UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
__________________
Date of Report (Date of earliest event reported): February 27, 2017
AVNET, INC.
(Exact name of registrant as specified in Charter)
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New York |
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1-4224 |
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11-1890605 |
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(State or other jurisdiction |
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(Commission |
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(IRS Employer |
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Of incorporation) |
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File Number) |
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Identification No.) |
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2211 South 47th Street, Phoenix, Arizona |
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85034 |
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(Address of principal executive offices) |
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(Zip Code) |
(480) 643-2000
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Interest Purchase Agreement
As previously announced, on September 19, 2016, Avnet, Inc. (the “Company”) entered into an Interest Purchase Agreement (the “Interest Purchase Agreement”) with Tech Data Corporation (“the Buyer”), pursuant to which, the Company agreed to sell its Technology Solutions operating group (the “TS Business”) to the Buyer.
On February 27, 2017, the Company and the Buyer entered into the First Amendment to the Interest Purchase Agreement (the “Amendment” and the Interest Purchase Agreement, as so amended, the “Purchase Agreement”), pursuant to which the parties agreed, among other things, that certain intercompany indebtedness in China would remain outstanding following the Closing and be payable by the Buyer’s subsidiaries to the Company’s subsidiaries and to modify the definition of “Retained Business” to exclude the business of integration and resale of certain technology products in the United States to certain customers.
Other than as expressly modified pursuant the Amendment, the Interest Purchase Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on September 20, 2016 and is incorporated herein by reference, remains in full force and effect as originally executed on September 19, 2016.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of (1) the Interest Purchase Agreement, and (2) the Amendment, a copy of which is filed herewith as Exhibit 2.2 and incorporated herein by reference.
Accounts Receivable Securitization Program
In connection with the Company’s sale of its TS Business to the Buyer, on February 27, 2017, the Company and Avnet Receivables Corporation, a wholly owned subsidiary of the Company (“ARC”), entered into the Third Amended and Restated Receivables Purchase Agreement with the companies and financial institutions party thereto (collectively, the “Purchasers”) and JPMorgan Chase Bank, N.A., as agent (the “Receivables Purchase Agreement”). Pursuant to the Receivables Purchase Agreement, ARC may sell, on a revolving basis, an undivided interest of up to $400 million in eligible receivables to the Purchasers. As of February 27, 2017, approximately $274 million was outstanding under the Receivables Purchase Agreement. The accounts receivable securitization program expires on August 19, 2018. Borrowings under the program bear interest at a base rate or commercial paper rate, plus an applicable margin. The Receivables Purchase Agreement amends and supersedes the Second Amended and Restated Receivable Purchase Agreement, dated August 26, 2010 as amended, among the Company, ARC, the companies and financial institutions party thereto and JPMorgan Chase Bank, N.A.
Concurrent with entry into the Receivables Purchase Agreement, the Company and ARC entered into the Amended and Restated Receivables Sale Agreement (the “Receivables Sale Agreement” and together with the Receivables Purchase Agreement, the “Receivables Documents”). Under the Receivables Sale Agreement, the Company agreed to sell, and ARC agreed to purchase, certain accounts receivable originated by the Company in the United States for a purchase price reflecting a discount from the aggregate balance of such accounts receivable and certain credit adjustments. The Receivables Sale Agreement amends and supersedes the receivable sale agreement, dated June 28, 2001 as amended, between the Company and ARC.
Some or all of the parties to the Receivables Purchase Agreement, or their affiliates, have in the past provided investment or commercial banking services to the Company and its affiliates for which they received customary fees and expenses, and they may provide similar services in the future.
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The foregoing descriptions of the Receivables Documents do not purport to be complete and are qualified in their entirety by reference to the full text of the Receivables Purchase Agreement and the Receivables Sale Agreement, attached hereto as Exhibits 10.1 and 10.2, respectively, and incorporated herein by reference.
The Purchase Agreement and the Receivables Documents have been included to provide investors and security holders with information regarding their terms. They are not intended to provide any other factual information about the TS Business, the Company, the Buyer, ARC or any of their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Purchase Agreement and the Receivables Documents (i) were made by the parties thereto only for purposes of those agreements and as of specific dates; (ii) were made solely for the benefit of the parties to the Purchase Agreement or the Receivables Documents, as the case may be; (iii) may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Purchase Agreement or the Receivables Documents, as the case may be (such disclosures include information that has been included in public disclosures, as well as additional non-public information); (iv) may have been made for the purposes of allocating contractual risk between the parties to the Purchase Agreement or the Receivables Documents instead of establishing these matters as facts; and (v) may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the TS Business, the Company, the Buyer, ARC or any of their respective subsidiaries or affiliates. Additionally, the representations, warranties, covenants, conditions and other terms of the Purchase Agreement and the Receivables Documents may be subject to subsequent waiver or modification. Information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement or the Receivables Documents, as the case may be, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The Purchase Agreement and the Receivables Documents should not be read alone, but should instead be read in conjunction with the other information regarding the Company that is or will be contained in, or incorporated by reference into, the Forms 10-K, Forms 10-Q and other documents that are filed with the Securities and Exchange Commission.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On February 27, 2017, the Company completed the previously announced divestiture of the TS Business to the Buyer pursuant to the terms of the Purchase Agreement. The Company received approximately $2.4 billion in cash, which excludes net working capital and other contractual sales price adjustments and $247 million of the Buyer common stock based on the closing price of the Buyer shares on February 27, 2017.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure required hereunder is provided under Item 1.01 and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 27, 2017, in connection with the divestiture of the TS Business, the employment of Patrick Zammit, Senior Vice President of the Company and President of Avnet Technology Solutions, with the Company was terminated.
Item 8.01 Other Events.
On February 27, 2017, the Company issued a press release announcing the completion of the TS Business divestiture. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(b)Pro forma financial information
The Company’s unaudited pro forma condensed consolidated financial statements, which reflects the TS Business divestiture described in Item 2.01, is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
(d)Exhibits
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Exhibit No. |
Description |
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2.2 |
First Amendment to Interest Purchase Agreement, dated as of February 27, 2017, by and between Avnet, Inc. and Tech Data Corporation |
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10.1 |
Third Amended and Restated Receivables Purchase Agreement, dated February 27, 2017, among Avnet, Inc., Avnet Receivables Corporation, the companies and financial institutions party thereto and JPMorgan Chase Bank, N.A., as agent |
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10.2 |
Amended and Restated Receivables Sale Agreement, dated February 27, 2017, between Avnet, Inc. and Avnet Receivables Corporation |
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99.1 |
Press release issued by Avnet, Inc. on February 27, 2017 |
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99.2 |
Unaudited pro forma condensed consolidated financial information of Avnet, Inc. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: March 3, 2017 |
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AVNET, INC. |
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By: |
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/s/ Kevin Moriarty |
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Name: Kevin Moriarty |
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Title: Senior Vice President and |
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Chief Financial Officer |
Exhibit 2.2
FIRST AMENDMENT
TO
INTEREST PURCHASE AGREEMENT
This First Amendment to INTEREST Purchase Agreement (this “Amendment”), dated as of February 27, 2017, by and between Avnet, Inc. (the “Seller”) and Tech Data Corporation (the “Buyer”), amends that certain Interest Purchase Agreement, dated September 19, 2016, by and between the Seller and the Buyer (as amended, the “Purchase Agreement”). Capitalized terms used herein but not otherwise defined herein shall have the respective meanings assigned to such terms in the Purchase Agreement.
WITNESSETH:
WHEREAS, the Parties have previously executed and delivered the Purchase Agreement;
WHEREAS, pursuant to Section 9.2 of the Purchase Agreement, the Purchase Agreement may be amended, modified or supplemented only by an instrument in writing specifically designated as an amendment signed on behalf of each Party; and
WHEREAS, the Parties desire to amend the Purchase Agreement in the manner set forth herein.
NOW, THEREFORE, in connection with the Purchase Agreement, the transaction contemplated thereunder and the terms hereof, and in accordance with Section 9.2 of the Purchase Agreement, the Parties agree as follows:
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1.1 The definition of “Audited Financial Statements” set forth in Section 1.1 of the Purchase Agreement is amended and restated in its entirety to read as follows: |
“‘Audited Financial Statements’ means the audited combined balance sheets of the TS Business and the OEM Business (as defined in that certain Purchase Agreement, dated February 27, 2017, by and among the Seller, the Companies and the Buyer) as of July 2, 2016 and June 27, 2015 and the related audited combined statements of income, comprehensive income, stockholder’s equity and cash flows for each of the years in the three-year period ended July 2, 2016, together with all related notes and disclosures thereto.”
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1.2 The definition of “Retained Business” set forth in Section 1.1 of the Purchase Agreement is amended and restated in its entirety to read as follows: |
“‘Retained Business’ means the business of marketing and selling of semiconductors, interconnect, passive and electromechanical devices and embedded products, as well as value-added support and services relating to design-in and procurement of electronic components, as currently conducted by the Seller’s Electronics Marketing operating group, including the Tianjin business, but excluding the OEM Business.”
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1.3 Section 2.2(b) of the Purchase Agreement is deleted in its entirety. |
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1.4 Section 2.3(a) of the Purchase Agreement is amended to add the following to the end of such Section: |
“Notwithstanding anything to the contrary contained herein, the sale and purchase of the Interests shall be deemed to be effective as of 12:01 a.m. Eastern time on the Closing Date with economic effectiveness as of 12:01 a.m. local time on the Closing Date in each jurisdiction in which the TS Business operates.”
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1.5 Section 3.7(b) of the Purchase Agreement is amended and restated in its entirety to read as follows: |
“The Audited Financial Statements were derived from the books and records of the Seller and its Affiliates and fairly present, in all material respects, the combined financial position and results of operations of the TS Business and the OEM Business as at the respective dates thereof and for the respective periods indicated therein in accordance with GAAP applied on a consistent basis throughout the periods covered thereby.”
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1.6 Section 5.17 of the Purchase Agreement is amended to add the following to the end of such Section: |
“The Parties acknowledge and agree that in order to implement the Reorganization in accordance with the terms of the Reorganization Agreement, the Seller and its Affiliates shall enter into an entrustment loan in China with a Subsidiary of NewCo Non-US (the ‘Chinese Subsidiary’) not to exceed RMB 55,000,000 in the aggregate, in the form set forth as Annex A to this Amendment, which entrustment loan shall be an intercompany loan (the ‘China Loan’). Notwithstanding anything to the contrary set forth herein (including Section 5.5(a) hereof), the China Loan shall not be treated as intercompany indebtedness to be extinguished in connection with the Closing and instead shall constitute Indebtedness for all purposes hereof (including, without limitation, for purposes of calculating the Cash Purchase Price), and shall be repaid by NewCo Non-US or its Subsidiaries within five Business Days of the approval by the applicable Governmental Authorities of the capitalization of the Chinese Subsidiary. The Seller shall bear, and shall promptly reimburse the Buyer therefor following the Buyer’s request, the reasonable incremental expenses of NewCo Non-US and its Subsidiaries in connection with the implementation of the China Loan, including (A) the amount of any interest thereon in excess of 2% per annum, (B) the out-of-pocket expenses of any SAFE procedures described in Article 9.5 of the China Loan and (C) the out-of-pocket costs, taxes and the Commission Fee (as defined in the China Loan) described in Articles 5, 6 and 7 of the China Loan.”
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1.7 Section 5.25 of the Purchase Agreement is deleted in its entirety. |
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1.8 Section 2.2(b) of the Seller Disclosure Schedules is deleted in its entirety. |
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MISCELLANEOUS
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2.1 References. Each reference in the Purchase Agreement shall, unless the context otherwise requires, mean the Purchase Agreement as amended by this Amendment. |
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2.2 Ratification. The Purchase Agreement, as amended by this Amendment, is in all respects ratified, approved and confirmed. |
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2.3 No Other Amendments; Continuing Effect. The amendments set forth herein are limited precisely as written and will not be deemed to be an amendment of any other term or condition of the Agreement or any of the documents referred to therein. Except as expressly amended hereby, the terms and conditions of the Purchase Agreement shall continue in full force and effect. |
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2.4 Constructions, Etc. This Amendment shall be governed by all provisions of the Purchase Agreement, unless the context otherwise requires, including all provisions concerning construction, enforcement, notices, governing law and arbitration. |
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2.5 Successors. This Amendment shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. |
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2.7 Counterparts. This Amendment may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. |
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the date first written above by their respective officers thereunto duly authorized.
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AVNET, INC. |
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TECH DATA CORPORATION |
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Name: |
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[Signature Page First Amendment to Interest Purchase Agreement]
Annex A
China Loan
Exhibit 10.1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
dated as of February 27, 2017
Among
AVNET RECEIVABLES CORPORATION, as Seller,
AVNET, INC., as Servicer,
THE COMPANIES,
THE FINANCIAL INSTITUTIONS,
and
JPMORGAN CHASE BANK, N.A.,
as Agent
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
TABLE OF CONTENTS
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ARTICLE I PURCHASE ARRANGEMENTS |
2 | ||
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Section 1.1 Purchase Facility |
2 | ||
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Section 1.2 Increases |
2 | ||
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Section 1.3 Decreases |
2 | ||
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Section 1.4 Payment Requirements |
3 | ||
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ARTICLE II PAYMENTS AND COLLECTIONS |
3 | ||
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Section 2.1 Payments |
3 | ||
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Section 2.2 Collections Prior to Amortization |
3 | ||
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Section 2.3 Collections Following Amortization |
4 | ||
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Section 2.4 Application of Collections |
4 | ||
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Section 2.5 Payment Rescission |
5 | ||
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Section 2.6 Maximum Purchaser Interests |
5 | ||
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Section 2.7 Repurchase Option |
5 | ||
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Section 2.8 Release of Lock-Box Arrangements |
5 | ||
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Section 2.9 Compliance with FATCA |
5 | ||
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ARTICLE III COMPANY FUNDING |
6 | ||
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Section 3.1 CP Costs |
6 | ||
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Section 3.2 CP Costs Payments |
6 | ||
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Section 3.3 Calculation of CP Costs |
6 | ||
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ARTICLE IV FINANCIAL INSTITUTION FUNDING |
6 | ||
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Section 4.1 Financial Institution Funding |
6 | ||
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Section 4.2 Yield Payments |
6 | ||
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Section 4.3 Selection and Continuation of Tranche Periods |
7 | ||
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Section 4.4 Financial Institution Discount Rates |
7 | ||
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Section 4.5 Suspension of the LIBO Rate |
7 | ||
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Section 4.6 Extension of Liquidity Termination Date |
7 | ||
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ARTICLE V REPRESENTATIONS AND WARRANTIES |
8 | ||
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Section 5.1 Representations and Warranties of The Seller Parties |
8 | ||
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Section 5.2 Financial Institution Representations and Warranties |
12 | ||
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ARTICLE VI CONDITIONS OF PURCHASES |
12 | ||
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Section 6.1 Conditions Precedent to Amendment and Restatement |
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Section 6.2 Conditions Precedent to All Purchases and Reinvestments |
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ARTICLE VII COVENANTS |
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Section 7.1 Affirmative Covenants of The Seller Parties |
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Section 7.2 Negative Covenants of The Seller Parties |
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ARTICLE VIII ADMINISTRATION AND COLLECTION |
20 | ||
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Section 8.1 Designation of Servicer |
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Section 8.2 Duties of Servicer |
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Section 8.3 Collection Notices |
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Section 8.4 Responsibilities of Seller |
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Section 8.5 Reports |
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Section 8.6 Servicing Fees |
22 | ||
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Section 8.7 Limited Recourse to Servicer |
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Section 8.8 Risk Retention Compliance |
23 | ||
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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
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ARTICLE IX AMORTIZATION EVENTS |
23 | ||
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Section 9.1 Amortization Events |
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Section 9.2 Remedies |
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ARTICLE X INDEMNIFICATION |
24 | ||
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Section 10.1 Indemnities by The Seller Parties |
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Section 10.2 Increased Cost and Reduced Return |
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Section 10.3 Other Costs and Expenses |
28 | ||
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Section 10.4 Allocations |
28 | ||
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ARTICLE XI THE AGENT |
28 | ||
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Section 11.1 Authorization and Action |
28 | ||
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Section 11.2 Delegation of Duties |
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Section 11.3 Exculpatory Provisions |
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Section 11.4 Reliance by Agent |
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Section 11.5 Non-Reliance on Agent and Other Purchasers |
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Section 11.6 Reimbursement and Indemnification |
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Section 11.7 Agent in its Individual Capacity |
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Section 11.8 Successor Agent |
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ARTICLE XII ASSIGNMENTS; PARTICIPATIONS |
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Section 12.1 Assignments |
30 | ||
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Section 12.2 Participations |
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Section 12.3 Security Interests |
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ARTICLE XIII MISCELLANEOUS |
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Section 13.1 Waivers and Amendments |
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Section 13.2 Notices |
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Section 13.3 Ratable Payments |
33 | ||
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Section 13.4 Protection of Ownership Interests of the Purchasers |
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Section 13.5 Confidentiality |
33 | ||
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Section 13.6 Bankruptcy Petition |
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Section 13.7 Limitation of Liability |
34 | ||
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Section 13.8 CHOICE OF LAW |
35 | ||
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Section 13.9 CONSENT TO JURISDICTION |
35 | ||
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Section 13.10 WAIVER OF JURY TRIAL |
35 | ||
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Section 13.11 Integration; Binding Effect; Survival of Terms |
35 | ||
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Section 13.12 Counterparts; Severability; Section References |
35 | ||
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Section 13.13 JPM Chase Roles |
36 | ||
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Section 13.14 Characterization |
36 | ||
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Section 13.15 Confirmation and Ratification of Terms |
36 | ||
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Section 13.16 PATRIOT Act |
37 | ||
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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Exhibits and Schedules
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Exhibit I |
Definitions |
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Exhibit II |
Form of Purchase Notice |
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Exhibit III |
Jurisdictions of Organization of the Seller Parties; Locations of Records; Organizational Number(s); Federal Employer Identification Number(s); Other Names |
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Exhibit IV |
Names of Collection Banks; Collection Accounts |
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Exhibit V |
Form of Compliance Certificate |
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Exhibit VI |
Form of Collection Account Agreement |
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Exhibit VII |
Form of Assignment Agreement |
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Exhibit VIII |
Credit and Collection Policy |
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Exhibit IX |
Form of Contract(s) |
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Exhibit X |
Form of Monthly Report |
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Exhibit XI |
Collateral Description |
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Schedule A |
Commitments |
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Schedule B |
Closing Documents |
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Schedule C |
Computation of CP Costs |
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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
This Third Amended and Restated Receivables Purchase Agreement dated as of February 27, 2017 is among Avnet Receivables Corporation, a Delaware corporation (“Seller”), Avnet, Inc., a New York corporation (“Avnet”), as initial Servicer (the Servicer together with Seller, the “Seller Parties” and each a “Seller Party”), the entities listed on Schedule A to this Agreement under the heading “Financial Institution” (together with any of their respective successors and assigns hereunder, the “Financial Institutions”), the entities listed on Schedule A to this Agreement under the heading “Company” (together with any of their respective successors and assigns hereunder, the “Companies”) and JPMorgan Chase Bank, N.A., as agent for the Purchasers hereunder or any successor agent hereunder (together with its successors and assigns hereunder, the “Agent”). Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
On June 28, 2001 (the “Initial Closing Date”), the Seller Parties, Bank One, NA (Main Office Chicago), in its capacities as a Financial Institution and as agent, and Preferred Receivables Funding Corporation, in its capacity as a Company, entered into the original Receivables Purchase Agreement (the “Original Agreement”).
The Seller Parties, JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA (Main Office Chicago)), as Agent, the Amendment Date Companies and the Amendment Date Financial Institutions are parties to the Original Agreement as amended and restated pursuant to the first amendment and restatement thereof, dated as of February 6, 2002, as further amended and restated pursuant to the second amendment and restatement thereof, dated as of August 26, 2010, and as last amended by Amendment No. 10 thereto, dated as of December 30, 2016 (the “Existing Agreement”).
Subject to the terms and conditions set forth herein, the parties hereto desire to amend and restate the Existing Agreement pursuant to this Third Amended and Restated Receivables Purchase Agreement, effective as of February 27, 2017 (the “Amendment Date”).
Seller desires to continue to transfer and assign Purchaser Interests to the Purchasers from time to time.
Each Company may, in its absolute and sole discretion, continue to purchase Purchaser Interests from Seller from time to time.
In the event that any Company declines to make any purchase, such Company’s Related Financial Institution(s) shall, at the request of Seller, purchase Purchaser Interests that such Company declined to purchase from time to time.
JPMorgan Chase Bank, N.A. has been requested and is willing to continue to act as Agent on behalf of the Companies and the Financial Institutions in accordance with the terms hereof.
The Existing Agreement is hereby amended and restated in its entirety to read as set forth herein:
AGREEMENT
Now Therefore, in consideration of the foregoing and for other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree that, subject to satisfaction of the conditions precedent set forth in Section 6.1, the Existing Agreement is hereby amended and restated in its entirety to read as follows:
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Page 2
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Purchaser all Broken Funding Costs arising as a result of such reduction. No Aggregate Reduction will be made following the occurrence of the Amortization Date without the consent of the Agent. |
Page 3
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
amounts set aside during the preceding Settlement Period that have not been subject to a Reinvestment and apply such amounts (if not previously paid in accordance with Section 2.1) first, to reduce unpaid Obligations and second, to reduce the Capital of all Purchaser Interests of Terminating Financial Institutions, applied ratably to each Terminating Financial Institution according to its respective Termination Percentage. If such Capital and Obligations shall be reduced to zero, any additional Collections received by the Servicer (i) if applicable, shall be remitted to the Agent’s or applicable Purchaser’s account no later than 11:00 a.m. (Chicago time) to the extent required to fund any Aggregate Reduction on such Settlement Date and (ii) any balance remaining thereafter shall be remitted from the Servicer to Seller on such Settlement Date. Each Terminating Financial Institution shall be allocated a ratable portion of Collections from the Liquidity Termination Date that such Terminating Financial Institution did not consent to extend (as to such Terminating Financial Institution, the “Liquidity Provider Termination Date”), until such Terminating Financial Institution’s Capital shall be paid in full. This ratable portion shall be calculated on the Liquidity Provider Termination Date of each Terminating Financial Institution as a percentage equal to (i) Capital of such Terminating Financial Institution outstanding on its Liquidity Provider Termination Date, divided by (ii) the Aggregate Capital outstanding on such Liquidity Provider Termination Date (the “Termination Percentage”). Each Terminating Financial Institution’s Termination Percentage shall remain constant prior to the Amortization Date. On and after the Amortization Date, each Termination Percentage shall be disregarded, and each Terminating Financial Institution’s Capital shall be reduced ratably with all Financial Institutions in accordance with Section 2.3. |
first, to the payment of the Servicer’s reasonable out-of-pocket costs and expenses in connection with servicing, administering and collecting the Receivables, including the Servicing Fee, if Seller or one of its Affiliates is not then acting as the Servicer,
second, to the reimbursement of the Agent’s and the Purchasers’ costs of collection and enforcement of this Agreement,
third, ratably to the payment of all accrued and unpaid fees under the Fee Letters, CP Costs and Yield,
fourth, (to the extent applicable) to the ratable reduction of the Aggregate Capital (without regard to any Termination Percentage),
fifth, for the ratable payment of all other unpaid Obligations, provided that to the extent such Obligations relate to the payment of Servicer costs and expenses, including the Servicing Fee, when Seller or one of its Affiliates is acting as the Servicer, such costs and expenses will not be paid until after the payment in full of all other Obligations, and
sixth, after the Aggregate Unpaids have been indefeasibly reduced to zero, to Seller.
Collections applied to the payment of Aggregate Unpaids shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth in Section 2.4 above, shall be shared ratably (within each priority) among the Agent and the Purchasers in accordance with the amount of such Aggregate Unpaids owing to each of them in respect of each such priority.
