AMENDED AND RESTATED CREDIT AGREEMENT
 
among
 
COLOR EDGE LLC (f/k/a MCEI, LLC), COLOR EDGE VISUAL LLC (f/k/a MCEV, LLC) and
CRUSH CREATIVE LLC (f/k/a MCRU, LLC)
 
as Borrowers,
 
MERISEL, INC., MERISEL AMERICAS, INC. and CERTAIN SUBSIDIARIES OF MERISEL, INC.
PARTY HERETO
 
as Corporate Guarantors
 
and
 
AMALGAMATED BANK,
 
as Lender
 
Dated as of September 30, 2009
 

 

 

 
 
 
 

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TABLE OF CONTENTS

     
Page
SECTION 1.
 
DEFINITIONS
1
 
1.1
Defined Terms
1
 
1.2
Other Definitional Provisions
17
SECTION 2.
 
[RESERVED]
18
SECTION 3.
 
AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
18
 
3.1
Revolving Credit Commitments
18
 
3.2
Procedure for Revolving Credit Borrowing
18
 
3.3
Termination or Reduction of Revolving Credit Commitments
19
 
3.4
[Reserved.]
19
SECTION 4.
 
[RESERVED]
19
SECTION 5.
 
GENERAL PROVISIONS APPLICABLE TO LOANS
19
 
5.1
Interest Rates and Payment Dates
19
 
5.2
[Reserved.]
19
 
5.3
[Reserved.]
20
 
5.4
Repayment of Loans; Evidence of Debt
20
 
5.5
Optional Prepayments
20
 
5.6
Mandatory Prepayments
21
 
5.7
Computation of Interest and Fees
21
 
5.8
[Reserved.]
22
 
5.9
Payments
22
 
5.10
[Reserved.]
22
 
5.11
Requirements of Law
22
 
5.12
Taxes
22
 
5.13
[Reserved.]
23
 
5.14
Lending Offices; Change of Lending Office
23
 
5.15
Joint and Several Liability of the Borrowers
24
SECTION 6.
 
REPRESENTATIONS AND WARRANTIES
25
 
6.1
Financial Condition
25
 
6.2
No Change
25
 
6.3
Existence; Compliance with Law
25
 
6.4
Power; Authorization; Enforceable Obligations
26
 
6.5
No Legal Bar
26
 
6.6
No Material Litigation
26
 
6.7
No Default
26
 
6.8
Ownership of Property; Liens
26
 
6.9
Intellectual Property
27
 
6.10
No Burdensome Restrictions
27
 
6.11
Taxes
27

 
 
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6.12
Federal Regulations
27
 
6.13
ERISA
27
 
6.14
Investment Company Act; Other Regulations
28
 
6.15
Capitalization; Subsidiaries
28
 
6.16
Security Documents
28
 
6.17
Accuracy and Completeness of Information
29
 
6.18
Labor Relations
29
 
6.19
Insurance
30
 
6.20
Solvency
30
 
6.21
Purpose of Loans
30
 
6.22
Environmental Matters
30
 
6.23
MCEI Acquisition, MCEV Acquisition and MCRU Acquisition
31
 
6.24
Employment Agreements
32
SECTION 7.
 
CONDITIONS PRECEDENT
32
 
7.1
Conditions to the Execution and Delivery of this Agreement
32
 
7.2
Conditions to Each Loan
35
SECTION 8.
 
AFFIRMATIVE COVENANTS
35
 
8.1
Financial Statements
36
 
8.2
Certificates; Other Information
36
 
8.3
Payment of Obligations
37
 
8.4
Conduct of Business and Maintenance of Existence
37
 
8.5
Maintenance of Property; Insurance
38
 
8.6
Inspection of Property; Books and Records; Discussions
38
 
8.7
Notices
38
 
8.8
Environmental Laws
39
 
8.9
Changes to Standards of Eligibility and Reserves
39
 
8.10
Periodic Audit of Accounts Receivable and Inventory
39
 
8.11
Additional Collateral: Additional Guarantors
40
 
8.12
Control Agreements
40
 
8.13
Further Assurances
41
 
8.14
Post-Closing Lien Searches
41
SECTION 9.
 
NEGATIVE COVENANTS
41
 
9.1
Financial Condition Covenants
41
 
9.2
Limitation on Indebtedness
41
 
9.3
Limitation on Liens
42
 
9.4
Limitation on Guarantee Obligations
43
 
9.5
Limitation on Fundamental Changes
43
 
9.6
Limitation on Sale of Assets
43
 
9.7
Limitation on Dividends
44
 
9.8
Limitation on Investments, Loans and Advances
44
 
9.9
Limitation on Optional Payments and Modifications of Agreements
45
 
9.10
Limitation on Transactions with Affiliates
45
 
9.11
Limitation on Sales and Leasebacks
45
 
9.12
Limitation on Changes in Fiscal Year
45

 
 
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9.13
Limitation on Negative Pledge Clauses
45
 
9.14
Limitation on Lines of Business
45
 
9.15
Governing Documents
46
 
9.16
Limitation on Subsidiary Formation
46
 
9.17
Limitation on Securities Issuance
46
SECTION 10.
 
EVENTS OF DEFAULT
46
SECTION 11.
 
MISCELLANEOUS
49
 
11.1
Amendments and Waivers
49
 
11.2
Notices
49
 
11.3
No Waiver; Cumulative Remedies
50
 
11.4
Survival of Representations and Warranties
50
 
11.5
Payment of Expenses and Taxes
50
 
11.6
Successors and Assigns, Participations
51
 
11.7
Set-off
51
 
11.8
Counterparts
51
 
11.9
Severability
52
 
11.10
Integration
52
 
11.11
GOVERNING LAW
52
 
11.12
Submission to Jurisdiction; Waivers
52
 
11.13
Acknowledgements
53
 
11.14
WAIVERS OF JURY TRIAL
53
 
11.15
Confidentiality
53
 
11.16
Security Documents in Full Force and Effect
53
 
11.17
Lender Waiver of Events of Default
53
                 
SCHEDULES
           
Schedule 1.0
Commitment and Applicable Lending Offices
         
Schedule 6.4
Consents and Filings
         
Schedule 6.6
Material Litigation
         
Schedule 6.15
Capitalization; Subsidiaries
         
Schedule 6.16
Filing Jurisdictions
         
Schedule 6.19
Insurance
         
Schedule 7.1(r)
Employment Agreements
         
Schedule 9.2
Existing Indebtedness
         
Schedule 9.3
Existing Liens
         
Schedule 9.4
Existing Guarantee Obligations
       
EXHIBITS
           
Exhibit A
Form of Revolving Credit Note
         
Exhibit B
Form of Pledge Agreement
         
Exhibit C
Form of Security Agreement
         
Exhibit D
Form of Corporate Guarantee
   

 
 
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Exhibit E
[Reserved]
         
Exhibit F
Form of Closing Certificate
         
Exhibit G
Form of Opinion of Counsel to the Loan Parties
         
Exhibit H
Form of Borrowing Base Certificate
       
ANNEXES
           
Annex I
Form of Notice of Borrowing
         
Annex II
[Reserved]
         
Annex III
Form of Notice of Prepayment
   

 
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AMENDED AND RESTATED CREDIT AGREEMENT
 
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of September 30, 2009, among
COLOR EDGE LLC (f/k/a MCEI, LLC), a Delaware limited liability company (“MCEI”),
COLOR EDGE VISUAL LLC (f/k/a MCEV, LLC), a Delaware limited liability company
(“MCEV”) and CRUSH CREATIVE LLC (f/k/a MCRU, LLC) a Delaware limited liability
company (“MCRU”; each of MCEI, MCEV and MCRU, herein referred to as a “Borrower”
and, collectively, as the “Borrowers”), MERISEL, INC., a Delaware corporation
(“Merisel”), MERISEL AMERICAS, INC., a Delaware corporation (“Merisel Americas”)
and certain other affiliates of the Borrowers as guarantors (“Subsidiary
Guarantors”; each of Merisel, Merisel Americas and the Subsidiary Guarantors, a
“Corporate Guarantor” and, collectively, the “Corporate Guarantors”) and
AMALGAMATED BANK, a New York banking corporation (the “Lender”).
 
RECITALS
 
WHEREAS, the Borrowers, the Corporate Guarantors and the Lender are party to
that certain Credit Agreement, dated as of March 1, 2005, as amended by
Amendment No. 1 thereto, dated as of August 8, 2005, as further amended by
Amendment No. 2 thereto, dated as of February 27, 2008, and as further amended
by Amendment No. 3 thereto, dated as of March 26, 2009 (as so amended and in
effect on the date immediately prior to giving effect to the amendment and
restatement contemplated hereby, the “Existing Credit Agreement”); and
 
WHEREAS, the parties hereto desire to enter into this Agreement to amend and
restate, in its entirety, the Existing Credit Agreement to, among other things,
(i) delete all references to any obligations of the Borrowers under the Term
Loans (as such term is defined in the Existing Credit Agreement), (ii) reduce
the Revolving Credit Commitment from $15,500,000 to $12,000,000 and (iii) permit
a decrease in or change in control of the outstanding Capital Stock (as defined
below) of Merisel, all on, and subject to, the terms and conditions set forth in
this Agreement;
 
WHEREAS, the Borrowers have secured and desire to continue to secure and
Corporate Guarantors have guaranteed and are willing to continue to guaranty all
of the Obligations of the Borrowers by granting to Lender a first priority
perfected Lien upon all of their respective personal property; and
 
WHEREAS, on or prior to the Restatement Effective Date, the Borrowers will pay
in full, discharge or otherwise satisfy all obligations arising under the Term
Loans (as such term is defined in the Existing Credit Agreement).
 
NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the Borrowers, the Corporate Guarantors and
Lender agree that the Existing Credit Agreement shall be amended and restated in
its entirety to read as follows:
 
SECTION 1.  
DEFINITIONS

 
1.1 Defined Terms.  As used in this Agreement, the following terms shall have
the following meanings:
 
 
 

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“Account Control Agreement”: as defined in the Security Agreement.
 
“Acquisition”: as to any Person, the acquisition by such Person of (a) Capital
Stock of any other Person if, after giving effect to the acquisition of such
Capital Stock, such other Person would be a Subsidiary, (b) all or substantially
all of the assets of any other Person or (c) assets constituting one or more
business units of any other Person.
 
“Advertising Props”: Advertising Props, Inc., a Georgia corporation, and a
Corporate Guarantor under this Agreement.
 
“Affiliate”: as to any Person, any other Person (other than a Subsidiary) which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.  For purposes of this definition, “control” of a
Person (including, with its correlative meanings, “controlled by” and “under
common control with”) means the power, directly or indirectly, either to
(a) vote 10% or more of the securities having ordinary voting power for the
election of directors of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
 
“Aggregate Outstanding Revolving Credit Extensions of Credit”: at any time, an
amount equal to the aggregate principal amount of all Revolving Credit Loans
made by the Lender then outstanding.
 
“Agreement”: this Amended and Restated Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
 
“Applicable Lending Office”: the lending office of the Lender designated for any
Loan on Schedule 1.0 hereto (or any other lending office from time to time
notified to the Borrowers by the Lender) as the office at which such Loans are
to be made and maintained.
 
“Asset Sale”: any sale, lease or other disposition of property or series of
related sales, leases or other dispositions of property (excluding any such
sale, leases or other disposition (i) permitted by clauses (b), (c) and (d) of
Section 9.6 and (ii) in respect of the Cary Property) which yields gross
proceeds to any Borrower or any of the other Loan Parties (valued at the initial
principal amount thereof in the case of non-cash proceeds consisting of notes or
other debt securities and valued at fair market value in the case of other
non-cash proceeds) in excess of $250,000.
 
“Available Revolving Credit Commitment”: at any time, an amount equal to the
excess, if any, of (a) the amount of the Lender’s Revolving Credit Commitment at
such time over (b) the Lender’s Revolving Credit Loans outstanding at such time.
 
(a) “Base Rate”: for any day, the rate per annum (rounded upward, if necessary,
to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus ½
of 1%.  For purposes hereof: “Prime Rate” shall mean the rate of interest
publicly announced by the Lender in New York, New York from time to time as its
base rate (the base rate not being intended to be the lowest rate of interest
charged by the Lender in connection with extensions of credit to
debtors).  Notwithstanding the foregoing, if at any time the Base Rate does not
exceed 3.25% (the “Base Rate Floor”), then the Base Rate shall automatically be
increased to and be defined as the Base Rate Floor until such time as the Base
Rate exceeds the Base Rate Floor.
 
 
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“Base Rate Loan”: a loan the rate of interest applicable to which is based upon
the Base Rate.
 
“Board”: the Board of Governors of the Federal Reserve System of the United
States (or any successor).
 
“Borrower” or “Borrowers”: as defined in the heading hereto.
 
“Borrower Acquisitions”: collectively, the MCEI Acquisition, the MCEV
Acquisition and the MCRU Acquisition.
 
“Borrowing Base”: at any time, 80% of the then Eligible Accounts.  The Borrowing
Base in effect at any time shall be the Borrowing Base as shown on the Borrowing
Base Certificate most recently delivered by the Borrowers pursuant to this
Agreement; provided, however, that if the Borrowers shall fail to deliver a
Borrowing Base Certificate when required pursuant to Section 8.2(c), the
Borrowing Base in effect shall be zero until such Borrowing Base Certificate is
delivered.
 
“Borrowing Base Certificate”: a certificate, substantially in the form of
Exhibit H, with appropriate insertions, showing the Borrowing Base as of the
date set forth therein, and executed on behalf of the Borrowers by a duly
authorized officer thereof.
 
“Borrowing Date”: any Business Day specified in a notice pursuant to Section 3.2
as a date on which the Borrowers request the Lender to make Loans hereunder.
 
“Business”: as defined in Section 6.22(b).
 
“Business Day”: a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close.
 
“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
similar ownership interests in a Person (other than a corporation) and any and
all warrants, rights or options to purchase any of the foregoing.
 
“Cary Property”: any interest in that certain property designated as Lot 1-A,
containing 29.192 acres, located in Cary, North Carolina owned or to be owned by
Merisel or any of its Subsidiaries.
 
“Cash Equivalents”: (a) securities with maturities of 90 days or less from the
date of acquisition issued or fully guaranteed or insured by the United States
Government or any agency thereof, (b) certificates of deposit and eurodollar
time deposits with maturities of 90 days or less from the date of acquisition
and overnight bank deposits of the Lender or of any commercial bank having
capital and surplus in excess of $500,000,000, (c) repurchase obligations of the
Lender or of any commercial bank satisfying the requirements of clause (b) of
 
 
3

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 this definition, having a term of not more than seven days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-1 or the
equivalent thereof by Standard and Poor’s Ratings Group (“S&P”) or P-1 or the
equivalent thereof by Moody’s Investors Service, Inc. (“Moody’s”) and in either
case maturing within 90 days after the day of acquisition, (e) securities with
maturities of 90 days or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody’s,
(f) securities with maturities of 90 days or less from the date of acquisition
backed by standby letters of credit issued by the Lender or any commercial bank
satisfying the requirements of clause (b) of this definition or (g) shares of
money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition.
 
“Change of Control”: at any time on or after the Restatement Effective Date, (i)
Merisel shall fail to have legal and beneficial title to Capital Stock of any
Borrower representing 50.1% or more of the aggregate ordinary voting power or
economic interests represented by the issued and outstanding equity securities
of such Borrower, (ii) any Person who is not  Stonington, any Affiliate of
Stonington, or a limited partner of Stonington  acquires legal and beneficial
title to Capital Stock of Merisel representing thirty-five percent (35%) or more
of the aggregate ordinary voting power or economic interests represented by the
issued and outstanding equity securities of Merisel, or (iii) the Continuing
Directors shall not constitute at least 50% of the elected and acting members of
the board of directors of Merisel.
 
“Code”: the Internal Revenue Code of 1986, as amended from time to time.
 
