Exhibit 10J
RECEIVABLES SALE AGREEMENT
DATED AS OF June 28,200l
BETWEEN
AVNET, INC.,
as Originator
AND
AVNET RECEIVABLES CORPORATION,
as Buyer
TABLE OF CONTENTS
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ARTICLE I
AMOUNTS AND TERMS
Section 1.1 Purchase of Receivables ....................................... 2
Section 1.2 Payment for the Purchase ...................................... 3
Section 1.3 Purchase Price Credit Adjustments ............................. 5
Section 1.4 Payments and Computations, Etc ................................ 6
Section 1.5 Transfer of Records ........................................... 6
Section 1.6 Characterization .............................................. 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Originator .................. 7
Section 3.1 Conditions Precedent to Purchase .............................. 12
Section 3.2 Conditions Precedent to Subsequent Payments ................... 13
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Originator ........................... 13
Section 4.2 Negative Covenants of Originator .............................. 20
ARTICLE V
TERMINATION EVENTS
Section 5.1 Termination Events ............................................ 21
Section 5.2 Remedies ...................................................... 23
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnities by Originator ..................................... 23
Section 6.2 Other Costs and Expenses ...................................... 26
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ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments ........................................ 27
Section 7.2 Notices ....................................................... 27
Section 7.3 Protection of Ownership Interests of Buyer .................... 27
Section 7.4 Confidentiality ............................................... 28
Section 7.5 Bankruptcy Petition ........................................... 29
Section 7.6 CHOICE OF LAW ................................................. 29
Section 7.7 CONSENT TO JURISDICTION ....................................... 29
Section 7.8 WAIVER OF JURY TRIAL .......................................... 29
Section 7.9 Integration; Binding Effect; Survival of Terms ................ 30
Section 7.10 Counterparts; Severability; Section References. ............... 30
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Exhibits and Schedules
Exhibit I - Definitions
Exhibit II - Principal Place of Business; Location(s) of Records; Federal
Employer Identification Number; Other Names
Exhibit III - Lock-Boxes; Collection Accounts; Collection Banks
Exhibit IV - Form of Compliance Certificate
Exhibit V - Credit and Collection Policy
Exhibit VI - Form of Subscription Agreement
Exhibit VII - Form of Subordinated Note
Schedule A - List of Documents to Be Delivered to Buyer Prior to the
Purchase
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RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of June 28,2001, is
by and between AVNET, INC., a New York corporation ("Originator"), and AVNET
RECEIVABLES CORPORATION, a Delaware corporation ("Buyer"). Unless defined
elsewhere herein, capitalized terms used in this Agreement shall have the
meanings assigned to such terms in Exhibit I hereto (or, if not defined in
Exhibit I hereto, the meaning assigned to such term in Exhibit I to the Purchase
Agreement).
PRELIMINARY STATEMENTS
Originator now owns, and from time to time hereafter will own,
Receivables. Originator wishes to sell and assign to Buyer, and
Buyer wishes to purchase from Originator, all of Originator's right,
title and interest in and to such Receivables, together with the
Related Security and Collections with respect thereto.
Originator and Buyer intend the transactions contemplated
hereby to be true sales of the Receivables from Originator to Buyer,
providing Buyer with the full benefits of ownership of the
Receivables, and Originator and Buyer do not intend these transactions
to be, or for any purpose to be characterized as, loans from Buyer to
Originator.
Following the purchase of Receivables from Originator, Buyer
will sell undivided interests therein and in the associated Related
Security and Collections pursuant to that certain Receivables Purchase
Agreement dated as of June 28,200l (as the same may from time to time
hereafter be amended, supplemented, restated or otherwise modified,
the "Purchase Agreement") among Buyer, Originator, as Servicer,
Preferred Receivables Funding Corporation ("Companv"), the financial
institutions from time to time party thereto as "Financial
Institutions" and Bank One, NA (Main Office Chicago) or any successor
agent appointed pursuant to the terms of the Purchase Agreement, as
agent for Company and such Financial Institutions (in such capacity,
the "Agent").
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual agreements herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Purchase of Receivables.
(a) Effective on the date hereof, in consideration
for the Purchase Price and upon the terms and subject to the conditions set
forth herein, Originator does hereby sell, assign, transfer, set-over and
otherwise convey to Buyer, without recourse (except to the extent expressly
provided herein), and Buyer does hereby purchase from Originator, all of
Originator's right, title and interest in and to all Receivables existing as of
the close of business on the Business Day immediately prior to the date hereof
and all Receivables thereafter arising through and including the Termination
Date, together, in each case, with all Related Security relating thereto and all
Collections thereof. In accordance with the preceding sentence, on the date
hereof Buyer shall acquire all of Originator's right, title and interest in and
to all Receivables existing as of the close of business on the Business Day
immediately prior to the date hereof and thereafter arising through and
including the Termination Date, together with all Related Security relating
thereto and all Collections thereof. Buyer shall be obligated to pay the
Purchase Price for the Receivables purchased hereunder in accordance with
Section 1.2. In connection with consummation of the Purchase Price for any
Receivables purchased hereunder, Buyer may request that Originator deliver, and
Originator shall deliver, such approvals, opinions, information, reports or
documents as Buyer may reasonably request.
(b) It is the intention of the parties hereto that
the Purchase of Receivables made hereunder shall constitute a sale, which sale
is absolute and irrevocable and provides Buyer with the full benefits of
ownership of the Receivables. Except for the Purchase Price Credits owed
pursuant to Section 1.3, the sale of Receivables hereunder is made without
recourse to Originator; provided, however, that (i) Originator shall be liable
to Buyer for all representations, warranties, covenants and indemnities made by
Originator pursuant to theterms of the Transaction Documents to which Originator
is a party, and (ii) such sale does not constitute and is not intended to result
in an assumption by Buyer or any assignee thereof of any obligation of
Originator or any other Person arising in connection with the Receivables, the
related Contracts and/or other Related Security or any other obligations of
Originator. In view of the intention of the parties hereto that the Purchase of
Receivables made hereunder shall constitute a sale of such Receivables rather
than loans secured thereby, Originator agrees that it will, on or prior to the
date hereof and in accordance with Section 4.1(e)(n), identify in its general
ledger relating to the Receivables a legend acceptable to Buyer and to the Agent
(as Buyer's assignee), evidencing that Buyer has purchased such Receivables as
provided in this Agreement and to note in its financial statements that its
Receivables have been sold to Buyer. Upon the request of Buyer or the Agent (as
Buyer's assignee), Originator will execute and file such financing or
continuation statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate to perfect and
maintain the perfection of Buyer's
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ownership interest in the Receivables and the Related Security and Collections
with respect thereto, or as Buyer or the Agent (as Buyer's assignee) may
reasonably request.
Section 1.2 Payment for the Purchase.
(a) The Purchase Price for the Purchase of
Receivables in existence on the close of business on the Business Day
immediately preceding the date hereof (the "Initial Cutoff Date") shall be
payable in full by Buyer to Originator on the date hereof, and shall be paid to
Originator in the following manner:
(i) by delivery of immediately
available funds, to the extent of funds made available to Buyer in
connection with its subsequent sale of an interest in such Receivables
to the Purchasers under the Purchase Agreement; provided that a
portion of such funds shall be offset by amounts owed by Originator to
Buyer on account of the issuance of equity in the manner contemplated
in the Subscription Agreement and having a total value of not less
than the Required Capital Amount, and
(ii) the balance, by delivery of the
proceeds of a subordinated revolving loan from Originator to Buyer (a
"Subordinated Loan") in an amount not to exceed the least of (i) the
remaining unpaid portion of such Purchase Price, (ii) the maximum
Subordinated Loan that could be borrowed without rendering Buyer's Net
Worth less than the Required Capital Amount and (iii) the maximum
Subordinated Loan that could be borrowed without rendering the Net
Value less than the aggregate outstanding principal balance of the
Subordinated Loans (including the Subordinated Loan proposed to be
made on such date). Originator is hereby authorized by Buyer to
endorse on the schedule attached to the Subordinated Note an
appropriate notation evidencing the date and amount of each advance
thereunder, as well as the date of each payment with respect thereto,
provided that the failure to make such notation shall not affect any
obligation of Buyer thereunder.
