REMITTANCE AND INTERCREDITOR AGREEMENT
Exhibit
10.02
THIS
AGREEMENT, dated as of September 30, 2005, is made by Avnet Partner Solutions,
a
division of Avnet, Inc. (“Avnet”), for the benefit of Xxxxx Fargo Bank, National
Association (with all its participants, successors and assigns, “Xxxxx Fargo”),
acting through its Xxxxx Fargo Business Credit operating division.
SANZ
INC., formerly known as Storage Area Networks, Inc., a Colorado corporation
(the
“Borrower”), is now or hereafter may be indebted to Xxxxx Fargo on account of
loans or the other extensions of credit or financial accommodations from
Xxxxx
Fargo to the Borrower, or to any other person under the guaranty or endorsement
of the Borrower.
Avnet
has
made or may make loans or grant other financial accommodations to the
Borrower.
As
a
condition to making any loan or extension of credit to the Borrower, Xxxxx
Fargo
has required that Avnet subordinate the payment of Avnet’s loans and other
financial accommodations to the payment of any and all indebtedness of
the
Borrower to Xxxxx Fargo. Assisting the Borrower in obtaining credit
accommodations from Xxxxx Fargo and subordinating its interests pursuant
to the
terms of this Agreement are in Avnet’s best interest.
Xxxxx
Fargo agrees to allow the Escrow Agent to remit certain sums to Avnet as
documented in the Escrow Agreement and directly relating to the Avnet Priority
Accounts as more fully set forth herein.
ACCORDINGLY,
in consideration of the mutual covenants and undertakings herein contained,
and
in consideration of the loans and other financial accommodations that have
been
made and may hereafter be made by Xxxxx Fargo for the benefit of the Borrower,
and for other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, Xxxxx Fargo and Avnet hereby agrees as
follows:
1. Definitions.
As used
herein, the following terms have the meanings set forth below:
“Avnet
Indebtedness” means all obligations of the Borrower to make full and timely
payment of the invoices issued by Avnet, and each and every other debt,
liability and obligation of every type and description which the Borrower
may
now or at any time hereafter owe to Avnet, whether such debt, liability
or
obligation now exists or is hereafter created or incurred, and whether
it is or
may be direct or indirect, due or to become due, absolute or contingent,
primary
or secondary, liquidated or unliquidated, or joint, several or joint and
several.
“Avnet
Priority Accounts” means Borrower’s accounts identified by the Escrow Agreement,
defined below, to secure payment on the Avnet Indebtedness, which accounts
have
been approved in advance by Xxxxx Fargo (in its sole discretion) as having
priority as evidenced by a subordination letter in the form of Exhibit
A
attached hereto.
“Avnet
Security Agreement” means the Security Agreement, dated as of September __,
2005, by and between the Borrower and Avnet, together with all renewals,
extensions and modifications thereof and any other security agreement that
may
be accepted by Avnet from time to time.
“Borrower
Default” means a Default or Event of Default as defined in any agreement or
instrument evidencing, governing, or issued in connection with the Xxxxx
Fargo
Indebtedness, including, but not limited to, the Credit Agreement, or any
default under or breach of any such agreement or instrument.
“Collateral”
means all collateral now or hereafter securing payment of the Xxxxx Fargo
Indebtedness, including all proceeds thereof.
“Credit
Agreement” means that certain Credit and Security Agreement dated as of May 31,
2001, by and between the Borrower and Xxxxx Fargo as the same has been
and may
hereafter be amended, supplemented or restated from time to time.
“Escrow
Agreement” shall mean the escrow agreement(s) entered into from time to time by
Borrower, Avnet and the Escrow Agent to secure payment from Borrower on
the
Avnet Indebtedness.
“Escrow
Agent” shall mean Xxxxx Fargo Bank, National Association, acting through its
Corporate Trust and Escrow Services department, as escrow agent under the
Escrow
Agreement(s).
“Lien”
means any security interest, mortgage, deed of trust, pledge, lien, charge,
encumbrance, title retention agreement or analogous instrument or device,
including the interest of each lessor under any capitalized lease and the
interest of any bondsman under any payment or performance bond, in, of
or on any
assets or properties of a Person, whether now owned or hereafter acquired
and
whether arising by agreement or operation of law.
