Commitment Letter for $7,000,000 Revolving Loan Facility between RBC Centura Bank and Computer Software Innovations, Inc.

Summary

RBC Centura Bank has agreed to provide Computer Software Innovations, Inc. with a revolving loan facility of up to $7 million for short-term working capital and general corporate purposes. The loan is secured by the company's assets and requires monthly interest payments, with the principal due by June 30, 2009. The agreement includes financial and operating covenants, regular financial reporting, and requires the company to maintain its banking relationship with RBC Centura Bank. The terms are subject to the bank's review and compliance with all conditions outlined in the letter.

EX-10.3 4 dex103.htm COMMITMENT LETTER Commitment Letter

EXHIBIT 10.3


		531 South Main St. Greenville, SC 29601 864 ###-###-#### direct 864 ###-###-#### fax *@*

September 10, 2007

Ms. Nancy Hedrick

Mr. David Dechant

Computer Software Innovations

900 East Main St., Suite T

Easley, SC 29640

Dear Nancy and David:

RBC Centura Bank (“Bank”) is pleased to extend this commitment to make the Revolving Facility (the “Loan”) described in this letter to the Borrower identified below. The Loan will be made on the terms and conditions set forth in this letter and any attachments to this letter. Bank’s commitment set forth in this letter shall be referred to as the “Commitment” and this letter shall be referred to as the “Commitment Letter”. Any capitalized terms shall have the meanings ascribed to them in the Amended and Restated Loan and Security Agreement dated January 2, 2007 (the “Loan Agreement”) and the Commercial Promissory Note dated January 2, 2007 related to this Loan.

1. General Terms.



Borrower		Computer Software Innovations, Inc., a Delaware Corporation.

Loan Amount		Up to Seven Million Dollars ($7,000,000) as shown below.

Type of Loan		A revolving loan of up to Seven Million Dollars ($7,000,000).

Purpose of Loan		The Loan shall be used to fund short-term working capital and general corporate purposes of Borrower.

Interest Rate		Variable rate equal to “LIBOR” plus 250 basis points.

Payment Terms		Interest only monthly, maturing on 6-30-09. Any future renewal or extension will be based on Bank’s favorable review of Borrower’s financial performance.

Loan Advances		Advances under the Loan shall be based on a borrowing base and a certified borrowing base report. Bank will make advances to Borrower provided the outstanding balance under the Loan does not exceed the lesser of (i) the borrowing base which shall be comprised of eighty percent (80%) of Eligible Accounts and fifty percent (50%) of Eligible Inventory (capped at $1,000,000 borrowable), or (ii) the available amount under Revolving Facility. “Eligible Accounts” means accounts of the Borrower, in which Borrower

Computer Software Innovations, Inc.

September 10, 2007

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		has the right to grant a security interest to Bank, that are in existence and have arisen in the ordinary course of Borrower’s business and that comply with all of Borrower’s representations and warranties to Bank set forth in this Loan Agreement and the other Loan Documents; provided, the Bank may change the standards of eligibility by giving Borrower thirty (30) days’ prior written notice. Unless otherwise agreed to by Bank, Eligible Accounts shall not include the following: (i) the portion of accounts outstanding more than ninety (90) days after billing date (e-rate accounts shall be allowed to age up to one hundred twenty (120) days, (ii) all amounts due from any affiliate, (iii) bad or doubtful accounts, (iv) accounts subject to any security interest or other encumbrance ranking or capable of ranking in priority to the Bank’s security, (v) amount of all holdback, contra account or rights of setoff on the part of any account debtor, (vi) accounts of non-U.S. debtors, or (vii) any accounts which the Bank has previously advised to be ineligible. Exceptions may be granted to the above exclusions on a case by case basis. “Eligible Inventory” means finished goods, as defined under the Code, which are owned and held for sale by Borrower in the ordinary course of Borrower’s business.

Collateral		The Loan will be secured by valid, enforceable and perfected first priority liens and security interests in the following (“Collateral”): all of Borrower’s assets and property, including (without limitation) all of Borrower’s real estate, furniture, fixtures, equipment, accounts and accounts receivable, documents, instruments, securities and deposit accounts, equipment and machinery, and intangibles. The Loan will also be secured by valid, enforceable and perfected first priority liens and security interests in Borrower’s intellectual property, to the extent that such perfection and priority can be attained by the filing of financing statements with the South Carolina Secretary of State.

Fees and Expenses		No fee.

2. Covenants.



Financial Covenants		All financial covenants shall remain in place and enforceable.

Operating Covenants		Without prior written consent of the Bank, limitations on Borrower typically include, but are not limited to the following: Additional indebtedness (excluding approved acquisition debt), liens and security interests, loans, leases and capital expenditures not contained in Borrower’s annual budget submitted to the Bank, excess compensation, reorganization, investments, repayment of subordinated debt, and acquisitions.

3. Other Conditions.

Reporting

“Monthly Financial Reporting” to be submitted no later than the 25^th of each calendar month, and will include, for the prior month:

1) Borrowing Base report;

2) Accounts Receivable aging summary;

“Quarterly Financial Reporting” to be submitted no later than the 45^th day

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September 10, 2007

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		after each quarter end (beginning with the quarter ended 9-30-07), and will include, for the corresponding quarter of the prior year: Company-prepared income statement, balance sheet, and cash flow statement; “Annual Financial Reporting” will include: 1) Audit report for previous fiscal year, delivered within 120 days; 2) Budget, delivered within 30 days of fiscal year end; 3) Projections, operating plans, or other financial information (generally prepared by Borrower in the ordinary course of business) as Bank may reasonably request from time to time.

Banking Relationship		Borrower agrees to maintain its principal depository, operating accounts, and lockbox accounts with Bank. Borrower agrees to transfer such accounts held outside of the Bank to RBC Centura Bank.

Additional Requirements		Borrower shall satisfy all such other terms and conditions as Bank and its counsel deem necessary to ensure, including, but not limited to, the proper documentation of the Loan, the perfection of the liens and security interests in the Collateral and compliance with all laws and regulations applicable to Bank or Borrower relative to this Loan.

This commitment letter supercedes and replaces any prior discussions, term sheets or commitment letters relating to the Loan. This commitment, when accepted, shall constitute the entire agreement between Borrower and Bank concerning the renewal and extension of the maturity of the Loan, and it may not be altered or amended unless agreed to in writing by Bank, or otherwise modified by the Loan Documents. This commitment letter and the Loan Documents shall be applied and construed in harmony with each other to the end that Bank is ensured repayment of the Loan in accordance with their respective terms. To the extent of an irreconcilable conflict between this commitment letter and the Loan Documents, the terms of the Loan Documents shall prevail.

Please indicate your acceptance of this commitment and the terms and conditions contained herein by executing the acceptance below and returning the executed letter to Bank. RBC Centura Bank would like to express our appreciation for the opportunity you have given us to be of service. We look forward to working with you in connection with the Loan.


Sincerely, RBC CENTURA BANK

By:		/s/ Charles H. Arndt
		Charles H. Arndt Market Executive – Upstate SC

ACCEPTED AND AGREED TO: Borrower: Computer Software Innovations, Inc.

By:		/s/ Nancy K. Hedrick