC

DESERT MOUNTAIN ACQUISITION CO.

DAVID B. POMEROY, II

(Names of Person(s) Filing Statement)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

731822102

(CUSIP Number of Class of Securities)

Pomeroy IT Solutions, Inc. 1020 Peterburg Road Hebron, KY 41048 (859) 586-0600 ext. 1419 1-888-285-3475 (fax) Hebron LLC Desert Mountain Acquisition Co. David B. Pomeroy, II 42475 N. 112th Street N. Scottsdale, AZ 85262 (480) 595-0014 (480) 595-0699 (fax)

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement)

With Copies to:

John J. Hentrich, Esq. John D. Tishler, Esq. Sheppard, Mullin, Richter & Hampton LLP 12275 El Camino Real, Suite 200 San Diego, CA  92130 (858) 720-8900 (858) 509-3691 (fax) Richard G. Schmalzl, Esq. Graydon Head & Ritchey LLP 1900 Fifth Third Center 511 Walnut Street Cincinnati, Ohio 45202 (513) 629-2828 (513) 333-4326 (fax)

This statement is filed in connection with (check the appropriate box):

o a. The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14-C or Rule 13e-3(c) under the Securities Exchange Act of 1934.

o b.   The filing of a registration statement under the Securities Act of 1933.

o c.   A tender offer.

o d.    None of the above.

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies:  x

Check the following box if the filing is a final amendment reporting the results of the transaction:  o

CALCULATION OF FILING FEE

Transaction Valuation*	Amount of Filing Fee**
$59,641,253	$3,328

*   Calculated solely for the purpose of determining the filing fee, the transaction valuation was determined based upon the sum of (A) 9,351,277 shares of common stock multiplied by $6.00 per share; (B) in-the-money stock options with respect to 410,572 shares of common stock multiplied by $1.91 per share (which is the difference between $6.00 and the weighted average exercise price of $4.09 per share); and (C) 458,560 shares of restricted stock multiplied by $6.00 per share.

** The filing fee, calculated in accordance with Exchange Act Rule 0-11(c), was calculated by multiplying the transaction value by 0.0000558.

x Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration number, or the Form or Schedule and the date of its filing.

Amount Previously Paid:  $3,328

Form or Registration No.:  Schedule 14A

Filing Party:  Pomeroy IT Solutions, Inc.

Date Filed:  July 2, 2009

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INTRODUCTION

This Rule 13e-3 Transaction Statement on Schedule 13E-3, together with the exhibits hereto (this "Transaction Statement"), is being filed with the Securities and Exchange Commission ("SEC") by (a) Pomeroy IT Solutions, a Delaware corporation ("Pomeroy IT Solutions" or the "Company"), the issuer of the common stock that is subject to the Rule 13e-3 transaction, (b) Hebron LLC, a Delaware limited liability company ("Parent"), (c) Desert Mountain Acquisition Co., a Delaware corporation ("MergerSub"), and (d) David B. Pomeroy, II, an individual and director of Pomeroy IT Solutions (collectively, the "Filing Persons").

This Transaction Statement relates to the Agreement and Plan of Merger, dated as of May 19, 2009, as amended by the First Amendment to the Agreement and Plan of Merger, dated as of June 8, 2009, and the Second Amendment to the Agreement and Plan of Merger, dated as of June 20, 2009, all by and among the Company, Parent, MergerSub and Mr. Pomeroy (as amended, the "Merger Agreement"). If the Merger Agreement is adopted by the Company’s stockholders and the other conditions to closing of the Merger (as defined below) are satisfied or waived, MergerSub will merge with and into the Company, with the Company continuing as a surviving corporation and becoming a wholly owned subsidiary of Parent (the "Merger").

If the Merger is completed, each outstanding share of the Company's common stock, other than as provided below, will be converted into the right to receive $6.00 in cash, without interest and less any applicable withholding taxes (the "Merger Consideration").  The following outstanding shares of the Company's common stock will not be converted into the right to receive the Merger Consideration in connection with the Merger: (1) shares held by any of the Company's stockholders who are entitled to and who properly exercise appraisal rights under Delaware law; (2) shares the Company or any of its subsidiaries own; and (3) shares Parent or MergerSub own (including any such shares Mr. Pomeroy contributes to Parent prior to the effective time of the Merger) (the "Effective Time"). Mr. Pomeroy has agreed to contribute all of his shares of the Company's common stock to Parent prior to the effective time of the Merger.

Concurrently with the filing of this Transaction Statement, the Company is filing with the SEC a preliminary proxy statement (the "Proxy Statement") under Regulation 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), relating to the special meeting of the stockholders of the Company, Inc. at which the Company's stockholders will consider and vote upon a proposal to approve and adopt the Merger Agreement. The adoption of the Merger Agreement requires the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock.

Pursuant to General Instruction F to Schedule 13E-3, the information in the Proxy Statement, including all annexes, exhibits and appendices thereto, is expressly incorporated by reference herein in its entirety, and responses to each item herein are qualified in their entirety by the information contained in the Proxy Statement. The cross references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Proxy Statement of the information required to be included in response to the items of Schedule 13E-3. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Proxy Statement. All information contained in this Transaction Statement concerning any of the Filing Persons has been provided by such Filing Person and none of the Filing Persons, including the Company, takes responsibility for the accuracy of any information not supplied by such Filing Person.

The filing of this Transaction Statement shall not be construed as an admission by any of the Filing Persons or by any affiliate of a Filing Person, that the Company is "controlled" by any other Filing Person or that any Filing Person is an "affiliate" of the Company within the meaning of Rule 13e-3 under Section 13(e) of the Exchange Act.

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TABLE OF CONTENTS

Item 1.	Summary Term Sheet
Item 2.	Subject Company Information
Item 3.	Identity and Background of Filing Person(s)
Item 4.	Terms of the Transaction
Item 5.	Past Contacts, Transactions, Negotiations and Agreements
Item 6.	Purposes of the Transaction and Plans or Proposals
Item 7.	Purposes, Alternatives, Reasons and Effects
Item 8.	Fairness of the Transaction
Item 9.	Reports, Opinions, Appraisals and Negotiations
Item 10.	Source and Amounts of Funds or Other Consideration
Item 11.	Interest in Securities of the Subject Company
Item 12.	The Solicitation or Recommendation
Item 13.	Financial Statements
Item 14.	Persons/Assets, Retained, Employed, Compensated or Used
Item 15.	Additional Information
Item 16.	Exhibits
SIGNATURES

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Item 1. Summary Term Sheet

The information set forth in the Proxy Statement under the following captions are incorporated herein by reference:

"SUMMARY TERM SHEET"

"QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER"

Item 2. Subject Company Information

(a) Name and Address. The Company’s name and the address and telephone number of its principal executive office are as follows:

Pomeroy IT Solutions, Inc.

