Document:

ex101amendmentno1taa10q

                        FIRST AMENDMENT TO THE    AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT         This FIRST AMENDMENT  TO  THE    AMENDED  AND  RESTATED      TRANSFER  AND ADMINISTRATION AGREEMENT (this “Amendment”), dated as of April 16, 2019 (the  “First Amendment Closing Date”), is entered into by and among the following parties:         (i)   TECH DATA FINANCE SPV, INC., as Transferor;         (ii)  TECH DATA CORPORATION, as Collection Agent;         (iii) THE BANK OF NOVA SCOTIA,     as Administrative Agent, as Class Agent and              as a Bank Investor for the Scotia Bank Class;         (iv)  LIBERTY STREET FUNDING LLC, as Class Conduit for the Scotia Bank Class;         (v)   PNC  BANK,  NATIONAL  ASSOCIATION,  as  Class  Agent  and as  a Bank              Investor for the PNC Class;         (vi)  MUFG BANK, LTD. (f/k/a The Bank of Tokyo Mitsubishi UFJ, Ltd., New York              Branch), as Class Agent and as a Bank Investor for the MUFG Class;         (vii) VICTORY RECEIVABLES CORPORATION, as Class Conduit for the   MUFG              Class;         (viii) MIZUHO BANK, LTD., as Class Agent and as a Bank Investor for the Mizuho              Class;         (ix)  BNP PARIBAS, as Class Agent and as a Bank Investor for the BNP Class;         (x)   STARBIRD FUNDING CORPORATION, as Class Conduit for the BNP Class         Capitalized terms used but not otherwise defined herein (including such terms used above  and in Schedule A) have the respective meanings assigned thereto in the Amended Transfer and  Administration Agreement described below.                                 BACKGROUND         1.    The  parties  hereto  have  entered  into the Amended  and  Restated Transfer  and  Administration Agreement,  dated  as  of August  8,  2017 (as  amended,  amended  and  restated,  supplemented  or  otherwise  modified prior  to this  Amendment,  the “Existing Transfer  and  Administration Agreement”).         2.    The  parties  hereto  desire  to  amend  the Existing Transfer  and  Administration  Agreement as set forth herein.         NOW,  THEREFORE,  with  the  intention  of  being  legally  bound  hereby,  and  in  consideration of the mutual undertakings expressed herein, each party to this Amendment hereby  agrees as follows:    730331425 14453710  

 

      SECTION 1.  Amendments  to  the Existing Transfer  and  Administration Agreement.   The Existing Transfer  and  Administration Agreement  is  hereby  amended as  shown  on the  marked pages set forth on Exhibit A attached hereto (as so amended, the “Amended Transfer and  Administration Agreement”).         SECTION 2.  Representations  and  Warranties  of  the Transferor and Collection  Agent.   The Transferor and Collection Agent hereby represent and warrant to each of the parties hereto  as of the date hereof as follows:               (a)   Representations  and  Warranties.   The  representations  and  warranties        made by it in Section 6.01 or Section 6.02, as applicable, of the Amended Transfer and        Administration Agreement are true and correct on and as of the date hereof unless such        representations and warranties by their terms refer to an earlier date, in which case they        shall be true and correct on and as of such earlier date.               (b)   Power and Authority; Due Authorization.  It  (i) has all necessary power        and authority to (A) execute and deliver this Amendment and (B) perform its obligations        under this Amendment (including the Amended Transfer and Administration Agreement)        and  (ii)  the  execution,  delivery  and  performance  of,  and  the  consummation  of  the        transactions  provided  for  in,  this  Amendment (including the Amended Transfer  and        Administration Agreement) have been duly  authorized by it by  all necessary corporate        action.               (c)   Binding Obligations.  This Amendment (including the Amended Transfer        and Administration Agreement) constitutes the legal, valid and binding obligation of such        party, enforceable against it in accordance with its terms, except (i) as such enforceability        may  be  limited  by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium  or        other similar laws affecting the enforcement of creditors’ rights generally and (ii) as such        enforceability may be limited by general principles of equity, regardless of whether such        enforceability is considered in a proceeding in equity or at law.               (d)   No  Termination  Event.   No  Termination  Event  or Potential Termination        Event has occurred and is continuing, and no Termination Event or Potential Termination        Event would result from this Amendment.         SECTION 3.  Effect  of  Amendment;  Ratification.   All  provisions  of  the Existing  Transfer  and  Administration Agreement  and  the  other  Transaction  Documents,  as  expressly  amended  and  modified  by  this  Amendment,  shall  remain  in  full  force  and  effect.  After  this  Amendment becomes effective, all references in the Transfer and Administration Agreement (or  in any other Transaction Document) to “this Amended and Restated Transfer and Administration  Agreement”, “this  Agreement”, “hereof”, “herein” or  words  of  similar  effect  referring  to  the  Existing Transfer  and  Administration Agreement  shall  be deemed  to  be  references  to  the  Amended Transfer and Administration Agreement.  This Amendment shall not be deemed, either  expressly or impliedly, to waive, amend or supplement any provision of the Existing Transfer  and  Administration Agreement  other  than  as  set  forth  herein.   The Existing Transfer  and  Administration Agreement, as amended by this Amendment, is hereby ratified and confirmed in  all respects.                                         2           

 

      SECTION 4.  Conditions to Effectiveness.  This Amendment shall become effective as  of  the First Amendment Closing Date  upon  the  satisfaction  of  the  following  conditions  precedent:         (a)   Execution  of  Amendment.   The  Administrative  Agent  shall  have  received  counterparts hereto duly executed by each of the parties hereto.         (b)   Execution of Assignment and Acceptance.  The Administrative Agent shall have  received an executed copy of the Assignment and Acceptance, dated as of the date hereof, by and  among the parties hereto and the conditions precedent to the Effective Date (as defined therein)  shall have been satisfied.         (c)   Receipt of Fees. The Administrative Agent shall have received confirmation from  each Class Agent that such Class Agent has received the Amendment Fee due to it pursuant to,  and as defined in, Schedule A.          SECTION 5.  Severability.  Any provisions of this Amendment 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.         SECTION 6.  Counterparts.   This  Amendment may  be  executed  in  any  number  of  counterparts, each of which when so executed shall be deemed to be an original and all of which  when  taken  together  shall  constitute  one  and  the  same  agreement.   Delivery  of  an  executed  counterpart hereof by facsimile or other electronic means shall be equally effective as delivery of  an originally executed counterpart.         SECTION 7.  GOVERNING LAW AND JURISDICTION.          (a)   THIS  AMENDMENT,  INCLUDING  THE  RIGHTS  AND  DUTIES  OF  THE  PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH,  THE  LAWS  OF  THE  STATE  OF  NEW  YORK  (INCLUDING  SECTIONS  5-1401  AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK,  BUT  WITHOUT  REGARD  TO  ANY  OTHER  CONFLICTS  OF  LAW  PROVISIONS  THEREOF.         (b)   EACH  PARTY  HERETO  HEREBY  IRREVOCABLY  SUBMITS  TO  THE  NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT  SITTING  IN  NEW  YORK  CITY,  NEW  YORK  IN  ANY  ACTION  OR    PROCEEDING  ARISING OUT OF OR RELATING TO THIS AMENDMENT, AND EACH PARTY HERETO  HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION  OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE  COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  THE  PARTIES  HERETO  HEREBY  IRREVOCABLY  WAIVE,  TO  THE  FULLEST  EXTENT  THEY MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO  THE  MAINTENANCE  OF  SUCH  ACTION  OR  PROCEEDING.   THE  PARTIES  HERETO  AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL                                         3           

 

BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON  THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.         SECTION 8.  Section Headings.  The various headings of this Amendment are included  for convenience only and shall not affect the meaning or interpretation of this Amendment, the  Amended Transfer and Administration Agreement or any provision hereof or thereof.                                [Signature pages follow.]                                          4           

 

      IN WITNESS    WHEREOF. the    parties hereto have executed this Amendment as o r the  date first written above.                                           TECH DATA FINANCE SPY, INC.,                                         as Transferor                                           By:                    /J.-f_                                         Name   tli~~              .                                         Title:            I    olfv&(                                                \;fI    t                                           TECH DATA CORPORATION,                                          as Collection Agent                                           By:-------------­                                         Name:                                          Title:                                                                        Firs/ Amendment to the                                         Amended and Restated Transfer and Administration Agreement  

 

 

 

 

 

                  THE BANK OF NOVA SCOTIA,   as Administrative Agent       By:                                          Name:       Title:                      THE BANK OF NOVA SCOTIA,   as Class Agent for the Scotia Bank Class       By:                                          Name:       Title:          THE BANK OF NOVA SCOTIA,   as a Bank Investor for the Scotia Bank Class       By:                                          Name:       Title:          LIBERTY STREET FUNDING LLC,   as Class Conduit for the Scotia Bank Class       By:                                          Name: gáää=^K=oìëëç   Title: sáÅÉ=mêÉëáÇÉåí                               First Amendment to the  Amended and Restated Transfer and Administration Agreement  

