Exhibit 10.01
IBM Credit LLC
FOURTH AMENDED AND RESTATED
NOTES PAYABLE SUBORDINATION AGREEMENT
IBM CREDIT LLC
North Castle Drive
Armonk, NY 10504
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 500 North Central Expressway, Piano, TX 75074 (“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, sue 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

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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:
 
  Thomas J. Madden    
 
  Title: CFO    
 
    500 North Central Expressway    
 
    Plano, TX 75074    

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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:   Joseph Farrell    
 
     
 
   
 
  Title:   President / CEO    

          ACCEPTED:    
 
        IBM CREDIT LLC    
 
       
By:
       
 
 
 
   
Name:
  Thomas Harahan    
 
 
 
   
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:
   
                                         ,                     
   

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