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Purchaser amounts representing taxes payable by such Purchaser under FATCA, as determined in the sole discretion of the Seller Parties or the Agent, and to remit such amounts to the applicable governmental authorities. For purposes of this Section 2.9, “FATCA” shall include any amendments made to FATCA after the date of this Agreement. |
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for all Financial Institutions, the Agent shall calculate the aggregate amount of Yield due and payable on the applicable Settlement Date and shall notify Seller of the aggregate amount of Yield due and payable on such Settlement Date to each Financial Institution. |
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(a) With consultation from (and approval by) the applicable Financial Institution, Seller shall from time to time request Tranche Periods for the Purchaser Interests of the Financial Institutions, provided that, if at any time the Financial Institutions shall have a Purchaser Interest, Seller shall always request Tranche Periods such that at least one Tranche Period shall end on the date specified in clause (A) of the definition of Settlement Date. |
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(b) Seller or the applicable Financial Institution, upon notice to and consent by the other received at least three (3) Business Days prior to the end of a Tranche Period (the “Terminating Tranche”) for any Purchaser Interest, may, effective on the last day of the Terminating Tranche: (i) divide any such Purchaser Interest into multiple Purchaser Interests by subdividing the associated Capital for such Purchaser Interest into smaller amounts of Capital, (ii) combine any such Purchaser Interest with one or more other Purchaser Interests that have a Terminating Tranche ending on the same day as such Terminating Tranche by combining the associated Capital for such Purchaser Interests or (iii) combine any such Purchaser Interest with a new Purchaser Interest to be purchased on the day such Terminating Tranche ends by combining the associated Capital for such Purchaser Interests; provided that in no event may a Purchaser Interest of any Purchaser be combined with a Purchaser Interest of any other Purchaser. |
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(a) Seller may request one or more 364-day extensions of the Liquidity Termination Date then in effect by giving written notice of such request to the Agent (each such notice an “Extension Notice”) at least sixty (60) days prior to the Liquidity Termination Date then in effect. After the Agent’s receipt of any Extension Notice, the Agent shall promptly advise each Financial Institution of such Extension Notice. Each Financial Institution may, in its sole discretion, by a revocable notice (a “Consent Notice”) given to the Agent on or prior to the 30th day prior to the Liquidity Termination Date then in effect (such period from the date of the Extension Notice to such 30th day being referred to herein as the “Consent Period”), consent to such extension of such Liquidity Termination Date; provided, however, that, except as provided in Section 4.6(b), such extension shall not be effective with respect to any of the Financial Institutions if any one or more Financial Institutions: (i) notifies |
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the Agent during the Consent Period that such Financial Institution either does not wish to consent to such extension or wishes to revoke its prior Consent Notice or (ii) fails to respond to the Agent within the Consent Period (each Financial Institution that does not wish to consent to such extension or wishes to revoke its prior Consent Notice or fails to respond to the Agent within the Consent Period is herein referred to as a “Non-Renewing Financial Institution”). If none of the events described in the foregoing clauses (i) or (ii) occurs during the Consent Period and all Consent Notices have been received, then, the Liquidity Termination Date shall be irrevocably extended until the date that is 364 days after the Liquidity Termination Date then in effect. The Agent shall promptly notify Seller of any Consent Notice or other notice received by the Agent pursuant to this Section 4.6(a). |
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(b) Upon receipt of notice from the Agent pursuant to Section 4.6(a) of any Non-Renewing Financial Institution or that the Liquidity Termination Date has not been extended, one or more of the Financial Institutions (including any Non-Renewing Financial Institution) may proffer to the Agent and the Company in such Non-Renewing Financial Institution’s Purchaser Group the names of one or more institutions meeting the criteria set forth in Section 12.1(b)(i) that are willing to accept assignments of and assume the rights and obligations under this Agreement and the other applicable Transaction Documents of the Non-Renewing Financial Institution. Provided the proffered name(s) are acceptable to the Agent and the Company in such Non-Renewing Financial Institution’s Purchaser Group, the Agent shall notify the remaining Financial Institutions of such fact, and the then existing Liquidity Termination Date shall be extended for an additional 364 days upon satisfaction of the conditions for an assignment in accordance with Section 12.1 and the Commitment of each Non-Renewing Financial Institution shall be reduced to zero. If the rights and obligations under this Agreement and the other applicable Transaction Documents of each Non-Renewing Financial Institution are not assigned as contemplated by this Section 4.6(b) (each such Non-Renewing Financial Institution whose rights and obligations under this Agreement and the other applicable Transaction Documents are not so assigned is herein referred to as a “Terminating Financial Institution”) and at least one Financial Institution is not a Non-Renewing Financial Institution, the then existing Liquidity Termination Date shall be extended for an additional 364 days; provided, however, that (i) the Purchase Limit shall be reduced on the Liquidity Provider Termination Date applicable to each Terminating Financial Institution by an aggregate amount equal to the Terminating Commitment Availability of each Terminating Financial Institution as of such date and shall thereafter continue to be reduced by amounts equal to any reduction in the Capital of any Terminating Financial Institution (after application of Collections pursuant to Sections 2.2 and 2.3), (ii) the Company Purchase Limit of each Company shall be reduced by the aggregate amount of the Terminating Commitment Amount of each Terminating Financial Institution in such Company’s Purchaser Group and (iii) the Commitment of each Terminating Financial Institution shall be reduced to zero on the Liquidity Provider Termination Date applicable to such Terminating Financial Institution. Upon reduction to zero of the Capital of all of the Purchaser Interests of a Terminating Financial Institution (after application of Collections thereto pursuant to Sections 2.2 and 2.3) all rights and obligations of such Terminating Financial Institution hereunder shall be terminated and such Terminating Financial Institution shall no longer be a “Financial Institution”; provided, however, that the provisions of Article X shall continue in effect for its benefit with respect to Purchaser Interests held by such Terminating Financial Institution prior to its termination as a Financial Institution. |
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(c) Any requested extension may be approved or disapproved by a Financial Institution in its sole discretion. In the event that the Commitments are not extended in accordance with the provisions of this Section 4.6, the Commitment of each Financial Institution shall be reduced to zero on the Liquidity Termination Date. Upon reduction to zero of the Commitment of a Financial Institution and upon reduction to zero of the Capital of all of the Purchaser Interests of such Financial Institution all rights and obligations of such Financial Institution hereunder shall be terminated and such Financial Institution shall no longer be a “Financial Institution”; provided, however, that the provisions of Article X shall continue in effect for its benefit with respect to Purchaser Interests held by such Financial Institution prior to its termination as a Financial Institution. |
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(a) Corporate Existence and Power. Such Seller Party is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation. Such Seller Party 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 of the Servicer to so qualify or so hold could not reasonably be expected to have a Material Adverse Effect. |
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(b) Power and Authority; Due Authorization, Execution and Delivery. The execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder and, in the case of Seller, Seller’s use of the proceeds of purchases 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 such Seller Party is a party has been duly executed and delivered by such Seller Party. |
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(c) No Conflict. The execution and delivery by such Seller Party 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, (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 such Seller Party or its Subsidiaries (except as created hereunder); and no transaction contemplated hereby requires compliance with any bulk sales act or similar law. |
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(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 such Seller Party 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 such Seller Party’s knowledge, threatened, against or affecting such Seller Party, 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 such Seller Party pursuant to, and in full conformity with the requirements of, the Securities Exchange Act of 1934, as amended. In addition to the foregoing, there are no actions, suits or proceedings pending, or to the best of such Seller Party’s knowledge, threatened against or affecting the Receivables, the Related Security or any Transaction Document, in or before any court, arbitration or other body. Such Seller Party is not in default with respect to any order of any court, arbitrator or governmental body. |
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(f) Binding Effect. This Agreement and each other Transaction Document to which such Seller Party is a party constitute the legal, valid and binding obligations of such Seller Party enforceable against such Seller Party 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). |
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(g) Accuracy of Information. All information heretofore furnished by such Seller Party or any of its Affiliates to the Agent or the Purchasers 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 such Seller Party or any of its Affiliates to the Agent or the Purchasers 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. |
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(h) Use of Proceeds. No proceeds of any purchase hereunder will be used by the Seller Parties (i) for a purpose that violates, or would be inconsistent with, Regulation T, U or X promulgated by the |
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Board of Governors of the Federal Reserve System from time to time or (ii) to acquire any security in any transaction which is subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended. |
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(i) Good Title. Immediately prior to each purchase hereunder, Seller shall be the legal and beneficial owner of the Receivables and Related Security with respect thereto, 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 comparable law) of all appropriate jurisdictions to perfect Seller’s ownership interest in each Receivable, its Collections and the Related Security. |
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(j) Perfection. This Agreement, together with the filing of the financing statements contemplated hereby, is effective to, and shall, upon each purchase hereunder, transfer to the Agent for the benefit of the relevant Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or Purchasers shall acquire from Seller) a valid and perfected first priority undivided percentage ownership or security interest in all of Seller’s right, title and interest in, to and under each Receivable existing or hereafter arising and in the Related Security and Collections with respect thereto, 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 comparable law) of all appropriate jurisdictions to perfect the Agent’s (on behalf of the Purchasers) ownership or security interest in the Receivables, the Related Security and the Collections. |
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(k) Jurisdiction of Organization and Locations of Records. The jurisdiction of organization of such Seller Party and the offices where it keeps all of its Records are located at the address(es) listed on Exhibit III or such other locations of which the Agent has been notified in accordance with Section 7.2(a) in jurisdictions where all action required by Section 7.1(h) and/or Section 13.4(a) has been taken and completed. Seller’s organizational number assigned to it by its jurisdiction of organization and Seller’s Federal Employer Identification Number are correctly set forth on Exhibit III. Seller has not changed its corporate structure or its jurisdiction of organization since the Initial Closing Date except in accordance with Section 7.2(a). Seller is a Delaware corporation and is a “registered organization” (within the meaning of Section 9-102 of the UCC in effect in the State of Delaware). Servicer is a New York corporation and is a “registered organization” (within the meaning of Section 9-102 of the UCC in effect in the State of New York). |
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(l) Collections. The conditions and requirements set forth in Section 7.1(j) and Section 8.2 have at all times been satisfied and duly performed. The names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts of Seller at each Collection Bank and the post office box number of each Lock-Box, are listed on Exhibit IV. Seller has not granted any Person, other than the Agent as contemplated by this Agreement, dominion and control or “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any Lock-Box or Collection Account, or the right to take dominion and control or “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any such Lock-Box or Collection Account at a future time or upon the occurrence of a future event. Seller has taken all steps necessary to ensure that the Agent has “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) over all its Collection Accounts and Lock-Boxes. |
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(m) Material Adverse Effect. (i) The initial Servicer represents and warrants that since July 2, 2016, no event has occurred that would have a material adverse effect on the financial condition or operations of the initial Servicer and its Subsidiaries or the ability of the initial Servicer to perform its obligations under this Agreement, and (ii) Seller represents and warrants that since July 2, 2016, no event has occurred that would have a material adverse effect on (A) the financial condition or operations of Seller, (B) the ability of Seller to perform its obligations under the Transaction Documents, or (C) the collectibility of the Receivables generally or any material portion of the Receivables. |
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(n) Names. In the past five (5) years, Seller has not used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement. |
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(o) Ownership of Seller. Originator owns, directly or indirectly, 100% of the issued and outstanding capital stock of Seller, free and clear of any Adverse Claim. Such capital stock is validly issued, fully paid and nonassessable, and there are no options, warrants or other rights to acquire securities of Seller. |
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(p) Not an Investment Company. Such Seller Party is not, and is not controlled by, an “investment company” registered or required to be registered under the U.S. Investment Company Act of 1940, as amended (the “Investment Company Act”), and is not a “covered fund” under Section 13 of the U.S. Bank Holding Company Act of 1956, as amended, and the applicable rules and regulations thereunder (the “Volcker Rule”). In determining that it is not a “covered fund” under the Volcker Rule, although other exemptions or exclusions under the Investment Company Act may apply, Seller relies on the exemption from the definition of “investment company” set forth in Section 3(c)(5) of the Investment Company Act and does not rely solely on the exemption from the definition of “investment company” set forth in Section 3(c)(1) and/or 3(c)(7) of the Investment Company Act. |
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(q) Compliance with Law. Such Seller Party 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. Seller represents that 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. |
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(r) Compliance with Credit and Collection Policy. Seller 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 material change to the Credit and Collection Policy, except as permitted in accordance with Section 7.2(c) and except such material change as to which the Agent has been notified in accordance with Section 7.1(a)(vii). |
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(s) Payments to Originator. Seller represents that with respect to each Receivable transferred to Seller under the Receivables Sale Agreement, Seller has given reasonably equivalent value to Originator in consideration therefor and such transfer was not made for or on account of an antecedent debt. Seller represents that no transfer by Originator of any Receivable under the Receivables Sale Agreement is or may be voidable under any section of the Federal Bankruptcy Code. |
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(t) Enforceability of Contracts. Seller represents that 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, if any, 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). |
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(u) Eligible Receivables. Each Receivable included in the Net Receivables Balance as an Eligible Receivable on the date of its purchase under the Receivables Sale Agreement was an Eligible Receivable on such purchase date. |
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(v) Aggregate Capital. Seller has determined that, immediately after giving effect to each purchase hereunder, the Aggregate Capital is no greater than 97% or, if the Purchaser Interest Condition is existing immediately before and after giving effect to such purchase, 100% of the amount equal to (i) the Net Receivables Balance, minus (ii) the Aggregate Reserves. |
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(w) Accounting. The manner in which such Seller Party accounts for the transactions contemplated by this Agreement and the Receivables Sale Agreement does not jeopardize the true sale analysis of the sale of Receivables by Originator to Seller. |
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(x) Anti-Corruption Laws and Sanctions. Neither the Seller Parties, nor any of their respective Subsidiaries, nor, to the knowledge of the Seller Parties or their respective Subsidiaries, any director, officer, employee, agent, affiliate or representative of the Seller Parties or their respective Subsidiaries, is an individual or entity that is (i) currently the subject or target of any Sanctions or (ii) located, organized or resident in any country or territory to the extent that such country or territory itself is the subject of any country-wide Sanction. |
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(a) Existence and Power. Such Financial Institution is a corporation or a banking association duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, and has all corporate power to perform its obligations hereunder. |
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(b) No Conflict. The execution and delivery by such Financial Institution of this Agreement and the performance of its obligations hereunder are within its corporate powers, have been duly authorized by all necessary corporate action, do not contravene or violate (i) its certificate or articles of incorporation or association or by-laws, (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 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 its assets. This Agreement has been duly authorized, executed and delivered by such Financial Institution. |
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(c) Governmental Authorization. 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 such Financial Institution of this Agreement and the performance of its obligations hereunder, except that has already been received. |
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(d) Binding Effect. This Agreement constitutes the legal, valid and binding obligation of such Financial Institution enforceable against such Financial Institution 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 such enforcement is sought in a proceeding in equity or at law). |
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(i)the representations and warranties set forth in Section 5.1 are true and correct on and as of the date of such Incremental Purchase or Reinvestment as though made on and as of such date;
(ii)no event has occurred and is continuing, or would result from such Incremental Purchase or Reinvestment, that will constitute an Amortization Event, and no event has occurred and is continuing, or would result from such Incremental Purchase or Reinvestment, that would constitute a Potential Amortization Event; and
(iii)the Aggregate Capital does not exceed the Purchase Limit and, in the case of an Incremental Purchase, the aggregate Purchaser Interests do not exceed 97% or, if the Purchaser Interest Condition is existing on such date, 100%.
It is expressly understood that each Reinvestment shall, unless otherwise directed by the Agent or any Purchaser, occur automatically on each day that the Servicer shall receive any Collections without the requirement that any further action be taken on the part of any Person and notwithstanding the failure of Seller to satisfy any of the foregoing conditions precedent in respect of such Reinvestment. The failure of Seller to satisfy any of the foregoing conditions precedent in respect of any Reinvestment shall give rise to a right of the Agent, which right may be exercised at any time on demand of the Agent, to rescind the related purchase and direct Seller to pay to the Agent for the benefit of the Purchasers an amount equal to the Collections prior to the Amortization Date that shall have been applied to the affected Reinvestment.
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(a) Financial Reporting. Such Seller Party will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish or cause to be furnished to the Agent (and upon receipt thereof the Agent will forward the same to each Company or its designee): |
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(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 Avnet, and its Subsidiaries, for such fiscal year certified in a manner acceptable to the Agent by independent public accountants of recognized national standing. |
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(ii) Quarterly Reporting. Within sixty (60) days after the close of the first three (3) quarterly periods of each of its respective fiscal years, consolidated balance sheets of Avnet, 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 Avnet, 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. |
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(iii) Compliance Certificate. Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit V signed by such Seller Party’s Authorized Officer and dated the date of such annual financial statement or such quarterly financial statement, as the case may be. |
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(iv) Shareholders Statements and Reports. Promptly upon the furnishing thereof to the shareholders of Servicer copies of all financial statements, reports and proxy statements so furnished. |
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(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 the Agent, copies of the same. |
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(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 the Agent’s and each Purchaser’s consent thereto, provided that such consent shall not be unreasonably withheld. |
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(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 such Seller Party as the Agent may from time to time reasonably request in order to protect the interests of the Agent and the Purchasers under or as contemplated by this Agreement. |
To the extent any documents required to be delivered pursuant to Section 7.1(a)(i), (ii), (iv) or (v) are documents included in materials otherwise filed with the Securities and Exchange Commission, such documents may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which (i) Avnet posts such documents, or provides a link thereto on its corporate website on the Internet; or (ii) such documents are posted on Avnet’s behalf on an Internet or intranet website, if any, to which the Agent has access (whether a commercial, third-party website or whether sponsored by the Agent); provided that the Seller Parties shall deliver paper copies of such documents to the Agent upon the Agent’s written request for such documents until the Agent delivers a written request to cease delivering paper copies. The Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Seller Parties with any such request for delivery.
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(b) Notices. Such Seller Party will notify the Agent (and upon receipt thereof the Agent will forward such notice to each Company or its designee) 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: |
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(i) Amortization Events or Potential Amortization Events. The occurrence of each Amortization Event and each Potential Amortization Event, by a statement of an Authorized Officer of such Seller Party. |
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(ii) Judgment and Proceedings. (A) (1) The entry of any judgment or decree against the Servicer or any of its respective Subsidiaries if the aggregate amount of all judgments and decrees then outstanding against the Servicer and its Subsidiaries exceeds $25,000,000 and (2) the institution of any litigation, arbitration proceeding or governmental proceeding against the Servicer, which, individually or in the aggregate, if adversely determined, would reasonably be expected to result in a judgment in excess of $50,000,000; and (B) the entry of any judgment or decree or the institution of any litigation, arbitration proceeding or governmental proceeding against Seller. |
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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. |
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(iv) Termination Date. The occurrence of the “Termination Date” under and as defined in the Receivables Sale Agreement. |
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(v) Defaults Under Other Agreements. The occurrence of a default, an event of default or other event permitting or requiring acceleration under any other financing arrangement pursuant to which such Seller Party is a debtor or an obligor. |
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(vi) Downgrade of Originator. Any downgrade in the rating of any Indebtedness of Originator by S&P or by Moody’s, setting forth the Indebtedness affected and the nature of such change. |
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(vii) Appointment of Independent Director. The decision to appoint a new director of Seller as the “Independent Director” for purposes of this Agreement, such notice to be issued not less than ten (10) days prior to the effective date of such appointment and to certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Director.” |
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(c) Compliance with Laws and Preservation of Corporate Existence. Such Seller Party 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 do so could not reasonably be expected to have a Material Adverse Effect. Such Seller Party 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, except where the failure of the Servicer to so qualify or to maintain such qualification could not reasonably be expected to have a Material Adverse Effect. |
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(d) Audits. Such Seller Party will furnish to the Agent (and upon receipt thereof the Agent will forward the same to each Company or its designee) from time to time such information with respect to it and the Receivables as the Agent or the Required Purchasers may reasonably request. Such Seller Party will, from time to time during regular business hours as requested by the Agent upon reasonable notice and at the sole cost of such Seller Party, permit the Agent, or its agents or representatives, (i) to examine and make copies of and abstracts from all Records in the possession or under the control of such Seller Party relating to the Receivables and the Related Security, including, without limitation, the related Contracts, and (ii) to visit the offices and properties of such Seller Party for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to such Seller Party’s financial condition or the Receivables and the Related Security or any Seller Party’s performance under any of the Transaction Documents or any Seller Party’s performance under the Contracts and, in each case, with any of the officers or employees of Seller or the Servicer having knowledge of such matters. |
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(e) Keeping and Marking of Records and Books. |
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(i) The Servicer 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 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). The Servicer will give the Agent notice of any material change in the administrative and operating procedures referred to in the previous sentence. |
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(ii) Such Seller Party will (A) continue to identify in its general ledger a legend, reasonably acceptable by the Agent, describing the Purchaser Interests and (B) upon the request of the Agent (x) mark each Contract with a legend describing the Purchaser Interests and (y) deliver to the Agent all Contracts (including, without limitation, all multiple originals of any such Contract) relating to the Receivables. |
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(f) Compliance with Contracts and Credit and Collection Policy. Seller will timely and fully (i) perform and comply with all provisions, covenants and other promises, if any, 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. |
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(g) Performance and Enforcement of Receivables Sale Agreement. Seller will, and will require Originator to, perform each of their respective obligations and undertakings under and pursuant to the Receivables Sale Agreement, will purchase Receivables thereunder in strict compliance with the terms thereof and will vigorously enforce the rights and remedies accorded to Seller under the Receivables Sale Agreement. Seller will take all actions to perfect and enforce its rights and interests (and the rights and interests of the Agent and the Purchasers as assignees of Seller) under the Receivables Sale Agreement as the Agent may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in the Receivables Sale Agreement. |
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(h) Ownership. Seller will (or will cause Originator to) take all necessary action to (i) vest legal and equitable title to the Receivables, the Related Security and the Collections purchased under the Receivables Sale Agreement irrevocably in Seller, free and clear of any Adverse Claims other than Adverse Claims in favor of the Agent and the Purchasers (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 Seller’s interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of Seller therein as the Agent may reasonably request), and (ii) establish and maintain, in favor of the Agent, for the benefit of the Purchasers, a valid and perfected first priority undivided percentage ownership interest (and/or a valid and perfected first priority security interest) in all such Receivables, Related Security and Collections to the full extent contemplated herein, free and clear of any Adverse Claims other than Adverse Claims in favor of the Agent for the benefit of the Purchasers (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 the Agent’s (for the benefit of the Purchasers) interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of the Agent for the benefit of the Purchasers as the Agent may reasonably request). |
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(i) Purchasers’ Reliance. Seller acknowledges that the Purchasers are entering into the transactions contemplated by this Agreement in reliance upon Seller’s identity as a legal entity that is separate from Originator. Therefore, during the term of this Agreement, Seller shall take all reasonable steps, including, without limitation, all steps that the Agent or any Purchaser may from time to time reasonably request, to maintain Seller’s identity as a separate legal entity and to make it manifest to third parties that Seller is an entity with assets and liabilities distinct from those of Originator and any Affiliates thereof and not just 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, Seller will: |
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(A) conduct its own business in its own name and require that all full-time employees of Seller, if any, identify themselves as such and not as employees of Originator (including, without limitation, by means of providing appropriate employees with business or identification cards identifying such employees as Seller’s employees); |
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(B) compensate all employees, consultants and agents directly, from Seller’s own funds, for services provided to Seller by such employees, consultants and agents and, to the extent any employee, consultant or agent of Seller is also an employee, consultant or agent of Originator or any Affiliate thereof, allocate the compensation of such employee, consultant or agent between Seller and Originator or such Affiliate, as applicable, on a basis that reflects the services rendered to Seller and Originator or such Affiliate, as applicable; |
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(C) clearly identify its offices (by signage or otherwise) as its offices and, if such office is located in the offices of Originator, Seller shall lease such office at a fair market rent; |
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(D) have a separate telephone number, which will be answered only in its name and separate stationery, invoices and checks in its own name; |
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(E) conduct all transactions with Originator, the Servicer and any Affiliate thereof (including, without limitation, any delegation of its obligations hereunder as Servicer) strictly on an arm’s-length basis, allocate all overhead expenses (including, without limitation, telephone and other utility charges) for items shared between Seller and Originator or any Affiliate thereof on the basis of actual use to the extent practicable and, to the extent such allocation is not practicable, on a basis reasonably related to actual use; |
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(F) at all times have a Board of Directors consisting of three members, at least one member of which is an Independent Director; |
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(G) observe all corporate formalities as a distinct entity, and ensure that all corporate actions relating to (A) the selection, maintenance or replacement of the Independent Director, (B) the dissolution or liquidation of Seller or (C) the initiation of, participation in, acquiescence in or consent to any bankruptcy, insolvency, reorganization or similar proceeding involving Seller, are duly authorized by unanimous vote of its Board of Directors (including the Independent Director); |
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(H) maintain Seller’s books and records separate from those of Originator and any Affiliate thereof and otherwise readily identifiable as its own assets rather than assets of Originator or any Affiliate thereof; |
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(I) prepare its financial statements separately from those of Originator and insure that any consolidated financial statements of Originator or any Affiliate thereof that include Seller and that are filed with the Securities and Exchange Commission or any other governmental agency have notes clearly stating that Seller is a separate corporate entity and that its assets will be available first and foremost to satisfy the claims of the creditors of Seller; |
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(J) except as herein specifically otherwise provided, maintain the funds or other assets of Seller separate from, and not commingled with, those of Originator or any Affiliate thereof and only maintain bank accounts or other depository accounts to which Seller alone is the account party; |
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(K) pay all of Seller’s operating expenses from Seller’s own assets (except for certain payments by Originator or other Persons pursuant to allocation arrangements that comply with the requirements of this Section 7.1(i)); |
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(L) operate its business and activities such that: it does not engage in any business or activity of any kind, or enter into any transaction or indenture, mortgage, instrument, agreement, contract, lease or other undertaking, other than the transactions contemplated and authorized by this Agreement and the Receivables Sale Agreement; and does not create, incur, guarantee, assume or suffer to exist any indebtedness or other liabilities, whether direct or contingent, other than (1) as a result of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, (2) the incurrence of obligations under this Agreement, (3) the incurrence of obligations, as expressly contemplated in the Receivables Sale Agreement, to make payment to Originator thereunder for the purchase of Receivables from Originator under the Receivables Sale Agreement, and (4) the incurrence of operating expenses in the ordinary course of business of the type otherwise contemplated by this Agreement; |
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(M) maintain its corporate charter in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its Certificate of Incorporation or By-Laws in any respect that would impair its ability to comply with the terms |
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or provisions of any of the Transaction Documents, including, without limitation, Section 7.1(i) of this Agreement; and (2) its corporate charter, at all times that this Agreement is in effect, provides for not less than ten (10) days’ prior written notice to the Agent of the replacement or appointment of any director that is to serve as an Independent Director for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that Seller certify that the designated Person satisfied the criteria set forth in the definition herein of “Independent Director” and the Agent’s written acknowledgement that in its reasonable judgment the designated Person satisfies the criteria set forth in the definition herein of “Independent Director;” |
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(N) maintain the effectiveness of, and continue to perform under the Receivables Sale Agreement, such that it does not amend, restate, supplement, cancel, terminate or otherwise modify the Receivables Sale Agreement, or give any consent, waiver, directive or approval thereunder or waive any default, action, omission or breach under the Receivables Sale Agreement or otherwise grant any indulgence thereunder, without (in each case) the prior written consent of the Agent and the Required Purchasers; |
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(O) maintain its corporate separateness such that it does not merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions, and except as otherwise contemplated herein) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, any Person, nor at any time create, have, acquire, maintain or hold any interest in any Subsidiary; |
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(P) maintain at all times the Required Capital Amount (as defined in the Receivables Sale Agreement) and refrain from making any dividend, distribution, redemption of capital stock or payment of any subordinated indebtedness which would cause the Required Capital Amount to cease to be so maintained; and |
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(Q) take such other actions as are necessary on its part to ensure that the facts and assumptions set forth in the opinion issued by Covington & Burling LLP, as counsel for Seller, in connection with this Agreement and relating to true sale and substantive consolidation issues with respect to Originator and Seller, and in the certificates accompanying such opinion, remain true and correct in all material respects at all times. |
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(j) Collections. Such Seller Party 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 Seller or any Affiliate of Seller, Seller 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, Seller will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Agent and the Purchasers. Seller will maintain exclusive ownership, dominion and control (subject to the terms of this Agreement) of each Lock-Box and Collection Account and shall not grant the right to take dominion and control or establish “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any Lock-Box or Collection Account at a future time or upon the occurrence of a future event to any Person, except to the Agent as contemplated by this Agreement. With respect to any Lock-Box or Collection Account, Seller shall take all steps necessary to ensure that the Agent has “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) over such Lock-Box or Collection Account. So long as no Amortization Event or Potential Amortization Event shall have occurred and be continuing, the Servicer will be permitted to transfer proceeds from a Lock-Box or Collection Account to another account of Servicer, provided that at all times Servicer will hold such payments or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Agent and the Purchasers subject to application pursuant to Sections 2.2 and 2.3 hereof. |
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(k) Taxes. Such Seller Party will file all tax returns and reports required by law to be filed by it and will promptly pay all taxes and governmental charges at any time owing. Seller will pay when due |
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any taxes payable in connection with the Receivables, exclusive of taxes on or measured by income or gross receipts of any Company, the Agent or any Financial Institution. |
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(l) Insurance. Seller will maintain in effect, or cause to be maintained in effect, at Seller’s own expense, such liability insurance as Seller shall deem appropriate in its good faith business judgment. The Agent, for the benefit of the Purchasers, shall be named as an additional insured with respect to all such liability insurance maintained by Seller. Seller will pay or cause to be paid, the premiums therefor and deliver to the Agent evidence satisfactory to the Agent of such insurance coverage. Copies of each policy shall be furnished to the Agent and any Purchaser in certificated form upon the Agent’s or such Purchaser’s request. The foregoing requirements shall not be construed to negate, reduce or modify, and are in addition to, Seller’s obligations hereunder. |
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(m) Payment to Originator. With respect to any Receivable purchased by Seller from Originator, such sale shall be effected under, and in strict compliance with the terms of, the Receivables Sale Agreement, including, without limitation, the terms relating to the amount and timing of payments to be made to Originator in respect of the purchase price for such Receivable. |
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(n) Segregation of Other Servicer Collected Funds. The Servicer shall, within six (6) days of the date any Other Servicer Collected Funds are deposited, credited or funded to any Collection Account, (i) specifically identify all such Other Servicer Collected Funds and (ii) cause all Other Servicer Collected Funds to be transferred from the applicable Collection Account. |
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(o) Elimination of Other Servicer Collected Funds. Subject to Section 7.1(n), each Seller Party shall use all reasonable efforts to prevent all Other Servicer Collected Funds from being deposited, credited or otherwise funded to, any and all Collection Accounts. |