 

 

 

 

 

                  MUFG BANK, LTD.,   as a Bank Investor for the MUFG Class       By:                                          Name:       Title:          MUFG BANK, LTD.,   as a Class Agent for the MUFG Class       By:                                          Name:       Title:          VICTORY RECEIVABLES CORPORATION,    as a Class Conduit of the MUFG Class        By:                                          Name:       Title:                                                                      First Amendment to the  Amended and Restated Transfer and Administration Agreement  

 

 

 

 

 

 

 

                                 EXHIBIT A               Amendments to Existing Transfer and Administration Agreement                                     [see attached]    2017663-NYCSR07A - MSW  

 

                                       Exhibit A to Amendment #1 dated April 16, 2019                                       Conformed to Amendment #1 dated April 16, 2019                              AMENDED AND RESTATED                  TRANSFER AND ADMINISTRATION AGREEMENT                                        among                            TECH DATA FINANCE SPV, INC.,                                    as Transferor,                             TECH DATA CORPORATION,                                 as Collection Agent,                             THE BANK OF NOVA SCOTIA,                                as Administrative Agent                                         and                   THE CLASS INVESTORS AND THE CLASS AGENTS                        FROM TIME TO TIME PARTY HERETO                                Dated as of August 8, 2017   Redline                                        1 

 

                             TABLE OF CONTENTS                                                                            Page                                      Article I                                   DEFINITIONS   SECTION 1.01      Certain Defined Terms                                     1  SECTION 1.02      Other Interpretative Matters                             24                                      Article II                               TERMS OF THE LOANS   SECTION 2.01      Loan Facility                                            25  SECTION 2.02      Procedures for Credit Extensions                         26 SECTION 2.03      Mandatory Prepayments                                     27 SECTION 2.04      Voluntary Prepayments                                     27 SECTION 2.05      Interest and Fees                                         28 SECTION 2.06      Eurodollar Rate Protection; Illegality                    28 SECTION 2.07      Records of Loans                                          29                                      Article III                SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS  SECTION 3.01      Settlement Procedures                                     29 SECTION 3.02      Payments and Computations, Etc.                           31 SECTION 3.03      Delivery of Periodic Reports                              32 SECTION 3.04      Ratable Payments                                          32 SECTION 3.05      Right of Setoff                                           32                                      Article IV                    SECURITY INTEREST; SEGREGATED ACCOUNT  SECTION 4.01      Security Interest                                         33  SECTION 4.02      Protection of Security Interest of the Administrative Agent for the benefit                    of the Secured Parties                                   34 SECTION 4.03      Segregated Account                                        35                                          i  Redline                                        i 

 

                                    Article V              CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS   SECTION 5.01      Conditions Precedent to Effectiveness and the Refinancing Credit                   Extension                                                 35  SECTION 5.02      Conditions Precedent to All Credit Extensions            36 SECTION 5.03      Conditions Precedent to All Reinvestments and Cash Pooling Transfers 36                                      Article VI                        REPRESENTATIONS AND WARRANTIES   SECTION 6.01      Representations and Warranties of the Transferor         37  SECTION 6.02      Representations and Warranties of the Collection Agent   43                                     Article VII                                    COVENANTS   SECTION 7.01      Affirmative Covenants of the Transferor                  46 SECTION 7.02      Negative Covenants of the Transferor                      50  SECTION 7.03      Affirmative Covenants of Tech Data                       52 SECTION 7.04      Negative Covenants of Tech Data                           57  SECTION 7.05      Financial Covenants of the Collection Agent            58 59                                     Article VIII                         ADMINISTRATION AND COLLECTION                                 OF RECEIVABLES  SECTION 8.01      Appointment of the Collection Agent                     62 63 SECTION 8.02      Duties of the Collection Agent                          63 64 SECTION 8.03      Lock-Box Account Arrangements                           64 65 SECTION 8.04      Certain Enforcement Rights                                65 SECTION 8.05      Responsibilities of the Transferor                      65 66 SECTION 8.06      Servicing Fee                                             66  SECTION 8.07      Inspection Rights                                        66                                      Article IX                               TERMINATION EVENTS   SECTION 9.01      Termination Events                                       67  SECTION 9.02      Termination                                              69                                         ii   Redline                                        ii 

 

                                    Article X                            THE ADMINISTRATIVE AGENT   SECTION 10.01     Authorization and Action                               69 70 SECTION 10.02     Administrative Agent's Reliance, Etc.                     70  SECTION 10.03     Administrative Agent and Affiliates                      70 SECTION 10.04     Indemnification of Administrative Agent                 70 71 SECTION 10.05     Delegation of Duties                                      71 SECTION 10.06     Action or Inaction by Administrative Agent                71 SECTION 10.07     Notice of Termination Events; Action by Administrative Agent 71  SECTION 10.08     Non-Reliance on Administrative Agent and Other Parties 71 72 SECTION 10.09     Successor Administrative Agent                            72                                      Article XI                                 THE CLASS AGENTS  SECTION 11.01     Authorization and Action                                72 73 SECTION 11.02     Class Agent's Reliance, Etc.                              73  SECTION 11.03     Class Agent and Affiliates                               73 SECTION 11.04     Indemnification of Class Agents                         73 74 SECTION 11.05     Delegation of Duties                                      74 SECTION 11.06     Notice of Termination Events                              74 SECTION 11.07     Non-Reliance on Class Agent and Other Parties             74 SECTION 11.08     Successor Class Agent                                   74 75 SECTION 11.09     Reliance on Class Agent                                   75                                     Article XII                  INDEMNIFICATION; EXPENSES; RELATED MATTERS  SECTION 12.01     Indemnities by the Transferor                             75 SECTION 12.02     Indemnification by the Collection Agent                   77 SECTION 12.03     Increased Costs                                           77 SECTION 12.04     Taxes                                                     78  SECTION 12.05     Replacement Persons                                      83 SECTION 12.06     Costs and Expenses                                        84                                     Article XIII                                  MISCELLANEOUS  SECTION 13.01     Amendments, Etc.                                          84  SECTION 13.02     Notices, Etc.                                            85                                        iii   Redline                                        iii 

 

SECTION 13.03     Assignments                                               85  SECTION 13.04     No Proceedings; Limitation on Payments                   89 SECTION 13.05     Treatment of Certain Information; Confidentiality         89 SECTION 13.06     Confidentiality Agreement                                 90 SECTION 13.07     GOVERNING LAW                                             91  SECTION 13.08     Execution in Counterparts                                91  SECTION 13.09     Integration; Binding Effect; Third-Party Beneficiaries; Survival of                   Termination                                               91  SECTION 13.10     CONSENT TO JURISDICTION                                  92  SECTION 13.11    WAIVER OF JURY TRIAL                                      92 SECTION 13.12     Limitation of Liability                                   92  SECTION 13.13     Intent of the Parties                                    93  SECTION 13.14     USA Patriot Act                                          93  SECTION 13.15     Severability                                             93  SECTION 13.16     Mutual Negotiations                                      94 SECTION 13.17     Acknowledgment and Consent to Bail-In of EEA Financial Institutions 94   EXHIBITS  EXHIBIT A                      –     Form of Loan Request EXHIBIT B                      –     Form of Assignment and Acceptance Agreement EXHIBIT C                      –     Credit and Collection Policy EXHIBIT D                      –     Form of Periodic Report  SCHEDULES  SCHEDULE I                    –     Commitments SCHEDULE II                   –     Lock-Box Accounts and Lock-Box Banks SCHEDULE III                  –     Notice Addresses SCHEDULE IV                   –     Locations of Records and Chattel Paper  ANNEXES  ANNEX I                       –     Closing Memorandum                                          iv  Redline                                        iv 

 

