Exhibit 10.34

THIRD AMENDED AND RESTATED

RECEIVABLES SALE AND SERVICING AGREEMENT

Dated as of January 23, 2009

by and among

EACH OF THE ENTITIES PARTY HERETO FROM TIME TO TIME

AS ORIGINATORS,

SIT FUNDING CORPORATION,

as Buyer,

and

SYNNEX CORPORATION,

as Servicer

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TABLE OF CONTENTS

 

     Page ARTICLE I DEFINITIONS AND INTERPRETATION    1    Section 1.01.     
Definitions    1    Section 1.02.      Rules of Construction    1    Section
1.03.      Amendment and Restatement    2 ARTICLE II TRANSFERS OF RECEIVABLES   
2    Section 2.01.      Agreement to Transfer    2    Section 2.02.      Grant
of Security Interest    4    Section 2.03.      Originator Support Agreement   
4    Section 2.04.      Originators Remain Liable    4 ARTICLE III CONDITIONS
PRECEDENT    5    Section 3.01.      Conditions Precedent to Initial Transfer   
5    Section 3.02.      Conditions Precedent to all Transfers    5 ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS    6    Section 4.01.     
Representations and Warranties of the Transaction Parties    6    Section 4.02.
     Affirmative Covenants of the Originators    14    Section 4.03.     
Negative Covenants of the Originators    20    Section 4.04.      Breach of
Representations, Warranties or Covenants    23    Section 4.05.     
Supplemental Disclosure    23 ARTICLE V INDEMNIFICATION    23    Section 5.01.
     Indemnities by the Originators    23    Section 5.02.      Indemnities by
the Servicer    25 ARTICLE VI MISCELLANEOUS    26    Section 6.01.      Notices
   26    Section 6.02.      No Waiver; Remedies    27    Section 6.03.     
Successors and Assigns    27    Section 6.04.      Termination; Survival of
Obligations    28    Section 6.05.      Complete Agreement; Modification of
Agreement    28    Section 6.06.      Amendments and Waivers    28    Section
6.07.      Governing Law; Consent to Jurisdiction; Waiver of Jury Trial    29   
Section 6.08.      Counterparts    30    Section 6.09.      Severability    30
   Section 6.10.      Section Titles    30    Section 6.11.      No Setoff    30
   Section 6.12.      Confidentiality    30    Section 6.13.      Further
Assurances    32    Section 6.14.      Fees and Expenses    32    Section 6.15.
     Nonrecourse Obligations    32

 

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TABLE OF CONTENTS

(continued)

 

ARTICLE VII SERVICER PROVISIONS    33    Section 7.01.      Appointment of the
Servicer    33    Section 7.02.      Duties and Responsibilities of the Servicer
   33    Section 7.03.      Collections on Receivables    34    Section 7.04.
     Covenants of the Servicer    35    Section 7.05.      Reporting
Requirements of the Servicer    39 ARTICLE VIII EVENTS OF SERVICER TERMINATION
   39    Section 8.01.      Events of Servicer Termination    39 ARTICLE IX
SUCCESSOR SERVICER PROVISIONS    41    Section 9.01.      Servicer Not to Resign
   41    Section 9.02.      Appointment of the Successor Servicer    41   
Section 9.03.      Duties of the Servicer    41    Section 9.04.      Effect of
Termination or Resignation    42    Section 9.05.      Power of Attorney    42
   Section 9.06.      No Proceedings    42

 

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EXHIBITS, SCHEDULES AND ANNEXES

 

Exhibit 2.01(a)      Form of Receivables Assignment Exhibit 2.01(c)(ii)     
Form of Subordinated Note Exhibit 2.03      Form of Originator Support Agreement
Exhibit 9.05      Form of Power of Attorney (Administrative Agent) Schedule
4.01(b)      Jurisdiction of Organization; Executive Offices; Collateral
Locations; Corporate, Legal and Other Names; Identification Numbers
Schedule 4.01(d)      Litigation Schedule 4.01(h)      Ventures, Subsidiaries
and Affiliates; Outstanding Stock and Debt Schedule 4.01(i)      Tax Matters
Schedule 4.01(j)      Intellectual Property Schedule 4.01(m)      ERISA Schedule
4.01(t)      Deposit and Disbursement Accounts Schedule 4.02(g)      Corporate,
Legal and Trade Names Annex 7.05      Reporting Requirements of the Servicer
Annex X      Definitions Annex Y      Schedule of Documents Annex Z     
Financial Tests

 

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THIS THIRD AMENDED AND RESTATED RECEIVABLES SALE AND SERVICING AGREEMENT (as
amended, restated, supplemented or otherwise modified and in effect from time to
time, this “Agreement”), (a) is entered into as of January 23, 2009, by and
among each of the persons signatory hereto from time to time as Originators
(each an “Originator” and, collectively, the “Originators”), SYNNEX CORPORATION,
a Delaware corporation (“Parent”), in its capacity as servicer hereunder (in
such capacity, the “Servicer”) and SIT FUNDING CORPORATION, a Delaware
corporation (“Buyer”) and (b) amends and restates that certain Second Amended
and Restated Receivables Transfer Agreement, dated as of February 12, 2007,
between Parent as “Originator” and “Servicer”, and Buyer (as amended prior to
the date hereof, the “Existing Transfer Agreement”).

RECITALS

A. Buyer is a special purpose corporation, the sole shareholder of which is the
Parent.

B. Buyer has been formed for the sole purpose of purchasing all Receivables
originated by each Originator and to finance such Receivables under the Funding
Agreement.

C. Prior to the date hereof, each Originator has sold such Receivables or
contributed such Receivables to Buyer pursuant to the Existing Transfer
Agreement, and from and after the date hereof each Originator intends to
continue to sell, and Buyer intends to continue to purchase, such Receivables,
from time to time, as described herein.

D. In addition, the Parent may, from time to time, contribute capital to Buyer
in the form of Contributed Receivables or cash.

E. In order to effectuate the purposes of this Agreement and the Funding
Agreement, Buyer has appointed Parent to service, administer and collect the
Receivables securing the Advances pursuant to this Agreement and Parent is
willing to continue acting in its capacity as Servicer hereunder on the terms
and conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.01. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them in Annex X.

Section 1.02. Rules of Construction. For purposes of this Agreement, the rules
of construction set forth in Annex X shall govern. All Appendices hereto, or
expressly identified to this Agreement, are incorporated herein by reference
and, taken together with this Agreement, shall constitute but a single
agreement.

 

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Section 1.03. Amendment and Restatement. Upon the satisfaction or waiver of the
conditions precedent set forth herein, (a) the terms and provisions of the
Existing Transfer Agreement shall be amended, superseded and restated in their
entirety by the terms and provisions of this Agreement and, unless expressly
stated to the contrary, each reference to the document, instrument or agreement
delivered in connection therewith shall mean and be a reference to this
Agreement, (b) this Agreement is not intended to and shall not constitute a
novation of the Existing Transfer Agreement or the obligations and liabilities
existing thereunder, (c) with respect to any date or time period occurring and
ending prior to the Effective Date, the rights and obligations of the parties to
the Existing Transfer Agreement shall be governed by the Existing Transfer
Agreement and the other Related Documents (as defined therein), and (d) with
respect to any date or time period occurring and ending on or after the
Effective Date, the rights and obligations of the parties hereto shall be
governed by this Agreement and the other Related Documents (as defined herein).

ARTICLE II

TRANSFERS OF RECEIVABLES

Section 2.01. Agreement to Transfer.

(a) Receivables Transfers. Subject to the terms and conditions hereof, each
Originator agrees to sell (without recourse except to the limited extent
specifically provided herein) or, in the case of the Parent, sell or contribute,
to Buyer on the Effective Date and on each Business Day thereafter (each such
date, a “Transfer Date”) all Receivables owned by it on each such Transfer Date
other than the Excluded Receivables, and Buyer agrees to purchase or acquire as
a capital contribution all such Receivables on each such Transfer Date. All such
Transfers by an Originator to Buyer shall collectively be evidenced by a
certificate of assignment substantially in the form of Exhibit 2.01(a) (each, a
“Receivables Assignment,” and collectively, the “Receivables Assignments”), and
each Originator and Buyer shall have executed and delivered a Receivables
Assignment on or before the Effective Date.

(b) Determination of Sold Receivables. On and as of each Transfer Date, (i) all
Receivables other than the Excluded Receivables then owned by each Originator
(other than the Parent) and not previously acquired by Buyer shall be sold
immediately upon its creation, and (ii) to the extent Receivables then owned by
the Parent other than the Excluded Receivables have not been contributed to
Buyer in accordance with Section 2.01(d), such Receivables shall be sold to
Buyer (each such Receivable sold immediately upon its creation pursuant to
clauses (i) and (ii) above, individually, a “Sold Receivable” and, collectively,
the “Sold Receivables”).

(c) Payment of Sale Price. (i) In consideration for each Sale of Sold
Receivables hereunder, Buyer shall pay to the Originator thereof on the Transfer
Date therefor the applicable Sale Price therefor in Dollars in immediately
available funds. All cash payments by Buyer under this Section 2.01(c)(i) shall
be effected on the day when due by means of a wire transfer of same day funds to
such account or accounts as the Originators may designate from time to time.

(ii) To the extent that the Sale Price of Sold Receivables exceeds the amount of
cash then available to Buyer, the applicable Originator hereby agrees to make a
subordinated loan (each, a “Subordinated Loan”) to Buyer in an amount not to
exceed the

 

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lesser of (A) the amount of such excess in satisfaction of the equivalent
portion of the Sale Price not paid in cash and (B) the maximum Subordinated Loan
that could be borrowed without rendering Buyer’s Net Worth less than the
Required Capital Amount. The Subordinated Loans of an Originator shall be
evidenced by a subordinated promissory note substantially in the form of Exhibit
2.01(c)(ii) hereto (a “Subordinated Note”) executed by Buyer and payable to such
Originator. The Subordinated Loans shall bear interest and be payable as
provided in the Subordinated Note.

(d) Determination of Contributed Receivables. Prior to the delivery of an
Election Notice, on each Transfer Date on which Buyer cannot pay the Sale Price
therefor in cash or with Subordinated Loans pursuant to clause (c) above, the
Parent shall identify Receivables then owned by it which have not been
previously acquired by Buyer other than the Excluded Receivables, and shall,
prior to the delivery of an Election Notice, contribute such Receivables as a
capital contribution to Buyer (each such contributed Receivable, individually, a
“Contributed Receivable,” and collectively, the “Contributed Receivables”).
Notwithstanding the foregoing, the Parent shall not be obligated to make
additional contributions to Buyer at any time. If on any Transfer Date (i) the
Parent elects not to contribute Receivables (other than the Excluded
Receivables) to Buyer when Buyer cannot pay the Sale Price therefor in cash or
through Subordinated Loans, or (ii) any Originator (other than the Parent) does
not sell all of its then owned Receivables to Buyer other than the Excluded
Receivables, such Originator shall deliver to Buyer not later than 5:00 p.m.
(New York time) on the Business Day immediately preceding such Transfer Date a
notice of election thereof (each such notice, an “Election Notice”).

(e) Ownership of Transferred Receivables. On and after each Transfer Date and
after giving effect to the Transfers to be made on each such date, Buyer shall
own the Transferred Receivables and no Originator shall take any action
inconsistent with such ownership nor shall any Originator claim any ownership
interest in such Transferred Receivables. The Excluded Receivables shall not be
transferred hereunder or otherwise constitute “Sold Receivables”, “Contributed
Receivables” or “Transferred Receivables” hereunder or under the Related
Documents.

(f) Reconstruction of General Trial Balance. If at any time any Originator fails
to generate its General Trial Balance, Buyer shall have the right to reconstruct
such General Trial Balance so that a determination of the Transferred
Receivables can be made pursuant to Section 2.01(b). Each Originator agrees to
cooperate with such reconstruction, including by delivery to Buyer, upon Buyer’s
request, of copies of all Records.

(g) Servicing of Receivables. So long as no Event of Servicer Termination shall
have occurred and be continuing and no Successor Servicer has assumed the
responsibilities and obligations of the Servicer pursuant to Section 9.02, the
Servicer shall (i) conduct the servicing, administration and collection of the
Transferred Receivables and shall take, or cause to be taken, all such actions
as may be necessary or advisable to service, administer and collect the
Transferred Receivables, all in accordance with (A) the terms of this Agreement,
(B) customary and prudent servicing procedures for trade receivables of a
similar type and (C) all applicable laws, rules and regulations, and (ii) hold
all Contracts and other documents and incidents relating to the Transferred
Receivables in trust for the benefit of Buyer, as the owner thereof, and for the
sole purpose of facilitating the servicing of the Transferred Receivables in
accordance with the terms of this Agreement. Buyer hereby instructs the
Servicer, and the Servicer hereby

 

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acknowledges, that the Servicer shall hold all Contracts and other documents
relating to such Transferred Receivables in trust for the benefit of Buyer and
the Servicer’s retention and possession of such Contracts and documents shall at
all times be solely in a custodial capacity for the benefit of Buyer and its
assigns and pledgees.

Section 2.02. Grant of Security Interest. The parties hereto intend that each
Transfer shall be absolute and shall constitute a purchase and sale or capital
contribution, as applicable, and not a loan. Notwithstanding the foregoing, in
addition to and not in derogation of any rights now or hereafter acquired by
Buyer under Section 2.01 hereof, the parties hereto intend that this Agreement
shall constitute a security agreement under applicable law and if a court of
competent jurisdiction determines that any transaction provided for herein
constitutes a loan and not a sale or capital contribution, as applicable, that
each Originator shall be deemed to have granted, and each Originator does hereby
grant, to Buyer a continuing security interest in all of such Originator’s
right, title and interest in, to and under the Transferred Receivables whether
now owned or hereafter acquired by such Originator to secure the obligations of
such Originator to Buyer hereunder (including, if and to the extent that any
Transfer is recharacterized as a transfer for security under applicable law, the
repayment of a loan deemed to have been made by Buyer to the applicable
Originator in the amount of the Sale Price with respect thereto, including
interest thereon at the Base Rate). Each Originator hereto reconfirms its grant
of a security interest to Buyer of a first priority Lien in and to all of such
Originator’s right, title and interest in, to and under the “Transferred
Receivables” under, and as defined in, the Existing Transfer Agreement.

Section 2.03. Originator Support Agreement. The Parent hereby agrees that in the
event that any of its Affiliates become parties to this Agreement as
Originators, the Parent shall undertake and agree, to and for the benefit of
Buyer, to cause the due and punctual performance and observance by each such
Originator of all of the terms, conditions, agreements and undertakings on the
part of such Originator to be performed or observed by it hereunder or under any
other Related Document and, in connection therewith, shall execute and deliver
to Buyer an Originator Support Agreement in the form attached hereto as Exhibit
2.03, to more fully evidence such undertaking.

Section 2.04. Originators Remain Liable. It is expressly agreed by the
Originators that, anything herein to the contrary notwithstanding, each
Originator shall remain liable to the Obligor (and any other party to the
related Contract) under any and all of the Transferred Receivables originated by
it and under the Contracts therefor to observe and perform all the conditions
and obligations to be observed and performed by it thereunder. Buyer shall not
have any obligation or liability to the Obligor or any other party to the
related Contract under any such Transferred Receivables or Contracts by reason
of or arising out of this Agreement or the granting herein of a Lien thereon or
the receipt by Buyer of any payment relating thereto pursuant hereto. The
exercise by Buyer of any of its rights under this Agreement shall not release
any Originator from any of its respective duties or obligations under any such
Transferred Receivables or Contracts. Buyer shall not be required or obligated
in any manner to perform or fulfill any of the obligations of any Originator
under or pursuant to any such Transferred Receivable or Contract, or to make any
payment, or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by any party under

 

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any such Transferred Receivable or Contract, or to present or file any claims,
or to take any action to collect or enforce any performance or the payment of
any amounts that may have been assigned to it or to which it may be entitled at
any time.

ARTICLE III

CONDITIONS PRECEDENT

Section 3.01. Conditions Precedent to Initial Transfer. The initial Transfer
hereunder shall be subject to satisfaction of each of the following conditions
precedent:

(a) Sale Agreement; Other Documents. This Agreement or counterparts hereof shall
have been duly executed by, and delivered to, each Originator, the Servicer and
Buyer, and Buyer shall have received such information, documents, instruments,
agreements and legal opinions as Buyer shall request in connection with the
transactions contemplated by this Agreement, including all those identified in
the Schedule of Documents, each in form and substance satisfactory to Buyer.

(b) Governmental Approvals. Buyer shall have received (i) satisfactory evidence
that the Originators and the Servicer have obtained all required consents and
approvals of all Persons, including all requisite Governmental Authorities, to
the execution, delivery and performance of this Agreement and the other Related
Documents and the consummation of the transactions contemplated hereby and
thereby or (ii) an Officer’s Certificate from each Originator and the Servicer
in form and substance satisfactory to Buyer affirming that no such consents or
approvals are required.

(c) Compliance with Laws. Each Originator shall be in compliance with all
applicable foreign, federal, state, provincial and local laws and regulations,
including, without limitation, those specifically referenced in Section 4.02(f).

(d) Funding Agreement Conditions. Each of the conditions precedent set forth in
Section 3.01 of the Funding Agreement shall have been satisfied or waived in
writing as provided therein.

Section 3.02. Conditions Precedent to all Transfers. Each Transfer hereunder
(including the initial Transfer) shall be subject to satisfaction of the
following further conditions precedent as of the Transfer Date therefor:

(a) Representations and Warranties. The representations and warranties of each
Originator contained herein or in any other Related Document shall be true and
correct as of such Transfer Date, both before and after giving effect to such
Transfer and to the application of the Sale Price therefor, except to the extent
that any such representation or warranty expressly relates to an earlier date
and except for changes therein expressly permitted by this Agreement;

(b) No Facility Termination Date. (i) The Administrative Agent shall not have
declared the Facility Termination Date to have occurred following the occurrence
of a Termination Event, and (ii) the Facility Termination Date shall not have
automatically occurred, in either event, in accordance with Section 9.01 of the
Funding Agreement;

 

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(c) Compliance with Covenants. Each Originator shall be in compliance with each
of its covenants and other agreements set forth herein or in any other Related
Document;

(d) Funding Agreement Conditions. Each of the conditions precedent set forth in
Section 3.02 of the Funding Agreement shall have been satisfied or waived in
writing as provided therein; and

(e) Other Actions. Each Originator shall have taken such other action, including
delivery of approvals, consents, opinions, documents and instruments to Buyer as
Buyer may reasonably request.

The acceptance by any Originator of the Sale Price for any Sold Receivables and
the contribution to Buyer by the Parent of any Contributed Receivables on any
Transfer Date shall be deemed to constitute, as of any such Transfer Date, a
representation and warranty by such Originator that the conditions precedent set
forth in this Article III have been satisfied. Upon any such acceptance or
contribution, title to the Transferred Receivables sold or contributed on such
Transfer Date shall be vested absolutely in Buyer, whether or not such
conditions were in fact so satisfied.

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 4.01. Representations and Warranties of the Transaction Parties. To
induce Buyer to purchase the Sold Receivables and to acquire the Contributed
Receivables, each Transaction Party, as applicable, makes the following
representations and warranties to Buyer as of the Closing Date and, except to
the extent otherwise expressly provided below, as of each Transfer Date, each of
which shall survive the execution and delivery of this Agreement.

(a) Existence; Compliance with Law. Each Transaction Party (i) is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is duly qualified to do business and is in
good standing in every jurisdiction in which the nature of its business requires
it to be so qualified (except where the failure to be so qualified and in good
standing would not have a Material Adverse Effect); (ii) has the requisite power
and authority and the legal right to own, pledge, mortgage, operate and convey
all of its properties, to lease the property it operates under lease, and to
conduct its business as now or proposed to be conducted, and to execute and
deliver this Agreement and the Related Documents to which it is a party and to
perform the transactions contemplated hereby and thereby; (iii) has all
licenses, permits, consents or approvals from or by, and has made all filings
with, and has given all notices to, all Governmental Authorities having
jurisdiction, to the extent required for such ownership, operation and conduct
(except where the failure to have such licenses, permits, consents or approvals
or make such filings or give such notices would not have a Material Adverse
Effect); (iv) is in compliance with its articles or certificate of incorporation
and bylaws and other organizational documents; and (v) is in compliance with all
applicable provisions of law (except where the failure to be in compliance would
not have a Material Adverse Effect).

(b) Jurisdiction of Organization; Executive Offices; Collateral Locations;
Corporate or Other Names; FEIN. As of the Closing Date, each Originator is a
registered organization of the type and is organized under the laws of the state
set forth in Schedule 4.01(b) (which is its only jurisdiction of organization)
and each such Originator’s organizational identification number (if any), the
current

 

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location of such Originator’s executive office, principal place of business,
other offices, the warehouses and premises within which any records relating to
the Receivables is stored or located are set forth in Schedule 4.01(b) and,
except as set forth in Schedule 4.01(b), such locations have not changed during
the preceding twelve months. In addition, Schedule 4.01(b) lists the federal
employer identification number of each Originator.

(c) Corporate Power, Authorization, Enforceable Obligations. The execution,
delivery and performance by each Transaction Party of this Agreement and the
other Related Documents to which it is a party and the creation and perfection
of all Transfers and Liens provided for herein and therein, the exercise by
Buyer or its assigns of any of its rights and remedies under any Related
Document to which it is a party: (i) are within such Transaction Party’s
corporate power; (ii) have been duly authorized by all necessary corporate or
other action; (iii) do not contravene any provision of such Transaction Party’s
articles or certificate of incorporation or by-laws; (iv) do not violate any law
or regulation, or any order or decree of any court or Governmental Authority
except to the extent such violation could not reasonably be expected to result
in a Material Adverse Effect; (v) do not contravene, or cause such Transaction
Party to be in default under, any contractual restriction contained in any
indenture, loan or credit agreement, lease, mortgage, security agreement, bond,
note (other than, in the case of the Parent, the Convertible Senior Notes) or
other agreement or instrument binding on or affecting such Transaction Party or
its property; (vi) do not result in the creation or imposition of any Adverse
Claim upon any of the property of such Transaction Party; and (vii) do not
require the consent or approval of any Governmental Authority or any other
Person, except those referred to in Section 3.01(b), all of which will have been
duly obtained, made or complied with prior to the Effective Date. At or prior to
the Effective Date, each of the Related Documents shall have been duly executed
and delivered by or on behalf of the Transaction Party intended to be party
thereto and on the Closing Date each such Related Document shall then constitute
a legal, valid and binding obligation of such Transaction Party, enforceable
against it in accordance with its terms, subject, as to enforceability, to
(A) any applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting the
enforceability of creditors’ rights generally and (B) general equitable
principles, whether applied in a proceeding at law or in equity.

(d) No Litigation. Except as set forth in Schedule 4.01(d), no Litigation is now
pending or, to the knowledge of any Transaction Party, threatened against any
Transaction Party or any other Subsidiary of the Parent before any Governmental
Authority which (i) challenges such Transaction Party’s right, power or
competence to enter into or perform any of its obligations under the Related
Documents to which it is a party, or the validity or enforceability of any
Related Document or any action taken thereunder, (ii) seeks to prevent the
Transfer or pledge of any Receivable (other than Excluded Receivables) or the
consummation of any of the transactions contemplated under this Agreement or the
other Related Documents or (iii) is reasonably likely to result in a Material
Adverse Effect. To the knowledge of such Transaction Party, there does not exist
a state of facts which is reasonably likely to give rise to such proceedings.
Except as set forth in Schedule 4.01(d), such Transaction Party is not a party
to any consent decree.

 

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(e) Solvency. After giving effect to (i) the transactions contemplated by this
Agreement and the other Related Documents and (ii) the payment and accrual of
all transaction costs in connection with the foregoing, each Transaction Party
is and will be Solvent. After giving effect to the sale and contribution of
Transferred Receivables and other payments and transactions contemplated on such
Transfer Date, each Transaction Party is and will be Solvent.

(f) Material Adverse Effect. Since November 30, 2008, no event has occurred that
alone or together with other events could reasonably be expected to have a
Material Adverse Effect.

(g) Ownership of Receivables; Liens. Each Originator owns and has good and
marketable title to each Receivable (other than Excluded Receivables) originated
or acquired by it free and clear of any Adverse Claim and, from and after each
Transfer Date, Buyer will acquire valid and properly perfected title to, and the
sole record and beneficial ownership interest in, each Transferred Receivable
purchased or otherwise acquired on such date, free and clear of any Adverse
Claim or restrictions on transferability. Each Originator has received all
assignments, bills of sale and other documents, and has duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect such Originator’s right, title and interest in and to the Receivables
(other than Excluded Receivables) originated or acquired by it and its other
properties and assets. Each Originator has rights in and full power to transfer
its Receivables (other than Excluded Receivables) hereunder. No effective
financing statements or other similar instruments are of record in any filing
office listing any Originator as debtor and purporting to cover the Transferred
Receivables.

(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock and Debt. On the
Effective Date, no Originator has any Subsidiaries other than those Subsidiaries
set forth on Schedule 4.01(h) and, except as set forth on Schedule 4.01(h), no
Originator nor any Subsidiary of such Originator is engaged in any joint venture
or partnership with any other Person or has any equity interest in any other
Person. On the Effective Date, all of the issued and outstanding Stock of each
Originator (other than Parent) is directly or indirectly owned by the Parent.
Except as set forth in Schedule 4.01(h) and except for stock options issued
after the Effective Date pursuant to Parent’s stock option plans set forth on
Schedule 4.01(m), there are no outstanding rights to purchase stock, options,
warrants or similar rights, agreements or plans pursuant to which Parent or any
of its Subsidiaries may be required to issue, sell or purchase any Stock or
other equity security. Schedule 4.01(h) lists all Debt of each Originator as of
the Effective Date, other than any such Debt consisting of any letters of credit
issued for the account of such Originator.

(i) Taxes. Except as disclosed in Schedule 4.01(i), all material tax returns,
reports and statements, including information returns (Form 1120-S), required by
any Governmental Authority to be filed by any Transaction Party have been filed
with the appropriate Governmental Authority and all Charges and other
impositions shown thereon to be due and payable (other than Charges or other
impositions which such Transaction Party is diligently contesting in good faith
by appropriate proceedings, in respect of which no final unappealable order has
been made against such Transaction Party, and with respect to which such
Transaction Party is maintaining adequate reserves under GAAP) have been paid
prior to the date on which any fine, penalty, interest or late charge may be
added thereto for nonpayment thereof, or any such fine, penalty,

 

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interest, late charge or loss has been paid. Each Transaction Party has paid
when due and payable all material Charges required to be paid by it. Proper and
accurate amounts have been withheld by each Transaction Party from its employees
(as applicable) for all periods in full and complete compliance with the tax,
social security and unemployment withholding provisions of applicable federal,
state, local and foreign law and such withholdings have been timely paid to the
respective Governmental Authorities. Schedule 4.01(i) sets forth those taxable
years for which any of the tax returns of each Transaction Party are currently
being audited by the IRS or any other applicable Governmental Authority; and any
assessments or threatened assessments in connection with such audit or otherwise
currently outstanding. Except as described in Schedule 4.01(i), no Transaction
Party has executed or filed with the IRS or any other Governmental Authority any
agreement or other document extending, or having the effect of extending, the
period for assessment or collection of any Charges. No Transaction Party has
agreed or been requested to make any adjustment under IRC Section 481(a) by
reason of a change in accounting method or otherwise that would have a Material
Adverse Effect.

(j) Intellectual Property. Except as otherwise set forth in Schedule 4.01(j), on
the Effective Date, and thereafter, as of the end of each first and third fiscal
quarter of each of its fiscal years, each Originator owns all licenses, patents,
patent applications, copyrights, service marks, trademarks, trademark
applications and trade names which are necessary to continue to conduct its
business as heretofore conducted by it, now conducted by it and proposed to be
conducted by it, each of which is listed, together with United States Patent and
Trademark Office or United States Copyright Office application or registration
numbers (or similar information for foreign registration or applications), where
applicable, in Schedule 4.01(j), and will be updated by such Originator to
reflect any change therein at the end of each first and third fiscal quarter of
each of its fiscal years. Each Originator conducts business without infringement
or claim of infringement of any license, patent, copyright, service mark,
trademark, trade name, trade secret or other intellectual property right of
others, except where such infringement or claim of infringement, individually or
in the aggregate, could not have or result in a Material Adverse Effect. Except
as set forth in Schedule 4.01(j), to each Originator’s knowledge, there is no
infringement or claim of infringement by others of any material license, patent,
copyright, service mark, trademark, trade name, trade secret or other
intellectual property right of such Originator, except where such infringement
or claim of infringement, individually or in the aggregate, could not have or
result in a Material Adverse Effect.

(k) Full Disclosure. No information contained in this Agreement, any of the
other Related Documents or any written statement furnished by or on behalf of
any Transaction Party to Buyer, any Managing Agent or the Administrative Agent
relating to this Agreement, the Sold Receivables or any of the other Related
Documents, in each case, contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements contained herein
or therein not misleading in light of the circumstances under which they were
made. All business plans and other forecasts and projections (including the
Projections) furnished by or on behalf of any Transaction Party and made
available to Buyer, any Managing Agent or the Administrative Agent relating to
the financial condition, operations, business, properties or prospects of such
Transaction Party thereof were prepared in good faith on the basis of the facts
and assumptions stated therein, which assumptions were fair in light of the
conditions existing at the time of delivery of such forecasts, and represented,
at the time of delivery, such Transaction Party’s reasonable estimate of its
plans, forecasts or projections, as applicable, based on the information
available at the time (it being acknowledged that actual results may vary, and
such variations may be material).

 

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(l) Notices to Obligors. Each Transaction Party has directed all Obligors of
Transferred Receivables originated by it to remit all payments with respect to
such Receivables for deposit in a Lockbox or the Concentration Account.

(m) ERISA.

(i) Schedule 4.01(m) lists all Plans and separately identifies all Pension
Plans, including all Title IV Plans, Multiemployer Plans, ESOPs and Welfare
Plans, including all Retiree Welfare Plans. The IRS has issued an opinion letter
regarding the prototype plan document that has been adopted by Buyer with
respect to its Qualified Plan, and, except as set forth on Schedule 4.01(m), to
the knowledge of the Transaction Parties, nothing has occurred that could
reasonably be expected to cause the loss of the tax-qualified status of the
Qualified Plan. Except as otherwise provided in Schedule 4.01(m), to the
knowledge of the Transaction Parties, (x) each Plan is in material compliance
with the applicable provisions of ERISA and the IRC, including the timely filing
of all reports required under the IRC or ERISA, (y) no Transaction Party or any
of their respective ERISA Affiliates has failed to make any contribution or pay
any amount due as required by either Section 412 of the IRC or Section 302 of
ERISA or the terms of any Plan, subject to such sections, and (z) no Transaction
Party or any of their respective ERISA Affiliates has engaged in a “prohibited
transaction,” as defined in Section 4975 of the IRC, in connection with any Plan
that could reasonably be expected to subject any Transaction Party to a material
tax on prohibited transactions imposed by Section 4975 of the IRC.

(ii) Except as set forth in Schedule 4.01(m): (A) no Title IV Plan has any
Unfunded Pension Liability; (B) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has occurred within
the past three years or is reasonably expected to occur; (C) there are no
pending or, to the knowledge of any Transaction Party, threatened claims (other
than claims for benefits in the normal course), sanctions, actions or lawsuits,
asserted or instituted against any Plan or any Person as fiduciary or sponsor of
any Plan; (D) no Transaction Party or any of their respective ERISA Affiliates
has incurred or reasonably expects to incur any liability as a result of a
complete or partial withdrawal from a Multiemployer Plan; (E) within the last
five years no Title IV Plan with Unfunded Pension Liabilities has been
transferred outside of the “controlled group” (within the meaning of
Section 4001(a)(14) of ERISA) of any Transaction Party or their respective ERISA
Affiliates; (F) Stock of all Transaction Parties and their respective ERISA
Affiliates makes up, in the aggregate, no more than 10% of the assets of any
Plan subject to Title I of ERISA, measured on the basis of fair market value as
of the last valuation date of any Plan; and (G) no liability under any Title IV
Plan has been satisfied with the purchase of a contract from an insurance
company that is not rated AAA by S&P or an equivalent rating by another
nationally recognized rating agency.

