Exhibit 10.1
SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
     THIS SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is
dated as of January 6, 2009 (the “Amendment Date”), by and between WACHOVIA
BANK, NATIONAL ASSOCIATION (formerly known as Congress Financial Corporation
(Southwest), a Texas corporation) (“Lender”), and SUPPLIES DISTRIBUTORS, INC., a
Delaware corporation (“Borrower”).
RECITALS
     WHEREAS, Borrower and Lender are parties to that certain Loan and Security
Agreement dated as of March 29, 2002, as amended by each of the following (as so
amended, the “Loan Agreement”): (a) the First Amendment to Loan and Security
Agreement dated as of April 20, 2004; (b) the Second Amendment to Loan and
Security Agreement dated as of December 21, 2004; (c) the Third Amendment to
Loan and Security Agreement dated as of June 24, 2005; (d) the Fourth Amendment
to the Loan and Security Agreement dated as of April 17, 2006; and (e) the Fifth
Amendment to the Loan and Security Agreement dated as of March 28, 2007.
     WHEREAS, Borrower and Lender desire to amend the Loan Agreement in the
manner provided below.
     NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, do hereby amend the Loan Agreement as follows.
AGREEMENT
ARTICLE I
DEFINITIONS
     1.01 Capitalized terms used in this Amendment, to the extent not otherwise
defined herein, shall have the same meaning as in the Loan Agreement, as amended
by this Amendment.
ARTICLE II
AMENDMENTS TO THE LOAN AGREEMENT
     Effective as of the Amendment Date, the Loan Agreement is hereby amended
and supplemented as follows:
     2.01 Amendment to definition of “Interest Rate”. Clause (a) of the
definition of “Interest Rate” contained in Section 1.1 of the Loan Agreement
shall be deleted in its entirety and the following new clause (a) shall be
substituted therefor:
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     “‘Interest Rate’ shall mean,
     (a) Subject to clause (b) of this definition below:
     (i) as to Prime Rate Loans, a rate per annum equal to the greater of
(x) three percent (3.00%) or (y) sum of the “Applicable Prime Rate Margin” if
the average Excess Availability for the immediately preceding four (4) fiscal
quarters for the Borrower is at or within the amounts indicated for such
percentage (set forth below), plus the Prime Rate,
     (ii) as to Eurodollar Rate Loans, a rate per annum equal to the greater of
(x) three percent (3.00%) or (y) the sum of the corresponding “Applicable
Eurodollar Rate Margin” if the average Excess Availability for the immediately
preceding four (4) fiscal quarters is at or within the amounts indicated for
such percentage (set forth below), plus the Adjusted Eurodollar Rate (in each
case, based on the Eurodollar Rate applicable for the Interest Period selected
by Borrower, as in effect three (3) Business Days after the date of receipt by
Lender of the request of Borrower for such Eurodollar Rate Loans in accordance
with the terms hereof, whether such rate is higher or lower than any rate
previously quoted to Borrower).

                                              Applicable             Applicable
Prime   Eurodollar Pricing Level   Excess Availability   Rate Margin   Rate
Margin   I    
$3,000,001 or more
    0.25 %     2.50 % II  
$1,000,000 to
                       
$3,000,000
    0.50 %     2.75 % III  
less than $1,000,000
    0.75 %     3.00 %