      This  AMENDED  AND  RESTATED  TRANSFER  AND  ADMINISTRATION AGREEMENT (as further amended, restated, supplemented or otherwise modified from time to time, this "Agreement ") is entered into as of August 8, 2017 (the "Amendment  Date ") by and among the following parties:              (i)   TECH  DATA  FINANCE  SPV,  INC.,  a  Delaware  corporation,  as       transferor (together with its successors and assigns, the "Transferor ");               (ii)  the Persons from time to time party hereto as Class Investors and as Class        Agents;               (iii) THE BANK OF NOVA SCOTIA, a banking corporation organized and        existing under the laws of Canada ("Scotia Bank "), as Administrative Agent; and               (iv)  TECH DATA CORPORATION, a Florida corporation ("Tech  Data "), as        collection  agent  (in  such  capacity,  together  with  its  successors  and  assigns  in  such        capacity, the "Collection Agent ");                            PRELIMINARY STATEMENTS        WHEREAS, this Agreement amends and restates in its entirety that certain Transfer and Administration Agreement, dated as of May 19, 2000 (as amended, supplemented or otherwise modified prior to the date hereof, the "Original Agreement "), among the parties hereto.        WHEREAS, the Original Agreement is being amended and restated in connection with  the appointment of Scotia Bank as Administrative Agent and the addition of AVT Technology  Solutions LLC,  a Delaware limited liability company ("AVT TS ") as an additional originator.        NOW, THEREFORE, the parties hereby agree as follows:                                    ARTICLE I                                   DEFINITIONS        SECTION 1.01   Certain   Defined   Terms .   As  used  in  this  Agreement,  the  following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):        "61 –90  Day  Obligor " means an Obligor whose Contract provides for a due date that is between 61 and 90 days following the original invoice date.        "Administrative  Agent " means Scotia Bank, in its capacity as contractual representative for the Credit Parties, and any successor thereto in such capacity appointed pursuant to Article X.        "Adverse  Claim " means a lien, security interest or other charge or encumbrance, or any other type of preferential arrangement in the nature of an interest in the applicable asset or assets                                      98 70  Redline                                        1 

 

of any kind; it being understood that none of the foregoing shall constitute an "Adverse Claim" to the extent (i) in favor of, or assigned to, the Administrative  Agent  (for  the  benefit  of  the Secured Parties), (ii) created under or pursuant to, or expressly contemplated to exist and not prohibited by, any Transaction Document (including any lien, security interest or other charge or encumbrance, or any other type of preferential arrangement in favor of any Lock-Box Bank), or (iii) any rights of setoff in favor of an Obligor under a Receivable that reduces the Outstanding Balance thereof in accordance with this Agreement.        "Affected   Person "  means  each  Credit  Party  and  each  Program  Support Provider,  the parent or holding company that Controls any Credit Party or Program Support Provider, and any of their respective Affiliates, in each case that are party to, or entitled to any payment under, the Transaction Documents.        "Affiliate "  means,  with  respect  to  any  Person,  any  other  Person  directly  or  indirectly  controlling,  controlled  by,  or  under  direct or indirect  common  control  with,  such  Person.   A  Person shall be deemed to control another Person if the controlling Person possesses, directly or  indirectly,  the  power  to  direct  or  cause  the  direction  of  the  management  or  policies  of  the  controlled Person, whether through ownership of voting stock, by contract or otherwise.        "Aggregate   Capital "  means,  at  any  time  of  determination,  the  aggregate  outstanding  Capital of all Class Investors at such time.         "Aggregate   Interest "  means,  at  any  time  of  determination,  the  aggregate  accrued  and unpaid Interest on the Loans of all Class Investors at such time.         "Agreement " has the meaning set forth in the preamble  to this Agreement.         "Amendment Date " has the meaning set forth in the preamble  to this Agreement.         "Amendment Financing Statements " has the meaning set forth in Section 4.01(c ).         "Anti-Corruption  Laws " means the United States Foreign Corrupt Practices Act of 1977, the  UK  Bribery  Act  2010,  and  other  similar  anti-corruption  legislation  in  other  jurisdictions applicable to each Originator, the Seller, the Collection Agent, the Transferor or their respective Subsidiaries from time to time.        "Applicable  Law " means, with respect to any Person, any statutes, laws, treaties, rules, regulations, orders, decrees, writs, judgments, injunctions or determinations of any arbitrator or court or other Official Body, in each case binding upon such Person, its business or any of its property or to which such Person, its business or any of its property is subject.        "Assignment   and   Acceptance   Agreement "  means  an  assignment  and  acceptance agreement, in substantially the form of Exhibit  B  hereto, or in such other form acceptable to the Administrative Agent and the Transferor.        "Attorney   Costs "  means  the  reasonable  and  documented  out-of-pocket  fees,  costs, expenses and disbursements of external counsel.                                      98 70  Redline                                        2 

 

      "AVT TS " has the meaning set forth in the Preliminary Statements .        "Bank Investors " means those Persons party hereto as a "Bank Investors," as identified on  Schedule I  hereto.        "Bankruptcy  Code " means the United States Bankruptcy Reform Act of 1978 (11 U.S.C.  § 101, et seq.), as amended from time to time.         "Base  Rate " means, a rate per annum equal to the greater of (i) the prime rate of interest  announced by the Administrative Agent from time to time, changing when and as said prime rate  changes (such rate not necessarily being the lowest or best rate charged by the Administrative  Agent) and (ii) the sum of (a) 1.50% and (b) the Federal Funds Rate.         "Borrowing   Base "  means,  at  any  time  of  determination,  the  amount  equal  to  the  Net Receivables Pool Balance at such time, minus  the Total Reserves at such time.         "Borrowing  Base  Deficit " means, at any time of determination, the amount, if any, by which (a) the Aggregate Capital at such time, exceeds  (b) the lesser of (i) the Borrowing Base at such time and (ii) the Facility Limit at such time.        "Business  Day " means any day (other than Saturday or Sunday) on which:  (a) banks are  not authorized or required to close in New York, New  York;  Charlotte,  North  Carolina;  San  Francisco,  California;  Clearwater,  Florida;  or  Chicago,  Illinois  and  (b)  if  this  definition  of  "Business  Day"  is  utilized  in  connection  with  calculating  any  Eurodollar  Rate,  dealings  are  carried out in the London interbank market.         "Capital " means, with respect to any Class Investor, the aggregate principal amount of all  Loans made to the Transferor by such Class Investor pursuant to Article  II, as reduced from time to time by Collections distributed and applied on account of such Capital pursuant to Section 3.01; provided , that if such Capital shall have been reduced by any distribution and thereafter all or a portion of such distribution is rescinded or must otherwise be returned for any reason, such Capital shall be increased by the amount of such rescinded or returned distribution as though it had not been made.        "Capital Requirements (Risk Retention) " means Sections 404 through 410 of the CRR, as supplemented  by  Commission  Delegated  Regulation  (EU)  No  625/2014  of  March  13,  2014  and any   related   regulatory   guidance   issued   by   any   EU   Official   Body   and   notified  by   the Administrative Agent or any Class Agent to Tech Data.        "Capitalized  Lease " of a Person means any lease of property by such Person as lessee  which  would  be  capitalized  on  a  balance  sheet  of  such  Person  prepared  in  accordance  with  generally accepted accounting principles.         "Cash  Pooling  and  Management  Agreement " means the Cash Pooling and Management Agreement dated as of August 8, 2017, between Tech Data and the Transferor.                                       98 70  Redline                                        3 

 

      "Cash Pooling Transfer " has the meaning set forth in Section 3.01(a ).        "Change   in   Law "  means  the  occurrence,  after  the  Amendment  Date,  of  any  of  the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application  thereof  by  any  Official  Body  or  (c)  the  making  or  issuance  of  any  request,  rule, guideline or directive (whether or not having the force of law) by any Official Body; provided that notwithstanding anything herein to the contrary, ( xy) the Dodd-Frank Wall Street Reform and  Consumer  Protection  Act  and  all  requests,  rules,  guidelines  or  directives  thereunder  or issued in connection therewith and ( yz) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to the agreements reached by the Basel Committee on Banking Supervision in "Basel III:  A  Global  Regulatory  Framework  for  More  Resilient  Banks  and  Banking  Systems"  (as amended, supplemented or otherwise modified or replaced from time to time), shall in each case, to the extent requiring any change to the compliance policies and practices (including relating to capital,  liquidity  or  leverage  requirements)  of  any  Affected  Person  after  the  date  hereof,  be deemed to be a "Change in Law," regardless of the date enacted, adopted or issued.         "Class " means, (i) for any Class Conduit, such Class Conduit, together with such Class  Conduit's Related Bank Investors and related Class Agent and/or (ii) for any Class Investor that  does not have a Related Class Conduit, such Class Investor, together with such Class Investor's  related Class Agent and each other Class Investor for which such Class Agent acts as a Class  Agent hereunder.         "Class   Agent "  means,  (i)  with  respect  to  each  Class,  each  Person  acting  as  agent  on behalf of such Class and designated as the Class Agent for such Class on Schedule  I  hereto and (ii) with respect to the Administrative Agent, the Administrative Agent.        "Class   Agent's   Account "  means,  with  respect  to  any  Class  Agent,  the account(s) from time  to  time  designated  in  writing  by  the  applicable  Class  Agent  to  the  Transferor  and  the Collection Agent for purposes of receiving payments.        "Class  Commitment " means, with respect to any Class, at any time of determination, the aggregate Commitments of all Bank Investors within such Class.        "Class  Conduit " means each Person party hereto as a "Class Conduit," as identified on  Schedule I  hereto.        "Class  Investors " means the Class Conduits and the Bank Investors, and if the context so  requires, the Administrative Agent.         "Code " means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.                                       98 70  Redline                                        4 

 