The Purchase Price for each Receivable coming into existence after the Initial
Cutoff Date shall be due and owing in full by Buyer to Originator or its
designee on the date each such Receivable came into existence (except that Buyer
may, with respect to any such Purchase Price, offset against such Purchase Price
any amounts owed by Originator to Buyer hereunder and which have become due
but remain unpaid) and shall be paid to Originator in the manner provided in the
following paragraphs (b), (c) and (d).
(b) With respect to any Receivables coming into
existence after the Initial Cutoff Date, on each Settlement Date, Buyer shall
pay the Purchase Price therefor in accordance with Section 1.2(d) and in the
following manner:
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first, by delivery of immediately available funds, to
the extent of funds available to Buyer from its subsequent sale of an
interest in the Receivables to the Agent for the benefit of the
Purchasers under the Purchase Agreement or other cash on hand;
second, by delivery of the proceeds of a Subordinated
Loan, provided that the making of any such Subordinated Loan shall be
subject to the provisions set forth in Section 1.2(a)(ii); and
third, unless Originator has declared the Termination
Date to have occurred pursuant to Section 5.2, by accepting a
contribution to its capital pursuant to the Subscription Agreement in
an amount equal to the remaining unpaid balance of such Purchase
Price.
Subject to the limitations set forth in Section 1.2(a)(ii), Originator
irrevocably agrees to advance each Subordinated Loan requested by Buyer on or
prior to the Termination Date. The Subordinated Loans shall be evidenced by, and
shall be payable in accordance with the terms and provisions of the Subordinated
Note and shall be payable solely from funds which Buyer is not required under
the Purchase Agreement to set aside for the benefit of, or otherwise pay over
to, the Purchasers.
(c) From and after the Termination Date, Originator
shall not be obligated to (but may, at its option): (i) sell Receivables to
Buyer, or (ii) contribute Receivables to Buyer's capital pursuant to clause
third of Section 1.2(b) unless Originator reasonably determines that the
Purchase Price therefor will be satisfied with funds available to Buyer from
sales of interests in the Receivables pursuant to the Purchase Agreement,
Collections, proceeds of Subordinated Loans, other cash on hand or otherwise.
(d) Although the Purchase Price for each Receivable
coming into existence after the Initial Cutoff Date shall be due and payable in
full by Buyer to Originator on the date such Receivable came into existence,
settlement of the Purchase Price between Buyer and Originator shall be effected
on a monthly basis on Settlement Dates with respect to all Receivables coming
into existence during the same Calculation Period and based on the information
contained in the Monthly Report delivered by the Servicer pursuant to Article
VIII of the Purchase Agreement for the Calculation Period then most recently
ended. Although settlement shall be effected on Settlement Dates, increases or
decreases in the amount owing under the Subordinated Note made pursuant to
Section 1.2(b) and any contribution of capital by Originator to Buyer made
pursuant to Section 1.2(b) shall be deemed to have occurred and shall be
effective as of the last Business Day of the Calculation Period to which such
settlement relates.
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Section 1.3 Purchase Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable is:
(i) reduced as a result of any
defective or rejected or returned goods or services, any discount or
any adjustment or otherwise by Originator (other than cash Collections
on account of the Receivables),
(ii) reduced or canceled as a result of
a setoff in respect of any claim by any Person (whether such claim
arises out of the same or a related transaction or an unrelated
transaction), or
(b) any of the representations and warranties set
forth in Article u are not true when made or deemed made with respect to any
Receivable,
then, in such event, Buyer shall be entitled to a credit (each, a "Purchase
Price Credit") against the Purchase Price otherwise payable hereunder equal to
the Outstanding Balance of such Receivable (calculated before giving effect to
the applicable reduction or cancellation). If such Purchase Price Credit exceeds
the Original Balance of the Receivables coming into existence on any day, then
Originator shall pay the remaining amount of such Purchase Price Credit in cash
immediately, provided that if the Termination Date has not occurred, Originator
shall be allowed to deduct the remaining amount of such Purchase Price Credit
from any indebtedness owed to it under the Subordinated Note.
Section 1.4 Payments and Computations, Etc. All amounts to be
paid or deposited by Buyer hereunder shall be paid or deposited in accordance
with the terms hereof on the day when due in immediately available funds to the
account of Originator designated from time to time by Originator or as otherwise
directed by Originator. In the event that any payment owed by any Person
hereunder becomes due on a day that is not a Business Day, then such payment
shall be made on the next succeeding Business Day. If any Person fails to pay
any amount hereunder when due, such Person agrees to pay, on demand, the Default
Fee in respect thereof until paid in full; provided, however, that such Default
Fee shall not at any time exceed the maximum rate permitted by applicable law.
All computations of interest payable hereunder shall be made on the basis of a
year of 360 days for the actual number of days (including the first but
excluding the last day) elapsed.
Section 1.5 Transfer of Records.
(a) In connection with the Purchase of Receivables
hereunder, Originator hereby sells, transfers, assigns and otherwise conveys to
Buyer all of Originator's right and title to and interest in the Records
relating to all Receivables sold hereunder, without the
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need for any further documentation in connection with the Purchase. In
connection with such transfer, Originator hereby grants to each of Buyer, the
Agent and the Servicer an irrevocable, non-exclusive license to use, without
royalty or payment of any kind, all software used by Originator to account for
the Receivables, to the extent necessary to administer the Receivables, whether
such software is owned by Originator or is owned by others and used by
Originator under license agreements with respect thereto, provided that should
the consent of any licenser of such software be required for the grant of the
license described herein, to be effective, Originator hereby agrees that upon
the request of Buyer Buyer's assignee), Originator will use its reasonable
efforts to obtain the consent of such third-party licenser. The license granted
hereby shall be irrevocable until the indefeasible payment in full of the
Aggregate Unpaids, and shall terminate on the date this Agreement terminates in
accordance with its terms.
(b) Originator (i) shall take such action requested by Buyer
and/or the Agent (as Buyer's assignee), from time to time hereafter, that may be
necessary or appropriate to ensure that Buyer and its assigns under the
Purchase Agreement have an enforceable ownership interest in the Records
relating to the Receivables purchased from Originator hereunder, and (ii) shall
use its reasonable efforts to ensure that Buyer, the Agent and the Servicer each
has an enforceable right (whether by license or sublicense or otherwise) to use
all of the computer software used to account for the Receivables and/or to
recreate such Records.
Section 1.6 Characterization. If, notwithstanding the
intention of the parties expressed in Section 1.1 (b), any sale or contribution
by Originator to Buyer of Receivables hereunder shall be characterized as a
secured loan and not a sale or such sale shall for any reason be ineffective or
unenforceable, then this Agreement shall be deemed to constitute a security
agreement under the UCC and other applicable law. For this purpose and without
being in derogation of the parties' intention that the sale of Receivables
hereunder shall constitute a true sale thereof, Originator hereby grants to
Buyer a duly perfected security interest in all of Originator's right, title and
interest in, to and under all Receivables now existing and hereafter arising,
all Collections and Related Security with respect thereto, each Lock-Box and
Collection Account, all other rights and payments relating to the Receivables
and all proceeds of the foregoing to secure the prompt and complete payment of a
loan deemed to have been made in an amount equal to the Purchase Price of the
Receivables together with all other obligations of Originator hereunder, which
security interest shall be prior to all other Adverse Claims thereto. Buyer and
its assigns shall have, in addition to the rights and remedies which they may
have under this Agreement, all other rights and remedies provided to a secured
creditor under the UCC and other applicable law, which rights and remedies shall
be cumulative.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Originator.