1020 Petersburg Road

Hebron, Kentucky 41048

(859) 586-0600

(b) Securities. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"THE SPECIAL MEETING—Record Date; Shares Entitled to Vote; Quorum"

(c) Trading Market and Price. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

"SUMMARY TERM SHEET—Market Prices and Dividend Data"

"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Market Price of Our Company Common Stock and Dividend Information"

(d) Dividends. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Market Price of Our Company Common Stock and Dividend Information"

(e) Prior Public Offerings. None.

(f) Prior Stock Purchases. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Transactions in Common Stock"

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Item 3. Identity and Background of Filing Person(s)

(a) Name and Address. Pomeroy IT Solutions, Inc. is the subject company. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—The Parties to the Merger"

"THE PARTIES TO THE MERGER"

"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Directors and Executive Officers"

"IMPORTANT INFORMATION REGARDING DAVID B. POMEROY, II, PARENT AND MERGERSUB"

(b) Business and Background of Entities. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—The Parties to the Merger"

"THE PARTIES TO THE MERGER"

"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Directors and Executive Officers"

"IMPORTANT INFORMATION REGARDING DAVID B. POMEROY, II, PARENT AND MERGERSUB"

(c) Business and Background of Natural Persons. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Directors and Executive Officers"

"IMPORTANT INFORMATION REGARDING DAVID B. POMEROY, II, PARENT AND MERGERSUB"

Item 4. Terms of the Transaction

(a) Material Terms. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET"

"QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER"

"THE SPECIAL MEETING"

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"SPECIAL FACTORS"

"THE MERGER AGREEMENT"

"ANNEX A-1—AGREEMENT AND PLAN OF MERGER"

"ANNEX A-2—FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER"

"ANNEX A-3—SECOND AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER"

(c) Different Terms. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Interests of the Executive Officers and Directors in the Merger"

"SUMMARY TERM SHEET—Treatment of Outstanding Stock Options and Restricted Stock Awards"

"SPECIAL FACTORS—Interests of Our Executive Officers and Directors in the Merger"

"THE MERGER AGREEMENT—Treatment of Outstanding Stock Options and Restricted Stock Awards"

(d) Appraisal Rights. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Appraisal Rights"

"QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER—What rights do I have if I oppose the merger?"

"SPECIAL FACTORS—Appraisal Rights"

"ANNEX C—SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW"

(e) Provisions for Unaffiliated Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SPECIAL FACTORS—Provisions for Unaffiliated Stockholders"

(f) Eligibility for Listing or Trading. Not applicable.

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Item 5. Past Contacts, Transactions, Negotiations and Agreements

(a) Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Interests of Our Executive Officers and Directors in the Merger"

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS—Interests of Our Executive Officers and Directors in the Merger"

(b) Significant Corporate Events. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SPECIAL FACTORS—Background of the Merger"

"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Directors and Executive Officers"

(c) Negotiations or Contacts. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Interests of Our Executive Officers and Directors in the Merger"

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS—Interests of Our Executive Officers and Directors in the Merger"

(e) Agreements Involving the Subject Company’s Securities. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Voting Agreement"

"THE MERGER AGREEMENT—Treatment of Outstanding Stock Options and Restricted Stock Units"

Item 6. Purposes of the Transaction and Plans or Proposals

(b) Use of Securities Acquired. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Merger Consideration"

"THE MERGER AGREEMENT—Merger Consideration"

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(c)(1)-(8) Plans. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER—What effects will the merger have on our Company?"

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS—Plans for Our Company After the Merger"

Item 7. Purposes, Alternatives, Reasons and Effects

(a) Purposes. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"

"SPECIAL FACTORS—Purpose and Reasons for the Merger for Parent, MergerSub and Mr. Pomeroy"

"SPECIAL FACTORS—Position of Parent, MergerSub and Mr. Pomeroy as to the Fairness of the Merger"

(b) Alternatives. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"

"SPECIAL FACTORS—Purpose and Reasons for the Merger for Parent, MergerSub and Mr. Pomeroy"

"SPECIAL FACTORS—Position of Parent, MergerSub and Mr. Pomeroy as to the Fairness of the Merger"

 (c) Reasons. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SPECIAL FACTORS—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"

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"SPECIAL FACTORS—Purpose and Reasons for the Merger for Parent, MergerSub and Mr. Pomeroy"

"SPECIAL FACTORS—Position of Parent, MergerSub and Mr. Pomeroy as to the Fairness of the Merger"

"SPECIAL FACTORS—Plans for Our Company After the Merger"

(d) Effects. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Treatment of Outstanding Stock and Restricted Stock Awards"

"QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER—What effects will the merger have on Our Company?"

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS—Form of the Merger"

"SPECIAL FACTORS—Merger Consideration"

"SPECIAL FACTORS—Effects on Our Company if the Merger is Not Completed"

"SPECIAL FACTORS—Material United States Federal Income Tax Consequences"

"SPECIAL FACTORS—Interests of Our Executive Officers and Directors in the Merger"

"SPECIAL FACTORS—Estimated Fees and Expenses of the Merger"

"MERGER AGREEMENT—Treatment of Outstanding Stock Options and Restricted Stock Units"

Item 8. Fairness of the Transaction

(a) Fairness. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"

"SPECIAL FACTORS—Position of Parent, MergerSub and Mr. Pomeroy as to the Fairness of the Merger"

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(b) Factors Considered in Determining Fairness. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Opinion of the Special Committee's Financial Advisor"

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"

"SPECIAL FACTORS—Opinion of the Special Committee's Financial Advisor"

"SPECIAL FACTORS—Position of Parent, MergerSub and Mr. Pomeroy as to the Fairness of the Merger"

"ANNEX B—OPINION OF HOULIHAN LOKEY DATED JUNE 20, 2009"

(c) Approval of Security Holders. The transaction is not structured so that approval of at least a majority of unaffiliated security holders is required.  The adoption of the merger agreement requires the affirmative vote of the stockholders holding a majority of the shares of the Company's common stock outstanding and entitled to vote at the special meeting. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—The Special Meeting of Stockholders"

"THE SPECIAL MEETING—Record Date; Shares Entitled to Vote; Quorum"

"THE SPECIAL MEETING—Vote Required"

(d) Unaffiliated Representative. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"