 

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(n) Brokers. No broker or finder acting on behalf of any Transaction Party was
employed or utilized in connection with this Agreement or the other Related
Documents or the transactions contemplated hereby or thereby and no Transaction
Party has any obligation to any Person in respect of any finder’s or brokerage
fees in connection herewith or therewith.

(o) Margin Regulations. No Transaction Party is engaged in the business of
extending credit for the purpose of “purchasing” or “carrying” any “margin
security” as such terms are defined in Regulations T, U or X of the Federal
Reserve Board as now and from time to time hereafter in effect (such securities
being referred to herein as “Margin Stock”). No Transaction Party owns any
Margin Stock, and no portion of the proceeds of the Sale Price from any Sale
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Debt that was
originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any portion of such proceeds to be considered a
“purpose credit” within the meaning of Regulations T, U or X of the Federal
Reserve Board. No Transaction Party will take or permit to be taken any action
that might cause any Related Document to violate any regulation of the Federal
Reserve Board.

(p) Nonapplicability of Bulk Sales Laws. No transaction contemplated by this
Agreement or any of the other Related Documents requires compliance with any
bulk sales act or similar law.

(q) Investment Company Act Exemptions. Each purchase of Transferred Receivables
under this Agreement constitutes a purchase or other acquisition of notes,
drafts, acceptances, open accounts receivable or other obligations representing
part or all of the sales price of merchandise, insurance or services within the
meaning of Section 3(c)(5) of the Investment Company Act.

(r) Government Regulation. No Transaction Party is (i) an “investment company”
or an “affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company,” as such terms are defined in the Investment Company Act or
(ii) subject to regulation under the Federal Power Act, or any other federal or
state statute that restricts or limits its ability to incur Debt or to perform
its obligations hereunder or under any other Related Document. The purchase or
acquisition of the Transferred Receivables by Buyer hereunder, the application
of the Sale Price therefor and the consummation of the transactions contemplated
by this Agreement and the other Related Documents will not violate any provision
of any such statute or any rule, regulation or order issued by the Securities
and Exchange Commission.

(s) Books and Records; Minutes. The by-laws or the certificate or articles of
incorporation of each Originator require it to maintain (i) books and records of
account and (ii) minutes of the meetings and other proceedings of its
Stockholders and board of directors (or an analogous governing body).

(t) Deposit and Disbursement Accounts. Schedule 4.01(t) lists all banks and
other financial institutions at which any Originator or the Servicer maintains
deposit accounts established for the receipt of collections on accounts
receivable, including the Concentration Account, and such schedule correctly
identifies the name, address and telephone number of each depository, the name
in which the account is held, a description of the purpose of the account, and
the complete account number therefor.

 

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(u) Representations and Warranties in Other Related Documents. Each of the
representations and warranties of each Transaction Party contained in the
Related Documents (other than this Agreement) is true and correct and such
Transaction Party hereby makes each such representation and warranty to, and for
the benefit of, Buyer as if the same were set forth in full herein. Each
Transaction Party consents to the assignment of Buyer’s rights with respect to
all such representations and warranties to the Administrative Agent and the
Secured Parties (and their respective successors and assigns) pursuant to the
Funding Agreement as more fully described in Section 6.03 below.

(v) Receivables. With respect to each Transferred Receivable acquired by Buyer
hereunder:

(i) each such Receivable included in any Borrowing Base Certificate as an
Eligible Receivable, as of the applicable Transfer Date therefor, satisfied the
criteria for an Eligible Receivable;

(ii) immediately prior to its transfer to Buyer, such Receivable was owned by
the Originator thereof free and clear of any Adverse Claim, and such Originator
had the full right, power and authority to sell, contribute, assign, transfer
and pledge its interest therein as contemplated under this Agreement and the
other Related Documents and, upon such Transfer, Buyer will acquire valid and
properly perfected title to and the sole record and beneficial ownership
interest in such Receivable, free and clear of any Adverse Claim and, following
such Transfer, such Receivable will not be subject to any Adverse Claim as a
result of any action or inaction on the part of such Originator;

(iii) the Transfer of each such Receivable pursuant to this Agreement and the
Receivables Assignment executed by the Originator thereof constitutes, as
applicable, a valid sale, contribution, transfer, assignment, setover and
conveyance to Buyer of all right, title and interest of such Originator in and
to such Receivable; and

(iv) the Originator of such Receivable has no knowledge of any fact (including
Dilution Factors) (including any defaults by the Obligor thereunder on any other
Receivable) that would cause it or should have caused it to expect that any
payments on such Receivable will not be paid in full when due or to expect any
other Material Adverse Effect with respect to such Receivable.

(w) Fair Value. With respect to each Transferred Receivable acquired by Buyer
hereunder, (i) the consideration received from Buyer in respect of such
Transferred Receivable represents adequate consideration and fair and reasonably
equivalent value for such Transferred Receivable as of the applicable Transfer
Date and (ii) such consideration is not less than the fair market value of such
Transferred Receivables, in each case, as of the applicable Transfer Date and
taking into account any increase in the outstanding balance of the Subordinated
Note.

 

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(x) Supplementary Representations.

(i) Receivables; Accounts.

(A) Each Receivable (other than Excluded Receivables) constitutes an “account”
or a “general intangible” within the meaning of the applicable UCC.

(B) Each Account constitutes a “deposit account” within the meaning of the
applicable UCC.

(ii) Creation of Security Interest. Prior to the Transfer thereof, the
Originators own and have good and marketable title to the Receivables (other
than Excluded Receivables), the Accounts and the Lockboxes, free and clear of
any Adverse Claim. The Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Transferred Receivables, the
Accounts, the Lockboxes and the Collections in favor of Buyer, which security
interest is prior to all other Adverse Claims and is enforceable as such as
against any creditors of and purchasers from the Originators.

(iii) Perfection. Within 10 days of the Effective Date, the Originators have
caused the filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable law and entered into
the Account Agreements in order to perfect the Transfer of the Transferred
Receivables from the Originators to Buyer pursuant to this Agreement.

(iv) Priority.

(A) Other than the Transfer of the Transferred Receivables by the Originators to
the Borrower pursuant to this Agreement, no Originator has pledged, assigned,
sold, conveyed, or otherwise granted a security interest in any of the
Transferred Receivables, the Accounts, the Lockboxes to any other Person.

(B) No Originator has authorized, or is aware of, any filing of any financing
statement against itself or any other Originator that includes a description of
collateral covering the Transferred Receivables or any other assets transferred
to Buyer hereunder, other than any financing statement filed pursuant to this
Agreement and the Funding Agreement or financing statements that have been
validly terminated on or prior to the date hereof.

(C) No Originator is aware of any judgment, ERISA or tax lien filings against
itself or any other Originator.

(D) None of the Accounts or any of the Lockboxes are in the name of any Person
other than the Borrower or the Administrative Agent. No Originator has consented
to any Bank complying with instructions of any person other than the
Administrative Agent.

 

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(v) Survival of Supplemental Representations. Notwithstanding any other
provision of this Agreement or any other Related Document, the representations
contained in this Section 4.01(x) shall be continuing, and remain in full force
and effect until the Termination Date.

The representations and warranties described in this Section 4.01 shall survive
the Transfer of the Transferred Receivables to Buyer, any subsequent assignment
of the Transferred Receivables by Buyer, and the termination of this Agreement
and the other Related Documents and shall continue until the indefeasible
payment in full of all Transferred Receivables.

Section 4.02. Affirmative Covenants of the Originators. Each Originator
covenants and agrees that, unless otherwise consented to by Buyer, from and
after the Effective Date and until the Termination Date:

(a) Offices and Records. Each Originator shall maintain its organizational form,
jurisdiction of organization, organizational identification number, principal
place of business and chief executive office and the office at which it keeps
its Records at the respective locations specified in Schedule 4.01(b) or, upon
30 days’ prior written notice to Buyer and the Administrative Agent, at such
other location in a jurisdiction where all action requested by Buyer, any Lender
or the Administrative Agent pursuant to Section 6.13 shall have been taken with
respect to the Transferred Receivables. Each Originator shall at its own cost
and expense, for not less than three years from the date on which each
Transferred Receivable was originated, or for such longer period as may be
required by law, maintain adequate Records with respect to such Transferred
Receivable, including records of all payments received, credits granted and
merchandise returned with respect thereto. Upon the request of Buyer, each
Originator shall (i) mark each Contract (other than invoices) evidencing each
Transferred Receivable with a legend, acceptable to Buyer, evidencing that Buyer
has purchased such Transferred Receivable and that the Administrative Agent, for
the benefit of the Secured Parties, has a security interest in and lien thereon,
and (ii) mark its master data processing records evidencing such Transferred
Receivables with such a legend.

(b) Access. Each Originator shall, at its own expense, during normal business
hours, from time to time upon one Business Day’s prior notice and as frequently
as Buyer or the Servicer determines to be appropriate: (i) provide Buyer, the
Servicer and any of their respective officers, employees, agents and
representatives access to its properties (including properties of such
Originator utilized in connection with the collection, processing or servicing
of the Transferred Receivables), facilities, advisors and employees (including
officers) of each Originator, (ii) permit Buyer and the Servicer and any of
their respective officers, employees, agents and representatives to inspect,
audit and make extracts from such Originator’s books and records, including all
Records maintained by such Originator, (iii) permit Buyer, the Servicer and
their respective officers, employees, agents and representatives, to inspect,
review and evaluate the Transferred Receivables of such Originator, and
(iv) permit Buyer, the Servicer and their respective officers, employees, agents
and representatives to discuss matters relating to the Transferred Receivables
or such Originator’s performance under this Agreement or the affairs, finances
and accounts of such Originator with any of its officers, directors, employees,
representatives or agents (in each case, with those Persons having knowledge of
such matters) and with its independent certified public accountants; provided
that any access described in clauses (i) – (iv) above shall be reasonably
related to the transactions

 

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contemplated by the Transaction Documents and to the Transferred Receivables. If
an Incipient Termination Event or a Termination Event shall have occurred and be
continuing, or Buyer, in good faith, notifies any Originator that an Incipient
Termination Event or a Termination Event may have occurred, is imminent or deems
its rights or interests in the Transferred Receivables insecure, each such
Originator shall provide such access at all times and without advance notice and
shall provide Buyer and the Servicer with access to its suppliers and customers.
Each Originator shall make available to Buyer and the Servicer and their
respective counsel, as quickly as is possible under the circumstances, originals
or copies of all books and records, including Records maintained by such
Originator, as Buyer or the Servicer may request. Each Originator shall deliver
any document or instrument necessary for Buyer or the Servicer, as they may from
time to time request, to obtain records from any service bureau or other Person
that maintains records for such Originator, and shall maintain duplicate records
or supporting documentation on media, including computer tapes and discs owned
by such Originator.

(c) Communication with Accountants. Each Originator authorizes Buyer the
Servicer and their designated representatives to communicate directly with its
independent certified public accountants, and authorizes and, if requested by
Buyer or Servicer, shall instruct those accountants to disclose and make
available to Buyer, the Servicer and their designated representatives, any and
all financial statements and other supporting financial documents, schedules and
information relating to such Originator (including copies of any issued
management letters) with respect to the business, financial condition and other
affairs of such Originator. Each Originator agrees to render to Buyer and the
Servicer at such Originator’s own cost and expense, such clerical and other
assistance as may be reasonably requested with regard to the foregoing, it being
understood that the Originator shall be required to comply with a request under
this Section 4.02(c) only to the extent such request is reasonably related to
the transactions contemplated by the Transaction Documents and to the
Transferred Receivables. If any Termination Event shall have occurred and be
continuing, each Originator shall, promptly upon request therefor, deliver to
Buyer or its designee all Records reflecting activity through the close of
business on the Business Day immediately preceding the date of such request.

(d) Compliance With Credit and Collection Policies. Each Originator shall comply
with the Credit and Collection Policies applicable to each Transferred
Receivable and the Contracts therefor, and with the terms of such Transferred
Receivables and Contracts.

(e) Assignment. Each Originator agrees that Buyer may collaterally assign (and
has collaterally assigned) all of its right, title and interest in, to and under
the Transferred Receivables and this Agreement to the Administrative Agent (for
the benefit of the Secured Parties) under the Funding Agreement, including its
right to exercise the remedies set forth in Section 4.04. Each Originator agrees
that, prior to the Termination Date under the Funding Agreement, the
Administrative Agent (for the benefit of the Secured Parties) may enforce
directly, without joinder of Buyer, all of Buyer’s rights hereunder and all of
the obligations of such Originator hereunder, including any obligations of such
Originator set forth in Sections 4.04, 5.01 and 6.14, and that the
Administrative Agent and the Secured Parties shall be third party beneficiaries
of Buyer’s rights hereunder.

 

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(f) Compliance with Agreements and Applicable Laws. Each Originator shall
perform each of its obligations under this Agreement and the other Related
Documents and comply with all federal, state, provincial and local laws and
regulations applicable to it and the Receivables, including those relating to
truth in lending, retail installment sales, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices, privacy,
licensing, securities laws, margin regulations, taxation, ERISA and labor
matters and environmental laws and environmental permits, except where the
failure to so comply could not reasonably be expected to result in a Material
Adverse Effect. Each Originator shall pay all Charges, including any stamp
duties, which may be imposed as a result of the transactions contemplated by
this Agreement and the other Related Documents, except to the extent such
Charges are being contested in accordance with Section 4.02(k).

(g) Maintenance of Existence and Conduct of Business. Each Originator shall:
(i) do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and, except where the failure to do so
could not reasonably be expected to result in a Material Adverse Effect, its
rights and franchises; (ii) continue to conduct its business substantially as
now conducted or as otherwise permitted hereunder; (iii) at all times maintain,
preserve and protect all of its assets and properties which are necessary in the
conduct of its business, including all licenses, permits, charters and
registrations, and keep the same in good repair, working order and condition in
all material respects (taking into consideration ordinary wear and tear) and
from time to time make, or cause to be made, all necessary or appropriate
repairs, replacements and improvements thereto consistent with industry
practices; and (iv) transact business only in such corporate, legal and trade
names as are set forth in Schedule 4.02(g) or, upon 30 days’ prior written
notice to Buyer, in such other corporate, legal or trade names with respect to
which all action requested by Buyer pursuant to Section 6.13 shall have been
taken with respect to the Transferred Receivables.

(h) Notice of Material Event. Each Originator shall promptly inform Buyer and
the Administrative Agent in writing of the occurrence of any of the following,
in each case setting forth the details thereof, any notices or other
correspondence relating thereto, and what action, if any, such Originator
proposes to take with respect thereto:

(i) any Litigation commenced or threatened against the Parent, any Originator or
any other Subsidiary of the Parent or with respect to or in connection with all
or any portion of the Transferred Receivables that (A) is reasonably likely to
involve an amount in excess of $10,000,000 individually or in the aggregate with
any related Litigation, (B) seeks injunctive relief, (C) is asserted or
instituted against any Plan, its fiduciaries (in their capacity as a fiduciary
of any such Plan) or its assets or against the Parent, any Originator or any
other Subsidiary of the Parent or any of their respective ERISA Affiliates in
connection with any Plan, (D) alleges criminal misconduct by the Parent, any
Originator or any other Subsidiary of the Parent, or (E) if determined
adversely, could reasonably be expected to have a Material Adverse Effect;

(ii) the commencement of a case or proceeding by or against the Parent, any
Originator or any other Subsidiary of the Parent seeking a decree or order in
respect of the Parent, any Originator or such Subsidiary (A) under the
Bankruptcy Code or

 

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any other applicable federal, state, provincial or foreign bankruptcy or other
similar law, (B) appointing a custodian, receiver, liquidator, assignee, trustee
or sequestrator (or similar official) for the Parent, any Originator or such
Subsidiary or for any substantial part of such Person’s assets, or (C) ordering
the winding-up or liquidation of the affairs of the Parent, any Originator or
any other Subsidiary of the Parent;

(iii) the receipt of notice that (A) the Parent, such Originator, or any other
Subsidiary of the Parent is being placed under regulatory supervision, (B) any
material license, permit, charter, registration or approval necessary for the
conduct of the Parent’s, such Originator’s or any other Subsidiary of the
Parent’s business is to be, or may be, suspended or revoked, or (C) the Parent,
such Originator or any other Subsidiary of the Parent is to cease and desist any
practice, procedure or policy employed by the Parent, such Originator or any
other Subsidiary of the Parent in the conduct of its business if such cessation
could reasonably be expected to have a Material Adverse Effect;

(iv)(A) any Adverse Claim made or asserted against any of the Transferred
Receivables of which it becomes aware or (B) any determination that a
Transferred Receivable was not an Eligible Receivable at the time of its
Transfer to Buyer or has ceased to be an Eligible Receivable on account of any
matter giving rise to indemnification under Section 5.01;

(v) the establishment of any Title IV Plan or undertaking to make contributions
to any Multiemployer Plan, ESOP or Retiree Welfare Plan not listed on Schedule
4.01(m); or

(vi) any other event, circumstance or condition that has had or could reasonably
be expected to have a Material Adverse Effect.

(i) Separate Identity.

(i) Each Originator shall, and shall cause each other member of the Parent Group
to, maintain records and books of account separate from those of Buyer.

(ii) The financial statements of the Parent and its consolidated Subsidiaries
shall disclose the effects of each Originator’s transactions in accordance with
GAAP and, in addition, disclose that (A) Buyer’s sole business consists of the
purchase or acceptance through capital contribution (in the case of the Parent)
of the Transferred Receivables from the Originators and the subsequent financing
of such Receivables pursuant to the Funding Agreement, (B) Buyer is a separate
legal entity with its own separate creditors who will be entitled, upon its
liquidation, to be satisfied out of Buyer’s assets prior to any value in Buyer
becoming available to Buyer’s Stockholders and (C) the assets of Buyer are not
available to pay creditors of any Originator or any other Affiliate of such
Originator.

(iii) The resolutions, agreements and other instruments underlying the
transactions described in this Agreement shall be continuously maintained by
each Originator as official records.

 

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(iv) Each Originator shall, and shall cause each other member of the Parent
Group to, maintain an arm’s-length relationship with Buyer and shall not hold
itself out as being liable for the Debts of Buyer.

(v) Each Originator shall, and shall cause each other member of the Parent Group
to, keep its assets and its liabilities wholly separate from those of Buyer.

(vi) Each Originator shall, and shall cause each other member of the Parent
Group to, conduct its business solely in its own name or the name of the Parent
or through its duly Authorized Officers or agents and in a manner designed not
to mislead third parties as to the separate identity of Buyer.

(vii) No Originator shall (and each Originator shall cause each other member of
the Parent Group not to) mislead third parties by conducting or appearing to
conduct business on behalf of Buyer or expressly or impliedly representing or
suggesting that such Originator or any other member of the Parent Group is
liable or responsible for the Debts of Buyer or that the assets of such
Originator or any other member of the Parent Group are available to pay the
creditors of Buyer.

(viii) The operating expenses and liabilities of Buyer shall be paid from
Buyer’s own funds and not from any funds of any Originator or other member of
the Parent Group.

(ix) Each Originator shall, and shall cause each other member of the Parent
Group to, at all times have stationery and other business forms and a mailing
address and telephone number separate from those of Buyer.

(x) Each Originator shall, and shall cause each other member of the Parent Group
to, at all times limit its transactions with Buyer only to those expressly
permitted hereunder or under any other Related Document.

(xi) Each Originator shall, and shall cause each other member of the Parent
Group to, comply with (and cause to be true and correct) each of the facts and
assumptions contained in the opinions of Pillsbury Winthrop Shaw Pittman LLP
delivered pursuant to the Schedule of Documents.

(j) ERISA and Environmental Notices. Each Originator shall give Buyer prompt
written notice of (i) any event that could reasonably be expected to result in
the imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA, (ii) any event that could reasonably be expected to result in the
incurrence by any Originator of any liabilities under Title IV of ERISA (other
than premium payments arising in the ordinary course of business), and (iii) any
environmental claims against the Parent, any Originator or any other Subsidiary
of the Parent which, individually or in the aggregate, could reasonably be
expected to exceed $250,000.

 

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(k) Payment, Performance and Discharge of Obligations.

(i) Subject to Section 4.02(k)(ii), each Originator shall (and shall cause each
other member of the Parent Group to) pay, perform and discharge or cause to be
paid, performed and discharged all of its obligations and liabilities, including
all Charges upon its income and properties and all lawful claims for labor,
materials, supplies and services, promptly when due.

(ii) Each Originator and each other member of the Parent Group may in good faith
contest, by appropriate proceedings, the validity or amount of any Charges or
claims described in Section 4.02(k)(i); provided that (A) adequate reserves with
respect to such contest are maintained on the books of such Originator or such
member, as applicable, in accordance with GAAP, (B) such contest is maintained
and prosecuted continuously and with diligence, (C) none of the Transferred
Receivables may become subject to forfeiture or loss as a result of such
contest, (D) no Lien may be imposed to secure payment of such Charges or claims
other than inchoate tax liens and (E) the Administrative Agent has advised such
Originator in writing that it reasonably believes that nonpayment or
nondischarge thereof could not reasonably be expected to have or result in a
Material Adverse Effect.

(l) Deposit of Collections. Each Originator shall (and shall cause each of its
Affiliates to) (i) instruct all Obligors to remit all payments with respect to
any Transferred Receivables directly into the Concentration Account, and
(ii) deposit or cause to be deposited promptly into the Concentration Account,
and in any event no later than the first Business Day after receipt thereof, all
Collections it may receive in respect of Transferred Receivables (and until so
deposited, all such Collections shall be held in trust for the benefit of Buyer
and its assigns (including the Administrative Agent and the Secured Parties)).
No Originator shall make or permit to be made deposits into a Lockbox or the
Concentration Account other than in accordance with this Agreement and the other
Related Documents. Without limiting the generality of the foregoing, each
Originator shall ensure that no Collections or other proceeds with respect to a
Receivable reconveyed to it pursuant to Section 4.04 hereof are paid or
deposited into any Lockbox or the Concentration Account.

(m) Accounting Changes. If any Accounting Changes occur and such changes result
in a change in the standards or terms used herein, then the parties hereto agree
to enter into good faith negotiations in order to amend such provisions so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the financial condition of such Persons and their
Subsidiaries shall be the same after such Accounting Changes as if such
Accounting Changes had not been made. If the parties hereto agree upon the
required amendments to this Agreement, then after appropriate amendments have
been executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained herein shall, only to the extent of
such Accounting Change, refer to GAAP consistently applied after giving effect
to the implementation of such Accounting Change. If such parties cannot agree
upon the required amendments within 30 days following the date of implementation
of any Accounting Change, then all financial statements delivered and all
standards and terms used herein shall be prepared, delivered and used without
regard to the underlying Accounting Change.

(n) Originators to Maintain Perfection and Priority. In order to evidence the
interests of Buyer under this Agreement, each Originator shall, from time to
time take such action, or execute and deliver such instruments (other than
filing financing statements) as may be necessary or advisable (including, such
actions as are requested by Buyer) to maintain and perfect, as a first-priority

 

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interest, Buyer’s ownership and security interest in the Transferred Receivables
and all other assets sold to Buyer pursuant hereto. Each Originator shall, from
time to time and within the time limits established by law, prepare and present
to Buyer for Buyer’s authorization and approval all financing statements,
amendments, continuations or initial financing statements in lieu of a
continuation statement in the, or other filings necessary to continue, maintain
and perfect Buyer’s ownership and security interest in the Transferred
Receivables and all other assets sold to Buyer pursuant hereto as a
first-priority interest. Buyer’s approval of such filings shall authorize the
Originators to file such financing statements under the UCC without the
signature of Buyer where allowed by applicable law. Notwithstanding anything
else in the Related Documents to the contrary, neither the Servicer nor any
Originator shall have any authority to file a termination, partial termination,
release, partial release or any amendment that deletes the name of a debtor or
excludes collateral as specified on any such financing statements, without the
prior written consent of Buyer. Each Originator agrees to maintain perfection
and priority of the security interest in the Transferred Receivables in
accordance with Section 6.13.

Section 4.03. Negative Covenants of the Originators. Each Originator covenants
and agrees that, without the prior written consent of Buyer, from and after the
Closing Date and until the Termination Date:

(a) Sale of Receivables and Related Assets. No Originator shall sell, transfer,
convey, assign (by operation of law or otherwise) or otherwise dispose of, or
assign any right to receive income in respect of, any of its Receivables (other
than Excluded Receivables) or Contracts therefor, or any of its rights with
respect to any Lockbox or the Concentration Account, except for the sales,
transfers, conveyances, assignments or dispositions expressly contemplated
hereunder.

(b) Liens. No Originator shall create, incur, assume or permit to exist any
Adverse Claim on or with respect to its Receivables (other than Excluded
Receivables) (whether now owned or hereafter acquired) except for Permitted
Encumbrances that do not attach to Transferred Receivables. Neither the Parent
nor any of its domestic Subsidiaries shall create, incur, assume or permit to
exist any Lien upon any of its property or receivables whether now owned or
hereafter acquired, [except for (i) Liens permitted pursuant to Section 6.7 of
the Credit Agreement and (ii) Liens created pursuant to the Credit Agreement or
any credit facility effecting a refinancing of the Debt incurred pursuant to the
Credit Agreement; provided that any such credit facility expressly excludes all
Transferred Receivables from any such Lien and the terms and conditions of any
such credit facility are not otherwise inconsistent with the terms and
conditions of this Agreement or any other Related Document (but in any event
which terms and conditions are consistent with the provisions of the Credit
Agreement relating to the transactions contemplated by this Agreement and the
other Related Documents)

(c) Modifications of Receivables or Contracts. No Originator shall extend,
amend, forgive, discharge, compromise, cancel or otherwise modify the terms of
any Transferred Receivable, or amend, modify or waive any term or condition of
any Contract therefor.

 

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(d) Sale Characterization. No Originator shall (and each Originator shall cause
each other member of the Parent Group not to) make statements or disclosures or
prepare any financial statements for any purpose, including for federal income
tax, reporting or accounting purposes, that shall account for the transactions
contemplated by this Agreement in any manner other than with respect to the Sale
of each Sold Receivable originated or acquired by it, as a true sale or absolute
assignment of its full right, title and ownership interest in such Transferred
Receivable to Buyer and with respect to the Transfer of each Contributed
Receivable originated or acquired by it, as a contribution to the capital of
Buyer.

(e) Capital Structure and Business. Except as permitted in Section 4.02(g),
Originator shall not (and shall not suffer or permit any of its Subsidiaries
to):

(i) make any changes in any of its business objectives, purposes or operations
that could reasonably be expected to have or result in a Material Adverse
Effect,

(ii) make any material change in its capital structure as described on Schedule
4.01(h) (including the issuance or recapitalization of any shares of Stock or
other securities convertible into Stock or any revision of the terms of its
outstanding Stock), except that changes in Originator’s capital structure shall
be permitted so long as such changes, individually and in the aggregate, do not
constitute a Change of Control;

(iii) amend its certificate or articles of incorporation, charter, bylaws, or
other organizational documents in any manner which may adversely affect the
Secured Parties; or

(iv) engage in any business other than manufacturing, operational, logistics,
distribution and related services in the computer and technology industry or
other than the businesses engaged in by it on the Effective Date and those
incidental thereto.

(f) Actions Affecting Rights. No Originator shall (i) take any action, or fail
to take any action, if such action or failure to take action may interfere with
the enforcement of any rights hereunder or under the other Related Documents,
including rights with respect to the Transferred Receivables; or (ii) fail to
pay any Charge, fee or other obligation of such Originator with respect to the
Transferred Receivables, or fail to defend any action, if such failure to pay or
defend may adversely affect the priority or enforceability of the perfected
title of Buyer to and the sole record and beneficial ownership interest of Buyer
in the Transferred Receivables or, prior to their Transfer hereunder, such
Originator’s right, title or interest therein.

(g) ERISA. No Originator shall, or shall cause or permit any ERISA Affiliate to,
cause or permit to occur an event that could reasonably be expected to result in
the imposition of a Lien under Section 412 of the IRC or Section 303(k) or 4068
of ERISA or cause or permit to occur an ERISA Event.

(h) Change to Credit and Collection Policies. No Originator shall fail to comply
in any material respect with, and no change, amendment, modification or waiver
shall be made to, the Credit and Collection Policies without the prior written
consent of Buyer.

 

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(i) Adverse Tax Consequences. No Originator shall take or permit to be taken any
action (other than with respect to actions taken or to be taken solely by a
Governmental Authority), or fail or neglect to perform, keep or observe any of
its obligations hereunder or under the other Related Documents, that would have
the effect directly or indirectly of subjecting any payment to Buyer, or to any
assignee who is a resident of the United States of America, to withholding
taxation.

(j) No Proceedings. From and after the Effective Date and until the date one
year plus one day following the Termination Date, no Originator shall, directly
or indirectly, institute or cause to be instituted against Buyer any proceeding
of the type referred to in Sections 8.01(d) and 8.01(e) of the Funding
Agreement.

(k) Mergers, Acquisitions, Sales, etc. Other than as permitted pursuant to
Section 6.1 of the Credit Agreement, neither the Parent nor any of its domestic
Subsidiaries shall (i) be a party to any merger or consolidation, or directly or
indirectly purchase or otherwise acquire all or substantially all of the assets
or any stock of any class of, or any partnership or joint venture interest in,
any other Person, or otherwise create or acquire a Subsidiary, or (ii) directly
or indirectly sell, transfer, assign, convey or lease whether in one or a series
of transactions, all or substantially all of its assets other than pursuant
hereto, or permit any Subsidiary to do any of the foregoing, except for any such
merger or consolidation, sale, transfer, conveyance, lease or assignment of or
by any majority-owned Subsidiary into such Person or into, with or to any other
majority-owned Subsidiary and any such purchase or other acquisition by such
Person or any majority-owned Subsidiary of the assets or stock of any
majority-owned Subsidiary. In connection with any merger or consolidation that
is permitted pursuant to Section 6.1 of the Credit Agreement, each Originator
will (i) provide written notice thereof to Buyer, and (ii) take all such actions
and deliver, or cause to be delivered, such opinion letters of counsel,
certificates and other agreements that Buyer or the Administrative Agent deems
reasonably necessary or desirable under the UCC to maintain the perfection and
priority of Buyer’s ownership interest in the Transferred Receivables.

(l) Modification to the Credit Agreement. The Parent covenants and agrees to
provide the Administrative Agent copies of each material amendment, modification
or waiver to any provision of the Credit Agreement promptly after the execution
thereof. If any such amendment amends the financial tests set forth in Annex Z
hereto or increases the thresholds for events of the type described in
Section 8.01(b) or (f), then the Transaction Parties hereby agree to amend this
Agreement to conform to such amendments at the request of the Administrative
Agent.

(m) Commingling. No Originator shall (and each Originator shall cause each other
member of the Parent Group not to) deposit or permit the deposit of any funds
that do not constitute Collections of Transferred Receivables into any Lockbox
or the Concentration Account; provided that after the Facility Termination Date,
so long as any Transferred Receivables of an Obligor remain unpaid, no
Originator shall instruct such Obligor to remit Collections of any Transferred
Receivables to any Person or account other than to a Lockbox or the
Concentration Account. If any funds not constituting collections of Transferred
Receivables are nonetheless deposited into a Lockbox or the Concentration
Account and such Originator so notifies Buyer, Buyer shall notify the Servicer
to promptly remit any such amounts to the applicable Originator.