“Person”
means any individual, corporation, partnership, joint venture, limited
liability
company, association, joint-stock company, trust, unincorporated organization
or
government or any agency or political subdivision thereof.
“Xxxxx
Fargo Indebtedness” means each and every debt, liability and obligation of every
type and description which the Borrower may now or at any time hereafter
owe to
Xxxxx Fargo, whether such debt, liability or obligation now exists or is
hereafter created or incurred, and whether it is or may be direct or indirect,
due or to become due, absolute or contingent, primary or secondary, liquidated
or unliquidated, or joint, several or joint and several, all interest thereon,
and all fees, costs and other charges related thereto (including all interest,
fees, costs and other charges accruing after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Borrower, whether or not allowed in such proceeding
or
other action, and whether or not Xxxxx Fargo is deemed to be unsecured
or
under-secured), all renewals, extensions and modifications thereof and
any notes
issued in whole or partial substitution therefor.
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2. Subordination.
Excluding the Avnet Priority Accounts, the payment of all of the Avnet
Indebtedness is hereby expressly subordinated to the extent and in the
manner
hereinafter set forth to the payment in full of the Xxxxx Fargo Indebtedness;
and regardless of any priority otherwise available to Avnet by law or by
agreement, Xxxxx Fargo shall hold a first priority Lien in the Collateral,
and
any Lien claimed therein by Avnet shall be and remain fully subordinate
for all
purposes to the Lien of Xxxxx Fargo therein for all purposes whatsoever.
The
Avnet Indebtedness (excluding the Avnet Priority Accounts) shall continue
to be
subordinated to the Xxxxx Fargo Indebtedness even if the Xxxxx Fargo
Indebtedness is deemed unsecured, under-secured, subordinated, avoided
or
disallowed under the United States Bankruptcy Code or other applicable
law.
However, and at all times under this Agreement, the security interest of
Avnet
in the Avnet Priority Accounts shall be prior and superior to the security
interest of Xxxxx Fargo in the Avnet Priority Accounts, and Xxxxx Fargo’s
security interest in the Avnet Priority Accounts shall be subordinate to
the
security interest of Avnet therein.
3. Payments.
Until
all of the Xxxxx Fargo Indebtedness has been paid in full and Xxxxx Fargo
has
released its Lien in the Collateral, Avnet shall not, without Xxxxx Fargo’s
prior written consent, demand, receive or accept any payment from the Borrower
in respect of the Avnet Indebtedness, or exercise any right of or permit
any
setoff in respect of the Avnet Indebtedness, except that Avnet may accept
(i)
payments required to be paid under the invoices issued by Avnet, so long
as no
Borrower Default has occurred and is continuing or will occur as a result
of or
immediately following any such payment; and (ii) remittances in accordance
with
the Escrow Agreement on the Avnet Priority Account(s). The Escrow Agreement
will
require the Escrow Agent to promptly remit to Avnet the amounts agreed
upon by
the Borrower and Avnet in the Escrow Agreement when such monies are received
in
the Avnet Priority Account(s).
4. Receipt
of Prohibited Payments.
If
Avnet receives any payment on the Avnet Indebtedness that Avnet is not
entitled
to receive under the provisions of this Agreement, Avnet will hold the
amount so
received in trust for Xxxxx Fargo and will forthwith turn over such amount
to
Xxxxx Fargo (endorsement by Avnet when necessary) for application to then
existing Xxxxx Fargo Indebtedness (whether or not due), in such manner
of
application as Xxxxx Fargo may deem appropriate. If Avnet exercises any
right of
setoff which Avnet is not permitted to exercise under the provisions of
this
Agreement, Avnet will promptly pay over to Xxxxx Fargo, in immediately
available
funds, an amount equal to the amount of the claims or obligations offset.
5. Action
on Avnet Indebtedness.
Excluding Avnet Priority Accounts, Avnet will not commence any action or
proceeding against the Borrower to recover all or any part of the Avnet
Indebtedness, or join with any creditor (unless Xxxxx Fargo shall so join)
in
bringing any proceeding against the Borrower under any bankruptcy,
reorganization, readjustment of debt, arrangement of debt receivership,
liquidation or insolvency law or statute of the federal or any state government,
or take possession of, sell, or dispose of any Collateral, or exercise
or
enforce any right or remedy available to Avnet with respect to any such
Collateral, unless and until the Xxxxx Fargo Indebtedness has been paid
in full
and Xxxxx Fargo has released its Lien in the Collateral.