 (e) Approval of Directors. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SPECIAL FACTORS—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"

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"SPECIAL FACTORS—Interests of Our Executive Officers and Directors in the Merger"

(f) Other Offers. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"

Item 9. Reports, Opinions, Appraisals and Certain Negotiations

(a) – (c) Report, Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal; Availability of Documents.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Opinion of the Special Committee's Financial Advisor"

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"

"SPECIAL FACTORS—Opinion of the Special Committee's Financial Advisor"

"ANNEX B—OPINION OF HOULIHAN LOKEY DATED JUNE 20, 2009"

The opinion of Houlihan Lokey dated June 20, 2009, which is attached as Annex B to the Proxy Statement, as well as the discussion materials prepared by Houlihan Lokey for discussion with the special committee of the board of directors of the Company, dated April 2, 2009, May 18, 2009 and June 20, 2009, which are attached as exhibits to this Transaction Statement, will be made available for inspection and copying at the principal executive offices of the Company during its regular business hours by any interested holder of the Company’s common stock or representative who has been so designated in writing.

Item 10. Source and Amounts of Funds or Other Consideration

(a) Source of Funds. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Parent's Financing for the Transaction"

"SPECIAL FACTORS—Parent's Financing for the Transaction"

"SPECIAL FACTORS—Estimated Fees and Expenses of the Merger"

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(b) Conditions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Parent's Financing for the Transaction"

"SPECIAL FACTORS— Parent's Financing for the Transaction "

"MERGER AGREEMENT—Financing"

(c) Expenses. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"THE SPECIAL MEETING—Solicitation of Proxies"

"SPECIAL FACTORS— Parent's Financing for the Transaction "

"SPECIAL FACTORS—Estimated Fees and Expenses of the Merger"

"SPECIAL FACTORS—Opinion of the Special Committee's Financial Advisor – Other Matters"

"THE MERGER AGREEMENT—Termination Fees"

(d) Borrowed Funds. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET— Parent's Financing for the Transaction "

"SPECIAL FACTORS—Background of the Merger"

"SPECIAL FACTORS— Parent's Financing for the Transaction "

Item 11. Interest in Securities of the Subject Company

(a) Securities Ownership. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Interests of Our Executive Officers and Directors in the Merger"

"SPECIAL FACTORS—Interests of Our Executive Officers and Directors in the Merger"

"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Ownership of Common Stock by Certain Beneficial Owners and Directors and Executive Officers"

(b) Securities Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Transactions in Common Stock"

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"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Ownership of Common Stock by Certain Beneficial Owners and Directors and Executive Officers"

Item 12. The Solicitation or Recommendation

(d) Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Interests of Our Executive Officers and Directors in the Merger"

"SUMMARY TERM SHEET—Voting Agreement"

"THE SPECIAL MEETING—Vote Required for Approval"

"SPECIAL FACTORS—Interests of Our Executive Officers and Directors in the Merger"

(e) Recommendations of Others. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"SUMMARY TERM SHEET—Recommendation of Our Board of Directors"

"THE SPECIAL MEETING—Vote Required for Approval"

"SPECIAL FACTORS—Reasons for the Merger and Recommendation of the Special Committee and Our Board of Directors"

Item 13. Financial Statements

(a) Financial Statements. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Historical Selected Financial Data"

"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Ratio of Earnings to Fixed Charges"

"IMPORTANT INFORMATION REGARDING POMEROY IT SOLUTIONS, INC.—Book Value Per Share"

"WHERE YOU CAN FIND MORE INFORMATION"

"ANNEX D-1—ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 5, 2009"

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"ANNEX D-2—QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED APRIL 5, 2009"

Certain of the materials filed as Exhibits (c)(2) through (c)(4) to this Transaction Statement include projected financial information. The Company does not, as a matter of course, publicly disclose projections as to its future financial performance. The projections were not prepared with a view to public disclosure and are included in this Transaction Statement only because such information was made available, in whole or in part, to Mr. Pomeroy and certain of his affiliated companies and their financing sources in connection with their due diligence review of the Company, and to Houlihan Lokey Howard & Zukin Capital, Inc. for use in connection with its financial analysis in connection with the Merger. The projections were not prepared with a view to compliance with published guidelines of the SEC regarding projections or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Furthermore, BDO Seidman, LLP, the Company's auditors, has not examined, compiled or otherwise applied procedures to the projections included in any of the presentations filed as Exhibits to this Transaction Statement and, accordingly, assumes no responsibility for, and expresses no opinion on, them.

(b) Pro Forma Information. Not applicable.

Item 14. Persons/Assets, Retained, Employed, Compensated or Used

(a) Solicitations or Recommendations. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"THE SPECIAL MEETING—Solicitation of Proxies"

"THE SPECIAL MEETING—Questions and Additional Information"

(b) Employees and Corporate Assets. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

"THE SPECIAL MEETING—Solicitation of Proxies"

"SPECIAL FACTORS—Interests of Our Executive Officers and Directors in the Merger"

Item 15. Additional Information

(b) Other Material Information. The information contained in the Proxy Statement, including all annexes thereto, is incorporated herein by reference.

Item 16. Exhibits

(a)(1) Preliminary Proxy Statement of Pomeroy IT Solutions, Inc., incorporated herein by reference to the Schedule 14A filed with the Securities and Exchange Commission on June 30, 2009 (the "Proxy Statement").

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(a)(2) Notice of Special Meeting of Stockholders of Pomeroy IT Solutions, Inc., incorporated herein by reference to the Proxy Statement.

(a)(3) Form of Preliminary Proxy Card, incorporated herein by reference to the Proxy Statement.

(a)(4) Form 8-K of Pomeroy IT Solutions, Inc., incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission on May 20, 2009.

(a)(5) Form 8-K of Pomeroy IT Solutions, Inc., incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission on June 9, 2009.

(a)(6) Form 8-K of Pomeroy IT Solutions, Inc., incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission on June 20, 2009.

(a)(7) Schedule 14A of Pomeroy IT Solutions, Inc., filed with the Securities and Exchange Commission on June 30, 2009.

(b)(1) Amended and Restated Commitment Letter, dated July 1, 2009, from GE Capital Commercial Distribution Finance to Mr. David Pomeroy.

(c)(1) Opinion of Houlihan Lokey, dated June 20, 2009, incorporated herein by reference to Annex B of the Proxy Statement.

(c)(2) Discussion Materials prepared by Houlihan Lokey for discussion with the special committee of the board of directors of the Company, dated June 20, 2009.

