Document:

avt_Ex10_2

		
			Exhibit 10.2
		

		
			 
		

		
			Execution Version
		

		
			 
		

		
			SECOND AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
		

		
			DATED AS OF August 16, 2018
		

		
			 
		

		
			 
		

		
			BETWEEN
		

		
			 
		

		
			AVNET, INC.,
		

		
			as Originator
		

		
			 
		

		
			AND
		

		
			AVNET RECEIVABLES CORPORATION,
		

		
			as Buyer
		

		
			 
		

		
			 
		

		
			

		 

 

		

		
			TABLE OF CONTENTS
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Page

				
	
					
						 

					
					
						 

				
	
					
						Article I AMOUNTS AND TERMS OF THE PURCHASE

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						1.1

					
					
						Purchase of Receivables

					
2
				
	
					
						1.2

					
					
						Payment for the Purchase

					
3
				
	
					
						1.3

					
					
						Purchase Price Credit Adjustments

					
4
				
	
					
						1.4

					
					
						Payments and Computations, Etc. 

					
5
				
	
					
						1.5

					
					
						Transfer of Records

					
5
				
	
					
						1.6

					
					
						Characterization

					
5
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Article II

					
					
						 

				
	
					
						REPRESENTATIONS AND WARRANTIES

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						2.1

					
					
						Representations and Warranties of Originator

					
6
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Article III

					
					
						 

				
	
					
						CONDITIONS OF PURCHASE

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						3.1

					
					
						Conditions Precedent to Purchase

					
10
				
	
					
						3.2

					
					
						Conditions Precedent to Subsequent Payments

					
10
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Article IV

					
					
						 

				
	
					
						COVENANTS

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						4.1

					
					
						Affirmative Covenants of Originator

					
10
				
	
					
						4.2

					
					
						Negative Covenants of Originator

					
15
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Article V

					
					
						 

				
	
					
						TERMINATION EVENTS

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						5.1

					
					
						Termination Events

					
16
				
	
					
						5.2

					
					
						Remedies

					
17
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Article VI

					
					
						 

				
	
					
						INDEMNIFICATION

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						6.1

					
					
						Indemnities by Originator

					
18
				
	
					
						6.2

					
					
						Other Costs and Expenses

					
20
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Article VII

					
					
						 

				
	
					
						MISCELLANEOUS

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						7.1

					
					
						Waivers and Amendments

					
20
				
	
					
						7.2

					
					
						Notices

					
20
				
	
					
						7.3

					
					
						Protection of Ownership Interests of Buyer

					
21
				

		
			 
		

		
			 
		

		

		 

 

	
					
						

					
						 

					
					
						 

					
					
						 

				
	
					
						7.4

					
					
						Confidentiality

					
22
				
	
					
						7.5

					
					
						Bankruptcy Petition

					
23
				
	
					
						7.6

					
					
						Limitation of Liability

					
23
				
	
					
						7.7

					
					
						CHOICE OF LAW

					
23
				
	
					
						7.8

					
					
						CONSENT TO JURISDICTION

					
23
				
	
					
						7.9

					
					
						WAIVER OF JURY TRIAL

					
24
				
	
					
						7.10

					
					
						Integration; Binding Effect; Survival of Terms

					
24
				
	
					
						7.11

					
					
						Counterparts; Severability; Section References

					
25
				
	
					
						7.12

					
					
						Subordination

					
25
				
	
					
						7.13

					
					
						Third Party Beneficiaries

					
25
				

		
			 
		

		
			
		

		
			

		 

		

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			Exhibits and Schedules
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						Exhibit I

					
					
						-

					
					
						Definitions

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Exhibit II

					
					
						-

					
					
						Jurisdictions of Organization; Locations of Records; Organizational Number(s); Federal Employer Identification Numbers(s); Other Names

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Exhibit III

					
					
						-

					
					
						Lock-Boxes; Collection Accounts; Collection Banks

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Exhibit IV

					
					
						-

					
					
						Form of Compliance Certificate

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Exhibit V

					
					
						-

					
					
						Credit and Collection Policy

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Exhibit VI

					
					
						-

					
					
						Collateral Description

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Exhibit VII

					
					
						-

					
					
						Form of Subordinated Note

				

		
			 
		

		
			 
		

		
			

		 

		

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			SECOND AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
		

		
			THIS SECOND AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT, dated as of August 16, 2018,  is by and between AVNET, INC., a New York corporation (“Originator”), and AVNET RECEIVABLES CORPORATION, a Delaware corporation (“Buyer”).  Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I hereto (or, if not defined in Exhibit I hereto, the meaning assigned to such term in Exhibit I to the Purchase Agreement).
		

		
			PRELIMINARY STATEMENTS
		

		
			Originator from time to time originates Receivables.
		

		
			Originator and Buyer are parties to the Existing RSA,  pursuant to which Originator sells and assigns to Buyer, and Buyer purchases from Originator, all of Originator’s right, title and interest in and to such Receivables, together with the Related Security and Collections with respect thereto.
		

		
			Originator and Buyer desire to amend and restate the Existing RSA, effective as of August 16, 2018 (the “Amendment Date”), on the terms and conditions set forth herein.
		

		
			Originator and Buyer intend the transactions contemplated hereby to be true sales of the Receivables from Originator to Buyer, providing Buyer with the full benefits of ownership of the Receivables, and Originator and Buyer do not intend these transactions to be, or for any purpose to be characterized as, loans from Buyer to Originator.
		

		
			Buyer from time to time sells undivided interests in the Receivables and in the associated Related Security and Collections pursuant to that certain Fourth Amended and Restated Receivables Purchase Agreement, dated as of August 16, 2018  (as the same may from time to time hereafter be amended, supplemented, restated or otherwise modified, the “Purchase Agreement”), among Buyer, Originator, as Servicer, the Companies from time to time party thereto,  the Financial Institutions from time to time party thereto and Wells Fargo Bank, N.A. or any successor agent appointed pursuant to the terms of the Purchase Agreement, as agent for such Companies and such Financial Institutions (in such capacity, the “Agent”).
		

		
			NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Existing RSA is hereby amended and restated in its entirety to read as set forth herein:
		

		
			 
		

		
			 
		

		
			

		 

		

			 

		

 

		

		
			ARTICLE I
		

		
			AMOUNTS AND TERMS OF THE PURCHASE
		

		
			1.1       Purchase of Receivables.
		

		
			(a)     Each of the parties hereto acknowledges and ratifies the prior sales and purchases under the Existing RSA of the Receivables, Related Security relating thereto and Collections thereof, and agrees that the parties’ continuing rights and obligations with respect to such Receivables shall be governed by the terms of this Agreement.  Upon the terms and subject to the conditions set forth herein, Originator does hereby sell, assign, transfer, set-over and otherwise convey to Buyer, without recourse (except to the extent expressly provided herein), and Buyer does hereby purchase from Originator, in each case to the extent not previously  sold, assigned, transferred, set-over and otherwise conveyed under the Existing RSA, including the Original RSA,  all of Originator’s right, title and interest in and to all Receivables existing on the Business Day immediately preceding the Amendment Date and all Receivables thereafter arising through and including the Termination Date, together, in each case, with all Related Security relating thereto and all Collections thereof.  In accordance with the preceding sentence, on the Amendment Date, Buyer shall acquire all of Originator’s right, title and interest in and to all Receivables existing on the Amendment Date and thereafter arising through and including the Termination Date, together with all Related Security relating thereto and all Collections thereof, in each case, to the extent not previously acquired under the Existing RSA.  Buyer shall be obligated to pay the Purchase Price for the Receivables purchased hereunder in accordance with Section 1.2.  In connection with consummation of the Purchase Price for any Receivables purchased hereunder, Buyer may request that Originator deliver, and Originator shall deliver, such approvals, opinions, information, reports or documents as Buyer may reasonably request.
		

		
			(b)     It is the intention of the parties hereto that the Purchase of Receivables made hereunder shall constitute a sale, which sale is absolute and irrevocable and provides Buyer with the full benefits of ownership of the Receivables.  Except for the Purchase Price Credits owed pursuant to Section 1.3, the sale of Receivables hereunder is made without recourse to Originator; provided,  however, that (i) Originator shall be liable to Buyer (and its assigns) for all representations, warranties, covenants and indemnities made by Originator pursuant to the terms of the Transaction Documents to which Originator is a party, and (ii) such sale does not constitute and is not intended to result in an assumption by Buyer or any assignee thereof of any obligation of Originator or any other Person arising in connection with the Receivables, the related Contracts and/or other Related Security or any other obligations of Originator.  In view of the intention of the parties hereto that the Purchase of Receivables made hereunder shall constitute a sale of such Receivables rather than loans secured thereby, Originator agrees that it has, and in accordance with Section 4.1(e)(ii),  will continue to, identify in its general ledger a legend, reasonably acceptable to Buyer and to the Agent (as Buyer’s assignee), that Buyer has purchased such Receivables as provided in this Agreement and to note in its financial statements that its Receivables have been sold to Buyer.  Upon the request of Buyer or the Agent (as Buyer’s assignee), Originator will authorize and file such financing or continuation statements, or amendments thereto or assignments thereof, and execute and file such other instruments, documents or notices, as may be necessary or appropriate to perfect and maintain the perfection of Buyer’s ownership interest in the Receivables and the Related
		

		
			
		

		
			

		 

		

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			Security and Collections with respect thereto, or as Buyer or the Agent (as Buyer’s assignee) may reasonably request.
		

		
			1.2       Payment for the Purchase.
		

		
			(a)     The parties acknowledge that the Purchase Price for all Receivables, Related Security and Collections existing prior to the Amendment Date and sold and purchased under the Existing RSA has been paid in full by Buyer to Originator.
		

		
			The Purchase Price for each Receivable coming into existence after the Amendment Date shall be due and owing in full by Buyer to Originator or its designee on the date each such Receivable came into existence (except that Buyer may, with respect to any such Purchase Price, offset against such Purchase Price any amounts owed by Originator to Buyer hereunder and which have become due but remain unpaid) and shall be paid to Originator in the manner provided in the following paragraphs (b),  (c) and (d).
		

		
			(b)     With respect to any Receivables coming into existence after the Amendment Date, on each Settlement Date, Buyer shall pay the Purchase Price therefor in accordance with Section 1.2(d) and in the following manner:
		

		
			first, by delivery of immediately available funds, to the extent of funds available to Buyer from its subsequent sale of an interest in the Receivables to the Agent for the benefit of the Purchasers under the Purchase Agreement or other cash on hand;
		

		
			second, by delivery of the proceeds of a subordinated revolving loan from Originator to Buyer (a “Subordinated Loan”),  provided that the amount of any such Subordinated Loan shall not exceed the least of (i) the remaining unpaid portion of such Purchase Price, (ii) the maximum Subordinated Loan that could be borrowed without rendering Buyer’s Net Worth less than the Required Capital Amount and (iii) the maximum Subordinated Loan that could be borrowed without rendering the Net Value less than the aggregate outstanding principal balance of the Subordinated Loans (including the Subordinated Loan proposed to be made on such date); and
		

		
			third, unless Buyer has declared the Termination Date to have occurred pursuant to Section 5.2, by accepting a contribution to its capital pursuant to the Subscription Agreement in an amount equal to the remaining unpaid balance of such Purchase Price.
		

		
			Subject to the limitations set forth in clause second above, Originator irrevocably agrees to advance each Subordinated Loan requested by Buyer on or prior to the Termination Date.  The Subordinated Loans shall be evidenced by, and shall be payable in accordance with the terms and provisions of, the Subordinated Note and shall be payable solely from funds which Buyer is not required under the Purchase Agreement to set aside for the benefit of, or otherwise pay over to, the Purchasers.
		

		
			Originator is hereby authorized by Buyer to endorse on the schedule attached to the Subordinated Note an appropriate notation evidencing the date and amount of each advance thereunder, as well
		

		
			
		

		
			

		 

		

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			as the date of each payment with respect thereto, provided that the failure to make such notation shall not affect any obligation of Buyer thereunder.
		

		
			(c)     From and after the Termination Date, Originator shall not be obligated to (but may, at its option):  (i) sell Receivables to Buyer, or (ii) contribute Receivables to Buyer’s capital pursuant to clause third of Section 1.2(b) unless Originator reasonably determines that the Purchase Price therefor will be satisfied with funds available to Buyer from sales of interests in the Receivables pursuant to the Purchase Agreement, Collections, proceeds of Subordinated Loans, other cash on hand or otherwise.
		

		
			(d)     Although the Purchase Price for each Receivable coming into existence after the Amendment Date shall be due and payable in full by Buyer to Originator on the date such Receivable came into existence, settlement of the Purchase Price between Buyer and Originator shall be effected on a monthly basis on Settlement Dates with respect to all Receivables coming into existence during the same Calculation Period and based on the information contained in the Monthly Report delivered by the Servicer pursuant to Article VIII of the Purchase Agreement for the Calculation Period then most recently ended.  Although settlement shall be effected on Settlement Dates, increases or decreases in the amount owing under the Subordinated Note made pursuant to Section 1.2(b) and any contribution of capital by Originator to Buyer made pursuant to Section 1.2(b) shall be deemed to have occurred and shall be effective as of the last Business Day of the Calculation Period to which such settlement relates.
		

		
			1.3       Purchase Price Credit Adjustments.  If on any day:
		

		
			(a)     the Outstanding Balance of a Receivable is:
		

		
			(i)   reduced as a result of any defective or rejected or returned goods or services, any discount or any adjustment or otherwise by Originator (other than cash Collections on account of the Receivables),
		

		
			(ii)  reduced or canceled as a result of a setoff in respect of any claim by any Person (whether such claim arises out of the same or a related transaction or an unrelated transaction), or
		

		
			(b)     any of the representations and warranties set forth in Article II are not true when made or deemed made with respect to any Receivable,
		

		
			then, in such event, Buyer shall be entitled to a credit (each, a “Purchase Price Credit”) against the Purchase Price otherwise payable hereunder equal to the Outstanding Balance of such Receivable (calculated before giving effect to the applicable reduction or cancellation).  If such Purchase Price Credit exceeds the Purchase Price payable by Buyer on any day, then Originator shall pay to Buyer the remaining amount of such Purchase Price Credit in cash immediately, provided that if the Termination Date has not occurred, Originator shall be allowed to deduct the remaining amount of such Purchase Price Credit from any indebtedness owed to it under the Subordinated Note.
		

		
			
		

		
			

		 

		

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			1.4       Payments and Computations, Etc.  All amounts to be paid or deposited by Buyer hereunder shall be paid or deposited in accordance with the terms hereof on the day when due in immediately available funds to the account of Originator designated from time to time by Originator or as otherwise directed by Originator.  In the event that any payment owed by any Person hereunder becomes due on a day that is not a Business Day, then such payment shall be made on the next succeeding Business Day.  If any Person fails to pay any amount hereunder when due, such Person agrees to pay, on demand, the Default Fee in respect thereof until paid in full; provided,  however, that such Default Fee shall not at any time exceed the maximum rate permitted by applicable law.  All computations of interest payable hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed.
		

		
			1.5       Transfer of Records.
		

		
			(a)     In connection with the Purchase of Receivables hereunder, Originator hereby sells, transfers, assigns and otherwise conveys to Buyer all of Originator’s right and title to and interest in the Records relating to all Receivables sold hereunder, without the need for any further documentation in connection with the Purchase.  In connection with such transfer, Originator hereby grants to each of Buyer, the Agent and the Servicer an irrevocable, non-exclusive license to use, without royalty or payment of any kind, all software used by Originator to account for the Receivables, to the extent necessary to administer the Receivables, whether such software is owned by Originator or is owned by others and used by Originator under license agreements with respect thereto, provided that should the consent of any licensor of such software be required for the grant of the license described herein, to be effective, Originator hereby agrees that upon the request of Buyer (or Buyer’s assignee), Originator will use its reasonable efforts to obtain the consent of such third-party licensor.  The license granted hereby shall be irrevocable until the indefeasible payment in full of the Aggregate Unpaids, and shall terminate on the date this Agreement terminates in accordance with its terms.
		

		
			(b)     Originator (i) shall take such action requested by Buyer and/or the Agent (as Buyer’s assignee), from time to time hereafter, that may be necessary or appropriate to ensure that Buyer and its assigns under the Purchase Agreement have an enforceable ownership interest in the Records relating to the Receivables purchased from Originator hereunder, and (ii) shall use its reasonable efforts to ensure that Buyer, the Agent and the Servicer each has an enforceable right (whether by license or sublicense or otherwise) to use all of the computer software used to account for the Receivables and/or to recreate such Records.
		

