exv10w1






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


 









 








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