EXHIBIT 10(n)
 
AMENDMENT NO. 17 TO TRANSFER AND ADMINISTRATION AGREEMENT

AMENDMENT NO. 17 TO TRANSFER AND ADMINISTRATION AGREEMENT, dated as of March 26,
2010 (this “Amendment”), to that certain Transfer and Administration Agreement
dated as of March 21, 2001, as amended by Amendment No. 1 to Transfer and
Administration Agreement dated as of November 30, 2001, Amendment No. 2 to
Transfer and Administration Agreement dated as of December 14, 2001, Amendment
No. 3 to Transfer and Administration Agreement dated as of March 20, 2002,
Amendment No. 4 to Transfer and Administration Agreement dated as of March 29,
2002, Amendment No. 5 to Transfer and Administration Agreement dated as of May
22, 2002, Amendment No. 6 and Limited Waiver to Transfer and Administration
Agreement dated as of September 27, 2002, Amendment No. 7 to Transfer and
Administration Agreement dated as of February 19, 2003, Amendment No. 8 to
Transfer and Administration Agreement dated as of April 14, 2003, Amendment No.
9 to Transfer and Administration Agreement dated as of August 13,
2003,  Amendment No. 10 to Transfer and Administration Agreement dated as of
February 18, 2004, Amendment No. 11 to Transfer and Administration Agreement
dated as of August 13, 2004, Amendment No. 12 to Transfer and Administration
Agreement dated as of February 14, 2005, Amendment No. 13 to Transfer and
Administration Agreement dated as of February 13, 2006, Amendment No. 14 to
Transfer and Administration Agreement dated as of October 31, 2006, Amendment
No. 15 to Transfer and Administration Agreement dated as of February 12,
2007  and Amendment No. 16 to Transfer and Administration Agreement dated as of
March 27, 2007 (as so amended and in effect, the “TAA”), by and among Arrow
Electronics Funding Corporation, a Delaware corporation (the “SPV”), Arrow
Electronics, Inc., a New York corporation, individually (“Arrow”) and as the
initial Master Servicer, the several commercial paper conduits identified on
Schedule A to the TAA and their respective permitted successors and assigns (the
“Conduit Investors”; each individually, a “Conduit Investor”), the agent bank
set forth opposite the name of each Conduit Investor on such Schedule A and its
permitted successors and assigns (each a “Funding Agent”) with respect to such
Conduit Investor, Bank of America, National Association, a national banking
association, as the administrative agent for the Investors (the “Administrative
Agent”), and the financial institutions from time to time parties thereto as
Alternate Investors.  Capitalized terms used and not otherwise defined herein
have the meanings assigned to such terms in the TAA.
 
PRELIMINARY STATEMENTS:
 
WHEREAS, the SPV, Arrow, the Conduit Investors, the Funding Agents, the
Alternate Investors and the Administrative Agent have entered into the TAA;
 
WHEREAS, the SPV and Arrow have requested that the Conduit Investors, the
Funding Agents, the Alternate Investors and the Administrative Agent agree to
make certain changes and amendments to the TAA;
 
 
 

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- 2 -
 
WHEREAS, subject to the terms and conditions set forth herein, the Conduit
Investors, the Alternate Investors, the Funding Agents and the Administrative
Agent are willing to make such changes and amendments to the TAA;
 
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
 
SECTION 1. Amendments to the TAA.  Effective as of the date hereof and subject
to the satisfaction of the conditions precedent set forth in Section 3 hereof,
the TAA is hereby amended to incorporate the changes reflected on Exhibit A
hereto.
 
SECTION 2. Representations and Warranties of the SPV and Arrow.  To induce the
Conduit Investors, Alternate Investors, the Funding Agents and the
Administrative Agent to enter into this Amendment, the SPV and Arrow each makes
the following representations and warranties (which representations and
warranties shall survive the execution and delivery of this Amendment) as of the
date hereof, after giving effect to the amendments set forth herein:
 
Section 2.1. Authority.  The SPV and Arrow each has the requisite corporate
power, authority and legal right to execute and deliver this Amendment and to
perform its obligations hereunder and under the Transaction Documents, including
the TAA (as modified hereby).  The execution, delivery and performance by the
SPV and Arrow of this Amendment and their performance of the Transaction
Documents, including the TAA (as modified hereby), have been duly approved by
all necessary corporate action and no other corporate proceedings are necessary
to consummate such transactions.
 
Section 2.2. Enforceability.  This Amendment has been duly executed and
delivered by the SPV and Arrow.  This Amendment is the legal, valid and binding
obligation of the SPV and Arrow, enforceable against the SPV and Arrow in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the rights of creditors generally and
the application of general principles of equity (regardless of whether
considered in a proceeding at law or in equity).  The making and delivery of
this Amendment and the performance of the Agreement, as amended by this
Amendment, do not violate any provision of law or any regulation (except to the
extent that the violation thereof could not, in the aggregate, be expected to
have a Material Adverse Effect or a material adverse effect on the condition
(financial or otherwise), business or properties of Arrow and the other
Originators, taken as a whole), or its charter or by-laws, or result in the
breach of or constitute a default under or require any consent under any
indenture or other agreement or instrument to which it is a party or by which it
or any of its properties may be bound or affected.
 
Section 2.3. Representations and Warranties.  The representations and warranties
contained in the Transaction Documents are true and correct on and as of the
date hereof as though made on and as of the date hereof after giving effect to
this Amendment.
 
 
 

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Section 2.4. No Termination Event.  After giving effect to this Amendment, no
event has occurred and is continuing that constitutes a Termination Event or a
Potential Termination Event.
 
SECTION 3. Conditions Precedent.  This Amendment shall become effective, as of
the date hereof, on the date on which the following conditions precedent shall
have been fulfilled:
 
Section 3.1. This Amendment. The Administrative Agent shall have received
counterparts of this Amendment, duly executed by each of the parties hereto.
 
Section 3.2. Additional Documents. The Administrative Agent shall have received
all additional approvals, certificates, documents, instruments and items of
information as the Administrative Agent may reasonably request and all of the
foregoing shall be in form and substance reasonably satisfactory to the
Administrative Agent and each Funding Agent.
 
SECTION 4. References to and Effect on the Transaction Documents.
 
Section 4.1. Except as specifically amended and modified hereby, each
Transaction Document is and shall continue to be in full force and effect and is
hereby in all respects ratified and confirmed.
 
Section 4.2. The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of any Investor, Funding
Agent or the Administrative Agent under any Transaction Document, nor constitute
a waiver, amendment or modification of any provision of any Transaction
Document, except as expressly provided in Section 1 hereof.
 
Section 4.3. This Amendment contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof superseding all prior oral or written
understandings.
 
Section 4.4. Each reference in the TAA to “this Agreement”, “hereunder”,
“hereof” or words of like import, and each reference in any other Transaction
Document to “the Transfer and Administration Agreement”, “thereunder”, “thereof”
or words of like import, referring to the Agreement, shall mean and be a
reference to the Agreement as amended hereby.
 
SECTION 5. Execution in Counterparts.  This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
agreement.  Delivery of an executed counterpart of a signature page to this
Amendment by telefacsimile shall be effective as delivery of a manually executed
counterpart of this Amendment.
 
 
 

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- 4 -
 
SECTION 6. GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
SECTION 7. WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY WAIVES ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH,
RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH
THIS AMENDMENT OR ANY OTHER TRANSACTION DOCUMENT.
 
SECTION 8. Assignment by Conduit Investors.  Each of the parties hereto hereby
acknowledges that YC SUSI Trust and Variable Funding Capital Company LLC
(together, the “Assigning Conduit Investors”) hereby assign their respective
Investments to their respective Related Alternate Investors; provided, however,
that the rights, remedies, provisions and agreements set forth in Section 11.1
of the TAA shall survive such assignment with respect to each of the Assigning
Conduit Investors in respect of events that have occurred prior to the date
hereof.
 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
 
 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
 
 

 
Arrow Electronics Funding Corporation,
as SPV                By:         Name:      Title:  

 
 
 

 
Arrow Electronics, Inc.,
individually and as Master Servicer                By:         Name:      Title:
 

 
 
Signature Page to
Amendment No. 17 to
Arrow Electronics
Transfer and Administration Agreement
 
 

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YC SUSI Trust,
as a Conduit Investor
        By: Bank of America, N.A., Administrative Trustee                By:   
     Name:      Title:  

 
 
 

 
Bank of America, National Association,
as a Funding Agent, as Administrative Agent, and as an Alternate Investor      
         By:         Name:      Title:  

 
 
Signature Page to
Amendment No. 17 to
Arrow Electronics
Transfer and Administration Agreement
 
 

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Liberty Street Funding Corp.,
as a Conduit Investor
               By:         Name:      Title:  

 
 

 
The Bank of Nova Scotia,
  as a Funding Agent and as an Alternate Investor                 By:       
 Name:      Title:  

 
 
Signature Page to
Amendment No. 17 to
Arrow Electronics
Transfer and Administration Agreement
 
 

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Gotham Funding Corporation,
  as a Conduit Investor                  By:         Name:      Title:  

 
 
 

 
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New
 
York Branch,
   
(formerly known as The Bank of Tokyo-Mitsubishi, Ltd., New York Branch) as a
Funding Agent
                     By:         Name:      Title:  

 
 
 

 
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch,
 
(formerly known as The Bank of Tokyo-Mitsubishi, Ltd., New York Branch) as an
Alternate Investor
                     By:         Name:      Title:  

 
 
Signature Page to
Amendment No. 17 to
Arrow Electronics
Transfer and Administration Agreement
 
 

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Park Avenue Receivables Company, LLC,
 
as a Conduit Investor
        By: JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank),
its attorney-in-fact                By:         Name:      Title:  

 
 

 
JPMorgan Chase Bank, N.A.
 
(formerly known as JPMorgan Chase Bank), as a Funding Agent and as an Alternate
Investor
                     By:         Name:      Title:  

 
 
Signature Page to
Amendment No. 17 to
Arrow Electronics
Transfer and Administration Agreement
 
 

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Variable Funding Capital Company LLC,
 
as a Conduit Investor
        By: Wachovia Capital Markets, LLC, as attorney-in-fact            
 By:         Name:      Title:  

 
 

 
Wachovia Bank, National Association,
 
as a Funding Agent and as an Alternate Investor
                     By:         Name:      Title:  

 
 
Signature Page to
Amendment No. 17 to
Arrow Electronics
Transfer and Administration Agreement
 
 

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EXHIBIT A
 
Please see attached.
 
 
 
 

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The TAA formerly provided that a Conduit Investor had the option of being either
a Match Funding Conduit Investor or a Pooled Funding Conduit Investor.  On March
27, 2007, (i) such option terminated, (ii) each Conduit Investor was thereupon
and at all times thereafter deemed to be a Pooled Funding Conduit Investor and
(iii) each term or provision of the TAA, including, without limitation, Section
2.4(b), relating to a Conduit Investor as a Match Funding Conduit Investor
ceased to be operative or available.

 

 

Transfer and Administration Agreement
 
by and among
 
Arrow Electronics Funding Corporation,
 

 
Arrow Electronics, Inc.,
 
Individually and as Master Servicer
 

 
The Persons Parties hereto as Conduit Investors,
 
Alternate Investors and Funding Agents
 

 
Bank of America,
National Association,
as Administrative Agent
 

 
 

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TABLE OF CONTENTS   Page  
ARTICLE I DEFINITIONS
1
 
Section 1.1 .  Certain Defined Terms
1
 
Section 1.2 .  Other Terms
24
 
Section 1.3 .  Computation of Time Periods
25
ARTICLE II PURCHASES AND SETTLEMENTS
25
 
Section 2.1 .  Transfer of Affected Assets; Intended Characterization
25
 
Section 2.2 .  Purchase Price
26
 
Section 2.3 .  Investment Procedures
28
 
Section 2.4 .  [IS RESERVED AND IS SPECIFIED IN SCHEDULE I.]
30
 
Section 2.5 .  Yield, Fees and Other Costs and Expenses
30
 
Section 2.6 .  Deemed Collections
30
 
Section 2.7 .  Payments and Computations, Etc
31
 
Section 2.8 .  Reports
31
 
Section 2.9 .  Collection Account
32
 
Section 2.10 .  Sharing of Payments, Etc
32
 
Section 2.11 .  Right of Setoff
33
 
Section 2.12 .  [RESERVED]
33
 
Section 2.13 .  [RESERVED]
33
 
Section 2.14 .  [RESERVED]
33
 
Section 2.15 .  [RESERVED]
33
 
Section 2.16 .  Special Termination Date with Respect to a Particular Conduit
Investor
33
ARTICLE III ADDITIONAL ALTERNATE INVESTOR PROVISIONS
34
 
Section 3.1 .  Assignment to Alternate Investors
34
 
Section 3.2 .  [RESERVED.]
34
 
Section 3.3 .  Non-Renewing Alternate Investors
34
ARTICLE IV REPRESENTATIONS AND WARRANTIES
35
 
Section 4.1 .  Representations and Warranties of the SPV and the Master Servicer
35
 
Section 4.2 .  Additional Representations and Warranties of the Master Servicer
41
ARTICLE V CONDITIONS PRECEDENT
42
 
Section 5.1 .  Conditions Precedent to Closing
42

 
 
 
- i -

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Section 5.2 .  Conditions Precedent to All Investments and Reinvestments
45
 
Section 5.3 .  Master Servicer Report
46
ARTICLE VI COVENANTS
47
 
Section 6.1 .  Affirmative Covenants of the SPV and Master Servicer
47
 
Section 6.2 .  Negative Covenants of the SPV and Master Servicer
53
ARTICLE VII ADMINISTRATION AND COLLECTIONS
55
 
Section 7.1 .  Appointment of Master Servicer
55
 
Section 7.2 .  Duties of Master Servicer
56
 
Section 7.3 .  Blocked Account Arrangements
58
 
Section 7.4 .  Enforcement Rights After Designation of New Master Servicer
58
 
Section 7.5 .  Master Servicer Default
59
 
Section 7.6 .  Servicing Fee
60
 
Section 7.7 .  Protection of Ownership Interest of the Investors
60
ARTICLE VIII TERMINATION EVENTS
61
 
Section 8.1 .  Termination Events
61
 
Section 8.2 .  Termination
64
ARTICLE IX INDEMNIFICATION; EXPENSES; RELATED MATTERS
64
 
Section 9.1 .  Indemnities by the SPV
64
 
Section 9.2 .  Indemnity for Taxes, Reserves and Expenses
67
 
Section 9.3 .  Taxes
69
 
Section 9.4 .  Other Costs and Expenses; Breakage Costs
70
 
Section 9.5 .  Reconveyance Under Certain Circumstances
71
 
Section 9.6 .  Indemnities by the Master Servicer
71
ARTICLE X THE ADMINISTRATIVE AGENT
71
 
Section 10.1 .  Appointment and Authorization of Administrative Agent
71
 
Section 10.2 .  Delegation of Duties
72
 
Section 10.3 .  Liability of Administrative Agent
72
 
Section 10.4 .  Reliance by Administrative Agent
72
 
Section 10.5 .  Notice of Termination Event, Potential Termination Event or
Master Servicer Default
73
 
Section 10.6 .  Credit Decision; Disclosure of Information by the Administrative
Agent
73
 
Section 10.7 .  Indemnification of the Administrative Agent
74
 
Section 10.8 .  Administrative Agent in Individual Capacity
75
 
Section 10.9 .  Resignation of Administrative Agent
75
 
Section 10.10 .  Payments by the Administrative Agent
76

 
 
 
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ARTICLE XI MISCELLANEOUS
76
 
Section 11.1 .  Term of Agreement
76
 
Section 11.2 .  Waivers; Amendments
76
 
Section 11.3 .  Notices; Payment Information
77
 
Section 11.4 .  Governing Law; Submission to Jurisdiction; Appointment of
Service Administrative Agent
78
 
Section 11.5 .  Integration
78
 
Section 11.6 .  Severability of Provisions
79
 
Section 11.7 .  Counterparts; Facsimile Delivery
79
 
Section 11.8 .  Successors and Assigns; Binding Effect
79
 
Section 11.9 .  Waiver of Confidentiality
82
 
Section 11.10 .  Confidentiality Agreement
82
 
Section 11.11 .  No Bankruptcy Petition Against the Conduit Investors
82
 
Section 11.12 .  No Recourse Against Conduit Investors, Stockholders, Officers
or Directors
83
     

 
 

 Schedules
 

Schedule A Investors Schedule B Match Funding Conduit Investors Schedule C
[Gates/Synnex Receivables Schedule] Schedule D [Excluded Receivables] Schedule I
Yield and Rate Periods Schedule II Calculation of Required Reserves Schedule III
Settlement Procedures Schedule IV Calculation of Fees Schedule V Agreed Upon
Procedures Schedule 4.1(g) List of Actions and Suits Schedule 4.1(i)  Location
of Certain Offices and Records Schedule 4.1(j) List of Subsidiaries, Divisions
and Tradenames; FEIN Schedule 4.1(s) List of Blocked Account Banks and Blocked
Accounts Schedule 11.3 Address and Payment Information    

 
Exhibits
 

Exhibit A-1  Form of Assignment and Assumption Agreement Exhibit B Form of
Contract Exhibit C Credit and Collection Policies and Practices Exhibit D  Form
of Investment Request Exhibit F Form of Servicer Report Exhibit G  Form of SPV
Secretary’s Certificate Exhibit H Forms of [Originator/Master Servicer]
Secretary’s Certificate
Exhibit I-1
Form of Opinion of Robert E. Klatell, Counsel to the SPV, Originators and Master
Servicer

 
 
 
- iii -

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Exhibit I-2
Form of Opinion of Milbank, Tweed, Hadley & McCloy LLP, Counsel to the SPV,
Originators and Master Servicer

Exhibit I-3
Form of Opinion of Davies, Ward, Phillips & Vineberg LLP, Canadian Counsel to
Arrow Electronics Canada Ltd.

Exhibit I-4               Form of Opinion of Counsel to SBM and Support Net,
Inc.
 
 
 
- iv -

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Transfer and Administration Agreement
 
This Transfer and Administration Agreement (this “Agreement”), dated as of March
21, 2001, by and among Arrow Electronics Funding Corporation, a Delaware
corporation (the “SPV”), Arrow Electronics, Inc., a New York corporation,
individually (“Arrow”) and as initial Master Servicer, the several commercial
paper conduits identified on Schedule A and their respective permitted
successors and assigns (the “Conduit Investors”; each individually, a “Conduit
Investor”), the financial institutions from time to time parties hereto as
Alternate Investors, the agent bank set forth opposite the name of each Conduit
Investor on Schedule A and its permitted successors and assigns (each a “Funding
Agent”) with respect to such Conduit Investor and Alternate Investor and Bank of
America, National Association, a national banking association (“Bank of
America”), as the Administrative Agent for the Conduit Investors and the
Alternate Investors.  Each Conduit Investor, its related Alternate Investor and
its related Funding Agent shall comprise a purchaser group (each, a “Purchaser
Group”); provided, however, that no Purchaser Group is required to include a
Conduit Investor.
 
ARTICLE I
 
DEFINITIONS
 
SECTION 1.1  .  Certain Defined Terms.  As used in this Agreement, the following
terms shall have the following meanings:
 
“Additional Commitment Amendment” means an amendment to this Agreement pursuant
to the provisions hereof, among the SPV, Arrow, the Administrative Agent and a
commercial paper conduit and the alternate investors related thereto providing
for such commercial paper conduit and alternate investors to become a party to
this Agreement with a corresponding increase in the Facility Limit hereunder.
 
“Additional Costs” is defined in Section 9.2(d).
 
“Adjusted Consolidated EBITDA” means for any fiscal period, without duplication
(a) the Consolidated Net Income of Arrow and its CA Subsidiaries for such
period, plus (b) to the extent deducted from earnings in determining
Consolidated Net Income for such period, the sum, in each case for such period,
of income taxes, interest expense, depreciation expense amortization expense,
including amortization of any goodwill or other intangibles, minus (c) to the
extent included in determining Consolidated Net Income for such period,
non-cash  equity earnings of unconsolidated CA Affiliates, plus (d) to the
extent excluded in determining Consolidated Net Income for such period, cash
distributions received by Arrow from unconsolidated CA Affiliates, plus (e) to
the extent deducted from earnings in determining Consolidated Net Income for
such period, non-cash charges due to impairments recorded in such period in
accordance with the Financial Accounting Standards Board’s Statement of
Financial Accounting Standards No. 142, all as determined on a consolidated
basis in accordance with GAAP plus (f) gains or losses related to the early
extinguishment of notes, bonds or other fixed income investments plus (g) gains
or losses due to integration or restructuring charges to the extent disclosed in
public filings; provided that in determining Adjusted Consolidated EBITDA for
any period of four consecutive fiscal quarters during which any business is
acquired by Arrow, such Adjusted Consolidated EBITDA shall be measured on a pro
forma basis to include the consolidated EBITDA of the acquired business
(determined for such business in the manner Adjusted Consolidated EBITDA is
determined for Arrow, as described above in this definition), plus identifiable,
board-approved and publicly announced acquisition-related synergies which are
expected to be realized over a twelve-month period following such acquisition.
 
 
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“Administrative Agent” means Bank of America or an Affiliate thereof, as
Administrative Agent for the Conduit Investors, the Funding Agents and the
Alternate Investors.
 
“Administrative Agent-Related Persons” means the Administrative Agent, together
with its Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and their respective Affiliates.
 
“Administrative Fee” means the fee payable to the Administrative Agent as set
forth in the Fee Letter.
 
“Adverse Claim” means a lien, security interest, charge or encumbrance, or other
right or claim in, of or on any Person’s assets or properties (including any UCC
financing statement or any similar instrument filed against such Person’s assets
or properties, and excluding (i) any repurchase right of HP in the HP
Receivables pursuant to the HP Receivables Purchase Agreement, (ii) any lien,
security interest, charge or encumbrance relating solely to Receivables with
Allied Signal, Inc. as the Obligor, at any time when such Receivables are not
treated as “Eligible Receivables” hereunder and (iv) the HP Financing Statement)
in favor of any other Person (including any bankruptcy trustee with respect to
any Originator or the SPV).
 
“Affected Assets” means, collectively, (a) the Receivables, (b) the Related
Security, (c) all rights and remedies of the SPV under the First Tier Agreement,
together with all financing statements filed by the SPV against Arrow in
connection therewith, (d) all Blocked Accounts and all funds and investments
therein and all Blocked Account Agreements, and (e) all proceeds of the
foregoing.
 
“Affiliate” means as to any Person, any other Person which, directly or
indirectly, owns, is in control of, is controlled by, or is under common control
with, such Person, in each case whether beneficially, or as a trustee, guardian
or other fiduciary. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the other Person, whether
through the ownership of voting securities or membership interests, by contract,
or otherwise.
 
“Aggregate Commitment” means, at any time, the sum of the Commitments then in
effect.
 
 
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“Aggregate Unpaids” means, at any time, an amount equal to the sum of (a) the
aggregate unpaid Yield accrued and to accrue to maturity with respect to all
Rate Periods at such time, (b) the Net Investment at such time and (c) all other
amounts owed (whether or not then due and payable) hereunder and under the other
Transaction Documents by the SPV or Arrow to the Administrative Agent, the
Funding Agents, the Investors or the Indemnified Parties at such time, including
all Fees, expenses, breakage costs and indemnities or any amounts payable to a
successor administrative agent pursuant to Section 10.9.
 
“Agreement” is defined in the preamble.
 
“Alternate Investor Percentage” means, at any time, a fraction, expressed as a
percentage, the numerator of which is the portion of the Net Investment funded
by the Alternate Investor(s) related to a particular Conduit Investor and the
denominator of which is the Net Investment funded through the Related Funding
Agent at such time.
 
“Alternate Investors” means each financial institution identified as such on the
signature pages hereof and any other financial institution that shall become a
party to this Agreement pursuant to Section 11.8.
 
“Alternate Rate” is defined in Section 2.4.
 
“Arrow” means Arrow Electronics, Inc., a New York corporation.
 
“Arrow Asia” means Arrow Asia Distribution Limited, a company incorporated in
Hong Kong and having its registered office at 20th Floor, Ever Gain Plaza, Tower
2, 88 Container Port Road, Kwai Chung, New Territories, Hong Kong.
 
“Arrow Asia Receivable” means a Receivable originated by Arrow Asia.
 
“Arrow Canada” means Arrow Electronics Canada Ltd., a Canadian corporation.
 
“Arrow Rating Event” means the withdrawal or downgrade of the long-term senior
unsecured debt rating of Arrow below either BBB- or Baa3 by S&P and Moody’s,
respectively.
 
“Asset Interest” is defined in Section 2.1(b).
 
“Assignment Amount” means, with respect to an Alternate Investor at the time of
any assignment pursuant to this Agreement, an amount equal to the least of
(a) such Alternate Investor’s Special Pro Rata Share of the applicable Net
Investment requested by the related Conduit Investor to be assigned at such
time; and (b) such Alternate Investor’s unused Commitment (minus the unrecovered
principal amount of such Alternate Investor’s investments in the Asset Interest
pursuant to the Program Support Agreement to which it is a party).
 
“Assignment and Assumption Agreement” means an Assignment and Assumption
Agreement substantially in any of the forms set forth in Exhibit A.
 
 
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“Bank of America” is defined in the preamble.
 
“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, 11 U.S.C. §§ 101 et
seq.
 
“Base Rate” is defined in Section 2.4.
 
“Billing Date” means the 5th day of each calendar month or if such day is not a
Business Day, the next succeeding Business Day.
 
“Billing Statement” means a statement prepared by each Funding Agent with
respect to the prior calendar month, setting forth the Aggregate Unpaids due and
owing to each related Investor (other than with respect to Yield),  and
specifying the nature of such Aggregate Unpaids, including without limitation,
any Fees due and owing to such Investor and any breakage costs incurred by any
such Investor.
 
“Blocked Account” means an account maintained by the SPV or an Originator as
Master Servicer or Sub-Servicer, as applicable, at a Blocked Account Bank for
the purpose of receiving Collections, set forth in Schedule 4.1(s) or any
account added as a Blocked Account pursuant to and in accordance with Section
4.1(s) and which, if not maintained at and in the name of the Administrative
Agent, is subject to a Blocked Account Agreement.
 
“Blocked Account Agreement” means an agreement among the SPV or an Originator,
the Administrative Agent and a Blocked Account Bank in substantially the form of
Exhibit E, or as otherwise may be acceptable to the Administrative Agent in its
sole discretion.
 
“Blocked Account Bank” means each of the banks set forth in Schedule 4.1(s), as
such Schedule 4.1(s) may be modified pursuant to Section 4.1(s).
 
“Business Day” means any day excluding Saturday, Sunday and any day on which
banks in New York, New York, Charlotte, North Carolina, Chicago, Illinois,
Toronto, Ontario, Boston, Massachusetts or San Francisco, California are
authorized or required by law to close, and, when used with respect to the
determination of any Offshore Rate or any notice with respect thereto, any such
day which is also a day for trading by and between banks in United States dollar
deposits in the London interbank market.
 
“CA Adjusted Fees” means, at a particular date, the sum of the annualized rates
of all fees and margins then in effect on such date under the Multi-year Credit
Agreement that are payable periodically to the banks and other financial
institutions and not any agent thereunder (except for account of such banks and
financial institutions) and accrue based on (x) the utilized portion of any
commitment to make loans thereunder in United States Dollars that shall bear
interest by reference to a London interbank market rate, provided that such fee
or margin shall not otherwise be payable or accrue under the Multi-year Credit
Facility on the unutilized portion of such commitment, (y) the outstanding
principal amount of such committed loans or (z) both the utilized and unutilized
amount of such commitment, provided that, in the case of any fee or margin under
this subclause (z), the annualized rate of such fee or margin shall be included
in the sum under this definition solely to the extent of the excess, if any, of
the annualized rate of such fee or margin over the Facility Fee Rate hereunder
on such date.  The sum under this definition above on the Closing Date shall (by
reference to the Multi-year Credit Agreement as then in effect) be equal to the
sum of (1) the “Applicable Margin” (as defined in the Multi-year Credit
Agreement) on such date, plus (2) the per annum rate then used to calculate the
“utilization fee” pursuant to Section 7.1 of the Multi-year Credit Agreement on
such date, plus (3) the excess, if any, of the “Facility Fee Rate” (as defined
Multi-year Credit Agreement) on such date over the Facility Fee Rate hereunder
on such date.
 
 
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“CA Affiliate” means, as to any Person, (a) any other Person (other than a CA
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person or (b) any Person who is a director
or officer of Arrow or any of its CA Subsidiaries.  For purposes of this
definition, “control” of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the securities having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
 
“CA Loan Parties” has the meaning ascribed to the term “Loan Parties” in the
Multi-year Credit Agreement.
 
“CA Permitted Receivables Securitization” means any transaction involving one or
more sales, contributions or other conveyances by Arrow or any CA Subsidiary of
any CA Receivables to a special purpose entity (which may be a CA Subsidiary or
CA Affiliate of Arrow), which special purpose entity finances such sales,
contributions or other conveyances by in turn conveying an interest in such CA
Receivables to one or more CA Receivable Financiers, provided that such
transaction shall not involve any recourse to Arrow or any CA Subsidiary (other
than such special purpose entity) for any reason other than (i) repurchases of
non-eligible CA Receivables, (ii) indemnification for losses (including any
adjustments for dilutions), other than credit losses related to the CA
Receivables conveyed in such transaction and (iii) payment of costs, fees,
expenses and indemnities relating to such transaction.
 
“CA Receivable Financier” means any Person (other than a CA Subsidiary or CA
Affiliate of Arrow) that finances the acquisition by a special purpose entity of
CA Receivables from Arrow or any CA Subsidiary.
 
“CA Receivables” means all accounts receivable of Arrow or any of its CA
Subsidiaries, and all proceeds thereof and rights (contractual and other) and
collateral related thereto.
 
“CA Subsidiary” means, as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person.  Unless otherwise qualified, all references to a “CA Subsidiary”
or to “CA Subsidiaries” in this Agreement shall refer to a CA Subsidiary or CA
Subsidiaries of Arrow.
 
 
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“Calculation Period” is defined on Schedule II.
 
“Canadian Receivable” means with respect to a Receivable, the Obligor of which
is a Canadian resident.
 
“Closing Date” means March 22, 2001.
 
“Code” means the Internal Revenue Code of 1986.
 
“Collection Account” is defined in Section 2.9.
 
“Collections” means, with respect to Receivables, all cash collections and other
cash proceeds of Receivables, including all finance charges, if any, and cash
proceeds of Related Security and all Deemed Collections, including any proceeds
from HP in respect of HP Receivables under the HP Receivables Purchase
Agreement.
 
“Commercial Paper” means the promissory notes issued or to be issued by the
Conduit Investors in the commercial paper market.
 
“Commitment” means, with respect to each Alternate Investor, as the context
requires, (a) the commitment of such Alternate Investor to make Investments and
to pay Assignment Amounts in accordance herewith in an amount not to exceed the
amount described in the following clause (b), and (b) the dollar amount set
forth opposite such Alternate Investor’s name on Schedule A hereto under the
heading “Alternate Investor(s) Commitment” (or (i) in the case of an Alternate
Investor which becomes a party hereto pursuant to an Assignment and Assumption
Agreement, as set forth in such Assignment and Assumption Agreement and (ii) in
the case of an Alternate Investor which becomes a party hereto pursuant to an
Additional Commitment Amendment, as specified in such Additional Commitment
Amendment), minus the dollar amount of any Commitment or portion thereof
assigned by such Alternate Investor pursuant to an Assignment and Assumption
Agreement, plus the dollar amount of any increase to such Alternate Investor’s
Commitment consented to by such Alternate Investor prior to the time of
determination; provided, however, that in the event that the Facility Limit is
reduced, the aggregate of the Commitments of all the Alternate Investors shall
be reduced in a like amount and the Commitment of each Alternate Investor shall
be reduced in proportion to such reduction.
 
“Commitment Termination Date” means the earlier to occur of (a) March 25, 2011
and (b) the date upon which the Termination Date is declared or automatically
occurs pursuant to Section 8.2.
 
“Conduit Assignee” means, with respect to any Conduit Investor, any commercial
paper conduit that issues commercial paper rated at least A-1 by S&P and P1 by
Moody’s and sponsored or administered by the Funding Agent with respect to such
Conduit Investor and designated by such Funding Agent to accept an assignment
from such Conduit Investor of all or a portion of such Conduit Investor’s rights
and obligations pursuant to Section 11.8(d)
 
 
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“Conduit Funding Limit” means, with respect to any Conduit Investor, the amount
set forth opposite such Conduit Investor’s name on Schedule A, as the same may
be reduced from time to time pursuant to the terms hereof.
 
“Conduit Investor” is defined in the preamble.
 
“Conduit Investor Percentage” means at any time with respect to any Conduit
Investor, 100%, less the related Alternate Investor Percentage at such time.
 
“Consolidated Cash Interest Expense” means for any period, (a) the amount which
would, in conformity with GAAP, be set forth opposite the caption “interest
expense” or any like caption on a consolidated income statement of Arrow and its
CA Subsidiaries minus (b) the amount of non-cash interest (including interest
paid by the issuance of additional securities) included in such amount; provided
that in the event of the consummation of any CA Permitted Receivables
Securitization (including the transactions contemplated hereunder),
“Consolidated Cash Interest Expense” shall be adjusted to include (without
duplication) an amount equal to the interest (or other fees in the nature of
interest or discount) accrued and paid or payable in cash for such period by the
special purpose entity to the CA Receivable Financiers under such CA Permitted
Receivables Securitization; provided further that, in computing “Consolidated
Cash Interest Expense” for the periods ending September 30, 2003 and December
31, 2003 such computation shall exclude Arrow’s net interest expense related to
the 6.875% Senior Notes due 2013 issued by Arrow pursuant to the Indenture dated
January 15, 1997 between Arrow and The Bank of New York in an amount not to
exceed (i) in the case of the period of four fiscal quarters ending September
30, 2003, $5,000,000 and (ii) in the case of the period of four fiscal quarters
ending December 31, 2003, $10,000,000.
 
“Consolidated Interest Coverage Ratio” means for any period, the ratio of (a)
Adjusted Consolidated EBITDA to (b) Consolidated Cash Interest Expense for such
period.
 
“Consolidated Leverage Ratio” means on any date, the ratio of (a) Consolidated
Total Debt on such date to (b) Adjusted Consolidated EBITDA for the period of
four consecutive fiscal quarters most recently ended on or prior to such date.
 
“Consolidated Net Income” means for any fiscal period, the consolidated net
income (or loss) of Arrow and its CA Subsidiaries after excluding all unusual,
extraordinary and non-recurring gains and after adding all unusual,
extraordinary and non-recurring losses, in all cases of Arrow and its CA
Subsidiaries determined on a consolidated basis during the relevant period in
accordance with GAAP.
 
“Consolidated Net Worth” means at a particular date, all amounts which would be
included under shareholders’ equity on a consolidated balance sheet of Arrow and
its CA Subsidiaries determined on a consolidated basis in accordance with GAAP,
adjusted to exclude non-cash charges due to impairments recorded in accordance
with the Financial Accounting Standards Board’s Statement of Financial
Accounting Standards No. 142.
 
 
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“Consolidated Total Capitalization” means at a particular date, the sum of (a)
Consolidated Net Worth plus (b) Consolidated Total Debt as at such date.
 
“Consolidated Total Debt” means at the date of determination thereof, (i) all
Indebtedness of Arrow and its CA Subsidiaries (excluding Indebtedness of Arrow
owing to any of its CA Subsidiaries or Indebtedness of any CA Subsidiary owing
to Arrow or any other CA Subsidiary of Arrow), as determined on a consolidated
basis in accordance with GAAP plus (ii) without duplication of amounts included
in clause (i) above, an amount equal to the aggregate unpaid amount of cash
proceeds advanced by the CA Receivables Financiers to the special purpose entity
under any CA Permitted Receivables Securitization at the date of determination.
 
“Contract” means, in relation to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes, or other writings pursuant to
which such Receivable arises or which evidence such Receivable or under which an
Obligor becomes or is obligated to make payment in respect of such Receivable.
 
“CP Rate” is defined in Section 2.4.
 
“Credit and Collection Policy” means, collectively, the Originators’ credit and
collection policies and practices, relating to Contracts and Receivables as in
effect on the Closing Date and set forth in Exhibit C, as modified, from time to
time, in compliance with Sections 6.1(a)(vii) and 6.2(c).
 
“Credit Memo” means a credit to the account of an Obligor.
 
“Deemed Collections” means any Collections on any Receivable deemed to have been
received pursuant to Section 2.6.
 
“Default Ratio” is defined in Schedule II.
 
“Defaulted Receivable” means as of any date of determination, a Receivable
(a) as to which any payment, or part thereof, remains unpaid for 91 days or more
from the original invoice date for such Receivable; (b) as to which an Event of
Bankruptcy has occurred and is continuing with respect to the Obligor thereof;
(c) which has been identified by the SPV, the related Originator or the Master
Servicer as uncollectible; or (d) which, consistent with the Credit and
Collection Policy, would be written off as uncollectible.
 
“Defaulting Alternate Investor” is defined in Section 2.3(f).
 
“Dilution” has the meaning ascribed to such term in Schedule II.
 
 
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“Dilution Ratio” is defined in Schedule II.
 
“Dollar” or “$” means the lawful currency of the United States.
 
“Eligible Investments” means highly rated short-term debt or the other highly
rated liquid investments in which each Conduit Investor is permitted to invest
cash pursuant to its commercial paper program documents.
 
“Eligible Receivable” means, at any time, any Receivable:
 
(a) which was originated by an Originator in the ordinary course of its
business;
 
(b) (i) which, arises pursuant to a Contract with respect to which each of the
related Originator and the SPV has performed all obligations (if any) required
to be performed by it thereunder, including shipment of the merchandise and/or
the performance of the services purchased thereunder; (ii) which has been billed
to the relevant Obligor; and (iii) which according to the Contract related
thereto, is required to be paid in full within no more than 90 days of the
original billing date therefor;
 
(c) which satisfies all applicable requirements of the Credit and Collection
Policy;
 
(d) which has been sold or contributed to the SPV pursuant to (and in accordance
with) the First Tier Agreement, which does not arise from the sale of any
inventory subject to any Adverse Claim and to which the SPV has good and
marketable title, free and clear of all Adverse Claims (other than any Adverse
Claim arising hereunder) and, until the HP Financing Statement has been
terminated, such Receivable is not covered by, or otherwise subject to, the HP
Financing Statement;
 
(e) as to which at the time of the purchase by the Administrative Agent, on
behalf of the Funding Agents for the benefit of the Investors thereof hereunder
the Administrative Agent has not notified the SPV that either such Receivable or
any class of Receivables of which such Receivable is a part is not acceptable
for purchase hereunder, as determined by the Funding Agents in their reasonable
discretion, because of the nature of the business of the Obligor or because of a
potential conflict of interest between the interests of the SPV or the
Originator, on the one hand, and any Investor, any Funding Agent, Conduit
Investor, any Program Support Provider, any Alternate Investor or any of their
Affiliates, on the other hand;
 
(f) the Obligor of which is a United States resident, is not an Affiliate or
employee of any Originator, and is not an Official Body;
 
(g) the Obligor of which has been directed to make all payments to a Blocked
Account;
 
 
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(h) the Obligor of which at the time of creation of an interest therein
hereunder, is not the Obligor of Extended Defaulted Receivables for which the
Unpaid Balances of all such Extended Defaulted Receivables exceeds 33% of the
Unpaid Balances of all Receivables for which it is the Obligor;
 
(i) which under the related Contract and applicable Law is assignable without
the consent of, or notice to, the Obligor thereunder unless such consent has
been obtained and is in effect or such notice has been given;
 
(j) which, together with the related Contract, is in full force and effect and
constitutes the legal, valid and binding obligation of the related Obligor
enforceable against such Obligor in accordance with its terms and is not subject
to any litigation, material dispute, legal right of offset, counterclaim or
other defense;
 
(k) which is invoiced, denominated and payable only in Dollars in the United
States;
 
(l) [RESERVED];
 
(m) which is not a Defaulted Receivable at the time of the purchase thereof by
the Administrative Agent, on behalf of the Funding Agents for the Investors,
hereunder;
 
(n) which, in the case of an HP Receivable, (i) is an HP Purchased Receivable,
(ii) which, as of any date of determination, was invoiced not less than 30 days
prior to such date of determination, and (iii) was transferred to SBM by HP
pursuant to the HP Receivables Purchase Agreement, which HP Receivables Purchase
Agreement remains in full force, and effect; and pursuant to which SBM is in
compliance with all material terms thereof, subject to a ten day grace period
with respect to any such term or provision;
 
(o) which has not been compromised, adjusted or modified (including by the
extension of time for payment or the granting of any discounts, allowances or
credits); provided, however, that, in the event such Receivable is so comprised,
adjusted or modified, and to the extent quantifiable, only the dollar amount of
such portion of such Receivable that is the subject of such comprise, adjustment
or modification shall be deemed to be ineligible pursuant to the terms of this
clause (o);
 
(p) which is an “account” or “general intangible” and is not evidenced by an
“instrument” or “chattel paper” within the meaning of Article 9 of the UCC of
all applicable jurisdictions or §1[1] of the PPSA;
 
(q) which is an “eligible asset” as defined in Rule 3a-7 under the Investment
Company Act of 1940;
 
 
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(r) which, together with the Contract related thereto, does not contravene in
any material respect any Laws applicable thereto (including Laws relating to
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to
which no part of the Contract related thereto is in violation of any such Law in
any material respect;
 
(s) the assignment of which under the First Tier Agreement by Arrow to the SPV
and hereunder by the SPV to the Administrative Agent for the benefit of the
Funding Agents on behalf of the Investors does not violate, conflict or
contravene any applicable Law or any contractual or other restriction,
limitation or encumbrance;
 
(t) which (together with the Related Security related thereto) has been the
subject of either a valid transfer and assignment from, or the grant of a first
priority perfected security interest therein by, the SPV to the Administrative
Agent, on behalf of the Funding Agents for the benefit of the Investors, of all
of the SPV’s right, title and interest therein;
 
(u) as to which no Tax is applicable, solely as a result of withholding by the
Obligor thereof or any assessment on the SPV or any Investor;
 
(v) [RESERVED]; and
 
(w) which, in respect of an Arrow Asia Receivable, has been originated by Arrow
Asia, and when added to the aggregate Unpaid Balance of all other Arrow Asia
Receivables, does not exceed an amount equal to 10% of the aggregate Unpaid
Balance of all Eligible Receivables.
 
“ERISA” means the U.S. Employee Retirement Income Security Act of 1974 and any
regulations promulgated and rulings issued thereunder.
 
“ERISA Affiliate” means, with respect to any Person, any corporation,
partnership, trust, sole proprietorship or trade or business which, together
with such Person, is treated as a single employer under Section 414(b) or (c) of
the Code or, with respect to any liability for contributions under Section
302(c) of ERISA, Section 414(m) or Section 414(o) of the Code.
 
“Event of Bankruptcy” means, with respect to any Person, (a) that such Person or
any Significant Subsidiary of such Person (i) shall generally not pay its debts
as such debts become due, (ii) shall admit in writing its inability, or shall be
deemed under any applicable Law to be unable, to pay its debts generally or
(iii) shall enter into an arrangement or compromise with creditors or
shareholders (solely in the case of Arrow Asia) or shall make a general
assignment for the benefit of creditors or, solely in the case of Arrow Asia,
shareholders; (b) any proceeding shall be instituted by or against such Person
or any Significant Subsidiary of such Person seeking to adjudicate it as
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, receiver and manager, trustee, provisional liquidator, liquidator,
provisional supervisor  or other similar official for it or any substantial part
of its property or assets; or (c) such Person or any Significant Subsidiary of
such Person shall take any corporate, partnership or other similar appropriate
action to authorize any of the actions set forth in the preceding clauses (a) or
(b).
 