      "Collateral " has the meaning set forth in Section 4.01(a ).        "Collection Agent " has the meaning set forth in the preamble  to this Agreement.         "Collection   Agent   Ratings   Event "  means  an  event that shall have occurred if the long term debt rating of Tech Data falls below "BB" from S&P or below "Ba2" from Moody's.        "Collection   Agent   Default " means the violation by the Collection Agent of any of the covenants set forth in Section 7.05.         "Collections " means, with respect to any Pool Receivable, all cash collections and other cash  proceeds  of  such Receivable, including, without  limitation,  all  Finance  Charges,  if  any, insurance proceeds, and cash proceeds of Related Security with respect to such Receivable and any Deemed Collections of such Receivable.        "Commercial  Paper " means the promissory notes issued by one or all, as applicable, of  the  Class  Conduits  (or  by  such  Class  Conduit's  related  commercial  paper  issuer  if  the  Class  Conduit does not itself issue commercial paper) in the commercial paper market.         "Commitment "  means,  with  respect  to  any  Bank  Investor,  the  maximum  aggregate amount which such Person is obligated to lend or pay hereunder on account of all Loans, on a combined basis, as set forth on Schedule  I , as may be reduced from time to time pursuant to Section 2.04(b ).        "Concentration  Percentage " means (a) for any Designated Obligor or Financing Party as  of any date of determination, for the Obligors comprising each Obligor Group specified in the  table  below,  on  an  individual  basis,  a  percentage  not  to  exceed  the  corresponding  "Obligor  Percentage" as set forth below:                         Obligor Group       Obligor Percentage                          Group A                12.00%                          Group B                 7.50%                          Group C                 5.00%                          Group D                 3.00%        or  such other greater amount determined by the Administrative Agent in the reasonable exercise of its good faith judgment and with the consent of all of the Class Agents and disclosed in a written notice delivered to the Transferor and the Collection Agent and (b) for each Special Obligor, the Special Concentration Limit (which is expressed as a percentage) applicable to such Special Obligor of the Outstanding Balance of all Eligible Receivables at such time, provided , however , that any such Special Concentration Limit may be revoked at any time effective upon three  Business  Days'  written notice from the Administrative Agent or any Class Agent to the Transferor, the Collection Agent, the Administrative Agent (if the Administrative Agent did not deliver such notice) and the Class Agents, such notice to be given in good faith and based on reasonable criteria.                                       98 70  Redline                                        5 

 

      "Concentration Reserve Percentage " means 12.00%.         "Connection   Income   Taxes "  means  Other  Connection  Taxes  that  are  imposed  on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.        "Contract "  means,  with  respect  to  any  Receivable,  any  and  all  contracts,  instruments,  agreements, leases, invoices, notes or other writings pursuant to which such Receivable arises or  that  evidence  such  Receivable  or  under  which  an  Obligor  becomes  or  is  obligated  to  make  payment in respect of such Receivable.         "Control " means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through  the  ownership  of  voting  securities,  by  contract  or  otherwise.  "Controlling"  and "Controlled" have meanings correlative thereto.        "Credit   and   Collection   Policy "  means  the  credit  and  collection  policy  or  policies  and practices  relating  to  Contracts  and  Receivables  existing  on  the  date  hereof  and  referred  to  in Exhibit C  attached hereto, as modified from time to time in accordance with this Agreement.         "Credit Extension " means the making of any Loan.        "Credit   Party "  means  each  Class  Investor,  the  Administrative  Agent  and  each  Class  Agent.         "Credit   Risk   Losses "  means,  with  respect  to  any  Pool  Receivable  and  its  Related Security, amounts owed but not received under such Pool Receivable or such Related Security due  to  the  insolvency,  bankruptcy,  lack  of creditworthiness  (including  willingness  to  pay)  or other  inability  to  pay  of  the  related  Pool  Obligor or  other  applicable  obligor  thereunder,  but excluding, for the avoidance of doubt, any amounts not received due to any incidental credit risk exposure to parties administering or servicing the collections thereon or that would be included in any Dilution Amount.        "CRR "  means   Regulation   (EU)   No   575/2013  of   the   European   Parliament   and   of   the Council  of  26  June  2013  on  prudential  requirements  for  credit  institutions  and  investment  firms and amending Regulation (EU) No 648/2012 , as amended from time to time.        "De Minimis Tax Liens " means tax liens imposed by any Official Body on the Collection  Agent or any Originator or their respective assets or properties (or imposed on or purported to be  imposed on any such assets or properties that have been or will be sold or conveyed pursuant to  the Purchase Agreement or the Originator Sale Agreement) that (a) have not been consented to  by the Collection Agent, any Originator or the Transferor and (b) do not, in the aggregate for all  De  Minimis  Tax  Liens,  exceed  the  lower  of  (i)  $1,000,000  and  (ii)  0.10%  of  the  aggregate  Outstanding Balance of all Pool Receivables at such time.                                       98 70  Redline                                        6 

 

      "Deemed  Collections " means all amounts required to be paid in cash to the Transferor  (whether or not actually paid) pursuant to Section 7.2(e) of the Purchase Agreement.        "Default Rate " means, for each Class Investor or the Administrative Agent, as applicable, a rate per annum equal to 2.50% per annum plus  the greater of the Base Rate or the otherwise applicable Interest Rate for such Class Investor or the Administrative Agent, as applicable.        "Default  Ratio " means the ratio (expressed as a percentage and rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of each calendar month  by  dividing :  (a)  the  sum  of  the  aggregate  outstanding  principal  amount (including any accrued and outstanding Finance Charges related thereto) of each Pool Receivable that became a Defaulted  Receivable  during  such  month,  as  of  the  date  such  Pool  Receivable  became  a Defaulted  Receivable  (such  amount  shall  exclude  Dilution  Amounts),  by   (b)  the  aggregate  amount of sales by each Originator giving rise to Pool Receivables in the month that is the fourth  month prior to the month of determination.         "Defaulted Receivable " means a Receivable:              (a)   as to which any payment, or part thereof, remains unpaid for 91 days or       more from the original due date for such Receivable;              (b)   as  to  which  an  Event  of  Bankruptcy  has  occurred with  respect  to  the       Obligor thereof;              (c)   which has been identified by the Collection Agent as uncollectible; or              (d)   which, consistent with the applicable Credit and  Collection  Policy,  has        been or should be written off the Transferor's books as uncollectible.         "Defaulting   Lender "  means,  subject  to  Section   2.02(f ),  any  Bank  Investor  that  (a)  has  failed to fund all or any portion of its Loans within two Business Days of the date such Loans  were  required  to  be  funded  hereunder  unless  such  Bank  Investor  notifies  the  Administrative  Agent  and  the  Transferor  in  writing  that  such  failure  is  the  result  of  such  Bank  Investor's  determination  that  one  or  more  conditions  precedent  to  funding  (each  of  which  conditions  precedent, together with any applicable default, shall be specifically identified in such writing)  has not been satisfied, (b) has notified the Transferor or the Administrative Agent in writing that  it  does  not  intend  to  comply  with  its  funding  obligations  hereunder,  or  has  made  a  public  statement to that effect (unless such writing or public statement relates to such Bank Investor's  obligation  to  fund  a  Loan  hereunder  and  states  that  such  position  is  based  on  such  Bank  Investor's  determination  that  a  condition  precedent  to  funding  (which  condition  precedent,  together  with  any  applicable  default,  shall  be  specifically  identified in such writing or public  statement) cannot be satisfied), (c) has failed, within three Business Days after written request by  the Administrative Agent or the Transferor, to confirm in writing to the Administrative Agent  and  the  Transferor  that  it  will  comply  with  its  prospective  funding  obligations  hereunder  (provided that such Bank Investor shall cease to be a Defaulting Lender pursuant to this clause                                      98 70  Redline                                        7 

 