“Collateral”: all property and interests in property of the Loan Parties, now
owned or hereinafter acquired, upon which a Lien is purported to be created by
any Security Document.
 
“Collateral Assignment of Purchase Agreement”: each of the Collateral Assignment
of Rights to Asset Purchase Agreement related to (a) the MCEI Acquisition
Agreement executed by MCEI and the other parties to the MCEI Acquisition
Agreement, (b) the MCEV Acquisition Agreement, executed by MCEV and the other
parties to the MCEV Acquisition Agreement and (c) the MCRU Acquisition
Agreement, executed by MCRU and the other parties to the MCRU Acquisition
Agreement, as the same may be amended, supplemented or otherwise modified from
time to time.
 
 “Collateral Certificate”: the collateral certificate to be executed and
delivered by each Loan Party in form and substance satisfactory to the Lender,
as it may be amended, supplemented or otherwise modified from time to time in
accordance with the terms and conditions of the Loan Documents.
 
“Color Edge”: Color Edge, Inc., a New York corporation.
 
“Color Edge Visual”: Color Edge Visual, Inc., a New York corporation.
 
“Commitment”: the Revolving Credit Commitment.
 
 
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“Commonly Controlled Entity”: an entity, whether or not incorporated, which is
under common control with any Borrower within the meaning of Section 4001 of
ERISA or is part of a group which includes any Borrower and which is treated as
a single employer under Section 414(b) or (c) of the Code or, for purposes of
the Code, Section 414(m) or (o) of the Code.
 
“Comp 24”: Comp 24, LLC, a Delaware limited liability company, and a Corporate
Guarantor under this Agreement.
 
“Consolidated EBITDA”: for any period with respect to Merisel and its
Subsidiaries, the sum, without duplication, for such period of (a) Consolidated
Net Income of Merisel and its consolidated Subsidiaries for such period, (b) the
sum of provisions for such period for income taxes, interest expense, and
depreciation and amortization expense used in determining such Consolidated Net
Income, (c) amounts deducted in accordance with GAAP in respect of other
extraordinary or non-recurring non-cash losses (or minus amounts added in
accordance with GAAP in respect of any extraordinary or non-recurring non-cash
gains) in determining such Consolidated Net Income; provided, that Consolidated
EBITDA shall in any event exclude, from and after the Restatement Effective Date
(including the Original Closing Date, in the case of the initial Loans made
hereunder), the amount of any non-cash income recognized during any period for
which Consolidated EBITDA is determined.  For purposes of this definition,
income or loss arising out of Merisel’s tax loss carryforward assets, goodwill
impairment determinations or impairment determinations with respect to other
balance sheet intangible assets shall be treated as an extraordinary or
non-recurring non-cash loss.
 
“Consolidated Net Income”: for any period with respect to Merisel and its
Subsidiaries, the consolidated net income (or deficit) of Merisel and its
consolidated Subsidiaries for such period (taken as a cumulative whole),
determined in accordance with GAAP; provided that there shall be excluded
(a) the income (or deficit) of any other Person accrued prior to the date it
becomes a Subsidiary of Merisel or is merged into or consolidated with Merisel
or any Subsidiary of Merisel, (b) the income (or deficit) of any Person (other
than a Subsidiary of Merisel) in which Merisel or any Subsidiary of Merisel has
an ownership interest, except to the extent that any such income has been
actually received by Merisel or such Subsidiary in the form of dividends or
similar distributions, (c) the undistributed earnings of any Subsidiary of
Merisel to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation, Governing Document or Requirement of Law applicable
to such Subsidiary, (d) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of income
accrued during such period, (e) any aggregate net gain or net loss during such
period arising from the sale, exchange or other disposition of capital assets
(such term to include all fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities), (f) any write-up of any asset, (g) any net gain from the collection
of the proceeds of life insurance policies, (h) any gain arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of Merisel or any of its Subsidiaries, (i) in the case of a
successor to Merisel or any of its Subsidiaries by consolidation or merger or as
a transferee of its assets, any earnings of the successor corporation prior to
such consolidation, merger or transfer of assets, and (j) any deferred credit
representing the excess of equity in any Subsidiary of Merisel at the date of
acquisition over the cost of the investment in such Subsidiary.
 
 
5

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“Consolidated Net Worth”: as of any date of determination with respect to the
Borrowers and the other Loan Parties, all items, which in conformity with GAAP,
would be included under shareholders’ or members’ equity on a consolidated
balance sheet of such Borrower and such Loan Parties as of such date.
 
“Consolidated Tangible Net Worth”: as of any date of determination with respect
to each Borrower and the other Loan Parties, Consolidated Net Worth as of such
date, minus the amount of all intangible assets which in conformity with GAAP
would be carried on a consolidated balance sheet of such Borrower and such Loan
Parties as of such date.
 
“Continuing Directors” means an individual (a) who was a member of the board of
directors of Merisel on the Restatement Effective Date, or (b) who at any time
after the Restatement Effective Date becomes a member of the board of directors
of Merisel as a result of an expansion of the number of members of the board of
directors.
 
“Contractual Obligation”: as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.
 
“Convertible Preferred”:  600,000 shares of convertible preferred stock, par
value $.01 per share, of Merisel, designated pursuant to the Certificate of
Designation of Convertible Preferred Stock of Merisel, Inc. filed with the
Securities and Exchange Commission as Exhibit 99.2 to the Current Report on Form
8-K dated June 9, 2000.
 
“Corporate Guarantee”: the guarantee executed and delivered by each of the
Corporate Guarantors, substantially in the form of Exhibit D, as the same may be
amended, supplemented or otherwise modified from time to time.
 
“Corporate Guarantors”: each of the Persons from time to time parties to the
Corporate Guarantee as guarantors; as of the Restatement Effective Date, the
Corporate Guarantors are Merisel, Merisel Americas, Comp 24, Fuel Digital,
Dennis Curtin, MADP and Advertising Props.
 
“Credit Exposure”: as to the Lender at any time the Revolving Credit Commitment
(or, if the Revolving Credit Commitment shall have expired or been terminated,
the aggregate unpaid principal amount of the Revolving Credit Loans).
 
“Crush Creative”: Crush Creative, Inc., a California corporation.
 
“Default”: any of the events specified in Section 10, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
 
“Dennis Curtin”: Dennis Curtin Studios, LLC, a Delaware limited liability
company, and a Corporate Guarantor under this Agreement.
 
 
6

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“Dollars” and “$”: dollars in lawful currency of the United States of America.
 
“Eligible Accounts”: as to any Borrower, at a particular date, the total
outstanding balance of accounts receivable (“Accounts”) of such Borrower, minus
(without duplication) the sum of the following as reasonably determined by the
Lender: (a) Accounts which are not bona fide, valid and legally enforceable
obligations of the obligor in respect thereof that arise from the actual sale
and delivery of goods or rendition and acceptance of services to such obligor in
the ordinary course of business of such Borrower; (b) Accounts which have not
been documented by an invoice in a customary form used by such Borrower and
reasonably acceptable to the Lender (it being agreed by the Lender that the
invoice forms currently used by such Borrower are acceptable to the Lender);
(c) Accounts which contravene, or arise from sales which contravene, any
Requirement of Law applicable thereto, where such contravention could be
reasonably expected to affect adversely the collectibility or value of such
Accounts; (d) Accounts which have been invoiced by such Borrower which have been
outstanding and unpaid for 100 days or more from the date of invoice thereof
(“Past Due Receivables”); (e) the lesser of (i) Accounts of any obligor which is
both a customer of and a vendor to such Borrower and (ii) the amount owing by
such Borrower to such obligors; (f) if more than 50% of the Accounts of any
obligor constitute Past Due Receivables, the Accounts of such obligor;
(g) Accounts which arise from a bill and hold sale prior to the shipment of the
goods that are the subject thereof; (h) Accounts of any obligor which is an
Affiliate or Subsidiary of such Borrower; (i) Accounts (“Foreign Accounts”) of
any obligor which is organized under the laws of a jurisdiction, or is located,
outside the United States of America, unless such Accounts have not remained
unpaid more than 60 days after the earlier of the date of invoice and the date
of shipment of the related goods, and (1) each such Account is supported by a
letter of credit in favor of such Borrower approved by the Lender in its
reasonable business judgment or by credit insurance reasonably acceptable to the
Lender, which letter of credit or credit insurance is subject to a perfected
first priority security interest in favor of the Lender or (2) such obligor is,
in the reasonable business judgment of the Lender, creditworthy in relation to
the amount of credit extended to such customer by such Borrower and has been,
prior to the time any trade credit is advanced to such obligor, approved in
writing by the Lender; (j) Accounts of the United States of America or any
instrumentality thereof, unless such Borrower duly assigns its rights to payment
of such Accounts to the Lender pursuant to the Assignment of Claims Act of 1940,
as amended from time to time (31 U.S.C. § 3723 et seq.); (k) Accounts which are
not denominated and payable in Dollars in the United States of America;
(1) Accounts which are not subject to a perfected first priority security
interest in favor of the Lender pursuant to the Security Agreement, other than
Foreign Accounts meeting the requirements for inclusion set forth in clause (i)
of this definition; (m) Accounts which do not conform in all material respects
to the representations and warranties contained in the Security Agreement with
respect thereto; (n) Accounts of obligors which are the subject of any
bankruptcy or insolvency proceeding of any kind (unless such obligor has
debtor-in-possession financing or credit support reasonably acceptable to the
Lender and such Account (to the extent not covered by credit insurance or
supported by a letter of credit in favor of such Borrower) constitutes a
post-petition claim against such obligor); and (o) such other Accounts as the
Lender, in its reasonable judgment, believes will not be paid in full within 100
days of the date of invoice thereof (as promptly notified by the Lender to such
Borrower).
 
“Environmental Laws”: any and all foreign, Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any
 
 
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Governmental Authority or other Requirements of Law (including common
law) regulating, relating to or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or may at any
time hereafter be in effect.
 
“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time.
 
“Event of Default”: any of the events specified in Section 10; provided that any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
 
“Exchange Act”: the Securities Exchange Act of 1934, as amended from time to
time, and any successor statute.
 
“Existing Credit Agreement”: as defined in the Recitals.
 
“Existing Financing Documents”: the Existing Credit Agreement, all “Loan
Documents” (as defined therein), and all other agreements, instruments or
documents entered into in connection therewith or pursuant thereto.
 
“Facility”: the Revolving Credit Facility.
 
“Federal Funds Effective Rate”: for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Lender from three federal funds
brokers of recognized standing selected by it.
 
“Financing Lease”: any lease of property, real or personal, the obligations of
the lessee in respect of which are required in accordance with GAAP to be
capitalized on a balance sheet of the lessee.
 
“Fuel Digital”: Fuel Digital, LLC, a Delaware limited liability company, and a
Corporate Guarantor under this Agreement.
 
“GAAP”: generally accepted accounting principles in the United States of America
in effect from time to time.
 
“Governing Documents”: as to any Person, its articles or certificate of
incorporation and by-laws, its partnership agreement, its certificate of
formation and operating agreement, and/or the other organizational or governing
documents of such Person.
 
“Governmental Authority”: any nation or government, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
 
 
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“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the “primary
obligations”) of any other third Person (the “primary obligor”) in any manner,
whether directly or indirectly, including, without limitation, any obligation of
the guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business.  The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
 
“Guarantor”: any Person executing and delivering the Corporate Guarantee, or
becoming party to the Corporate Guarantee (by supplement or otherwise), pursuant
to this Agreement.
 
“Hedge Agreement”: any interest rate or currency swap, cap or collar agreement
or similar arrangement or foreign exchange contract entered into by any Borrower
or any of its Subsidiaries providing for protection against fluctuations in
interest rates or currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
 
“Indebtedness”: of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money (whether by loan or the issuance
and sale of debt securities) or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all obligations of such Person under Financing Leases,
(d) all obligations of such Person in respect of letters of credit, acceptances
or similar instruments issued or created for the account of such Person, (e) all
liabilities secured by (or for which the holder of such obligations has an
existing right, contingent or otherwise, to be secured by) any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof, (1) all Guarantee Obligations
of such Person in respect of obligations of the kind referred to in clauses
(a) through (e) above, and (g) for the purposes of Section 10(e) only, all
obligations of such Person in respect of Hedge Agreements.  The amount of any
Indebtedness under (x) clause (e) shall be equal to the lesser of (A) the stated
amount of the relevant obligations and (B) the fair market value of the property
subject to the relevant Lien and (y) clause (g) shall be the net amount,
including any net termination payments, required to be paid to a counterparty
rather than the notional amount of the applicable Hedge Agreement.
 
 
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“Insolvency”: with respect to any Multiemployer Plan, the condition that such
Plan is insolvent within the meaning of Section 4245 of ERISA.
 
“Insolvent”: pertaining to a condition of Insolvency.
 
“Interest Payment Date”: the last Business Day of each March, June, September
and December.
 
“Lender”: as defined in the heading hereto.
 
“Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement and any Financing Lease having
substantially the same economic effect as any of the foregoing), and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction in respect of any of the foregoing.
 
“Loan”: any loan made by the Lender pursuant to this Agreement.
 
“Loan Documents”: this Agreement, the Notes, the Corporate Guarantee and the
Security Documents, together with all other related agreements, documents and
instruments delivered in connection therewith, each as amended, supplemented or
otherwise modified from time to time.
 
“Loan Parties”: each of the Borrowers, Merisel, Merisel Americas, and each of
their present and future Subsidiaries as Corporate Guarantors.
 
“MADP”: MADP, LLC, a Delaware limited liability company, and a Corporate
Guarantor under this Agreement.
 
“Material Adverse Effect”: a material adverse effect on (a) the business,
operations, property, condition (financial or otherwise) or prospects of the
Loan Parties taken as a whole or (b) the validity or enforceability of this
Agreement or any of the other Loan Documents or the rights or remedies of the
Lender hereunder or thereunder.
 
“Materials of Environmental Concern”: any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under, or
which form the basis of liability under, any Environmental Law, including,
without limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation, medical waste, radioactive materials and electromagnetic fields.
 
“MC24”:  COMP 24 LLC (f/k/a MC24, LLC), a Delaware limited liability company,
and a Corporate Guarantor under this Agreement.
 
 
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“MC24 Acquisition”: the purchase by MC24 of all of the assets of Comp 24
pursuant to the MC24 Acquisition Documents.
 
“MC24 Acquisition Agreement”: the Asset Purchase Agreement, dated as of
December 24, 2004, by and among MC24, Merisel, Comp 24, as seller and the
members of the seller that are parties thereto.
 
“MC24 Acquisition Documents”: collectively, the MC24 Acquisition Agreement and
any other documents executed in connection with the MC24 Acquisition.
 
“MC24 Obligations”: the obligations of MC24 to the Lender, created at any time
pursuant to a loan agreement between MC24 and the Lender; provided, however,
that such loan agreement shall only be entered into subsequent to the
consummation of the MC24 Acquisition.
 
“MCEI”: Color Edge LLC (f/k/a MCEI, LLC), a Delaware limited liability company,
and a Borrower under this Agreement.
 
“MCEI Acquisition”: the purchase by MCEI of all of the assets of Color Edge
pursuant to the MCEI Acquisition Documents.
 
“MCEI Acquisition Agreement”: the Asset Purchase Agreement, dated as of
December 24, 2004, by and among MCEI, Merisel, Color Edge, as seller and the
shareholders of the seller that are parties thereto.
 
“MCEI Acquisition Documents”: collectively, the MCEI Acquisition Agreement and
any other documents executed in connection with the MCEI Acquisition.
 
“MCEV”: Color Edge Visual LLC (f/k/a MCEV, LLC), a Delaware limited liability
company, and a Borrower under this Agreement.
 
“MCEV Acquisition”: the purchase by MCEV of all of the assets of Color Edge
Visual pursuant to the MCEV Acquisition Documents.
 