Originator hereby represents and warrants to Buyer on the date hereof, on the
date of the Purchase and on each date that any Receivable comes into existence
that:
(a) Corporate Existence and Power. Originator is a
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation, and is duly qualified to do business
and is in good standing as a foreign corporation, and has and holds all
corporate power, and all governmental licenses, authorizations, consents and
approvals required to carry on its business in each jurisdiction in which
its business is conducted except where the failure to so qualify or so hold
could not reasonably be expected to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization,
Execution and Delivery. The execution and delivery by Originator of this
Agreement and each other Transaction Document to which it is a party, and
the performance of its obligations hereunder and thereunder and,
Originator's use of the proceeds of the Purchase made hereunder, are within
its corporate powers and authority, and have been duly authorized by all
necessary corporate action on its part. This Agreement and each other
Transaction Document to which Originator is a party has been duly executed
and delivered by Originator.
(c) No Conflict. The execution and delivery by
Originator of this Agreement and each other Transaction Document to which it
is a party, and the performance of its obligations hereunder and thereunder
do not contravene or violate (i) its certificate or articles of
incorporation or by-laws or any shareholder agreements, voting trusts, and
similar arrangements applicable to any of its authorized shares, (ii) any
law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or by which it or
any of its property is bound, or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting it or its property, and do not
result in the creation or imposition of any Adverse Claim on assets of
Originator or its Subsidiaries (except as created hereunder); and no
transaction contemplated hereby requires compliance with any bulk sales act
or similar law.
(d) Governmental Authorization, Other than the
filing of the financing statements required hereunder, no authorization or
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due execution
and delivery by Originator of this Agreement and each other Transaction
Document to which it is a party and the performance of its obligations
hereunder and thereunder.
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(e) Actions, Suits. There are no actions, suits or
proceedings pending, or to the best of Originator's knowledge, threatened,
against or affecting Originator, or any of its properties, in or before any
court, arbitrator or other body, except for actions, suits or proceedings
(i) that, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect or (ii) that have been publicly disclosed
in any periodic report or other filing made by Originator pursuant to, and
in full conformity with the requirements of, the Securities Exchange Act of
1934. In addition to the foregoing, there are no actions, suits or
proceedings pending, or to the best of Originator's knowledge, threatened
against or affecting the Receivables, the Related Security or any
Transaction Document, in or before any court, arbitration or other body.
Originator is not in default with respect to any order of any court,
arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other
Transaction Document to which Originator is a party constitute the legal,
valid and binding obligations of Originator enforceable against Originator
in accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law).
(g) Accuracy of Information. All information
heretofore furnished by Originator or any of its Affiliates to Buyer (or its
assigns) for purposes of or in connection with this Agreement, any of the
other Transaction Documents or any transaction contemplated hereby or
thereby is, and all such information hereafter furnished by Originator or
any of its Affiliates to Buyer (or its assigns) will be, true and accurate
in every material respect on the date such information is stated or
certified and does not and will not contain any material misstatement of
fact or omit to state a material fact or any fact necessary to make the
statements contained therein not misleading.
(h) Use of Proceeds. No proceeds of any Purchase
Price payment hereunder will be used (i) for a purpose that violates, or
would be inconsistent with, any law, rule or regulation applicable to
Originator or (ii) to acquire any security in any transaction which is
subject to Section 13or14 of the Securities Exchange Act of 1934, as
amended.
(i) Good Title. Immediately prior to the Purchase
hereunder and ' upon the creation of each Receivable coming into existence
after the Initial Cut-Off Date, Originator (i) is the legal and beneficial
owner of the Receivables and (ii) is the legal and beneficial owner of the
Related Security with respect thereto or possesses a valid and perfected
security interest therein, in each case, free and clear of any Adverse
Claim, except as created by the Transaction Documents. There have been duly
filed all financing statements or other similar instruments or documents
necessary under the UCC (or any compara-
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ble law) of all appropriate jurisdictions to perfect Originator's ownership
interest in each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the
filing of financing statements contemplated hereby, is effective to transfer to
Buyer (and Buyer acquire from Originator) (i) legal and equitable title to,
with the right to sell and encumber each Receivable existing and hereafter
arising, together with the Collections with respect thereto, and (ii) all of
Originator's right, title and interest in the Related Security with each
Receivable, in each case, free and clear of any Adverse Claim, except as by the
Transactions Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable of all appropriate jurisdictions to perfect Buyer's ownership
interest in the Receivables, Related Security and the Collections.
(k) Places of Business and Locations of Records.
The principal places of business and chief executive office of Originator and
the offices where it keeps of its Records are located at the address listed on
Exhibit II or such other locations which Buyer has been notified in accordance
with Section 4.2(a) in jurisdictions where action required by Section 4.2(a)
has been taken and completed. Originator's Federal Employer Identification
Number is correctly set forth on Exhibit II.
(1) Collections. The conditions and requirements
set forth in Section 4.1 (i) have at all times been satisfied and duly
performed. The names and of all Collection Banks, together with the account
numbers of the Collection Accounts Originator at each Collection Bank and the
post office box number of each Lock-Box, listed on Exhibit III. Originator has
not granted any Person, other than Buyer (and its assigns) dominion and control
of any Lock-Box or Collection Account, or the right to dominion and control of
any such Lock-Box or Collection Account at a future time or the occurrence of a
future event.
(m) Material Adverse Effect. Since March 3 1,200l
no event occurred that would have a Material Adverse Effect.
(n) Names. In the past five (5) years, Originator
has not used corporate names, trade names or assumed names other than as listed
on Exhibit H.
(o) Ownership of Buver. Originator owns, directly
or 100% of the issued and outstanding capital stock of Buyer, free and clear of
any Adverse Claim. Such capital stock is validly issued, fully paid and
nonassessable, and there are options, warrants or other rights to acquire
securities of Buyer.
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(p) Not a Holding Company or an Investment Company.
Originator is not a "holding company" or a "subsidiary holding company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or any successor statute. Originator is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(q) Compliance with Law. Originator has complied in
all respects with all applicable laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. Each Receivable, together with the Contract related
thereto, does not contravene any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating to truth in
lending, fair credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy), and no part of such Contract is in
violation of any such law, rule or regulation.
(r) Compliance with Credit and Collection Policy.
Originator has complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the related Contract, and has not made
any change to such Credit and Collection Policy, except such material change as
to which Buyer (or its assigns) has been notified in accordance with Section 4.1
(a)(vii).
(s) Payments to Originator. With respect to each
Receivable transferred to Buyer hereunder, the Purchase Price received by
Originator constitutes reasonably equivalent value in consideration therefor and
such transfer was not made for or on account of an antecedent debt. No transfer
by Originator of any Receivable hereunder is or may be voidable under any
section of the Bankruptcy Reform Act of 1978 (11 U.S.C. Sections 101 et seq.),
as amended.
(t) Enforceability of Contracts. Each Contract with
respect to each Receivable is effective to create, and has created, a legal,
valid and binding obligation of the related Obligor to pay the Outstanding
Balance of the Receivable created thereunder and any accrued interest thereon,
enforceable against the Obligor in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable included at
any time in the Net Receivables Balance as an Eligible Receivable was, on the
later to occur of the date of the Purchase and the date it came into existence,
an Eligible Receivable on such date.
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(v) Accounting. The manner in which Originator
accounts for the transactions contemplated by this Agreement does not jeopardize
the characterization of the transactions contemplated herein as being true sales
of the Receivables by the Originator to the Buyer.
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The Purchase
under this Agreement is subject to the conditions precedent that (a) Buyer shall
have received on or before the date of such purchase those documents listed on
Schedule A and (b) all of the conditions to the initial purchase under the
Purchase Agreement shall have been satisfied or waived in accordance with the
terms thereof.
Section 3.2 Conditions Precedent to Subsequent Payments.
Buyer's obligation to pay for Receivables coming into existence after the
Initial Cutoff Date shall be subject to the further conditions precedent that
(a) the Facility Termination Date shall not have occurred; (b) Buyer (or its
assigns) shall have received such other approvals, opinions or documents as it
may reasonably request and (c) on the date such Receivable came into existence,
the following statements shall be true (and acceptance of the proceeds of any
payment for such Receivable shall be deemed a representation and warranty by
Originator that such statements are then true):
(i) the representations and warranties set forth in Article
II are true and correct on and as of the date such Receivable came into
existence as though made on and as of such date; and
(ii) no event has occurred and is continuing that will
constitute a Termination Event or a Potential Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment of the Purchase
Price for any Receivable (whether by payment of cash, through an increase in the
amounts outstanding under the Subordinated Note, by offset of amounts owed to
Buyer and/or by offset of capital contributions), title to such Receivable and
the Related Security and Collections with respect thereto shall vest in Buyer,
whether or not the conditions precedent to Buyer's obligation to pay for such
Receivable were in fact satisfied. The failure of Originator to satisfy any of
the foregoing conditions precedent, however, shall give rise to a right of Buyer
to rescind the related purchase and direct Originator to pay to Buyer an amount
equal to the Purchase Price payment that shall have been made with respect to
any Receivables related thereto.