 

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Section 4.04. Breach of Representations, Warranties or Covenants. Upon discovery
by any Originator or Buyer of any breach of representation, warranty or covenant
described in Sections 4.01(g), 4.01(l), 4.01(v), 4.01(w), 4.01(x), 4.02(l),
4.03(a), 4.03(b), 4.03(c), 4.03(d) and 4.03(m) with respect to any Transferred
Receivable, the party discovering the same shall give prompt written notice
thereof to the Administrative Agent and the other parties hereto. The Originator
that breached such representation, warranty or covenant shall, if requested by
notice from Buyer or the Administrative Agent, on the first Business Day
following receipt of such notice, either (a) repurchase the affected Transferred
Receivable from Buyer for cash remitted to the Concentration Account,
(b) transfer ownership of a new Eligible Receivable or new Eligible Receivables
to Buyer on such Business Day, or (c) in the case of the Parent, make a capital
contribution in cash to Buyer by remitting the amount of such capital
contribution to the Concentration Account, in each case, in an amount, or having
a Billed Amount (the “Rejected Amount”) equal to the Outstanding Balance
thereof. Each Originator shall ensure that no Collections or other proceeds with
respect to a Transferred Receivable so reconveyed to it are paid or deposited
into the Concentration Account. Notwithstanding any other provision herein to
the contrary, to the extent an Originator makes a determination that the most
efficient method of collecting a Receivable would be to offset amounts owed by
such Originator to such Obligor against amounts owed by such Obligor under such
Receivable, such Originator may request Buyer to sell such Receivable to
Originator for a price equal to the Outstanding Balance thereof. Any such sale
shall be in Buyer’s sole discretion and shall only be effective once the
purchase price has been deposited into the Concentration Account.

Section 4.05. Supplemental Disclosure. On the request of Buyer (in the event
that such information is not otherwise delivered by a Transaction Party to Buyer
pursuant to this Agreement), such Transaction Party will (or may, as it shall
elect) supplement (or cause to be supplemented) each Schedule hereto, or
representation herein or in any other Related Document with respect to any
matter hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Schedule or as an exception to such representation or which is necessary to
correct any information in such Schedule or representation which has been
rendered inaccurate thereby; provided that such supplement to any such Schedule
or representation shall not be deemed an amendment thereof except if and to the
extent that the information disclosed in such supplement updates (A) Schedule
4.01(b), (B) Schedule 4.01(j), (C) Schedule 4.01(m) to include any new Plans
maintained or contributed to in accordance with this Agreement, but includes no
additional exceptions or other changes to said schedule or (D) Schedule 4.01(t)
to include any accounts.

ARTICLE V

INDEMNIFICATION

Section 5.01. Indemnities by the Originators. Without limiting any other rights
that Buyer or any of its Stockholders, any of its assignees (including the
Secured Parties and the Administrative Agent), or any of their respective
officers, directors, employees, attorneys, agents or representatives and
transferees, successors and assigns (each, a “Buyer Indemnified Person”) may
have hereunder or under applicable law, each Originator hereby agrees to
indemnify and hold harmless each Buyer Indemnified Person from and

 

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against any and all Indemnified Amounts that may be claimed or asserted against
or incurred by any such Buyer Indemnified Person in connection with or arising
out of the transactions contemplated under this Agreement or under any other
Related Document and any actions or failures to act in connection therewith,
including any and all associated reasonable legal costs and expenses, or in
respect of any Transferred Receivable or any Contract therefor or the use by
such Originator of the Sale Price therefor; provided that no Originator shall be
liable for any indemnification to a Buyer Indemnified Person to the extent that
any such Indemnified Amounts (a) result from such Buyer Indemnified Person’s
gross negligence or willful misconduct, as finally determined by a court of
competent jurisdiction, or (b) constitute recourse for uncollectible or
uncollected Transferred Receivables due to the failure (without cause or
justification) or inability on the part of the related Obligor to perform its
obligations thereunder or the occurrence of any event of bankruptcy with respect
to such Obligor. Subject to clauses (a) and (b) of the proviso in the
immediately preceding sentence, but otherwise without limiting the generality of
the foregoing, each Originator shall pay on demand to each Buyer Indemnified
Person any and all Indemnified Amounts relating to or resulting from:

(i) reliance on any representation or warranty made or deemed made by such
Originator (or any of its officers) under or in connection with this Agreement
or any other Related Document (without regard to any qualifications concerning
the occurrence or non-occurrence of a Material Adverse Effect or similar
concepts of materiality) or on any other information delivered by such
Originator pursuant hereto or thereto that shall have been incorrect when made
or deemed made or delivered;

(ii) the failure by such Originator to comply with any term, provision or
covenant contained in this Agreement, any other Related Document or any
agreement executed in connection herewith or therewith (without regard to any
qualifications concerning the occurrence or non-occurrence of a Material Adverse
Effect or similar concepts of materiality), any applicable law, rule or
regulation with respect to any Transferred Receivable or the Contract therefor,
or the nonconformity of any Transferred Receivable or the Contract therefor with
any such applicable law, rule or regulation;

(iii) the failure to vest and maintain vested in Buyer, or to Transfer to Buyer,
valid and properly perfected title to and sole record and beneficial ownership
of the Receivables that constitute Transferred Receivables, together with all
Collections in respect thereof, free and clear of any Adverse Claim;

(iv) any dispute, claim, offset or defense of any Obligor (other than its
discharge in bankruptcy) to the payment of any Receivable that is the subject of
a Transfer hereunder (including (x) a defense based on such Receivable or the
Contract therefor not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms (other than as a
result of a discharge in bankruptcy), or any other claim resulting from the sale
of the merchandise or services giving rise to such Receivable or the furnishing
or failure to furnish such merchandise or services or relating to collection
activities with respect to such Receivable (if such collection activities were
performed by any Originator or any Affiliate thereof acting as the Servicer or a
Sub-Servicer) and (y) resulting from or in connection with any Dilution
Factors);

 

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(v) any products liability claim or other claim arising out of or in connection
with merchandise, insurance or services that is the subject of any Contract;

(vi) the commingling of Collections with respect to Transferred Receivables by
any Originator at any time with its other funds or the funds of any other
Person;

(vii) any failure by such Originator to cause the filing of, or any delay in
filing, financing statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or any other applicable laws with respect to
any Transferred Receivable that is the subject of a Transfer hereunder to the
extent that such filing is necessary to maintain the perfection and priority of
Buyer in such Receivable, whether at the time of any such Transfer or at any
subsequent time;

(viii) any investigation, Litigation or proceeding related to this Agreement or
the use of the Sale Price obtained in connection with any Sale or the ownership
of Transferred Receivables or Collections with respect thereto or in respect of
any Transferred Receivable or Contract therefor;

(ix) any claim brought by any Person other than a Buyer Indemnified Person
arising from any activity by such Originator or any of its Affiliates in
servicing, administering or collecting any Transferred Receivables;

(x) any failure of (w) a Lockbox Bank to comply with the terms of the applicable
Lockbox Agreement, (x) the Collection Account Bank to comply with the terms of
the Collection Account Agreement, (y) the Concentration Account Bank to comply
with the terms of the Concentration Account Agreement or (z) the Borrower
Account Bank to comply with the terms of the Borrower Account Agreement; and

(xi) any withholding, deduction or Charge imposed upon any payments with respect
to any Transferred Receivable, any Borrower Assigned Agreement or any other
Borrower Collateral.

Section 5.02. Indemnities by the Servicer.

(a) Without limiting any other rights that a Buyer Indemnified Person may have
hereunder or under applicable law, the Servicer hereby agrees to indemnify and
hold harmless each Buyer Indemnified Person from and against any and all
Indemnified Amounts that may be claimed or asserted against or incurred by any
such Buyer Indemnified Person in connection with or arising out of the
collection activities of the Servicer hereunder or out of any breach by the
Servicer of its obligations hereunder or under any other Related Document;
provided that the Servicer shall not be liable for any indemnification to a
Buyer Indemnified Person to the extent that any such Indemnified Amount
(x) results from such Buyer Indemnified Person’s gross negligence or willful
misconduct, in each case as finally determined by a court of competent
jurisdiction, or (y) constitutes recourse for uncollectible or uncollected
Transferred

 

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Receivables as a result of the insolvency, bankruptcy or the failure (without
cause or justification) or inability on the part of the related Obligor to
perform its obligations thereunder. Without limiting the generality of the
foregoing, the Servicer shall pay on demand to each Buyer Indemnified Person any
and all Indemnified Amounts relating to or resulting from:

(i) reliance on any representation or warranty made or deemed made by the
Servicer (or any of its officers) under or in connection with this Agreement or
any other Related Document (without regard to any qualifications concerning the
occurrence or non-occurrence of a Material Adverse Effect or similar concepts of
materiality) or on any other information delivered by the Servicer pursuant
hereto or thereto that shall have been incorrect when made or deemed made or
delivered;

(ii) the failure by the Servicer to comply with any term, provision or covenant
contained in this Agreement, any other Related Document or any agreement
executed in connection herewith or therewith (without regard to any
qualifications concerning the occurrence or non-occurrence of a Material Adverse
Effect or similar concepts of materiality), any applicable law, rule or
regulation with respect to any Transferred Receivable or the Contract therefor,
or the nonconformity of any Transferred Receivable or the Contract therefor with
any such applicable law, rule or regulation;

(iii) the imposition of any Adverse Claim with respect to any Transferred
Receivable or the Borrower Collateral as a result of any action taken by the
Servicer; or

(iv) the commingling of Collections with respect to Transferred Receivables by
the Servicer at any time with its other funds or the funds of any other Person.

(b) Any Indemnified Amounts subject to the indemnification provisions of this
Section 5.02 shall be paid by the Servicer to the Buyer Indemnified Person
entitled thereto within five Business Days following demand therefor.

ARTICLE VI

MISCELLANEOUS

Section 6.01. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt and three
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by email of the signed notice in PDF form or facsimile
transmission (with such email or facsimile promptly confirmed by delivery of a
copy by personal delivery or United States Mail as otherwise provided in this
Section 6.01), (c) one Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number set forth in Schedule 6.01 attached hereto or
to such other address (or facsimile number) as may be substituted by notice
given as herein provided. Without limiting the generality of the

 

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foregoing, all notices to be provided to Buyer hereunder shall be delivered to
both Buyer and the Administrative Agent under the Funding Agreement, and shall
be effective only upon such delivery to the Administrative Agent in accordance
with the terms of the Funding Agreement. The giving of any notice required
hereunder may be waived in writing by the party entitled to receive such notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to any Person (other than Buyer)
designated in any written communication provided hereunder to receive copies
shall in no way adversely affect the effectiveness of such notice, demand,
request, consent, approval, declaration or other communication. Notwithstanding
the foregoing, whenever it is provided herein that a notice is to be given to
any other party hereto by a specific time, such notice shall only be effective
if actually received by such party prior to such time, and if such notice is
received after such time or on a day other than a Business Day, such notice
shall only be effective on the immediately succeeding Business Day.

Section 6.02. No Waiver; Remedies. Buyer’s failure, at any time or times, to
require strict performance by the Originators of any provision of this Agreement
or any Receivables Assignment shall not waive, affect or diminish any right of
Buyer thereafter to demand strict compliance and performance herewith or
therewith. Any suspension or waiver of any breach or default hereunder shall not
suspend, waive or affect any other breach or default whether the same is prior
or subsequent thereto and whether the same or of a different type. None of the
undertakings, agreements, warranties, covenants and representations of any
Originator contained in this Agreement or any Receivables Assignment, and no
breach or default by any Originator hereunder or thereunder, shall be deemed to
have been suspended or waived by Buyer unless such waiver or suspension is by an
instrument in writing signed by an officer of or other duly authorized signatory
of Buyer and directed to such Originator specifying such suspension or waiver.
Buyer shall not waive any of the provisions set forth in Section 4.01(x) or
Section 4.02(n) if such waiver would adversely affect the Ratings. Buyer’s
rights and remedies under this Agreement shall be cumulative and nonexclusive of
any other rights and remedies that Buyer may have under any other agreement,
including the other Related Documents, by operation of law or otherwise.
Recourse to the Transferred Receivables shall not be required.

Section 6.03. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of each Originator, Servicer and Buyer and their
respective successors and permitted assigns, except as otherwise provided
herein. No Originator nor the Servicer may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder without
the prior express written consent of Buyer. Any such purported assignment,
transfer, hypothecation or other conveyance by any Originator or the Servicer
without the prior express written consent of Buyer shall be void. Each
Originator and the Servicer acknowledges that Buyer may collaterally assign (and
has collaterally assigned) all of its rights granted hereunder to the
Administrative Agent (for the benefit of the Secured Parties) under the Funding
Agreement, including the benefit of any indemnities under Article V, and the
Administrative Agent shall have all rights of Buyer hereunder and, to the extent
permitted under the Funding Agreement, may in turn assign such rights. Each
Originator and the Servicer acknowledges and agrees that until the Termination
Date under the Funding Agreement, (i) no consent or approval by Buyer hereunder
nor any delivery of a Servicer Termination Notice hereunder shall be effective
without the written consent and approval of the Administrative Agent, (ii) each
determination specified to be made by Buyer

 

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hereunder may be made by the Administrative Agent, and (iii) the Administrative
Agent may enforce directly, without joinder of Buyer, all of Buyer’s rights set
forth in this Agreement, including, without limitation, Sections 4.02(b),
4.02(c), 4.04, 6.13, 7.03(f), 7.03(h), 7.03(i), 7.03(j), 7.03(k), 8.01 and 9.02.
All such assignees, including parties to the Funding Agreement in the case of
any assignment to such parties, shall be third party beneficiaries of, and shall
be entitled to enforce Buyer’s rights and remedies under, this Agreement to the
same extent as Buyer or any of its designated representatives may do. The terms
and provisions of this Agreement are for the purpose of defining the relative
rights and obligations of each Originator, the Servicer and Buyer with respect
to the transactions contemplated hereby and, except for the Secured Parties and
the Administrative Agent, no Person shall be a third party beneficiary of any of
the terms and provisions of this Agreement.

Section 6.04. Termination; Survival of Obligations.

(a) 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 the Termination Date.

(b) Except as otherwise expressly provided herein or in any other Related
Document, no termination or cancellation (regardless of cause or procedure) of
any commitment made by Buyer under this Agreement shall in any way affect or
impair the obligations, duties and liabilities of any Originator or the rights
of Buyer relating to any unpaid portion of any and all recourse and indemnity
obligations of such Originator to Buyer, including those set forth in Sections
4.04, 5.01, 6.12, 6.14 and 6.15, whether due or not due, liquidated, contingent
or unliquidated or any transaction or event occurring prior to such termination,
or any transaction or event, the performance of which is required after the
Facility Termination Date. Except as otherwise expressly provided herein or in
any other Related Document, all undertakings, agreements, covenants, warranties
and representations of or binding upon each Originator, and all rights of Buyer
hereunder, all as contained in the Related Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided that the
rights and remedies set forth in Section 4.04, the indemnification and payment
provisions of Article V, and the provisions of Sections 4.03(j), 6.03, 6.12 and
6.14 shall be continuing and shall survive any termination of this Agreement.

Section 6.05. Complete Agreement; Modification of Agreement. This Agreement and
the other Related Documents constitute the complete agreement between the
parties with respect to the subject matter hereof and thereof, supersede all
prior agreements and understandings relating to the subject matter hereof and
thereof, and may not be modified, altered or amended except as set forth in
Section 6.06.

Section 6.06. Amendments and Waivers. No amendment, modification, termination or
waiver of any provision of this Agreement or any of the other Related Documents,
or any consent to any departure by any Originator therefrom, shall in any event
be effective unless the same shall be in writing and signed by each of the
parties hereto; provided that prior to the Termination Date, no amendment,
modification, termination or waiver of any provision of this Agreement or any of
the other Related Documents, or any consent to any departure by any Originator
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent. No consent or demand in any case shall,
in itself, entitle any party to any other consent or further notice or demand in
similar or other circumstances.

 

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Section 6.07. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.

(a) THIS AGREEMENT AND EACH RELATED DOCUMENT (EXCEPT TO THE EXTENT THAT ANY
RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE OBLIGATIONS ARISING
HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES), EXCEPT TO THE EXTENT THAT THE
PERFECTION, EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF BUYER IN THE
RECEIVABLES OR REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM
PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY RELATED DOCUMENT; PROVIDED THAT EACH PARTY HERETO ACKNOWLEDGES
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK CITY; PROVIDED FURTHER THAT
NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE BUYER FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE
ON THE RECEIVABLES OR ANY OTHER SECURITY FOR THE OBLIGATIONS OF THE ORIGINATORS
ARISING HEREUNDER, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
BUYER. EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY HERETO HEREBY
WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH IN SECTION
6.01 HEREOF AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER

 

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OF SUCH PARTY’S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED
STATES MAIL, PROPER POSTAGE PREPAID. NOTHING IN THIS SECTION SHALL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW.

(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS
ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON
AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

Section 6.08. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.

Section 6.09. Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

Section 6.10. Section Titles. The section titles and table of contents contained
in this Agreement are provided for ease of reference only and shall be without
substantive meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto.

Section 6.11. No Setoff. Each Originator’s obligations under this Agreement
shall not be affected by any right of setoff, counterclaim, recoupment, defense
or other right such Originator might have against Buyer, all of which rights are
hereby expressly waived by such Originator.

Section 6.12. Confidentiality.

(a) Except to the extent otherwise required by applicable law, as required to be
filed publicly with the Securities and Exchange Commission, or unless each
Affected Party shall otherwise consent in writing, each Originator, the Servicer
and Buyer agree to maintain the confidentiality of this Agreement (and all
drafts hereof and documents ancillary hereto) in its communications with third
parties other than any Affected Party or any Buyer Indemnified Person and
otherwise not to disclose, deliver or otherwise make available to any third
party (other than its directors, officers, employees, accountants or counsel)
the original or any copy of all or any part of this Agreement (or any draft
hereof and documents ancillary hereto) except to an Affected Party or a Buyer
Indemnified Person.

 

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(b) Each Originator and the Servicer agrees that it shall not (and shall not
permit any of its Affiliates to) issue any news release or make any public
announcement pertaining to the transactions contemplated by this Agreement and
the Related Documents without the prior written consent of Buyer (which consent
shall not be unreasonably withheld) unless such news release or public
announcement is required by law, in which case such Originator or the Servicer
shall consult with Buyer prior to the issuance of such news release or public
announcement. Any Originator or the Servicer may, however, disclose the general
terms of the transactions contemplated by this Agreement and the Related
Documents to trade creditors, suppliers and other similarly-situated Persons so
long as such disclosure is not in the form of a news release or public
announcement.

(c) Except to the extent otherwise required by applicable law, or in connection
with any judicial or administrative proceedings, as required to be filed
publicly with the Securities Exchange Commission, or unless the Originators and
the Servicer otherwise consent in writing, Buyer agrees (i) to maintain the
confidentiality of (A) this Agreement (and all drafts hereof and documents
ancillary hereto) and (B) all other confidential proprietary information with
respect to the Originators, the Servicer and their respective Affiliates and
each of their respective businesses obtained by Buyer in connection with the
structuring, negotiation and execution of the transactions contemplated herein
and in the other documents ancillary hereto, in each case, in its communications
with third parties other than any Originator or the Servicer, and (ii) not to
disclose, deliver, or otherwise make available to any third party (other than
its directors, officers, employees, accountants or counsel) the original or any
copy of all or any part of this Agreement (or any draft hereof and documents
ancillary hereto) except to any Originator. Notwithstanding the foregoing, Buyer
shall be permitted to disclose copies of this Agreement and the confidential
proprietary information described above to (1) each Affected Party and each
Affected Party’s and their respective Affiliates’ directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential and to not disclose or use such Information in
violation of Regulation FD (17 C.F.R. § 243.100-243.103)); (2) any regulatory
authority, (3) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (4) any other party to the Funding
Agreement, (5) to the extent required in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Related Document or the enforcement of rights hereunder or
thereunder, (6) subject to an agreement containing provisions substantially the
same as those of this Section, to any assignee or pledgee of (or participant
in), or any prospective assignee or pledgee of (or participant in), any of its
rights or obligations under this Agreement, (7) with the consent of the
applicable Originator or Servicer, (8) any nationally recognized statistical
rating organization rating a Conduit Lender’s Commercial Paper, any dealer or
placement agent of or depositary for the Conduit Lender’s Commercial Paper, any
Administrator, any Program Support Provider, any credit/financing provider to
any Conduit Lender or any of such Person’s counsel or accountants in relation to
this Agreement or any other Related Document if they agree to hold the
information confidential or (9) to the extent such Agreement or other
information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to Buyer or Affected Party on a
nonconfidential basis from a source other than the Parent or any Subsidiary
thereof.

 

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Section 6.13. Further Assurances.

(a) Each Originator shall, at its sole cost and expense, upon request of Buyer,
promptly and duly execute and deliver any and all further instruments and
documents and take such further actions that may be necessary or desirable or
that Buyer may request to carry out more effectively the provisions and purposes
of this Agreement or any other Related Document or to obtain the full benefits
of this Agreement and of the rights and powers herein granted, including
(i) using its best efforts to secure all consents and approvals necessary or
appropriate for the assignment to or for the benefit of Buyer of any Transferred
Receivable held by such Originator or in which such Originator has any rights
not heretofore assigned, and (ii) filing any financing or continuation
statements under the UCC with respect to the ownership interests or Liens
granted hereunder or under any other Related Document. Each Originator hereby
authorizes Buyer to file any such financing or continuation statements without
the signature of such Originator to the extent permitted by applicable law. A
carbon, photographic or other reproduction of this Agreement or of any notice or
financing statement covering the Transferred Receivables or any part thereof
shall be sufficient as a notice or financing statement where permitted by law.
If any amount payable under or in connection with any of the Transferred
Receivables is or shall become evidenced by any instrument, such instrument,
other than checks and notes received in the ordinary course of business, shall
be duly endorsed in a manner satisfactory to Buyer immediately upon such
Originator’s receipt thereof and promptly delivered to Buyer.

(b) If any Originator fails to perform any agreement or obligation under this
Section 6.13, Buyer may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the reasonable expenses of
Buyer incurred in connection therewith shall be payable by such Originator upon
demand of Buyer.

Section 6.14. Fees and Expenses. In addition to its indemnification obligations
pursuant to Article V, each Originator agrees, jointly and severally, to pay on
demand all Rating Agency fees and all costs and expenses incurred by Buyer in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the other Related Documents, including the reasonable fees and
out-of-pocket expenses incurred by Buyer, (including any such amounts owed by
Buyer in connection with its financing of the Transfers hereunder), for counsel,
advisors, consultants and auditors retained in connection with the transactions
contemplated hereby and advice in connection therewith, and each Originator
agrees, jointly and severally, to pay all costs and expenses, if any (including
reasonable attorneys’ fees and expenses but excluding any costs of enforcement
or collection of the Transferred Receivables), in connection with the
enforcement of this Agreement and the other Related Documents.

Section 6.15. Nonrecourse Obligations. Notwithstanding any provision in any
other Section of this Agreement to the contrary, any obligation of Buyer to pay
any amounts payable to the Originators pursuant to this Agreement shall be
without recourse to Buyer except to the extent that funds from Advances or
Collections are available to Buyer pursuant to the terms of the Funding
Agreement for such payment (collectively, the “Buyer Available Amounts”). In the
event that amounts payable to the Originators pursuant to this

 

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Agreement exceed Buyer Available Amounts, the excess of the amounts due
hereunder (and subject to this Section 6.15) over the Buyer Available Amounts
paid shall not constitute a “claim” under Section 101(5) of the Bankruptcy Code
against Buyer until such time as Buyer has Buyer Available Amounts.

ARTICLE VII

SERVICER PROVISIONS

Section 7.01. Appointment of the Servicer. Buyer hereby appoints the Servicer as
its agent to service the Transferred Receivables and, in accordance with the
Related Documents, to enforce Buyer’s rights and interests in and under each
Transferred Receivable and Contract therefor and to serve in such capacity until
the termination of its responsibilities pursuant to Sections 8.01 or 9.01. In
connection therewith, the Servicer hereby accepts such appointment and agrees to
perform the duties and obligations set forth herein. The Servicer may, with the
prior written consent of Buyer, subcontract with a Sub-Servicer for the
collection, servicing or administration of the Transferred Receivables; provided
that (a) the Servicer shall remain liable for the performance of the duties and
obligations of such Sub-Servicer pursuant to the terms hereof, (b) any
Sub-Servicing Agreement that may be entered into and any other transactions or
services relating to the Transferred Receivables involving a Sub-Servicer shall
be deemed to be between the Sub-Servicer and the Servicer alone, and Buyer shall
not be deemed a party thereto and shall have no obligations, duties or
liabilities with respect to the Sub-Servicer and (c) each Sub-Servicing
Agreement shall expressly provide that it shall automatically terminate upon the
termination of the Servicer’s responsibilities hereunder in accordance with the
terms hereof.

Section 7.02. Duties and Responsibilities of the Servicer.

(a) Subject to the provisions of this Agreement, the Servicer shall conduct the
servicing, administration and collection of the Transferred Receivables and
shall take, or cause to be taken, all actions that (i) may be necessary or
advisable to service, administer and collect each Transferred Receivable from
time to time, (ii) the Servicer would take if the Transferred Receivables were
owned by the Servicer, and (iii) are consistent with the Credit and Collection
Policies and industry practice for the servicing of accounts receivable similar
to such Transferred Receivables.

(b) In addition to the foregoing, in order to ensure that Buyer has adequate
funding for the purchase of Receivables hereunder, the Servicer shall be
responsible for the following:

(i) preparation and delivery on behalf of Buyer of all Borrowing Requests,
Repayment Notices, Borrowing Base Certificates, Monthly Reports, Weekly Reports
and Daily Reports required to be delivered under the Funding Agreement;

(ii) calculation and monitoring of the Borrowing Base and the components
thereof, and determination of whether the Receivables included in the
calculation of the Net Receivables Balance are in fact Eligible Receivables; and

(iii) establishment, maintenance and administration of the Lockboxes, the
Concentration Account and the Borrower Account in accordance with Article VI of
the Funding Agreement.

 

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Section 7.03. Collections on Receivables.

(a) In the event that the Servicer is unable to determine the specific
Transferred Receivables on which Collections have been received from the Obligor
thereunder, the parties agree that such Collections shall be deemed to have been
received on such Receivables in the order in which they were originated with
respect to such Obligor. In the event that the Servicer is unable to determine
the specific Transferred Receivables on which discounts, offsets or other
non-cash reductions have been granted or made with respect to the Obligor
thereunder, the parties agree for purposes of this Agreement only that such
reductions shall be deemed to have been granted or made (i) prior to a
Termination Event, on such Receivables as determined by the Servicer, and
(ii) from and after the occurrence of a Termination Event, in the reverse order
in which they were originated with respect to such Obligor.

(b) If the Servicer determines that amounts unrelated to the Transferred
Receivables (the “Unrelated Amounts”) have been deposited in any Account, then
the Servicer shall provide written evidence thereof to Buyer no later than the
first Business Day following the day on which the Servicer had actual knowledge
thereof, which evidence shall be provided in writing and shall be otherwise
satisfactory to Buyer.

(c) Authorization of the Servicer. Buyer hereby authorizes the Servicer to take
any and all reasonable steps in its name and on its behalf necessary or
desirable and not inconsistent with the rights of Buyer hereunder, in the
determination of the Servicer, to (a) collect all amounts due under any
Transferred Receivable, including endorsing the applicable name on checks and
other instruments representing Collections on such Receivable, and execute and
deliver any and all instruments of satisfaction or cancellation or of partial or
full release or discharge and all other comparable instruments with respect to
any such Receivable and (b) after any Transferred Receivable becomes a
Delinquent Receivable or a Defaulted Receivable and to the extent permitted
under and in compliance with applicable law and regulations, commence
proceedings with respect to the enforcement of payment of any such Receivable
and the Contract therefor and adjust, settle or compromise any payments due
thereunder, in each case to the same extent as the applicable Originator could
have done if it had continued to own such Receivable. Buyer shall furnish the
Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder. Notwithstanding anything to the contrary contained herein,
Buyer shall have the absolute and unlimited right to direct the Servicer (at the
Servicer’s expense) (i) to commence or settle any legal action to enforce
collection of any Transferred Receivable or (ii) to foreclose upon, repossess or
take any other action that Buyer deems necessary or advisable with respect
thereto. In no event shall the Servicer be entitled to make Buyer or any
Affected Party a party to any Litigation without such Affected Party’s express
prior written consent.

(d) Servicing Fees. As compensation for its servicing activities and as
reimbursement for its reasonable expenses in connection therewith, the Servicer
shall be entitled to receive the Servicing Fees monthly on each Settlement Date.
Such Servicing Fees shall be payable from available funds in accordance with
Section 2.07 and 2.08 of the Funding Agreement. The Servicer shall be required
to pay for all expenses incurred by it in connection with its activities
hereunder (including any payments to accountants, counsel or any other Person)
and shall not be entitled to any payment therefor other than the Servicing Fees.

 

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Section 7.04. Covenants of the Servicer. The Servicer covenants and agrees that
from and after the Effective Date and until the Termination Date:

(a) Compliance with Agreements and Applicable Laws. The Servicer shall perform
each of its obligations under this Agreement and the other Related Documents.
The Servicer shall comply with all federal, state and local laws and regulations
applicable to it and the Transferred Receivables, including those relating to
truth in lending, retail installment sales, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices, privacy,
licensing, taxation, ERISA and labor matters and environmental laws and
environmental permits, except, in each case, where the failure to so comply
could not reasonably be expected to result in a Material Adverse Effect.

(b) Maintenance of Existence and Conduct of Business. The Servicer shall: (i) do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and its rights and franchises; (ii) continue to
conduct its business substantially as now conducted or as otherwise permitted
hereunder and in accordance with the terms of its certificate or articles of
incorporation and by-laws; and (iii) at all times maintain, preserve and protect
all of its assets and properties used or useful in the conduct of its business,
including all licenses, permits, charters and registrations, and keep the same
in good repair, working order and condition in all material respects (taking
into consideration ordinary wear and tear) and from time to time make, or cause
to be made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with industry practices, except to the extent that the
failure to comply with this clause (iii) could not reasonably be expected to
have a Material Adverse Effect.

(c) Deposit of Collections. The Servicer shall deposit or cause to be deposited
promptly into the Concentration Account, and in any event no later than the
first Business Day after receipt thereof, all Collections it may receive with
respect to any Transferred Receivable.

(d) ERISA. The Servicer shall give the Administrative Agent prompt written
notice of any event that (i) could reasonably be expected to result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA, or (ii) could reasonably be expected to result in the incurrence by
Servicer of any liabilities under Title IV of ERISA (other than premium payments
arising in the ordinary course of business).

(e) Compliance with Credit and Collection Policies. The Servicer shall comply
with the Credit and Collection Policies with respect to each Transferred
Receivable and the Contract therefor. The Servicer shall not extend, amend,
forgive, discharge, compromise, waive, cancel or otherwise modify the terms of
any Transferred Receivable or amend, modify or waive any term or condition of
any Contract related thereto, except that the Servicer may (i) reduce the
Outstanding Balance of a Transferred Receivable as required to reflect any
Dilution Factors and (ii) take such actions, to the extent permitted by the
Credit and Collection Policies, as the Servicer may deem reasonably necessary or
desirable in order to maximize Collections with respect to any past-due
Receivable so long as, after giving effect to any such action, no Transferred
Receivables which constituted Eligible Receivables prior to such action would no
longer constitute Eligible Receivables as a result of such action. The Servicer
shall not without the prior written consent of Buyer amend, modify or waive any
term or provision of the Credit and Collection Policies.