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(p) General Ledger and Certain Receivables. Such Seller Party shall maintain its consolidated general accounting ledger such that all indebtedness and other obligations owed to Originator or in which Originator has a security interest or other interest arising in connection with the sale of merchandise or the rendering of services by Originator and sold to Seller are recorded as part of general ledger category “company code 0100” or “company code US10”; provided however, that from and after December 28, 2010 indebtedness or other obligations owed to Originator or in which Originator has a security interest or other interest arising in connection with the sale of merchandise or the rendering of services by the business previously conducted by businesses acquired by Originator in an Excluded Acquisition shall not be recorded as part of general ledger category “company code 0100” or “company code US10” until such time, if any, as such indebtedness or other obligations are originated, serviced and collected in a manner substantially similar to the Receivables. |
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(q) Anti-Corruption Laws and Sanctions. Each Seller Party will maintain in effect and enforce policies and procedures designed to ensure compliance by it and its directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. |
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(a) Name Change, Jurisdiction of Organization, Corporate Structure, Offices and Records. Such Seller Party will not change its name, identity, jurisdiction of organization or corporate structure (within the meaning of Sections 9-503 and/or 9-507 of the UCC of all applicable jurisdictions) or relocate any office where Records are kept unless it shall have: (i) given the Agent at least forty-five (45) days’ prior written notice thereof and (ii) delivered to the Agent all financing statements, instruments and other documents requested by the Agent in connection with such change or relocation. |
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(b) Change in Payment Instructions to Obligors. Except as may be required by the Agent pursuant to Section 8.2(b), such Seller Party 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 the Agent shall have received, at least ten (10) days before the proposed effective date therefor, (i) written |
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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 the Servicer may make changes in instructions to Obligors regarding payments if such new instructions require such Obligors to make payments to another existing Collection Account. |
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(c) Modifications to Contracts and Credit and Collection Policy. Such Seller Party 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 provided in Section 8.2(d), the Servicer 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. |
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(d) Sales, Liens. Seller 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 of its Receivables, Related Security or Collections, or upon or with respect to any Contract under which any of its Receivables arise, 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 the Agent and the Purchasers provided for herein), and Seller will defend the right, title and interest of the Agent and the Purchasers in, to and under any of the foregoing property, against all claims of third parties claiming through or under Seller or Originator. |
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(e) Aggregate Capital. Other than in compliance with Section 2.6, at no time prior to the Amortization Date shall Seller permit the Aggregate Capital to be greater than 97% or, if the Purchaser Interest Condition is existing at such time, 100% of the amount equal to (i) the Net Receivables Balance, minus (ii) the Aggregate Reserves. |
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(f) Termination Date Determination. Seller will not designate the Termination Date (as defined in the Receivables Sale Agreement), or send any written notice to Originator in respect thereof, without the prior written consent of the Agent, except with respect to the occurrence of such Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement. |
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(g) Restricted Junior Payments. From and after the occurrence of any Amortization Event, Seller will not make any Restricted Junior Payment if, after giving effect thereto, Seller would fail to meet its obligations set forth in Section 7.2(e). |
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(h) Anti-Corruption Laws and Sanctions. Seller shall not, directly or indirectly, sell any Purchaser Interest, and it will not knowingly use or procure for the use of Seller, Avnet or any of Avnet’s Subsidiaries, the proceeds of the sale of any Purchaser Interest to fund any activities of or business with any individual or entity, or in any Sanctioned Country, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any individual or entity of Sanctions. Seller shall not, directly or indirectly, knowingly use or procure for the use of Seller, Avnet or any of Avnet’s Subsidiaries, the proceeds of the sale of any Purchaser Interest for any purpose which would breach Anti-Corruption Laws. |
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(a) Without the prior written consent of the Agent and the Required Purchasers, Avnet shall not be permitted to delegate any of its duties or responsibilities as Servicer to any Person other than (i) |
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Seller and (ii) with respect to certain Charged-Off Receivables, outside collection agencies or law firms, taking action in connection with collection activities, in accordance with its customary practices. Seller shall not be permitted to further delegate to any other Person any of the duties or responsibilities of the Servicer delegated to it by Avnet. If at any time the Agent shall designate as Servicer any Person other than Avnet, all duties and responsibilities theretofore delegated by Avnet to Seller may, at the discretion of the Agent, be terminated forthwith on notice given by the Agent to Avnet and to Seller. |
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(b) Notwithstanding the foregoing subsection (b), (i) Avnet shall be and remain primarily liable to the Agent and the Purchasers for the full and prompt performance of all duties and responsibilities of the Servicer hereunder (unless a successor servicer has been designated by the Agent pursuant to Section 8.1 hereof) and (ii) the Agent and the Purchasers shall be entitled to deal exclusively with Avnet in matters relating to the discharge by the Servicer of its duties and responsibilities hereunder. The Agent and the Purchasers shall not be required to give notice, demand or other communication to any Person other than Avnet in order for communication to the Servicer and its sub-servicer or other delegate with respect thereto to be accomplished. Avnet, at all times that it is the Servicer, shall be responsible for providing any sub-servicer or other delegate of the Servicer with any notice given to the Servicer under this Agreement. |
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(a) The Servicer will instruct all Obligors to pay all Collections directly to a Lock-Box or Collection Account. The Servicer shall ensure that at all relevant times a Collection Account Agreement has been entered into and is in effect with each bank at which a Collection Account has been established. In the case of any remittances received in any Lock-Box or Collection Account that shall have been identified, to the satisfaction of the Servicer, to not constitute Collections or other proceeds of the Receivables or the Related Security, the Servicer shall promptly remit such items to the Person identified to it as being the owner of such remittances. From and after the date the Agent delivers to any Collection Bank a Collection Notice pursuant to Section 8.3, the Agent may request that the Servicer, and the Servicer thereupon promptly shall instruct all Obligors with respect to the Receivables to, remit all payments thereon to a new depositary account specified by the Agent and, at all times thereafter, Seller and the Servicer shall not deposit or otherwise credit, and shall not permit any other Person to deposit or otherwise credit to such new depositary account any cash or payment item other than Collections. The Agent shall notify each Financial Institution of such new depositary account. |
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(b) The Servicer shall administer the Collections in accordance with the procedures described herein and in Article II. The Servicer shall set aside and hold in trust for the account of Seller and the Purchasers their respective shares of the Collections in accordance with Article II. The Servicer shall, upon the request of the Agent, segregate, in a manner acceptable to the Agent, all cash, checks and other instruments received by it from time to time constituting Collections from the general funds of the Servicer or Seller prior to the remittance thereof in accordance with Article II. If the Servicer shall be required to segregate Collections pursuant to the preceding sentence, the Servicer shall segregate and deposit with a bank designated by the Agent such allocable share of Collections of Receivables set aside for the Purchasers on the first Business Day following receipt by the Servicer of such Collections, duly endorsed or with duly executed instruments of transfer. |
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(c) The Servicer may, in accordance with the Credit and Collection Policy, extend the maturity of any Receivable or adjust the Outstanding Balance of any Receivable as the Servicer determines to be appropriate to maximize Collections thereof; provided, however, that such extension or adjustment shall not alter the status of such Receivable as a Delinquent Receivable or Charged-Off Receivable or limit the rights of the Agent or the Purchasers under this Agreement. Notwithstanding anything to the contrary contained herein, the Agent shall have the right, in its sole discretion, to direct the Servicer to take all actions that a reasonable business person, exercising prudent business judgment, would undertake to commence or settle any legal action with respect to any Receivable or to foreclose upon or repossess any Related Security. |
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(d) The Servicer shall hold in trust for Seller and the Purchasers all Records that (i) evidence or relate to the Receivables, the related Contracts and Related Security or (ii) are otherwise necessary or |
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desirable to collect the Receivables and shall, as soon as practicable upon demand of the Agent, deliver or make available to the Agent all such Records, at a place selected by the Agent. The Servicer shall, as soon as practicable following receipt thereof turn over to Seller any cash collections or other cash proceeds received with respect to Indebtedness owed to Seller not constituting Receivables. The Servicer shall, from time to time at the request of any Purchaser, furnish to the Purchasers (promptly after any such request) a calculation of the amounts set aside for the Purchasers pursuant to Article II. |
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(e) Any payment by an Obligor in connection with any Receivables in respect of any indebtedness owed by it to Originator or Seller shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Agent, be applied as a Collection of any Receivable of such Obligor (starting with the oldest such Receivable) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other obligation of such Obligor. |
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Section 9.1 Amortization Events. The occurrence of any one or more of the following events shall constitute an Amortization Event: |
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(a) (i) Any Seller Party shall fail to make any payment or deposit required to be made by such Seller Party hereunder when due and, for any such payment or deposit which is not in respect of Capital, such failure continues for one (1) day, or (ii) any Seller Party shall fail to perform or observe any term, covenant or agreement applicable to it hereunder (other than as referred to in clause (i) of this paragraph (a) and Section 9.1(e)) or any other Transaction Document and such failure shall continue for three (3) consecutive Business Days. |
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(b) (i) Any representation, warranty, certification or statement made by any Seller Party in this Agreement (other than the representation or warranty set forth in Section 5.1(v)), 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 or (ii) the representation or warranty set forth in Section 5.1(v) shall prove to have been incorrect when made or deemed made and such breach of Section 5.1(v) is not cured within one (1) Business Day if such breached representation or warranty was made or deemed as of the date of any Weekly Report or Monthly Report or within five (5) Business Days if such breached representation or warranty was made or deemed as of any date other than the date of any Weekly Report or Monthly Report. |
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(c) Failure of Seller to pay any Indebtedness when due; or the failure of Servicer to pay any Indebtedness in excess of $35 million, individually or in the aggregate, when due; or the default by Servicer, or any affiliate of Servicer which is a party thereto, in the performance of any term, provision or condition contained in the Credit Agreement, 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 Indebtedness of any Seller Party in excess of $35 million (other than the Credit Agreement) shall be caused to be declared due and payable, or 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. |
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(d) (i) Any Seller Party 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; (ii) any proceeding shall be instituted by or against any Seller Party 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) any Seller Party or any of its Subsidiaries shall take any corporate action to authorize any of the actions set forth in clauses (i) or (ii) above in this subsection (d). |
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(e) Seller shall fail to comply with the terms of Section 2.6 hereof. |
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(f) As of the end of the fiscal month covered by the most recent Monthly Report required to be delivered pursuant to Section 8.5 hereof, the three-month rolling average of the Delinquency Ratio |
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Trigger shall exceed the Applicable Delinquency Ratio Threshold, or the three-month rolling average of the Dilution Ratio Trigger shall exceed the Applicable Dilution Ratio Threshold, or the three-month rolling average of the Loss Ratio Trigger shall exceed the Applicable Loss Ratio Threshold. |
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(g) A Change of Control shall occur. |
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(h) (i) the “Consolidated Interest Coverage Ratio” (as defined in the Credit Agreement) as of the end of any period of four fiscal quarters of Avnet shall be less than 3.00 to 1.00 or (ii) the “Consolidated Leverage Ratio” (as defined in the Credit Agreement) at any time shall be greater than 4.00 to 1.00. |
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(i) (i) One or more final judgments for the payment of money shall be entered against Seller or (ii) 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 the Servicer 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. |
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(j) The “Termination Date” under and as defined in the Receivables Sale Agreement shall occur; or Originator shall for any reason cease to transfer, or cease to have the legal capacity to transfer, or otherwise be incapable of transferring Receivables to Seller under the Receivables Sale Agreement. |
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(k) This Agreement shall terminate in whole or in part (except in accordance with its terms), or shall cease to be effective or to be the legally valid, binding and enforceable obligation of Seller, or any Obligor shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability, or the Agent for the benefit of the Purchasers shall cease to have a valid and perfected first priority security interest in the Receivables, the Related Security and the Collections with respect thereto and the Collection Accounts. |
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of any purchase hereunder, or the acquisition, funding or ownership, either directly or indirectly, by a Purchaser or a Funding Source of a Purchaser Interest or of an interest in the Receivables, or any Receivable or any Contract or any Related Security, or any action of any Seller Party or any Affiliate of any Seller Party, excluding, however: |
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(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; |
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(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 |
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(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 as a loan or loans by the Purchasers to Seller secured by the Receivables, the Related Security, the Collection Accounts and the Collections; |
provided, however, that nothing contained in this sentence shall limit the liability of Seller or limit the recourse of the Purchasers to Seller for amounts otherwise specifically provided to be paid by Seller under the terms of this Agreement. Without limiting the generality of the foregoing indemnification, Seller shall indemnify each Indemnified Party for Indemnified Amounts (including, without limitation, losses in respect of uncollectible receivables, regardless of whether reimbursement therefor would constitute recourse to Seller or the Servicer) relating to or resulting from:
any representation or warranty made by any Seller Party or Originator (or any officers of any such Person) under or in connection with this Agreement, any other Transaction Document or any other information or report delivered by any such Person pursuant hereto or thereto, which shall have been false or incorrect when made or deemed made;
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(iv) the failure by Seller, the Servicer or 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 failure of Originator to keep or perform any of its obligations, express or implied, with respect to any Contract; |
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(v) any failure of Seller, the Servicer or Originator to perform its duties, covenants or other obligations in accordance with the provisions of this Agreement or any other Transaction Document; |
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(vi) 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; |
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(vii) 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; |
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(viii) the commingling of Collections of Receivables at any time with other funds; |
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(ix) 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 an Incremental Purchase or a Reinvestment, the ownership of the Purchaser Interests or any other investigation, litigation or proceeding relating to Seller, the Servicer or Originator in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby; |
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(x) 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 sovereignty or otherwise from any legal action, suit or proceeding; |
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(xi) any Amortization Event described in Section 9.1(d); |
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(xii) any failure of Seller to acquire and maintain legal and equitable title to, and ownership of any Receivable and the Related Security and Collections with respect thereto from Originator, free and clear of any Adverse Claim (other than as created hereunder); or any failure of Seller to give reasonably equivalent value to Originator under the Receivables Sale Agreement in consideration of the transfer by Originator of any Receivable, or any attempt by any Person to void any such transfer under statutory provisions or common law or equitable action; |
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(xiii) any failure to vest and maintain vested in the Agent for the benefit of the Purchasers, or to transfer to the Agent for the benefit of the Purchasers, legal and equitable title to, and ownership of, a first priority perfected undivided percentage ownership interest (to the extent of the Purchaser Interests contemplated hereunder) or security interest in the Receivables, the Related Security and the Collections, free and clear of any Adverse Claim (except as created by the Transaction Documents); |
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(xiv) the failure to have filed, or any delay in filing, financing statements or other similar instruments or documents under the UCC (or any comparable law) 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 any Incremental Purchase or Reinvestment or at any subsequent time; |
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(xv) any action or omission by any Seller Party which reduces or impairs the rights of the Agent or the Purchasers with respect to any Receivable or the value of any such Receivable; |
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(xvi) any attempt by any Person to void any Incremental Purchase or Reinvestment hereunder under statutory provisions or common law or equitable action; and |
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(xvii) 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. |
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(l) Without limiting any other rights that the Agent, any Purchaser, any Funding Source or any of their respective Affiliates may have hereunder or under applicable law, the Servicer hereby agrees to indemnify (and pay upon demand to) each Indemnified Party for Indemnified Amounts awarded against or incurred by any of them arising out of the Servicer’s activities as Servicer hereunder excluding, however: |
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(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; |
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(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 |
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(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 as a loan or loans by the Purchasers to Seller secured by the Receivables, the Related Security, the Collection Accounts and the Collections; |
provided, however, that nothing contained in this sentence shall limit the liability of Servicer or limit the recourse of the Purchasers to Servicer for amounts otherwise specifically provided to be paid by Servicer under the terms of this Agreement.
(b) A certificate of the applicable Purchaser or Funding Source setting forth the amount or amounts necessary to compensate such Purchaser or Funding Source pursuant to paragraph (a) of this Section 10.2 shall be delivered to Seller and shall be conclusive absent manifest error.
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(c) If any Purchaser or any Funding Source has or anticipates having any claim for compensation from Seller pursuant to clause (iii) of the definition of Regulatory Requirement appearing in paragraph (a) of this Section 10.2, and such Purchaser or Funding Source, or Seller or the Servicer (each, an “Electing Party”) believes that having the facility publicly rated by one credit rating agency would reduce the amount of such compensation by an amount deemed by such Electing Party to be material, such Electing Party shall provide written notice to the related Consenting Parties (as defined below), Seller and the Servicer, as applicable (a “Ratings Request”), that such Electing Party intends to request a public rating of the facility from one credit rating agency, selected by a Purchaser or Funding Source that is an Electing Party or a Consenting Party (as defined below) and reasonably acceptable to Seller, of at least A-, A3 or the equivalent (the “Required Rating”). If the Electing Party is either Seller or the Servicer, then such Ratings Request will only be made with the consent of the related Purchasers or Funding Sources for which the Electing Party believes the compensation will be materially reduced (each, a “Consenting Party”), it being understood that any consent given by a Consenting Party with respect to a Ratings Request will not, in itself, be deemed to be consent to any reduction in compensation. Seller and the Servicer agree that they shall cooperate with such Electing Party’s efforts to obtain the Required Rating, and shall provide the applicable credit rating agency (either directly or through distribution to the Agent or Electing Party), any information requested by such credit rating agency for purposes of providing and monitoring the Required Rating. Each Consenting Party electing to receive the related ratings letter and each Electing Party shall share the cost of the initial fees payable to the credit rating agency for providing the related rating and all ongoing fees payable to the credit rating agency for their continued monitoring of the related rating. Nothing in this Section 10.2(c) shall preclude any Purchaser or Funding Source from demanding compensation from Seller pursuant to Section 10.2(a) hereof at any time and without regard to whether the Required Rating shall have been obtained, or shall require any Purchaser or Funding Source to obtain any rating on the facility prior to demanding any such compensation from Seller.
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The Agent shall not have any duties or responsibilities, except those expressly set forth herein or in any other Transaction Document, or any fiduciary relationship with any Purchaser, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of the Agent shall be read into this Agreement or any other Transaction Document or otherwise exist for the Agent. In performing its functions and duties hereunder and under the other Transaction Documents, the Agent shall act solely as agent for the Purchasers and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any Seller Party or any of such Seller Party’s successors or assigns. The Agent shall not be required to take any action that exposes the Agent to personal liability or that is contrary to this Agreement, any other Transaction Document or applicable law. The appointment and authority of the Agent hereunder shall terminate upon the indefeasible payment in full of all Aggregate Unpaids. Each Purchaser hereby authorizes the Agent to execute each of the Uniform Commercial Code financing or continuation statements (and amendments thereto and assignments or terminations thereof) on behalf of such Purchaser (the terms of which shall be binding on such Purchaser). |
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financial and other conditions and creditworthiness of Seller and made its own decision to enter into this Agreement, the other Transaction Documents and all other documents related hereto or thereto. |
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(a) Any Financial Institution may at any time and from time to time assign to one or more Persons (“Purchasing Financial Institutions”) all or any part of its rights and obligations under this Agreement pursuant to an assignment agreement, substantially in the form set forth in Exhibit VII hereto (the “Assignment Agreement”) executed by such Purchasing Financial Institution and such selling Financial Institution. The consent of the Company in such selling Financial Institution’s Purchaser Group shall be required prior to the effectiveness of any such assignment. Each assignee of a Financial Institution must (i) have a short-term debt rating of A-1 or better by S&P and P-1 by Moody’s and (ii) agree to deliver to the Agent, promptly following any request therefor by the |
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Agent or the Company in such selling Financial Institution’s Purchaser Group, an enforceability opinion in form and substance satisfactory to the Agent and such Company. Upon delivery of the executed Assignment Agreement to the Agent, such selling Financial Institution shall be released from its obligations hereunder to the extent of such assignment. Thereafter the Purchasing Financial Institution shall for all purposes be a Financial Institution party to this Agreement and shall have all the rights and obligations of a Financial Institution (including, without limitation, the applicable obligations of a Related Financial Institution) under this Agreement to the same extent as if it were an original party hereto and no further consent or action by Seller, the Purchasers or the Agent shall be required. |
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(b) Each of the Financial Institutions agrees that in the event that it shall cease to have a short-term debt rating of A-1 or better by S&P and P-1 by Moody’s (an “Affected Financial Institution”), such Affected Financial Institution shall be obliged, at the request of the Company in such Affected Financial Institution’s Purchaser Group or the Agent, to assign all of its rights and obligations hereunder to (x) another Financial Institution in such Affected Financial Institution’s Purchaser Group or (y) another funding entity nominated by the Agent or any Financial Institution and acceptable to the Company in such Affected Financial Institution’s Purchaser Group, and willing to participate in this Agreement through the Liquidity Termination Date in the place of such Affected Financial Institution; provided that the Affected Financial Institution receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such Financial Institution’s Pro Rata Share of the Aggregate Capital and Yield owing to the Financial Institutions in such Affected Financial Institution’s Purchaser Group and all accrued but unpaid fees and other costs and expenses payable in respect of its Pro Rata Share of the Purchaser Interests of the Financial Institutions in such Affected Financial Institution’s Purchaser Group. |
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(a) No provision of this Agreement may be amended, supplemented, modified or waived except in writing in accordance with the provisions of this Section 13.1(b). Each Company, Seller and the Agent, at the direction of the Required Purchasers, may enter into written modifications or waivers of any provisions of this Agreement, provided, however, that no such modification or waiver shall: |
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(i) without the consent of each affected Purchaser, (A) extend the Liquidity Termination Date or the date of any payment or deposit of Collections by Seller or the Servicer, (B) reduce the rate or extend the time of payment of Yield or any CP Costs (or any component of Yield or CP Costs), (C) reduce any fee payable to the Agent for the benefit of the Purchasers, (D) except pursuant to Article XII hereof, change the amount of the Capital of any Purchaser, any Financial Institution’s Pro Rata Share, any Company’s Pro Rata Share, any Financial Institution’s Commitment or any Company’s Company Purchase Limit (other than, to the extent applicable, pursuant to Section 4.6 or the terms of any Funding Agreement), (E) amend, modify or waive any provision of the definition of Required Purchasers or this Section 13.1(b) or Section 2.6, Section 4.6 or Section 13.6, (F) release all or substantially all of the property with respect to which a security or ownership interest therein has been granted hereunder to the Agent, the Purchasers or the Financial Institutions, (G) consent to or permit the assignment or transfer by Seller of any of its rights and obligations under this Agreement, or (H) amend or modify any defined term (or any defined term used directly or indirectly in such defined term) used in clauses (A) through (G) above in a manner that would circumvent the intention of the restrictions set forth in such clauses; |
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(ii) without the written consent of the then Agent, amend, modify or waive any provision of this Agreement if the effect thereof is to affect the rights or duties of such Agent; or |
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(iii) without the written consent of the Agent and each Purchaser (A) amend, modify or waive any Potential Amortization Event or Amortization Event; (B) change the definition of “Aggregate Reserves,” “Concentration Limits,” “Default Ratio,” “Delinquency Ratio Trigger,” “Dilution Horizon Factor,” “Dilution Reserve,” “Dilution Ratio,” “Dilution Percentage,” “Dilution Ratio Trigger,” “Eligible Receivable,” “Loss Horizon Factor,” “Loss Reserve,” “Loss Percentage,” “Loss Ratio Trigger,” “Servicing and Yield Reserve,” “Stress Factor” and “Weekly Reporting Condition”; (C) amend, modify or waive any provision in Article IX; or (D) amend or modify any defined term (or any defined term used directly or indirectly in such defined term) used in clauses (A) through (C) above in a manner that would circumvent the intention of the restrictions set forth in such clauses. |
Notwithstanding the foregoing, (i) without the consent of the Financial Institutions, but with the consent of Seller, the Agent may amend this Agreement solely to add additional Persons as Financial Institutions hereunder and (ii) the Agent, the Required Purchasers and each Company may enter into amendments to modify any of the terms or provisions of Article XI, Section 13.13 or any other provision of this Agreement without the consent of Seller, provided that such amendment has no negative impact upon Seller. Any modification or waiver made in accordance with this Section 13.1 shall apply to each of the Purchasers equally and shall be binding upon Seller, the Purchasers and the Agent.
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on behalf of Seller. Seller agrees to deliver promptly to the Agent and each applicable Purchaser a written confirmation of each telephonic notice signed by an authorized officer of Seller; provided, however, the absence of such confirmation shall not affect the validity of such notice. If the written confirmation differs from the action taken by the Agent or applicable Purchaser, the records of the Agent or applicable Purchaser shall govern absent manifest error. |
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(a) If any Seller Party fails to perform any of its obligations hereunder, the Agent or any Purchaser may (but shall not be required to) perform, or cause performance of, such obligations, and the Agent’s or such Purchaser’s costs and expenses incurred in connection therewith shall be payable by Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes the Agent at any time and from time to time after the occurrence of any Amortization Event in the sole discretion of the Agent, and appoints the Agent as its attorney-in-fact, to act on behalf of such Seller Party (i) to authorize on behalf of such Seller Party as debtor and to file financing or continuation statements (and amendments thereto and assignments thereof) necessary or desirable in the Agent’s sole discretion to perfect and to maintain the perfection and priority of the interest of the Purchasers in the Receivables, all Related Security and all Collections (collectively, the “Collateral”) and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Collateral as a financing statement in such offices as the Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the interests of the Purchasers in the Collateral. Such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes the Collateral (which may describe the Collateral as set forth in Exhibit XI) as the Agent may determine, in its sole discretion, is reasonably necessary or advisable to ensure the perfection of the security interest in the Collateral granted to the Agent in connection herewith. This appointment is coupled with an interest and is irrevocable. The authorization by each Seller Party set forth above is intended to meet all requirements for authorization by a debtor under Article 9 of any applicable enactment of the UCC, including, without limitation, Section 9-509 thereof. |
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authority or proceedings (whether or not having the force or effect of law), including disclosure in the financial statements of each of the Seller Parties of the existence and financial effects of the transactions contemplated by this Agreement. Anything herein to the contrary notwithstanding, each Seller Party, each Purchaser, the Agent, each Indemnified Party and any successor or assign of any of the foregoing (and each employee, representative or other agent of any of the foregoing) may disclose to any and all Persons, without limitation of any kind, the “tax treatment” and “tax structure” (in each case, within the meaning of U.S. Treasury Regulation § 1.6011-4) of the transactions contemplated herein and all materials of any kind (including opinions or other tax analyses) that are or have been provided to any of the foregoing relating to such tax treatment or tax structure, and it is hereby confirmed that each of the foregoing have been so authorized since the commencement of discussions regarding the transactions. |
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(a) Anything herein to the contrary notwithstanding, each Seller Party hereby consents to the disclosure of any nonpublic information with respect to it (i) to the Agent, the Financial Institutions or the Companies by each other, (ii) by the Agent or the Purchasers to any prospective or actual assignee or participant of any of them, (iii) by the Agent or any Purchaser to any rating agency, Funding Source, Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to any Company or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which the Agent or any Financial Institution acts as the administrative agent and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, (iv) by each Purchaser (or any administrative agent on its behalf), to a nationally recognized statistical rating organization in compliance with Rule 17g-5 under the Securities Exchange Act of 1934, as amended (or to any other rating agency in compliance with any similar rule or regulation in any relevant jurisdiction) or in accordance with any good faith interpretation thereof, and (v) by any Company (or any administrative agent on its behalf) to any collateral trustee appointed by such Company to comply with Rule 3a-7 under the Investment Company Act, provided such collateral trustee is subject to a confidentiality agreement regarding such information with restrictions on disclosure that are comparable to those contained in this Agreement. The Agent or the Purchaser, as applicable, will make reasonable efforts to enter into a confidentiality agreement, reasonably acceptable to the Servicer, with each rating agency hired by such Person and to which it is disclosing information pursuant to clause (iii) or (iv) above; provided, that the absence of such a confidentiality agreement shall not be construed to prohibit the Agent or any Purchaser from making disclosures to any rating agency as may be required by applicable law, rule or regulation (including, for this purpose, any requirements of Rule 17g-5 or any good faith interpretation thereof). 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) or otherwise with the consent of the applicable Seller Party or Seller Parties. Except as provided in this clause (b) above, the Agent and the Purchasers shall maintain and shall cause each of its employees and officers to maintain the confidentiality of any confidential or proprietary information with respect to the Seller Parties obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein. |
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(a) Notwithstanding any provisions contained in this Agreement to the contrary, no Company that funds its purchase of Purchaser Interests through the issuance of Commercial Paper shall, nor shall be obligated to, pay any amount pursuant to this Agreement unless (i) such Company has received funds which may be |
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used to make such payment and which funds are not required to repay its Commercial Paper when due and (ii) after giving effect to such payment, either (x) such Company could issue Commercial Paper to refinance all of its outstanding Commercial Paper (assuming such outstanding Commercial Paper matured at such time) in accordance with the program documents governing such Company’s securitization program or (y) all of such Company’s Commercial Paper is paid in full. Any amount which such Company does not pay pursuant to the operation of the preceding sentence shall not constitute a claim (as defined in §101 of the Federal Bankruptcy Code) against or corporate obligation of such Company for any such insufficiency unless and until such Company satisfies the provisions of clauses (i) and (ii) above. This paragraph (b) shall survive the termination of this Agreement. |
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(a) This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with 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 written understandings. |
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(b) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy). 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 any Seller Party pursuant to Article V, (ii) the indemnification, increased cost and payment provisions of Article X, and Sections 13.5, 13.6 and 13.7 shall be continuing and shall survive any termination of this Agreement. |
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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. |
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(a) In addition to any ownership interest which the Agent may from time to time acquire pursuant hereto, Seller hereby grants to the Agent for the ratable benefit of the Purchasers a valid and perfected security interest in all of Seller’s right, title and interest in, to and under all Receivables now existing or hereafter arising, the Collections, each Lock-Box, each Collection Account, all Related Security, all other rights and payments relating to such Receivables, and all proceeds of any thereof prior to all other liens on and security interests therein to secure the prompt and complete payment of the Aggregate Unpaids. The Agent and the Purchasers shall have, in addition to the rights and remedies that they may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC (or any comparable law) and other applicable law, which rights and remedies shall be cumulative. |
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(b) If, notwithstanding the intention of the parties expressed above, any sale or transfer by Seller hereunder shall be characterized as a secured loan and not a sale or such sale shall for any reason be ineffective or unenforceable (any of the foregoing being a “Recharacterization”), then this Agreement shall be deemed to constitute a security agreement under the UCC and other applicable law. In the case of any Recharacterization, Seller represents and warrants that each remittance of Collections to the Agent or the Purchasers hereunder will have been (i) in payment of a debt incurred in the ordinary course of business or financial affairs and (ii) made in the ordinary course of business or financial affairs. |
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(a) The effect of this Agreement is to amend and restate the Existing Agreement in its entirety, and to the extent that any rights, benefits or provisions in favor of the Agent or any Purchaser existed in the Existing Agreement and continue to exist in this Agreement without any written waiver of any such rights, benefits |
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or provisions prior to the Amendment Date, then such rights, benefits or provisions are acknowledged to be and to continue to be effective. This Agreement is not a novation. |
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(b) The parties hereto agree and acknowledge that any and all rights, remedies and payment provisions under the Existing Agreement (including any prior version of the Existing Agreement, including the Original Agreement), including, without limitation, any and all rights, remedies and payment provisions with respect to (i) any representation and warranty made or deemed to be made pursuant to Existing Agreement (including any prior version of the Existing Agreement, including the Original Agreement), or (ii) any indemnification provision, shall continue and survive the execution and delivery of this Agreement. |
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(c) The parties hereto agree and acknowledge that any and all amounts owing as or for Capital, Yield, CP Costs, fees, expenses or otherwise under or pursuant to the Existing Agreement immediately prior to the effectiveness of this Agreement shall be owing as or for Capital, Yield, CP Costs, fees, expenses or otherwise, respectively, under or pursuant to this Agreement. |
(SIGNATURE PAGES FOLLOW)
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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.