 
 
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“Excluded Taxes” means, with respect to any particular Indemnified Party, Taxes
that are both (A) imposed (i) by the jurisdiction in which such Indemnified
Party is organized, a taxing authority thereof or therein or (ii) by any other
taxing authority of a United States jurisdiction as a result of such Indemnified
Party doing business or maintaining an office in such jurisdiction (other than
any such Taxes imposed solely by reason of (x) having entered into, executed,
delivered, performed, not performed or enforced or failed to enforce the
Agreement or any documents relating thereto or (y) any of the transactions
contemplated therein) and also (B) imposed on, based on or measured by the net
income or gross receipts of such Indemnified Party.
 
“Extended Defaulted Receivable” mean any Receivable for which any payments, or
part thereof, remains unpaid for 121 days or more from the invoice date for such
Receivables.
 
“Facility Limit” means the sum of each of the Alternate Investor Commitments set
forth opposite each Alternate Investor’s name on Schedule A attached hereto;
provided that such amount may not at any time exceed the aggregate Commitments
then in effect.
 
“Federal Funds Rate” is defined in Section 2.4.
 
“Fee Letter” means the confidential letter agreement dated March 21, 2001 among
the SPV, Arrow, and the Administrative Agent with respect to certain fees to be
paid by the SPV and Arrow to Bank of America, National Association and Bank of
America Securities LLC.
 
“Fees” means any of the fees payable pursuant to the Fee Letter or as set forth
on Schedule IV hereto.
 
“Final Payout Date” means the earliest date, after the Termination Date, on
which the Net Investment has been reduced to zero, all accrued Servicing Fees
have been paid in full and all other Aggregate Unpaids have been paid in full in
cash.
 
“Financing Lease” means any lease of property, real or personal, the obligations
of the lessee in respect of which are required in accordance with GAAP to be
capitalized on a balance sheet of the lessee.
 
“First Tier Agreement” means the Sale Agreement dated as of March 21, 2001
between Arrow and the SPV.
 
“Fitch” means Fitch, Inc., or any successor that is a nationally recognized
statistical rating organization.
 
 
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“Fluctuation Factor” is defined in Section 2.4.
 
“Funding Account” is defined in Section 2.9(b).
 
“Funding Agent” as defined in the preamble.
 
“GAAP” means generally accepted accounting principles in the United States, in
effect from time to time.
 
“Gates/Arrow” means Gates/Arrow Distributing, Inc., a Delaware corporation.
 
“Gates/Synnex Property” means (a) all of the Gates/Synnex Receivables, (b) all
Collections and Related Security with respect to the Gates/Synnex Receivables,
(c) all proceeds of the Gates/Synnex Receivables and the Collections and Related
Security in respect of the Gates/Synnex Receivables, held in the Blocked
Accounts, and (d) all proceeds of the foregoing; provided that, for purposes of
this definition, (i) the terms “Collections” and “Related Security” (and the
terms “Contract”, “Obligor” and “Records” as used, directly or indirectly,
therein) shall be construed as if each of the references to “Receivable” and
“Receivables” in the definitions of such terms in this Section 1.1 were instead
a reference to “Gates/Synnex Receivable” or “Gates/Synnex Receivables”,
respectively, and (ii) the term “Records” shall be construed as if the reference
therein to the term “Affected Assets” were instead a reference to “Collections”,
as construed after giving effect to clause (i) of this proviso; provided,
further, that “Gates/Synnex Property” shall not include any Related Security
with respect to any Affected Assets, after giving effect to the transfer of the
Gates/Synnex Receivables provided hereunder, or any proceeds of such Related
Security held in the Blocked Accounts, but shall include copies of Records, as
construed after giving effect to clause (ii) of the preceding proviso, with
respect to Gates/Synnex Receivables to the extent that the transfer of such
copies shall not impair the originals of such Records.
 
“Gates/Synnex Purchase Agreement” means the Asset Purchase Agreement dated May
5, 2002 by and between Synnex Information Technologies, Inc. and Arrow.
 
“Gates/Synnex Receivables” means all indebtedness and other obligations, whether
constituting accounts, chattel paper, instruments or general intangibles, that
satisfy each of the following conditions:
 
(a)   indebtedness and other obligations which were transferred by either (i)
Arrow Canada to Arrow pursuant to the related Originator Sale Agreement, and
which indebtedness and obligations are Canadian Receivables, or (ii) Gates/Arrow
to Arrow pursuant to the related Originator Sale Agreement; and
 
(b)  indebtedness and other obligations that are subject to sale, transfer,
conveyance, assignment or delivery by Arrow to Synnex Information Technologies,
Inc. pursuant to the Gates/Synnex Purchase Agreement, including, without
limitation, all indebtedness and other obligations that would have been subject
to such sale, transfer, conveyance, assignment or delivery but for the
collection thereof prior to the Closing Date under (and as defined in) the
Gates/Synnex Purchase Agreement;
 
 
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(c)  indebtedness and other obligations that, if uncollected on the Closing Date
(as so defined), are listed on the Gates/Synnex Receivables Schedule not later
than the ninetieth day after the Closing Date (as so defined), or such later
date as permitted by the Administrative Agent and each Funding Agent in
connection with the delivery of a supplement to the Gates/Synnex Receivables
Schedule, whether or not such indebtedness and other obligations are listed on
the Gates/Synnex Receivables Schedule prior to such ninetieth day or such later
date as permitted by the Administrative Agent and each Funding Agent; and
 
(d) indebtedness and other obligations that are not listed on Schedule D hereto.
 
Gates/Synnex Receivables shall, as of the ninetieth day after the Closing Date
(as so defined), or such later date as permitted by the Administrative Agent and
each Funding Agent in connection with the delivery of a supplement to the
Gates/Synnex Receivables Schedule, exclude any indebtedness and other
obligations (other than indebtedness and other obligations collected prior to
the Closing Date) that are not listed on the Gates/Synnex Receivables Schedule
as of such ninetieth day or such later date as permitted by the Administrative
Agent and each Funding Agent.
 
“Gates/Synnex Receivables Schedule” means the schedule substantially in the form
of Schedule C, and includes each supplement thereto that may be delivered by
Arrow to the Administrative Agent at any time and from time to time hereunder,
listing additional indebtedness and other obligations that are subject to sale,
transfer, conveyance, assignment or delivery by Arrow to Synnex Information
Technologies, Inc. pursuant to the Gates/Synnex Purchase Agreement; provided
that, without the prior consent of the Administrative Agent and each Funding
Agent, no supplement shall be delivered hereunder at any time (a) after the
ninetieth day after the Closing Date under (and as defined in) the Gates/Synnex
Purchase Agreement or (b) when the Net Investment exceeds zero.
 
“Guarantee Obligation” means, as to any Person (the “guaranteeing person”), any
obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the “primary obligations”)
of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business.  The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person’s maximum reasonably anticipated liability in
respect thereof as determined by Arrow in good faith.
 
 
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“Hedging Agreements” means, (a) Interest Rate Agreements and (b) any swap,
futures, forward or option agreements or other agreements or arrangements
designed to limit or eliminate the risk and/or exposure of a Person to
fluctuations in currency exchange rates.
 
“HP” means Hewlett-Packard Company, a Delaware corporation.
 
“HP Financing Statement” means the UCC financing statement on Form UCC-1 filed
in Gwinnett County, Georgia (file No. 067-98-001717) in favor of HP, as secured
party, and SBM, as debtor.
 
“HP Purchased Receivables” means a “Purchased Receivable” as defined in the HP
Receivables Purchase Agreement for which SBM has paid HP the consideration
specified under the HP Receivables Purchase Agreement and which, as of any date
of determination, was invoiced not less than 30 days prior to such date of
determination.
 
“HP Receivables” means all of HP’s right, title and interest in and to the
specific unsecured accounts, accounts receivable and chattel paper owing to HP
by a Reseller (as defined in the HP Receivables Purchase Agreement) with respect
to the sale of HP products which are subject to the HP Receivables Purchase
Agreement.
 
“HP Receivables Purchase Agreement” means the Receivables Purchase Agreement,
dated as of October 2, 2000, between HP and SBM.
 
“Indebtedness” means, of any Person at any date, without duplication, (a) the
principal amount of all indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) the principal amount of any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) the portion of all obligations of such Person under
Financing Leases which must be capitalized in accordance with GAAP, (d) the
principal or stated amount of all obligations of such Person in respect of
letters of credit, banker’s acceptances or similar obligations issued or created
for the account of such Person, (e) all liabilities arising under Hedging
Agreements of such Person, (f) the principal or stated amount of all Guarantee
Obligations of such Person (other than guarantees by Arrow or any Subsidiary in
respect of current trade liabilities of Arrow or any Subsidiary incurred in the
ordinary course of business and payable in accordance with customary terms), and
(g) the principal amount of all liabilities secured by any lien on any property
owned by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof.
 
 
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“Indemnified Amounts” is defined in Section 9.1.
 
“Indemnified Parties” is defined in Section 9.1.
 
“Interest Component” means, at any time of determination, with respect to
Commercial Paper issued by a Conduit Investor, the aggregate Yield accrued and
to accrue through the end of the current Rate Period for the Portion of
Investment accruing Yield calculated by reference to the CP Rate at such time
(determined for such purpose using the CP Rate most recently determined by the
Related Funding Agent, multiplied by the Fluctuation Factor).
 
“Interest Rate Agreement” means, any interest rate protection agreement,
interest rate future, interest rate option, interest rate swap, interest rate
cap or other interest rate hedge or arrangement under which Arrow is a party or
a beneficiary.
 
“Investment” is defined in Section 2.2(a).
 
“Investment Date” is defined in Section 2.3(a).
 
“Investment Deficit” is defined in Section 2.3(f).
 
“Investment Request” means each request substantially in the form of Exhibit D.
 
“Investor(s)” means any of the Conduit Investors and/or the Alternate Investors,
as the context may require.
 
“Investor Interest” means on any day, with respect to any Investor, the
beneficial interest of such Investor in the Affected Assets, which beneficial
interest shall equal the product of (i) the Unpaid Balance of all Receivables
and (ii) a fraction, the numerator of which is the aggregate portion of the Net
Investment funded by such Investor and the denominator of which is the Net
Investment.
 
“Jabil/Branch WJ Receivable” means all indebtedness and other obligations,
whether constituting accounts, chattel paper, instruments or general
intangibles, which are due and payable by Jabil Circuit Inc. and are generated
and maintained in the Originator’s entering branch “WJ” and with respect to
which payments are not made to or deposited in the Collection Account.
 
“Key Link Group” means, collectively, the discrete divisions or other business
units formed by Arrow through its Support Net, Inc. subsidiary to hold and
operate the assets and properties acquired from, and to conduct the business
formerly conducted by, the Key Link Division of Agilysys Inc.
 
 
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“Key Link Receivable” means any indebtedness or obligations owed by any Obligor
and arising in connection with the sale or lease of goods or the rendering of
services by the Key Link Group.
 
“Law” means any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, order, injunction, writ, decree, judgment or award
of any Official Body.
 
“Majority Investors” means, at any time, each of the Alternate Investors which
hold Commitments aggregating in excess of 50% of the Maximum Net Investment as
of such date (or, if the Commitments shall have been terminated, one or more
Alternate Investors whose aggregate pro rata shares of the Net Investment exceed
50% of the aggregate share of the Net Investment held by all Alternate
Investors).
 
“Master Servicer” is defined in Section 7.1.
 
“Master Servicer Default” is defined in Section 7.5.
 
“Master Servicer Report” means a report, in substantially the form attached
hereto as Exhibit F or in such other form as is mutually agreed to by the SPV,
the Master Servicer and the Administrative Agent, furnished by the Master
Servicer pursuant to Section 2.8.
 
“Match Funding Conduit Investor” means each Conduit Investor that is identified
on Schedule B as a Match Funding Conduit Investor, until such time as any such
Match Funding Conduit Investor notifies the SPV and the Administrative Agent
that such Conduit Investor desires to be treated as a Pooled Funding Conduit
Investor for all purposes of this Agreement.
 
“Material Adverse Effect” means any event or condition which would have a
material adverse effect on (a) the collectibility of the Receivables, (b) the
condition (financial or otherwise), businesses or properties of the SPV, (c) the
ability of the SPV, the Master Servicer or any Originator to perform its
respective obligations under the Transaction Documents to which it is a party,
or (d) the interests of the Administrative Agent, Funding Agents or the
Investors under the Transaction Documents, including the first priority
perfected ownership or security interest in the Affected Assets in favor of the
Administrative Agent on behalf of the Funding Agents for the benefit of the
Investors.
 
“Maximum Net Investment” means the sum of each of the Allocable Portions of
Maximum Net Investment set forth opposite each Alternate Investor’s name on
Schedule A attached hereto.
 
“MOCA” means Midrange Open Computing Alliance, Inc., a Delaware corporation.
 
“Moody’s” means Moody’s Investors Service, Inc., or any successor that is a
nationally recognized statistical rating organization.
 
“Multiemployer Plan” is defined in Section 4001(a)(3) of ERISA.
 
 
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“Multi-year Credit Agreement” means the $1,000,000,000 Amended and Restated
Five-Year Credit Agreement, dated as of January 11, 2007, among Arrow, the
subsidiary borrowers parties thereto, the several banks from time to time
parties thereto, Bank of America, N.A., The Bank of Nova Scotia, BNP Paribas,
and Wachovia Bank, National Association, as Syndication Agents, and JPMorgan
Chase Bank, N.A., as Administrative Agent, as the same may from time to time be
amended, supplemented or otherwise modified, or, in the event that such Amended
and Restated Five-Year Credit Agreement has expired, has terminated or is
otherwise no longer in effect, the “Multi-year Credit Agreement” shall mean the
then current replacement credit or loan facility among Arrow and the lender(s)
party thereto; provided, however, that if no such credit or loan facility is
then in effect, the Multi-year Credit Agreement shall mean the most recent
credit or loan facility as in effect immediately prior to its expiration, or
other termination.
 
“Net Investment” means, at any time, the amount equal to (a) the sum of the cash
amounts paid to the SPV in respect of Investments pursuant to Sections 2.2(a)
and 2.3 together with the amount of any funding under a Program Support
Agreement allocated to the Interest Component at the time of such funding less
(b) the aggregate amount of Collections theretofore received and applied by the
Administrative Agent to reduce such Net Investment pursuant to Section 2.12;
provided that the Net Investment shall be restored and reinstated in the amount
of any Collections so received and applied if at any time the distribution of
such Collections is rescinded or must otherwise be returned for any reason; and
provided further, that the Net Investment shall be increased by the amount
described in Section 3.1(a) as described therein.
 
“Net Pool Balance” means, at any time, (a) the aggregate Unpaid Balances of
Eligible Receivables at such time, minus (b) the sum of (i) the aggregate Unpaid
Balances of such Eligible Receivables that have become Defaulted Receivables
after the time of purchase thereof and (ii) the aggregate, for all Obligors, of
the amount by which the Unpaid Balances of such Eligible Receivables (other than
Defaulted Receivables) of each Obligor exceeds the product of (A) the
Concentration Percentage for such Obligor, multiplied by (B) the Unpaid Balances
of all of the Eligible Receivables (other than Defaulted Receivables)  and (iii)
the aggregate, for all Obligors, of the amount by which the Unpaid Balances of
Eligible Receivables that are required to be paid in full within 61 to 90 days
of the original billing date therefor exceeds 20% of the Unpaid Balances of all
Receivables.
 
“Non-Defaulting Alternate Investor” is defined in Section 2.3(f).
 
“Obligor” means, with respect to any Receivable, the Person obligated to make
payments in respect of such Receivable pursuant to a Contract.
 
“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, in each case whether foreign or domestic.
 
“Offshore Rate” is defined in Section 2.4.
 
 
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“Originator” means any of Arrow, Support Net, Inc., an Indiana corporation; SBM;
Consan Incorporated, a Minnesota corporation; Gates/Arrow Distributing, Inc., a
Delaware corporation; Arrow Electronics Canada Ltd., a Canadian corporation,
MOCA, Arrow Asia, and such other originators as may be designated from time to
time by the SPV with the consent of the Administrative Agent and each Investor.
 
“Originator Sale Agreement” means any Originator Sale Agreement between an
Originator (other than Arrow) and Arrow, dated as of the Closing Date, as the
same may be amended, modified or supplemented with the consent of the
Administrative Agent at the direction of the Majority Investors.
 
“Other SPV” means any Person other than the SPV that has entered into a
receivables purchase agreement, loan and security agreement, note purchase
agreement, transfer and administration agreement or any other similar agreement
with any Conduit Investor.
 
“Pension Plan” means an employee pension benefit plan as defined in Section 3(2)
of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Plan) and to which the Originator, the SPV or an ERISA Affiliate of either may
have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA or by reason of
being deemed to be a contributing sponsor under Section 4069 of ERISA.
 
“Permitted Investment Date” means each Settlement Date or such other Business
Day within five days of the delivery of a Master Servicer Report.
 
“Person” means an individual, partnership, limited liability company,
corporation, joint stock company, trust (including a business trust),
unincorporated association, joint venture, firm, enterprise, Official Body or
any other entity.
 
“Pooled Funding Conduit Investor” means each Conduit Investor that is not a
Match Funding Conduit Investor.
 
“Portion of Investment” is defined in Section 2.4(a).
 
“Potential Termination Event” means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Termination Event.
 
“PPSA” means the Personal Property Security Act [Ontario].
 
“Pro Rata Share” means, on any date of determination, with respect to each
Purchaser Group, the ratio (expressed as a percentage) of (i) the Allocable
Portion of Maximum Net Investment set forth opposite the name of the Alternate
Investor for such Purchaser Group on Schedule A attached hereto to (ii) the
Aggregate Commitment at such time.
 
 
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“Program Support Agreement” means any agreement entered into by any Program
Support Provider providing for (i) cash collateral, (ii) the issuance of one or
more letters of credit for the account of a Conduit Investor, (iii) the issuance
of one or more surety bonds for which such Conduit Investor is obligated to
reimburse the applicable Program Support Provider for any drawings thereunder,
(iv) the sale by such Conduit Investor to any Program Support Provider of the
Asset Interest (or portions thereof or participations therein) and/or the making
of loans and/or (v) other extensions of credit to such Conduit Investor in
connection with such Conduit Investor’s commercial paper program, together with
any letter of credit, surety bond or other instrument issued thereunder.
 
“Program Support Provider” means 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, a Conduit Investor or providing cash collateral or issuing a
letter of credit, surety bond or other instrument to support any obligations
arising under or in connection with such Conduit Investor’s commercial paper
program.
 
“Purchase Termination Date” is defined in Section 7.1 of the First Tier
Agreement.
 
“Purchaser Group” is defined in the preamble.
 
“Rate Period” is defined in Section 2.4.
 
“Rate Type” is defined in Section 2.4.
 
“Ratings” means the actual or implied senior unsecured non-credit enhanced debt
ratings of Arrow in effect from time to time by Moody’s or S&P, as the case may
be, the bank debt rating of Arrow in effect from time to time by Moody’s or the
corporate credit rating of Arrow in effect from time to time by S&P.
 
“Receivable” means any indebtedness and other obligations owed by any Obligor to
HP, in the case of HP Purchased Receivables, or an Originator (without giving
effect to any transfer under the First Tier Agreement or any Originator Sale
Agreement or the HP Receivables Purchase Agreement) under a Contract or any
right of the SPV to payment from or on behalf of an Obligor, whether
constituting an account, chattel paper, instrument or general intangible, (i)
arising in connection with the sale or lease of goods or the rendering of
services in the ordinary course of business by such Originator or HP, and
includes the obligation to pay any finance charges, fees and other charges with
respect thereto, (ii) denominated in Dollars and payable only in the United
States, (iii) the Obligors of which are United States residents and are not an
Official Body, (iv) which are not Gates/Synnex Receivables, (v) which are not
Receivables owed by SPX Corp., by Actron Manufacturing Company (a subsidiary of
SPX Corp.) or any successor thereto; and (vi) which are not Jabil/Branch WJ
Receivables.  The term “Receivable” shall include any Key Link Receivable.
 
“Recipient” is defined in Section 2.10.
 
 
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“Records” means all Contracts and other documents, purchase orders, invoices,
agreements, books, records and any other media, materials or devices for the
storage of information (including tapes, disks, punch cards, computer programs
and databases and related property) maintained by the SPV, the related
Originator or the Master Servicer with respect to the Receivables, any other
Affected Assets or the Obligors.
 
“Reinvestment” is defined in Section 2.2(b).
 
“Reinvestment Period” means the period commencing on the Closing Date and ending
on the Termination Date.
 
“Related Alternate Investor” means, with respect to any Conduit Investor, each
Alternate Investor set forth opposite such Conduit Investor’s name on Schedule A
(and any transferee of any such Alternate Investor pursuant to Section 11.8).
 
“Related Commercial Paper” means, at any time of determination, Commercial Paper
the proceeds of which are then allocated by the Related Funding Agent as the
source of funding the acquisition or maintenance of, the Asset Interest.
 
“Related Funding Agent” means, with respect to any Conduit Investor, the Funding
Agent set forth opposite such Conduit Investor’s name on Schedule A.
 
“Related Security” means, with respect to any Receivable, all of the
Originator’s (without giving effect to any transfer under the Originator Sale
Agreement), Arrow’s (without giving effect to any transfer under the First Tier
Agreement) or the SPV’s rights, title and interest in, to and under:
 
(a) any goods (including returned or repossessed goods) and documentation or
title evidencing the shipment or storage of any goods relating to any sale
giving rise to such Receivable;
 
(b) all other security interests or liens and property subject thereto from time
to time, if any, purporting to secure payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise, together with
all financing statements and other filings signed by an Obligor relating
thereto;
 
(c) the Contract and all guarantees, indemnities, warranties, insurance (and
proceeds and premium refunds thereof) or other agreements or arrangements of any
kind from time to time supporting or securing payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise;
 
(d) all Records related to such Receivable;
 
(e) in the case of HP Receivables, the HP Receivables Purchase Agreement; and
 
(f) all Collections on and other proceeds of any of the foregoing.
 
 
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“Remittance Date” means the 10th day of each month, or if such day is not a
Business Day, the next succeeding Business Day.
 
“Renewal Date” means March 26, 2010.
 
“Reportable Event” means any event, transaction or circumstance which is
required to be reported with respect to any Pension Plan under Section 4043 of
ERISA and the applicable regulations thereunder (other than an event for which
the 30 day notice period is waived).
 
“Reporting Date” means each of the following dates: (i) at any time other than
during the occurrence and continuance of an Arrow Rating Event, the 18th day of
each calendar month or if such day is not a Business Day, the next succeeding
Business Day, (ii) at any time during the occurrence and continuance of an Arrow
Rating Event, the third Business Day of the week, and (iii) after the occurrence
of a Termination Event, within two (2) Business Days after a request from the
Administrative Agent; provided, however, if the public senior unsecured debt of
Arrow is rated below BB+ or Ba1 by S&P or Moody’s, respectively, the Reporting
Date shall be each Business Day of the week.
 
“Required Reserves” is defined in Schedule II.
 
“Restricted Payments” is defined in Section 6.2(k).
 
“SBM” means Scientific & Business Minicomputers, Inc., a Georgia corporation.
 
“Servicing Fee” means the fees payable by the SPV to the Master Servicer from
Collections, in an amount equal to either (i) at any time when Arrow or any of
its Affiliates, is the Master Servicer, the lesser of 110% of the expenses of
Arrow or such Affiliate incurred or otherwise attributable to its services as
Master Servicer during any period and 0.50% per annum on the daily average of
the aggregate Unpaid Balances of the Receivables, or (ii) at any time when Arrow
or any of its Affiliates is not the Master Servicer, the amount determined upon
the agreement of such Person and the Administrative Agent, payable in arrears on
each Settlement Date from Collections pursuant to, provided that such amount
shall not exceed 110% of the reasonable and appropriate out-of-pocket costs and
expenses of such successor Master Servicer, and subject to the priority of
payments set forth in Section 2.12.  With respect to any Portion of Investment,
the Servicing Fee allocable thereto shall be equal to the Servicing Fee
determined as set forth above, multiplied by a fraction, the numerator of which
is the amount of such Portion of Investment and the denominator of which is the
Net Investment.
 
“Settlement Date” means (a) prior to the Termination Date, the 23rd day of each
calendar month (or if such day is not a Business Day, the next succeeding
Business Day) or such other day as the SPV, the Administrative Agent and the
Majority Investors may from time to time mutually agree, and (b) for any Portion
of Investment on and after the Termination Date, each day selected from time to
time by the Majority Investors (it being understood that the Majority Investors
may select such Settlement Date to occur as frequently as daily) or, in the
absence of any such selection, the date which would be the Settlement Date for
such Portion of Investment pursuant to clause (a) of this definition. 
 
 
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“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor that is a nationally recognized statistical
rating organization.
 
“Significant Subsidiary” means any Subsidiary that, directly or indirectly,
accounts for more than five percent (5%) of the assets of Arrow and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
 
“Special Pro Rata Share” means, for an Alternate Investor, the Commitment of
such Alternate Investor, divided by the sum of the Commitments of all Related
Alternate Investors (or, if the Commitments shall have been terminated, the
portion of the Net Investment funded by such Alternate Investor divided by the
aggregate Net Investment funded by such Alternate Investor and its Related
Alternate Investors).
 
“Special Termination Date” means with respect to any Conduit Investor and its
Related Alternate Investors, five (5) Business Days prior to the Commitment
Termination Date if such Conduit Investor or its Related Alternate Investors do
not agree to extend the Commitment Termination Date.
 
“SPV” means Arrow Electronics Funding Corporation, a Delaware corporation.
 
“Sub-Servicer” is defined in Section 7.1(d).
 
“Subordinated Obligations” has the meaning assigned to it in Section 1.1 of the
First Tier Agreement.
 
“Subsidiary” means, with respect to any Person, any corporation or other Person
(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 of 1933.
 
“Tangible Net Worth” means the total of all assets appearing on a balance sheet
prepared for the SPV in accordance with GAAP, after deducting therefrom (without
duplication of deductions):
 
(i) any write-up in the book carrying value of any asset resulting from a
revaluation thereof subsequent to Closing Date;
 
(ii) all reserves required by GAAP, including but not limited to reserves for
liabilities, fixed or contingent, deferred income taxes, obsolescence,
depletion, insurance, and inventory valuation, which are not deducted from
assets;
 
 
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(iii) all Indebtedness of the SPV, including the Subordinated Obligations; and
 
(iv) the book value of all assets which would be treated as intangibles under
GAAP, including, without limitation, good will, trademarks, trade names,
patents, copyrights and licenses.
 
“Taxes” shall have the meaning specified in Section 9.3.
 
“Termination Date” means the earliest of (a) the Business Day designated by the
SPV to the Administrative Agent and each Funding Agent as the Termination Date
at any time following not less than thirty (30) days’ written notice to the
Administrative Agent and Funding Agents, (b) the day upon which the Termination
Date is declared or automatically occurs pursuant to Section 8.2, (c) the day
which is five (5) Business Days prior to the Commitment Termination Date, (d)
the Purchase Termination Date and (e) the day designated by the Administrative
Agent to the SPV as the Termination Date as a result of the failure of the
Master Servicer to comply with its obligations under Section 6.1(s).
 
“Termination Event” is defined in Section 8.1.
 
“Transaction Costs” is defined in Section 9.4(a).
 
“Transaction Documents” means, collectively, this Agreement, the First Tier
Agreement, the Originator Sale Agreements, the Fee Letter, the Blocked Account
Agreements, and all of the other instruments, documents and other agreements
executed and delivered by the Master Servicer, any Originator or the SPV in
connection with any of the foregoing.
 
“UCC” means the Uniform Commercial Code as in effect in the applicable
jurisdiction or jurisdictions.
 
“Unpaid Balance” of any Receivable means at any time the unpaid principal amount
thereof.
 
“U.S.” or “United States” means the United States of America.
 
“Yield” is defined in Section 2.4.
 
“Yield Payment Date” means, with respect to a Conduit Investor and its Related
Alternate Investor,  each Remittance Date, provided, however, that after the
occurrence of a Termination Date, the Yield Payment Date with respect to a
Conduit Investor and its Related Alternate Investor shall be the last day of
each Rate Period.
 
SECTION 1.2 .  Other Terms.  All terms defined directly or by incorporation
herein shall have the defined meanings when used in any certificate or other
document delivered pursuant hereto unless otherwise defined therein. For
purposes of this Agreement and all such certificates and other documents, unless
the context otherwise requires: (a) accounting terms not otherwise defined
herein, and accounting terms partly defined herein to the extent not defined,
shall have the respective meanings given to them under, and shall be construed
in accordance with, GAAP; (b) terms used in Article 9 of the UCC in the State of
New York, and not specifically defined herein, are used herein as defined in
such Article 9; (c) references to any amount as on deposit or outstanding on any
particular date means such amount at the close of business on such day; (d) the
words “hereof,” “herein” and “hereunder” and words of similar import refer to
this Agreement (or the certificate or other document in which they are used) as
a whole and not to any particular provision of this Agreement (or such
certificate or document); (e) references to any Section, Schedule or Exhibit are
references to Sections, Schedules and Exhibits in or to this Agreement (or the
certificate or other document in which the reference is made) and references to
any paragraph, subsection, clause or other subdivision within any Section or
definition refer to such paragraph, subsection, clause or other subdivision of
such Section or definition; (f) the term “including” means “including without
limitation”; (g) references to any Law refer to that Law as amended from time to
time and include any successor Law; (h) references to any agreement refer to
that agreement as from time to time amended or supplemented or as the terms of
such agreement are waived or modified in accordance with its terms; (i)
references to any Person include that Person’s successors and permitted assigns;
and (j) headings are for purposes of reference only and shall not otherwise
affect the meaning or interpretation of any provision hereof.
 
 
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SECTION 1.3 .  Computation of Time Periods.   Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word “from” means “from and including”, the words “to”
and “until” each means “to but excluding”, and the word “within” means “from and
excluding a specified date and to and including a later specified date”.
 
ARTICLE II
 
PURCHASES AND SETTLEMENTS
 
SECTION 2.1 .  Transfer of Affected Assets; Intended Characterization. 
(a)   Sale of Asset Interest.  In consideration of the payment by the
Administrative Agent (on behalf of the Funding Agents on behalf of the Conduit
Investors and/or the Alternate Investors) of the amount of the initial Net
Investment on the Closing Date and the Administrative Agent’s agreement (on
behalf of the Funding Agents on behalf of the Conduit Investors or the Alternate
Investors) to make payments to the SPV from time to time in accordance with
Section 2.2, effective upon the SPV’s receipt of payment for such initial Net
Investment on the Closing Date, the SPV hereby sells, conveys, transfers and
assigns to the Administrative Agent, on behalf of the Funding Agents on behalf
of the Conduit Investors or the Alternate Investors, as applicable, all of the
SPV’s right, title and interest in, to and under (i) all Receivables existing on
the Closing Date or thereafter arising or acquired by the SPV from time to time
prior to the Final Payout Date and (ii) all other Affected Assets, whether
existing on the Closing Date or thereafter arising at any time.  The Alternate
Investors’ several obligations to make purchases from the SPV hereunder shall
terminate on the Termination Date.
 
 
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(b) Purchase of Asset Interest.  Subject to the terms and conditions hereof, the
Administrative Agent on behalf of the Funding Agents (on behalf of their related
Conduit Investors and/or the Related Alternate Investors as applicable) hereby
purchases and accepts from the SPV an undivided percentage ownership interest in
the Receivables and all other Affected Assets sold, assigned and transferred
pursuant to subsection (a).  The Funding Agents’ right, title and interest in
and to the Receivables and all other Affected Assets hereunder is herein called
the “Asset Interest”.  The Funding Agents shall hold the Asset Interest on
behalf of their Related Conduit Investor and Related Alternate Investors in
accordance with the related Investor Interest, from time to time. To the extent
a Funding Agent holds the Asset Interest on behalf of the Related Alternate
Investors, such Funding Agent shall hold the Alternate Investor Percentage of
the Asset Interest on behalf of such Alternate Investors pro rata in accordance
with their respective outstanding portions of the Net Investment funded by them.
 
(c) Obligations Not Assumed.  The foregoing sale, assignment and transfer does
not constitute and is not intended to result in the creation, or an assumption
by any Funding Agent, the Administrative Agent or any Investor, of any
obligation of the SPV, any Originator, or any other Person under or in
connection with the Receivables or any other Affected Asset, all of which shall
remain the obligations and liabilities of the SPV and the applicable Originator.
 
(d) Intended Characterization; Grant of Security Interest.
 
(i) The SPV, each Funding Agent, the Administrative Agent and the Investors
intend that the sale, assignment and transfer of the Affected Assets to the
Funding Agent (on behalf of their related Conduit Investors and/or the Related
Alternate Investors as applicable) hereunder shall be treated as a sale for all
purposes, other than federal and state income tax purposes.  If notwithstanding
the intent of the parties, the sale, assignment and transfer of the Affected
Assets to the Funding Agents is not treated as a sale for all purposes, other
than federal and state income tax purposes (as to which the foregoing shall
constitute indebtedness of the SPV secured by the Affected Assets), such sale,
assignment and transfer of the Affected Assets shall be treated as the grant of,
and the SPV hereby does grant, a security interest in the Affected Assets to
secure the payment and performance of the SPV’s obligations to the
Administrative Agent, for the benefit of the Funding Agents (on behalf of the
related Conduit Investor and/or the Related Alternate Investors as applicable)
hereunder and under the other Transaction Documents or as may be determined in
connection therewith by applicable Law.
 
(ii) Each of the parties hereto further expressly acknowledges and agrees that
the Commitments of the Alternate Investors hereunder, regardless of the intended
true sale nature of the overall transaction, are financial accommodations
(within the meaning of Section 365(c)(2) of the Bankruptcy Code) to or for the
benefit of the SPV.
 
SECTION 2.2 .  Purchase Price.  Subject to the terms and conditions hereof,
including Article V, in consideration for the sale, assignment and transfer of
the Affected Assets by the SPV to the Funding Agents (on behalf of their related
Conduit Investors and/or the Related Alternate Investors as applicable)
hereunder:
 
 
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(a) Investments.  On the Closing Date, and thereafter from time to time during
the Reinvestment Period, on request of the SPV in accordance with Section 2.3,
each Funding Agent (on behalf of its related Conduit Investor or the Related
Alternate Investors as determined pursuant to Section 2.3) shall deposit in the
Funding Account for payment to the SPV from funds received from the related
Investors pursuant to Section 2.3(d) an amount equal in each instance to the
least of (i) its Purchaser Group’s Pro Rata Share of the amount requested by the
SPV under Section 2.3(a), (ii) its Purchaser Group’s Pro Rata Share of the
largest amount that will not cause (A) the Net Investment to exceed the Maximum
Net Investment or (B) the sum of the Net Investment and the Required Reserves to
exceed the Net Pool Balance and (iii) the largest amount which will not cause
such Investor to exceed its Conduit Funding Limit or Commitment, as
applicable.  Each such payment is herein called an “Investment”.
 
(b) Reinvestments.  On each Business Day during the Reinvestment Period, the
Master Servicer, on behalf of the Administrative Agent (on behalf of the Funding
Agents for the benefit of the Conduit Investor and/or the Alternate Investors as
applicable), shall pay to the SPV, out of Collections of Receivables, the amount
available for Reinvestment in accordance with Section 2.12(a)(iii).  Each such
payment is hereinafter called a “Reinvestment”.  All Reinvestments with respect
to the Conduit Investor Percentage and the Alternate Investor Percentage of the
Asset Interest shall be made ratably on behalf of the Conduit Investors and
Alternate Investors, as applicable, pro rata in accordance with their respective
outstanding portions of the Alternate Investor Percentage and Conduit Investor
Percentage, as applicable, of the Net Investment funded by them.
 
(c) Deferred Purchase Price.  On each Business Day on and after the Final Payout
Date, the Master Servicer, on behalf of the Administrative Agent on behalf of
the Funding Agents for the benefit of the Investors, shall pay to the SPV an
amount equal to the Collections of Receivables received by the SPV less the
accrued and unpaid Servicing Fee (and the SPV (or the Master Servicer on its
behalf) shall apply such Collections in the manner described in Section 2.14).
 
(d) SPV Payments Limited to Collections.  Notwithstanding any provision
contained in this Agreement to the contrary, the Administrative Agent shall not,
and shall not be obligated (whether on behalf of the Funding Agents for the
benefits of the Conduit Investors or the Alternate Investors, as applicable), to
pay any amount to the SPV as the purchase price of Receivables pursuant to
subsections (b) and (c) above except to the extent of Collections on Receivables
available for distribution to the SPV in accordance with this Agreement.  Any
amount which the Administrative Agent (whether on behalf of the Funding Agents
for the benefit of the Conduit Investors or the Alternate Investors, if
applicable) does not pay pursuant to the preceding sentence shall not constitute
a claim (as defined in § 101 of the Bankruptcy Code) against or corporate
obligation of the Administrative Agent, any Funding Agent or any Investor for
any such insufficiency unless and until such amount becomes available for
distribution to the SPV under Section 2.12.
 
 
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SECTION 2.3 .  Investment Procedures.
 
(a) Notice.  The SPV shall request an Investment hereunder, by request to the
Administrative Agent given by facsimile in the form of an Investment Request:
 
(i) For aggregate Investment amounts of $5,000,000 or more, but not greater than
$50,000,000, by no later than 10:15 a.m. (New York City time) on the same
Business Day as the proposed date of such Investment, in which case the
Administrative Agent will notify the Funding Agent for each Conduit Investor and
Alternate Investor, as applicable, of the Administrative Agent’s receipt of such
Investment Request by no later than 11:00 a.m. (New York City time) on the same
Business Day as the proposed date of the Investment;
 
(ii)  For aggregate Investment amounts of greater than $50,000,000 but not
greater than $100,000,000, by no later than 3:00 p.m. (New York City time) one
(1) Business Day prior to the proposed date of such Investment, in which case
the Administrative Agent will notify the Funding Agent for each Conduit Investor
and Alternate Investor, as applicable, of the Administrative Agent’s receipt of
such Investment Request by no later than 4:00 p.m. (New York City time) one (1)
Business Day prior to the proposed date of the investment;
 
(iii)  For aggregate Investment amounts of greater than $100,000,000, by no
later than 3:00 p.m. (New York City time) two (2) Business Days prior to the
proposed date of such Investment, in which case the Administrative Agent will
notify the Funding Agent for each Conduit Investor and Alternate Investor, as
applicable, of the Administrative Agent’s receipt of such Investment Request by
no later than 4:00 p.m. (New York City time) two (2) Business Days prior to the
proposed date of the investment.
 
Each such Investment Request shall specify (i) the desired amount of such
Investment (which shall be at least $5,000,000 or an integral multiple of
$1,000,000 in excess thereof or, to the extent that the then available unused
portion of the Maximum Net Investment is less than such amount, such lesser
amount equal to such available unused portion of the Maximum Net Investment),
including the aggregate Pro Rata Shares per Purchaser Group of such Investment
and (ii) the desired date of such Investment (the “Investment Date”) which shall
be a Permitted Investment Date.
 
(b) Notice.  The SPV shall request an Investment hereunder, by request to the
Administrative Agent given by facsimile in the form of an Investment Request at
least three (3) Business Days prior to the proposed date of any Investment
(including the initial Investment).  Each such Investment Request shall specify
(i) the desired amount of such Investment (which shall be at least $5,000,000 or
an integral multiple of $1,000,000 in excess thereof or, to the extent that the
then available unused portion of the Maximum Net Investment is less than such
amount, such lesser amount equal to such available unused portion of the Maximum
Net Investment), including the aggregate Pro Rata Shares per Purchaser Group of
such Investment, (ii) the Investment Date which shall be a Permitted Investment
Date and (iii) the desired Rate Period(s) and allocations of such Investment
thereto as required by Section 2.4.  The Administrative Agent will promptly
notify the Funding Agent for each Conduit Investor and Alternate Investor, as
applicable, of the Administrative Agent’s receipt of an Investment Request to be
made to such Person.
 
 
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(c) Conduit Investor Acceptance or Rejection; Investment Request Irrevocable.
 
(i) Each Funding Agent will promptly notify the related Conduit Investor of each
Funding Agent’s receipt of any Investment Request.  The Conduit Investor shall
instruct such Funding Agent to accept or reject (on such Conduit Investor’s
behalf) such Investment Request by notice given to the SPV, the Administrative
Agent and such Funding Agent by telephone or facsimile by no later than 10:00
a.m. (New York City time) on the requested Investment Date.  Failure by a
Conduit Investor to timely deliver such notice shall be deemed to be an
acceptance of such Investment Request.
 
(ii) Each Investment Request shall be irrevocable and binding on the SPV, and
the SPV shall indemnify each Investor against any loss or expense incurred by
such Investor, either directly or indirectly (including, in the case of a
Conduit Investor, through a Program Support Agreement) as a result of any
failure by the SPV to complete such Investment, including any loss (including
loss of profit) or expense incurred by a Funding Agent or any Investor, either
directly or indirectly (including, in the case of a Conduit Investor, pursuant
to a Program Support Agreement) by reason of the liquidation or reemployment of
funds acquired by such Investor (or the applicable Program Support Provider(s))
(including funds obtained by issuing commercial paper or promissory notes or
obtaining deposits or loans from third parties) in order to fund such
Investment.
 
(d) Alternate Investor’s Commitment.  Subject to Section 2.2(b) concerning
Reinvestments, at no time will a Conduit Investor have any obligation to fund an
Investment or Reinvestment.  At any time when a Conduit Investor has rejected a
request for Investment or has failed to make an Investment in connection with an
Investment Request it has accepted, the Related Funding Agent shall so notify
the Related Alternate Investors and such Alternate Investors shall make such
Investment, on a pro rata basis, in accordance with their respective Special Pro
Rata Shares.  Notwithstanding anything contained in this Section 2.3(c) or
elsewhere in this Agreement to the contrary, no Alternate Investor shall be
obligated to provide any Funding Agent or the SPV with funds in connection with
an Investment in an amount that would result in the portion of the Net
Investment then funded by it exceeding its Commitment then in effect (minus the
unrecovered principal amount of such Alternate Investor’s investment in the
Asset Interest pursuant to the Program Support Agreement to which it is a
party).  The obligation of each Alternate Investor to remit its Special Pro Rata
Share of any such Investment shall be several from that of each other Alternate
Investor, and the failure of any Alternate Investor to so make such amount
available to the Related Funding Agent shall not relieve any other Alternate
Investor of its obligation hereunder.
 
 
 
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(e) Payment of Investment.  On any Investment Date, each Conduit Investor and/or
Alternate Investor, as the case may be, shall, not later than 1:00 p.m. (New
York City time) on such date, remit its share of the aggregate amount of such
Investment (determined pursuant to Section 2.2(a)) to the Funding Account
specified from time to time by the Administrative Agent to each Funding Agent by
notice to such Persons by wire transfer of same day funds.  Following the
Administrative Agent’s receipt of funds from the Investors as aforesaid, the
Administrative Agent shall promptly remit such funds in the Funding Account in
respect of each Investment to the SPV’s account designated pursuant to Section
11.3, by wire transfer of same day funds.
 
(f) Administrative Agent May Advance Funds.  Unless the Administrative Agent
shall have received notice from a Funding Agent that any related Investor will
not make its share of any Investment available on the applicable Investment Date
therefor, the Administrative Agent may (but shall have no obligation to) make
any such Investor’s share of any such Investment available to the SPV in
anticipation of the receipt by the Administrative Agent of such amount from the
applicable Investor.  To the extent any such Investor or Funding Agent on behalf
of such Investor fails to remit any such amount to the Administrative Agent
after any such advance by the Administrative Agent on such Investment Date, such
Investor, on the one hand, and the SPV, on the other hand, shall be required to
pay such amount to the Administrative Agent for its own account, together with
interest thereon at a per annum rate equal to the Federal Funds Rate, in the
case of such Investor, or the Base Rate, in the case of the SPV, to the
Administrative Agent upon its demand therefor (provided that a Conduit Investor
shall have no obligation to pay such interest amounts except to the extent that
it shall have sufficient funds to pay the face amount of its Commercial Paper in
full).  Until such amount shall be repaid, such amount shall be deemed to be Net
Investment paid by the Administrative Agent and the Administrative Agent shall
be deemed to be the owner of an interest in the Asset Interest hereunder to the
extent of such Investment.  Upon the payment of such amount to the
Administrative Agent (i) by the SPV, the amount of the aggregate Net Investment
shall be reduced by such amount or (ii) by such Investor, such payment shall
constitute such Investor’s payment of its share of the applicable Investment.
 
