EXECUTION COPY
$600,000,000
AMENDED AND RESTATED FIVE-YEAR CREDIT AGREEMENT
AMONG
ARROW ELECTRONICS, INC.,
THE SUBSIDIARY BORROWERS
THE SEVERAL BANKS
FROM TIME TO TIME PARTIES HERETO,
BANK OF AMERICA, N.A.,
THE BANK OF NOVA SCOTIA,
BNP PARIBAS AND
WACHOVIA BANK NATIONAL ASSOCIATION
AS SYNDICATION AGENTS
AND
JPMORGAN CHASE BANK, N.A.,
AS ADMINISTRATIVE AGENT
--------------------------
X.X. XXXXXX SECURITIES INC.,
AS ARRANGER
Dated as of June 13, 2005
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS........................................................................................... 1
1.1 Defined Terms....................................................................................... 1
1.2 Other Definitional Provisions....................................................................... 23
1.3 Accounting Determinations........................................................................... 23
SECTION 2. THE COMMITTED RATE LOANS.............................................................................. 24
2.1 Committed Rate Loans................................................................................ 24
2.2 Procedure for Committed Rate Loan Borrowing......................................................... 24
2.3 Repayment of Committed Rate Loans; Evidence of Debt................................................. 25
2.4 Termination or Reduction of Commitments............................................................. 25
2.5 Optional Prepayments................................................................................ 25
2.6 Conversion and Continuation Options................................................................. 26
2.7 Minimum Amounts of Tranches......................................................................... 26
2.8 Interest Rates and Payment Dates for Committed Rate Loans........................................... 26
2.9 Inability to Determine Interest Rate................................................................ 27
2.10 Commitment Increases............................................................................... 27
2.11 Refunding of Committed Rate Loans Denominated in Available Foreign Currencies...................... 29
2.12 Certain Borrowings of Committed Rate Loans and Refunding of Loans.................................. 30
SECTION 3. THE COMPETITIVE ADVANCE LOANS......................................................................... 32
3.1 Competitive Advance Loans........................................................................... 32
3.2 Procedure for Competitive Advance Loan Borrowing.................................................... 32
3.3 Repayment of Competitive Advance Loans; Evidence of Debt............................................ 33
3.4 Prepayments......................................................................................... 34
SECTION 4. THE SWING LINE LOANS.................................................................................. 34
4.1 Swing Line Loans.................................................................................... 34
4.2 Procedure for Swing Line Borrowing.................................................................. 34
4.3 Repayment of Swing Line Loans; Evidence of Debt..................................................... 35
4.4 Allocating Swing Line Loans; Swing Line Loan Participations......................................... 35
SECTION 5. THE LETTERS OF CREDIT................................................................................. 37
5.1 L/C Commitment...................................................................................... 37
5.2 Procedure for Issuance of Letters of Credit under this Agreement.................................... 38
5.3 Fees, Commissions and Other Charges................................................................. 38
5.4 L/C Participations.................................................................................. 39
5.5 Reimbursement Obligation of the Specified Borrowers................................................. 39
5.6 Obligations Absolute................................................................................ 40
5.7 Letter of Credit Payments........................................................................... 41
5.8 Application......................................................................................... 41
SECTION 6. LOCAL CURRENCY FACILITIES............................................................................. 41
-i-
6.1 Terms of Local Currency Facilities.................................................................. 41
6.2 Reporting of Local Currency Outstandings............................................................ 43
6.3 Refunding of Local Currency Loans................................................................... 43
SECTION 7. CERTAIN PROVISIONS APPLICABLE TO THE LOANS AND LETTERS OF CREDIT..................................... 44
7.1 Facility Fee; Utilization Fee; Other Fees; Other Payments........................................... 44
7.2 Computation of Interest and Fees.................................................................... 45
7.3 Pro Rata Treatment and Payments..................................................................... 45
7.4 Illegality.......................................................................................... 46
7.5 Requirements of Law................................................................................. 46
7.6 Taxes............................................................................................... 49
7.7 Company's Options upon Claims for Increased Costs and Taxes......................................... 51
7.8 Break Funding Payments.............................................................................. 52
7.9 Determinations...................................................................................... 52
7.10 Change of Lending Office........................................................................... 53
7.11 Company Controls on Exposure; Calculation of Exposure; Prepayment if Exposure exceeds
Commitments....................................................................................... 53
SECTION 8. REPRESENTATIONS AND WARRANTIES........................................................................ 54
8.1 Financial Condition................................................................................. 54
8.2 No Change........................................................................................... 55
8.3 Corporate Existence; Compliance with Law............................................................ 55
8.4 Corporate Power; Authorization; Enforceable Obligations............................................. 55
8.5 No Legal Bar........................................................................................ 55
8.6 No Material Litigation.............................................................................. 56
8.7 No Default.......................................................................................... 56
8.8 Ownership of Property; Liens........................................................................ 56
8.9 Intellectual Property............................................................................... 56
8.10 Local Currency Facilities.......................................................................... 56
8.11 Taxes.............................................................................................. 56
8.12 Federal Regulations................................................................................ 57
8.13 ERISA.............................................................................................. 57
8.14 Investment Company Act; Other Regulations.......................................................... 58
8.15 Subsidiaries....................................................................................... 58
8.16 Accuracy and Completeness of Information........................................................... 58
8.17 Purpose of Loans; Commitments...................................................................... 58
8.18 Environmental Matters.............................................................................. 59
SECTION 9. CONDITIONS PRECEDENT.................................................................................. 60
9.1 Conditions to Closing Date.......................................................................... 60
9.2 Conditions to Each Extension of Credit.............................................................. 61
SECTION 10. AFFIRMATIVE COVENANTS................................................................................ 62
10.1 Financial Statements............................................................................... 62
10.2 Certificates; Other Information.................................................................... 64
10.3 Payment of Obligations............................................................................. 64
-ii-
10.4 Conduct of Business and Maintenance of Existence................................................... 65
10.5 Maintenance of Property; Insurance................................................................. 65
10.6 Inspection of Property; Books and Records; Discussions............................................. 65
10.7 Notices............................................................................................ 65
10.8 Environmental Laws................................................................................. 66
10.9 Additional Subsidiary Guarantees................................................................... 66
10.10 Foreign Subsidiary Borrowers...................................................................... 66
SECTION 11. NEGATIVE COVENANTS................................................................................... 67
11.1 Financial Condition Covenants...................................................................... 67
11.2 Limitation on Indebtedness of Subsidiaries......................................................... 68
11.3 Limitation on Liens................................................................................ 68
11.4 Limitation on Fundamental Changes.................................................................. 69
11.5 Limitations on Payments............................................................................ 70
11.6 Limitations on Acquisitions........................................................................ 70
11.7 Limitation on Negative Pledge Clauses.............................................................. 71
11.8 Limitation on Restrictions on Subsidiary Distributions............................................. 71
SECTION 12. EVENTS OF DEFAULT.................................................................................... 71
SECTION 13. THE ADMINISTRATIVE AGENT; THE SYNDICATION AGENTS; THE ARRANGER....................................... 75
13.1 Appointment........................................................................................ 75
13.2 Delegation of Duties............................................................................... 75
13.3 Exculpatory Provisions............................................................................. 75
13.4 Reliance by Administrative Agent................................................................... 75
13.5 Notice of Default.................................................................................. 76
13.6 Non-Reliance on Administrative Agent and Other Banks............................................... 76
13.7 Indemnification.................................................................................... 77
13.8 Administrative Agent in Its Individual Capacity.................................................... 77
13.9 Successor Administrative Agent..................................................................... 77
13.10 The Arranger and Syndication Agents............................................................... 78
SECTION 14. MISCELLANEOUS........................................................................................ 78
14.1 Amendments and Waivers............................................................................. 78
14.2 Notices............................................................................................ 80
14.3 No Waiver; Cumulative Remedies..................................................................... 81
14.4 Survival of Representations and Warranties......................................................... 81
14.5 Payment of Expenses and Taxes...................................................................... 82
14.6 Successors and Assigns; Participations and Assignments............................................. 82
14.7 Adjustments; Set-off............................................................................... 85
14.8 Power of Attorney.................................................................................. 86
14.9 Judgment........................................................................................... 86
14.10 Counterparts...................................................................................... 87
14.11 Severability...................................................................................... 87
14.12 Integration....................................................................................... 87
14.13 GOVERNING LAW..................................................................................... 87
-iii-
14.14 Submission To Jurisdiction; Waivers............................................................... 88
14.15 Acknowledgements.................................................................................. 88
14.16 WAIVERS OF JURY TRIAL............................................................................. 89
14.17 USA Patriot Act................................................................................... 89
SCHEDULES
I - Banks and Commitments
II - Subsidiary Borrowers
III - Certain Information Concerning Swing Line
Loans and Letters of Credit
IV - Administrative Schedule
1.1 - Existing Joint Ventures
5.1 - Existing Letters of Credit
8.10 - Outstanding Local Currency Loans
8.13 - Excluded ERISA Arrangements
8.15 - Subsidiaries
8.18 - Environmental Matters
11.2 - Existing Indebtedness
12(i) - Material Litigation
EXHIBITS
Exhibit A - Form of Joinder Agreement
Exhibit B - Form of Schedule Amendment
Exhibit C - Form of Local Currency Facility Addendum
Exhibit D - [Reserved]
Exhibit E - Form of Borrowing Certificate
Exhibit F-1 - Form of Company Guarantee
Exhibit F-2 - Form of Subsidiary Guarantee
Exhibit G-1 - Form of Opinion of Milbank, Tweed, Xxxxxx & XxXxxx LLP
Exhibit G-2 - Form of Opinion of Xxxxx X. Xxxxx
Exhibit G-3 - Opinions Relating to Foreign Subsidiary Borrowers
Exhibit H - Form of Certificate Pursuant to Subsection 10.2
Exhibit I - Form of Assignment and Acceptance
Exhibit J - [Reserved]
Exhibit K - Form of New Bank Supplement
Exhibit L - Form of Commitment Increase Supplement
-iv-
AMENDED AND RESTATED FIVE YEAR CREDIT AGREEMENT, dated as of June
13, 2005, among:
(i) ARROW ELECTRONICS, INC., a New York corporation (the
"Company");
(ii) the SUBSIDIARY BORROWERS (as hereinafter defined);
(iii) the several banks and other financial institutions from
time to time parties to this Agreement (the "Banks");
(iv) BANK OF AMERICA, N.A., THE BANK OF NOVA SCOTIA, BNP
PARIBAS AND WACHOVIA BANK NATIONAL ASSOCIATION, as syndication
agents for the Banks hereunder (in such capacity, the "Syndication
Agents"); and
(v) JPMORGAN CHASE BANK, N.A., as administrative agent for the
Banks hereunder (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Company has requested the Banks to make available a
five year revolving credit facility that amends and restates the Amended and
Restated Credit Agreement, dated as of December 18, 2003, among the Company,
certain of its subsidiaries, certain financial institutions, JPMorgan Chase
Bank, N.A. (f/k/a JPMorgan Chase Bank) as administrative agent, and others (as
in effect on the date hereof, the "Existing Credit Agreement"); and
WHEREAS, the Banks are willing to make such credit facility
available upon and subject to the terms and conditions hereafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto hereby agree that, effective as
of the Closing Date (as defined below), the Existing Credit Agreement shall be
amended and restated in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/100 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus -1/2 of
1%. For purposes hereof: "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by JPMorgan Chase Bank,
2005 Arrow Electronics Credit Agreement
2
N.A. as its prime rate in effect at its principal office in New York City
(the Prime Rate not being intended to be the lowest rate of interest
charged by JPMorgan Chase Bank, N.A. in connection with extensions of
credit to debtors); "Base CD Rate" shall mean the sum of (a) the product
of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the CD
Reserve Percentage and (b) the CD Assessment Rate; and "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone line
of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or, if
such rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New
York City received at approximately 10:00 A.M., New York City time, on
such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by JPMorgan Chase Bank, N.A. from three New York
City negotiable certificate of deposit dealers of recognized standing
selected by it. Any change in the ABR due to a change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate
shall be effective as of the opening of business on the effective day of
such change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"ABR Loans": Loans denominated in Dollars the rate of interest
applicable to which is based upon the ABR.
"Acceleration Date": any date on which the Commitments shall have
been terminated and/or the Loans shall have been declared immediately due
and payable pursuant to Section 12.
"Additional Local Currencies": Australian Dollars, Singapore
Dollars, New Taiwan Dollars and any other available and freely convertible
non-Dollar currency selected by the Company and approved by the
Administrative Agent in the manner described in subsection 14.1(b).
"Adjusted Consolidated EBITDA": for any fiscal period, without
duplication (a) the Consolidated Net Income of the Company and its
Subsidiaries for such period, plus (b) to the extent deducted from
earnings in determining Consolidated Net Income for such period, the sum,
in each case for such period, of income taxes, interest expense,
depreciation expense, amortization expense, including amortization of any
goodwill or other intangibles, minus (c) to the extent included in
determining Consolidated Net Income for such period, non-cash equity
earnings of unconsolidated Affiliates, plus (d) to the extent excluded in
determining Consolidated Net Income for such period, cash distributions
received by the Company from unconsolidated Affiliates plus (e) to the
extent deducted from earnings in determining Consolidated Net Income for
such period, non-cash charges due to impairments recorded in such period
in accordance with Financial Accounting Standards Board's Statement of
Financial Accounting Standards No. 142, all as determined on a
consolidated basis in accordance with GAAP plus (f)
2005 Arrow Electronics Credit Agreement
3
gains or losses related to the early extinguishment of notes, bonds or
other fixed income obligations plus (g) gains or losses due to integration
or restructuring charges to the extent disclosed in public filings;
provided that in determining Adjusted Consolidated EBITDA for any period
of four consecutive fiscal quarters during which any business is acquired
by the Company, such Adjusted Consolidated EBITDA shall be measured on a
pro forma basis to include the consolidated EBITDA of the acquired
business (determined for such business in the manner Adjusted Consolidated
EBITDA is determined for the Company, as described above in this
definition), plus identifiable, board-approved and publicly announced
acquisition-related synergies which are expected to be realized over a
twelve-month period following such acquisition.
"Administrative Agent": as defined in the preamble hereto.
"Administrative Schedule": Schedule IV to this Agreement, which
contains interest rate definitions and administrative information in
respect of each Currency and each Type of Loan.
"Affected Bank": any Bank affected by the events described in
subsection 7.4, 7.5 or 7.6, as the case may be, but only for the period
during which such Bank shall be affected by such events.
"Affiliate": as to any Person, (a) any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person or (b) any Person who is
a director or officer of the Company or any of its Subsidiaries. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (i) vote 10% or more of the securities
having ordinary voting power for the election of directors of such Person
or (ii) direct or cause the direction of the management and policies of
such Person, whether by contract or otherwise.
"Aggregate Commitments": the aggregate amount of the Commitments
hereunder.
"Aggregate Committed Outstandings": the aggregate outstanding
principal or face amount of the Committed Rate Loans, Swing Line Loans,
Letters of Credit and Local Currency Loans hereunder.
"Agreement": this Amended and Restated Five Year Credit Agreement,
as amended, supplemented or otherwise modified from time to time.
"Allocable Share": as to any Assenting Bank at any time, a fraction,
the numerator of which shall be the Commitment of such Assenting Bank then
in effect and the denominator of which shall be the aggregate of the
Commitments of all Assenting Banks then in effect.
"Applicable Margin": for each Type of Loan for any day, the rate per
annum determined based upon the Rating in effect on such date by both S&P
and Xxxxx'x set forth under the relevant column heading below opposite
such Rating:
2005 Arrow Electronics Credit Agreement
4
Applicable Margin
Rating Applicable Margin (in basis (in basis points)
Level (S&P/Xxxxx'x) points) for Eurocurrency Loans for ABR Loans
----- ---------------------------------- ------------------------------ -------------------
I Greater than or equal to BBB+/Baa1 37.5 0
II Greater than or equal to BBB/Baa2 47.5 0
III Greater than or equal to BBB-/Baa3 57.5 0
IV Greater than or equal to BB+/Ba1 80.0 0
V Less than BB+/Ba1 95.0 0
; provided that, in the event that the Ratings of S&P and Xxxxx'x do not
coincide, (i) the Applicable Margin set forth above opposite (A) the
higher of such Ratings if at least one Rating is within Level I - III or
(B) the lower of such Ratings if no Rating is within Level I - III, will
apply if the Ratings differ by only one level, (ii) the Applicable Margin
consistent with the Rating one level above the lower Rating will apply if
the ratings differ by two or more levels, and (iii), if there is no Rating
in effect, the Applicable Margin will be based on the Rating of less than
BB+/Ba1.
"Application": an application, in such form as the Issuing Bank may
specify from time to time, requesting the Issuing Bank to issue a Letter
of Credit.
"Arranger": JPMorgan Securities Inc., as sole advisor, sole lead
arranger and sole bookrunner.
"Arrow Note Documents": the collective reference to the Indenture
dated as of January 15, 1997 between the Company and The Bank of New York
(as successor to Bank of Montreal Trust Company), as Trustee, all
supplemental indentures in respect thereof, and all notes issued
thereunder and under any such supplemental indenture, as any such document
may be amended, restated, supplemented or otherwise modified and in effect
from time to time.
"Assenting Bank": as defined in subsection 7.7(a).
"Assignee": as defined in subsection 14.6(c).
"Assignment and Acceptance": each Assignment and Acceptance,
substantially in the form of Exhibit I, executed and delivered pursuant to
subsection 14.6(c).
"Available Foreign Currencies": (i) with respect to Committed Rate
Loans and Swing Line Loans, Pounds Sterling, euro, Hong Kong Dollars and
Swedish Kroner, and any other currency agreed upon by the Company, the
Administrative Agent and all of the Banks, (ii) with respect to
Competitive Advance Loans, any currency agreed upon by the
2005 Arrow Electronics Credit Agreement
5
Borrower of such Competitive Advance Loan and the Bank that makes such
Competitive Advance Loan and (iii) with respect to Letters of Credit,
Pounds Sterling and euro.
"Banks": as defined in the preamble hereto; provided, that unless
the context otherwise requires, each reference herein to the Banks shall
be deemed to include any Conduit Bank.
"Board": the Board of Governors of the Federal Reserve System or any
successor.
"Borrowers": the collective reference to the Company, the Subsidiary
Borrowers and the Local Currency Borrowers.
"Borrowing Date": any Business Day on which the Company or any
Subsidiary Borrower requests the Banks to make Loans hereunder.
"Borrowing Percentage": (a) with respect to Committed Rate Loans
denominated in Dollars to be made by any Bank at any time, the ratio
(expressed as a percentage) of the amount of such Bank's Undrawn
Commitment at such time to the aggregate amount of the Undrawn Commitments
of all the Banks at such time; provided, that in determining any Bank's
Undrawn Commitment for purpose of determining such Bank's Borrowing
Percentage of any such Committed Rate Loans whose proceeds will be
simultaneously applied to repay Swing Line Loans or Local Currency Loans
or to pay Reimbursement Obligations, such Bank's Commitment Percentage of
the amount of such Swing Line Loans and Reimbursement Obligations, and the
amount of such Local Currency Loans owing to such Bank, will not be
considered Committed Exposure of such Bank (such Borrowing Percentage of
each Bank at any time to be calculated by the Administrative Agent on the
basis of its most recent calculations of the Undrawn Commitments of the
Banks) and (b) with respect to Committed Rate Loans denominated in any
Available Foreign Currency to be made by any Bank at any time, a
percentage equal to such Bank's Foreign Currency Commitment Percentage in
the Currency of such Committed Rate Loans.
"Business": as defined in subsection 8.18(b).
"Business Day": (a) when such term is used in respect of any amount
denominated or to be denominated in (i) any Available Foreign Currency, a
London Banking Day which is also a day other than a Saturday or Sunday on
which banks are open for general banking business in (x) the city which is
the principal financial center of the country of issuance of such
Available Foreign Currency, (y) in the case of euros only, Frankfurt,
Germany (or such other principal financial center as the Administrative
Agent may from time to time nominate for this purpose) and (z) New York
City and (ii) Dollars, a London Banking Day which is also a day other than
a Saturday or Sunday on which banks are open for general banking business
in New York City and (b) when such term is used for the purpose of
determining the date on which the Eurocurrency Rate is determined under
this Agreement for any Loan denominated in euro for any Interest
2005 Arrow Electronics Credit Agreement
6
Period therefor and for purposes of determining the first and last day of
any Interest Period, references in this Agreement to Business Days shall
be deemed to be references to Target Operating Days.
"CD Assessment Rate": for any day as applied to any ABR Loan, the
annual assessment rate in effect on such day that is payable by a member
of the Bank Insurance Fund maintained by the Federal Deposit Insurance
Corporation (the "FDIC") classified as well-capitalized and within
supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. Section 327.4 (or any
successor provision) to the FDIC (or any successor) for the FDIC's (or
such successor's) insuring time deposits at offices of such institution in
the United States.
"CD Reserve Percentage": for any day as applied to any ABR Loan,
that percentage (expressed as a decimal) which is in effect on such day,
as prescribed by the Board, for determining the maximum reserve
requirement for a Depositary Institution (as defined in Regulation D of
the Board as in effect from time to time) in respect of new non-personal
time deposits in Dollars having a maturity of 30 days or more.
"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
Person under GAAP; and, for the purposes of this Agreement, the amount of
such obligations at any time shall be the capitalized amount thereof at
such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, options or rights to purchase any
of the foregoing.
"Change in Control": one or more of the following events:
(a) less than a majority of the members of the Company's board
of directors shall be persons who either (i) were serving as
directors on the Closing Date or (ii) were nominated as directors
and approved by the vote of the majority of the directors who are
directors referred to in clause (i) above or this clause (ii); or
(b) the stockholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company; or
(c) a Person or group of Persons acting in concert (other than
the direct or indirect beneficial owners of the Capital Stock of the
Company as of the Closing Date) shall, as a result of a tender or
exchange offer, open market purchases, privately negotiated
purchases or otherwise, have become the direct or indirect
beneficial owner (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended from time to time) of
securities of the Company representing 40% or more of the combined
voting power of the
2005 Arrow Electronics Credit Agreement
7
outstanding voting securities for the election of directors or shall have
the right to elect a majority of the board of directors of the Company.
"Closing Date": the date on which the conditions precedent set forth in
subsection 9.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Commitment": as to any Bank, the obligation of such Bank to make and/or
acquire participating interests in Committed Rate Loans or Swing Line Loans
hereunder and/or under Local Currency Facilities and issue and/or acquire
participating interests in Letters of Credit hereunder in an aggregate Dollar
Equivalent Amount at any one time outstanding not to exceed the amount set forth
opposite such Bank's name on Schedule I under the caption "Dollar Commitment
Amount", as such amount may be changed from time to time in accordance with the
provisions of this Agreement.
"Commitment Increase Notice": as defined in subsection 2.10(a).
"Commitment Increase Supplement": as defined in subsection 2.10(c).
"Commitment Percentage": as to any Bank at any time, the percentage which
such Bank's Commitment then constitutes of the aggregate Commitments (or, at any
time after the Commitments shall have expired or terminated, the percentage
which the amount of such Bank's Exposure at such time constitutes of the
aggregate amount of the Exposure of all the Banks at such time).
"Commitment Period": the period from and including the Closing Date to and
including the earlier of (i) the Termination Date and, (ii) such other date on
which the Commitments shall terminate as provided herein.
"Committed Exposure": as to any Bank, the sum of (a) the aggregate Dollar
Equivalent Amount of the principal amount of all outstanding Committed Rate
Loans and Local Currency Loans made by such Bank or its Local Currency Bank
affiliates, agencies or branches plus (b) such Bank's Commitment Percentage of
the aggregate Dollar Equivalent Amount of the principal or face amount of all
outstanding Swing Line Loans and L/C Obligations.
"Committed Rate Loan": as defined in subsection 2.1; a Committed Rate Loan
bearing interest based upon the ABR shall be a "Committed Rate ABR Loan", and a
Committed Rate Loan bearing interest based upon a Eurocurrency Rate shall be a
"Committed Rate Eurocurrency Loan".
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Company within the meaning of Section
4001 of ERISA or is part of a group which includes the Company and which is
treated as a single employer under Section 414 of the Code.
"Company": as defined in the preamble hereto.
2005 Arrow Electronics Credit Agreement
8
"Company Guarantee": the Guarantee of the Company, substantially in the
form of Exhibit F-1, as amended, supplemented or otherwise modified from time to
time.
"Competitive Advance Loan": as defined in subsection 3.1.
"Competitive Advance Loan Offer": with respect to any Competitive Advance
Loan Request in any Currency, an offer from a Bank in respect of such
Competitive Advance Loan Request, containing the information in respect of such
Competitive Advance Loan Offer and delivered to the Person, in the manner and by
the time specified for a Competitive Advance Loan Offer in respect of such
Currency in the Administrative Schedule.
"Competitive Advance Loan Request": with respect to any Competitive
Advance Loan in any Currency, a request from the Specified Borrower in respect
of such Loan, containing the information in respect of such Competitive Advance
Loan and delivered to the Person, in the manner and by the time specified for a
Competitive Advance Loan Request in respect of such Currency in the
Administrative Schedule.
"Conduit Bank": any special purpose corporation organized and administered
by any Bank for the purpose of making Loans and funding L/C Participant
Obligations otherwise required to be made or funded by such Bank and designated
to the Administrative Agent and the Borrower by such Bank in a written
instrument; provided, that the designation by any Bank of a Conduit Bank shall
not relieve the designating Bank of any of its obligations to fund a Loan or an
L/C Participant Obligation under this Agreement if, for any reason, its Conduit
Bank fails to fund any such Loan or L/C Participant Obligation, and the
designating Bank (and not the Conduit Bank) shall have the sole right and
responsibility to deliver all consents and waivers required or requested under
this Agreement with respect to its Conduit Bank, and provided, further, that no
Conduit Bank shall (a) be entitled to receive any greater amount pursuant to
Section 7.5, 7.6, 7.8 or 14.5 than the designating Bank would have been entitled
to receive in respect of the extensions of credit made by such Conduit Bank or
(b) be deemed to have any Commitment.