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AVNET RECEIVABLES CORPORATION, as Seller |
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By: |
/s/ Kevin Moriarty |
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Name: |
Kevin Moriarty |
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Title: |
President and Treasurer |
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Address: |
2211 South 47th Street |
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Phoenix, Arizona 85034 |
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Attention: President |
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Fax: |
(480) 643-7199 |
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AVNET, INC., as Servicer |
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By: |
/s/ Kevin Moriarty |
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Name: |
Kevin Moriarty |
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Title: |
Senior Vice President, Chief Financial Officer and Assistant Secretary |
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Address: |
2211 South 47th Street |
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Phoenix, Arizona 85034 |
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Attention: President |
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Fax: |
(480) 643-7199 |
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S-1
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CHARIOT FUNDING LLC, |
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as a Company and as a Financial Institution |
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By: |
JPMorgan Chase Bank, N.A., |
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its Attorney-in-Fact |
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By: |
/s/ John Lindsay |
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John Lindsay |
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Title: |
Vice President |
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Address: |
c/o JPMorgan Chase Bank, N.A., as agent |
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Asset Backed Finance |
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10S Dearborn St, 16th Floor |
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Chicago, Illinois 60603 |
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(312) 732-1844 |
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JPMORGAN CHASE BANK, N.A., |
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as Agent |
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By: |
/s/ John Lindsay |
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Name: |
John Lindsay |
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Title: |
Vice President |
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Address: |
c/o JPMorgan Chase Bank, N.A. |
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Asset Backed Finance |
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10S Dearborn St, 16th Floor |
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Chicago, Illinois 60603 |
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Fax: |
(312) 732-4487 |
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S-2
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LIBERTY STREET FUNDING LLC, as a Company |
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By: |
/s/ Jill Russo |
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Name: |
Jill Russo |
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Title: |
Vice President |
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Address: |
c/o Global Securitization Services, LLC |
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114 West 47th Street, Suite 2310 |
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New York, NY 10036 |
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Attn: Andrew L Stidd |
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Fax: |
(212) 302-8767 |
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THE BANK OF NOVA SCOTIA, as a Financial Institution |
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By: |
/s/ Diane Emanuel |
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Name: |
Diane Emanuel |
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Title: |
Managing Director & Head |
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Address: |
The Bank of Nova Scotia |
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250 Vesey Street |
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23rd Floor |
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New York, NY 10281 |
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Attn: Peter Gartland |
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Fax: |
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(212) 225-5274 |
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S-3
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
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MANHATTAN ASSET FUNDING COMPANY LLC, as a |
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Company |
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By: |
MAF RECEIVABLES CORP., its member |
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By: |
/s/ Irina Khaimova |
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Name: |
Irina Khaimova |
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Title: |
Vice President |
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Address: |
c/o SMBC Nikko Securities America, Inc. |
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277 Park Avenue |
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New York, New York 10172 |
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Attention: Structured Finance Group |
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Fax: |
(212) 224-4929 |
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SMBC NIKKO SECURITIES AMERICA, INC., as agent for |
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the SMBC Company |
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By: |
/s/ Yukimi Konno |
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Name: |
Yukimi Konno |
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Title: |
Managing Director |
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SUMITOMO MITSUI BANKING CORPORATION, as a |
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Financial Institution |
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By: |
/s/ James D. Weinstein |
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Name: |
James D. Weinstein |
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Title: |
Managing Director |
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Address: |
Sumitomo Mitsui Banking Corporation |
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277 Park Avenue |
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New York, New York 10172 |
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Attention: Structured Finance Group |
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Fax: |
(212) 224-4929 |
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S-4
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
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VICTORY RECEIVABLES CORPORATION, as a Company |
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By: |
/s/ David V. DeAngelis |
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Name: |
David V. DeAngelis |
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Title: |
Vice President |
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Address: |
c/o Global Securitization Services, LLC |
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68 South Service Road, Suite 120 |
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Melville, NY 11747 |
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Attention: David V. DeAnglelis |
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Tel: |
(631) 930-7126 |
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Fax: |
(212) 302-8767 |
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E-mail: |
ddeangelis@gssnyc.com |
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With a copy to: |
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THE BANK OF TOKYO MITSUBISHI |
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UFJ, LTD., NEW YORK BRANCH |
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Address: |
1221 Avenue of the Americas |
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New York, New York 10020 |
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Attention: Securitization Group |
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Telephone No.: (212) 782-6957 |
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Telecopier No.: (212) 782-6448 |
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Email: securitization_reporting@us.mufg.jp |
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nmonier@us.mufg.jp |
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THE BANK OF TOKYO MITSUBISHI UFJ, LTD |
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NEW YORK BRANCH, as a Financial Institution |
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By: |
/s/ Eric Williams |
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Name: |
Eric Williams |
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Title: |
Managing Director |
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Address: |
The Bank of Toyko-Mitsubishi UFJ, Ltd., |
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New York Branch |
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Attn: Securitization Group |
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1221 Avenue of the Americas |
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New York, NY 10020 |
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Fax: |
(212) 782-6448 |
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S-5
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
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PNC BANK NATIONAL ASSOCIATION, |
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as a Company and as a Financial Institution |
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By: |
/s/ Michael Brown |
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Name: |
Michael Brown |
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Title: |
Senior Vice President |
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Address: |
PNC Bank, National Association |
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Three PNC Plaza |
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225 Fifth Avenue |
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Pittsburgh, Pennsylvania 15222 |
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Attention: William P. Falcon |
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Tel: |
(412) 762-5442 |
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Fax: |
(412) 762-9184 |
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Email: |
william.falcon@pnc.com |
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S-6
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
|
BRANCH BANKING AND TRUST COMPANY, |
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as a Company and as a Financial Institution |
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By: |
/s/ T.J. Lockwood |
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Name: |
T.J. Lockwood |
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Title: |
Senior Vice President |
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Address: |
200 West 2nd St |
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Winston-Salem, NC 27101 |
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Tel: |
336-733-2389 |
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Fax: |
336-733-2327 |
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Email: |
tlockwood@bbandt.com |
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S-7
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
|
WELLS FARGO BANK, NATIONAL ASSOCIATION,, |
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as a Company and as a Financial Institution |
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By: |
/s/ Eero Maki |
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Name: |
Eero Maki |
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Title: |
Managing Director |
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Address: |
Wells Fargo Bank, National Association |
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1100 Abernathy Rd. NE., 16th Floor |
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Atlanta, GA 30328 |
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Attention: Jason Barwig |
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Tel: |
(770) 508-2184 |
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Fax: |
(866) 967-2064 |
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Email: |
Jason.barwig@wellsfargo.com |
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S-8
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
EXHIBIT I
DEFINITIONS
As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“Accrual Period” means each calendar month, provided that the initial Accrual Period hereunder with respect to each Company means the period from (and including) the date of the initial purchase by such Company hereunder to (and including) the last day of the calendar month thereafter.
“Adverse Claim” means a lien, security interest, charge or encumbrance, or other right or claim in, of or on any Person’s assets or properties in favor of any other Person.
“Affected Financial Institution” has the meaning specified in Section 12.1(c).
“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person or any Subsidiary of such Person. A Person shall be deemed to control another Person if the controlling Person owns 20% or more of any class of voting securities of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise.
“Agent” has the meaning set forth in the preamble to this Agreement.
“Aggregate Capital” means, on any date of determination, the aggregate amount of Capital of all Purchaser Interests outstanding on such date.
“Aggregate Reduction” has the meaning specified in Section 1.3.
“Aggregate Reserves” means, on any date of determination, the sum of the Loss Reserve, the Dilution Reserve and the Servicing and Yield Reserve.
“Aggregate Unpaids” means, at any time, an amount equal to the sum of all Aggregate Capital and all other unpaid Obligations (whether due or accrued) at such time.
“Agreement” means this Third Amended and Restated Receivables Purchase Agreement, dated as of February 27, 2017, as the same may be amended or modified and in effect from time to time.
“Alternative Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) the LIBO Rate for a one month Tranche Period on such day (or if such day is not a Business Day, the immediately preceding Business Day), provided that, for the avoidance of doubt, the LIBO Rate for any day shall be based on the rate appearing on the Reuters Screen LIBOR01 Page1 (or on any successor or substitute page) at approximately 11:00 a.m. London time on such day (without any rounding). Any change in the Alternative Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate, respectively.
“Amendment Date” has the meaning set forth in the Preliminary Statements to this Agreement.
“Amendment Date Companies” means the JPM Company, the Scotia Company, the BTMU Company, the PNC Company, the BB&T Company, the WFB Company and the SMBC Company.
Exh. I-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
“Amendment Date Financial Institutions” means the JPM Company, in its capacity as a Financial Institution, Scotia, BTMU, PNC, BB&T, WFB and SMBC.
“Amortization Date” means the earliest to occur of (i) the Business Day immediately prior to the occurrence of an Amortization Event set forth in Section 9.1(d)(ii), (ii) the Business Day specified in a written notice from the Agent following the occurrence of any other Amortization Event, (iii) the date which is thirty (30) Business Days after the Agent’s receipt of written notice from Seller that it wishes to terminate the facility evidenced by this Agreement, (iv) the Facility Termination Date and (v) the Business Day specified in a written notice from the Agent following the failure to obtain the Required Rating within sixty (60) days following delivery of a Ratings Request to Seller and the Servicer.
“Amortization Event” has the meaning specified in Article IX.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Seller Parties or their respective Subsidiaries from time to time concerning or relating to bribery or corruption.
“Applicable Delinquency Ratio Threshold” means, for any applicable period set forth below, the percentage set forth below opposite such period:
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Period |
Applicable Delinquency Ratio Threshold |
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From and including the Amendment Date through the delivery date for the Monthly Report reflecting the fiscal month ending April 1, 2017 |
18.00% |
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From but excluding the delivery date for the Monthly Report reflecting the fiscal month ending April 1, 2017 through the delivery date for the Monthly Report reflecting the fiscal month ending May 27, 2017 |
15.00% |
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From but excluding the delivery date for the Monthly Report reflecting the fiscal month ending May 27, 2017 and thereafter |
9.50% |
“Applicable Dilution Ratio Threshold” means 9.00%.
“Applicable Loss Ratio Threshold” means, for any applicable period set forth below, the percentage set forth below opposite such period:
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Period |
Applicable Loss Ratio Threshold |
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From and including the Amendment Date through the delivery date for the Monthly Report reflecting the fiscal month ending April 1, 2017 |
13.00% |
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|
From but excluding the delivery date for the Monthly Report reflecting the fiscal month ending April 1, 2017 through the delivery date for the Monthly Report reflecting the fiscal month ending May 27, 2017 |
11.00% |
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From but excluding the delivery date for the Monthly Report reflecting the fiscal month ending May 27, 2017 and thereafter |
7.00% |
Exh. I-2
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
“Applicable Margin” means 2.50%.
“Assignment Agreement” has the meaning set forth in Section 12.1(b).
“Authorized Officer” means, with respect to any Person, its president, vice president, corporate controller, treasurer or chief financial officer.
“Avnet” has the meaning set forth in the Preliminary Statements to this Agreement.
“BB&T” means Branch Banking and Trust Company and its successors and assigns.
“BB&T Company” means Branch Banking and Trust Company and its successors and assigns.
“Broken Funding Costs” means for any Purchaser Interest which (i) has its Capital reduced without compliance by Seller with the notice requirements hereunder or (ii) does not become subject to an Aggregate Reduction following the delivery of any Reduction Notice or (iii) is assigned, transferred or funded pursuant to a Funding Agreement or otherwise transferred or terminated prior to the date on which it was originally scheduled to end, an amount equal to the excess, if any, of (A) the CP Costs or Yield (as applicable) that would have accrued during the remainder of the Tranche Periods or the tranche periods for Commercial Paper determined by the applicable Purchaser to relate to such Purchaser Interest (as applicable) subsequent to the date of such reduction, assignment or termination (or in respect of clause (ii) above, the date such Aggregate Reduction was designated to occur pursuant to the Reduction Notice) of the Capital of such Purchaser Interest if such reduction, assignment or termination had not occurred or such Reduction Notice had not been delivered, over (B) the sum of (x) to the extent all or a portion of such Capital is allocated to another Purchaser Interest, the amount of CP Costs or Yield actually accrued during the remainder of such period on such Capital for the new Purchaser Interest, and (y) to the extent such Capital is not allocated to another Purchaser Interest, the income, if any, actually received net of any costs of redeployment of funds during the remainder of such period by the holder of such Purchaser Interest from investing the portion of such Capital not so allocated. In the event that the amount referred to in clause (B) exceeds the amount referred to in clause (A), the relevant Purchaser or Purchasers agree to pay to Seller the amount of such excess. All Broken Funding Costs shall be due and payable hereunder upon demand.
“BTMU” means The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and its successors and assigns.
“BTMU Company” means Victory Receivables Corporation and its successors and assigns.
“Business Day” means any day on which banks are not authorized or required to close in New York, New York or Chicago, Illinois and The Depository Trust Company of New York is open for business, and, if the applicable Business Day relates to any computation or payment to be made with respect to the LIBO Rate, any day on which dealings in dollar deposits are carried on in the London interbank market.
“Canadian Receivable” means a Receivable the Obligor of which, if a natural person, is a resident of Canada or, if a corporation or other business organization, is organized under the laws of Canada or any political subdivision thereof and has its chief executive office in Canada.
“Capital” of any Purchaser Interest means, at any time, (A) the Purchase Price of such Purchaser Interest, minus (B) the sum of the aggregate amount of Collections and other payments received by the Agent or any Purchaser which in each case are applied to reduce such Capital in accordance with the terms and conditions of this Agreement; provided that such Capital shall be restored (in accordance with Section 2.5) in the amount of any Collections or other payments so received and applied if at any time the distribution of such Collections or payments are rescinded, returned or refunded for any reason.
“Change of Control” means (i) 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, as amended) of 20% or more of the outstanding shares of voting stock of the
Exh. I-3
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Servicer or (ii) Avnet shall cease to own 100% of the outstanding equity interest in Seller, free and clear of any Adverse Claim.
“Charged-Off Receivable” means a Receivable: (i) as to which the Obligor thereof has taken any action, or suffered any event to occur, of the type described in Section 9.1(d) (as if references to Seller Party therein refer to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is deceased, (iii) which, consistent with the Credit and Collection Policy, would be written off Seller’s books as uncollectible or (iv) which has been identified by Seller as uncollectible.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Collateral” has the meaning set forth in Section 13.4(b).
“Collection Account” means each concentration account, depositary account, lock-box account or similar account in which any Collections are collected or deposited and which is listed on Exhibit IV.
“Collection Account Agreement” means an agreement substantially in the form of Exhibit VI, or otherwise in a form approved by Agent, among Seller or Originator, as applicable, the Agent and a Collection Bank.
“Collection Bank” means, at any time, any of the banks holding one or more Collection Accounts.
“Collection Notice” means a notice, in substantially the form of Annex A to Exhibit VI, from the Agent to a Collection Bank or any similar or analogous notice from the Agent to a Collection Bank.
“Collections” means, with respect to any Receivable, all cash collections and other cash proceeds in respect of such Receivable, including, without limitation, all yield, Finance Charges or other related amounts accruing in respect thereof and all cash proceeds of Related Security with respect to such Receivable.
“Commercial Paper” means promissory notes of any Company issued by such Company in the commercial paper market.
“Commitment” means, for each Financial Institution, the commitment of such Financial Institution to purchase Purchaser Interests from Seller to the extent that the Company in its Purchaser Group declines to purchase such Purchaser Interests, in an amount not to exceed (i) in the aggregate, the amount set forth opposite such Financial Institution’s name on Schedule A to this Agreement, as such amount may be modified in accordance with the terms hereof (including, without limitation, any termination of Commitments pursuant to Section 4.6) and (ii) with respect to any individual purchase hereunder, its Pro Rata Share of the Purchase Price therefor.
“Company” has the meaning set forth in the preamble to this Agreement.
“Company Costs” has the meaning set forth in Schedule C to this Agreement in connection with each respective Company.
“Company Purchase Limit” means, for each Company, the purchase limit of such Company with respect to the purchase of Purchaser Interests from Seller, in an amount not to exceed (i) in the aggregate, the amount set forth opposite such Company’s name on Schedule A to this Agreement, as such amount may be modified in accordance with the terms hereof (including Section 4.6(b)) and (ii) with respect to any individual purchase hereunder, its Pro Rata Share of the Purchase Price therefor.
“Concentration Limit” means, at any time, for any Obligor, 2.50% of the aggregate Outstanding Balance of all Eligible Receivables at such time; provided, that in the case of an Obligor and any Affiliate of such Obligor, the Concentration Limit shall be calculated as if such Obligor and such Affiliate are one Obligor; provided, further, that for so long as no Purchaser Revocation is in effect with respect to the applicable Special Concentration Limit: (i) in the case of an Obligor which is Honeywell International Inc. or a Subsidiary of Honeywell International Inc., the Concentration Limit for such Obligor shall be 10% of the aggregate Outstanding Balance of all Eligible Receivables
Exh. I-4
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
at such time; (ii) in the case of an Obligor which is Rockwell Collins, Inc. or a Subsidiary of Rockwell Collins, Inc., the Concentration Limit for such Obligor shall be 7.5% of the aggregate Outstanding Balance of all Eligible Receivables at such time; (iii) in the case of an Obligor which is Lockheed Martin Corporation or a Subsidiary of Lockheed Martin Corporation, the Concentration Limit for such Obligor shall be 10% of the aggregate Outstanding Balance of all Eligible Receivables at such time; (iv) in the case of an Obligor which is Harris Corporation or a Subsidiary of Harris Corporation, the Concentration Limit for such Obligor shall be 5% of the aggregate Outstanding Balance of all Eligible Receivables at such time; (v) in the case of an Obligor which is BAE Systems PLC or a Subsidiary of BAE Systems PLC, the Concentration Limit for such Obligor shall be 5% of the aggregate Outstanding Balance of all Eligible Receivables at such time and (vi) in the case of an Obligor which is Jabil Circuit, Inc. or a Subsidiary of Jabil Circuit, Inc., the Concentration Limit for such Obligor shall be 3.75% of the aggregate Outstanding Balance of all Eligible Receivables at such time.
“Consent Notice” has the meaning set forth in Section 4.6(a).
“Consent Period” has the meaning set forth in Section 4.6(a).
“Consenting Party” has the meaning set forth in Section 10.2(c).
“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or application for a letter of credit.
“Contract” means, with respect to any Receivable, any and all instruments, agreements, invoices or other writings pursuant to which such Receivable arises or which evidences such Receivable.
“CP Costs” means, for each day, the aggregate discount or yield accrued with respect to the Purchaser Interests of each respective Company as determined in accordance with Schedule C to this Agreement.
“Capital Requirements (Risk Retention)” means Sections 404 through 410 of the CRR, as supplemented by Commission Delegated Regulation (EU) No 625/2014 of March 13, 2014 and any related regulatory guidance, but excluding Section 407 of the CRR and Commission Delegated Regulation (EU) No 602/2014 of June 4, 2014 relating to additional risk weights imposed by reason of the negligence or omission of the applicable institution that is subject to such regulatory regime.
“CRR” means Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, as amended from time to time.
“Credit Agreement” means that certain Credit Agreement, dated as of July 9, 2014, among Avnet, Inc., certain other subsidiaries as borrowers, each lender from time to time party thereto and Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, as in effect on July 9, 2014, and (i) with respect to Section 9.1(h) of this Agreement, without giving effect to any amendment, restatement, waiver, release, supplementation, cancellation, termination or other modification thereof; and (ii) with respect to all other Sections of this Agreement, after giving effect to any amendment, restatement, waiver, release, supplementation, cancellation, termination or other modification thereof.
“Credit and Collection Policy” means the collection policies and practices relating to Contracts and Receivables summarized in Exhibit VIII hereto, as modified from time to time in accordance with the Receivables Sale Agreement and this Agreement.
“Deemed Collections” means the aggregate of all amounts Seller shall have been deemed to have received as a Collection of a Receivable. Seller shall be deemed to have received a Collection in full of a Receivable if at any
Exh. I-5
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
time (i) the Outstanding Balance of any such Receivable is either (x) reduced as a result of any defective or rejected goods or services, any discount or any adjustment or otherwise by Seller (other than cash Collections on account of the Receivables) or (y) 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 (ii) any of the representations or warranties in Article V are no longer true with respect to any Receivable.
“Default Fee” means with respect to any amount due and payable by Seller in respect of any Aggregate Unpaids, an amount equal to the greater of (i) $1,000 and (ii) interest on any such unpaid Aggregate Unpaids at a rate per annum equal to 2.00% above the Alternative Base Rate.
“Default Ratio” means an amount (expressed as a percentage) equal to (i) the sum of (A) the aggregate Outstanding Balance of all Receivables that were unpaid for 91 days or more (but less than 121 days) after the original due date as of the last day of the fiscal month then most recently ended and (B) the aggregate Outstanding Balance of all Receivables that became Charged-Off Receivables during such fiscal month divided by (ii) the aggregate Outstanding Balance of Receivables originated during the fiscal month that is the fourth fiscal month prior to the fiscal month then most recently ended; provided that for purposes of calculating the Loss Reserve for the period from and including the Amendment Date through and including the fiscal month end on July 1, 2017, clause (i)(A) above shall mean the product of (x) 0.55% and (y) the aggregate Outstanding Balance of Receivables originated during the fiscal month that is the fourth fiscal month prior to the fiscal month then most recently ended.
“Defaulted Receivable” means a Receivable (i) as to which any payment, or part thereof, remains unpaid for 91 calendar days or more from the original due date for such payment or (ii) that becomes a Charged-Off Receivable prior to 91 calendar days after the original due date.
“Delinquency Ratio Trigger” means, at any time, a percentage equal to (i) the aggregate Outstanding Balance of all Receivables that were Delinquent Receivables at such time divided by (ii) the aggregate Outstanding Balance of all Receivables at such time.
“Delinquent Receivable” means a Receivable as to which any payment, or part thereof, remains unpaid for 61 days or more from the original due date for such payment.
“Designated Obligor” means an Obligor indicated by the Agent to Seller in writing.
“Dilution Horizon Factor” means, at any time, a percentage equal to (i) the aggregate amount of Receivables, less the amount of such Receivables that are rebilled to the Obligor, originated during the three fiscal month period then most recently ended, divided by (ii) the aggregate Outstanding Balance of all Non-Delinquent Receivables at the end of the fiscal month period then most recently ended.
“Dilution Percentage” means as of any date of determination the greater of (i) 10% and (ii) a percentage calculated in accordance with the following formula:
DP = [(SF x ADR) + [(HDR - ADR) x (HDR/ADR)]] x DHF
where:
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DP |
= |
the Dilution Percentage; |
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SF |
= |
the Stress Factor; |
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ADR |
= |
the average of the monthly Dilution Ratios occurring during the 12 most recent fiscal months; |
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HDR |
= |
the highest average three-month Dilution Ratio occurring during the 12 most recent calendar months; and |
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DHF |
= |
the Dilution Horizon Factor at such time. |
“Dilution Ratio” means, at any time, a percentage equal to (i) the aggregate amount of Dilutions, less the amount of such Dilutions for which the related Receivables are rebilled to the Obligor, which occurred during the
Exh. I-6
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
fiscal month period then most recently ended, divided by (ii) the aggregate amount of Receivables, less the amount of such Receivables that are rebilled to the Obligor, originated during the fiscal month that is the third fiscal month prior to the fiscal month then most recently ended; provided, that for purposes of calculating the Dilution Reserve for the period from and including the Amendment Date through and including the fiscal month end on July 1, 2017, clause (i) above shall mean the product of (x) 1.30% and (y) the aggregate Outstanding Balance of Receivables originated during the fiscal month that is the third fiscal month prior to the fiscal month then most recently ended.
“Dilution Ratio Trigger” means, at any time, a percentage equal to (i) the aggregate amount of Dilutions, less the amount of such Dilutions for which the related Receivables are rebilled to the Obligor, which occurred during the fiscal month period then most recently ended, divided by (ii) the aggregate amount of Receivables, less the amount of such Receivables that are rebilled to the Obligor, originated during the fiscal month period three months prior to the month then most recently ended.
“Dilution Reserve” means, on any date, an amount equal to the Dilution Percentage multiplied by the Net Receivables Balance as of the close of business of the Servicer on such date.
“Dilutions” means, at any time, the aggregate amount of reductions or cancellations described in clause (i) of the definition of “Deemed Collections”.
“Discount Rate” means, the LIBO Rate or the Alternative Base Rate, as applicable, with respect to each Purchaser Interest of the Financial Institutions.
“Electing Party” has the meaning set forth in Section 10.2(c).
“Eligible Receivable” means, at any time, a Receivable:
(i) the Obligor of which (a) if a natural person, is a resident of the United States or, if a corporation or other business organization, is organized under the laws of the United States or any political subdivision thereof and has its chief executive office in the United States; (b) is not an Affiliate of any of the parties hereto; (c) is not a Designated Obligor; and (d) is not a government or a governmental subdivision or agency, provided that (x) a Government Receivable that otherwise would be an Eligible Receivable under this definition but for this clause (i) shall be an Eligible Receivable to the extent that the aggregate Outstanding Balance of all such Government Receivables does not exceed 2% of the aggregate Outstanding Balance of all Eligible Receivables; (y) a Canadian Receivable that otherwise would be an Eligible Receivable under this definition but for this clause (i) shall be an Eligible Receivable to the extent that the aggregate Outstanding Balance of all such Canadian Receivables does not exceed 5% of the aggregate Outstanding Balance of all Receivables and (z) a Foreign Receivable that otherwise would be an Eligible Receivable under this definition but for this clause (i) shall be an Eligible Receivable to the extent that the aggregate Outstanding Balance of all such Foreign Receivables does not exceed 5% of the aggregate Outstanding Balance of all Receivables,
(ii) the Obligor of which is not the Obligor of any Defaulted Receivable, which in the aggregate constitute more than 25% of all Receivables of such Obligor,
(iii) which is not a Charged-Off Receivable or a Delinquent Receivable,
(iv) which by its terms is due and payable (A) within 45 calendar days of the original billing date therefor and has not had its payment terms extended, (B) within 60 calendar days of the billing date therefor and has not had its payment terms extended, (C) within 90 calendar days of the billing date therefor and has not had its payment terms extended, (D) for so long as no Purchaser Revocation is in effect with respect to this clause (iv)(D), within 100 calendar days of the original billing date therefor and has not had its payment terms extended if the related Obligor is Rockwell Collins, Inc. or a Subsidiary of Rockwell Collins, Inc. or (E) for so long as no Purchaser Revocation is in effect with respect to this clause (iv)(E), within 150 calendar days of the original billing date therefor and has not had its payment terms extended if the related Obligor is Honeywell International Inc. or a Subsidiary of Honeywell International Inc.;
Exh. I-7
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
provided that (x) with respect to subsection (B) hereof the total amount of Eligible Receivables permitted pursuant to subsection (B) shall not exceed, on the date of any Monthly Report or Weekly Report, 25% of the aggregate amount of Eligible Receivables as set forth on such Monthly Report or Weekly Report; and (y) with respect to subsection (C) hereof the total amount of Eligible Receivables pursuant to subsection (C) shall not exceed, on the date of any Monthly Report or Weekly Report, (1) 40% of the aggregate amount of Eligible Receivables as set forth on such Monthly Report or Weekly Report so long as the Purchaser Interest Condition is satisfied and (2) 0% at all other times,
(v) which is an “account” within the meaning of the UCC of all applicable jurisdictions,
(vi) which is denominated and payable only in United States dollars in the United States,
(vii) which arises under a Contract in substantially the form of or containing comparable basic provisions as one of the form contracts set forth on Exhibit IX hereto, or if such form contracts are modified in any material respect, the Seller Parties will use reasonable efforts to give prior written notice of and provide a copy of such modified Contract to the Agent prior to its use, which, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the related Obligor enforceable against such Obligor in accordance with its terms subject to no offset, counterclaim or other defense,
(viii) which arises under a Contract which does not contain a confidentiality provision that purports to restrict the ability of any Purchaser to exercise its rights under this Agreement, including, without limitation, its right to review the Contract,
(ix) which arises under a Contract that contains an obligation to pay a specified sum of money, contingent only upon the sale of merchandise or the provision of services by Originator,
(x) which, together with the Contract related thereto, does not contravene any law, rule or regulation applicable thereto (including, without limitation, any law, rule and regulation relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no part of the Contract related thereto is in violation of any such law, rule or regulation,
(xi) which satisfies all applicable requirements of the Credit and Collection Policy,
(xii) which was generated in the ordinary course of Originator’s business,
(xiii) which arises solely from the sale of goods or the provision of services, to the related Obligor by Originator, and not by any other Person (in whole or in part),
(xiv) as to which the Agent has not notified Seller that the Agent has determined that such Receivable or class of Receivables is not acceptable as an Eligible Receivable, including, without limitation, because such Receivable arises under a Contract that is not acceptable to the Agent,
(xv) which is not subject to any right of rescission, set-off, counterclaim, any other defense (including defenses arising out of violations of usury laws) of the applicable Obligor against Originator or any other Adverse Claim, and the Obligor thereon holds no right as against Originator to cause Originator to repurchase the goods or merchandise the sale of which shall have given rise to such Receivable (except with respect to sale discounts effected pursuant to the Contract, or defective goods returned in accordance with the terms of the Contract),
(xvi) as to which Originator has satisfied and fully performed all obligations on its part with respect to such Receivable required to be fulfilled by it, and no further action is required to be performed by any Person with respect thereto other than payment thereon by the applicable Obligor, and
Exh. I-8
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
(xvii) all right, title and interest to and in which has been validly transferred by Originator directly to Seller under and in accordance with the Receivables Sale Agreement, and Seller has good and marketable title thereto free and clear of any Adverse Claim.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“Excluded Acquisition” means any direct or indirect acquisition of any business by Originator consummated on or after January 1, 2010.
“Excluded Receivable” means all indebtedness and other obligations owed to Originator or in which Originator 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 merchandise or the rendering of services by Originator and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto, which, in any case:
(i) the account debtor for which is Sirius Computer Solutions, Inc. and such indebtedness or other obligation was originated after May 22, 2015;
(ii) the account debtor for which is Intelbras S.A. Industria de Telecomunicacao Eletronica Brasileira and such indebtedness or other obligation was originated after December 30, 2016;
(iii) both (a) arises in connection with the sale of merchandise or the rendering of services by the business previously conducted by any businesses acquired by Originator in an Excluded Acquisition and (b) is not recorded or maintained in Avnet’s consolidated general ledger accounting records as part of general ledger category “company code 0100” or “company code US10” (other than any Receivables previously coded under “company code 0100” or “company code US10” that have been coded under any other category without the Agent’s prior written consent); or
(iv) was recorded or maintained in Avnet’s consolidated general ledger accounting records as part of general ledger category “company code 1001” immediately prior to the Amendment Date.
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 an Excluded Receivable separate from an Excluded Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; provided, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be an Excluded Receivable regardless of whether the account debtor or Seller treats such indebtedness, rights or obligations as a separate payment obligation.
“Extended Term Eligibility Exception” means either of the extended term eligibility exceptions set forth in clauses (iv)(D) and (iv)(E) of the definition of “Eligible Receivable.”
“Extension Notice” has the meaning set forth in Section 4.6(a).
“Facility Account” means Seller’s Account No. 5546079 at JPM Chase.
“Facility Termination Date” means the earliest of (i) the Liquidity Termination Date and (ii) the Amortization Date.
“FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 147(b)(1) of the Code.
Exh. I-9
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
“Federal Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy” (11 U.S.C. §§ 101 et seq.) as amended and any successor statute thereto.
