FOURTH AMENDED AND RESTATED NOTES PAYABLE SUBORDINATION AGREEMENT
Exhibit 10.01
IBM Credit LLC
FOURTH AMENDED AND RESTATED
NOTES PAYABLE SUBORDINATION AGREEMENT
NOTES PAYABLE SUBORDINATION AGREEMENT
IBM CREDIT LLC
Xxxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Xxxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Ladies and/or Gentlemen:
This Fourth Amended and Restated Notes Payable Subordination Agreement amends and restates in
its entirety the Amended and Restated Notes Payable Subordination Agreement dated November 13,
2002 executed by Priority Fulfillment Services, Inc. (“PFS”). Supplies Distributors, Inc., with
its principal place of business at 000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx, XX 00000 (“SDI”), is/may
become further indebted to PFS. PFS represents that no part of said indebtedness has been assigned
to or subordinated in favor of any other person, firm or corporation, other than pursuant to the
Notes Payable Subordination Agreement, dated as of March 29, 2002 by and between PFS and Congress
Financial Corporation (Southwest) (“Congress”) (“Notes Payable Subordination Agreement”) and that
PFS does not hold any security therefor. Capitalized terms used herein without definition shall
have the meaning ascribed thereto in the Financing Agreement referred to below.
To induce IBM Credit LLC (“IBM Credit”) to continue financing SDI under the terms of the
Agreement for Inventory Financing dated March 29, 2002 with SDI (as amended, modified, and
supplemented from time to time, the “Financing Agreement”) and in consideration of any loans,
advances, payments, extensions or credit (including the extension or renewal, in whole or in part,
of any antecedent or other debt), benefits or financial accommodations heretofore or hereafter
made, granted or extended by IBM Credit or which IBM Credit has or will become obligated to make,
grant or extend to or for the account of SDI whether under the Financing Agreement or otherwise,
and in consideration of any obligations heretofore or hereafter incurred by SDI to IBM Credit,
whether under the Financing Agreement or otherwise, PFS agrees to make the payment of the
indebtedness referred to in the first paragraph hereof and any and all other present or future
indebtedness of SDI to PFS together with any and all interest accrued thereon (collectively the
“Secondary Obligations”) subject and subordinate to the prior indefeasible payment in full of any
and all debts, obligations and liabilities of SDI to IBM Credit, whether absolute or contingent,
due or to become due, now existing or hereafter arising and whether direct or acquired by IBM
Credit by transfer, assignment or otherwise (collectively the “Primary Obligations”) and that SDI
shall make no payments to PFS until the Primary Obligations have been indefeasibly paid in full as
acknowledged in writing by IBM Credit. Notwithstanding the foregoing, SDI may make payments in
respect of the Secondary Obligations provided that (i) no Default or Event of Default exists
immediately prior to the payment of the Secondary Obligations and that no Default or Event of
Default will occur after any payment in respect of the Secondary Obligations (ii) any such payment
shall not cause the total amount of the Secondary Obligations to be less than Six Million Five
Hundred Thousand Dollars ($6,500,000), and (iii) such payment would be permitted under the Notes
Payable Subordination Agreement. Except as provided above, PFS agrees not to ask, demand, xxx for,
take or receive payment or security for all or any part of the Secondary Obligations until and
unless all of the Primary Obligations shall have been fully paid and discharged.
Upon any distribution of any assets of SDI whether by reason of sale, reorganization,
liquidation, dissolution, arrangement, bankruptcy, receivership, assignment for the benefit of
creditors, foreclosure or otherwise, IBM Credit shall be entitled to receive payment in full of the
Primary Obligations prior to the payment of any part of the Secondary Obligations. To enable IBM
Credit to enforce its rights hereunder in any such proceeding or upon the happening of any such
event, IBM Credit or any person whom IBM Credit may from time to time designate is hereby
irrevocably appointed attorney-in-fact for PFS with full power to act in the place and stead of PFS
including the right to make, present, file and vote proofs of claim against SDI on account of all
or any part of said Secondary Obligations as IBM Credit may deem advisable and to
Page 1 of 3
receive and collect any and all payments made thereon and to apply the same on account of
the Primary Obligations. PFS will execute and deliver to such instruments as IBM Credit may require
to enforce each of the Secondary Obligations, to effectuate said power of attorney and to effect
collection of any and all dividends or other payments which may be made at any time on account
thereof.
While this instrument remains in effect, PFS will not assign to or subordinate in favor of any
other person, firm or corporation, (except for Congress subject to terms of the Intercreditor
Agreement dated the date hereof between Congress and IBM Credit) any right, claim or interest in or
to the Secondary Obligations or commence or join with any other creditor in commencing any
bankruptcy, reorganization or insolvency proceeding against SDI. IBM Credit may at any time, in its
discretion, renew or extend the time of payment of all or any portion of the Primary Obligations or
waive or release any collateral which may be held therefor and IBM Credit may enter into such
agreements with SDI as IBM Credit may deem desirable without notice to or further assent from PFS
and without adversely affecting IBM Credit’s rights hereunder in any manner whatsoever.
In furtherance of the foregoing and as collateral security for the payment and discharge in
full of any and all of the Primary Obligations, PFS hereby transfers and assigns to IBM Credit the
Secondary Obligations and all collateral security therefor to which PFS now is or may at any time
be entitled and all rights under all guarantees thereof and agrees to deliver to IBM Credit
endorsed in blank all notes or other instruments now or hereafter evidencing said Secondary
Obligations. IBM Credit may file one or more financing statements concerning any security interest
hereby created without the signature of PFS appearing thereon.
The within instrument is and shall be deemed to be a continuing subordination and shall be
and remain in full force and effect until all Primary Obligations have been performed and paid in
full and IBM Credit’s commitment, if any, under the Financing Agreement has been terminated.
Dated March _____ , 2006.
| PRIORITY FULFILLMENT SERVICES, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | CFO | |||||
| 000 Xxxxx Xxxxxxx Xxxxxxxxxx | ||||||
| Xxxxx, XX 00000 | ||||||
Page 2 of 3
To: IBM Credit LLC
SDI hereby acknowledge notice of the within and foregoing subordination and agree to be
bound by all the terms, provisions and conditions thereof. SDI further agrees not to repay all or
any part of the Secondary Obligations, or to issue any note or other instrument evidencing the
same or to grant any collateral security therefor without IBM Credit’s prior written consent.
| SUPPLIES DISTRIBUTORS, INC. | ||||||
| By: | ||||||
| Name: | Xxxxxx Xxxxxxx | |||||
| Title: | President / CEO | |||||
| ACCEPTED: | ||||
| IBM CREDIT LLC | ||||
By: |
||||
Name:
|
Xxxxxx Xxxxxxx | |||
Title:
|
Manager, Credit | |||
ACKNOWLEDGMENT OF SUBORDINATION
| ) | ||||||
| ) | SS | |||||
| ) | ||||||
On the day of March, 2006,
appeared before me
to me known to be
the individual described in and who executed the foregoing instrument, and who acknowledged to me
that the same was executed as his or her free and voluntary act for the uses and purposes therein
set forth.
| (Notary Public) |
My Commission Expires: |
||
,
|
Page 3 of 3