 

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(f) Ownership of Transferred Receivables; Servicing Records. The Servicer shall
(i) identify the Transferred Receivables clearly and unambiguously in its
Servicing Records to reflect that such Transferred Receivables are the property
of Buyer and that a Lien on such Transferred Receivables has been granted to the
Administrative Agent for the benefit of the Secured Parties; (ii) maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing such Transferred
Receivables in the event of the destruction of any originals thereof) as are
necessary or advisable in accordance with industry practice (1) to reflect
promptly (a) all payments received and all credits and extensions granted with
respect to such Transferred Receivables, (b) the return, rejection,
repossessions, or stoppage in transit of any merchandise the sale of which has
given rise to any such Transferred Receivable and (c) any other reductions in
the Outstanding Balance of such Transferred Receivables on account of Dilution
Factors; and (2) to determine no less frequently than the date each Daily
Report, Weekly Report or Monthly Report is due, whether each Transferred
Receivable then outstanding qualifies as an Eligible Receivable; (iii) by no
later than the Effective Date, mark conspicuously with a legend, in form and
substance satisfactory to Buyer, its books and records (including computer
records) and credit files pertaining to the Borrower Collateral, and its file
cabinets or other storage facilities where it maintains information pertaining
thereto, to evidence the assignment of the Transferred Receivables under this
Agreement and the assignment and Liens granted pursuant to the Funding
Agreement. Upon the occurrence and during the continuance of an Incipient
Termination Event or a Termination Event, the Servicer shall deliver and turn
over such books and records to Buyer or its representatives at any time on
demand. The Servicer shall permit any representative of Buyer to inspect such
books and records and shall provide photocopies thereof to Buyer as more
specifically set forth in Section 7.04(i).

(g) Payment and Performance of Charges and other Obligations.

(i) Subject to Section 7.04(g)(ii), the Servicer shall pay, perform and
discharge or cause to be paid, performed and discharged promptly all charges and
claims payable by it, including (A) Charges imposed upon it, its income and
profits, or any of its property (real, personal or mixed) and all Charges with
respect to tax, social security and unemployment withholding with respect to its
employees, and (B) lawful claims for labor, materials, supplies and services or
otherwise before any amount thereof shall become past due.

(ii) The Servicer may in good faith contest, by appropriate proceedings, the
validity or amount of any charges or claims described in Section 7.04(g)(i);
provided that (A) adequate reserves with respect to such contest are maintained
on the books of the Servicer, in accordance with GAAP, (B) such contest is
maintained and prosecuted continuously and with diligence, (C) none of the
Borrower Collateral becomes subject to forfeiture or loss as a result of such
contest, (D) no Lien shall be imposed to secure payment of such charges or
claims other than inchoate tax liens and (E) the Administrative Agent has not
advised the Servicer in writing that it reasonably believes that failure to pay
or to discharge such claims or charges could have or result in a Material
Adverse Effect.

 

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(h) Access. The Servicer agrees to provide Buyer and Buyer’s employees,
directors, agents and representatives with all access that the Originators have
covenanted and agreed to provide to Buyer in Section 4.02(b).

(i) Communication with Accountants. The Servicer authorizes Buyer to communicate
directly with its independent certified public accountants, and authorizes and,
shall upon Buyer’s request, instruct those accountants to disclose and make
available to Buyer, its officers, employees, agents and representatives any and
all financial statements and other supporting financial documents, schedules and
information relating to the Servicer (including copies of any issued management
letters) with respect to the business, financial condition and other affairs of
the Servicer. The Servicer agrees to render to Buyer, at the Servicer’s own cost
and expense, such clerical and other assistance as may be reasonably requested
with regard to the foregoing, it being understood that the Servicer shall be
required to comply with a request under this Section 7.03(i) only to the extent
such request is reasonably related to the transactions contemplated by the
Transaction Documents and to the Transferred Receivables.

(j) Collection of Transferred Receivables. In connection with the collection of
amounts due or to become due under the Transferred Receivables, the Borrower
Assigned Agreements and any other Borrower Collateral, the Servicer shall take
such action as it, and from and after the occurrence and during the continuance
of a Termination Event, Buyer may deem necessary or desirable to enforce
collection of the Transferred Receivables, the Borrower Assigned Agreements and
the other Borrower Collateral; provided that the applicable Originator may,
rather than commencing any such action or taking any other enforcement action,
at its option, elect to pay to Buyer, for deposit into the Agent Account, an
amount equal to the Outstanding Balance of any such Transferred Receivable. If
(i) an Incipient Termination Event or a Termination Event shall have occurred
and be continuing or (ii) Buyer in good faith believes that an Incipient
Termination Event or a Termination Event is imminent, then Buyer may, without
prior notice to any Originator or the Servicer, (x) exercise its right to take
exclusive ownership and control of (1) the Collections and the Concentration
Account in accordance with the terms of the applicable Concentration Account
Agreement and (2) the Borrower Account in accordance with the Borrower Account
Agreement (in which case the Servicer shall be required to deposit any
Collections it then has in its possession or at any time thereafter receives,
immediately in the Collection Account) and (y) notify any Obligor under any
Transferred Receivable or obligors under the Borrower Assigned Agreements of the
sale to Buyer of such Transferred Receivables and of the pledge of such
Transferred Receivables or Borrower Assigned Agreements, as the case may be, to
the Administrative Agent and direct that payments of all amounts due or to
become due to Buyer thereunder be made directly to Buyer or any servicer,
collection agent or Lockbox or other account designated by Buyer and Buyer may
enforce collection of any such Transferred Receivable or the Borrower Assigned
Agreements and adjust, settle or compromise the amount or payment thereof. Buyer
shall provide prompt notice to the Servicer of any such notification of
assignment, pledge or direction of payment to the Obligors under any Transferred
Receivables.

(k) Performance of Borrower Assigned Agreements. The Servicer shall (i) perform
and observe all the terms and provisions of the Borrower Assigned Agreements to
be performed or observed by it, maintain the Borrower Assigned Agreements in
full force and effect, enforce the Borrower Assigned Agreements in accordance
with their terms and take all action as may from time to time be

 

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requested by Buyer in order to accomplish the foregoing, and (ii) upon the
request of and as directed by Buyer, make such demands and requests to any other
party to the Borrower Assigned Agreements as are permitted to be made by the
Servicer thereunder.

(l) License for Use of Software and Other Intellectual Property. Unless
expressly prohibited by the licensor thereof or any provision of applicable law,
if any, the Servicer hereby grants to Buyer (and to the Administrative Agent on
behalf of the Secured Parties as assignee of Buyer) a limited license to use,
without charge, the Servicer’s computer programs, software, printouts and other
computer materials, technical knowledge or processes, data bases, materials,
trademarks, registered trademarks, trademark applications, service marks,
registered service marks, service mark applications, patents, patent
applications, trade names, rights of use of any name, labels, fictitious names,
inventions, designs, trade secrets, goodwill, registrations, copyrights,
copyright applications, permits, licenses, franchises, customer lists, credit
files, correspondence, and advertising materials or any property of a similar
nature, as it pertains to the Transferred Receivables and the other Borrower
Collateral, or any rights to any of the foregoing, only as reasonably required
in connection with the collection of the Transferred Receivables and the
advertising for sale, and selling any of the Borrower Collateral, or exercising
of any other remedies with respect thereto, and the Servicer agrees that its
rights under all licenses and franchise agreements shall inure to Buyer (and to
the Administrative Agent on behalf of the Secured Parties as assignee of Buyer)
for purposes of the license granted herein. Except upon the occurrence and
during the continuation of a Termination Event, Buyer agrees not to use (and
shall cause the Administrative Agent to covenant not to use) any such license
without giving the Servicer prior written notice.

(m) Deposit of Collections. The Servicer shall (and shall cause each of its
Affiliates to) (i) instruct all Obligors to remit all payments with respect to
any Transferred Receivables directly into a Lockbox or the Concentration
Account, and (ii) deposit or cause to be deposited promptly into a Lockbox or
the Concentration Account, and in any event no later than the first Business Day
after receipt thereof, all Collections it may receive in respect of Transferred
Receivables (and until so deposited, all such Collections shall be held in trust
for the benefit of Buyer and its assigns (including the Administrative Agent and
the Secured Parties). The Servicer shall not make or permit to be made deposits
into a Lockbox or the Concentration Account other than in accordance with this
Agreement and the other Related Documents. Without limiting the generality of
the foregoing, the Servicer shall ensure that no Collections or other proceeds
with respect to a Receivable reconveyed to any Originator pursuant to
Section 4.04 hereof are paid or deposited into any Lockbox or the Concentration
Account.

(n) Commingling. The Servicer shall not (and shall cause each other member of
the Parent Group not to) deposit or permit the deposit of any funds that do not
constitute Collections of Transferred Receivables into any Lockbox or the
Concentration Account except as otherwise permitted by Section 4.03(m) hereof.
If any funds not constituting Collections of Transferred Receivables are
nonetheless deposited into a Lockbox or the Concentration Account and the
Servicer so notifies Buyer, Buyer shall promptly remit any such amounts to the
applicable Originator. So long as any Transferred Receivables of an Obligor
remain unpaid, the Servicer shall not instruct such Obligor to remit Collections
of any Receivables other than Excluded Receivables to any Person or account
other than to a Lockbox or the Concentration Account.

 

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(o) Separate Identity. The Servicer shall comply with Section 4.02(i) to the
same extent as if it were an Originator.

Section 7.05. Reporting Requirements of the Servicer. The Servicer hereby agrees
that, from and after the Effective Date and until the Termination Date, it shall
prepare and deliver or cause to be prepared and delivered to the Administrative
Agent and the Managing Agents the financial statements, notices, reports, and
other information at the times, to the Persons and in the manner set forth in
Annex 7.05.

ARTICLE VIII

EVENTS OF SERVICER TERMINATION

Section 8.01. Events of Servicer Termination. If any of the following events
(each, an “Event of Servicer Termination”) shall occur (regardless of the reason
therefor):

(a) the Servicer shall (i) fail to make any payment or deposit hereunder when
due and payable and the same shall remain unremedied for one (1) Business Day or
more; (ii) fail to deliver when due any of the reports required to be delivered
pursuant to Section 7.05 or any other report related to the Transferred
Receivables as required by the other Related Documents and the same shall remain
unremedied for two (2) Business Days or more; or (iii) fail or neglect to
perform, keep or observe any other provision of this Agreement or the other
Related Documents (other than any provision embodied in or covered by any other
clause of this Section 8.01) and the same shall remain unremedied for five
(5) days or more following the earlier to occur of an Authorized Officer of the
Servicer becoming aware of such breach and the Servicer’s receipt of notice
thereof; or

(b)(i) the Servicer shall fail to make any payment with respect to any of its
Debts which is in an aggregate principal amount exceeding $10,000,000 when due,
and the same shall remain unremedied for any applicable grace period with
respect thereto; or (ii) a default or breach shall occur and be continuing under
any agreement, document or instrument to which the Servicer is a party or by
which the Servicer or its property is bound (other than a Related Document), and
such default or breach shall remain unremedied after any applicable grace period
with respect thereto and which involves a Debt which is in an aggregate
principal amount exceeding $10,000,000; or

(c) a case or proceeding shall have been commenced against the Servicer or any
Affiliate which acts as a Sub-Servicer seeking a decree or order in respect of
any such Person (i) under the Bankruptcy Code or any other applicable federal,
state or foreign bankruptcy or other similar law, (ii) appointing a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
for any such Person or for any substantial part of such Person’s assets, or
(iii) ordering the winding-up or liquidation of the affairs of any such Person,
and such case or proceeding continues for 60 days unless dismissed or
discharged; provided that such 60-day period shall be deemed terminated
immediately if (x) a decree or order is entered by a court of competent
jurisdiction with respect to a case or proceeding described in this subsection
(c), or (y) any of the events described in Section 8.01(d) shall have occurred;
or

 

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(d) the Servicer or any Affiliate which acts as a Sub-Servicer shall (i) file a
petition seeking relief under the Bankruptcy Code or any other applicable
federal, state or foreign bankruptcy or other similar law, (ii) consent or fail
to object in a timely and appropriate manner to the institution of any
proceedings under the Bankruptcy Code or any other applicable federal, state or
foreign bankruptcy or similar law or to the filing of any petition thereunder or
to the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for any such Person or
for any substantial part of such Person’s assets, (iii) make an assignment for
the benefit of creditors, or (iv) take any corporate action in furtherance of
any of the foregoing; or

(e) the Servicer or any Affiliate which acts as a Sub-Servicer generally does
not pay its debts as such debts become due or admits in writing its inability
to, or is generally unable to, pay its debts as such debts become due; or

(f) a final judgment or judgments for the payment of money in excess of
$5,000,000 in the aggregate (net of insurance proceeds) at any time outstanding
shall be rendered against the Servicer or any other Subsidiary of the Parent
which acts as a Sub-Servicer and either (i) enforcement proceedings shall have
been commenced upon any such judgment or (ii) the same shall not, within 30 days
after the entry thereof, have been discharged or execution thereof stayed or
bonded pending appeal, or shall not have been discharged prior to the expiration
of any such stay; or

(g)(i) any information contained in any Borrowing Base Certificate, Monthly
Report, Weekly Report or Daily Report is untrue or incorrect in any respect or
(ii) any representation or warranty of the Servicer herein or in any other
Related Document or in any written statement, report, financial statement or
certificate (other than a Borrowing Base Certificate) made or delivered by the
Servicer to any Affected Party hereto or thereto is untrue or incorrect in any
material respect as of the date when made or deemed made and such representation
and warranty, if relating to any Transferred Receivable, has not been cured by
the repurchase of any such Transferred Receivable pursuant to Section 4.04; or

(h) Buyer shall have determined that any event or condition that materially
adversely affects the ability of the Servicer to collect the Transferred
Receivables or to otherwise perform hereunder has occurred; or

(i) a Termination Event shall have occurred or this Agreement shall have been
terminated; or

(j) a deterioration has taken place in the quality of servicing of Transferred
Receivables or other Receivables, other than the Mexico Receivables, serviced by
the Servicer that Buyer or the Administrative Agent, in its sole discretion,
determines to be material, and such material deterioration has not been
eliminated within 30 days after written notice thereof shall have been given by
the Administrative Agent to the Servicer; or

(k) the Servicer shall assign or purport to assign any of its obligations
hereunder without the prior written consent of Buyer; or

(l) a Change of Control shall have occurred; or

 

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(m) a default or breach of any of the tests set forth in Annex Z shall have
occurred;

then, and in any such event, Buyer may, by delivery of a Servicer Termination
Notice to the Servicer, terminate the servicing responsibilities of the Servicer
hereunder, without demand, protest or further notice of any kind, all of which
are hereby waived by the Servicer. Upon the delivery of any such notice, all
authority and power of the Servicer under this Agreement shall pass to and be
vested in the Successor Servicer acting pursuant to Section 9.02; provided that
notwithstanding anything to the contrary herein, the Servicer agrees to continue
to follow the procedures set forth in Section 7.02 with respect to Collections
on the Transferred Receivables until a Successor Servicer has assumed the
responsibilities and obligations of the Servicer in accordance with
Section 9.02.

ARTICLE IX

SUCCESSOR SERVICER PROVISIONS

Section 9.01. Servicer Not to Resign. The Servicer shall not resign from the
obligations and duties hereby imposed on it except upon a determination that
(a) the performance of its duties hereunder has become impermissible under
applicable law or regulation and (b) there is no reasonable action that the
Servicer could take to make the performance of its duties hereunder become
permissible under applicable law. Any such determination shall (i) with respect
to clause (a) above, be evidenced by an opinion of counsel to such effect and
(ii) with respect to clause (b) above, be evidenced by an Officer’s Certificate
to such effect, in each case delivered to the Administrative Agent. No such
resignation shall become effective until a Successor Servicer shall have assumed
the responsibilities and obligations of the Servicer in accordance with
Section 9.02.

Section 9.02. Appointment of the Successor Servicer. In connection with the
termination of the Servicer’s responsibilities or the resignation by the
Servicer under this Agreement pursuant to Sections 8.01 or 9.01, Buyer may at
any time appoint a successor servicer to the Servicer that shall be acceptable
to the Administrative Agent and shall succeed to all rights and assume all of
the responsibilities, duties and liabilities of the Servicer under this
Agreement (the Administrative Agent, in such capacity, or such successor
servicer being referred to as the “Successor Servicer”); provided that the
Successor Servicer shall have no responsibility for any actions of the Servicer
prior to the date of its appointment or assumption of duties as Successor
Servicer. In selecting a Successor Servicer, Buyer may (but shall not be
required to) obtain bids from any potential Successor Servicer and may agree to
any bid it deems appropriate. The Successor Servicer shall accept its
appointment by executing, acknowledging and delivering to Buyer an instrument in
form and substance acceptable to Buyer and the Administrative Agent.

Section 9.03. Duties of the Servicer. The Servicer covenants and agrees that,
following the appointment of, or assumption of duties by, a Successor Servicer:

(a) The Servicer shall terminate its activities as Servicer hereunder in a
manner that facilitates the transfer of servicing duties to the Successor
Servicer and is otherwise acceptable to Buyer and the Administrative Agent and,
without limiting the generality of the foregoing, shall, at its own expense,
timely deliver (i) any funds to the Administrative Agent that were required to
be remitted to the Administrative Agent for deposit in the Agent Account under
the Funding Agreement and (ii) copies of all Servicing Records and

 

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other information with respect to the Transferred Receivables to the Successor
Servicer at a place selected by the Successor Servicer. The Servicer shall
cooperate with the Successor Servicer in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement and
shall account for all funds and shall execute and deliver such instruments and
do such other things as may be required to vest and confirm in the Successor
Servicer all rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer. All reasonable costs and expenses (including
reasonable attorneys’ fees) incurred in connection with transferring all files
and other documents in respect of the Transferred Receivables to the Successor
Servicer shall be for the account of the predecessor Servicer.

(b) The Servicer shall terminate each existing Sub-Servicing Agreement and the
Successor Servicer shall not be deemed to have assumed any of the Servicer’s
interests therein or to have replaced the Servicer as a party thereto.

(c) In the event that the Servicer is terminated as Servicer hereunder but no
Successor Servicer has been appointed, the Servicer shall timely deliver to the
Administrative Agent or its designee, at a place designated by the
Administrative Agent or such designee, all Servicing Records and other
information with respect to the Transferred Receivables which otherwise would be
required to be delivered to the Successor Servicer under Section 9.03(a) above,
and all reasonable costs and expenses (including reasonable attorneys’ fees)
incurred in connection with transferring such files and other documents to the
Administrative Agent shall be for the account of the predecessor Servicer.

Section 9.04. Effect of Termination or Resignation. Any termination of or
resignation by the Servicer hereunder shall not affect any claims that Buyer or
its assigns may have against the Servicer for events or actions taken or not
taken by the Servicer arising prior to any such termination or resignation.

Section 9.05. Power of Attorney. On the Closing Date, the Servicer shall execute
and deliver a power of attorney in substantially in the form attached hereto as
Exhibit 9.05 (a “Power of Attorney”). The Power of Attorney is a power coupled
with an interest and shall be irrevocable until this Agreement has terminated in
accordance with its terms and all of the Transferred Receivables have been
indefeasibly paid or otherwise written off as uncollectible. The powers
conferred under the Power of Attorney are solely to protect the interests of
Buyer and its assigns (including the Administrative Agent and the Secured
Parties) in the Transferred Receivables and the ability of the Successor
Servicer to assume the servicing rights, powers and responsibilities of the
Servicer hereunder and shall not impose any duty upon the Administrative Agent
or the Successor Servicer to exercise any such powers. The Administrative Agent
covenants and agrees not to use the Power of Attorney except following a
Termination Event and prior to the occurrence of the Termination Date.

Section 9.06. No Proceedings. Each Originator and Servicer agrees that, from and
after the Closing Date and until the date one year plus one day following the
Termination Date, it will not, directly or indirectly, institute or cause to be
instituted against Buyer any proceeding of the type referred to in Sections
8.01(d) and 8.01(e) of the Funding Agreement. This Section 9.06 shall survive
the termination of this Agreement.

 

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IN WITNESS WHEREOF, the parties have caused this Receivables Sale and Servicing
Agreement to be executed by their respective duly authorized representatives, as
of the date first above written.

 

SYNNEX CORPORATION, individually and as an Originator By:  

/s/    Simon Y. Leung

Name:   Simon Y. Leung Title:   General Counsel and Corporate Secretary SIT
FUNDING CORPORATION, as Buyer By:  

/s/    Simon Y. Leung

Name:   Simon Y. Leung Title:   General Counsel and Corporate Secretary

SYNNEX CORPORATION,

as Servicer

By:  

/s/    Simon Y. Leung

Name:   Simon Y. Leung Title:   General Counsel and Corporate Secretary

 

   S-1   

Third Amended and Restated

Receivables Sale and Servicing Agreement

--------------------------------------------------------------------------------

EXHIBIT 2.01(a)

Form of

RECEIVABLES ASSIGNMENT

THIS RECEIVABLES ASSIGNMENT (the “Receivables Assignment”) is entered into as of
[DATE], by and between [Name of Originator] (the “Originator”) and SIT FUNDING
CORPORATION (“Buyer”).

1. We refer to that certain Third Amended and Restated Receivables Sale and
Servicing Agreement (as amended, restated, supplemented or otherwise modified
from time to time, the “Sale Agreement”) of even date herewith among the
Originator, the other Originators party thereto, Synnex Corporation and Buyer.
All of the terms, covenants and conditions of the Sale Agreement are hereby made
a part of this Receivables Assignment and are deemed incorporated herein in
full. Unless otherwise defined herein, capitalized terms or matters of
construction defined or established in the Sale Agreement shall be applied
herein as defined or established therein.

2. For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Originator hereby sells, or, in the event the
Originator is a shareholder of Buyer, sells or contributes, to Buyer, without
recourse, except as provided in Section 4.04 of the Sale Agreement, all of the
Originator’s right, title and interest in, to and under all of its Receivables
other than Excluded Receivables (including all Collections, Records and proceeds
with respect to such included Receivables) existing as of the Closing Date and
thereafter created or arising at any time until the Facility Termination Date.

3. Subject to the terms and conditions of the Sale Agreement, the Originator
hereby covenants and agrees to assign, sell or contribute, as applicable,
execute and deliver, or cause to be assigned, sold or contributed, executed and
delivered, and to do or make, or cause to be done or made, upon request of Buyer
and at the Originator’s expense, any and all agreements, instruments, papers,
deeds, acts or things, supplemental, confirmatory or otherwise, as may be
reasonably required by Buyer for the purpose of or in connection with acquiring
or more effectively vesting in Buyer or evidencing the vesting in Buyer of the
property, rights, title and interests of the Originator sold or contributed
hereunder or intended to be sold or contributed hereunder.

4. Wherever possible, each provision of this Receivables Assignment shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Receivables Assignment shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Receivables Assignment.

5. THIS RECEIVABLES ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES), AND ANY APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA.

Receivables Sale and Servicing Agreement

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have caused this Receivables Assignment to be
executed by their respective officers thereunto duly authorized, as of the day
and year first above written.

 

[NAME OF ORIGINATOR] By:  

 

Name:   Title:   SIT FUNDING CORPORATION, as Buyer By:  

 

Name:   Title:  

Receivables Sale and Servicing Agreement

Exhibit 2.01(a)-2

--------------------------------------------------------------------------------

EXHIBIT 2.01(c)(ii)

Form of

SUBORDINATED NOTE

 

$[        ]   [             ,         ]

FOR VALUE RECEIVED, the undersigned, SIT FUNDING CORPORATION, a Delaware
corporation (the “Borrower”), hereby promises to pay to the order of
[                                    ], a (the “Subordinated Lender”), or its
assigns, at [ADDRESS], or at such other place as the holder of this Subordinated
Note (“Note”) may designate from time to time in writing, in lawful money of the
United States of America and in immediately available funds, the principal
amount of [        ] DOLLARS [$        ], or, if less, the aggregate unpaid
principal amount of all Subordinated Loans (as defined in the Sale Agreement
referred to below) made to the Borrower, upon the earlier to occur of (i) Final
Advance Date and (ii) the Termination Date (in each case, as defined in Annex X
to the Sale Agreement referred to below), together with interest thereon from
time to time from the Effective Date (as defined in the Sale Agreement referred
to below) at the rate shown in The Wall Street Journal as the “Prime Rate” on
such date (the “Interest Rate”) on the unpaid principal amount of each
Subordinated Loan for the period commencing on and including the date of such
Subordinated Loan to but excluding the date such Subordinated Loan is paid in
full.

The date, amount and interest rate of each Subordinated Loan made by the
Subordinated Lender to the Borrower, and each payment made by or on behalf of
the Borrower on account of the principal thereof, shall be recorded by the
Subordinated Lender on its books and, prior to any transfer of this Note,
endorsed by the Subordinated Lender on the schedule attached hereto or any
continuation thereof. The books of the Subordinated Lender and such schedule
shall be presumptive evidence of the amounts due and owing to the Subordinated
Lender by the Borrower; provided that any failure of the Subordinated Lender to
record a notation in its books or on the schedule to this Note as aforesaid or
any error in so recording shall not limit or otherwise affect the obligation of
the Borrower to repay Subordinated Loans in accordance with their respective
terms set forth herein.

All capitalized terms, unless otherwise defined herein, shall have the meanings
assigned to them in the Third Amended and Restated Receivables Sale and
Servicing Agreement of even date herewith (as the same may be subsequently
amended, restated or otherwise modified, the “Sale Agreement”) by and among the
Borrower, the Subordinated Lender, the other Originators thereunder and Synnex
Corporation. This Note is issued pursuant to the Sale Agreement and is one of
the Subordinated Notes referred to therein. All of the terms, covenants and
conditions of the Sale Agreement and all other instruments evidencing the
indebtedness hereunder, including the other Related Documents, are hereby made a
part of this Note and are deemed incorporated herein in full.

The Borrower may at any time and from time to time voluntarily repay, in whole
or in part, all Subordinated Loans made hereunder. Any amount so repaid may,
subject to the terms and conditions hereof, be reborrowed hereunder; provided
that all repayments of Subordinated Loans or any portion thereof shall be made
together with payment of all interest accrued on the amount repaid to (but
excluding) the date of such repayment.

Receivables Sale and Servicing Agreement

--------------------------------------------------------------------------------

Interest shall be payable on the outstanding principal amount of this Note from
time to time in arrears on the first Business Day of each calendar month. All
computations of interest shall be made by the Subordinated Lender on the basis
of a 365 day year, in each case for the actual number of days occurring in the
period for which such interest is payable. The Interest Rate shall be determined
(i) on the first Business Day immediately prior to the Effective Date for
calculation of the Interest Rate for the period from the Effective Date through
the end of the first calendar month following the Effective Date, and (ii) as of
the last Business Day of each month for use in calculating the interest that is
payable for the following calendar month, and the Interest Rate so determined
shall be utilized for such calendar month. Each determination by the
Subordinated Lender of an interest rate hereunder shall be final, binding and
conclusive on the Borrower (absent manifest error). The Borrower shall pay
interest at the applicable Interest Rate on unpaid interest on any Subordinated
Loan or any installment thereof, and on any other amount payable by the Borrower
hereunder (to the extent permitted by law) that shall not be paid in full when
due (whether at stated maturity, by acceleration or otherwise) for the period
commencing on the due date thereof to (but excluding) the date the same is
indefeasibly paid in full.

If any payment or prepayment on this Note becomes due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the Interest Rate during such extension.

As set forth below, the indebtedness evidenced by this Subordinated Note is
subordinate in right of payment to all Borrower Obligations and all renewals,
extensions, refinancings or refundings of any such obligations (whether for
principal, interest (including but not limited to interest accruing after the
filing of a petition initiating any bankruptcy, insolvency or receivership
proceeding (each, an “Insolvency Proceeding”) whether or not such interest is
allowed in such Insolvency Proceeding), fees, indemnities, repurchase price,
expenses or otherwise) (collectively, the “Senior Obligations”). The
subordination provisions contained herein are for the direct benefit of, and may
be enforced by, any holder of a Senior Obligation, and may not be terminated,
amended or otherwise revoked until the Senior Obligations have been indefeasibly
paid in full in cash and the Related Documents terminated in accordance with
their respective terms. This Subordinated Note shall not be subject to any
defense or any rights of set-off, including on account of any past or present
debt. Upon the occurrence and during the continuance of any Termination Event or
Incipient Termination Event, the Subordinated Lender shall not demand,
accelerate, sue for, take, receive or accept from the Borrower, directly or
indirectly, in cash or other property or by set-off or any other manner
(including, without limitation, from or by way of collateral) any payment of or
security for all or any part of the indebtedness under this Subordinated Note or
exercise any remedies or take any action or proceeding to enforce the same. The
Subordinated Lender hereby agrees that prior to the date that is one year and
one day after all of the Senior Obligations have been indefeasibly paid in full
in cash and the Related Documents terminated in accordance with their respective
terms, the Subordinated Lender will not take any action to institute any
Insolvency Proceeding in respect of the Borrower or which would be reasonably
likely to cause the Borrower to be subject to, or seek the protection of, any
such Insolvency Proceeding.

Receivables Sale and Servicing Agreement

Exhibit 2.01(c)(ii)-2

--------------------------------------------------------------------------------

If the Borrower becomes subject to any Insolvency Proceeding, then the holders
of the Senior Obligations shall receive payment in full of all amounts due or to
become due on or with respect to the Senior Obligations before the Subordinated
Lender shall be entitled to receive any payment on account of this Subordinated
Note. Accordingly, any payment or distribution of assets of the Borrower of any
kind or character, whether in cash, securities or other property, in any
applicable Insolvency Proceeding, that 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
Administrative Agent for application to, or as collateral for the payment of,
the Senior Obligations until such Senior Obligations shall have been
indefeasibly paid in full in cash.

In no contingency or event whatsoever, whether by reason of advancement of the
proceeds hereof or otherwise, shall the amount paid or agreed to be paid to
Subordinated Lender for the use, forbearance or detention of money advanced
hereunder exceed the highest rate of interest permissible under law (the
“Maximum Lawful Rate”). In the event that a court of competent jurisdiction
determines that Subordinated Lender has charged or received interest hereunder
in excess of the Maximum Lawful Rate, the amount of interest payable hereunder
shall be equal to the amount payable under the Maximum Lawful Rate; provided
that if at any time thereafter the amount of interest payable to Subordinated
Lender hereunder is less than the amount payable under the Maximum Lawful Rate,
the Borrower shall continue to pay interest hereunder at the Maximum Lawful Rate
until such time as the total interest received by Subordinated Lender from the
making of Subordinated Loans hereunder is equal to the total interest that
Subordinated Lender would have received had the amount of interest payable to
Subordinated Lender hereunder been (but for the operation of this paragraph) the
amount of interest payable from the Effective Date. Thereafter, the amount of
interest payable hereunder shall be the amount determined in accordance with the
terms hereof unless and until the amount so calculated again exceeds the amount
payable under the Maximum Lawful Rate, in which event this paragraph shall again
apply. In no event shall the total interest received by Subordinated Lender
pursuant to the terms hereof exceed the amount that Lender could lawfully have
received had the interest due hereunder been calculated for the full term hereof
at the Maximum Lawful Rate. In the event the amount payable under the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. In the event that
a court of competent jurisdiction, notwithstanding the provisions of this Note,
shall make a final determination that Subordinated Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Subordinated Lender shall, to
the extent permitted by applicable law, promptly apply such excess first to any
interest due and not yet paid hereunder, then to the outstanding principal
amount of the Subordinated Loans, then to fees and any other unpaid charges, and
thereafter shall refund any excess to the Borrower or as a court of competent
jurisdiction may otherwise order.