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6. Action
Concerning Collateral.
(a) Notwithstanding
any Lien now held or hereafter acquired by Avnet, Xxxxx Fargo may take
possession of, sell, dispose of, and otherwise deal with all or any part
of the
Collateral, and may enforce any right or remedy available to it with respect
to
the Borrower or the Collateral, all with notice (but without consent) of
Avnet
and except as otherwise required by applicable law.
(b) In
addition, and without limiting the generality of the foregoing, if (i)
a
Borrower Default has occurred and is continuing, (ii) the Borrower or Xxxxx
Fargo intends to sell or otherwise dispose of any Collateral to an unrelated
third party outside the ordinary course of business, (iii) Xxxxx Fargo
has given
written notice thereof to Avnet, and (iv) Avnet has failed, within ten
(10) days
after receipt of such notice, to purchase for cash the Xxxxx Fargo Indebtedness
for the full amount thereof, Avnet shall be deemed to have consented to
such
sale or disposition, to have released any Lien it may have in such Collateral
and to have authorized Xxxxx Fargo or its agents to file partial releases
(and
any related financing statements such as “in-lieu” financing statements under
Part 7 of Article 9 of the Uniform Commercial Code) with respect to such
Collateral.
(c) Xxxxx
Fargo shall have no duty to preserve, protect, care for, insure, take possession
of, collect, dispose of, or otherwise realize upon any of the Collateral,
and in
no event shall Xxxxx Fargo be deemed Avnet’s agent with respect to the
Collateral. All proceeds received by Xxxxx Fargo with respect to any Collateral
may be applied, first, to pay or reimburse Xxxxx Fargo for all costs and
expenses (including reasonable attorneys’ fees) incurred by Xxxxx Fargo in
connection with the collection of such proceeds, and, second, to any Xxxxx
Fargo
Indebtedness secured by Xxxxx Fargo’s Lien in that Collateral in any order that
it may choose.
7. Bankruptcy
and Insolvency.
In the
event of any receivership, insolvency, bankruptcy, assignment for the benefit
of
creditors, reorganization or arrangement with creditors, whether or not
pursuant
to bankruptcy law, the sale of all or substantially all of the assets of
the
Borrower, dissolution, liquidation or any other marshalling of the assets
or
liabilities of the Borrower, Avnet will file all claims, proofs of claim
or
other instruments of similar character necessary to enforce the obligations
of
the Borrower in respect of the Avnet Indebtedness and will hold in trust
for
Xxxxx Fargo and promptly pay over to Xxxxx Fargo in the form received (except
for the endorsement of Avnet where necessary) for application to the then
existing Xxxxx Fargo Indebtedness, any and all moneys, dividends or other
assets
received in any such proceedings on account of the Avnet Indebtedness,
unless
and until the Xxxxx Fargo Indebtedness has been paid in full and Xxxxx
Fargo’s
Lien in the Collateral has been terminated. If Xxxxx Fargo desires to permit
the
use of cash collateral or to provide post-petition financing to the Borrower,
Avnet shall not object to the same or assert that its interests are not
being
adequately protected.
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8. Restrictive
Legend; Transfer of Avnet Indebtedness.
Avnet
will cause the Avnet Security Agreement and all notes, bonds, debentures
or
other instruments evidencing the Avnet Indebtedness or any part thereof
to
contain a specific statement thereon to the effect that the indebtedness
thereby
evidenced is subject to the provisions of this Agreement. Attached hereto
as
Exhibit B is a true and correct copy of the Avnet Security Agreement bearing
such legend. Avnet has not transferred or assigned any interest in the
Avnet
Security Agreement to any other Person. Without the prior written consent
of
Xxxxx Fargo, Avnet will not assign, transfer or pledge to any other Person
the
Avnet Security Agreement or any of the Avnet Indebtedness or agree to a
discharge or forgiveness of the same, such consent not to be unreasonably
withheld.
9. Continuing
Effect.