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ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Originator. Until the
date on which this Agreement terminates in accordance with its terms, Originator
hereby covenants as set forth below:
(a) Financial Reporting. Originator will maintain,
for itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to Buyer (or its assigns):
(i) Annual Reporting. Within 120 days
after the close of each of its respective fiscal years, audited,
unqualified consolidated financial statements (which shall include
balance sheets, statements of income and retained earnings and a
statement of cash flows) for Originator and its Subsidiaries for such
fiscal year certified in a manner acceptable to Buyer (or its assigns)
by independent public accountants of recognized national standing.
(ii) Quarterly Reporting. Within 60
days after the close of the first three (3) quarterly periods of each
of its respective fiscal years, consolidated balance sheets of
Originator and its Subsidiaries as at the close of each such period and
statements of income and retained earnings and a statement of cash
flows for Originator and its Subsidiaries for the period from the
beginning of such fiscal year to the end of such quarter, all
certified, subject to year-end audit adjustments, as to fairness of
presentation, GAAP, and consistency, by its chief financial officer,
chief accounting officer or treasurer.
(iii) Compliance Certificate. Together
with the financial statements required hereunder, a compliance
certificate in substantially the form of Exhibit IV signed by
Originator's Authorized Officer and dated the date of such annual
financial statement or such quarterly financial statement, as the case
may be.
(iv) Shareholders Statements and
Reports. Promptly upon the furnishing thereof to the shareholders of
Originator, copies of all financial statements, reports and proxy
statements so furnished.
(v) S.E.C. Filings. Promptly upon the
filing thereof, copies of all registration statements and annual,
quarterly, monthly or other regular reports which Originator or any of
its Subsidiaries files with the Securities and Exchange Commission.
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(vi) Copies of Notices. Promptly upon
its receipt of any notice, request for consent, financial statements,
certification, report or other communication under or in connection
with any Transaction Document from any Person other than Buyer, the
Agent or Company, copies of the same.
(vii) Change in Credit and Collection
Policy. At least thirty (30) days prior to the effectiveness of any
material change in or material amendment to the Credit and Collection
Policy, a copy of the Credit and Collection Policy then in effect and a
notice (A) indicating such change or amendment ,and (B) if such
proposed change or amendment would be reasonably likely to adversely
affect the collectibility of the Receivables or decrease the credit
quality of any newly created Receivables, requesting Buyer's consent
thereto.
(viii) Other Information. Promptly,
from time to time, such other information, documents, records or
reports relating to the Receivables or the condition or operations,
financial or otherwise, of Originator as Buyer (or its assigns) may
from time to time reasonably request in order to protect the interests
of Buyer (and its assigns) under or as contemplated by this Agreement.
(b) Notices. Originator will notify the Buyer (or
its assigns) in writing of any of the following promptly upon learning
of the occurrence thereof, describing the same and, if applicable, the
steps being taken with respect thereto:
(i) Termination Events or Potential
Termination Events. The occurrence of each Termination Event and each
Potential Termination Event, by a statement of an Authorized Officer of
Originator.
(ii) Judgment and Proceedings. (1) The
entry of any judgment or decree against Originator or any of its
Subsidiaries if the aggregate amount of all judgments and decrees then
outstanding against Originator and its Subsidiaries exceeds $25,000,000
and (2) the institution of any litigation, arbitration proceeding or
governmental proceeding against Originator which, individually or in
the aggregate, if adversely determined, would reasonably be expected to
result in a judgment in excess of $50,000,000 or could reasonably be
expected to have a Material Adverse Effect.
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(iii) Material Adverse Effect. The
occurrence of any event or condition that has had, or could reasonably
be expected to have, a Material Adverse Effect.
(iv) Defaults Under Other Agreements.
The occurrence of a default or an event of default under any other
financing arrangement pursuant to which Originator is a debtor or an
obligor.
(v) Downgrade of the Originator. Any
downgrade the rating of any Indebtedness of Originator by Standard and
Poor's Ratings Group or by Xxxxx'x Investors Service, Inc., setting
forth the Indebtedness affected and the nature of such change.
(c) Compliance with Laws and Preservation of
Corporate Existence. Originator will comply in all respects with all applicable
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, except where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect. Originator will
preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction where its business
is conducted.
(d) Audits. Originator will furnish to Buyer (or its
assigns) time to time such information with respect to it and the Receivables as
Buyer (or its assigns) may reasonably request. Originator will, from time to
time during regular business hours requested by Buyer (or its assigns), upon
reasonable notice and at the sole cost of Originator, permit Buyer (or its
assigns) or their respective agents or representatives, (i) to examine make
copies of and abstracts from all Records in the possession or under the control
of Originator relating to the Receivables and the Related Security, including,
without limitation, the related Contracts, and (ii) to visit the offices and
properties of Originator for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to Originator's financial
condition or the Receivables and the Related Security or Originator's
performance under any of the Transaction Documents or Originator's performance
under the Contracts and, in each case, with any of the officers or employees of
Originator having knowledge of such matters.
(e) Keeping and Marking of Records and Books.
(i) Originator will maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables in
the event of the destruction of the originals thereof), and keep
and maintain all documents, books, records and other information
reasonably necessary or advisable for
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the collection of all Receivables (including, without limitation,
records adequate to permit the immediate identification of each new
Receivable and all Collections of and adjustments to each existing
Receivable). Originator will give Buyer (or its assigns) notice of any
material change in the administrative and operating procedures
referred to in the previous sentence.
(ii) Originator will (A) on or prior to
the date hereof, identify in its general ledger a legend, acceptable
to Buyer (or its assigns), describing Buyer's ownership interests in
the Receivables and further describing the Purchaser Interests of the
Agent (on behalf of the Purchasers) under the Purchase Agreement and
(B) upon the request of Buyer (or its assigns), (x) xxxx each
Contract with a legend describing Buyer's ownership interests in the
Receivables and further describing the Purchaser Interests of the
Agent (on behalf of the Purchasers) and (y) deliver to Buyer (or its
assigns) all Contracts (including, without limitation, all multiple
originals of any such Contract) relating to the Receivables.
(f) Compliance with Contracts and Credit and
Collection Policy. Originator will timely and fully (i) perform and comply with
all provisions, covenants and other promises required to be observed by it under
the Contracts related to the Receivables, and (ii) comply in all respects with
the Credit and Collection Policy in regard to each Receivable and the related
Contract.
(g) Ownership. Originator will take all necessary
action to establish and maintain, irrevocably in Buyer, (A) legal and equitable
title to the Receivables and the Collections and (B) all of Originator's right,
title and interest in the Related Security associated with the Receivables, in
each case, free and clear of any Adverse Claims other than Adverse Claims in
favor of Buyer (and its assigns) (including, without limitation, the filing of
all financing statements or other similar instruments or documents necessary
under the UCC (or any comparable law) of all appropriate jurisdictions to
perfect Buyer's interest in such Receivables, Related Security and Collections
and such other action to perfect, protect or more fully evidence the interest of
Buyer as Buyer (or its assigns) may reasonably request).
(h) Purchasers' Reliance. Originator acknowledges
that the Agent and the Purchasers are entering into the transactions
contemplated by the Purchase Agreement in reliance upon Buyer's identity as a
legal entity that is separate from Originator and any Affiliates thereof.