“MCEV Acquisition Agreement”: the Asset Purchase Agreement, dated as of
December 24, 2004, by and among MCEV, Merisel, Color Edge Visual, as seller,
Photobition, as seller and the shareholders of the sellers that are parties
thereto.
 
“MCEV Acquisition Documents”: collectively, the MCEV Acquisition Agreement and
any other documents executed in connection with the MCEV Acquisition.
 
“MCRU”: MCRU, LLC, a Delaware limited liability company, and a Borrower under
this Agreement.
 
“MCRU Acquisition”: means the purchase by MCRU of all or substantially all of
the assets of Crush Creative pursuant to the MCRU Acquisition Documents.
 
 
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“MCRU Acquisition Agreement”: the Asset Purchase Agreement, dated as of July 6,
2005, by and among MCRU, Merisel, Crush Creative, as seller and the shareholders
of the seller that are parties thereto, and any amendments thereto.
 
“MCRU Acquisition Documents”: collectively, the MCRU Acquisition Agreement and
any other documents executed in connection with the MCRU Acquisition.
 
“Merisel”: as defined in the heading to this Agreement and a Corporate Guarantor
under this Agreement.
 
“Merisel Americas”: as defined in the heading to this Agreement and a Corporate
Guarantor under this Agreement.
 
“Multiemployer Plan”: a Plan which is a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA and which is subject to Title IV of ERISA.
 
“Net Cash Proceeds”: with respect to any sale, lease, transfer or other
disposition of any property or assets, or the incurrence or issuance of any
Indebtedness, or the sale or issuance of any Capital Stock in any Person, or the
receipt of any capital contributions, as the case may be, the aggregate amount
of cash received from time to time (whether as initial consideration or through
payment or disposition of deferred consideration) by or on behalf of such Person
for its own account in connection with any such transaction, after deducting
therefrom only:
 
(a)           reasonable and customary brokerage commissions, underwriting fees
and discounts, legal fees, finder’s fees and other similar fees, costs and
commissions that, in each case, are actually paid at the time of receipt of such
cash to a Person that is not a Subsidiary or Affiliate of any of the Loan
Parties or any of their Subsidiaries or Affiliates;
 
(b)           the amount of taxes payable in connection with or as a result of
such transaction that, in each case, are actually paid at the time of receipt of
such cash to the applicable taxation authority or other Governmental Authority
or, so long as such Person is not otherwise indemnified therefor, are reserved
for in accordance with GAAP, as in effect at the time of receipt of such cash,
based upon such Person’s reasonable estimate of such taxes, and paid to the
applicable taxation authority or other Governmental Authority within 180 days
after the date of receipt of such cash; and
 
(c)           in the case of any sale, lease, transfer or other disposition of
any property or asset, the outstanding principal amount of, the premium or
penalty, if any, on, and any accrued and unpaid interest on, any Indebtedness
(other than Indebtedness under or in respect of the Loan Documents) that is
secured by a Lien on the property and assets subject to such sale, lease,
transfer or other disposition and is required to be repaid under the terms of
such Indebtedness as a result of such sale, lease, transfer or other
disposition, in each case, to the extent that the amounts so deducted are
actually paid at the time of receipt of such cash to a Person that is not an
Affiliate of any of the Loan Parties or any of their Affiliates;
 
 
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provided, that any and all amounts so deducted by any such Person pursuant to
clauses (a) through (c) of this definition shall be properly attributable to
such transaction or to the property or asset that is the subject thereof and
provided, further, that if, at the time any of the taxes referred to in clause
(b) are actually paid or otherwise satisfied, the reserve therefor exceeds the
amount paid or otherwise satisfied, then the amount of such excess reserve shall
constitute “Net Cash Proceeds” on and as of the date of such payment or other
satisfaction for all purposes of this Agreement and, to the extent required
under Section 5.6, the applicable Borrowers shall reduce the Commitments on such
date in accordance with the terms of Section 5.6, and shall prepay the Loans
outstanding on such date in accordance with the terms of Section 5.6, in an
amount equal to the amount of such excess reserve.
 
“Non-Excluded Taxes”: as defined in Section 5.12(a).
 
“Note”: the reference to the Revolving Credit Note.
 
“Obligations”: the Revolving Credit Obligations.
 
“Original Closing Date”: March 1, 2005.
 
“Over Advance” as defined in Section 5.1(c).
 
“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA.
 
“Permitted Acquisition”: an acquisition of a business whereby (a) Merisel has
notified the Lender of such proposed acquisition; (b) the business to be
acquired would not subject the Lender to any additional regulatory or third
party approvals in connection with the exercise of its rights and remedies under
this Agreement or any other Loan Document; (c) no contingent liabilities or
Indebtedness will be incurred or assumed in connection with such Permitted
Acquisition which could reasonably be expected to have a Material Adverse
Effect; and (d) Merisel has delivered to the Lender a certificate of Merisel
certifying that no Default or Event of Default then exists or would result after
giving effect to the Permitted Acquisition.
 
“Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
 
“Photobition”: Photobition New York, Inc., a Delaware corporation.
 
“Plan”: at a particular time, any employee benefit plan which is covered by
ERISA and in respect of which any Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
 
“Pledge Agreement”: the Pledge Agreement executed and delivered by the Loan
Parties party thereto, substantially in the form of Exhibit B, as the same may
be amended, supplemented or otherwise modified from time to time.
 
“Prior Crush Creative Credit Agreement”: the Credit Agreement, dated as of
September 15, 2004, as amended by the December 15, 2004 Amendment and as
extended by the March 25, 2005 Amendment, between Crush Creative and the Prior
Crush Creative Creditor, the Promissory Note, dated November 26, 2003, made by
Crush Creative in favor of the Prior
 
 
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Crush Creative Creditor, the Promissory Note, dated May 26, 2004, made by Crush
Creative in favor of the Prior Crush Creative Creditor, the Promissory Note,
dated December 13, 2004, made by Crush Creative in favor of the Prior Crush
Creative Creditor, and the Promissory Note, dated May 20, 2002, between Crush
Creative and the Prior Crush Creative Creditor, each as further amended,
supplemented, restated or otherwise modified.
 
“Prior Crush Creative Creditor”: Mellon 1st Business Bank, as lender under the
Prior Crush Creative Credit Agreement, together with all successors, assigns,
participants thereof or therewith and other Persons to which any amounts are
owed pursuant to the Existing Financing Documents.
 
“Prior Crush Creative Financing Documents”: the Prior Crush Creative Credit
Agreement, all “Loan Documents” (as defined therein), and all other agreements,
instruments or documents entered into in connection therewith or pursuant
thereto. “Properties”: as defined in Section 6.22.
 
“Qualified Counterparty”: with respect to any Specified Hedge Agreement, any
counterparty thereto that, at the time such Specified Hedge Agreement was
entered into, was the Lender or an affiliate of the Lender.
 
“Recovery Event”: any settlement of or payment in respect of any property or
casualty insurance claim or any condemnation proceeding relating to any asset of
any Loan Party with a value in excess of $100,000.
 
“Regulation U”: Regulation U of the Board of Governors of the Federal Reserve
System as in effect from time to time.
 
“Reinvestment Deferred Amount”: with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by any Borrower or any of its Subsidiaries
in connection therewith which are not applied to reduce the Revolving Credit
Commitments pursuant to Section 5.6(c) as a result of the delivery of a
Reinvestment Notice.
 
“Reinvestment Event”: any Asset Sale or Recovery Event in respect of which any
Borrower has delivered a Reinvestment Notice.
 
“Reinvestment Notice”: a written notice executed by a Responsible Officer
stating that no Event of Default has occurred and is continuing and that the
Borrower (directly or indirectly through a Subsidiary Guarantor) intends and
expects to use all or a specified portion of the Net Cash Proceeds of an Asset
Sale or Recovery Event to acquire assets (directly or through the purchase of
the Capital Stock of a Person pursuant to an Acquisition) useful in its
business.
 
“Reinvestment Prepayment Amount”: with respect to any Reinvestment Event, the
Reinvestment Deferred Amount relating thereto less any amount expended prior to
the relevant Reinvestment Prepayment Date to acquire assets (directly or through
the purchase of the Capital Stock of a Person pursuant to an Acquisition) useful
in the Borrower’s or any of its Subsidiaries’ business.
 
 
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“Reinvestment Prepayment Date”: with respect to any Reinvestment Event, the
earlier of (a) the date occurring six months after such Reinvestment Event and
(b) the date on which the Borrower shall have determined not to, or shall have
otherwise ceased to, acquire assets (directly or through the purchase of the
Capital Stock of a Person pursuant to an Acquisition) useful in such Borrower’s
or any of its Subsidiaries’ business with all or any portion of the relevant
Reinvestment Deferred Amount.
 
“Reorganization”: with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.
 
“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty day notice period is waived under
Sections .21, .22, .23, .26, .27 or .28 of PBGC Reg. § 4043.
 
“Requirement of Law”: as to any Person, the certificate of incorporation and
by-laws or other organizational or Governing Documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
 
“Responsible Officer”: the chief executive officer and the president of each
Borrower or, with respect to financial matters, the chief financial officer of
each Borrower, or if a Borrower does not employ a chief executive officer,
president or chief financial officer, then the manager of such Borrower, if
applicable.
 
“Restatement Effective Date”: the date on which the conditions precedent set
forth in Section 7.1 shall be satisfied or waived.
 
“Restricted Payments”: as defined in Section 9.7.
 
“Revolving Credit Commitment”: the obligation of the Lender to make Revolving
Credit Loans to the Borrowers pursuant to Section 3.1 in an aggregate principal
and/or face amount at any one time outstanding not to exceed the amount set
forth opposite the Lender’s name on Schedule 1.0 under the caption “Revolving
Credit Commitment” or, as the case may be, in an Assignment and Acceptance, as
such amount may be changed from time to time in accordance with the provisions
of this Agreement.  The aggregate amount of the Revolving Credit Commitment as
of the Restatement Effective Date is $12,000,000.
 
“Revolving Credit Commitment Period”: the period from and including April 15,
2009 to the Revolving Credit Termination Date or such earlier date on which the
Revolving Credit Commitments shall terminate as provided herein.
 
“Revolving Credit Facility”: the Revolving Credit Commitments and the extensions
of credit made thereunder.
 
“Revolving Credit Loans”: as defined in Section 3.1.
 
“Revolving Credit Note”: as defined in Section 5.4(e).
 
 
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“Revolving Credit Obligations”: the unpaid principal amount of and interest
(including, without limitation, interest accruing after the maturity of the
Revolving Credit Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrowers, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) on the Revolving Credit
Loans, and all other obligations and liabilities of the Loan Parties to the
Lender arising in connection with the Revolving Credit Loans, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, or out of or in connection with this
Agreement, the Revolving Credit Note, the Corporate Guarantee, the Security
Documents, any other Loan Documents, and any other document made, delivered or
given in connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel to the
Lender that are required to be paid by a Loan Party pursuant to the terms of the
Loan Documents) or otherwise.
 
“Revolving Credit Termination Date”: means August 31, 2011; provided that the
Revolving Credit Termination Date may be extended for one or more 364-day
periods at the sole discretion of the Lender as set forth in this paragraph.  So
long as no Default or Event of Default has occurred and is continuing, if
Borrowers request, by written notice to the Lender, given no earlier than 120
days prior to the then current Revolving Credit Termination Date, but in any
event, no later than 90 days prior to the then current Revolving Credit
Termination Date, that such Revolving Credit Termination Date be extended for a
period of 364 days, the Lender may, in its sole discretion, agree to such
request by providing written notice to that effect to Borrowers no later than 30
days prior to the then current Revolving Credit Termination Date, in which
case, such Revolving Credit Termination Date shall be deemed so extended from
the then current Revolving Credit Termination Date and the last day of such 364
day period shall become the Revolving Credit Termination Date.  For the
avoidance of doubt, if the Lender has not provided such written notice to
Borrower agreeing to any such extension, no such extension shall occur.  The
Borrower shall be deemed to have represented and warranted on and as of the date
of any such extension of the Revolving Credit Termination Date, that no Default
or Event of Default has occurred and is continuing.
 
“Security Agreement”: the Security Agreement executed and delivered by the Loan
Parties, substantially in the form of Exhibit C, as the same may be amended,
supplemented or otherwise modified from time to time.
 
“Security Documents”: the collective reference to the Account Control
Agreements, the Pledge Agreement, the Security Agreement, each Collateral
Assignment of Purchase Agreement, the Trademark Security Agreement and all other
security documents hereafter delivered to the Lender granting a Lien on any
asset or assets of any Person to secure any of the Obligations or to secure any
guarantee of any such Obligations.
 
“Single Employer Plan”: any Plan which is covered by Title IV of ERISA, but
which is not a Multiemployer Plan.
 
 
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“Specified Hedge Agreement”: any Hedge Agreement entered into by (a) any
Borrower or any of its Subsidiaries and (b) any Person that, at the time such
Hedge Agreement is entered into, is a Qualified Counterparty.
 
“Sponsor”: Stonington and Phoenix Acquisition Company II, L.L.C., a Delaware
limited liability company.
 
“Stock Equivalents”: all securities convertible into or exchangeable for Capital
Stock and all warrants, options or other rights to purchase or subscribe for any
Capital Stock, whether or not presently convertible, exchangeable or
exercisable.
 
“Stock Repurchase Transactions”: as defined in Section 9.7.
 
“Stonington”:  Stonington Capital Appreciation 1994 Fund, L.P., a Delaware
limited partnership.
 
“Subordinated Indebtedness”: collectively, any unsecured Indebtedness of any
Borrower: (i) no part of the principal of which is required to be paid (whether
by way of mandatory sinking fund, mandatory redemption, mandatory prepayment or
otherwise) prior to March 31, 2012; (ii) the payment of the principal of and
interest on which and other obligations of such Borrower in respect thereof are
subordinated to the prior payment in full of the principal of and interest
(including post-petition interest) on the Loans and all other obligations and
liabilities of the Borrowers to the Lender hereunder on terms and conditions
approved in writing by the Lender; (iii) no portion which is guaranteed by any
Loan Party unless such Loan Party is a Corporate Guarantor and all Guarantee
Obligations in respect of such guarantee of such subordinated Indebtedness are
subordinated to the Corporate Guarantee and all other obligations and
liabilities of such Corporate Guarantor to the Lender under Loan Documents in
the manner and to the extent such subordinated Indebtedness is subordinated to
the Loans under subclause (ii) of this definition; and (iv) all other terms and
conditions of which are reasonably satisfactory in form and substance to the
Lender (as evidenced by its prior written approval thereof).
 
“Subsidiary”: as to any Person, a corporation, partnership or other entity of
which shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other entity are
at the time owned, or the management of which is otherwise controlled, directly
or indirectly through one or more intermediaries, or both, by such
Person.  Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
Merisel.
 
“Trademark Security Agreement”: the Trademark Security Agreement dated as of
February 28, 2008 among the Borrowers, Merisel, Merisel Americas, MC24 and the
Lender.
 
“Uniform Customs”: the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500, as the
same may be amended from time to time.
 
1.2 Other Definitional Provisions.
 
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(a) Unless otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in any Notes or any other Loan
Documents or any certificate or other document made or delivered pursuant hereto
or thereto.
 
(b) As used herein and in any Notes, any other Loan Documents and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrowers and the other Loan Parties not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP.
 
(c) The words “hereof’, “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
 
(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.
 
SECTION 2.  
[RESERVED]

 
SECTION 3.  
AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS

 
3.1 Revolving Credit Commitments.  (a) Subject to the terms and conditions
hereof, the Lender agrees to make revolving credit loans (“Revolving Credit
Loans”) to the Borrowers from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed the amount which would equal the lesser of (i) the amount of the
Lender’s Revolving Credit Commitment then in effect, and (ii) the Borrowing Base
then in effect.  During the Revolving Credit Commitment Period the Borrowers may
use the Revolving Credit Commitments by borrowing, prepaying the Revolving
Credit Loans in whole or in part, and reborrowing, all in accordance with the
terms and conditions hereof.
 