This
Agreement shall constitute a continuing agreement of subordination, and
Xxxxx
Fargo may, without notice to or consent by Avnet, modify any term of the
Xxxxx
Fargo Indebtedness in reliance upon this Agreement. Without limiting the
generality of the foregoing, Xxxxx Fargo may, at any time and from time
to time,
without the consent of or notice to Avnet and without incurring responsibility
to Avnet or impairing or releasing any of Xxxxx Fargo’s rights or any of Avnet’s
obligations hereunder:
(a) change
the interest rate or change the amount of payment or extend the time for
payment
or renew or otherwise alter the terms of any Xxxxx Fargo Indebtedness or
any
instrument evidencing the same in any manner;
(b) sell,
exchange, release or otherwise deal with any property at any time securing
payment of the Xxxxx Fargo Indebtedness or any part thereof;
(c) release
anyone liable in any manner for the payment or collection of the Xxxxx
Fargo
Indebtedness or any part thereof;
(d) exercise
or refrain from exercising any right against the Borrower or any other
Person
(including Avnet); and
(e) apply
any
sums received by Xxxxx Fargo, by whomsoever paid and however realized,
to the
Xxxxx Fargo Indebtedness in such manner as Xxxxx Fargo shall deem
appropriate.
10. No
Commitment.
None of
the provisions of this Agreement shall be deemed or construed to constitute
or
imply any commitment or obligation on the part of Xxxxx Fargo to make any
future
loans or other extensions of credit or financial accommodations to the
Borrower.
Avnet
hereby waives any and all right to require the marshalling of assets in
connection with the exercise of any of Xxxxx Fargo’s remedies permitted by
applicable law or agreement.
11. Notice.
All
notices and other communications hereunder shall be in writing and shall
be
(i) personally delivered, (ii) transmitted by registered
mail, postage
prepaid, or (iii)
transmitted by telecopy, in each case addressed to the party to whom notice
is
being given at its address as set forth below:
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If
to
Xxxxx Fargo:
Xxxxx
Fargo Business Credit
MAC
C7300
210
0000
Xxxxxxxx
Xxxxxx,
Xxxxxxxx 00000
Telecopier:
(000) 000-0000
Attention:
Xxxx Xxxxxxx-Xxxxxx
If
to
Avnet:
AVNET,
INC.
Avnet
Partner Solutions
0000
Xxxxx Xxxxx Xxxx
Xxxxx,
Xxxxxxx 00000
Attention:
Legal Department
Telecopier:
(000) 000-0000
or
at
such other address as may hereafter be designated in writing by that party.
All
such notices or other communications shall be deemed to have been given
on
(i) the date received if delivered personally, (ii) the date
of
posting if delivered by mail, or (iii) the date of transmission
if
delivered by telecopy.
12. Conflict
in Agreements.
If the
subordination provisions of any instrument evidencing Avnet Indebtedness
conflict with the terms of this Agreement, the terms of this Agreement
shall
govern the relationship between Xxxxx Fargo and Avnet.
13. No
Waiver.
No
waiver shall be deemed to be made by either party of any of its rights
hereunder
unless the same shall be in writing signed on behalf of that party, and
each
such waiver, if any, shall be a waiver only with respect to the specific
matter
or matters to which the waiver relates and shall in no way impair the rights
of
that party or the obligations of a party to the other party in any other
respect
at any time.
14. Binding
Effect; Acceptance.
This
Agreement shall be binding upon each party and its heirs, legal representatives,
successors and assigns and shall inure to the benefit of that party and
its
participants, successors and assigns irrespective of whether this or any
similar
agreement is executed by any other creditor of the Borrower
15. Miscellaneous.
The
paragraph headings herein are included for convenience of reference only
and
shall not constitute a part of this Agreement for any other purpose. This
Agreement may be executed in any number of counterparts, each of which
shall be
an original, but all of which together shall constitute one
instrument.
16. Governing
Law; Consent to Jurisdiction and Venue; Waiver of Jury Trial.
This
Agreement shall be governed by and construed in accordance with the substantive
laws (other than conflict laws) of the State of Colorado. Each party consents
to
the personal jurisdiction of the state and federal courts located in the
State
of Colorado in connection with any controversy related to this Agreement,
waives
any argument that venue in any such forum is not convenient, and agrees
that any
litigation initiated by any of them in connection with this Agreement may
be
venued in either the state or federal courts located in the City and County
of
Denver, Colorado. THE
PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED
ON OR
PERTAINING TO THIS AGREEMENT.