SECTION 2.4 .  [IS RESERVED AND IS SPECIFIED IN SCHEDULE I.]
 
SECTION 2.5 .  Yield, Fees and Other Costs and Expenses.  Notwithstanding any
limitation on recourse herein, the SPV shall pay, as and when due in accordance
with this Agreement, all Fees, Yield, all amounts payable pursuant to Article
IX, if any, and the Servicing Fees.  On each Remittance Date, to the extent not
paid pursuant to Section 2.12 for any reason, the SPV shall pay to the
Administrative Agent, for the benefit of the Funding Agents on behalf of the
Conduit Investors or the Alternate Investors, as applicable, an amount equal to
the accrued and unpaid Yield in respect of the prior calendar month.  Nothing in
this Agreement shall limit in any way the obligations of the SPV to pay the
amounts set forth in this Section 2.5.
 
SECTION 2.6 .  Deemed Collections.  (a)   Dilutions.  If on any day the Unpaid
Balance of a Receivable is reduced or such Receivable is canceled as a result of
any Dilution, the SPV shall be deemed to have received on such day a Collection
of such Receivable in the amount of the Unpaid Balance (as determined
immediately prior to such Dilution) of such Receivable (if such Receivable is
canceled) or, otherwise in the amount of such reduction, and the SPV shall pay
to the Master Servicer an amount equal to such Deemed Collection and such amount
shall be applied by the Master Servicer as a Collection in accordance with
Section 2.12.
 
 
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(b) Breach of Representation or Warranty.  If on any day any of the
representations or warranties in Article IV was or becomes untrue with respect
to a Receivable (whether on or after the date of transfer thereof to the
Administrative Agent, for the benefit of the Funding Agents, on behalf of the
Investors, as contemplated hereunder), the SPV shall be deemed to have received
on such day a Collection of such Receivable in full and the SPV shall on such
day pay to the Master Servicer an amount equal to the Unpaid Balance of such
Receivable and such amount shall be allocated and applied by the Master Servicer
as a Collection in accordance with Section 2.12.  Notwithstanding the foregoing,
any representation or warranty made with respect to a Receivable in respect of
the criteria set forth in clause (e), (h) or (m) of the definition of “Eligible
Receivable” in Section 1.1 shall be made with respect to such criteria solely as
of the date such Receivable was purchased hereunder.
 
SECTION 2.7 .  Payments and Computations, Etc.  All amounts to be paid or
deposited by the SPV or the Master Servicer hereunder shall be paid or deposited
in accordance with the terms hereof no later than 11:00 a.m. (New York City
time) on the day when due in immediately available funds; if such amounts are
payable to the Administrative Agent (whether on behalf of any Funding Agent, any
Investor or otherwise) they shall be paid or deposited in the account designated
pursuant to Section 11.3, until otherwise notified by the Administrative
Agent.  The SPV shall, to the extent permitted by Law, pay to the Administrative
Agent, for the benefit of the Funding Agents, on behalf of the Investors, upon
demand, interest on all amounts not paid or deposited when due hereunder at a
rate equal to 2.00% per annum, plus the Base Rate.  All computations of Yield
and all per annum fees hereunder shall be made on the basis of a year of 360
days for the actual number of days (including the first but excluding the last
day(except in the case of a Rate Period applicable to a Pooled Funding Conduit
Investor, which shall include the first and the last day)) elapsed.  Any
computations by the Administrative Agent of amounts payable by the SPV hereunder
shall be binding upon the SPV absent manifest error.  The determination of the
CP Rate by each Funding Agent on behalf of its related Conduit Investor shall be
conclusive and binding upon the SPV absent manifest error.
 
SECTION 2.8 .  Reports.  By no later than 4:00 p.m. (New York City time) on each
Reporting Date, the Master Servicer shall prepare and forward to the
Administrative Agent a Master Servicer Report, as at, and for the Calculation
Period ending on, the immediately preceding Month End Date; provided, however,
that with respect to a Master Servicer Report delivered on a weekly basis, the
information shall be provided as of the Friday of the preceding week and with
respect to a Master Servicer Report delivered more frequently than weekly, the
information shall be provided as of the Business Day immediately prior to such
Reporting Date. The Master Servicer Report shall be certified by the SPV and the
Master Servicer.  The Administrative Agent shall promptly provide a copy of such
Master Servicer Report to each Investor.
 
 
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SECTION 2.9 .  Collection Account.  (a)  The Administrative Agent shall
establish in its name on or before the day of the initial Investment hereunder
and shall maintain a segregated account (the “Collection Account”), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Administrative Agent, for the benefit of the Funding Agents, on
behalf of the Investors.  The Administrative Agent shall have exclusive dominion
and control over the Collection Account and all monies, instruments and other
property from time to time in the Collection Account.  On and after the
occurrence of a Termination Event or a Potential Termination Event (which
Potential Termination Event is not capable of being cured), the Master Servicer
shall remit daily within one Business Day of receipt to the Collection Account
all Collections received.  Funds on deposit in the Collection Account (other
than investment earnings) shall be invested by the Administrative Agent, in the
name of the Administrative Agent for the benefit of the Funding Agents on behalf
of the Investors, in Eligible Investments that will mature so that such funds
will be available so as to permit amounts in the Collection Account to be paid
and applied on the next Settlement Date and otherwise in accordance with the
provisions of Section 2.12; provided that such funds shall not reduce the Net
Investment or accrued Yield hereunder until so applied under Section 2.12.  On
each Remittance Date, all interest and earnings (net of losses and investment
expenses) on funds on deposit in the Collection Account shall be applied as
Collections set aside for the Administrative Agent in accordance with Section
2.12.  On the Final Payout Date, any funds remaining on deposit in the
Collection Account shall be paid to the SPV for application as set forth in
Section 2.14.
 
(b) The Administrative Agent shall establish in its name on or before the day of
the initial Investment hereunder and shall maintain a segregated account (the
“Funding Account”) for the benefit of the Funding Agents, on behalf of the
Conduit Investors and the Alternate Investors, into which all payments received
by the Administrative Agent from the Funding Agents and the Investors shall be
deposited pursuant to Section 2.3(d).  The Administrative Agent shall have the
sole right of withdrawal from the Funding Account.
 
SECTION 2.10 .  Sharing of Payments, Etc.  If any Investor (for purposes of this
Section 2.10 only, being a “Recipient”) shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of the portion of the Asset Interest owned by it (other
than pursuant to the Fee Letter, or Article IX and other than as a result of the
differences in the timing of the applications of Collections pursuant to Section
2.12 and other than a result of the different methods for calculating Yield) in
excess of its ratable share of payments on account of the Asset Interest
obtained by the Investors entitled thereto, such Recipient shall forthwith
purchase from the Investors entitled to a share of such amount participations in
the portions of the Asset Interest owned by such Persons as shall be necessary
to cause such Recipient to share the excess payment ratably with each such other
Person entitled thereto; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such Recipient, such purchase from
each such other Person shall be rescinded and each such other Person shall repay
to the Recipient the purchase price paid by such Recipient for such
participation to the extent of such recovery, together with an amount equal to
such other Person’s ratable share (according to the proportion of (a) the amount
of such other Person’s required payment to (b) the total amount so recovered
from the Recipient) of any interest or other amount paid or payable by the
Recipient in respect of the total amount so recovered.
 
 
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SECTION 2.11 .  Right of Setoff.  Without in any way limiting the provisions of
Section 2.10, the Administrative Agent, each Funding Agent and each Investor is
hereby authorized (in addition to any other rights it may have) at any time
after the occurrence of the Termination Date due to the occurrence of a
Termination Event or during the continuance of a Potential Termination Event
(which Potential Termination Event is not capable of being cured) to set-off,
appropriate and apply (without presentment, demand, protest or other notice
which are hereby expressly waived) any deposits and any other indebtedness held
or owing by the Administrative Agent, such Funding Agent or such Investor to, or
for the account of, the SPV against the amount of the Aggregate Unpaids owing by
the SPV to such Person or to the Administrative Agent, or such Funding Agent on
behalf of such Person (even if contingent or unmatured).
 
[SECTIONS 2.12 THROUGH 2.15 ARE RESERVED AND SPECIFIED
 
 IN SCHEDULE III (SETTLEMENT PROCEDURES).]
 
SECTION 2.12 .  [RESERVED]
 
SECTION 2.13 .  [RESERVED]
 
SECTION 2.14 .  [RESERVED]
 
SECTION 2.15 .  [RESERVED]
 
SECTION 2.16 .  Special Termination Date with Respect to a Particular Conduit
Investor. Notwithstanding anything to the contrary contained in this Agreement,
if there shall occur a Special Termination Date with respect to a Conduit
Investor or its Related Alternate Investors, then, from and after such Special
Termination Date, (a) no further Investments or Reinvestments shall be made by
such Conduit Investors or Related Alternate Investor, (b) the Administrative
Agent shall distribute Collections to such Conduit Investor or Related Alternate
Investor in accordance with the provisions of Sections 2.12 and 2.13 applicable
to a Special Termination Date, (c) in all respects, the provisions of this
Agreement with respect to a Termination Date shall be deemed to apply with
respect to such Conduit Investor or Related Alternate Investor for which a
Special Termination Date has occurred, other than as explicitly set forth
herein, and (d) all provisions of this Agreement shall continue to apply to the
other Conduit Investors and Related Alternate Investors.
 
 
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ARTICLE III
 
ADDITIONAL ALTERNATE INVESTOR PROVISIONS
 
SECTION 3.1 .  Assignment to Alternate Investors.
 
(a) SPV’s Obligation to Pay Certain Amounts; Additional Assignment Amount.  The
SPV shall pay to the Administrative Agent, on behalf of a Funding Agent, for the
account of the Related Conduit Investor, in connection with any assignment by
such Conduit Investor to the Related Alternate Investors pursuant to this
Agreement, an aggregate amount equal to all Yield to accrue through the end of
the current Rate Period to the extent attributable to the portion of the Net
Investment so assigned to such Alternate Investors (which Yield shall be
determined for such purpose using the CP Rate most recently determined by such
Funding Agent) (as determined immediately prior to giving effect to such
assignment), plus all other accrued Aggregate Unpaids (other than the Net
Investment and other than any Yield not described above) payable to such Conduit
Investor in respect of such portion of the Net Investment so assigned.  If the
SPV fails to make payment of such amounts at or prior to the time of assignment
by such Conduit Investor to the Related Alternate Investors, such amount shall
be paid by the Alternate Investors (in accordance with their respective Special
Pro Rata Shares) to such Conduit Investor as additional consideration for the
interests assigned to the Alternate Investors and the amount of the “Net
Investment” hereunder held by the Alternate Investors shall be increased by an
amount equal to the additional amount so paid by the Alternate Investors.
 
(b) Payments to Funding Agent’s Account.  After any assignment in whole by a
Conduit Investor to the Related Alternate Investors pursuant to this Agreement
at any time on or after the Conduit Investment Termination Date, all payments to
be made hereunder by the SPV or the Master Servicer to such Conduit Investor
shall be made to the Related Funding Agent’s account as such account shall have
been designated by such Funding Agent to the Administrative Agent, the SPV and
the Master Servicer.
 
SECTION 3.2 .  [RESERVED.]
 
SECTION 3.3 .  Non-Renewing Alternate Investors.  If at any time the SPV
requests that the Alternate Investors renew their Commitments hereunder and some
but less than all the Alternate Investors consent to such renewal within 30 days
of the SPV’s request, the SPV may arrange for an assignment to one or more
financial institutions of all the rights and obligations hereunder of each such
non-consenting Alternate Investor in accordance with Section 11.8, provided that
any such financial institution shall be acceptable to the Related Funding Agent
in its sole and absolute discretion.  Any such assignment shall become effective
on the then-current Commitment Termination Date.  Each Alternate Investor which
does not so consent to any renewal shall cooperate fully with the SPV in
effectuating the administrative details of any such assignment.  If none or less
than all the Commitments of the non-renewing Alternate Investors are so assigned
as provided above and the related Conduit Investor Percentage equals 100%, then
(i) the extended Commitment Termination Date shall be effective solely with
respect to the renewing Alternate Investors, (ii) the Facility Limit shall
automatically be reduced by an amount equal to the aggregate of the Commitments
of all non-renewing Alternate Investors, (iii) the Conduit Funding Limit of the
Related Conduit Investor shall automatically be reduced by an amount equal to
the aggregate of the Commitments of all non-renewing Related Alternate
Investors, and (iv) this Agreement and the Commitments of the renewing Alternate
Investors shall remain in effect in accordance with their terms notwithstanding
the expiration of the Commitments of  such non-renewing Alternate Investors.
 
 
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ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES
 
SECTION 4.1 .  Representations and Warranties of the SPV and the Master
Servicer.  Each of the SPV and the Master Servicer represents and warrants to
each Funding Agent, the Administrative Agent and each Investor, as to itself,
that, on the Closing Date and on each Investment Date and Reinvestment Date:
 
(a) Corporate Existence and Power. It (i) is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, (ii) has all corporate power and all licenses, authorizations,
consents and approvals of all Official Bodies required to carry on its business
in each jurisdiction in which its business is now and proposed to be conducted
(except where the failure to have any such licenses, authorizations, consents
and approvals would not individually or in the aggregate have a Material Adverse
Effect) and (iii) is duly qualified to do business and is in good standing in
every other jurisdiction in which the nature of its business requires it to be
so qualified, except where the failure to be so qualified or in good standing
would not have a Material Adverse Effect.
 
(b) Corporate and Governmental Authorization; Contravention.  The execution,
delivery and performance by it of this Agreement and the other Transaction
Documents to which it is a party are (i) within the its corporate powers,
(ii) have been duly authorized by all necessary corporate and shareholder
action, (iii) require no action by or in respect of, or filing with, any
Official Body or official thereof (except as contemplated by Sections 5.1(f),
5.1(g) and 7.7, all of which have been (or as of the Closing Date will have
been) duly made and in full force and effect), (iv) do not contravene or
constitute a default under (A) its articles of incorporation or by-laws, (B) any
Law applicable to it, except to the extent (solely in the case of the Master
Servicer) that the failure to comply therewith could not, in the aggregate, be
expected to have a Material Adverse Effect or a material adverse effect on the
condition (financial or otherwise), business or properties of Arrow and the
other Originators, taken as a whole, (C) any contractual restriction binding on
or affecting it or its property or (D) any order, writ, judgment, award,
injunction, decree or other instrument binding on or affecting it or its
property, or (v) result in the creation or imposition of any Adverse Claim upon
or with respect to its property or the property of any of its Subsidiaries
(except as contemplated hereby).
 
(c) Binding Effect.  Each of this Agreement and the other Transaction Documents
to which it is a party has been duly executed and delivered and constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally and the application of
general principles of equity (regardless of whether considered in a proceeding
at law or in equity).
 
 
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(d) Perfection.  In the case of the SPV, it is the owner of all of the
Receivables and other Affected Assets, free and clear of all Adverse Claims
(other than any Adverse Claim arising hereunder), and upon the making of the
initial Investment on the Closing Date and at all times thereafter until the
Final Payout Date, all financing statements and other documents required to be
recorded or filed in order to perfect and protect the first priority perfected
ownership or security interest of the Administrative Agent for the benefit of
each Funding Agent on behalf of the related Investors in the Asset Interest
against all creditors of and purchasers from the SPV, Arrow and the other
Originators will have been duly filed in each filing office necessary for such
purpose and all filing fees and taxes, if any, payable in connection with such
filings shall have been paid in full.
 
(e) Accuracy of Information.  All information heretofore furnished by it
(including the Master Servicer Reports and its financial statements) to any
Investor, any Funding Agent or the Administrative Agent for purposes of or in
connection with this Agreement or any transaction contemplated hereby was true,
complete and accurate in every material respect, on the date such information is
stated or certified, and no such item contains or contained any untrue statement
of a material fact or omits or did omit to state a material fact necessary in
order to make the statements contained therein, in the light of the
circumstances under which (and as of the date) they were made, not misleading.
 
(f) Tax Status; GAAP Treatment.  It has (i) in the case of the SPV, timely filed
all tax returns (federal, state and local) required to be filed and, in the case
of the Master Servicer, filed all material tax returns (federal, state and
local) required to be filed and (ii) paid or made adequate provision for the
payment of all taxes, assessments and other governmental charges and, solely
with respect to the Master Servicer, which, individually or in the aggregate,
would not result in liability in excess of $5,000,000.
 
(g) Action, Suits.  It is not in violation of any order of Official Body or
arbitrator which could not, in the aggregate, be expected to have a Material
Adverse Effect or a material adverse effect on the condition (financial or
otherwise), businesses or properties of Arrow and the other Originators, taken
as a whole.  Except as set forth in Schedule 4.1(g), there are no actions,
suits, litigation or proceedings pending, or to its knowledge, threatened,
against or affecting it or any of its Subsidiaries or their respective
properties, in or before any Official Body or arbitrator which in each case with
respect to the Master Servicer or any of its Subsidiaries (other than the SPV),
if adversely determined could have a Material Adverse Effect or a material
adverse effect on the condition (financial or otherwise), businesses or
properties of Arrow and the other Originators, taken as a whole.
 
 
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(h) Use of Proceeds.  In the case of the SPV, no proceeds of any Investment or
Reinvestment will be used by it (i) to acquire any security in any transaction
which is subject to Section 13 or 14 of the Securities Exchange Act of 1934,
(ii) to acquire any equity security of a class which is registered pursuant to
Section 12 of such act or (iii) for any other purpose that violates applicable
Law, including Regulation U of the Federal Reserve Board.
 
(i) Principal Place of Business; Chief Executive Office; Location of
Records.  Its principal place of business, chief executive office and the
offices where it keeps all its material Records, are located at the address(es)
described on Schedule 4.1(i) or such other locations notified to the
Administrative Agent in accordance with Section 7.7 in jurisdictions where all
action required by Section 7.7 has been taken and completed.
 
(j) Subsidiaries; Tradenames, Etc.  In the case of the SPV, as of the Closing
Date: (i) it has only the Subsidiaries and divisions listed on Schedule 4.1(j);
and (ii) it has, within the last five (5) years, operated only under the
tradenames identified in Schedule 4.1(j), and, within the last five (5) years,
has not changed its name, the location of its chief executive office, merged
with or into or consolidated with any other Person or been the subject of any
proceeding under the Bankruptcy Code, except as disclosed in Schedule
4.1(j).  Schedule 4.1(j) also lists the correct Federal Employer Identification
Number of the SPV.
 
(k) Good Title.  In the case of the SPV, upon each Investment and Reinvestment,
the Administrative Agent for the benefit of each Funding Agent, on behalf of the
related Investors shall acquire a valid and enforceable perfected first priority
ownership interest or a first priority perfected security interest in each
Receivable and all other Affected Assets that exist on the date of such
Investment or Reinvestment, with respect thereto, free and clear of any Adverse
Claim (other than that created by the Administrative Agent, any Funding Agent or
any Investor).
 
(l) Nature of Receivables.  Each Receivable (i) represented by it to be an
Eligible Receivable in any Master Servicer Report or (ii) included in the
calculation of the Net Pool Balance in fact satisfies at such time the
definition of “Eligible Receivable” set forth herein and, in the case of
clause (ii) above, is not a Receivable of the type described in clauses (b)(i)
or (b)(ii) of the definition of “Net Pool Balance”.  It has no knowledge of any
fact (including any defaults by the Obligor thereunder on any other Receivable)
that would cause it or should have caused it to expect any payments on such
Receivable not to be paid in full when due or that is reasonably likely to cause
or result in any other Material Adverse Effect with respect to such Receivable.
 
(m) Coverage Requirement;.  The sum of the Net Investment, plus the Required
Reserves does not exceed the Net Pool Balance.
 
(n) Credit and Collection Policy.  Since January 31, 2001, there have been no
material changes in the Credit and Collection Policy other than in accordance
with this Agreement.  Since such date, no material adverse change has occurred
in the overall rate of collection of the Receivables other than as disclosed in
writing to the Administrative Agent and each Funding Agent.  It has at all times
materially complied with the Credit and Collection Policy with regard to each
Receivable.
 
 
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(o) Material Adverse Effect.  Since December 31, 1999, there has been no
Material Adverse Effect.
 
(p) No Termination Event.  In the case of the SPV, no event has occurred and is
continuing and no condition exists, or would result from any Investment or
Reinvestment or from the application of the proceeds therefrom, which
constitutes or may be reasonable be expected to constitute a Termination Event
or a Potential Termination Event.  In the case of the Master Servicer, no Master
Servicer Default has occurred and is continuing to exist.
 
(q) Not an Investment Company or Holding Company.  It is not, and is not
controlled by, an “investment company” within the meaning of the Investment
Company Act of 1940, or is exempt from all provisions of such act.  It is not a
“holding company,” or a subsidiary or affiliate of a “holding company,” within
the meaning of the Public Utility Holding Company Act of 1935.
 
(r) ERISA.  No steps have been taken by any Person to terminate any Pension Plan
the assets of which will not be sufficient to satisfy all of its benefit
liabilities (as determined under Title IV of ERISA) on the date of such
termination.  Neither Arrow, the SPV nor any ERISA Affiliates of either such
Person has incurred any withdrawal liability (which has not been satisfied)
under Title IV of ERISA with respect to any Multiemployer Plan.  No contribution
failure has occurred with respect to any Pension Plan sufficient to give rise to
a lien under Section 302(f) of ERISA, and each Pension Plan has been
administered in all material respects in compliance with its terms and
applicable provisions of ERISA and the Code.
 
(s) Blocked Accounts.  The names and addresses of all the Blocked Account Banks,
together with the account numbers of the Blocked Accounts at such Blocked
Account Banks, are specified in Schedule 4.1(s) (or at such other Blocked
Account Banks and/or with such other Blocked Accounts as have been notified to
the Administrative Agent and for which Blocked Account Agreements have been
executed in accordance with Section 7.3 and delivered to the Master
Servicer).  All Blocked Accounts are subject to Blocked Account Agreements.  All
Obligors have been instructed to make payment to a Blocked Account and only
Collections are deposited into the Blocked Accounts, except for other amounts
(i) that are withdrawn from such Blocked Accounts within one Business Day of
such amounts becoming available for transfer therefrom or (ii) that are
deposited in respect of HP Receivables which are not HP Purchased Receivables.
 
(t) Bulk Sales.  In the case of the SPV, no transaction contemplated hereby or
by the First Tier Agreement requires compliance with any bulk sales act or
similar law.
 
(u) Transfers Under First Tier Agreement.  In the case of the SPV, each
Receivable has been purchased by it from Arrow pursuant to, and in accordance
with, the terms of the First Tier Agreement.  In the case of Arrow, each
Receivable has either been originated by Arrow or purchased by Arrow from an
Originator pursuant to, and in accordance with, the terms of the applicable
Originator Sale Agreement.
 
 
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(v) Preference; Voidability.  In the case of the SPV, it shall have given
reasonably equivalent value to Arrow in consideration for the transfer to it of
the Affected Assets from Arrow, and each such transfer shall not have been made
for or on account of an antecedent debt owed by Arrow to it and no such transfer
is or may be voidable under any section of the Bankruptcy Code.
 
(w) Nonconsolidation.  The SPV is operated in such a manner that the separate
corporate existence of the SPV, on the one hand, and each Originator or any
Affiliate thereof, on the other, would not be disregarded in the event of the
bankruptcy or insolvency of any Originator or any Affiliate thereof and, without
limiting the generality of the foregoing:
 
(i) the SPV is a limited purpose corporation whose activities are restricted in
its certificate of incorporation to activities related to purchasing or
otherwise acquiring receivables (including the Receivables) and related assets
and rights and conducting any related or incidental business or activities it
deems necessary or appropriate to carry out its primary purpose, including
entering into agreements like the Transaction Documents;
 
(ii) the SPV has not engaged, and does not presently engage, in any activity
other than those activities expressly permitted hereunder and under the other
Transaction Documents, nor has the SPV entered into any agreement other than
this Agreement, the other Transaction Documents to which it is a party, and with
the prior written consent of the Investors, each Funding Agent and the
Administrative Agent, any other agreement necessary to carry out more
effectively the provisions and purposes hereof or thereof;
 
(iii) (A) the SPV maintains its own deposit account or accounts, separate from
those of any of its Affiliates, with commercial banking institutions, (B) the
funds of the SPV are not and have not been diverted to any other Person or for
other than the corporate use of the SPV and (C) except as may be expressly
permitted by this Agreement, the funds of the SPV are not and have not been
commingled with those of any of its Affiliates;
 
(iv) to the extent that the SPV contracts or does business with vendors or
service providers where the goods and services provided are partially for the
benefit of any other Person, the costs incurred in so doing are fairly allocated
to or among the SPV and such entities for whose benefit the goods and services
are provided, and each of the SPV and each such entity bears its fair share of
such costs; and  all material transactions between the SPV and any of its
Affiliates shall be only on an arm’s-length basis;
 
(v) the SPV maintains stationery through which all business correspondence and
communication are conducted, in each case separate from those of each Originator
and its respective Affiliates;
 
 
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(vi) the SPV conducts its affairs strictly in accordance with its certificate of
incorporation and observes all necessary, appropriate and customary corporate
formalities, including (A) holding all regular and special stockholders’ and
directors’ meetings appropriate to authorize all corporate action (which, in the
case of regular stockholders’ and directors’ meetings, are held at least
annually), (B) keeping separate and accurate minutes of such meetings, (C)
passing all resolutions or consents necessary to authorize actions taken or to
be taken, and (D) maintaining accurate and separate books, records and accounts,
including intercompany transaction accounts;
 
(vii) all decisions with respect to its business and daily operations are
independently made by the SPV (although the officer making any particular
decision may also be an employee, officer or director of an Affiliate of the
SPV) and are not dictated by any Affiliate of the SPV (it being understood that
the Master Servicer, which is an Affiliate of the SPV, will undertake and
perform all of the operations, functions and obligations of it set forth herein
and it may appoint Sub-Servicers, which may be Affiliates of the SPV, to perform
certain of such operations, functions and obligations);
 
(viii) the SPV acts solely in its own corporate name and through its own
authorized officers and agents, and no Affiliate of the SPV shall be appointed
to act as its agent, except as expressly contemplated by this Agreement;
 
(ix) no Affiliate of the SPV advances funds to the SPV, other than as is
otherwise provided herein or in the other Transaction Documents, and no
Affiliate of the SPV otherwise supplies funds to, or guaranties debts of, the
SPV; provided, however, that an Affiliate of the SPV may provide funds to the
SPV in connection with the capitalization of the SPV;
 
(x) other than organizational expenses and as expressly provided in the
Transaction Documents, the SPV pays all expenses, indebtedness and other
obligations incurred by it;
 
(xi) the SPV does not guarantee, and is not otherwise liable, with respect to
any obligation of any of its Affiliates;
 
(xii) any financial reports required of the SPV comply with generally accepted
accounting principles and are issued separately from, but may be consolidated
with, any reports prepared for any of its Affiliates;
 
(xiii) at all times the SPV is adequately capitalized to engage in the
transactions contemplated in its certificate of incorporation;
 
(xiv) the financial statements and books and records of the SPV and Arrow
reflect the separate corporate existence of the SPV;
 
 
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(xv) the SPV does not act as agent for any Originator or any Affiliate thereof,
but instead presents itself to the public as a corporation separate from each
such member and independently engaged in the business of purchasing and
financing Receivables;
 
(xvi) the SPV maintains a three-person board of directors, including at least
one independent director, who has never been, and shall at no time be a
stockholder, director, officer, employee or associate, or any relative of the
foregoing, of any Originator or any Affiliate thereof (other than the SPV and
any other bankruptcy-remote special purpose entity formed for the sole purpose
of securitizing, or facilitating the securitization of, financial assets of any
Originator or any Affiliate thereof), all as provided in its certificate or
articles of incorporation, and is otherwise reasonably acceptable to the
Investors, the Funding Agents and the Administrative Agent; and
 
(xvii) the bylaws or the certificate or articles of incorporation of the SPV
require the affirmative vote of the independent director before a voluntary
petition under Section 301 of the Bankruptcy Code may be filed by the SPV, and
the SPV to maintain correct and complete books and records of account and
minutes of the meetings and other proceedings of its stockholders and board of
directors.
 
(x) Dilution.  In the case of the Master Servicer, upon the issuance of a Credit
Memo relating to a specific Receivable, the amount of such Credit Memo is
applied against such Receivable, and the Unpaid Balance of such Receivable is
aged in accordance with the original invoice date of such Receivable.
 
(y) Representations and Warranties in other Related Documents.  In the case of
the SPV, each of the representations and warranties made by it contained in the
Transaction Documents (other than this Agreement) was true, complete and correct
in all respects and it hereby makes, as of the date that such representation or
warranty was made or deemed made, each such representation and warranty to, and
for the benefit of, each Funding Agent, the Administrative Agent and the
Investors as if the same were set forth in full herein.
 
(z) No Master Servicer Default.  In the case of the Master Servicer, no event
has occurred and is continuing and no condition exists, or would result from a
purchase in respect of any Investment or Reinvestment or from the application of
the proceeds therefrom, which constitutes or may reasonably be expected to
constitute a Master Servicer Default.
 
(aa) Gates/Synnex Receivables.  The initial Schedule C and each supplement
thereto contains a true and complete list of all Gates/Synnex Receivables as of
the effective date specified therein except with respect to Gates/Synnex
Receivables collected prior to such effective date.
 
SECTION 4.2 .  Additional Representations and Warranties of the Master Servicer.
 The  Master Servicer represents and warrants on the Closing Date and on each
Investment Date and Reinvestment Date to each Funding Agent, to the
Administrative Agent and the Investors, which representation and warranty shall
survive the execution and delivery of this Agreement, that each of the
representations and warranties of the Master Servicer (whether made by the
Master Servicer in its capacity as an Originator or as the Master Servicer)
contained in any Transaction Document (other than this Agreement) was true,
complete and correct as of the date made or deemed made and, if made by the
Master Servicer in its capacity as an Originator, applies with equal force to
the Master Servicer in its capacity as Master Servicer, and the Master Servicer
hereby so makes each such representation and warranty to, and for the benefit
of, each Funding Agent, the Administrative Agent and the Investors as if the
same were set forth in full herein.
 
 
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ARTICLE V
 
CONDITIONS PRECEDENT
 
SECTION 5.1 .  Conditions Precedent to Closing.  The occurrence of the Closing
Date and the effectiveness of the Commitments hereunder shall be subject to the
conditions precedent that (i) the SPV or Arrow shall have paid in full (A) all
amounts required to be paid by either of them on or prior to the Closing Date
pursuant to the Fee Letter or otherwise hereunder and (B) the fees and expenses
described in clause (i) of Section 9.4(a) and invoiced prior to the Closing
Date, and (ii) the Administrative Agent shall have received, sufficient original
(unless otherwise indicated) copies for itself and each of the Investors and the
Administrative Agent’s counsel, of each of the following documents, each in form
and substance satisfactory to the Administrative Agent and each Funding Agent.
 
(a) A duly executed counterpart of this Agreement, the First Tier Agreement, the
Fee Letter and each of the other Transaction Documents executed by the
Originators, the SPV and the Master Servicer, as applicable.
 
(b) A certificate, substantially in the form of Exhibit G, of the secretary or
assistant secretary of the SPV, certifying and (in the case of clauses (i)
through (iii) below) attaching as exhibits thereto, among other things:
 
(i) the articles of incorporation, charter or other organizing document
(including a limited liability company agreement, if applicable) of the SPV
(certified by the Secretary of State or other similar official of the SPV’s
jurisdiction of incorporation or organization, as applicable, as of a recent
date);
 
(ii) the by-laws of the SPV;
 
(iii) resolutions of the board of directors or other governing body of the of
the SPV authorizing the execution, delivery and performance by the SPV of this
Agreement, the First Tier Agreement and the other Transaction Documents to be
delivered by the SPV hereunder or thereunder and all other documents evidencing
necessary corporate action (including shareholder consents) and government
approvals, if any; and
 
 
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(iv) the incumbency, authority and signature of each officer of the SPV
executing the Transaction Documents or any certificates or other documents
delivered hereunder or thereunder on behalf of the SPV.
 
(c) A certificate, substantially in the form of Exhibit H of the secretary or
assistant secretary of each Originator and the Master Servicer certifying and
(in the case of clauses (i) through (iii) below) attaching as exhibits thereto,
among other things:
 
(i) the articles of incorporation, charter or other organizing document
(including a limited liability company agreement, if applicable) of such
Originator or Master Servicer (certified by the Secretary of State or other
similar official of its jurisdiction of incorporation or organization, as
applicable, as of a recent date);
 
(ii) the by-laws of such Originator or the Master Servicer;
 
(iii) resolutions of the board of directors or other governing body of such
Originator or the Master Servicer authorizing the execution, delivery and
performance by it of this Agreement, the First Tier Agreement and the other
Transaction Documents to be delivered by it hereunder or thereunder and all
other documents evidencing necessary corporate action (including shareholder
consents) and government approvals, if any; and
 
(iv) the incumbency, authority and signature of each officer of such Originator
or the Master Servicer executing the Transaction Documents or any certificates
or other documents delivered hereunder or thereunder on its behalf.
 
(d) A good standing certificate for the SPV issued by the Secretary of State or
a similar official of the SPV’s jurisdiction of incorporation or organization,
as applicable, and certificates of qualification as a foreign corporation issued
by the Secretaries of State or other similar officials of each jurisdiction
where such qualification is material to the transactions contemplated by this
Agreement and the other Transaction Documents, in each case, dated as of a
recent date.
 
(e) A good standing certificate for each Originator and the Master Servicer
issued by the Secretary of State or a similar official of its jurisdiction of
incorporation or organization, as applicable, and certificates of qualification
as a foreign corporation issued by the Secretaries of State or other similar
officials of each jurisdiction where such qualification is material to the
transactions contemplated by this Agreement and the other Transaction Documents,
in each case, dated as of a recent date.
 
(f) Acknowledgment copies of proper financing statements (Form UCC-1), filed on
or before the initial Investment Date naming the SPV, as debtor, in favor of the
Administrative Agent, as secured party, for the benefit of the Investors or
other similar instruments or documents as may be necessary or in the reasonable
opinion of the Administrative Agent desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the Administrative Agent’s
ownership or security interest in all Receivables and the other Affected Assets.
 
 
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(g) Acknowledgment copies of proper financing statements (Form UCC-1), filed on
or before the initial Investment Date naming Arrow, as debtor, in favor of the
SPV, as secured party and Administrative Agent for the benefit of the Investors,
assignee or other similar instruments or documents as may be necessary or in the
reasonable opinion of the Administrative Agent desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the Administrative
Agent’s ownership or security interest in all Receivables and the other Affected
Assets.
 
(h) Acknowledgment copies of proper financing statements (Form UCC-1 or Form
PPSA 1[c] [Ontario]) or certified statements (Form RG), as applicable, filed on
or before the initial Investment Date naming the applicable Originator, as the
debtor, in favor of Arrow, as secured party, and the Administrative Agent, for
the benefit of the Investors, as assignee, or other similar instruments or
documents as may be necessary or in the reasonable opinion of the Administrative
Agent desirable under the UCC of all appropriate jurisdictions or any comparable
law to perfect the SPV’s ownership interest in all Receivables and the other
Affected Assets.
 
(i) Copies of proper financing statements (Form UCC-3), if any, filed on or
before the initial Investment Date necessary to terminate all security interests
and other rights of any Person in Receivables or the other Affected Assets
previously granted by SPV.
 
(j) Copies of proper financing statements (Form UCC-3 or Form PPSA 2[c]) or
certified statements (Form RG), as applicable, or appropriate acknowledgments,
waivers or consents, if any, filed or obtained on or before the initial
Investment Date necessary to terminate all security interests and other rights
of any Person in Receivables or the other Affected Assets previously granted by
any Originator.
 
(k) Certified copies of requests for information or copies (Form UCC-11, PPSA
Registration System Inquiry Response Certificate or Certified Statement) (or a
similar search report certified by parties acceptable to the Administrative
Agent) dated a date reasonably near the date of the initial Investment listing
all effective financing statements which name the SPV or an Originator (under
their respective present names and any previous names) as debtor and which are
filed in jurisdictions in which the filings were made pursuant to clauses (f) or
(g) above and such other jurisdictions where the Administrative Agent may
reasonably request together with copies of such financing statements (none of
which shall cover any Receivables, other Affected Assets or Contracts), and
similar search reports with respect to federal tax liens and liens of the
Pension Benefit Guaranty Corporation in such jurisdictions, showing no such
liens on any of the Receivables, other Affected Assets or Contracts.
 
(l) Executed copies of the Blocked Account Agreements relating to each of the
Blocked Accounts.
 
(m) A favorable opinion of Milbank, Tweed, Hadley & McCloy LLP, (i) special
counsel to the SPV, the Master Servicer and the Originators, substantially in
the form set forth in Exhibit I-2, including the time period over which UCC
financing statements filed in all appropriate jurisdictions remain effective and
as to such other matters as any Funding Agent may reasonably request, (ii) a
favorable opinion of Davies, Ward, Phillips & Vineberg LLP, special counsel to
the SPV, the Master Servicer and the Originator, substantially in the form set
forth in Exhibit I-3, and (iii) a favorable opinion of Robert E. Klatell,
counsel to the SPV, the Master Servicer and certain Originators substantially in
the form set forth in Exhibit I-1.
 
 
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(n) A favorable opinion of Milbank, Tweed, Hadley & McCloy LLP, special counsel
to the SPV, the Master Servicer and the Originators, covering certain bankruptcy
and insolvency matters in form and substance satisfactory to the Administrative
Agent, Administrative Agent’s counsel and each Funding Agent.
 
(o) A listing in form reasonably acceptable to the Administrative Agent setting
forth all Receivables and the Unpaid Balances thereon as of March 2, 2001 and
such other information as the Administrative Agent may reasonably request.
 
(p) Satisfactory results of a review and audit by the Administrative Agent and
each Investor (including discussions with the Originators’ independent
accountants) of the Originators’ collection, operating and reporting systems,
Credit and Collection Policy, historical receivables data and accounts,
including satisfactory results of a review of the Originators’ operating
location(s) and satisfactory review and approval of the Eligible Receivables in
existence on the date of the initial purchase under the First Tier Agreement and
a written outside audit report of a nationally-recognized accounting firm as to
such matters.
 
(q) A Master Servicer Report as of March 2, 2001 showing the calculation of the
Net Investment and Required Reserves after giving effect to the initial
Investment.
 
(r) Evidence of the appointment of Arrow as agent for process as required by
Section 11.4(c).
 
(s) Evidence that each of the Collection Account and the Funding Account
required to be established hereunder has been established.
 
(t) To the extent required by each Conduit Investor’s commercial paper program
documents, a letter from the applicable rating agencies confirming that such
Conduit Investor’s participation in the transaction contemplated by this
Agreement will not result in the withdrawal or downgrading of the rating of such
Conduit Investor’s commercial paper.
 
(u) Such other approvals, documents, instruments, certificates and opinions as
the Administrative Agent, any Funding Agent or any Investor, may reasonably
request.
 
SECTION 5.2 .  Conditions Precedent to All Investments and Reinvestments.  Each
Investment and Reinvestment hereunder (including the initial Investment) shall
be subject to the conditions precedent that (i) the Closing Date shall have
occurred, (ii) the Administrative Agent shall have received such approvals,
documents, instruments, certificates and opinions as the Administrative Agent
may reasonably request, and (iii) on the date of such Investment or Reinvestment
the following statements shall be true (and the SPV by accepting the amount of
such Investment or Reinvestment shall be deemed to have certified that):
 
 
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(a) The representations and warranties contained in Sections 4.1 and 4.2 are
true, complete and correct on and as of such day as though made on and as of
such day and shall be deemed to have been made on such day,
 
(b) In the case of a Reinvestment, the amount of the Reinvestment will not
exceed the amount available therefor under Section 2.12, and in the case of an
Investment, the amount of such Investment will not exceed the amount available
therefor under Section 2.2 and after giving effect thereto, the sum of the Net
Investment and Required Reserves will not exceed the Net Pool Balance,
 
(c) In the case of an Investment, the Administrative Agent shall have received
an Investment Request, appropriately completed, within the time period required
by Section 2.3,
 
(d) In the case of an Investment, the Administrative Agent shall have received a
Master Servicer Report (i) at any time other than during the occurrence and
continuance of an Arrow Rating Event, dated no more than five (5) days prior to
the proposed Investment Date, and (ii) at any time during the occurrence and
continuance of an Arrow Rating Event, dated no later than the last Business Day
of the week immediately prior to the week of such proposed Investment Date,
provided, however, if the senior unsecured debt of Arrow is rated below BB+ or
Ba1 by S&P or Moody’s, respectively, such Master Servicer Report shall be dated
no later than the Business Day immediately prior to such proposed Investment
Date, and in each such case, the information contained in Master Servicer Report
shall be true, complete and correct.
 
(e) No Termination Event or Potential Termination Event has occurred and is
continuing.
 
SECTION 5.3 .  Master Servicer Report.  Any Investment hereunder which is
proposed by the SPV to occur within 90 days of the Closing Date (as defined in
the Gates/Synnex Purchase Agreement) shall be subject to the condition precedent
that the Master Servicer shall have delivered to the Administrative Agent, at
least three days prior to the proposed date of such Investment, a Master
Servicer Report as at, and for the Calculation Period ending on the Month End
Date immediately preceding such proposed date of Investment, which Master
Servicer Report shall give effect to all transfers of Gates/Synnex Receivables
as of such proposed date of Investment (as if such transfers occurred on such
Month End Date), unless the effect of all such transfers shall have been
reflected in a Master Servicer Report previously delivered hereunder.
 
 
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ARTICLE VI

 
COVENANTS
 
SECTION 6.1 .  Affirmative Covenants of the SPV and Master Servicer.  At all
times from the date hereof to the Final Payout Date, unless the Majority
Investors shall otherwise consent in writing:
 
(a) Reporting Requirements.  The SPV shall maintain, for itself and each of its
Subsidiaries, a system of accounting established and administered in accordance
with GAAP, and furnish to the Administrative Agent who shall in turn promptly
forward each of the reports outlined below to each of the Investors:
 
(i) Annual Reporting.  Within one hundred twenty (120) days after the close of
the SPV’s and Arrow’s fiscal years, (A) financial statements, audited by a
nationally-recognized accounting firm in accordance with GAAP on a consolidated
basis for Arrow and its consolidated Subsidiaries, in each case, including
balance sheets as of the end of such period, related statements of operations,
shareholder’s equity and cash flows, accompanied by an unqualified audit report
certified by independent certified public accountants (without a “going concern”
or like qualification or exception and without any qualifications or exception
as to the scope of the audit), acceptable to the Administrative Agent, prepared
in accordance with GAAP, and (B) unaudited financial statements of the SPV, to
include balance sheets as of the end of such period and the related statements
of operations, prepared in accordance with GAAP and certified by an officer of
the SPV, provided that in lieu of furnishing such financial statements of Arrow
and its consolidated Subsidiaries, it may furnish to the Administrative Agent
Arrow’s Form 10-K filed with the Securities and Exchange Commission.
 
