Revolving Credit Agreement

REVOLVING CREDIT AGREEMENT


DATED AS OF APRIL 27, 1992


THE FIRST NATIONAL BANK OF BOSTON


AND


ROSS WHITE ENTERPRISES, INC., d/b/a
NATIONAL COMPUTER DISTRIBUTORS


TABLE OF CONTENTS Section Page - ------- ----
SECTION I - DEFINITIONS 1.1 General............................................................ 1 1.2 Accounting Terms................................................... 9


SECTION II - DESCRIPTION OF CREDIT


2.1 The Loans.......................................................... 9 2.2 Notice and Manner of Borrowing..................................... 9 2.3 Closing Fee........................................................ 9 2.4 Commitment Fee..................................................... 10 2.5 Commitment Reduction/Early Termination Fee......................... 10 2.6 The Loan Account................................................... 10 2.7 Interest Rates and Payments of Interest............................ 10 2.8 Changed Circumstances.............................................. 11 2.9 Payments and Prepayments of the Loans.............................. 11 2.10 Method of Payment.................................................. 11 2.11 Overdue Payments................................................... 11 2.12 Computation of Interest and Fees................................... 11 2.13 Borrowing Base Availability........................................ 11 2.14 Borrowing Base Excesses............................................ 12 2.15 Promises to Pay.................................................... 12 2.16 Authorization to Debit Loan Account................................ 12 2.17 Capital Adequacy................................................... 12


SECTION III - CONDITIONS OF LOANS


3.1 Conditions Precedent to Initial Loan............................... 13 3.2 Conditions Precedent to All Loans.................................. 15


SECTION IV - REPRESENTATIONS AND WARRANTIES


4.1 Organization and Qualification..................................... 15 4.2 Corporate Authority................................................ 16 4.3 Valid Obligations.................................................. 16 4.4 Consents or Approvals.............................................. 16 4.5 Title to Properties; Absence of Encumbrances....................... 16 4.6 Financial Statements............................................... 17 4.7 Changes............................................................ 17 4.8 Defaults........................................................... 17 4.9 Taxes.............................................................. 17 4.10 Litigation......................................................... 17 4.11 Use of Proceeds.................................................... 17 4.12 Subsidiaries....................................................... 18 4.13 Investment Company Act............................................. 18 4.14 Compliance with ERISA.............................................. 18 4.15 Security Interest.................................................. 18 4.16 Application of Proceeds............................................ 18 4.17 Taxes and Charges Relating to the Agreement........................ 18
(i)


SECTION V - AFFIRMATIVE COVENANTS Section Page - ------- ---- 5.1 Financial Statements and other Reporting Requirements.............. 19 5.2 Conduct of Business................................................ 20 5.3 Maintenance and Insurance.......................................... 20 5.4 Taxes.............................................................. 21 5.5 Inspection by the Bank............................................. 21 5.6 Maintenance of Books and Records................................... 21 5.7 Ratio of EBIT to Interest Expense.................................. 21 5.8 Minimum Total Capital Funds........................................ 21 5.9 Leverage Ratio..................................................... 21 5.10 Ratio Senior Bank Indebtedness to Total Capital Funds.............. 22 5.11 Further Assurances................................................. 22


SECTION VI - NEGATIVE COVENANTS


6.1 Indebtedness....................................................... 22 6.2 Contingent Liabilities............................................. 22 6.3 Encumbrances....................................................... 23 6.4 Capital Expenditures............................................... 24 6.5 ERISA.............................................................. 24 6.6 Merger; Consolidation; Sale or Lease of Assets..................... 24 6.7 Leases............................................................. 24 6.8 Sale and Leaseback................................................. 24 6.9 Investments........................................................ 25 6.10 Change in Terms and Prepayment of Subordinated Indebtedness........ 25 6.11 Dividends and Equity Distributions................................. 25