		
			1.6       Characterization.  If, notwithstanding the intention of the parties expressed in Section 1.1(b), any sale or contribution by Originator to Buyer of Receivables hereunder shall be characterized as a secured loan and not a sale or such sale shall for any reason be ineffective or unenforceable (any of the foregoing being a “Recharacterization”), then this Agreement shall be deemed to constitute a security agreement under the UCC and other applicable law. For this purpose and without being in derogation of the parties’ intention that the sale of Receivables hereunder shall constitute a true sale thereof, Originator (i) reaffirms its prior grant of a duly perfected security interest to Buyer pursuant to the Existing RSA and (ii) hereby grants to Buyer a duly perfected security interest in all of Originator’s right title and interest in, to and under all Receivables now existing and hereafter arising through and including the Termination Date, all
		

		
			
		

		
			

		 

		

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			Collections and Related Security with respect thereto, each Lock-Box and Collection Account, all other rights and payments relating to the Receivables and all proceeds of the foregoing (collectively, the “RSA Collateral”) to secure the prompt and complete payment of a loan deemed to have been made in an amount equal to the Purchase Price of the Receivables together with all other obligations of Originator hereunder, which security interest shall be prior to all other Adverse Claims thereto. Each party hereto acknowledges and agrees that the security interest and liens granted pursuant to the Existing RSA shall continue in full force and effect, and this Section 1.6 shall be deemed to be a continuation and reaffirmation, and not a replacement or novation, of the security interest and liens granted under and pursuant to the Existing RSA.  Buyer and its assigns shall have, in addition to the rights and remedies which they may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other applicable law, which rights and remedies shall be cumulative. In the case of any Recharacterization, each of the Originator and the Buyer represents and warrants as to itself that each remittance of Collections by the Originator to the Buyer hereunder will have been (i) in payment of a debt incurred by the Originator in the ordinary course of business or financial affairs of the Originator and the Buyer and (ii) made in the ordinary course of business or financial affairs of the Originator and the Buyer.
		

		
			ARTICLE II
		

		
			REPRESENTATIONS AND WARRANTIES
		

		
			2.1       Representations and Warranties of Originator.  Originator hereby represents and warrants to Buyer on the Amendment Date, on the date of the Purchase and on each date that any Receivable comes into existence that:
		

		
			(a)     Corporate Existence and Power.  Originator is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation, and is duly qualified to do business and is in good standing as a foreign corporation, and has and holds all corporate power, and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted except where the failure to so qualify or so hold could not reasonably be expected to have a Material Adverse Effect.
		

		
			(b)     Power and Authority; Due Authorization, Execution and Delivery.  The execution and delivery by Originator of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder and, Originator’s use of the proceeds of the Purchase made hereunder, are within its corporate powers and authority, and have been duly authorized by all necessary corporate action on its part.  This Agreement and each other Transaction Document to which Originator is a party has been duly executed and delivered by Originator.
		

		
			(c)     No Conflict.  The execution and delivery by Originator of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder do not contravene or violate (i) its certificate or articles of incorporation or by-laws or any shareholder agreements, voting trusts, and similar arrangements applicable to any of its authorized shares, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or by
		

		
			
		

		
			

		 

		

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			which it or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on assets of Originator or its Subsidiaries (except as created hereunder); and no transaction contemplated hereby requires compliance with any bulk sales act or similar law.
		

		
			(d)     Governmental Authorization.  Other than the filing of the financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by Originator of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder.
		

		
			(e)     Actions, Suits.  There are no actions, suits or proceedings pending, or to the best of Originator’s knowledge, threatened, against or affecting Originator, or any of its properties, in or before any court, arbitrator or other body, except for actions, suits or proceedings (i) that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect or (ii) that have been publicly disclosed in any periodic report or other filing made by Originator pursuant to, and in full conformity with the requirements of, the Securities Exchange Act of 1934, as amended.  In addition to the foregoing, there are no actions, suits or proceedings pending, or to the best of Originator’s knowledge, threatened against or affecting the Receivables, the Related Security or any Transaction Document, in or before any court, arbitration or other body.  Originator is not in default with respect to any order of any court, arbitrator or governmental body.
		

		
			(f)      Binding Effect.  This Agreement and each other Transaction Document to which Originator is a party constitute the legal, valid and binding obligations of Originator enforceable against Originator in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
		

		
			(g)     Accuracy of Information.  All information heretofore furnished by Originator or any of its Affiliates to Buyer (or its assigns) for purposes of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by Originator or any of its Affiliates to Buyer (or its assigns) will be, true and accurate in every material respect on the date such information is stated or certified and does not and will not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.
		

		
			(h)     Use of Proceeds.  No proceeds of any Purchase Price payment hereunder will be used by Originator (i) for a purpose that violates, or would be inconsistent with, any law, rule or regulation applicable to Originator or (ii) to acquire any security in any transaction which is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended.
		

		
			(i)      Good Title.  Immediately prior to the Purchase hereunder and upon the creation of each Receivable coming into existence after the Initial Cutoff Date, Originator (i)
		

		
			
		

		
			

		 

		

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			is the legal and beneficial owner of the Receivables and (ii) is the legal and beneficial owner of the Related Security with respect thereto or possesses a valid and perfected security interest therein, in each case, free and clear of any Adverse Claim, except as created by the Transaction Documents.  There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Originator’s ownership interest in each Receivable, its Collections and the Related Security.
		

		
			(j)      Perfection.  This Agreement, together with the filing of the financing statements contemplated hereby, is effective to transfer to Buyer (and Buyer shall acquire from Originator) (i) legal and equitable title to, with the right to sell and encumber each Receivable existing and hereafter arising, together with the Collections with respect thereto, and (ii) all of Originator’s right, title and interest in the Related Security associated with each Receivable, in each case, free and clear of any Adverse Claim, except as created by the Transactions Documents.  There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyer’s ownership interest in the Receivables, the Related Security and the Collections.
		

		
			(k)     Jurisdiction of Organization and Locations of Records.  The jurisdiction of organization of Originator and the offices where it keeps all of its Records are located at the address(es) listed on Exhibit II or such other locations of which Buyer has been notified in accordance with Section 4.2(a) in jurisdictions where all action required by Section 4.2(a) and/or Section 7.3(a) has been taken and completed.  Originator’s organizational number assigned to it by its jurisdiction of organization and Originator’s Federal Employer Identification Number are correctly set forth on Exhibit II.  Originator has not changed its corporate structure or jurisdiction of organization except in accordance with Section 4.2(a).  Originator is a New York corporation and is a “registered organization” (within the meaning of Section 9-102 of the UCC in effect in the State of New York).
		

		
			(l)      Collections.  The conditions and requirements set forth in Section 4.1(i) have at all times been satisfied and duly performed.  The names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts of Originator at each Collection Bank and the post office box number of each Lock-Box, are listed on Exhibit III.  Originator has not granted any Person, other than Buyer (and its assigns) dominion and control or “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any Lock-Box or Collection Account, or the right to take dominion and control or “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any such Lock-Box or Collection Account at a future time or upon the occurrence of a future event.  Originator has taken all steps necessary to ensure that the Agent has “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) over all of its Collection Accounts and Lock-Boxes.
		

		
			(m)    Material Adverse Effect.  Since July 2, 2017, no event has occurred that would have a Material Adverse Effect.
		

		
			
		

		
			

		 

		

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			(n)     Names.  In the past five years, Originator has not used any corporate names, trade names or assumed names other than as listed on Exhibit II.
		

		
			(o)     Ownership of Buyer.  Originator owns, directly or indirectly, 100% of the issued and outstanding capital stock of Buyer, free and clear of any Adverse Claim.  Such capital stock is validly issued, fully paid and nonassessable, and there are no options, warrants or other rights to acquire securities of Buyer.
		

		
			(p)     Not an Investment Company.  Originator is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or any successor statute.
		

		
			(q)     Compliance with Law.  Originator has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect.  Each Receivable, together with the Contract related thereto, does not contravene any laws, rules or regulations applicable thereto (including,  without limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy), and no part of such Contract is in violation of any such law, rule or regulation.
		

		
			(r)      Compliance with Credit and Collection Policy.  Originator has complied in all material respects with the Credit and Collection Policy with regard to each Receivable and the related Contract, and has not made any change to the Credit and Collection Policy, except any such material change which has been made in accordance with Section 4.2(c) and as to which Buyer (or its assigns) has been notified in accordance with Section 4.1(a)(vii).
		

		
			(s)      Payments to Originator.  With respect to each Receivable transferred to Buyer hereunder, the Purchase Price received by Originator constitutes reasonably equivalent value in consideration therefor and such transfer was not made for or on account of an antecedent debt.  No transfer by Originator of any Receivable hereunder is or may be voidable under any section of the Federal Bankruptcy Code.
		

		
			(t)      Enforceability of Contracts.  Each Contract with respect to each Receivable is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Receivable created thereunder and any accrued interest thereon, enforceable against the Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
		

		
			(u)     Eligible Receivables.  Each Receivable included at any time in the Net Receivables Balance as an Eligible Receivable was, on the later to occur of the date of the Purchase and the date it came into existence, an Eligible Receivable on such date.
		

		
			(v)     Accounting.  The manner in which Originator accounts for the transactions contemplated by this Agreement does not jeopardize the characterization of the
		

		
			
		

		
			

		 

		

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			transactions contemplated herein as being true sales of the Receivables by the Originator to the Buyer.
		

		
			ARTICLE III
		

		
			CONDITIONS OF PURCHASE
		

		
			3.1       Conditions Precedent to Purchase.  The effectiveness of the amendment and restatement of this Agreement is subject to the conditions precedent that all of the conditions to the concurrent amendment and restatement of the Purchase Agreement (as set forth therein) shall have been satisfied or waived in accordance with the terms thereof.
		

		
			3.2       Conditions Precedent to Subsequent Payments.  Buyer’s obligation to pay for Receivables coming into existence after the Amendment Date shall be subject to the further conditions precedent that (a) the Facility Termination Date shall not have occurred; (b) Buyer (or its assigns) shall have received such other approvals, opinions or documents as it may reasonably request and (c) on the date such Receivable came into existence, the following statements shall be true (and acceptance of any payment for such Receivable shall be deemed a representation and warranty by Originator that such statements are then true):
		

		
			(i)   the representations and warranties set forth in Article II are true and correct on and as of the date such Receivable came into existence as though made on and as of such date; and
		

		
			(ii)  no event has occurred and is continuing that will constitute a Termination Event or a Potential Termination Event.
		

		
			Notwithstanding the foregoing conditions precedent, upon payment of the Purchase Price for any Receivable (whether by payment of cash, through an increase in the amounts outstanding under the Subordinated Note, by offset of amounts owed to Buyer and/or by offset of capital contributions), title to such Receivable and the Related Security and Collections with respect thereto shall vest in Buyer, whether or not the conditions precedent to Buyer’s obligation to pay for such Receivable were in fact satisfied.  The failure of Originator to satisfy any of the foregoing conditions precedent, however, shall give rise to a right of Buyer to rescind the related purchase and direct Originator to pay to Buyer an amount equal to the Purchase Price payment that shall have been made with respect to any Receivables related thereto.
		

		
			ARTICLE IV
		

		
			COVENANTS
		

		
			4.1       Affirmative Covenants of Originator.  Until the date on which this Agreement terminates in accordance with its terms, Originator hereby covenants as set forth below:
		

		
			(a)     Financial Reporting.  Originator will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish to Buyer (or its assigns):
		

		
			
		

		
			

		 

		

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			(i)   Annual Reporting.  Within 120 days after the close of each of its respective fiscal years, audited, unqualified consolidated financial statements (which shall include balance sheets, statements of income and retained earnings and a statement of cash flows) for Originator and its Subsidiaries for such fiscal year certified in a manner acceptable to Buyer (or its assigns) by independent public accountants of recognized national standing.
		

		
			(ii)  Quarterly Reporting.  Within 60 days after the close of the first three quarterly periods of each of its respective fiscal years, consolidated balance sheets of Originator and its Subsidiaries as at the close of each such period and a  statement of income and a statement of cash flows for Originator and its Subsidiaries for the period from the beginning of such fiscal year to the end of such quarter, all certified, subject to year-end audit adjustments, as to fairness of presentation and GAAP, by its chief financial officer, chief accounting officer or treasurer.
		

		
			(iii) Compliance Certificate.  Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit IV signed by Originator’s Authorized Officer and dated the date of such annual financial statement or such quarterly financial statement, as the case may be.
		

		
			(iv)  Shareholders Statements and Reports.  Promptly upon the furnishing thereof to the shareholders of Originator, copies of all financial statements, reports and proxy statements so furnished.
		

		
			(v)  S.E.C. Filings.  Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which Originator or any of its Subsidiaries files with the Securities and Exchange Commission.
		

		
			(vi) Copies of Notices.  Promptly upon its receipt of any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Person other than Buyer or the Agent, copies of the same.
		

		
			(vii) Change in Credit and Collection Policy.  At least 30 days prior to the effectiveness of any material change in or material amendment to the Credit and Collection Policy, a copy of the Credit and Collection Policy then in effect and a notice (A) indicating such change or amendment, and (B) if such proposed change or amendment would be reasonably likely to adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables, requesting Buyer’s consent thereto.
		

		
			(viii) Other Information.  Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the condition or operations, financial or otherwise, of Originator as Buyer (or its
		

		
			
		

		
			

		 

		

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			assigns) may from time to time reasonably request in order to protect the interests of Buyer (and its assigns) under or as contemplated by this Agreement.
		

		
			To the extent any documents required to be delivered pursuant to Section 4.1(a)(i),  (ii),  (iv) or (v) are documents included in materials otherwise filed with the Securities and Exchange Commission, such documents may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which (i) Originator posts such documents, or provides a link thereto on its corporate website on the Internet; or (ii) such documents are posted on Originator’s behalf on an Internet or intranet website, if any, to which the Buyer and its assigns have access (whether a commercial, third-party website or whether sponsored by Buyer or its assigns); provided that Originator shall deliver paper copies of such documents to Buyer (or its assigns) upon a written request by Buyer (or its assigns) for such documents until the party requesting paper copies delivers a written request to cease delivering paper copies.
		

		
			(b)     Notices.  Originator will notify the Buyer (or its assigns) in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:
		

		
			(i)   Termination Events or Potential Termination Events.  The occurrence of each Termination Event and each Potential Termination Event, by a statement of an Authorized Officer of Originator.
		

		
			(ii) Judgment and Proceedings.  (1) The entry of any judgment or decree against Originator or any of its Subsidiaries if the aggregate amount of all judgments and decrees then outstanding against Originator and its Subsidiaries exceeds $25,000,000 and (2) the institution of any litigation, arbitration proceeding or governmental proceeding against Originator which, individually or in the aggregate, if adversely determined, would reasonably be expected to result in a judgment in excess of $50,000,000 or could reasonably be expected to have a Material Adverse Effect.
		

		
			(iii) Material Adverse Effect.  The occurrence of any event or condition that has had, or could reasonably be expected to have, a Material Adverse Effect.
		

		
			(iv) Defaults Under Other Agreements.   The occurrence of a default, an event of default or other event permitting or requiring acceleration under any other financing arrangement pursuant to which Originator is a debtor or an obligor.
		

		
			(v)  Downgrade of the Originator.  Any downgrade in the rating of any Indebtedness of Originator by S&P Global Ratings or by Moody’s Investors Service, Inc., setting forth the Indebtedness affected and the nature of such change.
		

		
			(c)     Compliance with Laws and Preservation of Corporate Existence.  Originator will comply in all respects with all applicable laws, rules, regulations, orders, writs,
		

		
			
		

		
			

		 

		

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			judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect.  Originator will preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where its business is conducted.
		

		
			(d)     Audits.  Originator will furnish to Buyer (or its assigns) from time to time such information with respect to it and the Receivables as Buyer (or its assigns) may reasonably request.  Originator will, from time to time during regular business hours as requested by Buyer (or its assigns), upon reasonable notice and at the sole cost of Originator, permit Buyer (or its assigns) or its or their respective agents or representatives, as applicable, (i) to examine and make copies of and abstracts from all Records in the possession or under the control of Originator relating to the Receivables and the Related Security, including, without limitation, the related Contracts, and (ii) to visit the offices and properties of Originator for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to Originator’s financial condition or the Receivables and the Related Security or Originator’s performance under any of the Transaction Documents or Originator’s performance under the Contracts and, in each case, with any of the officers or employees of Originator having knowledge of such matters.
		

		
			(e)     Keeping and Marking of Records and Books.
		

		
			(i)   Originator will maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable).  Originator will give Buyer (or its assigns) notice of any material change in the administrative and operating procedures referred to in the previous sentence.
		

		
			(ii)  Originator will (A) identify in its general ledger a legend, reasonably acceptable to Buyer and its assigns, describing Buyer’s ownership interests in the Receivables and further describing the Purchaser Interests of the Agent (on behalf of the Purchasers) under the Purchase Agreement and (B) upon the request of Buyer (or its assigns), (x) mark each Contract with a legend describing Buyer’s ownership interests in the Receivables and further describing the Purchaser Interests of the Agent (on behalf of the Purchasers) and (y) deliver to Buyer (or its assigns) all Contracts (including, without limitation, all multiple originals of any such Contract) relating to the Receivables.
		

		
			(f)      Compliance with Contracts and Credit and Collection Policy.  Originator will timely and fully (i) perform and comply with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and (ii)
		

		
			
		

		
			

		 

		

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			comply in all respects with the Credit and Collection Policy in regard to each Receivable and the related Contract.
		

		
			(g)     Ownership.  Originator will take all necessary action to establish and maintain, irrevocably in Buyer, (A) legal and equitable title to the Receivables and the Collections and (B) all of Originator’s right, title and interest in the Related Security associated with the Receivables, in each case, free and clear of any Adverse Claims other than Adverse Claims in favor of Buyer (and its assigns) (“Permitted Adverse Claim”) (including,  without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyer’s interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of Buyer as Buyer (or its assigns) may reasonably request).
		