(ii) Quarterly Reporting.  Within sixty (60) days after the close of the first
three quarterly periods of each of the SPV’s and Arrow’s fiscal years, for (A)
Arrow and its consolidated Subsidiaries, consolidated unaudited balance sheets
as at the close of each such period and consolidated related statements of
operations, shareholder’s equity and cash flows for the period from the
beginning of such fiscal year to the end of such quarter, all certified by its
chief financial officer, and (B) unaudited financial statements of the SPV, to
include balance sheets as of the end of such period and the related statements
of operations, prepared in accordance with GAAP and certified by an officer of
the SPV, provided that in lieu of furnishing such unaudited consolidated balance
sheet of Arrow and its consolidated Subsidiaries, it may furnish to the
Administrative Agent Arrow’s Form 10-Q filed with the Securities and Exchange
Commission.
 
(iii) Compliance Certificate.  Together with the financial statements required
hereunder, a compliance certificate signed by the SPV’s or Arrow’s, as
applicable, chief financial officer stating that (A) the attached financial
statements have been prepared in accordance with GAAP and accurately reflect the
financial condition of the SPV or Arrow and its consolidated Subsidiaries as
applicable and (B) to the best of such Person’s knowledge, no Termination Event
or Potential Termination Event exists, or if any Termination Event or Potential
Termination Event exists, stating the nature and status thereof and showing the
computation of, and showing compliance with, the financial ratio set forth in
Section 8.1(o).
 
 
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(iv) Shareholders Statements and Reports.  Promptly upon the furnishing thereof
to the shareholders of the SPV, Arrow or any Originator, copies of all financial
statements, reports and proxy statements so furnished.
 
(v) SEC Filings.  Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which Arrow
or any Subsidiary of Arrow files (or causes to be filed) with the Securities and
Exchange Commission.
 
(vi) Notice of Termination Events or Potential Termination Events; Etc. (A) As
soon as possible and in any event within two (2) Business Days after the SPV or
the Master Servicer obtains (or should have obtained) knowledge of each and any
Termination Event or Potential Termination Event, a statement of the chief
financial officer or chief accounting officer of the SPV setting forth details
of such Termination Event or Potential Termination Event and the action which
the SPV proposes to take with respect thereto, which information shall be
updated promptly from time to time; (B) promptly after the SPV obtains knowledge
thereof, notice of any litigation, investigation or proceeding that may exist at
any time between the SPV and any Person that may result in a Material Adverse
Effect or any litigation or proceeding relating to any Transaction Document; and
(C) promptly after the occurrence thereof, notice of a Material Adverse Effect.
 
(vii) Change in Credit and Collection Policy and Debt Ratings.  Within ten (10)
Business Days after the date any material change in or amendment to the Credit
and Collection Policy is made, a copy of such change in or amendment to the
Credit and Collection Policy then in effect indicating such change or
amendment.  Within five (5) days after the date of any change in Arrow’s public
or private debt ratings, if any, a written certification of Arrow’s public and
private debt ratings after giving effect to any such change.
 
(viii) Credit and Collection Policy.  Within ninety (90) days after the close of
each of Arrow’s and the SPV’s fiscal years, a complete copy of the Credit and
Collection Policy then in effect, if requested by the Administrative Agent.
 
(ix) ERISA.  Promptly after the filing, giving or receiving thereof, copies of
all reports and notices with respect to any Reportable Event pertaining to any
Pension Plan and copies of any notice by any Person of its intent to terminate
any Pension Plan or any notice received by any Person regarding withdrawal
liability from any Multiemployer Plan, and promptly upon the occurrence thereof,
written notice of any contribution failure with respect to any Pension Plan
sufficient to give rise to a lien under Section 302(f) of ERISA.
 
 
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(x) Change in Accountants or Accounting Policy.  Promptly, notice of any change
in the accountants or any material change in the accounting policy of either the
SPV, Arrow or any Originator.
 
(xi) Modification of Systems.  The Master Servicer agrees, promptly after the
replacement or any material modification of any computer, automation or other
operating systems (in respect of hardware or software) used to perform its
services as Master Servicer or to make any calculations or report hereunder or
otherwise relating to the Receivables, to give notice of any such replacement or
modification to the Administrative Agent to the extent such replacement or
material modification could be expected to have a Material Adverse Effect.
 
(xii) Litigation.  As soon as possible, and in any event within ten Business
Days of the Master Servicer’s knowledge thereof, the Master Servicer shall give
the Administrative Agent and Funding Agents notice of (i) any litigation,
investigation or proceedings against the SPV which may exist at any time, and
(ii) any material adverse development in any such previously disclosed
litigation.  No notices, waivers or communications in respect of the matters
disclosed pursuant to the preceding sentence shall be required except that the
Master Servicer shall give the Administrative Agent and each Funding Agent
prompt notice of any final court decisions, at the trial level or on appeal,
whether favorable or adverse, and if any judgments are rendered against the
Master Servicer in respect of such matters, the amount and terms of such
judgment and provisions which the Master Servicer has made to pay such
judgments.
 
(xiii) Other Information.  Such other information (including non-financial
information) as the Administrative Agent, any Funding Agent or any Investor may
from time to time reasonably request with respect to any Originator or the SPV.
 
(b) Conduct of Business; Ownership.  (i) Each of the SPV and the Master Servicer
shall, and the Master Servicer shall cause each of its Subsidiaries to, carry on
and conduct its business in substantially the same manner and in substantially
the same fields of enterprise as it is presently conducted and do all things
necessary to remain duly organized and validly existing as a domestic
corporation in its jurisdiction of incorporation.  The SPV shall at all times be
a wholly-owned Subsidiary of Arrow.
 
(ii) Each of the SPV and the Master Servicer shall, and the Master Servicer
shall cause each of its Subsidiaries to, do all things necessary to remain in
good standing as a domestic corporation in its jurisdiction of incorporation and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
 
 
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(c) Compliance with Laws, Etc.  Each of the SPV and the Master Servicer shall,
and the Master Servicer shall cause each of its Subsidiaries to, comply with all
Laws to which it or its respective properties may be subject and preserve and
maintain its corporate existence, rights, franchises, qualifications and
privileges except to the extent that the failure to comply therewith would not
be expected to have a Material Adverse Effect or a material adverse effect on
the condition (financial or otherwise), business or properties of Arrow and the
other Originators, taken as a whole.
 
(d) Furnishing of Information and Inspection of Records.  Each of the SPV and
the Master Servicer shall furnish to the Administrative Agent from time to time
such information with respect to the Affected Assets as the Administrative Agent
may reasonably request, including listings identifying the Obligor and the
Unpaid Balance for each Receivable.  Each of the SPV and the Master Servicer
shall, at any time and from time to time during regular business hours, as
reasonably requested by the Administrative Agent, permit the Administrative
Agent, any Funding Agent or any Investor, or their respective agents or
representatives, (i) to examine and make copies of and take abstracts from all
books, records and documents (including computer tapes and disks) relating to
the Receivables or other Affected Assets, including the related Contracts and
(ii) to visit the offices and properties of the SPV, the Originators or the
Master Servicer, as applicable, for the purpose of examining such materials
described in clause (i), and to discuss matters relating to the Affected Assets
or the SPV’s, the Originators’ or the Master Servicer’s performance hereunder,
under the Contracts and under the other Transaction Documents to which such
Person is a party with any of the officers, directors, employees or independent
public accountants of the SPV, the Originators or the Master Servicer, as
applicable, having knowledge of such matters.
 
(e) Keeping of Records and Books of Account.  Each of the SPV and the Master
Servicer shall maintain and implement administrative and operating procedures
(including an ability to recreate records evidencing Receivables and related
Contracts in the event of the destruction of the originals thereof), and keep
and maintain, all documents, books, computer tapes, disks, records and other
information reasonably necessary or advisable for the collection of all
Receivables (including records adequate to permit the daily identification of
each new Receivable and all Collections of and adjustments to each existing
Receivable).  Each of the SPV and the Master Servicer shall give the
Administrative Agent and each Funding Agent prompt notice of any material change
in its administrative and operating procedures referred to in the previous
sentence.
 
(f) Performance and Compliance with Receivables and Contracts and Credit and
Collection Policy.  Each of the SPV and the Master Servicer shall, (i) at its
own expense, timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables; and (ii) timely and fully comply in all material
respects with the Credit and Collection Policy in regard to each Receivable and
the related Contract.
 
(g) Notice of Administrative Agent’s Interest.  In the event that the SPV or any
Originator shall sell or otherwise transfer any interest in accounts receivable
or any other financial assets (other than as contemplated by the Transaction
Documents), any computer tapes or files or other documents or instruments which
contain information with respect to the Receivables and which is provided by the
Master Servicer in connection with any such sale or transfer shall disclose the
SPV’s ownership of the Receivables and the Administrative Agent’s interest
therein.
 
 
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(h) Collections.  Each of the SPV and the Master Servicer shall instruct all
Obligors to cause all Collections to be deposited directly to a Blocked Account
or to post office boxes to which only Blocked Account Banks have access and
shall cause all items and amounts relating to such Collections received in such
post office boxes to be removed and deposited into a Blocked Account on a daily
basis.
 
(i) Collections Received.  Each of the SPV and the Master Servicer shall hold in
trust, and deposit, immediately, but in any event not later than one Business
Day of its receipt thereof, to a Blocked Account or, if required by Section 2.9,
to the Collection Account, all Collections received by it from time to time.
 
(j) Blocked Accounts.  Each Blocked Account shall at all times be subject to a
Blocked Account Agreement.
 
(k) [RESERVED].
 
(l) Separate Business; Nonconsolidation.  The SPV shall not (i) engage in any
business not permitted by its articles of incorporation or by-laws as in effect
on the Closing Date or (ii) conduct its business or act in any other manner
which is inconsistent with Section 4.1(w). The officers and directors of the SPV
(as appropriate) shall make decisions with respect to the business and daily
operations of the SPV independent of and not dictated by Arrow or any other
controlling Person.
 
(m) Corporate Documents.  The SPV shall only amend, alter, change or repeal its
articles of incorporation with the prior written consent of the Majority
Investors.
 
(n) Change in Accountants or Accounting Policies.  The Master Servicer shall
promptly notify the Administrative Agent of any change in its accountants or any
material change in its accounting policy.
 
(o) Ownership Interest, Etc.  The SPV shall, at its expense, take all action
necessary or desirable to establish and maintain a valid and enforceable
ownership or security interest in the Receivables, the Related Security and
proceeds with respect thereto, and a first priority perfected security interest
in the Affected Assets, in each case free and clear of any Adverse Claim (other
than that created or imposed by the Administrative Agent, any Funding Agent or
any Investor), in favor of the Administrative Agent, on behalf of the Funding
Agents, for the benefit of the Investors, including taking such action to
perfect, protect or more fully evidence the interest of the Administrative
Agent, as the Administrative Agent may reasonably request.
 
 
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(p) Enforcement of First Tier Agreement.  The SPV, on its own behalf and on
behalf of the Administrative Agent, each Funding Agent and each Investor, shall
promptly enforce all covenants and obligations of Arrow contained in the First
Tier Agreement and shall cause the enforcement (to the extent of the SPV’s
rights under the First Tier Agreement) of all commitments and obligations of
Arrow and the other Originators contained in the Originator Sale Agreements (it
being agreed that the Administrative Agent, on behalf of the Funding Agents for
the benefit of the Investors, shall be entitled to enforce such rights against
Arrow if the SPV does not enforce such rights following notice from the
Administrative Agent).  The SPV shall deliver consents, approvals, directions,
notices, waivers and take such other actions available to it as a party under
the First Tier Agreement as may be directed by the Administrative Agent acting
at the direction of the Majority Investors.
 
(q) Financial Covenant. The SPV shall maintain at all times a Tangible Net Worth
greater than $1.00.
 
(r)  Jabil/Branch WJ Receivables.  Neither the SPV or the Master Servicer shall
change, modify or amend, or consent to any change, modification or amendment by
the Originator, of the manner in which Jabil/Branch WJ Receivables are
identified in their respective accounts receivable reporting systems.
 
(s) Rating Confirmation. Upon written request of any Funding Agent(s), such
Funding Agent shall (at such Funding Agent’s expense (including reasonable legal
expenses of the Master Servicer, up to $5,000) and with the reasonable
cooperation of the Master Servicer), obtain a rating, in form satisfactory to
the requesting Funding Agent, of the facility contemplated by this Agreement
(the “External Rating”) from S&P, Moody’s, Fitch or another
nationally-recognized rating agency reasonably acceptable to the
requesting Funding Agent within sixty (60) days from the date of such written
request, at least equal to the implied rating of “A” established by the
Administrative Agent as of the Renewal Date (the "Implied Rating").  Except as
set forth in the next succeeding paragraph or if any change in Law or any change
in regulatory guidelines by any Official Body requires an additional External
Rating, once the External Rating has been obtained, no Funding Agent may request
another External Rating hereunder
 
If the External Rating is less than the Implied Rating, then the Master Servicer
may effect a Ratings Cure (as defined below).  The Master Servicer may effect
only one such Ratings Cure prior to obtaining an External Rating that is equal
to or better than the Implied Rating.  A “Ratings Cure” means the satisfaction
by the Master Servicer of each of the following conditions:  (i) promptly
following receipt of the External Rating, the Master Servicer notifies the
Administrative Agent of its intention to effect a Ratings Cure, (ii) the Master
Servicer takes, or causes the SPV to take, any actions permitted under this
Agreement and the First Tier Agreement that Master Servicer reasonably believes
would improve the rating of the facility contemplated by this Agreement and
(iii) within thirty (30) days following receipt of the External Rating, obtains
a new external rating of the facility contemplated by this Agreement from the
rating agency that provided the External Rating (or, with the Administrative
Agent's consent, from another nationally-recognized rating agency) and such new
rating is at least equal to the Implied Rating.
 
 
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SECTION 6.2 .  Negative Covenants of the SPV and Master Servicer.  At all times
from the date hereof to the Final Payout Date, unless the Majority Investors
shall otherwise consent in writing:
 
(a) No Sales, Liens, Etc.  (i) Except as otherwise contemplated  herein and in
the First Tier Agreement, neither the SPV nor the Master Servicer shall, nor
shall either of them permit any of its respective Subsidiaries to, sell, assign
(by operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist any Adverse Claim upon (or the filing of any financing statement) or
with respect to (A) any of the Affected Assets, or (B) any inventory or goods,
the sale of which may give rise to a Receivable, or assign any right to receive
income in respect thereof and (ii) the SPV shall not issue any security to, or
sell, transfer or otherwise dispose of any of its property or other assets
(including the property sold to it by Arrow under Section 2.1 of the First Tier
Agreement) to, any Person other than an Affiliate (which Affiliate is not a
special purpose entity organized for the sole purpose of issuing asset backed
securities) or except as otherwise expressly provided for in the Transaction
Documents.
 
(b) No Extension or Amendment of Receivables.  Except as otherwise permitted in
Section 7.2, neither the SPV nor the Master Servicer shall extend, amend or
otherwise modify the terms of any Receivable, or amend, modify or waive any term
or condition of any Contract related thereto.
 
(c) No Change in Business or Credit and Collection Policy.  Neither the SPV nor
the Master Servicer shall make any change in the character of its business or in
the Credit and Collection Policy, which change would, in either case, impair the
collectibility of any Receivable or otherwise have a Material Adverse Effect.
 
(d) No Subsidiaries, Mergers, Etc.  Neither the SPV nor the Master Servicer
shall consolidate, amalgamate or merge with or into, or sell, lease or transfer
all or substantially all of its assets to, any other Person, provided, however,
the Master Servicer may merge with another Person if (i) the Master Servicer is
the corporation surviving such merger and (ii) immediately after giving effect
to such merger, no Termination Event or Potential Termination shall have
occurred and be continuing. The SPV shall not form or create any Subsidiary.
 
(e) Change in Payment Instructions to Obligors.  Neither the SPV nor the Master
Servicer shall add or terminate any bank as a Blocked Account Bank or any
account as a Blocked Account to or from those listed in Schedule 4.1(s) or make
any change in its instructions to Obligors regarding payments to be made to any
Blocked Account, unless (i) such instructions are to deposit such payments to
another existing Blocked Account or to the Collection Account or (ii) the
Administrative Agent shall have received written notice of such addition,
termination or change at least ten (10) days prior thereto and the
Administrative Agent shall have received a Blocked Account Agreement executed by
each new Blocked Account Bank or an existing Blocked Account Bank with respect
to each new Blocked Account, as applicable.
 
 
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(f) Deposits to Lock-Box Accounts.  Neither the SPV nor the Master Servicer
shall (and Arrow shall cause each other Originator not to) deposit or otherwise
credit, or cause to be so deposited or credited, to any Blocked Account or the
Collection Account cash or cash proceeds other than Collections (except for
amounts deposited in respect of HP Receivables which are not HP Purchased
Receivables) or permit to be so deposited or credited any such cash or cash
proceeds to the Blocked Account or the Collection Account, unless such cash or
cash proceeds are withdrawn from the applicable Blocked Account or Collection
Account within one Business Day of such cash or cash proceeds becoming available
for transfer therefrom.”
 
(g) Change of Name, Etc.  The SPV shall not change its name, identity or
structure (including a merger) or the location of its chief executive office or
any other change which could render any UCC financing statement filed in
connection with this Agreement or any other Transaction Document to become
“seriously misleading” under the UCC, unless at least thirty (30) days prior to
the effective date of any such change the SPV delivers to the Administrative
Agent (i) such documents, instruments or agreements, executed by the SPV as are
necessary to reflect such change and to continue the perfection of the
Administrative Agent’s ownership interests or security interests in the Affected
Assets and (ii) new or revised Blocked Account Agreements executed by the
Blocked Account Banks which reflect such change and enable the Administrative
Agent to continue to exercise its rights contained in Section 7.3.
 
(h) Amendment to First Tier Agreement.  The SPV shall not amend, modify, or
supplement the First Tier Agreement or waive any provision thereof or permit an
amendment, modification or supplementing of the Originator Sale Agreements (to
the extent of the SPV’s rights under the First Tier Agreement with respect
thereto), in each case except with the prior written consent of the
Administrative Agent acting at the direction of the Majority Investors; nor
shall the SPV take, or permit Arrow to take (to the extent of the SPV’s rights
under the First Tier Agreement), any other action under the First Tier Agreement
or the Originator Sale Agreements that could have a Material Adverse Effect on
the Administrative Agent, any Funding Agent or any Investor or which is
inconsistent with the terms of this Agreement.
 
(i) Other Debt.  Except as provided herein, the SPV shall not create, incur,
assume or suffer to exist any indebtedness whether current or funded, or any
other liability other than (i) indebtedness of the SPV representing fees,
expenses and indemnities arising hereunder or under the First Tier Agreement for
the purchase price of the Receivables and other Affected Assets under the First
Tier Agreement, and (ii) other indebtedness incurred in the ordinary course of
its business in an amount not to exceed $9,500 at any time outstanding.
 
(j) Payment to Arrow.  The SPV shall not (i) acquire any Receivable other than
through, under, and pursuant to the terms of, the First Tier Agreement or (ii)
pay for the acquisition of any such Receivable other than by (in each case in
accordance with the First Tier Agreement):  (x) the SPV making a cash payment to
Arrow from available cash; (y) the SPV making a payment to Arrow from the
proceeds of a subordinated loan made by Arrow to the SPV, evidenced by one or
more subordinated promissory notes or (z) at the election of Arrow, treating a
portion or all of the purchase price of such Receivable as a contribution to the
capital of the SPV.
 
 
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(k) Restricted Payments.  The SPV shall not (A) purchase or redeem any shares of
its capital stock, (B) prepay, purchase or redeem any Indebtedness, (C) lend or
advance any funds or (D) repay any loans or advances to, for or from any of its
Affiliates (the amounts described in clauses (A) through (D) being referred to
as “Restricted Payments”), except that the SPV may (1) make Restricted Payments
out of funds received pursuant to Section 2.2 and (2) may make other Restricted
Payments (including the payment of dividends) if, after giving effect thereto,
no Termination Event or Potential Termination Event shall have occurred and be
continuing.
 
ARTICLE VII

 
ADMINISTRATION AND COLLECTIONS
 
SECTION 7.1 .  Appointment of Master Servicer.
 
(a) The servicing, administering and collection of the Receivables shall be
conducted by the Person (the “Master Servicer”) so designated from time to time
as Master Servicer in accordance with this Section 7.1.  Each of the SPV, the
Administrative Agent, the Funding Agents and the Investors hereby appoints as
its agent the Master Servicer, from time to time designated pursuant to this
Section 7.1, to enforce its respective rights and interests in and under the
Affected Assets. To the extent permitted by applicable law, each of the SPV and
Arrow (to the extent not then acting as Master Servicer hereunder) hereby grants
to any Master Servicer appointed hereunder an irrevocable power of attorney to
take any and all steps in the SPV’s and/or Arrow’s name and on behalf of the SPV
or Arrow as necessary or desirable, in the reasonable determination of the
Master Servicer, to collect all amounts due under any and all Receivables,
including endorsing the SPV’s and/or Arrow’s name on checks and other
instruments representing Collections and enforcing such Receivables and the
related Contracts and to take all such other actions set forth in this Article
VII.  Until the Administrative Agent gives notice to Arrow (in accordance with
this Section 7.1) of the designation of a new Master Servicer, Arrow is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Master Servicer pursuant to the terms hereof.  Upon the occurrence of a
Termination Event or a Potential Termination Event (which Potential Termination
Event is not capable of being cured), the Administrative Agent may (with the
consent of the Majority Investors), and upon the direction of the Majority
Investors shall, designate as Master Servicer any Person (including itself) to
succeed Arrow or any successor Master Servicer, on the condition in each case
that any such Person so designated shall agree to perform the duties and
obligations of the Master Servicer pursuant to the terms hereof.
 
(b) Upon the designation of a successor Master Servicer as set forth above,
Arrow agrees that it will terminate its activities as Master Servicer hereunder
in a manner which the Administrative Agent determines will facilitate the
transition of the performance of such activities to the new Master Servicer, and
Arrow shall cooperate with and assist such new Master Servicer.  Such
cooperation shall include access to and transfer of records and use by the new
Master Servicer of all records, licenses, hardware or software necessary or
reasonably desirable to collect the Receivables and the Related Security.
 
 
 
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(c) Arrow acknowledges that each of the SPV, the Administrative Agent, the
Funding Agents and the Investors have relied on Arrow’s agreement to act as
Master Servicer hereunder in making their decision to execute and deliver this
Agreement.  Accordingly, Arrow agrees that it will not voluntarily resign as
Master Servicer.
 
(d) The Master Servicer may delegate its duties and obligations hereunder to any
subservicer (each, a “Sub-Servicer”); provided that, in each such delegation,
(i) such Sub-Servicer shall agree in writing to perform the duties and
obligations of the Master Servicer pursuant to the terms hereof, (ii) the Master
Servicer shall remain primarily liable to the SPV, the Administrative Agent, the
Funding Agents and the Investors for the performance of the duties and
obligations so delegated, (iii) the SPV, the Administrative Agent, the Funding
Agents, the Investors and each Originator shall have the right to look solely to
the Master Servicer for performance and (iv) the terms of any agreement with any
Sub-Servicer shall provide that the Administrative Agent may terminate such
agreement upon the termination of the Master Servicer hereunder by giving notice
of its desire to terminate such agreement to the Master Servicer (and the Master
Servicer shall provide appropriate notice to such Sub-Servicer).
 
(e) Arrow hereby irrevocably agrees that if at any time it shall cease to be the
Master Servicer hereunder, it shall act (if the then current Master Servicer so
requests) as the data-processing agent of the Master Servicer and, in such
capacity, Arrow shall conduct, for a reasonable fee as may be agreed between
Arrow and the Administrative Agent, the data-processing functions of the
administration of the Receivables and the Collections thereon in substantially
the same way that Arrow conducted such data-processing functions while it acted
as the Master Servicer.
 
SECTION 7.2 .  Duties of Master Servicer.  (a)  The Master Servicer shall take
or cause to be taken all such action as may be necessary or advisable to collect
each Receivable from time to time, all in accordance with this Agreement and all
applicable Law, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.  The Master Servicer shall set aside (and, if
applicable, segregate) and hold in trust for the account of the SPV, the
Administrative Agent, the Funding Agents and the Investors the amount of the
Collections to which each is entitled in accordance with Article II.  So long as
no Termination Event or Potential Termination Event shall have occurred and is
continuing, the Master Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable (but not beyond ten
(10) days) and extend the maturity or adjust the Unpaid Balance of any Defaulted
Receivable as the Master Servicer may determine to be appropriate to maximize
Collections thereof; provided, however, that (i) such extension or adjustment
shall not alter the status of such Receivable as a Defaulted Receivable or limit
the rights of the SPV, the Investors, the Funding Agents or the Administrative
Agent under this Agreement and (ii) if a Termination Event or Potential
Termination Event has occurred and Arrow is still acting as Master Servicer,
Arrow may make such extension or adjustment only upon the prior written approval
of the Administrative Agent.  The SPV shall deliver to the Master Servicer and
the Master Servicer shall hold in trust for the SPV and the Administrative
Agent, for the benefit of the Funding Agents on behalf of the Investors, in
accordance with their respective interests, all Records which evidence or relate
to any Affected Asset.  Notwithstanding anything to the contrary contained
herein, the Administrative Agent shall have the right in its reasonable
discretion to direct the Master Servicer (whether Arrow, any other Originator or
any other Person is the Master Servicer) to commence or settle any legal action
to enforce collection of any Receivable or to foreclose upon or repossess any
Affected Asset provided, however, that upon the occurrence of a Termination
Event or Potential Termination Event (which Potential Termination Event is not
capable of being cured), the Administrative Agent shall have the absolute and
unlimited right to so direct the Master Servicer.  The Master Servicer shall not
make the Administrative Agent, any Funding Agent or any Investor a party to any
litigation without the prior written consent of such Person. At any time when a
Termination Event or Potential Termination Event (which Potential Termination
Event is not capable of being cured) exists, the Administrative Agent may notify
any Obligor of its interest in the Receivables and the other Affected Assets.
 
 
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(b) The Master Servicer shall, as soon as practicable following receipt thereof,
turn over to the SPV all collections from any Person of indebtedness of such
Person which are not on account of a Receivable.  Notwithstanding anything to
the contrary contained in this Article VII, the Master Servicer, if not the SPV,
Arrow, any Affiliate of the SPV, or Arrow, shall have no obligation to collect,
enforce or take any other action described in this Article VII with respect to
any indebtedness that is not included in the Asset Interest other than to
deliver to the SPV the Collections and documents with respect to any such
indebtedness as described above in this Section 7.2(b).
 
(c) The Funding Agents may engage twice during any twelve-month period,
commencing June 1, 2003, at the Master Servicer’s sole expense, the services of
a specialty audit firm or a firm of independent public accountants (which may
also render other services to the Master Servicer), to furnish an agreed-upon
procedures report to the Funding Agents substantially in compliance with the
procedures set forth in Schedule V or any additional procedures as the Funding
Agents reasonably deem appropriate; provided that, if the senior unsecured debt
of Arrow is rated below BBB- or Baa3 by S&P or Moody’s, respectively, the
Funding Agents retain the right to request such reports on a reasonable, more
frequent basis, at the Master Servicer’s sole expense.
 
(d) Any payment by an Obligor in respect of any indebtedness owed by it to an
Originator shall, except as otherwise specified by such Obligor, required by
contract or law or clearly indicated by facts or circumstances (including by way
of example an equivalence of a payment and the amount of a particular invoice)
after due investigation in accordance with such Originator’s Credit and
Collection Policy, and unless otherwise instructed by the Administrative Agent,
upon the occurrence of a Termination Date, be applied as a Collection of any
Receivable of such Obligor (starting with the oldest such Receivable) to the
extent of any amounts then due and payable thereunder before being applied to
any other receivable or other indebtedness of such Obligor.
 
 
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SECTION 7.3 .  Blocked Account Arrangements.  Prior to the initial Investment
hereunder, the SPV, Arrow and each other Originator shall enter into Blocked
Account Agreements with all of the Blocked Account Banks, and deliver original
counterparts thereof to the Administrative Agent. Upon the occurrence of a
Termination Event or a Potential Termination Event (which Potential Termination
Event is not capable of being cured), the Administrative Agent may at any time
thereafter give notice to each Blocked Account Bank that the Administrative
Agent is exercising its rights under the Blocked Account Agreements to do any or
all of the following: (i) to have the exclusive ownership and control of the
Blocked Account Accounts transferred to the Administrative Agent and to exercise
exclusive dominion and control over the funds deposited therein, (ii) to have
the proceeds that are sent to the respective Blocked Accounts be redirected
pursuant to its instructions rather than deposited in the applicable Blocked
Account, and (iii) to take any or all other actions permitted under the
applicable Blocked Account Agreement.  Arrow hereby agrees that if the
Administrative Agent, at any time, takes any action set forth in the preceding
sentence, the Administrative Agent shall have exclusive control of the proceeds
(including Collections) of all Receivables and Arrow hereby further agrees to
take any other action that the Administrative Agent may reasonably request to
transfer such control.  Any proceeds of Receivables received by Arrow, as Master
Servicer or otherwise, thereafter shall be sent immediately to the
Administrative Agent.  The parties hereto hereby acknowledge that if at any time
the Administrative Agent takes control of any Blocked Account, the
Administrative Agent shall not have any rights to the funds therein in excess of
the unpaid amounts due to SPV, the Administrative Agent and the Investors or any
other Person hereunder and the Administrative Agent shall distribute or cause to
be distributed such funds in accordance with Section 7.2(b) (including the
proviso thereto) and Article II (in each case as if such funds were held by the
Master Servicer thereunder); provided, however, that the Administrative Agent
shall not be under any obligation to remit any such funds to the SPV, Arrow or
any other Person unless and until the Administrative Agent has received from
such Person evidence satisfactory to the Administrative Agent that the
Originator or such Person is entitled to such funds hereunder and under
applicable Law.
 
SECTION 7.4 .  Enforcement Rights After Designation of New Master Servicer. 
(a)   At any time following the occurrence of a Termination Event or a Potential
Termination Event (which Potential Termination Event is not capable of being
cured):
 
(i) the Administrative Agent may, and upon the direction of the Majority
Investors shall, direct the Obligors that payment of all amounts payable under
any Receivable be made directly to the Administrative Agent or its designee;
 
(ii) the SPV shall, at the Administrative Agent’s request (which request shall
be made at the direction of the Majority Investors or in the Administrative
Agent’s sole discretion) and at the SPV’s expense, give notice of the
Administrative Agent’s, the SPV’s, and/or the Investors’ ownership of the
Receivables and (in the case of the Administrative Agent) interest in the Asset
Interest to each Obligor and direct that payments be made directly to the
Administrative Agent or its designee, except that if the SPV fails to so notify
each Obligor, the Administrative Agent may so notify the Obligors; and
 
 
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(iii) the SPV shall, at the Administrative Agent’s request (which request shall
be made at the direction of the Majority Investors or in the Administrative
Agent’s sole discretion), (A) assemble all of the Records and shall make the
same available to the Administrative Agent or its designee at a place selected
by the Administrative Agent or its designee, and (B) segregate all cash, checks
and other instruments received by it from time to time constituting Collections
of Receivables in a manner acceptable to the Administrative Agent and shall,
promptly upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Administrative
Agent or its designee.
 
(b) The SPV and Arrow hereby authorizes the Administrative Agent, and
irrevocably appoints the Administrative Agent as its attorney-in-fact with full
power of substitution and with full authority in the place and stead of the SPV
or Arrow, as applicable, which appointment is coupled with an interest, to take
any and all steps in the name of the SPV or Arrow, as applicable, and on behalf
of the SPV or Arrow, as applicable, necessary or desirable, in the determination
of the Administrative Agent, to collect any and all amounts or portions thereof
due under any and all Receivables or Related Security, including endorsing the
name of Arrow on checks and other instruments representing Collections and
enforcing such Receivables, Related Security and the related Contracts.
Notwithstanding anything to the contrary contained in this subsection (b), none
of the powers conferred upon such attorney-in-fact pursuant to the immediately
preceding sentence shall subject such attorney-in-fact to any liability if any
action taken by it shall prove to be inadequate or invalid, nor shall they
confer any obligations upon such attorney-in-fact in any manner whatsoever.
 
SECTION 7.5 .  Master Servicer Default.  The occurrence of any one or more of
the following events shall constitute a “Master Servicer Default”:
 
(a) The Master Servicer (i) shall fail to make any payment or deposit required
to be made by it hereunder within one (1) Business Day of when due or the Master
Servicer shall fail to observe or perform any term, covenant or agreement on the
Master Servicer’s part to be performed under Sections 6.1(b)(i) (conduct of
business, ownership), 6.1(f) (compliance with receivables and credit and
collection policy), 6.1(h) (obligor payments), 6.1(i) (handling collections),
6.2(a) (no sales or liens), 6.2(c) (no change in business or policy), 6.2(d) (no
subsidiaries, mergers), 6.2(e) (no change in obligor payments), or 6.2(f) (no
change in handling collections) (any of the preceding parenthetical phrases in
this clause (i) are for purposes of reference only and shall not otherwise
affect the meaning or interpretation of any provision hereof), or (ii) shall
fail to observe or perform any other term, covenant or agreement to be observed
or performed by it under Sections 2.8, 2.9, 2.12 or 2.15, or (iii) shall fail to
observe or perform any other term, covenant or agreement hereunder or under any
of the other Transaction Documents to which such Person is a party or by which
such Person is bound, and such failure shall remain unremedied for twenty (20)
days; or
 
(b) any representation, warranty, certification or statement made by the Master
Servicer in this Agreement, the First Tier Agreement, the Originator Sale
Agreements or in any of the other Transaction Documents or in any certificate or
report delivered by it pursuant to any of the foregoing shall prove to have been
incorrect in any material respect when made or deemed made; or
 
 
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(c) failure of the Master Servicer or any of its Subsidiaries (other than the
SPV) to pay when due (after giving effect to any applicable grace period) any
amounts due under any agreement under which any Indebtedness greater than
$50,000,000 (or its equivalent in any other currency) is governed; or the
default by the Master Servicer or any of its Subsidiaries in the performance of
any term, provision or condition contained in any agreement under which any
Indebtedness greater than $50,000,000 (or its equivalent in any other currency)
was created or is governed, regardless of whether such event is an “event of
default” or “default” under any such agreement if the effect of such default is
to cause, or permit the holder(s) or any trustee or agent on behalf of holder(s)
of such Indebtedness to cause such Indebtedness to become due and payable or
required to become prepaid (other than by a regularly scheduled payment) prior
to the scheduled date of maturity thereof; or
 
(d) any Event of Bankruptcy shall occur with respect to the Master Servicer or
any of its Significant Subsidiaries; or
 
(e) there shall have occurred an event which, materially and adversely affects
the Master Servicer’s ability to either collect the Receivables or to perform
its obligations as Master Servicer under this Agreement.
 
SECTION 7.6 .  Servicing Fee.  The Master Servicer shall be paid a Servicing Fee
in accordance with Section 2.12 and subject to the priorities therein.  If the
Master Servicer is not the SPV or Arrow or an Affiliate of the SPV or Arrow, the
Master Servicer, by giving three (3) Business Days’ prior written notice to the
Administrative Agent, may revise the percentage used to calculate the Servicing
Fee so long as the revised percentage will not result in a Servicing Fee that
exceeds 110% of the reasonable and appropriate out-of-pocket costs and expenses
of such Master Servicer incurred in connection with the performance of its
obligations hereunder as documented to the reasonable satisfaction of the
Administrative Agent; provided, however, that at any time after the Net
Investment, plus Required Reserves exceeds the Net Pool Balance, any
compensation to the Master Servicer in excess of the Servicing Fee initially
provided for herein shall be an obligation of the SPV and shall not be payable,
in whole or in part, from Collections allocated to the Investors.
 
SECTION 7.7 .  Protection of Ownership Interest of the Investors.  Each of Arrow
and the SPV agrees that it shall, and Arrow shall cause each other Originator,
from time to time, at its expense to, promptly execute and deliver all
instruments and documents and take all actions as may be necessary or as the
Administrative Agent may reasonably request in order to perfect or protect the
Asset Interest or to enable the Administrative Agent, the Funding Agents or the
Investors to exercise or enforce any of their respective rights
hereunder.  Without limiting the foregoing, each of Arrow and the SPV shall, and
Arrow shall cause each other Originator to, upon the request of the
Administrative Agent, acting at the written direction of any Funding Agent or
Investor, in order to accurately reflect this purchase and sale transaction, (i)
execute and file such financing or continuation statements or change statements
or amendments thereto or any registrations, instruments or notices or
assignments thereof (as otherwise permitted to be executed and filed pursuant
hereto) as may be requested by the Administrative Agent, at the direction of any
Funding Agent or Investor, and (ii) mark its respective master data processing
records and other documents with a legend describing the conveyance to the to
the Administrative Agent, on behalf of the Funding Agents for the benefit of the
Investors, of the Asset Interest.  Each of Arrow and the SPV shall, and Arrow
shall cause each other Originator to, upon the reasonable request of the
Administrative Agent, at the direction of any Funding Agent or Investor, obtain
such additional search reports as the Administrative Agent at the direction of
any Funding Agent or Investor shall request.  To the fullest extent permitted by
applicable law, the Administrative Agent shall be permitted to sign and file
continuation statements and amendments thereto and assignments thereof without
the SPV’s or Arrow’s signature.  Carbon, photographic or other reproduction of
this Agreement or any financing statement shall be sufficient as a financing
statement.  Neither Arrow nor the SPV shall, nor shall Arrow permit any
Originator to, change its respective name, identity or corporate structure which
could cause any UCC financing statement filed in connection with this Agreement
to become “seriously misleading” (within the meaning of Section 9-402(7) of the
UCC as in effect in the States of New York,  Colorado, Minnesota, Georgia and
Indiana, as applicable, with respect to each such entity) nor relocate its
respective chief executive office unless it shall have:  (A) given the
Administrative Agent at least thirty (30) days prior notice thereof and (B)
prepared at the SPV’s expense and delivered to the Administrative Agent all
financing statements, instruments and other documents necessary to preserve and
protect the Asset Interest as requested by the Administrative Agent in
connection with such change or relocation.  Any filings under the UCC or
otherwise that are occasioned by such change in name or location shall be made
at the expense of the SPV.
 
 
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ARTICLE VIII

 
TERMINATION EVENTS
 
SECTION 8.1 .  Termination Events.  The occurrence of any one or more of the
following events shall constitute a “Termination Event”:
 
(a) the SPV, Arrow, any Originator or the Master Servicer shall fail to make any
payment or deposit to be made by it hereunder, under the First Tier Agreement or
under any Originator Sale Agreement within one Business Day of when due
hereunder or thereunder; or
 
(b) any representation, warranty, certification or statement made or deemed made
by the SPV, Arrow or any Originator in this Agreement, any other Transaction
Document to which it is a party or in any other information, report or document
delivered pursuant hereto or thereto shall prove to have been incorrect in any
material respect when made or deemed made or delivered; or
 
(c) the SPV, Arrow, any Originator or the Master Servicer shall default in the
performance of any payment or undertaking (other than those covered by clause
(a) above) (i) to be performed or observed under Sections 6.1(a)(vi) (notice of
termination), 6.1(a)(vii) (notice of changes to credit and collection policy),
6.1(b)(i) (conduct of business, ownership), 6.1(f) (compliance with receivables
and credit and collection policy), 6.1(g) (notice of Administrative Agent’s
interest), 6.1(h) (obligor payments), 6.1(i) (handling collections), 6.1(k)
(sale treatment), 6.1(l) (nonconsolidation), 6.1(q) (financial covenant), 6.2(a)
(no sales or liens), 6.2(c) (no change in business or policy), 6.2(d) (no
subsidiaries, mergers), 6.2(e) (no change in obligor payments), 6.2(f) (no
change in handling collections), 6.2(g) (no name change), 6.2(h) (no amendment),
6.2(i) (no debt), 6.2(j) (payment to originator) (any of the preceding
parenthetical phrases in this clause (i) are for purposes of reference only and
shall not otherwise affect the meaning or interpretation of any provision
hereof) or (ii) to be performed or observed under any other provision of this
Agreement or any provision of any other Transaction Document to which it is a
party and such default in the case of this clause (ii) shall continue for twenty
(20) days; or
 
 
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(d) any Event of Bankruptcy shall occur with respect to the SPV, Arrow or any
Significant Subsidiary of Arrow or any Subsidiary of the SPV; or
 
(e) the Administrative Agent, on behalf of the Funding Agents for the benefit of
the Investors, shall for any reason fail or cease to have a valid and
enforceable perfected first priority ownership or security interest in the
Affected Assets, free and clear of any Adverse Claim; or
 
(f) a Master Servicer Default shall have occurred; or
 
(g) on any date, the sum of the Net Investment (as determined after giving
effect to all distributions pursuant to this Agreement on such date), plus the
Required Reserves shall exceed the Net Pool Balance (as such Required Reserves
and Net Pool Balance are shown in the most recent Master Servicer Report
delivered on or prior to such date); or
 
(h) the average Default Ratio for any period of three (3) consecutive months
exceeds 6.0%; or
 
(i) the average Dilution Ratio for any period of three (3) consecutive months
exceeds 11%; or
 
(j) failure of the SPV, Arrow or any Subsidiary of the SPV or Arrow to pay when
due any amounts due (after giving effect to any applicable grace period) under
any agreement to which any such Person is a party and under which any
Indebtedness greater than $5,000 in the case of the SPV or any Subsidiary of the
SPV, or $50,000,000 (or its equivalent in any other currency), in the case of
Arrow or any Subsidiary of Arrow (other than the SPV) is governed; or the
default by the SPV, Arrow or any Subsidiary of the SPV or Arrow in the
performance of any term, provision or condition contained in any agreement to
which any such Person is a party and under which any Indebtedness owing by the
SPV, Arrow or any Subsidiary of the SPV or Arrow greater than such respective
amounts was created or is governed, regardless of whether such event is an
“event of default” or “default” under any such agreement if the effect of such
default is to cause, or to permit the holder(s) or any trustee or agent acting
on behalf of holder(s) of such Indebtedness to cause such Indebtedness to become
due and payable prior to its stated maturity; or
 
 
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(k) there shall be a “change of control” with respect to Arrow, an Originator or
the SPV (for the purposes of this clause only “change in control” means:
 
(i) the failure of Arrow to own, free and clear of any Adverse Claim and on a
fully diluted basis, 100% of the outstanding shares of voting stock of the SPV
or more than 50% of the outstanding shares of the voting stock any Originator
(other than Arrow), or
 
(ii) (1)  less than a majority of the members of Arrow’s board of directors
shall be persons who either (x) were serving as directors on the Closing Date or
(y) were nominated as directors and approved by the vote of the majority of the
directors who are directors referred to in clause (x) above or this clause (y);
or
 
     (2)  the stockholders of Arrow shall approve any plan or proposal for the
liquidation or dissolution of Arrow; or
 
(iii) a Person or group of Persons acting in concert (other than the direct or
indirect beneficial owners of the outstanding shares of the voting stock of
Arrow as of the Closing Date) shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or otherwise, have become
the direct or indirect beneficial owner (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934, as amended from time to time) of securities
of Arrow representing 40% or more of the combined voting power of the
outstanding voting securities for the election of directors or shall have the
right to elect a majority of the board of directors of Arrow.
 
(l) any Person shall institute steps to terminate any Pension Plan if the assets
of such Pension Plan will not be sufficient to satisfy all of its benefit
liabilities (as determined under Title IV of ERISA) at the time of such
termination, or a contribution failure occurs with respect to any Pension Plan
which is sufficient to give rise to a lien under Section 302(f) of ERISA, or any
Person shall incur any liability with respect to the withdrawal or partial
withdrawal from any Pension Plan or Multiemployer Plan, which in each case could
be reasonably expected to cause a Material Adverse Effect or a material adverse
effect on the condition (financial or otherwise), business or properties of
Arrow or the other Originators, taken as a whole; or
 
(m) any material provision of this Agreement or any other Transaction Document
to which an Originator, Arrow or the SPV is a party shall cease to be in full
force and effect or an Originator, Arrow or the SPV shall so state in writing;
or
 
(n) the Consolidated Leverage Ratio on any day during any fiscal quarter exceeds
4.00 to 1.00; or
 
 
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(o) the Consolidated Interest Coverage Ratio for any period of four consecutive
fiscal quarters of Arrow is less than 3.00 to 1.00; or
 
(p) the SPV shall cease making purchases under the First Tier Agreement or the
First Tier Agreement shall be terminated for any reason; or
 
(q) the Administrative Agent on behalf of the Funding Agents for the benefit of
the Investors shall not have received within 60 days of the Closing Date
favorable opinions of counsel to Support Net, Inc. and SBM covering the matters
set forth in Exhibit I-4, in form and substance satisfactory to the
Administrative Agent, the Administrative Agent’s counsel and each Funding Agent;
or
 
(r)  the Master Servicer shall fail to comply with its obligations under Section
6.1(s).
 