"Consolidated Cash Interest Expense": for any period, (a) the amount which
would, in conformity with GAAP, be set forth opposite the caption "interest
expense" or any like caption on a consolidated income statement of the Company
and its Subsidiaries minus (b) the amount of non-cash interest (including
interest paid by the issuance of additional securities) included in such amount;
provided that in the case of any Permitted Receivables Securitization,
"Consolidated Cash Interest Expense" shall be adjusted to include (without
duplication) an amount equal to the interest (or other fees in the nature of
interest or discount) accrued and paid or payable in cash for such period by the
special purpose entity to the Receivable Financiers under such Permitted
Receivables Securitization.
"Consolidated Interest Coverage Ratio": for any period, the ratio of (a)
Adjusted Consolidated EBITDA to (b) Consolidated Cash Interest Expense for such
period.
2005 Arrow Electronics Credit Agreement
9
"Consolidated Leverage Ratio": on any date, the ratio of (a) Consolidated
Total Debt on such date to (b) Adjusted Consolidated EBITDA for the period of
four consecutive fiscal quarters most recently ended on or prior to such date.
"Consolidated Net Income": for any fiscal period, the consolidated net
income (or loss) of the Company and its Subsidiaries after excluding all
unusual, extraordinary and non-recurring gains and after adding all unusual,
extraordinary and non-recurring losses, in all cases of the Company and its
Subsidiaries determined on a consolidated basis during the relevant period in
accordance with GAAP.
"Consolidated Total Debt": at the date of determination thereof, (i) all
Indebtedness of the Company and its Subsidiaries (excluding Indebtedness of the
Company owing to any of its Subsidiaries or Indebtedness of any Subsidiary of
the Company owing to the Company or any other Subsidiary of the Company), as
determined on a consolidated basis in accordance with GAAP plus (ii) without
duplication of amounts included in clause (i) above, an amount equal to the
aggregate unpaid amount of cash proceeds advanced by the Receivables Financiers
to the special purpose entity under any Permitted Receivables Securitization at
the date of determination.
"Contractual Obligation": as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
"Credit Documents": this Agreement, the Applications, the Subsidiary
Guarantees, the Company Guarantee and the Local Currency Facilities.
"Currencies": the collective reference to Dollars and Foreign Currencies.
"Default": any of the events specified in Section 12, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Disposition": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof; and
the terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollar Equivalent Amount": with respect to (i) the amount of any Foreign
Currency on any date, the equivalent amount in Dollars of such amount of Foreign
Currency, as determined by the Administrative Agent using the Exchange Rate and
(ii) any amount in Dollars, such amount.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary": as to any Person, a Subsidiary of such Person
organized under the laws of a State of the United States or the District of
Columbia.
2005 Arrow Electronics Credit Agreement
10
"Domestic Subsidiary Borrower": each Subsidiary of the Company listed as a
Domestic Subsidiary Borrower in Schedule II as amended from time to time in
accordance with subsection 14.1(b)(i).
"Environmental Laws": any and all applicable foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirements
of Law (including, without limitation, common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of human health
or the environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"euro": the single currency of participating member states of the European
Union.
"Eurocurrency Loan": any Loan bearing interest based upon a Eurocurrency
Rate.
"Eurocurrency Rate": in respect of Dollars and each Available Foreign
Currency, the rate determined as the Eurocurrency Rate for Dollars or such
Available Foreign Currency in the manner set forth in the Administrative
Schedule.
"European Subsidiaries": as of any date, any Subsidiary of the Company
that is domiciled in Europe.
"Event of Default": any of the events specified in Section 12, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Exchange Rate": with respect to any Foreign Currency on any date, the
rate at which such Foreign Currency may be exchanged into Dollars, as set forth
on such date on page 3750 of the Telerate screen at or about 11:00 a.m. London
time on such date. In the event that such rate does not appear on page 3750 of
the Telerate screen, the "Exchange Rate" with respect to such Foreign Currency
shall be determined by reference to such other publicly available service for
displaying exchange rates as may be agreed upon by the Administrative Agent and
the Company or, in the absence of such agreement, such "Exchange Rate" shall
instead be the Administrative Agent's spot rate of exchange in the interbank
market where its foreign currency exchange operations in respect of such Foreign
Currency are then being conducted, at or about 10:00 a.m., local time, at such
date for the purchase of Dollars with such Foreign Currency, for delivery two
Business Days later; provided, that if at the time of any such determination, no
such spot rate can reasonably be quoted, the Administrative Agent may use any
reasonable method as it deems applicable to determine such rate, and such
determination shall be conclusive absent manifest error (without prejudice to
the determination of the reasonableness of such method).
2005 Arrow Electronics Credit Agreement
11
"Existing Credit Agreement": as defined in the recitals hereof.
"Existing Joint Ventures": the Persons specified on Schedule 1.1.
"Existing Subsidiary Guarantee": the Subsidiary Guarantee executed on
February 22, 2001 by Support Net, Inc., an Indiana corporation, Gates/Arrow
Distributing, Inc., a Delaware corporation, and Mid Range Open Computing
Alliance, Inc., a Delaware corporation, as the same may be amended, supplemented
or otherwise modified from time to time.
"Exposure": at any date, (a) as to all the Banks, the aggregate Dollar
Equivalent Amount of (i) the outstanding principal amount of all Loans then
outstanding and (ii) all L/C Obligations then outstanding, (b) as to any Bank,
the aggregate Dollar Equivalent Amount of (i) the outstanding principal amount
of all Committed Rate Loans, Local Currency Loans and Competitive Advance Loans
made by such Bank or its Local Bank affiliates, branches or agencies and (ii)
such Bank's Commitment Percentage of the outstanding principal amount of all
Swing Line Loans and L/C Obligations and (c) as to any Borrower, the aggregate
Dollar Equivalent Amount of the outstanding principal amount of all Loans to
such Borrower then outstanding.
"Extensions of Credit": the collective reference to the making of any
Loans (including, without limitation, participating in any Swing Line Loans) and
the issuance of, or participation in, any Letters of Credit but excluding the
continuation or conversion of any Loan pursuant to a Notice of Conversion or a
Notice of Continuation.
"Facility Fee Rate": a rate per annum determined based upon the Rating in
effect on such date by both S&P and Xxxxx'x set forth under the relevant column
heading below opposite such Rating:
Facility Fee Rate
Level Rating(S&P/Xxxxx'x) (in basis points)
----- ---------------------------------- -----------------
I Greater than or equal to BBB+/Baa1 12.5
II Greater than or equal to BBB/Baa2 15.0
III Greater than or equal to BBB-/Baa3 17.5
IV Greater than or equal to BB+/Ba1 20.0
V Less than BB+/Ba1 30.0
; provided that, in the event that the Ratings of S&P and Xxxxx'x do not
coincide, (i) the Facility Fee Rate set forth above opposite (A) the higher of
such Ratings if at least one Rating is within Level I - III or (B) the lower of
such Ratings if no Rating is within Level I - III, will apply if the Ratings
differ by only one level, (ii) the Facility Fee Rate consistent with the Rating
one level above the lower Rating will apply if the ratings differ
2005 Arrow Electronics Credit Agreement
12
by two or more levels, and (iii), if there is no Rating in effect, the Facility
Fee Rate will be based on the Rating of less than BB+/Ba1.
"Federal Funds Effective Rate": for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by JPMorgan Chase Bank,
N.A. from three federal funds brokers of recognized standing selected by it.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Foreign Currencies": the collective reference to the Available Foreign
Currencies and the Additional Local Currencies.
"Foreign Currency Commitment": as to any Bank and any Available Foreign
Currency, the obligation of such Bank to make Committed Rate Loans hereunder
denominated in such Available Foreign Currency in an aggregate principal amount
at any one time outstanding not to exceed the amount set forth opposite such
Bank's name on Schedule I under the caption "[Name of applicable Available
Foreign Currency] Commitment Amount", as such amount may be changed from time to
time in accordance with the provisions of this Agreement.
"Foreign Currency Commitment Percentage": as to any Bank and any Available
Foreign Currency at any time, the percentage which such Bank's Foreign Currency
Commitment in such Available Foreign Currency then constitutes of the aggregate
Foreign Currency Commitments of all Banks in such Available Foreign Currency.
"Foreign Currency Exposure": at any date, the aggregate Dollar Equivalent
Amount of (a) the outstanding principal amount of all Loans then outstanding
which are denominated in a currency other than Dollars and (b) all L/C
Obligations then outstanding which are denominated in a currency other than
Dollars.
"Foreign Currency Exposure Sublimit": at any date, (a) with respect to
euros, a Dollar Equivalent Amount equal to $300,000,000, (b) with respect to
Pounds Sterling, a Dollar Equivalent Amount equal to $200,000,000, (c) with
respect to Hong Kong Dollars, a Dollar Equivalent Amount equal to $100,000,000,
and (d) with respect to Swedish Kroner, a Dollar Equivalent Amount equal to
$100,000,000.
"Foreign Subsidiary": any Subsidiary that is not a Domestic Subsidiary.
"Foreign Subsidiary Borrower": each Subsidiary of the Company listed as a
Foreign Subsidiary Borrower in Schedule II as amended from time to time in
accordance with subsection 14.1(b)(i); provided that with respect to any
Subsidiary for which a Foreign Subsidiary Opinion has not previously been
delivered, if the aggregate Exposure
2005 Arrow Electronics Credit Agreement
13
of such Subsidiary owing to all Banks exceeds $20,000,000 for a period of 30
consecutive days, then, unless a Foreign Subsidiary Opinion is delivered within
30 days after the end of such period, such Subsidiary shall cease to be a
Foreign Subsidiary Borrower 30 days after the end of such period with respect to
all Exposure of such Subsidiary owing to the Banks in excess of $20,000,000.
"Foreign Subsidiary Opinion": with respect to any Foreign Subsidiary
Borrower, a legal opinion of counsel to such Foreign Subsidiary Borrower
addressed to the Administrative Agent and the Banks concluding that such Foreign
Subsidiary Borrower and the Credit Documents to which it is a party
substantially comply with the matters listed on Exhibit G-3 hereto, with such
deviations therefrom as the Administrative Agent shall consent (such consent not
to be unreasonably withheld).
"Funding Office": (i) for each Type of Committed Rate Loan and each
Currency, the Funding Office set forth in respect thereof in the Administrative
Schedule and (ii) for each Competitive Advance Loan, as agreed by the Borrower
that borrows such Competitive Advance Loan, the Bank that makes such Competitive
Advance Loan and the Administrative Agent.
"Funding Time": (i) for each Type of Committed Rate Loan and each
Currency, the Funding Time set forth in respect thereof in the Administrative
Schedule and (ii) for each Competitive Advance Loan, as agreed by the Borrower
that borrows such Competitive Advance Loan, the Bank that makes such Competitive
Advance Loan and the Administrative Agent.
"GAAP": generally accepted accounting principles in the United States of
America in effect from time to time.
"Governing Documents": as to any Person, the certificate or articles of
incorporation and by-laws or other organizational or governing documents of such
Person.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing person"), any
obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to
2005 Arrow Electronics Credit Agreement
14
maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Company in good faith.
"Guarantor": the Company or any Subsidiary in its capacity as a party to
the Company Guarantee or a Subsidiary Guarantee, as the case may be.
"Hedging Agreements": (a) Interest Rate Agreements and (b) any swap,
futures, forward or option agreements or other agreements or arrangements
designed to limit or eliminate the risk and/or exposure of a Person to
fluctuations in currency exchange rates.
"Hedging Banks": any Bank or any of its subsidiaries or affiliates which
from time to time enter into Hedging Agreements with the Company or any of its
Subsidiaries.
"Increasing Bank": as defined in subsection 2.10(c).
"Indebtedness": of any Person at any date, without duplication, (a) the
principal amount of all indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) the principal amount of any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) the portion of all obligations of such Person under
Financing Leases which must be capitalized in accordance with GAAP, (d) the
principal or stated amount of all obligations of such Person in respect of
letters of credit, banker's acceptances or similar obligations issued or created
for the account of such Person, (e) all liabilities arising under Hedging
Agreements of such Person, (f) the principal or stated amount of all Guarantee
Obligations of such Person (other than guarantees by the Company or any
Subsidiary in respect of current trade liabilities of the Company or any
Subsidiary incurred in the ordinary course of business and payable in accordance
with customary terms), and (g) the principal amount of all liabilities secured
by any Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof.
2005 Arrow Electronics Credit Agreement
15
"Insolvency": with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December, (b) as to any Committed Rate Eurocurrency
Loan having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any Committed Rate Eurocurrency Loan having an
Interest Period longer than three months, each day which is three months after
the first day of such Interest Period and the last day of such Interest Period,
(d) as to any Swing Line Loan, the last Business Day of each calendar month
during which such Swing Line Loan is outstanding, and (e) as to any Competitive
Advance Loan, the date or dates set forth in the applicable Competitive Advance
Loan Request or otherwise agreed upon by the relevant Borrower and Bank at the
time the terms of such Competitive Advance Loan are determined as provided in
subsection 3.2.
"Interest Period": with respect to any Committed Rate Eurocurrency Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurocurrency
Loan and ending one, two, three or six months thereafter, as selected by
the relevant Borrower in its Notice of Borrowing or Notice of Conversion,
as the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurocurrency Loan and
ending one, two, three or six months thereafter, as selected by the
relevant Borrower by a Notice of Continuation with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date; and
(3) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
2005 Arrow Electronics Credit Agreement
16
"Interest Rate Agreement": any interest rate protection agreement,
interest rate future, interest rate option, interest rate swap, interest rate
cap or other interest rate hedge or arrangement under which the Company is a
party or a beneficiary.
"Issuing Bank": in respect of any Currency, each Bank listed as an Issuing
Bank in Schedule III in respect of such Currency.
"Issuing Office": in respect of each Issuing Bank, the Issuing Office set
forth for such Issuing Bank in Schedule III.
"Joinder Agreement": each Joinder Agreement, substantially in the form of
Exhibit A, from time to time executed and delivered hereunder pursuant to
subsection 14.1 (b).
"L/C Commitment": the Dollar Equivalent Amount of $100,000,000.
"L/C Obligations": at any time, an amount equal to the sum of the Dollar
Equivalent Amount of (a) the aggregate then undrawn and unexpired amount of the
then outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
subsection 5.5(a).
"L/C Participant": in respect of each Letter of Credit, each Bank (other
than the Issuing Bank in respect of such Letter of Credit) in its capacity as
the holder of a participating interest in such Letter of Credit.
"Letters of Credit": as defined in subsection 5.1(b).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Financing Lease
having substantially the same economic effect as any of the foregoing).
"Liquidity": the sum of (a) cash and cash equivalents and short-term
investments convertible into cash within sixty (60) days held by the Company and
its Subsidiaries, plus (b) so long as the Company is able to satisfy the
conditions to borrowing set forth in subsection 9.2 (including, but not limited
to, compliance with the financial covenants pursuant to Section 11.1), the
aggregate amount of Undrawn Commitments, plus (c) any amount then available to
the Company or its Subsidiaries under any Permitted Receivables Securitization
or other legally committed credit facilities (provided that, in the case of this
clause (c), the Company or the applicable Subsidiary is able to satisfy all
conditions to the availability of such financing).
"Loan": any Committed Rate Loan, Competitive Advance Loan, Swing Line Loan
or Local Currency Loan.
2005 Arrow Electronics Credit Agreement
17
"Loan Parties": the Company and each Subsidiary of the Company which is a
party to a Credit Document.
"Local Currency Bank": any Bank (or, if applicable, any affiliate, branch
or agency thereof) party to a Local Currency Facility.
"Local Currency Bank Maximum Borrowing Amount": as defined in subsection
6.1(b).
"Local Currency Borrower": each Subsidiary of the Company organized under
the laws of a jurisdiction outside the United States that the Company designates
as a "Local Currency Borrower" in a Local Currency Facility Addendum.
"Local Currency Facility": any Qualified Credit Facility that the Company
designates as a "Local Currency Facility" pursuant to a Local Currency Facility
Addendum or that is set forth on Schedule 8.10.
"Local Currency Facility Addendum": a Local Currency Facility Addendum
received by the Administrative Agent, substantially in the form of Exhibit C and
conforming to the requirements of Section 6.
"Local Currency Facility Agent": with respect to each Local Currency
Facility, the Local Currency Bank acting as agent for the Local Currency Banks
party thereto.
"Local Currency Facility Maximum Borrowing Amount": as defined in
subsection 6.1(b).
"Local Currency Loan": any loan made pursuant to a Local Currency
Facility.
"London Banking Day": any day on which banks in London are open for
general banking business, including dealings in foreign currency and exchange.
"Material Adverse Effect": a material adverse effect on (a) the business,
operations, property, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries taken as a whole, (b) the ability of the Company to
perform its obligations under this Agreement or other Credit Documents or (c)
the validity or enforceability of this Agreement or any of the other Credit
Documents or the rights or remedies of the Administrative Agent or the Banks
hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any hazardous or
toxic substances, materials or wastes, defined or regulated as such in or under
any Environmental Law, including, without limitation, asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation.
"Moody's": Xxxxx'x Investors Service, Inc.
2005 Arrow Electronics Credit Agreement
18
"Multiemployer Plan": a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"New Bank": as defined in subsection 2.10(b).
"New Bank Supplement": as defined in subsection 2.10(b).
"Non-Excluded Taxes": as defined in subsection 7.6.
"Notice of Borrowing": with respect to a Committed Rate Loan of any Type
in any Currency, a notice from the Specified Borrower in respect of such Loan,
containing the information in respect of such Loan and delivered to the Person,
in the manner and by the time specified for a Notice of Borrowing in respect of
such Currency and such Type of Loan in the Administrative Schedule.
"Notice of Continuation": with respect to a Committed Rate Eurocurrency
Loan in any Currency, a notice from the Specified Borrower in respect of such
Loan, containing the information in respect of such Loan and delivered to the
Person, in the manner and by the time specified for a Notice of Continuation in
respect of such Currency in the Administrative Schedule.
"Notice of Conversion": with respect to a Committed Rate Loan in Dollars
which a Specified Borrower wishes to convert from a Eurocurrency Loan to an ABR
Loan, or from an ABR Loan to a Eurocurrency Loan, as the case may be, a notice
from such Borrower setting forth the amount of such Loan to be converted, the
date of such conversion and, in the case of conversions of ABR Loans to
Eurocurrency Loans, the length of the initial Interest Period applicable
thereto. Each Notice of Conversion shall be delivered to the Administrative
Agent at its address set forth in subsection 14.2 and shall be delivered before
12:00 Noon, New York City time, on the Business Day of the requested conversion
in the case of conversions to ABR Loans, and before 12:00 Noon, New York City
time, three Business Days before the requested conversion in the case of
conversions to Eurocurrency Loans.
"Notice of Local Currency Outstandings": with respect to each Local
Currency Facility Agent, a notice from such Local Currency Facility Agent
containing the information, delivered to the Person, in the manner and by the
time, specified for a Notice of Local Currency Outstandings in the
Administrative Schedule.
"Notice of Prepayment": with respect to prepayment of any Committed Rate
Loan of any Type in any Currency, a notice from the Specified Borrower in
respect of such Loan, containing the information in respect of such prepayment
and delivered to the Person, in the manner and by the time specified for a
Notice of Prepayment in respect of such Currency and such Type of Loan in the
Administrative Schedule.
"Notice of Swing Line Borrowing": with respect to a Swing Line Loan of any
Type in any Currency, a notice from the Specified Borrower in respect of such
Loan, containing the information in respect of such Swing Line Loan and
delivered to the
2005 Arrow Electronics Credit Agreement
19
Person, in the manner and by the time agreed by the Company and the applicable
Swing Line Bank in respect of such Currency and such Type of Loan.
"Notice of Swing Line Outstandings": with respect to each Swing Line Bank,
a notice from such Swing Line Bank containing the information, delivered to the
Person, in the manner and by the time, specified for a Notice of Swing Line
Outstandings in the Administrative Schedule.
"Notice of Swing Line Refunding": with respect to each Swing Line Bank, a
notice from such Swing Line Bank containing the information, delivered to the
Person, in the manner and by the time, specified for a Notice of Swing Line
Refunding in the Administrative Schedule.
"Objecting Bank": as defined in subsection 14.1(e).
"Offered Increase Amount": as defined in subsection 2.10(a).
"Participant": as defined in subsection 14.6(b).
"Payment Office": (i) for each Type of Committed Rate Loan and each
Currency, the Payment Office set forth in respect thereof in the Administrative
Schedule and (ii) for each Competitive Advance Loan, as agreed by the Borrower
that borrows such Competitive Advance Loan, the Bank that makes such Competitive
Advance Loan and the Administrative Agent.
"Payment Time": for each Type of Committed Rate Loan and each Currency,
the Payment Time set forth in respect thereof in the Administrative Schedule and
(ii) for each Competitive Advance Loan, as agreed by the Borrower that borrows
such Competitive Advance Loan, the Bank that makes such Competitive Advance Loan
and the Administrative Agent.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA.
"Permitted Acquisition": on any date of determination, the acquisition of
all or part of any Person or business unit in any transaction or series of
transactions by the Company or any Subsidiary.
"Permitted Joint Venture": on any date of determination, a limited-purpose
corporation, partnership, limited liability company, joint venture or other
similar legal arrangement (whether created by contract or conducted through a
separate legal entity, but excluding any Subsidiary) now or hereafter formed or
invested in by the Company or any of its Subsidiaries with another Person or
Persons in order to conduct a common venture or enterprise with such Person or
Persons.
"Permitted Receivables Securitization": any transaction involving one or
more sales, contributions or other conveyances by the Company or any Subsidiary
of any Receivables to a special purpose entity (which may be a Subsidiary or
Affiliate of the
2005 Arrow Electronics Credit Agreement
20
Company), which special purpose entity finances such sales, contributions or
other conveyances by in turn conveying an interest in such Receivables to one or
more Receivable Financiers, provided that such transaction shall not involve any
recourse to the Company or any Subsidiary (other than such special purpose
entity) for any reason other than (i) repurchases of non-eligible Receivables,
(ii) indemnification for losses (including any adjustments for dilutions), other
than credit losses related to the Receivables conveyed in such transaction and
(iii) payment of costs, fees, expenses and indemnities relating to such
transaction.
"Person": an individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is covered
by ERISA and in respect of which the Company or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pounds", "Pounds Sterling" and "Sterling": the lawful currency of the
United Kingdom.
"Properties": as defined in subsection 8.18(a).
"Qualified Credit Facility": a credit facility (a) providing for one or
more Local Currency Banks to make loans denominated in an Additional Local
Currency to a Local Currency Borrower, (b) providing for such loans to bear
interest at a rate or rates determined by the Company and such Local Currency
Bank or Local Currency Banks and (c) otherwise conforming to the requirements of
Section 6.
"Ratings": the actual or implied senior unsecured non-credit enhanced debt
ratings of the Company in effect from time to time by Moody's or S&P, as the
case may be, the bank debt rating of the Company in effect from time to time by
Moody's or the corporate credit rating of the Company in effect from time to
time by S&P.
"Re-Allocation Date": as defined in subsection 2.10(e).
"Receivables": all accounts receivable of the Company or any of its
Subsidiaries, and all proceeds thereof and rights (contractual and other) and
collateral related thereto.
"Receivable Financier": any Person (other than a Subsidiary or Affiliate
of the Company) that finances the acquisition by a special purpose entity of
Receivables from the Company or any Subsidiary.
"Register": as defined in subsection 14.6(d).
"Regulation U": Regulation U of the Board as in effect from time to time.
2005 Arrow Electronics Credit Agreement
21
"Reimbursement Obligation": in respect of each Letter of Credit, the
obligation of the account party thereunder to reimburse the Issuing Bank for all
drawings made thereunder in accordance with Section 5 and the Application
related to such Letter of Credit.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Replacement Bank": a bank or financial institution that assumes certain
Commitments and obligations and purchases certain Loans and rights pursuant to
subsection 7.7(b) or 14.1(e).
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section
2615.
"Required Banks": at any time, Banks the Commitment Percentages of which
aggregate more than 50%.
"Requirement of Law": as to any Person, the Governing Documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": as to any Person, the chief executive officer, the
chairman of the board, the president, the chief financial officer, the chief
accounting officer, any executive or senior vice president or the treasurer of
such Person.
"Restricted Payments": as defined in subsection 11.5.
"S&P": Standard & Poor's Ratings Group.
"Schedule Amendment": each Schedule Amendment, substantially in the form
of Exhibit B, executed and delivered pursuant to subsection 14.1.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"Specified Borrower": the collective reference to the Company and the
Subsidiary Borrowers.
"Subsidiary": as to any Person, a corporation, partnership or other entity
of which shares of stock or other ownership interests having ordinary voting
power (other than stock or such other ownership interests having such power only
by reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other entity are
at the time owned, or the management of which is otherwise controlled, directly
or indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a
2005 Arrow Electronics Credit Agreement
22
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Company.
"Subsidiary Borrower": the collective reference to the Foreign Subsidiary
Borrowers and the Domestic Subsidiary Borrowers.
"Subsidiary Guarantee": each of (a) the Existing Subsidiary Guarantee and
(b) each other Subsidiary Guarantee, substantially in the form of Exhibit F-2,
to be executed and delivered from time to time by any other Domestic Subsidiary
pursuant to subsection 10.9, in each case, as the same may be amended,
supplemented or otherwise modified from time to time.
"Swing Line Bank": in respect of any Specified Borrower and any Currency,
each Bank listed as a Swing Line Bank in respect of such Specified Borrower and
Currency in Schedule III.
"Swing Line Currency": in respect of any Specified Borrower, the Currency
set forth for such Specified Borrower in Schedule III.
"Swing Line Limit": in respect of any Specified Borrower, the amount
listed as the Swing Line Limit in respect of such Specified Borrower in Schedule
III, but not in any case for all Specified Borrowers to exceed a Dollar
Equivalent Amount equal to $150,000,000.
"Swing Line Loan": as defined in subsection 4.1.
"Swing Line Rate": in respect of each Swing Line Currency for each Swing
Line Bank, the interest rate agreed from time to time between the Company and
such Swing Line Bank.