		
			(h)     Purchasers’ Reliance.  Originator acknowledges that the Agent and the Purchasers are entering into the transactions contemplated by the Purchase Agreement in reliance upon Buyer’s identity as a legal entity that is separate from Originator and any Affiliates thereof.  Therefore, from and after the date of execution and delivery of this Agreement, Originator will take all reasonable steps including, without limitation, all steps that Buyer, or any assignee of Buyer, may from time to time reasonably request to maintain Buyer’s identity as a separate legal entity and to make it manifest to third parties that Buyer is an entity with assets and liabilities distinct from those of Originator and any Affiliates thereof and not a division of Originator or any such Affiliate.  Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, Originator (i) will not hold itself out to third parties as liable for the debts of Buyer nor purport to own the Receivables and other assets acquired by Buyer, (ii) will take all other actions necessary on its part to ensure that Buyer is at all times in compliance with the covenants set forth in Section 7.1(i) of the Purchase Agreement and (iii) will cause all tax liabilities arising in connection with the transactions contemplated herein or otherwise to be allocated between Originator and Buyer on an arm’s-length basis and in a manner consistent with the procedures set forth in U.S. Treasury Regulations §§ 1.1502-33(d) and 1.1552-1.
		

		
			(i)      Collections.  Originator will cause (1) all proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into a Collection Account and (2) each Lock-Box and Collection Account to be subject at all times to a Collection Account Agreement that is in full force and effect.  In the event any payments relating to Receivables are remitted directly to Originator or any Affiliate of Originator, Originator will remit (or will cause all such payments to be remitted) directly to a Collection Bank and deposited into a Collection Account within two Business Days following receipt thereof and, at all times prior to such remittance, Originator will itself hold such payments in trust for the exclusive benefit of Buyer and its assigns.  Originator will transfer exclusive ownership, dominion and control of each Lock-Box and Collection Account to Buyer and, will not grant the right to take dominion and control or establish “control” (within the meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any Lock-Box or Collection Account at a future time or upon the occurrence of a future event to any Person, except to Buyer (or its assigns) as contemplated by this Agreement and the Purchase Agreement.  With respect to any Lock-Box or Collection Account, Originator shall take all steps necessary to ensure that the Agent has “control” (within the meaning of
		

		
			
		

		
			

		 

		

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			Section 9-104 of the UCC of all applicable jurisdictions) over such Lock-Box or Collection Account.
		

		
			(j)      Taxes.  Originator will file all tax returns and reports required by law to be filed by it and promptly pay all taxes and governmental charges at any time owing.  Originator will pay when due any taxes payable in connection with the Receivables, exclusive of taxes on or measured by income or gross receipts of Buyer and its assigns.
		

		
			(k)     Insurance.  Originator will maintain in effect, or cause to be maintained in effect, at Originator’s own expense, such casualty and liability insurance as Originator deems appropriate in its good faith business judgment.  Buyer and the Agent, for the benefit of the Purchasers, shall be named as additional insureds with respect to all such liability insurance maintained by Originator.  Originator will pay or cause to be paid, the premiums therefor and deliver to Buyer and the Agent evidence satisfactory to Buyer and the Agent of such insurance coverage.  Copies of each policy shall be furnished to Buyer, the Agent and any Purchaser in certificated form upon Buyer’s, the Agent’s or such Purchaser’s request.
		

		
			(l)      Segregation of Other Servicer Collected Funds.  Originator shall, within six days of the date any Other Servicer Collected Funds are deposited, credited or funded to any Collection Account, (i) specifically identify all such Other Servicer Collected Funds and (ii) cause all Other Servicer Collected Funds to be transferred from the applicable Collection Account.
		

		
			(m)    Elimination of Other Servicer Collected Funds.  Subject to Section 4.1(l), Originator shall use all reasonable efforts to prevent all Other Servicer Collected Funds from being deposited, credited or otherwise funded to, any and all Collection Accounts.
		

		
			4.2       Negative Covenants of Originator.  Until the date on which this Agreement terminates in accordance with its terms, Originator hereby covenants that:
		

		
			(a)     Name Change, Jurisdiction of Organization, Corporate Structure, Offices and Records.  Originator will not change its name, identity, jurisdiction of organization or corporate structure (within the meaning of Sections 9-503 and/or 9-507 of the UCC of all applicable jurisdictions) or relocate any office where Records are kept unless it shall have: (i) given Buyer (or its assigns) at least 45 days’ prior written notice thereof and (ii) delivered to Buyer (or its assigns) all financing statements, instruments and other documents requested by Buyer (or its assigns) in connection with such change or relocation.
		

		
			(b)     Change in Payment Instructions to Obligors.  Except as may be required by the Agent pursuant to Section 8.2(b) of the Purchase Agreement, Originator will not add or terminate any bank as a Collection Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box or Collection Account, unless Buyer and the Agent shall have received, at least 10 days before the proposed effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Collection Bank or a Collection Account or Lock-Box, an executed Collection Account Agreement with respect to the new Collection Account or Lock-Box; provided,  however, that
		

		
			
		

		
			

		 

		

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			Originator may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Collection Account.
		

		
			(c)     Modifications to Contracts and Credit and Collection Policy.  Originator will not make any change to the Credit and Collection Policy that could adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables.  Except as otherwise permitted in its capacity as Servicer pursuant to Article VIII of the Purchase Agreement, Originator will not extend, amend or otherwise modify the terms of any Receivable or any Contract related thereto other than in accordance with the Credit and Collection Policy.
		

		
			(d)     Sales, Liens.  Originator will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any Receivable, Related Security or Collections, or upon or with respect to any Contract under which any Receivable arises, or any Lock-Box or Collection Account, or assign any right to receive income with respect thereto (other than, in each case, the creation of the interests therein in favor of Buyer (or its assigns) provided for herein), and Originator (or its assigns) will defend the right, title and interest of Buyer, or its assigns, in, to and under any of the foregoing property, against all claims of third parties claiming through or under Originator.  Originator shall not create or suffer to exist any mortgage, pledge, security interest, encumbrance, lien, charge or other similar arrangement on any of its inventory, the financing or lease of which gives rise to any Receivable, other than a Permitted Adverse Claim.
		

		
			(e)     Accounting for Purchase.  Originator will not, and will not permit any Affiliate to, account for or treat (whether in financial statements or otherwise) the transactions contemplated hereby in any manner other than the sale of the Receivables and the Related Security by Originator to Buyer or in any other respect account for or treat the transactions contemplated hereby in any manner other than as a sale of the Receivables and the Related Security by Originator to Buyer except to the extent that such transactions are not recognized on account of consolidated financial reporting in accordance with generally accepted accounting principles.
		

		
			ARTICLE V
		

		
			TERMINATION EVENTS
		

		
			5.1       Termination Events.  The occurrence of any one or more of the following events shall constitute a “Termination Event”:
		

		
			(a)     Originator shall fail (i) to make any payment or deposit required to be made by Originator hereunder when due and such failure continues for one day, or (ii) to perform or observe any term, covenant or agreement hereunder (other than as referred to in clause (i) of this paragraph (a)) or any other Transaction Document to which it is a party and such failure shall continue for three consecutive Business Days.
		

		
			(b)     Any representation, warranty, certification or statement made by Originator in this Agreement, any other Transaction Document or in any other document
		

		
			
		

		
			

		 

		

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			delivered pursuant hereto or thereto shall prove to have been incorrect when made or deemed made.
		

		
			(c)     Failure of Originator to pay any Indebtedness when due in excess of $35 million, individually or in the aggregate; or the default by Originator in the performance of any term, provision or condition contained in any agreement under which any such Indebtedness was created or is governed, the effect of which is to cause, or to permit the holder or holders of such Indebtedness to cause, such Indebtedness to become due prior to its stated maturity; or any such Indebtedness of Originator shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the date of maturity thereof.
		

		
			(d)     (i)  Originator or any of its Subsidiaries shall generally not pay its debts as such debts become due or shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors; or (ii) any proceeding shall be instituted by or against Originator or any of its Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property or (iii) Originator or any of its Subsidiaries shall take any corporate action to authorize any of the actions set forth in the foregoing clauses (i) or (ii) of this subsection (d).
		

		
			(e)     A Change of Control shall occur.
		

		
			(f)      (i) the “Consolidated Interest Coverage Ratio” (as defined in the Credit Agreement) as of the end of any period of four fiscal quarters of Originator shall be less than 3.00 to 1.00 or (ii) the “Consolidated Leverage Ratio” (as defined in the Credit Agreement) at any time during any period set forth below shall be greater than 4.00 to 1.00.
		

		
			(g)     One or more final judgments for the payment of money in an amount in excess of $50,000,000, individually or in the aggregate, shall be entered against Originator on claims not covered by insurance or as to which the insurance carrier has denied its responsibility, and such judgment shall continue unsatisfied and in effect for 30 consecutive days without a stay of execution.
		

		
			5.2       Remedies. Upon the occurrence and during the continuation of a Termination Event, Buyer (at the direction of the Agent) may take any of the following actions:  (i) declare the Termination Date to have occurred, whereupon the Termination Date shall forthwith occur, without demand, protest or further notice of any kind, all of which are hereby expressly waived by Originator; provided,  however, that upon the occurrence of a Termination Event described in Section 5.1(d), or of an actual or deemed entry of an order for relief with respect to Originator under the Federal Bankruptcy Code, the Termination Date shall automatically occur, without demand, protest or any notice of any kind, all of which are hereby expressly waived by Originator and (ii) to the fullest extent permitted by applicable law, declare that the Default Fee shall accrue with respect to any amounts then due and owing by Originator to Buyer.  The aforementioned rights and remedies shall be without limitation and shall be in addition to all other rights and remedies of Buyer and its assigns otherwise available under any
		

		
			
		

		
			

		 

		

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			other provision of this Agreement, by operation of law, at equity or otherwise, all of which are hereby expressly preserved, including, without limitation, all rights and remedies provided under the UCC, all of which rights shall be cumulative.
		

		
			ARTICLE VI
		

		
			INDEMNIFICATION
		

		
			6.1       Indemnities by Originator.  Without limiting any other rights that Buyer may have hereunder or under applicable law, Originator hereby agrees to indemnify (and pay upon demand to) Buyer and its assigns, officers, directors, agents and employees (each an “Indemnified Party”) from and against any and all damages, losses, claims, taxes, liabilities, costs, expenses and for all other amounts payable, including reasonable attorneys’ fees (which attorneys may be employees of Buyer or any such assign) and disbursements (all of the foregoing being collectively referred to as “Indemnified Amounts”) awarded against or incurred by any of them arising out of or as a result of this Agreement, or the use of the proceeds of any purchase hereunder, or the acquisition, funding or ownership, either directly or indirectly, by Buyer (or its assigns) of an interest in the Receivables, or any Receivable or any Contract or any Related Security, excluding, however:
		

		
			(i)   Indemnified Amounts to the extent a final judgment of a court of competent jurisdiction holds that such Indemnified Amounts resulted from gross negligence or willful misconduct on the part of the Indemnified Party seeking indemnification;
		

		
			(ii)  Indemnified Amounts to the extent the same includes losses in respect of Receivables that are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or
		

		
			(iii)  taxes imposed by the jurisdiction in which such Indemnified Party’s principal executive office is located, on or measured by the overall net income of such Indemnified Party to the extent that the computation of such taxes is consistent with the characterization for income tax purposes of the acquisition by the Purchasers of Purchaser Interests under the Purchase Agreement as a loan or loans by the Purchasers to Buyer secured by, among other things, the Receivables, the Related Security and the Collections;
		

		
			provided,  however, that nothing contained in this sentence shall limit the liability of Originator or limit the recourse of Buyer to Originator for amounts otherwise specifically provided to be paid by Originator under the terms of this Agreement.  Without limiting the generality of the foregoing indemnification, Originator shall indemnify Buyer for Indemnified Amounts (including, without limitation, losses in respect of uncollectible receivables, regardless of whether reimbursement therefor would constitute recourse to Originator) relating to or resulting from:
		

		
			(i)   any representation or warranty made by Originator (or any officers of Originator) under or in connection with this Agreement, any other Transaction Document or any other information or report delivered by
		

		
			
		

		
			

		 

		

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			Originator pursuant hereto or thereto that shall have been false or incorrect when made or deemed made;
		

		
			(ii) the failure by Originator to comply with any applicable law, rule or regulation with respect to any Receivable or Contract related thereto, or the nonconformity of any Receivable or Contract included therein with any such applicable law, rule or regulation or any failure of Originator to keep or perform any of its obligations, express or implied, with respect to any Contract;
		

		
			(iii) any failure of Originator to perform its duties, covenants or other obligations in accordance with the provisions of this Agreement or any other Transaction Document;
		

		
			(iv) any products liability, personal injury or damage, suit or other similar claim arising out of or in connection with merchandise, insurance or services that are the subject of any Contract or any Receivable;
		

		
			(v)  any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or service related to such Receivable or the furnishing or failure to furnish such merchandise or services;
		

		
			(vi) the commingling of Collections of Receivables at any time with other funds;
		

		
			(vii) any investigation, litigation or proceeding related to or arising from this Agreement or any other Transaction Document, the transactions contemplated hereby, the use of the proceeds of any Purchase Price Payment, the ownership of the Receivables or any other investigation, litigation or proceeding relating to Originator in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby;
		

		
			(viii) any inability to litigate any claim against any Obligor in respect of any Receivable as a result of such Obligor being immune from civil and commercial law and suit on the grounds of sovereignty or otherwise from any legal action, suit or proceeding;
		

		
			(ix) any Termination Event described in Section 5.1(d);
		

		
			(x)  any failure to vest and maintain vested in Buyer, or to transfer to Buyer, legal and equitable title to, and ownership of, the Receivables and the Collections, and all of Originator’s right, title and interest in the Related Security associated with the Receivables, in each case, free and clear of any Adverse Claim;
		

		
			
		

		
			

		 

		

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			(xi) the failure to have filed, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Receivable, the Related Security and Collections with respect thereto, and the proceeds of any thereof, whether at the time of the Purchase or at any subsequent time;
		

		
			(xii) any action or omission by Originator which reduces or impairs the rights of Buyer with respect to any Receivable or the value of any such Receivable;
		

		
			(xiii) any attempt by any Person to void the Purchase hereunder under statutory provisions or common law or equitable action; and
		

		
			(xiv) the failure of any Receivable included in the calculation of the Net Receivables Balance as an Eligible Receivable to be an Eligible Receivable at the time so included.
		

		
			6.2       Other Costs and Expenses.  Originator shall pay to Buyer on demand all costs and out-of-pocket expenses in connection with the preparation, execution, delivery and administration of this Agreement, the transactions contemplated hereby and the other documents to be delivered hereunder.  Originator shall pay to Buyer on demand any and all costs and expenses of Buyer, if any, including reasonable counsel fees and expenses in connection with the enforcement of this Agreement and the other documents delivered hereunder and in connection with any restructuring or workout of this Agreement or such documents, or the administration of this Agreement following a Termination Event.
		

		
			ARTICLE VII
		

		
			MISCELLANEOUS
		

		
			7.1       Waivers and Amendments.
		

		
			(a)     No failure or delay on the part of Buyer (or its assigns) in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy.  The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law.  Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given.
		

		
			(b)     No provision of this Agreement may be amended, supplemented, modified or waived except in writing signed by Originator and Buyer, subject in each case to the prior written consent of the Agent and the Required Purchasers.
		

		
			7.2       Notices.  All communications and notices provided for hereunder shall be in writing (including bank wire, telecopy or electronic facsimile transmission or similar writing) and shall be given to the other parties hereto at their respective addresses or telecopy numbers set forth on the signature pages hereof or at such other address or telecopy number as such Person
		

		
			
		

		
			

		 

		

			20

		

 

		

		
			may hereafter specify for the purpose of notice to each of the other parties hereto.  Each such notice or other communication shall be effective (i) if given by telecopy, upon the receipt thereof, (ii) if given by mail, three Business Days after the time such communication is deposited in the mail with first class postage prepaid or (iii) if given by any other means, when received at the address specified in this Section 7.2.
		

		
			7.3       Protection of Ownership Interests of Buyer.
		

		
			(a)     Originator agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that may be necessary or desirable, or that Buyer (or its assigns) may request, to perfect, protect or more fully evidence the interest of Buyer hereunder and the Purchaser Interests, or to enable Buyer (or its assigns) to exercise and enforce their rights and remedies hereunder.  Without limiting the foregoing, Originator will, upon the request of Buyer (or its assigns), file such financing or continuation statements, or amendments thereto or assignments thereof, and execute and file such other instruments and documents, that may be necessary or desirable, or that Buyer (or its assigns) may reasonably request, to perfect, protect or evidence the interest of Buyer hereunder and the Purchaser Interests.  At any time, Buyer (or its assigns) may, at Originator’s sole cost and expense, direct Originator to notify the Obligors of Receivables of the ownership interests of Buyer under this Agreement and may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to Buyer or its designee.
		