Wherever possible each provision of this Note shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note.

Receivables Sale and Servicing Agreement

Exhibit 2.01(c)(ii)-3

--------------------------------------------------------------------------------

Time is of the essence of this Note. To the fullest extent permitted by
applicable law, the Borrower expressly waives presentment, demand, diligence,
protest and all notices of any kind whatsoever with respect to this Note.

BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE
MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND
THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE BORROWER HERETO
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS NOTE, THE SALE AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, WHETHER ARISING IN CONTRACT,
TORT OR OTHERWISE.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402
OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES), AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.

IN WITNESS WHEREOF, the Borrower has caused this Note to be signed and delivered
by its duly authorized officer as of the date set forth above.

 

SIT FUNDING CORPORATION By:  

 

Name:  

 

Title:  

 

Receivables Sale and Servicing Agreement

Exhibit 2.01(c)(ii)-4

--------------------------------------------------------------------------------

SCHEDULE OF LOANS TO SUBORDINATED NOTE

 

Date

  

Amount of

Subordinated Loan

  

Amount of

Principal Paid

  

Unpaid

Principal Balance

  

Notation

made by

                                                                               
                                                                               
                                                                                
                                                                              
                                                                                
                                                                          

Receivables Sale and Servicing Agreement

Exhibit 2.01(c)(ii)-5

--------------------------------------------------------------------------------

EXHIBIT 2.03

Form of

ORIGINATOR SUPPORT AGREEMENT

THIS ORIGINATOR SUPPORT AGREEMENT (“Agreement”) is entered into as of [        
    ,         ], by SYNNEX CORPORATION, a Delaware corporation (“Parent”), in
favor of SIT FUNDING CORPORATION, a Delaware corporation (“SPE”).

RECITALS

A. SIT Funding Corporation, as purchaser, has entered into a Third Amended and
Restated Receivables Sale and Servicing Agreement dated as of January 23, 2009
(as the same may from time to time be amended, restated, supplemented or
otherwise modified, the “Sale Agreement”), with Synnex Corporation, and the
persons party thereto as “Originators.” Unless otherwise defined herein,
capitalized terms or matters of construction defined or established Annex X to
the Sale Agreement shall be applied herein as defined or established therein.

B. It is a condition precedent to [            ] becoming a party to the Sale
Agreement as an “Originator” that Parent, as owner, directly or indirectly, of
at least 100% of the outstanding Stock having ordinary voting power to elect the
board of directors of [            ] and each other Originator, shall have
executed and delivered this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce SPE to make
purchases under the Sale Agreement, Parent hereby agrees as follows:

Section 1. Unconditional Undertaking. Parent hereby unconditionally and
irrevocably undertakes and agrees with and for the benefit of SPE and the
Administrative Agent (for itself and for the benefit of the Secured Parties) to
cause the due and punctual performance and observance by the Servicer and each
other Originator and their respective successors and assigns (collectively, the
“Synnex Entities”) of all of the terms, covenants, conditions, agreements and
undertakings on the part of such Synnex Entity to be performed or observed under
the Sale Agreement or any document delivered by such Synnex Entity in connection
with the Sale Agreement, the Funding Agreement and the Related Documents in
accordance with the terms thereof, including the punctual payment when due of
all obligations of such Synnex Entity now or hereafter existing under the Sale
Agreement whether for indemnification payments, fees, expenses or otherwise
(such terms, covenants, conditions, agreements, undertakings and other
obligations being the “Guaranteed Obligations”), and agrees to pay any and all
reasonable and documented expenses (including reasonable and documented fees and
expenses of attorneys, auditors and accountants) incurred by SPE, the
Administrative Agent and their respective assigns in enforcing any rights under
this Agreement; provided that the foregoing unconditional undertaking of Parent
is not intended

Receivables Sale and Servicing Agreement

--------------------------------------------------------------------------------

to, and shall not, constitute a guarantee of the collectibility or payment of
the Transferred Receivables. Parent agrees that each of its Subsidiaries that
becomes an “Originator” under the Sale Agreement shall be deemed to be an
“Originator” for purposes of this Agreement. In the event that any Synnex Entity
shall fail in any manner whatsoever to perform or observe any of its Guaranteed
Obligations when the same shall be required to be performed or observed under
the Sale Agreement or any such other Related Document, then Parent will itself
duly and punctually perform or observe, or cause to be duly and punctually
performed or observed, such Guaranteed Obligations, and it shall not be a
condition to the accrual of the obligation of Parent hereunder to perform or
observe any Guaranteed Obligation (or to cause the same to be performed or
observed) that SPE or the Administrative Agent, as applicable, shall have first
made any request of or demand upon or given any notice to Parent or to any
Synnex Entity or their respective successors or assigns, or have instituted any
action or proceeding against Parent or any Synnex Entity or their respective
successors or assigns in respect thereof.

Section 2. Obligation Absolute. Parent undertakes that the Guaranteed
Obligations will be performed or paid strictly in accordance with the terms of
the Sale Agreement or any other Related Document delivered by an Synnex Entity
in connection with the Sale Agreement regardless of any law, regulation or order
applicable to SPE or the Administrative Agent now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of SPE or the
Administrative Agent with respect thereto. The obligations of Parent under this
Agreement are independent of the Guaranteed Obligations, and a separate action
or actions may be brought and prosecuted against Parent to enforce this
Agreement, irrespective of whether any action is brought against any Synnex
Entity or whether any Synnex Entity is joined in any such action or actions. The
liability of Parent under this Agreement shall be absolute and unconditional
irrespective of:

(a) any lack of validity or enforceability of the Sale Agreement or any other
agreement or instrument relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Guaranteed Obligations, or any other amendment or waiver
of or any consent to departure from the Sale Agreement or any other agreement or
instrument relating thereto, including, without limitation, any increase in the
Guaranteed Obligations resulting from additional purchases or contributions of
Receivables (other than Excluded Receivables) or otherwise;

(c) any taking, exchange, release or non-perfection of any collateral, or any
taking, release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Guaranteed Obligations;

(d) any manner of application of collateral, or proceeds thereof, to all or any
of the Guaranteed Obligations, or any manner of sale or other disposition of any
collateral for all or any of the Guaranteed Obligations or any other assets of
any Synnex Entity or any of its subsidiaries;

Receivables Sale and Servicing Agreement

 

Exhibit 2.03-2

--------------------------------------------------------------------------------

(e) any change, restructuring or termination of the corporate structure or
existence of any Synnex Entity or any of its subsidiaries; or

(f) any other circumstance that might otherwise constitute a defense available
to, or a discharge of, any Synnex Entity or a guarantor.

This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by SPE upon the insolvency, bankruptcy or
reorganization of any Synnex Entity or otherwise, all as though payment had not
been made.

Section 3. Waivers. Parent hereby waives promptness, diligence, notice of
acceptance and, except to the extent required under the Sale Agreement, any
other notice with respect to any of the Guaranteed Obligations and this
Agreement and any requirement that SPE or the Administrative Agent protect,
secure, perfect or insure any Lien or any property subject thereto or exhaust
any right or take any action against any Synnex Entity or any other person or
entity or any collateral.

Section 4. Subrogation. Parent agrees not to exercise any rights that it may
acquire by way of subrogation against any Synnex Entity and its property or any
rights of indemnification, contribution and reimbursement from any Synnex Entity
and its property, in each case in connection with this Agreement and any
payments made hereunder, until such time as the Guaranteed Obligations have been
paid and performed in full and the Termination Date has occurred.

Section 5. Separate Identity from Buyer. Parent shall itself, and shall ensure
that each of its Affiliates, at all times comply with the covenants and
agreements of the Originators set forth in Section 4.02(i) of the Sale Agreement
as if Parent and each of its Affiliates were identified therein. Parent is party
to no agreements with SPE or the Administrative Agent other than pursuant to the
Related Documents.

Section 6. No Proceedings. From and after the Closing Date and until the date
one year plus one day following the date on which all Borrower Obligations have
been indefeasibly paid in full in cash, Parent shall not, directly or
indirectly, institute or cause to be instituted against SPE any proceeding of
the type referred to in Sections 8.01(c) or 8.01(d) of the Sale Agreement.

Section 7. Amendments and Waivers. No amendment or waiver of any provision of
this Agreement, and no consent to any departure by Parent herefrom, shall in any
event be effective unless the same shall be in writing and signed by SPE and the
Administrative Agent, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

Receivables Sale and Servicing Agreement

 

Exhibit 2.03-3

--------------------------------------------------------------------------------

Section 8. Addresses for Notices. All notices and other communications hereunder
shall be sent in the manner provided in Section 6.01 of the Sale Agreement,
which provisions are incorporated herein by this reference as though fully set
forth herein.

Section 9. No Waiver; Remedies. No failure on the part of SPE or the
Administrative Agent to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

Section 10. Continuing Agreement; Assignments under Sale Agreement. This
Agreement is a continuing agreement and shall (a) remain in full force and
effect until the Termination Date has occurred and the payment and performance
in full of the Guaranteed Obligations and the payment of all other amounts
payable under this Agreement, (b) be binding upon Parent, its successors and
assigns, and (c) inure to the benefit of, and be enforceable by, SPE, the
Administrative Agent and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), if SPE assigns all
or any of the Transferred Receivables, or any interest therein, the assignees
shall thereupon become vested with all the benefits in respect thereof granted
to SPE and the Administrative Agent herein or otherwise, including the rights to
receive any notices hereunder, to consent to any waivers, amendments or other
modifications of this Agreement, and/or to be reimbursed for any expenses in
enforcing any rights hereunder.

Section 11. Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

Section 12. GOVERNING LAW. THIS AGREEMENT AND THE ORIGINATOR OBLIGATIONS ARISING
HEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402
OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES) AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.

IN WITNESS WHEREOF, Parent has caused this Agreement to be duly executed and
delivered by its officer thereunto duly authorized as of the date first above
written.

 

SYNNEX CORPORATION, as Parent By:  

 

Name:  

 

Title:  

 

Receivables Sale and Servicing Agreement

 

Exhibit 2.03-4

--------------------------------------------------------------------------------

EXHIBIT 9.05

Form of

POWER OF ATTORNEY

IN FAVOR OF THE ADMINISTRATIVE AGENT

This Power of Attorney is executed and delivered by SYNNEX CORPORATION, as
Servicer (“Grantor”) in favor of BANK OF AMERICA, NATIONAL ASSOCIATION (the
“Administrative Agent”) or such successor entity as the Administrative Agent may
designate herein (the Administrative Agent or such successor entity, the
“Attorney”) pursuant to that certain Third Amended and Restated Receivables Sale
and Servicing Agreement dated as of January 23, 2009 (as the same may from time
to time be amended, restated, supplement or otherwise modified, the “Sale
Agreement”), by and among Grantor, as Servicer, the persons party thereto as
“Originators”, and SIT Funding Corporation, as Buyer. Capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to them in the
Sale Agreement. No person to whom this Power of Attorney is presented, as
authority for Attorney to take any action or actions contemplated hereby, shall
be required to inquire into or seek confirmation from Grantor as to the
authority of Attorney to take any action described below, or as to the existence
of or fulfillment of any condition to this Power of Attorney, which is intended
to grant to Attorney unconditionally the authority to take and perform the
actions contemplated herein, and Grantor irrevocably waives any right to
commence any suit or action, in law or equity, against any person or entity that
acts in reliance upon or acknowledges the authority granted under this Power of
Attorney. The power of attorney granted hereby is coupled with an interest and
may not be revoked or cancelled by Grantor until all Transferred Receivables
under the Sale Agreement have been indefeasibly paid in full and/or written-off
as uncollectible and Attorney has provided its written consent thereto.

Grantor hereby irrevocably constitutes and appoints Attorney (and all officers,
employees or agents designated by Attorney), with full power of substitution, as
its true and lawful attorney in fact with full irrevocable power and authority
in its place and stead and in its name or in Attorney’s own name, from time to
time in Attorney’s discretion, to take any and all appropriate action and to
execute and deliver any and all documents and instruments that may be necessary
or desirable to accomplish the purposes of the Sale Agreement, and, without
limiting the generality of the foregoing, hereby grants to Attorney the power
and right, on its behalf, without notice to or assent by it, to do the
following: (a) open mail for it, and ask, demand, collect, give acquittances and
receipts for, take possession of, or endorse and receive payment of, any checks,
drafts, notes, acceptances, or other instruments for the payment of moneys due
in respect of Transferred Receivables, and sign and endorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, and notices in connection with any
Transferred Receivable or other Borrower Collateral; (b) pay or discharge any
taxes, Liens, or other encumbrances levied or placed on or threatened against
any Borrower Collateral; (c) defend any suit, action or proceeding brought
against it or any Borrower Collateral if the Grantor does not defend such suit,
action, or proceeding or if Attorney believes that it is not pursuing such
defense in a manner that will maximize the recovery to the Attorney, and settle,
compromise or adjust any suit, action, or proceeding described above and, in
connection therewith, give such discharges or releases as Attorney may deem
appropriate; (d) file or prosecute any claim, Litigation, suit or

Receivables Sale and Servicing Agreement

--------------------------------------------------------------------------------

proceeding in any court of competent jurisdiction or before any arbitrator, or
take any other action otherwise deemed appropriate by Attorney for the purpose
of collecting any and all such moneys due with respect to any Transferred
Receivable or other Borrower Collateral or otherwise with respect to the Related
Documents whenever payable and to enforce any other right in respect of its
property; (e) sell, transfer, pledge, make any agreement with respect to, or
otherwise deal with, any Transferred Receivables or other Borrower Collateral,
and execute, in connection with such sale or action, any endorsements,
assignments or other instruments of conveyance or transfer in connection
therewith; and (g) cause the certified public accountants then engaged by it to
prepare and deliver to Attorney at any time and from time to time, promptly upon
Attorney’s request, any and all financial statements or other reports required
to be delivered by or on behalf of Grantor under the Related Documents, all as
though Attorney were the absolute owner of its property for all purposes, and to
do, at Attorney’s option and its expense, at any time or from time to time, all
acts and other things that Attorney reasonably deems necessary to perfect,
preserve, or realize upon the Transferred Receivables and the Administrative
Agent’s interests therein, all as fully and effectively as it might do. Grantor
hereby ratifies, to the extent permitted by law, all that said attorneys shall
lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, this Power of Attorney is executed by Grantor, and Grantor
has caused its seal to be affixed pursuant to the authority of its board of
directors this      day of [        ], 20[    ].

 

Grantor          ATTEST:   

 

      By:   

 

      (SEAL) Title:   

 

      [Notarization in appropriate form for the state of execution is required.]
  

Receivables Sale and Servicing Agreement

 

Exhibit 9.05(b)-2

--------------------------------------------------------------------------------

SCHEDULES

Receivables Sale and Servicing Agreement

--------------------------------------------------------------------------------

ANNEX 7.05

REPORTING REQUIREMENTS OF THE SERVICER

The Servicer shall furnish, or cause to be furnished, to Buyer (with copies to
each Managing Agent and the Administrative Agent):

(a) Annual Audited Financials. As soon as available, and in any event within
ninety (90) days after the end of each fiscal year, a copy of (1) the audited
consolidated financial statements for such year for each of the Servicer and its
Subsidiaries, certified, as to the audited financial statements, without
qualification in a manner satisfactory to Buyer and the Administrative Agent by
any of (i) Deloitte & Touche USA LLP, (ii) Ernst & Young LLP, (iii) KPMG LLP or
(iv) PricewaterhouseCoopers LLP (or any of their respective successors) or other
nationally recognized independent public accountants acceptable to Buyer and the
Administrative Agent, with such financial statements being prepared in
accordance with GAAP applied consistently throughout the period involved (except
as approved by such accountants and disclosed therein) and (2) the unaudited
consolidating financial statements for the Servicer and its Subsidiaries.

(b) Quarterly Financials. As soon as available, and in any event within
forty-five (45) days after the end of each fiscal quarter (other than the last
quarter of such fiscal year), financial information regarding the Servicer and
its Subsidiaries, certified by the Chief Financial Officer of the Servicer,
consisting of consolidated unaudited balance sheets as of the close of such
fiscal quarter and the related statements of income and cash flows for that
portion of the fiscal year ending as of the close of such fiscal quarter, all
prepared in accordance with GAAP, subject to normal year-end audit adjustments
and the absence of footnotes. Such financial information shall be accompanied by
the certification of the Chief Financial Officer of the Servicer that (A) such
financial information presents fairly in accordance with GAAP the financial
position and results of operations of the Servicer and its Subsidiaries, on a
consolidated and consolidating basis, in each case as at the end of such quarter
and for the period then ended and (B) any other information presented is true,
correct and complete in all material respects and that there was no Incipient
Termination Event or Termination Event in existence as of such time or, if an
Incipient Termination Event or Termination Event shall have occurred and be
continuing, describing the nature thereof and all efforts undertaken to cure
such Incipient Termination Event or Termination Event. In addition, the Servicer
shall furnish, or cause to be furnished, to the Administrative Agent and the
Managing Agents, within forty-five (45) days after the end of each fiscal
quarter, (1) a statement in reasonable detail (each, a “Compliance Certificate”)
showing the calculations used in determining compliance with each financial test
described in Annex Z of this Agreement and (2) a management discussion and
analysis that includes a comparison of performance for the fiscal year to date
as of the end of that fiscal quarter to the corresponding period in the prior
year, as set forth in the quarterly filings made by the Servicer with the
Securities and Exchange Commission.

(c) Intentionally Omitted.

(d) Operating Plan. As soon as available, but not later than 45 days after the
end of each fiscal year, an annual operating plan for such fiscal year for the
Servicer, which will (i) include a statement of the material assumptions on
which such plan is based,

Receivables Sale and Servicing Agreement

--------------------------------------------------------------------------------

(ii) include quarterly balance sheets and quarterly projections for such year
and (iii) integrate sales, gross profits, operating expenses, operating profit,
cash flow projections and Borrowing Base projections, all prepared on the same
basis and in similar detail as that on which operating results are reported (and
in the case of cash flow projections, representing management’s good faith
estimates of future financial performance based on historical performance), and
including plans for personnel, capital expenditures and facilities.

(e) Management Letters. Within 10 Business Days after receipt thereof by the
Servicer, copies of all management letters, exception reports or similar letters
or reports received by the Borrower from its independent certified public
accountants.

(f) Default Notices. As soon as practicable, and in any event within five
Business Days after an Authorized Officer of the Servicer has actual knowledge
of the existence thereof, telephonic or telecopied notice of each of the
following events, in each case specifying the nature and anticipated effect
thereof and what action, if any, the Servicer proposes to take with respect
thereto, which notice, if given telephonically, shall be promptly confirmed in
writing on the next Business Day:

(i) any Incipient Termination Event or Termination Event;

(ii) any Adverse Claim made or asserted against any of the Transferred
Receivables of which it becomes aware;

(iii) the occurrence of any event that would have a material adverse effect on
the aggregate value of the Transferred Receivables or on the assignments and
Liens granted by the Originators pursuant to this Agreement;

(iv) the occurrence of any event of the type described in Sections 4.02(h)(i),
(ii) or (iii) of this Agreement involving any Obligor obligated under
Transferred Receivables with an aggregate Outstanding Balance at such time of
$2,000,000 or more;

(v) the commencement of a case or proceeding by or against Buyer, the Parent,
the Servicer, any Originator, any other Subsidiary of the Servicer or any
Obligor seeking a decree or order in respect of Buyer, the Parent, the Servicer,
any Originator, any other Subsidiary of the Servicer or any Obligor (A) under
the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy
or other similar law, (B) appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for Buyer, the Parent,
the Servicer, any Originator, any other Subsidiary of the Servicer or any
Obligor or for any substantial part of its respective assets, or (C) ordering
the winding up or liquidation of the affairs of Buyer, the Parent, the Servicer,
any Originator, any other Subsidiary of the Servicer or any Obligor;

(vi) the receipt of notice that (A) Buyer, the Parent, the Servicer, any
Originator, any other Subsidiary of the Servicer or any Obligor is being placed
under regulatory supervision, (B) any material license, permit, charter,
registration or

Receivables Sale and Servicing Agreement

 

Annex 7.05-2

--------------------------------------------------------------------------------

approval necessary for the conduct of the business of Buyer, the Parent, the
Servicer, any Originator, any other Subsidiary of the Servicer or any Obligor is
to be, or may be, suspended or revoked, or (C) the Borrower, the Parent, the
Servicer, any Originator, any other Subsidiary of the Servicer or any Obligor is
to cease and desist any practice, procedure or policy employed by it in the
conduct of its business if such cessation could reasonably be expected to have a
Material Adverse Effect; or

(vii) any other event, circumstance or condition that has had or could
reasonably be expected to have a Material Adverse Effect.

(g) SEC Filings and Press Releases. Promptly upon their becoming available,
copies of any final registration statements and the regular, periodic and
special reports, if any, which the Parent shall have filed with the Securities
and Exchange Commission (or any governmental agency substituted therefor) or any
national securities exchange and copies of all management letters delivered to
the Parent or any of its Subsidiaries by its accountants.

(h) ERISA Notices. Promptly after the filing or receiving thereof, copies of all
material reports and notices that Buyer, any Originator, the Servicer or any of
its other Subsidiaries files under ERISA with the Internal Revenue Services or
the PBGC or the U.S. Department of Labor or that Buyer, any Originator, the
Servicer or any of its other Subsidiaries receives from any of the foregoing or
from any multiemployer plan (within the meaning of Section 4001(a)(3) of ERISA)
to which Buyer, any Originator, the Servicer or any of its other Subsidiaries is
or was, within the preceding five years, a contributing employer, in each case
in respect of any accumulated funding deficiency under ERISA, any “Reportable
Event” under ERISA, or any assessment of withdrawal liability under ERISA or ay
other event or condition which could, in the aggregate, result in the imposition
of liability on Buyer, any Originator, the Servicer or any of its other
Subsidiaries in excess of $1,500,000.

(i) Litigation. Promptly upon learning thereof, written notice of any Litigation
affecting Buyer, the Transferred Receivables or the Borrower Collateral, whether
or not fully covered by insurance, and regardless of the subject matter thereof
that (i) seeks damages in excess of $100,000, (ii) seeks injunctive relief,
(iii) is asserted or instituted against any Plan, its fiduciaries (in their
capacity as a fiduciary of any such Plan) or its assets or against Buyer or any
ERISA Affiliate of Buyer in connection with any Plan, (iv) alleges criminal
misconduct by the Servicer or (v) would, if determined adversely, have a
Material Adverse Effect.

(j) Other Documents. Such other financial and other information respecting the
Transferred Receivables, the Contracts therefor or the condition or operations,
financial or otherwise, of Buyer, any Originator, the Servicer or any of its
other Subsidiaries as any Managing Agent or Administrative Agent shall, from
time to time, reasonably request.

(k) Miscellaneous Certifications. As soon as available, and in any event within
90 days after the end of each fiscal year, a bringdown certificate by Servicer,
and if requested, an opinion or opinions of counsel, in each case in form and
substance reasonably satisfactory to Buyer, the Managing Agents and the
Administrative Agent, reaffirming as of the date of such opinion the opinions of
counsel with respect to the Servicer delivered to Buyer, the Managing Agents and
the Administrative Agent on the Closing Date.

Receivables Sale and Servicing Agreement

 

Annex 7.05-3

--------------------------------------------------------------------------------

ANNEX X

DEFINITIONS

[Attached]

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ANNEX X

to

THIRD AMENDED AND RESTATED RECEIVABLES SALE AND SERVICING

AGREEMENT

and

THIRD AMENDED AND RESTATED RECEIVABLES FUNDING AND ADMINISTRATION

AGREEMENT

dated as of

January 23, 2009

Definitions and Interpretation

 

   Annex X

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SECTION 1. Definitions and Conventions. Capitalized terms used in the Sale
Agreement (as defined below) and the Funding Agreement (as defined below) shall
have (unless otherwise provided elsewhere therein) the following respective
meanings:

“Account” shall mean any of the Concentration Account, the Collection Account or
the Borrower Account.

“Account Agreement” shall mean any of the Borrower Account Agreement, the
Collection Account Agreement or the Concentration Account Agreement.

“Accounting Based Consolidation Event” shall mean the consolidation, for
financial and/or regulatory accounting purposes, of all or any portion of the
assets and liabilities of any Conduit Lender that are the subject of this
Agreement or any other Transaction Document with all or any portion of the
assets and liabilities of the Managing Agent or any Committed Lender in such
Conduit Lender’s Lender Group or any of their affiliates as the result of the
occurrence of any change after the Closing Date in accounting standards or the
issuance of any pronouncement, interpretation or release, by any accounting body
or any other governmental body charged with the promulgation or administration
of accounting standards, including, without limitation, the Financial Accounting
Standards Board, the International Accounting Standards Board, the American
Institute of Certified Public Accountants, the Federal Reserve Board of
Governors and the Securities and Exchange Commission.

“Accounting Changes” shall mean, with respect to any Person, (a) changes in
accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion of the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants (or any successor thereto or
any agency with similar functions); (b) changes in accounting principles
concurred with by such Person’s certified public accountants; (c) purchase
accounting adjustments under A.P.B. 16 or 17 and EITF 88-16, and the application
of the accounting principles set forth in FASB 109, including the establishment
of reserves pursuant thereto and any subsequent reversal (in whole or in part)
of such reserves; and (d) the reversal of any reserves established as a result
of purchase accounting adjustments.

“Additional Amounts” shall mean any amounts payable to any Affected Party under
Sections 2.09 or 2.10 of the Funding Agreement.

“Additional Costs” shall have the meaning assigned to it in Section 2.09(b) of
the Funding Agreement.

“Administrative Agent” shall have the meaning set forth in the preamble of the
Funding Agreement.

“Administrative Services Agreement” shall mean that certain Ancillary Services
and Lease Agreement dated as of December 10, 1997, between the Borrower and the
Parent.

“Administrators” shall mean the YC SUSI Administrator, the MAFC Administrator
and any other Person that becomes a party to this Agreement as an
“Administrator”.

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“Advance” shall mean any Revolving Credit Advance or Swing Line Advance, as the
context may require.

“Advance Date” shall mean each day on which any Advance is made.

“Adverse Claim” shall mean any claim of ownership or any Lien, other than any
ownership interest or Lien created under the Sale Agreement or the Funding
Agreement.

“Affected Party” shall mean each of the following Persons: each Lender, the
Administrative Agent, each Managing Agent, each Administrator, each Program
Support Provider, each Affiliate of the foregoing Persons, and any participant
with the rights of a Lender under Section 12.02(c) of the Funding Agreement and
their respective successors, transferees and permitted assigns.

“Affiliate” shall mean, with respect to (a) Borrower, or Parent or any of their
Subsidiaries, or any Obligor, each Person that, directly or indirectly, owns or
controls, whether beneficially, or as a trustee, guardian or other fiduciary ten
percent (10%) or more of the Stock having ordinary voting power in the election
of directors of such Person, or (b) with respect to each Person, including those
Persons to which clause (a) is applicable, (i) each Person that controls, is
controlled by or is under common control with such Person, or (ii) each of such
Person’s officers, directors, joint venturers and partners. For the purposes of
this definition, “control” of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise.

“Agent Account” shall mean account number 12334-52548, Reference: SIT Funding
Corporation, established at the Agent Bank in the name of the Administrative
Agent.

“Agent Bank” means Bank of America.

“Agent-Related Persons” means, with respect to any Managing Agent or the
Administrative Agent, such Person together with its Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such Persons and
their respective Affiliates.

“Aggregate Commitment” means, at any time, the aggregate commitment of all
Lenders to make Advances, which aggregate commitment shall be Three Hundred
Fifty Seven Million Dollars ($357,000,000) on the Closing Date, as such amount
may be adjusted, if at all, from time to time in accordance with the Funding
Agreement.

“Agreed-Upon Procedures” means the procedures set forth in Schedule B to the
Funding Agreement.

“Alternate Rate” means, for any Interest Period for any Portion of Advances, an
interest rate per annum equal to the Applicable Margin above the LIBOR Rate for
such Interest Period; provided that in the case of:

 

  (a) any Interest Period which commences on a date prior to the Administrative
Agent receiving at least three (3) Business Days’ notice thereof, or

 

2    Annex X

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  (b) any Interest Period relating to a Portion of Advances which is less than
$1,000,000,

the “Alternate Rate” for each day in such Interest Period shall be an interest
rate per annum equal to the Base Rate in effect on such day.

“Appendices” shall mean, with respect to any Related Document, all exhibits,
schedules, annexes and other attachments thereto, or expressly identified
thereto.

“Applicable Margin” shall have the meaning assigned to it in the Fee Letters.

“Assignment Agreement” shall mean an assignment agreement in the form of Exhibit
12.02 attached to the Funding Agreement.

“Assignment Amount” means, with respect to a Committed Lender at the time of any
assignment pursuant to Section 13.01, an amount equal to the least of (a) such
Committed Lender’s pro rata share of the Advances requested by the Discretionary
Lender in its Lender Group to be assigned at such time; (b) such Committed
Lender’s unused Commitment (minus the unrecovered principal amount of such
Committed Lender’s fundings pursuant to the Program Support Agreement to which
it is a party) and (c) in the case of an assignment on or after the applicable
Conduit Investment Termination Date, an amount equal to the sum of such
Committed Lender’s pro rata share of the Lender Group Percentage of (i) the
aggregate Outstanding Balance of the Receivables (other than Defaulted
Receivables), plus (ii) all Collections received by the Servicer but not yet
remitted by the Servicer to the Agent, plus (iii) any amounts required to be
paid to the Borrower by the Originators at such time under the Sale Agreement.

“Assignment and Acceptance Agreement” shall have the meaning assigned to it in
the Recitals of the Funding Agreement.

“Authorized Officer” shall mean, with respect to any corporation or limited
liability company, the Chairman or Vice-Chairman of the Board, the President,
any Vice President, the General Counsel, the Secretary, the Treasurer, the
Controller, any Assistant Secretary, any Assistant Treasurer, any manager or
managing member and each other officer of such corporation or limited liability
company specifically authorized to sign agreements, instruments or other
documents on behalf of such corporation or limited liability company in
connection with the transactions contemplated by the Sale Agreement, the Funding
Agreement and the other Related Documents.

“Available Amounts” shall have the meaning assigned to it in Section 12.15 of
the Funding Agreement.

“Bank” shall mean any of the Concentration Account Bank, the Collection Account
Bank or the Borrower Account Bank.

 

3    Annex X

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“Bank of America Committed Lender” shall mean Bank of America, N.A. and each
other Lender party hereto from time to time as a “Bank of America Committed
Lender”.

“Bank of America Discretionary Lender” shall mean YC SUSI and each Conduit
Assignee thereof.

“Bank of America Fee Letter” shall mean that certain letter agreement, dated the
Closing Date, between the Parent, the Borrower, the Administrative Agent and
Banc of America Securities, LLC.

“Bank of America Lender Group” shall mean the YC SUSI Administrator, Bank of
America, N.A., as Managing Agent, Bank of America Committed Lenders and Bank of
America Discretionary Lenders.

“Bankruptcy Code” shall mean the provisions of title 11 of the United States
Code, 11 U.S.C. § § 101 et seq.

“Base Rate” means, for any day, a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate for such day, plus 0.50% and (b) the rate of
interest in effect for such day as publicly announced from time to time by the
applicable Managing Agent as its “prime rate”. The “prime rate” is a rate set by
the applicable Managing Agent based upon various factors including such Managing
Agent’s costs and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate. Any change in the prime rate announced by a
Managing Agent shall take effect at the opening of business on the day specified
in the public announcement of such change.