"Target Operating Day": any day that is not (a) a Saturday or Sunday, (b)
Christmas Day or New Year's Day or (c) any other day on which the Trans-European
Real-time Gross Settlement Operating System (or any successor settlement system)
is not operating (as determined by the Administrative Agent).
"Termination Date": June 13, 2010.
"Total Assets": at a particular date, the assets of the Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Tranche": the collective reference to Committed Rate Eurocurrency Loans
in any Currency the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day).
"Transferee": as defined in subsection 14.6(f).
2005 Arrow Electronics Credit Agreement
23
"Type": in respect of any Loan, its character as a Committed Rate
Loan, Competitive Advance Loan or Swing Line Loan, as the case may be.
"UCC": the Uniform Commercial Code as from time to time in effect in
the relevant jurisdiction.
"Undrawn Commitment": as to any Bank at any time, the amount of such
Bank's Commitment minus the amount of such Bank's Committed Exposure at
such time but not less than zero.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500 as the same may be amended from time to time.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms relating to the Company and its
Subsidiaries not defined in subsection 1.1 and accounting terms partly defined
in subsection 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) The phrases "to the knowledge of the Company" and "of which any
Subsidiary is aware" and phrases of similar import when used in this Agreement
shall mean to the actual knowledge of a Responsible Officer of the Company or
any such Subsidiary, as the case may be.
1.3 Accounting Determinations. Unless otherwise specified herein,
all accounting determinations for purposes of calculating or determining
compliance with the terms found in subsection 1.1 or the standards and covenants
found in subsection 11.1 and otherwise to be made under this Agreement shall be
made in accordance with GAAP applied on a basis consistent in all material
respects with that used in preparing the financial statements referred to in
subsection 8.1. If GAAP shall change from the basis used in preparing such
financial statements, the certificates required to be delivered pursuant to
subsection 10.2 demonstrating compliance with the covenants contained herein
shall set forth calculations setting forth the adjustments necessary to
demonstrate how the Company is in compliance with the financial covenants based
upon GAAP as in effect on the Closing Date.
2005 Arrow Electronics Credit Agreement
24
SECTION 2. THE COMMITTED RATE LOANS
2.1 Committed Rate Loans. (a) Subject to the terms and conditions
hereof, each Bank severally agrees to make loans on a revolving credit basis
("Committed Rate Loans") to any Specified Borrower from time to time during the
Commitment Period; provided, that no Committed Rate Loan shall be made by any
Bank if, after giving effect to the making of such Loan and the simultaneous
application of the proceeds thereof, (i) the aggregate amount of the Exposure of
all the Banks would exceed the aggregate amount of the Commitments, (ii) the
aggregate amount of the Foreign Currency Exposure in respect of any Currency
would exceed the Foreign Currency Exposure Sublimit for such Currency (iii) in
the case of Committed Rate Loans denominated in an Available Foreign Currency,
the aggregate principal amount of Committed Rate Loans outstanding to a Bank in
such Currency would exceed the Foreign Currency Commitment of such Bank in such
Currency or (iv) the aggregate amount of the Exposure of a Bank would exceed the
Commitment of such Bank. During the Commitment Period, the Specified Borrowers
may use the Commitments by borrowing, prepaying the Committed Rate Loans in
whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) The Committed Rate Loans may be made in Dollars or any Available
Foreign Currency and may from time to time be (i) Committed Rate Eurocurrency
Loans, (ii) in the case of Committed Rate Loans in Dollars only, Committed Rate
ABR Loans or (iii) a combination thereof, as determined by the relevant
Specified Borrower and set forth in the Notice of Borrowing or Notice of
Conversion with respect thereto; provided, that no Committed Rate Eurocurrency
Loan shall be made after the day that is one month prior to the Termination
Date.
2.2 Procedure for Committed Rate Loan Borrowing. Any Specified
Borrower may request the Banks to make Committed Rate Loans on any Business Day
during the Commitment Period by delivering a Notice of Borrowing. Each borrowing
of Committed Rate Loans (other than pursuant to a Swing Line refunding pursuant
to subsection 4.4, pursuant to subsection 5.5(c) or pursuant to subsection 6.3)
shall be in an amount equal to (a) in the case of ABR Loans, $1,000,000 or a
whole multiple of $500,000 in excess thereof (or, if the then aggregate undrawn
amount of the Commitments is less than $1,000,000, such lesser amount) and (b)
in the case of Eurocurrency Loans, (i) if in Dollars, $5,000,000 or increments
of $1,000,000 thereafter, and (ii) if in any Available Foreign Currency, an
amount in such Available Foreign Currency of which the Dollar Equivalent Amount
is at least $5,000,000. Upon receipt of any such Notice of Borrowing from a
Specified Borrower, the Administrative Agent shall promptly notify each Bank
that has a Commitment in the relevant Currency of receipt of such Notice of
Borrowing and of such Bank's Borrowing Percentage of the Committed Rate Loans to
be made pursuant thereto. Subject to the terms and conditions hereof, each Bank
that has a Commitment in the relevant Currency will make its Borrowing
Percentage of each such borrowing available to the Administrative Agent for the
account of such Specified Borrower at the Funding Office, and at or prior to the
Funding Time, for the Currency of such Loan in funds immediately available to
the Administrative Agent in the applicable Currency. The amounts made available
by each Bank will then be made available to such Specified Borrower at the
Funding Office, in like funds as received by the Administrative Agent.
2005 Arrow Electronics Credit Agreement
25
2.3 Repayment of Committed Rate Loans; Evidence of Debt. (a) Each
Specified Borrower hereby unconditionally promises to pay to the Administrative
Agent for the account of each Bank on the Termination Date (or such earlier date
on which the Loans become due and payable pursuant to Section 12), the then
unpaid principal amount of each Committed Rate Loan made by such Bank to such
Specified Borrower. Each Specified Borrower hereby further agrees to pay to the
Administrative Agent for the account of each Bank, interest on the unpaid
principal amount of the Committed Rate Loans made to such Specified Borrower
from time to time outstanding from the date hereof until payment in full thereof
at the rates per annum, and on the dates, set forth in subsection 2.8.
(b) Each Bank shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of each Specified Borrower to
such Bank resulting from each Committed Rate Loan of such Bank from time to
time, including the amounts of principal and interest payable and paid to such
Bank from time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 14.6(d), and a subaccount therein for each Bank, in which shall be
recorded (i) the amount of each Committed Rate Loan made hereunder and each
Interest Period (if any) applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from each Specified
Borrower to each Bank under Committed Rate Loans and (iii) the amount of any sum
received by the Administrative Agent from each Specified Borrower in respect of
Committed Rate Loans, and the amount of each Bank's share thereof.
(d) The entries made in the Register and the accounts of each Bank
maintained pursuant to subsection 2.3(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of each Specified Borrower therein recorded; provided, however, that
the failure of any Bank or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of each Specified Borrower to repay (with applicable interest) the
Committed Rate Loans made to such Specified Borrower by such Bank in accordance
with the terms of this Agreement.
2.4 Termination or Reduction of Commitments. The Company shall have
the right, upon not less than five Business Days' notice to the Administrative
Agent, to terminate the Commitments or, from time to time, to reduce the amount
of the Commitments. Any such reduction shall be in an amount equal to $5,000,000
or a whole multiple thereof and shall reduce permanently the Commitments then in
effect; provided that the Commitments may not be optionally reduced at any time
to an amount which is less than the amount of the Exposure of all the Banks at
such time; and provided further that the Commitments may not be reduced to an
amount which is less than $50,000,000 unless they are terminated in full.
2.5 Optional Prepayments. By giving a Notice of Prepayment, any
Specified Borrower may, at any time and from time to time, prepay the Committed
Rate Loans made to such Specified Borrower, in whole or in part, without premium
or penalty (except as provided in subsection 7.8). Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Bank
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with any amounts
payable pursuant to
2005 Arrow Electronics Credit Agreement
26
subsection 7.8. Partial prepayments shall be in an aggregate principal amount of
$1,000,000 or a whole multiple of $500,000 in excess thereof or an aggregate
principal Dollar Equivalent Amount of at least $1,000,000 for Loans denominated
in a Foreign Currency.
2.6 Conversion and Continuation Options. (a) By giving a Notice of
Conversion, any Specified Borrower may elect from time to time (i) to convert
such Specified Borrower's Eurocurrency Loans in Dollars to ABR Loans or (ii) to
convert such Specified Borrower's ABR Loans to Eurocurrency Loans in Dollars.
Upon receipt of any Notice of Conversion the Administrative Agent shall promptly
notify each relevant Bank thereof. All or any part of Eurocurrency Loans
outstanding in Dollars or ABR Loans may be converted as provided herein,
provided that (i) no ABR Loan may be converted into a Eurocurrency Loan when any
Event of Default has occurred and is continuing and the Administrative Agent has
or the Required Banks have determined that such a conversion is not appropriate
and (ii) no ABR Loan may be converted into a Eurocurrency Loan after the date
that is one month prior to the Termination Date.
(b) By giving a Notice of Continuation, any Specified Borrower may
continue any of such Specified Borrower's Eurocurrency Loans as Eurocurrency
Loans in the same Currency for additional Interest Periods.
(c) Any Specified Borrower may convert Committed Rate Loans
outstanding in Dollars or one Available Foreign Currency to Committed Rate Loans
in Dollars or a different Currency by repaying such Loans in the first Currency
and borrowing Loans of such different Currency in accordance with the applicable
provisions of this Agreement.
(d) If any Specified Borrower shall fail to timely give a Notice of
Continuation or a Notice of Conversion in respect of any of such Specified
Borrower's Eurocurrency Loans with respect to which an Interest Period is
expiring, such Specified Borrower shall be deemed to have given a Notice of
Continuation for an Interest Period of one month.
2.7 Minimum Amounts of Tranches. All borrowings, conversions and
continuations of Committed Rate Loans and all selections of Interest Periods
shall be in such amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of the Committed Rate
Loans comprising (i) each Tranche in Dollars shall be not less than $5,000,000
and (ii) each Tranche in any Available Foreign Currency shall be not less than
the Dollar Equivalent Amount in such Currency of $5,000,000.
2.8 Interest Rates and Payment Dates for Committed Rate Loans. (a)
Each Committed Rate Eurocurrency Loan shall bear interest for each day during
each Interest Period with respect thereto at a rate per annum equal to the
Eurocurrency Rate for such Interest Period plus the Applicable Margin.
(b) Each Committed Rate ABR Loan shall bear interest at a rate per
annum equal to the ABR plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any Committed
Rate Loan or (ii) any interest payable thereon shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum which is
2005 Arrow Electronics Credit Agreement
27
(x) in the case of overdue principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection plus
2% or (y) in the case of overdue interest, the rate described in paragraph (b)
of this subsection plus 2%, in each case from the date of such non-payment until
such amount is paid in full (as well after as before judgment).
(d) Interest on Committed Rate Loans shall be payable in arrears on
each Interest Payment Date; provided, that interest accruing pursuant to
paragraph (c) of this subsection shall be payable from time to time on demand.
2.9 Inability to Determine Interest Rate. If on or prior to the date
on which the Eurocurrency Rate is determined for any Interest Period in respect
of any Eurocurrency Loan in any Currency:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that, by reason
of circumstances affecting the relevant market generally, adequate and
reasonable means do not exist for ascertaining the Eurocurrency Rate for
such affected Currency or such affected Interest Period, or
(b) the Administrative Agent shall have received notice from Banks
having Commitments comprising at least 25% of the aggregate amount of the
Commitments (or, in the case of Loans denominated in an Available Foreign
Currency, Banks having at least 25% of the Foreign Currency Commitments in
such Available Foreign Currency) that the Eurocurrency Rate determined or
to be determined for such affected Interest Period will not adequately and
fairly reflect the cost to such Banks (as conclusively certified by such
Banks) of making or maintaining their affected Committed Rate Loans during
such affected Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Company and the Banks as soon as practicable thereafter. If such notice is given
(x) any Eurocurrency Loans requested to be made in such affected Currency on the
first day of such affected Interest Period shall be made as ABR Loans in Dollars
in the Dollar Equivalent Amount, (y) any Committed Rate Loans that were to have
been converted on the first day of such affected Interest Period from ABR Loans
to Eurocurrency Loans shall be continued as ABR Loans and (z) any Eurocurrency
Loans in such affected Currency that were to have been continued as such shall
be converted, on the first day of such Interest Period, to ABR Loans in Dollars
in the Dollar Equivalent Amount. Until such notice has been withdrawn by the
Administrative Agent, no further Eurocurrency Loans in such affected Currency
shall be made, converted to or continued as such.
2.10 Commitment Increases. (a) At any time after the Closing Date,
provided that no Event of Default shall have occurred and be continuing, the
Borrowers may request an increase of the aggregate Commitments in an aggregate
amount up to $250,000,000 by notice to the Administrative Agent in writing of
the amount (the "Offered Increase Amount") of such proposed increase (such
notice, a "Commitment Increase Notice"). Any such Commitment Increase Notice
must offer each Bank the opportunity to subscribe for its pro rata share of the
increased Commitments; provided, however, the Borrowers may, with the consent of
the Administrative Agent (which consent shall not be unreasonably withheld or
delayed), without
2005 Arrow Electronics Credit Agreement
28
offering to each Bank the opportunity to subscribe for its pro rata share of the
increased Commitments, offer to any bank or other financial institution that is
not an existing Bank the opportunity to provide a new Commitment pursuant to
paragraph (b) below. If any portion of the increased Commitments offered to the
Banks as contemplated in the immediately preceding sentence is not subscribed
for by the Banks, the Borrowers may, with the consent of the Administrative
Agent as to any bank or financial institution that is not at such time a Bank
(which consent shall not be unreasonably withheld or delayed), offer to any
existing Bank or to one or more additional banks or financial institutions the
opportunity to provide all or a portion of such unsubscribed portion of the
increased Commitments pursuant to paragraph (b) below.
(b) Any additional bank or financial institution that the Borrowers
select to offer the opportunity to provide any portion of the increased
Commitments, and that elects to become a party to this Agreement and provide a
Commitment, shall execute a New Bank Supplement with the Borrowers and the
Administrative Agent, substantially in the form of Exhibit K (a "New Bank
Supplement"), whereupon such bank or financial institution (a "New Bank") shall
become a Bank for all purposes and to the same extent as if originally a party
hereto and shall be bound by and entitled to the benefits of this Agreement, and
Schedule I shall be deemed to be amended to add the name and Commitment of such
New Bank, provided that the Commitment of any such New Bank shall be in a
principal amount not less than $10,000,000.
(c) Any Bank that accepts an offer to it by the Borrowers to
increase its Commitment pursuant to this subsection 2.10 shall, in each case,
execute a Commitment Increase Supplement with the Borrowers and the
Administrative Agent, substantially in the form of Exhibit L (a "Commitment
Increase Supplement"), whereupon such Bank (an "Increasing Bank") shall be bound
by and entitled to the benefits of this Agreement with respect to the full
amount of its Commitment as so increased, and Schedule I shall be deemed to be
amended to so increase the Commitment of such Bank.
(d) The effectiveness of any New Bank Supplement or Commitment
Increase Supplement shall be contingent upon receipt by the Administrative Agent
of such corporate resolutions of the Borrowers and legal opinions of counsel to
the Borrowers as the Administrative Agent shall reasonably request with respect
thereto.
(e) (i) Except as otherwise provided in subparagraphs (ii) and (iii)
of this paragraph (e), if any bank or financial institution becomes a New
Bank pursuant to subsection 2.10(b) or any Bank's Commitment is increased
pursuant to subsection 2.10(c), additional Committed Rate Loans made on or
after the date of the effectiveness thereof (the "Re-Allocation Date")
shall be made in accordance with the pro rata provisions of subsection 5.3
based on the Commitment Percentages (or relevant Foreign Currency
Commitment Percentages, as the case may be) in effect on and after such
Re-Allocation Date (except to the extent that any such pro rata borrowings
would result in any Bank making an aggregate principal amount of Committed
Rate Loans in excess of its Commitment (or relevant Foreign Currency
Commitment, as the case may be), in which case such excess amount will be
allocated to, and made by, the relevant New Banks and Increasing Banks to
the extent of, and in accordance with the pro rata provisions of
subsection 5.3 based on, their respective Commitments (or relevant Foreign
Currency Commitments, as the case may be)). On each Re-Allocation Date,
the
2005 Arrow Electronics Credit Agreement
29
Administrative Agent shall deliver a notice to each Bank of the adjusted
Commitment Percentages after giving effect to any increase in the
aggregate Commitments made pursuant to this subsection 2.10 on such
Re-Allocation Date.
(ii) In the event that on any such Re-Allocation Date there is an
unpaid principal amount of ABR Loans, the applicable Borrower shall make
prepayments thereof and one or more Borrowers shall make borrowings of ABR
Loans and/or Eurocurrency Loans, as the applicable Borrower shall
determine, so that, after giving effect thereto, the ABR Loans and
Eurocurrency Loans outstanding are held as nearly as may be in accordance
with the pro rata provisions of subsection 5.3 based on such new
Commitment Percentages.
(iii) In the event that on any such Re-Allocation Date there is an
unpaid principal amount of Eurocurrency Loans, such Eurocurrency Loans
shall remain outstanding with the respective holders thereof until the
expiration of their respective Interest Periods (unless the applicable
Borrower elects to prepay any thereof in accordance with the applicable
provisions of this Agreement), and on the last day of the respective
Interest Periods the applicable Borrower shall make prepayments thereof
and the applicable Borrowers shall make borrowings of ABR Loans and/or
Eurocurrency Loans so that, after giving effect thereto, the ABR Loans and
Eurocurrency Loans outstanding are held by all of the Banks as nearly as
may be in accordance with the pro rata provisions of subsection 5.3 based
on such new Commitment Percentages.
(f) Notwithstanding anything to the contrary in this subsection
2.10, no Bank shall have any obligation to increase its Commitment unless it
agrees to do so in its sole discretion.
2.11 Refunding of Committed Rate Loans Denominated in Available
Foreign Currencies. (a) Notwithstanding noncompliance with the conditions
precedent set forth in subsection 9.2, if any Committed Rate Loans denominated
in any Available Foreign Currency (any such Loans, "Specified Loans") are
outstanding on (i) any date on which an Event of Default pursuant to Section
12(g) shall have occurred with respect to the Company or (ii) any Acceleration
Date, then, at 10:00 A.M., New York City time, on the second Business Day
immediately succeeding (x) the date on which such Event of Default occurs (in
the case of clause (i) above) or (y) such Acceleration Date (in the case of
clause (ii) above), the Administrative Agent shall be deemed to have received a
notice from the Company pursuant to subsection 2.2 requesting that ABR Loans be
made pursuant to subsection 2.1 on such second Business Day in an aggregate
amount equal to the Dollar Equivalent Amount of the aggregate amount of all
Specified Loans, and the procedures set forth in subsection 2.2 shall be
followed in making such ABR Loans. The proceeds of such ABR Loans shall be
applied to repay such Specified Loans.
(b) If, for any reason, ABR Loans may not be made pursuant to
paragraph (a) of this subsection 2.11 to repay Specified Loans as required by
such paragraph, effective on the date such ABR Loans would otherwise have been
made, (i) the principal amount of each relevant Specified Loan shall be
converted into Dollars (calculated on the basis of the Exchange Rate as of the
immediately preceding Business Day) ("Converted Specified Loans") and (ii) each
Bank severally, unconditionally and irrevocably agrees that it shall purchase in
Dollars a participating
2005 Arrow Electronics Credit Agreement
30
interest in such Converted Specified Loans in an amount equal to the amount of
ABR Loans which would otherwise have been made by such Bank pursuant to
paragraph (a) of this subsection 2.11. Each Bank will immediately transfer to
the Administrative Agent, in immediately available funds, the amount of its
participation, and the proceeds of such participation shall be distributed by
the Administrative Agent to each Bank having such Specified Loans in such amount
as will reduce the amount of the participating interest retained by such Bank in
the Converted Specified Loans to the amount of the ABR Loans which were to have
been made by it pursuant to paragraph (a) of this subsection 2.11. All Converted
Specified Loans shall bear interest at the rate which would otherwise be
applicable to ABR Loans. Each Bank shall share on a pro rata basis (calculated
by reference to its participating interest in such Converted Specified Loans) in
any interest which accrues thereon and in all repayments thereof.
(c) If, for any reason, ABR Loans may not be made pursuant to
paragraph (a) of this subsection 2.11 to repay Specified Loans as required by
such paragraph and the principal amount of any Specified Loans may not be
converted into Dollars in the manner contemplated by paragraph (b) of this
subsection 2.11, (i) the Administrative Agent shall determine the Dollar
Equivalent Amount of such Specified Loans (calculated on the basis of the
Exchange Rate determined as of the Business Day immediately preceding the date
on which ABR Loans would otherwise have been made pursuant to said paragraph
(a)) and (ii) effective on the date on which ABR Loans would otherwise have been
made pursuant to said paragraph (a), each Bank severally, unconditionally and
irrevocably agrees that it shall purchase in Dollars a participating interest in
such Specified Loans in an amount equal to the amount of ABR Loans which would
otherwise have been made by such Bank pursuant to paragraph (a) of this
subsection 2.11. Each Bank will immediately transfer to the Administrative
Agent, in immediately available funds, the amount of its participation, and the
proceeds of such participation shall be distributed by the Administrative Agent
to each relevant Bank having Specified Loans in such amount as will reduce the
Dollar Equivalent Amount as of such date of the amount of the participating
interest retained by such Bank in such Specified Loans to the amount of the ABR
Loans which were to have been made by it pursuant to paragraph (a) of this
subsection 2.11. Each Bank shall share on a pro rata basis (calculated by
reference to its participating interest in such Specified Loans) in any interest
which accrues thereon, in all repayments of principal thereof and in the
benefits of any collateral furnished in respect thereof and the proceeds of such
collateral.
(d) If any amount required to be paid by any Bank to any other Bank
pursuant to this subsection 2.11 in respect of any Specified Loan is not paid to
such Bank on the date such payment is due from such Bank, such obligor Bank
shall pay to such obligee Bank on demand an amount equal to the product of (i)
such amount, times (ii) the daily average Federal funds rate, as quoted by such
obligee Bank during the period from and including the date such payment is
required to the date on which such payment is immediately available to such
obligee Bank, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. A
certificate of an obligee Bank submitted to any obligor Bank through the
Administrative Agent with respect to any amounts owing under this subsection (d)
shall be conclusive in the absence of manifest error.
2.12 Certain Borrowings of Committed Rate Loans and Refunding of
Loans. (a) If on any Borrowing Date on which a Specified Borrower has requested
the Banks (the "Specified Foreign Currency Banks") to make Committed Rate Loans
denominated in an
2005 Arrow Electronics Credit Agreement
31
Available Foreign Currency (the "Requested Specified Loans") (i) the principal
amount of the Requested Specified Loans to be made by any Specified Foreign
Currency Bank exceeds the unused amount of the Commitment of such Specified
Foreign Currency Bank in the requested Available Foreign Currency (before giving
effect to the making and payment of any Loans required to be made pursuant to
this subsection 2.12 on such Borrowing Date) , (ii) the principal amount of such
Requested Specified Loan, when added to the outstanding principal amount of all
other Committed Rate Loans of such Specified Foreign Currency Banks denominated
in the Available Foreign Currency in which the Requested Specified Loans are to
be made, does not exceed the aggregate amount of such Specified Foreign Currency
Banks' Foreign Currency Commitments in such requested Available Foreign Currency
and (iii) the Dollar Equivalent of the amount of the excess described in the
foregoing clause (i) is less than or equal to the aggregate unused amount of the
Commitments of all Banks other than such Specified Foreign Currency Banks
(before giving effect to the making and payment of any Loans pursuant to this
subsection 2.12 on such Borrowing Date), each Bank other than such Specified
Foreign Currency Banks shall make a Committed Rate Loan denominated in Dollars
to the Company (or any Specified Borrower identified by the Company) on such
Borrowing Date, and the proceeds of such Committed Rate Loans shall be
simultaneously applied to repay outstanding Committed Rate Loans denominated in
Dollars of such Specified Foreign Currency Banks in each case in amounts such
that, after giving effect to (1) such borrowings and repayments and (2) the
borrowing from such Specified Foreign Currency Banks of the Requested Specified
Loans, the excess described in the foregoing clause (i) will be eliminated. To
effect such borrowings and repayments, (x) not later than 12:00 Noon, New York
City time, on such Borrowing Date, the proceeds of such Committed Rate Loans
denominated in Dollars shall be made available by each Bank other than such
Specified Foreign Currency Banks to the Administrative Agent at its office
specified in subsection 14.2 in Dollars and in immediately available funds and
the Administrative Agent shall apply the proceeds of such Committed Rate Loans
denominated in Dollars toward repayment of outstanding Committed Rate Loans
denominated in Dollars of such Specified Foreign Currency Banks (as directed by
the Company) and (y) concurrently with the repayment of such Loans on such
Borrowing Date, (I) such Specified Foreign Currency Banks shall, in accordance
with the applicable provisions hereof, make the Requested Specified Loans in an
aggregate amount equal to the amount so requested by the relevant Specified
Borrower and (II) the relevant Borrower shall pay to the Administrative Agent
for the account of the Specified Foreign Currency Banks whose Loans to such
Borrower are repaid on such Borrowing Date pursuant to this subsection 2.12 all
interest accrued on the amounts repaid to the date of repayment, together with
any amounts payable pursuant to subsection 7.8 in connection with such
repayment, provided that the Administrative Agent shall have provided notice to
the Company prior to the making of such Requested Specified Loans that the
making thereof would obligate the Company to pay amounts pursuant to subsection
7.8.
(b) If any borrowing of Committed Rate Loans is required pursuant to
this subsection 2.12, the Company shall notify the Administrative Agent in the
manner provided for Committed Rate Loans in subsection 2.3, except that the
minimum borrowing amounts and threshold multiples in excess thereof applicable
to ABR Loans set forth in subsection 2.3 shall not be applicable to the extent
that such minimum borrowing amounts exceed the amounts of Committed Rate Loans
required to be made pursuant to this subsection 2.12.