SECTION VII - SECURITY AGREEMENT


7.1 Creation of Security Interest...................................... 25 7.2 Covenants Pertaining to Collateral................................. 26 7.3 Reports, etc. Pertaining to Collateral............................. 27 7.4 Collection of Accounts and Adjustments............................. 29 7.5 Bank's Rights in Collateral........................................ 29 7.6 Remedies........................................................... 30 7.7 Waivers............................................................ 31


SECTION VIII - DEFAULTS


8.1 Events of Default.................................................. 32 8.2 Remedies........................................................... 34


(ii)


SECTION IX - MISCELLANEOUS Section Page - ------- ---- 9.1 Notices........................................................... 34 9.2 Expenses.......................................................... 35 9.3 Set-Off........................................................... 36 9.4 Term of Agreement................................................. 36 9.5 No Waivers........................................................ 36 9.6 Governing Law..................................................... 36 9.7 Amendments........................................................ 36 9.8 Binding Effect of Agreement....................................... 36 9.9 Counterparts...................................................... 37 9.10 Severability...................................................... 37 9.11 Captions.......................................................... 37 9.12 Entire Agreement.................................................. 37 9.13 Jury Waiver....................................................... 37


EXHIBITS


EXHIBIT 3.1(j) FORM OF LEGAL OPINION


EXHIBIT 4.1 LOCATIONS


EXHIBIT 4.5 ENCUMBRANCES


EXHIBIT 4.10 LITIGATION


EXHIBIT 5.1(c) FORM OF CHIEF FINANCIAL OFFICER'S REPORT


EXHIBIT 6.1(b) INDEBTEDNESS


EXHIBIT 6.3(f)(iii) FORM OF VENDOR SUBORDINATION LETTER


EXHIBIT 7.3(c) FORM OF BORROWING BASE CERTIFICATE


EXHIBIT 7.5 FORM OF AGENCY ACCOUNT AGREEMENT


(iii)


REVOLVING CREDIT AGREEMENT


THIS REVOLVING CREDIT AGREEMENT (the "Agreement") is made as of April 27, 1992 between ROSS WHITE ENTERPRISES, INC., d/b/a NATIONAL COMPUTER DISTRIBUTORS (the "Borrower"), a Florida corporation with its chief executive office at 3401-C N.W. 72nd Avenue, Miami, Florida 33132 and THE FIRST NATIONAL BANK OF BOSTON, a national banking association having its head office at 100 Federal Street, Boston, Massachusetts 02110.


SECTION I


DEFINITIONS
-----------


1.1 General.
-------


All capitalized terms used in this Agreement or in any certificate, report or other document made or delivered pursuant to this Agreement (unless otherwise defined therein) shall have the meanings assigned to them below:


Accounts. All of the accounts of the Borrower including, without
-------- limitation, all rights to payment for goods sold or leased or for services rendered, all sums of money or other proceeds due or becoming due thereon, all instruments pertaining thereto, all guarantees and security therefor, all goods giving rise thereto and all rights pertaining to and interest in such goods including the right of stoppage in transit; all rights under contracts to receive money; all other rights and claims to the payment of money, including, without limitation, chattel paper and amounts due from affiliates of the Borrower; and insurance proceeds with respect to any of the foregoing.


Agency Account Agreement. See Section 7.5.
------------------------


Agreement. This Agreement (including all exhibits, schedules, annexes and
--------- the like referred to herein) as originally executed, or if amended, varied or supplemented from time to time, as so amended, varied or supplemented.


Base Rate. The rate of interest announced from time to time by the Bank at
--------- its head office at 100 Federal Street, Boston, Massachusetts 02110 as its "Base Rate".


Borrowing Base. An amount equal to the lesser of (i) $20,000,000; or (ii)
-------------- the sum of (x) 85% of the face value of Eligible Accounts due and owing at such time; plus (y) 50% of Eligible Inventory, not to exceed $12,000,000.
----


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Borrowing Base Certificate. See Section 7.3(c).
--------------------------


Business Day. Any day other than a Saturday, Sunday or legal holiday on
------------ which banks in Boston, Massachusetts are open for the conduct of a substantial part of their commercial lending business.