(c)  upon receipt of such written confirmation by the Administrative Agent and the Transferor), or  (d)  an  Event  of  Bankruptcy  has  occurred  with  respect to such Bank Investor or any direct or  indirect parent company of such Bank Investor.         "Delinquency   Ratio "  means  the  ratio  (expressed  as  a  percentage  and  rounded  to  the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of each calendar  month  by  dividing :  (a)  the  aggregate  outstanding  principal  amounts  (including  any  accrued  and  outstanding  Finance  Charges  related  thereto)  of  all  Pool  Receivables  that  were  Delinquent  Receivables  on  such  day,  by   (b)  the  aggregate  outstanding  principal  amounts  (including any accrued and outstanding Finance Charges related thereto) of all Pool Receivables  on such day. For purposes of this calculation, any Dilution Amounts shall be excluded.         "Delinquent  Receivable " means a Receivable: as to which any payment or part thereof  remains unpaid for more than sixty (60) days from the original due date for such Receivable.         "Designated Obligor " means, at any time, each Pool Obligor; provided , however , that any  Pool Obligor shall cease to be a Designated Obligor upon notice from the Administrative Agent  to the Transferor and the Collection Agent, delivered at any time in good faith and based upon  reasonable criteria.         "Dilution  Amount " means, with respect to any calendar month, an amount equal to the aggregate reduction in the Outstanding Balance of all Pool Receivables in such calendar month (without giving effect to the receipt of any Deemed Collections) resulting from:  (i) defective, rejected or returned goods or services, (ii) revisions, cancellations, allowances, rebates, credits, credit  memos,  discounts,  chargebacks,  allowances,  warranty  payments,  billing  adjustments  or any  other  voluntary  reductions  in  the  amounts  actually  owed  by  the  applicable  Pool  Obligor made by the Transferor, any Originator, the Collection Agent or any of their respective Affiliates (other than as a result of the receipt of Collections), (iii) setoffs, counterclaims or, to the extent relating to the goods or services of any Originator, disputes between any Pool Obligor and the Transferor, any Originator, the Collection Agent or their respective Affiliates (whether arising from  the  transaction  giving  rise  to  a  Pool  Receivable  or  any  unrelated  transaction)  or  (iv) corrections to the reported Outstanding Balance of any Pool Receivable previously included in the Net Receivables Pool Balance in excess of its actual Outstanding Balance as of the date of such inclusion.        "Dilution  Horizon  Ratio " means, at any time, the result of (I) the quotient, expressed as a  percentage,  of  (a)  the  aggregate  amount  of  sales  by  the  Originators  giving  rise  to  Pool  Receivables in the two month period ending on the last day of the most recent month, divided by  (b) the aggregate initial Outstanding Balance of Eligible Receivables at the last day of the most  recent  month,  multiplied  by  (II)  the  greater  of  (a) 0.75 and (b) such other amount as may be  determined  from  time  to  time  by  the  Administrative Agent  based  on  the  reported  weighted  average days lag (or weighted average dilution horizon, as applicable) for all credit memos of all  Pool Receivables as noted in the most recent calendar year's audit of agreed upon procedures  performed subsequent to the Amendment Date (or such other subsequent audit if more recent)  divided by 60. For the avoidance of doubt, any change to the Dilution Horizon Ratio as a result                                       98 70  Redline                                        8 

 

of this clause  (II)  will be effective as of the last day of the month in which such final audit of  agreed upon procedures report is delivered.         "Dilution  Ratio " means the ratio (expressed as a percentage and rounded to the nearest 1/100th  of  1%,  with  5/1000th  of 1% rounded upward),  computed  as  of  the  last  day  of  each calendar  month  by  dividing :   (a)  the  aggregate  Dilution  Amount  with  respect  to  all  Pool Receivables during such month, by  (b) the aggregate amount of sales by the Originators giving rise to Pool Receivables in the month that is two months prior to the month of determination.        "Dilution   Volatility   Component "  means,  for  any  calendar  month,  (a)  the  positive difference, if any, between: (i) the highest average of the Dilution Ratios for any two consecutive calendar months during the twelve most recent calendar months and (ii) the arithmetic average of the Dilution Ratios for such twelve calendar months,  times   (b)  (i)  the  highest  average  of  the Dilution Ratios for any two consecutive calendar months during the twelve most recent calendar months, divided  by  (ii) the arithmetic average of the Dilution Ratios for such twelve calendar  months.         "Dynamic  Dilution  Reserve  Percentage " means, on any day, the product of (a) the sum of (i) 2.25 times the average of the Dilution Ratios for the twelve most recent calendar months, plus (ii) the Dilution Volatility Component, multiplied  by  (b) the Dilution Horizon Ratio.        "Dynamic  Loss  Reserve  Percentage " means on any day the product of (i) 2.25, (ii) the highest  three  month  average  of  the  Default  Ratio  occurring  during  the  twelve  month  period ending on the last day of the most recent month, and (iii) the Loss Horizon Ratio; provided, however, that, until such time as the Class Agents and the Bank Investors shall agree in writing (upon written notice from the Transferor received at least ten (10) days prior to the Settlement Date as to which such requested consent is to be effective, it being the intention of the parties hereto to modify the below definition of "Defaulted Receivable" to replace "61 and 90 days" with "91  and  120"  days  when  the  Transferor  is  able  to  calculate  the  amount  of  such  Receivables) solely for the purposes of the calculation of the Dynamic Loss Reserve Percentage, the Default Ratio shall be calculated on the basis of the following definition of "Defaulted Receivable."               "Defaulted   Receivable "  means  any  Receivable  (i)  as  to  which  any  payment,  or              part thereof, remains unpaid for between 61 and 90 days from the original due              date for such Receivable; (ii) as to which an Event of Bankruptcy has occurred              with  respect  to  the  Obligor  thereof;  (iii)  which  has  been  identified  by  the              Collection Agent as uncollectible; or (iv) which, consistent with the applicable              Credit and Collection Policy, has been or should be written off the Transferor's              books as uncollectible.         "Dollars " and "$" each means the lawful currency of the United States of America.         "Drawn  Spread " has the meaning set forth in the Side Letter applicable to all Classes, by  and among the Transferor, the Class Agents and the Class Investors.                                       98 70  Redline                                        9 

 

      "Eligible   Contract "  means  an  agreement  or  invoice  reasonably  acceptable  to  the  Administrative  Agent,  pursuant  to  or  under  which  an  Obligor  shall  be  obligated  to  pay  for  merchandise purchased or services rendered.         "Eligible Receivable " means, at any time of determination, a Pool Receivable:               (a)   which has been transferred by Tech Data to the Transferor pursuant to the        Purchase Agreement and to which the Transferor has good title thereto, free and clear of        all Adverse Claims;               (b)   the Obligor of which (I) is (x) a resident of the United States or one of its        instrumentalities, (y) is a resident of any jurisdiction other than the United States or one        of its instrumentalities or (z) a government or a governmental subdivision or agency, (II)        is  a  Designated  Obligor  at  the  time  of  the  Transferor's  acquisition  of  such  Pool        Receivable, and (III) is not an Affiliate or employee of any of the parties hereto;               (c)   which is not a Defaulted Receivable;               (d)   which is not a Delinquent Receivable;               (e)   which (A) arises pursuant to a Contract that contains an obligation to pay a        specified sum of money and with respect to which each of the Originators, the Seller and        the Transferor has performed all obligations required to be performed by it thereunder,        although payment under such Receivable may be contingent only upon the shipment of        the  merchandise  and/or  the performance of the services purchased thereunder; (B) has        been billed; and (C) according to the Contract related thereto, (x) has a due date no more        than ninety (90) days after the original invoice date (it being understood that a Receivable        payable in accordance with "no terms" does not satisfy this criteria) or (y) for Receivables        with respect to which the Obligor or Financing Party has been designated as a Special        Obligor and until three (3) Business Days after such designation may be revoked by the        Agent  or  any  Class  Agent,  such  longer  period  approved  by  the  Agent  and  the  Class        Agents at the time such Obligor or Financing Party was designated a Special Obligor;               (f)   which is an "eligible asset" as defined in Rule 3a-7 under the Investment        Company Act of 1940, as amended;               (g)   a purchase of which by the Transferor with the proceeds of Commercial        Paper would constitute a "current transaction" within the meaning of Section 3(a)(3) of        the Securities Act of 1933, as amended;               (h)   which is an "account" or "chattel paper" within the meaning of Article 9 of        the UCC of all applicable jurisdictions;               (i)   which is denominated and payable only in United States  dollars  in  the        United States;                                       98 70  Redline                                       10 

 

            (j)   which, arises under an Eligible Contract that together with the Receivable       related  thereto,  is  in  full  force  and  effect  and  constitutes  the  legal,  valid  and  binding       obligation of the related Obligor enforceable against such Obligor in accordance with its       terms and, to the best knowledge of the Collection Agent or the Transferor is not subject       to any litigation, dispute, offset, counterclaim or other defense at such time;              (k)   which, together with the Contract related thereto, does not contravene in       any material respect 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       with respect to which no part of the Contract related thereto is in violation of any such       law, rule or regulation in any material respect;              (l)    which (A) satisfies, in all material respects, all applicable requirements of       the  applicable  Credit  and  Collection  Policy  and  (B)  is  assignable  by  the  applicable       Originator, the Seller, the Transferor or the Administrative Agent without the consent of,       or  notice  to,  the  Obligor  or  Financing  Party  thereunder  unless  such  consent  has  been       obtained and is in effect or such notice has been given;              (m)   which was generated in the ordinary course of the applicable Originator's       business;              (n)   the  Obligor  or  Financing  Party  of  which  has  been  directed  to  make  all        payments  to  a  Lock-Box  Account  with  respect  to  which  a  Lock-Box  Agreement  is  in        effect;               (o)   which has not been compromised, adjusted or modified (including by the        extension of time for payment or the granting of any discounts, allowances or credits);        provided, however, that only such portion of such Receivable that is the subject of such        compromise, adjustment or modification shall be deemed to be ineligible pursuant to the        terms of this clause (o) ;              (p)   (i) the assignment of which under the Originator Sale Agreement by the       applicable Originator to the Seller (if applicable), (ii) the assignment of which under the       Purchase  Agreement  by  the  Seller  to  the  Transferor and  (iii)  the  grant  of  a  security       interest with respect thereto hereunder by the Transferor to the Administrative Agent do       not  violate,  conflict  or  contravene  any  applicable Law  or  any  contractual  or  other       restriction, limitation or encumbrance;              (q)   which is not subject to any Adverse Claim and with respect to which no       financing  statement  has  been  authorized  to  be  filed  except  as  permitted  by  this       Agreement or any other Transaction Document; and              (r)   with respect to the Obligor thereof, not more than 25% of the Receivables       (as of the preceding month-end) owed by such Obligor are Defaulted Receivables.                                      98 70  Redline                                       11 

