Notes Payable Subordination Agreement [Amended and Restated] (2003)Full Document 

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                              AMENDED AND RESTATED
                      NOTES PAYABLE SUBORDINATION AGREEMENT

IBM CREDIT CORPORATION
4000 Executive Parkway, Third Floor
San Ramon, CA 94583

Ladies and/or Gentlemen:

    Supplies Distributors, Inc. (formerly BSD Acquisition Corp.), with its
principal place of business at 500 North Central Expressway, Plano, TX 75074
("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, sue for, take or receive payment or security for all or any
part of the Secondary Obligations until and unless all of the Primary

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