Chief Financial Officer's Report. See Section 5.1(c).
--------------------------------


Code. The Internal Revenue Code of 1986 and the rules and regulations
---- thereunder, collectively, as the same may from time to time be supplemented or amended and remain in effect.


Collateral. Any and all property of the Borrower in which the Bank now
---------- has, by this Agreement acquires or hereafter acquires, a security interest, lien or encumbrance, including without limitation, the security interest granted pursuant to Section 7.1 of this Agreement.


Controlled Group. All trades or businesses (whether or not incorporated)
---------------- under common control that, together with the Borrower, are treated as a single employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA.


Default. An event or condition that, with the passage of time or the
------- giving of notice, or both, would constitute an Event of Default.


EBIT. At any time that the amount thereof shall be determined, the
---- Borrower's Net Income before total interest expense, income tax expense, expenses attributable to stock bonuses paid to Gregory A. White under the Employment Agreement dated March 31, 1992 between Gregory A. White and the Borrower, as amended and in effect as of the date of this Agreement, expenses attributable to capitalized transaction costs associated with the transactions consummated under and in connection with the Purchase Agreement and the transactions contemplated by this Agreement, the amortization of good will and noncompete agreements and other intangibles shown on the Borrower's balance sheet, but after the depreciation of the Borrower's fixed asset expense.


Eligible Account. An Account which meets all of the following
---------------- requirements:


(a) such Account is owned by the Borrower and represents a complete bona fide transaction which requires no further act under any circumstances on part of the Borrower to make such Account payable to the account debtor;


(b) such Account is not past due more than 60 days;


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(c) the goods the sale of which gave rise to such Account were shipped or delivered to the account debtor on an absolute sale as is and not on a bill and hold sale basis, a consignment sale basis, a guaranteed sale basis, a sale or return basis, or on the basis of any other similar understanding, and no material part of such goods has been returned or rejected;


(d) such Account is not evidenced by chattel paper or an instrument of any kind unless such chattel paper or instrument has been delivered to and is in the possession of the Bank;


(e) the account debtor with respect to such Account is not insolvent or the subject of any bankruptcy or insolvency proceedings of any kind or of any other proceeding or action, threatened or pending, which might have a materially adverse effect on such account debtor and is not, in the reasonable discretion of the Bank, deemed ineligible for credit or other reasons;


(f) such Account is not owing by an account debtor whose then-existing accounts owing to the Borrower exceed in face amount 30% of the Borrower's total Eligible Accounts;


(g) such Account is not owing by an account debtor when 50% of all then-existing accounts owing to the Borrower by such account debtor are past due more than 60 days;


(h) if such Account arises from the performance of services, such services have been fully rendered;


(i) if the account debtor with respect thereto is located outside of the United States of America (excluding for this purpose the Commonwealth of Puerto Rico or the United States Virgin Islands), the goods which gave rise to such Account were shipped after receipt by the Borrower from the account debtor of an irrevocable letter of credit, which letter of credit has been confirmed by a financial institution reasonably acceptable to the Bank and is in form and substance reasonably acceptable to the Bank, payable in the full face amount of the face value of he Account in Dollars at a place of payment located within the United States;


(j) the amount owning on the invoice evidencing such Account is a valid, legally enforceable obligation of the account debtor with respect thereto and is not subject to any material present, or contingent, and no facts exist which are the basis for any future, offset, deduction or counterclaim, dispute or other defense on the part of such account debtor;


(k) such Account is subject to a security interest in favor of the Bank, which security interest is perfected as to such Account, and is subject to no other Lien whatsoever other than a Permitted Lien;


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(l) such Account is evidenced by an invoice or other documentation in form reasonably acceptable to the Bank;


(m) such Account is not subject to the Assignment of Claims Act of 1940, as amended from time to time, or any applicable law now or hereafter existing similar in effect thereto, as determined in the reasonable discretion of the Bank, or to any provision prohibiting its assignment or requiring notice of or consent to such assignment;


(n) the goods giving rise to such Account were not, at the time of the sale thereof, subject to any Lien, except the Permitted Liens; and


(o) such Account is not determined by the Bank to be ineligible for any other reason based upon such credit and collateral considerations as the Bank may reasonably deem appropriate.