SECTION 8.2 .  Termination.  Upon the occurrence of any Termination Event, the
Administrative Agent may (unless otherwise instructed by all the Investors), or
at the direction of any Investor shall, by notice to the SPV and the Master
Servicer, declare the Termination Date to have occurred; provided, however, that
in the case of any event described in Section 8.1(d) or 8.1(e), the Termination
Date shall be deemed to have occurred automatically upon the occurrence of such
event.  Upon any such declaration or automatic occurrence, the Administrative
Agent shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided under the UCC of
the applicable jurisdiction and other applicable laws, all of which rights shall
be cumulative.
 
ARTICLE IX

 
INDEMNIFICATION; EXPENSES; RELATED MATTERS
 
SECTION 9.1 .  Indemnities by the SPV.  Without limiting any other rights which
the Indemnified Parties may have hereunder or under applicable Law, the SPV
hereby agrees to indemnify the Investors, each Funding Agent, the Administrative
Agent, the Administrator, the Program Support Providers and their respective
officers, directors, employees, counsel and other agents (collectively,
“Indemnified Parties”) from and against any and all damages, losses, claims,
liabilities, costs and expenses, including reasonable attorneys’ fees (which
such attorneys may be employees of the Program Support Providers, the Funding
Agents or the Administrative Agent, as applicable) and disbursements (all of the
foregoing being collectively referred to as “Indemnified Amounts”) awarded
against or incurred by any of them in any action or proceeding between the SPV,
Arrow or an Originator (including, in its capacity as the Master Servicer or any
Affiliate of Arrow acting as Master Servicer) and any of the Indemnified Parties
or between any of the Indemnified Parties and any third party or otherwise
arising out of or as a result of this Agreement, the other Transaction
Documents, the ownership or maintenance, either directly or indirectly, by the
Administrative Agent, any Funding Agent or any Investor of the Asset Interest or
any of the other transactions contemplated hereby or thereby, excluding,
however, (i) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of such Indemnified Party, (ii) recourse
(except as otherwise specifically provided in this Agreement) for uncollectible
Receivables or (iii) any expenses, costs or related amounts (including
attorneys’ fees) incurred by an Indemnified Party with respect to any action or
proceeding to the extent the SPV, Arrow, and/or an Originator shall be the
prevailing party against such Indemnified Party.  Without limiting the
generality of the foregoing, the SPV shall indemnify each Indemnified Party for
Indemnified Amounts relating to or resulting from:
 
 
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(a) any representation or warranty made by the SPV or any Originator (including,
Arrow or any of its Affiliates in the capacity as the Master Servicer) or any
officers of the SPV or Arrow or any other Originator (including, in its capacity
as the Master Servicer or any Affiliate of an Originator acting as Master
Servicer) under or in connection with this Agreement, the First Tier Agreement,
any Originator Sale Agreement any of the other Transaction Documents, any Master
Servicer Report or any other information or report delivered by the SPV or the
Master Servicer pursuant hereto, or pursuant to any of the other Transaction
Documents which shall have been incomplete, false or incorrect in any respect
when made or deemed made;
 
(b) the failure by the SPV or any Originator (including Arrow, in its capacity
as the Master Servicer or any Affiliate of Arrow acting as a Sub-Servicer) to
comply with any applicable Law with respect to any Receivable or the related
Contract, or the nonconformity of any Receivable or the related Contract with
any such applicable Law;
 
(c) the failure (i) to vest and maintain vested in the Administrative Agent, for
the benefit of the Funding Agents, on behalf of the Investors, a first priority,
perfected ownership interest in the Asset Interest free and clear of any Adverse
Claim or (ii) to create or maintain a valid and perfected first priority
security interest in favor of the Administrative Agent, for the benefit of the
Funding Agents, on behalf of the Investors, in the Affected Assets, free and
clear of any Adverse Claim;
 
(d) the failure to file, or any delay in filing, financing statements,
continuation statements, or other similar instruments or documents under the UCC
of any applicable jurisdiction or other applicable laws with respect to any of
the Affected Assets;
 
(e) any dispute, claim, offset or defense (other than discharge in bankruptcy)
of the Obligor to the payment of any Receivable (including a defense based on
such Receivable or the related Contract not being the legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its terms),
or any other claim resulting from the sale of merchandise or services related to
such Receivable or the furnishing or failure to furnish such merchandise or
services, or from any breach or alleged breach of any provision of the
Receivables or the related Contracts restricting assignment of any Receivables;
 
(f) any failure of the Master Servicer to perform its duties or obligations in
accordance with the provisions hereof;
 
 
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(g) any products liability claim or personal injury or property damage suit or
other similar or related claim or action of whatever sort arising out of or in
connection with merchandise or services which are the subject of any Receivable;
 
(h) the transfer of an interest in any Receivable other than an Eligible
Receivable;
 
(i) the failure by the SPV, any Originator or the Master Servicer to comply with
any term, provision or covenant contained in this Agreement or any of the other
Transaction Documents to which it is a party or to perform any of its respective
duties or obligations under the Receivables or related Contracts;
 
(j) the Net Investment exceeding the Net Pool Balance, minus the Required
Reserves at any time;
 
(k) the failure of the SPV, Arrow or any Originator to pay when due any taxes,
including sales, excise, goods and services, or personal property taxes payable
by such Person in connection with any of the Receivables or this Agreement;
 
(l) any repayment by any Indemnified Party of any amount previously distributed
in reduction of Net Investment which such Indemnified Party believes in good
faith is required to be made;
 
(m) the commingling by the SPV, any Originator or the Master Servicer of
Collections of Receivables at any time with any other funds, including funds in
respect of HP Receivables at any time when such HP Receivables are not
Receivables hereunder;
 
(n) any investigation, litigation or proceeding related to this Agreement, any
of the other Transaction Documents, the use of proceeds of Investments by the
SPV or any Originator, the ownership of the Asset Interest, or any Affected
Asset;
 
(o) failure of any Blocked Account Bank to remit any amounts held in the Blocked
Accounts or any related lock-boxes pursuant to the instructions of the Master
Servicer, the SPV, the related Originator or the Administrative Agent (to the
extent such Person is entitled to give such instructions in accordance with the
terms hereof and of any applicable Blocked Account Agreement) whether by reason
of the exercise of set-off rights or otherwise;
 
(p) any inability to obtain any judgment in or utilize the court or other
adjudication system of, any state in which an Obligor may be located as a result
of the failure of the SPV or any Originator to qualify to do business or file
any notice of business activity report or any similar report;
 
(q) any attempt by any Person to void, rescind or set-aside any transfer by any
Originator to Arrow or Arrow to the SPV of any Receivable or Related Security
under statutory provisions or common law or equitable action, including any
provision of the Bankruptcy Code or other insolvency law;
 
 
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(r) any action taken by the SPV, any Originator, or the Master Servicer (if any
Originator or any Affiliate or designee of an Originator) in the enforcement or
collection of any Receivable;
 
(s) the use of the proceeds of any Investment or Reinvestment; or
 
(t) the transactions contemplated hereby being characterized as other than debt
for the purposes of the Code.
 
SECTION 9.2 .  Indemnity for Taxes, Reserves and Expenses.  (a) If after the
Closing Date, the adoption of any Law or bank regulatory guideline or any
amendment or change in the administration, interpretation or application of any
existing or future Law or bank regulatory guideline by any Official Body charged
with the administration, interpretation or application thereof, or the
compliance with any law, bank regulatory guideline or directive of any Official
Body (in the case of any bank regulatory guideline, whether or not having the
force of Law):
 
(i) shall subject any Indemnified Party (or its applicable lending office) to
any tax, duty or other charge (other than Excluded Taxes) with respect to this
Agreement, the other Transaction Documents, the ownership, maintenance or
financing of the Asset Interest, or payments of amounts due hereunder, or shall
change the basis of taxation of payments to any Indemnified Party of amounts
payable in respect of this Agreement, the other Transaction Documents, the
ownership, maintenance or financing of the Asset Interest, or payments of
amounts due hereunder or its obligation to advance funds hereunder, under a
Program Support Agreement or the credit or liquidity support furnished by a
Program Support Provider pursuant to Program Support Agreement or otherwise in
respect of this Agreement, the other Transaction Documents, the ownership,
maintenance or financing of the Asset Interest (except for changes in the rate
of general corporate, franchise, net income or other income tax imposed on such
Indemnified Party by the jurisdiction in which such Indemnified Party is
organized or in which such Indemnified Party’s principal executive office is
located);
 
(ii) shall impose, modify or deem applicable any reserve, special deposit or
similar requirement (including any such requirement imposed by the Board of
Governors of the Federal Reserve System) against assets of, deposits with or for
the account of, or credit extended by, any Indemnified Party or shall impose on
any Indemnified Party or on the United States market for certificates of deposit
or the London interbank market any other condition affecting this Agreement, the
other Transaction Documents, the ownership, maintenance or financing of the
Asset Interest, or payments of amounts due hereunder or its obligation to
advance funds hereunder, under a Program Support Agreement or the credit or
liquidity support provided by a Program Support Provider pursuant to a Program
Support Agreement or otherwise in respect of this Agreement, the other
Transaction Documents, the ownership, maintenance or financing of the Asset
Interest; or
 
 
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(iii) imposes upon any Indemnified Party any other condition or expense
(including any loss of margin, reasonable attorneys’ fees and expenses, and
expenses of litigation or preparation therefor in contesting any of the
foregoing) with respect to this Agreement, the other Transaction Documents, the
ownership, maintenance or financing of the Asset Interest, or payments of
amounts due hereunder or its obligation to advance funds hereunder under a
Program Support Agreement or the credit or liquidity support furnished by a
Program Support Provider pursuant to a Program Support Agreement or otherwise in
respect of this Agreement, the other Transaction Documents, the ownership,
maintenance or financing of the Asset Interests,
 
and the result of any of the foregoing is to increase the cost to or to reduce
the amount of any sum received or receivable by such Indemnified Party with
respect to this Agreement, the other Transaction Documents, the ownership,
maintenance or financing of the Asset Interest, the Receivables, the obligations
hereunder or under a Program Support Agreement, the funding of any purchases
hereunder or a Program Support Agreement or the provision of credit or liquidity
under a Program Support Agreement by an amount deemed by such Indemnified Party
to be material, then, within ten (10) days after demand by such Indemnified
Party through the Administrative Agent, the SPV shall pay to the Administrative
Agent, for the benefit of such Indemnified Party, such additional amount or
amounts as will compensate such Indemnified Party for such increased cost or
reduction.
 
(b) If any Indemnified Party shall have determined that the adoption of any
applicable Law, any generally accepted accounting principle or bank regulatory
guideline regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any Official Body or any
accounting board or authority responsible for the establishment or
interpretation of national or international accounting principles (other than
with respect to an Accounting Based Consolidation Event (as defined in Schedule
IV hereto)), or any request or directive regarding capital adequacy (in the case
of any bank regulatory guideline, whether or not having the force of law) of any
such Official Body or the compliance with any law, bank regulatory guideline or
directive of any Official Body, has or would have the effect of reducing the
rate of return on capital of such Indemnified Party (or its parent) as a
consequence of such Indemnified Party’s obligations hereunder or under a Program
Support Agreement or with respect hereto or thereto to a level below that which
such Indemnified Party (or its parent) could have achieved but for such
adoption, change, request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by such Indemnified Party
to be material, then from time to time, within ten (10) days after demand by
such Indemnified Party through the Administrative Agent, the SPV shall pay to
the Administrative Agent, for the benefit of such Indemnified Party, such
additional amount or amounts as will compensate such Indemnified Party (or its
parent) for such reduction.
 
(c) The applicable Funding Agent shall promptly notify the SPV and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle an Indemnified Party to compensation pursuant to
this Section 9.2; provided that no failure to give or any delay in giving such
notice shall affect the Indemnified Party’s right to receive such
compensation.  A notice by such Funding Agent or the applicable Indemnified
Party claiming compensation under this Section 9.2 and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error.  In determining such amount, such Funding Agent
or any applicable Indemnified Party may use any reasonable averaging and
attributing methods.
 
 
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(d) Anything in this Section 9.2 to the contrary notwithstanding, if any Conduit
Investor enters into agreements for the acquisition of interests in receivables
from one or more Other SPVs, such Conduit Investor shall allocate the liability
for any amounts under this Section 9.2 which are in connection with a Program
Support Agreement or the credit or liquidity support provided by a Program
Support Provider (“Additional Costs”) to the SPV and each Other SPV; provided,
however, that if such Additional Costs are attributable to the SPV, any
Originator or the Master Servicer and not attributable to any Other SPV, the SPV
shall be solely liable for such Additional Costs or if such Additional Costs are
attributable to Other SPVs and not attributable to the SPV, any Originator or
the Master Servicer, such Other SPVs shall be solely liable for such Additional
Costs.
 
SECTION 9.3 .  Taxes.  (a) All payments and distributions made hereunder by or
on behalf of the SPV or the Master Servicer (each, a “payor”) to any Indemnified
Party (each, a “recipient”) shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
any other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority (such items being called “Taxes”),
but excluding Excluded Taxes.
 
(b) In the event that any withholding or deduction from any payment made by the
payor hereunder is required in respect of any Taxes, then such payor shall:
 
(i) pay directly to the relevant authority the full amount required to be so
withheld or deducted;
 
(ii) promptly forward to the Administrative Agent an official receipt or other
documentation satisfactory to the Administrative Agent evidencing such payment
to such authority; and
 
(iii) subject to Section 9.3(e), pay to the recipient such additional amount or
amounts as is necessary to ensure that the net amount actually received by the
recipient will equal the full amount such recipient would have received had no
such withholding or deduction of Taxes, other than Excluded Taxes been required.
 
(c) If any Taxes are directly asserted against any recipient with respect to any
payment received by such recipient hereunder, the recipient may pay such Taxes
and the payor will, subject to Section 9.3(e), promptly pay such additional
amounts (including any penalties, interest or expenses) as shall be necessary in
order that the net amount received by the recipient after the payment of such
Taxes other than Excluded Taxes (including any Taxes on such additional amount)
shall equal the amount such recipient would have received had such Taxes other
than Excluded Taxes not been asserted.
 
 
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(d) If the payor fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the recipient the required receipts or other
required documentary evidence, the payor shall indemnify the recipient for any
incremental Taxes, interest, or penalties that may become payable by any
recipient as a result of any such failure.
 
(e) Each Investor that is not a United States person within the meaning of
section 7701(A)(30) of the Code shall on the Closing Date (or if later, the date
on which such person first becomes an Investor hereunder by assignment or
otherwise) provide to the Administrative Agent to be forwarded to the relevant
payor either (i) a duly completed IRS Form W-8ECI, (ii) a duly completed IRS
Form W-8BEN, in each case entitling such Investor to a complete exemption from
withholding on payments and distributions hereunder (which in the case of a form
W-8BEN, is based on its entitlement to exemption under an applicable income tax
treaty).  Notwithstanding the foregoing provisions of Section 9.3, no payor
shall be required to pay any additional amounts or indemnities in respect of
Taxes to a recipient that exceed the amount that would have been payable had the
recipient complied with its obligations under this Section 9.3(e).
 
SECTION 9.4 .  Other Costs and Expenses; Breakage Costs.  (a) The SPV agrees,
upon receipt of a written invoice, to pay or cause to be paid, and to save the
Investors, the Funding Agents and the Administrative Agent harmless against
liability for the payment of, all reasonable out-of-pocket expenses (including
attorneys’, accountants’, rating agencies’, and other third parties’ fees and
expenses, any filing fees and expenses incurred by officers or employees of any
Investor and/or the Administrative Agent) or intangible, documentary or
recording taxes incurred by or on behalf of the any Investor, any Funding Agent
or the Administrative Agent (i) in connection with the preparation, negotiation,
execution and delivery of this Agreement, the other Transaction Documents and
any documents or instruments delivered pursuant hereto and thereto and the
transactions contemplated hereby or thereby (including the perfection or
protection of the Asset Interest) (which payment of attorneys’ fees and
expenses, in the case of this clause (i) shall be limited to Dechert LLP, Sidley
Austin LLP or any other attorneys’ fees and expenses of an attorney approved in
advance by the Master Servicer) and (ii) from time to time (A) relating to any
amendments, waivers or consents under this Agreement and the other Transaction
Documents, (B) arising in connection with any Investor’s, any Funding Agent’s or
the Administrative Agent’s enforcement or preservation of rights (including the
perfection and protection of the Asset Interest under this Agreement), or (C)
arising in connection with any dispute, disagreement, litigation or preparation
for litigation involving this Agreement or any of the other Transaction
Documents (all of such amounts, collectively, “Transaction Costs”).
 
(b) The SPV shall pay the Administrative Agent for the account of each Investor,
as applicable, on demand, such amount or amounts as shall compensate such
Investor for any loss (including loss of profit), cost or expense incurred by it
(as reasonably determined by the applicable Funding Agent) as a result of any
reduction of any Portion of Investment of such Investor other than on the last
day of the related Rate Period (determined without regard for clause (ii) of
paragraph (a) of the definition thereof) funding such Portion of Investment of
such Investor, such compensation to be (i) limited to an amount equal to any
loss or expense suffered by the Investors during the period from the date of
receipt of such repayment to (but excluding) the maturity date of such
Commercial Paper (or other financing source) and (ii) net of the income, if any,
received by the recipient of such reductions from investing the proceeds of such
reductions of such Portion of Investment.  The determination by the Related
Funding Agent of the amount of any such loss or expense shall be set forth in a
written notice to the SPV and Administrative Agent in reasonable detail and
shall be conclusive, absent manifest error.
 
 
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SECTION 9.5 .  Reconveyance Under Certain Circumstances.  The SPV agrees to
accept the reconveyance from the Administrative Agent, on behalf of the Funding
Agents for the benefit of the Investors, of the Asset Interest if the
Administrative Agent notifies SPV of a material breach of any representation or
warranty made or deemed made pursuant to Article IV and the SPV shall fail to
cure such breach within fifteen (15) days (or, in the case of the
representations and warranties in Sections 4.1(d) and 4.1(k), three (3) days) of
such notice.  The reconveyance price shall be paid by the SPV to the
Administrative Agent, for the account of the Investors, as applicable in
immediately available funds on such 15th day (or 3rd day, if applicable) in an
amount equal to the Aggregate Unpaids.
 
SECTION 9.6 .  Indemnities by the Master Servicer.  Without limiting any other
rights which the Administrative Agent, the Funding Agents or the Investors or
the other Indemnified Parties may have hereunder or under applicable law, the
Master Servicer hereby agrees to indemnify (without recourse, except as
otherwise specifically provided in this Agreement) the Indemnified Parties from
and against any and all Indemnified Amounts arising out of or resulting from
(whether directly or indirectly) (a) the failure of any information contained in
any Master Servicer Report (to the extent provided by the Master Servicer) to be
true and correct, or the failure of any other information provided to any
Indemnified Party by, or on behalf of, the Master Servicer to be true and
correct, (b) the failure of any representation, warranty or statement made or
deemed made by the Master Servicer (or any of its officers) under or in
connection with this Agreement to have been true and correct as of the date made
or deemed made, (c) the failure by the Master Servicer to comply with any
applicable Law with respect to any Receivable or the related Contract, (d) any
dispute, claim, offset or defense of the Obligor to the payment of any
Receivable resulting from or related to the collection activities in respect of
such Receivable, or (e) any failure of the Master Servicer to perform its duties
or obligations in accordance with the provisions hereof.
 
ARTICLE X
 
 
THE ADMINISTRATIVE AGENT
 
SECTION 10.1 .  Appointment and Authorization of Administrative Agent.  Each of
the Investors and the Funding Agents hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its behalf under the
provisions of this Agreement and each other Transaction Document and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and any other Transaction
Document, together with such other powers as are reasonably incidental
thereto.  Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Transaction Document, the Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
in this Agreement, nor shall the Administrative Agent have or be deemed to have
any fiduciary relationship with any Investor or Funding Agent, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Transaction Document or otherwise exist
against the Administrative Agent. Without limiting the generality of the
foregoing sentence, the use of the term “agent” in this Agreement with reference
to the Administrative Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable
Law.  Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.
 
 
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SECTION 10.2 .  Delegation of Duties.  The Administrative Agent may execute any
of its duties under this Agreement or any other Transaction Document by or
through agents, employees or attorneys-in-fact and shall be entitled to advice
of counsel concerning all matters pertaining to such duties.  The Administrative
Agent shall not be responsible for the negligence or misconduct of any
Administrative Agent or attorney-in-fact that it selects with reasonable care.
 
SECTION 10.3 .  Liability of Administrative Agent.  No Administrative
Agent-Related Person shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Transaction Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to
any Investor or Funding Agent for any recital, statement, representation or
warranty made by the SPV, any Originator or the Master Servicer, or any officer
thereof, contained in this Agreement or in any other Transaction Document, or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Transaction Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Transaction Document, or for any failure of the SPV, any Originator, the Master
Servicer or any other party to any Transaction Document to perform its
obligations hereunder or thereunder.  No Administrative Agent-Related Person
shall be under any obligation to any Investor to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Transaction Document, or to inspect
the properties, books or records of the SPV, any Originator or the Master
Servicer or any of their respective Affiliates.
 
SECTION 10.4 .  Reliance by Administrative Agent.  (a)  The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the SPV, the Originators
and the Master Servicer), independent accountants and other experts selected by
the Administrative Agent.  The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Transaction Document unless it shall first receive such advice or concurrence of
the Funding Agents, on behalf of the Conduit Investors or the Majority
Investors, as applicable, as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Investors or Funding
Agents, as applicable, against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action.  The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Transaction Document
in accordance with a request or consent of the Funding Agents, on behalf of the
Conduit Investors or the Majority Investors, as applicable, or, if required
hereunder, all Investors and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Funding Agents and Investors.
 
 
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(b) For purposes of determining compliance with the conditions specified in
Article V, each Funding Agent and Investor that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by the Administrative Agent to
such Funding Agent or Investor for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to such Funding Agent or Investor.
 
SECTION 10.5 .  Notice of Termination Event, Potential Termination Event or
Master Servicer Default.  The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Potential Termination Event, a
Termination Event or a Master Servicer Default, unless the Administrative Agent
has received written notice from a Funding Agent, an Investor, the Master
Servicer or the SPV referring to this Agreement, describing such Potential
Termination Event, Termination Event or Master Servicer Default and stating that
such notice is a “Notice of Termination Event or Potential Termination Event” or
“Notice of Master Servicer Default,” as applicable.  The Administrative Agent
will notify the Investors and the Funding Agents of its receipt of any such
notice. The Administrative Agent shall (subject to Section 10.4) take such
action with respect to such Potential Termination Event, Termination Event or
Master Servicer Default as may be requested by the Majority Investors (except as
otherwise explicitly set forth herein), provided, however, that, unless and
until the Administrative Agent shall have received any such request, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Potential Termination
Event, Termination Event or Master Servicer Default as it shall deem advisable
or in the best interest of the Investors.
 
SECTION 10.6 .  Credit Decision; Disclosure of Information by the Administrative
Agent.  Each Investor and Funding Agent acknowledges that none of the
Administrative Agent-Related Persons has made any representation or warranty to
it, and that no act by the Administrative Agent hereinafter taken, including any
consent to and acceptance of any assignment or review of the affairs of the SPV,
the Master Servicer, the Originators or any of their respective Affiliates,
shall be deemed to constitute any representation or warranty by any
Administrative Agent-Related Person to any Investor or Funding Agent as to any
matter, including whether the Administrative Agent-Related Persons have
disclosed material information in their possession.  Each Investor and Funding
Agent, including any Investor or Funding Agent by assignment, represents to the
Administrative Agent that it has, independently and without reliance upon any
Administrative Agent-Related Person and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, property, financial and other condition and
creditworthiness of the SPV, the Master Servicer, the Originators or their
respective Affiliates, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the SPV hereunder.  Each Investor and Funding
Agent also represents that it shall, independently and without reliance upon any
Administrative Agent-Related Person and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Transaction Documents, and to make such investigations
as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and creditworthiness of the
SPV, the Master Servicer or the Originators.  Except for notices, reports and
other documents expressly herein required to be furnished to the Investors or
the Funding Agents by the Administrative Agent herein, the Administrative Agent
shall not have any duty or responsibility to provide any Investor or Funding
Agent with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of the
SPV, the Master Servicer, the Originators or their respective Affiliates which
may come into the possession of any of the Administrative Agent-Related Persons.
 
 
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SECTION 10.7 .  Indemnification of the Administrative Agent.  Whether or not the
transactions contemplated hereby are consummated, each of the Alternate
Investors shall indemnify upon demand each Administrative Agent-Related Person
(to the extent not reimbursed by or on behalf of the SPV (including by the
Seller under the First Tier Agreement or the Master Servicer hereunder) and
without limiting the obligation of the SPV to do so), pro rata based upon such
Alternate Investor’s Commitment relative to the Aggregate Commitment, and hold
harmless each Administrative Agent-Related Person from and against any and all
Indemnified Amounts incurred by it; provided, however, that no Alternate
Investor shall be liable for the payment to any Administrative Agent-Related
Person of any portion of such Indemnified Amounts resulting from such Person’s
gross negligence or willful misconduct; provided, however, that no action taken
in accordance with the directions of the Majority Investors shall be deemed to
constitute gross negligence or willful misconduct for purposes of this
Section.  Without limitation of the foregoing, each Funding Agent and Alternate
Investor shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including attorney’s fees)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Transaction Document, or any document contemplated by or referred to herein, to
the extent that the Administrative Agent is not reimbursed for such expenses by
or on behalf of the SPV (including by the Seller under the First Tier Agreement
or the Master Servicer hereunder).  The undertaking in this Section shall
survive payment on the Final Payout Date and the resignation or replacement of
the Administrative Agent.
 
 
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SECTION 10.8 .  Administrative Agent in Individual Capacity.  Bank of America
(and any successor acting as Administrative Agent) and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with any of the SPV, any
Originator and the Master Servicer or any of their Subsidiaries or Affiliates as
though Bank of America were not the Administrative Agent or an Alternate
Investor hereunder and without notice to or consent of the Investors or the
Funding Agents.  The Funding Agents and the Investors acknowledge that, pursuant
to such activities, Bank of America or its Affiliates may receive information
regarding the SPV, the Originators, the Master Servicer or their respective
Affiliates (including information that may be subject to confidentiality
obligations in favor of such Person) and acknowledge that the Administrative
Agent shall be under no obligation to provide such information to them.  With
respect to its Commitment, Bank of America (and any successor acting as
Administrative Agent) in its capacity as an Alternate Investor hereunder shall
have the same rights and powers under this Agreement as any other Alternate
Investor and may exercise the same as though it were not the Administrative
Agent or an Alternate Investor, and the term “Alternate Investor” or “Alternate
Investors” shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity.
 
SECTION 10.9 .  Resignation of Administrative Agent.  The Administrative Agent
may resign as Administrative Agent upon thirty (30) days’ notice to the Funding
Agents and the Investors.  If the Administrative Agent resigns under this
Agreement, the Majority Investors shall appoint from among the Alternate
Investors a successor agent for the Investors.  If no successor agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Investors
and Arrow a successor agent from among the Alternate Investors.  Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring
Administrative Agent and the term “Administrative Agent” shall mean such
successor agent and the retiring Administrative Agent’s appointment, powers and
duties as Administrative Agent shall be terminated.  After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this  Section 10.9 and Sections 10.3 and 10.7 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under this Agreement.  If no successor agent has accepted
appointment as Administrative Agent by the date which is thirty (30) days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent may engage a third-party to act as Administrative Agent,
after consulting with the SPV, the Master Servicer and the Investors.  The
Administrative Agent’s resignation shall become effective upon the acceptance of
such Person as administrative agent.  Any fees payable to the successor
administrative agent in excess of the Administrative Fee then payable to the
resigning Administrative Agent shall be paid by the Alternate Investors and
reimbursed by the SPV as an Aggregate Unpaid.
 
 
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SECTION 10.10 .  Payments by the Administrative Agent.  Unless specifically
allocated to an Alternate Investor or an Indemnified Party pursuant to the terms
of this Agreement, all amounts received by the Administrative Agent on behalf of
the Alternate Investors shall be paid by the Administrative Agent to the
Alternate Investors (at their respective accounts specified in their respective
Assignment and Assumption Agreements) pro rata in accordance with their
respective outstanding funded portions of the Net Investment on the Business Day
received by the Administrative Agent, unless such amounts are received after
12:00 noon on such Business Day, in which case the Administrative Agent shall
use its reasonable efforts to pay such amounts to the Alternate Investors on
such Business Day, but, in any event, shall pay such amounts to the Alternate
Investors not later than the following Business Day.
 
ARTICLE XI
 
 
MISCELLANEOUS
 
SECTION 11.1 .  Term of Agreement.  This Agreement shall terminate on the Final
Payout Date; provided, however, that (i) the rights and remedies of the
Administrative Agent, the Investors and the Funding Agents with respect to any
representation and warranty made or deemed to be made by the SPV pursuant to
this Agreement, (ii) the indemnification and payment provisions of Article IX,
(iii) the provisions of Section 10.7 and (iv) the agreements set forth in
Sections 2.2(c), 11.11 and 11.12, shall be continuing and shall survive any
termination of this Agreement.
 
SECTION 11.2 .  Waivers; Amendments.  (a)   No failure or delay on the part of
the Administrative Agent, any Funding Agent, any Conduit Investor or any
Alternate Investor in exercising any power, right or remedy under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or remedy preclude any other further exercise thereof or
the exercise of any other power, right or remedy.  The rights and remedies
herein provided shall be cumulative and nonexclusive of any rights or remedies
provided by law.
 
(b) Any provision of this Agreement or any other Transaction Document may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the SPV, Arrow, the applicable Originator, the Master Servicer, each
Conduit Investor, each Funding Agent and the Majority Investors (and, if Article
X or the rights or duties of the Administrative Agent are affected thereby, by
the Administrative Agent) and if such amendment is material, the Rating Agencies
have provided rating confirmation, to the extent required by the terms and
conditions of the commercial paper program of any Conduit Investor, of such
Conduit Investor’s Commercial Paper; provided that no such amendment or waiver
shall, unless signed by each Alternate Investor directly affected thereby, (i)
increase the Commitment of an Alternate Investor, (ii) reduce the Net Investment
or rate of Yield to accrue thereon or any fees or other amounts payable
hereunder, (iii) postpone any date fixed for the payment of any scheduled
distribution in respect of the Net Investment or Yield with respect thereto or
any fees or other amounts payable hereunder or for termination of any
Commitment, (iv) change the percentage of the Commitments of Alternate Investors
which shall be required for the Alternate Investors or any of them to take any
action under this Section 11.2(b) or any other provision of this Agreement, (v)
change the definition of “Required Reserves”, (vi) release any material portion
of the property with respect to which a security or ownership interest therein
has been granted hereunder to the Administrative Agent or the Alternate
Investors, (vii) extend or permit the extension of the Commitment Termination
Date (it being understood that a waiver of a Termination Event  shall not
constitute an extension or increase in the Commitment of any Alternate
Investor), or (viii) change the required percentage for voting requirements
under this Agreement or any other Transaction Document; and provided, further,
that the signature of the SPV or any Originator shall not be required for the
effectiveness of any amendment which modifies the representations, warranties,
covenants or responsibilities of the Master Servicer at any time when the Master
Servicer is not Arrow or any Affiliate of Arrow or a successor Master Servicer
designated by the Administrative Agent pursuant to Section 7.1.  Notwithstanding
the foregoing provisions of this Section 11.2(b), in connection solely with an
Additional Commitment Amendment to this Agreement, the consent solely of the
SPV, Arrow and the Administrative Agent (which consent shall not be unreasonably
withheld or delayed) shall be required and this Agreement shall be amended by
such Additional Commitment Amendment if such amendment is in writing and signed
by each of the SPV, Arrow and the Administrative Agent and such Additional
Commitment Amendment does not increase the Conduit Funding Limit for any Conduit
Investor or the Commitment of any Alternate Lender without such Conduit
Investor’s and/or Alternate Investor’s consent in its sole discretion.
 
 
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SECTION 11.3 .  Notices; Payment Information.  Except as provided below, all
communications and notices provided for hereunder shall be in writing (including
facsimile or electronic transmission or similar writing) and shall be given to
the other party at its address or facsimile number set forth in Schedule 11.3 or
at such other address or facsimile number as such party may hereafter specify
for the purposes of notice to such party.  Each such notice or other
communication shall be effective (i) if given by facsimile, when such facsimile
is transmitted to the facsimile number specified in this Section 11.3 and
confirmation is received, (ii) if given by mail, three (3) Business Days
following such posting, if postage prepaid, and if sent via U.S. certified or
registered mail, (iii) if given by overnight courier, one (1) Business Day after
deposit thereof with a national overnight courier service, or (iv) if given by
any other means, when received at the address specified in this Section 11.3,
provided that an Investment Request shall only be effective upon receipt by the
Administrative Agent.  However, anything in this Section 11.3 to the contrary
notwithstanding, the SPV hereby authorizes the Administrative Agent, the Funding
Agents and the Investors to make investments in Permitted Investments and to
make Investments and Rate Period selections based on telephonic notices made by
any Person which the Conduit Investor in good faith believes to be acting on
behalf of the SPV.  The SPV agrees to deliver promptly to the Administrative
Agent, each Funding Agent and Conduit Investor a written confirmation of each
telephonic notice signed by an authorized officer of SPV.  However, the absence
of such confirmation shall not affect the validity of such notice.  If the
written confirmation differs in any material respect from the action taken by
the Administrative Agent, the records of the Administrative Agent shall govern.
 
 
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SECTION 11.4 .  Governing Law; Submission to Jurisdiction; Appointment of
Service Administrative Agent.
 
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).  EACH OF THE PARTIES HERETO  HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE COUNTY OF NEW YORK FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT,
ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.  NOTHING IN THIS SECTION 11.4 SHALL AFFECT THE RIGHT
OF THE INVESTORS TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF THE SPV, ANY
ORIGINATOR OR THE MASTER SERVICER OR ANY OF THEIR RESPECTIVE PROPERTY IN THE
COURTS OF OTHER JURISDICTIONS.
 
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR
THE OTHER TRANSACTION DOCUMENTS.
 
(c) The SPV and the Master Servicer each hereby appoint, and Arrow shall cause
each Originator to appoint, Arrow located at 25 Hub Drive, Melville, New York
11747, as the authorized agent upon whom process may be served in any action
arising out of or based upon this Agreement, the other Transaction Documents to
which such Person is a party or the transactions contemplated hereby or thereby
that may be instituted in the United States District Court for the Southern
District of New York and of any New York State court sitting in The County of
New York by any Investor, the Administrative Agent, any Funding Agent or any
successor or assignee of any of them.
 
SECTION 11.5 .  Integration.  This Agreement contains the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire Agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings.
 
 
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SECTION 11.6 .  Severability of Provisions.  If any one or more of the
provisions of this Agreement shall for any reason whatsoever be held invalid,
then such provisions shall be deemed severable from the remaining provisions of
this Agreement and shall in no way affect the validity or enforceability of such
other provisions.
 
SECTION 11.7 .  Counterparts; Facsimile Delivery.  This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Delivery by facsimile of an executed signature page of this Agreement
shall be effective as delivery of an executed counterpart hereof.
 
SECTION 11.8 .  Successors and Assigns; Binding Effect.  (a)   This Agreement
shall be binding on the parties hereto and their respective successors and
assigns; provided, however, that none of the SPV, the Master Servicer, any
Originator (including Arrow) may assign any of its rights or delegate any of its
duties hereunder, or under the First Tier Agreement, or under any Originator
Sale Agreement, as applicable or under any of the other Transaction Documents to
which it is a party without the prior written consent of each Funding
Agent.  Except as provided in clause (b) below, no provision of this Agreement
shall in any manner restrict the ability of any Investor to assign, participate,
grant security interests in, or otherwise transfer any portion of the Asset
Interest, including without limitation, the right of any Conduit Investor to
assign its rights and obligations hereunder to its Related Alternate Investors
without the consent of any other party hereto.
 
(b) Any Alternate Investor may assign all or any portion of its Commitment and
its interest in the Net Investment, the Asset Interest and its other rights and
obligations hereunder to any Person with notice to the Administrative Agent and
the written approval of the Related Funding Agent, on behalf of the Conduit
Investor and, so long as no Termination Event has occurred and is continuing,
the SPV (which approval of the SPV shall not be unreasonably withheld).  In
connection with any such assignment, the assignor shall deliver to the
assignee(s) an Assignment and Assumption Agreement, duly executed, assigning to
such assignee a pro rata interest in such assignor’s Commitment and other
obligations hereunder and in the Net Investment, the Asset Interest and other
rights hereunder, and such assignor shall promptly execute and deliver all
further instruments and documents, and take all further action, that the
assignee may reasonably request, in order to protect, or more fully evidence the
assignee’s right, title and interest in and to such interest and to enable the
Administrative Agent, on behalf of such assignee, to exercise or enforce any
rights hereunder and under the other Transaction Documents to which such
assignor is or, immediately prior to such assignment, was a party.  Upon any
such assignment, (i) the assignee shall have all of the rights and obligations
of the assignor hereunder and under the other Transaction Documents to which
such assignor is or, immediately prior to such assignment, was a party with
respect to such assignor’s Commitment and interest in the Net Investment and the
Asset Interest for all purposes of this Agreement and under the other
Transaction Documents to which such assignor is or, immediately prior to such
assignment, was a party and (ii) the assignor shall have no further obligations
with respect to the portion of its Commitment which has been assigned and shall
relinquish its rights with respect to the portion of its interest in the Net
Investment and the Asset Interest which has been assigned for all purposes of
this Agreement and under the other Transaction Documents to which such assignor
is or, immediately prior to such assignment, was a party.  No such assignment
shall be effective unless a fully executed copy of the related Assignment and
Assumption Agreement shall be delivered to the Administrative Agent and the
SPV.  All costs and expenses (including reasonable attorney fees) of the
Administrative Agent, the assignor Alternate Investor and the assignee Alternate
Investor incurred in connection with any assignment hereunder shall be borne by
the assignor.
 
 
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(c) By executing and delivering an Assignment and Assumption Agreement, the
assignor and assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment
and Assumption Agreement, the assignor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, the other
Transaction Documents or any other instrument or document furnished pursuant
hereto or thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value or this Agreement, the other Transaction
Documents or any such other instrument or document; (ii) the assignor makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the SPV, Arrow, any Originator other than Arrow or the
Master Servicer or the performance or observance by the SPV, Arrow, any
Originator other than Arrow or the Master Servicer of any of their respective
obligations under this Agreement, the First Tier Agreement, the other
Transaction Documents or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this
Agreement, the First Tier Agreement, each other Transaction Document and such
other instruments, documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Assumption Agreement and to purchase such interest; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, or any of its
Affiliates, or the assignor and based on such agreements, documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Transaction Documents; (v) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers as provided (and subject to all restrictions set forth) in this
Agreement, the other Transaction Documents and any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Administrative
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto and to enforce its respective rights and interests
in and under this Agreement, the other Transaction Documents and the Affected
Assets; (vi) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement and the other
Transaction Documents are required to be performed by it as the assignee of the
assignor; and (vii) such assignee agrees that it will not institute against the
Conduit Investor any proceeding of the type referred to in Section 11.11 prior
to the date which is one year and one day after the payment in full of all
Commercial Paper issued by the Conduit Investor.
 
 
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(d) Without limiting the foregoing, a Conduit Investor may, from time to time,
with prior or concurrent notice to SPV, the Master Servicer and the
Administrative Agent, in one transaction or a series of transactions, assign all
or a portion of its Net Investment and its rights and obligations under this
Agreement and any other Transaction Documents to which it is a party to a
Conduit Assignee.  Upon and to the extent of such assignment by the Conduit
Investor to a Conduit Assignee, (i) such Conduit Assignee shall be the owner of
the assigned portion of the applicable Net Investment, (ii) the related
administrator for such Conduit Assignee will act as the Funding Agent for such
Conduit Assignee, with all corresponding rights and powers, express or implied,
granted to the Related Funding Agent hereunder or under the other Transaction
Documents, (iii) such Conduit Assignee and its liquidity support provider(s) and
credit support provider(s) and other related parties shall have the benefit of
all the rights and protections provided to such Conduit Investor and its Program
Support Provider(s) herein and in the other Transaction Documents (including any
limitation on recourse against such Conduit Assignee or related parties, any
agreement not to file or join in the filing of a petition to commence an
insolvency proceeding against such Conduit Assignee, and the right to assign to
another Conduit Assignee as provided in this paragraph), (iv) such Conduit
Assignee shall assume all (or the assigned or assumed portion) of such Conduit
Investor’s obligations, if any, hereunder or any other Transaction Document, and
such Conduit Investor shall be released from such obligations, in each case to
the extent of such assignment, and the obligations of such Conduit Investor and
such Conduit Assignee shall be several and not joint, (v) all distributions in
respect of the Net Investment shall be made to the applicable Funding Agent, on
behalf of such Conduit Investor and such Conduit Assignee on a pro rata basis
according to their respective interests, (vi) the definition of the term “CP
Rate” with respect to the portion of the Net Investment funded with commercial
paper issued by such Conduit Investor from time to time shall be determined in
the manner set forth in the definition of “CP Rate” applicable to the Conduit
Investor on the basis of the interest rate or discount applicable to commercial
paper issued by such Conduit Assignee (rather than such Conduit Investor), (vii)
the defined terms and other terms and provisions of this Agreement and the other
Transaction Documents shall be interpreted in accordance with the foregoing, and
(viii) if requested by the Funding Agent with respect to the Conduit Assignee,
the parties will execute and deliver such further agreements and documents and
take such other actions as the Funding Agent may reasonably request to evidence
and give effect to the foregoing.  No assignment by such Conduit Investor to a
Conduit Assignee of all or any portion of the Net Investment shall in any way
diminish the Related Alternate Investors’ obligation under Section 2.3 to fund
any Investment not funded by such Conduit Investor or such Conduit Assignee or
to acquire from the Conduit Investor or such Conduit Assignee all or any portion
of the Net Investment pursuant to Section 3.1.
 
(e) In the event that a Conduit Investor makes an assignment to a Conduit
Assignee in accordance with clause (d) above, the Related Alternate Investors:
(i) if requested by the applicable Funding Agent, shall terminate their
participation in the applicable Program Support Agreement to the extent of such
assignment, (ii) if requested by the applicable Funding Agent, shall execute
(either directly or through a participation agreement, as determined by such
Funding Agent) the program support agreement related to such Conduit Assignee,
to the extent of such assignment, the terms of which shall be substantially
similar to those of the participation or other agreement entered into by such
Alternate Investor with respect to the applicable Program Support Agreement (or
which shall be otherwise reasonably satisfactory to such Funding Agent and the
Alternate Investors), (iii) if requested by such Conduit Investor, shall enter
into such agreements as requested by such Conduit Investor pursuant to which
they shall be obligated to provide funding to such Conduit Assignee on
substantially the same terms and conditions as is provided for in this Agreement
in respect of such Conduit Investor (or which agreements shall be otherwise
reasonably satisfactory to such Conduit Investor and the Related Alternate
Investors), and (iv) shall take such actions as the Administrative Agent and the
Funding Agent shall reasonably request in connection therewith.
 