 

      "ERISA "  means  the  Employee  Retirement  Income  Security  Act  of  1974,  as  amended from time to time, and any rule or regulation issued thereunder.        "ERISA   Affiliate "  means  any  trade  or  business  (whether  or  not  incorporated)  that, together with the Transferor, is treated as a single employer under Section 414(b) or 414(c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(m) or 414(o) of the Code.        "Eurodollar   Rate " means any Interest Rate that is, or is based on, a London Interbank  Offered Rate.        "EU  Securitization  Regulation"  means  (EU)  2017/2402  of  the  European  Parliament  and of  the  Council  and  any  Implementing  Technical  Standards,  Regulatory  Technical  Standards  and official   guidance   issued   by   the   European   Banking   Authority   and   the   European   Securities   and Markets Authority , as amended from time to time.        "Event  of  Bankruptcy " means, with respect to any Person, (i) that such Person (a) shall generally not pay its debts as such debts become due or (b) shall admit in writing its inability to pay its debts generally or (c) shall make a general assignment for the benefit of creditors; (ii) any proceeding shall be instituted by or against such Person seeking to adjudicate it as bankrupt or insolvent,  or  seeking  liquidation,  winding  up,  reorganization,  arrangement,  adjustment, protection,  relief  or  composition  of  it  or  its  debts  under  any  law  relating  to  bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment  of  a  receiver,  trustee  or  other  similar official for it or any substantial part of its property or (iii) if such Person is a corporation, such Person or any Subsidiary shall take any corporate action to authorize any of the actions set forth in the preceding clauses (i) or (ii) .        "Excess Concentration Amount " means, the sum, without duplication, of:              (a)   the  sum  of  the  amounts  calculated  for  each  Designated  Obligor  or       Financing Party equal to the excess (if any) of (i) the aggregate Outstanding Balance of       the  Eligible  Receivables  of  such  Designated  Obligor  or  Financing  Party,  over   (ii)  the        product  of  (x)  the  Concentration  Percentage  of  such  Designated  Obligor  or  Financing        Party,  multiplied   by   (y)  the  aggregate  Outstanding  Balance of all Eligible Receivables       then in the Receivables Pool; plus              (b)   the excess (if any) of (i) the aggregate Outstanding Balance of all Eligible       Receivables,  the  Obligor  of  which  is  a  Foreign  Obligor,  over   (ii)  the  product  of  (x)       5.00%, multiplied  by  (y) the aggregate Outstanding Balance of all Eligible Receivables        then in the Receivables Pool; plus              (c)   the excess (if any) of (i) the aggregate Outstanding Balance of all Eligible       Receivables, the Obligor of which is an Official Body, over  (ii) the product of (x) 2.50%,       multiplied  by  (y) the aggregate Outstanding Balance of all Eligible Receivables then in       the Receivables Pool; plus                                      98 70  Redline                                       12 

 

            (d)   the excess (if any) of (i) the aggregate Outstanding Balance of all Eligible       Receivables, the Obligor of which is a 61–90 Day Obligor, over  (ii) the product of (x)        5.00%, multiplied  by  (y) the aggregate Outstanding Balance of all Eligible Receivables        then in the Receivables Pool.   provided , however , that for the avoidance of doubt, the aggregate amount included in the Excess Concentration Amount at any time with respect to any Pool Obligor's Eligible Receivables shall not exceed the aggregate Outstanding Balance of all such Pool Obligor's Eligible Receivables at such time.        "Exchange  Act " means the Securities Exchange Act of 1934, as amended or otherwise  modified from time to time.         "Exchange  Act  Reports " means the "Annual Reports" of Tech Data on Form 10-K, the  "Quarterly Reports" of Tech Data on Form 10-Q and all "Current Reports" of Tech Data on Form  8-K.         "Excluded  Taxes " means any of the following Taxes imposed on or with respect to an Affected Person or required to be withheld or deducted from a payment to an Affected Person: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes and branch  profits  Taxes,  in  each  case,  (i)  imposed  as a  result  of  such  Affected  Person  being organized under the laws of, or having its principal office or, in the case of any Class Investor, its applicable  lending  office  located  in,  the  jurisdiction  imposing  such  Tax  (or  any  political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Class Investor, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Class Investor with respect to an applicable interest in the Loans or Commitment pursuant to a law in effect  on  the  date  on  which  (i)  such  Class  Investor  acquires  such  interest  in  the  Loan  or Commitment  (other  than  pursuant  to  an  assignment  request  by  the  Transferor  under  Section 12.05) or (ii) such Class Investor changes its lending office, except in each case to the extent that amounts  with  respect  to  such  Taxes  were  payable  either  to  such  Class  Investor's  assignor immediately  before  such  Class  Investor  became  a  party  hereto  or  to  such  Class  Investor immediately before it changed its lending office, (c) Taxes attributable to such Recipient's failure to  comply  with  Section   12.04(f )  and  (d)  any  U.S.  federal  withholding  Taxes  imposed  under FATCA.        "Existing Financing Statements " has the meaning set forth in Section 4.01(c ).        "Facility  Limit " means, at any time of determination, the aggregate Commitment of all  Bank Investors, as set forth on Schedule   I , as may be reduced from time to time pursuant to Section 2.04(b ).  References to the unused portion of the Facility Limit shall mean, at any time of determination, an amount equal to (x) the Facility Limit at such time, minus  (y) the Aggregate  Capital.         "FATCA "  means  Sections  1471  through  1474  of  the  Code,  as of  the  date  of  this  Agreement  (or  any  amended  or  successor  version  that  is  substantively  comparable  and  not                                      98 70  Redline                                       13 

 

materially  more  onerous  to  comply  with),  any  current  or  future  regulations  or  official interpretations  thereof  and  any  agreements  entered into pursuant to Section 1471(b)(1) of the Code.        "Federal   Funds   Rate "  means,  for  any  day,  the  per  annum  rate  set  forth in  the  weekly  statistical  release  designated  as  H.15(519),  or  any  successor  publication,  published  by  the  Federal Reserve Board (including any such successor, "H.15(519)") for such day opposite the  caption  "Federal  Funds  (Effective)."   If  on  any  relevant day such rate is not yet published in  H.15(519), the rate for such day will be the rate set forth in the daily statistical release designated  as  the  Composite  3:30  p.m.  Quotations  for  U.S.  Government  Securities,  or  any  successor  publication, published by the Federal Reserve Bank of New York (including any such successor,  the "Composite 3:30 p.m. Quotations") for such day under the caption "Federal Funds Effective  Rate."  If on any relevant day the appropriate rate is not yet published in either H.15(519) or the  Composite 3:30 p.m. Quotations, the rate for such day will be the arithmetic mean as determined  by  the  Administrative  Agent  of  the  rates  for  the  last  transaction  in  overnight  Federal  funds  arranged  before  9:00  a.m.  (New  York  time)  on  that  day  by  each  of  three  leading  brokers  of  Federal funds transactions in New York City selected by the Administrative Agent.         "Federal  Reserve  Board " means the Board of Governors of the Federal Reserve System,  or any entity succeeding to any of its principal functions.         "Fees " has the meaning set forth in Section 2.05(a ).         "Final  Payout  Date " means the date on or after the occurrence of the Termination Date when  (i)  the  Aggregate  Capital  and  Aggregate  Interest  have  been  paid  in  full,  (ii)  all  non- contingent Obligations then owed by the Transferor shall have been paid in full, (iii) all other non-contingent amounts then owing to the Credit Parties  and  any  other  Indemnified  Party  or Affected Person hereunder and under the other Transaction Documents have been paid in full and (iv) all accrued Servicing Fees have been paid in full.        "Financial Covenant Amendment " has the meaning set forth in Section 7.05(d ).        "Finance  Charges " means, with respect to a Contract, any finance, interest, late or similar  charges owing by an Obligor pursuant to such Contract.         "Financing   Party "  means  a  third-party  who  receives  an  invoice  from the  applicable  Originator billed to an Obligor with respect to the provision goods and services to such Obligor  under a Contract whereby the Financing Party remits payment to such Originator on behalf of  such Obligor in connection with a financing of the goods and/or services covered under such  Contract.        "First  Amendment"  means  the  First  Amendment  to  the  Amended  and  Restated  Transfer and   Administration   Agreement,   dated   as   of   April   16,   2019,   by   and   among   the   parties   to   the Amended and Restated Transfer Agreement.                                        98 70  Redline                                       14 