“Base Rate Advance” shall mean an Advance or portion thereof bearing interest by
reference to the Base Rate.

“Billed Amount” shall mean, with respect to any Receivable, the amount billed on
the Billing Date to the Obligor thereunder.

“Billing Date” shall mean, with respect to any Receivable, the date on which the
invoice with respect thereto was generated.

“BK Obligor” means an Obligor that is (i) unable to make payment of its
obligations when due, (ii) a debtor in a voluntary or involuntary bankruptcy
proceeding, or (iii) the subject of a comparable receivership or insolvency
proceeding, unless, in the case of a bankruptcy proceeding in clause (ii) or
(iii), the applicable Originator has been designated as a “critical vendor” and
the Obligor thereunder has obtained (x) in the case of any Receivable originated
pre-petition, a final court order approving the payment of the pre-petition
claims of such Originator on an administrative priority basis or (y) in the case
of any Receivable originated post-petition, (A) a final court order approving
the payment of the post-petition claims of such Originator on an administrative
priority basis and (B) a debtor-in-possession financing facility and management
of the applicable Originator reasonably believes that such financing will be
available to pay the Receivables owing by such Obligor, and, in any such case,
such Obligor has agreed post-petition to pay the Receivables owing by such
Obligor on a current basis in accordance with its terms.

 

4    Annex X

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“Borrower” shall have the meaning assigned to it in the preamble to the Funding
Agreement.

“Borrower Account” shall mean that certain deposit account identified as the
“Borrower Account” on Schedule 4.01(q) to the Funding Agreement, maintained by
the Borrower at the Borrower Account Bank, which account shall be subject to a
Borrower Account Agreement.

“Borrower Account Agreement” shall mean any agreement among the Borrower, the
Administrative Agent, and the Borrower Account Bank with respect to the Borrower
Account that provides, among other things, that (a) all items of payment
deposited in the Borrower Account are held by the Borrower Account Bank as
custodian for the Administrative Agent, (b) the Borrower Account Bank has no
rights of setoff or recoupment or any other claim against the Borrower Account,
as the case may be, other than for payment of its service fees and other charges
directly related to the administration of the Borrower Account and for returned
checks or other items of payment and (c) after notice from the Administrative
Agent to the Borrower Account Bank, the Borrower Account Bank agrees to forward
all Collections received in the Borrower Account to the Collection Account
within one Business Day of receipt, and is otherwise in form and substance
acceptable to the Administrative Agent.

“Borrower Account Bank” shall mean the bank or other financial institution at
which the Borrower Account is maintained, which shall initially be Bank of
America, N.A.

“Borrower Account Collateral” shall have the meaning assigned to it in
Section 7.01(c) of the Funding Agreement.

“Borrower Assigned Agreements” shall have the meaning assigned to it in
Section 7.01(b) of the Funding Agreement.

“Borrower Collateral” shall have the meaning assigned to it in Section 7.01 of
the Funding Agreement.

“Borrower Obligations” shall mean all loans, advances, debts, liabilities,
indemnities and obligations for the performance of covenants, tasks or duties or
for payment of monetary amounts (whether or not such performance is then
required or contingent, or such amounts are liquidated or determinable) owing by
the Borrower to any Affected Party under the Funding Agreement, any other
Related Document and any document or instrument delivered pursuant thereto, and
all amendments, extensions or renewals thereof, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, whether or not
evidenced by any note, agreement or other instrument, arising thereunder,
including the Outstanding Principal Amount, interest, fees, amounts payable in
respect of Funding Excess, Successor Servicing Fees and Expenses, Additional
Amounts, Additional Costs, Indemnified Amounts, and including the “Borrower
Obligations” under, and as defined in, the Existing Receivables Purchase
Agreement. This term includes all principal, interest (including all interest
that accrues after the commencement of any case or proceeding by or against the
Borrower

 

5    Annex X

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in bankruptcy, whether or not allowed in such case or proceeding), fees,
charges, expenses, attorneys’ fees and any other sum chargeable to the Borrower
under any of the foregoing, whether now existing or hereafter arising, voluntary
or involuntary, whether or not jointly owed with others, direct or indirect,
absolute or contingent, liquidated or unliquidated, and whether or not from time
to time decreased or extinguished and later increased, created or incurred, and
all or any portion of such obligations that are paid to the extent all or any
portion of such payment is avoided or recovered directly or indirectly from any
Secured Party or any assignee of any Secured Party as a preference, fraudulent
transfer or otherwise.

“Borrowing” shall mean (i) the Revolving Credit Advances of the Lenders (other
than the Swing Line Lender), and (ii) each Swing Line Advance made by the Swing
Line Lender.

“Borrowing Base” shall mean, as of any date of determination, the amount equal
to the lesser of:

 

  (a) the Maximum Advances Outstanding,

and

 

  (b) an amount equal to the positive difference, if any, of:

 

  (i) the product of (1) the Dynamic Advance Rate multiplied by (2) the Net
Receivables Balance,

minus

 

  (ii) the sum of (W) the Interest Reserve, (X) the Servicing Fee Reserve, and
(Y) such other reserves as the Administrative Agent may determine from time to
time based upon its reasonable credit judgment;

in each case as disclosed in the most recently submitted Borrowing Base
Certificate or Borrowing Request or as otherwise determined by the
Administrative Agent based on Borrower Collateral information available to it,
including any information obtained from any audit or from any other reports with
respect to the Borrower Collateral, which determination shall be final, binding
and conclusive on all parties to the Funding Agreement (absent manifest error).

“Borrowing Base Certificate” shall have the meaning assigned to it in
Section 5.02(b) of the Funding Agreement.

“Borrowing Request” shall have the meaning assigned to it in Section 2.03(a) of
the Funding Agreement.

“Breakage Costs” shall have the meaning assigned to it in Section 2.10 of the
Funding Agreement.

 

6    Annex X

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“Business Day” shall mean any day that is not a Saturday, a Sunday or a day on
which banks are required or permitted to be closed in Charlotte, North Carolina,
the State of New York or, with respect to any remittances to be made by the
Concentration Account Bank to the Concentration Account, in the jurisdiction in
which the Account maintained by such Bank is located.

“Buyer” shall have the meaning assigned to it in the preamble to the Sale
Agreement.

“Buyer Available Amounts” shall have the meaning assigned to it in Section 6.15
of the Sale Agreement.

“Buyer Indemnified Person” shall have the meaning assigned to it in Section 5.01
of the Sale Agreement.

“Canadian Subsidiary” shall have the meaning set forth in Annex A to the Credit
Agreement.

“Capital Lease” shall mean, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.

“Capital Lease Obligation” shall mean, with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.

“Change of Control” shall mean any event, transaction or occurrence after the
Closing Date as a result of which (a) any person or group of persons (within the
meaning of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities Exchange Commission under the Securities Exchange Act of 1934, as
amended) of a greater percentage of the issued and outstanding shares of Stock
of the Parent having the right to vote for the election of directors of the
Parent under ordinary circumstances than indirectly owned by the Mitac Group;
(b) during any period of twelve (12) consecutive calendar months ending after
the Closing Date, individuals who at the beginning of such twelve-month period
constituted the board of directors of the Parent (together with any new
directors whose election by the board of directors of the Parent or whose
nomination for election by the Stockholders of the Parent was approved by a vote
of at least two-thirds the directors then in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason other than death or disability to
constitute a majority of the directors then in office; (c) the Parent ceases to
own and control, directly or indirectly, all of the economic and voting rights
associated with all of the outstanding Stock, directly or indirectly, of any
Originator (other than Parent) or the Borrower; or (d) any Transaction Party has
sold, transferred, conveyed, assigned or otherwise disposed of all or
substantially all of its assets (other than such a sale of assets from one
Originator to another Originator).

 

7    Annex X

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“Charge-Off’ shall mean the extent to which any Transferred Receivable is
subject to any Dilution Factor described in clause (a) of the definition
thereof.

“Charges” shall mean (i) all federal, state, provincial, county, city,
municipal, local, foreign or other governmental taxes (including taxes owed to
the PBGC at the time due and payable); (ii) all levies, assessments, charges, or
claims of any governmental entity or any claims of statutory lienholders, the
nonpayment of which could give rise by operation of law to a Lien on Borrower
Collateral or any other property of the Borrower or any Originator and (iii) any
such taxes, levies, assessment, charges or claims which constitute a lien or
encumbrance on any property of the Borrower or any Originator.

“Class” means, with respect to an Obligor, at any time of determination the
classification of such Obligor as a “Class A Obligor”, “Class B Obligor”, “Class
C Obligor” or “Class D Obligor”.

“Class A Obligor”, “Class B Obligor”, “Class C Obligor” and “Class D Obligor”,
respectively, shall mean, as of any date of determination, an Obligor having a
short-term rating or unsecured long-term debt rating or both a short-term rating
and an unsecured long-term rating from either of Moody’s or S&P as determined in
the following manner:

 

Class of Obligor

  

Short-Term

Rating

    

Long-Term
Rating of Obligor

Class A Obligor

   A-1/P-1      A/A2 or higher

Class B Obligor

   A-2/P-2      A- or BBB+/A3 or Baa1 (but lower than A/A2)

Class C Obligor

   A-3/P-3      BBB or BBB-/Baa2 or Baa3 (but lower than BBB+/Baa1)

Class D Obligor

   Lower than A-3/P-3 or Not Rated      Lower than BBB-/Baa3 or Not Rated

“Class of Obligor” for any Obligor shall be determined by the Administrative
Agent as follows: (i) the short term rating issued by S&P for such Obligor shall
be used to determine the “Class of Obligor”; provided that if such short-term
rating is unavailable, the long-term unsecured rating issued by S&P for the
Obligor shall be used, (ii) concomitantly with (i), the short-term rating issued
by Moody’s for such Obligor shall be used to determine the “Class of Obligor”;
provided that if such short-term rating is unavailable, the long-term unsecured
rating issued by Moody’s for the Obligor shall be used, and (iii) only if there
is a difference between the “Class of Obligor” indicated in (i) and (ii),
determined concomitantly, then the Obligor shall be deemed a member of the lower
of the determined “Class of Obligor”.

“Closing Date” shall mean January 23, 2009.

“Collection Account” shall mean that certain account established by the Borrower
pursuant to Section 6.01(b) of the Funding Agreement and maintained by the
Borrower at the Collection Account Bank, which account shall be subject to a
Collection Account Agreement.

 

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“Collection Account Agreement” shall mean any agreement among the Borrower, the
Administrative Agent, and the Collection Account Bank with respect to the
Collection Account that provides, among other things, that (a) all items of
payment deposited in the Collection Account are held by the Collection Account
Bank as custodian for the Administrative Agent and (b) the Collection Account
Bank has no rights of setoff or recoupment or any other claim against the
Borrower Account other than for payment of its service fees and other charges
directly related to the administration of the Borrower Account and for returned
checks or other items of payment, and is otherwise in form and substance
acceptable to the Administrative Agent.

“Collection Account Bank” shall mean the bank or other financial institution at
which the Collection Account is maintained.

“Collections” shall mean, with respect to any Transferred Receivable, all cash
collections and other proceeds of such Receivable (including late charges, fees
and interest arising thereon, and all recoveries with respect to any Transferred
Receivable which has been written off as uncollectible).

“Commercial Paper” means the promissory notes issued or to be issued by a
Conduit Lender (or its related commercial paper issuer if such Conduit Lender
does not itself issue commercial paper) in the commercial paper market.

“Commitment” shall mean as to any Committed Lender (other than the Swing Line
Lender), the aggregate commitment of such Committed Lender to make Revolving
Credit Advances as set forth in the signature page to the Funding Agreement or
in the most recent Assignment Agreement executed by such Lender, as such amount
may be adjusted, if at all, from time to time in accordance with the Funding
Agreement.

“Committed Lenders” shall mean, (a) for the Bank of America Lender Group, the
Bank of America Committed Lender, (b) for the SMBC Lender Group, the SMBC
Committed Lender, (c) any other Person that shall become a party to the Funding
Agreement in the capacity as a “Committed Lender”, and, in each case, successors
and permitted assigns.

“Concentration Account” shall mean that certain account established by the
Borrower pursuant to Section 6.01(a) of the Funding Agreement and maintained by
the Borrower at the Concentration Account Bank, which account shall be subject
to a Concentration Account Agreement.

“Concentration Account Agreement” shall mean any agreement among the Borrower,
the Administrative Agent and the Concentration Account Bank with respect to one
or more Lockboxes and the Concentration Account that provides, among other
things, that (a) all items of payment deposited in such Lockboxes and
Concentration Account are held by the Concentration Account Bank as custodian
for the Administrative Agent and (b) the Concentration Account Bank has no
rights of setoff or recoupment or any other claim against the Concentration
Account, other than for payment of its service fees and other charges directly
related to the administration of the Concentration Account and for returned
checks or other items of payment and is otherwise in form and substance
acceptable to the Administrative Agent.

 

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“Concentration Account Bank” shall mean the bank or other financial institution
at which the Concentration Account is maintained.

“Concentration Percentage” shall mean, as of any date of determination, for the
Obligors comprising each Class of Obligor specified in the table below, on an
individual basis, a percentage not to exceed the corresponding “Individual
Obligor Percentage”, subject to adjustment for any Special Obligors as approved
by the Administrative Agent with the consent of the Requisite Lenders.

 

Class of Obligor

   Individual Obligor
Percentage

Class A

   15.00%

Class B

   7.50%*

Class C

   5.00%

Class D

   4.50%

 

* provided that one Class B Obligor may have an Individual Obligor Percentage of
up to 10.0%.

“Conduit Assignee” means, with respect to any Conduit Lender, any special
purpose entity that finances its activities directly or indirectly through asset
backed commercial paper and is administered by the same Administrator as such
Conduit Lender (or an Affiliate of such Administrator consented to by the
Borrower) and designated by such Administrator from time to time to accept an
assignment from such Conduit Lender of all or a portion of its interest under
the Funding Agreement.

“Conduit Investment Termination Date” shall mean, with respect to any Conduit
Lender, the date of the delivery by such Conduit Lender to the Borrower of
written notice that such Conduit Lender elects, in its sole discretion, to
permanently cease to fund Advances hereunder.

“Conduit Lender” shall mean YC SUSI, Manhattan Asset Funding Company, any other
Person that shall become a party to this Agreement in the capacity as a “Conduit
Lender” and any Conduit Assignee of any of the foregoing.

“Contract” shall mean any agreement or invoice pursuant to, or under which, an
Obligor shall be obligated to make payments with respect to any Receivable.

“Contributed Receivables” shall have the meaning assigned to it in
Section 2.01(d) of the Sale Agreement.

“Convertible Senior Notes” shall mean those certain convertible senior notes
issued by the Parent with a final maturity date of not less than ten (10) years
from the date of issuance, in an amount not to exceed $150,000,000 with an
interest rate up to 5.5% and subject to the terms set forth in the Convertible
Senior Notes Offering Memorandum.

 

10    Annex X

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“Convertible Senior Notes Offering Memorandum” shall mean that certain draft
Offering Memorandum, dated May 5, 2008, together with any immaterial changes
(including, without limitation, (x) the months during the year during which
semiannual payments are required to be made and (y) the principal amount of the
Convertible Senior Notes, provided that the principal amount, including any
exercised or available over-allotments, shall not exceed $150,000,000) made to
subsequent versions of, and the final, Offering Memorandum.

“CP Rate” shall mean, for any Interest Period for any Portion of Advances funded
by a particular Conduit Lender, the per annum rate equivalent to the sum of the
Applicable Margin plus the weighted average cost (as determined by the related
Administrator and including incremental carrying costs incurred with respect to
Commercial Paper maturing on dates other than those on which corresponding funds
are received by such Conduit Lender, other borrowings by such Conduit Lender
(other than under any Program Support Agreement) and any other costs associated
with the issuance of Commercial Paper, including dealer fees and placement agent
commissions) of or related to the issuance of Commercial Paper that are
allocated, in whole or in part, by such Conduit Lender or its Administrator to
fund or maintain such Portion of Advances (and which may be also allocated in
part to the funding of other assets of such Conduit Lender); provided that if
any component of such rate is a discount rate, in calculating the “CP Rate” for
such Portion of Advances for such Interest Period, such Conduit Lender shall for
such component use the rate resulting from converting such discount rate to an
interest bearing equivalent rate per annum.

“Credit Agreement” shall mean that certain Third Amended and Restated Credit
Agreement, dated as of January 23, 2009, among Parent, Bank of America, National
Association, as administrative agent, and the financial institutions from time
to time party thereto as lenders and as in effect on Closing Date together with
all amendments, restatements, supplements or modifications thereto that are in
effect on the Closing Date or adopted from time to time thereafter to the extent
not prohibited under the Related Documents, and any refinancings, replacements
or refundings thereof that (a) are agreed to by the Administrative Agent and
Requisite Lenders or (b) (i) have terms and conditions no less favorable (as
determined by the Administrative Agent, in the exercise of its reasonable credit
judgment) to the Administrative Agent or any Lender than the terms and
conditions of the existing Credit Agreement and (ii) with respect to which an
intercreditor agreement having terms and conditions acceptable to the
Administrative Agent and the Lenders is in full force and effect.

“Credit and Collection Policies” shall mean the written credit, collection,
customer relations and service policies of the Originators in effect on the
Closing Date and attached as Exhibit A to the Funding Agreement, as the same may
from time to time be amended, restated, supplemented or otherwise modified with
the prior written consent of the Requisite Lenders.

“Daily Report” shall have the meaning assigned to it in paragraph (a) of
Annex 5.02(a) to the Funding Agreement.

“Debt” of any Person shall mean, without duplication, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services payment for which is deferred more than 90 days, but excluding
obligations to trade

 

11    Annex X

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creditors incurred in the ordinary course of business that are not overdue by
more than 90 days unless being contested in good faith, (b) all reimbursement
and other obligations with respect to letters of credit, bankers’ acceptances
and surety bonds, whether or not matured, (c) all obligations evidenced by
notes, bonds, debentures or similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capital Lease Obligations,
(f) all obligations of such Person under commodity purchase or option agreements
or other commodity price hedging arrangements, in each case whether contingent
or matured, (g) all obligations of such Person under any foreign exchange
contract, currency swap agreement, interest rate swap, cap or collar agreement
or other similar agreement or arrangement designed to alter the risks of that
Person arising from fluctuations in currency values or interest rates, in each
case whether contingent or matured, (h) all liabilities of such Person under
Title IV of ERISA, (i) all Guaranteed Indebtedness of such Person, (j) all
indebtedness referred to in clauses (a) through (i) above secured by (or for
which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property or other assets
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such indebtedness,
(k) all “Indebtedness” as such term is defined in the Credit Agreement, (1) all
“Loans” and other obligations of the Parent and its Subsidiaries under the
Credit Agreement (which shall only be Debt of the Parent, its Subsidiaries and
any Person who guarantees such Debt), and (m) the Borrower Obligations.

“Debtor Relief Laws” means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, fraudulent conveyance,
reorganization, or similar laws affecting the rights, remedies, or recourse of
creditors generally, including the Bankruptcy Code and all amendments thereto,
as are in effect from time to time.

“Default Rate” means, for any period, the applicable Base Rate for such period
plus the Applicable Margin.

“Default Ratio” shall mean, as of any date of determination, the ratio
(expressed as a percentage) of:

(a) the sum of (without duplication) (i) the aggregate Outstanding Balance of
all Transferred Receivables which became Defaulted Receivables during the
Settlement Period immediately preceding such date and (ii) with respect to any
Obligor that, during the Settlement Period immediately preceding such date,
became (A) a debtor in a voluntary or involuntary bankruptcy proceeding, or
(B) the subject of a comparable receivership or insolvency proceeding, the
aggregate Outstanding Balance of Transferred Receivables owing by such Obligor
that were owing by such Obligor before such Obligor became (x) a debtor in a
voluntary or involuntary bankruptcy proceeding, or (y) the subject of a
comparable receivership or insolvency,

to

(b) the aggregate Outstanding Balance of all Transferred Receivables originated
during the Settlement Period which ended three (3) months prior to the last day
of the Settlement Period immediately preceding such date.

 

12    Annex X

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“Default Trigger Ratio” shall mean, as of any date of determination, the ratio
(expressed as a percentage) of:

(a) the aggregate Outstanding Balance of all Defaulted Receivables as of the
last day of the three Settlement Periods immediately preceding such date;

to

(b) the aggregate Outstanding Balance of all Transferred Receivables originated
during the fourth, fifth and sixth Settlement Periods immediately preceding such
date.

“Defaulted Receivable” shall mean any Transferred Receivable (a) with respect to
which any payment, or part thereof, remains unpaid from 91 to 120 days after its
Billing Date, (b) with respect to which the Obligor thereunder is a BK Obligor
or (c) that otherwise has been or should be written off in accordance with the
Credit and Collection Policies.

“Delinquency Ratio” shall mean, as of any date of determination, the ratio
(expressed as a percentage) of:

(a) the aggregate Outstanding Balance of all Transferred Receivables with
respect to which any payment, or part thereof, remains unpaid from 61 to 90 days
after its Billing Date

to

(b) the aggregate Outstanding Balance of all Transferred Receivables originated
during the Settlement Period which ended two (2) months prior to the last day of
the Settlement Period immediately preceding such date.

“Delinquency Trigger Ratio” shall mean, as of any date of determination, the
ratio (expressed as a percentage) of:

(c) the aggregate Outstanding Balance of Transferred Receivables on the first
day of the three (3) Settlement Periods immediately preceding such date with
respect to which any payment, or part thereof, remains unpaid from 61 to 90 days
after its Billing Date

to

(d) the aggregate Billed Amount for all Transferred Receivables originated
during the second, third and fourth Settlement Periods immediately preceding
such date.

“Dilution Factors” shall mean, with respect to any Transferred Receivable, any
portion of which (a) was reduced, canceled or written-off as a result of (i) any
credits, rebates, freight charges, cash discounts, volume discounts, cooperative
advertising

 

13    Annex X

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expenses, royalty payments, warranties, cost of parts required to be maintained
by agreement (either express or implied), allowances for early payment,
warehouse and other allowances, defective, rejected, returned or repossessed
merchandise or services, or any failure by any Originator to deliver any
merchandise or services or otherwise perform under the underlying Contract or
invoice, (ii) any change in or cancellation of any of the terms of the
underlying Contract or invoice or any cash discount, rebate, retroactive price
adjustment or any other adjustment by the applicable Originator which reduces
the amount payable by the Obligor on the related Receivable, or (iii) any setoff
in respect of any claim by the Obligor thereof (whether such claim arises out of
the same or a related transaction or an unrelated transaction) or (b) is subject
to any specific dispute, offset, counterclaim or defense whatsoever (except
discharge in bankruptcy of the Obligor thereof); provided that the Dilution
Factors shall not be deemed to include any write-offs of Defaulted Receivables.

“Dilution Horizon Factor” shall mean, as of any date of determination, (x) the
aggregate principal amount of Transferred Receivables originated during the two
most recent Settlement Periods preceding such date divided by (y) the Net
Receivables Balance as of the end of the Settlement Period immediately preceding
such date.

“Dilution Ratio” shall mean, as of any date of determination, the ratio
(expressed as a percentage) of:

(a) the aggregate Dilution Factors for all Transferred Receivables during the
Settlement Period immediately preceding such date

to

(b) the aggregate Billed Amount of all Transferred Receivables originated during
the second Settlement Period immediately preceding such date.

“Dilution Reserve Ratio” shall mean, as of any date of determination, the ratio
(expressed as a percentage) calculated in accordance with the following formula:

DRR = (2.25 × ADR) + [(HDR – ADR) × (HDR ÷ ADR)] × DHF

where

 

  DRR =   the Dilution Reserve Ratio;   ADR =   the average of the Dilution
Ratios occurring during the twelve most recent calendar Settlement Periods
preceding such date;   HDR =   the highest Dilution Ratio occurring during the
twelve most recent Settlement Periods preceding such date; and   DHF =   the
Dilution Horizon Factor.

 

14    Annex X

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“Dilution Trigger Ratio” shall mean, as of any date of determination, the ratio
(expressed as a percentage) of:

(a) the aggregate Dilution Factors for all Transferred Receivables for the three
Settlement Periods immediately preceding such date

to

(b) the aggregate Billed Amount for all Transferred Receivables originated
during the second, third and fourth Settlement Periods immediately preceding
such date.

“Discretionary Lenders” shall mean the SMBC Discretionary Lender, the Bank of
America Discretionary Lender and each other Person that shall become a party to
the Funding Agreement in the capacity as a “Discretionary Lender”, and, in each
case, successors and permitted assigns.

“Dollars” or “$” shall mean lawful currency of the United States of America.

“Dynamic Advance Rate” shall mean, as of any date of determination, a percentage
equal to 100% minus the greater of (i) the Minimum Reserve Ratio and (ii) the
sum of the Loss Reserve Ratio and the Dilution Reserve Ratio as of such date.

“Effective Date” shall have the meaning assigned to it in Section 3.01 of the
Funding Agreement.

“Election Notice” shall have the meaning assigned to it in Section 2.01(d) of
the Sale Agreement.

“Eligible Receivable” shall mean, as of any date of determination, a Transferred
Receivable:

(a) (i) that is due and payable within 120 days after its Billing Date and
(ii) with respect to which no payment or part thereof remains unpaid for more
than 90 days after its Billing Date; provided further, for purposes of
clarification, that any Transferred Receivable shall be deemed an Eligible
Receivable within the first 90 days after its Billing Date subject to the
remaining qualifications hereunder;

(b) that is not a liability of an Excluded Obligor or an Obligor with respect to
which more than 50% of the aggregate Outstanding Balance of all Receivables
owing by such Obligor are more than 90 days after its Billing Date;

(c) that is not a liability of an Obligor organized under the laws of any
jurisdiction outside of the United States of America (including the District of
Columbia but otherwise excluding its territories and possessions);

(d) that is denominated and payable in Dollars in the United States of America
and is not represented by a note or other negotiable instrument or by chattel
paper;

(e) that is not subject to any right of rescission, dispute, offset (including
as a result of customer promotional allowances, discounts, rebates, or claims
for damages), hold back defense, adverse claim or other claim (with only the
portion of any such

 

15    Annex X

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Receivable subject to any such right of rescission, dispute, offset (including
as a result of customer promotional allowances, discounts, rebates, or claims
for damages), hold back defense, adverse claim or other claim being considered
an Ineligible Receivable by virtue of this clause (e)), whether arising out of
transactions concerning the Contract therefor or otherwise;

(f) with respect to which the Obligor thereunder is not a BK Obligor;

(g) that is not an Unapproved Receivable;

(h) that does not represent “billed but not yet shipped” goods or merchandise,
partially performed or unperformed services, consigned goods or “sale or return”
goods and does not arise from a transaction for which any additional performance
by the Originator thereof, or acceptance by or other act of the Obligor
thereunder, including any required submission of documentation, remains to be
performed as a condition to any payments on such Receivable or the
enforceability of such Receivable under applicable law;

(i) as to which the representations and warranties set forth in Sections
4.01(v)(ii) through (iv) of the Sale Agreement are true and correct in all
respects as of the Transfer Date therefor;

(j) that is not the liability of an Obligor that has any claim of a material
nature against or affecting the Originator thereof or the property of such
Originator which gives rise to a right of set-off against such Receivable (with
only that portion of Receivables owing by such Obligor equal to the amount of
such claim being an Ineligible Receivable); provided that claims which arise in
the ordinary course of business and are properly reflected in contra accounts on
the books and records of the Originators, the Borrower and the Servicer shall
not cause an otherwise Eligible Receivable to become ineligible under this
clause (j) but shall instead cause a reduction in the Outstanding Balance of
such Eligible Receivables for all computational purposes under the Related
Documents;

(k) that was originated in accordance with and satisfies in all material
respects all applicable requirements of the Credit and Collection Policies;

(l) that represents the genuine, legal, valid and binding obligation of the
Obligor thereunder enforceable by the holder thereof in accordance with its
terms (and which, for the avoidance of doubt, is not in any way a limited
obligation of the related Obligor (e.g., limited to collections received by such
Obligor from its own accounts receivable));

(m) that is entitled to be paid pursuant to the terms of the Contract therefor
and has not been paid in full or been compromised, adjusted, extended, reduced,
satisfied, subordinated, rescinded or modified (except for adjustments to the
Outstanding Balance thereof to reflect Dilution Factors made in accordance with
the Credit and Collection Policies);

(n) that does not contravene in any material respect any laws, rules or
regulations applicable thereto (including laws, rules and regulations relating
to usury, consumer protection, truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no party to the Contract therefor is in
violation of any such law, rule or regulation that, in each case, could
reasonably be expected to have a material adverse effect on the collectibility,
value or payment terms of such Receivable;

 

16    Annex X

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(o) with respect to which no proceedings or investigations are pending or
threatened before any Governmental Authority (i) asserting the invalidity of
such Receivable or the Contract therefor, (ii) asserting the bankruptcy or
insolvency of the Obligor thereunder; unless, in the case of a bankruptcy
proceeding, the applicable Originator has been designated as a “critical vendor”
and the Obligor thereunder has obtained (A) in the case of any Receivable
originated pre-petition, a final court order approving the payment of the
pre-petition claims of such Originator on an administrative priority basis or
(B) in the case of any Receivable originated post-petition, (1) a final court
order approving the payment of the post-petition claims of such Originator on an
administrative priority basis and (2) a debtor-in-possession financing facility
and management of the applicable Originator reasonably believes that such
financing will be available to pay the Receivables owing by such Obligor, and,
in any such case, such Obligor has agreed post-petition to pay the Receivables
owing by such Obligor on a current basis in accordance with its terms,
(iii) seeking payment of such Receivable or payment and performance of such
Contract or (iv) seeking any determination or ruling that could reasonably be
expected to materially and adversely affect the validity or enforceability of
such Receivable or such Contract;

(p) (i) that is an “account” within the meaning of the UCC (or any other
applicable legislation) of the jurisdictions in which the each of the
Originators, the Parent and the Borrower are organized and in which chief
executive offices of each of the Originators, the Parent and the Borrower are
located and (ii) under the terms of the related Contract, the right to payment
thereof may be freely assigned, including as a result of compliance with
applicable law (or with respect to which, the prohibition on the assignment of
rights to payment are made fully ineffective under applicable law);

(q) that is payable solely and directly to an Originator and not to any other
Person (including any shipper of the merchandise or goods that gave rise to such
Receivable), except to the extent that payment thereof may be made to a Lockbox
or otherwise as directed pursuant to Article VI of the Funding Agreement;

(r) with respect to which all material consents, licenses, approvals or
authorizations of, or registrations with, any Governmental Authority required to
be obtained, effected or given in connection with the creation or assignment of
such Receivable or the Contract therefor have been duly obtained, effected or
given and are in full force and effect (including approvals by the United States
Government of the assignment of the Originator’s government contracts; provided
that up to 5% of the Net Receivables Balance may be government contracts for
which the Originator has not obtained the approvals of the United States
Government);

(s) that is created through the provision of merchandise, goods or services by
the Originator thereof in the ordinary course of its business;

 

17    Annex X

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(t) that is not the liability of an Obligor that, under the terms of the Credit
and Collection Policies, is receiving or should receive merchandise, goods or
services on a “cash on delivery” basis;

(u) that does not constitute a rebilled amount arising from a deduction taken by
an Obligor with respect to a previously arising Receivable;

(v) as to which the Borrower has a first priority perfected ownership interest
and in which the Administrative Agent has a first priority perfected security
interest, in each case not subject to any Lien, right, claim, security interest
or other interest of any other Person (other than, in the case of the Borrower,
the Lien of the Administrative Agent for the benefit of the Secured Parties);

(w) to the extent such Transferred Receivable represents sales tax or a vendor
pass-through payment, such portion of such Receivable shall not be an Eligible
Receivable;

(x) that does not represent the balance owed by an Obligor on a Receivable in
respect of which the Obligor has made partial payment;

(y) with respect to which no check, draft or other item of payment was
previously received that was returned unpaid or otherwise;

(z) with respect to which, if such Receivable is a Financing Receivable, the
Obligor under such Financing Receivable has entered into an intercreditor
agreement with Bank of America, N.A., Synnex and Borrower, in form and substance
satisfactory to the Administrative Agent and the agent under the Credit
Agreement;

(aa) that is not a Receivable of an Obligor with respect to which the Parent (or
any Affiliate thereof) performs servicing duties as agent for such Obligor with
respect to such Obligor’s own accounts receivable, if any portion of the
Outstanding Balance of such Receivable causes the aggregate Outstanding Balance
of all such Receivables in the Borrower Collateral to exceed 5% of the Net
Receivables Balance;

(bb) that is not a Receivable the Obligor of which is Apptis Inc., except as
expressly permitted in writing by the Requisite Lenders;

(cc) that do not arise under partially performed or unperformed Contracts for
services or the delivery of goods or merchandise; and

(dd) that complies with such other criteria and requirements as the
Administrative Agent in its reasonable credit judgment may from time to time
specify to the Borrower or the Originator thereof upon not less than ten
Business Days prior written notice.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974 and any
regulations promulgated thereunder.