(c)(3) Discussion Materials prepared by Houlihan Lokey for discussion with the special committee of the board of directors of the Company, dated May 18, 2009.

(c)(4) Discussion Materials prepared by Houlihan Lokey for discussion with the special committee of the board of directors of the Company, dated April 2, 2009.

(d)(1) Agreement and Plan of Merger dated as of May 19, 2009, by and among Pomeroy IT Solutions, Inc., Hebron LLC, Desert Mountain Acquisition Co., and David B. Pomeroy, II, incorporated herein by reference to Annex A-1 to the Proxy Statement.

(d)(2) First Amendment to Agreement and Plan of Merger dated as of June 8, 2009, by and among Pomeroy IT Solutions, Inc., Hebron LLC, Desert Mountain Acquisition Co., and David B. Pomeroy, II, incorporated herein by reference to Annex A-2 to the Proxy Statement.

(d)(3) Second Amendment to the Agreement and Plan of Merger dated as of June 20, 2009, by and among Pomeroy IT Solutions, Inc., Hebron LLC, Desert Mountain Acquisition Co., and David B. Pomeroy, II, incorporated herein by reference to Annex A-3 to the Proxy Statement.

(f)(1) Appraisal Rights, incorporated herein by reference to the Section entitled "SPECIAL FACTORS—Appraisal Rights" in the Proxy Statement.

(f)(2) Section 262 of the Delaware General Corporation Law, incorporated herein by reference to Annex C of the Proxy Statement.

(g)(1) Investor, Customer and Employee Q&A, incorporated by reference to the Schedule 14A of Pomeroy IT Solutions, Inc. filed with the Securities and Exchange Commission on June 30, 2009.

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SIGNATURES

After due inquiry and to the best of their knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

July 2, 2009	Pomeroy IT Solutions, Inc.
	/s/ Christopher C. Froman
	Title: President and Chief Executive Officer
July 2, 2009	Hebron LLC
	/s/ David B. Pomeroy, II
	Title: Member
July 2, 2009	Desert Mountain Acquisition Co.
	/s/ David B. Pomeroy, II
	Title: President
July 2, 2009	David B. Pomeroy, II
	/s/ David B. Pomeroy, II

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Exhibit Index

(a)(1) Preliminary Proxy Statement of Pomeroy IT Solutions, Inc., incorporated herein by reference to the Schedule 14A filed with the Securities and Exchange Commission on June 30, 2009 (the "Proxy Statement").

(a)(2) Notice of Special Meeting of Stockholders of Pomeroy IT Solutions, Inc., incorporated herein by reference to the Proxy Statement.

(a)(3) Form of Preliminary Proxy Card, incorporated herein by reference to the Proxy Statement.

(a)(4) Form 8-K of Pomeroy IT Solutions, Inc., incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission on May 20, 2009.

(a)(5) Form 8-K of Pomeroy IT Solutions, Inc., incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission on June 9, 2009.

(a)(6) Form 8-K of Pomeroy IT Solutions, Inc., incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission on June 20, 2009.

(a)(7) Schedule 14A of Pomeroy IT Solutions, Inc., filed with the Securities and Exchange Commission on June 30, 2009.

(b)(1) Amended and Restated Commitment Letter, dated July 1, 2009, from GE Capital Commercial Distribution Finance to Mr. David Pomeroy.

(c)(1) Opinion of Houlihan Lokey, dated June 20, 2009, incorporated herein by reference to Annex B of the Proxy Statement.

(c)(2) Discussion Materials prepared by Houlihan Lokey for discussion with the special committee of the board of directors of the Company, dated June 20, 2009.

(c)(3) Discussion Materials prepared by Houlihan Lokey for discussion with the special committee of the board of directors of the Company, dated May 18, 2009.

(c)(4) Discussion Materials prepared by Houlihan Lokey for discussion with the special committee of the board of directors of the Company, dated April 2, 2009.

(d)(1) Agreement and Plan of Merger dated as of May 19, 2009, by and among Pomeroy IT Solutions, Inc., Hebron LLC, Desert Mountain Acquisition Co., and David B. Pomeroy, II, incorporated herein by reference to Annex A-1 to the Proxy Statement.

(d)(2) First Amendment to Agreement and Plan of Merger dated as of June 8, 2009, by and among Pomeroy IT Solutions, Inc., Hebron LLC, Desert Mountain Acquisition Co., and David B. Pomeroy, II, incorporated herein by reference to Annex A-2 to the Proxy Statement.

(d)(3) Second Amendment to the Agreement and Plan of Merger dated as of June 20, 2009, by and among Pomeroy IT Solutions, Inc., Hebron LLC, Desert Mountain Acquisition Co., and David B. Pomeroy, II, incorporated herein by reference to Annex A-3 to the Proxy Statement.

(f)(1) Appraisal Rights, incorporated herein by reference to the Section entitled "SPECIAL FACTORS—Appraisal Rights" in the Proxy Statement.

(f)(2) Section 262 of the Delaware General Corporation Law, incorporated herein by reference to Annex C of the Proxy Statement.

(g)(1) Investor, Customer and Employee Q&A, incorporated by reference to the Schedule 14A of Pomeroy IT Solutions, Inc. filed with the Securities and Exchange Commission on June 30, 2009.

-18-

   GE Capital Commercial Distribution Finance     TEA   2300 Windy Ridge Parkway, Suite 700 Atlanta, GA 30339 USA

July 1, 2009

CONFIDENTIAL

VIA EMAIL

Mr. David Pomeroy

Re:  Amended and Restated Commitment Letter

Dear Mr. Pomeroy:

You have advised GE Commercial Distribution Finance Corporation (“GECDF”, or “Lender”) that a newly formed entity controlled by David Pomeroy and with minority interest to be held only by key managers of Target (“Newco Parent”), through a wholly owned subsidiary of Newco Parent (“Acquisitionco”), will acquire all of the outstanding capital securities of Pomeroy IT Solutions, inc. (“Target”) (other than the capital securities of Target owned by David Pomeroy).  Acquisitionco is seeking up to Fifty Million Dollars ($50,000,000) of financing (the “Financing”) in support of the recapitalization of Target by purchasing all the capital securities of Target not owned by David Pomeroy and refinancing of all of Target’s existing secured debt (the “Transaction”).  As used herein, “Credit Parties” means Newco Parent, Acquisitionco, Target and its subsidiaries.