		
			(b)     If Originator fails to perform any of its obligations hereunder, Buyer (or its assigns) may (but shall not be required to) perform, or cause performance of, such obligations, and Buyer’s (or such assigns’) costs and expenses incurred in connection therewith shall be payable by Originator as provided in Section 6.2.  Originator irrevocably authorizes Buyer (and its assigns) at any time and from time to time in the sole discretion of Buyer (or its assigns), and appoints Buyer (and its assigns) as its attorney(ies)-in-fact, to act on behalf of Originator (i) to authorize on behalf of Originator as debtor and to file financing or continuation statements (and amendments thereto and assignments thereof) necessary or desirable in Buyer’s (or its assigns’) sole discretion to perfect and to maintain the perfection and priority of the interest of Buyer in the Receivables, Related Security, Collections and all other property sold to Buyer hereunder or under the Existing RSA, other than any of the foregoing which have previously been released by the Buyer and its assigns (the collateral in which Buyer continues to maintain an interest, the “Sold Property”) and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Receivables as a financing statement in such offices as Buyer (or its assigns) in their sole discretion deem necessary or desirable to perfect and to maintain the perfection and priority of Buyer’s interests in the Sold Property.  Such financing statements may describe the Sold Property in the same manner as described herein or may contain an indication or description of collateral that describes such Sold Property (which may describe the collateral as set forth in Exhibit VI) as Buyer (or its assigns) may determine, in its sole discretion, is reasonably necessary or advisable to ensure the perfection of the security interest in the Sold Property granted to Buyer in connection herewith.  The authorization by Originator set forth above is intended to meet all requirements for authorization by a debtor under Article 9 of any applicable enactment of the UCC, including, without limitation, Section 9-509 thereof.  The foregoing appointment is coupled with an interest and is irrevocable.
		

		
			
		

		
			

		 

		

			21

		

 

		

		
			7.4       Confidentiality.
		

		
			(a)     Originator shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement, except as required by law, and the other confidential or proprietary information with respect to the Agent and each Purchaser and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that Originator and its officers and employees may disclose such information to Originator’s external accountants and attorneys and as required by any applicable law or order of any judicial or administrative proceeding.
		

		
			(b)     Anything herein to the contrary notwithstanding, Originator hereby consents to the disclosure of any nonpublic information with respect to it (i) to Buyer, the Agent, the Financial Institutions or Companies by each other, (ii) by Buyer, the Agent or the Purchasers to any prospective or actual assignee or participant of any of them and (iii) by the Agent or any Purchaser to any rating agency, Funding Source, Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to any Company or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which the Agent or any Financial Institution acts as the administrative agent and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing.  In addition, the Purchasers and the Agent may disclose any such nonpublic information pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).
		

		
			(c)     Buyer shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement, except as required by law, and the other confidential or proprietary information with respect to Originator, the Obligors and their respective businesses obtained by it in connection with the due diligence evaluations, structuring, negotiating and execution of the Transaction Documents, and the consummation of the transactions contemplated herein and any other activities of Buyer arising from or related to the transactions contemplated herein provided,  however, that each of Buyer and its employees and officers shall be permitted to disclose such confidential or proprietary information: (i) to the Agent and the other Purchasers, (ii) to any prospective or actual assignee or participant of the Agent or the other Purchasers who execute a confidentiality agreement for the benefit of Originator and Buyer on terms comparable to those required of Buyer hereunder with respect to such disclosed information, (iii) to any rating agency, provider of a surety, guaranty or credit or liquidity enhancement to any Company, (iv) to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, and (v) to the extent required pursuant to any applicable law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings with competent jurisdiction (whether or not having the force or effect of law) so long as such required disclosure is made under seal to the extent permitted by applicable law or by rule of court or other applicable body.
		

		
			(d)     Anything herein to the contrary notwithstanding, Buyer, Originator, each Indemnified Party and any successor or assign of any of the foregoing (and each employee, representative or other agent of any of the foregoing) may disclose to any and all Persons, without limitation of any kind, the “tax treatment” and “tax structure” (in each case, within the meaning of U.S. Treasury Regulation § 1.6011-4) of the transactions contemplated herein and all
		

		
			
		

		
			

		 

		

			22

		

 

		

		
			materials of any kind (including opinions or other tax analyses) that are or have been provided to any of the foregoing relating to such tax treatment or tax structure, and it is hereby confirmed that each of the foregoing have been so authorized since the commencement of discussions regarding the transactions.
		

		
			7.5       Bankruptcy Petition.
		

		
			(a)     Originator and Buyer each hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any Company or any Funding Source that is a special purpose bankruptcy remote entity, it will not institute against, or join any other Person in instituting against, any Company or any such entity any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.
		

		
			(b)     Originator covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding obligations of Buyer under the Purchase Agreement, it will not institute against, or join any other Person in instituting against, Buyer any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.
		

		
			7.6       Limitation of Liability.  Except with respect to any claim arising out of the willful misconduct or gross negligence of any Company, the Agent or any Financial Institution, no claim may be made by Originator or any other Person against any Company, the Agent or any Financial Institution or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and Originator hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.
		

		
			7.7       CHOICE OF LAW.  THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
		

		
			7.8       CONSENT TO JURISDICTION.  ORIGINATOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT AND ORIGINATOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
		

		
			
		

		
			

		 

		

			23

		

 

		

		
			ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST ORIGINATOR IN THE COURTS OF ANY OTHER JURISDICTION.  ANY JUDICIAL PROCEEDING BY ORIGINATOR AGAINST BUYER (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK COUNTY, NEW YORK.
		

		
			7.9       WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
		

		
			7.10     Integration; Binding Effect; Survival of Terms.
		

		
			(a)     This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto 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.
		

		
			(b)     This Agreement shall be binding upon and inure to the benefit of Originator, Buyer and their respective successors and permitted assigns (including any trustee in bankruptcy).  Originator may not assign any of its rights and obligations hereunder or any interest herein without the prior written consent of Buyer.  Buyer may assign at any time its rights and obligations hereunder and interests herein to any other Person without the consent of Originator.  Without limiting the foregoing, Originator acknowledges that Buyer, pursuant to the Purchase Agreement, may assign to the Agent, for the benefit of the Purchasers, its rights, remedies, powers and privileges hereunder and that the Agent may further assign such rights, remedies, powers and privileges to the extent permitted in the Purchase Agreement.  Originator agrees that the Agent, as the assignee of Buyer, shall, subject to the terms of the Purchase Agreement, have the right to enforce this Agreement and to exercise directly all of Buyer’s rights and remedies under this Agreement (including, without limitation, the right to give or withhold any consents or approvals of Buyer to be given or withheld hereunder) and Originator agrees to cooperate fully with the Agent in the exercise of such rights and remedies.  This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms and shall remain in full force and effect until terminated in accordance with its terms; provided,  however, that the rights and remedies with respect to (i) any breach of any representation and warranty made by Originator pursuant to Article II; (ii) the indemnification and payment provisions of Article VI; and (iii) Sections  7.5 and 7.6 shall be continuing and shall survive any termination of this Agreement.
		

		
			
		

		
			

		 

		

			24

		

 

		

		
			7.11     Counterparts; Severability; Section References.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement.  Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  Unless otherwise expressly indicated, all references herein to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and sections of, and schedules and exhibits to, this Agreement.
		

		
			7.12     Subordination.  Originator shall have the right to receive, and Buyer shall make, any and all payments relating to any indebtedness, obligation or claim, Originator may from time to time hold or otherwise have against Buyer or any assets or properties of Buyer, whether arising hereunder or otherwise existing, provided that, after giving effect to any such payment, the aggregate Outstanding Balance of Receivables owned by Buyer at such time exceeds the sum of (a) the Aggregate Unpaids under the Purchase Agreement, plus (b) the aggregate outstanding principal balance of the Subordinated Loans.  Originator hereby agrees that at any time during which the condition set forth in the proviso of the immediately preceding sentence shall not be satisfied, Originator shall be subordinate in right of payment to the prior payment of any indebtedness or obligation of Buyer owing to the Agent or any Purchaser under the Purchase Agreement.  The foregoing constitutes a “subordination agreement” within the meaning of Section 510 of the Federal Bankruptcy Code.
		

		
			7.13     Third Party Beneficiaries.  The Agent and the Purchasers are express third party beneficiaries of this Agreement.
		

		
			[SIGNATURE PAGE FOLLOWS]
		

		
			 
		

		
			

		 

		

			25

		

 

		

		
			IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date hereof.
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						AVNET, INC.

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Joseph Burke

				
	
					
						 

					
					
						Name:

					
					
						 Joseph Burke

				
	
					
						 

					
					
						Title:

					
					
						 Vice President and Treasurer

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Address:

					
					
						2211 South 47th Street

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Phoenix, Arizona  85034

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Attention: Treasurer

				
	
					
						 

					
					
						 

					
					
						Fax:

					
					
						(480) 643-7199

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						AVNET RECEIVABLES CORPORATION

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 /s/ Ken Jacobson

				
	
					
						 

					
					
						Name:

					
					
						 Ken Jacobson

				
	
					
						 

					
					
						Title:

					
					
						 President and Treasurer

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Address:

					
					
						2211 South 47th Street

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Phoenix, Arizona  85034

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Attention: President

				
	
					
						 

					
					
						 

					
					
						Fax:

					
					
						(480) 643-7199

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		
			 
		

		
			

		 

		

			 

		

 

		

		
			Exhibit I
		

		
			Definitions
		

		
			This is Exhibit I to the Agreement (as hereinafter defined).  As used in the Agreement and the Exhibits, Schedules and Annexes thereto, capitalized terms have the meanings set forth in this Exhibit I (such meanings to be equally applicable to the singular and plural forms thereof).  If a capitalized term is used in the Agreement, or any Exhibit, Schedule or Annex thereto, and not otherwise defined therein or in this Exhibit I, such term shall have the meaning assigned thereto in Exhibit I to the Purchase Agreement.
		

		
			“Agent” has the meaning set forth in the Preliminary Statements to the Agreement.
		

		
			“Agreement” means this Second Amended and Restated Receivables Sale Agreement, dated as of August 16, 2018, between Originator and Buyer, as the same may be amended, restated or otherwise modified.
		

		
			“Amendment Date” has the meaning set forth in the preamble to the Agreement.
		

		
			“Buyer” has the meaning set forth in the preamble to the Agreement.
		

		
			“Calculation Period” means each calendar month or portion thereof which elapses during the term of the Agreement.  The first Calculation Period shall commence on the date of the Purchase of Receivables hereunder and the final Calculation Period shall terminate on the Termination Date.
		

		
			“Change of Control” means the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended) of 20% or more of the outstanding shares of voting stock of Originator.
		

		
			“Company” has the meaning set forth in the Preliminary Statements to the Agreement.
		

		
			“Credit and Collection Policy” means the credit and collection policies and practices relating to Contracts and Receivables summarized in Exhibit V, as modified from time to time in accordance with this Agreement and the Purchase Agreement.
		

		
			“Default Fee” means a per annum rate of interest equal to the sum of (i) the Prime Rate, plus (ii) 2% per annum.
		

		
			“Dilutions” means, at any time, the aggregate amount of reductions or cancellations described in Section 1.3(a) of the Agreement.
		

		
			“Discount Factor” means a percentage calculated to provide Buyer with a reasonable return on its investment in the Receivables after taking account of (i) the time value
		

		
			
		

		
			

		 

		

			Exh. I-1

		

 

		

		
			of money based upon the anticipated dates of collection of the Receivables and the cost to Buyer of financing its investment in the Receivables during such period and (ii) the risk of nonpayment by the Obligors.  Originator and Buyer may agree from time to time to change the Discount Factor based on changes in one or more of the items affecting the calculation thereof, provided that any change to the Discount Factor shall take effect as of the commencement of a Calculation Period, shall apply only prospectively and shall not affect the Purchase Price payment made prior to the Calculation Period during which Originator and Buyer agree to make such change.
		

		
			“Existing RSA”  means the Original RSA, as amended and restated by the Amended and Restated Receivables Sale Agreement, dated as of February 27, 2017 between the Originator and the Buyer.
		

		
			“Initial Cutoff Date”  means June 27, 2001.
		

		
			“Material Adverse Effect” means a material adverse effect on (i) the financial condition or operations of Originator and its Subsidiaries, (ii) the ability of Originator to perform its obligations under the Agreement or any other Transaction Document, (iii) the legality, validity or enforceability of the Agreement or any other Transaction Document, (iv) Originator’s, Buyer’s, the Agent’s or any Purchaser’s interest in the Receivables generally or in any significant portion of the Receivables, the Related Security or Collections with respect thereto, or (v) the collectibility of the Receivables generally or of any material portion of the Receivables.
		

		
			“Net Value” means, as of any date of determination, an amount equal to the sum of (i) the aggregate Outstanding Balance of the Receivables at such time, minus (ii) the sum of (A) the Aggregate Capital outstanding at such time, plus (B) the Required Reserves.
		

		
			“Net Worth” means as of the last Business Day of each Calculation Period preceding any date of determination, the excess, if any, of (a) the aggregate Outstanding Balance of the Receivables at such time, over (b) the sum of (i) the Aggregate Capital outstanding at such time, plus (ii) the aggregate outstanding principal balance of the Subordinated Loans (including any Subordinated Loan proposed to be made on the date of determination).
		

		
			“Original RSA” means that certain Receivables Sale Agreement, dated as of June 28, 2001, as last amended by Amendment No. 10 thereto, dated as of December 30, 2016, by and between the Originator and the Buyer.
		

		
			“Originator” has the meaning set forth in the preamble to the Agreement.
		

		
			“Permitted Adverse Claim” has the meaning set forth in Section 4.1(g).
		

		
			“Potential Termination Event” means an event which, with the passage of time or the giving of notice, or both, would constitute a Termination Event.
		

		
			“Purchase” means the purchase pursuant to Section 1.1(a) of the Agreement by Buyer from Originator of the Receivables and the Related Security and Collections related thereto, together with all related rights in connection therewith.
		

		
			
		

		
			

		 

		

			Exh. I-2

		

 

		

		
			“Purchase Agreement” has the meaning set forth in the Preliminary Statements to the Agreement.
		

		
			“Purchase Price” means, with respect to the Purchase, the aggregate price to be paid by Buyer to Originator for such Purchase in accordance with Section 1.2 of the Agreement for the Receivables, Collections and Related Security being sold to Buyer, which price shall equal on any date (i) the product of (x) the Outstanding Balance of such Receivables on such date, multiplied by (y) one minus the Discount Factor in effect on such date, minus (ii) any Purchase Price Credits to be credited against the Purchase Price otherwise payable in accordance with Section 1.3 of the Agreement.
		

		
			“Purchase Price Credit” has the meaning set forth in Section 1.3 of the Agreement.
		

		
			“Receivable”  means all indebtedness and other obligations owed to Originator (at the time it arises, and before giving effect to any transfer or conveyance under the Agreement) or Buyer (after giving effect to the transfers under the Agreement) or in which Originator or Buyer has a security interest or other interest (including,  without limitation, any indebtedness, obligation or interest constituting an account, chattel paper, instrument or general intangible), arising in connection with the sale of merchandise or the rendering of services by Originator, and further includes,  without limitation, the obligation to pay any Finance Charges with respect thereto; provided, that ‘Receivable’ shall not include any Excluded Receivable.  Indebtedness and other rights and obligations arising from any one transaction, including,  without limitation, indebtedness and other rights and obligations represented by an individual invoice, shall constitute a Receivable separate from a Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; provided, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless of whether the account debtor or Originator treats such indebtedness, rights or obligations as a separate payment obligation.
		

		
			“Related Security” means, with respect to any Receivable:
		

		
			(i)   all of Originator’s interest in the inventory and goods (including returned or repossessed inventory or goods), if any, the sale of which by Originator gave rise to such Receivable (including as a result of related financing arrangements), and all insurance contracts with respect thereto,
		

		
			(ii)  except to the extent prohibited by the terms of any Contract (unless, and to the extent, such prohibition is rendered ineffective by law, including, without limitation, statutory authority), all other security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements and security agreements describing any collateral securing such Receivable,
		

		
			(iii) except to the extent prohibited by the terms of any Contract (unless, and to the extent, such prohibition is rendered ineffective by
		

		
			
		

		
			

		 

		

			Exh. I-3

		

 

		

		
			law, including, without limitation, statutory authority), all guaranties, letters of credit, insurance, “supporting obligations” (within the meaning of Section 9-102(a) of the UCC of all applicable jurisdictions), and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise,
		

		
			(iv) except to the extent prohibited by the terms of any Contract (unless, and to the extent, such prohibition is rendered ineffective by law, including, without limitation, statutory authority), all service contracts and other contracts and agreements associated with such Receivable,
		

		
			(v)  all Records related to such Receivable,
		

		
			(vi) all of Originator’s right, title and interest in, to and under each Lock-Box, each Collection Account and each Collection Account Agreement, and
		

		
			(vii) all proceeds of any of the foregoing.
		

		
			“Required Capital Amount” means, as of any date of determination, an amount equal to the sum of (i) the twenty-four month rolling average of Dilutions, plus (ii) the result obtained in the foregoing clause (i) of this definition, multiplied by 10%.
		

		
			“RSA Collateral” has the meaning set forth in Section 1.6 of the Agreement.
		

		
			“Settlement Date” means, with respect to each Calculation Period, the date that is the 20th calendar day of the month following such Calculation Period.
		

		
			“Sold Property” has the meaning set forth in Section 7.3(b) of the Agreement.
		

		
			“Subordinated Loan” has the meaning set forth in Section 1.2(b) of the Agreement.
		