(b) The Revolving Credit Loans may be Base Rate Loans only.
 
3.2 Procedure for Revolving Credit Borrowing.  The Borrowers may borrow under
the Revolving Credit Commitments during the Revolving Credit Commitment Period
on any Business Day in an aggregate principal amount not exceeding the lesser of
(A) the aggregate Available Revolving Credit Commitments then in effect and
(B) the Borrowing Base then in effect, provided that the Borrowers shall give
the Lender irrevocable notice (which notice must be received by the Lender prior
to 10:00 a.m., New York City time, one Business Day prior to the requested
Borrowing Date), substantially in the form of Annex I, duly completed,
specifying (i) the amount to be borrowed and (ii) the requested Borrowing
Date.  Each borrowing under the Revolving Credit Commitments shall be in an
amount equal to $100,000 or a whole multiple thereof (or, if the then Available
Revolving Credit Commitments are less than $100,000, such lesser amount).  Each
such notice of borrowing shall be accompanied by a Borrowing Base Certificate in
accordance with Section 8.2(c)(ii).  Upon receipt of any such notice from the
Borrowers, the Lender will make the amount of the borrowing available to the
Borrowers by crediting the account of the Borrowers on the books at the Lender’s
office and in immediately available funds.
 
 
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3.3 Termination or Reduction of Revolving Credit Commitments.  The Borrowers
shall have the right, upon not less than five Business Days’ notice to the
Lender, to terminate the Revolving Credit Commitments or, from time to time, to
reduce the amount of the Revolving Credit Commitments; provided, that no such
termination or reduction shall be permitted if, after giving effect thereto and
to any prepayments of the Revolving Credit Loans made on the effective date
thereof, the aggregate principal amount of the Revolving Credit Loans then
outstanding would exceed the Revolving Credit Commitments then in effect.  Any
such reduction shall be in an amount equal to $100,000 or a whole multiple
thereof and shall reduce permanently the Revolving Credit Commitments then in
effect.
 
3.4 [Reserved.]
 
 
SECTION 4.  
[RESERVED]

 
SECTION 5.  
GENERAL PROVISIONS APPLICABLE TO LOANS

 
5.1 Interest Rates and Payment Dates.
 
(a) [Reserved.]
 
(b) Each Revolving Credit Loan shall bear interest at a rate per annum equal to
the Base Rate plus 2.5%.
 
(c) If any portion of any Revolving Credit Loan required to be prepaid pursuant
to Section 5.6(a) is not so prepaid (any such portion, an “Over Advance”), then
so long as such Over Advance has not been so prepaid such Over Advance of such
Revolving Credit Loan shall bear interest at the rate otherwise applicable
thereto pursuant to Section 5.1(b) plus 2% per annum.
 
(d) Except as otherwise provided in paragraph (c) of this Section, if all or a
portion of (i) any principal of any Loan, (ii) any interest payable thereon or
(iii) any other amount payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), the principal of all Loans
and any such overdue interest or other amount shall bear interest at a rate per
annum which is (x) in the case of principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus 2%
or (y) in the case of any such overdue interest or other amount, the rate
described in paragraph (b) of this Section with respect to Revolving Credit
Loans plus 2%, in each case from the date of such non-payment until such overdue
principal, interest or other amount is paid in full (as well after as before
judgment).
 
(e) Interest shall be payable in arrears on each Interest Payment Date, provided
that interest accruing pursuant to paragraph (d) of this Section and the
overadvance fee payable pursuant to paragraph (c) of this Section shall be
payable from time to time on demand.
 
5.2 [Reserved.]
 

 
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5.3 [Reserved.]

 
5.4 Repayment of Loans; Evidence of Debt.
 
(a) The Borrowers hereby, jointly and severally, unconditionally promise to pay
to the Lender the then unpaid principal amount of each Revolving Credit Loan on
the Revolving Credit Termination Date (or such earlier date on which the
Revolving Credit Loans become due and payable pursuant to Section 10).  The
Borrowers hereby further, jointly and severally, agree to pay interest on the
unpaid principal amount of the Revolving Credit Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 5.1.
 
(b) The Lender shall maintain in accordance with its usual practice an account
or accounts evidencing indebtedness of the Borrowers to the Lender resulting
from each Loan of the Lender from time to time, including the amounts of
principal and interest payable and paid to the Lender from time to time under
this Agreement.
 
(c) The Lender, on behalf of the Borrowers, shall maintain at the address of the
Lender referred to in Section 11.2 a register (the “Register”) for the
recordation of the addresses of the Lender and the Commitments of, and principal
amounts of the Loans owing to, the Lender from time to time, in which shall be
recorded (i) the amount of each Loan made hereunder and any Note evidencing such
Loan, (ii) the amount of any principal or interest due and payable or to become
due and payable from the Borrowers to the Lender hereunder and (iii) the amount
of any sum received by the Lender hereunder from the Borrowers.
 
(d) The entries made in the Register shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrowers therein recorded (absent manifest error) and the
Borrowers and the Lender may (and, in the case of any Loan or other obligation
hereunder not evidenced by a Note, shall) treat each Person whose name is
recorded in the Register as the owner of a Loan or other obligation hereunder as
the owner thereof for all purposes of this Agreement and the other Loan
Documents, notwithstanding any notice to the contrary; provided, however, that
the failure of the Lender to maintain the Register or any such account, or any
error therein, shall not in any manner affect the obligation of the Borrowers to
repay (with applicable interest) the Loans made to the Borrowers by the Lender
in accordance with the terms of this Agreement.  Any assignment of any Loan or
other obligation hereunder, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register.  The Register shall be available for inspection by the Borrowers at
any reasonable time and from time to time upon reasonable prior notice.
 
(e) The Borrowers agree that the Borrowers will execute and deliver to the
Lender a promissory note of the Borrowers evidencing the Revolving Credit Loans
of the Lender, substantially in the forms of Exhibit A, with appropriate
insertions as to date and principal amount (as amended, modified or supplemented
from time to time, a “Revolving Credit Note”).
 
5.5 Optional Prepayments.  The Borrowers may at any time and from time to time
prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Lender (in the form of Annex III), prior to
12:00 noon, New York City time, specifying the date and amount of
prepayment.  If any such notice is given, the amount specified in such notice
shall be
 
 
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due and payable on the date specified therein, together with any amounts payable
pursuant to Section 5.6.  Partial prepayments pursuant to this Section shall be
in an aggregate principal amount of $100,000 or a whole multiple thereof.
 
5.6 Mandatory Prepayments.
 
(a) Subject to Section 5.12, if on any date on which a Borrowing Base
Certificate is delivered pursuant to Section 8.2(c), the Aggregate Outstanding
Revolving Credit Extensions of Credit exceeds the Borrowing Base, the Borrowers
shall prepay the Revolving Credit Loans in an amount equal to the amount of such
excess no later than the fifth Business Day immediately following the date of
delivery of such Borrowing Base Certificate.
 
(b) Subject to Section 5.12, if on any date the Aggregate Outstanding Revolving
Credit Extensions of Credit of the Lender exceeds the Revolving Credit
Commitment, the Borrowers shall prepay the Revolving Credit Loans in an amount
equal to the amount of such excess within five Business Days of receiving notice
of such event from the Lender.
 
(c) If on any date any Borrower or any of the other Loan Parties shall receive
Net Cash Proceeds from (i) any incurrence of Indebtedness by such Borrower or
any of the other Loan Parties, other than Indebtedness permitted pursuant to
Section 9.2, then 100% of such Net Cash Proceeds shall be applied on such
Business Day toward the reduction of the Revolving Credit Commitments as set
forth in Section 5.6(e), or (ii) any sale or issuance of Capital Stock (other
than any sale or issuance of Capital Stock by Merisel) or receipt of any capital
contribution by any applicable Borrower or any of the other Loan Parties (other
than Merisel), then 100% of such Net Cash Proceeds shall be applied on such
Business Day toward the reduction of the Revolving Credit Commitments as set
forth in Section 5.6(e).
 
(d) If on any date any Borrower or any of the other Loan Parties shall receive
Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a
Reinvestment Notice shall be delivered in respect thereof within 30 Business
Days thereafter, 100% of such Net Cash Proceeds shall be applied on such 30th
Business Day toward the reduction of the Revolving Credit Commitments as set
forth in Section 5.6(e); provided, that, notwithstanding the foregoing, on each
Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event shall be applied toward
the reduction of the Revolving Credit Commitments as set forth in
Section 5.6(e).
 
(e) Amounts prepaid pursuant to this Section 5.6 (other than Section 5.6(a) and
(b)) shall be applied first, to the reduction of the Revolving Credit Commitment
and, second, to the extent that after giving effect to such reduction of
Revolving Credit Commitment the Aggregate Outstanding Revolving Credit
Extensions of Credit of the Lender exceed the Revolving Credit Commitment, to
the prepayment of the Revolving Credit Loans.
 
(f) Any prepayment of Loans and/or reduction of Commitments pursuant to this
Section, and the rights of the Lender in respect thereof, are subject to the
provisions of Section 5.9.
 
5.7 Computation of Interest and Fees.
 
 
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(a) Interest shall be calculated on the basis of a 365- (or 366-, as the case
may be) day year for the actual days elapsed.  Any change in the interest rate
on a Loan shall become effective as of the opening of business on the day on
which such change becomes effective.  The Lender shall as soon as practicable
notify the Borrowers of the effective date and the amount of each such change in
interest rate.
 
(b) Each determination of an interest rate by the Lender pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrowers in
the absence of manifest error.
 
5.8 [Reserved.]

 
5.9 Payments.  All payments (including prepayments) to be made by the Borrowers
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without set-off or counterclaim and shall be made prior to 12:00 noon,
New York City time, on the due date thereof to the Lender, at the Lender’s
office specified herein, in Dollars and in immediately available funds.  If any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.  In the case of any extension of any
payment of principal pursuant to the preceding sentence, interest thereon shall
be payable at the then applicable rate during such extension.
 
5.10 [Reserved.]
 
5.11 Requirements of Law.
 
(a) If the Lender shall have determined that the adoption of or any change in
any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by the Lender or any corporation controlling
the Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the rate of return on the
Lender’s or such corporation’s capital as a consequence of its obligations
hereunder to a level below that which the Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
the Lender’s or such corporation’s policies with respect to capital adequacy) by
an amount deemed by the Lender to be material, then from time to time, the
Borrowers shall promptly pay to the Lender such additional amount or amounts as
will compensate the Lender for such reduction.
 
(b) If the Lender becomes entitled to claim any additional amounts pursuant to
this Section, it shall promptly notify the Borrowers of the event by reason of
which it has become so entitled.  A certificate as to any additional amounts
payable pursuant to this Section reasonably submitted by the Lender to the
Borrowers shall be conclusive in the absence of manifest error.  The agreements
in this Section shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.
 
5.12 Taxes.
 
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(a) All payments made by the Borrowers under this Agreement and any Notes shall
be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes imposed in lieu of net income taxes imposed
on the Lender as a result of a present or former connection between the Lender
and the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Documents).  If any such non-excluded taxes, levies,
imposts, duties, charges, fees deductions or withholdings (“Non-Excluded
Taxes”) are required to be withheld from any amounts payable to the Lender
hereunder or under any Note, the amounts so payable to the Lender shall be
increased to the extent necessary to yield to the Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement, provided, however, that the
Borrowers shall not be required to increase any such amounts payable to the
Lender if it is not organized under the laws of the United States of America or
a state thereof and the Lender fails to comply with the requirements of clause
(b) of this Section.  Whenever any Non-Excluded Taxes are payable by the
Borrowers, as promptly as possible thereafter the Borrowers shall send to the
Lender a certified copy of an original official receipt received by the
Borrowers showing payment thereof.  If the Borrowers fail to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fail to remit
to the Lender the required receipts or other required documentary evidence, the
Borrowers shall indemnify the Lender for any incremental taxes, interest or
penalties that may become payable by the Lender as a result of any such
failure.  The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
 
(b) In addition, the Borrowers agree to pay to the relevant Governmental
Authority in accordance with applicable law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies (including, without limitation, mortgage recording taxes and similar
fees) imposed by any Governmental Authority that arise from any payment made
hereunder or under any Note, or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any Note (“Other Taxes”).
 
(c) Nothing contained in this Section 5.12 shall require the Lender to make
available any of its tax returns or any other information that it deems to be
confidential or proprietary.
 
5.13 [Reserved.]

 
5.14 Lending Offices; Change of Lending Office.
 
(a) Loans made by the Lender shall be made and maintained at the Lender’s
Applicable Lending Office.
 
(b) The Lender agrees that if it makes any demand for payment under Section 5.11
or 5.12(a) it will use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrowers to make payments under Section 5.11 or
5.12(a).
 
 
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5.15 Joint and Several Liability of the Borrowers.
 
(a) Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, each Borrower hereby accepts joint and several liability hereunder and
under the other Loan Documents in consideration of the financial accommodations
to be provided by the Lender under this Agreement and the other Loan Documents,
for the mutual benefit, directly and indirectly, of each Borrower and in
consideration of the undertakings of the other Borrower to accept joint and
several liability for the Obligations under this Agreement and the other Loan
Documents.  Each Borrower, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers with respect to the payment and
performance of all of the Obligations, it being the intention of the parties
hereto that all the Obligations shall be the joint and several obligations of
Borrowers without preference or distinction between them.  If and to the extent
that any Borrower shall fail to make any payment with respect to any of the
Obligations as and when due or to perform any of the Obligations in accordance
with the terms thereof, then in each event the other Borrowers will make such
payment with respect to, or perform, such Obligations.
 
The provisions of this Section 5.15(a) are made for the benefit of the Lender
and its successors and assigns and may be enforced by them from time to time
against either or all of the Borrowers as often as occasion therefor may arise
and without requirement on the part of the Lender or such successors or assigns
first to marshal any of its or their claims or to exercise any of its or their
rights against the other Borrower or to exhaust any remedies available to it or
them against the other Borrower or to resort to any other source or means of
obtaining payment of any of the Obligations hereunder or to elect any other
remedy.  The provisions of this Section 5.15(a) shall remain in effect until all
of the Obligations shall have been paid in full or otherwise fully
satisfied.  Each Borrower hereby agrees that it will not enforce any of its
rights of contribution or subrogation against the other Borrower with respect to
any liability incurred by it hereunder or under any of the other Loan Documents,
any payments made by it to the Lender with respect to any of the Obligations or
any Collateral until such time as all of the Obligations have been paid in full
in cash.  Any claim which either Borrower may have against the other Borrower
with respect to any payments to the Lender hereunder or under any of the other
Loan Documents are hereby expressly made subordinate and junior in right of
payment, without limitation as to any increases in the Obligations arising
hereunder or thereunder, to the prior payment in full in cash of the
Obligations.
 
(b) [Reserved.]
 
(c) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Borrower hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Borrower under applicable federal and state laws relating to the
insolvency of debtors.
 
 
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SECTION 6.  
REPRESENTATIONS AND WARRANTIES

 
To induce the Lender to enter into this Agreement and to make the Loans, each of
the Borrowers and the other Loan Parties hereby represent and warrant to the
Lender that:
 
6.1 Financial Condition.
 
(a) The consolidated balance sheet of Merisel and each of its Subsidiaries as at
December 31, 2008 and the related consolidated statements of income and of cash
flows for the fiscal year ended on such date, reported on by BDO Seidman, LLP,
copies of which have heretofore been furnished to the Lender, are complete and
correct and present fairly the consolidated financial condition of Merisel and
each of its Subsidiaries as at such date, and the consolidated results of their
operations and their consolidated cash flows for the fiscal year then
ended.  The unaudited consolidated balance sheet of Merisel and each of its
Subsidiaries as at June 30, 2009 and the related unaudited consolidated
statements of income and of cash flows for the six-month period ended on such
date, certified by a Responsible Officer, copies of which have heretofore been
furnished to the Lender, are complete and correct and present fairly the
consolidated financial condition of Merisel and each of its Subsidiaries as at
such date, and the consolidated results of their operations and their
consolidated cash flows for the six-month period then ended (subject to normal
year-end audit adjustments).  All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by such
accountants or Responsible Officer, as the case may be, and as disclosed
therein).  Neither Merisel nor any Subsidiary of Merisel had, at the date of the
most recent balance sheet referred to above, any material Guarantee Obligation,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction or other financial
derivative, which is not reflected in the foregoing statements or in the notes
thereto.  During the period from June 30, 2009 to and including the date hereof,
except as disclosed to the Lender, there has been no sale, transfer or other
disposition by Merisel or any of its Subsidiaries of any material part of its
business or property and no purchase or other acquisition of any business or
property (including any Capital Stock of any other Person) material in relation
to the consolidated financial condition of Merisel and its Subsidiaries at June
30, 2009.
 