 

      "Fitch "  means  Fitch,  Inc.  and  any  successor  thereto  that is  a  nationally  recognized  statistical rating organization.         "Foreign Lender " means each Class Investor that is not a U.S. Person.         "Foreign  Obligor " means an Obligor which is organized in or whose principal place of  business is in, any country other than the United States.         "GAAP "  means  generally  accepted  accounting  principles  in  the  United  States  of America,  consistently  applied;  provided ,  however ,  that  if  any  Person  hereafter  changes  its  accounting standards in accordance with applicable laws and regulations, including those of the  SEC, to adopt International Financial Reporting Standards, GAAP with respect to such Person  will  mean  such  International  Financial  Reporting  Standards  after  the  effective  date  of  such  adoption.         "Group   A   Obligor ,"  "Group   B   Obligor ,"  "Group   C   Obligor "  and  "Group   D   Obligor ," respectively, means, as of any date of determination, an Obligor having a short-term rating or unsecured long-term debt rating or both a short-term rating and an unsecured long-term rating from  either  of  Moody's  or  S&P  in  accordance  with  the  definition  of  "Obligor  Group"  as determined in the following manner:         Obligor Group     Short-Term Rating      Long-Term Rating of Obligor         Group A Obligor   A-1/P-1 or higher      A-/A3 or higher         Group B Obligor   A-2/P-2                BBB+/Baa1 or BBB/Baa2         Group C Obligor   A-3/P-3                BBB-/Baa3                           Lower than A-3/P-3 or not        Group D Obligor                          rated                  Below BBB-/Baa3 or not rated        "Guarantee " means, as to any Person, (A) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation  payable  or  performable  by  another  Person  (the  "primary  obligor")  in  any  manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (1) to  purchase  or  pay  (or  advance  or  supply  funds  for the  purchase  or  payment  of)  such Indebtedness or other obligation, (2) to purchase or lease property, securities or services for the purpose  of  assuring  the  obligee  in  respect  of  such Indebtedness  or  other  obligation  of  the payment or performance of such Indebtedness or other obligation, or (3) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other  obligation,  or  (B)  any  Adverse  Claim  on  any  assets  of  such  Person  securing  any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person. The amount of any Guarantee shall be deemed to be an                                      98 70  Redline                                       15 

 

amount equal to the stated or determinable amount of the related primary obligation, or portion thereof,  in  respect  of  which  such  Guarantee  is  made  or,  if  not  stated  or  determinable,  the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.        "Indebtedness "  means,  with  respect  to  any  Person,  such  Person's (i)  obligations  for  borrowed money, (ii) obligations representing the deferred purchase price of property other than  accounts payable arising in the ordinary course of such Person's business on terms customary in  the  trade,  (iii)  obligations,  whether  or  not  assumed,  secured  by  liens  or  payable  out  of  the  proceeds or production from property now or hereafter owned or acquired by such Person, (iv)  obligations  which  are  evidenced  by  notes,  acceptances,  or  other  instruments,  (v)  Capitalized  Lease  obligations  and  (vi)  obligations  for  which  such  Person  is  obligated  pursuant  to  a  Guarantee.         "Indemnified Amounts " has the meaning set forth in Section 12.01(a ).         "Indemnified Party " has the meaning set forth in Section 12.01(a ).        "Indemnified  Taxes " means (a) Taxes, other than Excluded Taxes, imposed on or with respect  to  any  payment  made by or on account of any obligation of the Transferor under any Transaction Document and (b) to the extent not otherwise described in clause (a) , Other Taxes.         "Intended Tax Treatment " has the meaning set forth in Section 13.13.        "Interest " means, for each Loan for any Interest Period (or portion thereof), the amount of  interest accrued on the Capital of such Loan during such Interest Period (or portion thereof) in  accordance with Section 2.05(b ).        "Interest  Period " means, for each Class: (a) before the Termination Date:  (i) initially, the  period commencing on the Amendment Date and ending on (and including) the last day of the  related  calendar  month  and  (ii)  thereafter,  each  calendar  month  and  (b)  on  and  after  the  Termination Date, such period (including a period of one day) as shall be selected from time to  time by the Administrative Agent (with the consent or at the direction of the Class Agents) or, in  the absence of any such selection, each calendar month.         "Interest Rate " means, for each Class Investor or the Administrative Agent, as applicable,  a rate per annum equal to the Drawn Spread plus  the Reference Rate for such Class Investor or the Administrative Agent, as applicable.        "Investment  Company  Act " means the Investment Company Act of 1940, as amended or  otherwise modified from time to time.         "IRS " means the United States Internal Revenue Service.         "Lease   Agreement "  means  the  Sublease  Agreement,  dated  as  of  October  12,  2015,  between the Transferor and Blackline Partners, LLC dba Cartwright & Company and consented  by Ottex Corporation.                                      98 70  Redline                                       16 

 

      "Loan " means any loan made by a Class Investor pursuant to Section 2.02.        "Loan  Request " means a letter in substantially the form of Exhibit  A  hereto executed and delivered  by  the  Transferor  to  the  Administrative  Agent  and  the  Class  Agents  pursuant  to Section 2.02(a ).        "Lock-Box " means each locked postal box with respect to which a Lock-Box Bank who  has executed a Lock-Box Agreement pursuant to which it has been granted exclusive access for  the purpose of retrieving and processing payments made on the Pool Receivables and which is  linked to a Lock-Box Account.         "Lock-Box  Account " means an account listed on Schedule  II  (as such schedule may be  modified from time to time in connection with the addition or removal of any Lock-Box Account  in accordance with the terms hereof) and maintained by an Originator or the Collection Agent at  a Lock-Box Bank for the purpose of receiving Collections from Receivables.         "Lock-Box   Agreement "  means  an  agreement  between  an  Originator  or  the  Collection Agent and a Lock-Box Bank regarding one or more Lock-Box Accounts, conferring Control of the applicable Lock-Box Account(s) in favor of the Administrative Agent, in form and substance satisfactory to the Administrative Agent.        "Lock-Box  Bank " means each of the banks set forth in Schedule  II  hereto and such banks  as may be added thereto or deleted therefrom in accordance with this Agreement.         "Loss   Horizon   Ratio "  means  the  ratio  (expressed  as  a  percentage  and  rounded  to  the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of each calendar month by dividing  (a) the aggregate amount of sales by the Originators giving rise to Pool  Receivables  in  the  four  month  period  ending  on  such  day,  by   (b)  the  aggregate  initial  Outstanding Balance of Eligible Receivables on such day.         "Majority   Class   Agents " means one or more Class Agents which in its Class, or their  combined Classes, as the case may be, have Bank Investors representing more than 50% of the  aggregate Commitments of all Bank Investors in all Classes (or, if the Commitments have been  terminated,  have  Class  Investors  representing  more than  50%  of  the  Aggregate  Capital);  provided , however , that so long as there are two or more Classes party hereto, no less than two  Class Agents shall constitute the Majority Class Agents; provided , further , that for purposes of  determining the Majority Class Agents, the Commitments of any Defaulting Lender and each  other Bank Investor in such Defaulting Lender's Group will be deemed to be zero.         "Material   Adverse   Effect "  means,  with  respect  to  any  event  or  circumstance and  with respect to any Person (or if no Person is specified, with respect to the Transferor, the Seller, the Originators and the Collection Agent), a material adverse effect on:              (a)   the assets, operations, business or financial condition of such Person and       its Subsidiaries, if any, taken as a whole;                                       98 70  Redline                                       17 

 