Any increase or decrease in the Interest Rate resulting from a change in average
Excess Availability for the immediately preceding four (4) fiscal quarters shall
become effective as of the first Business Day immediately following the end of a
fiscal quarter of Borrower; provided, however, that if average Excess
Availability for the immediately preceding four (4) fiscal quarters cannot be
determined, Pricing Level III shall apply as of the first Business Day
immediately following the end of a fiscal quarter of Borrower until such time as
average Excess Availability is determined. In addition, at all times (i) either
(A) during the period on and after the date of termination or non-renewal hereof
until such time as all Obligations are indefeasibly paid and satisfied in full
in immediately available funds, or (B) during the period from and after the date
of the occurrence of any Event of Default, and for so long as such Event of
Default is continuing as
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determined by Lender and (ii) when the Revolving Loans are outstanding in excess
of the amounts available to Borrower under Section 2 (whether or not such
excess(es) arise or are made with or without Lender’s knowledge or consent and
whether made before or after an Event of Default), Pricing Level III shall
apply.”
     2.02 Amendment to Section 3.3. Section 3.3 of the Loan Agreement shall be
deleted in its entirety and the following shall be substituted therefor:
     “Servicing Fee. Borrower shall pay to Lender quarterly, a servicing fee in
an amount equal to $1,500 in respect of Lender’s services for each fiscal
quarter (or part thereof) while the Loan Agreement remains in effect and for so
long thereafter as any of the Obligations are outstanding, which fee shall be
fully earned as of and payable in advance on the first day of every fiscal
quarter hereafter.”
     2.03 Amendment to Section 3.4. Section 3.4 of the Loan Agreement shall be
deleted in its entirety and the following shall be substituted therefor:
     “Unused Line Fee. Borrower shall pay to Lender monthly an unused line fee
at a rate equal to three-eighths of one percent (0.375%) per annum calculated
upon the amount by which $17,500,000 exceeds the average daily principal balance
of the outstanding Revolving Loans during the immediately preceding month (or
part thereof) while this Agreement is in effect and for so long thereafter as
any of the Obligations are outstanding, which fee shall be payable on the first
day of each month in arrears.”
     2.04 Amendment to Section 9.9. The amount “$5,000,000” contained in Section
9.9(g) of the Loan Agreement shall be deleted and the amount “$4,250,000” shall
be substituted therefor.
     2.05 Amendment to Section 9.11(c). Subsection (c) of Section 9.11 shall be
deleted in its entirety and the following new subsection (c) shall be
substituted therefor:
“(c) the aggregate amount of all such dividends does not exceed (i) $1,500,000
per year, plus (ii) an amount equal to any cash dividends received by Borrower
from Business Supplies Distributors Europe BV, plus (iii) an amount equal to any
cash dividends received by Borrower from Supplies Distributors SA, plus (iv) an
amount equal to any cash dividends received by Borrower from Supplies Canada.”
     2.06 Amendment to Section 9.16(f). The amount “$850.00” contained in
Section 9.16(f) of the Loan Agreement shall be deleted and the amount “$1,000”
shall be substituted therefor.
     2.07 Amendment to Section 12.1. Amendment to Section 12.1(a)(i) of the Loan
Agreement. Effective as of the date hereof, Section 12.1(a)(i) of the Loan
Agreement is hereby amended and restated in its entirety as follows:
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     “(i) March 29, 2011, or”
ARTICLE III.
NO WAIVER
     3.01 No Waiver. Nothing contained in this Amendment shall be construed as a
waiver by Lender of any covenant or provision of the Loan Agreement, the other
documents and agreements relating hereto or thereto (hereinafter individually
referred to as a “Loan Document” and collectively referred to as the “Loan
Documents”), this Amendment, or of any other contract or instrument between
Borrower and Lender, and the failure of Lender at any time or times hereafter to
require strict performance by Borrower of any provision thereof shall not waive,
affect or diminish any right of Lender to thereafter demand strict compliance
therewith. Lender hereby reserves all rights granted under the Loan Agreement,
the other Loan Documents, this Amendment and any other contract or instrument
between Borrower and Lender.
ARTICLE IV.
CONDITIONS PRECEDENT
     4.01 Conditions to Effectiveness. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent, in a manner
satisfactory to Lender, unless specifically waived in writing by Lender:
     (a) Lender shall have received a closing fee the amount of $20,000, which
shall be fully earned and payable on the Amendment Date.
     (b) Lender shall have received, in form and substance satisfactory to
Lender in its sole discretion, (i) this Amendment, duly executed by Borrower and
each of the attached Consent, Ratification and Releases duly executed by the
Guarantors, and (ii)  such additional documents, instruments and information as
Lender or its legal counsel may request;
     (c) The representations and warranties contained herein, in the Loan
Agreement, as amended hereby, and/or in the other Loan Documents shall be true
and correct as of the date hereof as if made on the date hereof;
     (d) No default shall have occurred under the Loan Agreement and be
continuing and no default shall exist under the Loan Agreement unless such
default has been specifically waived in writing by Lender; and
     (e) All corporate proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments and other legal
matters incident thereto shall be satisfactory to Lender and its legal counsel,
K&L Gates LLP.
ARTICLE V.
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