“Federal Funds Effective Rate” means, for any period, a fluctuating interest rate per annum for each day during such period equal to (a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York in the Composite Closing Quotations for U.S. Government Securities; or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:30 a.m. (Chicago time) for such day on such transactions received by the Agent from three federal funds brokers of recognized standing selected by it.
“Fee Letter” means each of (i) the amended and restated letter agreement relating to the payment of fees to Agent, dated as of August 18, 2016, between Seller and the Agent, as the same may be amended or modified and in effect from time to time, (ii) the amended and restated letter agreement relating to the payment of fees to the Purchasers, dated as of August 18, 2016, among Seller and the Purchasers, as the same may be amended or modified and in effect from time to time and (iii) any other fee letter or similar letter agreement relating to the payment of fees to any of the Purchasers entered into among Seller, the Purchasers party thereto and/or any agent or agents acting on behalf of any such Purchasers, as any such fee letter or letter agreement may be amended or modified and in effect from time to time.
“Finance Charges” means, with respect to a Contract, any finance, interest, late payment charges or similar charges owing by an Obligor pursuant to such Contract.
“Financial Institutions” has the meaning set forth in the preamble in this Agreement.
“Foreign Receivable” means a Receivable (other than a Canadian Receivable) the Obligor of which, if a natural person, is a resident of any member country in the Organization for Economic Co-operation and Development (other than the United States) (each such member country, a “Specified OECD Country”) or, if a corporation or other business organization, is organized under the laws of a Specified OECD Country or any political subdivision thereof and has its chief executive office in a Specified OECD Country or the United States.
“Funding Agreement” means this Agreement and any agreement or instrument executed by any Funding Source with or for the benefit of a Company.
“Funding Source” means with respect to any Company (i) such Company’s Related Financial Institution(s) or (ii) any insurance company, bank or other funding entity providing liquidity, credit enhancement or back-up purchase support or facilities to such Company.
“GAAP” means generally accepted accounting principles in effect in the United States of America as of the date of this Agreement.
“Government Receivable” means a Receivable the Obligor of which is the United States federal government, a state or local government, a governmental subdivision of the United States federal government or of a state or local government, or an agency of the United States federal government or of a state or local government. For the purposes of this definition the phrase “state or local government” means a state or local government of a state, city or municipality located within the fifty states of the United States or the District of Columbia.
“Incremental Purchase” means a purchase of one or more Purchaser Interests which increases the total outstanding Aggregate Capital hereunder.
“Indebtedness” of a Person means such Person’s (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property or services (other than accounts payable arising in the ordinary course of such Person’s business payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by liens or payable out of the proceeds or production from property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other instruments, (v) capitalized lease
Exh. I-10
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
obligations, (vi) net liabilities under interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and (viii) liabilities in respect of unfunded vested benefits under plans covered by Title IV of ERISA.
“Independent Director” means a member of the Board of Directors of Seller who (i) shall not have been at the time of such Person’s appointment or at any time during the preceding five years, and shall not be as long as such Person is a director of Seller, (A) a director, officer, employee, partner, shareholder, member, manager or Affiliate of any of the following Persons (collectively, the “Independent Parties”): Servicer, Originator, or any of their respective Subsidiaries or Affiliates (other than Seller), (B) a supplier to any of the Independent Parties, (C) a Person controlling or under common control with any partner, shareholder, member, manager, Affiliate or supplier of any of the Independent Parties, or (D) a member of the immediate family of any director, officer, employee, partner, shareholder, member, manager, Affiliate or supplier of any of the Independent Parties; (ii) has prior experience as an independent director for a corporation or limited liability company whose charter documents required the unanimous consent of all independent directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (iii) has at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities.
“Initial Closing Date” has the meaning set forth in the Preliminary Statements to this Agreement.
“JPM Chase” means JPMorgan Chase Bank, N.A., in its individual capacity and its successors.
“JPM Company” means Chariot Funding LLC and its successors and assigns.
“LIBO Rate” means the sum of (i) (x) with respect to Chariot Funding LLC and PNC Bank, National Association, the Daily/90 Day LIBOR Rate, as defined in Schedule C, or (y) with respect to the other Financial Institutions, subject to the limitation contained in the last sentence of Section 4.1, (a) the rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) appearing on Reuters Screen LIBOR01 Page1 (or any successor or substitute page) as the London Interbank offered rate for deposits in U.S. dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of the relevant Tranche Period and for delivery on the first day of such Tranche Period, for the number of days comprised therein, and in an amount equal to or comparable to the amount of the Capital associated with such Tranche Period (provided, that if at least two such offered rates appear on Reuters Screen LIBOR01 Page1, the rate in respect of such Tranche Period will be the arithmetic mean of such offered rates), divided by (b) one minus a percentage (expressed as a decimal) equal to the daily average during such Tranche Period of the percentage in effect on each day of such Tranche Period, as prescribed by the Board of Governors of the Federal Reserve System (or any successor thereto), for determining the aggregate maximum reserve requirements applicable to “Eurocurrency Liabilities” pursuant to Regulation D or any other then applicable regulation of such Board of Governors which prescribes reserve requirements applicable to “Eurocurrency Liabilities” as presently defined in Regulation D, plus (ii) the Applicable Margin; provided, however, that if the LIBO Rate as determined herein would be less than zero percent (0.00%) on any day, for purposes of this Agreement, such rate shall be deemed to be zero percent (0.00%) for such day. If for any reason the foregoing rates are unavailable from the Reuters service, then such rate of interest shall be based upon another market quotation rate source as determined by JPMorgan Chase Bank, N.A.
“Liquidity Provider Termination Date” has the meaning set forth in Section 2.2.
“Liquidity Termination Date” means August 19, 2018.
“Lock-Box” means each locked postal box with respect to which a bank who has executed a Collection Account Agreement has been granted exclusive access for the purpose of retrieving and processing payments made on the Receivables and which is listed on Exhibit IV.
Exh. I-11
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
“Long-Term Debt” means, at any time, in respect of Avnet, any publicly-held senior unsecured debt obligations outstanding at any such time with a maturity more than one year after the date of any determination hereunder.
“Loss Horizon Factor” means, at any time, a percentage equal to (i) (x) the aggregate amount of Receivables, less the amount of such Receivables that are rebilled to the Obligor, originated during the four fiscal month period then most recently ended, plus (y) 50% of the aggregate amount of Receivables, less the amount of such Receivables that are rebilled to the Obligor, originated during the fourth fiscal month preceding the fiscal month then most recently ended, divided by (ii) the aggregate Outstanding Balance of all Non-Delinquent Receivables at the end of the fiscal month then most recently ended.
“Loss Percentage” means at any time the greater of (i) 10% and (ii) a percentage calculated in accordance with the following formula:
LP = SF x LHF x LR
where:
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LP |
= |
the Loss Percentage; |
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SF |
= |
the Stress Factor; |
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LHF |
= |
the Loss Horizon Factor; and |
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LR |
= |
the highest three month rolling average of the Default Ratios occurring during the 12 most recent fiscal months. |
“Loss Reserve” means, on any date, an amount equal to the Loss Percentage multiplied by the Net Receivables Balance as of the close of business of the Servicer on such date.
“Loss Ratio Trigger” means, at any time, a percentage equal to (i) the aggregate Outstanding Balance of all Receivables that were Defaulted Receivables at such time, divided by (ii) the aggregate Outstanding Balance of all Receivables at such time.
“Material Adverse Effect” means a material adverse effect on (i) the financial condition or operations of any Seller Party and its Subsidiaries, (ii) the ability of any Seller Party to perform its obligations under this Agreement, (iii) the legality, validity or enforceability of this Agreement or any other Transaction Document, (iv) any Purchaser’s interest in the Receivables generally or in any significant portion of the Receivables, the Related Security or the Collections with respect thereto, or (v) the collectibility of the Receivables generally or of any material portion of the Receivables.
“Monthly Report” means a report, in substantially the form of Exhibit X hereto (appropriately completed), furnished by the Servicer to the Agent pursuant to Section 8.5.
“Moody’s” means Moody’s Investors Service, Inc. and its successors.
“Net Receivables Balance” means, at any time, the aggregate Outstanding Balance of all Eligible Receivables at such time reduced by the aggregate amount by which the Outstanding Balance of all Eligible Receivables of each Obligor and its Affiliates exceeds the Concentration Limit for such Obligor.
“Non-Delinquent Receivables” means, at any time, the aggregate Outstanding Balance of all Receivables that are not Delinquent Receivables.
“Non-Renewing Financial Institution” has the meaning set forth in Section 4.6(a).
“Obligations” has the meaning set forth in Section 2.1.
“Obligor” means a Person obligated to make payments pursuant to a Contract.
Exh. I-12
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
“Original Agreement” has the meaning set forth in the Preliminary Statements to this Agreement.
“Originator” means Avnet, Inc., in its capacity as seller under the Receivables Sale Agreement.
“Other Costs” has the meaning set forth in Section 10.3.
“Other Sellers” has the meaning set forth in Section 10.4.
“Other Servicer Collected Funds” means any cash collections, other cash proceeds or other amounts deposited, credited or funded to any Collection Account, to the extent such cash collections, other cash proceeds or other amounts do not constitute Collections.
“Outstanding Balance” of any Receivable at any time means the then outstanding principal balance thereof.
“Participant” has the meaning set forth in Section 12.2.
“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
“PNC” means PNC Bank, National Association and its successors and assigns.
“PNC Company” means PNC Bank, National Association and its successors and assigns.
“Pooled Commercial Paper” has the meaning set forth in Schedule C to this Agreement.
“Potential Amortization Event” means an event which, with the passage of time or the giving of notice, or both, would constitute an Amortization Event.
“Prime Rate” means a rate per annum equal to the prime rate of interest announced from time to time by the Agent.
“Proposed Reduction Date” has the meaning set forth in Section 1.3.
“Pro Rata Share” means, (a) for each Financial Institution, a percentage equal to (i) the Commitment of such Financial Institution, divided by (ii) the aggregate amount of all Commitments of all Financial Institutions in such Financial Institution’s Purchaser Group, adjusted as necessary to give effect to the application of the terms of Section 4.6 and (b) for each Company, a percentage equal to (i) the Company Purchase Limit of such Company, divided by (ii) the aggregate amount of all Company Purchase Limits of all Companies hereunder.
“Purchase Limit” means $400,000,000, as such amount may be modified in accordance with the terms of Section 4.6(b).
“Purchase Notice” has the meaning set forth in Section 1.2.
“Purchase Price” means, with respect to any Incremental Purchase of a Purchaser Interest, the amount paid to Seller for such Purchaser Interest which shall not exceed the least of (i) the amount requested by Seller in the applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the applicable purchase date and (iii) the excess, if any, of (A) 97% or, if the Purchaser Interest Condition is existing on the applicable purchase date, 100% of the amount equal to (1) the Net Receivables Balance on the applicable purchase date, minus (2) the Aggregate Reserves on the applicable purchase date, over (B) the aggregate outstanding amount of Aggregate Capital on the applicable purchase date, immediately prior to such proposed Incremental Purchase.
“Purchaser Group” means with respect to (i) each Company, a group consisting of such Company and its Related Financial Institutions and (ii) each Financial Institution, a group consisting of such Financial Institution, the
Exh. I-13
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Company for which such Financial Institution is a Related Financial Institution and each other Financial Institution that is a Related Financial Institution for such Company.
“Purchaser Interest” means, at any time, an undivided percentage ownership interest (computed as set forth below) associated with a designated amount of Capital, selected pursuant to the terms and conditions hereof in (i) each Receivable arising prior to the time of the most recent computation or recomputation of such undivided interest, (ii) all Related Security with respect to each such Receivable, and (iii) all Collections with respect to, and other proceeds of, each such Receivable. Each such undivided percentage interest shall equal:
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C |
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(NRB – AR) |
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where:
C=the Capital of such Purchaser Interest.
AR=the Aggregate Reserves.
NRB=the Net Receivables Balance.
Such undivided percentage ownership interest shall be initially computed on its date of purchase. Thereafter, until the Amortization Date, each Purchaser Interest shall be automatically recomputed (or deemed to be recomputed) on each day prior to the Amortization Date. The variable percentage represented by any Purchaser Interest as computed (or deemed recomputed) as of the close of the business day immediately preceding the Amortization Date shall remain constant at all times thereafter.
“Purchaser Interest Condition” means that either the rating of Avnet’s Long-Term Debt is equal to BBB- or higher by S&P or Baa3 or higher by Moody’s.
“Purchaser Revocation” means any revocation by any Purchaser, delivered in writing to the Agent and the Seller Parties, of any Special Concentration Limit or any Extended Term Eligibility Exception. A Purchaser Revocation may be rescinded in writing by all of the Purchasers that delivered the applicable Purchaser Revocation.
“Purchasers” means each Company and each Financial Institution.
“Purchasing Financial Institution” has the meaning set forth in Section 12.1(b).
“Ratings Request” has the meaning set forth in Section 10.2(c).
“Receivable” means all indebtedness and other obligations owed to Seller or Originator (at the time it arises, and before giving effect to any transfer or conveyance under the Receivables Sale Agreement or hereunder) or in which Seller or Originator 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 merchandise or the rendering of services by Originator, and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto; provided, that ‘Receivable’ shall not include any Excluded Receivable. 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, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless of whether the account debtor or Seller treats such indebtedness, rights or obligations as a separate payment obligation.
“Receivables Sale Agreement” means that certain Amended and Restated Receivables Sale Agreement, dated as of February 27, 2017, between Originator and Seller, as amended from time to time.
Exh. I-14
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
“Recharacterization” has the meaning set forth in Section 13.14(c).
“Records” means, with respect to any Receivable, all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to such Receivable, any Related Security therefor and the related Obligor.
“Reduction Notice” has the meaning set forth in Section 1.3.
“Regulatory Requirement” has the meaning set forth in Section 10.2(a).
“Reinvestment” has the meaning set forth in Section 2.2.
“Related Financial Institution” means with respect to each Company, each Financial Institution set forth opposite such Company’s name in Schedule A to this Agreement and/or, in the case of an assignment pursuant to Section 12.1, set forth in the applicable Assignment Agreement.
“Related Security” means, with respect to any Receivable:
(i) all of Seller’s interest in the inventory and goods (including returned or repossessed inventory or goods), if any, the sale of which by Originator gave rise to such Receivable (including as a result of related financing arrangements), and all insurance contracts with respect thereto,
(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, “supporting obligations” (within the meaning of Section 9-102(a) of the UCC of all applicable jurisdictions) 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 Seller’s right, title and interest in, to and under the Receivables Sale Agreement in respect of such Receivable,
(vii) all of Seller’s right, title and interest in, to and under each Lock-Box, each Collection Account and each Collection Account Agreement, and
(vii) all proceeds of any of the foregoing.
“Required Notice Period” means the number of days required notice set forth below applicable to the Aggregate Reduction indicated below:
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Aggregate Reduction |
Required Notice Period |
Exh. I-15
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
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≤$100,000,000 |
two Business Days |
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$100,000,000 to $250,000,000 |
five Business Days |
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>$250,000,000 |
ten Business Days |
“Required Purchasers” means, at any time, collectively, the Financial Institutions with Commitments in excess of 66-2/3% of the aggregate Commitments and the Companies with Company Purchase Limits in excess of 66-2/3% of the aggregate amount of all Company Purchase Limits of all Companies hereunder.
“Required Rating” has the meaning set forth in Section 10.2(c).
“Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of capital stock of Seller now or hereafter outstanding, except a dividend payable solely in shares of that class of stock or in any junior class of stock of Seller, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of capital stock of Seller now or hereafter outstanding, (iii) any payment or prepayment of principal of, premium, if any, or interest, fees or other charges on or with respect to, and any redemption, purchase, retirement, defeasance, sinking fund or similar payment and any claim for rescission with respect to the Subordinated Loans (as defined in the Receivables Sale Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of capital stock of Seller now or hereafter outstanding, and (v) any payment of management fees by Seller (except for reasonable management fees to the Servicer or its Affiliates in reimbursement of actual management services performed).
“S&P” means S&P Global Ratings, a division of the McGraw-Hill Companies, Inc.
“Sanctioned Country” means, at any time, a country or territory which is the subject or target of any country-wide Sanctions.
“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of Commerce, or the U.S. Department of State, or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
“Scotia” means The Bank Of Nova Scotia and its successors and assigns.
“Scotia Company” means Liberty Street Funding LLC and its successors and assigns.
“Seller” has the meaning set forth in the preamble to this Agreement.
“Seller Parties” has the meaning set forth in the preamble to this Agreement.
“Servicer” means at any time the Person (which may be the Agent) then authorized pursuant to Article VIII to service, administer and collect Receivables.
“Servicing and Yield Reserve” means, on any date, an amount equal to 2% multiplied by the Net Receivables Balance as of the close of business of the Servicer on such date.
“Servicing Fee” has the meaning set forth in Section 8.6.
“Settlement Date” means (A) the 20th calendar day of each month (and if such day is not a Business Day, then the next Business Day), and (B) the last day of the relevant Tranche Period in respect of each Purchaser Interest of any Financial Institution.
Exh. I-16
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
“Settlement Period” means (A) in respect of each Purchaser Interest of the Companies, the immediately preceding Accrual Period, and (B) in respect of each Purchaser Interest of any Financial Institution, the entire Tranche Period of such Purchaser Interest.
“SMBC” means Sumitomo Mitsui Banking Corporation and its successors and assigns.
“SMBC Company” means Manhattan Asset Funding Company LLC and its successors and assigns.
“Special Concentration Limit” means each of the Concentration Limits set forth in clauses (i) through (vi) of the second proviso to the definition of “Concentration Limit.”
“Stress Factor” means a number equal to 2.25.
“Subsidiary” of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, association, limited liability company, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a Subsidiary of Seller.
“Terminating Commitment Amount” means, with respect to any Terminating Financial Institution, an amount equal to the Commitment (without giving effect to clause (iii) of the proviso to the penultimate sentence of Section 4.6(b)) of such Terminating Financial Institution, minus, an amount equal to 2% of such Commitment.
“Terminating Commitment Availability” means, with respect to any Terminating Financial Institution, the positive difference (if any) between (a) an amount equal to the Commitment (without giving effect to clause (iii) of the proviso to the penultimate sentence of Section 4.6(b)) of such Terminating Financial Institution, minus, an amount equal to 2% of such Commitment minus (b) the Capital of the Purchaser Interests funded by such Terminating Financial Institution.
“Terminating Financial Institution” means the meaning set forth in Section 4.6(b).
“Termination Percentage” has the meaning set forth in Section 2.2.
“Terminating Tranche” has the meaning set forth in Section 4.3(b).
“Tranche Period” means, with respect to any Purchaser Interest held by a Financial Institution:
(a) if Yield for such Purchaser Interest is calculated on the basis of the LIBO Rate, a period of one, two, three, four or six months, commencing on a Business Day selected by Seller or the applicable Financial Institution pursuant to this Agreement. Such Tranche Period shall end on the day in the applicable succeeding calendar month which corresponds numerically to the beginning day of such Tranche Period, provided, however, that if there is no such numerically corresponding day in such succeeding month, such Tranche Period shall end on the last Business Day of such succeeding month; or
(b) if Yield for such Purchaser Interest is calculated on the basis of the Alternative Base Rate, a period commencing on a Business Day selected by Seller and agreed to by the applicable Financial Institution, provided no such period shall exceed one month.
If any Tranche Period would end on a day which is not a Business Day, such Tranche Period shall end on the next succeeding Business Day, provided, however, that in the case of Tranche Periods corresponding to the LIBO Rate, if such next succeeding Business Day falls in a new month, such Tranche Period shall end on the immediately preceding Business Day. In the case of any Tranche Period for any Purchaser Interest which commences before the Amortization Date and would otherwise end on a date occurring after the Amortization Date, such Tranche Period
Exh. I-17
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
shall end on the Amortization Date. The duration of each Tranche Period which commences after the Amortization Date shall be of such duration as selected by the applicable Financial Institution.
“Transaction Documents” means, collectively, this Agreement, each Purchase Notice, the Receivables Sale Agreement, each Collection Account Agreement, the Fee Letters, the Subordinated Note (as defined in the Receivables Sale Agreement) and all other instruments, documents and agreements executed and delivered in connection herewith.
“UCC” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.
“Weekly Report” means a report, in form and substance acceptable to the Agent (appropriately completed), furnished by the Servicer to the Agent pursuant to Section 8.5.
“Weekly Reporting Condition” means that either (i) the rating of Avnet’s Long-Term Debt is lower than BBB- by S&P and lower than Baa3 by Moody’s or (ii) no rating for Avnet’s Long-Term Debt is available from either Moody’s or S&P.
“WFB” means Wells Fargo Bank, National Association, a national banking association and its successors and assigns.
“WFB Company” means Wells Fargo Bank, National Association, a national banking association and its successors and assigns.
“Yield” means for each respective Tranche Period relating to Purchaser Interests of the Financial Institutions, an amount equal to the product of the applicable Discount Rate for each Purchaser Interest multiplied by the Capital of such Purchaser Interest for each day elapsed during such Tranche Period, annualized on a 360 day basis.
All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9. All section references herein to the UCC shall include all successor sections under any subsequent version or amendment to any Article of the UCC.
Exh. I-18
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
EXHIBIT II
FORM OF PURCHASE NOTICE
[Date]
JPMorgan Chase Bank, N.A.,
as Agent
10 S Dearborn St, 16th Floor
Chicago, Illinois 60603
Attention: Asset Backed Securities Conduit Group
ABS.Treasury.Dept@jpmorgan.com
Attention:_______
Re: PURCHASE NOTICE
Ladies and Gentlemen:
Reference is hereby made to the Third Amended and Restated Receivables Purchase Agreement, dated as of February 27, 2017, by and among Avnet Receivables Corporation, a Delaware corporation (the “Seller”), Avnet, Inc., as Servicer, the Financial Institutions, the Companies and JPMorgan Chase Bank, N.A., as Agent (as amended, restated, supplemented or otherwise modified from time to time the “Receivables Purchase Agreement”). Capitalized terms used herein shall have the meanings assigned to such terms in the Receivables Purchase Agreement.
The Agent is hereby notified of the following Incremental Purchase:
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Purchase Price: |
$ |
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Date of Purchase: |
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Requested Discount Rate: |
[LIBO Rate] [Alternative Base Rate] |
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Requested Tranche Period: |
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Please credit the Purchase Price in immediately available funds to our Facility Account [and then wire-transfer the Purchase Price in immediately available funds on the above-specified date of purchase to]:
[Account Name]
[Account No.]
[Bank Name & Address]
[ABA #]
Reference:
Telephone advice to: [Name] @ tel. No. ( )
Please advise [Name] at telephone no ( ) _________________ if any Company will not be making this purchase.
In connection with the Incremental Purchase to be made on the above listed “Date of Purchase” (the “Purchase Date”), Seller hereby certifies that the following statements are true on the date hereof, and will be true on the Purchase Date (before and after giving effect to the proposed Incremental Purchase):
Exh. II-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
(i)the representations and warranties of Seller set forth in Section 5.1 of the Receivables Purchase Agreement are true and correct on and as of the Purchase Date as though made on and as of such date;
(ii)no event has occurred and is continuing, or would result from the proposed Incremental Purchase, that will constitute an Amortization Event or a Potential Amortization Event;
(iii)the Facility Termination Date has not occurred, the Aggregate Capital does not exceed the Purchase Limit and the aggregate Purchaser Interests do not exceed 97% or, if the Purchaser Interest Condition is existing on the date hereof and on the Purchase Date, 100%; and
(iv)the amount of Aggregate Capital is $_________ after giving effect to the Incremental Purchase to be made on the Purchase Date.
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Very truly yours, |
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AVNET RECEIVABLES CORPORATION |
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Exh. II-2
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
EXHIBIT III
JURISDICTIONS OF ORGANIZATION; LOCATIONS OF RECORDS; ORGANIZATIONAL NUMBER(S); FEDERAL EMPLOYER IDENTIFICATION NUMBER(S); OTHER NAMES
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SERVICER: |
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Jurisdiction of Organization: |
New York |
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Location(s) of Records: |
2211 South 47th Street |
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Phoenix, Arizona 85034 |
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Organizational Number: |
None |
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Federal Employer |
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Identification Number: |
11-1890605 |
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Other Names: |
None |
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SELLER: |
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Jurisdiction of Organization: |
Delaware |
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Location(s) of Records: |
2211 South 47th Street |
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Phoenix, Arizona 85034 |
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Organizational Number: |
3406901 |
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Federal Employer |
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Identification Number: |
86-1034377 |
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Other Names: |
None |
Exh. III-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
EXHIBIT IV
NAMES OF COLLECTION BANKS; COLLECTION ACCOUNTS
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Lock-Box |
Related Collection Account |
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1.Bank of America, N.A. Ms. Cindy Hastings 555 S. Flower Street, 3rd Floor Los Angeles, California 90071
Lock-Boxes
P.O. Box 847722 Dallas, Texas 75202-7722 |
Deposit Account Number: 3752134661 |
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2.JPMorgan Chase Bank, N.A.
Carol Willoughby 560 Mission Street, Floor 03 San Francisco, CA, 94105-2907
Lock-Boxes
P.O. Box #100340 Pasadena, California 91189-0340
P.O. Box #70390 Chicago, Illinois 60673-0390 |
Lock-Box Account No.: 59-37116 |
Exh. IV-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
EXHIBIT V
FORM OF COMPLIANCE CERTIFICATE
To: JPMorgan Chase Bank, N.A., as Agent
This Compliance Certificate is furnished pursuant to that certain Third Amended and Restated Receivables Purchase Agreement, dated as of February 27, 2017, among Avnet Receivables Corporation (the “Seller”), Avnet, Inc. (the “Servicer”), the Purchasers party thereto and JPMorgan Chase Bank, N.A., as agent for such Purchasers (as the same may be amended, supplemented, restated or otherwise modified from time to time, the “Agreement”). Capitalized terms used and not otherwise defined herein are used with the meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected of [Insert name of applicable Seller Party] (the “Applicable Party”).
2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Applicable Party and its Subsidiaries during the accounting period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Amortization Event or Potential Amortization Event during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth in paragraph 5 below.
4. Schedule I attached hereto sets forth financial data and computations evidencing the compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct.
5. Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Applicable Party has taken, is taking, or proposes to take with respect to each such condition or event:
6. As of the date hereof, the jurisdiction of organization of Seller is Delaware, the jurisdiction of organization of the Servicer is New York, each of Seller and the Servicer is a “registered organization” (within the meaning of Section 9-102 of the UCC in effect in Delaware or New York, as applicable) and neither Seller or the Servicer has changed its jurisdiction of organization since June 28, 2001.
Exh. V-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this ____ day of ________, ____.
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Exh. V-2
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
SCHEDULE I TO COMPLIANCE CERTIFICATE
A. Schedule of Compliance as of __________, ____ with Section ___ of the Agreement. Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.
This schedule relates to the month ended:
Exh. V-3
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
EXHIBIT VI
FORM OF COLLECTION ACCOUNT AGREEMENT
[On letterhead of Originator]
_____________, _____
[Lock-Box Bank/Concentration Bank/Depositary Bank]
Re:[Name of Originator]
Ladies and Gentlemen:
Reference is hereby made to P.O. Box # in [city, state, zip code] (the “Lock-Box”) of which you have exclusive control for the purpose of receiving mail and processing payments therefrom pursuant to that certain [name of lock-box agreement] between you and Avnet, Inc. (the “Company”) dated (the “Agreement”). You hereby confirm your agreement to perform the services described therein. Among the services you have agreed to perform therein, is to endorse all checks and other evidences of payment, and credit such payments to the Company’s checking account no. maintained with you in the name of the Company (the “Lock-Box Account”). You hereby confirm and agree that the Lock-Box Account is a “deposit account” within the meaning of Section 9-102(a)(29) of the UCC.
The Company hereby informs you that pursuant to that certain Receivables Sale Agreement, dated as of ______ __, ____ between the Company and Avnet Receivables Corporation (the “Seller”), all of the Company’s right, title and interest in and to, and exclusive ownership and control of, the Lock-Box and the Lock-Box Account has been transferred to Seller. The Company and Seller hereby request that the name of the Lock-Box Account be changed to “[Avnet, Inc.], as Servicer.”
The Company and Seller hereby irrevocably instruct you, and you hereby agree, that upon receiving notice from JPMorgan Chase Bank, N.A. (“JPM Chase”) in the form attached hereto as Annex A: (i) the name of the Lock-Box Account will be changed to JPM Chase for itself and as agent (or any designee of JPM Chase) and JPM Chase will have exclusive ownership of and access to the Lock-Box and the Lock-Box Account, and neither the Company, Seller, nor any of their respective affiliates will have any control of the Lock-Box or the Lock-Box Account or any access thereto, (ii) you will either continue to send the funds from the Lock-Box to the Lock-Box Account, or will redirect the funds as JPM Chase may otherwise request, (iii) you will transfer monies on deposit in the Lock-Box Account, at any time, as directed by JPM Chase and otherwise comply with all instructions received from JPM Chase with respect to the Lock-Box and the Lock-Box Account without further consent by Company, Seller or any other person or entity, (iv) all services to be performed by you under the Agreement will be performed on behalf of JPM Chase, and (v) all correspondence or other mail which you have agreed to send to the Company or Seller will be sent to JPM Chase at the following address:
JPMorgan Chase Bank, N.A.
10 S Dearborn St, 16th Floor
Chicago, Illinois 60603
Attention: Asset Backed Securities Conduit Group
Moreover, upon such notice, JPM Chase for itself and as agent will have all rights and remedies given to the Company (and Seller, as the Company’s assignee) under the Agreement. Seller agrees, however, to continue to pay all fees and other assessments due thereunder at any time.