		
			“Subordinated Note” means a promissory note in substantially the form of Exhibit VII hereto as more fully described in Section 1.2 of the Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.
		

		
			“Subscription Agreement” means that certain Stockholder and Subscription Agreement, dated as of June 28, 2001, between Originator and Buyer.
		

		
			“Termination Date” means the earliest to occur of (i) the Facility Termination Date, (ii) the Business Day immediately prior to the occurrence of a Termination Event set forth in Section 5.1(d), (iii) the Business Day specified in a written notice from Buyer to Originator following the occurrence of any other Termination Event, and (iv) the date which is 30 Business Days after Buyer’s receipt of written notice from Originator that it wishes to terminate the facility evidenced by this Agreement.
		

		
			
		

		
			

		 

		

			Exh. I-4

		

 

		

		
			“Termination Event” has the meaning set forth in Section 5.1 of the Agreement.
		

		
			“Transaction Documents” means, collectively, this Agreement, the Purchase Agreement, each Collection Account Agreement, the Subordinated Note, the Subscription Agreement and all other instruments, documents and agreements executed and delivered in connection herewith.
		

		
			All accounting terms not specifically defined herein shall be construed in accordance with GAAP.  All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9.  All section references herein to the UCC shall include all successor sections under any subsequent version or amendment to any Article of the UCC.
		

		
			 
		

		
			 
		

		
			

		 

		

			Exh. I-5

		

 

		

		
			Exhibit II
		

		
			Jurisdictions of Organization;
		

		
			Locations of Records; Organizational Number(s);
		

		
			Federal Employer Identification Numbers(s); Other Names
		

			
					
						 

					
					
						 

				
	
					
						Jurisdictions of Organization:

					
					
						New York

				
	
					
						Location(s) of Records:

					
					
						2211 South 47th Street

					
						Phoenix, Arizona  85034

				
	
					
						Organizational Number:

					
					
						None

				
	
					
						Federal Employer
Identification Number:

					
					
						11-1890605

				
	
					
						Other Names:

					
					
						Not applicable

				

		
			 
		

		
			 
		

		
			

		 

		

			Exh. II-1

		

 

		

		
			Exhibit III
		

		
			Lock-boxes; Collection Accounts; Collection Banks
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						Lock-Box

					
					
						Related Collection
Account

				
	
					
						1.       Bank of America, N.A.

					
						 

					
						Ms. Cindy Hastings

					
						555 S. Flower Street, 3rd Floor

					
						Los Angeles, California  90071

					
						 

					
						Lock-Boxes

					
						 

					
						P.O. Box 847722

					
						Dallas, Texas  75202-7722

					
					
						Deposit Account Number:  3752134661

				
	
					
						2.       JPMorgan Chase Bank, N.A.

					
						 

					
						Roberta Burke Ault

					
						560 Mission St, Floor 05

					
						San Francisco, CA, 94105-2907

					
						(415) 315-8979

					
						roberta.f.burke@jpmchase.com

					
						 

					
						Lock-Boxes

					
						 

					
						P.O. Box #100340

					
						Pasadena, California  91189-0340

					
						 

					
						P.O. Box #70390

					
						Chicago, Illinois  60673-0390

					
					
						Lock-Box Account No.:  59-37116

				

		
			 
		

		
			 
		

		
			

		 

		

			Exh. III-1

		

 

		

		
			Exhibit IV
		

		
			Form of Compliance Certificate
		

		
			This Compliance Certificate is furnished pursuant to that certain Second Amended and Restated Receivables Sale Agreement, dated as of August 16, 2018, between Avnet, Inc. (“Originator”) and Avnet Receivables Corporation (as the same may be amended, supplemented, restated or otherwise modified from time to time, the “Agreement”).  Capitalized terms used and not otherwise defined herein are used with the meanings attributed thereto in the Agreement.
		

		
			THE UNDERSIGNED HEREBY CERTIFIES THAT:
		

		
			1.  I am the duly elected ______________ of Originator.
		

		
			2.  I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of Originator and its Subsidiaries during the accounting period covered by the attached financial statements.
		

		
			3.  The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Termination Event or a Potential Termination Event during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below.
		

		
			4.  Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Originator has taken, is taking, or proposes to take with respect to each such condition or event:
		

		
			5.  As of the date hereof, the jurisdiction of organization of Originator is New York, Originator is a “registered organization” (within the meaning of Section 9-102 of the UCC in effect in New York), and Originator has not changed its jurisdiction of organization since June 28, 2001.
		

		
			The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this __ day of ________ , 20__.
		

			
					
						 

					
					
						 

				
	
					
						__________________________________

					
					
						 

				
	
					
						Name

					
					
						 

				

		
			 
		

		
			 
		

		
			

		 

		

			Exh. IV-1

		

 

		

		
			Exhibit V
		

		
			Credit and Collection Policy
		

		
			 
		

		
			 
		

		
			

		 

		

			Exh. V-1

		

 

		

		
			Exhibit VI
		

		
			Collateral Description
		

		
			The collateral covered by this financing statement consists of all of Debtor’s right, title and interest (now owned or hereafter existing) in, to and under:
		

		
			(a)        all Receivables now existing or hereafter arising;
		

		
			(b)        all Collections;
		

		
			(c)        all Related Security with respect thereto;
		

		
			(d)        each Lock-Box;
		

		
			(e)        each Collection Account;
		

		
			(f)        all other rights and payments relating to the Receivables; and
		

		
			(g)        all proceeds of the foregoing.
		

		
			As used herein, the following terms have the respective meanings set forth below:
		

		
			“Agent” means Wells Fargo Bank, N.A. in its capacity as agent for the Purchasers under the Receivables Purchase Agreement, together with its successors and assigns.
		

		
			“Avnet” means Avnet, Inc., a New York corporation.
		

		
			“Buyer” means Avnet Receivables Corporation, a Delaware corporation.
		

		
			“Collection Account” means each concentration account, depositary account, lock-box account or similar account in which any Collections are collected or deposited and which is listed on Exhibit IV to the Receivables Purchase Agreement.
		

		
			“Collection Account Agreement” means an agreement in form and substance satisfactory to the Agent, among Seller or Originator, as applicable, the Agent and a Collection Bank, governing the terms of the related Collection Account, as the same may be amended, restated, supplemented or otherwise modified from time to time.
		

		
			“Collection Bank” means, at any time, any of the banks holding one or more Collection Accounts.
		

		
			“Collections” means, with respect to any Receivable, all cash collections and other cash proceeds in respect of such Receivable, including, without limitation, all yield, Finance Charges or other related amounts accruing in respect thereof and all cash proceeds of Related Security with respect to such Receivable.
		

		
			
		

		
			

		 

		

			Exh. VI-1

		

 

		

		
			“Companies” means the entities listed on Schedule A to the Receivables Purchase Agreement under the heading “Company”, together with any of their respective successors or assigns.
		

		
			“Contract” means, with respect to any Receivable, any and all instruments, agreements, invoices or other writings pursuant to which such Receivable arises or which evidences such Receivable.
		

		
			“Excluded Acquisition” means any direct or indirect acquisition of any business by Originator consummated on or after January 1, 2010.
		

		
			“Excluded Receivable” means all indebtedness and other obligations owed to Originator or in which Originator has a security interest or other interest (including, without limitation, any indebtedness, obligation or interest constituting an account, chattel paper, instrument or general intangible) arising in connection with the sale of merchandise or the rendering of services by Originator and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto:
		

		
			(i) the account debtor for which is Intelbras S.A. Industria de Telecomunicacao Eletronica Brasileira and such indebtedness or other obligation was originated after December 30, 2016;
		

		
			(ii) the account debtor for which is 3M Company and such indebtedness or other obligation was originated after October 31, 2017; or
		

		
			(iii) which both (a) arises in connection with the sale of merchandise or the rendering of services by the business previously conducted by any businesses acquired by Originator in an Excluded Acquisition and (b) is not recorded or maintained in Avnet’s consolidated general ledger accounting records as part of general ledger category “company code US10” (other than any Receivables previously coded under “company code US10” that have been coded under any other category without the Agent’s prior written consent).
		

		
			Indebtedness and other rights and obligations arising from any one transaction, including, without limitation, indebtedness and other rights and obligations represented by an individual invoice, shall constitute an Excluded Receivable separate from an Excluded Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; provided, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be an Excluded Receivable regardless of whether the account debtor or Seller treats such indebtedness, rights or obligations as a separate payment obligation.
		

		
			“Finance Charges” means, with respect to a Contract, any finance, interest, late payment charges or similar charges owing by an Obligor pursuant to such Contract.
		

		
			“Financial Institutions” means the entities listed on Schedule A to the Receivables Purchase Agreement under the heading “Financial Institutions”, together with any of their respective successors or assigns.
		

		
			
		

		
			

		 

		

			Exh. VI-2

		

 

		

		
			“Lock-Box” means each locked postal box with respect to which a bank who has executed a Collection Account Agreement has been granted exclusive access for the purpose of retrieving and processing payments made on the Receivables and which is listed on Exhibit IV to the Receivables Purchase Agreement.
		

		
			“Obligor” means a Person obligated to make payments pursuant to a Contract.
		

		
			“Originator” means Avnet, in its capacity as seller under the Receivables Sale Agreement.
		

		
			“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
		

		
			“Purchasers” means each Company and each Financial Institution.
		

		
			“Receivable” means all indebtedness and other obligations owed to Originator (at the time it arises, and before giving effect to any transfer or conveyance under the Receivables Sale Agreement) or Buyer (after giving effect to the transfers under the Receivables Sale Agreement) or in which Originator or Buyer has a security interest or other interest (including, without limitation, any indebtedness, obligation or interest constituting an account, chattel paper, instrument or general intangible), arising in connection with the sale of merchandise or the rendering of services by Originator, and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto; provided, that ‘Receivable’ shall not include any Excluded Receivable.  Indebtedness and other rights and obligations arising from any one transaction, including, without limitation, indebtedness and other rights and obligations represented by an individual invoice, shall constitute a Receivable separate from a Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; provided, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless of whether the account debtor or Originator treats such indebtedness, rights or obligations as a separate payment obligation.
		

		
			“Receivables Purchase Agreement” means the Fourth Amended and Restated Receivables Purchase Agreement, dated as of August 16, 2018, by and among Seller, Servicer, the Financial Institutions party thereto, the Companies party thereto, and the Agent, as the same may be amended, restated or otherwise modified and in effect from time to time.
		

		
			“Receivables Sale Agreement” means the Second Amended and Restated Receivables Sale Agreement, dated as of August 16, 2018, between Originator and Buyer, as the same may be amended, restated or otherwise modified and in effect from time to time.
		

		
			“Records” means, with respect to any Receivable, all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to such Receivable, any Related Security therefor and the related Obligor.
		

		
			“Related Security” means, with respect to any Receivable:
		

		
			
		

		
			

		 

		

			Exh. VI-3

		

 

		

		
			(i)         all of Originator’s interest in the inventory and goods (including returned or repossessed inventory or goods), if any, the sale of which by Originator gave rise to such Receivable (including as a result of related financing arrangements), and all insurance contracts with respect thereto,
		

		
			(ii)       except to the extent prohibited by the terms of any Contract (unless, and to the extent, such prohibition is rendered ineffective by law, including, without limitation, statutory authority), all other security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements and security agreements describing any collateral securing such Receivable,
		

		
			(iii)      except to the extent prohibited by the terms of any Contract (unless, and to the extent, such prohibition is rendered ineffective by law, including, without limitation, statutory authority), all guaranties, letters of credit, insurance, “supporting obligations” (within the meaning of Section 9-102(a) of the UCC of all applicable jurisdictions), and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise,
		

		
			(iv)       except to the extent prohibited by the terms of any Contract (unless, and to the extent, such prohibition is rendered ineffective by law, including, without limitation, statutory authority), all service contracts and other contracts and agreements associated with such Receivable,
		

		
			(v)        all Records related to such Receivable,
		

		
			(vi)       all of Originator’s right, title and interest in, to and under each Lock-Box, each Collection Account and each Collection Account Agreement, and
		

		
			(vii)     all proceeds of any of the foregoing.
		

		
			“Seller” means Avnet Receivables Corporation, a Delaware corporation, together with its successors and assigns.
		

		
			“Servicer” means at any time the Person (which may be the Agent) then authorized pursuant to Article VIII of the Receivables Purchase Agreement to service, administer and collect Receivables.
		

		
			“UCC” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.
		

		
			ANY ATTEMPT BY A THIRD PARTY TO ACQUIRE AN INTEREST IN THE COLLATERAL WITHOUT THE PRIOR WRITTEN CONSENT OF THE SECURED PARTY HEREUNDER SHALL VIOLATE THE RIGHTS OF THE SECURED PARTY.
		

		
			 
		

		
			 
		

		
			

		 

		

			Exh. VI-4

		

 

		

		
			Exhibit VII
		

		
			Form of Subordinated Note
		

		
			SUBORDINATED NOTE
		

		
			______________, 20__
		

		
			1.         Note.  FOR VALUE RECEIVED, the undersigned, AVNET RECEIVABLES CORPORATION, a Delaware corporation (“SPV”), hereby unconditionally promises to pay to the order of AVNET, INC., a New York corporation (“Originator”), in lawful money of the United States of America and in immediately available funds, on the date following the Termination Date which is one year and one day after the date on which (i) the Outstanding Balance of all Receivables sold under the “Sale Agreement” referred to below has been reduced to zero and (ii) Originator has paid to the Buyer all indemnities, adjustments and other amounts which may be owed thereunder in connection with the Purchases (the “Collection Date”), the aggregate unpaid principal sum outstanding of all Subordinated Loans made from time to time by Originator to SPV pursuant to and in accordance with the terms of that certain Second Amended and Restated Receivables Sale Agreement dated as of August 16, 2018 between Originator and SPV (as amended, restated, supplemented or otherwise modified from time to time, the “Sale Agreement”).  Reference to Section 1.2 of the Sale Agreement is hereby made for a statement of the terms and conditions under which the loans evidenced hereby have been and will be made.  All terms which are capitalized and used herein and which are not otherwise specifically defined herein shall have the meanings ascribed to such terms in the Sale Agreement.
		

		
			2.         Interest.  SPV further promises to pay interest on the outstanding unpaid principal amount hereof from the date hereof until payment in full hereof at a rate equal to the Prime Rate; provided,  however, that if SPV shall default in the payment of any principal hereof, SPV promises to pay, on demand, interest at the rate of the Prime Rate plus 2.00% per annum on any such unpaid amounts, from the date such payment is due to the date of actual payment.  Interest shall be payable on the first Business Day of each month in arrears; provided,  however, that SPV may elect on the date any interest payment is due hereunder to defer such payment and upon such election the amount of interest due but unpaid on such date shall constitute principal under this Subordinated Note.  The outstanding principal of any loan made under this Subordinated Note shall be due and payable on the Collection Date and may be repaid or prepaid at any time without premium or penalty.
		

		
			3.         Principal Payments.  Originator is authorized and directed by SPV to enter on the grid attached hereto, or, at its option, in its books and records, the date and amount of each loan made by it which is evidenced by this Subordinated Note and the amount of each payment of principal made by SPV, and absent manifest error, such entries shall constitute prima facie evidence of the accuracy of the information so entered; provided that neither the failure of Originator to make any such entry or any error therein shall expand, limit or affect the obligations of SPV hereunder.
		

		
			 
		

		
			

		 

		

			Exh. VII-1

		

 

		

		
			4.         Subordination.  Originator shall have the right to receive, and SPV shall make, any and all payments relating to the loans made under this Subordinated Note;  provided that, after giving effect to any such payment, the aggregate Outstanding Balance of Receivables (as each such term is defined in the Purchase Agreement) owned by SPV at such time exceeds the sum of (a) the Aggregate Unpaids (as defined in the Purchase Agreement) outstanding at such time under the Purchase Agreement, plus (b) the aggregate outstanding principal balance of all loans made under this Subordinated Note.  Originator hereby agrees that at any time during which the conditions set forth in the proviso of the immediately preceding sentence shall not be satisfied, Originator shall be subordinate in right of payment to the prior payment of any indebtedness or obligation of SPV owing to the Agent or any Purchaser under the Purchase Agreement.  The subordination provisions contained herein are for the direct benefit of, and may be enforced by, the Agent and the Purchasers and/or any of their respective assignees (collectively, the “Senior Claimants”) under the Purchase Agreement.  Until the date on which all Capital outstanding under the Purchase Agreement has been repaid in full and all other obligations of SPV and/or the Servicer thereunder and under the Fee Letter(s) referenced therein (all such obligations, collectively, the “Senior Claim”) have been indefeasibly paid and satisfied in full,  Originator shall not institute against SPV any proceeding of the type described in Section 5.1(d) of the Sale Agreement unless and until the Collection Date has occurred.  Should any payment, distribution or security or proceeds thereof be received by Originator in violation of this Section 4, Originator agrees that such payment shall be segregated, received and held in trust for the benefit of, and deemed to be the property of, and shall be immediately paid over and delivered to the Agent for the benefit of the Senior Claimants.
		