     5.01 Ratifications. The terms and provisions set forth in this Amendment
shall
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modify and supersede all inconsistent terms and provisions set forth in the Loan
Agreement and except as expressly modified and superseded by this Amendment, the
terms and provisions of the Loan Agreement are ratified and confirmed and shall
continue in full force and effect. The Borrower and Lender agree that the Loan
Agreement, as amended hereby, shall continue to be legal, valid, binding, and
enforceable in accordance with their respective terms.
     5.02 Representations and Warranties. Borrower hereby represents and
warrants to Lender that (i) the execution, delivery and performance of this
Amendment and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of Borrower and will not violate the Articles of Incorporation or
Bylaws of Borrower, (ii) the representations and warranties contained in the
Loan Agreement, as amended hereby, and any other Loan Document are true and
correct on and as of the date hereof as though made on and as of the date hereof
(except to the extent any such representation or warranty is by its terms
expressly limited to a certain date or dates, in which case it remains true,
accurate and correct as of such date or dates and except as otherwise disclosed
to Lender pursuant to the Loan Documents prior to the date hereof),
(iii) Borrower is in full compliance with all covenants and agreements contained
in the Loan Agreement, as amended hereby, and (iv) Borrower has not amended its
Articles of Incorporation or Bylaws since the Closing Date of the Loan
Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
     6.01 Survival of Representations and Warranties. All representations and
warranties made in the Loan Agreement or any other document or documents
relating thereto, including, without limitation, any Loan Document furnished in
connection with this Amendment, shall survive the execution and delivery of this
Amendment and the other Loan Documents, and no investigation by Lender or any
closing shall affect the representations and warranties or the right of Lender
to rely upon them.
     6.02 Reference to Loan Agreement. Each of the Loan Documents, including the
Loan Agreement and any and all other agreements, documents or instruments now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to the
terms of the Loan Agreement as amended hereby, are hereby amended so that any
reference in such Loan Documents to the Loan Agreement shall mean a reference to
the Loan Agreement as amended hereby.
     6.03 Expenses of Lender. As provided in the Loan Agreement, Borrower agrees
to pay on demand all reasonable costs and expenses incurred by Lender in
connection with the preparation, negotiation and execution of this Amendment and
the other Loan Documents executed pursuant hereto and any and all amendments,
modifications, and supplements thereto, including without limitation the
reasonable costs and fees of Lender’s legal counsel, and all reasonable costs
and expenses incurred by Lender in connection with the enforcement or
preservation of any rights under the Loan Agreement, as amended hereby, or any
other Loan Document, including without limitation the reasonable costs and fees
of Lender’s legal counsel.
     6.04 Severability. Any provision of this Amendment held by a court of
competent
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jurisdiction to be invalid or unenforceable shall not impair or invalidate the
remainder of this Amendment and the effect thereof shall be confined to the
provision so held to be invalid or unenforceable. Furthermore, in lieu of each
such invalid or unenforceable provision there shall be added automatically as a
part of this Amendment a valid and enforceable provision that comes closest to
expressing the intention of such invalid or unenforceable provision.
     6.05 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN
DALLAS, TEXAS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF TEXAS.
     6.06 Successors and Assigns. This Amendment is binding upon and shall inure
to the benefit of Lender and Borrower and their respective successors and
assigns, except Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.
     6.07 Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
     6.08 Effect of Waiver. No consent or waiver, express or implied, by Lender
to or for any breach of or deviation from any covenant or condition of the Loan
Agreement shall be deemed a consent or waiver to or of any other breach of the
same or any other covenant, condition or duty.
     6.09 Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
     6.10 NO ORAL AGREEMENTS. THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
     6.11 RELEASE. BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE “OBLIGATIONS” OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF
ANY KIND OR NATURE FROM LENDER. BORROWER HEREBY VOLUNTARILY AND KNOWINGLY
RELEASES AND FOREVER DISCHARGES LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES,
SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF
ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR
CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE
THE DATE
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THIS AMENDMENT IS EXECUTED, WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE AGAINST
LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND
IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION
OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY “LOANS”, INCLUDING,
WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING
OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE
EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN AGREEMENT OR OTHER
AGREEMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
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     IN WITNESS WHEREOF, this Amendment has been duly executed by Borrower and
Lender to be effective as of the date first above written.