2005 Arrow Electronics Credit Agreement
32
SECTION 3. THE COMPETITIVE ADVANCE LOANS
3.1 Competitive Advance Loans. (a) Subject to the terms and
conditions hereof, any Specified Borrower may, from time to time during the
Commitment Period, request the Banks to offer bids, and any Bank may, in its
sole discretion, offer such bids, to make competitive advance loans
("Competitive Advance Loans") to such Specified Borrower on the terms and
conditions set forth in such bids. Each Competitive Advance Loan shall bear
interest at the rates, be payable on the dates, and shall mature on the date,
agreed between such Specified Borrower and Bank at the time such Competitive
Advance Loan is made; provided, that (i) each Competitive Advance Loan shall
mature not earlier than 1 day and not later than 180 days, after the date such
Competitive Advance Loan is made and (ii) no Competitive Advance Loan shall
mature after the Termination Date. During the Commitment Period, the Specified
Borrowers may accept bids from Banks from time to time for Competitive Advance
Loans, and borrow and repay Competitive Advance Loans, all in accordance with
the terms and conditions hereof; provided, that no Competitive Advance Loan
shall be made if, after giving effect to the making of such Loan and the
simultaneous application of the proceeds thereof, (i) the aggregate amount of
the Exposure of all the Banks would exceed the aggregate amount of the
Commitments, or (ii) the aggregate amount of the Foreign Currency Exposure in
respect of any Currency would exceed the Foreign Currency Exposure Sublimit for
such Currency. Subject to the foregoing, any Bank may, in its sole discretion,
make Competitive Advance Loans in an aggregate outstanding amount exceeding the
amount of such Bank's Commitment.
(b) The Competitive Advance Loans may be made in Dollars or any
Available Foreign Currency, as agreed between the Specified Borrower and Bank in
respect thereof at the time such Competitive Advance Loan is made.
3.2 Procedure for Competitive Advance Loan Borrowing. (a) Any
Specified Borrower may request Competitive Advance Loans by delivering a
Competitive Advance Loan Request. The Administrative Agent shall notify each
Bank promptly by facsimile transmission of the contents of each Competitive
Advance Loan Request received by the Administrative Agent. Each Bank may elect,
in its sole discretion, to offer irrevocably to make one or more Competitive
Advance Loans to the Specified Borrower by delivering a Competitive Advance Loan
Offer to the Administrative Agent.
(b) Before the acceptance time set forth in the applicable
Competitive Advance Loan Request, the Specified Borrower, in its absolute
discretion, shall:
(i) cancel such Competitive Advance Loan Request by giving the
Administrative Agent telephone notice to that effect, or
(ii) by giving telephone notice to the Administrative Agent
immediately confirmed in writing or by facsimile transmission,
subject to the provisions of subsection 3.2(c), accept one or more
of the offers made by any Bank or Banks pursuant to subsection
3.2(a) of the amount of Competitive Advance Loans for each relevant
maturity date and reject any remaining offers made by Banks pursuant
to subsection 3.2(a).
2005 Arrow Electronics Credit Agreement
33
(c) The Specified Borrower's acceptance of Competitive Advance Loans
in response to any Competitive Advance Loan Request shall be subject to the
following limitations:
(i) The amount of Competitive Advance Loans accepted for each
maturity date specified by any Bank in its Competitive Advance Loan
Offer shall not exceed the maximum amount for such maturity date
specified in such Competitive Advance Loan Offer;
(ii) the aggregate amount of Competitive Advance Loans
accepted for all maturity dates specified by any Bank in its
Competitive Advance Loan Offer shall not exceed the aggregate
maximum amount specified in such Competitive Advance Loan Offer for
all such maturity dates;
(iii) the Specified Borrower may not accept offers for
Competitive Advance Loans for any maturity date in an aggregate
principal amount in excess of the maximum principal amount requested
in the related Competitive Advance Loan Request; and
(iv) if the Specified Borrower accepts any of such offers, it
must accept offers based solely upon pricing for such relevant
maturity date and upon no other criteria whatsoever and if two or
more Banks submit offers for any maturity date at identical pricing
and the Specified Borrower accepts any of such offers but does not
wish to (or by reason of the limitations set forth in subsection
3.2(c)(iii) cannot) borrow the total amount offered by such Banks
with such identical pricing, the Administrative Agent shall allocate
offers from all of such Banks in amounts among them pro rata
according to the amounts offered by such Banks (or as nearly pro
rata as shall be practicable).
(d) If the Specified Borrower notifies the Administrative Agent that
a Competitive Advance Loan Request is cancelled, the Administrative Agent shall
give prompt telephone notice thereof to the Banks.
(e) If the Specified Borrower accepts one or more of the offers made
by any Bank or Banks, the Administrative Agent promptly shall notify each Bank
which has made such a Competitive Advance Loan Offer of (i) the aggregate amount
of such Competitive Advance Loans to be made for each maturity date and (ii) the
acceptance or rejection of any offers to make such Competitive Advance Loans
made by such Bank. Before the Funding Time for the applicable Currency, each
Bank whose Competitive Advance Loan Offer has been accepted shall make available
to the Administrative Agent for the account of the Specified Borrower at the
Funding Office for the applicable Currency the amount of Competitive Advance
Loans in the applicable Currency to be made by such Bank, in immediately
available funds.
3.3 Repayment of Competitive Advance Loans; Evidence of Debt. (a)
Each Specified Borrower that borrows any Competitive Advance Loan hereby
unconditionally promises to pay to the Bank that made such Competitive Advance
Loan on the maturity date, as agreed by such Specified Borrower and Bank (or
such earlier date on which all the Loans become due and payable pursuant to
Section 12), the then unpaid principal amount of such
2005 Arrow Electronics Credit Agreement
34
Competitive Advance Loan. Each Specified Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Competitive Advance Loans made by
any Bank to such Specified Borrower from time to time outstanding from the date
thereof until payment in full thereof at the rate per annum, and on the dates,
agreed by such Specified Borrower and Bank at the time such Competitive Advance
Loan is made. All payments in respect of Competitive Advance Loans shall be made
by such Specified Borrower to the Administrative Agent for the account of the
Bank that makes such Competitive Advance Loan to the Payment Office and by the
Payment Time for the applicable Currency.
(b) Each Bank shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of each Specified Borrower to
such Bank resulting from each Competitive Advance Loan of such Bank from time to
time, including the amounts of principal and interest payable and paid to such
Bank from time to time in respect of Competitive Advance Loans. The entries made
in the accounts of each Bank maintained pursuant to this subsection 3.3(b)
shall, to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of each Specified Borrower therein
recorded, absent manifest error; provided, however, that the failure of any Bank
to maintain any such account, or any error therein, shall not in any manner
affect the obligation of each Specified Borrower to repay (with applicable
interest) the Competitive Advance Loans made to such Specified Borrower by such
Bank in accordance with the terms of this Agreement.
3.4 Prepayments. Unless otherwise agreed by the Bank making a
Competitive Advance Loan, upon giving a Notice of Prepayment at the address and
time specified in Schedule IV may be optionally prepaid prior to the scheduled
maturity date thereof.
SECTION 4. THE SWING LINE LOANS
4.1 Swing Line Loans. Subject to the terms and conditions hereof,
each Specified Borrower may borrow from such Specified Borrower's Swing Line
Bank swing line loans ("Swing Line Loans") from time to time during the
Commitment Period in a Swing Line Currency of such Specified Borrower; provided,
that no Swing Line Loan shall be made if, after giving effect to the making of
such Loan and the simultaneous application of the proceeds thereof, (i) the
aggregate amount of the Exposure of all the Banks would exceed the aggregate
amount of the Commitments, (ii) the aggregate amount of the Foreign Currency
Exposure in respect of any Currency would exceed the Foreign Currency Exposure
Sublimit for such Currency, or (iii) the aggregate Dollar Equivalent Amount of
all outstanding Swing Line Loans of such Specified Borrower would exceed the
Swing Line Limit for such Specified Borrower or the Dollar Equivalent Amount of
all outstanding Swing Line Loans would exceed $150,000,000. During the
Commitment Period, the Specified Borrowers may borrow and prepay the Swing Line
Loans, in whole or in part, all in accordance with the terms and conditions
hereof.
4.2 Procedure for Swing Line Borrowing. (a) Any Specified Borrower
may borrow Swing Line Loans during the Commitment Period on any Business Day by
giving a Notice of Swing Line Borrowing in respect of such Swing Line Loan.
Subject to the terms and conditions hereof, on the Borrowing Date of each Swing
Line Loan, the relevant Swing Line Bank shall make the proceeds thereof
available to the relevant Specified Borrower in
2005 Arrow Electronics Credit Agreement
35
immediately available funds in the applicable Currency in the manner from time
to time agreed by such Specified Borrower and such Swing Line Bank.
(b) Upon request of the Administrative Agent and on the last
Business Day of each month on which a Swing Line Bank has any outstanding Swing
Line Loans, such Bank shall deliver to the Administrative Agent a Notice of
Swing Line Outstandings. The Administrative Agent will, at the request of any
Swing Line Bank, advise such Swing Line Bank of the Exchange Rate used by the
Administrative Agent in calculating the Dollar Equivalent Amount of Swing Line
Loans of such Swing Line Bank on any date.
4.3 Repayment of Swing Line Loans; Evidence of Debt. (a) Each
Specified Borrower hereby unconditionally promises to pay to its Swing Line Bank
on the Termination Date (or such earlier date on which such Swing Line Loans
become due and payable pursuant to subsection 4.4 or on which all the Loans
become due and payable pursuant to Section 12), the then unpaid principal amount
of all Swing Line Loans made to such Specified Borrower. Each Specified Borrower
hereby further agrees to pay interest on the unpaid principal amount of all
Swing Line Loans made to such Specified Borrower from time to time outstanding
from the date thereof until payment in full thereof at the Swing Line Rate for
the Currency of such Swing Line Loan, payable on the last Business Day of each
calendar month on which such Swing Line Loans are outstanding. All payments in
respect of Swing Line Loans shall be made by such Specified Borrower to its
Swing Line Bank at the address set forth in Schedule III for such Swing Line
Bank and Swing Line Loans in such Currency.
(b) Each Swing Line Bank shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of each Specified
Borrower to such Swing Line Bank resulting from each Swing Line Loan of such
Bank from time to time, including the amounts of principal and interest payable
and paid to such Swing Line Bank from time to time under this Agreement. The
entries made in the accounts of each Swing Line Bank maintained pursuant to this
subsection 4.3(b) shall, to the extent permitted by applicable law, be prima
facie evidence of the existence and amounts of the obligations of each Specified
Borrower therein recorded; provided, however, that the failure of any Swing Line
Bank to maintain any such account, or any error therein, shall not in any manner
affect the obligation of each Specified Borrower to repay (with applicable
interest) the Swing Line Loans made to such Specified Borrower by such Swing
Line Bank in accordance with the terms of this Agreement.
4.4 Allocating Swing Line Loans; Swing Line Loan Participations. (a)
If any Event of Default shall occur and be continuing, any Swing Line Bank may,
in its sole and absolute discretion, direct that the Swing Line Loans owing to
it be refunded, by delivering a Notice of Swing Line Refunding. Upon receipt of
a Notice of Swing Line Refunding the Administrative Agent shall promptly give
notice of the contents thereof to the Banks and, unless an Event of Default
described in Section 12(g) in respect of the Company or the relevant Specified
Borrower has occurred, to the Company and the relevant Specified Borrower. Each
such Notice of Swing Line Refunding shall be deemed to constitute delivery by
such Specified Borrower of a Notice of Borrowing of Committed Rate Eurocurrency
Loans in the amount and Currency of the Swing Line Loans to which it relates,
for an Interest Period of one month's duration. Subject to the terms and
conditions hereof, each Bank (including each Swing Line Bank in its capacity as
a Bank having a Commitment) hereby agrees to make a Committed Rate
2005 Arrow Electronics Credit Agreement
36
Loan to such Specified Borrower pursuant to Section 2 in an amount equal to such
Bank's Borrowing Percentage of the aggregate amount of the Swing Line Loans to
which such Notice of Swing Line Refunding relates. Unless any of the events
described in Section 12(g) in respect of the Company or such Specified Borrower
shall have occurred (in which case the procedures of subsection 4.4(b) shall
apply), each Bank shall make the amount of such Committed Rate Loan available to
the Administrative Agent at the Funding Office, and at or prior to the Funding
Time, for the Currency of such Loan in funds immediately available to the
Administrative Agent. The proceeds of such Committed Rate Loans shall be
immediately made available to such Swing Line Bank by the Administrative Agent
and applied by such Swing Line Bank to repay the Swing Line Loans to which such
Notice of Swing Line Refunding related.
(b) If prior to the time a Committed Rate Loan would have otherwise
been made pursuant to subsection 4.4(a), one of the events described in Section
12(g) shall have occurred in respect of the Company or the relevant Specified
Borrower, each Bank (other than the relevant Swing Line Bank) shall, on the date
such Committed Rate Loan would have been made pursuant to the Notice of Swing
Line Refunding referred to in subsection 4.4(a) (the "Refunding Date"), purchase
an undivided participating interest in the outstanding Swing Line Loans to which
such Notice of Swing Line Refunding related, in an amount equal to (i) such
Bank's Commitment Percentage times (ii) the aggregate principal amount of such
Swing Line Loans then outstanding which were to have been repaid with Committed
Rate Loans (the "Swing Line Participation Amount"). On the Refunding Date, (x)
each Bank shall transfer to such Swing Line Bank, in immediately available
funds, such Bank's Swing Line Participation Amount, and upon receipt thereof
such Swing Line Bank shall, if requested by any Bank, deliver to such Bank a
participation certificate dated the date of such Swing Line Bank's receipt of
such funds and evidencing such Bank's ownership of its Swing Line Participation
Amount and (y) the interest rate on the applicable Swing Line Loan will
automatically be converted to the applicable Eurocurrency Rate with an Interest
Period of one month plus the Applicable Margin. If any amount required to be
paid by any Bank to any Swing Line Bank pursuant to this subsection 4.4 in
respect of any Swing Line Participation Amount is not paid to such Swing Line
Bank on the date such payment is due from such Bank, such Bank shall pay to such
Swing Line Bank on demand an amount equal to the product of (i) such amount,
times (ii) (A) in the case of any such payment obligation denominated in
Dollars, the daily average Federal funds rate, as quoted by such Swing Line
Bank, or (B) in the case of any such payment obligation denominated in an
Available Foreign Currency, the rate customary in such Currency for settlement
of similar inter-bank obligations, as quoted by such Swing Line Bank, in each
case during the period from and including the date such payment is required to
the date on which such payment is immediately available to the Swing Line Bank,
times (iii) a fraction the numerator of which is the number of days that elapse
during such period and the denominator of which is 360. A certificate of a Swing
Line Bank submitted to any Bank with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after any Swing Line Bank has received
from any Bank such Bank's Swing Line Participation Amount, such Swing Line Bank
receives any payment on account of the related Swing Line Loans, such Swing Line
Bank will distribute to such Bank its Commitment Percentage of such payment on
account of its Swing Line Participation Amount (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which such
Bank's participating interest was outstanding and funded);
2005 Arrow Electronics Credit Agreement
37
provided, however, that in the event that such payment received by such Swing
Line Bank is required to be returned, such Bank will return to such Swing Line
Bank any portion thereof previously distributed to it by such Swing Line Bank.
(d) Each Bank's obligation to make Committed Rate Loans pursuant to
subsection 4.4(a) and to purchase participating interests pursuant to subsection
4.4(b) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against any other
Bank or any Specified Borrower, or any Specified Borrower may have against any
Bank or any other Person, as the case may be, for any reason whatsoever; (ii)
the occurrence or continuance of a Default or an Event of Default; (iii) any
adverse change in the condition (financial or otherwise) of the Company or any
of its Subsidiaries; (iv) any breach of this Agreement by any party hereto; or
(v) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
SECTION 5. THE LETTERS OF CREDIT
5.1 L/C Commitment. (a) As of the Closing Date, the existing letters
of credit set forth on Schedule 5.1 shall be deemed Letters of Credit hereunder.
Subject to the terms and conditions hereof, each Issuing Bank agrees to issue
letters of credit for the account of any Specified Borrower on any Business Day
during the Commitment Period in such form as shall be reasonably acceptable to
such Issuing Bank; provided, that no Letter of Credit shall be issued if, after
giving effect thereto (i) the aggregate amount of the Exposure of all the Banks
would exceed the aggregate amount of the Commitments, (ii) the aggregate amount
of the Foreign Currency Exposure in respect of any Currency would exceed the
Foreign Currency Exposure Sublimit for such Currency or (iii) the aggregate
amount of the L/C Obligations would exceed $100,000,000.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars or an Available Foreign Currency
and shall be either (A) a standby letter of credit issued to support
obligations of a Specified Borrower, contingent or otherwise, to
provide credit support for workers' compensation, other insurance
programs and other lawful corporate purposes (a "Standby Letter of
Credit") or (B) a commercial letter of credit issued in respect of
the purchase of goods and services in the ordinary course of
business of the Company and its Subsidiaries (a "Commercial Letter
of Credit"; together with the Standby Letters of Credit, the
"Letters of Credit") and,
(ii) expire no later than the earlier of 365 days after its
date of issuance and 5 Business Days prior to the Termination Date
although any such Letter of Credit may be automatically extended for
periods of one year from the current or any future expiration date
of the Letter of Credit (unless the Issuing Bank elects not to
extend such Letter of Credit) and the extended maturity date is not
beyond 5 Business Days prior to the Termination Date.
2005 Arrow Electronics Credit Agreement
38
(c) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New York
or, if acceptable to the Required Banks and the relevant account party, the
jurisdiction of the Issuing Office at which such Letter of Credit is issued.
(d) No Issuing Bank shall at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause such
Issuing Bank or any Bank to exceed any limits imposed by, any change after the
date hereof in any applicable Requirement of Law.
5.2 Procedure for Issuance of Letters of Credit under this
Agreement. Any Specified Borrower may from time to time request that an Issuing
Bank issue a Letter of Credit by delivering to such Issuing Bank at its Issuing
Office an Application therefor (with a copy to the Administrative Agent),
completed to the satisfaction of the Issuing Bank, and such other certificates,
documents and other papers and information as such Issuing Bank may reasonably
request. Upon receipt by an Issuing Bank of any Application, and subject to the
terms and conditions hereof, such Issuing Bank will process such Application and
the certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall any
Issuing Bank be required to issue any Letter of Credit earlier than five
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by such Issuing Bank and such Specified Borrower. Such
Issuing Bank shall advise the Administrative Agent of the terms of such Letter
of Credit on the date of issuance thereof and shall promptly thereafter furnish
copies thereof and each amendment thereto to the Company and through the
Administrative Agent each Bank.
5.3 Fees, Commissions and Other Charges. (a) Each Specified Borrower
for whose account a Letter of Credit is issued hereunder shall pay to the
Administrative Agent, for the account of the Banks (including the Issuing Bank)
pro rata according to their Commitment Percentages, a letter of credit
commission with respect to each Letter of Credit, computed at a rate equal to
the then Applicable Margin for Eurocurrency Loans on the daily average undrawn
face amount of such Letter of Credit. Such commissions shall be payable in
arrears on the last Business Day of each March, June, September and December to
occur after the date of issuance of each Letter of Credit and on the expiration
date of such Letter of Credit and shall be nonrefundable.
(b) In addition to the foregoing fees and commissions, each
Specified Borrower for whose account a Letter of Credit is issued hereunder
shall (i) pay or reimburse the Issuing Bank for such normal and customary costs
and expenses as are incurred or charged by such Issuing Bank in issuing,
effecting payment under, amending or otherwise administering such Letter of
Credit and (ii) pay the Issuing Bank such other fees as shall be agreed by the
Issuing Bank and such Specified Borrower.
2005 Arrow Electronics Credit Agreement
39
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Bank and the Banks all fees and commissions
received by the Administrative Agent for their respective accounts pursuant to
this subsection.
5.4 L/C Participations. (a) Each Issuing Bank irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing Bank
to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from such Issuing Bank, on
the terms and conditions hereinafter stated, for such L/C Participant's own
account and risk, an undivided interest equal to such L/C Participant's
Commitment Percentage in such Issuing Bank's obligations and rights under each
Letter of Credit issued by such Issuing Bank hereunder and the amount of each
draft paid by such Issuing Bank thereunder. Each L/C Participant unconditionally
and irrevocably agrees with each Issuing Bank that, if a draft is paid under any
Letter of Credit issued by such Issuing Bank for which the Specified Borrower
which is the account party under such Letter of Credit has not reimbursed such
Issuing Bank to the full extent required by the terms of this Agreement, such
L/C Participant shall pay to such Issuing Bank upon demand at such Issuing
Bank's Issuing Office an amount equal to such L/C Participant's Commitment
Percentage of the amount of such draft, or any part thereof, which is not so
reimbursed.
(b) If any amount required to be paid by any L/C Participant to any
Issuing Bank pursuant to subsection 5.4(a) in respect of any unreimbursed
portion of any payment made by such Issuing Bank under any Letter of Credit is
not paid to such Issuing Bank on the date such payment is due from such L/C
Participant, such L/C Participant shall pay to such Issuing Bank on demand an
amount equal to the product of (i) such amount, times (ii) (A) in the case of
any such payment obligation denominated in Dollars, the daily average Federal
funds rate, as quoted by such Issuing Bank, or (B) in the case of any such
payment obligation denominated in an Available Foreign Currency, the rate
customary in such Currency for settlement of similar inter-bank obligations, as
quoted by such Issuing Bank, in each case during the period from and including
the date such payment is required to the date on which such payment is
immediately available to the Issuing Bank, times (iii) a fraction the numerator
of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of an Issuing Bank submitted to any
L/C Participant with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after an Issuing Bank has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with subsection 5.4(a) the Issuing Bank
receives any payment related to such Letter of Credit (whether directly from the
account party or otherwise, including by way of set-off or proceeds of
collateral applied thereto by such Issuing Bank), or any payment of interest on
account thereof, such Issuing Bank will distribute to such L/C Participant its
pro rata share thereof; provided, however, that in the event that any such
payment received by such Issuing Bank shall be required to be returned by the
Issuing Bank, such L/C Participant shall return to such Issuing Bank the portion
thereof previously distributed by such Issuing Bank to it.
5.5 Reimbursement Obligation of the Specified Borrowers. (a) Each
Specified Borrower for whose account a Letter of Credit is issued hereunder
agrees to reimburse the Issuing Bank in respect of such Letter of Credit on each
date on which such Issuing Bank
2005 Arrow Electronics Credit Agreement
40
notifies such Specified Borrower (with a copy to the Administrative Agent at its
address in the Administrative Schedule for Notices of Borrowing for the
applicable Currency) of the date and amount of a draft presented under such
Letter of Credit and paid by such Issuing Bank for the amount of (i) such draft
so paid and (ii) any taxes, fees, charges or other costs or expenses incurred by
such Issuing Bank in connection with such payment; provided if any Issuing Bank
shall notify the Specified Borrower of a drawing after 2:00 p.m. local time of
such Issuing Bank's Issuing Office on the date of any drawing under a Letter of
Credit, the Specified Borrower will not be required to reimburse such Issuing
Bank until the next succeeding Business Day. Each such payment shall be made to
such Issuing Bank at its Issuing Office in the Currency in which payment of such
draft was made and in immediately available funds.
(b) Interest shall be payable on any and all amounts remaining
unpaid by any Specified Borrower under this subsection from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate which is (i) in the case of such
amounts payable in Dollars, 2% above the ABR from time to time and (ii) in the
case of such amounts payable in any other currency, 2% above the rate reasonably
determined by the Issuing Bank as the cost of funding such overdue amount from
time to time on an overnight basis.
(c) Each notice of a drawing under any Letter of Credit denominated
in Dollars shall constitute a request by the Specified Borrower for a borrowing
pursuant to subsection 2.2 of ABR Loans in the amount of such drawing plus any
amounts payable pursuant to subsection 5.5(a)(ii) in respect of such drawing.
The Borrowing Date with respect to such borrowing shall be the date of such
drawing.
5.6 Obligations Absolute. (a) The obligations of the Specified
Borrowers under this Section 5 shall be absolute and unconditional under any and
all circumstances and irrespective of any set-off, counterclaim or defense to
payment which any Specified Borrower may have or have had against the Issuing
Bank or any beneficiary of a Letter of Credit.
(b) Each Specified Borrower for whose account a Letter of Credit is
issued hereunder also agrees with the Issuing Bank in respect of such Letter of
Credit that such Issuing Bank shall not be responsible for, and such Specified
Borrower's Reimbursement Obligations under subsection 5.5(a) shall not be
affected by, among other things, (i) the validity or genuineness of documents or
of any endorsements thereon, even though such documents shall in fact prove to
be invalid, fraudulent or forged, provided, that reliance upon such documents by
such Issuing Bank shall not have constituted gross negligence or willful
misconduct of such Issuing Bank or (ii) any dispute between or among such
Specified Borrower and any beneficiary of any Letter of Credit or any other
party to which such Letter of Credit may be transferred or (iii) any claims
whatsoever of any Specified Borrower against any beneficiary of such Letter of
Credit or any such transferee.
(c) No Issuing Bank shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by such Issuing Bank's gross negligence or willful
misconduct.
2005 Arrow Electronics Credit Agreement
41
(d) Each Specified Borrower for whose account a Letter of Credit is
issued hereunder agrees that any action taken or omitted by any Issuing Bank
under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Customs, shall
be binding on such Specified Borrower and shall not result in any liability of
such Issuing Bank to such Specified Borrower.
5.7 Letter of Credit Payments. If any draft shall be presented for
payment to an Issuing Bank under any Letter of Credit, such Issuing Bank shall
promptly notify the account party of the date and amount thereof. The
responsibility of the Issuing Bank to the account party in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
5.8 Application. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 5, the provisions of this Section 5 shall apply.
SECTION 6. LOCAL CURRENCY FACILITIES
6.1 Terms of Local Currency Facilities. (a) Subject to the
provisions of this Section 6, the Company may in its discretion from time to
time designate any Subsidiary of the Company organized under the laws of any
jurisdiction outside the United States as a "Local Currency Borrower" and any
Qualified Credit Facility to which such Local Currency Borrower and any one or
more Banks (or its affiliates, agencies or branches) is a party as a "Local
Currency Facility", with the consent of each such Bank in its sole discretion,
by delivering a Local Currency Facility Addendum to the Administrative Agent and
the Banks (through the Administrative Agent) executed by the Company, each such
Local Currency Borrower and each such Bank, provided, that on the effective date
of such designation no Event of Default shall have occurred and be continuing.