You hereby acknowledge that monies deposited in the Lock-Box Account or any other account established with you by JPM Chase for the purpose of receiving funds from the Lock-Box are subject to the liens of
Exh. VI-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
JPM Chase for itself and as agent, and will not be subject to deduction, set-off, banker’s lien or any other right you or any other party may have against the Company or Seller.
THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS. This letter agreement may be executed in any number of counterparts and all of such counterparts taken together will be deemed to constitute one and the same instrument.
Regardless of any provisions in any other agreement, for purposes of the Uniform Commercial Code as in effect in the State of Illinois, Illinois shall be deemed to be your jurisdiction (within the meaning of Section 9-304 of the UCC) and the Lock-Box Account shall be governed by the laws of the State of Illinois. This letter agreement may be executed in any number of counterparts and all of such counterparts taken together will be deemed to constitute one and the same instrument.
This letter agreement contains the entire agreement between the parties, and may not be altered, modified, terminated or amended in any respect, nor may any right, power or privilege of any party hereunder be waived or released or discharged, except upon execution by all parties hereto of a written instrument so providing. In the event that any provision in this letter agreement is in conflict with, or inconsistent with, any provision of the Agreement, this letter agreement will exclusively govern and control. Each party agrees to take all actions reasonably requested by any other party to carry out the purposes of this letter agreement or to preserve and protect the rights of each party hereunder.
Exh. VI-2
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Please indicate your agreement to the terms of this letter agreement by signing in the space provided below. This letter agreement will become effective immediately upon execution of a counterpart of this letter agreement by all parties hereto.
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Very truly yours, |
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AVNET, INC. |
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AVNET RECEIVABLES CORPORATION |
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this day of |
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JPMORGAN CHASE BANK, N.A., as Agent |
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Exh. VI-3
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
ANNEX A
FORM OF NOTICE
[On letterhead of JPM Chase]
_____________, _____
[Collection Bank/Depositary Bank/Concentration Bank]
Re:Avnet. Inc./Avnet Receivables Corporation
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights pursuant to that certain letter agreement among Avnet, Inc., Avnet Receivables Corporation, you and us, to have the name of, and to have exclusive ownership and control of, account number (the “Lock-Box Account”) maintained with you, transferred to us. [Lock-Box Account will henceforth be a zero-balance account, and funds deposited in the Lock-Box Account should be sent at the end of each day to .] You have further agreed to perform all other services you are performing under that certain agreement dated between you and Avnet, Inc. on our behalf.
We appreciate your cooperation in this matter.
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JPMORGAN CHASE BANK, N.A. |
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Annex A-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
EXHIBIT VII
FORM OF ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this “Assignment Agreement”) is entered into as of the ___ day of ____________, ____, by and between _____________________ (“Assignor”) and __________________ (“Assignee”).
PRELIMINARY STATEMENTS
A.This Assignment Agreement is being executed and delivered in accordance with Section 12.1(b) of that certain Third Amended and Restated Receivables Purchase Agreement, dated as of February 27, 2017, by and among Avnet Receivables Corporation, as Seller, Avnet, Inc., as Servicer, the Companies party thereto, the Financial Institutions party thereto and JPMorgan Chase Bank, N.A., as Agent (as amended, modified or restated from time to time, the “Purchase Agreement”). Capitalized terms used and not otherwise defined herein are used with the meanings set forth or incorporated by reference in the Purchase Agreement.
B.Assignor is a Financial Institution party to the Purchase Agreement, and Assignee wishes to become a Financial Institution thereunder; and
C.Assignor is selling and assigning to Assignee an undivided ____________% (the “Transferred Percentage”) interest in all of Assignor’s rights and obligations under the Purchase Agreement and the Transaction Documents, including, without limitation, Assignor’s Commitment and (if applicable) the Capital of Assignor’s Purchaser Interests as set forth herein.
AGREEMENT
The parties hereto hereby agree as follows:
1.The sale, transfer and assignment effected by this Assignment Agreement shall become effective (the “Effective Date”) two (2) Business Days (or such other date selected by the Agent in its sole discretion) following the date on which a notice substantially in the form of Schedule II to this Assignment Agreement (“Effective Notice”) is delivered by the Agent to the Company in the Assignor’s and Assignee’s Purchaser Group, Assignor and Assignee. From and after the Effective Date, Assignee shall be a Financial Institution party to the Purchase Agreement for all purposes thereof as if Assignee were an original party thereto and Assignee agrees to be bound by all of the terms and provisions contained therein.
2.If Assignor has no outstanding Capital under the Purchase Agreement, on the Effective Date, Assignor shall be deemed to have hereby transferred and assigned to Assignee, without recourse, representation or warranty (except as provided in paragraph 6 below), and the Assignee shall be deemed to have hereby irrevocably taken, received and assumed from Assignor, the Transferred Percentage of Assignor’s Commitment and all rights and obligations associated therewith under the terms of the Purchase Agreement, including, without limitation, the Transferred Percentage of Assignor’s future funding obligations under Article I of the Purchase Agreement.
3.If Assignor has any outstanding Capital under the Purchase Agreement, at or before 12:00 noon, local time of Assignor, on the Effective Date Assignee shall pay to Assignor, in immediately available funds, an amount equal to the sum of (i) the Transferred Percentage of the outstanding Capital of Assignor’s Purchaser Interests (such amount, being hereinafter referred to as the “Assignee’s Capital”); (ii) all accrued but unpaid (whether or not then due) Yield attributable to Assignee’s Capital; and (iii) accruing but unpaid fees and other costs and expenses payable in respect of Assignee’s Capital for the period commencing upon each date such unpaid amounts commence accruing, to and including the Effective Date (the “Assignee’s Acquisition Cost”); whereupon, Assignor shall be deemed to have sold, transferred and assigned to Assignee, without recourse, representation or warranty (except as provided in paragraph 6 below), and Assignee shall be deemed to have hereby
Exh. VII-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
irrevocably taken, received and assumed from Assignor, the Transferred Percentage of Assignor’s Commitment and the Capital of Assignor’s Purchaser Interests (if applicable) and all related rights and obligations under the Purchase Agreement and the Transaction Documents, including, without limitation, the Transferred Percentage of Assignor’s future funding obligations under Article I of the Purchase Agreement.
4.Concurrently with the execution and delivery hereof, Assignor will provide to Assignee copies of all documents requested by Assignee which were delivered to Assignor pursuant to the Purchase Agreement.
5.Each of the parties to this Assignment Agreement agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Assignment Agreement.
6.By executing and delivering this Assignment Agreement, Assignor and Assignee confirm to and agree with each other, the Agent and the other Financial Institutions in the Assignor’s and Assignee’s Purchaser Group as follows: (a) other than the representation and warranty that it has not created any Adverse Claim upon any interest being transferred hereunder, Assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made by any other Person in or in connection with the Purchase Agreement or the Transaction Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of Assignee, the Purchase Agreement or any other instrument or document furnished pursuant thereto or the perfection, priority, condition, value or sufficiency of any collateral; (b) Assignor makes no representation or warranty and assumes no responsibility with respect to the financial condition of Seller, any Obligor, any Affiliate of Seller or the performance or observance by Seller, any Obligor, any Affiliate of Seller of any of their respective obligations under the Transaction Documents or any other instrument or document furnished pursuant thereto or in connection therewith; (c) Assignee confirms that it has received a copy of the Purchase Agreement and copies of such other Transaction Documents, and other documents and information as it has requested and deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (d) Assignee will, independently and without reliance upon the Agent, any Company, Seller or any other Financial Institution or Purchaser and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Purchase Agreement and the Transaction Documents; (e) Assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Transaction Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (f) Assignee agrees that it will perform in accordance with their terms all of the obligations which, by the terms of the Purchase Agreement and the other Transaction Documents, are required to be performed by it as a Financial Institution (including, without limitation, as a Related Financial Institution) or, when applicable, as a Purchaser.
7.Each party hereto represents and warrants to and agrees with the Agent that it is aware of and will comply with the provisions of the Purchase Agreement, including, without limitation, Article I and Sections 4.1, and 13.6 thereof.
8.Schedule I hereto sets forth the revised Commitment of Assignor, the Company for which Assignee shall act as a Related Financial Institution and the Commitment of Assignee, as well as administrative information with respect to Assignee.
9.THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
10. Assignee hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of all senior indebtedness for borrowed money of any Company, it will not institute against, or join any other Person in instituting against, any Company 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.
Exh. VII-2
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to be executed by their respective duly authorized officers of the date hereof.
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[ASSIGNOR] |
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[ASSIGNEE] |
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Exh. VII-3
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
SCHEDULE I TO ASSIGNMENT AGREEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
Date: _______________, ____
Transferred Percentage: ________%
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B-2 |
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Assignor |
Commitment (prior to giving effect to the Assignment Agreement) |
Commitment (after giving effect to the Assignment Agreement) |
Outstanding Capital (if any) |
Ratable Share of Outstanding Capital |
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Outstanding Capital (if any) |
Ratable Share of Outstanding Capital |
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Assignee is a Related Financial Institution for: _____________________
Address for Notices
Attention:
Phone:
Fax:
Exh. VII-4
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
SCHEDULE II TO ASSIGNMENT AGREEMENT
EFFECTIVE NOTICE
TO:________________________, Assignor
________________________
________________________
________________________
TO:________________________, Assignee
________________________
________________________
________________________
The undersigned, as Agent under the Third Amended and Restated Receivables Purchase Agreement, February 27, 2017, by and among Avnet Receivables Corporation, a Delaware corporation, Avnet, Inc., as Servicer, the Companies party thereto, the Financial Institutions party thereto and JPMorgan Chase Bank, N.A., as Agent (as amended, modified or restated from time to time, the “Purchase Agreement”), hereby acknowledges receipt of executed counterparts of a completed Assignment Agreement dated as of ____________, ____ between __________________, as Assignor, and __________________, as Assignee. Terms defined in such Assignment Agreement are used herein as therein defined.
1.Pursuant to such Assignment Agreement, you are advised that the Effective Date will be ______________, ____.
2.The Company in the Assignor’s Purchaser Group hereby consents to the Assignment Agreement as required by Section 12.1(b) of the Purchase Agreement.
[3.Pursuant to such Assignment Agreement, the Assignee is required to pay $____________ to Assignor at or before 12:00 noon (local time of Assignor) on the Effective Date in immediately available funds.]
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JPMORGAN CHASE BANK, N.A., |
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Exh. VII-5
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
EXHIBIT VIII
CREDIT AND COLLECTION POLICY
See Attached
Exh. VIII-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
EXHIBIT IX
FORM OF CONTRACT(S)
See Attached
Exh. IX-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
EXHIBIT X
FORM OF MONTHLY REPORT
The attached Monthly Report is a true and accurate accounting pursuant to the terms of the Third Amended and Restated Receivables Purchase Agreement, dated as of February 27, 2017 (as the same may be amended, supplemented, restated or otherwise modified from time to time, the “Agreement”), by and among Avnet Receivables Corporation (the “Seller”), Avnet, Inc. (the “Servicer”), the Purchasers party thereto and JPMorgan Chase Bank, N.A., as agent for such Purchasers, and I have no knowledge of the existence of any conditions or events which constitute an Amortization Event or Potential Amortization Event, as each such term is defined under the Agreement, during or at the end of the accounting period covered by this monthly report or as of the date of this certificate, except as set forth below.
By:______________________
Name:___________________
Title:____________________
Company Name:___________
Date:____________________
Exh. X-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
EXHIBIT XI
COLLATERAL DESCRIPTION
All assets and personal property of the Debtor now owned or hereafter acquired and wherever located.
You are hereby notified that any purchase of or any interest in any chattel paper or instruments of the Debtor covered by this financing statement will violate the rights of the Secured Party.
Exh. XI-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
SCHEDULE A
COMMITMENTS, COMPANY PURCHASE LIMITS
AND RELATED FINANCIAL INSTITUTIONS
Commitments of Financial Institutions
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Financial Institution |
Commitment |
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Chariot Funding LLC |
$76,500,000.00 |
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The Bank of Nova Scotia |
$76,500,000.00 |
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The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch |
$51,000,000.00 |
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PNC Bank, National Association |
$50,000,000.00 |
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Sumitomo Mitsui Banking Corporation |
$51,000,000.00 |
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Branch Banking and Trust Company |
$25,000,000.00 |
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Wells Fargo Bank, National Association |
$75,000,000.00 |
Company Purchase Limits and
Related Financial Institutions of Companies
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Company |
Company Purchase Limit |
Related Financial Institution(s) |
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Chariot Funding LLC |
$75,000,000.00 |
Chariot Funding LLC |
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Liberty Street Funding LLC |
$75,000,000.00 |
The Bank of Nova Scotia |
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Victory Receivables Corporation |
$50,000,000.00 |
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch |
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PNC Bank, National Association |
$50,000,000.00 |
PNC Bank, National Association |
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Manhattan Asset Funding Company LLC |
$50,000,000.00 |
Sumitomo Mitsui Banking Corporation |
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Branch Banking and Trust Company |
$25,000,000.00 |
Branch Banking and Trust Company |
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Wells Fargo Bank, National Association |
$75,000,000.00 |
Wells Fargo Bank, National Association |
A-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
SCHEDULE B
DOCUMENTS TO BE DELIVERED
TO THE AGENT, THE AMENDMENT DATE FINANCIAL INSTITUTIONS AND THE AMENDMENT DATE COMPANIES ON OR PRIOR TO THE AMENDMENT DATE
1.Executed copies of this Agreement, duly executed by the parties hereto.
2.Executed copies of the Receivables Sale Agreement, duly executed by the parties thereto.
3.Copy of the Resolutions of the Board of Directors of each of Avnet and Seller (to the extent such resolutions are deemed required for Avnet by counsel), certified by its Secretary and authorizing such Person’s execution, delivery and performance of this Agreement, the Receivables Sale Agreement and the other documents to be delivered by it hereunder.
4.Articles or Certificate of Incorporation of each of Avnet and Seller and certified by the Secretary of State of its jurisdiction of incorporation on or within thirty (30) days prior to the date hereof.
5.Good Standing Certificate for each Seller Party issued by the Secretaries of State of its state of incorporation and each jurisdiction listed below:
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Seller: Delaware (SOI) |
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Seller: Arizona |
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Avnet: New York (SOI) |
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Avnet: Arizona |
6.A certificate of the Secretary of each of Avnet and Seller certifying (i) the names and signatures of the officers authorized on its behalf to execute this Agreement, the Receivables Sale Agreement and any other documents to be delivered by it hereunder or thereunder and (ii) a copy of such Person’s By-Laws.
7.A copy of search results showing UCC filings filed with the Secretary of State of the State of Delaware from December 13, 2016 through February 9, 2017 naming Seller as debtor.
8.A copy of search results showing UCC filings filed with the Secretary of State of the State of New York from December 14, 2016 through February 1, 2017 naming Avnet as debtor.
9.A favorable opinion of legal counsel for Avnet and Seller reasonably acceptable to the Agent which addresses the following matters and such other matters as the Agent may reasonably request:
--In the event of the bankruptcy of Avnet:
(a)section 362(a) of title 11 of the United States Code would not apply to stay payment to Seller of the amounts collected on the Receivables and proceeds of sale thereof;
(b)the Receivables and proceeds of sale or collections thereof would not constitute property of Avnet’s bankruptcy estate under section 541(a)(1) or (a)(6) of title 11 of the United States Code; and
(c)in a case under title 11 of the United States Code, a creditor or the trustee in bankruptcy of Avnet would not have valid legal grounds to have a court disregard the separate legal existence and corporate form of Seller so as to cause a substantive consolidation of the assets and liabilities of Avnet and Seller.
B-1
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
--Each of Avnet and Seller is a corporation duly incorporated, validly existing, and in good standing under the laws of its state of incorporation.
--Each of Avnet and Seller has all requisite authority to conduct its business in each jurisdiction where failure to be so qualified would have a material adverse effect on such Person’s business.
--Each of Avnet and Seller has all requisite power and authority to execute, deliver and perform all of its obligations under this Agreement, the Receivables Sale Agreement and each other Transaction Document to which it is a party.
--The execution and delivery by each of Avnet and Seller of this Agreement, the Receivables Sale Agreement and each other Transaction Document to which it is a party and its performance of its obligations thereunder have been duly authorized by all necessary corporate action and proceedings on the part of such Person and will not:
(a)require any action by or in respect of, or filing with, any governmental body, agency or official (other than the filing of UCC financing statements); or
(b)contravene, or constitute a default under, any provision of applicable law or regulation or of its articles or certificate of incorporation or bylaws or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Person.
--This Agreement, the Receivables Sale Agreement and each other Transaction Document to which such Person is a party has been duly executed and delivered by such Person and constitutes the legal, valid, and binding obligation of such Person, enforceable in accordance with its terms, except to the extent the enforcement thereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and subject also to the availability of equitable remedies if equitable remedies are sought.
--To the best of the opinion giver’s knowledge, there is no action, suit or other proceeding against Avnet or Seller or any of their respective Affiliates, which would materially adversely affect the business or financial condition of such Person and its Affiliates taken as a whole or which would materially adversely affect the ability of such Person to perform its obligations under any Transaction Document to which it is a party.
--The provisions of the Receivables Sale Agreement are effective to create a valid security interest in favor of Seller in all Receivables, and upon the filing of financing statements, Seller shall acquire a perfected security interest in such Receivables.
--The provisions of this Agreement are effective to create a valid security interest in favor of the Agent for the benefit of the Purchasers in all Receivables, and upon the filing of financing statements, the Agent for the benefit of the Purchasers shall acquire a perfected security interest in such Receivables.
10.Compliance Certificates for Seller, Originator and the Servicer.
11.The Monthly Report for December 2016.
12.A pro forma report containing the information typically included in a Monthly Report, for the month ended January 28, 2017, reflecting (i) only the Receivables recorded as part of general ledger category “company code 0100” or “company code US10” and (ii) the Net Receivables Balance and Aggregate Reserves as the
B-2
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
same would be calculated after giving effect to the amendment and restatement to occur on the Amendment Date.
13.Executed copies of (i) all consents from and authorizations by any Persons and (ii) all waivers and amendments to existing credit facilities, that are necessary in connection with this Agreement or the Receivables Sale Agreement.
B-3
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
SCHEDULE C
COMPUTATION OF CP COSTS
With respect to the Purchaser Interest of the Companies on any day, the CP Costs on such day shall equal the sum of Company Costs for each Company as of such day, where “Company Costs” has the meaning specified below.
“Company Costs” means, with respect to Purchaser Interests of the Companies,:
a.For any Purchaser Interest purchased by the JPM Company, for any day, an amount equal to (i) the product of (A) the Daily/90 Day LIBOR Rate in respect of such day, and (B) the aggregate Capital associated with each Purchaser Interest that shall have been funded by the JPM Company with the issuance of Commercial Paper, divided by (ii) 360. “Daily/90 Day LIBOR Rate” means, for any day, a rate per annum equal to the ninety (90) day London-Interbank Offered Rate appearing on the Bloomberg BBAM (British Bankers Association) Page (or on any successor or substitute page of such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Agent from time to time in accordance with its customary practices for purposes of providing quotations of interest rates applicable to U.S. Dollar deposits in the London interbank market) at approximately 11:00 a.m. (London time) on such day or, if such day is not a Business Day in London, the immediately preceding Business Day in London; provided, however, that if the Daily/90 Day LIBOR Rate as determined herein would be less than zero percent (0.00%) on any day, for purposes of this Agreement, such rate shall be deemed to be zero percent (0.00%) for such day. In the event that such rate is not available on any day at such time for any reason, then the “Daily/90 Day LIBOR Rate” for such day shall be the rate at which ninety (90) day U.S. Dollar deposits of $5,000,000 are offered by the principal London office of the Agent in immediately available funds in the London interbank market at approximately 11:00 a.m. (London time) on such day; and if the Agent is for any reason unable to determine the Daily/90 Day LIBOR Rate in the foregoing manner or has determined in good faith that the Daily/90 Day LIBOR Rate determined in such manner does not accurately reflect the cost of acquiring, funding or maintaining a Purchaser Interest, the Daily/90 Day LIBOR Rate for such day shall be the Alternative Base Rate.
b.For any Purchaser Interest purchased by the Scotia Company, for any day, the per annum rate equivalent to the “weighted average cost” (as defined below) related to the issuance of Commercial Paper that is allocated, in whole or in part, to fund the Capital of such Purchaser Interest (and which may also be allocated in part to the funding of other assets of the Scotia Company); provided, however, that if any component of such rate is a discount rate in calculating the Company Costs for the Capital of such Purchaser Interest for such date, the rate used to calculate such component of such rate shall be a rate resulting from converting such discount rate to an interest bearing equivalent rate per annum. For the purposes of this paragraph (b), the “weighted average cost” shall consist of (x) the actual interest rate paid to purchasers of Commercial Paper issued by the Scotia Company, (y) the costs associated with the issuance of such Commercial Paper (including dealer fees and commissions to placement agents), and (z) interest on other borrowing or funding sources by the Scotia Company, including to fund small or odd dollar amounts that are not easily accommodated in the commercial paper market. For each Settlement Period, the Scotia Company shall calculate its aggregate Company Costs for such Settlement Period and report such Company Costs to the Agent pursuant to Section 3.3 of this Agreement.
c.For any Purchaser Interest purchased by the SMBC Company, for any day, the sum of (i) discount or yield accrued on Pooled Commercial Paper (as defined below) on such day, plus (ii) any and all accrued commissions in respect of placement agents and Commercial Paper dealers, and issuing and paying agent fees incurred, in respect of such Pooled Commercial Paper for such day, plus (iii) other costs associated with funding small or odd-lot amounts with respect to all receivable
C-1
11963665-NYCSR07A - MSW
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
purchase facilities which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income net of expenses received on such day from investment of collections received under all receivable purchase facilities funded substantially with Pooled Commercial Paper, minus (v) any payment received on such day net of expenses in respect of broken funding costs related to the prepayment of any purchaser interest of the SMBC Company pursuant to the terms of any receivable purchase facilities funded substantially with Pooled Commercial Paper. In addition to the foregoing costs, if Seller shall request any Incremental Purchase during any period of time determined by the SMBC Company (or by the SMBC Company’s agent on its behalf) in its sole discretion to result in incrementally higher Company Costs with respect to the SMBC Company applicable to such Incremental Purchase by the SMBC Company, the Capital associated with any such Incremental Purchase shall, during such period, be deemed to be funded by the SMBC Company in a special pool (which may include capital associated with other receivable purchase facilities) for purposes of determining such additional Company Costs applicable only to such special pool and charged each day during such period against such Capital. Each Purchaser Interest funded substantially with Pooled Commercial Paper will accrue Company Costs with respect to the SMBC Company each day on a pro rata basis, based upon the percentage share the Capital in respect of such Purchaser Interest represents in relation to all assets held by the SMBC Company and funded substantially with Pooled Commercial Paper. For the purposes of this paragraph (d), “Pooled Commercial Paper” means Commercial Paper notes of the SMBC Company subject to any particular pooling arrangement by the SMBC Company, but excluding Commercial Paper issued by the SMBC Company for a tenor and in an amount specifically requested by any Person in connection with any agreement effected by the SMBC Company. For each Settlement Period, the SMBC Company shall calculate its aggregate Company Costs for such Settlement Period and report such Company Costs to the Agent pursuant to Section 3.3 of this Agreement.
d.For any Purchaser Interest purchased by the BTMU Company, for any day, the sum of (i) discount or yield accrued on Pooled Commercial Paper (as defined below) on such day, plus (ii) any and all accrued commissions in respect of placement agents and Commercial Paper dealers, and issuing and paying agent fees incurred, in respect of such Pooled Commercial Paper for such day, plus (iii) other costs associated with funding small or odd-lot amounts with respect to all receivable purchase facilities which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income net of expenses received on such day from investment of collections received under all receivable purchase facilities funded substantially with Pooled Commercial Paper, minus (v) any payment received on such day net of expenses in respect of broken funding costs related to the prepayment of any purchaser interest of the BTMU Company pursuant to the terms of any receivable purchase facilities funded substantially with Pooled Commercial Paper. In addition to the foregoing costs, if Seller shall request any Incremental Purchase during any period of time determined by the BTMU Company (or by the BTMU Company’s agent on its behalf) in its sole discretion to result in incrementally higher Company Costs with respect to the BTMU Company applicable to such Incremental Purchase by the BTMU Company, the Capital associated with any such Incremental Purchase shall, during such period, be deemed to be funded by the BTMU Company in a special pool (which may include capital associated with other receivable purchase facilities) for purposes of determining such additional Company Costs applicable only to such special pool and charged each day during such period against such Capital. Each Purchaser Interest funded substantially with Pooled Commercial Paper will accrue Company Costs with respect to the BTMU Company each day on a pro rata basis, based upon the percentage share the Capital in respect of such Purchaser Interest represents in relation to all assets held by the BTMU Company and funded substantially with Pooled Commercial Paper. For the purposes of this paragraph (e), “Pooled Commercial Paper” means Commercial Paper notes of the BTMU Company subject to any particular pooling arrangement by the BTMU Company, but excluding Commercial Paper issued by the BTMU Company for a tenor and in an amount specifically requested by any Person in connection with any agreement effected by the BTMU Company. For each Settlement Period, the BTMU Company shall calculate its aggregate Company Costs for such Settlement Period and report such Company Costs to the Agent pursuant to Section 3.3 of this Agreement.
C-2
21963665-NYCSR07A - MSW
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
e.For any Purchaser Interest purchased by the WFB Company for any day, an amount equal to (i) the product of (A) the Daily/30 Day LIBOR Rate in respect of such day, and (B) the aggregate Capital associated with each Purchaser Interest that shall have been funded by the WFB Company, as applicable, divided by (ii) 360. “Daily/30 Day LIBOR Rate” means, for any day, a rate per annum equal to the one-month Eurodollar rate for U.S. dollar deposits as reported on the Reuters Screen LIBOR01 Page or any other page that may replace such page from time to time for the purpose of displaying offered rates of leading banks for London interbank deposits in United States dollars, as of 11:00 a.m. (London time) on such day, or if such day is not a Business Day, then the immediately preceding Business Day (or if not so reported, then as determined by WFB, as applicable, from another recognized source for interbank quotation), in each case, changing when and as such rate changes; provided, however, that if the Daily/30 Day LIBOR Rate as determined herein would be less than zero percent (0.00%) on any day, for purposes of this Agreement, such rate shall be deemed to be zero percent (0.00%) for such day.
f.For any Purchaser Interest purchased by the BB&T Company, for any day, an amount equal to (i) the product of (A) Daily/30 Day LIBOR Rate in respect of such day, and (B) the aggregate Capital associated with each Purchaser Interest that shall have been funded by the BB&T Company, divided by (ii) 360. “Daily/30 Day LIBOR Rate” means, for any day, a rate per annum equal to the one-month Eurodollar rate for U.S. dollar deposits as reported on the display designated as Reuters Screen LIBOR01 Page (or such other successor page as may replace Reuters Screen LIBOR01 Page or such other service or services as may be nominated by ICE Benchmark Administration Limited for the purpose of displaying London interbank offered rates for U.S. dollar deposits), as of 11:00 a.m. (London time) on such day, or if such day is not a Business Day in London, then the immediately preceding Business Day in London (or if not so reported, then as determined by BB&T from another recognized source for interbank quotation), in each case, changing when and as such rate changes; provided, however, that if the Daily/30 Day LIBOR Rate as determined herein would be less than zero percent (0.00%) on any day, for purposes of this Agreement, such rate shall be deemed to be zero percent (0.00%) for such day. If BB&T is for any reason unable to determine the Daily/30 Day LIBOR Rate in the foregoing manner or has determined in good faith that the Daily/30 Day LIBOR Rate determined in such manner does not accurately reflect the cost of acquiring, funding or maintaining a Purchaser Interest, the Daily/30 Day LIBOR Rate for such day shall be the Alternative Base Rate.
g.For any Purchaser Interest purchased by the PNC Company, for any day, an amount equal to (i) the product of (A) the Daily/90 Day LIBOR Rate in respect of such day, and (B) the aggregate Capital associated with each Purchaser Interest that shall have been funded by the PNC Company with the issuance of Commercial Paper, divided by (ii) 360. “Daily/90 Day LIBOR Rate” means, for any day, a rate per annum equal to the ninety (90) day London-Interbank Offered Rate appearing on the Bloomberg BBAM (British Bankers Association) Page (or on any successor or substitute page of such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Agent from time to time in accordance with its customary practices for purposes of providing quotations of interest rates applicable to U.S. Dollar deposits in the London interbank market) at approximately 11:00 a.m. (London time) on such day or, if such day is not a Business Day in London, the immediately preceding Business Day in London; provided, however, that if the Daily/90 Day LIBOR Rate as determined herein would be less than zero percent (0.00%) on any day, for purposes of this Agreement, such rate shall be deemed to be zero percent (0.00%) for such day. In the event that such rate is not available on any day at such time for any reason, then the “Daily/90 Day LIBOR Rate” for such day shall be the rate at which ninety (90) day U.S. Dollar deposits of $5,000,000 are offered by the principal London office of the Agent in immediately available funds in the London interbank market at approximately 11:00 a.m. (London time) on such day; and if the Agent is for any reason unable to determine the Daily/90 Day LIBOR Rate in the foregoing manner or has determined in good faith that the Daily/90 Day LIBOR Rate determined in such manner does not accurately reflect the cost of acquiring, funding or maintaining a Purchaser Interest, the Daily/90 Day LIBOR Rate for such day shall be the Alternative Base Rate.