 
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(f) Each of the SPV, the Master Servicer and Arrow hereby agrees and consents to
the assignment by a Conduit Investor from time to time of all or any part of its
rights under, interest in and title to this Agreement and the Asset Interest to
any Program Support Provider.
 
(g) Notwithstanding any other provision of this Agreement to the contrary, any
Investor may at any time pledge or grant a security interest in all or any
portion of its rights (including, without limitation, any Portion of Investment
and any rights to payment of Yield and Fees) under this Agreement to secure
obligations of such Investor to a Federal Reserve Bank, without notice to or
consent of the SPV or the Administrative Agent; provided, that no such pledge or
grant of a security interest shall release an Investor from any of its
obligations hereunder, or substitute any such pledgee or grantee for such
Investor as a party hereto.
 
SECTION 11.9 .  Waiver of Confidentiality.  Each of the SPV, the Master Servicer
and Arrow hereby consents to the disclosure, solely for the purposes related to
the Transaction Documents and the transactions contemplated thereby, of any
non-public information with respect to it received by the Administrative Agent,
any Funding Agent, or any Investor to any other Investor or potential Investor,
the Administrative Agent, any nationally recognized statistical rating
organization rating a Conduit Investor’s Commercial Paper, any dealer or
placement agent of or depositary for such Conduit Investor’s Commercial Paper,
its administrator, any Program Support Provider or any of such Person’s counsel
or accountants in relation to this Agreement or any other Transaction Document.
 
SECTION 11.10 .  Confidentiality Agreement.  Each of the SPV, the Master
Servicer and Arrow hereby agrees that it will not disclose the contents of this
Agreement or any other Transaction Document or any other proprietary or
confidential information of or with respect to any Investor, the Funding Agent,
the Administrative Agent or any Program Support Provider to any other Person
except (a) its auditors and attorneys, employees or financial advisors (other
than any commercial bank) and any nationally recognized statistical rating
organization, provided such auditors, attorneys, employees, financial advisors
or rating agencies are informed of the highly confidential nature of such
information, (b) to any commercial paper conduits and their related funding
agents and alternate investors in connection with an Additional Commitment
Amendment or (c) as otherwise required by applicable law or order of a court of
competent jurisdiction.
 
SECTION 11.11 .  No Bankruptcy Petition Against the Conduit Investors.  Each of
the SPV, the Master Servicer and Arrow hereby covenants and agrees that, prior
to the date which is one year and one day after the payment in full of all
outstanding Commercial Paper or other rated indebtedness of the Conduit
Investors, it will not institute against, or join any other Person in
instituting against, any Conduit Investor any proceeding of a type referred to
in the definition of Event of Bankruptcy.
 
 
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SECTION 11.12 .  No Recourse Against Conduit Investors, Stockholders, Officers
or Directors.  Notwithstanding anything to the contrary contained in this
Agreement, the obligations of the Conduit Investors under this Agreement and all
other Transaction Documents are solely the corporate obligations of the Conduit
Investors and shall be payable solely to the extent of funds received from the
SPV in accordance herewith or from any party to any Transaction Document in
accordance with the terms thereof in excess of funds necessary to pay matured
and maturing Commercial Paper, and to the extent funds are not available to pay
such obligations, the claims relating thereto shall not constitute a claim
against the Conduit Investors but shall continue to accrue.  Each party hereto
agrees that the payment of any claim (as defined in Section 101 of Title 11 of
the Bankruptcy Code) of any such party shall be subordinated to the payment in
full of all Commercial Paper.  No recourse under any obligation, covenant or
agreement of the Conduit Investors contained in this Agreement shall be had
against any stockholder, employee, officer, director, manager, administrator,
agent or incorporator of the Conduit Investors or beneficial owner of any of
them, as such, by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly agreed and
understood that this Agreement is solely a corporate obligation of the Conduit
Investors, and that no personal liability whatsoever shall attach to or be
incurred by any stockholder, employee, officer, director, manager,
administrator, agent or incorporator of the Conduit Investors or beneficial
owner of any of them, as such, or any of them, under or by reason of any of the
obligations, covenants or agreements of the Conduit Investors contained in this
Agreement, or implied therefrom, and that any and all personal liability for
breaches by the Conduit Investors of any of such obligations, covenants or
agreements, either at common law or at equity, or by statute or constitution, of
every such stockholder, employee, officer, director,  manager, administrator,
agent or incorporator of the Conduit Investors or beneficial owner of any of
them is hereby expressly waived as a condition of and consideration for the
execution of this Agreement; provided, however, that this Section 11.12 shall
not relieve any such stockholder, employee, officer, director, manager, agent or
incorporator of the Conduit Investor or beneficial owner of any of them of any
liability it might otherwise have for its own intentional misrepresentation or
willful misconduct.  Bankers Trust Company shall have no obligation, in its
capacity as program administrator for Victory Receivables Corporation or
otherwise, to take any actions under the Transaction Documents if Bankers Trust
Company is relieved of its obligations as program administrator for Victory
Receivables Corporation.
 
[Signatures Follow]
 
 
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In Witness Whereof, the parties hereto have executed and delivered this
Agreement as of the date first written above.
 
 

 
Arrow Electronics Funding Corporation,
as SPV                By:         Name:      Title:  

 
 
 

 
Arrow Electronics, Inc.,
individually and as Master Servicer                By:         Name:      Title:
 

 
 
 
 Signature Page to
Transfer and Administration Agreement

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

 
 
 

 
Bank of America, National Association,
as a Funding Agent, as Administrative Agent, and as an Alternate Investor      
         By:         Name:      Title:  

 
 
 
 Signature Page to
Transfer and Administration Agreement

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

 

 

 
Liberty Street Funding Corp.,
as a Conduit Investor
               By:         Name:      Title:  

 
 

 
The Bank of Nova Scotia,
  as a Funding Agent and as an Alternate Investor                 By:       
 Name:      Title:  

 
 
 
 
 Signature Page to
Transfer and Administration Agreement

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

 
 
 

 
Gotham Funding Corporation,
  as a Conduit Investor                  By:         Name:      Title:  

 
 
 

 
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New
 
York Branch,
   
(formerly known as The Bank of Tokyo-Mitsubishi, Ltd., New York Branch) as a
Funding Agent
                     By:         Name:      Title:  

 
 
 

 
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch,
 
(formerly known as The Bank of Tokyo-Mitsubishi, Ltd., New York Branch) as an
Alternate Investor
                     By:         Name:      Title:  

 
 
 
 Signature Page to
Transfer and Administration Agreement

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

 
 
 
 

 
Park Avenue Receivables Company, LLC,
 
as a Conduit Investor
        By: JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank),
its attorney-in-fact                By:         Name:      Title:  

 
 

 
JPMorgan Chase Bank, N.A.
 
(formerly known as JPMorgan Chase Bank), as a Funding Agent and as an Alternate
Investor
                     By:         Name:      Title:  

 
 
 
 Signature Page to
Transfer and Administration Agreement

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

 
 
 
 

 
Wells Fargo, N.A. (fka Wachovia Bank, National Association),
 
as a Funding Agent and as an Alternate Investor
               By:         Name:      Title:  

 
 
 

 
 Signature Page to
Transfer and Administration Agreement

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

 

SCHEDULE A1

Conduit
Investor
Conduit
Funding
Limit
Related
Alternate
Investor(s)
Related
Funding Agent
Alternate
Investor(s)
Commitment
Allocable Portion of
Maximum
Net
Investment
None
None
Bank of America, National Association
Bank of America, National Association
 
$68,000,000
$68,000,000
Liberty Street Funding Corp.
 
$69,360,000
The Bank of Nova Scotia
The Bank of Nova Scotia
$69,360,000
$68,000,000
Gotham Funding Corporation
 
$69,360,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
 
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
$69,360,000
$68,000,000
Park Avenue Receivables Company, LLC
$48,960,000
JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank)
 
JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank)
$48,960,000
$48,000,000
None
None
Wells Fargo, N.A. (fka Wachovia Bank, National Association)
 
Wells Fargo, N.A. (fka Wachovia Bank, National Association)
$48,000,000
$48,000,000

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

 
 
1 As may be adjusted from time to time by the Administrative Agent, with the
consent of the relevant Investors, as required, to reflect non-renewing
Investors, assignments, reductions of the Commitments and similar changes.

 
 
 
SCHEDULE A-1

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

 
 
SCHEDULE B

 
[INTENTIONALLY OMITTED]
 
 
 
SCHEDULE B-1

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

 
SCHEDULE C

[Gates/Synnex Receivables Schedule]

 
 
SCHEDULE C-1

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

 
SCHEDULE D

[Excluded Receivables]

 
SCHEDULE D-1

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

 
 
SCHEDULE I
 
 
Section 2.4 of the Agreement shall be read in its entirety as follows:
 
SECTION 2.4  Determination of Yield and Rate Periods
 
(a) Portions of Investment.  The Net Investment shall be allocated to tranches
(each a “Portion of Investment”) having Rate Periods and accruing Yield at the
Rate Types specified and determined in accordance with this Section 2.4.  At any
time, each Portion of Investment shall have only one Rate Period and one Rate
Type.  In addition, at any time when the Net Investment is not divided into more
than one portion, “Portion of Investment” means 100% of the Net Investment.
 
(b) Asset Interest held on behalf of Conduit Investors.  (i) At all times on and
after the Closing Date, but prior to the Termination Date, solely with respect
to any Portion of Investment held on behalf of each Match Funding Conduit
Investor at any time when such Conduit Investor funds such Portion of Investment
through the issuance of Commercial Paper, the SPV may, subject to such Conduit
Investor’s approval and the limitations described below, request Rate Periods
and allocate a Portion of Investment to each selected Rate Period, so that the
aggregate Portions of Investment allocated to outstanding Rate Periods at all
times shall equal the portion of the Net Investment held on behalf of such
Conduit Investors.  The SPV shall give the Administrative Agent and the Funding
Agent with respect to each Match Funding Conduit Investor irrevocable notice by
telephone or by fax of each requested Rate Period at least three (3) Business
Days prior to the requested Investment Date or the expiration of any then
existing Rate Period, as applicable; provided, however, that each Match Funding
Conduit Investor may select, in its sole discretion, any such Rate Period if (x)
the SPV fails to provide such notice on a timely basis or (y) the Funding Agent
with respect to such Match Funding Conduit Investor determines, in its sole
discretion, that the Rate Period requested by the SPV is unavailable or for any
reason commercially undesirable to such Investor; provided, further, that the
SPV shall not select any Rate Period with respect to a Portion of Investment
which Rate Period would have a maturity date after a Special Termination Date
with respect to the related Conduit Investor if such Special Termination Date is
known at the time of such selection.  Each Match Funding Conduit Investor
confirms that it is its intention prior to the date it ceases purchasing new
Investments or Reinvestments to allocate all or substantially all of the portion
of the Net Investment held on its behalf to one or more Rate Periods with
respect to which the Yield applicable thereto is calculated by reference to the
CP Rate; provided that each Match Funding Conduit Investor may determine, from
time to time, in its sole discretion, that funding such Net Investment by means
of one or more such Rate Periods is not possible or is not desirable for any
reason. Each Rate Period applicable to any Portion of Investment funded by a
Match Funding Conduit Investor pursuant to a Program Support Agreement shall be
a period, selected by the applicable Funding Agent (which for the initial Rate
Period shall not exceed five (5) Business Days, and Yield with respect thereto
shall be calculated by reference to the Alternate Rate.
 
 
Schedule I-1

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(ii)  From time to time, for purposes of determining the Rate Periods applicable
to the different portions of the Net Investment and of calculating Yield with
respect thereto, the applicable Funding Agent, in consultation with the SPV and
the Administrative Agent as described in Section 2.4(b)(i) above, shall allocate
each Portion of Investment.  From time to time the Administrative Agent shall
notify the Master Servicer of the number of Portions of Investment and the Rate
Type of each Portion of Investment.
 
(c) Asset Interest held on behalf of Alternate Investors.  Unless an Alternate
Investor specifies otherwise, the initial Rate Period applicable to any Portion
of Investment funded by the Alternate Investors (or any of them), shall be a
period of not greater than five (5) Business Days and Yield with respect thereto
shall be calculated by reference to the Alternate Rate.  Thereafter, unless an
Alternate Investor specifies otherwise, with respect to such Portion of
Investment, and with respect to any other Portion of Investment held on behalf
of the Alternate Investors (or any of them), the Rate Period applicable thereto
shall be determined by the SPV (or, if on or after the Termination Date, by the
Administrative Agent and applicable Funding Agent) and Yield with respect
thereto shall be calculated by reference to the Alternate Rate.  The SPV shall
give the Administrative Agent irrevocable notice by telephone of the new
requested Rate Period at least three (3) Business Days prior to the expiration
of any then existing Rate Period; and
 
(d) Rate Definitions.  As used in this Section 2.4, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined).
 
“Alternate Rate” means, for any Rate Period for any Portion of Investment, an
interest rate per annum equal to the sum of the Offshore Rate and the Applicable
Margin for such Rate Period; provided, however, that, in the case of:
 
(i) with respect to any Portion of the Investment funded by a Match Funding
Conduit Investor, any Rate Period of one to (and including) 14 days; or
 
(ii) (A) with respect to any Portion of the Investment funded by a Match Funding
Conduit Investor, any Rate Period as to which the Administrative Agent does not
receive notice, by 2:00 p.m. (New York City time) on the third Business Day
preceding the first day of such Rate Period of the SPV’s desired duration of
such Rate Period as provided by Section 2.4(b)(i), and (B) with respect to any
portion of the Investment funded by a Pooled Funding Investor or an Alternate
Investor, any Rate Period which commences prior to the Administrative Agent
receiving at least three (3) Business Days notice thereof; or
 
(iii) the initial Rate Period applicable to any Portion of Investment funded by
(a) an Alternate Investor or (b) a Program Support Provider under a Program
Support Agreement; or
 
 
Schedule I-2

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(iv) any Rate Period relating to a Portion of Investment which is less than
$1,000,000,
 
the “Alternate Rate” for each such Rate Period shall be an interest rate per
annum equal to the Base Rate in effect on each day of such Rate Period plus the
Applicable Margin.  The “Alternate Rate” for any date on or after the
declaration or automatic occurrence of the Termination Date pursuant to Section
8.2 or clause (e) of the definition of “Termination Date” shall be an interest
rate equal to 2.50% per annum above the Base Rate in effect on such day.
 
“Applicable Margin” means, on any date, (i) to the extent that the Alternate
Rate is determined by reference to the Offshore Rate, the Program Fee rate (as
defined in Schedule IV hereto), and (ii) to the extent that the Alternate Rate
is determined by reference to the Base Rate, the rate per annum determined based
upon the Rating in effect on such date by both S&P and Moody’s set forth under
the relevant column heading below opposite such Rating:

 
Rating
(S&P/Moody’s)
Applicable Margin (in basis
points) to the extent that the
Alternate Rate is determined
by reference to the Base Rate
   
Greater than or equal to
BBB/Baa2
125
   
Greater than or equal to
BBB-/Baa3
150
   
Greater than or equal to
BB+/Ba1
175
   
Less than
BB+/Ba1
200
 

; provided that, in the event that the Ratings of S&P and Moody’s do not
coincide, (i) the Applicable Margin set forth above opposite the lower of such
Ratings will apply if the Ratings differ by only one level, (ii) the Applicable
Margin consistent with the Rating one level above the lower Rating will apply if
the ratings differ by two or more levels, and (iii), if there is no Ratings in
effect, the Applicable Margin will be based on the Rating of less than BB+/Ba1.

“Base Rate” means, for any day, a rate per annum equal to the higher of (a) the
Federal Funds Rate for such day, plus 1.50% and (b) the rate of interest in
effect for such day as publicly announced from time to time by the
Administrative Agent as its “prime rate”.  The “prime rate” is a rate set by the
Administrative Agent based upon various factors including the Administrative
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
the Administrative Agent shall take effect at the opening of business on the day
specified in the public announcement of such change.
 
 
Schedule I-3

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“CP Rate” means, for any Rate Period for any Portion of Investment (a) funded by
a Pooled Funding Conduit Investor, the per annum rate equivalent to the weighted
average cost (as determined by the related Funding Agent and which shall include
commissions of dealers and placement agents (without duplication of any Fees for
such purposes pursuant to Section 2.5)), incremental carrying costs incurred
with respect to Commercial Paper maturing on dates other than those on which
corresponding funds are received by the Conduit Investor (and not otherwise
allocable to other investments or assets of such Conduit Investor), other
borrowings by the Conduit Investor (other than under any Program Support
Agreement) and any other costs associated with the issuance of Commercial Paper)
of or related to the issuance of Commercial Paper that are allocated, in whole
or in part, by the Conduit Investor or its Funding Agent to fund or maintain
such Portion of Investment (and which may be also allocated in part to the
funding of other assets of the Conduit Investor), and (b) funded by a Match
Funding Conduit Investor for any Rate Period (which shall be a period selected
in accordance with Section 2.4(b)) for any Portion of Investment funded by the
Conduit Investor issuing Commercial Paper, the rate equivalent to the rate (or
if more than one rate, the weighted average of the rates) at which Commercial
Paper having a term equal to such Rate Period may be sold by any placement agent
or commercial paper dealer selected by the Conduit Investor (which rate shall
include commissions of dealers and placement agents and incremental carrying
costs incurred with respect to (i) Commercial Paper maturities and/or dealer
fees that may become due and payable on dates other than those on which
corresponding funds are received by such Conduit Investor, and (ii) other
borrowings by such Conduit Investor with respect to the issuance of Commercial
Paper), provided, however, that if the rate (or rates) as agreed between any
such placement agent or dealer and the Conduit Investor is a discount rate, then
the rate (or if more than one rate, the weighted average of the rates) resulting
from the Conduit Investor’s converting such discount rate (or rates) to an
interest-bearing equivalent rate per annum.
 
“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 weighted average rate charged to the
Administrative Agent on such day on federal fund transactions.
 
“Fluctuation Factor” means 1.5.
 
“Offshore Rate” means for any Rate Period (which shall be either one month or
three months as directed by the SPV or the Administrative Agent, as applicable),
a rate per annum determined by the Administrative Agent pursuant to the
following formula:
 
Offshore Rate =              Offshore Base Rate
 

1.00 - Eurodollar Reserve Percentage
 
 
 
Schedule I-4

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Where,
 
“Offshore Base Rate” means, for such Rate Period:
 
(a)           the rate per annum (carried out to the fifth decimal place) equal
to the rate determined by the Administrative 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 Rate
Period) with a term comparable to such Rate Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Rate Period, or
 
(b)           in the event the rate referenced in the preceding subsection (a)
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 Administrative 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 Rate Period) with a term comparable to such Rate Period, determined as
of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Rate Period, or
 
(c)           in the event the rates referenced in the preceding subsections (a)
and (b) are not available, the rate per annum determined by the Administrative
Agent as the rate of interest at which Dollar deposits (for delivery on the
first day of such Rate Period) in same day funds in the approximate amount of
the applicable Portion of Investment to be funded by reference to the Offshore
Rate and with a term comparable to such Rate 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 Business Days prior to the first day
of such Rate Period;
 
or such other comparable rate as any Alternate Investor is accustomed to using
in transactions of this type; provided, that, for Wells Fargo, N.A. (fka
Wachovia Bank, National Association), “Offshore Base Rate” shall be defined as,
on any day, the three-month Eurocurrency rate for Dollar deposits as reported on
the Reuters Screen LIBOR01 Page (or on any successor or substitute page of such
page); and
 
“Eurodollar Reserve Percentage” means, for any day during any Rate 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 Investor, 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
Offshore Rate shall be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage;
 
 
Schedule I-5

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“Rate Period” means, unless otherwise mutually agreed by the applicable Funding
Agent and the SPV, with respect to any Portion of Investment at any time, (a)
funded by a Match Funding Conduit Investor or an Alternate Investor, the funding
period then in effect with respect to such Portion of Investment determined in
accordance with this Section 2.4; provided, that
 
(i)  any Rate Period with respect to any Portion of Investment which would
otherwise end on a day which is not a Business Day shall be extended to the next
succeeding Business Day; provided, however, if Yield in respect of such Rate
Period is computed by reference to the Offshore Rate, and such Rate 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 Rate Period shall end
on the next preceding Business Day; and
 
(ii)  in the case of any Rate Period for any Portion of Investment which
commences before the Termination Date and would otherwise end on a date
occurring after the Termination Date, such Rate Period shall end on such
Termination Date and the duration of each Rate Period which commences on or
after the Termination Date shall be of such duration as shall be selected by the
applicable Funding Agent
 
and (b) funded by a Pooled Funding Conduit Investor, (i) with respect to any
Portion of Investment funded by the issuance of Commercial Paper, (A) initially
the period commencing on (and including) the date of the initial purchase or
funding of such Portion of Investment and ending on (and including) the second
Business Day immediately prior to the Remittance Date next succeeding such
purchase or funding, and (B) thereafter, each period commencing on (and
including) the first day after the last day of the immediately preceding Rate
Period for such Portion of Investment and ending on (and including) the second
Business Day immediately prior to the second Remittance Day occurring after the
end of the previous Rate Period; and (ii) with respect to any Portion of
Investment not funded by the issuance of Commercial Paper, (A) initially the
period commencing on (and including) the date of the initial purchase or funding
of such Portion of Investment and ending on (but excluding) the next following
Settlement Date, and (B) thereafter, each period commencing on (and including) a
Settlement Date and ending on (but excluding) the next following Settlement
Date; provided, that
 
(1)           any Rate Period with respect to any Portion of Investment (other
than any Portion of Investment accruing Yield at the CP Rate, in the case of a
Pooled Funding Conduit Investor) which would otherwise end on a day which is not
a Business Day shall be extended to the next succeeding Business Day; provided,
however, if Yield in respect of such Rate Period is computed by reference to the
Offshore Rate, and such Rate 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 Rate Period shall end on the next preceding Business Day;
 
(2)           in the case of any Rate Period for any Portion of Investment which
commences before the Termination Date and would otherwise end on a date
occurring after the Termination Date, such Rate Period shall end on such
Termination Date and the duration of each Rate Period which commences on or
after the Termination Date shall be of such duration as shall be selected by the
Administrative Agent; and
 
 
Schedule I-6

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(3)           any Rate Period in respect of which Yield is computed by reference
to the CP Rate may be terminated at the election of, and upon notice thereof to
the SPV by, the Administrative Agent any time, in which case the Portion of
Investment allocated to such terminated Rate Period shall be allocated to a new
Rate 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.
 
“Rate Type” means the Offshore Rate, the Base Rate or the CP Rate.
 
“Yield” means:
 
(i)  for any Portion of Investment during any Rate Period to the extent a
Conduit Investor funds such Portion of Investment through the issuance of
Commercial Paper,
 

    D   CPR x I x  360        

 
(ii)  for any Portion of Investment funded by an Alternate Investor and for any
Portion of Investment to the extent the Related Conduit Investor will not be
funding such Portion of Investment through the issuance of Commercial Paper,
 

    D   AR x I x  360        

     
where:
 
 

 
AR
=
the Alternate Rate for such Portion of Investment for such Rate Period,
         
CPR
=
the CP Rate for such Portion of Investment for such Rate Period,
         
D
=
the actual number of days during such Rate Period (including the first day and
excluding the last day thereof), and
         
I
=
such Portion of Investment during such Rate Period

 
; provided that no provision of the Agreement shall require the payment or
permit the collection of Yield in excess of the maximum permitted by applicable
law; and provided, further, that at all times after the declaration or automatic
occurrence of the Termination Date pursuant to Section 8.2, Yield for all
Portions of Investment shall be determined as provided in clause (ii) of this
definition.
 
 
Schedule I-7

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(f)           Offshore Rate Protection; Illegality.  (i)  If the Administrative
Agent is unable to obtain on a timely basis the information necessary to
determine the Offshore Rate for any proposed Rate Period, then
 
(A)           the Administrative Agent shall forthwith notify the Funding
Agents, which Funding Agents shall notify the Conduit Investors or Alternate
Investors, as applicable, and the SPV that the Offshore Rate cannot be
determined for such Rate Period, and
 
(B)           while such circumstances exist, none of the Conduit Investors, the
Alternate Investors, the Funding Agents or the Administrative Agent shall
allocate any Portions of Investment with respect to Investments made during such
period or reallocate any Portions of Investment allocated to any then existing
Rate Period ending during such period, to a Rate Period with respect to which
Yield is calculated by reference to the Offshore Rate.
 
(ii)           If, with respect to any outstanding Rate Period, the Funding
Agent on behalf of a Conduit Investor or any of the Alternate Investors on
behalf of which the Administrative Agent holds any Portion of Investment
notifies the Administrative Agent that it is unable to obtain matching deposits
in the London interbank market to fund its purchase or maintenance of such
Portion of Investment or that the Offshore Rate applicable to such Portion of
Investment will not adequately reflect the cost to the Person of funding or
maintaining such Portion of Investment for such Rate Period, then (A) the
Administrative Agent shall forthwith so notify the SPV and the Investors and
(B) upon such notice and thereafter while such circumstances exist none of the
Administrative Agent, such Funding Agent, such Conduit Investor or Alternate
Investors, as applicable, shall allocate any other Portions of Investment with
respect to Investments made during such period or reallocate any Portion of
Investment allocated to any Rate Period ending during such period, to a Rate
Period with respect to which Yield is calculated by reference to the Offshore
Rate.
 
(iii)           Notwithstanding any other provision of this Agreement, if the
Funding Agent on behalf of the Related Conduit Investor or Related Alternate
Investors, as applicable, shall notify the Administrative Agent that such Person
has determined (or has been notified by any Program Support Provider) that the
introduction of or any change in or in the interpretation of any Law makes it
unlawful (either for such Conduit Investor, such Alternate Investor, or such
Program Support Provider, as applicable), or any central bank or other Official
Body asserts that it is unlawful, for such Conduit Investor, such Alternate
Investor or such Program Support Provider, as applicable, to fund the purchases
or maintenance of any Portion of Investment accruing Yield calculated by
reference to the Offshore Rate, then (A) as of the effective date of such notice
from such Person to the Administrative Agent, the obligation or ability of such
Conduit Investor or such Alternate Investor, as applicable, to fund the making
or maintenance of any Portion of Investment accruing Yield calculated by
reference to the Offshore Rate shall be suspended until such Person notifies the
Administrative Agent that the circumstances causing such suspension no longer
exist and (B) each Portion of Investment made or maintained by such Person shall
either (1) if such Person may lawfully continue to maintain such Portion of
Investment accruing Yield calculated by reference to the Offshore Rate until the
last day of the applicable Rate Period, be reallocated on the last day of such
Rate Period to another Rate Period and shall accrue Yield calculated by
reference to the Base Rate or (2) if such Person shall determine that it may not
lawfully continue to maintain such Portion of Investment accruing Yield
calculated by reference to the Offshore Rate until the end of the applicable
Rate Period, such Person’s share of such Portion of Investment allocated to such
Rate Period shall be deemed to accrue Yield at the Base Rate from the effective
date of such notice until the end of such Rate Period.
 
 
Schedule I-8

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SCHEDULE II
 
Calculation of Required Reserves
 
“Required Reserves” at any time means the sum of (a) the Yield Reserve, plus (b)
the Servicing Fee Reserve, plus (c) the Net Pool Balance multiplied by the
greater of (i) the sum of the Loss Reserve Ratio and the Dilution Reserve Ratio
and (ii) the Minimum Reserve Ratio, each as in effect at such time.
 
“Calculation Period” means each fiscal month of Arrow.
 
“Concentration Percentage” for any Obligor of any Receivable at any time means
the greater of (a) the Special Concentration Percentage, if any, for such
Obligor and (b) 4.00%.
 
“Daily Average Sales” for any three Calculation Periods means the quotient of
(a) total sales during such Calculation Periods divided by (b) 91.
 
“Days Sales Outstanding” for any Calculation Period means the quotient (rounded,
if necessary, to the nearest whole number) of (a) Net Receivables Outstanding as
of the most recent Month End Date divided by (b) the Daily Average Sales for the
three Calculation Periods ended on the most recent Month End Date.
 
“Default Ratio” for any Calculation Period means the quotient, expressed as a
percentage, of (a) the aggregate Unpaid Balance of (i) each Receivable, the
invoice date of which is 121-150 days prior to the Month End Date and (ii) each
Receivable evidenced by a promissory note issued after the origination of such
Receivable, the invoice date of which is less than 121 days prior to the Month
End Date, divided by (b) the aggregate initial Unpaid Balance of Receivables
which arose during the Calculation Period ending on the Month End Date four
months prior.
 
“Dilution” means on any date an amount equal to the sum, without duplication, of
the aggregate reduction effected on such day in the Unpaid Balances of the
Receivables attributable to any non-cash items including credits, rebates,
billing errors, sales or similar taxes, cash discounts, volume discounts,
allowances, disputes (it being understood that a Receivable is “subject to
dispute” only if and to the extent that, in the reasonable good faith judgment
of the related Originator (which shall be exercised in the ordinary course of
business) the Obligor’s obligation in respect of such Receivable is reduced on
account of any performance failure on the part of the related Originator),
set-offs, counterclaims, chargebacks, returned or repossessed goods, sales and
marketing discounts, warranties, any unapplied credit memos and other
adjustments that are made in respect of Obligors; provided, that writeoffs
related to an Obligor’s bad credit shall not constitute Dilution.
 
“Dilution Horizon Ratio” for any Calculation Period means the quotient of (a)
the aggregate amount of sales by the Originators giving rise to Receivables in
the most recently concluded period consisting of the greater of (i) one and
one-half (1.5) Calculation Periods and (ii) the weighted average dilution
horizon calculated in accordance with the Agreed Upon Procedures as set forth in
Schedule V, divided by (b) the Net Pool Balance as of the Month End date for
such Calculation Period.
 
 
Schedule II-1

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“Dilution Ratio” for any Calculation Period means the ratio (expressed as a
percentage) computed by dividing (a) the aggregate Dilution incurred during such
Calculation Period, by (b) the aggregate amount of sales by the Originators
giving rise to Receivables in the two month prior Calculation Period.”
 
“Dilution Reserve Ratio” for any Calculation Period means the product of (a) the
sum of (i) the product of the Dilution Stress Factor multiplied by the 12 month
average Dilution Ratio, plus (ii) the Dilution Volatility Ratio multiplied by
(b) the Dilution Horizon Ratio.
 
“Dilution Stress Factor” means (i) 1.75, with respect to any Calculation Period
during which Arrow’s senior unsecured debt is rated equal to or higher than BBB
and Baa2 by S&P and Moody’s, respectively, (ii) 2.00, with respect to any
Calculation Period during which Arrow’s senior unsecured debt is rated BBB- and
Baa3 by S&P and Moody’s, respectively, (iii) 2.25, with respect to any
Calculation Period during which Arrow’s senior unsecured debt is rated equal to
or less than BB+ or Ba1 but greater than BB- and Ba3 by S&P or Moody’s,
respectively, and (iv) 2.50, with respect to any Calculation Period during which
Arrow’s senior unsecured debt is rated equal to or less than BB- or Ba3 by S&P
or Moody’s, respectively, or is not rated by each of S&P and Moody’s, provided,
however, that in the event the ratings of Moody's and S&P do not correspond, the
“Dilution Stress Factor” shall be determined using the lower rating, provided,
further, that in the event the respective ratings of Moody's or S&P differ
within a Calculation Period, the “Dilution Stress Factor” shall be determined
using the lower rating with respect to such Calculation Period.
 
“Dilution Volatility Ratio” for any Calculation Period means the product of (a)
the difference between (i) the highest three-month average Dilution Ratio
observed over the twelve consecutive Calculation Periods ending on the Month End
Date of such Calculation Period (the “Dilution Spike”) less (ii) the average of
the Dilution Ratios observed over the twelve consecutive Calculation Periods
ending on the Month End Date of such Calculation Period and (b) the quotient,
expressed as a percentage, of (x) the Dilution Spike, divided by (y) the average
of the Dilution Ratios observed over the twelve consecutive Calculation Periods
ending on the Month End Date of such Calculation Period.
 
“Loss Horizon Ratio” for any Calculation Period means the quotient, expressed as
a percentage, of (a) the aggregate initial Unpaid Balance of Receivables which
arose during the prior three Calculation Periods, divided by (b) the Net Pool
Balance at the most recent Month End Date.
 
“Loss Reserve Ratio” for any Calculation Period means the product of (a) 2.00,
multiplied by (b) the Peak Default Ratio for such Calculation Period, multiplied
by (c) the Loss Horizon Ratio for such Calculation Period; provided, however,
that in the event that Arrow’s senior unsecured debt is rated below BBB- or Baa3
but greater than BB- and Ba3 by S&P and Moody’s, respectively, in any
Calculation Period, the Loss Reserve Ratio for such Calculation Period means the
product of (a) 2.25, multiplied by (b) the Peak Default Ratio for such
Calculation Period, multiplied by (c) the Loss Horizon Ratio for such
Calculation Period; provided, further, that in the event that Arrow’s senior
unsecured debt is rated equal to or below BB- or Ba3 by S&P and Moody’s,
respectively, or is not rated by each of S&P and Moody’s, in any Calculation
Period, the Loss Reserve Ratio for such Calculation Period means the product of
(a) 2.50, multiplied by (b) the Peak Default Ratio for such Calculation Period,
multiplied by (c) the Loss Horizon Ratio for such Calculation Period; provided,
further, that in the event the ratings of Moody's and S&P do not correspond, the
“Loss Reserve Ratio” shall be determined using the lower rating.
 
 
Schedule II-2

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“Minimum Reserve Ratio” for any Calculation Period means the sum of (a) 4.00,
multiplied by the percentage set forth in clause (b) of the definition of
“Concentration Percentage”, plus (b) the product of (i) the Dilution Ratio
multiplied by (ii) the Dilution Horizon Ratio; provided, however, that in the
event that Arrow’s senior unsecured debt is rated equal to or below BB+ or Ba1
by S&P and Moody’s, respectively, or is not rated by each of S&P and Moody’s, in
any Calculation Period, the Minimum Reserve Ratio for such Calculation Period
means the sum of (a) 5.00, multiplied by the percentage set forth in clause (b)
of the definition of “Concentration Percentage”, plus (b) the product of (i) the
Dilution Ratio multiplied by (ii) the Dilution Horizon Ratio; provided, further,
that in the event the ratings of Moody's and S&P do not correspond, the “Minimum
Reserve Ratio” shall be determined using the lower rating.
 
“Month End Date” means the last day of each fiscal month of Arrow.
 
“Net Receivables Outstanding” means, as of any Month End Date, the difference
between (a) the amount of accounts receivables as reflected in the SPV’s books
and records in accordance with GAAP as of such Month End Date minus (b) the
aggregate amount of the allowance for the collection of doubtful Receivables as
reflected in the SPV’s books and records in accordance with GAAP as of such
Month End Date.
 
“Peak Default Ratio” for any Calculation Period means the highest three-month
rolling average Default Ratio observed during the twelve consecutive Calculation
Periods ending on the Month End Date of such Calculation Period.
 
“Servicing Fee Reserve” at any time means an amount equal to the product of (a)
the aggregate Unpaid Balance of Receivables as of the most recent Month End
Date, (b) 0.50%, and (c) the quotient of (i) 2.0 multiplied by Days Sales
Outstanding, divided by (ii) 360.
 
“Special Concentration Percentage” for any Obligor of any Receivable at any time
means, in the case of any Obligor which has (or the parent company of which has)
a long-term debt rating from each of S&P and Moody’s not lower than the
applicable rating set forth in the left-hand column below, the percentage set
forth opposite the applicable ratings in the right-hand column below:

 
Long Term Ratings
S&P and Moody’s
 
Special
Concentration Percentage
 
“A-” and “A3”
 
12.00%
 
“BBB-” and “Baa3”
 
6.00%

 
 
 
Schedule II-3

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Any Obligor which does not have (and the parent company of which does not have)
the ratings described above shall not have a Special Concentration Limit,
provided, however that with the consent of each Investor, the Administrative
Agent may, in its reasonable discretion, determine a Special Concentration
Percentage for an Obligor.
 
“Yield Reserve” for any Calculation Period means an amount equal to the product
of (a) the Net Investment as of the most recent Month End Date, (b) 1.5, (c) the
Base Rate and (d) the quotient, expressed as a percentage, of (i) 2.00
multiplied by the Days Sales Outstanding divided by (ii) 360.
 
 
Schedule II-4

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SCHEDULE III
 
(Settlement Procedures)
 
Sections 2.12 through 2.15 of the Agreement shall be read in their entirety as
follows:
 
SECTION  2.12 Settlement Procedures.  (a)  Daily Procedure.  On each Business
Day, the Master Servicer shall, out of the Collections of Receivables received
or deemed received by the SPV or the Master Servicer since the immediately
preceding Business Day:
 
(i)           set aside and hold in trust for the benefit of the Administrative
Agent, on behalf of the Funding Agents for the benefit of the Investors, an
amount equal to the aggregate of the Yield (which, in the case of Yield computed
by reference to the CP Rate with respect to a Portion of Investment funded by a
Pooled Funding Conduit Investor, shall be determined for such purpose using the
CP Rate most recently determined by the Related Funding Agent, multiplied by the
Fluctuation Factor) and Servicing Fee in each case accrued through such day for
all Portions of Investment and any other Aggregate Unpaids (other than Net
Investment) accrued through such day and in each case not previously set aside;
and
 
(ii)           set aside and hold in trust for the benefit of the Administrative
Agent on behalf of the Funding Agents for the benefit of the Investors an amount
equal to the excess, if any, of
 
(A)           the greatest of:
 
 
(1)
if the SPV shall have elected to reduce the Net Investment under Section 2.13,
the amount of the proposed reduction,

 
 
(2)
the amount, if any, by which the sum of the Net Investment and Required Reserves
shall exceed the Net Pool Balance, together with the amount, if any, by which
the Net Investment shall exceed the Maximum Net Investment, and

 
 
(3)
if such day is on or after the Termination Date (other than a Special
Termination Date), the Net Investment, and

 
 
(4)
if such day is on or after a Special Termination Date, the aggregate of the Net
Investments held by such Investor(s) with respect to which such Special
Termination Date has occurred; over

 
(B)           the aggregate of the amounts theretofore set aside and then so
held for the benefit of the Administrative Agent pursuant to this clause (ii);
and
 
 
Schedule III-1

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(iii)           pay the remainder, if any, of such Collections to the SPV for
application to Reinvestment, for the benefit of the Administrative Agent, on
behalf of the Funding Agents for the benefit of the Investors, in the
Receivables and other Affected Assets in accordance with Section 2.2(b).  To the
extent and for so long as such Collections may not be reinvested pursuant to
Section 2.2(b), the Master Servicer shall set aside and hold such Collections in
trust for the benefit of the Administrative Agent.
 
(b)           Yield Payment Date and Remittance Date Procedure.
 
(i)           The Master Servicer shall deposit into the Administrative Agent’s
account on each Yield Payment Date, out of amounts set aside pursuant to clause
(i) of Section 2.12(a), an amount equal to the accrued and unpaid Yield for the
related Rate Period.
 
(ii)           The Master Servicer shall deposit into the Administrative Agent’s
account on each Remittance Date, out of amounts set aside pursuant to clause (i)
of Section 2.12(a), the Servicing Fee and any other Fees due and payable
pursuant to Section 2.5.
 
(iii)           Notwithstanding clauses (i) and (ii) of Section 2.12(b), amounts
set aside pursuant to clause (i) of Section 2.12(a) in respect of the Servicing
Fee shall not be deposited by the Master Servicer into the Administrative
Agent’s account to the extent that the Master Servicer is then entitled to
retain such amounts pursuant to Section 2.12(c), from which amounts the Master
Servicer shall pay the Servicing Fee on the Remittance Date for its own account.
 
(c)           Settlement Date Procedure.
 
(i)  The Master Servicer shall deposit into the Administrative Agent’s account,
on each Business Day selected by the SPV for a reduction of the Net Investment
under Section 2.13, the amount of Collections held for the Administrative Agent
pursuant to Section 2.12(a)(ii).
 
(ii)  On any date on or prior to the Termination Date, if the sum of the Net
Investment and Required Reserves exceeds the Net Pool Balance, the Master
Servicer shall immediately pay to the Administrative Agent’s account from
amounts set aside pursuant to clause (ii) or (to the extent not theretofore
reinvested) clause (iii) of Section 2.12(a) an amount equal to such excess.
 
(iii)  On each Settlement Date, the Master Servicer shall deposit to the
Administrative Agent’s account on behalf of Funding Agents for the benefit of
the Investors:
 
(A)           out of the amounts set aside pursuant to clause (i) of
Section 2.12(a) and not theretofore deposited in accordance with Section
2.12(b), (if none of Arrow and its Affiliates is then the Master Servicer) the
Servicing Fee, together with any other accrued Aggregate Unpaids (other than Net
Investment and other than Yield with respect to any Rate Period not ending on or
to such Settlement Date), in each case  then due; and
 
 
Schedule III-2

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(B)           out of the amount, if any, set aside pursuant to clause (ii) and
(to the extent not theretofore reinvested) clause (iii) of Section 2.12(a) and
not theretofore deposited to the Administrative Agent’s account pursuant to this
Section 2.12(c), an amount equal to the lesser of such amount and the Net
Investment;
 
provided, however, that the Administrative Agent hereby gives its consent (which
consent may be revoked upon the occurrence of a Termination Event or Potential
Termination Event), for the Master Servicer to retain amounts which would
otherwise be deposited in respect of accrued and unpaid Servicing Fee, in which
case if such amounts are so retained, no distribution shall be made in respect
of such Servicing Fee under clause (d) below.  Any amounts set aside pursuant to
Section 2.12(a) in excess of the amount required to be deposited in the
Administrative Agent’s account pursuant to this subsection (c) or pursuant to
subsection (b) above shall, solely to the extent then required by
Section 2.12(a), continue to be set aside and held in trust by the Master
Servicer for application on the next succeeding Settlement Date(s).
 
(d)           Order of Application.  (i) Upon receipt by the Administrative
Agent of funds deposited pursuant to subsection (b), the Administrative Agent
shall distribute them to the Investors, pro rata based on the amount of Yield
owing to each of them (as so notified by the Related Funding Agents to the
Administrative Agent in accordance with Section 2.12(d)), in payment of the
accrued and unpaid Yield on the Portion of Investment for the related Rate
Period.  Upon receipt by the Administrative Agent of funds deposited pursuant to
subsection (c), the Administrative Agent shall distribute them to the Persons,
to the extent and for the purposes and in the order of priority set forth below:
 
(1)           to the Investors, pro rata based on the amount of accrued and
unpaid Yield owing to each of them, in payment of the accrued and unpaid Yield
on all Portions of Investment;
 
(2)           if Arrow or any Affiliate of Arrow is not then the Master
Servicer, to the Master Servicer in payment of the accrued and unpaid Servicing
Fee payable on such Settlement Date;
 
(3)           provided no Termination Date has occurred and is continuing, to
the Investors with respect to which a Special Termination Date has occurred, pro
rata based on their respective interests in the Asset Interest (as determined in
accordance with Section 2.1(b)), in reduction of the Net Investment held by such
Investors;
 
(4)           to the Investors, pro rata based on their respective interests in
the Asset Interest (as determined in accordance with Section 2.1(b)), in
reduction of the Net Investment;
 
 
Schedule III-3

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(5)           to the Investors, pro rata in payment of any Aggregate Unpaids in
respect of breakage costs owed by the SPV hereunder to such Investors;
 
(6)           to the Administrative Agent and the applicable Funding Agents, and
Investors, pro rata in payment of any other Aggregate Unpaids owed by the SPV
hereunder to such Person (other than Net Investment, Yield and Servicing Fee);
and
 
(7)           if Arrow or any Affiliate of Arrow is the Master Servicer, to the
Master Servicer in payment of the accrued Servicing Fee payable on such
Settlement Date, to the extent not retained pursuant to subsection (c) above.
 