		
			5.         Bankruptcy; Insolvency.  Upon the occurrence of any proceeding of the type described in Section 5.1(d) of the Sale Agreement involving SPV as debtor, then and in any such event the Senior Claimants shall receive payment in full of all amounts due or to become due on or in respect of the Aggregate Capital and the Senior Claim (including “CP Costs” and “Yield” as defined and as accruing under the Purchase Agreement after the commencement of any such proceeding, whether or not any or all of such CP Costs or Yield is an allowable claim in any such proceeding) before Originator is entitled to receive payment on account of this Subordinated Note, and to that end, any payment or distribution of assets of SPV of any kind or character, whether in cash, securities or other property, in any applicable insolvency proceeding, which would otherwise be payable to or deliverable upon or with respect to any or all indebtedness under this Subordinated Note, is hereby assigned to and shall be paid or delivered by the Person making such payment or delivery (whether a trustee in bankruptcy, a receiver, custodian or liquidating trustee or otherwise) directly to the Agent for application to, or as collateral for the payment of, the Senior Claim until such Senior Claim shall have been paid in full and satisfied.
		

		
			6.         Amendments.  Prior to the indefeasible payment of the Aggregate Unpaids, this Subordinated Note shall not be amended or modified without the prior written consent of the Agent for the benefit of the Purchasers.
		

		
			7.         GOVERNING LAW.  THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED AT NEW YORK, NEW YORK, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF THE
		

		
			
		

		
			

		 

		

			Exh. VII-2

		

 

		

		
			STATE OF NEW YORK.  WHEREVER POSSIBLE EACH PROVISION OF THIS SUBORDINATED NOTE SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS SUBORDINATED NOTE.
		

		
			8.         Waivers.  All parties hereto, whether as makers, endorsers, or otherwise, severally waive presentment for payment, demand, protest and notice of dishonor.  Originator additionally expressly waives all notice of the acceptance by any Senior Claimant of the subordination and other provisions of this Subordinated Note and expressly waives reliance by any Senior Claimant upon the subordination and other provisions herein provided.
		

		
			9.         Assignment.  This Subordinated Note may not be assigned, pledged or otherwise transferred to any party other than Originator without the prior written consent of the Agent, and any such attempted transfer shall be void.
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						AVNET RECEIVABLES CORPORATION

				
	
					
						 

					
					
						By: 

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						 

				

		
			 
		

		
			 
		

		
			

		 

		

			Exh. VII-3

		

 

		

		
			Schedule
		

		
			to
		

		
			SUBORDINATED NOTE
		

		
			SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
		

		
			 
		

			
					
						Date

					
					
						 

					
					
						Amount of
Subordinated
Loan

					
					
						 

					
					
						Amount of
Principal
Paid

					
					
						 

					
					
						Unpaid
Principal
Balance

					
					
						 

					
					
						Notation made by

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		 

		

			Exh. VII-4Exhibit 4.1

 

ADIAL PHARMACEUTICALS, INC.

2017 EQUITY INCENTIVE PLAN

 

Adopted by the Board of Directors: October
9, 2017

Approved by the Stockholders: October
9, 2017

IPO Date: July 31, 2018

 

1. Establishment and Purpose.

 

The purpose of the Adial Pharmaceuticals,
Inc. 2017 Equity Incentive Plan (the “Plan”) is to promote the interests of Adial Pharmaceuticals, Inc. (the
“Company”) and the stockholders of the Company by providing officers, directors, employees and consultants of
the Company with appropriate incentives and rewards to encourage them to enter into and continue in the employ or service of the
Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals
in fulfilling long-term corporate objectives.

 

2. Definitions. For purposes
of the Plan, the following terms shall be defined as set forth below.

 

	 	(a)	“Administrator” means the Board of Directors or a Committee appointed by the Board of Directors that will be administering the Plan, in accordance with Section 3 hereof.

 

	 	(b)	“Agreement” shall mean the written agreement between the Company and a Participant evidencing an Award.

 

	 	(c)	“Annual Incentive Award” shall mean an Award described in Section 6(g) hereof that is based upon a period of one year or less.

 

	 	(d)	“Award” shall mean any Option, Restricted Stock, Stock Bonus award, Stock Appreciation Right, Performance Award, Other Cash-Based Award or Other Stock-Based Award granted pursuant to the terms of the Plan.

 

	 	(e)	“Award Agreement” shall mean either (i) a written or electronic agreement entered into between the Company and a Participant setting forth the terms and conditions of an Award including any amendment or modification thereof; or (ii) a written or electronic statement issued by the Company to a Participant describing the terms and provisions of such Award, including any amendment or modification thereof. The Administrator may provide for the use of electronic, internet or other non-paper Award Agreements, and the use of electronic, internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan and need not be identical.

 

	 	(f)	“Beneficiary” and “Beneficiaries” means the person, persons, trust or trusts which have been designated by a Participant in his or her most recent written beneficiary designation submitted to the Administrator to receive the benefits specified under the Plan upon such Participant’s death or, if there is no designated Beneficiary or surviving designated Beneficiary, then the person, persons, trust or trusts entitled by will or the laws of descent and distribution to receive such benefits.

 

	 	(g)	“Board of Directors” shall mean the Board of Directors of the Company.

 

	 	(h)	“Capital Stock” means each and every class (if more than one) of common stock of the Company, regardless of the number of votes per share.

 

    1

     

    

 

	 	(i)	“Cause” shall mean a termination of a Participant’s employment by the Company or any of its Subsidiaries due to (i) the continued failure, after written notice, by such Participant substantially to perform his or her duties with the Company or any of its Subsidiaries (other than any such failure resulting from incapacity due to reasonably documented physical illness or injury or mental illness); (ii) the Participant’s indictment or conviction of, or entering a plea of guilty or nolo contendere to, a crime constituting a felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; or (iii) the material breach by the Participant of any agreement between such Participant, on the one hand, and the Company, on the other hand. Notwithstanding the above, with respect to any Participant who is a party to an employment agreement with the Company, Cause shall have the meaning set forth in such employment agreement. The determination that a termination of the Participant’s service is either for Cause or without Cause shall be made by the Company, in its sole discretion.

 

	 	(j)	A “Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

 

	 	(i)	any Person is or becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company) representing 50% or more of the Company’s then outstanding securities; or

 

	 	(ii)	the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the Effective Date, constitute the Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board of Directors or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least a two-thirds of the directors then still in office who either were directors on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended; or

 

	 	(iii)	there is consummated a merger or consolidation of the Company with any other corporation other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a re-capitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company) representing 50% or more of the combined voting power of the Company’s then outstanding securities; or

 

	 	(iv)	the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity at least 75% of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale.

 

	 	(k)	“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder. References in the Plan to specific sections of the Code shall be deemed to include any successor provisions thereto.

 

    2

     

    

 

	 	(l)	“Committee” shall mean the committee of the Board of Directors delegated with the authority to administer the Plan, or the full Board of Directors, as provided in Section 3 hereof. With respect to any decision involving an Award intended to satisfy the requirements of Section 162(m) of the Code, the Committee shall consist of two or more directors of the Company who are “outside directors” within the meaning of Section 162(m) of the Code. With respect to any decision involving an Award intended to satisfy the requirements of Rule 16b-3, the Committee shall consist solely of two or more “non-employee directors” within the meaning of Rule 16b-3. The fact that a Committee member shall fail to qualify under any of these requirements shall not invalidate an Award if the Award is otherwise validly made under the Plan. The Board of Directors may at any time appoint additional members to the Committee, remove and replace members of the Committee with or without Cause, and fill vacancies on the Committee however caused.

 

	 	(m)	“Company” shall mean Adial Pharmaceuticals, Inc., a Delaware corporation, or any successor thereto, and, where appropriate, each of its Subsidiaries.
	 	 	 
	 	(n)	“Company Stock” shall mean the common stock of the Company, par value $0.001 per share.
	 	 	 
	 	(o)	“Disability” shall mean total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.
	 	 	 
	 	(p)	“Effective Date” shall mean the IPO Date, provided that this Plan has been adopted by the Board of Directors and approved by the stockholders of the Company.
	 	 	 
	 	(q)	“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.
	 	 	 
	 	(r)	The “Fair Market Value” of a share of Company Stock, as of a date of determination, shall mean (i) the closing sales price per share of Company Stock on the principal national securities exchange on which such Company Stock is listed on the date of the grant of such Award; (ii) if the shares of Company Stock are not listed or admitted to trading on any such exchange, the closing price of the shares of Company Stock on the principal securities market on which the shares trade as reported for the last preceding date on which there was a sale of such stock on such market; or (iii) if the shares of Company Stock are not then listed on a national securities exchange or traded on a securities market or in an over-the-counter market or the value of such shares is not otherwise determinable, such value as determined by the Administrator in good faith upon the advice of a qualified valuation expert. In no event shall the Fair Market Value of any share of Company Stock, the Option exercise price of any Option, the appreciation base per share of Company Stock under any Stock Appreciation Right, or the amount payable per share of Company Stock under any other Award, be less than the par value per share of Company Stock.
	 	 	 
	 	(s)	“Full Value Award” shall mean any Award, other than an Option or a Stock Appreciation Right, which Award is settled in Company Stock.
	 	 	 
	 	(t)	“Incentive Stock Option” shall mean an Option that is an “incentive stock option” within the meaning of Section 422 of the Code, or any successor provision, and that is designated by the Administrator as an Incentive Stock Option.
	 	 	 
	 	(u)	“IPO Date” means the date on which the underwriting agreement between the Company and the underwriter(s) managing the initial public offering of the Company Stock, pursuant to which the Company Stock is priced for the initial public offering, is executed.
	 	 	 
	 	(v)	“Long-Term Incentive Award” shall mean an Award that is based upon a period in excess of one year.

 

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	 	(w)	“Nonemployee Director” shall mean a member of the Board of Directors who is not an employee of the Company.
	 	 	 
	 	(x)	“Nonstatutory Stock Option” shall mean an Option other than an Incentive Stock Option.

 

 

	 	(y)	“Option” shall mean an option to purchase shares of Company Stock granted pursuant to Section 6(b).

 

	 	(z)	“Other Cash-Based Award” shall mean a right or other interest granted to a Participant pursuant to Section 6(g) hereof other than an Other Stock-Based Award entitling such Participant to receive a cash payment at such times, and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.

 

	 	(aa)	“Other Stock-Based Award” shall mean a right or other interest granted to a Participant, valued in whole or in part by reference to, or otherwise based on, or related to, Company Stock pursuant to Section 6(g) hereof, including but not limited to: (i) unrestricted Company Stock awarded as a bonus or upon the attainment of performance goals or otherwise as permitted under the Plan; and (ii) a right granted to a Participant to acquire Company Stock from the Company containing terms and conditions prescribed by the Administrator.

 

	 	(bb)	“Participant” shall mean an officer, director, employee or consultant of the Company to whom an Award is granted pursuant to the Plan, and, upon the death of the officer, director, employee or consultant, his or her successors, heirs, executors and administrators, as the case may be.

 

	 	(cc)	“Performance Award” shall mean an Award granted to a Participant pursuant to Section 6(f) hereof.

 

	 	(dd)	“Person” shall have the meaning set forth in Section 3(a)(9) of the Exchange Act, except that such term shall not include: (i) the Company; (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company; (iii) an underwriter temporarily holding securities pursuant to an offering of such securities; or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

 

	 	(ee)	“Restricted Stock” shall mean a share of Company Stock that is granted pursuant to the terms of Section 6(e) hereof.

 

	 	(ff)	“Retirement” shall mean, in the case of employees, the termination of employment with the Company (other than for Cause) during or after the calendar year in which a Participant has or will reach (i) age 55 with ten years of service with the Company; or (ii) age 60 with five years of service with the Company. “Retirement” shall mean, in the case of directors, the termination of service with the Company (other than for Cause) during or after the calendar year in which a Participant has or will reach age 75 with five years of service with the Company.

 

	 	(gg)	“Rule 16b-3” shall mean Rule 16b-3 promulgated under the Exchange Act, as amended from time to time.

 

	 	(hh)	“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

 

	 	(ii)	“Stock Appreciation Right” shall mean the right, granted to a Participant under Section 6(d), to be paid an amount measured by the appreciation in the Fair Market Value of a share of Company Stock from the date of grant to the date of exercise of the right, with payment to be made in cash and/or a share of Company Stock, as specified in the Award or determined by the Administrator.

 

	 	(jj)	“Stock Bonus” shall mean a bonus payable in shares of Company Stock granted pursuant to Section 6(e) hereof.

 

	 	(kk)	“Subsidiary” shall mean an entity (whether or not a corporation) that is wholly or majority owned or controlled, directly or indirectly, by the Company; provided, however, that with respect to Incentive Stock Options, the term “Subsidiary” shall include only an entity that qualifies under Section 424(f) of the Code as a “subsidiary corporation” with respect to the Company.

 

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3. Administration of the Plan.

 

The Plan shall be administered by the Administrator,
which shall be the Company’s Board of Directors or a Committee appointed by the Board of Directors. The Administrator shall
have the authority, in its sole discretion, subject to and not inconsistent with the express terms and provisions of the Plan,
to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary
or advisable in the administration of the Plan, including, without limitation, the authority to grant Awards; to determine the
persons to whom and the time or times at which Awards shall be granted; to determine the type and number of Awards to be granted
(including whether an Option granted is an Incentive Stock Option or a Nonstatutory Stock Option); to determine the number of shares
of Company Stock to which an Award may relate and the terms, conditions, restrictions and performance criteria, if any, relating
to any Award; to determine whether, to what extent, and under what circumstances an Award may be settled, cancelled, forfeited,
exchanged or surrendered; to make adjustments in the performance goals that may be required for any award in recognition of unusual
or nonrecurring events affecting the Company or the financial statements of the Company (to the extent not inconsistent with Section 162(m)
of the Code, if applicable), or in response to changes in applicable laws, regulations, or accounting principles; to construe and
interpret the Plan and any Award; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the
terms and provisions of Agreements; and to make all other determinations deemed necessary or advisable for the administration of
the Plan.

 

The Administrator may, in its absolute
discretion, without amendment to the Plan, (a) accelerate the date on which any Option granted under the Plan becomes exercisable,
waive or amend the operation of Plan provisions respecting exercise after termination of employment or otherwise adjust any of
the terms of such Option; and (b) accelerate the vesting date, or waive any condition imposed hereunder, with respect to any
Award or otherwise adjust any of the terms applicable to any such Award. Notwithstanding the foregoing, and subject to Sections
4(c) and 4(d), neither the Administrator nor its delegates shall have the authority to re-price (or cancel and/or re-grant) any
Option, Stock Appreciation Right or, if applicable, other Award at a lower exercise, base or purchase price without first obtaining
the approval of the Company’s stockholders.

 

Subject to Section 162(m) of the Code
and except as required by Rule 16b-3 of the Exchange Act with respect to grants of Awards to individuals who are subject to Section 16
of the Exchange Act, or as otherwise required for compliance with Rule 16b-3 of the Exchange Act or other applicable law, the Administrator
may delegate all or any part of its authority under the Plan to officers or managers of the Company.

 

Subject to Section 162(m) of the Code
and Section 16 of the Exchange Act, to the extent the Administrator deems it necessary, appropriate or desirable to comply
with foreign law or practices and to further the purpose of the Plan, the Administrator may, without amending this Plan, establish
special rules applicable to Awards granted to Participants who are foreign nationals, are employed outside the United States, or
both, including rules that differ from those set forth in the Plan, and grant Awards to such Participants in accordance with those
rules.

 

All decisions, determinations and interpretations
of the Administrator shall be final and binding on all persons with any interest in an Award, including the Company and the Participant
(or any person claiming any rights under the Plan from or through any Participant). No member of the Administrator acting in their
capacity as Administrator shall be liable for any action taken or determination made in good faith with respect to the Plan or
any Award.

 

 

4. Stock Subject to the Plan.

 

 

	 	(a)	Shares Available for Awards. The maximum aggregate number of shares of Company Stock reserved for issuance under the Plan (all of which may be granted as Incentive Stock Options) shall be One Million Seven Hundred and Fifty Thousand (1,750,000) shares. Notwithstanding the foregoing, of the One Million Seven Hundred and Fifty Thousand (1,750,000) shares reserved for issuance under this Plan, no more than One Million (1,000,000) of such shares shall be issued as Full Value Awards. Shares of Company Stock reserved under the Plan may be authorized but unissued Company Stock or authorized and issued Company Stock held in the Company’s treasury. The Administrator may direct that any stock certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares pursuant to the Plan.

 

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	 	(b)	Individual Limitation. To the extent required by Section 162(m) of the Code, the total number of shares of Company Stock subject to Awards awarded to any one Participant during any tax year of the Company, shall not exceed Five Hundred Thousand (500,000) shares (subject to adjustment as provided herein).

 

	 	(c)	Adjustment for Change in Capitalization. In the event that the Administrator shall determine that any dividend or other distribution (whether in the form of cash, Company Stock, or other property), recapitalization, Company Stock split, reverse Company Stock split, reorganization, reclassification, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event, affects the Company Stock such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of Participants under the Plan, then the Administrator shall make such equitable changes or adjustments as it deems necessary or appropriate to any or all of (i) the number and kind of shares of Company Stock that may thereafter be issued in connection with Awards; (ii) the number and kind of shares of Company Stock, securities or other property (including cash) issued or issuable in respect of outstanding Awards; (iii) the exercise price, grant price or purchase price relating to any Award; and (iv) the maximum number of shares subject to Awards which may be awarded to any employee during any tax year of the Company; provided that, with respect to Incentive Stock Options, any such adjustment shall be made in accordance with Section 424 of the Code; and provided further that, no such adjustment shall cause any Award hereunder which is or could be subject to Section 409A of the Code to fail to comply with the requirements of such section.