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31963665-NYCSR07A - MSW
Exhibit 10.2
AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
DATED AS OF FEBRUARY 27, 2017
BETWEEN
AVNET, INC.,
as Originator
AND
AVNET RECEIVABLES CORPORATION,
as Buyer
112
TABLE OF CONTENTS
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ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE |
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1.1 |
Purchase of Receivables |
2 |
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1.2 |
Payment for the Purchase |
3 |
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1.3 |
Purchase Price Credit Adjustments |
4 |
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1.4 |
Payments and Computations, Etc. |
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1.5 |
Transfer of Records |
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1.6 |
Characterization |
6 |
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ARTICLE II |
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REPRESENTATIONS AND WARRANTIES |
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2.1 |
Representations and Warranties of Originator |
6 |
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ARTICLE III |
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CONDITIONS OF PURCHASE |
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3.1 |
Conditions Precedent to Purchase |
10 |
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3.2 |
Conditions Precedent to Subsequent Payments |
10 |
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ARTICLE IV |
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COVENANTS |
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4.1 |
Affirmative Covenants of Originator |
10 |
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4.2 |
Negative Covenants of Originator |
15 |
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ARTICLE V |
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TERMINATION EVENTS |
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5.1 |
Termination Events |
16 |
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5.2 |
Remedies |
17 |
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ARTICLE VI |
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INDEMNIFICATION |
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6.1 |
Indemnities by Originator |
18 |
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6.2 |
Other Costs and Expenses |
20 |
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ARTICLE VII |
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MISCELLANEOUS |
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7.1 |
Waivers and Amendments |
20 |
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7.2 |
Notices |
21 |
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7.3 |
Protection of Ownership Interests of Buyer |
21 |
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7.4 |
Confidentiality |
22 |
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7.5 |
Bankruptcy Petition |
23 |
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7.6 |
Limitation of Liability |
23 |
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7.7 |
CHOICE OF LAW |
23 |
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7.8 |
CONSENT TO JURISDICTION |
24 |
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7.9 |
WAIVER OF JURY TRIAL |
24 |
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7.10 |
Integration; Binding Effect; Survival of Terms |
24 |
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7.11 |
Counterparts; Severability; Section References |
25 |
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7.12 |
Subordination |
25 |
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7.13 |
Third Party Beneficiaries |
25 |
ii
Exhibits and Schedules
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Exhibit I |
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Definitions |
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Exhibit II |
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Jurisdictions of Organization; Locations of Records; Organizational Number(s); Federal Employer Identification Numbers(s); Other Names |
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Exhibit III |
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Lock-Boxes; Collection Accounts; Collection Banks |
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Exhibit IV |
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Form of Compliance Certificate |
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Exhibit V |
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Credit and Collection Policy |
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Exhibit VI |
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Collateral Description |
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Exhibit VII |
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Form of Subordinated Note |
iii
AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
THIS AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT, dated as of February 27, 2017, 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 from time to time originates Receivables.
Originator and Buyer are parties to that certain Receivables Sale Agreement, dated as of June 28, 2001 (the “Initial Closing Date”), as last amended by Amendment No. 10 thereto, dated as of December 30, 2016 (the “Existing RSA”), pursuant to which Originator sells and assigns to Buyer, and Buyer purchases 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 desire to amend and restate the Existing RSA, effective as of February 27, 2017 (the “Amendment Date”), on the terms and conditions set forth herein.
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.
Buyer from time to time sells undivided interests in the Receivables and in the associated Related Security and Collections pursuant to that certain Third Amended and Restated Receivables Purchase Agreement, dated as of February 27, 2017 (as the same may from time to time hereafter be amended, supplemented, restated or otherwise modified, the “Purchase Agreement”), among Buyer, Originator, as Servicer, the Companies from time to time party thereto, the Financial Institutions from time to time party thereto and JPMorgan Chase Bank, N.A. or any successor agent appointed pursuant to the terms of the Purchase Agreement, as agent for such Companies 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 Existing RSA is hereby amended and restated in its entirety to read as set forth herein:
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ARTICLE I
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(a) Each of the parties hereto acknowledges and ratifies the prior sales and purchases under the Existing RSA of the Receivables, Related Security relating thereto and Collections thereof existing on June 27, 2001 (the “Initial Cutoff Date”) and thereafter arising from time to time through the Amendment Date, and agrees that the parties’ continuing rights and obligations with respect to such Receivables shall be governed by the terms of this Agreement. 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, in each case to the extent not previously sold, assigned, transferred, set-over and otherwise conveyed under the Existing RSA, all of Originator’s right, title and interest in and to all Receivables existing on the Business Day immediately preceding the Amendment Date (the “Amendment Cutoff Date”) 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 Amendment Date, Buyer shall acquire all of Originator’s right, title and interest in and to all Receivables existing on the Amendment Cutoff Date and thereafter arising through and including the Termination Date, together with all Related Security relating thereto and all Collections thereof, in each case, to the extent not previously acquired under the Existing RSA. 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. |
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(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 (and its assigns) for all representations, warranties, covenants and indemnities made by Originator pursuant to the terms 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 has, and in accordance with Section 4.1(e)(ii), will continue to, identify in its general ledger a legend, reasonably acceptable to Buyer and to the Agent (as Buyer’s assignee), 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 authorize and file such financing or continuation statements, or amendments thereto or assignments thereof, and execute and file such other instruments, documents or notices, as may be necessary or appropriate to perfect and |
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maintain the perfection of Buyer’s 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. |
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(a) The parties acknowledge that the Purchase Price for the sale and purchase of Receivables, Related Security and Collections in existence on the Initial Cutoff Date was paid in full by Buyer to Originator in the following manner: |
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(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, subject to 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 |
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(ii) the balance, by delivery of the proceeds of a subordinated revolving loan from Originator to Buyer (a “Subordinated Loan”). |
The parties acknowledge that the Purchase Price for all Receivables, Related Security and Collections existing prior to the Amendment Cutoff Date and sold and purchased under the Existing RSA has been paid in full by Buyer to Originator.
The Purchase Price for each Receivable coming into existence after the Amendment 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).
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(b) With respect to any Receivables coming into existence after the Amendment 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: |
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 amount of any such Subordinated Loan shall not 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); and
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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 clause second above, 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.
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.
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(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. |
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(d) Although the Purchase Price for each Receivable coming into existence after the Amendment 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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(a) the Outstanding Balance of a Receivable is: |
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(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), |
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(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 |
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(b) any of the representations and warranties set forth in Article II 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 Purchase Price payable by Buyer on any day, then Originator shall pay to Buyer 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.
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(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 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 licensor 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 (or Buyer’s assignee), Originator will use its reasonable efforts to obtain the consent of such third-party licensor. 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. |
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(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 |
5
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. |
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(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. |
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(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 |
6
part. This Agreement and each other Transaction Document to which Originator is a party has been duly executed and delivered by Originator. |
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(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. |
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(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, as amended. 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. |
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(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). |
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(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. |
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(h) Use of Proceeds. No proceeds of any Purchase Price payment hereunder will be used by Originator (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 13 or 14 of the Securities Exchange Act of 1934, as amended. |
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(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 comparable law) of all appropriate jurisdictions to perfect Originator’s ownership interest in each Receivable, its Collections and the Related Security. |
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(j) Perfection. This Agreement, together with the filing of the financing statements contemplated hereby, is effective to transfer to Buyer (and Buyer shall 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 associated with each Receivable, in each case, free and clear of any Adverse Claim, except as created 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 law) of all appropriate jurisdictions to perfect Buyer’s ownership interest in the Receivables, the Related Security and the Collections. |
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(k) Jurisdiction of Organization and Locations of Records. The jurisdiction of organization of Originator and the offices where it keeps all of its Records are located at the address(es) listed on Exhibit II or such other locations of which Buyer has been notified in accordance with Section 4.2(a) in jurisdictions where all action required by Section 4.2(a) and/or Section 7.3(a) has been taken and completed. Originator’s organizational number assigned to it by its jurisdiction of organization and Originator’s Federal Employer Identification Number are correctly set forth on Exhibit II. Originator has not changed its corporate structure or jurisdiction of organization except in accordance with Section 4.2(a). Originator is a New York corporation and is a “registered organization” (within the meaning of Section 9-102 of the UCC in effect in the State of New York). |
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(l) Collections. The conditions and requirements set forth in Section 4.1(j) have at all times been satisfied and duly performed. The names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts of Originator at each Collection Bank and the post office box number of each Lock-Box, are listed on Exhibit III. Originator has not granted any Person, other than Buyer (and its assigns) dominion and control or “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any Lock-Box or Collection Account, or the right to take dominion and control or “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any such Lock-Box or Collection Account at a future time or upon the occurrence of a future event. |
8
Originator has taken all steps necessary to ensure that the Agent has “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) over all of its Collection Accounts and Lock-Boxes. |
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(m) Material Adverse Effect. Since July 2, 2016, no event has occurred that would have a Material Adverse Effect. |
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(n) Names. In the past five (5) years, Originator has not used any corporate names, trade names or assumed names other than as listed on Exhibit II. |
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(o) Ownership of Buyer. Originator owns, directly or indirectly, 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 no options, warrants or other rights to acquire securities of Buyer. |
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(p) Not an Investment Company. Originator is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or any successor statute. |
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(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. |
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(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 the Credit and Collection Policy, except any such material change which has been made in accordance with Section 4.2(c) and as to which Buyer (or its assigns) has been notified in accordance with Section 4.1(a)(vii). |
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(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 Federal Bankruptcy Code. |
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(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). |
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(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. |
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(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 |
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(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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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: |
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(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): |
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(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. |
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(ii) Quarterly Reporting. Within sixty (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. |
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(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. |
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(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. |
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(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 or the Agent, copies of the same. |
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(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 |
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credit quality of any newly created Receivables, requesting Buyer’s consent thereto. |
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(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. |
To the extent any documents required to be delivered pursuant to Section 4.1(a)(i), (ii), (iv) or (v) are documents included in materials otherwise filed with the Securities and Exchange Commission, such documents may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which (i) Originator posts such documents, or provides a link thereto on its corporate website on the Internet; or (ii) such documents are posted on Originator’s behalf on an Internet or intranet website, if any, to which the Buyer and its assigns have access (whether a commercial, third-party website or whether sponsored by Buyer or its assigns); provided that Originator shall deliver paper copies of such documents to Buyer (or its assigns) upon a written request by Buyer (or its assigns) for such documents until the party requesting paper copies delivers a written request to cease delivering paper copies.
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(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: |
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(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. |
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(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. |
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(iv) Defaults Under Other Agreements. The occurrence of a default, an event of default or other event permitting or requiring acceleration under any other financing arrangement pursuant to which Originator is a debtor or an obligor. |
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(v) Downgrade of the Originator. Any downgrade in the rating of any Indebtedness of Originator by Standard and Poor’s Ratings Services or by Moody’s Investors Service, Inc., setting forth the Indebtedness affected and the nature of such change. |
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(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. |
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(d) Audits. Originator will furnish to Buyer (or its assigns) from 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 as requested by Buyer (or its assigns), upon reasonable notice and at the sole cost of Originator, permit Buyer (or its assigns) or its or their respective agents or representatives, as applicable, (i) to examine and 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. |
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(e) Keeping and Marking of Records and Books. |
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(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 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. |
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(ii) Originator will (A) identify in its general ledger a legend, reasonably acceptable to Buyer and 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) mark 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 |
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(y) deliver to Buyer (or its assigns) all Contracts (including, without limitation, all multiple originals of any such Contract) relating to the Receivables. |
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(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. |
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(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). |
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(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 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 §§ 1.1502-33(d) and 1.1552-1. |
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(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 or |
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establish “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) 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. With respect to any Lock-Box or Collection Account, Originator shall take all steps necessary to ensure that the Agent has “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) over such Lock-Box or Collection Account. |
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(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. |
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(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. |
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(l) Segregation of Other Servicer Collected Funds. Originator shall, within six (6) days of the date any Other Servicer Collected Funds are deposited, credited or funded to any Collection Account, (i) specifically identify all such Other Servicer Collected Funds and (ii) cause all Other Servicer Collected Funds to be transferred from the applicable Collection Account. |
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(m) Elimination of Other Servicer Collected Funds. Subject to Section 4.1(l), Originator shall use all reasonable efforts to prevent all Other Servicer Collected Funds from being deposited, credited or otherwise funded to, any and all Collection Accounts. |
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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, Jurisdiction of Organization, Corporate Structure, Offices and Records. Originator will not change its name, identity, jurisdiction of organization or corporate structure (within the meaning of Sections 9-503 and/or 9-507 of the UCC of all applicable jurisdictions) or relocate 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. |
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(b) Change in Payment Instructions to Obligors. Except as may be required by the Agent pursuant to Section 8.2(b) of the Purchase Agreement, 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 |
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and the Agent 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. |
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(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. |
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(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, other than a Permitted Adverse Claim. |
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(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 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. |
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5.1 Termination Events. The occurrence of any one or more of the following events shall constitute a “Termination Event”: |
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(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 |
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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. |
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(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. |
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(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. |
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(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 corporate action to authorize any of the actions set forth in the foregoing clauses (i) or (ii) of this subsection (d). |
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(e) A Change of Control shall occur. |
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(f) (i) the “Consolidated Interest Coverage Ratio” (as defined in the Current Avnet Credit Agreement) as of the end of any period of four fiscal quarters of Originator shall be less than 3.00 to 1.00 or (ii) the “Consolidated Leverage Ratio” (as defined in the Current Avnet Credit Agreement) at any time during any period set forth below shall be greater than 4.00 to 1.00. |
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(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. |
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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. |
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(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; |
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(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 |
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(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
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whether reimbursement therefor would constitute recourse to Originator) relating to or resulting from:
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(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; |
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(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 failure of Originator to keep or perform any of its obligations, express or implied, with respect to any Contract; |
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(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; |
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(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; |
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(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; |
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(vi) the commingling of Collections of Receivables at any time with other funds; |
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(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; |
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(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 sovereignty or otherwise from any legal action, suit or proceeding; |
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(ix) any Termination Event described in Section 5.1(d); |
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(x) any failure to vest and maintain vested in Buyer, or to transfer to Buyer, legal and equitable title to, and ownership of, 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; |
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(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; |
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(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; |
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(xiii) any attempt by any Person to void the Purchase hereunder under statutory provisions or common law or equitable action; and |
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(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. |
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(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 preclude 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 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. |
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(b) No provision of this Agreement may be amended, supplemented, modified or waived except in writing signed by Originator and Buyer, subject in each case to the prior written consent of the Agent and the Required Purchasers. |
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(a) Originator agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that may be necessary or desirable, or that Buyer (or its assigns) may request, to perfect, protect or more fully evidence the interest of Buyer hereunder and the Purchaser Interests, or to enable Buyer (or its assigns) to exercise and enforce their rights and remedies hereunder. Without limiting the foregoing, Originator will, upon the request of Buyer (or its assigns), file such financing or continuation statements, or amendments thereto or assignments thereof, and execute and file such other instruments and documents, that may be necessary or desirable, or that Buyer (or its assigns) may reasonably request, to perfect, protect or evidence the interest of Buyer hereunder and the Purchaser Interests. At any time, Buyer (or its assigns) may, at Originator’s sole cost and expense, direct Originator to notify the Obligors of Receivables of the ownership interests of Buyer under this Agreement and may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to Buyer or its designee. |
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(b) If Originator fails to perform any of its obligations hereunder, Buyer (or its assigns) may (but shall not be required to) perform, or cause performance of, such obligations, and Buyer’s (or such assigns’) costs and expenses incurred in connection therewith shall be payable by Originator as provided in Section 6.2. Originator irrevocably authorizes Buyer (and its assigns) at any time and from time to time in the sole discretion of Buyer (or its assigns), and appoints Buyer (and its assigns) as its attorney(ies)-in-fact, to act on behalf of Originator (i) to authorize on behalf of Originator as debtor and to file financing or continuation statements (and amendments thereto and assignments thereof) necessary or desirable in Buyer’s (or its assigns’) sole discretion to perfect and to maintain the perfection and priority of the interest of Buyer in the Receivables, Related Security, Collections and all other property sold to Buyer hereunder or under the Existing RSA, other than any of the foregoing which have previously been released by the Buyer and its assigns (the collateral in which Buyer continues to maintain an interest, the “Sold Property”) and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Receivables as a financing statement in such offices as Buyer (or its assigns) in their sole discretion deem necessary or desirable to perfect and to maintain the perfection and priority of Buyer’s interests in the Sold Property. Such financing statements may describe the Sold Property in the same |
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manner as described herein or may contain an indication or description of collateral that describes such Sold Property (which may describe the collateral as set forth in Exhibit VI) as Buyer (or its assigns) may determine, in its sole discretion, is reasonably necessary or advisable to ensure the perfection of the security interest in the Sold Property granted to Buyer in connection herewith. The authorization by Originator set forth above is intended to meet all requirements for authorization by a debtor under Article 9 of any applicable enactment of the UCC, including, without limitation, Section 9-509 thereof. The foregoing appointment is coupled with an interest and is irrevocable. |
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(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 each Purchaser 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. |
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(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 Companies 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 or any Purchaser to any rating agency, Funding Source, Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to any Company or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which the Agent or any Financial Institution 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). |
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(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 any Company, (iv) to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, and (v) to the extent required pursuant to any applicable law, rule, regulation, direction, request or order of any judicial, administrative or |
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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 of court or other applicable body. |
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(d) Anything herein to the contrary notwithstanding, Buyer, Originator, each Indemnified Party and any successor or assign of any of the foregoing (and each employee, representative or other agent of any of the foregoing) may disclose to any and all Persons, without limitation of any kind, the “tax treatment” and “tax structure” (in each case, within the meaning of U.S. Treasury Regulation § 1.6011-4) of the transactions contemplated herein and all materials of any kind (including opinions or other tax analyses) that are or have been provided to any of the foregoing relating to such tax treatment or tax structure, and it is hereby confirmed that each of the foregoing have been so authorized since the commencement of discussions regarding the transactions. |
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(a) Originator and Buyer each hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any Company or any Funding Source that is a special purpose bankruptcy remote entity, it will not institute against, or join any other Person in instituting against, any 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. |
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(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. |
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(a) This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with 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 written understandings. |
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(b) This Agreement shall be binding upon and inure to the benefit of Originator, Buyer and their respective successors and permitted assigns (including any trustee in bankruptcy). Originator may not assign any of its rights and obligations hereunder or any interest herein without the prior written consent of Buyer. Buyer may assign at any time its rights and obligations hereunder and interests herein to any other Person without the consent of Originator. Without limiting the foregoing, Originator acknowledges that Buyer, 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 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 |
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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) Sections 7.5 and 7.6 shall be continuing and shall survive any termination of this Agreement. |
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7.13 Third Party Beneficiaries. The Agent and the Purchasers are express third party beneficiaries of this Agreement. |
[SIGNATURE PAGE FOLLOWS]
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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.
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AVNET, INC. |
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By: |
/s/ Kevin Moriarty |
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Name: |
Kevin Moriarty |
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President and Treasurer |
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2211 South 47th Street |
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Phoenix, Arizona 85034 |
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Attention: Treasurer |
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(480) 643-7199 |
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AVNET RECEIVABLES CORPORATION |
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/s/ Kevin Moriarty |
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Kevin Moriarty |
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Senior Vice President, Chief Financial Officer and Assistant Secretary |
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2211 South 47th Street |
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Phoenix, Arizona 85034 |
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Attention: Treasurer |
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(480) 643-7199 |
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I |
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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 this Amended and Restated Receivables Sale Agreement, dated as of February 27, 2017, between Originator and Buyer, as the same may be amended, restated or otherwise modified.
“Amendment Cutoff Date’ has the meaning set forth in Section 1.2(a) of the Agreement.
“Amendment Date” has the meaning set forth in the preamble to the Agreement.
“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, as amended) 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 the credit and collection policies and practices relating to Contracts and Receivables summarized in Exhibit V, as modified from time to time in accordance with this Agreement and the Purchase 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.
Exh. I-1
“Discount Factor” means a percentage calculated to provide Buyer with a reasonable return on its investment in the Receivables after taking account of (i) the time value of money based upon the anticipated dates of collection of the Receivables and the cost to Buyer of financing its investment in the Receivables during such period and (ii) the risk of nonpayment by the Obligors. Originator and Buyer may agree from time to time to 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 of the commencement of a Calculation Period, shall apply only prospectively and shall not affect the Purchase Price payment made prior to the Calculation Period during which Originator and Buyer agree to make such change.
“Existing RSA” has the meaning set forth in the preamble to the Agreement.
“Initial Closing Date” has the meaning set forth in the preamble to the Agreement.
“Initial Cutoff Date” has the meaning set forth in Section 1.1(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 Transaction 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 of any material portion of the Receivables.
“Net Value” means, as of any date of determination, an amount equal to the sum of (i) the aggregate Outstanding Balance of the Receivables at such time, minus (ii) the sum of (A) the Aggregate Capital outstanding at such time, plus (B) the Aggregate Reserves.
“Net Worth” means as of the last Business Day of each Calculation Period 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, plus (ii) the aggregate outstanding principal balance of the Subordinated Loans (including any Subordinated Loan proposed to be made on the date of determination).
“Originator” has the meaning set forth in the preamble to the Agreement.
“Potential Termination Event” means an event which, with the passage of time or the giving of notice, or both, would constitute a Termination Event.
“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
Exh. I-2
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 time 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 merchandise or the rendering of services by Originator, and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto; provided, that ‘Receivable’ shall not include any Excluded Receivable. 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, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless of whether the account debtor or Originator treats such indebtedness, rights or obligations as a separate payment obligation.
“Related Security” means, with respect to any Receivable:
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(xv) all of Originator’s interest in the inventory and goods (including returned or repossessed inventory or goods), if any, the sale of which by Originator gave rise to such Receivable (including as a result of related financing arrangements), and all insurance contracts with respect thereto, |
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(xvi) 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, |
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(xvii) 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, “supporting obligations” (within the meaning of Section 9-102(a) of the UCC of all applicable jurisdictions), and other agreements or arrangements of whatever character from time to time supporting or securing |
Exh. I-3
payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise, |
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(xviii) 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, |
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(xix) all Records related to such Receivable, |
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(xx) all of Originator’s right, title and interest in, to and under each Lock-Box, each Collection Account and each Collection Account Agreement, and |
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(xxi) 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%.
“Settlement Date” means, with respect to each Calculation Period, the date that is the 20th calendar day of the month following such Calculation Period.
“Sold Property” has the meaning set forth in Section 7.3(b) of the Agreement.
“Subordinated Loan” has the meaning set forth in Section 1.2(a) of the Agreement.
“Subordinated Note” means a promissory note in substantially the form of Exhibit VII hereto as more fully described in Section 1.2 of the Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Subscription Agreement” means that certain Stockholder and Subscription Agreement, dated as of June 28, 2001, between Originator and Buyer.
“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 Event set forth in Section 5.1(d), (iii) the Business Day specified in a written notice from Buyer to Originator following the occurrence of any other Termination Event, and (iv) the date which is thirty (30) Business Days after Buyer’s receipt of written notice from Originator that it wishes to terminate the facility evidenced by this Agreement.
“Termination Event” has the meaning set forth in Section 5.1 of the Agreement.
“Transaction Documents” means, collectively, this Agreement, the Purchase Agreement, each Collection Account Agreement, the Subordinated Note, the Subscription Agreement and all other instruments, documents and agreements executed and delivered in connection herewith.
Exh. I-4
All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9. All section references herein to the UCC shall include all successor sections under any subsequent version or amendment to any Article of the UCC.
Exh. I-5
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I |
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Exhibit II
Jurisdictions of Organization;
Locations of Records; Organizational Number(s);
Federal Employer Identification Numbers(s); Other Names
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Jurisdictions of Organization: |
New York |
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Location(s) of Records: |
2211 South 47th Street Phoenix, Arizona 85034 |
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Organizational Number: |
None |
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Federal Employer Identification Number: |
11-1890605 |
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Other Names: |
Not applicable |
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Exh. II-1
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II |
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Exhibit III
Lock-boxes; Collection Accounts; Collection Banks
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Lock-Box |
Related Collection Account |
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1.Bank of America, N.A. Ms. Cindy Hastings 555 S. Flower Street, 3rd Floor Los Angeles, California 90071
Lock-Boxes
P.O. Box 847722 Dallas, Texas 75202-7722 |
Deposit Account Number: 3752134661 |
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2.JPMorgan Chase Bank, N.A. Carol Willoughby 560 Mission Street, Floor 03 San Francisco, CA, 94105-2907
Lock-Boxes
P.O. Box #100340 Pasadena, California 91189-0340
P.O. Box #70390 Chicago, Illinois 60673-0390 |
Lock-Box Account No.: 59-37116 |
Exh. III-1
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III |
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Exhibit IV
Form of Compliance Certificate
This Compliance Certificate is furnished pursuant to that certain Amended and Restated Receivables Sale Agreement, dated as of February 27, 2017, between Avnet, Inc. (“Originator”) and Avnet Receivables Corporation (as the same may be amended, supplemented, restated or otherwise modified from time to time, the “Agreement”). Capitalized terms used and not otherwise defined herein are used with the meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of Originator.
2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of Originator and its Subsidiaries during the accounting period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Termination Event or a Potential Termination Event during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below.
4. Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Originator has taken, is taking, or proposes to take with respect to each such condition or event:
5. As of the date hereof, the jurisdiction of organization of Originator is New York, Originator is a “registered organization” (within the meaning of Section 9-102 of the UCC in effect in New York), and Originator has not changed its jurisdiction of organization since June 28, 2001.
The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this __ day of ________ , 20__.
______________________________
Name
Exh. IV-1
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Exhibit V
Credit and Collection Policy
Exh. V-1
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V |
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Exhibit VI
Collateral Description
The collateral covered by this financing statement consists of all of Debtor’s right, title and interest (now owned or hereafter existing) in, to and under:
(a)all Receivables now existing or hereafter arising;
(b)all Collections;
(c)all Related Security with respect thereto;
(d)each Lock-Box;
(e)each Collection Account;
(f)all other rights and payments relating to the Receivables; and
(g)all proceeds of the foregoing.
As used herein, the following terms have the respective meanings set forth below:
“Agent” means JPMorgan Chase Bank, N.A. in its capacity as agent for the Purchasers under the Receivables Purchase Agreement, together with its successors and assigns.
“Avnet” means Avnet, Inc., a New York corporation.
“Buyer” means Avnet Receivables Corporation, a Delaware corporation.
“Collection Account” means each concentration account, depositary account, lock-box account or similar account in which any Collections are collected or deposited and which is listed on Exhibit IV to the Receivables Purchase Agreement.
“Collection Account Agreement” means an agreement substantially in the form of Exhibit VI to the Receivables Purchase Agreement, or otherwise in a form approved by Agent, among Seller or Originator, as applicable, the Agent and a Collection Bank.
“Collection Bank” means, at any time, any of the banks holding one or more Collection Accounts.
“Collections” means, with respect to any Receivable, all cash collections and other cash proceeds in respect of such Receivable, including, without limitation, all yield, Finance Charges or other related amounts accruing in respect thereof and all cash proceeds of Related Security with respect to such Receivable.
Exh. VI-1
“Companies” means the entities listed on Schedule A to the Receivables Purchase Agreement under the heading “Company”, together with any of their respective successors or assigns.
“Contract” means, with respect to any Receivable, any and all instruments, agreements, invoices or other writings pursuant to which such Receivable arises or which evidences such Receivable.
“Excluded Acquisition” means any direct or indirect acquisition of any business by Originator consummated on or after January 1, 2010.
“Excluded Receivable” means all indebtedness and other obligations owed to Originator or in which Originator 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 merchandise or the rendering of services by Originator and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto, which, in any case:
(i)the account debtor for which is Sirius Computer Solutions, Inc. and such indebtedness or other obligation was originated after May 22, 2015;
(ii)the account debtor for which is Intelbras S.A. Industria de Telecomunicacao Eletronica Brasileira and such indebtedness or other obligation was originated after December 30, 2016;
(iii)both (a) arises in connection with the sale of merchandise or the rendering of services by the business previously conducted by any businesses acquired by Originator in an Excluded Acquisition and (b) is not recorded or maintained in Avnet’s consolidated general ledger accounting records as part of general ledger category “company code 0100” or “company code US10” (other than any Receivables previously coded under “company code 0100” or “company code US10” that have been coded under any other category without the Agent’s prior written consent); or
(iv)was recorded or maintained in Avnet’s consolidated general ledger accounting records as part of general ledger category “company code 1001” immediately prior to February 27, 2017.
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 an Excluded Receivable separate from an Excluded Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; provided, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be an Excluded Receivable regardless of whether the account debtor or Seller treats such indebtedness, rights or obligations as a separate payment obligation.
“Finance Charges” means, with respect to a Contract, any finance, interest, late payment charges or similar charges owing by an Obligor pursuant to such Contract.
Exh. VI-2
“Financial Institutions” means the entities listed on Schedule A to the Receivables Purchase Agreement under the heading “Financial Institutions”, together with any of their respective successors or assigns.
“Lock-Box” means each locked postal box with respect to which a bank who has executed a Collection Account Agreement has been granted exclusive access for the purpose of retrieving and processing payments made on the Receivables and which is listed on Exhibit IV to the Receivables Purchase Agreement.
“Obligor” means a Person obligated to make payments pursuant to a Contract.
“Originator” means Avnet, in its capacity as seller under the Receivables Sale Agreement.
“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
“Purchasers” means each Company and each Financial Institution.