(ii)           In determining the amount of Yield owed to each Investor, the
Administrative Agent shall be entitled to rely on the information provided by
the Related Funding Agent, which information shall be delivered no later than
the Business Day prior to a Yield Payment Date to the SPV, the Master Servicer
and the Administrative Agent.  The SPV shall be entitled to rely on such
information for all purposes under the Transaction Documents.
 
SECTION 2.13                                Optional Reduction of Net
Investment.  The SPV may at any time elect to cause the reduction of the Net
Investment as follows:
 
(a)           the SPV shall instruct the Master Servicer to (and the Master
Servicer shall) set aside Collections and hold them in trust for the
Administrative Agent under clause (ii) of Section 2.12(a) until the amount so
set aside shall equal the desired amount of reduction;
 
(b)            the SPV shall give the Administrative Agent at least one Business
Day’s prior written notice of the amount of such reduction and the date on which
such reduction will occur and the Administrative Agent shall promptly forward
such notice to each Funding Agent; and
 
(c)           on each Settlement Date occurring at least the Required Notice
Days (defined below) after the date of the SPV’s notice, the Master Servicer
shall pay to the Administrative Agent, in reduction of the Net Investment, the
amount of such Collections so held or, if less, the Net Investment (it being
understood that the Net Investment shall not be deemed reduced by any amount set
aside or held pursuant to this Section 2.13 unless and until, and then only to
the extent that, such amount is finally paid to the Administrative Agent as
aforesaid); provided that, the amount of any such payment and reduction shall be
not less than $1,000,000.  For purposes hereof “Required Notice Days” means (i)
no later than 3:00 p.m. (New York City time) one (1) Business Day in the case of
a reduction of Net Investment of up to $50,000,000, in which case the
Administrative Agent shall notify the Funding Agent for each Conduit Investor
and Alternate Investor, as applicable, of the Administrative Agent’s receipt of
the SPV’s notice no later than 4:00 p.m. on such day, (ii) no later than 3:00
p.m. (New York City time) two (2) Business Days in the case of a reduction of
Net Investment of at least $50,000,001 and less than $100,000,000, in which case
the Administrative Agent shall notify the Funding Agent for each Conduit
Investor and Alternate Investor, as applicable, of the Administrative Agent’s
receipt of the SPV’s notice no later than 4:00 p.m. on such day and (iii) no
later than 3:00 p.m. (New York City time) three (3) Business Days in the case of
a reduction of Net Investment of $100,000,000 or more, in which case the
Administrative Agent shall notify the Funding Agent for each Conduit Investor
and Alternate Investor, as applicable, of the Administrative Agent’s receipt of
the SPV’s notice no later than 4:00 p.m. on such day.
 
 
Schedule III-4

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SECTION 2.14  Application of Collections Distributable to SPV.  Unless otherwise
instructed by the SPV, the Master Servicer shall allocate and apply, on behalf
of the SPV, Collections distributable to the SPV hereunder first, to the payment
or provision for payment of the SPV’s operating expenses, as instructed by the
SPV, second, to the payment or provision for payment when due of accrued
interest on any Subordinated Obligations payable by the SPV to Arrow under the
First Tier Agreement, third, to the payment to Arrow of the purchase price of
new Receivables in accordance with the First Tier Agreement, fourth, to the
payment to Arrow of any Subordinated Obligations payable by the SPV to Arrow
pursuant to the First Tier Agreement, and fifth, to the making of advances to
Arrow pursuant to Section 3.2 of the First Tier Agreement, subject to
Section 6.2(k).  Any amounts distributable to the SPV and not allocated pursuant
to this Section 2.14, may, at the option of the SPV, be invested in Eligible
Investments or in direct obligations of (including obligations issued or held in
book entry form on the books of) the Department of the Treasury of the United
States of America.
 
SECTION 2.15  Collections Held in Trust.  So long as the SPV or the Master
Servicer shall hold any Collections or Deemed Collections then or thereafter
required to be paid by the SPV to the Master Servicer or by the SPV or the
Master Servicer to the Administrative Agent, it shall hold such Collections in
trust, and, if requested by the Administrative Agent after the occurrence and
during the continuance of a Termination Event or Potential Termination Event (if
such Potential Termination Event is not capable of being cured), shall deposit
such Collections within one Business Day of receipt thereof into the Collection
Account.  The Net Investment shall not be deemed reduced by any amount held in
trust by the Master Servicer or in the Collection Account pursuant to Section
2.12 unless and until, and then only to the extent that, such amount is finally
paid to the Administrative Agent in accordance with Section 2.12(c).
 
 
Schedule III-5

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SCHEDULE IV
 
Calculation of Fees
 
“Facility Fee” means a fee, calculated on the basis of the actual number of days
elapsed divided by 360 and payable to each Related Funding Agent on each
Remittance Date (to be allocated among such Related Funding Agent, the Conduit
Investor associated with such Related Funding Agent, and its Related Alternate
Investor, as appropriate), in an amount equal to the product of (i) the daily
average of such Related Alternate Investor’s Commitment during the calendar
month immediately prior to such Remittance Date, as applicable, and (ii) the
rate per annum (the “Facility Fee Rate”) determined based upon the rating of
Arrow’s unsecured long-term debt by S&P and Moody’s as set forth below under
“Facility Fee Rate,” provided, however, that in the event that the ratings of
S&P and Moody’s do not correspond, the rate shall be determined using the lower
of the ratings, and provided, further, that in the event that the rating changes
during a calendar month, the rate shall be determined using a weighted daily
average of rates in effect during such calendar  month.
 
“Participation Fee” means a fee payable on the Renewal Date to each of the
Funding Agents in the amount of the product of (i) 0.05% times (ii) the
respective Conduit Funding Limit or Alternate Investor’s Commitment, as
applicable, listed on Schedule A next to each Related Funding Agent’s name.
 
“Program Fee” means a fee, calculated on the basis of the actual number of days
elapsed divided by 360 and payable to each Conduit Investor, on each Remittance
Date, in an amount equal to (i) at any time prior to an Accounting Based
Consolidation Event with respect to such Conduit Investor, the product of (x)
the daily average Net Investment held by such Conduit Investor during the
calendar month immediately prior to such Remittance Date, and (y) the rate per
annum determined based upon the rating of Arrow’s senior unsecured debt by S&P
and Moody’s as set forth below under “Program Fee Rate (Per Annum)(prior to an
Accounting Based Consolidation Event)” and (ii) at any time after an Accounting
Based Consolidation Event with respect to such Conduit Investor, the product of
(x) the daily average Net Investment held by such Conduit Investor during the
calendar month immediately prior to such Remittance Date, and (y) the greatest
of (I) 1.10% per annum, (II) the CA Adjusted Fees, (III) 2.75%, in the event
that Arrow’s senior unsecured debt is rated equal to BB+ or Ba1 by S&P and
Moody’s, respectively, and (IV) 5.00%, in the event that Arrow’s senior
unsecured debt is rated equal to or below BB or Ba2 by S&P and Moody’s,
respectively; provided, however, that in the event that the ratings of S&P and
Moody’s do not correspond, the rate shall be determined using the lower of the
ratings, and provided, further, that in the event that the rating changes during
a calendar month, the rate shall be determined using a weighted daily average of
rates in effect during such calendar month, and provided, further, in the event
that an Accounting Based Consolidation Event shall be deemed to have occurred
with respect to a Conduit Investor with retroactive effect, the Program Fee with
respect to those Remittance Dates during such retroactive period shall be
recalculated and the difference between (A) the aggregate Program Fees accrued
during such period and (B) the aggregate Program Fees accrued during such period
calculated on the basis that an Accounting Based Consolidation Event had
occurred with respect to such Conduit Investor at the onset of such period,
shall be payable to such Conduit Investor on the immediately following
Remittance Date.  As used herein, “Accounting Based Consolidation Event” means
the existence of, or occurrence of any change in, accounting standards or the
issuance of any pronouncement or release by any accounting body or any other
body charged with the promulgation or administration of accounting standards
(including, without limitation, the Financial Accounting Standards Board, the
American Institute of Certified Public Accountants or the Securities and
Exchange Commission) or the existence of, or occurrence of any change in, the
interpretation or application of any accounting standard, the effect of which
(in any such event) is to cause or require the consolidation of all or any
portion of the assets and liabilities of a Conduit Investor with the assets and
liabilities of the Related Alternate Investor or Related Funding Agent or any of
their Affiliates or the effect of which is to deem all or any portion of the
assets and liabilities of a Conduit Investor to be consolidated with the assets
and liabilities of the Related Alternate Investor or Related Funding Agent or
any of their Affiliates; provided, however, that an Accounting Based
Consolidation Event may only occur with respect to a Conduit Investor if the
existence or occurrence of such change or issuance shall have caused the
consolidation of all or any portion of the assets and liabilities of such
Conduit Investor with the assets and liabilities of the Related Alternate
Investor or Related Funding Agent.
 
 
Schedule IV-1

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Rating
S&P/Moody’s
Facility Fee
Rate (Per Annum)
 
Program Fee
Rate (Per Annum) (prior
to an Accounting Based
Consolidation Event)
 
Greater than or equal to BBB+/Baa1
0.450%
0.500%
BBB/Baa2
0.500%
0.550%
BBB-/Baa3
0.500%
0.600%
BB+/Ba1
0.550%
0.700%
BB/Ba2
0.650%
0.800%
BB-/Ba3
0.700%
0.800%
Less than BB-/Ba3 or not rated by each of S&P and Moody’s
Base Rate
Base Rate

 
Schedule IV-2

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SCHEDULE V
 
AGREED UPON PROCEDURES
 
Arrow Electronics Securitization Audit Procedures
 
(a) Receivable Balances/Rollforward
 
(i) Select the current month, previous two fiscal quarter ends, the previous
fiscal year end and reconcile the receivable balances and rollforward activity
(i.e. sales, collections, credits, and write-offs) as represented in the Master
Servicer Reports for those periods to the supporting journals, the general
ledger, the monthly financial statements, and the audited consolidating
financial statements (if applicable).  Explain the nature of significant
reconciling items. (Are any of the discrepancies timing related?)
 
(ii) Obtain a description of each type/category of dilutive credits not
previously included in last year’s audit report.
 
(iii) Select 30 credit memos that were issued in the last three months and
complete the following:
1. Determine the weighted average dilution horizon. (The dilution horizon is
defined as the period from original invoice date to the issuance of a credit
memo against that invoice.)
 
2. Prepare a table summarizing the weighted average dilution horizon by entity
and by type of credit memo.
 
(b) Receivable Agings
 
(i) Select the current month and the previous two fiscal quarter ends and
reconcile the agings as represented in the Master Servicer Reports for those
periods to the applicable Originator’s detail aged balance of accounts. Note
differences and explain the nature of significant reconciling items.
 
(ii) Reconcile the total receivables balance represented in the Master Servicer
Reports for the current month, and the last two fiscal quarters, to the general
ledger. If there are any material reconciling items, determine if they are being
resolved appropriately and whether they have any impact on the stated amount of
the Receivables.
 
(iii) Select 10 credit memos that were issued in the last two months due to
partial payment of invoices. Test each credit memo and corresponding invoices to
determine if the credit was applied correctly in accordance with the credit and
collection policies and if the invoice was re-aged or continued to age from
original invoice date.
 
 
Schedule V-1

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(iv) Have there been any changes to the way the Master Servicer accounts for
partial payments since the last audit report?
 
(v) Determine and include in your report the exact definition of the receivable
aging policy utilized (i.e. invoice date).
 
(vi) Have there been any changes to the way the Master Servicer accounts for
unapplied amounts since the last audit report? If so, please describe all
material changes.
 
(vii) Have there been any changes to the Credit and Collection Policy since the
last audit report?  If so, please describe all material changes.
 
(viii) Select 30 invoices issued during the most recent month and determine if
the Receivable created by each invoice was categorized correctly as eligible or
ineligible in the most recent Master Servicer Report per the Agreement.
 
(ix) Select 25 invoices from among the various aging categories on the current
month’s aged trial balance and determine if the invoices/accounts are properly
aged in accordance with the terms and methodology.  Note in your report any
invoices/accounts that may be aged in a nonconforming manner.
 
(x) Prepare a listing of the 25 accounts analyzed with an indication of the
aging accuracy.
 
(xi) Regarding the 10 largest Obligors that are +60 days from invoice, inquire
as to the reasons for material past due amounts.  Include this analysis as an
exhibit to your report.
 
(xii) Obtain the sales journal from three months prior.  Select 10 of these
invoices and trace them the through to resolution (i.e. collection, dilution,
write-off, delinquent).  Prepare a listing of the invoices analyzed and include
this detailed information in an exhibit to your report.
 
(xiii) Select 10 cash receipts from the most recent monthly cash collections
report to determine if cash was applied to the correct invoices and if the paid
invoices were properly removed from the aging.
 
(c) Bad Debt Allowance & Write-Offs
 
(i) Select the three most recent fiscal quarter ends and reconcile the monthly
write-off amounts as represented in the Master Servicer Reports to the detailed
general ledger.  Trace the write-off information from the monthly activity in
the bad debt allowance account to the monthly write-off information shown on the
receivable rollforward.  Highlight and explain any differences.
 
 
Schedule V-2

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(ii) Determine that the write-offs shown are the amount of write-offs actually
taken, noting that write-offs may be taken against an allowance account or
directly expensed.
 
(iii) Explain any reconciling items.
 
(iv) Obtain a listing of the 10 largest accounts that were written-off in the
last 12 months and complete the following:
1. Ask management to provide you with the reason for the write-off and note the
response.
 
2. Has the applicable Originator reserved for any non-delinquent or
non-defaulted accounts?
 
3. Is there a separate account in which delinquent accounts are placed prior to
eventual charge-off whereby the amounts are not reflected on the aging?
 
(d) Concentrations
 
(i) Obtain a list of the 20 largest Obligors in the portfolio and verify the
accuracy of this information by tracing amounts to the summary/detailed aged
receivable trial balance.
 
(ii) Compare the concentration information in the most recent Master Servicer
Report with information contained on the applicable Originator’s general ledger
for the date the report was compiled. Note any significant reconciling items.
Seek an explanation from management for any significant differences, and
document the responses.
 
(iii) Confirm that the concentrations reported were the largest concentrations
at that time.
 
(e) Credit File Review
 
(i) Select 10 credit files (include in your sample large obligors, delinquent
obligors, & new obligors). Test adherence to the applicable Originator’s Credit
and Collection Policy, including: proper credit approval, date of financial
information (Dun & Bradstreet reports, financial statements), credit references,
adherence to credit limit, etc.
 
(ii) Determine whether the credit limit is appropriate per the Credit and
Collection Policy.
 
 
Schedule V-3

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(iii) Prepare a listing of the files analyzed, noting your results and the
adequacy of compliance with the required terms, the reasons for delinquencies,
and whether the outstanding Receivable balances are within the credit limit at
the present time.
 
(f) Collection Methodology
 
(i) Confirm the listing of the Blocked Account Banks (Schedule 4.1(s) of the
Agreement) in which collections are deposited.
 
(ii) Are there any deposits other than Receivable collections that flow through
the Blocked Accounts?  If so, report the amount of those funds from the most
recent three months and the accompanying reason behind their remittance to the
lockbox accounts.
 
(iii) Document the collection process for payments not going directly through a
Blocked Account.
 
(iv) Examine the most recent bank statement/general ledger reconciliation on the
largest depository accounts, noting the timeliness of completion and materiality
of any unreconciled variances.
 
(g) Coverage Test (intra-month)
 
Ask management to provide daily Receivable balance information for the most
recent three months.  Attach this information as an exhibit to your report.
 
(h) Computer Systems & Reporting
 
Discuss any material changes in the Master Servicer’s accounts receivable
systems.
 
(i) Internal Audit
 
Inquire if internal auditors and/or credit reviewers have performed any reviews
of the Credit and Collection Policy and/or receivable system during the last
twelve months.  If so, obtain a copy of any reports, noting in your report any
that may pertain to the Receivables being purchased.  If not, inquire as to when
any such review would be scheduled.  Discuss with the internal auditors any
weaknesses they have noted pertaining to the applicable Originator’s Receivables
and related areas (i.e. EDP or general ledger systems).
 
(j) External Auditors
 
(i) Discuss the results from the most recent receivable confirmation procedures,
as perform in connection with the fiscal year-end financial audit.  If possible,
quantify the extent of the coverage and specify the type of procedures used
(negative/positive confirmations, subsequent cash receipts), noting any issues.
 
 
Schedule V-4

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(ii) Obtain a copy of the management letter prepared in conjunction with the
most recent fiscal year-end financial audit.  Note any weaknesses identified in
the company’s receivable operations and/or related controls (i.e. EDP and
general ledger systems).  Discuss the current status of these issues with
management.
 
(iii) Confirm the SPV is in compliance with the following sections of the
Agreement:
1. Section 6.1 (q):                                (Tangible Net Worth)
 
2. Section 6.2 (i)                                (Limitation on debt)
 
 
Schedule V-5

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

 
 

SCHEDULE 4.1(g)
 
List of Actions and Suits
 
Arrow Electronics, Inc.

N/A

Arrow Electronics Funding Corporation

N/A
 
 
Schedule 4.1(g)-1 

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

 

 
SCHEDULE 4.1(i)
 
Location of Certain Offices and Records
 
Arrow Electronics Funding Corporation
Location of Certain Offices and Records
 
 

Principal Place of Business: 7459 South Lima Street
Building 2
Englewood, Colorado 80112     Chief Executive Office: 7459 South Lima Street
Building 2
Englewood, Colorado 80112     Location of Records:  7459 South Lima Street
Building 2
Englewood, Colorado 80112

 
 
Arrow Electronics, Inc.
Location of Certain Offices and Records
 
 

Principal Place of Business: 25 Hub Drive
Melville, New York 11747     Chief Executive Office: 25 Hub Drive
Melville, New York 11747     Location of Records:  25 Hub Drive
Melville, New York 11747

 
 
Schedule 4.1(i)-1 

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

 
 
 
SCHEDULE 4.1(k)
 
List of Subsidiaries, Divisions and Tradenames; FEIN
 
 

Subsidiaries:  None.     Divisions: None.     Tradenames: None.     Federal
Employer
Identification Number: 22-3786784

 
                                           
 
Schedule 4.1(k)-1 

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

 
 
SCHEDULE 4.1(s)
 
List of Blocked Account Banks and Blocked Accounts
 

Blocked Account Bank
Account Number(s)
Lockbox Number(s)
JPMorgan Chase Bank, N.A.
One Chase Manhattan Plaza
New York, NY 10005
212.552.5729
Contact Person:  Max Toscano, 7th Floor
144091191
N/A
304239488
N/A
Bank of America, National Association
Bank of America Plaza
Mailcode:  NC1-002-27-05
101 S. Tryon Street
Charlotte, NC  28255
704.386.7007
Contact Person:  Joshua Thomas
1486700243
350090
13469
21174
1233207297
13219
Wells Fargo, N.A. (fka Wachovia Bank, National Association)
375 Park Avenue, 3rd Floor
New York, NY  10152-0002
Attn:  Jordan Fragiacoma
2000011045638
0951597
0079329

 
Schedule 4.1(s)-1 

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

 
 
SCHEDULE 11.3
 
Address and Payment Information
 

  If to the Conduit Investors:        (1) Liberty Street Funding Corp.
c/o Global Securitization Services, LLC
114 West 47th Street
Suite 1715
New York, New York  10036
Attention:             Andrew L. Stidd
Telephone:           212/302-5151
Facsimile:              212/302-8767          (2)
Gotham Funding Corporation
c/o The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
1251 Avenue of the Americas
New York, New York  10020
Attention:           Hermina Batson
Telephone:         212/782-4908
Facsimile:           212/782-6448
         (3)
Park Avenue Receivables Company, LLC
c/o JPMorgan Securities Inc.
270 Park Avenue, 10th Floor
New York, New York 10017

Attention:            Mark Connor
Telephone:           212/834-5681
Facsimile:             212/834-6657
              If to the Alternate Investors:          (1)
Bank of America, National Association
NC1-027-21-04
214 North Tryon Street, 21st Floor
Charlotte, North Carolina 28255

Attention:    Global Asset Backed Securitization Group;
           Portfolio Management
Attention:            Robert R. Wood and Jessica Richmond
Telephone:           704/388-8371
Facsimile:             704/387-2828

 
 
 
Schedule 11.3-1

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

 
 
 

   (2)
The Bank of Nova Scotia
1 Liberty Plaza, 26th Floor
New York, New York 10006

Attention:            Michael Eden
Telephone:           212/225-5070
Facsimile:             212/225-5290
         (3)
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
1251 Avenue of the Americas
New York, New York  10020

Attention:            Hermina Batson
Telephone:           212/782-4908
Facsimile:             212/782-6448
         (4)
JPMorgan Securities Inc.
c/o Park Avenue Receivables Company, LLC
270 Park Avenue, 10th Floor
New York, New York 10017

Attention:            Mark Connor
Telephone:           212/834-5681
Facsimile:             212/834-6657
         
Wells Fargo Capital Finance
6 Concourse Parkway
Suite 1450
Atlanta, Georgia  30328

Attention:            William P. Rutkowski
Telephone:           404/732-0816
Facsimile:             404/732-0802
        If to the Funding Agents:          (1)
Bank of America, National Association,
as Funding Agent
NC1-027-21-04
214 North Tryon Street, 21st Floor
Charlotte, North Carolina 28255

Attention:            Global Asset Backed Securitization Group;
        Portfolio Management
Attention:            Robert R. Wood and Jessica Richmond
Telephone:           704/388-8371
Facsimile:             704/387-2828
     

 
 
 
Schedule 11.3-2

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

 
 
 

    Payment Information:           Bank of America

ABA 026009593
Account No.: 000687650048
Account Name: BofA as Agent – Arrow Electronics
         (2)
The Bank of Nova Scotia,

as Funding Agent for Liberty Street Funding Corp.
1 Liberty Plaza, 26th Floor
New York, New York 10006
Attention:            Michael Eden

Telephone:           212/225-5070
Facsimile:             212/225-5290
         
Payment Information:
 
The Bank of Nova Scotia- New York Agency
ABA No. 026-002-532
Account No. 02158-13
Reference:  Arrow Electronics Funding Corporation [Reason for Payment]
         (3)
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch,

as Funding Agent for Gotham Funding Corporation
1251 Avenue of the Americas
12th Floor
New York, New York 10020
Attention:            Hermina Batson

Telephone:           212/782-4908
Facsimile:             212/782-6448
         
Payment Information:
 
Bank of Tokyo-Mitsubishi UFJ Trust Company
ABA No. 026-009-687
Account Name: Gotham Funding Corporation
Account No. 310035147
Reference:  Arrow - Electronics
         (4) JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank),

as Funding Agent for Park Avenue Receivables Company, LLC
Chase Tower
Mail Suite: IL1-0079
Chicago, Illinois 60670
Attention:            D’Andrea Anderson
Telephone:           (312) 732-7206
Facsimile:             (312) 732-1844
     

 
 
 
Schedule 11.3-3

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

 
 
 

   
Payment Information:
 
JPMorgan Chase Bank, N.A.
ABA No. 021000021
Account Title:  Park Avenue Company
Account No. 645475302
Reference:  Arrow Electronics
Attention: D’Andrea Anderson
          Wells Fargo, N.A. (fka Wachovia Bank, National Association),

as Funding Agent
Wells Fargo Capital Finance
6 Concourse Parkway
Suite 1450
Atlanta, Georgia  30328
Attention:            Tim Brazeau
Telephone:           (404) 732-0822
Facsimile:             (404) 732-0802
         
Payment Information:

Wells Fargo Bank, N.A.
ABA No. 053000219
Account Name:  Leverage Finance – NC
Account No. 2070482789126
Reference:  Arrow Electronics
        If to the SPV:          
Arrow Electronics Funding Corporation
7459 South Lima Street
Building 2
Englewood, Colorado 80112
Telephone:
Facsimile:
 
Payment Information:
Chase Manhattan Bank
ABA 021 000 021
Account No. 323-1-96500
Reference A/R Securitization Funding
     

 
 
 
Schedule 11.3-4

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

 
 
 

  If to Arrow or the Master Servicer:          
Arrow Electronics, Inc.
50 Marcus Drive
Melville, New York 11747
Telephone:        (631) 847-1657
Facsimile:          (631) 847-5379

Payment Information:
 
Chase Manhattan Bank
New York, New York
ABA  021000021
Account No. 144-0-91175
        If to the Administrative Agent:          
Bank of America, National Association
NC1-027-21-04
214 North Tryon Street, 21st Floor
Charlotte, North Carolina 28255
Attention:        Global Asset Backed Securitization Group;
        Portfolio Management
Attention:         Robert R. Wood and Jessica Richmond
Telephone:        704/388-8371 or 704/386-7261
Facsimile:          704/387-2828
        Additional copy of Master Servicer Report, Investment Request to be
delivered to:          
Bank of America, National Association,
as Administrator
NC1-027-21-04
214 North Tryon Street, 21st Floor
Charlotte, North Carolina 28255
Attention:         Global Asset Backed Securitization Group;
         Portfolio Management
Attention:         Robert R. Wood and Jessica Richmond
Telephone:        704/388-8371
Facsimile:          704/387-2828
Email:                jessica.a.richmond@bankofamerica.com
     

 
 
Schedule 11.3-5

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

 
 
 

  Payment Information:        
Collection Account
 
ABA  026009593
Account Name: BA as Agent for Investors - Collection Account (Arrow)
Account No. 0006 8765 0051
Reference: Arrow Electronics
 
Funding Account
 
ABA 026009593
Account Name:  BA as Agent for Investors - Arrow Electronics
Account No. 0006 8765 0048
Reference:  Arrow Electronics
     

 
 
 
Schedule 11.3-6

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

 

Exhibit A-1
 
Form of Assignment and Assumption Agreement
 
Reference is made to the Transfer and Administration Agreement dated as of March
__, 2001 as it may be amended or otherwise modified from time to time (as so
amended or modified, the “Agreement”) among Arrow Electronics Funding
Corporation, as transferor (in such capacity, the “SPV”), Arrow Electronics,
Inc., individually (the “Arrow”) and as master servicer (in such capacity, the
“Master Servicer”), the parties thereto as “Conduit Investors,” “Alternate
Investors” and “Funding Agents,” and Bank of America, National Association, a
national banking association.  Terms defined in the Agreement are used herein
with the same meaning.
 
[___________________] (the “Assignor”) and [_____________________] (the
“Assignee”) agree as follows:
 
3. The Assignor hereby sells and assigns to the Assignee, without recourse and
without representation and warranty, and the Assignee hereby purchases and
assumes from the Assignor, an interest in and to all of the Assignor’s rights
and obligations under the Agreement and the other Transaction Documents.  Such
interest expressed as a percentage of all rights and obligations of the Related
Alternate Investors, shall be equal to the percentage equivalent of a fraction
the numerator of which is $[________] and the denominator of which is the
Facility Limit.  After giving effect to such sale and assignment, the Assignee’s
Commitment will be as set forth on the signature page hereto.
 
4. In consideration of the payment of $[___________], being [___]% of the
existing Net Investment, and of $[___________], being [___]% of the aggregate
unpaid accrued discount, receipt of which payment is hereby acknowledged, the
Assignor hereby assigns to the Agent for the account of the Assignee, and the
Assignee hereby purchases from the Assignor, a [___]% interest in and to all of
the Assignor’s right, title and interest in and to the Net Investment purchased
by the undersigned on March __, 2001 under the Agreement.
 
5. Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any Adverse Claim; (ii) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement, any other
Transaction Document or any other instrument or document furnished pursuant
thereto or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Agreement or the Receivables, any other Transaction
Document or any other instrument or document furnished pursuant thereto; and
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any of the SPV or the Master Servicer,
Arrow or any Originator or the performance or observance by any of the SPV or
the Master Servicer, Arrow or any Originator of any of its obligations under the
Agreement, any other Transaction Document, or any instrument or document
furnished pursuant thereto.
 
 
 
Exhibit A-1-1

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

 
 
6. The Assignee (i) confirms that it has received a copy of the Agreement, the
First Tier Agreement and each Originator Agreement together with copies of the
financial statements referred to in Section 6.1 of the Agreement, to the extent
delivered through the date of this Assignment and Assumption Agreement (the
“Assignment”), and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment; (ii) agrees that it will, independently and without reliance upon
the Administrative Agent, any Funding Agent, any of their respective Affiliates,
any Conduit Investor, the Assignor or any other Alternate Investor and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Agreement and any other Transaction Document; (iii) appoints and authorizes
the Administrative Agent and the Related Funding Agent to take such action as
Administrative Agent or the Related Funding Agent on its behalf and to exercise
such powers and discretion under the Agreement and the other Transaction
Documents as are delegated to the Administrative Agent or the Related Funding
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (iv) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Agreement are
required to be performed by it as an Alternate Investor; and (v) specifies as
its address for notices and its account for payments the office and account set
forth beneath its name on the signature pages hereof; and (vi) attaches the
forms prescribed by the Internal Revenue Service of the United States of America
certifying as to the Assignee’s status for purposes of determining exemption
from United States withholding taxes with respect to all payments to be made to
the Assignee under the Agreement or such other documents as are necessary to
indicate that all such payments are subject to such rates at a rate reduced by
an applicable tax treaty.
 
7. The effective date for this Assignment shall be the later of (i) the date on
which the Related Funding Agent and the Administrative Agent, receive this
Assignment executed by the parties hereto and receives the consent of the
Related Funding Agent, and to the extent required under the Agreement, the SPV,
and (ii) the date of this Assignment (the “Effective Date”).  Following the
execution of this Assignment and the consent of the Related Funding Agent, and
to the extent required under the Agreement, the SPV, this Assignment will be
delivered to the Administrative Agent for acceptance and recording.
 
8. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in this
Assignment, have the rights and obligations of an Alternate Investor thereunder
and (ii) the Assignor shall, to the extent provided in this Assignment,
relinquish its rights and be released from its obligations under the Agreement.
 
9. Upon such acceptance and recording, from and after the Effective Date, the
Administrative Agent shall make all payments under the Agreement in respect of
the interest assigned hereby (including, without limitation, all payments in
respect of such interest in Net Investment, Discount and fees) to the
Assignee.  The Assignor and Assignee shall make all appropriate adjustments in
payments under the Agreement for periods prior to the Effective Date directly
between themselves.
 
 
 
Exhibit A-1-2

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

 
 
10. The Assignee shall not be required to fund hereunder an aggregate amount at
any time outstanding in excess of $[___________], minus the aggregate
outstanding amount of any interest funded by the Assignee in its capacity as a
participant under any Program Support Agreement.
 
11. The Assignor agrees to pay the Assignee its pro rata share of fees in an
amount equal to the product of (a) [_____] per annum and (b) the Assignor’s
Commitment during the period after the Effective Date for which such fees are
owing and paid by the SPV pursuant to the Agreement. Amounts paid under this
section shall be credited against amounts payable to the Assignee under any
participation agreement entered into pursuant to the Agreement.
 
12. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).
 
13. This agreement contains the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire Agreement among the parties hereto with respect to
the subject matter hereof superseding all prior oral or written understandings.
 
14. If any one or more of the covenants, agreements, provisions or terms of this
agreement shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of this agreement and shall in no
way affect the validity or enforceability of the other provisions of this
agreement.
 
15. This agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. Delivery by facsimile of an
executed signature page of this agreement shall be effective as delivery of an
executed counterpart hereof.
 
16. This agreement shall be binding on the parties hereto and their respective
successors and assigns.
 
[Signatures commence upon the following page]
 
 
 
Exhibit A-1-3

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

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed by their respective officers thereunto duly
authorized as of the date first above written
 
 
[ASSIGNOR]
               
 
By:
   
 
Name:
   
 
Title:
               
 
[ASSIGNEE]
             
 
By:
   
 
Name:
   
 
Title:
   

 
 
 
Exhibit A-1-4

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

 
 
Address for notices and Account for payments:
 
For Credit Matters:                     For Administrative Matters:
 
[NAME]                                                                           [NAME]
 
 
Attention:                                                                        Attention:
 
Telephone:                     [(___) ___-____]                     
Telephone:                       [(___) ___-____]
Telefax:                          [(___) ___-____]                    
 Telefax:                           [(___) ___-____]
 
Account for Payments:
 
NAME
 
ABA Number:                               [___-___-___]
Account Number:                          [___________]
Attention:                                     [______________]
Re:                                                [________________]
 
 
 
Consented to this [_____] day of
[_______________________], 20__

BANK OF AMERICA, NATIONAL ASSOCIATION,
as Administrative Agent
 
By:
   
Name:
   
Title:
   

 
 

 
ARROW ELECTRONICS FUNDING CORPORATION
 
 
By:
   
Name:
   
Title:
   

 
 
Exhibit A-1-5

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

 
 
Exhibit B
 
Form of Contract
 

 
Exhibit B-1

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

 
 
Exhibit C
 
Credit and Collection Policies and Practices
 
The Originator’s Credit and Collection Policy or Policies and practices,
relating to Contracts and Receivables, existing on the date hereof are as set
forth in manuals that were delivered by the SPV on January 31, 2001 to the
Administrative Agent.
 
 
 
Exhibit C-1

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

 
 
Exhibit D
 
Form of Investment Request
 
Arrow Electronics Funding Corporation (the “SPV”), pursuant to Section 2.3(a) of
the Transfer and Administration Agreement, dated as of March __, 2001 (as
amended, modified, or supplemented from time to time, the “Agreement”), among
the SPV, Arrow Electronics, Inc., individually (“Arrow”) and as master servicer
(in such capacity, the “Master Servicer”), the parties thereto as “Conduit
Investors,” “Alternate Investors” and “Funding Agents,” and Bank of America,
National Association, a national banking association, effect an Investment from
it pursuant to the following instructions:
 
Investment Date: [________________]
Investment request is made to:  [specify [Conduit Investor] [Alternate
Investors] of Related Funding Agent]
Investment Amount: [___________________________________] 2/
Investment Amount per Funding Agent:
 
Funding Agent
Pro Rata Share (rounded)
Amount Requested
Rate Period Requested (Days)
Funding Agent A
%
$
 
Funding Agent B
%
$
 
Funding Agent C
%
$
 
Funding Agent D
%
$
 
Funding Agent E
%
$
 
Funding Agent F
%
$
 
Total
100%
$
 

 
Account to be credited:
 
[bank name]
ABA No. [_____________________________________]
Account No. [_________________________________]
Reference No. [_______________________________]
 
Please credit the above-mentioned account on the Investment Date.  Capitalized
terms used herein and not otherwise defined herein have the meaning assigned to
them in the Agreement.
 
The SPV hereby certifies as of the date hereof that the conditions precedent to
such Investment set forth in Section 4.2 of the Agreement have been satisfied,
and that all of the representations and warranties made in Section 4.1 of the
Agreement are true and correct on and as of the Investment Date, both before and
after giving effect to the Investment.
 
 

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

2  At least $5,000,000 and in integral multiples of $1,000,000.
 
 
 
Exhibit D-1

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

 
 
 

  ARROW ELECTRONICS FUNDING CORPORATION        
Dated: __________________
By: ____________________________
 
Name:
 
Title:

 
 
 
Exhibit D-2

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

 
 
Exhibit F
 
Form of Servicer Report
 
 
 
Exhibit F-1

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

 
 
Exhibit G
 
Form of SPV Secretary’s Certificate
 
SECRETARY’S CERTIFICATE
 
March __, 2001
 
I, [__________________], the undersigned [________________] of Arrow Electronics
Funding Corporation (the “SPV”), a Delaware corporation, DO HEREBY CERTIFY that:
 
17. Attached hereto as Annex A is a true and complete copy of the Certificate of
Incorporation of the SPV as in effect on the date hereof.
 
18. Attached hereto as Annex B is a true and complete copy of the By-laws of the
SPV as in effect on the date hereof.
 
19. Attached hereto as Annex C is a true and complete copy of the resolutions
duly adopted by the Board of Directors of the SPV [adopted by unanimous written
consent] as of March __, 2001, authorizing the execution, delivery and
performance of each of the documents mentioned therein, which resolutions have
not been revoked, modified, amended or rescinded and are still in full force and
effect.
 
20. The below-named persons have been duly qualified as and at all times since
March __, 2001, to and including the date hereof have been officers or
representatives of the SPV holding the respective offices or positions below set
opposite their names and are authorized to execute on behalf of the SPV the
below-mentioned Transfer and Administration Agreement and all other Transaction
Documents (as defined in such Transfer and Administration Agreement) to which
the SPV is a party and the signatures below set opposite their names are their
genuine signatures:
 
Name
Signatures
Office
                 

21. The representations and warranties of the SPV contained in Section 4.1 of
the Transfer and Administration Agreement dated as of March __, 2001 among the
SPV, Arrow Electronics, Inc., individually (the “Arrow”) and as master servicer
(in such capacity, the “Master Servicer”), the parties thereto as “Conduit
Investors,” “Alternate Investors” and “Funding Agents,” and Bank of America,
National Association, a national banking association are true and correct as if
made on the date hereof.
 
 
 
Exhibit G-1

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

 
 
WITNESS my hand and seal of the SPV as of the day first above written.
 
 

      Secretary

 
I, [________________] the undersigned, [________________] of the SPV, DO HEREBY
CERTIFY that [_____________________] is the duly elected and qualified Secretary
of the SPV and the signature above is his/her genuine signature.
 
WITNESS my hand as of the day first above written.
 
 

      [________________]

 
 
 
Exhibit G-2

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

 
 
Exhibit H
 
Form of [Originators/Master Servicer] Secretary’s Certificate
 
SECRETARY’S CERTIFICATE
 
March __, 2001
 
I, [__________________], the undersigned [________________] of
[Originator/Master Servicer] (the “[Originator/Master Servicer]”), a [________]
corporation, DO HEREBY CERTIFY that:
 
22. Attached hereto as Annex A is a true and complete copy of the Certificate of
Incorporation of the [Originator/Master Servicer] as in effect on the date
hereof.
 
23. Attached hereto as Annex B is a true and complete copy of the By-laws of the
[Originator/Master Servicer] as in effect on the date hereof.
 
24. Attached hereto as Annex C is a true and complete copy of the resolutions
duly adopted by the Board of Directors of the [Originator/Master Servicer]
[adopted by unanimous written consent] as of March __, 2001, authorizing the
execution, delivery and performance of each of the documents mentioned therein,
which resolutions have not been revoked, modified, amended or rescinded and are
still in full force and effect.
 
25. The below-named persons have been duly qualified as and at all times since
March __, 2001, to and including the date hereof have been officers or
representatives of the [Originator/Master Servicer] holding the respective
offices or positions below set opposite their names and are authorized to
execute on behalf of the [Originator/Master Servicer] the below-mentioned the
Transfer and Administration Agreement dated as of February __, 2001 among Arrow
Electronics Funding Corporation, Arrow Electronics, Inc., individually (the
“Arrow”) and as master servicer (in such capacity, the “Master Servicer”), the
parties thereto as “Conduit Investors,” “Alternate Investors” and “Funding
Agents,” and Bank of America, National Association, a national banking
association (the “Agreement”) Originator Sale Agreement and all other
Transaction Documents to which the [Originator/Master Servicer] is a party and
the signatures below set opposite their names are their genuine signatures:
 
Name
Signatures
Office
                 

 
26. The representations and warranties of the [Originator/Master Servicer]
contained in the Originator Sale Agreement [and First Tier Agreement, each]
dated as of March __, 2001, between the [Originator/Master Servicer] and Arrow
Electronics Funding Corporation [and the representations and warranties of Arrow
Originator, in its capacity as Servicer, contained in Section 4.2 of the
Agreement,] are true and correct as if made on the date hereof.
 
 
 
Exhibit H-1

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

 
 
WITNESS my hand and seal of the [Originator/Master Servicer] as of the date
first above written.
 
 

        Secretary  

 
 
I, the undersigned, [_______________] of the [Originator/Master Servicer], DO
HEREBY CERTIFY that [_____________________] is the duly elected and qualified
Secretary of the [Originator/Servicer] and the signature above is his/her
genuine signature.
 
WITNESS my hand as of the date first above written.
 
 

        [________________]  

 
 
 
Exhibit H-2

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

 
 
Exhibit I-1
 
Form of Opinion of Robert E. Klatell, Counsel to SPV, Originators and Master
Servicer
 
March __, 2001
 
To the parties listed on Schedule A
     annexed hereto
 
Ladies and Gentlemen:
 
This opinion is furnished to you pursuant to Section 5.1(m) of the Transfer and
Administration Agreement dated as of March 21, 2001 (the “Agreement”) among
Arrow Electronics Funding Corporation, as transferor (in such capacity, the
“SPV”), Arrow Electronics, Inc., individually (“Arrow”) and as master servicer
(in such capacity, the “Master Servicer”), the parties thereto as “Conduit
Investors,” “Alternate Investors” and “Funding Agents,” and Bank of America,
National Association, as administrative agent (in such capacity, the
“Administrative Agent”).  Capitalized terms used herein and not otherwise
defined herein shall have the meanings given such terms in the Agreement.
 
I have acted as counsel to Arrow, Gates/Arrow Distributing, Inc. (together with
Arrow, the Applicable Originators) (in connection with the preparation of the
Agreement, the Originator Sale Agreement, the First Tier Agreement, the other
Transaction Documents and the transactions contemplated thereby.
 
I have examined, on the date hereof, the Agreement and all exhibits thereto, the
First Tier Agreement and all exhibits thereto, each Originator Sale Agreement,
certificates of public officials and of officers of the SPV, Arrow and the other
Originators and certified copies of Arrow’s, the others Originator’s and the
SPV’s certificate of incorporation, by-laws, the Board of Directors’ resolutions
authorizing Arrow’s, the other Originator’s and the SPV’s participation in the
transactions contemplated by the Agreement, the Originator Sale Agreement, the
First Tier Agreement, the other Transaction Documents, copies of each of the
above having been delivered to you.  I have also examined the closing documents
delivered pursuant to the Agreement, the Originator Sale Agreement and the First
Tier Agreement and copies of all such documents and records, and have made such
investigations of law, as we have deemed necessary and relevant as a basis for
our opinion.  With respect to the accuracy of material factual matters which
were not independently established, we have relied on certificates and
statements of officers of Arrow, the other Originators and the SPV.
 
On the basis of the foregoing, I am of the opinion that:
 
 
 
Exhibit I-1-1

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

 
 
27. Each of the Applicable Originators is a corporation duly incorporated,
validly existing and in good standing under the laws of its respective state or
jurisdiction of formation, has the corporate power and authority to own its
properties and to carry on its business as now being conducted, and had at all
relevant times, and now has, all necessary power, authority, and legal right to
acquire and own the Receivables and other Affected Assets, and is duly qualified
and in good standing as a foreign corporation and is authorized to do business
in each jurisdiction in which the character of its properties or the nature of
its business requires such qualification or authorization.
 
28. Each of the Applicable Originators has the power, corporate and other, and
has taken all necessary corporate action to execute, deliver and perform the
Agreement, the First Tier Agreement, the Originator Sale Agreement and the other
Transaction Documents to which it is a party, each in accordance with its
respective terms, and to consummate the transactions contemplated thereby.  The
Transaction Documents to which each of Arrow and the other Originators is a
party have been duly executed and delivered by Arrow and the other Originators,
as applicable, and constitute the legal, valid and binding obligations of each
such party, enforceable against such party in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles.
 
29. The execution, delivery and performance in accordance with their terms by
each of Arrow and the other Originators of the First Tier Agreement, Originator
Sale Agreement and the other Transaction Documents to which it is a party and
the consummation of the transactions contemplated thereby, do not and will not
(i) require (a) any governmental approval or (b) any consent or approval of any
stockholder of Arrow or any of the other Originators that has not been obtained,
(ii) violate or conflict with, result in a breach of, or constitute a default
under (a) the certificate of incorporation or the by-laws of Arrow or any of the
other Originators, or (b) any other agreement to which Arrow or any of the other
Originators is a party or by which Arrow or any of the other Originators or any
of their respective properties may be bound, or (iii) result in or require the
creation or imposition of any Adverse Claim upon any of the assets, property or
revenue of Arrow or any of the other Originators other than as contemplated by
the First Tier Agreement or the Originator Sale Agreement, as applicable.
 