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IN
WITNESS WHEREOF, Avnet and Xxxxx Fargo have executed this Agreement as
of the
date and year first above-written.
| AVNET PARTNER SOLUTIONS, | ||
| A DIVISION OF AVNET, INC. | ||
| |
|
|
| By: | /s/ Xxxx Xxxxx | |
|
Name: Xxxx Xxxxx |
||
| Its: Authorized Officer | ||
| XXXXX FARGO BANK, NATIONAL | ||
| ASSOCIATION, acting through its XXXXX | ||
| FARGO BUSINESS CREDIT operating division | ||
| |
|
|
| By: | /s/ Xxxx Xxxxxxx-Xxxxxx | |
|
Name: Xxxx Xxxxxxx-Xxxxxx |
||
| Its: Vice President | ||
7
Acknowledgment
by Borrower
The
undersigned, being the Borrower referred to in the foregoing Agreement,
hereby
(i) acknowledges receipt of a copy thereof, (ii) agrees to
all of the
terms and provisions thereof, (iii) agrees to and with Xxxxx Fargo
that it
shall make no payment on the Avnet Indebtedness that Avnet would not be
entitled
to receive under the provisions of the Agreement, (iv) agrees that
any such
payment will constitute a default under the Xxxxx Fargo Indebtedness, and
(v) agrees to xxxx its books conspicuously to evidence the subordination
of
the Avnet Indebtedness effected hereby.
| SANZ INC. | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxx | |
|
Name: Xxxxxx X. Xxxxx |
||
| Its: Chief Financial Officer | ||
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EXHIBIT
A
___________,
2005
|
Avnet
Partner Solutions,
a
division of Avnet, Inc.
0000
Xxxxx Xxxxx Xxxx
Xxxxx,
Xxxxxxx 00000
Attention:
Legal Department
|
Re: Purchase
Order No. ______________________ attached hereto
This
letter refers to (i) the Remittance and Intercreditor Agreement dated as
of
September 30, 2005 (the “Agreement”), made by Avnet Partner Solutions, a
division of Avnet, Inc. (“Avnet”), for the benefit of Xxxxx Fargo Bank, National
Association (with all its participants, successors and assigns, “Xxxxx Fargo”),
acting through its Xxxxx Fargo Business Credit operating division and (ii)
the
proceeds of the above referenced purchase order (the “Escrowed Payment”) for
certain accounts belonging to SANZ Inc., a Colorado corporation (the
“Borrower”), which accounts have been assigned to Xxxxx Fargo. Unless the
context clearly indicates otherwise, all terms used in this letter have
the same
meaning as in the Agreement, whether by definition therein or by the context
in
which such terms are used therein.
The
subordination described in this letter is effective only if the Borrower’s
customer has been instructed to make the Escrowed Payment to the Escrow
Agent
under the Escrow Agreement, which Escrow Agreement shall be in form and
substance satisfactory to Xxxxx Fargo.
Xxxxx
Fargo hereby agrees for the benefit of Avnet, its successors and assigns,
that
any and all security interests that Xxxxx Fargo may now have in the Escrowed
Payment are hereby subordinated to the security interest of Avnet in the
Escrowed Payment, and such Escrowed Payment shall be a “Avnet Priority Account”
as defined in the Agreement.
|
XXXXX
FARGO:
XXXXX
FARGO BANK, NATIONAL
ASSOCIATION,
acting
through its
XXXXX
FARGO
BUSINESS CREDIT operating
division
By: __________________________________________
Name:
Xxxx Xxxxxxx-Xxxxxx
Its:
Vice President
|
BORROWER:
SANZ
INC.
By:
__________________________________________
Name:
Xxxxxx X. Xxxxx
Its:
Chief Financial Officer
|
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EXHIBIT
B
attach
copy of Avnet Security Agreement with following legend
THIS
SECURITY AGREEMENT IS SUBJECT TO THE TERMS OF A REMITTANCE AND INTERCREDITOR
AGREEMENT BY AVNET PARTNER SOLUTIONS, A DIVISION OF AVNET, INC. IN FAVOR
OF
XXXXX FARGO BANK, NATIONAL ASSOCIATION, ACTING THROUGH ITS XXXXX FARGO
BUSINESS
CREDIT OPERATING DIVISION, DATED AS OF SEPTEMBER 30, 2005.
10