Concurrently with the delivery of a Local Currency Facility Addendum, the
Company or the relevant Local Currency Borrower shall furnish to the
Administrative Agent copies of all documentation executed and delivered by any
Local Currency Borrower in connection therewith, together with, if applicable,
an English translation thereof. Except as otherwise provided in this Section 6
or in the definition of "Qualified Credit Facility" in subsection 1.1, the terms
and conditions of each Local Currency Facility shall be determined by mutual
agreement of the relevant Local Currency Borrower(s) and Local Currency Bank(s).
The documentation governing each Local Currency Facility shall (i) contain an
express acknowledgement that such Local Currency Facility shall be subject to
the provisions of this Section 6 and (ii) designate a Local Currency Facility
Agent for such Local Currency Facility. Each of the Company and, by agreeing to
any Local Currency Facility designation as contemplated hereby, each relevant
Local Currency Bank (if any) party thereto which is an affiliate, branch or
agency of a Bank, acknowledges and agrees that each reference in this Agreement
to any Bank shall, to the extent applicable, be deemed to be a reference to such
Local Currency Bank. In the event of any inconsistency between the terms of this
Agreement and the terms of any Local Currency Facility, the terms of this
Agreement shall prevail.
2005 Arrow Electronics Credit Agreement
42
(b) The documentation governing each Local Currency Facility shall
set forth (i) the maximum amount (expressed in Dollars) available to be borrowed
from all Local Currency Banks under such Local Currency Facility (as the same
may be reduced from time to time, a "Local Currency Facility Maximum Borrowing
Amount") and (ii) with respect to each Local Currency Bank party to such Local
Currency Facility, the maximum Dollar Equivalent Amount available to be borrowed
from such Local Currency Bank thereunder (as the same may be reduced from time
to time, a "Local Currency Bank Maximum Borrowing Amount").
(c) Except as otherwise required by applicable law, in no event
shall the Local Currency Banks party to a Local Currency Facility have the right
to accelerate the Local Currency Loans outstanding thereunder, or to terminate
their commitments (if any) to make such Local Currency Loans prior to the
earlier of the stated termination date in respect thereof or the Termination
Date, except, in each case, in connection with an acceleration of the Loans or a
termination of the Commitments pursuant to Section 12 of this Agreement,
provided, that nothing in this paragraph (c) shall be deemed to require any
Local Currency Bank to make a Local Currency Loan if the applicable conditions
precedent to the making of such Local Currency Loan set forth in the relevant
Local Currency Facility have not been satisfied. No Local Currency Loan may be
made under a Local Currency Facility if (i) after giving effect thereto, the
conditions precedent in subsection 9.2 would not be satisfied or (ii) after
giving effect to the making of such Local Currency Loan and the simultaneous
application of the proceeds thereof, (A) the aggregate amount of the Exposure of
all the Banks would exceed the aggregate amount of the Commitments, or (B) the
amount of such Local Currency Bank's Committed Exposure would exceed the amount
of such Local Currency Bank's Commitment.
(d) The relevant Local Currency Borrower shall furnish to the
Administrative Agent copies of any amendment, supplement or other modification
(including any change in commitment amounts or in the Local Currency Banks
participating in any Local Currency Facility) to the terms of any Local Currency
Facility promptly after the effectiveness thereof (together with, if applicable,
an English translation thereof). If any such amendment, supplement or other
modification to a Local Currency Facility shall (i) add a Local Currency Bank as
a Local Currency Bank thereunder or (ii) change the Local Currency Facility
Maximum Borrowing Amount or any Local Currency Bank Maximum Borrowing Amount
with respect thereto, the Company shall promptly furnish an appropriately
revised Local Currency Facility Addendum, executed by the Company, the relevant
Local Currency Borrower and the affected Local Currency Banks (or any agent
acting on their behalf), to the Administrative Agent and the Banks (through the
Administrative Agent).
(e) The Company may terminate its designation of a facility as a
Local Currency Facility, with the consent of each Local Currency Bank party
thereto in its sole discretion, by written notice to the Administrative Agent,
which notice shall be executed by the Company, the relevant Local Currency
Borrower and each Local Currency Bank party to such Local Currency Facility (or
any agent acting on their behalf). Once notice of such termination is received
by the Administrative Agent, such Local Currency Facility and the loans and
other obligations outstanding thereunder shall immediately cease to be subject
to the terms of this Agreement and shall cease to benefit from the Company
Guarantee.
2005 Arrow Electronics Credit Agreement
43
6.2 Reporting of Local Currency Outstandings. On the date of the
making of any Local Currency Loan having a maturity of 30 or more days to a
Local Currency Borrower and on the last Business Day of each month on which a
Local Currency Borrower has any outstanding Local Currency Loans, the Local
Currency Facility Agent for such Local Currency Borrower, shall deliver to the
Administrative Agent a Notice of Local Currency Outstandings. The Administrative
Agent will, at the request of any Local Currency Facility Agent, advise such
Local Currency Facility Agent of the Exchange Rate used by the Administrative
Agent in calculating the Dollar Equivalent Amount of Local Currency Loans under
the related Local Currency Facility on any date.
6.3 Refunding of Local Currency Loans. (a) Notwithstanding
noncompliance with the conditions precedent set forth in subsection 9.2, if any
Local Currency Loans are outstanding on (i) any date on which an Event of
Default pursuant to Section 12(g) shall have occurred with respect to the
Company, (ii) any Acceleration Date or (iii) any date on which an Event of
Default pursuant to Section 12(a)(ii) shall have occurred and be continuing for
three or more Business Days and, in the case of clause (iii) above, any Local
Currency Bank party to the affected Local Currency Facility shall have given
notice thereof to the Administrative Agent requesting that the Local Currency
Loans ("Affected Local Currency Loans") outstanding thereunder be refunded
pursuant to this subsection 6.3, then, at 10:00 A.M., New York City time, on the
second Business Day immediately succeeding (x) the date on which such Event of
Default occurs (in the case of clause (i) above), (y) such Acceleration Date (in
the case of clause (ii) above) or (z) the date on which such notice is received
by the Administrative Agent (in the case of clause (iii) above), the
Administrative Agent shall be deemed to have received a notice from the Company
pursuant to subsection 2.2 requesting that ABR Loans be made pursuant to
subsection 2.1 on such second Business Day in an aggregate amount equal to the
Dollar Equivalent Amount of the aggregate amount of all Local Currency Loans (in
the case of clause (i) or (ii) above) or the Affected Local Currency Loans (in
the case of clause (iii) above), and the procedures set forth in subsection 2.2
shall be followed in making such ABR Loans. The proceeds of such ABR Loans shall
be applied to repay such Local Currency Loans.
(b) If, for any reason, ABR Loans may not be made pursuant to
paragraph (a) of this subsection 6.3 to repay Local Currency Loans as required
by such paragraph, effective on the date such ABR Loans would otherwise have
been made, (i) the principal amount of each relevant Local Currency Loan shall
be converted into Dollars (calculated on the basis of the Exchange Rate as of
the immediately preceding Business Day) ("Converted Local Currency Loans") and
(ii) each Bank severally, unconditionally and irrevocably agrees that it shall
purchase in Dollars a participating interest in such Converted Local Currency
Loans in an amount equal to the amount of ABR Loans which would otherwise have
been made by such Bank pursuant to paragraph (a) of this subsection 6.3. Each
Bank will immediately transfer to the Administrative Agent, in immediately
available funds, the amount of its participation, and the proceeds of such
participation shall be distributed by the Administrative Agent to each relevant
Local Currency Bank in such amount as will reduce the amount of the
participating interest retained by such Local Currency Bank in the Converted
Local Currency Loans to the amount of the ABR Loans which were to have been made
by it pursuant to paragraph (a) of this subsection 6.3. All Converted Local
Currency Loans shall bear interest at the rate which would otherwise be
applicable to ABR Loans. Each Bank shall share on a pro rata basis (calculated
by reference
2005 Arrow Electronics Credit Agreement
44
to its participating interest in such Converted Local Currency Loans) in any
interest which accrues thereon and in all repayments thereof.
(c) If, for any reason, ABR Loans may not be made pursuant to
paragraph (a) of this subsection 6.3 to repay Local Currency Loans as required
by such paragraph and the principal amount of any Local Currency Loans may not
be converted into Dollars in the manner contemplated by paragraph (b) of this
subsection 6.3, (i) the Administrative Agent shall determine the Dollar
Equivalent Amount of such Local Currency Loans (calculated on the basis of the
Exchange Rate determined as of the Business Day immediately preceding the date
on which ABR Loans would otherwise have been made pursuant to said paragraph
(a)) and (ii) effective on the date on which ABR Loans would otherwise have been
made pursuant to said paragraph (a), each Bank severally, unconditionally and
irrevocably agrees that it shall purchase in Dollars a participating interest in
such Local Currency Loans in an amount equal to the amount of ABR Loans which
would otherwise have been made by such Bank pursuant to paragraph (a) of this
subsection 6.3. Each Bank will immediately transfer to the Administrative Agent,
in immediately available funds, the amount of its participation, and the
proceeds of such participation shall be distributed by the Administrative Agent
to each relevant Local Currency Bank in such amount as will reduce the Dollar
Equivalent as of such date of the amount of the participating interest retained
by such Local Currency Bank in such Local Currency Loans to the amount of the
ABR Loans which were to have been made by it pursuant to paragraph (a) of this
subsection 6.3. Each Bank shall share on a pro rata basis (calculated by
reference to its participating interest in such Local Currency Loans) in any
interest which accrues thereon, in all repayments of principal thereof and in
the benefits of any collateral furnished in respect thereof and the proceeds of
such collateral.
(d) If any amount required to be paid by any Bank to any Local
Currency Bank pursuant to this subsection 6.3 in respect of any Local Currency
Loan is not paid to such Local Currency Bank on the date such payment is due
from such Bank, such Bank shall pay to such Local Currency Bank on demand an
amount equal to the product of (i) such amount, times (ii) the daily average
Federal funds rate, as quoted by such Local Currency Bank during the period from
and including the date such payment is required to the date on which such
payment is immediately available to the Local Currency Bank, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. A certificate of a Local Currency
Bank submitted to any Bank through the Administrative Agent with respect to any
amounts owing under this subsection (d) shall be conclusive in the absence of
manifest error.
SECTION 7. CERTAIN PROVISIONS APPLICABLE TO THE LOANS AND LETTERS OF CREDIT
7.1 Facility Fee; Utilization Fee; Other Fees; Other Payments. (a)
The Company shall pay to the Administrative Agent for the account of each Bank a
facility fee for the period from and including the Closing Date to, but
excluding, the Termination Date, computed at the Facility Fee Rate in effect
from time to time on the average daily amount of the Commitment (used and
unused) of such Bank during the period for which payment is made, payable
quarterly in arrears on the last day of each March, June, September and December
and
2005 Arrow Electronics Credit Agreement
45
on the Termination Date or such earlier date on which the Commitments shall
terminate as provided herein, commencing on the first of such dates to occur
after the date hereof.
(b) The Company shall pay (i) to the Administrative Agent for the
account of each Bank a utilization fee of 0.125% per annum on such Bank's
Commitment Percentage of the aggregate outstanding principal or face amount of
Committed Rate Loans, Swing Line Loans, Letters of Credit and Local Currency
Loans for each day on which the Aggregate Committed Outstandings are equal to or
exceed 33-1/3% of the Aggregate Commitments and (ii) to the applicable Issuing
Bank for its own account a fronting fee of 0.125% per annum on the undrawn and
unexpired amount of each Letter of Credit, in each case payable quarterly in
arrears on the last day of each March, June, September and December and on the
Termination Date or such earlier date on which the Commitments shall terminate
as provided herein, commencing on the first of such dates to occur after the
date hereof or the issuance date, as relevant.
(c) The Company agrees to pay to the Administrative Agent, for its
own account and for the account of the Arranger, the fees in the amounts and on
the dates agreed to by such parties in writing prior to the date of this
Agreement.
7.2 Computation of Interest and Fees. (a) Facility and utilization
fees and, whenever it is calculated on the basis of the Prime Rate, interest
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed; and, otherwise, interest and Letter of Credit
commissions shall be calculated on the basis of a 360-day year for the actual
days elapsed. The Administrative Agent shall as soon as practicable notify the
relevant Specified Borrower and the Banks of each determination of a
Eurocurrency Rate. Any change in the ABR due to a change in the Prime Rate, the
Base CD Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate, the
Base CD Rate or the Federal Funds Effective Rate, respectively. The
Administrative Agent shall as soon as practicable notify the relevant Borrower
and the Banks of the effective date and the amount of each such change in
interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrowers and the Banks in the absence of manifest error.
7.3 Pro Rata Treatment and Payments. (a) Each payment by the Company
on account of any facility fee or utilization fee hereunder and any reduction of
the Commitments of the Banks shall be made pro rata according to the respective
Commitment Percentages of the Banks. Each disbursement of Committed Rate Loans
in any Currency shall be made by the Banks holding Commitments in such Currency
pro rata according to the respective Borrowing Percentages of such Banks. Each
payment (including each prepayment) by any Borrower on account of principal of
and interest on any Loans in any Currency shall be made pro rata according to
the respective principal amounts of the Loans of such Currency of such Borrower
then due and owing to the Banks. All payments (including prepayments) to be made
by any Borrower hereunder, whether on account of principal, interest, fees,
Reimbursement Obligations or otherwise, shall be made without set off or
counterclaim. All payments in respect of Committed Rate Loans or Letters of
Credit in any Currency shall be made in such Currency and in immediately
available funds at the Payment Office, and at or prior to the Payment Time, for
2005 Arrow Electronics Credit Agreement
46
such Type of Loans and such Currency, on the due date thereof. The
Administrative Agent shall distribute to the Banks any payments received by the
Administrative Agent promptly upon receipt in like funds as received. If any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
(b) Unless the Administrative Agent shall have been notified in
writing by any Bank prior to a Borrowing Date in respect of Committed Rate Loans
that such Bank will not make the amount that would constitute its Borrowing
Percentage of such borrowing available to the Administrative Agent, the
Administrative Agent may assume that such Bank is making such amount available
to the Administrative Agent, and the Administrative Agent may, in reliance upon
such assumption, make available to the relevant Borrower a corresponding amount.
If such amount is not made available to the Administrative Agent by the required
time on the Borrowing Date therefor, such Bank shall pay to the Administrative
Agent, on demand, such amount with interest thereon at a rate equal to (A) in
the case of any such Committed Rate Loans denominated in Dollars, the daily
average Federal funds rate, as quoted by the Administrative Agent, or (B) in the
case of any Committed Rate Loans denominated in an Available Foreign Currency,
the rate customary in such Currency for settlement of similar inter-bank
obligations, as quoted by the Administrative Agent, in each case for the period
until such Bank makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Bank with
respect to any amounts owing under this subsection shall be conclusive in the
absence of manifest error. If such Bank's Borrowing Percentage of such borrowing
is not made available to the Administrative Agent by such Bank within three
Business Days of such Borrowing Date, the Administrative Agent shall also be
entitled to recover such amount with interest thereon at the rate per annum
applicable to Swing Line Loans in such Currency hereunder, on demand, from the
relevant Borrower.
7.4 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation
thereof by any Governmental Authority charged with the administration or
interpretation thereof shall make it unlawful for any Bank to make or maintain
Loans or to make or maintain Extensions of Credit to one or more Foreign
Subsidiary Borrowers or Local Currency Borrowers contemplated by this Agreement,
the commitment of such Bank hereunder to make Loans to such Foreign Subsidiary
Borrowers or Local Currency Borrowers, continue Loans to such Foreign Subsidiary
Borrowers or Local Currency Borrowers as such, and maintain Extensions of Credit
to such Foreign Subsidiary Borrowers or Local Currency Borrowers shall forthwith
be cancelled to the extent necessary to remedy or prevent such illegality.
Nothing in this subsection 7.4 shall affect the obligation of the Banks to make
and maintain Loans to the Company.
7.5 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law (other than the Certificate of Incorporation and By-Laws or
other organizational or governing documents of the Banks) or in the
interpretation or application thereof or compliance by any Bank or Issuing Bank
with any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date hereof:
2005 Arrow Electronics Credit Agreement
47
(i) shall subject any Bank or Issuing Bank or any corporation
controlling such Bank or from which such Bank obtains funding or
credit to any tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit or any Eurocurrency Loan or Local
Currency Loan made by it, or change the basis of taxation of
payments to such Bank or such corporation in respect thereof (except
for Non-Excluded Taxes covered by subsection 7.6 (including taxes
excluded under the first sentence of subsection 7.6(a)) and changes
in the rate of tax on the overall net income of such Bank or Issuing
Bank or such corporation);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, deposit insurance, compulsory loan or similar
requirement against assets held by, deposits or other liabilities in
or for the account of, advances, loans or other extensions of credit
by, or any other acquisition of funds by, any office of such Bank or
Issuing Bank or any corporation controlling such Bank or Issuing
Bank or from which such Bank obtains funding or credit which is not
otherwise included in the determination of the Eurocurrency Rate
hereunder or the interest rate on such Local Currency Loans under
the relevant Local Currency Facility; or
(iii) shall impose on such Bank or Issuing Bank or any
corporation controlling such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank or
Issuing Bank or such corporation, by an amount which such Bank or Issuing Bank
or such corporation deems to be material, of making, converting into, continuing
or maintaining Eurocurrency Loans or Local Currency Loans or issuing or
participating in Letters of Credit or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, the Company shall promptly pay such
Bank or Issuing Bank, within five Business Days after its demand, any additional
amounts necessary to compensate such Bank or Issuing Bank for such increased
cost or reduced amount receivable, together with interest on each such amount
from the date due until payment in full at a rate per annum equal to the ABR
plus 2%. If any Bank or Issuing Bank becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Company,
through the Administrative Agent, of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Bank or Issuing Bank, through the Administrative
Agent, to the Company shall be conclusive in the absence of manifest error. This
covenant shall survive the termination of this Agreement and the payment of
Loans and all other amounts payable hereunder.
(b) If any Bank shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Bank or any
corporation controlling such Bank or Issuing Bank with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof does or shall have the
effect of reducing the rate of return on such Bank's or Issuing Bank or such
corporation's capital as a consequence of its obligations hereunder or under any
Letter of Credit to a level below that which such Bank or Issuing Bank or such
corporation could have achieved but for such change or compliance (taking into
consideration such Bank's or Issuing Bank or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Bank or Issuing Bank to
2005 Arrow Electronics Credit Agreement
48
be material, then from time to time, after submission by such Bank or Issuing
Bank to the Company (with a copy to the Administrative Agent) of a written
request therefor (which written request shall be conclusive in the absence of
manifest error), the Company shall pay to such Bank or Issuing Bank such
additional amount or amounts as will compensate such Bank or Issuing Bank for
such reduction.
(c) In addition to, and without duplication of, amounts which may
become payable from time to time pursuant to paragraphs (a) and (b) of this
subsection 7.5, each Borrower agrees to pay to each Bank which requests
compensation under this paragraph (c) by notice to such Borrower, on the last
day of each Interest Period with respect to any Committed Rate Eurocurrency Loan
made by such Bank to such Borrower, at any time when such Bank shall be required
to maintain reserves against "Eurocurrency liabilities" under Regulation D of
the Board (or, at any time when such Bank may be required by the Board or by any
other Governmental Authority, whether within the United States or in another
relevant jurisdiction, to maintain reserves against any other category of
liabilities which includes deposits by reference to which the Eurocurrency Rate
is determined as provided in this Agreement or against any category of
extensions of credit or other assets of such Bank which includes any such
Committed Rate Eurocurrency Loans), an additional amount (determined by such
Bank's calculation or, if an accurate calculation is impracticable, reasonable
estimate using such reasonable means of allocation as such Bank shall determine)
equal to the actual costs, if any, incurred by such Bank during such Interest
Period as a result of the applicability of the foregoing reserves to such
Committed Rate Eurocurrency Loans.
(d) A certificate of each Bank, Issuing Bank, Swing Line Bank or
Local Currency Bank setting forth such amount or amounts as shall be necessary
to compensate such Bank, Issuing Bank, Swing Line Bank or Local Currency Bank as
specified in paragraph (a), (b) or (c) above, as the case may be, and setting
forth in reasonable detail an explanation of the basis of requesting such
compensation in accordance with paragraph (a), (b) or (c) above, including
calculations in detail comparable to the detail set forth in certificates
delivered to such Bank in similar circumstances under comparable provisions of
other comparable credit agreements, shall be delivered to the relevant Borrower
and shall be conclusive absent manifest error. The relevant Borrower shall pay
each Bank, Issuing Bank, Swing Line Bank or Local Currency Bank the amount shown
as due on any such certificate delivered to it within 10 days after its receipt
of the same.
(e) Failure or delay on the part of any Bank or the Issuing Bank to
demand compensation pursuant to this subsection shall not constitute a waiver of
such Bank's or the Issuing Bank's right to demand such compensation; provided
that the Company shall not be required to compensate a Bank or the Issuing Bank
pursuant to this subsection for any increased costs or reductions incurred more
than six months prior to the date that such Bank or the Issuing Bank, as the
case may be, notifies the Company of the event giving rise to such increased
costs or reductions and of such Bank's or the Issuing Bank's intention to claim
compensation therefor; provided further that, if the event giving rise to such
increased costs or reductions is retroactive, then the six-month period referred
to above shall be extended to include the period of retroactive effect thereof.
2005 Arrow Electronics Credit Agreement
49
(f) Notwithstanding the foregoing provisions of this subsection, a
Bank shall not be entitled to compensation pursuant to this subsection in
respect of any Competitive Advance Loan if the event that would otherwise
entitle it to such compensation shall have been publicly announced prior to
submission of the Competitive Advance Loan Offer pursuant to which such Loan was
made.
(g) The agreements in this subsection shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.
7.6 Taxes. (a) All payments made by any Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding, in the case of the Administrative Agent and each Bank, (i)
net income taxes, capital taxes, doing business taxes and franchise taxes
imposed on the Administrative Agent or such Bank (including, without limitation,
each Bank in its capacity as an Issuing Bank or as a Swing Line Bank), as the
case may be, as a result of a present or former connection between the
jurisdiction of the government or taxing authority imposing such tax and the
Administrative Agent or such Bank (excluding a connection arising solely from
the Administrative Agent or such Bank having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement) or any
political subdivision or taxing authority thereof or therein, (ii) taxes
required to be withheld because of a failure to deliver any certificate
described in this subsection 7.6 for any reason and (iii) any and all
withholding taxes payable with respect to payments under this Agreement made by
the Company or by any Subsidiary Borrower that was organized under the laws of
the United States, other than any such withholding taxes imposed as a result of
any change in or amendment to the laws of any jurisdiction affecting taxation
(including any regulation or ruling proposed or promulgated by a taxing
authority thereof and any treaty provisions) or any change in the official
application, enforcement or interpretation of such laws, regulations, rulings or
treaties or any other action taken by a taxing authority or a court of competent
jurisdiction, which change, amendment, application, enforcement, interpretation
or action becomes effective after the date hereof (all such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions and withholdings being
hereinafter called "Non-Excluded Taxes"). If any Non-Excluded Taxes are required
to be withheld from any amounts payable to the Administrative Agent or any Bank
hereunder, the amounts so payable to the Administrative Agent or such Bank shall
be increased to the extent necessary to yield to the Administrative Agent or
such Bank (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement. Whenever any Non-Excluded Taxes are payable by any Borrower, as
promptly as possible thereafter such Borrower shall send to the Administrative
Agent for its own account or for the account of such Bank, as the case may be, a
certified copy of an original official receipt received by such Borrower showing
payment thereof. If such Borrower fails to pay any Non-Excluded Taxes when due
to the appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, such
Borrower shall indemnify the Administrative Agent and such Bank for any
incremental taxes, interest or penalties that may become payable by the
Administrative Agent or such Bank as a result of any such failure. The
agreements in this subsection 7.6(a) shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
2005 Arrow Electronics Credit Agreement
50
(b) (i) Each Bank (including each Assignee) that is not incorporated
under the laws of the United States of America or a state thereof agrees
that it will deliver to the Company and the Administrative Agent
concurrently with the delivery of this Agreement (or, in the case of any
Assignee, concurrently with the delivery of an Assignment and Acceptance)
two duly completed copies of (x) United States Internal Revenue Service
Form W-8BEN or W-8ECI or successor applicable form, as the case may be,
and (y) an Internal Revenue Service Form W-8BEN or W-9 or successor
applicable form, as the case may be. Each such Bank also agrees to deliver
to the Company and the Administrative Agent two further copies of the said
Form W-8BEN or W-8ECI and Form W-8BEN or W-9, or successor applicable
forms or other manner of certification, as the case may be, on or before
the date that any such form expires or becomes obsolete or after the
occurrence of any event (including, without limitation, a change in such
Bank's lending office) requiring a change in the most recent form
previously delivered by it to the Company and the Administrative Agent,
and such extensions or renewals thereof as may reasonably be requested by
the Company or the Administrative Agent, unless in any such case an event
(including, without limitation, any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise
be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with
respect to it and such Bank so advises the Company and the Administrative
Agent. Such Bank shall certify (x) in the case of a Form W-8BEN or W-8ECI,
that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (y)
in the case of a Form W-8BEN or W-9, that it is entitled to an exemption
from United States backup withholding tax.