(b) [Reserved].
 
(c) [Reserved].
 
6.2 No Change.  Since June 30, 2009 there has been no development or event which
has had or could reasonably be expected to have a Material Adverse Effect.
 
6.3 Existence; Compliance with Law.  Each of the Borrowers and the other Loan
Parties (a) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (b) has the power and authority,
and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign corporation or other entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
 
 
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6.4 Power; Authorization; Enforceable Obligations.  Each Loan Party has the
power and authority, and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and, in the case of each Borrower, to borrow
hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of this Agreement and any Notes and to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party.  No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents to which
any such Loan Party is a party other than those set forth on Schedule 6.4, all
of which consents, authorizations, filings and notices have been duly made and
are in full force and effect.  This Agreement has been, and each other Loan
Document to which it is a party will be, duly executed and delivered on behalf
of each Loan Party.  This Agreement constitutes, and each other Loan Document to
which it is a party when executed and delivered will constitute, a legal, valid
and binding obligation of each Loan Party enforceable against such Loan Party in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
 
6.5 No Legal Bar.  The execution, delivery and performance of the Loan Documents
to which each Loan Party is a party, the borrowings hereunder and the use of the
proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of any Loan Party and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation (other than
Liens created by the Security Documents in favor of the Lender).
 
6.6 No Material Litigation.  Except as listed on Schedule 6.6, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of any Loan Party, threatened by or
against any Loan Party or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
 
6.7 No Default.  Except for any defaults associated with matters listed on
Schedule 6.6, none of the Borrowers nor any of the other Loan Parties is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse
Effect.  Except as listed on Schedule 6.7, no Default or Event of Default has
occurred and is continuing.
 
6.8 Ownership of Property; Liens.  Each Borrower and the other Loan Parties has
good record and marketable title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its other property, and none of such property, except for such personal
property located in the State of Georgia, is subject to any Lien except as
permitted by Section 9.3.
 
 
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6.9 Intellectual Property.  Each Borrower and each of the other Loan Parties
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the “Intellectual
Property”).  No claim has been asserted and is pending by any Person challenging
or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does any Loan Party know of
any valid basis for any such claim.  The use of such Intellectual Property by
each Borrower and the other Loan Parties does not infringe on the rights of any
Person, except for such claims and infringements that, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
 
6.10 No Burdensome Restrictions.  No Requirement of Law or Contractual
Obligation of any Borrower or any of the other Loan Parties could reasonably be
expected to have a Material Adverse Effect.
 
6.11 Taxes.  Each Borrower and the other Loan Parties has filed or caused to be
filed all tax returns which, to the knowledge of such Borrower and the other
Loan Parties, are required to be filed and has paid all taxes shown to be due
and payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of such Borrower or such other Loan Party, as the case may be); no tax
Lien has been filed, and, to the knowledge of each Borrower and the other Loan
Parties, no claim is being asserted, with respect to any such tax, fee or other
charge.
 
6.12 Federal Regulations.  No part of the proceeds of any Loans will be used for
“purchasing” or “carrying” any “margin stock” within the respective meanings of
each of the quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect, or for
any purpose which violates, or which would be inconsistent with, the provisions
of the regulations of such Board of Governors.  If requested by the Lender, each
Borrower will furnish to the Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in
said Regulation U.
 
6.13 ERISA.  Neither a Reportable Event nor an “accumulated funding deficiency”
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Single Employer Plan,
and each Plan (other than a Multiemployer Plan or a multiemployer welfare plan
maintained pursuant to a collective bargaining agreement) has complied in all
material respects with the applicable provisions of ERISA and the Code.  No
termination of a Single Employer Plan has occurred (other than a termination
described in Section 4041(b) of ERISA with respect to which none of the
Borrowers has incurred any liability (i) to the PBGC or (ii) in excess of $0),
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period.  Except to the extent that any such excess could not
 
 
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have a Material Adverse Effect, the present value of all accrued benefits under
each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by more than $0.  Neither the
Borrowers nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan, and, to the knowledge of any Borrower,
such Borrower would not become subject to any material liability under ERISA if
such Borrower or any Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made.  To the knowledge of any
Borrower, no such Multiemployer Plan is in Reorganization or Insolvent.  Except
to the extent that any such excess could not have a Material Adverse Effect, the
present value (determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees
participating) of the liability of each Borrower and each Commonly Controlled
Entity for post retirement benefits to be provided to their current and former
employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) other than such liability disclosed in the financial
statements of such Borrower does not, in the aggregate, exceed the assets under
all such Plans allocable to such benefits by an annual amount in excess of $0.
 
6.14 Investment Company Act; Other Regulations.  Each Borrower is not an
“investment company”, or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended.  Each
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
 
6.15 Capitalization; Subsidiaries.  Schedule 6.15(a) sets forth the name of each
Loan Party, except for Merisel, and each direct or indirect Subsidiary thereof,
its form of organization, its jurisdiction of organization, the total number of
issued and outstanding shares or other interests of Capital Stock thereat, the
name of each holder of Capital Stock thereof and the number of shares or other
interests of such Capital Stock held by each such holder and the percentage of
all outstanding shares or other interests of such class of Capital Stock held by
such holders.  All outstanding Capital Stock of each Loan Party listed on
Schedule 6.15(a) is free and clear of all Liens other than Liens created
pursuant to the Loan Documents, and is duly authorized, validly issued, fully
paid and nonassessable.  As of the Restatement Effective Date, except as set
forth on Schedule 6.15(b), (i) none of the Loan Parties has issued any
securities convertible into, or options or warrants for, any common or preferred
equity securities thereof and (ii) there are no agreements, voting trusts or
understandings binding upon any of the Loan Parties with respect to the voting
securities of any of the Loan Parties or affecting in any manner the sale,
pledge, assignment or other disposition thereof, including any right of first
refusal, option, redemption, call or other right with respect thereto, whether
similar or dissimilar to any of the foregoing.
 
6.16 Security Documents
 
.
 
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(a) The provisions of each Security Document are effective to create in favor of
the Lender a legal, valid and enforceable security interest in all right, title
and interest of the Loan Party thereto in the “Collateral” described therein.
 
(b) (i) When proper financing statements have been filed in the offices in the
jurisdictions listed in Schedule 6.16, the Security Agreements shall each
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of each Loan Party in the “Collateral” described therein, which can
be perfected by such filing, subject to no other Liens other than Liens on
equipment permitted under Section 9.3(f) or (g).
 
             (ii) When certificates representing the Pledged Stock (as defined
in the Pledge Agreement) are delivered to the Lender, together with stock powers
or transfer powers, as applicable, endorsed in blank by a duly authorized
officer of the pledgors thereof, the Pledge Agreement shall constitute a fully
perfected first Lien on, and security interest in, all right, title and interest
of the pledgors parties thereto in the “Collateral” described therein.
 
(c) Neither Borrower nor any other Loan Party owns any property, or has any
interest in any property, that is not subject to a fully perfected first
priority Lien on, or security interest in, such property in favor of the Lender,
other than any such property having an aggregate fair market value at any one
time not exceeding $250,000.
 
6.17 Accuracy and Completeness of Information.
 
(a) All factual information, reports and other papers and data with respect to
the Loan Parties (other than projections) furnished, and all factual statements
and representations made, to the Lender by a Loan Party, or on behalf of a Loan
Party, were, at the time the same were so furnished or made, when taken together
with all such other factual information, reports and other papers and data
previously so furnished and all such other factual statements and
representations previously so made, complete and correct in all material
respects, to the extent necessary to give the Lender true and accurate knowledge
of the subject matter thereof in all material respects, and did not, as of the
date so furnished or made, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances in which the same
were made.
 
(b) All projections with respect to the Loan Parties furnished by or on behalf
of a Loan Party to the Lender were prepared and presented in good faith by or on
behalf of such Loan Party.  No fact is known to a Loan Party which materially
and adversely affects or in the future is reasonably likely (so far as such Loan
Party can reasonably foresee) to have a Material Adverse Effect which has not
been set forth in the financial statements referred to in Section 6.1 or in such
information, reports, papers and data or otherwise disclosed in writing to the
Lender prior to the Restatement Effective Date.
 
6.18 Labor Relations.  No Loan Party is engaged in any unfair labor practice
which could reasonably be expected to have a Material Adverse Effect.  There is
(a) no unfair labor practice compliant pending or, to the best knowledge of each
Loan Party and each of its Subsidiaries, threatened against a Loan Party before
the National Labor Relations Board which could reasonably
 
 
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be expected to have a Material Adverse Effect and no grievance or arbitration
proceeding arising out of or under a collective bargaining agreement is so
pending or threatened; (b) no strike, labor dispute, slowdown or stoppage
pending or, to the best knowledge of each Loan Party, threatened against a Loan
Party; and (c) no union representation question existing with respect to the
employees of a Loan Party and no union organizing activities are taking place
with respect to any thereof.
 
6.19 Insurance.  Each Loan Party has, with respect to its properties and
business, insurance covering the risks, in the amounts, with the deductible or
other retention amounts, and with the carriers, listed on Schedule 6.19, which
insurance meets the requirements of Section 8.5 hereof and Section 5(m) of the
Security Agreement as of the Restatement Effective Date.
 
6.20 Solvency.  As of the date hereof, the Restatement Effective Date, and each
other date of determination, after giving effect to the Term Loan Facility (as
such term is defined in the Existing Credit Agreement) being repaid in full and
discharged on or prior to such date and after giving effect to the making of the
Loans to be made on or prior to such date, (i) the amount of the “present fair
saleable value” of the assets of each Borrower and of each Borrower and the
other Loan Parties, taken as a whole, will, as of such date, exceed the amount
of all “liabilities of such Borrower and of such Borrower and the other Loan
Parties, taken as a whole, contingent or otherwise”, as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (ii) the present fair
saleable value of the assets of each Borrower and of each Borrower and the other
Loan Parties, taken as a whole, will, as of such date, be greater than the
amount that will be required to pay the liabilities of such Borrower and of such
Borrower and the other Loan Parties, taken as a whole, on their respective debts
as such debts become absolute and matured, (iii) none of the Borrowers nor each
Borrower and the other Loan Parties, taken as a whole, will have, as of such
date, an unreasonably small amount of capital with which to conduct their
respective businesses, and (iv) each Borrower, and each Borrower and the other
Loan Parties, taken as a whole, will be able to pay their respective debts as
they mature.  For purposes of this Section 6.20, “debt” means “liability on a
claim”, “claim” means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured, and
(y) right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
 
6.21 Purpose of Loans. The proceeds of the Revolving Credit Loan were used by
the Loan Parties to refinance Indebtedness referenced in the Existing Credit
Agreement, including Indebtedness under the Prior Crush Creative Credit
Agreement, and, after the Restatement Effective Date, shall be used for working
capital purposes in the ordinary course of business.  No portion of the proceeds
of any Loan shall be used to effect the Stock Repurchase Transactions.
 
6.22 Environmental Matters.
 
(a) The facilities and properties owned, leased or operated by each Borrower or
any of the other Loan Parties (the “Properties”) do not contain, and have not
previously contained, any Materials of Environmental Concern in amounts or
concentrations which (i) constitute or constituted a violation of, or (ii) could
reasonably be expected to give rise to liability under, any Environmental Law.
 
 
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(b) The Properties and all operations at the Properties are in compliance, and
have in the last five years been in compliance, in all material respects with
all applicable Environmental Laws, and there is no contamination at, under or
about the Properties or violation of any Environmental Law with respect to the
Properties or the business operated by any Borrower or any of its Subsidiaries
(the “Business”) which could materially interfere with the continued operation
of the Properties or materially impair the fair saleable value thereof.
 
(c) Neither any Borrower nor any of the other Loan Parties has received any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of the Properties or the Business, nor does any Borrower have
knowledge or reason to believe that any such notice will be received or is being
threatened.
 
(d) Materials of Environmental Concern have not been transported or disposed of
from the Properties in violation of, or in a manner or to a location which could
reasonably be expected to give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to liability under, any
applicable Environmental Law.
 
(e) No judicial proceeding or governmental or administrative action is pending
or, to the knowledge of any Borrower, threatened, under any Environmental Law to
which any Borrower or any Loan Party is or will be named as a party with respect
to the Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Properties or the Business.
 
(f) There has been no release or threat of release of Materials of Environmental
Concern at or from the Properties, or arising from or related to the operations
of any Borrower or any other Loan Party in connection with the Properties or
otherwise in connection with the Business, in violation of or in amounts or in a
manner that could reasonably give rise to liability under Environmental Laws.
 
6.23 MCEI Acquisition, MCEV Acquisition and MCRU Acquisition.  Each Borrower and
Merisel hereby represents and warrants that (i) the MCEI Acquisition and the
MCEV Acquisition were consummated on the terms and subject to the satisfaction
of all the conditions thereto (or, with respect to any material waiver thereof,
the approval of the Lender) as set forth in the MCEI Acquisition Documents and
the MCEV Acquisition Documents, as applicable; (ii) each party to the MCEI
Acquisition Documents and MCEV Acquisition Documents performed all of its
obligations thereunder; (iii) each Borrower assumed only the Assumed
Liabilities, as defined in the MCEI Acquisition Documents and the MCEV
Acquisition Documents, as applicable; (iv) each of the conditions in the MCEI
Acquisition Agreement and the MCEV Acquisition Agreement were satisfied;
(v) none of the MCEI Acquisition Documents nor the MCEV Acquisition Documents
was
 
 
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materially amended, modified, supplemented or waived except to settle or waive
post closing adjustments and payments due from Borrowers or Merisel to sellers;
(vi) there is no material financial change in the condition of any Loan Party
after giving effect to the Borrower Acquisitions, except those contemplated in
the MCEI Acquisition Documents and the MCEV Acquisition Documents; (vii) each of
the representations and warranties made by any sellers or any Loan Party in the
MCEI Acquisition Documents and the MCEV Acquisition Documents were true and
correct as of the Original Closing Date; and (viii) each of the foregoing
representations and warranties in this Section 6 was true and correct in all
material respects immediately after giving effect to each of the MCEI
Acquisition and the MCEV Acquisition.
 
Each Borrower and Merisel hereby represents and warrants that (i) the MCRU
Acquisition has been consummated on the terms and subject to the satisfaction of
all the conditions thereto (or, with respect to any material waiver thereof, the
approval of the Lender) as set forth in the MCRU Acquisition Documents;
(ii) each party to the MCRU Acquisition Documents has performed all of its
obligations thereunder; (iii) MCRU has assumed only the Assumed Liabilities, as
defined in the MCRU Acquisition Documents including, without limitation, the
Prior Crush Creative Financing Documents; (iv) each of the conditions in the
MCRU Acquisition Agreement has been satisfied; (v) none of the MCRU Acquisition
Documents have been materially amended, modified, supplemented or waived except
to settle or waive post closing adjustments and payments due from Borrowers or
Merisel to sellers; (vi) there is no material financial change in the condition
of any Loan Party after giving effect to the MCRU Acquisitions, except those
contemplated in the MCRU Acquisition Documents; (vii) each of the
representations and warranties made by any sellers or any Loan Party in the MCRU
Acquisition Documents are true and correct as of August 8, 2005; and (viii) each
of the foregoing representations and warranties in this Section 6 is true and
correct in all material respects immediately after giving effect to the MCRU
Acquisition.
 