Therefore, from and after the date of execution and delivery of this Agreement,
Originator will take all reasonable steps including, without limitation, all
steps that Buyer, or any assignee of Buyer, may from time to time reasonably
request to maintain Buyer's identity as a separate legal entity and to make it
manifest to third parties that Buyer is an entity with assets and liabilities
distinct from those of Originator and any
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Affiliates thereof and not a division of Originator or any such Affiliate.
Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, Originator (i) will not hold itself out to third
parties as liable for the debts of Buyer nor purport to own the Receivables and
other assets acquired by Buyer, (ii) will take all other actions necessary on
its part to ensure that Buyer is at all times in compliance with the covenants
set forth in Section 7.1(i) of the Purchase Agreement and (iii) will cause all
tax liabilities arising in connection with the transactions contemplated herein
or otherwise to be allocated between Originator and Buyer on an arm's-length
basis and in a manner consistent with the procedures set forth in U.S.
Treasury Regulations Sections 1.1502-33(d) and 1.1552-l.
(i) Collections. Originator will cause (1) all
proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into
a Collection Account and (2) each Lock-Box and Collection Account to be subject
at all times to a Collection Account Agreement that is in full force and effect.
In the event any payments relating to Receivables are remitted directly to
Originator or any Affiliate of Originator, Originator will remit (or will cause
all such payments to be remitted) directly to a Collection Bank and deposited
into a Collection Account within two (2) Business Days following receipt thereof
and, at all times prior to such remittance, Originator will itself hold such
payments in trust for the exclusive benefit of Buyer and its assigns. Originator
will transfer exclusive ownership, dominion and control of each Lock-Box and
Collection Account to Buyer and, will not grant the right to take dominion and
control of any Lock-Box or Collection Account at a future time or upon the
occurrence of a future event to any Person, except to Buyer (or its assigns) as
contemplated by this Agreement and the Purchase Agreement.
(j) Taxes. Originator will file all tax returns and
reports required by law to be filed by it and promptly pay all taxes and
governmental charges at any time owing. Originator will pay when due any taxes
payable in connection with the Receivables, exclusive of taxes on or measured by
income or gross receipts of Buyer and its assigns.
(k) Insurance. Originator will maintain in effect, or
cause to be maintained in effect, at Originator's own expense, such casualty and
liability insurance as Originator deems appropriate in its good faith business
judgment. Buyer and the Agent, for the benefit of the Purchasers, shall be named
as additional insureds with respect to all such liability insurance maintained
by Originator. Originator will pay or cause to be paid, the premiums therefor
and deliver to Buyer and the Agent evidence satisfactory to Buyer and the Agent
of such insurance coverage. Copies of each policy shall be furnished to Buyer,
the Agent and any Purchaser in certificated form upon Buyer's, the Agent's or
such Purchaser's request.
Section 4.2 Negative Covenants of Originator. Until the date
on which this Agreement terminates in accordance with its terms, Originator
hereby covenants that:
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(a) Name Change, Offices and Records. Originator will
not change its name, identity or corporate structure (within the meaning of
Section 9-402(7) of any applicable enactment of the UCC) or relocate its chief
executive office or any office where Records are kept unless it shall have: (i)
given Buyer (or its assigns) at least forty-five (45) days' prior written
notice thereof and (ii) delivered to Buyer (or its assigns) all financing
statements, instruments and other documents requested by Buyer (or its assigns)
in connection with such change or relocation.
(b) Change in Payment Instructions to Obligers.
Originator will not add or terminate any bank as a Collection Bank, or make any
change in the instructions to Obligors regarding payments to be made to any
Lock-Box or Collection Account, unless Buyer (or its assigns) shall have
received, at least ten (10) days before the proposed effective date therefor,
(i) written notice of such addition, termination or change and (ii) with respect
to the addition of a Collection Bank or a Collection Account or Lock-Box, an
executed Collection Account Agreement with respect to the new Collection Account
or Lock-Box; provided, however, that Originator may make changes in instructions
to Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and
Collection Policy. Originator will not make any change to the Credit and
Collection Policy that could adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created Receivables.
Except as otherwise permitted in its capacity as Servicer pursuant to Article
VIII of the Purchase Agreement, Originator will not extend, amend or otherwise
modify the terms of any Receivable or any Contract related thereto other than in
accordance with the Credit and Collection Policy.
(d) Sales, Liens. Originator will not sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, or create or suffer to exist any Adverse Claim upon (including,
without limitation, the filing of any financing statement) or with respect to,
any Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of Buyer (or its
assigns) provided for herein), and Originator (or its assigns) will defend the
right, title and interest of Buyer, or its assigns, in, to and under any of the
foregoing property, against all claims of third parties claiming through or
under Originator. Originator shall not create or suffer to exist any mortgage,
pledge, security interest, encumbrance, lien, charge or other similar
arrangement on any of its inventory, the financing or lease of which gives rise
to any Receivable.
(e) Accounting; for Purchase. Originator will not,
and will not permit any Affiliate to, account for or treat (whether in financial
statements or otherwise) the
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transactions contemplated hereby in any manner other than the sale of the
Receivables and the Related Security by Originator to Buyer or in any other
respect account for or treat the transactions contemplated hereby in any manner
other than as a sale of the Receivables and the Related Security by Originator
to Buyer except to the extent that such transactions are not recognized on
account of consolidated financial reporting in accordance with generally
accepted accounting principles.
ARTICLE V
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any one or
more of the following events shall constitute a Termination Event:
(a) Originator shall fail (i) to make any payment or
deposit required to be made by Originator hereunder when due and such failure
continues for one (1) day, or (ii) to perform or observe any term, covenant or
agreement hereunder (other than as referred to in clause (i) of this paragraph
(a)) or any other Transaction Document to which it is a party and such failure
shall continue for three (3) consecutive Business Days.
(b) Any representation, warranty, certification or
statement made by Originator in this Agreement, any other Transaction Document
or in any other document delivered pursuant hereto or thereto shall prove to
have been incorrect when made or deemed made.
(c) Failure of Originator to pay any Indebtedness
when due in excess of $35 million, individually or in the aggregate; or the
default by Originator in the performance of any term, provision or condition
contained in any agreement under which any such Indebtedness was created or is
governed, the effect of which is to cause, or to permit the holder or holders of
such Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of Originator shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled payment)
prior to the date of maturity thereof.
(d) (i) Originator or any of its Subsidiaries shall
generally not pay its debts as such debts become due or shall admit in writing
its inability to pay its debts generally or shall make a general assignment for
the benefit of creditors; or (ii) any proceeding shall be instituted by or
against Originator or any of its Subsidiaries seeking to adjudicate it
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or any substantial part of
its property or (iii) Originator or any of its Subsidiaries shall take any
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corporate action to authorize any of the actions set forth in the foregoing
clauses (i) or (ii) of this subsection (d).
(e) A Change of Control shall occur.
(f) The senior unsecured long-term debt rating of
Avnet shall fall below BBB, as determined by Standard & Poor's Ratings Services,
and shall fall below Baa2, as determined by Xxxxx'x Investors Service, Inc.
(g) One or more final judgments for the payment of
money in an amount in excess of $50,000,000, individually or in the aggregate,
shall be entered against Originator on claims not covered by insurance or as to
which the insurance carrier has denied its responsibility, and such judgment
shall continue unsatisfied and in effect for thirty (30) consecutive days
without a stay of execution.