(ii) Upon the written request of any Borrower, each Bank promptly
will provide to such Borrower and to the Administrative Agent, or file
with the relevant taxing authority (with a copy to the Administrative
Agent) such form, certification or similar documentation (each duly
completed, accurate and signed) as is required by the relevant
jurisdiction in order to obtain an exemption from, or reduced rate of
Non-Excluded Taxes to which such Bank or the Administrative Agent is
entitled pursuant to an applicable tax treaty or the law of the relevant
jurisdiction; provided, however, such Bank will not be required to (x)
disclose information which in its reasonable judgment it deems
confidential or proprietary or (y) incur a cost if such cost would, in its
reasonable judgment, be substantial in comparison to the cost of the
Borrower under this subsection 7.6 of such Bank's failure to provide such
form, certification or similar documentation. Such Bank shall certify in
the case of any such form, certification or similar documentation so
provided (to the extent it may accurately and properly do so) that it is
entitled to receive payments under this Agreement without deduction or
withholding, or at a reduced rate of deduction or withholding of
Non-Excluded Taxes.
(iii) A Bank shall be required to furnish a form under this
paragraph (b) only if it is entitled to claim an exemption from or a
reduced rate of withholding under applicable law. A Bank that is not
entitled to claim an exemption from or a reduced rate of withholding under
applicable law, promptly upon written request of the applicable Borrower,
shall inform the applicable Borrower in writing.
2005 Arrow Electronics Credit Agreement
51
(c) If any Bank is, in its sole opinion, able to apply for any tax
credit, tax deduction or other reduction in tax (a "Tax Benefit") by reason of
any increased amount paid by the Company under this subsection 7.6, such Bank
will use reasonable efforts to obtain such Tax Benefit and, upon receipt thereof
will pay to the Company such amount, not exceeding the increased amount paid by
the Company, as it considers, in its sole opinion, to be equal to the net
after-tax value to such Bank of the Tax Benefit or such part thereof allocable
to such withholding or deduction, having regard to all of such Bank's dealings
giving rise to similar credits and to the cost of obtaining the same, less any
and all expenses incurred by such Bank in obtaining such Tax Benefit (including
any and all professional fees incurred therewith); provided, however, that (i)
no Bank shall be obligated by this subsection 7.6 to disclose to the Company any
information regarding its tax affairs or computations, (ii) nothing in this
subsection 7.6 shall interfere with the right of each Bank to arrange its tax
affairs as it deems appropriate and (iii) nothing in this subsection 7.6 shall
impose an obligation on a Bank to obtain any Tax Benefit if, in such Bank's sole
opinion, to do so would (x) impose undue hardships, burdens or expenditures on
such Bank or (y) increase such Bank's exposure to taxation by the jurisdiction
in question.
7.7 Company's Options upon Claims for Increased Costs and Taxes. In
the event that any Affected Bank shall decline to make Loans pursuant to
subsection 7.4 or shall have notified the Company that it is entitled to claim
compensation pursuant to subsection 7.5 or 7.6, the Company may exercise any one
or both of the following options:
(a) The Company may request one or more of the Banks which are not
Affected Banks to take over all (but not part) of any Affected Banks' then
outstanding Loans and to assume all (but not part) of any Affected Bank's
Commitments, if any, and obligations hereunder, and if applicable, under any
Local Currency Facility. If one or more Banks shall so agree in writing
(collectively, the "Assenting Banks"; individually, an "Assenting Bank") with
respect to an Affected Bank, (i) the Commitments, if any, of each Assenting Bank
and the obligations of such Assenting Bank under this Agreement shall be
increased by its respective Allocable Share of the Commitments, if any, and of
the obligations of such Affected Bank under this Agreement and if applicable,
under any Local Currency Facility and (ii) each Assenting Bank shall make Loans
to the Company, according to such Assenting Bank's respective Allocable Share,
in an aggregate principal amount equal to the outstanding principal amount of
the Loans and, if applicable, Local Currency Loans, of such Affected Bank, on a
date mutually acceptable to the Assenting Banks, such Affected Bank and the
Company. The proceeds of such Loans, together with funds of the Company, shall
be used to prepay the Loans, and if applicable, Local Currency Loans, of such
Affected Bank, together with all interest accrued thereon and all other amounts
owing to such Affected Bank hereunder (including any amounts payable pursuant to
subsection 7.8 in connection with such prepayment), and, upon such assumption by
the Assenting Bank and prepayment by the Company, such Affected Bank shall cease
to be a "Bank" for purposes of this Agreement and shall no longer have any
obligations or rights hereunder (other than any obligations or rights which
according to this Agreement shall survive the termination of this Agreement).
(b) The Company may designate a Replacement Bank to assume the
Commitments, if any, and the obligations of any such Affected Bank hereunder and
if applicable, under any Local Currency Facility, and to purchase the
outstanding Loans of such Affected Bank and such Affected Bank's rights
hereunder and with respect thereto, without recourse upon, or
2005 Arrow Electronics Credit Agreement
52
warranty by, or expense to, such Affected Bank (unless such Affected Bank agrees
otherwise), for a purchase price equal to the outstanding principal amount of
the Loans and, if applicable, Local Currency Loans, of such Affected Bank plus
(i) all interest accrued and unpaid thereon and all other amounts owing to such
Affected Bank hereunder and (ii) any amount which would be payable to such
Affected Bank pursuant to subsection 7.8, and upon such assumption and purchase
by the Replacement Bank, such Replacement Bank, if it is not already a Bank,
shall be deemed to be a "Bank" for purposes of this Agreement and such Affected
Bank shall cease to be a "Bank" for purposes of this Agreement and shall no
longer have any obligations or rights hereunder (other than any obligations or
rights which according to this Agreement shall survive the termination of this
Agreement).
7.8 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan or Committed Rate Loan other than on the last
day of an Interest Period therefor (including as a result of an Event of Default
and as a result of the provisions of subsection 2.11 or 2.12), (b) the
conversion of any Eurocurrency Loan other than on the last day of an Interest
Period therefor, (c) the failure to borrow, convert, continue or prepay any Loan
on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice is permitted to be revocable hereunder and is revoked in
accordance herewith), (d) the failure to borrow any Competitive Advance Loan
after accepting the Competitive Advance Loan Offer to make such Loan, or (e) the
assignment as a result of a request by the Company pursuant to subsection 7.7 of
any Eurocurrency Loan other than on the last day of an Interest Period therefor
or of any Competitive Advance Loan, then, in any such event, the Company shall
compensate each Bank for the loss, cost and expense attributable to such event.
In the case of a Eurocurrency Loan, the loss to any Bank attributable to any
such event shall be deemed to include an amount determined by such Bank to be
equal to the excess, if any, of (i) the amount of interest that such Bank would
pay for a deposit equal to the principal amount of such Bank denominated in the
Currency of such Loan for the period from the date of such payment, conversion,
failure or assignment to the last day of the then current Interest Period for
such Loan (or, in the case of a failure to borrow, convert or continue, the
duration of the Interest Period that would have resulted from such borrowing,
conversion or continuation) if the interest rate payable on such deposit were
equal to the Eurocurrency Rate for such Currency for such Interest Period, over
(ii) the amount of interest that such Bank would earn on such principal amount
for such period if such Bank were to invest such principal amount for such
period at the interest rate that would be bid by such Bank (or an affiliate of
such Bank) for deposits denominated in such Currency from other banks in the
eurocurrency market at the commencement of such period. The Company shall also
compensate each relevant Bank for any loss, cost or expense suffered by such
Bank as a result of the conversion, pursuant to subsection 2.11(b) or 6.3(b), of
the Currency in which a Loan is denominated, or the purchase or sale, pursuant
to subsection 2.11(c) or 6.3(c), of a participating interest in any Loan. A
certificate of any Bank setting forth any amount or amounts that such Bank is
entitled to receive pursuant to this Section shall be delivered to the Company
and shall be conclusive absent manifest error. The Company shall pay such Bank
the amount shown as due on any such certificate within 10 days after receipt
thereof.
7.9 Determinations. In making the determinations contemplated by
subsection 7.5, 7.6 and 7.8, each Bank may make such estimates, assumptions,
allocations and the like that such Bank in good faith determines to be
appropriate. Upon request of the Company, each Bank shall furnish to the
Company, at any time after demand for payment of an amount under
2005 Arrow Electronics Credit Agreement
53
subsection 7.5(a) or 7.8, a certificate outlining in reasonable detail the
computation of any amounts owing. Any certificate furnished by a Bank shall be
binding and conclusive in the absence of manifest error.
7.10 Change of Lending Office. If an event occurs with respect to
any Bank that makes operable the provisions of subsection 7.4 or entitles such
Bank to make a claim under subsection 7.5 or 7.6, such Bank shall, if requested
in writing by the Company, to the extent not inconsistent with such Bank's
internal policies, use reasonable efforts to (a) designate another office or
offices for the making and maintaining of its Loans or (b) obtain a different
source of funds or credit, as the case may be, the designation or obtaining of
which will eliminate such operability or reduce materially the amount such Bank
is so entitled to claim, provided that such designation or obtaining would not,
in the sole discretion of such Bank, result in such Bank incurring any costs
unless the Company has agreed to reimburse such Bank therefor.
7.11 Company Controls on Exposure; Calculation of Exposure;
Prepayment if Exposure exceeds Commitments. (a) The Company will implement and
maintain internal accounting controls to monitor the borrowings and repayments
of Loans by the Borrowers and the issuance of and drawings under Letters of
Credit, with the object of preventing any request for an Extension of Credit
that would result in (i) the Exposure of the Banks being in excess of the
Commitments, or (ii) the Foreign Currency Exposure in respect of any Currency
exceeding the Foreign Currency Exposure Sublimit for such Currency, and of
promptly identifying and remedying any circumstance where, by reason of changes
in exchange rates, (i) the aggregate amount of the Exposure exceeds the
Commitments, or (ii) the amount of the Foreign Currency Exposure in respect of
any Currency exceeds the Foreign Currency Exposure Sublimit for such Currency.
In the event that at any time the Company determines that (i) the aggregate
amount of the Exposure of the Banks exceeds the aggregate amount of the
Commitments by more than 5%, or (ii) the amount of the Foreign Currency Exposure
in respect of any Currency exceeds the Foreign Currency Exposure Sublimit for
such Currency, the Company will, as soon as practicable but in any event within
five Business Days of making such determination, make or cause to be made such
repayments or prepayments of Loans as shall be necessary to cause (i) the
aggregate amount of the Exposure of the Banks to no longer exceed the
Commitments, and (ii) the amount of the Foreign Currency Exposure in respect of
any Currency not to exceed the Foreign Currency Exposure Sublimit for such
Currency.
(b) The Administrative Agent will calculate the aggregate amount of
the Exposure of the Banks from time to time, and in any event not less
frequently than once during each calendar month. In making such calculations,
the Administrative Agent will rely on the information most recently received by
it from the Swing Line Banks in respect of outstanding Swing Line Loans, from
Banks in respect of outstanding Competitive Advance Loans, from Local Currency
Facility Agents in respect of outstanding Local Currency Loans and Issuing Banks
in respect of L/C Obligations. Upon making each such calculation, the
Administrative Agent will inform the Company and the Banks of the results
thereof.
(c) In the event that on any date the Administrative Agent
calculates that (i) the aggregate amount of the Exposure of the Banks exceeds
the aggregate amount of the Commitments by more than 5%, or (ii) the Foreign
Currency Exposure in respect of any Currency exceeds the Foreign Currency
Exposure Sublimit for such Currency, the
2005 Arrow Electronics Credit Agreement
54
Administrative Agent will give notice to such effect to the Company. After
receipt of any such notice, the Company will, as soon as practicable but in any
event within five Business Days of receipt of such notice, make or cause to be
made such repayments or prepayments of Loans as shall be necessary to cause (i)
the aggregate amount of the Exposure of the Banks to no longer exceed the
Commitments, or (ii) the Foreign Currency Exposure in any respect of any
Currency not to exceed the Foreign Currency Exposure Sublimit for such Currency.
(d) If at any time the Committed Exposure of any Bank exceeds such
Bank's Commitment, upon demand of such Bank, the Company will within one
Business Day prepay Loans in such amounts that after giving effect to such
prepayment the Committed Exposure of such Bank does not exceed its Commitment.
(e) Any prepayment required to be made pursuant to this subsection
7.11 shall be accompanied by payment of amounts payable, if any, pursuant to
subsection 7.8 in respect of the amount so prepaid.
SECTION 8. REPRESENTATIONS AND WARRANTIES
To induce the Syndication Agents, the Administrative Agent and the
Banks to enter into this Agreement and to make the Loans and issue or
participate in the Letters of Credit, the Company and each Subsidiary Borrower
(insofar as the representations and warranties by such Subsidiary Borrower
relate to it) hereby represents and warrants to each Agent, the Administrative
Agent and each Bank that:
8.1 Financial Condition. The audited consolidated balance sheets of
the Company and its consolidated Subsidiaries as at December 31, 2004 and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by Ernst & Young LLP, copies of which have
heretofore been furnished to each Bank or will be furnished to each Bank that
has not already received such copies, present fairly the consolidated financial
condition of the Company and its consolidated Subsidiaries as at such date, and
the consolidated results of their operations and their consolidated cash flows
for the fiscal year then ended. The unaudited consolidating balance sheet of the
Company and its consolidated Subsidiaries by geographic region as at March 31,
2005 and the related unaudited consolidating statement of operations and
retained earnings for the portion of the fiscal year ended on March 31, 2005,
present fairly the consolidating financial condition of the Company and its
consolidated Subsidiaries by geographic region as at such date, and the
consolidating results of their operations for the fiscal year then ended. All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein). Neither the Company nor any of
its consolidated Subsidiaries had, at the date of the most recent balance sheet
referred to above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign currency
swap or exchange transaction, which is not reflected in the foregoing statements
or referred to in the notes thereto. During the period from March 31, 2005 to
and including the date hereof there has been no sale, transfer or other
disposition by the Company or any of its consolidated Subsidiaries of any
material part of its business or property
2005 Arrow Electronics Credit Agreement
55
(other than the sale of assets relating to the cable and assembly business in an
aggregate amount up to $15,000,000) and no purchase or other acquisition of any
business or property (including any Capital Stock of any other Person) material
in relation to the consolidated financial condition of the Company and its
consolidated Subsidiaries at March 31, 2005 except as disclosed in writing to
the Banks prior to the Closing Date).
8.2 No Change. Since December 31, 2004 there has been no development
or event which has had or could reasonably be expected to have a Material
Adverse Effect.
8.3 Corporate Existence; Compliance with Law. The Company and each
of its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate or
other power and authority, and the legal right, to own and operate its property,
to lease the property it operates as lessee and to conduct the business in which
it is currently engaged, (c) is duly qualified as a foreign corporation or other
entity and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except where the failure to be duly qualified or in
good standing could not reasonably be expected to have a Material Adverse
Effect, and (d) is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
8.4 Corporate Power; Authorization; Enforceable Obligations. Each of
the Company and its Subsidiaries has the corporate or other power and authority,
and the legal right, to make, deliver and perform the Credit Documents to which
it is a party and to borrow hereunder and has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of this Agreement
and the execution, delivery and performance of the Credit Documents to which it
is a party. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents. This Agreement
has been, and each other Credit Document to which the Company or any of its
Subsidiaries is a party will be, duly executed and delivered on behalf of the
Company or such Subsidiary, as the case may be. This Agreement constitutes, and
each other Credit Document to which it is a party when executed and delivered
will constitute, a legal, valid and binding obligation of the Company or any of
its Subsidiaries party thereto enforceable against the Company or such
Subsidiary, as the case may be, in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
8.5 No Legal Bar. The execution, delivery and performance of the
Credit Documents to which the Company or any of its Subsidiaries is a party, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or Contractual Obligation of the Company or of any of its
Subsidiaries (except for violations of Contractual Obligations which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect) and will not result in, or require, the creation or
imposition of any Lien
2005 Arrow Electronics Credit Agreement
56
on any of its or their respective properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation, except for the Liens expressly
permitted by subsection 11.3.
8.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Company, threatened by or against the Company or any of
its Subsidiaries or against any of its or their respective properties or
revenues with respect to any of the Credit Documents or any of the transactions
contemplated hereby or thereby.
8.7 No Default. No Default or Event of Default has occurred and is
continuing.
8.8 Ownership of Property; Liens. Each of the Company and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, except where the failure to have
such title or such leasehold interest, as the case may be, could not reasonably
be expected to have a Material Adverse Effect, and none of such property is
subject to any Lien except as permitted by subsection 11.3.
8.9 Intellectual Property. Each of the Company and each of its
Subsidiaries owns, or is licensed to use, all domestic and foreign trademarks,
tradenames, copyrights, technology, know-how and processes necessary for the
conduct of its business as currently conducted (the "Intellectual Property")
except for those the failure to own or license which could not reasonably be
expected to have a Material Adverse Effect. No claim has been asserted and is
pending or, to the knowledge of the Company, has been threatened by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property which could
reasonably be expected to have a Material Adverse Effect, nor does the Company
know of any valid basis for any such claim. The use of such Intellectual
Property by the Company and its Subsidiaries does not infringe on the rights of
any Person, except for such claims and infringements that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
8.10 Local Currency Facilities. Schedule 8.10 sets forth, as of the
Closing Date, all Local Currency Facilities (including the Local Currency
Borrower, Local Currency Banks, Local Currency Facility Agent, Local Currency
Facility Maximum Borrowing Amount and Local Currency Bank Maximum Borrowing
Amount with respect thereto).
8.11 Taxes. Each of the Company and its consolidated Subsidiaries
has filed or caused to be filed all tax returns which, to the knowledge of the
Company, are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any unfiled tax returns for
taxes, and unpaid taxes, fees and other charges, (a) the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the Company or its consolidated Subsidiaries, as the case may be, or
(b) which in each case, individually or in the aggregate, would not cause the
Company and its consolidated Subsidiaries to have a liability in excess of
$20,000,000 or the Dollar Equivalent Amount thereof); no notice of tax Lien has
been filed, and,
2005 Arrow Electronics Credit Agreement
57
to the knowledge of the Company, no claim is being asserted by any taxing
authority, with respect to any such tax, fee or other charge except for claims
the amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Company or its consolidated
Subsidiaries, as the case may be, and claims for amounts which, in the
aggregate, do not exceed $20,000,000.
8.12 Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect or for any purpose which violates the provisions of the regulations of
such Board of Governors. If requested by any Bank or the Administrative Agent,
the Company will furnish to the Administrative Agent and each Bank a statement
to the foregoing effect in conformity with the requirements of FR Form U-1
referred to in said Regulation U.
8.13 ERISA. Each Plan which is intended to be qualified under
Section 401(a) (or 403(a) as appropriate) of the Code and each related trust
agreement, annuity contract or other funding instrument which is intended to be
tax-exempt under Section 501(a) of the Code is so qualified and tax-exempt and
has been so qualified and tax-exempt during the period from its adoption to
date. No event has occurred in connection with which the Company or any Commonly
Controlled Entity or any Plan, directly or indirectly, could reasonably be
expected to be subject to any material liability under ERISA, the Code or any
other law, regulation or governmental order or under any agreement, instrument,
statute, rule of law or regulation pursuant to or under which the Company or a
Subsidiary has agreed to indemnify or is required to indemnify any person
against liability incurred under, or for a violation or failure to satisfy the
requirements of, any such statute, regulation or order. No Reportable Event has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. The present value of all accrued benefits under each Single
Employer Plan maintained by the Company or any Commonly Controlled Entity or for
which the Company or any Commonly Controlled Entity has or could have any
liability (based on those assumptions used to fund the Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Neither the Company nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Company nor any Commonly Controlled Entity could reasonably be
expected to become subject to any liability under ERISA if the Company or any
such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date on
which this representation is made or deemed made. No such Multiemployer Plan is
in Reorganization or Insolvent. The present value (determined using actuarial
and other assumptions which are reasonable in respect of the benefits provided
and the employees participating) of the unfunded liability of the Company and
each Commonly Controlled Entity for benefits under all unfunded retirement or
severance plans, programs, policies or other arrangements (including, without
limitation, post retirement benefits to be provided to their current and former
employees under Plans which are welfare benefit plans (as
2005 Arrow Electronics Credit Agreement
58
defined in Section 3(1) of ERISA)), whether or not funded does not, in the
aggregate, exceed $15,000,000 (excluding those arrangements set forth on
Schedule 8.13).
8.14 Investment Company Act; Other Regulations. Neither the Company
nor any Subsidiary of the Company is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended. Neither the Company nor any Subsidiary of the
Company is subject to regulation under any Federal or State statute or
regulation which limits its ability to incur Indebtedness.
8.15 Subsidiaries. On the Closing Date, the only Subsidiaries of the
Company, and the only material partnerships or joint ventures in which the
Company or any Subsidiary has an interest, are those set forth on Schedule 8.15.
On the Closing Date, the Company owns the percentage of the issued and
outstanding Capital Stock or other evidences of the ownership of each
Subsidiary, partnership or joint venture set forth on Schedule 8.15 as set forth
on such Schedule. On the Closing Date, except as set forth on Schedule 8.15, no
such Subsidiary, partnership or joint venture has issued any securities
convertible into shares of its Capital Stock. The outstanding stock and
securities (or other evidence of ownership) of such Subsidiaries, partnerships
or joint ventures owned by the Company and its Subsidiaries are owned by the
Company and its Subsidiaries free and clear of all Liens, warrants, options or
rights of others of any kind whatsoever except for Liens permitted by subsection
11.3.
8.16 Accuracy and Completeness of Information. No document furnished
or statement made in writing to the Banks by the Company in connection with the
negotiation, preparation or execution of this Agreement or any of the other
Credit Documents contains any untrue statement of a material fact, or omits to
state any such material fact necessary in order to make the statements contained
therein not misleading, in either case which has not been corrected,
supplemented or remedied by subsequent documents furnished or statements made in
writing to the Banks. All other written information, reports and other papers
and data with respect to the Company and its Subsidiaries (other than financial
statements), furnished to the Banks by the Company, or on behalf of the Company,
were (a) in the case of those not prepared for delivery to the Banks, to the
Company's knowledge, at the time the same were so furnished, complete and
correct in all material respects for the purposes for which the same were
prepared and (b) in the case of those prepared for delivery to the Banks, to the
Company's knowledge, complete and correct in all material respects, or have been
subsequently supplemented by other information, reports or other papers or data,
to the extent necessary to give the Banks a true and accurate knowledge of the
subject matter in all material respects, it being understood that financial
projections as to future events are not to be viewed as facts and that actual
results may differ from projected results.
8.17 Purpose of Loans; Commitments. The proceeds of the Loans and
Letters of Credit shall be used by the Company for general corporate purposes of
the Company and, to the extent permitted hereunder, its Subsidiaries, including
working capital in the ordinary course of business, letters of credit,
repayment, prepayment or purchase of long-term indebtedness and acquisitions,
and the Commitments may be used by the Company as backup for its commercial
paper program, as applicable.
2005 Arrow Electronics Credit Agreement
59
8.18 Environmental Matters. Except as set forth on Schedule 8.18 or
insofar as there is no reasonable likelihood of a Material Adverse Effect
arising from any combination of facts or circumstances inconsistent with
any of the following:
(a) The facilities and properties owned or operated by the Company
or any of its Subsidiaries (the "Properties") do not contain, and to the
knowledge of the Company or its Subsidiaries, have not previously
contained, any Materials of Environmental Concern in amounts or
concentrations which (i) constitute or constituted a violation of, or (ii)
could reasonably be expected to give rise to liability under, any
applicable Environmental Law.
(b) The Properties and all operations at the Properties are in
compliance with all applicable Environmental Laws, and there is no
contamination at, under or to the knowledge of the Company about the
Properties or violation of any Environmental Law with respect to the
Properties or the business operated by the Company or any of its
Subsidiaries (the "Business") which could materially interfere with the
continued operation of the Properties.
(c) Neither the Company nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business,
nor does the Company or any of its Subsidiaries have knowledge or reason
to believe that any such notice will be received or is being threatened.
(d) To the knowledge of the Company or any of its Subsidiaries,
Materials of Environmental Concern have not been transported or disposed
of from the Properties in violation of, or in a manner or to a location
which could reasonably be expected to give rise to liability under, any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that could reasonably be
expected to give rise to liability under, any applicable Environmental
Law.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened, under any Environmental Law to which the Company or any
Subsidiary is or will be named as a party with respect to the Properties
or the Business, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other analogous
administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or
related to the operations of the Company or any Subsidiary in connection
with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that could reasonably give rise
to liability under any applicable Environmental Laws.
2005 Arrow Electronics Credit Agreement
60
SECTION 9. CONDITIONS PRECEDENT
9.1 Conditions to Closing Date. The occurrence of the Closing Date,
and the agreement of each Bank to make the initial Extension of Credit requested
to be made by it on or after the Closing Date, shall be subject to the
satisfaction, on or prior to the Closing Date, of the following conditions
precedent:
(a) Credit Documents. The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer of
the Company and each Subsidiary that will be a Subsidiary Borrower party
hereto on the Closing Date, with a counterpart for each Bank, (ii) for the
account of each Bank, an amended and restated Company Guarantee executed
and delivered by a duly authorized officer of the Company, with a
counterpart or conformed copy for each Bank and (iii) for the account of
each Bank, an amendment and restatement of each Existing Subsidiary
Guarantee and any other Subsidiary Guarantee, in each case executed and
delivered by a duly authorized officer of the Company or the applicable
Subsidiary Guarantor, with a counterpart or conformed copy for each Bank.
(b) Corporate Proceedings of each Loan Party. The Administrative
Agent shall have received, with a counterpart for each Bank, a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of each Loan Party (except any Foreign
Subsidiary Borrower) authorizing (i) the execution, delivery and
performance of each Credit Document to which it is a party and (ii) in the
case of each Borrower (except any Foreign Subsidiary Borrower), the
borrowings contemplated hereunder, certified by the Secretary or an
Assistant Secretary of such Loan Party as of the Closing Date, which
certificate shall be in form and substance satisfactory to the
Administrative Agent and shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded.
(c) Fees and Expenses. The Administrative Agent shall have received
the fees and expenses to be received on or prior to the Closing Date
pursuant to subsection 7.1(c).
(d) Legal Opinions. The Administrative Agent shall have received,
with a counterpart for each Bank, the following executed legal opinions:
(i) the executed legal opinion of Milbank, Tweed, Xxxxxx &
XxXxxx LLP, counsel to the Company and the Subsidiary Borrowers,
substantially in the form of Exhibit G-1, with such modifications
therein as shall be reasonably requested or approved by the
Administrative Agent; and
(ii) the executed legal opinion of Xxxxx X. Xxxxx, general
counsel of the Company, substantially in the form of Exhibit G-2,
with such modifications therein as shall be reasonably requested or
approved by the Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement and the other Credit Documents
as the Administrative Agent may reasonably require.