 

18    Annex X

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“ERISA Affiliate” shall mean, with respect to any Originator, any trade or
business (whether or not incorporated) that, together with such Originator, are
treated as a single employer within the meaning of Sections 414(b), (c), (m) or
(o) of the IRC.

“ERISA Event” shall mean, with respect to any Originator or any ERISA Affiliate,
the occurrence of one or more of the following events: (a) any event described
in Section 4043(c) of ERISA with respect to a Title IV Plan unless the 30-day
requirement with respect thereto has been waived pursuant to the regulations
under Section 4043 of ERISA; (b) the withdrawal of any Originator or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a “substantial employer,” as defined in Section 4001(a)(2)
of ERISA; (c) the complete or partial withdrawal of any Originator or any ERISA
Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any
Originator or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days;
(g) any other event or condition that might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 of
ERISA; or (i) the loss of a Qualified Plan’s qualification or tax exempt status.

“ESOP” means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.

“Eurodollar Reserve Percentage” means, for any day during any Interest Period,
the reserve percentage (expressed as a decimal, rounded upward to the next
1/100th of 1%) in effect on such day, whether or not applicable to any Lender,
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as “eurocurrency
liabilities”). The LIBOR Rate shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.

“Event of Bankruptcy” shall mean, with respect to any Person, (a) that such
Person becomes unable or admits in writing its inability or fails generally to
pay its debts as they become due; (b) that any writ or warrant of attachment or
execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within thirty (30) days after its issue or levy; (c) that such Person
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors, or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or (d) that any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for sixty (60) calendar days; or (e) that any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for sixty (60) calendar days, or an order for relief is
entered in any such proceeding.

 

19    Annex X

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“Event of Servicer Termination” shall have the meaning assigned to it in
Section 8.01 of the Sale Agreement.

“Excess Concentration Amount” shall mean, with respect to any Obligor or on an
aggregate basis by the Largest Obligor(s), as applicable, of one or more
Transferred Receivables, as of any date of determination after giving effect to
all Eligible Receivables transferred on such date, the amount by which (a) the
Outstanding Balance of Eligible Receivables owing by such Obligor or on an
aggregate basis by the Largest Obligor(s), as applicable, exceeds (b)(i) the
Concentration Percentage for such Obligor or the Largest Obligor(s), as
applicable, on such date, multiplied by (ii) the aggregate Outstanding Balance
of Eligible Receivables as of such time of determination; provided that, in the
case of Obligors which are Affiliates (including Affiliates of one or more
Largest Obligors), the Excess Concentration Amount for such Obligor shall be
calculated as if such Obligor and its Affiliates which are Obligors were one
Obligor.

“Excluded Obligor” shall mean any Obligor (a) that is an Affiliate of any
Originator, the Parent or the Borrower, or (b) that is designated as an Excluded
Obligor by the Administrative Agent in its reasonable discretion upon ten
(10) Business Days’ prior written notice from the Administrative Agent to the
Borrower, the Lenders, the Servicer and the Parent.

“Excluded Receivable” shall mean a Mexico Receivable or any Receivable
originated or acquired by an Originator on or after the Effective Date and not
transferred to Buyer prior to the Effective Date.

“Existing Receivables Purchase Agreement” shall have the meaning assigned to it
in the preamble of the Funding Agreement.

“Existing Transfer Agreement” shall have the meaning assigned to it in the
preamble of the Sale Agreement.

“Facility Fee” shall have the meaning assigned to it in the Fee Letters.

“Facility Limit” means at any time $357,000,000, as such amount may be adjusted,
if at all, from time to time in accordance with the Funding Agreement.

“Facility Limit Reduction Notice” shall have the meaning assigned to it in
Section 2.02(a) of the Funding Agreement.

“Facility Termination Date” shall mean the earliest of (a) the date so
designated pursuant to Section 9.01 of the Funding Agreement, (b) the Final
Advance Date, and (c) the date of termination of the Aggregate Commitment
specified in a Facility Termination Notice.

“Facility Termination Notice” shall have the meaning assigned to it in
Section 2.02(b) of the Funding Agreement.

 

20    Annex X

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“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the applicable
Managing Agent on such day on such transactions as determined by it.

“Federal Reserve Board” shall mean the Board of Governors of the Federal Reserve
System.

“Fee Letters” shall mean (i) the Bank of America Fee Letter and (ii) the SMBC
Fee Letter.

“Fees” shall mean any and all fees payable to the Administrative Agent or any
Lender pursuant to the Funding Agreement or any other Related Document,
including the Facility Fee.

“Final Advance Date” shall mean January 22, 2010, as such date may be extended
with the consent of the Borrower, the Lenders and the Administrative Agent.

“Financing Receivable” shall mean a Receivable which evidences the obligation of
an Obligor to pay the purchase price of merchandise, goods or services which are
neither purchased nor deemed purchased by such Obligor but which were financed
by such Obligor pursuant to a floorplan financing arrangement.

“Funding Agreement” shall mean that certain Third Amended and Restated
Receivables Funding and Administration Agreement, dated as of the Closing Date,
by and among the Borrower, the Lenders, the Managing Agents, the Administrators,
the Swing Line Lender and the Administrative Agent.

“Funding Availability” shall mean, as of any date of determination, the amount,
if any, by which the Borrowing Base exceeds the Outstanding Principal Amount, in
each case as of the end of the immediately preceding day.

“Funding Excess” shall mean, as of any date of determination, the extent to
which the Outstanding Principal Amount exceeds the Borrowing Base, in each case
as disclosed in the most recently submitted Borrowing Base Certificate or
Borrowing Request or as otherwise determined by the Administrative Agent based
on Borrower Collateral information available to it, including any information
obtained from any audit or from any other reports with respect to the Borrower
Collateral, which determination shall be final, binding and conclusive on all
parties to the Funding Agreement (absent manifest error).

 

21    Annex X

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“GAAP” shall mean generally accepted accounting principles in the United States
of America as in effect from time to time, consistently applied as such term is
further defined in Section 2(a) of this Annex X.

“General Trial Balance” shall mean, with respect to any Originator and as of any
date of determination, such Originator’s accounts receivable trial balance
(whether in the form of a computer printout, magnetic tape or diskette) as of
such date, listing Obligors and the Receivables owing by such Obligors as of
such date together with the aged Outstanding Balances of such Receivables, in
form and substance satisfactory to the Borrower and the Administrative Agent.

“Governmental Authority” shall mean any nation or government, any state,
province or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

“Guaranteed Indebtedness” shall mean, as to any Person, any obligation of such
Person guaranteeing any indebtedness, lease, dividend, or other obligation
(“primary obligation”) of any other Person (the “primary obligor”) in any
manner, including any obligation or arrangement of such Person to (a) purchase
or repurchase any such primary obligation, (b) advance or supply funds (i) for
the purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the primary
obligor, (c) purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation, or (d) indemnify the
owner of such primary obligation against loss in respect thereof. The amount of
any Guaranteed Indebtedness at any time shall be deemed to be the amount equal
to the lesser at such time of (x) the stated or determinable amount of the
primary obligation in respect of which such Guaranteed Indebtedness is incurred
and (y) the maximum amount for which such Person may be liable pursuant to the
terms of the instrument embodying such Guaranteed Indebtedness; or, if not
stated or determinable, the maximum reasonably anticipated liability (assuming
full performance) in respect thereof.

“Incipient Servicer Termination Event” shall mean any event that, with the
passage of time or notice or both, would, unless cured or waived, become an
Event of Servicer Termination.

“Incipient Termination Event” shall mean any event that, with the passage of
time or notice or both, would, unless cured or waived, become a Termination
Event.

“Indemnified Amounts” shall mean, with respect to any Person, any and all suits,
actions, proceedings, claims, damages, losses, liabilities and reasonable
expenses (including, but not limited to, reasonable attorneys’ fees and
disbursements and other costs of investigation or defense, including those
incurred upon any appeal).

“Indemnified Person” shall have the meaning assigned to it in Section 10.01(a)
of the Funding Agreement.

 

22    Annex X

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“Indemnified Taxes” shall have the meaning assigned to it in Section 2.08(h) of
the Funding Agreement.

“Ineligible Receivable” shall mean any Receivable (or portion thereof) which
fails to satisfy all of the requirements of an “Eligible Receivable” set forth
in the definition thereof.

“Intercreditor Agreement” shall mean each of (i) that certain Second Amended and
Restated Intercreditor Agreement dated as of January 23, 2009, entered into by
and among Parent, the Originators from time to time party thereto, Borrower and
Bank of America, in various capacities, (ii) that certain Second Amended and
Restated Intercreditor Agreement dated as of February 12, 2007, entered into by
Parent, the Originators from time to time party thereto, Borrower, General
Electric Capital Corporation, in various capacities, IBM Canada Limited and IBM
Credit LLC, and (iii) each other intercreditor agreement entered into from time
to time by Parent, Borrower, Bank of America in various capacities, and other
creditors.

“Interest Component” means, at any time of determination for any Conduit Lender,
the aggregate Yield accrued and to accrue through the end of the current
Interest Period for the Portion of Advances accruing Yield calculated by
reference to the CP Rate at such time (determined for such purpose using the CP
Rate most recently determined by its Administrator).

“Interest Period” means (a) with respect to any Portion of Advances funded by
the issuance of Commercial Paper, (i) initially the period commencing on (and
including) the date of the initial funding of such Portion of Advances and
ending on (and including) the last day of the current calendar month, and
(ii) thereafter, each period commencing on (and including) the first day after
the last day of the immediately preceding Interest Period for such Portion of
Advances and ending on (and including) the last day of the current calendar
month; (b) with respect to any Portion of Advances not funded by the issuance of
Commercial Paper, (i) initially the period commencing on (and including) the
date of the initial funding of such Portion of Advances and ending on (but
excluding) the next following Settlement Date, and (ii) thereafter, each period
commencing on (and including) a Settlement Date and ending on (but excluding)
the next following Settlement Date; and (c) with respect to any Swing Line
Advance, the period commencing on (and including) the date of the initial
funding of such Swing Line Advance and ending on (but excluding) the day on
which such Swing Line Advance is reimbursed or otherwise repaid in full;
provided that:

 

  (a) any Interest Period with respect to any Portion of Advances (other than
any Portion of Advances accruing Yield at the CP Rate) that would otherwise end
on a day which is not a Business Day shall be extended to the next succeeding
Business Day; provided that if Yield in respect of such Interest Period is
computed by reference to the LIBOR Rate, and such Interest Period would
otherwise end on a day which is not a Business Day, and there is no subsequent
Business Day in the same calendar month as such day, such Interest Period shall
end on the next preceding Business Day;

 

23    Annex X

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  (b) in the case of any Interest Period for any portion of Advance that
commences before the Facility Termination Date and would otherwise end on a date
occurring after the Facility Termination Date, such Interest Period shall end on
such Facility Termination Date and the duration of each Interest Period which
commences on or after the Facility Termination Date shall be of such duration as
shall be selected by such Managing Agent; and

 

  (c) any Interest Period in respect of which Yield is computed by reference to
the CP Rate may be terminated at the election of the applicable Managing Agent
any time, in which case the Portion of Advances allocated to such terminated
Interest Period shall be allocated to a new Interest Period commencing on (and
including) the date of such termination and ending on (but excluding) the next
following Settlement Date, and shall accrue Yield at the Alternate Rate.

“Interest Reserve” shall mean, as of any date of determination, an amount equal
to the product of (i) 1.5, (ii) the Base Rate, (iii) the Outstanding Principal
Amount and (iv) a fraction, the numerator of which is the higher of (a) 30 and
(b) the Receivables Collection Turnover as of the end of the Settlement Period
immediately preceding such date multiplied by 2, and the denominator of which is
360.

“Investment Company Act” shall mean the provisions of the Investment Company Act
of 1940, 15 U.S.C. § § 80a et seq., and any regulations promulgated thereunder.

“Investments” shall mean, with respect to any Borrower Account Collateral, the
certificates, instruments, investment property or other investments in which
amounts constituting such collateral are invested from time to time.

“IRC” shall mean the Internal Revenue Code of 1986 and any regulations
promulgated thereunder.

“IRS” shall mean the Internal Revenue Service.

“Largest Obligor(s)” shall mean, for each Class of Obligor, the Obligor or
Obligors with the largest aggregate Outstanding Balance of Eligible Receivables
as of such time of determination (which may include one or more Special
Obligors, as applicable), and the number of Largest Obligors for a particular
Class of Obligor shall not exceed the number set forth in the “Number of Largest
Obligors” column in the definition of “Concentration Percentage”.

“Lender” shall have the meaning assigned to it in the preamble of the Funding
Agreement. For the avoidance of doubt, unless the context otherwise requires,
the term “Lenders” includes the Swing Line Lender.

“Lender Group” shall mean each of the following groups:

 

  (a) the Bank of America Lender Group;

 

  (b) the SMBC Lender Group; and

 

24    Annex X

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(c) for each additional Lender Group party to the Funding Agreement after the
Closing Date, the applicable Conduit Lender, its Administrator, the applicable
Managing Agent and the related Committed Lenders from time to time party hereto.

“Lender Group Percentage” means, for any Lender Group, the percentage equivalent
(carried out to five decimal places) of a fraction the numerator of which is the
aggregate amount of the Commitments of all Committed Lenders in that Lender
Group and the denominator of which is the sum of such numerators for each of the
Lender Groups.

“LIBOR Business Day” shall mean a Business Day on which banks in the city of
London are generally open for interbank or foreign exchange transactions.

“LIBOR Rate” means, for any Interest Period, a rate per annum determined by the
applicable Managing Agent pursuant to the following formula:

 

 

LIBOR Rate

 

=

               LIBOR Base Rate                                   

1.00 – Eurodollar Reserve Percentage

  

Where,

“LIBOR Base Rate” means, for such Interest Period:

(i) the rate per annum (carried out to the fifth decimal place) equal to the
rate determined by the applicable Managing Agent to be the offered rate that
appears on the page of the Telerate Screen that displays an average British
Bankers Association Interest Settlement Rate (such page currently being page
number 3750) for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period, or

(ii) in the event the rate referenced in the preceding subsection (i) does not
appear on such page or service or such page or service shall cease to be
available, the rate per annum (carried to the fifth decimal place) equal to the
rate determined by the applicable Managing Agent to be the offered rate on such
other page or other service that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two (2) Business Days
prior to the first day of such Interest Period, or

(iii) in the event the rates referenced in the preceding subsections (i) and
(ii) are not available, the rate per annum determined by the applicable Managing
Agent as the rate of interest at which Dollar deposits (for delivery on the
first day of such Interest Period) in same day funds in the approximate amount
of the applicable Portion of Advances to be funded by reference to the LIBOR
Rate and with a term equivalent to such Interest Period would be offered by its
London Branch to major banks in the offshore dollar market at their request at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Interest Period; and

 

25    Annex X

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“LIBOR Rate Advance” shall mean an Advance or portion thereof bearing interest
by reference to the LIBOR Rate.

“Lien” shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the UCC or
comparable law of any jurisdiction).

“Litigation” shall mean, with respect to any Person, any action, claim, lawsuit,
demand, investigation or proceeding pending or threatened against such Person
before any court, board, commission, agency or instrumentality of any federal,
state, local or foreign government or of any agency or subdivision thereof or
before any arbitrator or panel of arbitrators.

“Lockbox” shall have the meaning assigned to it in Section 6.01(a)(ii) of the
Funding Agreement, and references to any Lockbox shall be understood to be
references to any lockbox accounts associated therewith and governed by the same
Lockbox Agreement.

“Lockbox Agreement” shall mean any agreement among an Originator, the Borrower,
the Administrative Agent and a Lockbox Bank with respect to a Lockbox that
provides, among other things, that (a) all items of payment deposited in such
Lockbox are held by such Lockbox Bank as custodian for the Administrative Agent,
(b) such Lockbox Bank has no right of setoff or recoupment or any other claim
against such Lockbox, other than for payment of its services fees and other
charges directly related to the administration of such Lockbox and for returned
checks or other items of payment, and (c) such Lockbox Bank agrees to forward
all Collections received in such Lockbox to the Concentration Account within one
Business Day of receipt and is otherwise in form and substance acceptable to the
Administrative Agent.

“Lockbox Bank” shall mean any bank or other financial institution at which one
or more Lockboxes are maintained.

“Loss Reserve Ratio” shall mean, as of any date of determination, the ratio
(expressed as a percentage) calculated in accordance with the following formula:

LRR = LHF × ARR × 2.25

where

 

LRR =

  the Loss Reserve Ratio;

LHF =

  a Loss Horizon Factor equal to (x) the aggregate principal amount of
Transferred Receivables originated during the three (3) most recent Settlement
Periods preceding such date divided by (z) the Net Receivables Balance as of the
end of the Settlement Period immediately preceding such date; and

 

26    Annex X

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ARR =

  the highest three-month rolling average of the Default Ratios occurring during
the twelve most recent Settlement Periods.

“MAFC Administrator” shall mean Sumitomo Mitsui Banking Corporation or an
Affiliate thereof, as administrator for Manhattan Asset Funding Company.

“Managing Agent” means, with respect to any Lender Group, the Person acting as
Managing Agent for such Lender Group and designated as such on the signature
pages hereto or in any Assignment Agreement under the Funding Agreement, and
each of its successors and assigns.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, assets, liabilities, operations, or financial or other condition of
(i) any Originator or the Originators considered as a whole, (ii) the Borrower,
(iii) the Servicer or (iv) the Parent and its Subsidiaries considered as a
whole, (b) the ability of any Originator, the Borrower, the Parent or the
Servicer to perform any of its obligations under the Related Documents in
accordance with the terms thereof, (c) the validity or enforceability of any
Related Document or the rights and remedies of the Borrower, the Managing
Agents, the Lenders, SMBC-SI or the Administrative Agent under any Related
Document, (d) the federal income tax attributes of the sale, contribution or
pledge of the Transferred Receivables pursuant to any Related Document or
(e) the Transferred Receivables (or collectibility thereof), the Contracts
therefor, the Borrower Collateral (in each case, taken as a whole) or the
ownership interests or Liens of the Borrower or the Lenders or the
Administrative Agent thereon or the priority of such interests or Liens.

“Maturity Date” shall mean, with respect to any Receivable, the due date for
payment therefor specified in the Contract therefor, or, if no date is so
specified, 30 days from the Billing Date.

“Maximum Advances Outstanding” means an amount equal to the Facility Limit
divided by 1.02.

“Mexico Receivables” shall mean Receivables arising out of any of the following:
(a) the Accounts Receivable Assignment Agreement dated as of February 28, 2006,
among Corporative Lanix, S.A. de C.V., Alef Soluciones Integrales, S.A. de C.V.
and Accesorios y Suministros Informáticos, S.A. de C.V. (collectively, the
“Lanix Consortium”), as assignors, Synnex Mexico and the Originator, as
assignee, as the same may be amended, extended, replaced, restated, supplemented
or otherwise modified from time to time, (b) the Accounts Receivables Assignment
Agreement dated as of December 5, 2005, among the Lanix Consortium, as
assignors, Synnex Mexico and the Originator as assignee, as the same may be
amended, extended, replaced, restated, supplemented or otherwise modified from
time to time, (c) the Multiannual Services Agreement (Contracto Multianual de
Prestación de Servicios) number 62.PE.2005-2010, dated October 31, 2005, between
the Lanix Consortium, as service providers, and the Ministry of Education
(Secretaría de Educación Pública), a Ministry of the Federal Public
Administration of México (the “SEP”), as the same may be amended, extended,
replaced, restated, supplemented or otherwise modified from time to time, and
(d) the Multiannual Services Agreement (Contracto Multianual de Prestación de
Servicios) number 62.PE.2005-2010, dated October 31, 2005, between the Lanix
Consortium, as service providers, and SEP, as the same may be amended, extended,
replaced, restated, supplemented or otherwise modified from time to time.

 

27    Annex X

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“Minimum Reserve Ratio” shall mean, as of any date of determination, the ratio
(expressed as a percentage) calculated in accordance with the following formula:

MRR = ADR × DHF + CF

where

 

MRR =

  the Minimum Reserve Ratio;

ADR =

  the average of the Dilution Ratios occurring during the twelve most recent
calendar Settlement Periods preceding such date;

DHF =

  the Dilution Horizon Factor; and

CF =

  a concentration factor equal to 22.5%.

“Mitac Group” shall mean any or all of Mitac International Corp., a Taiwanese
corporation, Union Petrochemical Corp., a Taiwanese corporation and Synnex
Technology International, a Taiwanese corporation.

“Monthly Report” shall have the meaning assigned to it in paragraph (a) of
Annex 5.02(a) to the Funding Agreement.

“Moody’s” shall mean Moody’s Investors Service, Inc. or any successor thereto.

“Multiemployer Plan” shall mean a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA with respect to which any Originator or ERISA
Affiliate is making, is obligated to make, or has made or been obligated to
make, contributions on behalf of participants who are or were employed by any of
them.

“Net Receivables Balance” means, as of any date of determination, the amount
equal to:

 

  (a) the Outstanding Balance of Eligible Receivables,

minus

 

  (b) the Excess Concentration Amount;

in each case as disclosed in the most recently submitted Borrowing Base
Certificate or Borrowing Request or as otherwise determined by the
Administrative Agent based on Borrower Collateral information available to it,
including any information obtained from any audit or from any other reports with
respect to the Borrower Collateral, which determination shall be final, binding
and conclusive on all parties to the Funding Agreement (absent manifest error).

 

28    Annex X

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“Net Worth” means as of any date of determination, the excess, if any, of
(a) the aggregate Outstanding Balance of the Transferred Receivables at such
time, over (b) the sum of (i) the Outstanding Principal Amount 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).

“Non-Consenting Lender” shall have the meaning assigned to it in
Section 12.07(c) of the Funding Agreement.

“Non-Funding Lender” shall have the meaning assigned to it in Section 2.03(e) of
the Funding Agreement.

“Notes” shall mean, collectively, the Revolving Notes and the Swing Line Note.

“Obligor” shall mean, with respect to any Receivable, the Person primarily
obligated to make payments in respect thereof.

“Officer’s Certificate” shall mean, with respect to any Person, a certificate
signed by an Authorized Officer of such Person.

“Official Body” means any government or political subdivision or any agency,
authority, bureau, central bank, commission, department or instrumentality of
any such government or political subdivision, or any court, tribunal, grand jury
or arbitrator, or any accounting board or authority (whether or not a part of
government) which is responsible for the establishment or interpretation of
national or international accounting principles, in each case whether foreign or
domestic.

“Originator” shall have the meaning assigned to it in the preamble to the Sale
Agreement.

“Originator Support Agreement” shall mean an agreement substantially in the form
of Exhibit 2.03 to the Sale Agreement made by Parent in favor of the Borrower.

“Other Lender” shall have the meaning assigned to it in Section 2.03(e) of the
Funding Agreement.

“Outstanding Balance” shall mean, with respect to any Receivable, as of any date
of determination, the amount (which amount shall not be less than zero) equal to
(a) the Billed Amount thereof, minus (b) all Collections received from the
Obligor thereunder, minus (c) all discounts to, or any other modifications by,
the Originator, the Borrower or the Servicer that reduce such Billed Amount;
provided that if the Administrative Agent or the Servicer makes a good faith
determination that all payments by such Obligor with respect to such Billed
Amount have been made, the Outstanding Balance shall be zero.

“Outstanding Principal Amount” shall mean, as of any date of determination, the
amount equal to (a) the aggregate Advances made by the Lenders under the Funding
Agreement on or before such date, minus (b) the aggregate amounts disbursed to
any Lender in reduction of the principal of such Advances pursuant to the
Funding Agreement on or before such date and not

 

29    Annex X

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required to be returned as preference payments or otherwise; provided that
references to the Outstanding Principal Amount of any Lender shall mean an
amount equal to (x) the aggregate Advances made by such Lender pursuant to the
Funding Agreement on or before such date, minus (y) the aggregate amounts
disbursed to such Lender in reduction of the principal of such Advances pursuant
to the Funding Agreement on or before such date and not required to be returned
as preference payments or otherwise.

“Parent” shall have the meaning assigned to it in the preamble to the Sale
Agreement.

“Parent Group” shall mean the Parent and each of its Affiliates other than the
Borrower.

“PBGC” shall mean the Pension Benefit Guaranty Corporation.

“Pension Plan” shall mean a Plan described in Section 3(2) of ERISA.

“Permitted Encumbrances” shall mean the following encumbrances: (a) Liens for
taxes or assessments or other governmental charges or levies not yet due and
payable; (b) pledges or deposits securing obligations under workmen’s
compensation, unemployment insurance, social security or public liability laws
or similar legislation; (c) pledges or deposits securing bids, tenders,
government contracts, contracts (other than contracts for the payment of money)
or leases to which any Originator, the Borrower or the Servicer is a party as
lessee made in the ordinary course of business; (d) deposits securing statutory
obligations of any Originator, the Borrower or the Servicer; (e) inchoate and
unperfected workers’, mechanics’, suppliers’ or similar Liens arising in the
ordinary course of business; (f) carriers’, warehousemen’s or other similar
possessory Liens arising in the ordinary course of business; (g) deposits
securing, or in lieu of, surety, appeal or customs bonds in proceedings to which
any Originator, the Borrower or the Servicer is a party; (h) any judgment Lien
not constituting a Termination Event under Section 8.01(g) of the Funding
Agreement; (i) Liens existing on the Closing Date and listed on Schedule 5.03(b)
of the Funding Agreement; and (j) presently existing or hereinafter created
Liens in favor of the Buyer, the Borrower, the Lenders or the Administrative
Agent under the Funding Agreement and the Related Documents.

“Permitted Investments” shall mean any of the following:

(a) obligations of, or guaranteed as to the full and timely payment of principal
and interest by, the United States of America or obligations of any agency or
instrumentality thereof if such obligations are backed by the full faith and
credit of the United States of America, in each case with maturities of not more
than 90 days from the date acquired;

(b) repurchase agreements on obligations of the type specified in clause (a) of
this definition; provided that the short-term debt obligations of the party
agreeing to repurchase are rated at least “A-1” or the equivalent by S&P and
“P-1” or the equivalent by Moody’s;

(c) federal funds, certificates of deposit, time deposits and bankers’
acceptances of any depository institution or trust company incorporated under
the laws of the United States of America or any state, in each case with
original maturities of not more

 

30    Annex X

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than 90 days or, in the case of bankers’ acceptances, original maturities of not
more than 365 days; provided that the short-term obligations of such depository
institution or trust company are rated at least “A-1” or the equivalent by S&P
and “P-1” or the equivalent by Moody’s;

(d) commercial paper of any corporation incorporated under the laws of the
United States of America or any state thereof with original maturities of not
more than 180 days that on the date of acquisition are rated at least “A-1” or
the equivalent by S&P and “P-1” or the equivalent by Moody’s; and

(e) securities of money market funds rated at least “A-1” or the equivalent by
S&P and “P-1” or the equivalent by Moody’s.

“Person” shall mean any individual, sole proprietorship, partnership, joint
venture, unincorporated organization, trust, association, corporation (including
a business trust), limited liability company, institution, public benefit
corporation, joint stock company, Governmental Authority or any other entity of
whatever nature.

“Plan” shall mean, at any time during the preceding five years, an “employee
benefit plan,” as defined in Section 3(3) of ERISA, that any Originator or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any Originator or ERISA
Affiliate.

“Portion of Advances” shall have the meaning assigned to it in Section 2.06 of
the Funding Agreement.

“Power of Attorney” shall have the meaning assigned to it in Section 9.05 of the
Sale Agreement or Section 9.03 of the Funding Agreement, as applicable.

“Program Support Agreement” means and includes, with respect to any Conduit
Lender, any agreement entered into by any Program Support Provider providing for
the issuance of one or more letters of credit for the account of the Conduit
Lender (or any related commercial paper issuer that finances the Conduit
Lender), the issuance of one or more surety bonds for which the Conduit Lender
(or such related issuer) is obligated to reimburse the applicable Program
Support Provider for any drawings thereunder, the sale by the Conduit Lender (or
such related issuer) to any Program Support Provider of the Borrower Obligation
outstanding to such Conduit Lender (or portions thereof or participations
therein) and/or the making of loans and/or other extensions of credit to the
Conduit Lender (or such related issuer) in connection with its commercial paper
program, together with any letter of credit, surety bond or other instrument
issued thereunder.

“Program Support Provider” means and includes, with respect to any Conduit
Lender, any Person now or hereafter extending credit or having a commitment to
extend credit to or for the account of, or to make purchases from, the Conduit
Lender (or any related commercial paper issuer that finances the Conduit Lender)
or issuing a letter of credit, surety bond or other instrument to support any
obligations arising under or in connection with the Conduit Lender’s (or such
related issuer’s) commercial paper program.

 

31    Annex X

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“Projections” shall mean the Parent’s forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; and (c) cash flow statements consistent
with the historical financial statements of the Parent, together with
appropriate supporting details and a statement of underlying assumptions.

“Proposed Change” shall have the meaning assigned to it in Section 12.07(c) of
the Funding Agreement.

“Pro Rata Share” shall mean with respect to all matters relating to any Lender
(other than the Swing Line Lender), the percentage obtained by dividing (i) the
Commitment of that Lender by (ii) the Aggregate Commitment, as such percentage
may be adjusted by assignments permitted pursuant to Section 12.02 of the
Funding Agreement; provided that if all of the Commitments are terminated
pursuant to the terms of the Funding Agreement, then “Pro Rata Share” shall mean
with respect to all matters relating to any Lender, the percentage obtained by
dividing (x) the sum of (A) such Lender’s Revolving Credit Advances, plus
(B) such Lender’s share of the obligations to purchase participations in Swing
Line Loans and refinance Swing Line Loans pursuant to Section 2.01(b)(iii) and
(iv) of the Funding Agreement, by (y) the aggregate Outstanding Principal
Amount.

“Qualified Plan” shall mean a Pension Plan that is intended to be tax-qualified
under Section 401(a) of the IRC.

“Rate Type” means the LIBOR Rate, the Base Rate or the CP Rate.

“Rating Agency” shall mean Moody’s or S&P.

“Ratings” means for any Discretionary Lender or any other Lender which requires
such a “Rating” in connection with the Funding Agreement, the ratings by the
Rating Agencies of such Person of the indebtedness for borrowed money of such
Person.