Based on our understanding of the Transaction as described above and the information which you have provided to us to date, and subject to the terms and conditions contained in the attached Summary of Terms, GECDF is pleased to offer its commitment to provide the Financing described herein in the amount of up to Fifty Million Dollars ($50,000,000), upon receipt/completion of the following conditions and subject to the terms and conditions outlined in the attached Summary of Terms including the deliveries required thereby (together with the Summary of Terms, this “Commitment Letter”):

David Pomeroy	Page 2
July 1, 2009

1) Acceptable structure of each Credit Party and the proposed merger of Acquisitionco with and into Target.

2) Due diligence regarding Target, its subsidiaries, Newco Parent and Acquisitionco, and their business, finances (including capitalization) and operations.

3) David Pomeroy have contributed all of the outstanding stock of Target owned by David Pomeroy to the Transaction (e.g. this stock will be “rolled over” and not cashed out).

4) Payment at closing of all fees due at closing, as described in the Interest Rate and Fee Letter between GECDF and the Credit Parties.

5) Pro forma/projected financial statements for such periods and containing such information relating to the Target and its subsidiaries which are acceptable to GECDF.

6) The execution and delivery of final legal documentation acceptable to GECDF and its counsel incorporating, without limitation, the terms set forth in this Commitment Letter.

GECDF’s obligations contained herein are also expressly conditioned upon there being an absence of (A) any material adverse change in the business, condition (financial or otherwise), operations, performance, properties, or prospects of Acquisitionco, Newco Parent, Target or its subsidiaries, from that reflected in the financial statements dated as of January 5, 2009, previously delivered to GECDF; (B) any material adverse change in the business, condition (financial or otherwise), operations, performance, properties, or prospects of Acquisitionco, Newco Parent, Target or its subsidiaries which; or (C) any material adverse change in the capital markets generally, or in the industries in which the Target conducts its business.  GECDF reserves the right at any time to syndicate the Financing and any definitive loan documents shall contemplate such syndication, including the requirement of a certain percentage of lenders to approve, waive and amend the definitive loan documents.

By signing this Commitment Letter, GECDF and Acquisitionco acknowledge that this Commitment Letter supersedes any and all discussions and understandings, written or oral, between or among GECDF and any other person as to the subject matter hereof, including, without limitation, any prior commitment letters (and attachments) whether or not fully or partially executed.  No amendments, waivers or modifications of this Commitment Letter or any of its contents shall be effective unless expressly set forth in writing and executed by GECDF and Acquisitionco.

This Commitment Letter and Summary of Terms are being provided to you on the condition that, except as required by law, neither they,nor their contents, will be disclosed publicly or privately except to Target and to those individuals who are Target’s or your officers, employees or advisors who have a need to know of them as a result of their being specifically involved in the Transaction under consideration and then only on the condition that such matters may not, except as required by law, be further disclosed.  No person, other than the parties signatory hereto, is entitled to rely upon this Commitment Letter or any of its contents. No person shall, except as required by law, use the name of, or refer to, GECDF, or any of its affiliates, in any correspondence, discussions, press release, advertisement or disclosure made in connection with the Transaction without the prior written consent of GECDF.

David Pomeroy	Page 3
July 1, 2009

Regardless of whether the commitment herein is terminated or the Transaction or the Financing closes, Acquisitionco agrees to pay upon demand to GECDF all out-of-pocket expenses (“Transaction Expenses”) which may be incurred by GECDF in connection with the Financing or the Transaction (including all reasonable legal, environmental, and other consultant costs and fees incurred in the preparation of this Commitment Letter and evaluation of, and documenting, negotiation and closing of, the Financing and the Transaction). Regardless of whether the commitment herein is terminated or the Transaction or the Financing closes, Acquisitionco for itself and its affiliates shall indemnify and hold harmless each of GECDF, its affiliates, and the directors, officers, employees, attorneys and representatives of any of them (each, an “Indemnified Person”), from and against all suits, actions, proceedings, claims, damages, losses, liabilities and expenses (including, but not limited to, attorneys’ fees and disbursements and other costs of investigation or defense, including those incurred upon any appeal), which may be instituted or asserted against or incurred by any such Indemnified Person in connection with, or arising out of, this Commitment Letter,the Financing or the Transaction under consideration, the documentation related thereto, any other financing related thereto, any actions or failures to act in connection therewith, and any and all environmental liabilities and legal costs and expenses arising out of or incurred in connection with any disputes between or among any parties to any of the foregoing, and any investigation, litigation, or proceeding related to any such matters.  Notwithstanding the preceding sentence, indemnitors shall not be liable for any indemnification to an Indemnified Person to the extent that any such suit, action, proceeding, claim, damage, loss, liability or expense results solely from that Indemnified Person’s gross negligence or willful misconduct, as finally determined by a court of competent jurisdiction.  Under no circumstances shall GECDF or any of its affiliates be liable to you or any other person for any punitive, exemplary, consequential or indirect damages which may be alleged in connection with this Commitment Letter, the Transaction, the Financing, the documentation related thereto or any other financing, regardless of whether the commitment herein is terminated or the Transaction or the Financing closes.

EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS COMMITMENT LETTER, ANY TRANSACTION RELATING HERETO OR THERETO, OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  Each party hereto consents and agrees that the state or federal courts located in Illinois shall have exclusive jurisdiction to hear and determine any claims or disputes between or among any of the parties hereto pertaining to this Commitment Letter, the Financing or the Transaction under consideration, any other financing related thereto, and any investigation, litigation, or proceeding related to or arising out of any such matters, provided, that the parties hereto acknowledge that any appeals from those courts may have to be heard by a court (including an appellate court) located outside of such jurisdiction.  Each party hereto expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and hereby waives any objection which such party may have based upon lack of personal jurisdiction, improper venue or inconvenient forum.

David Pomeroy	Page 4
July 1, 2009

This Commitment Letter is governed by and shall be construed in accordance with the laws of the State of Illinois applicable to contracts made and performed in that state.

This Commitment Letter is expressly conditioned upon GECDF having access to all relevant facilities, personnel and accountants, and copies of all documents which GECDF may request, including business plans, financial statements (actual and pro forma), books, records, and other documents, of each Credit Party.