Eligible Inventory. Inventory which meets all of the following
------------------ requirements:


(a) such Inventory is owned by the Borrower, is subject to a security interest in favor of the Bank, which security interest is perfected as to such Inventory, and is subject to no other Lien whatsoever other than a Permitted Lien;


(b) such Inventory consists of finished goods;


(c) such Inventory is in good condition and meets all standards applicable to such goods, their use or sale imposed by any governmental agency, or department or division thereof, having regulatory authority over such matters;


(d) such Inventory is currently either usable or saleable, at prices approximately at least cost, in the normal course of the Borrower's business;


(e) such Inventory is located within the United States at one of the locations set forth in the most recent Schedule of Inventory;


(f) such Inventory is in the possession of the Borrower and not any third part, such as warehousers or contractors (unless the Bank has received a waiver from the applicable warehousers or contractors in form and substance reasonably satisfactory to the Bank);


(g) such Inventory is of a quality and from a vendor satisfactory to the Bank;


(h) such Inventory is obtained from a vendor offering stock rotation or stock balancing privileges to the Borrower; and


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(i) such Inventory is not determined by the Bank to be ineligible for any other reason based upon such reasonable credit and collateral considerations as the Bank may deem appropriate.


Inventory immediately loses the status of Inventory if and when the Borrower sells it, otherwise passes title thereto or consumes it or the Bank releases or transfers its security interest therein. If and when an Eligible Account exists by virtue of constituting proceeds of Eligible Inventory, the Inventory giving rise to the Eligible Account automatically loses its status as Eligible Inventory.


Encumbrances. See Section 6.3.
------------


Equipment. All of the Borrower's machinery, equipment and fixtures,
--------- wherever located, including, without limitation, office furniture, furnishings and trade fixtures specialty tools and parts, motor vehicles and materials handling equipment, together with the Borrower's interest in, and right to, any and all manuals and other materials that contain technical data relating to the use, operations, or structure of such equipment, and at least one set of copies of those materials on which then-current information is recorded.


ERISA. The Employee Retirement Income Security Act of 1974 and the rules
----- and regulations thereunder, collectively, as the same may from time to time be supplemented or amended and remain in effect.


Event of Default. Any event described in Section 8.1.
----------------


General Intangibles. All of the general intangibles of the Borrower,
------------------- including, without limitation, tax refunds, rights with respect to trademarks, service marks, trade names, patens, copyright rights, trade-secrets information, and rights to prevent others from doing acts that constitute unfair competition with or misappropriation of the property of the Borrower including, without limitations, any sums (net of expenses) that the Borrower may receive arising out of any claim for infringement of its rights in any patent, copyright, trademark, trade name, trade secret or other proprietary right and all rights of the Borrower under contracts to enjoy performance by others or to be entitled to enjoy rights granted by others or to be entitled to enjoy rights granted by others, including without limitation any licenses.


Guarantees. As applied to the Borrower, all guarantees, endorsements or
---------- other contingent or surety obligations with respect to obligations of others whether or not reflected on the balance sheet of the borrower, including any obligation to furnish funds, directly or indirectly (whether by virtue of partnership arrangements, by agreement to keep-well or otherwise), through the purchase of goods, supplies or


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services, or by way of stock purchase, capital contribution, advance or loan, or to enter into a contract for any of the foregoing, for the purpose of payment of obligations of any other person or entity.


Indebtedness. As applied to the Borrower, (i) all obligations for borrowed
------------ money or other extensions of credit, including all obligations representing the deferred purchase price of property, other than accounts payable arising in the ordinary course of business, (ii) all obligations evidenced by bonds, notes, debentures or other similar instruments, (iii) all obligations secured by any mortgage, pledge, security interest or other lien on property owned or acquired by the Borrower whether or not the obligations secured thereby shall have been assumed, (iv) that portion of all obligations arising under capital leases that is required to be capitalized on the consolidated balance sheet of the Borrower, and (v) all Guarantees.