“Ratios” shall mean, collectively, the Default Ratio, the Default Trigger Ratio,
the Delinquency Ratio, the Dilution Ratio, the Dilution Reserve Ratio, the
Dilution Trigger Ratio and the Receivables Collection Turnover.

“Receivable” shall mean, with respect to any Obligor:

(a) indebtedness of such Obligor (whether constituting an account, chattel
paper, document, instrument or general intangible (under which the Obligor’s
principal obligation is a monetary obligation) and whether or not earned by
performance) arising from the provision of merchandise, goods or services by an
Originator, or other Person approved by the Administrative Agent and the Lenders
in their sole discretion, to such Obligor (or in the case of a Financing
Receivable, to a third party), including the right to payment of any interest or
finance charges and other obligations of such Obligor with respect thereto;

(b) all Liens and property subject thereto from time to time, if any, securing
or purporting to secure any such indebtedness of such Obligor, whether pursuant
to the related Contract or otherwise, together with all financing statements and
other filings authorized by such Obligor relating thereto;

 

32    Annex X

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(c) all guaranties, indemnities and warranties, insurance policies, financing
statements, supporting obligations and other agreements or arrangements of
whatever character from time to time supporting or securing payment of any such
indebtedness, whether pursuant to the related Contract or otherwise;

(d) any Returned Goods and documentation of title evidencing the shipment or
storage of any goods relating to any sale giving rise to such Receivable;

(e) all Collections with respect to any of the foregoing;

(f) all Records with respect to any of the foregoing; and

(g) all proceeds with respect to any of the foregoing.

“Receivables Assignment” shall have the meaning assigned to it in
Section 2.01(a) of the Sale Agreement.

“Receivables Collection Turnover” shall mean, as of any date of determination,
the amount (expressed in days) equal to:

(a) a fraction, (i) the numerator of which is equal to the aggregate Outstanding
Balance of Transferred Receivables on the first day of the Settlement Period
immediately preceding such date and (ii) the denominator of which is equal to
aggregate Collections received during such Settlement Period with respect to all
Transferred Receivables,

multiplied by

(b) the number of days per period contained in such Settlement Period.

“Receivables Collection Turnover Trigger” shall mean, as of any date of
determination, the amount (expressed in days) equal to:

(a) a fraction, (i) the numerator of which is equal to the aggregate Outstanding
Balance of Transferred Receivables on the first day of the three (3) Settlement
Periods immediately preceding such date and (ii) the denominator of which is
equal to aggregate Collections received during such three (3) Settlement Periods
with respect to all Transferred Receivables,

multiplied by

(b) the average number of days per period contained in such three (3) Settlement
Periods.

“Records” shall mean all Contracts and other documents, books, records and other
information (including customer lists, credit files, computer programs, tapes,
disks, data processing software and related property and rights) prepared and
maintained by any Originator, the Servicer, any Sub-Servicer or the Borrower
with respect to the Receivables and the Obligors thereunder and the Borrower
Collateral.

 

33    Annex X

--------------------------------------------------------------------------------

“Refunded Swing Line Loan” shall have the meaning assigned to it in
Section 2.01(b)(iii) of the Funding Agreement.

“Regulatory Change” shall mean any change after the Closing Date in any federal,
state or foreign law, regulation (including Regulation D of the Federal Reserve
Board), pronouncement by the Financial Accounting Standards Board or the
adoption or making after such date of any interpretation, directive or request
under any federal, state or foreign law or regulation (whether or not having the
force of law) by any Governmental Authority, the Financial Accounting Standards
Board, or any central bank or comparable agency, charged with the interpretation
or administration thereof, including an Accounting Based Consolidation Event,
that, in each case, is applicable to any Affected Party.

“Rejected Amount” shall have the meaning assigned to it in Section 4.04 of the
Sale Agreement.

“Related Committed Lenders” shall mean, with respect to any Discretionary
Lender, the Committed Lenders in such Discretionary Lender’s Lender Group.

“Related Documents” shall mean each Account Agreement, each Lockbox Agreement,
the Sale Agreement, the Funding Agreement, the Revolving Notes, the Swing Line
Note, each Receivables Assignment, the Subordinated Notes, each Originator
Support Agreement, the Fee Letters and all other agreements, instruments,
documents and certificates identified in the Schedule of Documents and including
all other pledges, powers of attorney, consents, assignments, contracts,
notices, and all other written matter whether heretofore, now or hereafter
executed by or on behalf of any Person, or any employee of any Person, and
delivered in connection with the Sale Agreement, the Funding Agreement or the
transactions contemplated thereby. Any reference in the Sale Agreement, the
Funding Agreement or any other Related Document to a Related Document shall
include all Appendices thereto, and all amendments, restatements, supplements or
other modifications thereto, and shall refer to such Related Document as the
same may be in effect at any and all times such reference becomes operative.

“Repayment Notice” shall have the meaning assigned to it in Section 2.03(h) of
the Funding Agreement.

“Reportable Event” shall mean any of the events set forth in Section 4043(c) of
ERISA.

“Required Capital Amount” means, at any time of determination, an amount equal
to (a) the Loss Reserve Ratio times 1.25 times the Net Receivables Balance plus
(b) the Outstanding Balance of all Transferred Receivables (other than
Charge-Offs) on which any amount is unpaid more than 90 days past its Maturity
Date plus (c) the sum of the Excess Concentration Amounts for the three Obligors
with the largest aggregate Outstanding Balance of Eligible Receivables.

“Requisite Lenders” shall mean (a) two or more Lenders having in the aggregate
more than fifty-one percent (51%) of the Aggregate Commitment, or (b) if the
Commitments have been terminated, two or more Lenders having in the aggregate
more than fifty-one percent (51%) aggregate Outstanding Principal Amount;
provided that if at any time there is only one Lender party to the Funding
Agreement, “Requisite Lenders” shall mean such Lender.

 

34    Annex X

--------------------------------------------------------------------------------

“Retiree Welfare Plan” shall mean, at any time, a Welfare Plan that provides for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant’s termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.

“Returned Goods” shall mean, with respect to any Receivable, all right, title
and interest of any Originator, the Borrower, the Administrative Agent or the
Lenders, as applicable, in and to returned, repossessed or foreclosed goods
and/or merchandise, the sale of which gave rise to such Receivable.

“Revolving Credit Advance” shall have the meaning assigned to it in
Section 2.01(a) of the Funding Agreement.

“Revolving Note” shall have the meaning assigned to it in Section 2.01(b) of the
Funding Agreement.

“Revolving Period” shall mean the period from and including the Closing Date
through and including the day immediately preceding the Facility Termination
Date.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor thereto.

“Sale” shall mean, with respect to a sale of receivables under the Sale
Agreement, a sale of Receivables by an Originator to the Borrower in accordance
with the terms of the Sale Agreement.

“Sale Agreement” shall mean that certain Third Amended and Restated Receivables
Sale and Servicing Agreement, dated as of the Closing Date, by and among each
Originator, the Servicer and the Borrower, as the Buyer thereunder.

“Sale Price” shall mean, with respect to any Sale of any Sold Receivable, a
price calculated by the Borrower and approved from time to time by the
Administrative Agent equal to:

(a) the Outstanding Balance of such Sold Receivable, minus

(b) a discount reflecting the expected costs to be incurred by the Borrower in
financing the purchase of the Sold Receivables until the Outstanding Balance of
such Sold Receivables is paid in full, minus

(c) a discount reflecting the portion of the Sold Receivables that is reasonably
expected by such Originator on the Transfer Date to become Defaulted Receivables
by reason of clause (b) of the definition thereof, minus

 

35    Annex X

--------------------------------------------------------------------------------

(d) a discount reflecting the portion of the Sold Receivables that is reasonably
expected by such Originator on the Transfer Date to be reduced on account of
Dilution Factors, minus

(e) amounts expected to be paid to the Servicer with respect to the servicing,
administration and collection of the Sold Receivables;

provided that such calculations shall be determined based on the historical
experience of (y) such Originator, with respect to the calculations required in
each of clauses (c) and (d) above, and (z) the Borrower, with respect to the
calculations required in clauses (b) and (e) above.

“Schedule of Documents” shall mean the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Sale Agreement, the Funding Agreement and the
other Related Documents and the transactions contemplated thereunder,
substantially in the form attached as Annex Y to the Funding Agreement and the
Sale Agreement.

“Secured Parties” means the Lenders, the Administrative Agent, each Managing
Agent, each Administrator and each of the Program Support Providers; provided
that a Program Support Provider shall only be a Secured Party hereunder if such
Program Support Provider is both a Lender hereunder and a regulated banking
institution.

“Securities Act” shall mean the provisions of the Securities Act of 1933, 15
U.S.C. Sections 77a et seq., and any regulations promulgated thereunder.

“Securities Exchange Act” shall mean the provisions of the Securities Exchange
Act of 1934, 15 U.S.C. Sections 78a et seq., and any regulations promulgated
thereunder.

“Servicer” shall have the meaning assigned to it in the preamble to the Sale
Agreement.

“Servicer Termination Notice” shall mean any notice by the Administrative Agent
to the Servicer that (a) an Event of Servicer Termination has occurred and
(b) the Servicer’s appointment under the Funding Agreement has been terminated.

“Servicing Fee” shall mean, for any day within a Settlement Period, the amount
equal to (a) (i) the Servicing Fee Rate divided by (ii) 360, multiplied by
(b) the Outstanding Balance of Transferred Receivables on such day.

“Servicing Fee Rate” shall mean 1.00%.

“Servicing Fee Reserve” shall mean, as of any date of determination, an amount
equal to the product of (i) the Servicing Fee Rate, (ii) the Outstanding Balance
of Transferred Receivables and (iii) a fraction, the numerator of which is the
higher of (a) 30 and (b) the Receivables Collection Turnover as of the end of
the Settlement Period immediately preceding such date multiplied by 2, and the
denominator of which is 360.

 

36    Annex X

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“Servicing Officer” shall mean any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Transferred Receivables
and whose name appears on any Officer’s Certificate listing servicing officers
furnished to the Administrative Agent by the Servicer, as such certificate may
be amended from time to time.

“Servicing Records” shall mean all Records prepared and maintained by the
Servicer with respect to the Transferred Receivables and the Obligors
thereunder.

“Settlement Date” shall mean (i) the twelfth day of each calendar month (or, if
such day is not a Business Day, the immediately succeeding Business Day), and
(ii) from and after the occurrence of a Termination Event, any other day
designated as such by the Administrative Agent in its sole discretion.

“Settlement Period” shall mean (a) solely for purposes of determining the
Ratios, (i) with respect to all Settlement Periods other than the final
Settlement Period, each calendar month, whether occurring before or after the
Closing Date, and (ii) with respect to the final Settlement Period, the period
ending on the Termination Date and beginning with the first day of the calendar
month in which the Termination Date occurs, and (b) for all other purposes,
(i) with respect to the initial Settlement Period, the period from and including
the Closing Date through and including the last day of the calendar month in
which the Closing Date occurs, (ii) with respect to the final Settlement Period,
the period ending on the Termination Date and beginning with the first day of
the calendar month in which the Termination Date occurs, and (iii) with respect
to all other Settlement Periods, each calendar month.

“SMBC Committed Lender” shall mean Sumitomo Mitsui Banking Corporation and each
other Lender party hereto from time to time as an “SMBC Committed Lender”.

“SMBC Discretionary Lender” shall mean Manhattan Asset Funding Company LLC and
any Conduit Assignee thereof.

“SMBC Fee Letter” shall mean that certain letter agreement, dated the Closing
Date, between the Parent, the Borrower, Sumitomo Mitsui Banking Corporation and
SMBC-SI.

“SMBC Lender Group” shall mean the MAFC Administrator, Sumitomo Mitsui Banking
Corporation, as Managing Agent, the SMBC Committed Lenders and the SMBC
Discretionary Lenders.

“SMBC-SI” shall mean SMBC Securities, Inc., as representative on behalf of the
SMBC Lender Group.

“Sold Receivable” shall have the meaning assigned to it in Section 2.01(b) of
the Sale Agreement.

“Solvent” shall mean, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person;
(b) the present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its Debts as they become absolute and matured; (c) such Person does not intend
to, and does not believe that it will, incur Debts or

 

37    Annex X

--------------------------------------------------------------------------------

liabilities beyond such Person’s ability to pay as such Debts and liabilities
mature; and (d) such Person is not engaged in a business or transaction, and is
not about to engage in a business or transaction, for which such Person’s
property would constitute an unreasonably small capital. The amount of
contingent liabilities (such as Litigation, guaranties and pension plan
liabilities) at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the amount that can
reasonably be expected to become an actual or matured liability.

“Special Obligor” shall mean one or more Class A Obligors, Class B Obligors,
Class C Obligors or Class D Obligors whose “Individual Obligor Percentage” of
Eligible Receivables (as specified in the definition of “Concentration
Percentage”) is adjusted as permitted under the Funding Agreement to a
percentage greater than such “Individual Obligor Percentage” of Eligible
Receivables, which adjustment has been approved in writing as a Special Obligor
by notice substantially in the form of Annex Z to the Funding Agreement,
following a request by Synnex to the Administrative Agent. Any Lender may revoke
Special Obligor status at any time. For the avoidance of doubt, Sun Microsystems
constitutes a Special Obligor with an “Individual Obligor Percentage” of 7.5%
and the status of which as a Special Obligor (i) shall be automatically revoked
if Sun Microsystems’ rating falls below “BB” or “Ba2” by S&P or Moody’s, as
applicable, and (ii) may be revoked by any Lender in its sole discretion upon
written notice to the Servicer.

“Stock” shall mean all shares, options, warrants, member interests, general or
limited partnership interests or other equivalents (regardless of how
designated) of or in a corporation, limited liability company, partnership or
equivalent entity whether voting or nonvoting, including common stock, preferred
stock or any other “equity security” (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act).

“Stockholder” shall mean, with respect to any Person, each holder of Stock of
such Person.

“Subordinated Loan” shall have the meaning given such term in Section 2.01(c) of
the Sale Agreement.

“Subordinated Note” shall have the meaning given such term in Section 2.01(c) of
the Sale Agreement.

“Sub-Servicer” shall mean any Person with whom the Servicer enters into a
Sub-Servicing Agreement.

“Sub-Servicing Agreement” shall mean any written contract entered into between
the Servicer and any Sub-Servicer pursuant to and in accordance with
Section 7.01 of the Sale Agreement relating to the servicing, administration or
collection of the Transferred Receivables.

“Subsidiary” shall mean, with respect to any Person, any corporation or other
entity (a) of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person or (b) that is directly or indirectly controlled by such Person
within the meaning of control under Section 15 of the Securities Act.

 

38    Annex X

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“Successor Servicer” shall have the meaning assigned to it in Section 9.02 of
the Sale Agreement.

“Successor Servicing Fees and Expenses” shall mean the fees and expenses payable
to the Successor Servicer as agreed to by the Borrower, the Managing Agent and
the Administrative Agent.

“Swing Line Advance” shall have the meaning assigned to it in Section 2.01(b)(i)
of the Funding Agreement.

“Swing Line Advance Margin” shall have the meaning assigned to it in the Bank of
America Fee Letter.

“Swing Line Commitment” shall mean, as to the Swing Line Lender, the commitment
of the Swing Line Lender to make Swing Line Advances pursuant to the terms of
the Funding Agreement. As of the Closing Date, the Swing Line Commitment is
$7,500,000.

“Swing Line Lender” shall have the meaning set forth in the preamble of the
Funding Agreement.

“Swing Line Loan” shall mean at any time, the aggregate amount of Swing Line
Advances outstanding to the Borrower.

“Swing Line Note” shall have the meaning assigned to it in Section 2.01(b)(ii)
of the Funding Agreement.

“Synnex Canada Real Property Co.” shall have the meaning set forth in Annex A to
the Credit Agreement.

“Synnex Mexico” shall mean Synnex de Mexico S.A. de C.V., a Subsidiary of the
Originator.

“Termination Date” shall mean the date on which (a) the Outstanding Principal
Amount has been permanently reduced to zero, (b) all other Borrower Obligations
under the Funding Agreement and the other Related Documents have been
indefeasibly repaid in full and completely discharged and (c) the Facility Limit
has been irrevocably reduced to zero in accordance with the provisions of
Section 2.02(b) of the Funding Agreement.

“Termination Event” shall have the meaning assigned to it in Section 8.01 of the
Funding Agreement.

“Title IV Plan” shall mean a Pension Plan (other than a Multiemployer Plan) that
is covered by Title IV of ERISA and that any Originator or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.

 

39    Annex X

--------------------------------------------------------------------------------

“Transaction Parties” means the Originators, the Servicer and, if the Parent is
not the Servicer, the Parent.

“Transfer” shall mean any Sale or contribution (or purported Sale or
contribution) of Transferred Receivables by any Originator to the Borrower
pursuant to the terms of the Sale Agreement.

“Transfer Date” shall have the meaning assigned to it in Section 2.01(a) of the
Sale Agreement.

“Transferred Receivable” shall mean any Sold Receivable or Contributed
Receivable; provided that any Receivable repurchased by an Originator thereof
pursuant to Section 4.04 of the Sale Agreement shall not be deemed to be a
Transferred Receivable from and after the date of such repurchase unless such
Receivable has subsequently been repurchased by or contributed to the Borrower.

“UCC” shall mean, with respect to any jurisdiction, the Uniform Commercial Code
as the same may, from time to time, be enacted and in effect in such
jurisdiction.

“Unapproved Receivable” shall mean any receivable (a)(i) with respect to which
the Originator’s customer relationship with the Obligor thereof arises as a
result of the acquisition by such Originator of another Person, or (ii) that was
originated in accordance with standards established by another Person acquired
by an Originator, in each case, solely with respect to any such acquisitions
that have not been approved in writing by the Administrative Agent and the
Lenders and then only for the period prior to any such approval, or (b) that
constitutes a Mexico Receivable.

“Underfunded Plan” shall mean any Plan that has an Underfunding.

“Underfunding” shall mean, with respect to any Title IV Plan, the excess, if
any, of (a) the present value of all benefits under the Title IV Plan (based on
the assumptions used to fund the Title IV Plan pursuant to Section 412 of the
IRC) as of the most recent valuation date over (b) the fair market value of the
assets of such Title IV Plan as of such valuation date.

“Unfunded Pension Liability” shall mean, at any time, the aggregate amount, if
any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, and (b) for a period of five years following a transaction
that might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by any Originator or
any ERISA Affiliate as a result of such transaction.

“Unrelated Amounts” shall have the meaning assigned to it in Section 7.03 of the
Sale Agreement.

 

40    Annex X

--------------------------------------------------------------------------------

“Weekly Report” shall have the meaning assigned to it in paragraph (a) of
Annex 5.02(a) to the Funding Agreement.

“Welfare Plan” means a Plan described in Section 3(i) of ERISA.

“YC SUSI Administrator” shall mean Bank of America or an Affiliate thereof, as
administrative trustee for YC SUSI.

“Yield” means:

(i) for any Portion of Advances during any Interest Period to the extent a
Conduit Lender funds such Portion of Advances through the issuance of Commercial
Paper (directly or indirectly through a related commercial paper issuer),

 

CPR × I ×     D     360

(ii) for any Portion of Advances funded by a Committed Lender and for any
Portion of Advances to the extent a Conduit Lender will not be funding such
Portion of Advances through the issuance of Commercial Paper (directly or
indirectly through a related commercial paper issuer),

 

AR × I ×     D     360

(iii) for any Swing Line Advance funded by a Swing Line Lender,

 

SLR × I ×     D     360

where

 

AR

  =    the Alternate Rate for such Portion of Advances for such Interest Period,

CPR

  =    the CP Rate for such Conduit Lender for such Portion of Advances for such
Interest Period (as determined by the applicable Administrator on or prior to
the fifth (5th) Business Day of the calendar month next following such Interest
Period),

SLR

  =    the rate applicable to a Swing Line Advance equal to the sum of (i) the
LIBOR Base Rate with a term equivalent to one month plus (ii) the Swing Line
Advance Margin, determined as of the date such Swing Line Advance is made,

D

  =    the actual number of days during the applicable Interest Period, and

I

  =    the weighted average of such Portion of Advances or Swing Line Advance
outstanding during such Interest Period;

 

41    Annex X

--------------------------------------------------------------------------------

provided that no provision of this Agreement shall require the payment or permit
the collection of Yield in excess of the maximum permitted by applicable law;
provided further that at all times after the declaration or automatic occurrence
of any Termination Event, Yield for all Portion of Advances shall be payable at
the Default Rate; provided further that notwithstanding the forgoing, all
computations of Yield based on the Base Rate shall be based on a year of 365 or
366 days, as applicable; and provided further that the minimum Yield payable to
the Swing Line Lender for each Swing Line Advance for any Interest Period shall
be $1,000.

SECTION 2. Other Terms and Rules of Construction.

(a) Accounting Terms. Unless otherwise specifically provided therein, any
accounting term used in any Related Document shall have the meaning customarily
given such term in accordance with GAAP, and all financial computations
thereunder shall be computed in accordance with GAAP consistently applied. That
certain items or computations are explicitly modified by the phrase “in
accordance with GAAP” shall in no way be construed to limit the foregoing.

(b) Other Terms. All other undefined terms contained in any of the Related
Documents shall, unless the context indicates otherwise, have the meanings
provided for by the UCC as in effect in the State of New York to the extent the
same are used or defined therein.

(c) Rules of Construction. Unless otherwise specified, references in any Related
Document or any of the Appendices thereto to a Section, subsection or clause
refer to such Section, subsection or clause as contained in such Related
Document. The words “herein,” “hereof” and “hereunder” and other words of
similar import used in any Related Document refer to such Related Document as a
whole, including all annexes, exhibits and schedules, as the same may from time
to time be amended, restated, modified or supplemented, and not to any
particular section, subsection or clause contained in such Related Document or
any such annex, exhibit or schedule. Any reference to any amount on any date of
determination means such amount as of the close of business on such date of
determination. Any reference to or definition of any document, instrument or
agreement shall, unless expressly noted otherwise, include the same as amended,
restated, supplemented or otherwise modified from time to time. Wherever from
the context it appears appropriate, each term stated in either the singular or
plural shall include the singular and the plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, feminine and
neuter genders. The words “including,” “includes” and “include” shall be deemed
to be followed by the words “without limitation”; the word “or” is not
exclusive; references to Persons include their respective successors and assigns
(to the extent and only to the extent permitted by the Related Documents) or, in
the case of Governmental Authorities, Persons succeeding to the relevant
functions of such Persons; and all references to statutes and related
regulations shall include any amendments of the same and any successor statutes
and regulations.

 

42    Annex X

--------------------------------------------------------------------------------

(d) Rules of Construction for Determination of Ratios. The Ratios as of the last
day of the Settlement Period immediately preceding the Closing Date shall be
established by the Administrative Agent on or prior to the Closing Date and the
underlying calculations for periods immediately preceding the Closing Date to be
used in future calculations of the Ratios shall be established by the
Administrative Agent on or prior to the Closing Date in accordance with the form
of Monthly Report. For purposes of calculating the Ratios, (i) averages shall be
computed by rounding to the second decimal place and (ii) the Settlement Period
in which the date of determination thereof occurs shall not be included in the
computation thereof and the first Settlement Period immediately preceding such
date of determination shall be deemed to be the Settlement Period immediately
preceding the Settlement Period in which such date of determination occurs.

 

43    Annex X

--------------------------------------------------------------------------------

ANNEX Y

SCHEDULE OF DOCUMENTS

Receivables Sale and Servicing Agreement

--------------------------------------------------------------------------------

ANNEX Z

FINANCIAL TESTS

(a) Minimum Net Worth. Servicer and its Subsidiaries on a consolidated basis
shall have a Net Worth, as of the Closing Date and as of the end of the fiscal
quarter ending on November 30, 2005, of not less than $300,000,000. Thereafter,
Servicer and its Subsidiaries on a consolidated basis shall have, as of the end
of each fiscal quarter in each fiscal year ending on and after November 30,
2006, a Net Worth at least equal to the sum of (i) the Net Worth required
hereunder for the immediately preceding fiscal year plus (ii) an amount equal to
fifty percent (50%) of the positive net income of Servicer and its Subsidiaries
on a consolidated basis for such immediately preceding fiscal year plus (iii) an
amount equal to one hundred percent (100%) of the amount of any equity raised by
or capital contributed to Servicer during such immediately preceding fiscal
year.

(b) Minimum Fixed Charge Coverage Ratio. Servicer, on a consolidated basis with
its Subsidiaries, shall have for each Rolling Period from and after the Rolling
Period ending in November 2008, a Fixed Charge Coverage Ratio of not less than
1.25 to 1.00.

Capitalized terms used in this Annex Z and not otherwise defined below shall
have the respective meanings ascribed to them in Annex X.

“Capital Expenditures” shall mean, with respect to any Person, all expenditures
(by the expenditure of cash or the incurrence of Debt) by such Person during any
measuring period for any fixed assets or improvements or for replacements,
substitutions or additions thereto, that have a useful life of more than one
year and that are required to be capitalized under GAAP; provided that “Capital
Expenditures” shall exclude (A) the purchase price of up to $12,500,000 paid or
to be paid by Canadian Subsidiary in connection with its acquisition of Synnex
Canada Real Property Co. ; (B) expenditures made with respect to property to the
extent (and only to the extent) such expenditures are made from the proceeds of
property insurance used to restore or replace property that has been the subject
of a casualty event covered by such insurance; and (C) the aggregate amount of
all expenditures (by the expenditure of cash or the incurrence of Debt) for any
fixed assets or improvements or for replacements, substitutions or additions
thereto, that have a useful life of more than one year and that are required to
be capitalized under GAAP made by Servicer and its Subsidiaries, with respect to
(i) building a distribution facility in Olive Branch, Mississippi in an amount
not to exceed $16 million, (ii) acquiring its Fremont, California headquarters
in an amount not to exceed $13 million, and (iii) expenditures at its
Greenville, South Carolina facility in an amount not to exceed $7 million;
provided that (A) such expenditures under clause (i) are made within 18 months
of March 27, 2008, (B) such expenditures under clause (ii) are made prior to
December 31, 2009, (C) such expenditures under clause (iii) are made prior to
December 31, 2008, and (D) such expenditures under clauses (i) and (ii) shall be
funded by the incurrence of Debt.

 

   Receivables Sale and Servicing Agreement

--------------------------------------------------------------------------------

“EBITDA” shall mean, with respect to any Person and its Subsidiaries for any
fiscal period, the amount equal to (a) consolidated net income of such Person
for such period, minus (b) the sum of (i) interest income (excluding any fee
income characterized as interest income in accordance with GAAP and earned under
any contracts entered into by the such Person or any such Subsidiary, or any
reseller customer thereof, with any governmental authority of the United Mexican
States), (ii) gain from extraordinary items for such period, (iii) any aggregate
net gain (but not any aggregate net loss) during such period arising from the
sale, exchange or other disposition of capital assets by such Person (including
any fixed assets, whether tangible or intangible, all inventory sold in
conjunction with the disposition of fixed assets and all securities), and
(iv) any other non-cash gains that have been added in determining consolidated
net income (including LIFO adjustments), in each case to the extent included in
the calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication, plus (c) the sum of (i) any
provision for income taxes, (ii) Interest Expense, (iii) loss from extraordinary
items for such period, (iv) the amount of non-cash charges (including
depreciation, amortization and LIFO adjustments) for such period, (v) amortized
debt discount for such period, and (vi) the amount of any deduction to
consolidated net income as the result of any grant to any members of the
management of such Person of any Stock, in each case to the extent included in
the calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication. For purposes of this definition,
the following items shall be excluded in determining consolidated net income of
a Person: (A) the income (or deficit) of any other Person accrued prior to the
date it became a Subsidiary of, or was merged or consolidated into, such Person
or any of such Person’s Subsidiaries; (B) the income (or deficit) of any other
Person (other than a Subsidiary) in which such Person has an ownership interest,
except to the extent any such income has actually been received by such Person
in the form of cash dividends or distributions; (C) the undistributed earnings
of any Subsidiary of such Person to the extent that the declaration or payment
of dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (D) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (E) any write-up of any asset; (F) any net
gain from the collection of the proceeds of life insurance policies; (G) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Debt, of such Person, (H) in the case of a successor to such
Person by consolidation or merger or as a transferee of its assets, any earnings
of such successor prior to such consolidation, merger or transfer of assets, and
(I) any deferred credit representing the excess of equity in any Subsidiary of
such Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary.

 

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Annex Z-2

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“Fixed Charge Coverage Ratio” shall mean, as of any date, the ratio of
(a) EBITDA for the Rolling Period ending on such date to (b) Fixed Charges for
such period.

“Fixed Charges” shall mean, with respect to any fiscal period of Servicer, the
sum of (a) cash Interest Expense during such period, plus (b) regularly
scheduled payments of principal on Debt of Servicer and its Subsidiaries paid
during such period (other than regularly scheduled payments or principal in
respect of (i) Debt owing under this Agreement and the Credit Agreement), plus
(c) the aggregate amount of all Capital Expenditures made by Servicer and its
Subsidiaries during such period, plus (d) income tax expense during such period,
plus (e) any dividend, return of capital or any other distribution in connection
with its Stock.

“Interest Expense” shall mean, with respect to any fiscal period of Servicer,
interest expense (whether cash or non-cash) of Servicer and its Subsidiaries on
a consolidated basis for such period, including amortization of original issue
discount on any Debt and of all fees payable in connection with the incurrence
of such Debt (to the extent included in interest expense), the interest portion
of any deferred payment obligation and the interest component of any Capital
Lease Obligation.

“Net Worth” shall mean, as of any date, the excess of (a) the consolidated
assets of Servicer and its Subsidiaries over (b) the consolidated liabilities of
Servicer and its Subsidiaries as determined in accordance with GAAP.

“Rolling Period” shall mean, as of the end of any fiscal quarter of Servicer,
the immediately preceding four (4) fiscal quarters, including the fiscal quarter
then ending.

(b) Rules of Construction. Unless otherwise specifically provided herein, any
accounting term used in this Annex Z shall have the meaning customarily given
such term in accordance with GAAP, and all financial computations thereunder
shall be computed on a consolidated basis in accordance with GAAP consistently
applied. That certain items or computations are explicitly modified by the
phrase “in accordance with GAAP” shall in no way be construed to limit the
foregoing. If any “Accounting Changes” (as defined below) occur and such changes
result in a change in the calculation of the financial, standards or terms used
in this Annex Z or elsewhere in the Related Documents, then the parties thereto
agree to enter into negotiations in order to amend such provisions so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the financial condition of such Persons and their
Subsidiaries shall be the same after giving effect to such Accounting Changes as
if such Accounting Changes had not been made. “Accounting Changes” means
(i) changes in accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion by the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants (or successor thereto
or any agency with similar functions), and (ii) changes in accounting principles
concurred in by the Borrower’s Independent

 

   Receivables Sale and Servicing Agreement

 

Annex Z-3

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Accounting Firm. In the event that the parties to this Agreement shall have
agreed upon any such required amendment, then, after such amendment has been
evidenced in writing and the underlying Accounting Change with respect thereto
has been implemented, any reference to GAAP contained in this Annex Z shall,
only to the extent of such Accounting Change, refer to GAAP consistently applied
after giving effect to the implementation of such Accounting Change. If such
parties cannot agree upon the required amendments within thirty (30) days
following the date of implementation of any Accounting Change, then all
financial statements delivered and all calculations of financial tests and other
standards and terms in accordance with the Related Documents shall be prepared,
delivered and made without regard to the underlying Accounting Change.

 

   Receivables Sale and Servicing Agreement

 

Annex Z-4