6.24 Employment Agreements.  Each of the employment agreements and
non-competition agreements between any Borrower or Merisel and each Person
listed on Schedule 7.1(r) is in full force and effect, and is a valid, binding
and enforceable obligation of the parties thereto.
 
SECTION 7.  
CONDITIONS PRECEDENT

 
7.1 Conditions to the Execution and Delivery of this Agreement.  The execution
and delivery by the Lender of this Agreement is subject to the satisfaction of
the following conditions precedent, each to the satisfaction of the Lender in
its sole discretion:
 
(a) Loan Documents.  Lender shall have received:
 
(i) this Agreement, executed and delivered by a duly authorized officer of each
Loan Party;
 
(ii) an Amended and Restated Revolving Credit Note, duly completed in accordance
with the provisions of Section 5.4(e) of this Agreement and executed by a duly
authorized officer of each Borrower;
 
 
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(iii) the Second Reaffirmation and Confirmation Agreement (Security Documents)
dated the Restatement Effective Date and reaffirming the Security Agreement, the
Pledge Agreement, the Corporate Guarantee and the Trademark Security Agreement,
executed and delivered by a duly authorized officer of each party to any of the
foregoing; and
 
(iv) a Collateral Certificate, dated the Restatement Effective Date and executed
and delivered by a duly authorized officer of each Loan Party.
 
(b) Lender shall have received payment in full of the outstanding principal
balance of the Term Loan (as defined in the Existing Credit Agreement), all
accrued interest thereon and all other accrued fees and charges related thereto.
 
(c) Secretary’s Certificates.  The Lender shall have received a certificate of
each Loan Party, dated the Restatement Effective Date, substantially in the form
of Exhibit F, with appropriate insertions and attachments, satisfactory in form
and substance to the Lender, executed by the President or any Vice President and
the Secretary or any Assistant Secretary or sole member of such Loan Party.
 
(d) Borrowing Base Certificate.  The Lender shall have received a Borrowing Base
Certificate showing the Borrowing Base as of the Restatement Effective Date,
with appropriate insertions and dated the Restatement Effective Date,
satisfactory in form and substance to the Lender, executed by the President or
any Vice President of each Borrower.
 
(e) Organizational Proceedings of the Loan Parties.  The Lender shall have
received a copy of the resolutions, in form and substance satisfactory to the
Lender, of the board of directors or other managers, shareholders or the consent
of the sole member, as the case may be, of each Loan Party authorizing (i) the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, (ii) the borrowings contemplated hereunder and
(iii) the granting by it of the Liens created pursuant to the Security
Documents, certified by the Secretary or an Assistant Secretary of such Loan
Party or of the sole member of such Loan Party as of the Restatement Effective
Date, which certification shall be included in the certificate delivered in
respect of such Loan Party pursuant to Section 7.1(c), shall be in form and
substance satisfactory to the Lender and shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded.
 
(f) Incumbency Certificates.  The Lender shall have received a certificate of
each Loan Party, dated the Restatement Effective Date, as to the incumbency and
signature of the officers of such Loan Party executing any Loan Document, which
certificate shall be included in the certificate delivered in respect of such
Loan Party pursuant to Section 7.1(c), shall be satisfactory in form and
substance to the Lender, and shall be executed by the President or any Vice
President and the Secretary or any Assistant Secretary of such Loan Party.
 
(g) Corporate Documents.  The Lender shall have received true and complete
copies of the certificate of incorporation or formation and by-laws or operating
or limited liability company agreement of each Loan Party, as applicable,
certified as of the Restatement Effective Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of such Loan Party, which
certification shall be included in the certificate delivered in respect of such
Loan Party pursuant to Section 7.1(c) and shall be in form and substance
satisfactory to the Lender.
 
 
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(h) Good Standing Certificates.  The Lender shall have received certificates
dated as of a recent date from the Secretary of State or other appropriate
authority, evidencing the good standing of each Loan Party (i) in the
jurisdiction of its organization and (ii) in each other jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires it to qualify as a foreign Person except, as to this subclause (ii),
where the failure to so qualify could not have a Material Adverse Effect.
 
(i) Consents, Licenses and Approvals.  The Lender shall have received a
certificate of each Borrower (i) attaching copies of all consents,
authorizations and filings referred to in Section 6.4, and (ii) stating that
such consents, licenses and filings are in full force and effect as of the
Restatement Effective Date, and each such consent, authorization and filing
shall be in form and substance satisfactory to the Lender.
 
(j) Fees.  The Lender shall have received payment of all fees, expenses and
other amounts due and payable under the Loan Documents.
 
(k) Legal Opinions.  The Lender shall have received the executed legal opinion
of Rosner & Napierala, LLP, counsel to the Loan Parties.  The legal opinion
shall cover such matters incident to the transactions contemplated by this
Agreement as the Lender may reasonably require.
 
(l) Pledged Stock; Stock Powers.  The Lender shall have received, if applicable,
the certificates representing the shares or other equity interests of
corporations or the membership interests of limited liability companies, as
applicable, pledged pursuant to the Pledge Agreement, together with a signed,
undated stock or transfer power, as applicable, for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof.  Each
Issuer referred to in the Pledge Agreement shall have delivered an
acknowledgement of and consent to such Pledge Agreement, executed by a duly
authorized officer of such Issuer, in substantially the form appended to such
Pledge Agreement.
 
(m) Actions to Perfect Liens.  The Lender shall have received evidence in form
and substance satisfactory to it that all filings, recordings, registrations and
other actions, including, without limitation, the filing of duly executed
financing statements on form UCC-1, necessary or, in the opinion of the Lender,
desirable to perfect the Liens created by the Security Documents shall have been
completed.
 
(n) Lien Searches.  The Lender shall have received the results of a recent
search by a Person satisfactory to the Lender, of the Uniform Commercial Code,
judgment and tax lien filings which may have been filed with respect to personal
property of each Loan Party, except for personal property located in the State
of Georgia, and the results of such search shall be satisfactory to the Lender.
 
(o) [Reserved].
 
 
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(p) Insurance.  The Lender shall have received evidence in form and substance
satisfactory to it that all of the requirements of Section 8.5 hereof and
Section 5(m) of the Security Agreement shall have been satisfied.
 
(q) [Reserved].
 
(r) Employment Agreements.  The Lender shall have received (i) true and correct
copies of employment agreements and non-competition agreements between any
Borrower or Merisel and each of the Persons listed on Schedule 7.1(r), all of
such agreements to be in form and substance satisfactory to the Lender, and
(ii) a certificate of each Borrower certifying as to the authenticity of such
agreements and that such agreements have not been amended, supplemented or
modified and are in full force and effect.
 
7.2 Conditions to Each Loan.  The agreement of the Lender to make any Loan
requested to be made by it on any date (including, without limitation, its
initial Loan) is subject to the satisfaction of the following conditions
precedent:
 
(a) Representations and Warranties.  Each of the representations and warranties
made by each Borrower and the other Loan Parties in or pursuant to the Loan
Documents shall be true and correct in all material respects on and as of such
date as if made on and as of such date.
 
(b) No Default.  No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the Loans requested to be made
on such date.
 
(c) Borrowing Base.  In the ease of any Revolving Credit Loans requested to be
made, the Lender shall have timely received a Borrowing Base Certificate for the
most recent period for which such Borrowing Base Certificate is required to be
delivered, in accordance with Section 8.2(c).
 
(d) Additional Matters.  All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement, the other Loan Documents shall be satisfactory
in form and substance to the Lender, and the Lender shall have received such
other documents and legal opinions in respect of any aspect or consequence of
the transactions contemplated hereby or thereby as it shall reasonably request.
 
(e) Financial Condition.  No material adverse change in the financial condition
of any Borrower shall have occurred on such date or after giving effect to the
Loans requested to be made on such date.
 
Each borrowing by the Borrowers hereunder shall constitute a representation and
warranty by the Borrowers as of the date thereof that the conditions contained
in this Section 7.2 have been satisfied.
 
SECTION 8.  
AFFIRMATIVE COVENANTS

 
The Borrowers and each of the Corporate Guarantors hereby agree that, so long as
any of the Commitments remain in effect or any amount is owing to the Lender
hereunder or under any other Loan Document, each Borrower, Merisel and (except
in the case of delivery of financial information, reports and notices) each
other Corporate Guarantor shall:
 
 
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8.1 Financial Statements.  Furnish to the Lender:
 
(a) as soon as available, but in any event within 120 days after the end of each
fiscal year of each Borrower, a copy of the consolidated and consolidating
balance sheet of Merisel and its Subsidiaries as at the end of such year and the
related consolidated (and with respect to statement of income, consolidating),
statements of income and retained earnings and of cash flows for such year,
setting forth in each case in comparative form the figures for the previous
year, reported on without a “going concern” or like qualification or exception,
or qualification arising out of the scope of the audit, by BDO Seidman, LLP or
other independent certified public accountants acceptable to the Lender; and
 
(b) as soon as available, but in any event not later than 60 days after the end
of each of the first three quarterly periods of each fiscal year of each
Borrower, the unaudited consolidated and consolidating balance sheet of Merisel
and its Subsidiaries as at the end of such quarter and the related unaudited
consolidated (and with respect to statement of income, consolidating) statements
of income and retained earnings and of cash flows of Merisel and its
Subsidiaries for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year end audit adjustments);
 
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
 
8.2 Certificates; Other Information.  Furnish to the Lender:
 
(a) concurrently with the delivery of the financial statements referred to in
Section 8.1(a), a certificate of the independent certified public accountants
reporting on such financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate;
 
(b) concurrently with the delivery of the financial statements referred to in
Sections 8.1(a) and (b), a certificate of a Responsible Officer (i) stating
that, to the best of such Officer’s knowledge, each Borrower during such period
has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Loan
Documents to be observed, performed or satisfied by it, and that such Officer
has obtained no knowledge of any Default or Event of Default except as specified
in such certificate and (ii) showing in detail the calculations supporting such
Officer’s certification of the Borrower’s compliance with the requirements of
Section 9.1;
 
(c) (i) within twenty days following the end of each calendar month, a Borrowing
Base Certificate showing the Borrowing Base as of the last day of such month,
and (ii) concurrently with the delivery of any notice of borrowing pursuant to
Section 3.2, a Borrowing Base Certificate showing the Borrower’s Base as of the
end of the immediately preceding Business Day, in each case certified as
complete and correct by a Responsible Officer;
 
 
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(d) within twenty days after the end of each month, with respect to the Borrower
and each other Loan Party, an accounts receivable aging and accounts payable
aging, in each case in reasonable detail and in form reasonably satisfactory to
the Lender, and certified by a Responsible Officer of each Borrower as being
true and correct;
 
(e) not later than thirty days prior to the end of each fiscal year of each
Borrower, a copy of the projections by such Borrower of the operating budget and
cash flow budget of such Borrower and the other Loan Parties for the succeeding
fiscal year, such projections to be accompanied by a certificate of a
Responsible Officer to the effect that such projections have been prepared on
the basis of sound financial planning practice and that such Officer has no
reason to believe they are incorrect or misleading in any material respect;
 
(f) (i) within five days after the same are sent, copies of all financial
statements and reports which each Borrower sends to its stockholders or members,
and, if applicable, (ii) within five days after the same are filed, copies of
all financial statements and reports which such Borrower may make to, or file
with, the Securities and Exchange Commission or any successor or analogous
Governmental Authority;
 
(g) during the month of January in each calendar year, a report of a reputable
insurance broker with respect to the insurance maintained by each Borrower and
the other Loan Parties in accordance with Section 8.5 of this Agreement and
Section 5(m) of the Security Agreement, and such supplemental reports as the
Lender may from time to time request;
 
(h) promptly, such additional financial and other information as the Lender may
from time to time reasonably request;
 
(i) promptly, a certificate notifying Lender of the adoption by the Board of
Directors of Merisel of a plan to become a non-reporting company under the
Exchange Act, along with the board resolutions authorizing such adoption; and
 
(j) beginning with the first fiscal quarter immediately following Merisel’s
becoming a non-reporting company under the Exchange Act, as soon as available,
but in any event, no later than 20 days following the end of each fiscal
quarter, a list naming each of the owners of the Capital Stock of Merisel.
 
8.3 Payment of Obligations.  Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
such Borrower or its Subsidiaries, as the case may be.
 
8.4 Conduct of Business and Maintenance of Existence.  Continue to engage in
business of the same general type as now conducted by it and preserve, renew and
keep in full force and effect its corporate existence and take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business except as otherwise permitted pursuant to
Section 9.5; comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, be reasonably expected to have a Material Adverse Effect.
 
 
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8.5 Maintenance of Property; Insurance.  Keep all property useful and necessary
in its business in good working order and condition; maintain with financially
sound and reputable insurance companies insurance on all its property in at
least such amounts and against at least such risks (but including in any event
public liability insurance, and, at the option of Merisel, and in its reasonable
discretion, accounts receivable and business interruption insurance) as are
usually insured against in the same general area by companies engaged in the
same or a similar business, which insurance shall name the Lender as lender loss
payee, in the case of property or casualty insurance, and as an additional
insured, in the case of liability insurance; and furnish to the Lender, upon
written request, full information as to the insurance carried.
 
8.6 Inspection of Property; Books and Records; Discussions.  Keep proper books
of records and account in which full, true and correct entries in conformity
with GAAP and all Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities; and permit
representatives of the Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of such Borrower and
the other Loan Parties with officers and employees of such Borrower and the
other Loan Parties and with its independent certified public accountants.
 
8.7 Notices.  Promptly (or in the case of clause (g) below, within 30 days) give
notice to the Lender of:
 
(a) the occurrence of any Default or Event of Default;
 
(b) any (i) default or event of default under any Contractual Obligation of such
Borrower or any of the other Loan Parties or (ii) litigation, investigation or
proceeding which may exist at any time between such Borrower or any of the other
Loan Parties and any Governmental Authority, which in either case, if not cured
or if adversely determined, as the case may be, could reasonably be expected to
have a Material Adverse Effect;
 
(c) any litigation or proceeding affecting such Borrower or any of the other
Loan Parties in which the amount involved is $1,000,000 or more and not covered
by insurance or in which injunctive or similar relief is sought;
 
(d) the acquisition by any Loan Party of any property or interest in property
(including, without limitation, real property), that is not subject to a
perfected Lien in favor of the Lender pursuant to the Security Documents;
 
(e) the occurrence of any transaction or occurrence referred to in
Section 5.6(c), and the receipt of any Net Cash Proceeds or any insurance
proceeds as a result thereof (whether or not such Net Cash Proceeds or proceeds
are then required to be applied to the repayment of Loans and reduction of
Revolving Credit Commitments as specified in Section 5.6(c));
 
 
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(f) the following events, as soon as possible and in any event within 30 days
after such Borrower knows or has reason to know thereof: (i) the occurrence or
expected occurrence of any Reportable Event with respect to any Plan, a failure
to make any required contribution to a Plan, the creation of any Lien in favor
of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization
or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings
or the taking of any other action by the PBGC or such Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the terminating, Reorganization or Insolvency of, any Plan; and
 
(g) any development or event which, to the best of the Borrowers’ knowledge, has
had or could reasonably be expected to have a Material Adverse Effect.
 
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action such Borrower proposes to take with respect thereto.
 
8.8 Environmental Laws.
 
(a) Comply with, and ensure compliance by all tenants and subtenants, if any,
with, all applicable Environmental Laws and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.
 
(b) Conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws.
 