 

	 	(d)	Specific Adjustments. Notwithstanding the foregoing, in connection with a spin-off or similar corporate transaction, the Administrator shall be required with respect to the Plan and to Awards granted thereunder to make adjustments described in this Section 4(d) that may include, but are not limited to, (i) the imposition of restrictions on any distribution with respect to Restricted Stock or similar Awards; and (ii) the substitution of comparable Options to purchase the common stock of another entity or Stock Appreciation Rights or Other Stock-Based Awards denominated in the securities of another entity, which may be settled in the form of cash, Company Stock, stock of such other entity, or other securities or property, as determined by the Administrator to the extent that any existing gain would otherwise be diminished without payment of adequate compensation to the holder of the award; and, in the event of such a substitution, references in this Plan and in the applicable Award Agreements thereunder to “Company Stock” or “Stock” shall be deemed to also refer to the securities of the other entity where appropriate.

 

	 	(e)	Reuse of Shares. Except as set forth below, if any shares subject to an Award are forfeited, cancelled, exchanged or surrendered, or if an Award terminates or expires without a distribution of shares to the Participant, the shares of stock with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, withholding, termination or expiration, again be available for Awards under the Plan. Notwithstanding the foregoing, upon the exercise of any Award granted in tandem with any other Awards, such related Awards shall be cancelled to the extent of the number of shares of Company Stock as to which the Award is exercised and such number of shares shall no longer be available for Awards under the Plan. In addition, notwithstanding the forgoing, the shares of stock surrendered or withheld as payment of either the exercise price of an Option (including shares of stock otherwise underlying an Award of a Stock Appreciation Right that are retained by the Company to account for the appreciation base of such Stock Appreciation Right) and/or withholding taxes in respect of an Award shall no longer be available for Awards under the Plan.

 

5. Eligibility.

 

The persons who shall be eligible to receive
Awards pursuant to the Plan shall be the individuals the Administrator shall select from time to time, who are employees (including
officers of the Company and its Subsidiaries, whether or not they are directors of the Company or its Subsidiaries), Nonemployee
Directors, and consultants of the Company and its Subsidiaries; provided, that Incentive Stock Options shall be granted only to
employees (including officers and directors who are also employees) of the Company or its Subsidiaries.

 

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6. Awards Under the Plan.

 

	 	(a)	Agreement. The Administrator may grant Awards in such amounts and with such terms and conditions as it shall determine in its sole discretion, subject to the terms and provisions of the Plan. Each Award granted under the Plan shall be evidenced by an Agreement as the Administrator may in its sole discretion deem necessary or desirable and unless Administrator determines otherwise, such Agreement must be signed, acknowledged and returned by the Participant to the Company. Unless the Administrator determines otherwise, any failure by the Participant to sign and return the Award Agreement within such reasonable period of time following the granting of the Award as the Administrator shall prescribe shall cause such Award to the Participant to be null and void. By accepting an Award or other benefits under the Plan (including participation in the Plan), each Participant shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, all provisions of the Plan and the Award Agreement.

 

	 	(b)	Stock Options.

 

	 	(i)	Grant of Stock Options. The Administrator may grant Options under the Plan to purchase shares of Company Stock in such amounts and subject to such terms and conditions as it shall from time to time determine in its sole discretion, subject to the terms and provisions of the Plan. The exercise price of the share purchasable under an Option shall be determined by the Administrator but in no event shall the exercise price be less than the Fair Market Value per share on the grant date of such Option. The date as of which the Administrator adopts a resolution granting an Option shall be considered the day on which such Option is granted unless such resolution specifies a later date.

 

	 	(ii)	Identification. Each Option shall be clearly identified in the applicable Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option and shall state the number of shares of Company Stock to which the Option (and/or each type of Option) relates.

 

	 	(c)	Special Requirements for Incentive Stock Options.

 

	 	(i)	To the extent that the aggregate Fair Market Value of shares of Company Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year under the Plan and any other stock option plan of the Company shall exceed $100,000, such Options shall be treated as Nonstatutory Stock Options. Such Fair Market Value shall be determined as of the date on which each such Incentive Stock Option is granted.

 

	 	(ii)	No Incentive Stock Option may be granted to an individual if, at the time of the proposed grant, such individual owns (or is deemed to own under the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company unless (A) the exercise price of such Incentive Stock Option is at least 110% of the Fair Market Value of a share of Company Stock at the time such Incentive Stock Option is granted and (B) such Incentive Stock Option is not exercisable after the expiration of five years from the date such Incentive Stock Option is granted.

 

	 	(d)	Stock Appreciation Rights.

 

	 	(i)	The Administrator may grant a related Stock Appreciation Right in connection with all or any part of an Option granted under the Plan, either at the time such Option is granted or at any time thereafter prior to the exercise, termination or cancellation of such Option, and subject to such terms and conditions as the Administrator shall from time to time determine in its sole discretion, consistent with the terms and provisions of the Plan, provided, however, that in no event shall the appreciation base of the shares of Company Stock subject to the Stock Appreciation Right be less than the Fair Market Value per share on the grant date of such Stock Appreciation Right. The holder of a related Stock Appreciation Right shall, subject to the terms and conditions of the Plan and the applicable Award Agreement, have the right by exercise thereof to surrender to the Company for cancellation all or a portion of such related Stock Appreciation Right, but only to the extent that the related Option is then exercisable, and to be paid therefor an amount equal to the excess (if any) of (i) the aggregate Fair Market Value of the shares of Company Stock subject to the related Stock Appreciation Right or portion thereof surrendered (determined as of the exercise date) over (ii) the aggregate appreciation base of the shares of Company Stock subject to the Stock Appreciation Right or portion thereof surrendered. Upon any exercise of a related Stock Appreciation Right or any portion thereof, the number of shares of Company Stock subject to the related Option shall be reduced by the number of shares of Company Stock in respect of which such Stock Appreciation Right shall have been exercised.

 

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	 	(ii)	The Administrator may grant unrelated Stock Appreciation Rights in such amount and subject to such terms and conditions, as the Administrator, shall from time to time determine in its sole discretion, subject to the terms and provisions of the Plan, provided, however, that in no event shall the appreciation base of the shares of Company Stock subject to the Stock Appreciation Right be less than the Fair Market Value per share on the grant date of such Stock Appreciation Right. The holder of an unrelated Stock Appreciation Right shall, subject to the terms and conditions of the Plan and the applicable Award Agreement, have the right to surrender to the Company for cancellation all or a portion of such Stock Appreciation Right, but only to the extent that such Stock Appreciation Right is then exercisable, and to be paid therefor an amount equal to the excess (if any) of (x) the aggregate Fair Market Value of the shares of Company Stock subject to the Stock Appreciation Right or portion thereof surrendered (determined as of the exercise date), over (y) the aggregate appreciation base of the shares of Company Stock subject to the Stock Appreciation Right or portion thereof surrendered.

 

	 	(iii)	The grant or exercisability of any Stock Appreciation Right shall be subject to such conditions as the Administrator in its sole discretion, shall determine.

 

	 	(e)	Restricted Stock and Stock Bonus.

 

	 	(i)	The Administrator may grant Restricted Stock awards, alone or in tandem with other Awards under the Plan, subject to such restrictions, terms and conditions, as the Administrator shall determine in its sole discretion and as shall be evidenced by the applicable Award Agreements. The vesting of a Restricted Stock award granted under the Plan may be conditioned upon the completion of a specified period of employment or service with the Company or any Subsidiary, upon the attainment of specified performance goals, and/or upon such other criteria as the Administrator may determine in its sole discretion.

 

	 	(ii)	Each Agreement with respect to a Restricted Stock award shall set forth the amount (if any) to be paid by the Participant with respect to such Award and when and under what circumstances such payment is required to be made.

 

	 	(iii)	The Administrator may, upon such terms and conditions as the Administrator determines in its sole discretion, provide that a certificate or certificates representing the shares underlying a Restricted Stock award shall be registered in the Participant’s name and bear an appropriate legend specifying that such shares are not transferable and are subject to the provisions of the Plan and the restrictions, terms and conditions set forth in the applicable Award Agreement, or that such certificate or certificates shall be held in escrow by the Company on behalf of the Participant until such shares become vested or are forfeited. Except as provided in the applicable Award Agreement, no shares underlying a Restricted Stock award may be assigned, transferred, or otherwise encumbered or disposed of by the Participant until such shares have vested in accordance with the terms of such Award.

 

	 	(iv)	If and to the extent that the applicable Award Agreement may so provide, a Participant shall have the right to vote and receive dividends on the shares underlying a Restricted Stock award granted under the Plan. Unless otherwise provided in the applicable Award Agreement, any stock received as a dividend on or in connection with a stock split of the shares underlying a Restricted Stock award shall be subject to the same restrictions as the shares underlying such Restricted Stock award.

  

	 	(v)	The Administrator may grant Stock Bonus awards, alone or in tandem with other Awards under the Plan, subject to such terms and conditions as it shall determine in its sole discretion and as may be evidenced by the applicable Award Agreement.

 

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	 	(f)	Performance Awards.

 

	 	(i)	The Administrator may grant Performance Awards, alone or in tandem with other Awards under the Plan, to acquire shares of Company Stock in such amounts and subject to such terms and conditions as the Administrator shall from time to time in its sole discretion determine, subject to the terms of the Plan. To the extent necessary to satisfy the short-term deferral exception to Section 409A of the Code, unless the Administrator shall determine otherwise, the Performance Awards shall provide that payment shall be made within 2 1/2 months after the end of the year in which the Participant has a legally binding vested right to such award.

 

	 	(ii)	In the event that the Administrator grants a Performance Award or other Award (other than Nonstatutory Stock Option or Incentive Stock Option or a Stock Appreciation Right) that is intended to constitute qualified performance-based compensation within the meaning Section 162(m) of the Code, the following rules shall apply (as such rules may be modified by the Administrator to conform with Section 162(m) of the Code and the Treasury Regulations thereunder as may be in effect from time to time, and any amendments, revisions or successor provisions thereto): (a) payments under the Performance Award shall be made solely on account of the attainment of one or more objective performance goals established in writing by the Administrator not later than 90 days after the commencement of the period of service to which the Performance Award relates (but in no event after 25% of the period of service has elapsed); (b) the performance goal(s) to which the Performance Award relates shall be based on one or more of the following business criteria applied to the Participant and/or a business unit or the Company and/or a Subsidiary: (1) scientific progress; (2) product development progress; (3) business development progress; (4) sales; (5) sales growth; (6) earnings growth; (7) cash flow or cash position; (8) gross margins; (9) stock price; (10) financings (issuance of debt or equity); (11) market share; (12) total shareholder return; (13) net revenues; (14) earnings per share of Company Stock; (15) net income (before or after taxes); (16) return on assets; (17) return on sales; (18) return on assets; (19) equity or investment; (20) improvement of financial ratings; (21) achievement of balance sheet or income statement objectives; (22) total stockholder return; (23) earnings from continuing operations; levels of expense; cost or liability; (24) earnings before all or any interest; taxes; depreciation and/or amortization (“EBIT”; “EBITA” or “EBITDA”); (25) cost reduction goals; (26) business development goals (including without limitation product launches and other business development-related opportunities); (27) identification or consummation of investment opportunities or completion of specified projects in accordance with corporate business plans; including strategic mergers; acquisitions or divestitures; (28) meeting specified market penetration or value added goals; (29) development of new technologies (including patent application or issuance goals); and (30) any combination of; or a specified increase or decrease of one or more of the foregoing over a specified period; and (c) once granted, the Administrator may not have discretion to increase the amount payable under such Award, provided, however, that whether or not an Award is intended to constitute qualified performance-based compensation within the meaning of Section 162(m) of the Code, the Administrator, to the extent provided by the Administrator at the time the Award is granted or as otherwise permitted under Section 162(m) of the Code, shall have the authority to make appropriate adjustments in performance goals under an Award to reflect the impact of extraordinary items not reflected in such goals. For purposes of the Plan, extraordinary items shall be defined as (1) any profit or loss attributable to acquisitions or dispositions of stock or assets including, without limitation, licenses; (2) any changes in accounting standards that may be required or permitted by the Financial Accounting Standards Board or adopted by the Company after the goal is established; (3) all items of gain, loss or expense for the year related to restructuring charges for the Company; (4) all items of gain, loss or expense for the year determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business; (5) all items of gain,
loss or expense for the year related to discontinued operations that do not qualify as a segment of a business as defined in APB Opinion No. 30; and (6) such other items as may be prescribed by Section 162(m) of the Code and the Treasury Regulations thereunder as may be in effect from time to time, and any amendments, revisions or successor provisions and any changes thereto. The Board of Directors or the Committee shall, prior to making payment under any award under this Section 6(f), certify in writing that all applicable performance goals have been attained. Notwithstanding anything to the contrary contained in the Plan or in any applicable Award Agreement, no dividends or dividend equivalents will be paid with respect to unvested Performance Awards.

 

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	 	(g)	Other Stock-Based Award; Cash-Based Award.

 

	 	(i)	The Administrator is authorized to grant Awards to Participants in the form of Other Stock-Based Awards or Other Cash-Based Awards, as deemed by the Administrator to be consistent with the purposes of the Plan. To the extent necessary to satisfy the short-term deferral exception to Section 409A of the Code, unless the Administrator shall determine otherwise, the awards shall provide that payment shall be made within 21⁄2 months after the end of the year in which the Participant has a legally binding vested right to such award. With respect to Other Cash-Based Awards intended to qualify as performance based compensation under Section 162(m) of the Code, (i) the maximum value of the aggregate payment that any Participant may receive with respect to any such Other Cash-Based Award shall be in such amounts and subject to such terms and conditions as the Board of Directors or the Committee shall determine; (ii) the maximum value of the aggregate payment that any Participant may receive with respect to any such Other Cash-Based Award that is a Long-Term Incentive Award is the highest amount paid pursuant to clause (i) above multiplied by a fraction, the numerator of which is the number of months in the performance period and the denominator of which is twelve, and (iii) such additional rules set forth in Section 6(f) applicable to Awards intended to qualify as performance-based compensation under Section 162(m) shall apply. The Administrator may establish such other rules applicable to the Other Stock-Based Awards or Cash-Based Awards to the extent not inconsistent with Section 162(m) of the Code.

 

 

	 	(h)	Exercisability of Awards; Cancellation of Awards in Certain Cases.

 

	 	(i)	Except as hereinafter provided, each Agreement with respect to an Option or Stock Appreciation Right shall set forth the period during which and the conditions subject to which the Option or Stock Appreciation Right evidenced thereby shall be exercisable, and each Agreement with respect to a Restricted Stock award, Stock Bonus award, Performance Award or other Award shall set forth the period after which and the conditions subject to which amounts underlying such Award shall vest or be deliverable, all such periods and conditions to be determined by the Administrator in its sole discretion.

                                     

	 	(ii)	Except as provided in Section 7(d) hereof, no Option or Stock Appreciation Right may be exercised and no shares of Company Stock underlying any other Award under the Plan may vest or become deliverable more than ten years after the date of grant (the “Stated Expiration Date”).

 

	 	(iii)	Except as provided in Section 7 hereof, no Option or Stock Appreciation Right may be exercised and no shares of Common Stock underlying any other Award under the Plan may vest or become deliverable unless the Participant is at such time in the employ (for Participants who are employees) or service (for Participants who are Nonemployee Directors or consultants) of the Company or a Subsidiary (or a company, or a parent or subsidiary company of such company, issuing or assuming the relevant right or award in a Change in Control) and has remained continuously so employed or in service since the relevant date of grant of the Award.

 

	 	(iv)	An Option or Stock Appreciation Right shall be exercisable by the filing of a written notice of exercise or a notice of exercise in such other manner with the Company, on such form and in such manner as the Administrator in its sole discretion prescribe, and by payment in accordance with Section 6(i) hereof.

 

	 	(v)	Unless the applicable Award Agreement provides otherwise, the “Option exercise date” and the “Stock Appreciation Right exercise date” shall be the date that the written notice of exercise, together with payment, are received by the Company.

 

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	 	(i)	Payment of Award Price.

 

	 	(i)	Unless the applicable Award Agreement provides otherwise or the Administrator in its sole discretion otherwise determines, any written notice of exercise of an Option or Stock Appreciation Right must be accompanied by payment of the full Option or Stock Appreciation Right exercise price.

 

	 	(ii)	Payment of the Option exercise price and of any other payment required by the Award Agreement to be made pursuant to any other Award shall be made in any combination of the following: (a) by certified or official bank check payable to the Company (or the equivalent thereof acceptable to the Administrator); (b) with the consent of the Administrator its sole discretion, by personal check (subject to collection) which may in the discretion of the Administrator be deemed conditional; (c) unless otherwise provided in the applicable Award Agreement, and as permitted by the Administrator by delivery of previously-acquired shares of Common Stock owned by the Participant having a Fair Market Value (determined as of the Option exercise date, in the case of Options, or other relevant payment date as determined by the Administrator, in the case of other Awards) equal to the portion of the exercise price being paid thereby; and/or (d) unless otherwise provided in applicable Award Agreement, and as permitted by the Administrator, on a net-settlement basis with the Company withholding the amount of Common Stock sufficient to cover the exercise price and tax withholding obligation. Payment in accordance with clause (a) of this Section 6(i)(ii) may be deemed to be satisfied, if and to the extent that the applicable Award Agreement so provides or the Administrator permits, by delivery to the Company of an assignment of a sufficient amount of the proceeds from the sale of Company Stock to be acquired pursuant to the Award to pay for all of the Company Stock to be acquired pursuant to the Award and an authorization to the broker or selling agent to pay that amount to the Company and to effect such sale at the time of exercise or other delivery of shares of Company Stock.