Section 5.2 Remedies. Upon the occurrence and during the
continuation of a Termination Event, Buyer may take any of the following
actions: (i) declare the Termination Date to have occurred, whereupon the
Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by Originator;
provided, however, that upon the occurrence of a Termination Event described in
Section 5.1(d), or of an actual or deemed entry of an order for relief with
respect to Originator under the Federal Bankruptcy Code, the Termination Date
shall automatically occur, without demand, protest or any notice of any kind,
all of which are hereby expressly waived by Originator and (ii) to the fullest
extent permitted by applicable law, declare that the Default Fee shall accrue
with respect to any amounts then due and owing by Originator to Buyer. The
aforementioned rights and remedies shall be without limitation and shall be in
addition to all other rights and remedies of Buyer and its assigns otherwise
available under any other provision of this Agreement, by operation of law, at
equity or otherwise, all of which are hereby expressly preserved, including,
without limitation, all rights and remedies provided under the UCC, all of
which rights shall be cumulative.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnities by Originator. Without limiting any
other rights that Buyer may have hereunder or under applicable law, Originator
hereby agrees to indemnify (and pay upon demand to) Buyer and its assigns,
officers, directors, agents and employees (each an "Indemnified Party") from
and against any and all damages, losses, claims, taxes, liabilities, costs,
expenses and for all other amounts payable, including reasonable attorneys'
fees (which attorneys may be employees of Buyer or any such assign) and
disbursements (all of the foregoing being collectively referred to as
"Indemnified
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Amounts") awarded against or incurred by any of them arising out of or as a
result of this Agreement or the acquisition, either directly or indirectly, by
Buyer of an interest in the Receivables, excluding, however:
(i) Indemnified Amounts to the extent a
final judgment of a court of competent jurisdiction holds that such
Indemnified Amounts resulted from gross negligence or willful
misconduct on the part of the Indemnified Party seeking
indemnification;
(ii) Indemnified Amounts to the extent
the same includes losses in respect of Receivables that are
uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor; or
(iii) taxes imposed by the jurisdiction
in which such Indemnified Party's principal executive office is
located, on or measured by the overall net income of such Indemnified
Party to the extent that the computation of such taxes is consistent
with the characterization for income tax purposes of the acquisition by
the Purchasers of Purchaser Interests under the Purchase Agreement as a
loan or loans by the Purchasers to Buyer secured by, among other
things, the Receivables, the Related Security and the Collections;
provided, however, that nothing contained in this sentence shall limit the
liability of Originator or limit the recourse of Buyer to Originator for amounts
otherwise specifically provided to be paid by Originator under the terms of this
Agreement. Without limiting the generality of the foregoing indemnification,
Originator shall indemnify Buyer for Indemnified Amounts (including, without
limitation, losses in respect of uncollectible receivables, regardless of
whether reimbursement therefor would constitute recourse to Originator) relating
to or resulting from:
(i) any representation or warranty made
by Originator (or any officers of Originator) under or in connection
with this Agreement, any other Transaction Document or any other
information or report delivered by Originator pursuant hereto or
thereto that shall have been false or incorrect when made or deemed
made;
(ii) the failure by Originator, to
comply with any applicable law, rule or regulation with respect to any
Receivable or Contract related thereto, or the nonconformity of any
Receivable or Contract included therein with any such applicable law,
rule or regulation or any
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failure of Originator to keep or perform any of its obligations, express or
implied, with respect to any Contract;
(iii) any failure of Originator to perform its
duties, covenants or other obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
(iv) any products liability, personal injury or
damage, suit or other similar claim arising out of or in connection with
merchandise, insurance or services that are the subject of any Contract or any
Receivable;
(v) any dispute, claim, offset or defense (other
than discharge in bankruptcy of the Obligor) of the Obligor to the payment of
any Receivable (including, without limitation, a defense based on such
Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its terms),
or any other claim resulting from the sale of the merchandise or service related
to such Receivable or the furnishing or failure to furnish such merchandise or
services;
(vi) the commingling of Collections of
Receivables at any time with other funds;
(vii) any investigation, litigation or
proceeding related to or arising from this Agreement or any other Transaction
Document, the transactions contemplated hereby, the use of the proceeds of any
Purchase Price Payment, the ownership of the Receivables or any other
investigation, litigation or proceeding relating to Originator in which any
Indemnified Party becomes involved as a result of any of the transactions
contemplated hereby;
(viii) any inability to litigate any claim
against any Obligor in respect of any Receivable as a result of such Obligor
being immune from civil and commercial law and suit on the grounds of sover-
eignty or otherwise from any legal action, suit or proceeding;
(ix) any Termination Event described in Section
5.1 (d);
(x) any failure to vest and maintain vested in
Buyer, or to transfer to Buyer, legal and equitable title to, and ownership of,
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the Receivables and the Collections, and all of Originator's right,
title and interest in the Related Security associated with the
Receivables, in each case, free and clear of any Adverse Claim;
(xi) the failure to have filed, or any
delay in filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Receivable, the Related Security
and Collections with respect thereto, and the proceeds of any thereof,
whether at the time of the Purchase or at any subsequent time;
(xii) any action or omission by
Originator which reduces or impairs the rights of Buyer with respect to
any Receivable or the value of any such Receivable;
(xiii) any attempt by any Person to
void the Purchase hereunder under statutory provisions or common law or
equitable action; and
(xiv) the failure of any Receivable
included in the calculation of the Net Receivables Balance as an
Eligible Receivable to be an Eligible Receivable at the time so
included.
Section 6.2 Other Costs and Expenses. Originator shall pay to
demand all costs and out-of-pocket expenses in connection with the preparation,
delivery and administration of this Agreement, the transactions contemplated
hereby other documents to be delivered hereunder. Originator shall pay to Buyer
on demand and all costs and expenses of Buyer, if any, including reasonable
counsel fees and in connection with the enforcement of this Agreement and the
other documents hereunder and in connection with any restructuring or workout of
this Agreement or documents, or the administration of this Agreement following a
Termination Event.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of Buyer (or its
assigns) in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or remedy any other further exercise thereof or the exercise
of any other power, right or remedy. The rights and remedies herein provided
shall be cumulative and nonexclusive of any rights or
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remedies provided by law. Any waiver of this Agreement shall be effective
only in the specific instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing signed by Originator and
Buyer and, to extent required under the Purchase Agreement, the Agent and the
Financial Institutions the Required Financial Institutions.
Section 7.2 Notices. All communications and notices provided
for hereunder shall be in writing (including bank wire, telecopy or electronic
facsimile transmission or similar writing) and shall be given to the other
parties hereto at their respective addresses or telecopy numbers set forth on
the signature pages hereof or at such other address or telecopy number as such
Person may hereafter specify for the purpose of to each of the other parties
hereto. Each such notice or other communication shall be effective (i) if given
by telecopy, upon the receipt thereof, (ii) if given by mail, three Business
Days after the time such communication is deposited in the mail with first
postage prepaid or (iii) if given by any other means, when received at the
address in this Section 7.2.
Section 7.3 Protection of Ownership Interests of Buver.
(a) Originator agrees that from time to time, at its
expense, it promptly execute and deliver all instruments and documents, and take
all actions, that be necessary or desirable, or that Buyer (or its assigns) may
request, to perfect, protect more fully evidence the interest of Buyer hereunder
and the Purchaser Interests, or to Buyer (or its assigns) to exercise and
enforce their rights and remedies hereunder. At time, Buyer (or its assigns)
may, at Originator's sole cost and expense, direct Originator notify the
Obligors of Receivables of the ownership interests of Buyer under this and may
also direct that payments of all amounts due or that become due under any or
Receivables be made directly to Buyer or its designee.
(b) If Originator fails to perform any of its
obligations Buyer (or its assigns) may (but shall not be required to) perform,
or cause performance such obligations, and Buyer's (or such assigns') costs and
expenses incurred in therewith shall be payable by Originator as provided in
Section 6.2. Originator authorizes Buyer (and its assigns) at any time and from
time to time in the sole Buyer (or its assigns), and appoints Buyer (and its
assigns) as its attorney(ies)-in-fact, on behalf of Originator (i) to execute on
behalf of Originator as debtor and to file statements necessary or desirable in
Buyer's (or its assigns') sole discretion to perfect maintain the perfection and
priority of the interest of Buyer in the Receivables and (ii) a carbon,
photographic or other reproduction of this Agreement or any financing with
respect to the Receivables as a financing statement in such offices as Buyer (or
its
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assigns) in their sole discretion deem necessary or desirable to perfect and to
maintain the perfection and priority of Buyer's interests in the Receivables.
This appointment is coupled with an interest and is irrevocable.
Section 7.4 Confidentiality.
(a) Originator shall maintain and shall cause each
of its employees and officers to maintain the confidentiality of this
Agreement, except as required by law, and the other confidential or proprietary
information with respect to the Agent and Company and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
Originator and its officers and employees may disclose such information to
Originator's external accountants and attorneys and as required by any
applicable law or order of any judicial or administrative proceeding.