Please indicate your acceptance of this Commitment Letter in the space indicated below and return a copy of this Commitment Letter so executed to GECDF.  This Commitment Letter will expire at 5:00 p.m. time on July 1, 2009, unless on or prior to such time GECDF has received (at 2300 Windy Ridge Parkway, Suite 800; Atlanta, GA 30339) a copy of this Commitment Letter executed by Acquisitionco.  Under the Prior Documents (as defined below), GECDF received the Good Faith Deposit (as defined in the Prior Documents).  The Good Faith Deposit shall continue to be held by GECDF to cover GECDF’s due diligence costs and expenses.  Promptly upon GECDF's request, Acquisitionco shall provide additional diligence funds to GECDF (such funds are also deemed to be included in the Good Faith Deposit).  The Good Faith Deposit, to the extent not expended or reasonably expected to be expended by GECDF for the fees and expenses set forth in this letter, are refundable to Acquisitionco if the Transaction does not close, and if the Transaction does close, any such remaining funds shall be applied to the fees due at Closing.  The Good Faith Deposit is not a limit on the amounts that the Acquisitionco may owe GECDF under this Commitment Letter and Acquisitionco shall be fully liable for all such amounts.  Failure to pay the Good Faith Deposit as required herein shall give GECDF the unilateral right to terminate this Commitment Letter without any obligation or liability of any kind or nature to Newco Parent or any other person or entity.

Once effective, GECDF’s commitment to provide financing in accordance with the terms of this Commitment Letter shall cease if the Transaction does not close, or the Financing is not funded for any reason, on or before September 30, 2009 (or such later date as GECDF may agree to in its sole discretion), and, notwithstanding any further discussions, negotiations or other actions taken after such date, neither GECDF nor any of its affiliates shall have any liability to any person in connection with its refusal to fund the Financing or any portion thereof after such date.

This letter 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 letter may be given by facsimile or other electronic transmission (including PDF signatures), and such signatures shall be fully binding on the party sending the same.

{remainder of page intentionally left blank; signature page follows}

David Pomeroy	Page 5
July 1, 2009

This Commitment Letter and the attached Amended and Restated Summary of Terms amends and restates the Commitment Letter and attached Summary of Terms, each dated as of June 15, 2009 (the “Prior Documents”).  The Prior Documents are hereby terminated and are no longer in force or effect.

We look forward to continuing to work with you toward completing this transaction.

Sincerely,
GE COMMERCIAL DISTRIBUTION FINANCE
CORPORATION
By:	/s/ David Mintert
Its:	Duly Authorized Signatory

AGREED AND ACCEPTED THIS

___ DAY OF JULY, 2009

/s/ David Pomeroy

Name: David Pomeroy

Title: President

AMENDED AND RESTATED SUMMARY OF TERMS

Up to $50.0 MILLION IN COMBINED SENIOR SECURED CREDIT FACILITIES (the “Financing”)

GENERAL TERMS AND CONDITIONS OF THE FINANCING

The summary of terms amend and restate in their entirety the summary of terms dated June 15, 2009

BORROWER:	An entity controlled by David Pomeroy with minority interests held only by key managers of Target (“Newco Parent”) and a new entity to be wholly owned by Newco Parent (“Acquisitionco”), as co-borrowers. Upon the merger of Acquisitionco with Pomeroy IT Solutions, Inc. (“Target”), and the Target being the surviving entity, Target and all subsidiaries of Target (by way of joinder as co-borrowers) shall become a borrower (collectively, “Borrower”).
LENDER:	GE Commercial Distribution Finance Corporation(“GECDF”)
CREDIT FACILITIES:	The Financing will consist of two Facilities, a 3-year committed receivables based revolving credit facility (“A/R Revolver”) and a discretionary  inventory finance facility (“Inventory Facility”) subject to a combined facility (“Facility”) limit of Fifty Million Dollars ($50,000,000).  The two Facilities will be freely allocable (subject to the terms and conditions contained in the definitive loan documents) subject to the Fifty Million Dollar ($50,000,000) limitation.  The A/R Revolver will be a committed facility and the Inventory Facility will be discretionary and not committed.  The Borrower may terminate the Inventory Facility at any time on no less than sixty (60) days prior written notice to GECDF and GECDF may terminate the Inventory Facility at any time on no less than sixty (60) days prior written notice to Borrower, provided, however, that during the existence of an event of default, no such prior notice shall be required by GECDF to terminate the facilities.  If Borrower elects to terminate a Facility, it must terminate both Facilities.
	Certain of the terms specific to the A/R revolver and Inventory Facility are listed in Exhibit A and Exhibit B, respectively, and attached herewith.
COLLATERAL	To secure the Financing and all obligations of Borrower in connection therewith, GECDF shall receive at closing a fully perfected first priority security interest (other than IBM, Lenovo, Infoprint, Lexmark, Nortel, and HP Inventory) in substantially all assets of the Borrower, including but not limited to all of the following property, whether now existing or hereafter arising, of Borrower and its subsidiaries (the "Collateral"): (a) all accounts and other receivables for goods sold or leased or services rendered whether or not earned ("Receivables"); (b) all instruments, chattel paper and other contracts evidencing, or substituted for, any Receivable; (c) all guarantees, letters of credit, security and other credit enhancements for the Receivables; (d) all claims and causes of action in any way relating to any of the Receivables; (e) all bank accounts into which any proceeds of Receivables are deposited (including all cash and other funds on deposit therein); (f) all books and records relating to any of the foregoing; (g) all substitutions, replacements, accessions, products or proceeds (including, without limitation, insurance proceeds) of any of the foregoing; (h) all inventory of the Borrower (“Inventory”); and (i) all other material assets of the Borrower.  In addition, GECDF would have the right to utilize, at no cost or expense, any trade names, trademarks, copyrights or other intellectual property to the extent necessary or appropriate in order to sell, lease or otherwise dispose of any of the Collateral.

David Pomeroy	Page 2
July 1, 2009

	Also, all obligations of the Borrower under the Facility shall be cross-defaulted to all other material indebtedness (a mutually agreed upon level shall be determined) of Borrower.  All subsidiaries of Target together with Target shall upon the effectiveness of the merger become co-borrowers.
COLLATERAL MONITORING	Borrower will provide, on a weekly basis, Borrowing Base Certificates and other collateral information and operating statistics reasonably requested by GECDF. GECDF will establish customary reserves in a facility of this type, including a Ten Million Dollar ($10,000,000) excess collateral reserve such other reserves necessary to maintain adequate collateral levels to support both the A/R Revolver and Inventory Facility as determined by GECDF.
MANDATORY PREPAYMENTS:	Customary mandatory prepayments including, but not limited to, disposition of assets, equity issuance, debt issuance, and change of control of each Borrower.
FINANCIAL REPORTING:	The Financing Documentation would require Borrower, on a monthly basis, to provide to GECDF (each in form and substances reasonably satisfactory to GECDF) internally prepared financial statements (within thirty (30) days after each month end), and also on a monthly basis, accounts receivable reports, accounts payable reports, and inventory reports, each in form and substances reasonably satisfactory to GECDF and submitted to GECDF by the fifteenth (15th) of the following month.  Annually (within ninety (90) days following fiscal year end), Borrower shall be required to provide unqualified audited financial statements, and an operating plan for the subsequent year.  Borrower shall provide such other reports and information as GECDF may request from time to time.  All financial statements shall be prepared on a consolidated and consolidating basis.  Borrower would provide other information reasonably requested by GECDF.  All financial statements shall be prepared on a consolidated and consolidating basis in accordance with GAAP.
CONDITIONS PRECEDENT:	Conditions Precedent would include, but may not be limited to, conditions customary for transactions of this type well as the following:

· The Borrower, Target and its subsidiaries will not be in default of any agreements for any material obligations or indebtedness.