                  LENDER:   BORROWER:    
 
                WACHOVIA BANK, NATIONAL
ASSOCIATION   SUPPLIES DISTRIBUTORS, INC.,    
 
               
By:
      By:        
Name:
 
 
  Name:  
 
   
Title:
 
 
  Title:  
 
   
 
 
 
     
 
   
 
                Address:   Chief Executive Office:    
 
                5001 LBJ Freeway, Suite 1050   500 North Central Expressway, 5th
Floor     Dallas, Texas 75244   Plano, Texas 75074    

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CONSENT, RATIFICATION AND RELEASE
     Each of the undersigned hereby consents to the terms of the within and
foregoing Amendment, confirms and ratifies the terms of that certain Secured
Guarantee dated March 29, 2002 and that certain General Security Agreement dated
March 29, 2002 each as amended from time to time and as executed by the
undersigned for the benefit of Lender (the “Guaranty Documents”), and
acknowledges that the Guaranty Documents are in full force and effect and
ratifies the same, that the undersigned has no defense, counterclaim, set-off or
any other claim to diminish the undersigned’s liability under such documents,
that the undersigned’s consent is not required to the effectiveness of the
within and foregoing Amendment, and that no consent by the undersigned is
required for the effectiveness of any future amendment, modification,
forbearance or other action with respect to the Obligations, the Collateral, or
any of the other Loan Documents. THE UNDERSIGNED HEREBY VOLUNTARILY AND
KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER, ITS PREDECESSORS, AGENTS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS,
CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR
UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED,
CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART
ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH THE UNDERSIGNED MAY NOW
OR HEREAFTER HAVE AGAINST LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES,
SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS
ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND
ARISING FROM ANY “LOANS”, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR,
CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE
HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER
THE LOAN AGREEMENT OR OTHER AGREEMENTS, AND NEGOTIATION FOR AND EXECUTION OF
THIS AMENDMENT.

                  PRIORITY FULFILLMENT SERVICES, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   
 
                BUSINESS SUPPLIES DISTRIBUTORS HOLDINGS, LLC    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   

Consent, Ratification and Release attached to Sixth Amendment to Loan and
Security Agreement

 

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CONSENT, RATIFICATION AND RELEASE
     The undersigned hereby consents to the terms of the within and foregoing
Amendment, confirms and ratifies the terms of that certain Guarantee dated
March 29, 2002 as amended from time to time and as executed by the undersigned
for the benefit of Lender (the “Guaranty Documents”), and acknowledges that the
Guaranty Documents are in full force and effect and ratifies the same, that the
undersigned has no defense, counterclaim, set-off or any other claim to diminish
the undersigned’s liability under such documents, that the undersigned’s consent
is not required to the effectiveness of the within and foregoing Amendment, and
that no consent by the undersigned is required for the effectiveness of any
future amendment, modification, forbearance or other action with respect to the
Obligations, the Collateral, or any of the other Loan Documents. THE UNDERSIGNED
HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER, ITS
PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE
CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND
LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,
SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED, WHICH THE UNDERSIGNED MAY NOW OR HEREAFTER HAVE AGAINST LENDER, ITS
PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND
IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION
OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY “LOANS”, INCLUDING,
WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING
OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE
EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN AGREEMENT OR OTHER
AGREEMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.

                  PFSWEB, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   

Consent, Ratification and Release attached to Sixth Amendment to Loan and
Security Agreement