(b) Anything herein to the contrary notwithstanding,
Originator hereby consents to the disclosure of any nonpublic information with
respect to it (i) to Buyer, the Agent, the Financial Institutions or Company by
each other, (ii) by Buyer, the Agent or the Purchasers to any prospective or
actual assignee or participant of any of them and (iii) by the Agent to any
rating agency, Commercial Paper dealer or provider of a surety, guaranty or
credit or liquidity enhancement to Company or any entity organized for the
purpose of purchasing, or making loans secured by, financial assets for which
Bank One acts as the administrative agent and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing. In
addition, the Purchasers and the Agent may disclose any such nonpublic
information pursuant to any law, rule, regulation, direction, request or order
of any judicial, administrative or regulatory authority or proceedings (whether
or not having the force or effect of law).
(c) Buyer shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of this Agreement,
except as required by law, and the other confidential or proprietary
information with respect to Originator, the Obligors and their respective
businesses obtained by it in connection with the due diligence evaluations,
structuring, negotiating and execution of the Transaction Documents, and the
consummation of the transactions contemplated herein and any other activities
of Buyer arising from or related to the transactions contemplated
herein provided, however, that each of Buyer and its employees and officers
shall be permitted to disclose such confidential or proprietary information:
(i) to the Agent and the other Purchasers, (ii) to any prospective or actual
assignee or participant of the Agent or the other Purchasers who execute a
confidentiality agreement for the benefit of Originator and Buyer on terms
comparable to those required of Buyer hereunder with respect to such disclosed
information, (iii) to any rating agency, provider of a surety, guaranty or
credit or liquidity enhancement to Company, (iv) to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing,
-24-
and (v) to the extent required pursuant to any applicable law, rule,
regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings with competent jurisdiction (whether or not
having the force or effect of law) so long as such required disclosure is made
under seal to the extent permitted by applicable law or by rule court or other
applicable body.
Section 7.5 Bankruptcy Petition. (a) Originator and Buyer
each hereby covenants and agrees that, prior to the date that is one year and
one day after the payment full of all outstanding senior indebtedness of
Company or any Financial Institution that is a special purpose bankruptcy
remote entity, it will not institute against, or join any other Person in
instituting against, Company or any such entity any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
(b) Originator covenants and agrees that, prior to
the date that is one year and one day after the payment in full of all
outstanding obligations of Buyer under the Purchase Agreement, it will not
institute against, or join any other Person in instituting against, Buyer any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States or any state of
the United States.
Section 7.6 Limitation of Liability. Except with respect to
any claim arising out of the willful misconduct or gross negligence of Company,
the Agent or any Financial Institution, no claim may be made by Originator or
any other Person against Company, the Agent or any Financial Institution or
their respective Affiliates, directors, officers, employees, attorneys or
agents for any special, indirect, consequential or punitive damages in respect
of any claim for breach of contract or any other theory of liability arising
out of or related to the transactions contemplated by this Agreement, or any
act, omission event occurring in connection therewith; and Originator hereby
waives, releases, and agrees not to xxx upon any claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
Section 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK EXCLUDING
CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
Section 7.8 CONSENT TO JURISDICTION. ORIGINATOR HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT
-25-
OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO
THIS AGREEMENT AND ORIGINATOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER AS TO THE VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM.NOTHING HEREIN SHALL LIMIT THE RIGHT OF BUYER (OR ITS
ASSIGNS) TO PROCEEDINGS AGAINST ORIGINATOR IN THE COURTS OF ANY OTHER DICTION.
ANY JUDICIAL PROCEEDING BY ORIGINATOR AGAINST BUYER ITS ASSIGNS) OR ANY
AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT
EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY A COURT
IN NEW YORK COUNTY, NEW YORK.
Section 7.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY
ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER
OR THEREUNDER.
Section 7.10 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction
Document contain the final and complete integration of all prior expressions by
the parties hereto respect to the subject matter hereof and shall constitute
the entire agreement among the parties hereto with respect to the subject
matter hereof superseding all prior oral or understandings.
(b) This Agreement shall be binding upon and inure to
the of Originator, Buyer and their respective successors and permitted assigns
(including trustee in bankruptcy). Originator may not assign any of its rights
and obligations or any interest herein without the prior written consent of
Buyer. Buyer may assign at time its rights and obligations hereunder and
interests herein to any other Person without consent of Originator. Without
limiting the foregoing, Originator acknowledges that pursuant to the Purchase
Agreement, may assign to the Agent, for the benefit of the Purchasers, its
rights, remedies, powers and privileges hereunder and that the Agent may
further assign such rights, remedies, powers and privileges to the extent
permitted in the
-26-
Purchase Agreement. Originator agrees that the Agent, as the assignee of Buyer,
shall, subject to the terms of the Purchase Agreement, have the right to enforce
this Agreement and to exercise directly all of Buyer's rights and remedies under
this Agreement (including, without limitation, the right to give or withhold any
consents or approvals of Buyer to be given or withheld hereunder) and Originator
agrees to cooperate fully with the Agent in the exercise of such rights and
remedies. This Agreement shall create and constitute the continuing obligations
of the parties hereto in accordance with its terms and shall remain in full
force and effect until terminated in accordance with its terms; provided,
however, that the rights and remedies with respect to (i) any breach of any
representation and warranty made by Originator pursuant to Article II; (ii) the
indemnification and payment provisions of Article VI; and (iii) Section 7.5
shall be continuing and shall survive any termination of this Agreement.
Section 7.11 Counterparts; SeverabilitY; Section References.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same Agreement. Any provisions of this Agreement which are
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. Unless otherwise
expressly indicated, all references herein to "Article," "Section, " "Schedule"
or "Exhibit" shall mean articles and sections of, and schedules and exhibits to,
this Agreement.
Section 7.12 Subordination. Originator shall have the right
to receive, and Buyer shall make, any and all payments relating to any
indebtedness, obligation or claim, Originator may from time to time hold or
otherwise have against Buyer or any assets or properties of Buyer, whether
arising hereunder or otherwise existing, provided that, after giving effect to
any such payment, the aggregate Outstanding Balance of Receivables owned by
Buyer at such time exceeds the sum of (a) the Aggregate Unpaids under the
Purchase Agreement, plus (b) the aggregate outstanding principal balance of the
Subordinated Loans. Originator hereby agrees that at any time during which the
condition set forth in the proviso of the immediately preceding sentence shall
not be satisfied, Originator shall be subordinate in right of payment to the
prior payment of any indebtedness or obligation of Buyer owing to the Agent or
any Purchaser under the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
-27-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date hereof.
AVNET, INC.
By:/s/ Xxxxxxx Xxxxxxxx
______________________________________________
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
Address: 0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Fax: (000) 000-0000
AVNET RECEIVABLES CORPORATION
By:/s/ Xxxxx X. Xxxx
______________________________________________
Name: Xxxxx X. Xxxx
Title: Vice President and Secretary
Address: 0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: President
Fax: (000) 000-0000
EXHIBIT I
Definitions
This is Exhibit I to the Agreement (as hereinafter defined).
As used in the Agreement and the Exhibits, Schedules and Annexes thereto,
capitalized terms have the meanings set forth in this Exhibit I (such meanings
to be equally applicable to the singular and plural forms thereof). If a
capitalized term is used in the Agreement, or any Exhibit, Schedule or Annex
thereto, and not otherwise defined therein or in this Exhibit I, such term shall
have the meaning assigned thereto in Exhibit I to the Purchase Agreement.
"Agent" has the meaning set forth in the Preliminary
Statements to the Agreement.
"Agreement" means the Receivables Sale Agreement, dated as of
June 28, 2001 between Originator and Buyer, as the same may be amended, restated
or otherwise modified.
"Buyer" has the meaning set forth in the preamble to the
Agreement.
"Calculation Period" means each calendar month or portion
thereof which elapses during the term of the Agreement. The first Calculation
Period shall commence on the date of the Purchase of Receivables hereunder and
the final Calculation Period shall terminate on the Termination Date.
"Change of Control" means the acquisition by any Person, or
two or more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 20% or more of the outstanding shares of
voting stock of Originator.