 

7. Termination of Employment.

 

	 	(a)	Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, upon termination of a Participant’s employment or service with the Company and its Subsidiaries by the Company or its Subsidiary for Cause (or in the case of a Nonemployee Director upon such Nonemployee Director’s failure to be renominated as Nonemployee Director of the Company), the portions of outstanding Awards granted to such Participant that are exercisable as of the date of such termination of employment or service shall remain exercisable, and any payment or notice provided for under the terms of any other outstanding Award as respects the portion thereof that is vested as of the date of such termination of employment or service, may be given, for a period of ninety (90) days from and including the date of termination of employment or service (and shall thereafter terminate). All portions of outstanding Awards granted to such Participant that are not exercisable as of the date of such termination of employment or service, and any other outstanding Award which is not vested as of the date of such termination of employment or service shall terminate upon the date of such termination of employment or service.

 

	 	(b)	Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, upon termination of the Participant’s employment or service with the Company and its Subsidiaries for any reason other than as described in subsection (a), (c), (d) or (e) hereof, the portions of outstanding Awards granted to such Participant that are exercisable as of the date of such termination of employment or service shall remain exercisable for a period of ninety (90) days (and shall terminate thereafter), and any payment or notice provided for under the terms of any other outstanding Award as respects the portion thereof vested as of the date of termination of employment or service may be given, for a period of ninety (90) days from and including the date of termination of employment or service (and shall terminate thereafter). All additional portions of outstanding Awards granted to such Participant that are not exercisable as of the date of such termination of employment or service, and any other outstanding Award that is not vested as of the date of such termination of employment or service shall terminate upon the date of such termination of employment or service.

 

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	 	(c)	Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if the Participant voluntarily Retires with the consent of the Company or the Participant’s employment or service terminates due to Disability, all outstanding Awards (except, in the event a Participant voluntarily Retires, with respect to Awards (other than Options and Stock Appreciation Rights) intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code) granted to such Participant shall continue to vest in accordance with the terms of the applicable Award Agreements. The Participant shall be entitled to exercise each such Award and to make any payment, give any notice or to satisfy other condition under each such other Award, in each case, for a period of one year from and including the later of (i) the date such entire Award becomes vested or exercisable in accordance with the terms of such Award and (ii) the date of Retirement, and thereafter such Awards or parts thereof shall be canceled. Notwithstanding the foregoing, the Administrator in its sole discretion may provide for a longer or shorter period for exercise of an Award or may permit a Participant to continue vesting under an Award or to make any payment, give any notice or to satisfy other condition under any other Award.

 

	 	(d)	Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, if the Participant’s employment or service terminates by reason of death, or if the Participant’s employment or service terminates under circumstances providing for continued rights under subsection (b), (c) or (e) of this Section 7 and during the period of continued rights described in subsection (b), (c) or (e) the Participant dies, all outstanding Awards granted to such Participant shall vest and become fully exercisable (if applicable), and any payment or notice provided for under the terms of any other outstanding Award may be immediately paid or given and any condition may be satisfied, by the person to whom such rights have passed under the Participant’s will (or if applicable, pursuant to the laws of descent and distribution) for a period of one year from and including the date of the Participant’s death and thereafter all such Awards or parts thereof shall be canceled.

 

	 	(e)	Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant and the Company, upon termination of a Participant’s employment or service with the Company and its Subsidiaries (i) by the Company or its Subsidiaries without Cause (including, in case of a Nonemployee Director, the failure to be elected as a Nonemployee Director); or (ii) by the Participant for “good reason” or any like term as defined under any employment agreement with the Company or a Subsidiary to which a Participant may be a party to, the portions of outstanding Awards granted to such Participant which are exercisable as of the date of termination of employment or service of such Participant shall remain exercisable, and any payment or notice provided for under the terms of any other outstanding Award as respects the portion thereof vested as of the date of termination of employment or service may be given, for a period of one year from and including the date of termination of employment or service and shall terminate thereafter.

 

 

	 	(f)	Notwithstanding anything in this Section 7 to the contrary, no Option or Stock Appreciation Right may be exercised and no shares of Company Stock underlying any other Award under the Plan may vest or become deliverable past the Stated Expiration Date. In addition, the Administrator in its sole discretion, and in accordance with Section 409A of the Code, shall determine (i) for purposes of the Plan, whether any termination of employment or service is a voluntary Retirement with the Company’s consent or is due to Disability for purposes of the Plan; (ii) whether any leave of absence (including any short-term or long-term Disability or medical leave) constitutes a termination of employment or service, or a failure to have remained continuously employed or in service, for purposes of the Plan (regardless of whether such leave or status would constitute such a termination or failure for purposes of employment law); (iii) the applicable date of any such termination of employment or service; and (iv) the impact, if any, of any of the foregoing on Awards under the Plan.

 

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8. Effect of Change in Control.

 

Unless otherwise determined in an Award
Agreement, in the event of a Change in Control:

 

	 	(a)	With respect to each outstanding Award that is assumed or substituted in connection with a Change in Control, in the event of a termination of a Participant’s employment or service by the Company without Cause during the 12-month period following such Change in Control, on the date of such termination (i) such Award shall become fully vested and, if applicable, exercisable; (ii) the restrictions, payment conditions, and forfeiture conditions applicable to any such Award granted shall lapse; and (iii) any performance conditions imposed with respect to Awards shall be deemed to be fully achieved at target levels.

 

	 	(b)	For purposes of this Section 8, an Award shall be considered assumed or substituted if, following the Change in Control, the Award remains subject to the same terms and conditions that were applicable to the Award immediately prior to the Change in Control except that, if the Award related to shares of Company Stock, the Award instead confers the right to receive common stock of the acquiring entity.

 

	 	(c)	With respect to each outstanding Award that is not assumed or substituted in connection with a Change in Control, immediately upon the occurrence of the Change in Control, (i) such Award shall become fully vested and, if applicable, exercisable; (ii) the restrictions, payment conditions, and forfeiture conditions applicable to any such Award granted shall lapse; and (iii) any performance conditions imposed with respect to Awards shall be deemed to be fully achieved at target levels.

 

 

	 	(d)	Notwithstanding any other provision of the Plan: (i) in the event of a Change in Control, except as would otherwise result in adverse tax consequences under Section 409A of the Code, the Board may, in its sole discretion, provide that each Award shall, immediately upon the occurrence of a Change in Control, be cancelled in exchange for a payment in cash or securities in an amount equal to (x) the excess of the consideration paid per Share in the Change in Control over the exercise or purchase price (if any) per Share subject to the Award multiplied by (y) the number of Shares granted under the Award; and (ii) with respect to any Award that constitutes a deferral of compensation subject to Section 409A of the Code, in the event of a Change in Control that does not constitute a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company under Section 409A(a)(2)(A)(v) of the Code and regulations thereunder, such Award shall be settled in accordance with its original terms or at such earlier time as permitted by Section 409A of the Code.

 

9. Miscellaneous.

 

	 	(a)	The Administrator may specify in an Award Agreement at the time of the Award that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events shall include, but shall not be limited to, termination of service for Cause, violation of material Company policies, breach of non-competition, confidentiality or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company. Notwithstanding any other provision hereof, the Administrator shall have the right at any time to deny or delay a Participant’s exercise of Options if such Participant is reasonably believed by the Administrator to have engaged in material conduct adverse to the interests of the Company.

 

	 	(b)	Participants are and at all times shall remain subject to the trading window policies adopted by the Company from time to time throughout the period of time during which they may exercise Options, Stock Appreciation Rights or sell shares of Company Stock acquired pursuant to the Plan.

 

10. No Special Employment Rights, No
Right to Award.

 

	 	(a)	Nothing contained in the Plan or any Agreement shall confer upon any Participant any right with respect to the continuation of employment or service by the Company or interfere in any way with the right of the Company, subject to the terms of any separate employment agreement to the contrary, at any time to terminate such employment or service or to increase or decrease the compensation of the Participant.

 

 

	 	(b)	No person shall have any claim or right to receive an Award hereunder. The granting of an Award to a Participant at any time shall neither require the Company to grant any other Award to such Participant or other person at any time or preclude the Company from making subsequent grants to such Participant or any other person.

 

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11. Securities Matters; No Assignment
or Transfer.

 

	 	(a)	The Company shall be under no obligation to effect the registration pursuant to the Securities Act of any interests in the Plan or any shares of Company Stock to be issued hereunder or to effect similar compliance under any state laws. Notwithstanding anything herein to the contrary, the Company shall not be obligated to cause to be issued or delivered any certificates evidencing shares of Company Stock pursuant to the Plan unless and until the Company is advised by its counsel that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange or securities market on which shares of Company Stock are traded. The Administrator may require, as a condition of the issuance and delivery of certificates evidencing shares of Company Stock pursuant to the terms hereof, that the recipient of such shares make such agreements and representations, and that such certificates bear such legends, as the Administrator in its sole discretion, deems necessary or desirable.

 

	 	(b)	The transfer of any shares of Company Stock hereunder shall be effective only at such time as counsel to the Company shall have determined that the issuance and delivery of such shares is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange or securities market on which shares of Company Stock are traded. The Administrator may, in its sole discretion, defer the effectiveness of any transfer of shares of Company Stock hereunder in order to allow the issuance of such shares to be made pursuant to registration or an exemption from registration or other methods for compliance available under federal or state securities laws. The Administrator shall inform the Participant in writing of its decision to defer the effectiveness of a transfer. During the period of such deferral in connection with the exercise of an Award, the Participant may, by written notice, withdraw such exercise and obtain the refund of any amount paid with respect thereto.

 

12. Withholding Taxes.

 

	 	(a)	Whenever cash is to be paid pursuant to an Award, the Company shall have the right to deduct therefrom an amount sufficient to satisfy any federal, state and local withholding tax requirements related thereto.

 

	 	(b)	Whenever shares of Company Stock are to be delivered pursuant to an Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any federal, state and local (including jurisdictions outside the United States) withholding tax requirements related thereto. With the approval of the Administrator a Participant may satisfy the foregoing requirement by electing to have the Company withhold from delivery shares of Company Stock having a value equal to the minimum amount of tax required to be withheld. Such shares shall be valued at their Fair Market Value on the date of which the amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash. Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuant to an Award.

 

13. Non-Competition and Confidentiality.

 

The Administrator may specify in an Award
Agreement that the Participant’s rights, payments and benefits with respect to an Award shall be conditioned upon the Participant
making a representation regarding compliance with non-competition, confidentiality or other restrictive covenants that may apply
to the Participant and providing that the Participant’s rights, payments and benefits with respect to an Award shall be subject
to reduction, cancellation, forfeiture or recoupment on account of a breach of such representations.

 

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14. Notification of Election Under Section
83(b) of the Code.

 

If any Participant shall, in connection
with the acquisition of shares of Company Stock under the Plan, make the election permitted under Section 83(b) of the Code,
such Participant shall notify the Company of such election within 10 days of filing notice of the election with the Internal Revenue
Service.

 

15. Amendment or Termination of the
Plan. 

 

The Administrator may, at any time, suspend
or terminate the Plan or revise or amend it in any respect whatsoever; provided, however, that the requisite stockholder approval
shall be required if and to the extent the Administrator determines that such approval is appropriate or necessary for purposes
of satisfying Section 162(m) or Section 422 of the Code, Rule 16b-3 or other applicable laws, rules or regulations. Awards may
be granted under the Plan prior to the receipt of such stockholder approval of the Plan but each such grant shall be subject in
its entirety to such approval and no Award may be exercised, vested or otherwise satisfied prior to the receipt of such approval.
No amendment or termination of the Plan may, without the consent of a Participant, adversely affect the Participant’s rights
under any outstanding Award.

 

16. Transferability; Nonassignability.

 

	 	(a)	Awards under the Plan shall not be assignable or transferable by the Participant, except by will or by the laws of descent and distribution, and shall not be subject in any manner to assignment, alienation, pledge, encumbrance or charge. Notwithstanding the foregoing, the Administrator may provide in an Award Agreement that the Participant shall have the right to designate a Beneficiary or Beneficiaries who shall be entitled to any rights, payments or other benefits specified under an Award following the Participant’s death. During the lifetime of a Participant, an Award shall be exercised only by such Participant or such Participant’s guardian or legal representative. In the event of a Participant’s death, an Award may, to the extent permitted by the Award Agreement, be exercised by the Participant’s Beneficiary as designated by the Participant in the manner prescribed by the Administrator or, in the absence of an authorized Beneficiary designation, by the legatee of such Award under the Participant’s will or by the Participant’s estate in accordance with the Participant’s will or the laws of descent and distribution, in each case in the same manner and to the same extent that such Award was exercisable by the Participant on the date of the Participant’s death.

 

	 	(b)	Notwithstanding anything else in this Section 16 to the contrary, the Administrator may in its discretion provide in an Award Agreement that an Award in the form of a Nonstatutory Stock Option, share-settled Stock Appreciation Right, Restricted Stock, or share-settled Other Stock-Based Award may be transferred, on such terms and conditions as the Administrator deems appropriate, either (i) by will or by the laws of descent and distribution; (ii) by instrument to a Beneficiary; (ii) by instrument to an inter vivos or testamentary trust (or other entity) in which the Award is to be passed to the Participant’s designated beneficiaries; or (iii) with the prior written approval of the Company, by gift, in a form acceptable to the Company. Any transferee of the Participant’s rights shall succeed and be subject to all of the terms of the applicable Award Agreement and the Plan. 

 

17. Effective Date and Term of Plan.

 

The Plan came into existence on the date
that the Plan was adopted by the Board of Directors. However, no Award may be granted under the Plan prior to the IPO Date. In
addition, the Plan shall be subject to the requisite approval of the stockholders of the Company. Unless earlier terminated by
the Board of Directors, the right to grant Awards under the Plan shall terminate on the close of business on August 30, 2027. Awards
outstanding at Plan termination shall remain in effect according to their terms and the provisions of the Plan.

 

 

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18. Applicable Law.

 

Except to the extent preempted by any applicable
federal law, the Plan shall be construed and administered in accordance with the laws of the State of Delaware, without reference
to its principles of conflicts of law.

 

19. Participant Rights.

 

	 	(a)	No Participant shall have any claim to be granted any award under the Plan, and there is no obligation for uniformity of treatment for Participants. Except as provided specifically herein, a Participant or a transferee of an Award shall have no rights as a stockholder with respect to any shares covered by any award until the date of the issuance of the Award  to him or her for such shares (which may be certificated or uncertificated as stated herein).

 

	 	(b)	Determinations by the Administrator under the Plan relating to the form, amount and terms and conditions of grants and Awards need not be uniform, and may be made selectively among persons who receive or are eligible to receive grants and awards under the Plan, whether or not such persons are similarly situated.

 

20. Unfunded Status of Awards.

 

The Plan is intended to constitute an “unfunded”
plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Agreement shall give any such Participant any rights that are greater than those of a general
creditor of the Company.

 

21. No Fractional Shares.

 

No fractional shares of Company Stock shall
be issued or delivered pursuant to the Plan. The Administrator shall determine whether cash, other Awards, or other property shall
be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited
or otherwise eliminated.

 

22. Interpretation.

 

The Plan is designed and intended, to the
extent applicable, to comply with Section 162(m) of the Code, and to provide for grants and other transactions which are exempt
under Rule 16b-3, and all provisions hereof shall be construed in a manner to so comply. Awards under the Plan are intended to
comply with Code Section 409A to the extent subject thereto and the Plan and all Awards shall be interpreted in accordance
with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder, including
without limitation any such regulations or other guidance that may be issued after the Effective Date of the Plan. Notwithstanding
any provision in the Plan to the contrary, no payment or distribution under this Plan that constitutes an item of deferred compensation
under Code Section 409A and becomes payable by reason of a Participant’s termination of employment or service with the
Company will be made to such Participant until such Participant’s termination of employment or service constitutes a “separation
from service” (as defined in Code Section 409A). For purposes of this Plan, each amount to be paid or benefit to be
provided shall be construed as a separate identified payment for purposes of Code Section 409A. If a Participant is a “specified
employee” (as defined in Code Section 409A), then to the extent necessary to avoid the imposition of taxes under Code
Section 409A, such Participant shall not be entitled to any payments upon a termination of his or her employment or service
until the earlier of: (i) the expiration of the six (6)-month period measured from the date of such Participant’s “separation
from service” or (ii) the date of such Participant’s death. Upon the expiration of the applicable waiting period
set forth in the preceding sentence, all payments and benefits deferred pursuant to this Section 22 (whether they would have
otherwise been payable in a single lump sum or in installments in the absence of such deferral) shall be paid to such Participant
in a lump sum as soon as practicable, but in no event later than sixty (60) calendar days following such expired period, and
any remaining payments due under this Plan will be paid in accordance with the normal payment dates specified for them herein.

 

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