8.9 Changes to Standards of Eligibility and Reserves
 
.  The Lender shall be entitled to (a) increase the standards of eligibility and
establish or increase any reserves under this Agreement on 30 days’ prior
written notice to the Borrowers in the event that the most recent audit of
accounts receivable and/or inventory of any Borrower and the other Loan Parties
conducted pursuant to Section 8.10 was, in the commercially reasonable judgment
of the Lender, materially different from historical performance, and
(b) increase the advance rates, reduce the standards of eligibility and reduce
any reserves under this Agreement, in each case in its reasonable judgment.
 
8.10 Periodic Audit of Accounts Receivable and Inventory
 
.  The Lender shall, at the Loan Parties’ expense, be entitled to perform a
periodic due diligence audit, inspection, test and review of the accounts
receivable and inventory of such Borrower and the other Loan Parties on a
mutually convenient Business Day twice during each calendar year and shall in
each case be satisfied in all material respects with the results thereof;
provided, however, if the Lender in its reasonable judgment is not satisfied
that the results of any due diligence inspection, test, and review performed
pursuant to this Section 8.10 establish that the Loan Parties’ most recent
determination of the Borrowing Base was made in compliance with the applicable
provisions of this Agreement, the Lender shall be entitled to perform additional
due diligence inspections, tests and reviews of such inventory and accounts
receivable on mutually convenient Business Days during the succeeding
 
 
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twelve-month period until the Lender shall be so satisfied; and provided
further, that upon the occurrence and during the continuation of an Event of
Default, the Lender shall be entitled to perform such additional due diligence
audits, inspections, tests and review of such accounts receivable as the Lender
shall deem necessary or advisable.
 
8.11 Additional Collateral: Additional Guarantors.
 
(a) In the event that any Borrower or any Loan Party acquires any property or
interest in property (including, without limitation, real property) other than
property made subject to a Lien permitted under Section 9.3(g), that is not
subject to a perfected Lien in favor of the Lender pursuant to the Security
Documents, such Borrower or such Loan Party shall take such action (including,
without limitation, the preparation and filing of mortgages or deeds of trust in
form and substance satisfactory to the Lender) as the Lender shall request in
order to create and/or perfect a Lien in favor of the Lender on such property.
 
(b) In the event that any Borrower or any other Loan Party is permitted to
acquire or form any additional Subsidiary, such Subsidiary shall execute a
guarantee and a security agreement, or supplements to the Corporate Guarantee
and the Security Agreement, and the Borrower and/or any Loan Party which is a
holder of any Capital Stock of such Subsidiary shall execute such pledge
agreements or supplements to the Pledge Agreement, each in form and substance
satisfactory to the Lender, and shall take such other action as shall be
necessary or advisable (including, without limitation, the execution of
financing statements on form UCC-1) in order to perfect the Liens granted by
such Subsidiary in favor of the Lender and to effect and perfect the pledge of
all of the Capital Stock of such Subsidiary in favor of the Lender.  Such
Subsidiary shall thereupon become a Guarantor for all purposes under the Loan
Documents, including, without limitation, Section 8.11(a) of this
Agreement.  The Lender shall be entitled to receive legal opinions of one or
more counsel to such Borrower and such Subsidiary addressing such matters as the
Lender or its counsel may reasonably request, including, without limitation, the
enforceability of the guaranty and the security agreement to which such
Subsidiary becomes a party and the pledge of the Capital Stock of such
Subsidiary, and the creation, validity and perfection of the Liens so granted by
such Subsidiary and the Borrower and/or the other Loan Parties to the Lender.
 
8.12 Control Agreements.
 
(a)           Subject to Sections 8.12(b) and (c) below, the Loan Parties shall
grant and maintain at all times a perfected Lien in all of its “deposit
accounts” and “security accounts” (as such terms are defined in the Uniform
Commercial Code in effect in the State of New York) to the Lender.
 
   (b)           The security interest contemplated by Section 8.12(a) shall not
apply to (i) any “deposit account” exclusively used for payroll, payroll taxes
and other employee wage and benefit payments to or for the benefit of the Loan
Parties’ employees or (ii) any “deposit account” used by any Loan Party in the
ordinary course of business in which not more than $50,000 is held at any time;
provided that the aggregate amount of funds maintained in all such deposit
accounts under this clause (ii) shall not exceed $200,000 at any one time.
 
 
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  (c)           The Loan Parties shall use commercially reasonable best efforts
to deliver to the Lender, all control agreements that, in the reasonable
judgment, of the Lender, are required for the Loan Parties to comply with
Section 8.12(a), each duly executed by, in addition to the applicable Loan
Party, the applicable financial institution, each in form and substance
reasonably satisfactory to the Lender.
 
8.13 Further Assurances.  At any time and from time to time, without expense to
the Lender, execute, acknowledge (if appropriate) and deliver, or cause to be
executed, acknowledged (if appropriate) and delivered, any and all of such
further assurances and other instruments and will take or cause to be taken such
other action, as may be reasonably required by the Lender, as necessary to
maintain, preserve, safeguard and continue their respective rights and interests
hereunder.  Each Borrower and the Corporate Guarantors hereby irrevocably
authorizes the Lender to file (without such Borrower’s or any Corporate
Guarantor’s signature) any financing statement or similar document pursuant to
the Uniform Commercial Code as enacted and in force in any jurisdiction within,
or subject to, the jurisdiction of the United States and any analogous document
under legislation of like import or purpose for the time being in force, in any
other country, the filing of which may be reasonably necessary to perfect,
protect or continue any of the respective rights of the Lender hereunder and
under the Loan Documents.
 
8.14 Post-Closing Lien Searches.  Within 10 days after the Restatement Date,
Lender shall have received the results of a recent search by a Person
satisfactory to the Lender, of the Uniform Commercial Code, judgment and tax
lien filings which may be filed with respect to personal property of each Loan
Party located in the State of Georgia, and the results of such search shall be
satisfactory to the Lender.  If any such personal property is subject to a Lien,
except for Liens permitted pursuant to Section 9.3, then Borrower and/or any
Loan Party, at its/their, own cost and expense, shall cause the Lien to be
discharged, dismissed or removed within 30 days after Lender first knows of the
existence thereof.
 
SECTION 9.  
NEGATIVE COVENANTS

 
The Borrowers and each of the Corporate Guarantors hereby agree that, so long as
any of the Commitments remain in effect or any amount owing to the Lender
hereunder or under any other Loan Document is outstanding, each Borrower shall
not, and each Corporate Guarantor shall not, directly or indirectly:
 
9.1 Financial Condition Covenants.
 
(a) Consolidated EBITDA.  Permit Consolidated EBITDA as at the end of any fiscal
quarter, beginning with the fiscal quarter ending December 31, 2009, to be less
than “0.”
 
(b) Maintenance of Tangible Net Worth.  Permit Consolidated Tangible Net Worth
on any date to be less than $15,500,000.
 
9.2 Limitation on Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness, except:
 
(a) Indebtedness of such Borrower under this Agreement;
 
 
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(b) Indebtedness of such Borrower to any Corporate Guarantor and of any
Corporate Guarantor to the Borrower or any other Corporate Guarantor; provided
that such Indebtedness is subordinated to the Obligations in a manner
satisfactory to the Lender;
 
(c) Indebtedness of such Borrower and any of the other Loan Parties incurred to
finance the acquisition of fixed or capital assets (whether pursuant to a loan,
a Financing Lease or otherwise) in an aggregate principal amount not exceeding
as to such Borrower and the other Loan Parties $250,000 in each calendar year;
provided, however, that the Borrowers may incur Indebtedness in respect of
Financing Leases listed on Schedule 9.2(c), up to an aggregate amount of
$1,800,000 to finance the acquisition of new fixed or capital assets at their
facilities located in Edison, New Jersey and Burbank, California, but such
amounts, once repaid, may not be reborrowed;
 
(d) Indebtedness outstanding on the date hereof and listed on Schedule 9.2(d);
 
(e) Indebtedness of such Borrower created in the ordinary course of business
consistent with such Borrower’s past business practices;
 
(f) Guarantee Obligations permitted pursuant to Section 9.4;
 
(g) Indebtedness of MC24 to the Lender created at any time pursuant to the MC24
Obligations; and
 
(h) assumed Indebtedness in connection with any Permitted Acquisition.
 
9.3 Limitation on Liens.  Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:
 
(a) Liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of such Borrower or the other Loan Parties, as the
case may be, in conformity with GAAP;
 
(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than 60 days or which are being contested in good faith by
appropriate proceedings;
 
(c) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation;
 
(d) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
 
(e) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of such Borrower or such Loan Party;
 
 
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(f) Liens in existence on the date hereof listed on Schedule 9.3, securing (i)
Indebtedness permitted by Section 9.2(d) and (ii) Indebtedness listed on
Schedule 9.2(c), provided that no such Lien is spread to cover any additional
property after the Restatement Effective Date and that the amount of
Indebtedness secured thereby is not increased;
 
(g) Liens securing Indebtedness of such Borrower and the other Loan Parties
permitted by Section 9.2(c) incurred to finance the acquisition of fixed or
capital assets, provided that such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets, (ii) such
Liens do not at any time encumber any property other than the property financed
by such Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased beyond what is permitted by Section 9.2 and (iv) the principal amount
of Indebtedness secured by any such Lien shall at no time exceed 100% of the
original purchase price of such property at the time it was acquired;
 
(h) Liens created pursuant to the Security Documents; and
 
(i) Liens securing the Indebtedness created pursuant to the MC24 Obligations.
 
9.4 Limitation on Guarantee Obligations.  Create, incur, assume or suffer to
exist any Guarantee Obligation except:
 
(a) Guarantee Obligations in existence on the date hereof and listed on
Schedule 9.4;
 
(b) the Corporate Guarantee; and
 
(c) any Guarantee Obligations related to the MC24 Obligations.
 
9.5 Limitation on Fundamental Changes.  Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
 
(a) if applicable, any Subsidiary of any Borrower created pursuant to
Section 9.16 hereof may be merged or consolidated with or into such Borrower
(provided that such Borrower shall be the continuing or surviving corporation);
and
 
(b) if applicable, any wholly owned Subsidiary created pursuant to Section 9.16
may sell, lease, transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to such Borrower.
 
9.6 Limitation on Sale of Assets.  Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or hereafter
acquired, or, in the case of any Subsidiary of any Loan Party, issue or sell any
shares of such Subsidiary’s Capital Stock to any Person other than such Loan
Party or any Subsidiary which is a Corporate Guarantor, except:
 
 
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(a) the sale or other disposition of obsolete or worn out property in the
ordinary course of business; provided that, except for the dispositions listed
on Schedule 9.2(c), the Net Cash Proceeds of each such transaction in excess of
$250,000 per year are applied to the prepayment of the Loans as provided in
Section 5.6(d);
 
(b) the sale or other disposition of any property in the ordinary course of
business;
 
(c) the sale of inventory in the ordinary course of business; and
 
(d) the sale or discount without recourse of accounts receivable arising in the
ordinary course of business in connection with the compromise or collection
thereof.
 
9.7 Limitation on Dividends
 
(a) .  (a) Declare or pay any dividend (other than dividends payable solely in
Convertible Preferred or common stock of Merisel) on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of, any shares
of any class of Capital Stock of Merisel, or any warrants or options to purchase
any such Capital Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of Merisel, or (b) enter into any derivative or
other transaction with any financial institution, commodities or stock exchange
or clearinghouse (a “Derivatives Counterparty”) obligating Merisel or any Loan
Party to make payments to such Derivatives Counterparty as a result of any
change in value of any such Capital Stock (such declarations, payments, setting
apart, purchases, redemptions, defeasances, retirements, acquisitions and
distributions, and such transactions with any Derivatives Counterparties, being
herein called “Restricted Payments”).  Notwithstanding the foregoing clause (a),
Merisel, at any time on or after the Restatement Effective Date, may effect one
or more transactions that together shall cause Merisel to no longer be a
reporting company under Sections 12 or 15 of the Exchange Act (the “Stock
Repurchase Transactions”); provided, that (x) any payments, expenses or fees in
connection with the Stock Repurchase Transactions shall not exceed $2,500,000.00
in the aggregate, (y) immediately before and after giving effect to the Stock
Repurchase Transactions, (i) no Default or Event of Default shall have occurred
and be continuing and (ii) Borrowers and each Corporate Guarantor are in
compliance with the covenants set forth in Section 9.1 recomputed for the most
recently ended quarter for which information is available but giving effect to
the Stock Repurchase Transactions and are in compliance with all other terms and
conditions of this Agreement, and (z) Merisel shall be eligible to file, and
shall file, notices with the Securities and Exchange Commission of its
withdrawal from reporting company status within nine (9) months from the date of
the adoption of a plan by the Board of Directors of Merisel through board
resolutions to become a non-reporting company; provided further that no later
than ten (10) calendar days after Merisel becomes a non-reporting company under
the Exchange Act the Loan Parties shall provide the Lender with evidence of the
transition to non-reporting status along with evidence of consummation of the
Stock Repurchase Transactions including any filings, notices, opinions of
counsel and any other documents, agreement or instruments contemplated by and
executed in connection therewith.
 
9.8 Limitation on Investments, Loans and Advances.  Make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, or make any other investment in, any Person, except:
 
 
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(a) extensions of trade credit in the ordinary course of business;
 
(b) investments in Cash Equivalents;
 
(c) loans and advances by any Loan Party to another Loan Party to support the
ordinary business practices of the Loan Parties; provided that any such loans
and advances are otherwise permitted to be incurred pursuant to Section 9.2; and
 
(d) any Permitted Acquisition.
 
9.9 Limitation on Optional Payments and Modifications of Agreements.  (a) Make
any optional payment or prepayment on or redemption or purchase of any
Indebtedness (other than the Loans), (b) amend, modify or change, or consent or
agree to any amendment, modification or change to any of the terms of any
Indebtedness (other than any such amendment, modification or change which would
extend the maturity or reduce the amount of any payment of principal thereof or
which would reduce the rate or extend the date for payment of interest thereon),
or (c) amend the subordination provisions of any Subordinated Indebtedness.
 
9.10 Limitation on Transactions with Affiliates.  Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate unless such transaction is
(a) otherwise permitted under this Agreement, (b) in the ordinary course of such
Borrower’s or such other Loan Party’s business except to the extent specifically
permitted by Section 9.7 and (c) upon fair and reasonable terms no less
favorable to such Borrower or such Loan Party, as the case may be, than it would
obtain in a comparable arm’s length transaction with a Person which is not an
Affiliate.
 
9.11 Limitation on Sales and Leasebacks.  Enter into any arrangement with any
Person providing for the leasing by such Borrower or any other Loan Party of
real or personal property which has been or is to be sold or transferred by such
Borrower or such Loan Party to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of such Borrower or such Loan Party.
 
9.12 Limitation on Changes in Fiscal Year.  Permit the fiscal year of such
Borrower to end on a day other than December 31.
 
9.13 Limitation on Negative Pledge Clauses.  Enter into with any Person any
agreement, other than (a) this Agreement, (b) any industrial revenue bonds,
purchase money mortgages or Financing Leases permitted by this Agreement (in
which cases, any prohibition or limitation shall only be effective against the
assets financed thereby), or (c) the loan documents related to the MC24
Obligations which prohibits or limits the ability of such Borrower or any of the
other Loan Parties to create, incur, assume or suffer to exist any Lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired.
 
9.14 Limitation on Lines of Business.  Enter into any business, either directly
or through any Subsidiary, except for those businesses (a) in which such
Borrower and the other Loan Parties are engaged on the date of this Agreement or
(b) which are of the same general type as the business now conducted by such
Borrower or any other Loan Party.
 
 
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9.15 Governing Documents.  Amend its certificate of incorporation or management
agreement, as the case may be (except to increase the number of authorized
shares of common stock or membership units, respectively), partnership agreement
or management agreement, as the case may be, or other Governing Documents,
without the prior written consent of the Lender, which shall not be unreasonably
withheld or delayed.
 
9.16 Limitation on Subsidiary Formation.  Form any Subsidiaries unless,
immediately upon the formation of such Subsidiary, all requirements of
Section 8.11 shall have been satisfied.
 
