AMENDMENT 7 TO AMENDED AND RESTATED PLATINUM PLAN AGREEMENT (WITH INVOICE DISCOUNTING)
Exhibit 10.78
This Amendment 7 (“Amendment”) dated March 28, 2007 is made to the AMENDED AND RESTATED
PLATINUM PLAN AGREEMENT (WITH INVOICE DISCOUNTING) by and among IBM BELGIUM FINANCIAL SERVICES
S.A., with a registered number of R.C. Brussels 451.673 with an address of Xxxxxx xx Xxxxxxx 00,
XX- 0000 Xxxxxxxx VAT BE 424300467 (“IBM GF” or
“us”), Suppliers Distributors S.A. with a
registered number of RC Liege 208795 with an address of Xxx Xxxxx Xxxxxxx 0, X-0000
Xxxxx-Xxxxxxxx, Xxxxxxx (“SDSA”), and Business Supplies Distributors Europe BV a Netherlands
company registered in Maastricht with a Netherlands trade registration number of HR Maastricht
14062763 with an address of Xxxxxxxxxx 00, 0000 XX Xxxxxxx, Xxx Xxxxxxxxxxx (“BSDE”) (SDSA and BSDE
collectively, “you”), PFS Web B.V. SPRL a company registered in The Netherlands, having the
statutory seat in Amsterdam under the number 17109541, and having the administration and direction
seat in Grace Hollogne, with a Belgian trade registration number of R.C. Liege 204162, VAT BE
466681054 (“PFS Web B.V. ”) (SDSA, BSDE and PFS Web B.V. collectively, the “Loan Parties”)
RECITALS:
A. The Loan Parties and IBM GF have entered into that certain AMENDED AND RESTATED PLATINUM
PLAN AGREEMENT (WITH INVOICE DISCOUNTING) dated as of March 29, 2002 (as amended and modified from
time to time, the “Agreement”);
B. The Loan Parties have requested and IBM GF has agreed to extend the Agreement for twelve
months;
C. The Loan Parties agree to certain financial covenants revisions by IBM GF; and
D.
The parties have agreed to modify the Agreement as more specifically set forth
below,
upon and subject to the terms and conditions set forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, IBM GF and the Loan Parties hereby agree
as follows:
Section 1. Definitions. All capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Agreement.
Section 2. Amendment. Subject to Section 4 hereof, the Agreement is hereby amended as follows:
A. The Agreement is hereby amended as follows:
(a) Section 1.1 is hereby amended by adding the following definition:
“Termination Date”: means March 31, 2008 or such other date as to
which IBM GF and the Loan Parties may agree from time to time.
(b) Section 8.2.7 is hereby amended by deleting it in its entirety and substituting, in lieu
thereof, the following:
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” Financial Covenants
You agree to comply with the Financial Covenants, if any, set out in the relevant supplements
or the Schedule. You also agree that you will not, without our consent, make any of the following
payments (“Restricted Payments”) without our prior written consent (i) declare or pay any dividend
(other than dividends payable solely in common stock of BSDE and/or SDSA and the aggregate amount
of such dividends under this Agreement and the AIF does not cause you or Holdings to violate such
Financial Covenants 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 BSDE and/or SDSA or any warrants, options or rights to
purchase any such capital stock or Equity Interests, 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 BSDE and/or SDSA ; or (ii) make any optional payment or prepayment on
or redemption (including, without limitation, by making payments to a sinking or analogous fund) or
repurchase of any Indebtedness (other than the Obligations)), except as permitted by the Amended
and Restated Notes Payable Subordination Agreement. However, as long as you are not in violation
with any such Financial Covenants prior to or subsequent to the following transactions, (i) BSDE
may pay cash dividends to Supplies Distributors, Inc. up to an amount not to exceed BSDE’s
liquidation value, and (ii) SDSA may pay cash dividends in an amount not to exceed 407,000 euros to
Supplies Distributors, Inc. in fiscal year 2007.”
(c) Section 10.1 is hereby amended by deleting it in its entirety and substituting,
in lieu thereof, the following:
“This Agreement will remain in force until the Termination Date. However
following the occurrence of an Event of Default that we have not waived in
writing we may by notice with immediate effect terminate this Agreement.
Upon any termination of this Agreement we shall have all the rights and
remedies set out in Clause 9.2 until the complete discharge of all the Loan
Parties’ obligations to us. Any such termination shall not affect any
right we have in relation to the IBM Reimbursables and IBM Receivables or
the Receivables Rights and the Supplier Obligations and the Product Rights.
B. The Schedule to the Agreement is hereby amended by deleting such Schedule in its entirety
and substituting, in lieu thereof, the Schedule attached hereto. Such new Schedule shall be
effective as of the date specified in the new Schedule. The changes contained in the new Schedule
include, without limitation, the following:
Credit Line: €12,500,000
VAT Receivables: Deleted from Collateral Valuation
Prepayment Percentage: (i) 80% of Eligible IBM Reimbursables (1) and (ii) 80% of Eligible
IBM Receivables
IBM Receivables
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Collateral Value of Stock-in-Trade: (A) 100% of paid for IBM Printing Systems Division or
InfoPrint Solution Company inventory (other than (a) machines which IBM Printing Systems Division
or Infoprint Solution Company has declared obsolete at least 60 days prior to the date of
determination and (b) service parts) which (i) we have purchased the associated Supplier Invoice
from the Authorised Supplier
on or after the Closing Date (ii) purchased directly from IBM or InfoPrint Solution Company prior
to the Closing Date and not subject to retention of title, provided, however, we have a first
priority security interest in such inventory, (iii) is repurchasable under a repurchase agreement
with the Authorized Supplier and (iv) is secured and managed through a pledge with Disposition,
with coverage percentage acceptable to us (such acceptable percentage to be determined by us within
60 days of the date this Schedule is executed)The value to be assigned to such inventory shall be
based upon the Supplier Invoice net of all applicable credit notes.
