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Exhibit 10.1
 
AMENDMENT NO. 7 TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT

Amendment No. 7 to Amended and Restated Loan and Security Agreement dated as of
_______________, 2007, by and between ZONES, INC. (“Borrower”) and GE COMMERCIAL
DISTRIBUTION FINANCE CORPORATION (formerly known as Transamerica Commercial
Finance Corporation) (“Lender”).

PREAMBLE:

Pursuant to that certain Amended and Restated Loan and Security Agreement dated
as of April 11, 2003 by and among Lender, Borrower, and The Mac Zone, Inc.
(“Borrower 3”) (Borrower and Borrower 3 are sometimes hereinafter individually
referred to as an “Original Borrower” and collectively as the “Original
Borrowers”) as amended from time to time (collectively, the “Loan Agreement”),
Lender made certain financing available to Original Borrowers.  Borrower and
Borrower 3 have merged with the surviving entity being Borrower (the
“Borrower/Borrower 3 Merger”).  Borrower has requested Lender to modify certain
terms and provisions of the Documents.  Lender has agreed to do so, upon the
terms and conditions of this Amendment.

NOW, THEREFORE, in consideration of the premises which are incorporated herein
by this reference and constitute an integral part of this Amendment, the
execution and delivery of this Amendment and the mutual covenants and agreements
hereafter set forth, the parties hereto agree as follows:

1.    The parties acknowledge and agree that as a result of the
Borrower/Borrower 3 Merger, (A) Borrower 3 shall no longer be deemed to be a
“Borrower” under the Loan Agreement and Documents; and (B) all references to
“any Borrower” or “Borrowers” in the Loan Agreement or the Documents (as defined
in the Loan Agreement) shall only include, without limitation, the Borrower; and
(C) all references to Borrower 3 in the Loan Agreement or the Documents are
deleted in their entirety.

2.    The definition of “Maximum Credit Amount” located in Section 1.1 of the
Loan Agreement is hereby deleted in its entirety and replaced with the
following:

“‘Maximum Credit Amount’ shall mean $50,000,000.00.”

3.    Section 5.1(W) of the Loan Agreement entitled “Unsubordinated Debt to
Tangible Net Worth Ratio” is hereby deleted in its entirety and replaced with
the following:

“(W)  Unsubordinated Debt to Tangible Net Worth Ratio.  Commencing on September
30, 2007, and at all times thereafter, it shall not cause, suffer or permit the
ratio of (i) Borrower’s total liabilities minus subordinated debt to (ii)
Borrower’s Tangible Net Worth to be greater than 3.75 to 1.00, as measured at
the end of each fiscal quarter.”

4.    Section 5.1(X) of the Loan Agreement entitled “Tangible Net Worth” is
hereby deleted in its entirety and replaced with the following:

“(X)  Tangible Net Worth.  Commencing on September 30, 2007, and at all times
thereafter, it shall not cause, suffer or permit Borrower’s Tangible Net Worth
to be less than $30,000,000.00, as measured at the end of each fiscal quarter.”

5.    Section 5.1(Y) of the Loan Agreement entitled “Fixed Charge Coverage” is
hereby deleted in its entirety.

6.    Section 5.1(Z) of the Loan Agreement entitled “Current Ratio” is hereby
deleted in its entirety.

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7.    All representations and warranties made to the Lender in the Documents are
hereby restated to the Lender and all of such representations and warranties
remain true and correct as of the date of this Amendment.

8.    All of the pledges, assignments, transfers, conveyances, mortgages and
grants of security interest of any property given to Lender by Borrower pursuant
to the Documents, including, but not limited to, pursuant to Article 3 of the
Loan Agreement, have constituted and shall and hereinafter do continue to
constitute pledges, assignments, transfers, conveyances, mortgages and grants of
security interests of property to secure the Liabilities.

9.    Lender’s obligation to enter into this Amendment is subject to the
fulfillment of each and every one of the following conditions prior to, or
contemporaneously with the execution and delivery of this Amendment.

A.       All of the conditions precedent set forth in the Loan Agreement shall
have been met; and

B.        Lender shall have received such instruments, agreements and documents
in form and manner satisfactory to Lender and its counsel as Lender may
reasonably request and where applicable, duly executed and recorded.

10.    All references to the Loan Agreement in any of the Documents shall mean
the Loan Agreement, as amended by this Amendment and as may be further amended
and/or restated from time to time.

11.    The Loan Agreement (as amended by this Amendment), together with the
Documents, contain the entire agreement between the parties hereto with respect
to the transactions contemplated herein and supercede all prior representations,
agreements, covenants and understandings, whether oral or written, related to
the subject matter of the Loan Agreement.  Except as specifically set forth in
the Agreement, Lender makes no covenants to Borrower, including, but not limited
to, any other commitments to provide any additional financing to Borrower.

12.    This Amendment may be executed in any number of counterparts, each of
which counterpart, once they are executed and delivered shall be deemed to be an
original and all of which counterparts taken together shall constitute but one
in the same amendment.

13.    Except as specifically amended and modified by this Amendment, (A) the
Loan Agreement shall remain in full force and effect and is hereby restated and
incorporated herein by this reference; and (B) all terms defined in the Loan
Agreement shall have the same meanings herein as therein.

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first above written.

BORROWER:
ZONES, INC.
         
By: /s/ RONALD MCFADDEN
     
Title: SVP & CFO
   
LENDER:
GE COMMERCIAL DISTRIBUTION FINANCECORPORATION
         
By: /s/ DAVID LYNCH
     
Title: VP - Operations

 

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