2005 Arrow Electronics Credit Agreement
61
(e) No Material Litigation. No litigation, inquiry, injunction or
restraining order shall be pending, entered or threatened (including any
proposed statute, rule or regulation) which in the reasonable judgment of
any Bank could have a Material Adverse Effect.
(f) Existing Credit Agreement. Any principal, interest, fees or
other amounts owing or accrued and unpaid under the Existing Credit
Agreement to any Person which is a Bank under (and as defined in) the
Existing Credit Agreement shall have been paid in full to such Person.
(g) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Credit Documents
shall be reasonably satisfactory in form and substance to the
Administrative Agent.
9.2 Conditions to Each Extension of Credit. The agreement of each
Bank to make any Extension of Credit requested to be made by it on any date
(including, without limitation, its initial Extension of Credit, but excluding
any Committed Rate Loan made pursuant to a Notice of Swing Line Refunding,
pursuant to subsections 5.5(c) or 6.3 or pursuant to subsection 2.6(c) if the
Dollar Equivalent Amount thereof is not increased) is subject to the
satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Company and its Subsidiaries in or pursuant to the
Credit Documents (other than, in respect of any Extension of Credit made
after the Closing Date the proceeds of which are to be applied by the
Company to repay maturing commercial paper (as specified in the applicable
Notice of Borrowing), subsection 8.2) shall be true and correct in all
material respects on and as of such date as if made on and as of such date
except for representations and warranties expressly stated to relate to a
specific earlier date, in which case such representations and warranties
are true and correct as of such earlier date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date after giving effect to the Loans requested
to be made on such date.
(c) No Material Adverse Change in Subsidiary Borrowers. If such
Extension of Credit is to or for a Subsidiary Borrower, no event which has
or could reasonably expected to have a material adverse effect on the
ability of such Subsidiary Borrower to perform its obligations under this
Agreement shall have occurred.
(d) Borrowing Certificate. In the case of the first requested
borrowing subsequent to the Closing Date, the Administrative Agent shall
have received with a counterpart for each Bank, a certificate of the
Company, dated as of such date, substantially in the form of Exhibit E,
with appropriate insertions and attachments, satisfactory in form and
substance to the Administrative Agent, executed by any Responsible Officer
of the Company.
2005 Arrow Electronics Credit Agreement
62
(e) Foreign Subsidiary Borrowers. In the case of the first requested
borrowing by each Foreign Subsidiary Borrower, the Company shall deliver
to the Administrative Agent (i) on or prior to such date a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of such Foreign Subsidiary Borrower
authorizing (1) the execution, delivery and performance of each Credit
Document to which it is a party and (2) the borrowings contemplated
hereunder, certified by the Secretary or an Assistant Secretary or other
authorized officer of such Foreign Subsidiary Borrower as of the Closing
Date, which certificate shall be in form and substance satisfactory to the
Administrative Agent and shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded and (ii)
five (5) Business Days prior to such date any additional information
requested by the Lenders in connection with Section 14.17.
Each borrowing by and Letter of Credit issued on behalf of any Borrower shall
constitute a representation and warranty by the Company and such Borrower as of
the date of such Loan and/or Letter of Credit that the conditions contained in
this subsection 9.2 have been satisfied.
SECTION 10. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding and unpaid or any other amount
is owing to any Bank, any Agent or the Administrative Agent hereunder or under
any Local Currency Facility, the Company shall and (except in the case of
delivery of financial information, reports and notices) shall cause each of its
Subsidiaries to:
10.1 Financial Statements. Furnish to each Bank:
(a) as soon as available, but in any event within the earlier of (i)
120 days after the end of each fiscal year of the Company or (ii) 30 days
after the date on which such financial statements are required to be filed
with the Securities and Exchange Commission under the Securities Act of
1933, a copy of the audited consolidated balance sheet of the Company and
its consolidated Subsidiaries as at the end of such year and the related
consolidated statements of operations and shareholders equity and of cash
flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope
of the audit, by Ernst & Young or other independent certified public
accountants of nationally recognized standing reasonably acceptable to the
Required Banks; provided that the Company may in lieu of furnishing such
financial statements furnish to each Bank its Form 10-K filed with the
Securities and Exchange Commission or any successor or analogous
Governmental Authority for such year;
(b) as soon as available, but in any event within the earlier of (i)
120 days after the end of each fiscal year of the Company or (ii) 30 days
after the date on which consolidated financial statements for the relevant
period are required to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, the unaudited consolidating
balance sheet of the Company and its consolidated Subsidiaries by
geographic region as at the end of such year and the related unaudited
consolidating
2005 Arrow Electronics Credit Agreement
63
statements of operations of the Company and its consolidated Subsidiaries
by geographic region for such year, setting forth in each case in
comparative form the figures for the previous year, certified pursuant to
subsection 10.2(b) by a Responsible Officer as fairly presenting the
consolidating financial condition and results of operations of the Company
and its consolidated Subsidiaries by geographic region;
(c) as soon as available, but in any event within the earlier of (i)
60 days after the end of each of the first three quarterly periods of each
fiscal year of the Company or (ii) 15 days after the date on which such
financial statements are required to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, the unaudited
consolidated balance sheet of the Company and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of operations and shareholders' equity and of cash
flows of the Company and its consolidated Subsidiaries for such quarter
and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for such
quarter of the previous year, certified by a Responsible Officer as fairly
presenting in all material respects when considered in relation to the
consolidated financial statements of the Company and its consolidated
Subsidiaries (subject to normal year-end audit adjustments); provided that
the Company may in lieu of furnishing such unaudited consolidated balance
sheet furnish to each Bank its Form 10-Q filed with the Securities and
Exchange Commission or any successor or analogous Governmental Authority
for the relevant quarterly period; and
(d) as soon as available, but in any event within the earlier of (i)
60 days after the end of each of the first three quarterly periods of each
fiscal year of the Company or (ii) 15 days after the date on which
consolidated financial statements for the relevant period are required to
be filed with the Securities and Exchange Commission under the Securities
Act of 1933, the unaudited consolidating balance sheet of the Company and
its consolidated Subsidiaries by geographic region as at the end of such
quarter and the related unaudited consolidating statements of operations
of the Company and its consolidated Subsidiaries by geographic region for
such quarter and the portion of the fiscal year through the end of such
quarter, in the case of the unaudited consolidating balance sheet setting
forth in comparative form the figures for the previous year (but not the
corresponding figures for such quarter of the previous year) and in the
case of the statements of operations setting forth in comparative form the
figures for such quarter of the previous year, certified by a Responsible
Officer as fairly presenting the consolidating financial condition and
results of operations of the Company and its consolidated Subsidiaries by
geographic region (subject to normal year-end audit adjustments);
the financial statements to be furnished pursuant to this subsection 10.1 shall
fairly present the consolidated (or consolidating by geographic region)
financial position and results of operations of the Company and its consolidated
Subsidiaries in accordance with GAAP (subject, in the case of subsections
10.1(c) and (d), to normal year-end audit adjustments and the absence of
complete footnotes) applied consistently throughout the periods reflected
therein and with prior periods (except as approved by such accountants or
Responsible Officer, as the case may be, and disclosed therein).
2005 Arrow Electronics Credit Agreement
64
10.2 Certificates; Other Information. Furnish to each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 10.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 10.1(a) and 10.1(b), a certificate of a
Responsible Officer substantially in the form of Exhibit H;
(c) concurrently with the delivery of the financial statements
referred to in subsection 10.1(c), a certificate of a Responsible Officer
(i) stating that, to the best of such Responsible Officer's knowledge, the
Company has observed and performed all of its covenants and other
agreements contained in this Agreement and the other Credit Documents to
which it is a party to be observed or performed by it, (ii) that such
Responsible Officer has obtained no knowledge of any Default or Event of
Default except as specified therein and (iii) setting forth calculations
supporting compliance with subsections 11.1(a) and (b);
(d) as soon as delivered, a copy of the letter, addressed to the
Company, of the certified public accountants who prepared the financial
statements referred to in subsection 10.1(a) for such fiscal year and
otherwise referred to as a "management letter";
(e) within five days after the same are sent, copies of all
financial statements and reports which the Company sends to its
stockholders generally, and within five days after the same are filed,
copies of all financial statements and reports which the Company or any of
its Subsidiaries may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(f) concurrently with the delivery of the financial statements
referred to in subsections 10.1(a) and 10.1(c), a certificate of a
Responsible Officer setting forth the name of each Foreign Subsidiary
Borrower and each outstanding Swing Line Loan, Competitive Advance Loan,
Local Currency Loan made and Letter of Credit issued to the Foreign
Subsidiary Borrowers as of the date of such financial statements; and
(g) promptly, such additional documents, instruments, legal opinions
or financial and other information as the Administrative Agent or any Bank
may from time to time reasonably request.
10.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, including, without limitation, all obligations
in respect of taxes, except where the amount or validity thereof is currently
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been provided on the books of the
2005 Arrow Electronics Credit Agreement
65
Company or its Subsidiaries, as the case may be, or where the failure to pay,
discharge or otherwise satisfy could not reasonably be expected to have a
Material Adverse Effect.
10.4 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as otherwise permitted
pursuant to subsection 11.4; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
10.5 Maintenance of Property; Insurance. Keep all property useful
and necessary in its business in good working order and condition, except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect; maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least such
risks (but including in any event public liability, product liability and
business interruption) as are usually insured against in the same general area
by companies engaged in the same or a similar business; and furnish to each
Bank, upon written request, full information as to the insurance carried.
10.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which the entries are, in all material
respects, full, true and correct in conformity with sound business practice and
all Requirements of Law shall be made of all dealings and transactions in
relation to its business and activities; and, upon reasonable notice under the
circumstances, permit representatives of the Administrative Agent to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of the Company and its Subsidiaries with officers and employees
of the Company and its Subsidiaries and with its independent certified public
accountants.
10.7 Notices. Promptly, after the Company becomes aware thereof,
give notice to the Administrative Agent and each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Company or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the
Company or any of its Subsidiaries and any Governmental Authority, which
in either case of clauses (i) or (ii), if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect or cause a Default or an Event of Default;
(c) any litigation or proceeding affecting the Company or any of its
Subsidiaries (i) in which the amount involved is $20,000,000 or more and
not covered by insurance or (ii) in which injunctive or similar relief is
sought which could reasonably be expected to have a Material Adverse
Effect;
2005 Arrow Electronics Credit Agreement
66
(d) the following events: (i) the occurrence or expected occurrence
of any Reportable Event with respect to any Plan, a failure to make any
required contribution to a Plan, the creation of any Lien in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization
or Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the Company
or any Commonly Controlled Entity or any Multiemployer Plan with respect
to the withdrawal from, or the terminating (other than a standard
termination under Section 4041(b) of ERISA), Reorganization or Insolvency
of, any Plan; and
(e) any change, development or event involving a prospective change,
which has had or could reasonably be expected to have a Material Adverse
Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Company proposes to take with respect thereto.
10.8 Environmental Laws. (a) Comply with, and take all reasonable
efforts to ensure compliance by all tenants and subtenants, if any, in all
material respects with, all applicable Environmental Laws and obtain and comply
in all material respects with and maintain, and undertake all reasonable efforts
to ensure that all tenants and subtenants obtain and comply in all material
respects with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not
reasonably be expected to have a Material Adverse Effect.
10.9 Additional Subsidiary Guarantees. In the event that any
Domestic Subsidiary (with assets accounting for more than 5% of Total Assets)
which is not a Guarantor shall own any assets or generate any revenues
(excluding any Domestic Subsidiary the sole activities of which consist of
entering into one or more Permitted Receivables Securitizations), take all
actions necessary to cause such Domestic Subsidiary to execute and deliver a
Subsidiary Guarantee, within 30 days of the occurrence of such event.
10.10 Foreign Subsidiary Borrowers. Within 45 days after the Closing
Date, the Company shall deliver to the Administrative Agent (i) an executed
Foreign Subsidiary Opinion of counsel to each Foreign Subsidiary Borrower that
is a party to this Agreement on the Closing Date if the aggregate Exposure of
such Subsidiary owing to all Banks as of the Closing Date exceeds $20,000,000
and (ii) a copy of all documentation with respect to all Local Currency
Facilities.
2005 Arrow Electronics Credit Agreement
67
SECTION 11. NEGATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding and unpaid or any other amount
is owing to any Bank, any Agent or the Administrative Agent hereunder or under
any Local Currency Facility:
11.1 Financial Condition Covenants. The Company shall not:
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio on any day during any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------------------------- --------------
June 30, 2005 6.00 to 1.00
September 30, 2005 6.00 to 1.00
December 31, 2005 6.00 to 1.00
March 31, 2006 6.00 to 1.00
June 30, 2006 5.00 to 1.00
September 30, 2006 5.00 to 1.00
December 31, 2006 5.00 to 1.00
March 31, 2007 5.00 to 1.00
June 30, 2007 5.00 to 1.00
September 30, 2007 5.00 to 1.00
December 31, 2007 and thereafter 4.00 to 1.00
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
Consolidated
Interest Coverage
Fiscal Quarter Ratio
-------------------------------- -----------------
June 30, 2005 2.50 to 1.00
September 30, 2005 2.50 to 1.00
December 31, 2005 2.50 to 1.00
March 31, 2006 2.50 to 1.00
June 30, 2006 2.50 to 1.00
September 30, 2006 2.50 to 1.00
December 31, 2006 2.50 to 1.00
March 31, 2007 2.50 to 1.00
2005 Arrow Electronics Credit Agreement
68
June 30, 2007 2.50 to 1.00
September 30, 2007 2.50 to 1.00
December 31, 2007 and thereafter 3.00 to 1.00
11.2 Limitation on Indebtedness of Subsidiaries. The Company shall
not permit any of its Subsidiaries to, and the Subsidiaries shall not, directly
or indirectly, create, incur, assume or suffer to exist any Indebtedness, except
(a) any Indebtedness of Subsidiaries pursuant to any of the Credit Documents,
(b) any Guarantee Obligation of any Domestic Subsidiary guaranteeing
Indebtedness of the Company otherwise permitted hereunder so long as such
Domestic Subsidiary shall have executed and delivered to the Administrative
Agent a Subsidiary Guarantee and such Subsidiary Guarantee shall be in full
force and effect, (c) cash pooling arrangements in connection with cash
management systems entered into by the Company or any Subsidiaries in the
ordinary course of business; provided that such arrangements do not have a
negative balance, (d) Indebtedness in respect of drafts on Italian banks with
regard to working capital needs in the ordinary course of business, (e)
Indebtedness of any Foreign Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including Capital
Lease Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets prior to
the acquisition thereof, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof
(provided that such Indebtedness is incurred prior to or within 180 days after
such acquisition or the completion of such construction or improvement), (f)
Indebtedness of any Foreign Subsidiary owing to the Company or any other
Subsidiary, (g) Indebtedness specified on Schedule 11.2, (h) Indebtedness
consisting of liabilities of any Subsidiary in respect of a Permitted
Receivables Securitization in an aggregate amount up $550,000,000 and (i) any
other Indebtedness of a Foreign Subsidiary in an aggregate amount not to exceed
$150,000,000, of which no more than $50,000,000 may constitute Indebtedness of
European Subsidiaries.
11.3 Limitation on Liens. The Company shall not, and shall not
permit any of its Domestic Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Company or its Domestic
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 60 days or which are being
contested in good faith by appropriate proceedings;
2005 Arrow Electronics Credit Agreement
69
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Company or such Domestic Subsidiary;
(f) Liens created in connection with Indebtedness incurred pursuant
to Section 11.2(h);
(g) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date
hereof prior to the time such Person becomes a Subsidiary; provided that
(i) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary, as the case may be,
(ii) such Lien shall not apply to any other property or assets of the
Company or any Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date
such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(h) Liens on fixed or capital assets acquired, constructed or
improved by the Company or any Subsidiary; provided that (i) such security
interests and the Indebtedness secured thereby are incurred prior to or
within 90 days after such acquisition or the completion of such
construction or improvement, (ii) the Indebtedness secured thereby does
not exceed the cost of acquiring, constructing or improving such fixed or
capital assets and (iii) such security interests shall not apply to any
other property or assets of the Company or any Subsidiary;
(i) any Lien on a bank account of the Company or any Subsidiary
arising in connection with the cash pooling arrangements referred to in
Section 11.2(c); and
(j) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Company and all Domestic
Subsidiaries) a Dollar Equivalent Amount equal $40,000,000 at any time
outstanding.
11.4 Limitation on Fundamental Changes. The Company shall not, and
shall not permit any of its Domestic Subsidiaries to, directly or indirectly,
enter into any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all of its
property, business or assets, except:
2005 Arrow Electronics Credit Agreement
70
(i) any Subsidiary may be merged or consolidated with or into the
Company (provided that the Company shall be the continuing or surviving
corporation) or with or into any one or more wholly-owned Domestic
Subsidiaries; and
(ii) any Subsidiary may sell, lease, transfer or otherwise dispose
of any or all of its assets (upon voluntary liquidation or otherwise) (a)
to the Company or any other wholly owned Domestic Subsidiary or (b) to any
other Person if the Company would be permitted to sell such assets
directly to such Person under this Section 11.4.
11.5 Limitations on Payments. For the period from and including the
Closing Date until and including the first fiscal quarter end on which the
Consolidated Leverage Ratio for the period of four consecutive quarters ending
on such date is less than 3.5 to 1.0 (before and after giving effect to such
restricted payment), the Company shall not, and shall not permit any of its
Subsidiaries to, make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of any Loan Party, whether
now or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
any Loan Party (collectively, "Restricted Payments"), except that (w) the
Company or any Subsidiary may purchase all or any portion of the minority equity
interests in any Subsidiary listed as less than wholly-owned (directly or
indirectly) by the Company on Schedule 8.15, (x) any Subsidiary or Loan Party
may make Restricted Payments to any other Loan Party, (y) any Loan Party may
make Restricted Payments consisting solely of Capital Stock of any Loan Party
and (y) any Loan Party may make payments related to restricted stock for
employee compensation and ESOP related purchases in an aggregate amount not to
exceed $30,000,000 in each fiscal year of the Borrower.
11.6 Limitations on Acquisitions. The Company shall not, and shall
not permit any of its Subsidiaries to, purchase any assets constituting a
business unit of, or the Capital Stock of, any Person, or make any investment in
or loan or advance to any joint venture except for investments in Existing Joint
Ventures in an aggregate amount not to exceed $50,000,000, Permitted Joint
Ventures and Permitted Acquisitions; provided that immediately prior to and
after giving effect to such Permitted Acquisition:
(a) no Default or Event of Default shall have occurred and be continuing;
and
(b) such Permitted Joint Ventures and Permitted Acquisitions are funded
(i) with common stock of the Company; or (ii) cash or other consideration, so
long as, at the time of and after giving pro forma effect to such Permitted
Joint Venture or Permitted Acquisitions funded with consideration other than
common stock of the Company, either (A) the Consolidated Leverage Ratio is less
than or equal to 4.00 to 1.00 or (B) the Company has Liquidity of at least
$450,000,000; provided that the criteria set forth under this clause (b)(ii)
shall not be a condition to consummation of Permitted Joint Ventures or
Permitted Acquisitions for aggregate consideration not exceeding $50,000,000 in
each fiscal year of the Company.
2005 Arrow Electronics Credit Agreement
71
11.7 Limitation on Negative Pledge Clauses. The Company shall not,
and shall not permit any of its Subsidiaries to, enter into or suffer to exist
or become effective any agreement that prohibits or limits the ability of the
Company or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its Property or revenues, whether now owned or hereafter
acquired, to secure the obligations of the Loan Parties under the Credit
Documents, other than (a) this Agreement and the other Credit Documents, (b)
conditions imposed by law, regulation, court order, rule or decree, (c)
agreements relating to Property encumbered by Liens permitted by Section 11.3 as
long as such agreements apply only to the Property encumbered by such Liens, (d)
restrictions contained in the Arrow Note Documents or any other evidence of
Indebtedness so long as not materially more restrictive in the aggregate than
the Arrow Note Documents, (e) any agreement relating to Property of a Subsidiary
that is in effect at the time such Person becomes a Subsidiary (provided that
such agreement was not entered into in contemplation of such Person becoming a
Subsidiary), (f) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary, (g)
any agreement evidencing Indebtedness of any Foreign Subsidiary permitted by
Section 11.2 so long as such agreement does not restrict any Lien securing any
Property of the Company or any Domestic Subsidiary, (h) agreements with
suppliers to the Company or any Subsidiary relating to any inventory supplied by
such suppliers and (i) any restrictions in Hedging Agreements that require the
granting of liens to the counterparty thereunder on an equal and ratable basis
with Liens securing the obligations of the Loan Parties under the Credit
Documents.
11.8 Limitation on Restrictions on Subsidiary Distributions. The
Company shall not, and shall not permit any of its Subsidiaries to, enter into
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Subsidiary to (a) make Restricted Payments in respect of
any Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to,
the Company or any other Subsidiary, (b) make investments in the Company or any
other Subsidiary or (c) transfer any of its assets to the Company or any other
Subsidiary, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Credit Documents, (ii) any
restrictions with respect to a Subsidiary imposed pursuant to an agreement that
has been entered into in connection with the Disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary, (iii) conditions imposed
by law, regulation, court order, rule or decree, (iv) restrictions relating to
any special purpose entity under any Permitted Receivables Securitization, (v)
any restriction imposed on any Subsidiary that is in effect at the time such
Person becomes a Subsidiary (provided that such restriction was not entered into
in contemplation of such Person becoming a Subsidiary) and (vi) any restriction
in any agreement evidencing Indebtedness of any Foreign Subsidiary permitted by
Section 11.2.
SECTION 12. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) (i) Any Specified Borrower shall fail to pay any principal of
any Loan or any Reimbursement Obligation owing by it when due (whether at
the stated maturity, by acceleration or otherwise) in accordance with the
terms hereof; or (ii) any Local Currency
2005 Arrow Electronics Credit Agreement
72
Borrower shall fail to pay any principal of on any Local Currency Loan
when due in accordance with the applicable terms of the relevant Local
Currency Facility; or (iii) any Specified Borrower or Local Currency
Borrower shall fail to pay any interest on any Loan or Local Currency Loan
or any fee or any other amount payable hereunder or under any Local
Currency Facility, within five days after any such interest or other
amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Company or any Subsidiary herein or in any other Credit Document or which
is contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or
any such other Credit Document shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(c) The Company or any Subsidiary shall default in the observance or
performance of any agreement contained in Section 11 and, with respect to
subsections 11.2 and 11.3, such default shall continue unremedied for a
period of 20 days; or
(d) The Company or any Subsidiary shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Credit Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days after the Company has knowledge thereof; or
(e) Any of the Credit Documents shall cease, for any reason, to be
in full force and effect, or the Company shall so assert in writing
(except for the termination of any Local Currency Facility if all Local
Currency Loans and other amounts owing thereunder are paid in full); or
(f) The Company or any of its consolidated Subsidiaries shall (i)
default in any payment of principal of or interest of any Indebtedness
(other than the Loans and Reimbursement Obligations) or in the payment of
any Guarantee Obligation or in connection with any Permitted Receivables
Securitization, in each case with an outstanding principal amount in
excess of a Dollar Equivalent Amount equal to $50,000,000 when due beyond
the period of grace, if any, provided in the instrument or agreement under
which such Indebtedness or Guarantee Obligation was created; or (ii)
default in the observance or performance of any other agreement or
condition relating to any such Indebtedness, Guarantee Obligation or
Permitted Receivables Securitization or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable; or
(g) (i) Any Specified Borrower, or any Subsidiary that, directly or
indirectly, accounts for more than 5% of Total Assets, at any date shall
commence any case,
2005 Arrow Electronics Credit Agreement
73
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it
or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Company or any such Subsidiary
shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against any Specified Borrower or any Subsidiary
any case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against any Specified Borrower or any Subsidiary any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or
(h) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Company or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Banks, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Company or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Banks is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or
conditions, if any, could reasonably be expected to subject the Company to
any tax, penalty or other liabilities in the aggregate material in
relation to the business, operations, property or financial or other
condition of the Company; or
(i) One or more judgments or decrees (other than those related to
material litigation listed on Schedule 12(i); provided that the aggregate
amount of such judgments shall not exceed $25,000,000) shall be entered
against the Company or any of its Subsidiaries involving in the aggregate
a liability (not paid or fully covered by insurance) of a Dollar
Equivalent Amount equal to $25,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 60 days from the entry thereof; or
2005 Arrow Electronics Credit Agreement
74
(j) The Company Guarantee or any Subsidiary Guarantee shall cease,
for any reason, to be in full force and effect (other than, in the case of
any Subsidiary Guarantee, in accordance with the terms thereof) or any
Guarantor party thereto shall so assert; or
(k) A Change in Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) above with respect to any Specified
Borrower or Guarantor, automatically the Commitments shall immediately terminate
and the Loans hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall become
immediately due and payable and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Banks, the Administrative Agent may, or upon the request of the
Required Banks, the Administrative Agent shall, by notice to the Company declare
the Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Banks, the
Administrative Agent may, or upon the request of the Required Banks, the
Administrative Agent shall, by notice to the Company, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable. With
respect to all Letters of Credit with respect to which presentment for honor
shall not have occurred at the time of an acceleration pursuant to the preceding
sentence, the applicable Borrower shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to the
aggregate then undrawn and unexpired amount of Letters of Credit issued for its
account. Each Borrower hereby grants to the Administrative Agent, for the
benefit of the Issuing Banks and the L/C Participants, a security interest in
such cash collateral to secure all obligations of such Borrower under this
Agreement and the other Loan Documents. Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payment of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay other obligations of the applicable Borrower
hereunder. After all such Letters of Credit shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been satisfied and all
other obligations of the applicable Borrower hereunder shall have been paid in
full, the balance, if any, in such cash collateral account shall be returned to
the applicable Borrower. The Borrowers shall execute and deliver to the
Administrative Agent, for the account of the Issuing Banks and the L/C
Participants, such further documents and instruments as the Administrative Agent
may request to evidence the creation and perfection of the within security
interest in such cash collateral account.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
2005 Arrow Electronics Credit Agreement
75
SECTION 13. THE ADMINISTRATIVE AGENT; THE SYNDICATION AGENTS; THE ARRANGER
13.1 Appointment. Each Bank hereby irrevocably designates and
appoints JPMorgan Chase Bank, N.A., as the Administrative Agent of such Bank
under this Agreement and the other Credit Documents, and each such Bank
irrevocably authorizes JPMorgan Chase Bank, N.A., as the Administrative Agent
for such Bank, to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Credit Document or otherwise exist against the
Administrative Agent.