30. Except as set forth in the schedules attached hereto, there are not, in any
court or before any arbitrator of any kind or before or by any governmental or
non-governmental body, any actions, suits, proceedings, litigation or
investigations, pending or to the best of our knowledge, after due inquiry,
threatened, (i) against the Arrow or any of the other Originators or the
business or any property of such parties except actions, suits or proceedings
that, if adversely determined, would not, singly or in the aggregate, have a
Material Adverse Effect or (ii) relating to the First Tier Agreement, the
Originator Sale Agreement or any other Transaction Document.
 
31. None of Arrow or any other Originator is, or is controlled by, an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.
 
 
 
Exhibit I-1-2

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

 
 
The foregoing opinions and conclusions were given only in respect of the laws of
[insert state or other jurisdiction], the State of New York and, to the extent
specifically referred to herein, the Federal laws of the United States of
America.
 
This opinion has been delivered at your request for the purposes contemplated by
the Agreement.  Without our prior written consent, this opinion is not to be
utilized or quoted for any other purpose and no one other than you is entitled
to rely thereon; provided, that any Alternate Investor, any Program Support
Provider and any placement Agent or dealer of the Conduit Investor’s commercial
paper may rely on this opinion as of it were addressed to them.
 
Very truly yours,
 
 
 
Exhibit I-1-3

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

 
 
Exhibit I-2
 
Form of Opinion of Milbank, Tweed, Hadley & McCloy LLP, Counsel to the SPV,
Originators and Master Servicer
 
March __, 2001
 
To the parties listed on Schedule A
     annexed hereto
 
Ladies and Gentlemen:
 
This opinion is furnished to you pursuant to Section 5.1(m) of the Transfer and
Administration Agreement dated as of March __, 2001 (the “Agreement”) among
Arrow Electronics Funding Corporation, as transferor (in such capacity, the
“SPV”), Arrow Electronics, Inc., individually (the “Arrow”) and as master
servicer (in such capacity, the “Master Servicer”), the parties thereto as
“Conduit Investors,” “Alternate Investors” and “Funding Agents,” and Bank of
America, National Association, as administrative agent (in such capacity, the
“Administrative Agent”).  Capitalized terms used herein and not otherwise
defined herein shall have the meanings given such terms in the Agreement.
 
We have acted as counsel to Arrow, the other Originators and the SPV in
connection with the preparation of the Agreement, the Originator Sale Agreement,
the First Tier Agreement, the other Transaction Documents and the transactions
contemplated thereby.
 
We have examined, on the date hereof, the Agreement and all exhibits thereto,
the First Tier Agreement and all exhibits thereto, the Originator Sale
Agreement, certificates of public officials and of officers of the SPV, Arrow
and the other Originators and certified copies of Arrow’s, the others
Originator’s and the SPV’s certificate of incorporation, by-laws, the Board of
Directors’ resolutions authorizing Arrow’s, the other Originator’s and the SPV’s
participation in the transactions contemplated by the Agreement, the Originator
Sale Agreement, the First Tier Agreement, the other Transaction Documents,
copies of each of the above having been delivered to you, copies of the
financing statements on Form UCC-1 filed in the filing offices listed in
Schedule I hereto executed by each Originator (other than Arrow), as debtor, in
favor of Arrow, as secured party and  showing the Administrative Agent, on
behalf of the Funding Agents (on behalf of the Conduit Investors and the
Alternate Investor), as the assignee of the secured party substantially in the
form attached hereto as Exhibit A (the “Originator Financing Statements”),
copies of the financing statements filed on Form UCC-1 filed in the filing
offices listed in Schedule II hereto executed by Arrow, as debtor, in favor of
the SPV, as secured party and showing the Administrative Agent, on behalf of the
Funding Agents (on behalf of the Conduit Investors and the Alternate Investors),
as the assignee of the secured party, substantially in the form attached hereto
as Exhibit B (the “Arrow Financing Statements”) and copies of the financing
statements on Form UCC-1 filed in the filing offices listed in Schedule III
hereto executed by SPV, as debtor, in favor of the Administrative Agent, on
behalf of the Funding Agents (on behalf of the Conduit Investors and the
Alternate Investors), as secured party, substantially in the form attached
hereto as Exhibit C (the “SPV Financing Statements”).  We have also examined the
closing documents delivered pursuant to the Agreement, the Originator Sale
Agreement and the First Tier Agreement and copies of all such documents and
records, and have made such investigations of law, as we have deemed necessary
and relevant as a basis for our opinion.  With respect to the accuracy of
material factual matters which were not independently established, we have
relied on certificates and statements of officers of Arrow, the other
Originators and the SPV.
 
 
 
Exhibit I-2-1

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

 
 
On the basis of the foregoing, we are of the opinion that:
 
32. The SPV is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, has the corporate power and
authority to own its properties and to carry on its business as now being
conducted, and had at all relevant times, and now has, all necessary power,
authority, and legal right to acquire and own the Receivables and other Affected
Assets, and is duly qualified and in good standing as a foreign corporation and
is authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization.
 
33. The SPV has the power, corporate and other, and has taken all necessary
corporate action to execute, deliver and perform the Agreement and the other
Transaction Documents to which it is a party, each in accordance with its
respective terms, and to consummate the transactions contemplated thereby.  The
Transaction Documents to which the SPV is a party have been duly executed and
delivered by the SPV and constitute the legal, valid and binding obligations of
the SPV enforceable against the SPV in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency and other similar
laws affecting the enforcement of creditors’ rights generally and by general
equitable principles.
 
34. The execution, delivery and performance in accordance with their terms by
the SPV of the Agreement and the other Transaction Documents and the
consummation of the transactions contemplated thereby, do not and will not (i)
require (a) any governmental approval or (b) any consent or approval of any
stockholder of the SPV that has not been obtained, (ii) violate or conflict
with, result in a breach of, or constitute a default under (a) the certificate
of incorporation or the by-laws of the SPV, (b) any other agreement to which the
SPV is a party or by which the SPV or any of its properties may be bound, or (c)
any Law applicable to the SPV of any court or of any Official Body having
jurisdiction over the SPV or any of its properties, or (iii) result in or
require the creation or imposition of any Adverse Claim upon any of the assets,
property or revenue of the SPV other than as contemplated by the Agreement.
 
35. The execution, delivery and performance in accordance with their terms by
each of Arrow and the other Originators of the First Tier Agreement, Originator
Sale Agreement and the other Transaction Documents to which it is a party and
the consummation of the transactions contemplated thereby, do not and will not
(i) require (a) any governmental approval or (b) any consent or approval of any
stockholder of Arrow or any of the other Originators that has not been obtained,
(ii) violate or conflict with, result in a breach of, or constitute a default
under (a) the certificate of incorporation or the by-laws of Arrow or any of the
other Originators, (b) any other agreement to which Arrow or any of the other
Originators is a party or by which Arrow or any of the other Originators or any
of their respective properties may be bound, or (c) any Law applicable to Arrow
or any of the other Originators of any Official Body having jurisdiction over
Arrow or any of the other Originators or any of its properties, or (iii) result
in or require the creation or imposition of any Adverse Claim upon any of the
assets, property or revenue of Arrow or any of the other Originators other than
as contemplated by the First Tier Agreement or the Originator Sale Agreement, as
applicable.
 
 
 
Exhibit I-2-2

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

 
 
36. Except as set forth in the schedules attached hereto, there are not, in any
court or before any arbitrator of any kind or before or by any governmental or
non-governmental body, any actions, suits, proceedings, litigation or
investigations, pending or to the best of our knowledge, after due inquiry,
threatened, (i) against the SPV or the business or any property of the SPV
except actions, suits or proceedings that, if adversely determined, would not,
singly or in the aggregate, have a Material Adverse Effect or (ii) relating to
the Agreement or any other Transaction Document.
 
37. Except as set forth in the schedules attached hereto, there are not, in any
court or before any arbitrator of any kind or before or by any governmental or
non-governmental body, any actions, suits, proceedings, litigation or
investigations, pending or to the best of our knowledge, after due inquiry,
threatened, (i) against the Arrow or any of the other Originators or the
business or any property of such parties except actions, suits or proceedings
that, if adversely determined, would not, singly or in the aggregate, have a
Material Adverse Effect or (ii) relating to the First Tier Agreement, the
Originator Sale Agreement or any other Transaction Document.
 
38. The Receivables constitute “accounts” or “general intangibles” as that term
is defined in the Uniform Commercial Code as in effect in the State of New York.
 
39. The Originator Sale Agreement creates a valid and enforceable security
interest (as that term is defined in Section 1-201(37) of the Uniform Commercial
Code (including the conflict of laws rules thereof) (the “UCC”) as in effect in
New York (the “New York UCC”) and [insert reference to applicable jurisdiction],
under Article 9 of the New York UCC [and under similar provisions of applicable
jurisdiction] (“Originator Sale Security Interest”) in favor of the SPV in the
Receivables and other Affected Assets and the proceeds thereof (except that the
First Tier Security Interest will attach to any Receivable created after the
date hereof only when the Originator possesses rights in such Receivable).  The
internal laws of [insert state or other jurisdiction] govern the perfection by
the filing of financing statements of the Originator Sale Security Interest in
the Receivables and the proceeds thereof.  The Originator Financing Statement(s)
have been filed in the filing office(s) located in [insert state or other
jurisdiction] listed in Schedule I hereto, which [is] [are] the only office(s)
in which filings are required under the [insert state or other jurisdiction] UCC
to perfect the Originator Sale Security Interest in the Receivables and the
proceeds thereof, and accordingly the Originator Sale Security Interest in each
Receivable and the proceeds thereof will, on the date of the initial transfer
under the First Tier Agreement, be perfected under Article 9 of the [insert
state or other jurisdiction] UCC.  All filing fees and all taxes required to be
paid as a condition to or upon the filing of the Originator Financing
Statement(s) in [insert state or other jurisdiction] have been paid in full.  As
of the date hereof, there were no (i) UCC financing statements naming the
Originators  as debtor, originator or assignor and covering any Receivables or
other Affected Assets or any interest therein or (ii) notices of the filing of
any federal tax lien (filed pursuant to Section 6323 of the Internal Revenue
Code) or lien of the Pension Benefit Guaranty Corporation (filed pursuant to
Section 4068 of the Employment Retirement Income Security Act) covering any
Receivable or other Affected Asset or any interest therein.  The filing of the
Originator Financing Statements in the filing offices listed in Schedule I will
create a first priority security interest in each Receivable.  Such perfection
and priority will continue, provided that appropriate continuation statements
are timely filed where and when required under the UCC.
 
 
 
Exhibit I-2-3

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

 
 
40. The First Tier Agreement creates a valid and enforceable security interest
(as that term is defined in Section 1-201(37) of the Uniform Commercial Code
(including the conflict of laws rules thereof) (the “UCC”) as in effect in New
York (the “New York UCC”) under Article 9 of the New York UCC (“First Tier
Security Interest”) in favor of the SPV in the Receivables and other Affected
Assets and the proceeds thereof (except that the First Tier Security Interest
will attach to any Receivable created after the date hereof only when Arrow
possesses rights in such Receivable).  The internal laws of New York govern the
perfection by the filing of financing statements of the First Tier Security
Interest in the Receivables and the proceeds thereof.  The Arrow Financing
Statement(s) have been filed in the filing office(s) located in [insert
jurisdictions] listed in Schedule II hereto, which are the only office(s) in
which filings are required under the New York UCC to perfect the First Tier
Security Interest in the Receivables and the proceeds thereof, and accordingly
the First Tier Security Interest in each Receivable and the proceeds thereof
will, on the date of the initial transfer under the First Tier Agreement, be
perfected under Article 9 of the New York UCC.  All filing fees and all taxes
required to be paid as a condition to or upon the filing of the Arrow Financing
Statement(s) in New York have been paid in full.  As of the date hereof, there
were no (i) UCC financing statements naming Arrow as debtor, originator or
assignor and covering any Receivables or other Affected Assets or any interest
therein or (ii) notices of the filing of any federal tax lien (filed pursuant to
Section 6323 of the Internal Revenue Code) or lien of the Pension Benefit
Guaranty Corporation (filed pursuant to Section 4068 of the Employment
Retirement Income Security Act) covering any Receivable or other Affected Asset
or any interest therein.  The filing of the Originator Financing Statement(s) in
the filing offices listed in Schedule II will create a first priority security
interest in each Receivable.  Such perfection and priority will continue,
provided that appropriate continuation statements are timely filed where and
when required under the UCC.
 
41. The Agreement creates a valid and enforceable security interest (as that
term is defined in Section 1-201(37) of the New York UCC, under Article 9 of the
New York UCC (“Second Tier Security Interest”) in favor of the Agent in each
Receivable and other Affected Assets (except that the Second Tier Security
Interest will attach only when the SPV possesses rights in such
Receivable).  The internal laws of New York govern the perfection by the filing
of financing statements of the Second Tier Security Interest in the Receivables
and the proceeds thereof.  The SPV Financing Statement(s) have been filed in the
filing office(s) located in [insert state or other jurisdiction] listed in
Schedule II hereto, which are the only office(s) in which filings are required
under the  UCC to perfect the Second Tier Security Interest in the Receivables
and the proceeds thereof, and accordingly the Second Tier Security Interest in
each Receivable and the proceeds thereof will, on the date of the initial
transfer under the Agreement, be perfected under Article 9 of the New York
UCC.  All filing fees and all taxes required to be paid as a condition to or
upon the filing of the SPV Financing Statement(s) in New York have been paid in
full.  As of the date hereof, there were no (i) UCC financing statements naming
SPV as debtor, originator or assignor and covering any Receivables or other
Affected Assets or any interest therein or (ii) notices of the filing of any
federal tax lien (filed pursuant to Section 6323 of the Internal Revenue Code)
or lien of the Pension Benefit Guaranty Corporation (filed pursuant to Section
4068 of the Employment Retirement Income Security Act) covering any Receivable
or other Affected Assets or any interest therein.  The filing of the SPV
Financing Statement(s) in the filing offices listed in Schedule III will create
a first priority security interest in each Receivable.  Such perfection and
priority will continue, provided that appropriate continuation statements are
timely filed where and when required under the UCC.
 
 
 
Exhibit I-2-4

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

 
 
42. The SPV is not, and is not controlled by, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.
 
In giving the opinions in paragraphs 8, 9 and 10, we have assumed that Arrow’s,
each of the Originator’s and the SPV’s chief executive office will continue to
be located in [insert state or other jurisdiction].  The conclusions expressed
in paragraphs 8, 9 and 10 are subject to the accuracy of the personnel in the
filing offices referred to above with regard to the filing, indexing and
recording of financing statements and notices of Adverse Claim, and to the
correctness of reports to us by [____________], who performed the searches of
such records and who made the filings on behalf of Arrow, the Originators and
the SPV in [insert state or other jurisdiction].
 
In giving the opinions set forth in paragraphs 8, 9 and 10, we have assumed that
all filings as appropriate in the event of a change in the name, identity or
corporate structure of the debtor (or the Originator or assignor) named in any
financing statements and all continuation statements necessary under the UCC to
maintain the perfection of the Originator Sale Agreement, First Tier Security
Interest and the Second Tier Security Interest in the Receivables and the
proceeds thereof will be duly and timely filed.  In giving such opinions, we
also do not express any opinion as to (a) transactions excluded from Article 9
of the UCC by virtue of Section 9-104 of the UCC, (b) any security interest in
proceeds except to the extent that the validity and perfection of any interest
in proceeds (as such term is defined under the UCC) thereof that is covered by
the Originator Financing Statements or the SPV Financing Statements or any duly
filed financing statement referred to above may be permitted by Section 9-306 of
the UCC, and (c) any security interest that is terminated or released.
 
 
 
Exhibit I-2-5

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

 
 
The foregoing opinions and conclusions were given only in respect of the laws of
[insert state or other jurisdiction], the State of New York and, to the extent
specifically referred to herein, the Federal laws of the United States of
America.
 
This opinion has been delivered at your request for the purposes contemplated by
the Agreement.  Without our prior written consent, this opinion is not to be
utilized or quoted for any other purpose and no one other than you is entitled
to rely thereon; provided, that any Alternate Investor, any Program Support
Provider and any placement Agent or dealer of the Conduit Investor’s commercial
paper may rely on this opinion as of it were addressed to them.
 
Very truly yours,

 
Exhibit I-2-6

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

 
 
Exhibit I-3
 
Form of Opinion of Davies, Ward, Phillips & Vineberg LLP, Canadian Counsel to
Arrow Electronics Canada Ltd.
 
March __, 2001
 
To:
                                                                                                
Arrow Electronics, Inc.;

Arrow Electronics Funding Corporation;

Each of the Investors and Funding Agents (listed in Schedule 1 annexed hereto)
party to the Transfer and Administration Agreement dated as of March 20, 2001
among Arrow Electronics Funding Corporation, Arrow Electronics, Inc., the
parties thereto as “Conduit Investors,” “Alternate Investors” and “Funding
Agents,” and Bank of America, National Association, as administrative agent;
 
 
 

Bank of America, National Association, as Administrative Agent for such
Investors and Funding Agents;
 

 
Moody's Investors Service, Inc.; and

 
Standard & Poor's Ratings Services (a division of The McGraw-Hill Companies,
Inc.).
 
 
Ladies and Gentlemen:
We have acted as Quebec and Ontario counsel to Arrow Electronics Canada Ltd.
(“Arrow Canada”) in connection with the transactions contemplated by the
Originator Sale Agreement dated as of March 20, 2001 (the “Originator Sale
Agreement”), between Arrow Canada, as Seller, and Arrow Electronics, Inc.
(“Arrow”), as Buyer.  Capitalized terms used herein and not otherwise defined
herein shall have the meanings given such terms in the Originator Sale
Agreement.
We have examined the following documents:
 
  a)            
the Originator Sale Agreement;

 
 
 
Exhibit I-3-1

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

 
 
b)            
the certificate of an officer of Arrow Canada (the “Officer’s Certificate”), a
copy of which is attached hereto as Schedule 2;

 
c)            
certified copies of Arrow Canada’s certificate of amalgamation and by-laws; and

 
d)            
directors’ resolutions authorizing Arrow Canada’s participation in the
transactions contemplated by the Originator Sale Agreement.

We have made such investigations of law as we have deemed necessary and relevant
as a basis for our opinion.  With respect to the accuracy of factual matters
upon which the opinions expressed herein are based, we have relied solely on the
Officer’s Certificate.
 
For the purposes of the opinion expressed herein, we have assumed the
genuineness of the signatures of all parties and that the Originator Sale
Agreement has been duly authorized, executed and delivered by Arrow and
constitutes legal, valid and binding obligations of the parties thereto,
enforceable against them according to its terms. We have also assumed that under
the laws of the State of New York (“New York”) on the date hereof, to the extent
applicable, the provisions of the Originator Sale Agreement are sufficient to
effect and do effect a valid sale, assignment and transfer to Arrow of the
Seller Affected Assets and we have assumed that the terms of the Originator Sale
Agreement will be interpreted and understood under the laws of New York to have
the same meaning, content and effect as they would have under the laws of the
Province of Ontario. We express no opinion as to the effect of provisions which
may be implied by New York law.  We have also assumed the authenticity of all
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as certified or photostatic copies or facsimiles
thereof and the authenticity of the originals of such certified or photostatic
copies or facsimiles.
The opinions expressed herein are given only in respect of the laws of the
Province of Ontario (“Ontario”) and the laws of Canada applicable therein
(“Ontario Law”) and, with respect to the opinion expressed in paragraphs 4 and
5, the laws of the Province of Quebec (“Quebec”) and the laws of Canada
applicable therein (“Quebec Law”).  Accordingly, we express no opinions as to
the laws of any other jurisdiction.
On the basis of and subject to the foregoing, and the further assumptions and
qualifications set forth below, we are of the opinion that:
I:           GENERAL OPINIONS
43. Arrow Canada is a corporation duly amalgamated and validly existing under
the laws of Canada, and has the corporate power and authority to own its
properties and to carry on its business as now being conducted.  Arrow Canada
has all necessary power, authority, and capacity to acquire and own the Seller
Affected Assets.
44. Arrow Canada has all necessary corporate power and authority to execute,
deliver and perform its obligations under the Originator Sale Agreement.
45. The execution, delivery, and performance in accordance with its terms by
Arrow Canada of the Originator Sale Agreement and the consummation of the
transactions contemplated thereby, do not and will not (i) require any
governmental approval under Ontario Law or (ii) violate or conflict with, result
in a breach of, or constitute a default under the articles of amalgamation or
the by-laws of Arrow Canada or Ontario Law;
 
 
 
Exhibit I-3-2

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

 
 
46. Under Ontario Law and Quebec Law, no registration, recording or filing is
required in any public office of record in Ontario or Quebec, in connection with
the Originator Sale Agreement, other than the filing of a financing statement
pursuant to the Personal Property Security Act (Ontario) (“PPSA”) and the filing
of a registration pursuant to the Civil Code of Quebec (“CCQ”).  A financing
statement with respect to the Originator Sale Agreement was filed under the PPSA
for a registration period of 10 years on March 15, 2001 as registration no.
20010135 1651 9065 8595 and file number 870652206.  Provided that the rights of
Arrow under the Originator Sale Agreement are duly registered in the Register of
Personal and Movable Real Rights (the “RPMRR”) pursuant to article 1642 of the
CCQ, such rights will have been duly registered in such places in Quebec as are
currently necessary to render such rights under the Obligator Sale Agreement
enforceable as against Obligors and Creditors (as defined below).  No opinion is
expressed herein with respect to the need to amend or renew such filings in the
future.
47. We have conducted or caused to be conducted searches against Arrow Canada
and against the names of its predecessors in title listed in Schedule 3,  under
the statutes and at the offices of public record set out in Schedule 3, the
results of which searches were current in each case only to the respective times
on the respective dates set out in Schedule 3.  Such statutes and public offices
are the only statutes and public offices where, under Ontario Law and Quebec
Law, transfers of interests in accounts receivable would ordinarily or
customarily be the subject of a recording, filing or registration in order to
create, validate, preserve, perfect or protect such transfers with respect to
each of the corporations named in Schedule 3.  Such searches disclosed no
security interests registered or recorded which might affect the Seller Affected
Assets, except as set out in Schedule 3.
In giving the opinions in paragraphs 46 and 47 above, we have assumed that Arrow
Canada’s chief executive office is located in Ontario.  The conclusions
expressed in paragraphs 46 and 47 are subject to the accuracy of the personnel
in the filing offices referred to above with regard to the filing, indexing and
recording of registrations, financing statements and notices of Adverse Claim.
48.            In any proceeding brought before a court of competent
jurisdiction in the Province of Ontario for the enforcement of the Originator
Sale Agreement, the laws of New York would, to the extent specifically pleaded
and proven as a fact by expert evidence, be applied by such court, in accordance
with the choice of the laws of New York as the governing law of the Originator
Sale Agreement, to all issues which under the conflict of laws rules of the
Province of Ontario are to be determined in accordance with the proper or
governing law of a contract, except that in any such proceeding such court:
a)    
will apply those laws of the Province of Ontario which such court would
characterize as procedural and will not apply those laws of New York which such
court would characterize as procedural;

b)    
will not apply those laws of New York which such court would characterize as
revenue, expropriatory, penal or similar laws; and

c)    
will not apply those laws of  New York the application of which would be
inconsistent with public policy, as such term is interpreted under Ontario Law.

 
 
 
Exhibit I-3-3

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49.            The courts of the Province of Ontario would give a judgment in
Canadian dollars based upon a final and conclusive in personam judgment for a
sum certain, obtained in a New York court against Arrow Canada with respect to a
claim pursuant to the Originator Sale Agreement in accordance with the
submission by Arrow Canada to the jurisdiction of the court of New York without
reconsideration of the merits, if:
a)    
such judgment was:

i)    
not obtained by fraud, or in any manner contrary to the principles of natural
justice;

ii)   
not for a claim in respect of any laws of New York or of any other jurisdiction
other than the Province of Ontario which a court of the Province of Ontario
would characterize as revenue, expropriatory, penal or similar laws;

iii)   
not contrary to public policy, as such term is interpreted under Ontario Law, or
contrary to any order made by the Attorney General of Canada under the Foreign
Extraterritorial Measures Act (Canada) or by the Competition Tribunal under the
Competition Act (Canada) in respect of certain judgments referred to therein;
and

iv)   
not impeachable as void or voidable under New York law;

b)    
there has been compliance with the Limitations Act (Ontario) which has the
effect that any action to enforce a foreign judgment must be commenced within
six years of the date of the foreign judgment; and

c)    
no new admissible evidence relevant to the action is discovered prior to the
rendering of judgment by an Ontario court.

 

 
II:           TAX OPINIONS
We have also been asked to consider whether, under the Income Tax Act (Canada)
(the “Tax Act”), any amounts paid by an Obligor of any Unpaid Balance on the
Seller Receivables to Arrow would be subject to Canadian non-resident
withholding tax.
Our opinions expressed in this section are based, in part, upon our opinions
expressed above and are subject to the foregoing assumptions.  In addition, for
the purposes of our opinions expressed in this section, we have assumed that, as
at the date of the initial purchase and as of the date of each subsequent
purchase under the Originator Sale Agreement,
(a)        
the Seller Receivables do not bear any stated interest;

(b)        
the Unpaid Balance of the Seller Receivables is not in excess of the fair market
value of the products or services provided by Arrow Canada to the Obligor (at
the time the Seller Receivables arose) to which the Unpaid Balance of the Seller
Receivables relates;

(c)        
Arrow Canada and the relevant Obligors are resident in Canada, and Arrow is not
resident in Canada, each for the purposes of the Tax Act;

(d)        
Arrow Canada and Arrow are related persons for the purposes of the Tax Act; and

(e)        
each of the terms of the Originator Sale Agreement (including the calculation of
the Discount Percentage) are the same terms (and calculation) as would be the
case if Arrow Canada and Arrow dealt with each other at arm’s length for the
purposes of the Tax Act.

In our opinion, no amount will be required to be deducted or withheld under Part
XIII of the Income Tax Act (Canada) from the payment of any Unpaid Balance on
the Seller Receivables by the Obligor to, or for the benefit of, Arrow or any
other beneficial owner of the Seller Receivables that is not resident in Canada
for the purposes of the Tax Act and who subsequently acquires such interest from
Arrow.
 
 
 
Exhibit I-3-4

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Furthermore, in our opinion, neither Arrow, the SPV, nor any of the Investors
will, by virtue only of the transactions effected by the Originator Sale
Agreement, be deemed to be a resident of Canada or carrying on business in
Canada for the purposes of the Tax Act.

III.  QUALIFICATIONS
 
The foregoing opinions are subject to the following further qualifications:

(a)        
the enforceability of any provision of the Originator Sale Agreement may be
limited by insolvency, reorganization, arrangement, fraudulent preferences and
conveyances, assignments and preferences, and other similar laws affecting the
rights of creditors generally;

(b)        
equitable remedies, including, without limitation, specific performance and
injunction, may be granted only in the discretion of a court of competent
jurisdiction; in addition, a court might not allow a creditor to exercise rights
to accelerate the performance of obligations or otherwise seek enforcement of
the Originator Sale Agreement based upon the occurrence of a default deemed
immaterial, may require that discretionary powers afforded to a party be
exercised reasonably and in good faith or may decline to accept the factual or
legal determinations of a party notwithstanding that a contract or instrument
provides that the determination of that party shall be conclusive;

(c)        
the enforceability of any provision of the Originator Sale Agreement exculpating
a party from a liability or duty otherwise owed by it to another or waiving
legal and equitable defences may be limited by law;

(d)        
the costs of or incidental to proceedings authorized to be taken in court or
before a judge are in the discretion of the court or judge and the court or
judge has the full power to determine by whom and to what extent such costs
shall be paid;

(e)        
the enforceability of rights of indemnity or contribution provided in the
Originator Sale Agreement may be limited by law;

(f)        
the enforceability of the Originator Sale Agreement with respect to property
forming part of the Seller Affected Assets to which the laws of Ontario apply,
as against subsequent purchasers from Arrow Canada, is subject to the
qualification that:

(i)          
a subsequent purchaser of chattel paper (as defined in the PPSA) which forms
part of the Seller Affected Assets who takes possession of the chattel paper  in
the ordinary course of business, gives value and who does not know of Arrow’s
ownership interest therein at the time of taking possession;

(ii)         
a subsequent purchaser of an instrument (as defined in the PPSA) which forms
part of the Seller Affected Assets who takes possession of such collateral,
gives value and who does not know of Arrow’s ownership interest therein at the
time of taking possession;

 
 
 
Exhibit I-3-5

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(iii)        
a subsequent purchaser of a security (as defined in the PPSA) which forms part
of the Seller Affected Assets who purchases in good faith and takes possession
of such collateral, or a subsequent purchaser of such collateral who purchases
in the ordinary course of business, takes possession of such collateral and does
not know that the purchase constitutes a breach of the Originator Sale
Agreement;

(iv)        
a holder in due course of a bill, note or cheque which forms part of the Seller
Affected Assets;

(v)         
a loss payee or additional insured party under any policy of insurance which
forms part of the Seller Affected Assets; and

(vi)        
a transferee from Arrow Canada of money which forms part of the Seller Affected
Assets may acquire an interest therein in priority to Arrow’s interest therein;

(g)        
under the laws of Ontario, an Obligor may pay Arrow Canada until such Obligor
receives notice, reasonably identifying the relevant rights, that the account or
chattel paper has been assigned to Arrow, and, if requested by such Obligor,
Arrow has furnished proof within a reasonable time that the assignment has been
made, and, if Arrow does not do so, such Obligor may pay Arrow Canada;

(h)        
under the laws of Quebec, an Obligor or the surety or guarantor of an Obligor
(each also being, for the purposes of this paragraph only, an “Obligor”) may pay
Arrow Canada until either (i) such Obligor has acquiesced in the assignment;
(ii) such Obligor has received a copy or a pertinent extract of the Originator
Sale Agreement or any other evidence of the assignment which may be set up
against Arrow Canada; or (iii) if the relevant Obligor cannot be found in
Quebec, a notice of assignment has been published in a newspaper distributed in
the locality of the last known address of such Obligor or, if he carries on an
enterprise, in the locality where its principal establishment is situated;

(i)         
in the event that any part of the Seller Affected Assets in Quebec constitutes a
claim attested by a bearer instrument, as defined at article 1647 of the CCQ,
the Obligor who issued it is bound to pay the debt attested thereby to any
bearer who hands over the instrument to him, except where he has received notice
of a judgment ordering him to withhold payment thereof; a person who has been
unlawfully dispossessed of a bearer instrument forming part of the Seller
Affected Assets may not prevent the Obligor who issued it from paying the claim
to the person who presents the instrument except on notification of an order of
a court;

(j)         
to the extent that any part of the Seller Affected Assets constitutes corporeal
movable property in Quebec, a subsequent purchaser thereof in good faith who is
first given possession of the property is vested with the ownership thereof,
even though his title may be later in time than that of Arrow;

(k)        
to the extent that any part of the Seller Affected Assets constitutes corporeal
movable property in Quebec, a possessor in good faith thereof acquires the
ownership thereof after three years running from the dispossession of the owner.

 
 
 
Exhibit I-3-6

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(l)         
under the laws of Quebec, the assignment of a right resulting from a contract of
insurance may not be set up against the insurer, the beneficiary, or third
persons until the insurer receives notice thereof;

(m)       
under the laws of Quebec, an Obligor may set up against Arrow Canada or Arrow
any payment made in good faith by himself or his surety to an apparent creditor,
even if the Obligor or his surety has received evidence of the assignment;

(n)        
no opinion is expressed regarding the existence of, or the right, title or
interest of Arrow Canada to, any of the Seller Affected Assets;

(o)        
to the extent, if any, that the Originator Sale Agreement purports to assign any
Crown debts (as defined in the Financial Administration Act (Canada), no steps
have been taken to provide the notices or obtain the acknowledgements provided
for in Part VII of that Act.  An assignment of Crown debts not complying with
that Act is ineffective as between the assignor and the assignee and as against
the Crown and, therefore, there will not be a valid assignment of any such Crown
debts unless that Act is complied with;

(p)        
Arrow’s interest may not be enforceable in respect of proceeds of the Seller
Affected Assets which are not identifiable or traceable as assets of Arrow; and

(q)        
to the extent that the interest of Arrow in and to the Seller Affected Assets
constitutes security interests in chattel paper, accounts, claims or the
proceeds thereof, such security interest may be subordinate to (i) the interest
of a person who is the beneficiary of a deemed trust arising under the
Employment Standards Act (Ontario) or under the Pension Benefits Act (Ontario)
and (ii) the interest of a claimant under non-consensual, unregistered liens,
hypothecs, trusts and claims created or imposed by statute or rule of law.

IV:           BANKRUPTCY OPINIONS
You have also asked us to consider whether under Ontario Law, creditors of Arrow
Canada, subsequent purchasers of the Seller Affected Assets, or a trustee in
bankruptcy, receiver, receiver-manager or liquidator of Arrow Canada
(collectively, “Creditors”) could look successfully to the Seller Affected
Assets to satisfy a claim against Arrow Canada after the sale, assignment and
transfer of the Seller Affected Assets by Arrow Canada to Arrow pursuant to the
Originator Sale Agreement.
For the purposes hereof, “Insolvency Statutes” means the Bankruptcy and
Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the
Assignments and Preferences Act (Ontario) and the Fraudulent Conveyances Act
(Ontario).
For the purposes of the opinions expressed in this Section IV, we have assumed
that, on the Closing Date and on the date of each sale of Seller Affected Assets
pursuant to the Originator Sale Agreement:
(i)          
Arrow Canada is not insolvent, in insolvent circumstances or on the eve of or in
contemplation of insolvency or unable to meet its debts, as applicable, within
the meaning of any of the Insolvency Statutes;

(ii)         
Arrow Canada will not become insolvent or be put in insolvent circumstances or
become unable to meet its debts, as applicable, within the meaning of any of the
Insolvency Statutes by the entering into of, or immediately after completion of
the transactions contemplated by, the Originator Sale Agreement;

 
 
 
Exhibit I-3-7

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(iii)        
Arrow Canada has not received a notice that the Seller Affected Assets are the
subject of a seizure by a sheriff or otherwise or the subject of a garnishment,
charging or equitable execution order or notice that a trustee in bankruptcy has
an interest therein;

 (iv)        
Arrow Canada has entered into the Originator Sale Agreement in good faith for
the purpose of selling the Seller Affected Assets to, and assigning and
transferring all of its right, title and interest in, to and under the Seller
Affected Assets to Arrow and receiving from Arrow the consideration therefor
specified in the Originator Sale Agreement, and not for the purpose of injuring,
obstructing, impeding, defeating, hindering, delaying, defrauding or oppressing
the rights and claims of Creditors or others against Arrow Canada, providing
payment or security for payment to Arrow or for any other purpose relating in
any way to the claims of Creditors or others against Arrow Canada;

(v)         
the consideration paid and to be paid by Arrow for the Seller Affected Assets
pursuant to the Originator Sale Agreement represents approximately the present
fair market value of the Seller Affected Assets;

(vi)        
Arrow Canada is not a party to any agreement with Arrow whereby Arrow would be
legally responsible for the obligations of Arrow Canada; and

 
(vii)       
Arrow Canada has not granted any security interests in the Seller Affected
Assets and the Seller Affected Assets are not subject to any non-consensual
unregistered liens, trusts or claims created or imposed by statute or rule of
law.

Creditors may assert their rights only against assets in which Arrow Canada has
a beneficial ownership interest, subject to the provisions of the Insolvency
Statutes discussed below which, in our opinion, are not applicable.  In our
opinion, to the extent that Ontario Law applies to the sale of the Seller
Affected Assets, the Originator Sale Agreement is effective to validly transfer
to Arrow all of Arrow Canada’s right, title and interest in, to and under the
Seller Affected Assets on the date of the initial sale thereunder and
thereafter, the form and content of the Originator Sale Agreement is sufficient
to transfer to Arrow all of Arrow Canada’s right, title and interest in, to and
under the Seller Affected Assets (other than those subject to the initial sale)
when such assets are created or acquired by Arrow Canada.  Arrow Canada has not
and will not, pursuant to the Originator Sale Agreement, retain any beneficial
interest in the Seller Affected Assets.  Accordingly, in a bankruptcy,
insolvency or liquidation of Arrow Canada, the Seller Affected Assets would not
form part of the property of Arrow Canada within the meaning of any applicable
Insolvency Statute.  Arrow is a separate legal entity from Arrow Canada which,
absent any agreement to the contrary, would not be legally responsible for the
obligations of Arrow Canada.  As such, Creditors could not look successfully to
the Seller Affected Assets to satisfy a claim which they may have against Arrow
Canada, whether before or after a bankruptcy or insolvency of Arrow Canada, or
in any other proceeding instituted by or against Arrow Canada under the
Insolvency Statutes, in that the sale by Arrow Canada to Arrow of the Seller
Affected Assets will be recognized as a sale in any such proceeding, subject to
the provisions of the Insolvency Statutes discussed below which, based on the
assumption noted above, are not applicable; provided, however, that if the
Collections become commingled with the assets of Arrow Canada, such that they
are not identifiable as property of Arrow, Arrow may not be successful in
reclaiming its property by way of a trust claim or a proprietary claim under the
applicable Insolvency Statute.
 
 
 
Exhibit I-3-8

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However, in the case of amounts payable under the Seller Affected Assets which
have not been collected, (i) the enforcement of Arrow’s rights to such payments
may be affected by a stay in respect of Arrow Canada under the applicable
Insolvency Statute until a court of competent jurisdiction has determined the
issue of whether the transactions contemplated by the Originator Sale Agreement
constitute an effective sale of the Seller Affected Assets by Arrow Canada to
Arrow, (ii) the costs associated with collecting the Seller Affected Assets
during such stay could be charged against such Seller Affected Assets in
priority to Arrow’s interest therein, (iii) the terms of such stay may preclude
the termination of Arrow Canada as Sub-Servicer under the Originator Sale
Agreement or the notification of the relevant Obligors of such sale by the terms
of such stay, and (iv) Arrow may be required to notify the relevant Obligors of
such sale and take proceedings against Arrow Canada or others who obtain payment
or possession of such Seller Affected Assets or who are alleging a right to such
payment or possession.
You have also asked us to consider whether the sale of the Seller Affected
Assets pursuant to the Originator Sale Agreement could be overridden or set
aside by a court upon the application of Creditors pursuant to the Insolvency
Statutes.  Pursuant to the provisions of the Insolvency Statutes, to the extent
relevant, certain transactions may be overridden or set aside in circumstances
therein specified, as follows:
(i)          
a transaction entered into by an insolvent debtor with the intention of giving
any of its creditors a preference over its other creditors;

(ii)         
a transfer of property made with the intention of defeating, hindering, delaying
or defrauding creditors or others of their claims against the transferor; and

(iii)        
a settlement of property where the settlor subsequently becomes bankrupt.

Based upon and subject to the foregoing and the assumptions expressed herein, we
are of the opinion that the sale of the Seller Affected Assets pursuant to the
Originator Sale Agreement would not be overridden or set aside by a court upon
the application of a Creditor pursuant to any of the Insolvency Statutes.
This opinion has been delivered at your request for the purposes contemplated by
the Agreement.  Without our prior written consent, this opinion is not to be
utilized or quoted for any other purpose and no one other than you is entitled
to rely thereon; provided, that any Alternate Investor, any Program Support
Provider and any placement Agent or dealer of the Conduit Investor’s commercial
paper may rely on this opinion as of it were addressed to them.
Very truly yours,
 
 
 
Exhibit I-3-9

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Exhibit I-4
 
Form of Opinion of Counsel to SBM and Support Net, Inc.
 
March 21, 2001
 
To the parties listed on Schedule A
     annexed hereto
 
Ladies and Gentlemen:
 
This opinion is furnished to you pursuant to Section 8.1(q) of the Transfer and
Administration Agreement dated as of March 21, 2001 (the “Agreement”) among
Arrow Electronics Funding Corporation, as transferor (in such capacity, the
“SPV”), Arrow Electronics, Inc., individually (the “Arrow”) and as master
servicer (in such capacity, the “Master Servicer”), the parties thereto as
“Conduit Investors,” “Alternate Investors” and “Funding Agents,” and Bank of
America, National Association, as administrative agent (in such capacity, the
“Administrative Agent”).  Capitalized terms used herein and not otherwise
defined herein shall have the meanings given such terms in the Agreement.
 
We have acted as counsel to [SBM] and [Support Net, Inc.] (the “Applicable
Originators) with the preparation of the Agreement, the Originator Sale
Agreements to which the Applicable Originators are a party, the First Tier
Agreement, the other Transaction Documents and the transactions contemplated
thereby.
 
We have examined, on the date hereof, the Agreement and all exhibits thereto,
the First Tier Agreement and all exhibits thereto, the Originator Sale
Agreements, certificates of public officials and of officers of the Applicable
Originators and certified copies of the Applicable Originators’ certificate of
incorporation, by-laws, the Board of Directors’ resolutions authorizing the
Applicable Originators’ participation in the transactions contemplated by the
Agreement, the Originator Sale Agreements to which the Applicable Originators
are a party, the First Tier Agreement, the other Transaction Documents, copies
of each of the above having been delivered to you.  We have also examined the
closing documents delivered pursuant to the Agreement, the Originator Sale
Agreements to which the Applicable Originators are a party and the First Tier
Agreement and copies of all such documents and records, and have made such
investigations of law, as we have deemed necessary and relevant as a basis for
our opinion.  With respect to the accuracy of material factual matters which
were not independently established, we have relied on certificates and
statements of officers the Applicable Originators.
 
On the basis of the foregoing, we are of the opinion that:
 
 
 
Exhibit I-4-1

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50. Each of the Applicable Originators is a corporation duly incorporated,
validly existing and in good standing under the laws of its respective state or
jurisdiction of formation, has the corporate power and authority to own its
properties and to carry on its business as now being conducted, and had at all
relevant times, and now has, all necessary power, authority, and legal right to
acquire and own the Receivables and other Affected Assets, and is duly qualified
and in good standing as a foreign corporation and is authorized to do business
in each jurisdiction in which the character of its properties or the nature of
its business requires such qualification or authorization.
 
51. Each of the Applicable Originators has the power, corporate and other, and
has taken all necessary corporate action to execute, deliver and perform the
Originator Sale Agreement and the other Transaction Documents to which it is a
party, each in accordance with its respective terms, and to consummate the
transactions contemplated thereby.  The Transaction Documents to which each of
the Applicable Originators is a party have been duly executed and delivered by
the Applicable Originators, and constitute the legal, valid and binding
obligations of each such party, enforceable against such party in accordance
with their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles.
 
52. The execution, delivery and performance in accordance with their terms by
each of the Applicable Originators of the Originator Sale Agreement and the
other Transaction Documents to which it is a party and the consummation of the
transactions contemplated thereby, do not and will not (i) require any consent
or approval of any stockholder of either of the Applicable Originators that has
not been obtained, (ii) violate or conflict with, result in a breach of, or
constitute a default under the certificate of incorporation or the by-laws of
either of the Applicable Originators.
 
The foregoing opinions and conclusions were given only in respect of the laws of
[insert state or other jurisdiction], the State of New York and, to the extent
specifically referred to herein, the Federal laws of the United States of
America.
 
This opinion has been delivered at your request for the purposes contemplated by
the Agreement.  Without our prior written consent, this opinion is not to be
utilized or quoted for any other purpose and no one other than you is entitled
to rely thereon; provided, that any Alternate Investor, any Program Support
Provider and any placement agent or dealer of any Conduit Investor’s commercial
paper may rely on this opinion as of it were addressed to them.
 
Very truly yours,
 

Exhibit I-4-2

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