In the event that products currently supplied by IBM Printing Systems Division (“InfoPrint
Products”) cease to be sold to you by an entity that is wholly owned by IBM Corporation, on the
date of such cessation :
| • | Any InfoPrint Products then forming part of the Collateral shall continue to be Collateral; | |
| • | Any InfoPrint Products supplied by any other legal entity (as part of the InfoPrint Solutions Company group) thereafter shall only form part of the Collateral from the date on which IGF has established arrangements and entered into agreements acceptable to it with such supplier and you for the continued financing of the InfoPrint Products. |
Financial Covenant Definitions: Changed for net Profit After Tax, Revenue and Working Capital
Turnover.
FINANCIAL COVENANTS
SDSA and BSDE will be required, on a consolidated basis, to maintain the following
financial ratios, percentages and amounts on a year to date basis as of the last day of
the fiscal period under review (quarterly and annually) by us and IBM Credit:
| Covenant | Covenant Requirement | |||
(i)
|
Debt to Tangible Net Worth | Greater than Zero and | ||
| Less than 7.0:1.0 | ||||
(ii)
|
Net Profit after Tax to Revenue | Greater than 0.10 percent | ||
(iii)
|
Working Capital Turnover (WCTO) | Greater than Zero and | ||
| Less than 43.0:1.0 |
PFSweb, Inc. will be required to maintain the following financial ratios,
percentages and amounts as of the last day of the fiscal period under review
(quarterly and annually) by IBM Credit:
| Covenant | ||||||||
| Covenant | Requirement | Date as of | ||||||
(i)
|
Minimum Tangible Net Worth | $ | 18,000,000.00 | 03/31/07 and beyond | ||||
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Section 3. Conditions of Effectiveness of Consent and Amendment. This Amendment shall have been
authorized, executed and delivered by each of the parties hereto and IBM GF shall have received a
copy of a fully executed Amendment.
Section 4. Representations and Warranties. Each Loan Party makes to IBM GF the following
representations and warranties all of which are material and are made to induce IBM GF to enter
into this Amendment.
Section 4.1 Accuracy and Completeness of Warranties and Representations. All representations made
by the Loan Party in the Agreement were true and accurate and complete in every respect as of the
date made, and, as amended by this Amendment, all representations made by the Loan Party in the
Agreement are true, accurate and complete in every material respect as of the date hereof, and do
not fail to disclose any material fact necessary to make representations not misleading.
Section 4.2 Violation of Other Agreements. The execution and delivery of this Amendment and the
performance and observance of the covenants to be performed and observed hereunder do not violate
or cause any Loan Party not to be in compliance with the terms of any agreement to which such Loan
Party is a party.
Section 4.3 Litigation. Except as has been disclosed by the Loan Party to IBM GF in writing, there
is no litigation, proceeding, investigation or labor dispute pending or threatened against any Loan
Party, which, if adversely determined, would materially adversely affect the Loan Party’s ability
to perform such Loan Party’s obligations under the Agreement and the other documents, instruments
and agreements executed in connection therewith or pursuant hereto.
Section 4.4 Enforceability of Amendment. This Amendment has been duly authorized, executed and
delivered by each Loan Party and is enforceable against each Loan Party in accordance with its
terms.
Section 5. Ratification of Agreement. Except as specifically amended hereby, all of the provisions
of the Agreement shall remain unamended and in full force and effect. Each Loan Party hereby
ratifies, confirms and agrees that the Agreement, as amended hereby, represents a valid and
enforceable obligation of such Loan Party, and is not subject to any claims, offsets or defenses.
Section 6. Ratification of Guaranty. Each of Holdings, SDI, PFSweb and PFS hereby ratify and
confirm their respective guaranties in favor of IBM GF and agree that such guaranties remain in
full force and effect and that the term “Liabilities”, as used therein include, without limitation
the indebtedness liabilities and obligations of SDSA and BSDE under the Agreement as amended
hereby. SDI hereby ratifies and confirms its Notes Payable Subordination Agreement executed by SDI
on March 29, 2002 and confirms such Notes Payable Subordination Agreement remains in full force and
effect.
Section 7. Governing Law. This Amendment shall be governed by and interpreted in accordance with
the laws which govern the Agreement.
Section 8. Counterparts. This Amendment may be executed in any number of counterparts, each of
which shall be an original and all of which shall constitute one agreement.
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IN WITNESS WHEREOF, each Loan Party has read this entire Amendment, and has caused its
authorized representatives to execute this Amendment and has caused its corporate seal, if any, to
be affixed hereto as of the date first written above.
| IBM BELGIUM FINANCIAL SERVICES S.A. | SUPPLIERS DISTRIBUTORS S.A. | |||||||||
By:
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By: | |||||||||
Print Name:
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Print Name: | |||||||||
Title:
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Title: | |||||||||
| BUSINESS SUPPLIES DISTRIBUTORS EUROPE BV | PFS WEB B.V. SPRL | |||||||||
By:
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By: | |||||||||
Print Name:
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Print Name: | |||||||||
Title:
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Title: | |||||||||
| The following parties agree to Section 6 as applicable to them. | ||||||||||
| SUPPLIES DISTRIBUTORS, INC. | PRIORITY FULFILLMENT SERVICES, INC. | |||||||||
By:
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By: | |||||||||
Print Name:
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Print Name: | |||||||||
Title:
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Title: | |||||||||
| BUSINESS SUPPLIES DISTRIBUTORS HOLDINGS, LLC | ||||||||||
By: |
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Print Name: |
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Title: |
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