EXHIBIT 10.28
IBM CREDIT CORPORATION
AMENDED AND RESTATED
NOTES PAYABLE SUBORDINATION AGREEMENT
IBM CREDIT CORPORATION
0000 Xxxxxxxxx Xxxxxxx, Xxxxx Xxxxx
Xxx Xxxxx, XX 00000
Ladies and/or Gentlemen:
Supplies Distributors, Inc. (formerly BSD Acquisition Corp.), with its
principal place of business at 000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx, XX 00000
("SDI"), is/may become further indebted to Priority Fulfillment Services, Inc.
("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 to enter into a financing agreement 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 eight
million dollars ($8,000,000), 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 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.
This Agreement amends and restates the Amended and Restated Notes Payable
Subordination Agreement dated March 29, 2002 among the parties hereto.
Dated .
----------------------
PRIORITY FULFILLMENT SERVICES, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: CFO
000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx, XX 00000
To: IBM Credit Corporation
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 CORPORATION
By:
----------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Manager, North America Commercial Financing
ACKNOWLEDGMENT OF SUBORDINATION
-------------------------- )
)SS
-------------------------- )
On the ___th day of November, 2002, 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:
-------------, -----