David Pomeroy	Page 3
July 1, 2009

· The Financing will not cause a breach under any contracts, agreements, laws, or bylaws of any Borrower, Target an its subsidiaries.

· No default or event of default shall exist under the definitive loan documents both before and after making the initial advance under the definitive loan documents.

· The merger of Acquisitionco and Target shall be effective at closing and shall be in compliance with all applicable laws, rules and regulations

FINANCIAL COVENANTS:	Financial covenants would include, but may not be limited to, the following:
	(i) Minimum TNW of Two Million Five Hundred Thousand Dollars ($2,500,000) at Closing (based on most recent fiscal month end after giving effect to the closing), Two Million Five Hundred Thousand Dollars ($2,500,000) at 10/05/09, increasing to Five Million Dollars ($5,000,000) at 1/5/10 fiscal year end and each of the three fiscal quarters thereafter, and increasing to Ten Million Dollars ($10,000,000) at 1/5/11 fiscal year end and each fiscal quarter thereafter;
	(ii) maximum Funded Debt to EBITDA ratio of 3.0 to 1.0 at 10/5/09 and each fiscal quarter end thereafter  The Funded Debt to EBITDA ratio will each build quarterly to a true trailing twelve month calculation starting with the fiscal quarter ending 10/5/09; and
	(iii) quarterly EBITDA shall be no less than the following percentage of quarterly net sales:

October 5, 2009	1.75%
January 5, 2010	1.50%
April 5, 2010 and each	1.75%
fiscal quarter end thereafter

OTHER TERMS AND CONDITIONS  (to include, but not be limited to, the following):

· Completion by GECDF of all business and legal due diligence with regards to Newco Parent, Acquisitionco and Target and its subsidiaries, with results satisfactory to GECDF.  Without limiting the foregoing, the corporate structure, capital structure, other debt instruments, material contracts and governing documents of each Borrower, Target and its subsidiaries must be acceptable to GECDF.

· At the Closing, the Borrower shall have Two Million Dollars ($2,000,000) in excess collateral availability plus cash subject to a control agreement in favor of GECDF.

· At all times after the Closing, there shall be a Ten Million Dollars ($10,000,000) reserve (reserve to be established against eligible receivables).

· Intercreditor Agreements with IBM and HP each acceptable to GECDF.

· Full cash dominion (control agreements and lockbox agreements).

· Terms, conditions and provisions of merger agreement between Acquisitionco and Target in form and substance satisfactory to Lender and its counsel.

· Quarterly field exams at Borrower’s expense.

· Acceptable written letter or report from an acceptable accounting firm providing that FAS 141(R) will be applicable to the Merger and the transactions contemplated hereby.

David Pomeroy	Page 4
July 1, 2009

· Unused line fee on the Facilities, as described in the Interest Rate and Fee Letter between GECDF and the Credit Parties.

· Other fees as described in the Interest Rate and Fee Letter between GECDF and the Credit Parties.

· Acceptable cash management, accounting and financial information systems.

· Satisfactory opinions of counsel from Borrower's outside counsel reasonably acceptable to Lender (including, without limitation, an opinion that the Financing does not violate material government contracts).

· Reporting requirements, documentation, conditions precedent, representations and warranties, indemnities, events of default and remedies as required by the Lender.

· Limitations on capital expenditures; loans, advances, investments and guarantees; sale of assets; additional indebtedness (including subordinated indebtedness); mergers; and the prepayment of subordinated debt. Cash dividends, other distributions to equity holders, or redemption of common or preferred stock shall be limited.

· Prior to the 1/5/10 fiscal year end, there shall be no dividends, management fees and other distributions; after the 1/5/10 fiscal year end, dividends, management fees and other distributions up to 50% of net income after tax (as calculated under GAAP) for a fiscal quarter may be made (after delivery of the quarterly financial statements to GECDF), if no default has occurred and is continuing and no default is reasonably likely to occur from making of any such dividend or distribution or payment of management fee, and if after giving effect to any such dividend or distribution or payment of management fee, the amount of Borrower’s cash plus excess collateral availability on the A/R Revolver is no less than Ten Million Dollars ($10,000,000).

· Limitation on acquisitions to acquisitions of Five Million Dollars ($5,000,000) per acquisition with a fiscal year aggregate limit of Ten Million Dollars ($10,000,000) for all acquisitions during such period, and subject to other customary requirements, including GECDF having a perfected first priority lien on all assets acquired, no default has occurred and is continuing and no default is reasonably likely to occur from the consummation of any such acquisition and, if after giving effect to an acquisition, the amount of Borrower’s cash plus excess collateral availability on the A/R Revolver is no less than Ten Million Dollars ($10,000,000).

· Commercially reasonable insurance protection for the Borrower’s industry, size and risk and the collateral protection (terms, underwriter, scope, and coverage to be acceptable to GECDF); GECDF named as loss payee (property/casualty) and additional insured (liability); and non-renewal/cancellation/amendment riders to provide 30 days advance notice to GECDF.

· Governing law Illinois.

· Rights of: Inspection; access to facilities, management and auditors.

· All consents and approvals shall have been obtained necessary to consummate the Transactions.

· There shall be no litigation pending or threatened against Credit Parties unless approved by GECDF.

· Transaction purchase price shall not be greater than an amount acceptable to GECDF, and the sources and uses at closing shall be satisfactory to Lender.

· David Pomeroy (through Newco Parent) shall control the Target after giving effect to the merger and the minority owners of Target shall be only key managers of Target.

· The initial advance shall not exceed Forty Five Million Dollars ($45,000,000).

· Neither the Borrower nor the Target or any of its Subsidiaries shall received any notice, written or oral, with respect to any vendor or customer indicating that such vendor or customer may or intends to terminate or materially reduce its dealings with the Borrower, the Target or any of its Subsidiaries, nor shall Target or any of its Subsidiaries have any knowledge of any such intention.