"Company" has the meaning set forth in the Preliminary
Statements to the Agreement.
"Credit and Collection Policy" means Originator's credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in Exhibit V, as modified from time to time in
accordance with the Agreement.
"Default Fee" means a per annum rate of interest equal to the
sum of(i) the Prime Rate, plus (ii) 2% per annum.
"Dilutions" means, at any time, the aggregate amount of
reductions or cancellations described in Section 1.3(a) of the Agreement.
"Discount Factor" means a percentage calculated to provide
Buyer with reasonable return on its investment in the Receivables after taking
account of(i) the value of money based upon the anticipated dates of collection
of the Receivables and cost to Buyer of financing its investment in the
Receivables during such period and (ii) risk of nonpayment by the Obligors.
Originator and Buyer may agree from time to time change the Discount Factor
based on changes in one or more of the items affecting the calculation thereof,
provided that any change to the Discount Factor shall take effect as the
commencement of a Calculation Period, shall apply only prospectively and shall
affect the Purchase Price payment made prior to the Calculation Period during
which Originator and Buyer agree to make such change.
"Initial Cutoff Date" has the meaning set forth in Section
1.2(a).
"Material Adverse Effect" means a material adverse effect on
(i) the financial condition or operations of Originator and its Subsidiaries,
(ii) the ability of Originator to perform its obligations under the Agreement or
any other Transaction Document, (iii) the legality, validity or enforceability
of the Agreement or any other Document, (iv) Originator's, Buyer's, the Agent's
or any Purchaser's interest in the receivables generally or in any significant
portion of the Receivables, the Related Security or Collections with respect
thereto, or (v) the collectibility of the Receivables generally or any material
portion of the Receivables.
"Net Value" means, as of any date of determination, an amount
equal sum of (i) the aggregate Outstanding Balance of the Receivables at such
time, minus sum of (A) the Aggregate Capital outstanding at such time, plus (B)
the Aggregate
"Net Worth" means as of the last Business Day of each
Calculation preceding any date of determination, the excess, if any, of (a) the
aggregate Outstanding Balance of the Receivables at such time, over (b) the sum
of(i) the Aggregate Capital outstanding at such time, p& (ii) the aggregate
outstanding principal balance of the Subordinated Loans (including any
Subordinated Loan proposed to be made on the date determination).
"Original Balance" means, with respect to any Receivable
coming into existence after the Initial Cutoff Date, the Outstanding Balance of
such Receivable on date it was created.
"Originator" has the meaning set forth in the preamble to the
Agreement
"Potential Termination Event" means an event which, with the
passage time or the giving of notice, or both, would constitute a Termination
Event.
Exh. I-2
"Purchase" means the purchase pursuant to Section 1.1 (a) of
the Agreement by Buyer from Originator of the Receivables and the Related
Security and Collections related thereto, together with all related rights in
connection therewith.
"Purchase Agreement" has the meaning set forth in the
Preliminary Statements to the Agreement.
"Purchase Price" means, with respect to the Purchase, the
aggregate price to be paid by Buyer to Originator for such Purchase in
accordance with Section 1.2 of the Agreement for the Receivables, Collections
and Related Security being sold to Buyer, which price shall equal on any date
(i) the product of (x) the Outstanding Balance of such Receivables on such
date, multiplied by (y) one minus the Discount Factor in effect on such date,
minus (ii) any Purchase Price Credits to be credited against the Purchase Price
otherwise payable in accordance with Section 1.3 of the Agreement.
"Purchase Price Credit" has the meaning set forth in Section
1.3 of the Agreement.
"Receivable" means all indebtedness and other obligations
owed to Originator (at the times it arises, and before giving effect to any
transfer or conveyance under the Agreement) or Buyer (after giving effect to the
transfers under the Agreement) or in which Originator or Buyer has a security
interest or other interest, including, without limitation, any indebtedness,
obligation or interest constituting an account, chattel paper, instrument or
general intangible, arising in connection with the sale of goods or the render-
ing of services by Originator and further includes, without limitation, the
obligation to pay any Finance Charges with respect thereto. Indebtedness and
other rights and obligations arising from any one transaction, including,
without limitation, indebtedness and other rights and obligations represented by
an individual invoice, shall constitute a Receivable separate from a Receivable
consisting of the indebtedness and other rights and obligations arising from any
other transaction; provided, further, that any indebtedness, rights or
obligations referred to in the immediately preceding sentence shall be a
Receivable regardless or whether the account debtor or Originator treats such
indebtedness, rights or obligations as a separate payment obligation.
"RelatedSecurity" means, with respect to any Receivable:
(i) all of Originator's interest in the
inventory and goods (including returned or repossessed inventory or
goods), if any, the sale, financing or lease of which by Originator
gave rise to such Receivable, and all insurance contracts with respect
thereto,
Exh. I-3
(ii) except to the extent prohibited by
the terms of any Contract (unless, and to the extent, such prohibition
is rendered ineffective by law, including, without limitation,
statutory authority), all other security interests or liens and
property subject thereto from time to time, if any, purporting to
secure payment of such Receivable, whether pursuant to the Contract
related to such Receivable or otherwise, together with all financing
statements and security agreements describing any collateral securing
such Receivable,
(iii) except to the extent prohibited
by the terms of any Contract (unless, and to the extent, such
prohibition is rendered ineffective by law, including, without
limitation, statutory authority), all guaranties, letters of credit,
insurance and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such Receivable
whether pursuant to the Contract related to such Receivable or
otherwise,
(iv) except to the extent prohibited by
the terms of any Contract (unless, and to the extent, such prohibition
is rendered ineffective by law, including, without limitation,
statutory authority), all service contracts and other contracts and
agreements associated with such Receivable,
(v) all Records related to such
Receivable,
(vi) all of Originator's right, title
and interest in each Lock-Box and each Collection Account, and
(vii) all proceeds of any of the
foregoing.
"Required Capital Amount" means, as of any date of
determination, an amount equal to the sum of (i) the twenty-four month rolling
average of Dilutions, plus (ii) the result obtained in the foregoing clause (i)
of this definition, multiplied by 10%.
"Revised Article 9" means the 1999 Official Text of Article 9
of the Uniform Commercial Code with conforming amendments to Articles 1,2,2a, 4,
5, 6,7 and 8 until such time as a version of such Official Text is adopted in
the State of New York and subsequent thereto shall mean the version of such
Official Text as adopted.
"Settlement Date" means, with respect to each Calculation
Period, the date that is the 20* calendar day of the month following such
Calculation Period.
Exh. I-4
"Subordinated Loan" has the meaning set forth in Section
1.2(a) of the Agreement.
"Subordinated Note" means a promissory note in substantially
the Exhibit VII hereto as more fully described in Section 1.2 of the Agreement,
as the be amended, restated, supplemented or otherwise modified from time to
time.
"Subscription Agreement" means that certain Stockholder and
Agreement, dated as of June 28,2001, between Originator and Buyer, substantially
in form of Exhibit VI hereto.
"Termination Date" means the earliest to occur of (i) the
Facility Termination Date, (ii) the Business Day immediately prior to the
occurrence of a Termination set forth in Section 5.1 (d), (iii) the Business Day
specified in a written notice from Originator following the occurrence of any
other Termination Event, and (iv) the date is thirty (30) Business Days after
Buyer's receipt of written notice from Originator that wishes to terminate the
facility evidenced by this Agreement.
"Termination Event" has the meaning set forth in Section 5,l
of the Agreement.
"Transaction Documents" means, collectively, this Agreement,
each Collection Account Agreement, the Subordinated Note, the Subscription
Agreement other instruments, documents and agreements executed and delivered in
connection herewith.
All accounting terms not specifically defined herein shall be
construed accordance with GAAP. All terms used in Article 9 of the UCC in the
State of New and not specifically defined herein, are used herein as defined in
such Article 9. All used in Article 9 of the UCC in the State of New York, and
not specifically defined are used herein as defined in such Article 9. All
section references herein to the UCC include all successor sections under any
subsequent version or amendment to any the UCC.
Exh. I-5