9.17 Limitation on Securities Issuances.  (A) Except as disclosed to the Lender,
permit any Subsidiary to issue any shares of Capital Stock that are not
“certificated securities” (as defined in § 8-102 of the Uniform Commercial Code
as in effect in the State of New York on the date hereof) and are not pledged to
the Lender pursuant to the Pledge Agreement or (B) issue or permit any
Subsidiary to issue any shares of preferred stock.
 
SECTION 10.  
EVENTS OF DEFAULT

 
If any of the following events shall occur and be continuing:
 
(a) (i) The Borrowers shall fail to pay any principal of Revolving Credit Loan
when due in accordance with the terms thereof or hereof and such failure shall
remain uncured for two Business Days after notice by the Lender; or (ii) the
Borrowers shall fail to pay any interest on any Loan, or any Loan Party shall
fail to pay any other amount payable hereunder or under the other Loan
Documents, in each case with respect to this clause within five days after any
such interest or other amount becomes due in accordance with the terms thereof
or hereof and such failure shall in each case remain uncured for two Business
Days after notice by the Lender; or
 
(b) Any representation or warranty made or deemed made by any Borrower or any
other Loan Party herein or in any other Loan Document or which is contained in
any certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been incorrect in any material respect on or as of the date
made or deemed made; or
 
(c) Any Borrower or any other Loan Party shall default in the observance or
performance of any agreement contained in Section 9 of this Agreement,
Section 11 of the Corporate Guarantee, Section 5 of the Pledge Agreement, or
Section 5 of the Security Agreement and such failure, to the extent such default
is amenable to cure, shall remain uncured for five Business Days after notice by
the Lender; or
 
(d) Any Borrower or any other Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of 25 days and, to the
extent such default is amenable to cure, such failure shall remain uncured for
five Business Days after notice by the Lender; or
 
 
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(e) Any Borrower or any of the other Loan Parties shall (i) default in any
payment of principal of or interest on any of the MC24 Obligations, or any other
Indebtedness (other than the Loans), or in the payment of any Guarantee
Obligation, beyond the period of grace (not to exceed 30 days), if any, provided
in the instrument or agreement under which such MC24 Obligations, Indebtedness
or Guarantee Obligation was created, if the aggregate amount of the Indebtedness
and/or Guarantee Obligations in respect of which such default or defaults shall
have occurred is at least $500,000, provided  that such amount limitation shall
not be applicable to the MC24 Obligations; or (ii) default in the observance or
performance of any other agreement or condition relating to any of the MC24
Obligations, or any other such Indebtedness or Guarantee Obligation, if the
aggregate amount of the Indebtedness and/or Guarantee Obligations in respect of
which such default or defaults shall have occurred is at least $500,000,
provided that such amount limitation shall not be applicable to the MC24
Obligations, or contained in any instrument or agreement evidencing, seeming or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of any of the MC24 Obligations, or any other such Indebtedness
or beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, the MC24 Obligations or such other
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable; or
 
(f) (i) Any Borrower or any of its Subsidiaries or any of the other Loan Parties
shall commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or any Borrower or any of the other Loan Parties shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any Borrower or any of the other Loan Parties any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or appointment or
(B) remains undismissed, undischarged or unbonded for a period of 75 days; or
(iii) there shall be commenced against any Borrower or any of the other Loan
Parties any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 75 days from the entry thereof; or (iv) any Borrower or
any of the other Loan Parties shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) any Borrower or any of the
other Loan Parties shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
 
(g) (i) Any Person shall engage in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any
“accumulated funding deficiency” (as defined in Section 302 of ERISA), whether
or not waived, shall exist with respect to any Plan or any Lien in favor of the
PBGC or a Plan shall arise on the assets of any Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
 
 
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appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Lender, likely to result in the termination of
such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) any Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Lender is likely
to, incur any liability in connection with a withdrawal from, or the Insolvency
or Reorganization of, a Multiemployer Plan or (vi) any other event or condition
shall occur or exist with respect to a Plan; and in each case in clauses
(i) through (vi) above, such event or condition, together with all other such
events or conditions, if any, involve an aggregate amount in excess of $250,000
and such failure shall remain uncured for five Business Days after notice by the
Lender; or
 
(h) One or more judgments or decrees shall be entered against any Borrower or
any of the other Loan Parties involving in the aggregate a liability (not paid
or fully covered by insurance) of $250,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending appeal
within 75 days from the entry thereof; or
 
(i) (i) Any of the Security Documents shall cease, for any reason other than
those caused by the Lender, to be in full force and effect, or any Borrower or
any other Loan Party which is a party to any of the Security Documents shall so
assert or (ii) the Lien created by any of the Security Documents shall cease to
be enforceable and of the same effect and priority purported to be created
thereby; or
 
(j) The Corporate Guarantee shall cease, for any reason, other than those caused
by the Lender, to be in full force and effect or any Guarantor shall so assert;
or
 
(k) Any Change of Control shall occur; or
 
(l) At any point from and after the date on which Merisel becomes a
non-reporting company under the Exchange Act as a result of the Stock Repurchase
Transactions, the then current chief executive officer shall cease to be the
Responsible Officer of Merisel or shall cease to have primary responsibility for
managing the operations of Merisel and its Subsidiaries and shall not have been
replaced by a successor(s) satisfactory to the Lender within 60 days;
 
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to any
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) the Lender may, by notice to the applicable Borrowers declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) the Lender may, by notice to the Borrowers,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement to be due and payable forthwith, whereupon
the same shall immediately become due and payable.
 
 
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SECTION 11.  
MISCELLANEOUS

 
11.1 Amendments and Waivers.  Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 11.1.  The
Lender may, from time to time, (a) enter into with the Borrowers written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lender or of the Borrowers
hereunder or thereunder or (b) waive, on such terms and conditions as the Lender
may specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its
consequences.  Any such waiver and any such amendment, supplement or
modification shall apply equally to the Lender and shall be binding upon each
Borrower, the Lender, and all future holders of the Loans.  In the case of any
waiver, the Borrowers and the Lender shall be restored to their former positions
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereon.
 
11.2 Notices.  All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by facsimile
transmission) and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made (a) in the case of delivery by hand, when
delivered, (b) in the case of delivery by mail, three Business Days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been electronically confirmed,
addressed as follows, or to such other address as may be hereafter notified by
the respective parties hereto:
 
The
Borrowers:                                                                    
COLOR EDGE LLC
COLOR EDGE VISUAL LLC
CRUSH CREATIVE LLC
c/o Merisel, Inc.
127 West 30th Street, 5th Floor,
New York, New York 10001
Attention:  Chief Financial Officer
Telephone:  (212) 502-6570
Facsimile:  (212) 502-9497

with a copy (which shall not constitute notice) to:

Rosner & Napierala, LLP
26 Broadway, 22nd Floor
New York, New York 10004
Attention:  Natalie A. Napierala
Telephone:  (212) 785-2577
Fax:  (212) 785-5203
 
 
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The
Lender:                                                                          
Amalgamated Bank
275 Seventh Avenue, 14th Floor
New York, New York 10001
Attention:  George N. Jarvis, EVP
Telephone:  (212) 895-4407
Fax:  (212) 895-4511
 
with a copy to:                                      Nixon Peabody LLP
Key Towers
40 Fountain Plaza, Suite 500
Buffalo, New York 14202
Attention: Martha M. Anderson
Telephone:  (716) 853-8105
Fax:  1-866-265-0759
 
provided that any notice, request or demand to or upon the Lender pursuant to
Section 2.2, 3.2, 3.4, 5.5 and 5.6, shall not be effective until received.
 
11.3 No Waiver; Cumulative Remedies.  No failure to exercise and no delay in
exercising, on the part of the Lender, any right, remedy, power or privilege
hereunder or under the other Loan.  Documents shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
 
11.4 Survival of Representations and Warranties.  All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
 
11.5 Payment of Expenses and Taxes.  The Borrowers agree (a) to pay or reimburse
the Lender for all its out-of-pocket costs and expenses incurred in connection
with the development, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Lender, (b) to pay or reimburse the Lender for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
to the Lender, (c) to pay, indemnify, and hold the Lender harmless from, any and
all recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold the Lender, and
each of their respective officers, employees, directors, trustees, agents,
advisors, affiliates and controlling persons (each, an “Indemnitee”), harmless
from and
 
 
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against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including, without limitation, any of the foregoing
relating to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of any Borrower or any of its
Subsidiaries (all the foregoing in this clause (d), collectively, the
“Indemnified Liabilities”); provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities (i) to the
extent such Indemnified Liabilities are found by a final, nonappealable judgment
of a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of such Indemnitee, or (ii) legal proceedings commenced
against an Indemnitee by any security holder or creditor thereof arising out of
and based upon rights afforded any such security holder or creditor solely in
its capacity as such.  The agreements in this Section shall survive repayment of
the Loans and all other amounts payable hereunder.
 
11.6 Successors and Assigns, Participations.
 
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Lender, and their respective successors and assigns, except that
the Borrowers may not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of the Lender (and any
purported such assignment or transfer by the Borrowers without such consent of
the Lender shall be null and void).
 
(b) For avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section do not prohibit the Lender from assigning or
participating any interests in the Loans, or the Loan Documents, and in
particular do not prohibit the Lender from creating security interests to secure
its obligations, including, without limitation, any pledge or assignment by the
Lender of any Loan or Note to any Federal Reserve Bank in accordance with
applicable law; provided that no such pledge or security interest shall release
the Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for the Lender as a party hereto.
 
11.7 Set-off.  In addition to any rights and remedies of the Lender provided by
law, the Lender shall have the right, without prior notice to the Borrowers, any
such notice being expressly waived by the Borrowers to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrowers
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Lender or any branch or agency thereof to or for the credit
or the account of the Borrowers.  The Lender agrees promptly to notify the
Borrowers after any such set-off and application made by the Lender, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.
 
11.8 Counterparts.  This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by facsimile
transmission of signature pages hereto), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.  A set of
the copies of this Agreement signed by all the parties shall be lodged with the
Borrowers and the Lender.
 
 
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11.9 Severability.  Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
 
11.10 Integration.  This Agreement and the other Loan Documents (i) represent
the agreement of the Borrowers and the Lender with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents and (ii) supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof except that this Agreement shall amend and restate in its entirety
the Existing Credit Agreement, and all Obligations of the Loan Parties
thereunder shall be governed by this Agreement.
 
11.11 GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
 
11.12 Submission to Jurisdiction; Waivers.  Each Borrower hereby irrevocably and
unconditionally:
 
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
 
(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
 
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Borrower at its
address set forth in Section 11.2 or at such other address of which the Lender
shall have been notified pursuant thereto;
 
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and
 
(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
 
 
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11.13 Acknowledgements.  Each Borrower hereby acknowledges that:
 
(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents;
 
(b) the Lender does not have any fiduciary relationship with or duty to such
Borrower arising out of or in connection with this Agreement or any of the other
Loan Documents, and the relationship between such Borrower and the other Loan
Parties, on one hand, and the Lender, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and
 
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among such
Borrower and the Lender.
 
11.14 WAIVERS OF JURY TRIAL.  EACH BORROWER AND THE LENDER HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
 
11.15 Confidentiality.  The Lender agrees to keep confidential all non-public
information provided to it by the Borrowers pursuant to this Agreement that is
designated by the Borrowers in writing as confidential; provided that nothing
herein shall prevent the Lender from disclosing any such information (i) to any
transferee, or to any actual or prospective counterparty (or its advisors) to
any swap, credit derivative or other derivative transaction relating to any
Borrower and its obligations, which in any such case agrees to comply with the
provisions of this Section 11.15, (ii) to its employees, directors, agents,
attorneys, accountants and other professional advisors, (iii) upon the request
or demand of any examiner or other Governmental Authority having jurisdiction
over the Lender, (iv) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (vi) which has been publicly disclosed other than in breach
of this Agreement, (vi) in connection with the exercise of any remedy hereunder,
or (vii) to the National Association of Insurance Commissioners or any other
similar organization.  Notwithstanding anything to the contrary contained in
this Agreement or any other Loan Document, all persons may disclose to any and
all persons, without limitation of any kind, the federal income tax treatment or
structure of the Loans and other Obligations, any fact relevant to understanding
the federal tax treatment or structure of the Loans and other Obligations, and
all materials of any kind (including opinions or other tax analyses) relating to
such federal tax treatment or structure.
 
11.16 Security Documents in Full Force and Effect.  The Borrowers hereby confirm
that each of the Security Documents remains in full force and effect
notwithstanding the amendment and restatement of the Existing Credit Agreement
pursuant to this Agreement, and that each of the Security Documents shall also
be deemed to cover, secure and support (as the case may be) any and all
additional Obligations of the Borrowers to the Lender as contemplated by this
Agreement.  The amendment and restatement of the Existing Credit Agreement shall
in no way impair the full force and effect of the other Loan Documents.
 
 
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11.17 Lender Waiver of Events of Default.  Lender hereby waives the Events of
Default and Defaults listed on Schedule 6.7.  This waiver shall be effective
only for the specific Events of Default and Defaults listed on Schedule 6.7, and
in no event shall this waiver be deemed to be a waiver of enforcement of the
Lender’s rights with respect to any other Events of Default or Defaults now
existing or hereafter arising, or the rights of the Lender to assert the failure
of any condition with respect to any matter, event or condition. Nothing
contained herein nor any communications between Borrower and Lender shall be a
waiver of any rights or remedies the Lender has or may have against Borrower,
except as specifically provided herein. Nothing contained herein, except as
specifically set forth herein, shall diminish, prejudice or waive any of the
Lender’s rights and remedies under this Agreement or applicable law, and the
Lender hereby reserves all such rights and remedies, including, without
limitation, the right to require, at any date hereafter, strict compliance with
each of the sections of this Agreement.
 

 
[Signature Pages Follow]
 

 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
 
 
 
BORROWERS:

 
 
 
CRUSH CREATIVE LLC

 
 
f/k/a MCRU, LLC

 
 
By: MERISEL AMERICAS, INC., as Sole Member

 
 
By:
    /s/ Victor L. Cisario

 
Name:  Victor L. Cisario

 
Title:    Chief Financial Officer

 
 
COLOR EDGE LLC

 
 
f/k/a MCEI, LLC

 
 
By: MERISEL AMERICAS, INC., as Sole Member

 
By:
    /s/ Victor L. Cisario

 
Name:  Victor L. Cisario

 
Title:    Chief Financial Officer

 
COLOR EDGE VISUAL LLC

 
 
f/k/a MCEV, LLC

 
 
By: MERISEL AMERICAS, INC., as Sole Member

 
 
By:
    /s/ Victor L. Cisario

 
Name:  Victor L. Cisario

 
Title:    Chief Financial Officer

 
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CORPORATE GUARANTORS:

 
 
MERISEL, INC.

 
By:
    /s/ Victor L. Cisario

 
Name:  Victor L. Cisario

 
Title:    Chief Financial Officer

 
 
MERISEL AMERICAS, INC.

 
By:
    /s/ Victor L. Cisario

 
Name:  Victor L. Cisario

 
Title:    Chief Financial Officer

 
 
COMP 24 LLC (f/k/a MC24, LLC)

 
FUEL DIGITAL, LLC

 
DENNIS CURTIN STUDIOS, LLC

 
MADP, LLC

 
 
By: MERISEL AMERICAS, INC., as Sole Member of each of the above-named entities

 

 
By:
    /s/ Victor L. Cisario

 
Name:  Victor L. Cisario

 
Title:    Chief Financial Officer

 
 
ADVERTISING PROPS, INC.

 
 
By:
    /s/ Victor L. Cisario

 
Name:  Victor L. Cisario

 
Title:    Chief Financial Officer

 
 
LENDER                                      

 
 
AMALGAMATED BANK

 
 
By:
    /s/ George N. Jarvis

 
Name: George N. Jarvis

 
Title: Executive Vice President

 
 
 
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