Inventory. All inventory of the Borrower wherever located, including,
--------- without limitation, all goods, merchandise, and other personal property which are held for sale, lease or other disposition, or held for display or demonstration, or leased or cosigned or which are raw materials, work in process, or materials used or consumed or to be used or consumed in the business of the Borrower. "Inventory" shall include all proprietary rights, patents, plans, drawings, diagrams, schematics, assembly and display materials relating to any of the foregoing.


Investments. The purchase or acquisition of any share of capital stock,
----------- partnership interest, evidence of indebtedness or other equity security of any other person or entity, any loan, advance or extension of credit to, or contribution to the capital of, any other person or entity, any real estate held for sale or investment, any commodities futures contracts held other than in connection with bona fide hedging transactions, any other investment in any other person or entity, and the making of any commitment or acquisition of any option to make an Investment.


Loan. A Loan made to the Borrower by the Bank pursuant to Section II of
---- this Agreement.


Loan Account. The general ledger account in the name of the Borrower on the
------------ books of the Bank in which will be recorded loans and advances made by the Bank to the Borrower pursuant to this Agreement, payments made on such loans, and other appropriate debits and credits as provided by this Agreement.


Maximum Commitment. $20,000,000.
------------------


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Net Income. At any date as of which the amount thereof shall be determined,
---------- all amounts that should, in accordance with generally accepted accounting principles, be included as the net income of the Borrower.


Obligations. Any and all obligations of the Borrower to the Bank of every
----------- kind and description, direct or indirect, absolute or contingent, primary or secondary, due or to become due, now existing or hereafter arising or acquired, regardless of how they arise or are acquired or by what agreement or instrument, if any, and including obligations to perform acts and refrain from taking action as well as obligations to pay money.


PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding to
---- any or all of its functions under ERISA.


Permitted Encumbrances. See Section 6.3.
----------------------


Plan. At any time, an employee pension or other benefit plan that is
---- subject to Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is either (i) maintained by the Borrower or any member of the Controlled Group for employees of the Borrower or any member of the Controlled Group or (ii) if such Plan is established, maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which the Borrower, or any member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five Plan years made contributions.


Proceeds. Whatever is received upon the sale, lease, exchange, collection
-------- or other disposition of the Collateral including, but not limited to, all Accounts, goods, money, checks, deposit accounts, and insurance proceeds.


Purchase Agreement. The Subordinated Note and Warrant Purchase Agreement
------------------ dated as of March 31, 1992 by and among the Borrower, those persons listed on Schedule A annexed thereto, and C.T. Capital Trust N.V., a Netherlands Antilles - ---------- corporation, as agent and attorney in fact for such persons.

Qualified Investments. Investments in (i) notes, bonds or other obligations
-------------------- of the United States of America or any agency thereof that as to principal and interest constitute direct obligations of or are guaranteed by the United States of America; (ii) certificates of deposit or other deposit instruments or accounts of banks or trust companies organized under the laws of the United States or any state thereof that have capital and surplus of at least $100,000,000, (iii) commercial paper that is rated not less than prime-one or A-1 or their equivalents by Moody's Investors Service, Inc. or


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Standard & Poor's Corporation, respectively, or their successors, and (iv) any repurchase agreement secured by any one or more of the foregoing.


Senior Bank Indebtedness. Any and all Indebtedness of the Borrower to the
------------------------ Bank whether under this Agreement or otherwise.


Service Fee. See Section 2.3.
-----------


Subordinated Indebtedness. Indebtedness of the Borrower evidenced by the
------------------------- Subordinated Notes, as defined in, and issued pursuant to, the Purchase Agreement and any other Indebtedness of the borrower the payment of principal of and interest on which is expressly subordinated in right of payment, to the prior payment in full of the Obligations, by a subordination agreement in a form and continuing terms approved by the Bank.


Subsidiary. Any corporation, association, joint stock company, business
---------- trust or other similar organization of which 50% or more of the ordinary voting power for the election of a majority of the members of the board of directors or other governing body of s ...