· Such other terms and conditions acceptable to GECDF.

· As of the closing date, there will have been (i) since Borrower’s last audited financial statements, no material adverse change, individually or in the aggregate, in the business, financial, prospects or other condition of Borrower, the industry in which any Borrower operates, or the collateral which will be subject to the security interest granted to GECDF or in the prospects or projections of Borrower, (ii) no litigation pending or threatened which, if successful, could reasonably be expected to have a material adverse impact on Borrower, its business or  ability to repay the loans, or which would challenge the transactions under consideration, a (iii) since Borrower’s last audited financial statements, no material increase in the liabilities, liquidated or contingent, of Borrower, or a material decrease in the assets of Borrower, and (iv) there not having occurred whether or not continuing, in GECDF’s reasonable judgment, a material disruption or material adverse change in the financial, banking or capital markets generally.

David Pomeroy	Page 5
July 1, 2009

The preceding summary of terms and conditions is not intended to be all-inclusive.  Any terms and conditions that are not specifically addressed above or in Exhibit A or Exhibit B, shall be subject to future negotiations.  Moreover, both parties acknowledge that: (i) this Summary of Terms is subject to GECDF's due diligence including due diligence on each of Borrower (and its owners), the Target and its subsidiaries, and their operations, financial conditions, and compliance with laws, as well as due diligence on the proposed structure of the Transaction, and (ii) this letter supersedes any and all discussions and understandings, written or oral, between or among GECDF and any other person as to the subject matter hereof.

Except as required by law, neither this letter nor its contents will be disclosed publicly or privately except to Target and to those individuals who are Target’s or your officers, employees or advisors, who have a need to know as a result of being involved in the Financing and then only on the condition that such matters may not be further disclosed. No one shall, except as required by law, use the name of, or refer to, GECDF, or any of its affiliates, in any correspondence, discussions, advertisement or disclosure made in connection with the Financing without the prior consent of GECDF.

Regardless of whether the Financing is approved or closes, Borrower agrees to pay upon demand to GECDF all out-of-pocket expenses (including all reasonable legal, field examination, and other consultant costs and fees) incurred in connection with this letter or the Financing.  Regardless of whether the Financing is approved or closes, Borrower agrees to indemnify and hold GECDF, its affiliates, and the directors, officers, employees, and representatives of any of them, harmless from and against all claims, expenses (including, but not limited to, attorneys' fees), damages, and liabilities of any kind which may be incurred by, or asserted against, any such person in connection with, or arising out of, this letter, the Financing, any other related financing, documentation, disputes or environmental liabilities, or any related investigation, litigation, or proceeding.  Under no circumstances shall GECDF or any of its affiliates be liable for any punitive, exemplary, consequential or indirect damages which may be alleged to result in connection with this letter, or the Financing or any other financing.

David Pomeroy	Page 6
July 1, 2009

EXHIBIT A to

SUMMARY OF TERMS

Up to $50.0 MILLION A/R REVOLVER  (freely allocable with the Inventory facility)

subject to a $50,000,000 facility cap

GENERAL TERMS AND CONDITIONS

AMOUNT: Inventory finance	Up to Fifty Million Dollars ($50,000,000) (freely allocable with the facility) subject to a Fifty Million Dollars ($50,000,000) facility cap
PURPOSE:	For the refinancing of existing senior indebtedness, acquisition of all outstanding stock of Pomeroy IT Solutions, Inc., inclusive of minority shareholders, funding working capital, and general corporate purposes, but subject to all of the outstanding stock of Target owned by David Pomeroy in Pomeroy IT Solutions, Inc. being rolled over and contributed to the Transaction.
REVOLVING PERIOD:	The Borrower may borrow, repay and re-borrow under the Revolver at its discretion as long as it is in compliance with the terms and conditions of the Financing.
AVAILABILITY:	85% advance rate against eligible accounts receivable.
Accounts Receivable	Availability will be based on the Borrower's eligible accounts receivable (the "Borrowing Base"). GECDF will retain the right from time to time to establish or adjust advance rates, standards of eligibility, and reserves against availability customary for facilities of this type, including any reserves necessary to prevent any SPP shortfalls in the inventory borrowing base.  Conditions may include, but not be limited to:

· Receivables must be subject to a first priority perfected security interest and not subject to any other liens or security interests

· Receivables must be generated solely by the Borrower.

· Receivables must be owned by Borrower free of claims, security interests or other encumbrances and not subject to defenses or offset.

· Receivables must satisfy all applicable requirements of the   Borrower’s credit and collection policies that must be acceptable to GECDF.

· Receivables may not be more than 90 days past invoice date or delinquent, or otherwise classified as defaulted.

· Receivables from obligors subject to bankruptcy proceedings would not be eligible for purchase.

· Receivables must be payable in US Dollars.

· Bill and hold, progress billed or otherwise incomplete goods or services would not be eligible for purchase.

· No receivable obligor may be an affiliate.

David Pomeroy	Page 7
July 1, 2009

	The criteria listed above are subject to further clarification and modification after review of the Borrower’s receivables portfolio and GECDF’s other standard eligibility criteria.
INTEREST:	As described in the Interest Rate and Fee Letter between GECDF and the Credit Parties.
DEFAULT RATES:	As described in the Interest Rate and Fee Letter between GECDF and the Credit Parties.

David Pomeroy	Page 8
July 1, 2009

EXHIBIT B to

SUMMARY OF TERMS

Up to $50.0 MILLION INVENTORY FACILITY (freely allocable with the A/R Revolver facility

subject to a $50,000,000 facility cap)

GENERAL TERMS AND CONDITIONS

AMOUNT	Up to Fifty Million Dollars ($50,000,000) (freely allocable with the A/R Revolver facility) subject to a Fifty Million Dollars ($50,000,000) facilitycap
PURPOSE	For the acquisition of inventory through GECDF authorized vendors and distributors.
FACILITY PERIOD	Subject to the continuation of existing Vendor/Distributor programs currently in place.
AVAILABILITY	GECDF financed Inventory will be given a 100% collateral value for GECDF financed Inventory less than 180 days from date of invoice and 50% collateral value of GECDF financed service parts less than 180 days from the date of invoice.   Eligibility will also be determined based on quarterly on-site exams of inventory levels, SKU appraisal and condition of inventory.
INTEREST	Support for free finance periods is dependent on continuation of finance programs on the part of Manufacturers and Distributors.  Termination of these programs may influence GECDF’s ability to support stated terms.
DEFAULT RATES	As described in the Interest Rate and Fee Letter between GECDF and the Credit Parties.