“Receivable” means all indebtedness and other obligations owed to Originator (at the time it arises, and before giving effect to any transfer or conveyance under the Receivables Sale Agreement) or Buyer (after giving effect to the transfers under the Receivables Sale 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 merchandise or the rendering of services by Originator, and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto; provided, that ‘Receivable’ shall not include any Excluded Receivable. 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, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless of whether the account debtor or Originator treats such indebtedness, rights or obligations as a separate payment obligation.
“Receivables Purchase Agreement” means the Third Amended and Restated Receivables Purchase Agreement, dated as of February 27, 2017, by and among Seller, Servicer, the Financial Institutions party thereto, the Companies party thereto, and the Agent, as the same may be amended, restated or otherwise modified and in effect from time to time.
“Receivables Sale Agreement” means the Amended and Restated Receivables Sale Agreement, dated as of February 27, 2017, between Originator and Buyer, as the same may be amended, restated or otherwise modified and in effect from time to time.
“Records” means, with respect to any Receivable, all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes,
Exh. VI-3
disks, punch cards, data processing software and related property and rights) relating to such Receivable, any Related Security therefor and the related Obligor.
“Related Security” 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 of which by Originator gave rise to such Receivable (including as a result of related financing arrangements), and all insurance contracts with respect thereto,
(ii)except to the extent prohibited by the terms of any Contract (unless, and to the extent, such prohibition is ren¬dered 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 ren¬dered ineffective by law, including, without limitation, statutory authority), all guaranties, letters of credit, insurance, “supporting obligations” (within the meaning of Section 9-102(a) of the UCC of all applicable jurisdictions), 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 ren¬dered 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, to and under each Lock-Box, each Collection Account and each Collection Account Agreement, and
(vii)all proceeds of any of the foregoing.
“Seller” means Avnet Receivables Corporation, a Delaware corporation, together with its successors and assigns.
“Servicer” means at any time the Person (which may be the Agent) then authorized pursuant to Article VIII of the Receivables Purchase Agreement to service, administer and collect Receivables.
“UCC” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.
Exh. VI-4
ANY ATTEMPT BY A THIRD PARTY TO ACQUIRE AN INTEREST IN THE COLLATERAL WITHOUT THE PRIOR WRITTEN CONSENT OF THE SECURED PARTY HEREUNDER SHALL VIOLATE THE RIGHTS OF THE SECURED PARTY.
Exh. VI-5
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VI |
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Exhibit VII
Form of Subordinated Note
SUBORDINATED NOTE
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1. Note. FOR VALUE RECEIVED, the undersigned, AVNET RECEIVABLES CORPORATION, a Delaware corporation (“SPV”), hereby unconditionally promises to pay to the order of AVNET, INC., a New York corporation (“Originator”), in lawful money of the United States of America and in immediately available funds, on the date following the Termination Date which is one year and one day after the date on which (i) the Outstanding Balance of all Receivables sold under the “Sale Agreement” referred to below has been reduced to zero and (ii) Originator has paid to the Buyer all indemnities, adjustments and other amounts which may be owed thereunder in connection with the Purchases (the “Collection Date”), the aggregate unpaid principal sum outstanding of all “Subordinated Loans” made from time to time by Originator to SPV pursuant to and in accordance with the terms of that certain Amended and Restated Receivables Sale Agreement dated as of ______________, ____ between Originator and SPV (as amended, restated, supplemented or otherwise modified from time to time, the “Sale Agreement”). Reference to Section 1.2 of the Sale Agreement is hereby made for a statement of the terms and conditions under which the loans evidenced hereby have been and will be made. All terms which are capitalized and used herein and which are not otherwise specifically defined herein shall have the meanings ascribed to such terms in the Sale Agreement. |
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2. Interest. SPV further promises to pay interest on the outstanding unpaid principal amount hereof from the date hereof until payment in full hereof at a rate equal to the Prime Rate; provided, however, that if SPV shall default in the payment of any principal hereof, SPV promises to pay, on demand, interest at the rate of the Prime Rate plus 2.00% per annum on any such unpaid amounts, from the date such payment is due to the date of actual payment. Interest shall be payable on the first Business Day of each month in arrears; provided, however, that SPV may elect on the date any interest payment is due hereunder to defer such payment and upon such election the amount of interest due but unpaid on such date shall constitute principal under this Subordinated Note. The outstanding principal of any loan made under this Subordinated Note shall be due and payable on the Collection Date and may be repaid or prepaid at any time without premium or penalty. |
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3. Principal Payments. Originator is authorized and directed by SPV to enter on the grid attached hereto, or, at its option, in its books and records, the date and amount of each loan made by it which is evidenced by this Subordinated Note and the amount of each payment of principal made by SPV, and absent manifest error, such entries shall constitute prima facie evidence of the accuracy of the information so entered; provided that neither the failure of Originator to make any such entry or any error therein shall expand, limit or affect the obligations of SPV hereunder. |
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4. Subordination. Originator shall have the right to receive, and SPV shall make, any and all payments relating to the loans made under this Subordinated Note provided |
Exh. VII-1
that, after giving effect to any such payment, the aggregate Outstanding Balance of Receivables (as each such term is defined in the Purchase Agreement) owned by SPV at such time exceeds the sum of (a) the Aggregate Unpaids (as defined in the Purchase Agreement) outstanding at such time under the Purchase Agreement, plus (b) the aggregate outstanding principal balance of all loans made under this Subordinated Note. Originator hereby agrees that at any time during which the conditions 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 SPV owing to the Agent or any Purchaser under the Purchase Agreement. The subordination provisions contained herein are for the direct benefit of, and may be enforced by, the Agent and the Purchasers and/or any of their respective assignees (collectively, the “Senior Claimants”) under the Purchase Agreement. Until the date on which all Capital outstanding under the Purchase Agreement has been repaid in full and all other obligations of SPV and/or the Servicer thereunder and under the Fee Letter referenced therein (all such obligations, collectively, the “Senior Claim”) have been indefeasibly paid and satisfied in full, Originator shall not institute against SPV any proceeding of the type described in Section 5.1(d) of the Sale Agreement unless and until the Collection Date has occurred. Should any payment, distribution or security or proceeds thereof be received by Originator in violation of this Section 4, Originator agrees that such payment shall be segregated, received and held in trust for the benefit of, and deemed to be the property of, and shall be immediately paid over and delivered to the Agent for the benefit of the Senior Claimants. |
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5. Bankruptcy; Insolvency. Upon the occurrence of any proceeding of the type described in Section 5.1(d) of the Sale Agreement involving SPV as debtor, then and in any such event the Senior Claimants shall receive payment in full of all amounts due or to become due on or in respect of the Aggregate Capital and the Senior Claim (including “CP Costs” and “Yield” as defined and as accruing under the Purchase Agreement after the commencement of any such proceeding, whether or not any or all of such CP Costs or Yield is an allowable claim in any such proceeding) before Originator is entitled to receive payment on account of this Subordinated Note, and to that end, any payment or distribution of assets of SPV of any kind or character, whether in cash, securities or other property, in any applicable insolvency proceeding, which would otherwise be payable to or deliverable upon or with respect to any or all indebtedness under this Subordinated Note, is hereby assigned to and shall be paid or delivered by the Person making such payment or delivery (whether a trustee in bankruptcy, a receiver, custodian or liquidating trustee or otherwise) directly to the Agent for application to, or as collateral for the payment of, the Senior Claim until such Senior Claim shall have been paid in full and satisfied. |
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6. Amendments. Prior to the indefeasible payment of the Aggregate Unpaids, this Subordinated Note shall not be amended or modified without the prior written consent of the Agent for the benefit of the Purchasers. |
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7. GOVERNING LAW. THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED AT NEW YORK, NEW YORK, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF THE STATE OF NEW YORK. WHEREVER POSSIBLE EACH PROVISION OF THIS SUBORDINATED NOTE SHALL BE INTERPRETED IN SUCH MANNER AS TO BE |
Exh. VII-2
EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS SUBORDINATED NOTE. |
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8. Waivers. All parties hereto, whether as makers, endorsers, or otherwise, severally waive presentment for payment, demand, protest and notice of dishonor. Originator additionally expressly waives all notice of the acceptance by any Senior Claimant of the subordination and other provisions of this Subordinated Note and expressly waives reliance by any Senior Claimant upon the subordination and other provisions herein provided. |
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9. Assignment. This Subordinated Note may not be assigned, pledged or otherwise transferred to any party other than Originator without the prior written consent of the Agent, and any such attempted transfer shall be void. |
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Exh. VII-3
Schedule
to
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
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Date |
Amount of |
Amount of |
Unpaid |
Notation made by |
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1
Exhibit 99.1
![AVNET-INC-sRGB-600x210px[1]](https://cdn.kscope.io/811b34f3538c1a2e07525653d003b280-avt20170303ex9915ef59e001.jpg)
Avnet Completes Sale of Technology Solutions to Tech Data
Creates a unique distribution model in the electronic components industry that supports customers at every stage of the product innovation and lifecycle
Phoenix – February 27, 2017 – Today, Avnet (NYSE: AVT) announced it has completed the sale of its Technology Solutions business to Tech Data Corporation (NASDAQ: TECD). With the divestiture of these operations, Avnet is now solely focused on electronic components and integrated and embedded solutions, supporting its customers, ranging from makers to startups to large technology manufacturers, at every stage of the product lifecycle as they bring their latest innovations to market.
Avnet received approximately $2.4 billion in cash and shares of Tech Data common stock valued at approximately $245 million based on the closing price of Tech Data’s shares on February 25, 2017.
“Today marks a critical stage in the transformation of Avnet. We have doubled down on our electronic components and integrated and embedded solutions business, which is complemented by our reach into a broader market of customers in the idea stage through our recent acquisitions of Premier Farnell and Hackster,” said William Amelio, CEO of Avnet. “We will now be able to focus all of our attention and considerable expertise and scale in supporting our customers at every phase of the product lifecycle with services that offer a time to market advantage. We also have substantial financial resources to further drive our targeted investments in integrated and embedded solutions, IoT and digital platforms to create even more opportunities for makers, entrepreneurs and large manufacturers.”
Avnet’s more than 95-year heritage as a leader in electronic components distribution, as well as its design and supply chain capabilities, are central to the company’s ability to support customers. With Avnet’s strategic approach to acquisitions, the company has greatly enhanced its support for customers at every stage of the product lifecycle, and offers true end-to-end solutions that accelerate a customer’s time to market and seamlessly transitions their products from prototype through to volume production. Avnet’s global workforce, partnerships with the world’s leading technology suppliers, and presence in more than 125 countries provide customers with strength and scale needed to navigate today’s rapidly changing technology industry.
Amelio added, “We wish our former Technology Solutions’ employees well as they start a new and successful chapter of their business history with Tech Data.”
Moving forward, the company will operate globally under the single name Avnet, dispensing with the business unit moniker “Electronics Marketing”.
Forward-Looking Statements
This document contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on management’s current expectations and are subject to uncertainty and changes in facts and circumstances. The forward-looking statements herein include statements addressing future financial and operating results of Avnet and may include words such as “will,” “anticipate,” “intend,” “estimate,” “forecast,” “expect,” “feel,” “believe,” “should,” and other words and terms of similar meaning in connection with any discussions of future operating or financial performance, business prospects or market conditions. Actual results may differ materially from the expectations contained in the forward-looking statements.
The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: the Company’s ability to retain and grow market share and to generate additional cash flow, risks associated with any acquisition activities and the successful integration of acquired companies, an industry down-cycle in semiconductors, IT hardware or software products, declines in sales, changes in business conditions and the economy in general, changes in market demand and pricing pressures, any material changes in the allocation of product or product rebates by suppliers, and other competitive and/or regulatory factors affecting the businesses of Avnet generally.
More detailed information about these and other factors is set forth in Avnet’s filings with the Securities and Exchange Commission, including the Company’s reports on Form 10-K, Form 10-Q and Form 8-K. Except as required by law, Avnet is under no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
For more information on today’s announcement, please visit Avnet Investor Relations.
Follow Avnet on Twitter: @Avnet
Connect with Avnet on LinkedIn: http://www.linkedin.com/company/avnet
Connect with Avnet on Facebook: http://www.facebook.com/AvnetInc
All brands and trade names are trademarks or registered trademarks, and are the properties of their respective owners. Avnet disclaims any proprietary interest in marks other than its own.
About Avnet
From idea to design and from prototype to production, Avnet supports customers at each stage of a product’s lifecycle. A comprehensive portfolio of design and supply chain services makes Avnet the go-to guide for innovators who set the pace for technological change. For nearly a century, Avnet has helped its customers and suppliers around the world realize the transformative possibilities of technology. Learn more about Avnet at www.avnet.com.
Media Relations Contact
Maureen O’Leary
480-643-7499
maureen.oleary@avnet.com
Investor Relations Contact
Vincent Keenan
480-643-7053
vincent.keenan@avnet.com
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On February 27, 2017, Avnet, Inc. (the “Company”) completed the previously announced divestiture of its Technology Solutions operating group (the “TS Business”) to Tech Data Corporation (“Tech Data”) for approximately $2.4 billion in cash, which excludes net working capital and other contractual sales price adjustments, and 2.8 million shares of Tech Data common stock which is valued at $247.2 million using the closing price on February 27, 2017.
The following unaudited pro forma condensed consolidated balance sheet as of December 31, 2016, reflects the Company’s financial position as if the sale of the TS Business had occurred on that date. The following unaudited pro forma condensed consolidated statements of operations for the six months ended December 31, 2016, and the three fiscal years ended July 2, 2016, June 27, 2015, and June 28, 2014, reflect the Company’s results of operations as if the sale of the TS Business had occurred on June 30, 2013. The unaudited pro forma condensed consolidated financial statements do not purport to represent what the actual results of operations or financial position would have been had the divestiture occurred on the dates assumed, nor are they necessarily indicative of future results of operations or financial position.
The unaudited pro forma condensed consolidated financial statements and the accompanying notes are based upon and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended July 2, 2016 filed with the SEC on August 12, 2016, and the Quarterly Report on Form 10-Q for the period ended December 31, 2016 filed with the SEC on January 30, 2017.
The unaudited pro forma condensed consolidated financial statements are presented based on currently available information and reflect certain estimates and assumptions, which are described in the accompanying notes and which management believes are reasonable. The actual results may differ materially from the estimates and assumptions within the accompanying unaudited pro forma condensed consolidated financial statements as a result of several factors, including the completion of the final net working capital adjustments due to changes in net working capital between the pro forma assumptions and the actual closing net working capital at the date of the divestiture and the determination of the final income tax expense from the divestiture.
AVNET, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2016
(UNAUDITED)
|
|
|
As Previously |
|
Pro Forma |
|
|
|
Total |
|
|||
|
|
|
Reported |
|
Adjustments |
|
Note |
|
Pro Forma |
|
|||
|
|
|
(Thousands, except share amounts) |
|
|||||||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,270,142 |
|
$ |
2,260,130 |
|
2b |
|
$ |
3,530,272 |
|
|
Marketable securities |
|
|
— |
|
|
247,232 |
|
2c |
|
|
247,232 |
|
|
Receivables, net |
|
|
2,996,110 |
|
|
— |
|
|
|
|
2,996,110 |
|
|
Inventories |
|
|
2,697,796 |
|
|
— |
|
|
|
|
2,697,796 |
|
|
Prepaid and other current assets |
|
|
59,564 |
|
|
— |
|
|
|
|
59,564 |
|
|
Assets held for sale |
|
|
4,053,487 |
|
|
(4,053,487) |
|
2a |
|
|
— |
|
|
Total current assets |
|
|
11,077,099 |
|
|
(1,546,125) |
|
|
|
|
9,530,974 |
|
|
Property, plant and equipment, net |
|
|
565,108 |
|
|
— |
|
|
|
|
565,108 |
|
|
Goodwill |
|
|
1,098,471 |
|
|
— |
|
|
|
|
1,098,471 |
|
|
Intangible assets, net |
|
|
296,058 |
|
|
— |
|
|
|
|
296,058 |
|
|
Other assets |
|
|
219,259 |
|
|
— |
|
|
|
|
219,259 |
|
|
Total assets |
|
$ |
13,255,995 |
|
$ |
(1,546,125) |
|
|
|
$ |
11,709,870 |
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt |
|
$ |
246,729 |
|
$ |
(86,147) |
|
2d |
|
$ |
160,582 |
|
|
Accounts payable |
|
|
1,774,021 |
|
|
— |
|
|
|
|
1,774,021 |
|
|
Accrued expenses and other |
|
|
456,397 |
|
|
370,000 |
|
2e |
|
|
826,397 |
|
|
Liabilities held for sale |
|
|
2,332,646 |
|
|
(2,332,646) |
|
2a |
|
|
— |
|
|
Total current liabilities |
|
|
4,809,793 |
|
|
(2,048,793) |
|
|
|
|
2,761,000 |
|
|
Long-term debt |
|
|
3,382,431 |
|
|
— |
|
|
|
|
3,382,431 |
|
|
Other liabilities |
|
|
351,909 |
|
|
— |
|
|
|
|
351,909 |
|
|
Total liabilities |
|
|
8,544,133 |
|
|
(2,048,793) |
|
|
|
|
6,495,340 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
4,711,862 |
|
|
502,668 |
|
2d |
|
|
5,214,530 |
|
|
Total liabilities and shareholders’ equity |
|
$ |
13,255,995 |
|
$ |
(1,546,125) |
|
|
|
$ |
11,709,870 |
|
See notes to unaudited pro forma condensed consolidated financial statements
AVNET, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2016
(UNAUDITED)
|
|
|
As Previously |
|
Pro Forma |
|
|
|
|
|
|||
|
|
|
Reported |
|
Adjustments |
|
Note |
|
Pro Forma |
|
|||
|
|
|
(Thousands, except per share amounts) |
|
|||||||||
|
Sales |
|
$ |
8,391,663 |
|
$ |
— |
|
|
|
$ |
8,391,663 |
|
|
Cost of sales |
|
|
7,282,823 |
|
|
— |
|
|
|
|
7,282,823 |
|
|
Gross profit |
|
|
1,108,840 |
|
|
— |
|
|
|
|
1,108,840 |
|
|
Selling, general and administrative expenses |
|
|
795,227 |
|
|
— |
|
|
|
|
795,227 |
|
|
Restructuring, integration and other expenses |
|
|
59,869 |
|
|
— |
|
|
|
|
59,869 |
|
|
Operating income |
|
|
253,744 |
|
|
— |
|
|
|
|
253,744 |
|
|
Other expense, net |
|
|
(50,248) |
|
|
— |
|
|
|
|
(50,248) |
|
|
Interest expense |
|
|
(53,984) |
|
|
— |
|
|
|
|
(53,984) |
|
|
Income from continuing operations before income taxes |
|
|
149,512 |
|
|
— |
|
|
|
|
149,512 |
|
|
Income tax expense |
|
|
49,359 |
|
|
— |
|
|
|
|
49,359 |
|
|
Income from continuing operations |
|
|
100,153 |
|
|
— |
|
|
|
|
100,153 |
|
|
Income from discontinued operations |
|
|
71,908 |
|
|
(71,908) |
|
3 |
|
|
— |
|
|
Net income |
|
$ |
172,061 |
|
$ |
(71,908) |
|
|
|
$ |
100,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.78 |
|
$ |
— |
|
|
|
$ |
0.78 |
|
|
Discontinued operations |
|
|
0.56 |
|
|
(0.56) |
|
3 |
|
|
— |
|
|
Net income per share - basic |
|
$ |
1.34 |
|
|
(0.56) |
|
|
|
|
0.78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.77 |
|
$ |
— |
|
|
|
$ |
0.77 |
|
|
Discontinued operations |
|
|
0.55 |
|
|
(0.55) |
|
3 |
|
|
— |
|
|
Net income per share - basic |
|
$ |
1.32 |
|
|
(0.55) |
|
|
|
|
0.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
127,716 |
|
|
— |
|
|
|
|
127,716 |
|
|
Diluted |
|
|
130,055 |
|
|
— |
|
|
|
|
130,055 |
|
|
Cash dividends paid per common share |
|
$ |
0.34 |
|
$ |
— |
|
|
|
$ |
0.34 |
|
See notes to unaudited pro forma condensed consolidated financial statements
AVNET, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 2, 2016
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
As Previously |
|
Pro Forma |
|
|
|
|
|||
|
|
|
Reported |
|
Adjustments 4 |
|
|
Pro Forma |
|
|||
|
|
|
(Thousands, except per share amounts) |
|
||||||||
|
Sales |
|
$ |
26,219,279 |
|
$ |
(9,478,682) |
|
|
$ |
16,740,597 |
|
|
Cost of sales |
|
|
23,181,768 |
|
|
(8,519,117) |
|
|
|
14,662,651 |
|
|
Gross profit |
|
|
3,037,511 |
|
|
(959,565) |
|
|
|
2,077,946 |
|
|
Selling, general and administrative expenses |
|
|
2,170,524 |
|
|
(710,251) |
|
|
|
1,460,273 |
|
|
Restructuring, integration and other expenses |
|
|
79,318 |
|
|
(34,557) |
|
|
|
44,761 |
|
|
Operating income |
|
|
787,669 |
|
|
(214,757) |
|
|
|
572,912 |
|
|
Other expense, net |
|
|
(18,105) |
|
|
15,115 |
|
|
|
(2,990) |
|
|
Interest expense |
|
|
(99,055) |
|
|
7,147 |
|
|
|
(91,908) |
|
|
Income before income taxes |
|
|
670,509 |
|
|
(192,495) |
|
|
|
478,014 |
|
|
Income tax expense |
|
|
163,978 |
|
|
(76,874) |
|
|
|
87,104 |
|
|
Net income |
|
$ |
506,531 |
|
$ |
(115,621) |
|
|
$ |
390,910 |
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
3.87 |
|
$ |
(0.88) |
|
|
$ |
2.99 |
|
|
Diluted |
|
$ |
3.80 |
|
$ |
(0.87) |
|
|
$ |
2.93 |
|
|
Shares used to compute earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
130,858 |
|
|
— |
|
|
|
130,858 |
|
|
Diluted |
|
|
133,173 |
|
|
— |
|
|
|
133,173 |
|
|
Cash dividends paid per common share |
|
$ |
0.68 |
|
$ |
— |
|
|
$ |
0.68 |
|
See notes to unaudited pro forma condensed consolidated financial statements
AVNET, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 27, 2015
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
As Previously |
|
Pro Forma |
|
|
|
|
|||
|
|
|
Reported |
|
Adjustments 4 |
|
|
Pro Forma |
|
|||
|
|
|
(Thousands, except per share amounts) |
|
||||||||
|
Sales |
|
$ |
27,924,657 |
|
$ |
(10,236,449) |
|
|
$ |
17,688,208 |
|
|
Cost of sales |
|
|
24,731,537 |
|
|
(9,255,978) |
|
|
|
15,475,559 |
|
|
Gross profit |
|
|
3,193,120 |
|
|
(980,471) |
|
|
|
2,212,649 |
|
|
Selling, general and administrative expenses |
|
|
2,274,642 |
|
|
(770,507) |
|
|
|
1,504,135 |
|
|
Restructuring, integration and other expenses |
|
|
90,805 |
|
|
(36,306) |
|
|
|
54,499 |
|
|
Operating income |
|
|
827,673 |
|
|
(173,658) |
|
|
|
654,015 |
|
|
Other expense, net |
|
|
(19,043) |
|
|
23,333 |
|
|
|
4,290 |
|
|
Interest expense |
|
|
(95,665) |
|
|
8,585 |
|
|
|
(87,080) |
|
|
Income before income taxes |
|
|
712,965 |
|
|
(141,740) |
|
|
|
571,225 |
|
|
Income tax expense |
|
|
141,052 |
|
|
(54,916) |
|
|
|
86,136 |
|
|
Net income |
|
$ |
571,913 |
|
$ |
(86,824) |
|
|
$ |
485,089 |
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
4.18 |
|
$ |
(0.64) |
|
|
$ |
3.54 |
|
|
Diluted |
|
$ |
4.12 |
|
$ |
(0.63) |
|
|
$ |
3.49 |
|
|
Shares used to compute earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
136,688 |
|
|
— |
|
|
|
136,688 |
|
|
Diluted |
|
|
138,791 |
|
|
— |
|
|
|
138,791 |
|
|
Cash dividends paid per common share |
|
$ |
0.64 |
|
$ |
— |
|
|
$ |
0.64 |
|
See notes to unaudited pro forma condensed consolidated financial statements
AVNET, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 28, 2014
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
As Previously |
|
Pro Forma |
|
|
|
|
|||
|
|
|
Reported |
|
Adjustments 4 |
|
|
Pro Forma |
|
|||
|
|
|
(Thousands, except per share amounts) |
|
||||||||
|
Sales |
|
$ |
27,499,654 |
|
$ |
(10,586,258) |
|
|
$ |
16,913,396 |
|
|
Cost of sales |
|
|
24,273,923 |
|
|
(9,571,018) |
|
|
|
14,702,905 |
|
|
Gross profit |
|
|
3,225,731 |
|
|
(1,015,240) |
|
|
|
2,210,491 |
|
|
Selling, general and administrative expenses |
|
|
2,341,168 |
|
|
(798,835) |
|
|
|
1,542,333 |
|
|
Restructuring, integration and other expenses |
|
|
94,623 |
|
|
(27,847) |
|
|
|
66,776 |
|
|
Operating income |
|
|
789,940 |
|
|
(188,558) |
|
|
|
601,382 |
|
|
Other expense, net |
|
|
16,010 |
|
|
5,498 |
|
|
|
21,508 |
|
|
Interest expense |
|
|
(104,823) |
|
|
13,936 |
|
|
|
(90,887) |
|
|
Income before income taxes |
|
|
701,127 |
|
|
(169,124) |
|
|
|
532,003 |
|
|
Income tax expense |
|
|
155,523 |
|
|
(70,968) |
|
|
|
84,555 |
|
|
Net income |
|
$ |
545,604 |
|
$ |
(98,156) |
|
|
$ |
447,448 |
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
3.95 |
|
$ |
(0.71) |
|
|
$ |
3.24 |
|
|
Diluted |
|
$ |
3.89 |
|
$ |
(0.70) |
|
|
$ |
3.19 |
|
|
Shares used to compute earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
137,991 |
|
|
— |
|
|
|
137,991 |
|
|
Diluted |
|
|
140,119 |
|
|
— |
|
|
|
140,119 |
|
|
Cash dividends paid per common share |
|
$ |
0.60 |
|
$ |
— |
|
|
$ |
0.60 |
|
See notes to unaudited pro forma condensed consolidated financial statements
AVNET, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
1. |
Basis of presentation |
The historical consolidated financial statements of the Company have been adjusted in the accompanying unaudited pro forma condensed consolidated financial statements to give effect to pro forma events that are (i) directly attributable to the divestiture transaction, (ii) factually supportable, and (iii) with respect to the unaudited pro forma condensed consolidated statements of operations, are expected to have a continuing impact on the results of operations.
|
2. |
Unaudited pro forma condensed consolidated balance sheet adjustments |
|
a. |
Represents the elimination of assets and liabilities related to the TS Business which were classified as held for sale as reported by the Company in its December 31, 2016 Quarterly Report filed on Form 10-Q. |
|
b. |
Represents the receipt of approximately $2.3 billion in cash proceeds from the sale of the TS Business, net of approximately $24 million in estimated transaction related costs and approximately $116 million of estimated cash and other purchase price adjustments. The effective date of the divestiture is February 27, 2017; therefore, customary net working capital price adjustments related to the effective period were estimated for pro forma adjustments. |
|
c. |
Represents the receipt of 2,785,402 of shares of Tech Data common stock valued at $247.2 million using the closing price of Tech Data common stock of $88.76 per share on February 27, 2017. |
|
d. |
Represents the elimination of TS Business debt outstanding as of December 31, 2016. |
|
e. |
Represents the estimated net gain of approximately $294 million, giving effect to the divestiture of the TS Business as of June 30, 2013, which includes accounting adjustments for the recognition of cumulative foreign currency translation losses of approximately $208 million related to the TS Business and an estimated income tax expense of approximately $370 million as a result of the sale. The actual gain will differ from the pro forma estimate due to the difference in timing between the assumed closing date for the pro forma financial statements and the actual closing date of February 27, 2017, the consideration adjustments, if any, for the final net working capital adjustment, and the actual income tax expense incurred on the sale. As the estimated gain is directly attributable to the divesture and is not expected to have a continuing impact on the Company’s operations, the estimated gain is only reflected in shareholders’ equity on the unaudited pro forma condensed consolidated balance sheet. |
|
3. |
Unaudited pro forma condensed consolidated statement of operations adjustments for the six months ended December 31, 2016 |
The Company included the results of the TS business as discontinued operations in its most recent Quarterly Report on Form 10-Q for the period ended December 31, 2016. As a result, the pro forma adjustments reflect the elimination of net income from discontinued operations, net of tax, and the basic and diluted earnings per share from discontinued operations.
|
4. |
Unaudited pro forma condensed consolidated statement of operations adjustments for the fiscal years 2016, 2015 and 2014 |
These adjustments reflect the elimination of sales, expenses and other amounts directly attributable to the TS divestiture. Excluded from these amounts are certain general corporate overhead expenses not specifically benefiting the TS Business. Such general corporate overhead expenses do not meet the requirements to be presented in discontinued operations and thus, will be presented as part of Avnet’s continuing operations. These adjustments include the estimated income tax effect of the pro forma adjustments using an estimated effective tax rate of 39.9%, 38.7%, and 42.0% for fiscal years 2016, 2015 and 2014, respectively.