13.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement and the other Credit Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
13.3 Exculpatory Provisions. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Credit Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Banks for
any recitals, statements, representations or warranties made by the Company or
any officer thereof contained in this Agreement or any other Credit Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or any other Credit Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Credit Document or for any failure of the Company to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement (other than conditions precedent set forth in Section 9.1) or any
other Credit Document, or to inspect the properties, books or records of the
Company.
13.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Company), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Credit
Document unless it shall first receive such advice or concurrence of the
Required Banks
2005 Arrow Electronics Credit Agreement
76
or all of the Banks, as may be required hereunder, as it deems appropriate or it
shall first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected from liability to the Banks in acting, or in refraining from
acting, under this Agreement and the other Credit Documents in accordance with a
request of the Required Banks or all of the Banks, as may be required hereunder,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Banks and their respective successors and assigns.
13.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Bank or the
Company referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Banks. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Banks or all of the Banks, as may be required hereunder;
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the Banks.
13.6 Non-Reliance on Administrative Agent and Other Banks. Each Bank
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by the Administrative
Agent hereinafter taken, including any review of the affairs of the Company,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Bank. Each Bank represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Company and made its own decision to make its Loans
hereunder and enter into this Agreement and the other Credit Documents to which
it is or will be a party. Each Bank also represents that it will, independently
and without reliance upon the Administrative Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Credit Documents, and to
make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Company and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Banks by
the Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Company and its Subsidiaries
which may come into the possession of the Administrative Agent and any Issuing
Bank or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
2005 Arrow Electronics Credit Agreement
77
13.7 Indemnification. The Banks agree to indemnify the
Administrative Agent and each Issuing Bank in their respective capacities as
such (to the extent not reimbursed by the Company and without limiting the
obligation of the Company to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this subsection (or, if indemnification is sought after the date upon
which the Commitments shall have terminated and the Loans shall have been paid
in full, ratably in accordance with their Commitment Percentages immediately
prior to such date), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Loans) be imposed on,
incurred by or asserted against the Administrative Agent or any Issuing Bank in
any way relating to or arising out of this Agreement, any of the other Credit
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent or any Issuing Bank under or in connection with any
of the foregoing; provided that no Bank shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Administrative Agent's or Issuing Bank's, as the case may be, gross negligence
or willful misconduct. The agreements in this subsection shall survive the
payment of the Loans, the Reimbursement Obligations and all other amounts
payable hereunder.
13.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Company and any of its
Subsidiaries as though the Administrative Agent were not the Administrative
Agent hereunder and under the other Credit Documents. With respect to its Loans
made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Credit Documents as any Bank and may
exercise the same as though it were not the Administrative Agent, and the terms
"Bank" and "Banks" shall include the Administrative Agent in its individual
capacity.
13.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Banks; provided that
any such resignation shall not be effective until a successor agent has been
appointed and approved in accordance with this subsection 13.9, and such
successor agent has accepted its appointment. If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the other Credit
Documents, then the Required Banks shall appoint from among the Banks a
successor administrative agent for the Banks, which successor agent shall be
approved by the Company (which approval shall not be unreasonably withheld or
delayed or be required during the existence of an Event of Default), whereupon
such successor administrative agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement. After
any retiring Administrative Agent's resignation as Administrative Agent, the
provisions of this subsection shall inure to its benefit as
2005 Arrow Electronics Credit Agreement
78
to any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement and the other Credit Documents.
13.10 The Arranger and Syndication Agents. Each Bank acknowledges
that none of the Arranger and the Syndication Agents, in such respective
capacity, shall have any duties or responsibilities, or shall incur any
liabilities, under this Agreement or the other Credit Documents.
SECTION 14. MISCELLANEOUS
14.1 Amendments and Waivers. (a) Neither this Agreement nor any
other Credit Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Banks may, or, with the written consent of the Required
Banks, the Administrative Agent may, from time to time, (i) enter into with the
Loan Parties party thereto written amendments, supplements or modifications to
this Agreement and the other Credit Documents for the purpose of adding any
provisions to this Agreement or the other Credit Documents or changing in any
manner the rights of the Banks or of the Loan Parties hereunder or thereunder or
(ii) waive, on such terms and conditions as the Required Banks or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Credit Documents or any Default
or Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) reduce the amount or
extend the scheduled date of maturity of any Loan or reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of any
payment thereof or increase the aggregate amount or extend the expiration date
of any Bank's Commitment, in each case without the consent of each Bank directly
affected thereby, or (ii) amend, modify or waive any provision of this
subsection or reduce the percentage specified in the definition of Required
Banks, or consent to the assignment or transfer by the Company of any of its
rights and obligations under this Agreement and the other Credit Documents or
amend, modify or waive subsection 7.3(a) or 14.6(a), or amend, modify or waive
any other provision hereof specifying the number or percentage of Banks required
to waive, amend or modify any rights hereunder or any determination granting
consent hereunder, or release any Subsidiary from its Subsidiary Guarantee or
release the Company from the Company Guarantee, in each case without the written
consent of all the Banks, or (iii) amend, modify or waive any provision of
Section 13 without the written consent of the then Administrative Agent. Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Banks and shall be binding upon the Company, the
Subsidiary Borrowers, the Banks, the Syndication Agents, the Administrative
Agent and all future holders of the Loans. In the case of any waiver, the
Company, the Banks and the Administrative Agent shall be restored to their
former position and rights hereunder and under any other Credit Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
(b) In addition to amendments effected pursuant to the foregoing
paragraph (a), Schedules II, III and IV may be amended as follows:
2005 Arrow Electronics Credit Agreement
79
(i) Schedule II will be amended to add Subsidiaries of the
Company as additional Subsidiary Borrowers upon (A) execution and
delivery by the Company, any such Subsidiary Borrower and the
Administrative Agent, of a Joinder Agreement providing for any such
Subsidiary to become a Subsidiary Borrower, and (B) delivery to the
Administrative Agent of (1) if reasonably requested by the
Administrative Agent, a legal opinion in respect of such additional
Subsidiary Borrower and (2) such other documents with respect
thereto as the Administrative Agent shall reasonably request.
(ii) Schedule II will be amended to remove any Subsidiary as a
Subsidiary Borrower upon (A) execution and delivery by the Company
of a Schedule Amendment providing for such amendment, (b) repayment
in full of all outstanding Loans of such Subsidiary Borrower and (c)
cash collateralization of all outstanding Letters of Credit issued
for the account of such Subsidiary Borrower.
(iii) Schedule III will be amended to designate other Banks as
additional or replacement Swing Line Banks or additional Issuing
Banks, upon execution and delivery by the Company, the
Administrative Agent and such additional or replacement Swing Line
Bank or additional Issuing Bank, as the case may be, of a Schedule
Amendment providing for such amendment. In the case of any
replacement of a Swing Line Bank pursuant to a Schedule Amendment,
the existing Swing Line Bank replaced pursuant thereto shall cease
to be a Swing Line Bank upon the effectiveness of such Schedule
Amendment and the repayment of all Swing Line Loans owing to such
replaced Swing Line Bank.
(iv) Schedule III will be amended to change administrative
information (including the Swing Line Rate definition) with respect
to Swing Line Banks or Issuing Banks, upon execution and delivery by
the Company, the Administrative Agent and such Swing Line Bank or
Issuing Bank, as the case may be, of a Schedule Amendment providing
for such amendment.
(v) Schedule IV will be amended to change administrative
information contained therein (other than any interest rate
definition, Funding Time, Payment Time or notice time contained
therein) or to add Available Foreign Currencies (and related
interest rate definitions and administrative information), upon
execution and delivery by the Company and the Administrative Agent
of a Schedule Amendment providing for such amendment.
(vi) Schedule IV will be amended to conform any Funding Time,
Payment Time or notice time contained therein to then-prevailing
market practices, upon execution and delivery by the Company, the
Required Banks and the Administrative Agent of a Schedule Amendment
providing for such amendment.
2005 Arrow Electronics Credit Agreement
80
(vii) Schedule IV will be amended to change any interest rate
definition contained therein, upon execution and delivery by the
Company, all the Banks and the Administrative Agent of a Schedule
Amendment providing for such amendment.
(c) The Administrative Agent shall give prompt notice to each Bank
of any amendment effect pursuant to subsection 14.1(b).
(d) Notwithstanding the provisions of this subsection 14.1, any
Local Currency Facility may be amended, supplemented or otherwise modified in
accordance with its terms so long as after giving effect thereto either (i) such
Local Currency Facility ceases to be a "Local Currency Facility" and the Company
so notifies the Administrative Agent or (ii) the Local Currency Facility
continues to meet the requirements of a Local Currency Facility set forth
herein.
(e) The Company may designate a Replacement Bank to assume the
Commitments, if any, and the obligations of any Bank (an "Objecting Bank") that
refuses to consent to an amendment, supplement or waiver that both requires the
consent of all the Banks in order to become effective and is acceptable to one
or more other Banks constituting the Required Banks, and to purchase the
outstanding Loans of such Objecting Bank and such Objecting Bank's rights
hereunder and with respect thereto, without recourse upon, or warranty by, or
expense to, such Objecting Bank (unless such Objecting Bank agrees otherwise),
for a purchase price equal to the outstanding principal amount of the Loans of
such Objecting Bank plus (i) all interest accrued and unpaid thereon and all
other amounts owing to such Objecting Bank hereunder and (ii) any amount which
would be payable to such Objecting Bank pursuant to subsection 7.8 (assuming
that all Loans of such Objecting Bank were prepaid on the date of such
assumption), and upon such assumption and purchase by the Replacement Bank, such
Replacement Bank, if it is not already a Bank, shall be deemed to be a "Bank"
for purposes of this Agreement and such Objecting Bank shall cease to be a
"Bank" for purposes of this Agreement and shall no longer have any obligations
or rights hereunder (other than any obligations or rights which according to
this Agreement shall survive the termination of this Agreement).
14.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or five days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Company, the Subsidiary
Borrowers and the Administrative Agent, and as set forth in Schedule I in the
case of the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Loans:
2005 Arrow Electronics Credit Agreement
81
The Company: Arrow Electronics, Inc.
00 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent: JPMorgan Chase Bank, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: JPMorgan Chase Bank, N.A.
0000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Subsidiary Borrowers: c/o Arrow Electronics, Inc
00 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
; provided that any Notice of Borrowing, Notice of Continuation, Notice of
Conversion, Notice of Swing Line Outstandings, Notice of Swing Line Refunding,
Notice of Local Currency Outstandings, Notice of Prepayment, Notice of Swing
Line or Borrowing, or any notice pursuant to subsections 2.4, 2.5 or 5.2 shall
not be effective until received.
14.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Bank, any
right, remedy, power or privilege hereunder or under the other Credit Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
14.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Credit Documents and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and the
other Credit Documents and the making of the Loans hereunder and the issuance of
Letters of Credit.
2005 Arrow Electronics Credit Agreement
82
14.5 Payment of Expenses and Taxes The Company agrees (a) to pay or
reimburse the Administrative Agent and the Arranger for all its reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Credit Documents and any other documents prepared
in connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including, without limitation,
the fees and disbursements of counsel to the Administrative Agent and the
Arranger, (b) to pay or reimburse each Bank and the Administrative Agent and any
Issuing Bank for all its reasonable costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement, the
other Credit Documents and any such other documents upon the occurrence of an
Event of Default, including, without limitation, the fees and disbursements of
counsel to the Administrative Agent and to the several Banks and any Issuing
Bank (including the allocated fees and expenses of in-house counsel), and (c) to
pay, indemnify, and hold each Bank, each Agent, the Arranger and the
Administrative Agent and any Issuing Bank harmless from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Bank, each Agent, the
Arranger and the Administrative Agent and any Issuing Bank (and their respective
directors, officers, employees and agents) (collectively, the "indemnified
person") harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Credit Documents and any such other documents, including, without
limitation, any of the foregoing relating to the use of proceeds of the Loans or
the violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Company, any of its Subsidiaries or any of
the Properties (it being understood that costs and expenses incurred in
connection with the enforcement or preservation of rights under this Agreement
and the other Credit Documents shall be paid or reimbursed in accordance with
clause (b) above rather than this clause (d)) (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"), provided, that the Company
shall have no obligation hereunder to any indemnified person with respect to
indemnified liabilities to the extent such indemnified liabilities are found by
final, nonappealable decision of a court of competent jurisidiction to have
resulted from the gross negligence or willful misconduct of such indemnified
person. Without limiting the foregoing, and to the extent permitted by
applicable law, the Company agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries to waive,
all rights for contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any indemnified
person. Any payments required to be made by the Company under this subsection
14.5 shall be made within 30 days of the demand therefor. The agreements in this
subsection shall survive repayment of the Loans and all other amounts payable
hereunder.
14.6 Successors and Assigns; Participations and Assignments.
2005 Arrow Electronics Credit Agreement
83
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any affiliate of the Issuing Bank that issues any
Letter of Credit), except that (i) no Specified Borrower may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Bank (and any attempted assignment or transfer by a Specified
Borrower without such consent shall be null and void) and (ii) no Bank may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Bank may assign to one or more assignees (each, an "Assignee") all or
a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it) with the prior
written consent of:
(A) the Company (such consent not to be unreasonably withheld),
provided that no consent of the Company shall be required for an
assignment to a Bank, an affiliate of a Bank, an Approved Fund (as defined
below) or, if an Event of Default under Section 12(a), 12(c) or 12(g) has
occurred and is continuing, any other Person; and
(B) the Administrative Agent; and
(C) the Issuing Bank.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Bank, an affiliate of a
Bank or an Approved Fund or an assignment of the entire remaining amount
of the assigning Bank's Commitments or Loans under any Facility, the
amount of the Commitments or Loans of the assigning Bank subject to each
such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent)
shall not be less than $5,000,000 unless each of the Company and the
Administrative Agent otherwise consent, provided that (1) no such consent
of the Company shall be required if an Event of Default under Section
12(a), 12(c) or 12(g) has occurred and is continuing and (2) such amounts
shall be aggregated in respect of each Bank and its affiliates or Approved
Funds, if any; provided further that after giving effect to any such
assignment, the transferor Bank's aggregate Dollar Equivalent Amount of
its Local Currency Bank Maximum Borrowing Amount under all Local Currency
Facilities may not exceed its Commitment hereunder;
(B) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; and
(C) the Assignee, if it shall not be a Bank, shall deliver to the
Administrative Agent an administrative questionnaire.
2005 Arrow Electronics Credit Agreement
84
For the purposes of this Section 14.6, "Approved Fund" means any
Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Bank, (b) an affiliate of a Bank or (c) an entity or an affiliate of an entity
that administers or manages a Bank.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Assumption the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Bank under this Agreement, and the assigning
Bank thereunder shall, to the extent of the interest assigned by such Assignment
and Assumption, be released from its obligations under this Agreement (and, in
the case of an Assignment and Assumption covering all of the assigning Bank's
rights and obligations under this Agreement, such Bank shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 7.5, 7.6,
7.8 and 14.5). Any assignment or transfer by a Bank of rights or obligations
under this Agreement that does not comply with this Section 14.6 shall be
treated for purposes of this Agreement as a sale by such Bank of a participation
in such rights and obligations in accordance with paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an agent
of the Company, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Banks, and the Commitments of, and principal amount of the
Loans and L/C Obligations owing to, each Bank pursuant to the terms hereof from
time to time (the "Register"). The entries in the Register shall be conclusive,
and the Company, the Administrative Agent, the Issuing Bank and the Banks may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Bank hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Company, the Issuing Bank and any Bank, at any reasonable time and from time to
time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Bank and an Assignee, the Assignee's completed
administrative questionnaire (unless the Assignee shall already be a Bank
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(c) (i) Any Bank may, without the consent of the Borrower, the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Bank's
rights and obligations under this Agreement (including all or a portion of its
Commitments and the Loans owing to it); provided that (A) such Bank's
obligations under this Agreement shall remain unchanged, (B) such Bank shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Company, the Administrative Agent, the Issuing Bank
and the other Banks shall continue to deal
2005 Arrow Electronics Credit Agreement
85
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which a Bank sells
such a participation shall provide that such Bank shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement may provide that
such Bank will not, without the consent of the Participant, agree to any
amendment, modification or waiver that (1) requires the consent of each Bank
directly affected thereby pursuant to the proviso to the second sentence of
Section 14.1 and (2) directly affects such Participant. Subject to paragraph
(c)(ii) of this Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 7.5, 7.6 and 7.8 to the same extent as if
it were a Bank and had acquired its interest by assignment pursuant to paragraph
(b) of this Section. To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 14.7(b) as though it were a Bank,
provided such Participant shall be subject to Section 14.7(a) as though it were
a Bank.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 7.5 or 7.6 than the applicable Bank would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. Any Participant that is a Non-U.S. Bank shall
not be entitled to the benefits of Section 7.6 unless such Participant complies
with such Section.
(d) Any Bank may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Bank, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Bank from any of its obligations hereunder or
substitute any such pledgee or Assignee for such Bank as a party hereto.
(e) The Borrower, upon receipt of written notice from the relevant
Bank, agrees to issue Notes to any Bank requiring Notes to facilitate
transactions of the type described in paragraph (d) above.
(f) Notwithstanding the foregoing, any Conduit Bank may assign any
or all of the Loans it may have funded hereunder to its designating Bank without
the consent of the Company or the Administrative Agent and without regard to the
limitations set forth in Section 14.6(b). Each of the Company, each Bank and the
Administrative Agent hereby confirms that it will not institute against a
Conduit Bank or join any other Person in instituting against a Conduit Bank any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding
under any state bankruptcy or similar law, for one year and one day after the
payment in full of the latest maturing commercial paper note issued by such
Conduit Bank; provided, however, that each Bank designating any Conduit Bank
hereby agrees to indemnify, save and hold harmless each other party hereto for
any loss, cost, damage or expense arising out of its inability to institute such
a proceeding against such Conduit Bank during such period of forbearance.
14.7 Adjustments; Set-off. (a) If any Bank (a "benefitted Bank")
shall at any time receive any payment of all or part of its Loans or the
Reimbursement Obligations then due and owing to it, or interest thereon, or
receive any collateral in respect thereof (whether
2005 Arrow Electronics Credit Agreement
86
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 12(g), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Bank, if any, in
respect of such other Bank's Loans or the Reimbursement Obligations then due and
owing to it, or interest thereon, such benefitted Bank shall purchase for cash
from the other Banks a participating interest in such portion of each such other
Bank's Loan or the Reimbursement Obligations owing to it, or shall provide such
other Banks with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted Bank to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Banks;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefitted Bank, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Each of the Company and the Subsidiary Borrowers
agrees that each Bank so purchasing a portion of another Bank's Loan may
exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Bank were the direct
holder of such portion.
(b) In addition to any rights and remedies of the Banks provided by
law, each Bank shall have the right, without prior notice to the Company or any
Subsidiary Borrower, any such notice being expressly waived by the Company and
the Subsidiary Borrowers to the extent permitted by applicable law, upon any
amount becoming due and payable by the Company hereunder or under this Agreement
or the other Credit Documents (whether at the stated maturity, by acceleration
or otherwise) to set-off and appropriate and apply against such amount any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Bank or any branch or agency
thereof to or for the credit or the account of the Company or such Subsidiary
Borrower, as the case may be. Each Bank agrees promptly to notify the Company
and the Administrative Agent after any such set-off and application made by such
Bank, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
14.8 Power of Attorney. Each Subsidiary Borrower hereby grants to
the Company an irrevocable power of attorney to act as its attorney-in-fact with
regard to matters relating to this Agreement, the Applications and each other
Credit Document, including, without limitation, execution and delivery of any
amendments, supplements, waivers or other modifications hereto or thereto,
receipt of any notices hereunder or thereunder and receipt of service of process
in connection herewith or therewith. Each Subsidiary Borrower hereby explicitly
acknowledges that the Administrative Agent and each Bank has executed and
delivered this Agreement and each other Credit Document to which it is a party,
and has performed its obligations under this Agreement and each other Credit
Document to which it is a party, in reliance upon the irrevocable grant of such
power of attorney pursuant to this subsection 14.8. The power of attorney
granted by each Subsidiary Borrower hereunder is coupled with an interest.
14.9 Judgment. (a) If for the purpose of obtaining judgment in any
court it is necessary to convert a sum due hereunder in one currency into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used
2005 Arrow Electronics Credit Agreement
87
shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the first currency with such other currency
on the Business Day preceding the day on which final judgment is given.
(b) The obligation of the Company or any Subsidiary Borrower in
respect of any sum due to any Bank or the Administrative Agent hereunder shall,
notwithstanding any judgment in a currency (the "Judgment Currency") other than
that in which such sum is denominated in accordance with the applicable
provisions of this Agreement or the other Credit Documents (the "Agreement
Currency"), be discharged only to the extent that on the Business Day following
receipt by such Bank or the Administrative Agent (as the case may be) of any sum
adjudged to be so due in the Judgment Currency such Bank or the Administrative
Agent (as the case may be) may in accordance with normal banking procedures
purchase the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to such Bank
or the Administrative Agent (as the case may be) in the Agreement Currency, the
Company or such Subsidiary Borrower (as the case may be) agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Bank or the
Administrative Agent (as the case may be) against such loss, and if the amount
of the Agreement Currency so purchased exceeds the sum originally due to any
Bank or the Administrative Agent (as the case may be), such Bank or the
Administrative Agent (as the case may be) agrees to remit to the Company or such
Subsidiary Borrower (as the case may be) such excess.
14.10 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Company and the
Administrative Agent.
14.11 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14.12 Integration. This Agreement and the other Credit Documents
represent the agreement of the Company, the Subsidiary Borrowers, the
Syndication Agents, the Administrative Agent and the Banks with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent or any Bank relative to subject matter
hereof not expressly set forth or referred to herein or in the other Credit
Documents.
14.13 GOVERNING LAW. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
(OTHER THAN ANY LOCAL CURRENCY FACILITY) AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS (OTHER THAN ANY
LOCAL CURRENCY FACILITY) SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
2005 Arrow Electronics Credit Agreement
88
14.14 Submission To Jurisdiction; Waivers. (a) Each of the Company
and the Subsidiary Borrowers hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Credit Documents
to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of
the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail),
postage prepaid, to the Company at its address set forth in
subsection 14.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to xxx in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages.
(b) Each Subsidiary Borrower hereby irrevocably appoints the Company
as its agent for service of process in any proceeding referred to in subsection
14.14(a) and agrees that service of process in any such proceeding may be made
by mailing or delivering a copy thereof to it care of the Company at its address
for notice set forth in subsection 14.2.
14.15 Acknowledgements. Each of the Company and the Subsidiary
Borrowers hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Credit Documents;
(b) none of the Syndication Agents, the Administrative Agent or any
Bank has any fiduciary relationship with or duty to the Company and the
Subsidiary Borrowers arising out of or in connection with this Agreement
or any of the other Credit Documents, and the relationship between the
Syndication Agents, the Administrative Agent and the Banks, on one hand,
and the Company and the Subsidiary Borrowers, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;
and
2005 Arrow Electronics Credit Agreement
89
(c) no joint venture is created hereby or by the other Credit
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Banks or among the Company and the Subsidiary Borrowers
and the Banks.
14.16 WAIVERS OF JURY TRIAL. THE COMPANY, THE SUBSIDIARY BORROWERS,
THE SYNDICATION AGENTS, THE ADMINISTRATIVE AGENT AND THE BANKS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
14.17 USA Patriot Act. Each Bank hereby notifies each Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001) (the "Act"), it is required to obtain, verify
and record information that identifies each Borrower, which information includes
the name and address of each Borrower and other information that will allow such
Bank to identify each Borrower in accordance with the Act.
2005 Arrow Electronics Credit Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
ARROW ELECTRONICS, INC.
By:____________________________
Name:
Title:
ARROW EUROPE GMBH
By:____________________________
Name:
Title:
XXXXXXX ELECTRONIC GMBH
By:____________________________
Name:
Title:
ARROW ELECTRONICS (UK) LTD.
By:____________________________
Name:
Title:
ARROW ELECTRONIQUE S.A.
By:____________________________
Name:
Title:
ARROW COMPUTER PRODUCTS SNC
By:____________________________
Name:
Title:
2005 Arrow Electronics Credit Agreement
ARROW NORDIC COMPONENTS AB
By:____________________________
Name:
Title:
MICROTRONICA UK
By:____________________________
Name:
Title:
B.V. ARROW ELECTRONICS DLC
By:____________________________
Name:
Title:
ARROW ASIA PAC LTD.
By:____________________________
Name:
Title:
COMPONENTS AGENT (CAYMAN) LTD.
By:____________________________
Name:
Title:
2005 Arrow Electronics Credit Agreement
JPMORGAN CHASE BANK, N.A., as
Administrative Agent, as an Agent
and as a Bank
By:____________________________
Name:
Title:
2005 Arrow Electronics Credit Agreement
BANK OF AMERICA, N.A., as a
Syndication Agent and as a Bank
By:____________________________
Name:
Title:
THE BANK OF NOVA SCOTIA, as a
Syndication Agent and as a Bank
By:____________________________
Name:
Title:
BNP PARIBAS, as Syndication Agent
and as a Bank
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
WACHOVIA BANK NATIONAL ASSOCIATION,
as Syndication Agent and as a Bank
By:____________________________
Name:
Title:
2005 Arrow Electronics Credit Agreement
_______________________, as a Bank
(name of institution)
By:____________________________
Name:
Title:
2005 Arrow Electronics Credit Agreement