            (b)   the  ability  of  any  such  Person  to  perform  its  obligations  under  this       Agreement or any other Transaction Document to which it is a party;              (c)   the validity or enforceability of this Agreement or any other Transaction       Document, or the validity, enforceability, value or collectibility of any material portion of       the Pool Receivables; or              (d)   the  status,  perfection,  enforceability  or  priority  of  the  interest  of  the       Administrative Agent (for the benefit of the Secured Parties) in the Pool Receivables.        "Maturity Date " means the Termination Date.        "Minimum Dilution Reserve Percentage " means 3.00%.        "Monthly  Settlement  Date " means the 7th day of each calendar month (or if such day is  not a Business Day, the next occurring Business Day).         "Moody's "  means  Moody's  Investors  Service,  Inc.  and  any  successor  thereto  that  is  a  nationally recognized statistical rating organization.         "Net  Receivables  Pool  Balance " means, at any time of determination:  (a) the aggregate  Outstanding  Balance  of  all  Eligible  Receivables  then  in  the  Receivables  Pool,  minus   (b)  the  Excess Concentration Amount.         "Non-Extending Lender " means a Class Investor that has indicated that it will not consent to a request to extend the Scheduled Termination Date.        "Obligations " means all present and future indebtedness, reimbursement obligations and  other  liabilities  and  obligations  (howsoever  created,  arising  or  evidenced,  whether  direct  or  indirect, absolute or contingent, or due or to become due) of the Transferor to any Credit Party,  Indemnified  Party  and/or  any  Affected  Person,  arising  under  this  Agreement  or  any  other  Transaction  Document  or  the  transactions  contemplated  hereby  or  thereby,  and  shall  include,  without limitation, all Capital and Interest on the Loans, all Fees and all other amounts due or to  become  due  under  the  Transaction  Documents  (whether  in  respect  of  fees,  costs,  expenses,  indemnifications or otherwise), including, without limitation, interest, fees and other obligations  that accrue after the commencement of any Event of Bankruptcy with respect to the Transferor  (in each case whether or not allowed as a claim in such proceeding).        "Obligor " means a Person obligated to make payments for the provision, to such Person  or a third party, of goods and services pursuant to a Contract.         "Obligor   Group "  for  any  Obligor  shall  be  determined  by  the  Administrative  Agent  as follows: (i) the short-term rating issued by S&P for such Obligor shall be used to determine the "Obligor Group"; provided , however , that if such short-term rating is unavailable, the long-term  unsecured rating issued by S&P for the Obligor shall be used, (ii) concomitantly with clause  (i) , the short-term rating issued by Moody's for such Obligor shall be used to determine the "Obligor                                      98 70  Redline                                       18 

 

Group"; provided , however , that if such short-term rating is unavailable, the long-term unsecured  rating issued by Moody's for the Obligor shall be used, (iii) only if there is a difference between  the  "Obligor  Group"  indicated  between  the  foregoing  clauses   (i)   and   (ii) ,  determined concomitantly,  then  the  Obligor  shall  be  deemed  a  member  of  the  lower  of  the  determined "Obligor  Group"  and  (iv)  if  the  Obligor  is  only  rated  by  one  of  S&P  and  Moody's,  the Administrative Agent shall use the one rating to determine the Obligor Group for such Obligor.        "Official  Body " means any government or political subdivision or any agency, authority, bureau,  central  bank,  commission,  department  or  instrumentality  of  any  such  government  or political subdivision, or any court, tribunal, grand jury or arbitrator, or any accounting board or authority (whether or not a part of government) which is responsible for the establishment or interpretation of national or international accounting principles, in each case whether foreign or domestic.        "Originator "  and  "Originators "  each  have  the  meaning  set  forth  in  the  Purchase Agreement,  as  the  same  may  be  modified  from  time  to  time  by  adding  new  Originators  or removing Originators, in each case, in accordance with the Purchase Agreement and with the prior written consent of the Administrative Agent.        "Originator Sale Agreement " has the meaning set forth in the Purchase Agreement.        "Other Connection Taxes " means, with respect to any Affected Person, Taxes imposed as a  result  of  a  present  or  former  connection  between such  Affected  Person  and  the  jurisdiction imposing such Tax (other than connections arising from such Affected Person having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any  Transaction  Document,  or  sold  or  assigned  an  interest  in  any  Loan  or  Transaction Document).        "Other   Taxes "  means  all  present  or  future  stamp,  court  or  documentary,  intangible,  recording, filing or similar Taxes imposed by any Official  Body  that  arise from any payment  made under, from the execution, delivery, performance, enforcement or registration of, from the  receipt or perfection of a security interest under, or otherwise with respect to, any Transaction  Document except any such Taxes that are Other Connection Taxes imposed with respect to an  assignment (other than an assignment made pursuant to Section 12.05).         "Other  Transferor " means any Person other than the Transferor that has entered into a  receivables purchase agreement, transfer and administration agreement or similar arrangement  for the financing of receivables with any Class Conduit.         "Outstanding   Balance "  means,  with  respect  to  any  Receivable  at  any  time,  the  then  outstanding principal amount thereof including any accrued  and  outstanding  Finance  Charges  related thereto, as adjusted in accordance with Section  3.02(d ); provided , that the Outstanding Balance of a Defaulted Receivable shall be zero.        "Participant " has the meaning set forth in Section 13.03(f ).                                      98 70  Redline                                       19 

 

      "Participant Register " has the meaning set forth in Section 13.03(g ).         "PATRIOT Act " has the meaning set forth in Section 13.14.        "Periodic  Report " means a monthly report or a weekly report, in substantially the form  attached hereto as Exhibit  D  or in such other form as is mutually agreed to by the Transferor and the Administrative Agent, furnished by the Collection Agent pursuant to Section 3.03.        "Person " means an individual, partnership, corporation (including a business trust), joint stock  company,  trust,  unincorporated  association,  joint  venture,  limited  liability  company  or other entity, or a government or any political subdivision or agency thereof.        "Pool Obligor " means an Obligor under a Pool Receivable.        "Pool Receivable " means a Receivable in the Receivables Pool.        "Potential  Termination  Event " means an event that but for notice or lapse of time or both  would constitute a Termination Event.         "Pro   Rata   Percentage "  means,  at  any  time  of  determination,  with  respect  to  any  Bank  Investor,  a  fraction (expressed as a percentage), (a) the numerator of which is (i) prior to the  termination  of  all  Commitments  hereunder,  its  Commitment  at  such  time  or  (ii)  if  all  Commitments hereunder have been terminated, the aggregate outstanding Capital of all Loans  being  funded  by  the  Class  Investors  in  such  Bank  Investor's  Class  at  such  time  and  (b)  the  denominator of which is (i) prior to the termination of all Commitments hereunder, the aggregate  Commitments of all Bank Investors at such time or (ii) if all Commitments hereunder have been  terminated, the Aggregate Capital at such time.         "Proceeds " means "proceeds" as defined in Section 9-102(a)(64) of the UCC.        "Program  Support  Agreement " means any agreement entered into in connection with this  Agreement pursuant to which a Program Support Provider agrees to provide liquidity, back-up  purchase or credit support in connection with a Class Conduit's extension of credit hereunder and  any  other  agreement  entered  into  by  any  Program  Support  Provider  providing  for:  (a)  the  issuance  of  one  or  more  letters  of  credit  for  the  account  of  any  Class  Conduit  or  its  related  commercial  paper  issuer,  (b)  the  issuance  of  one  or  more  surety  bonds  for  which  any  Class  Conduit or its related commercial paper issuer is obligated to reimburse the applicable Program  Support Provider for any drawings thereunder, (c) the sale by any Class Conduit to any Program  Support Provider of any Capital (or portions thereof or participation interest therein) maintained  by such Class Conduit and/or (d) the making of loans and/or other extensions of credit to any  Class Conduit or its related commercial paper issuer in connection with the related commercial  paper  program,  together  with  any  letter  of  credit, surety  bond  or  other  instrument  issued  thereunder.                                        98 70  Redline                                       20 

 

      "Program  Support  Provider " means, with respect to a Class Conduit, any bank, insurance  company  or  other  funding  institution  providing  liquidity,  credit  enhancement  or  back-up  purchase support or facilities to such Class Conduit.         "Purchase   Agreement "  means  the  Amended  and  Restated  Receivables  Purchase  and Servicing Agreement, dated as of the date hereof, by and between Tech Data, as seller, and the Transferor,  as  purchaser,  as  the  same  may  be  amended,  restated,  supplemented  or  otherwise modified from time to time.        "Purchase   Agreement   Termination   Event "  means  the  Transferor  ceasing  to  make purchases of Receivables from Tech Data under the Purchase Agreement.        "Rate  Period " means, with respect to any Interest Rate, the applicable period of time for which such Interest Rate is determined.        "Rating  Agency " means each of S&P, Fitch and Moody's, to the extent then rating the Commercial  Paper  of  any  Class  Conduit  (and/or  each other  rating  agency  then  rating  the Commercial Paper of any Class Conduit).        "Receivable " means the indebtedness owed to the Transferor or any Originator by any  Obligor under a Contract whether constituting an account, chattel paper, instrument or general  intangible, arising in connection with the sale of merchandise or services by any Originator and  thereafter transferred to the Transferor by the Seller pursuant to the Purchase Agreement, and  includes the right to payment of any Finance Charges and other obligations of such Obligor with  respect  thereto.   Notwithstanding  the  foregoing,  to  the  extent  any  portion  of  a  Receivable  is  deemed collected as a result of Deemed Collections that are received and applied in accordance  with Section  3.01(e ), such portion of such Receivable shall no longer constitute a Receivable hereunder.        "Receivables   Pool "  means,  at  any  time  of  determination,  all  of  the  then  outstanding Receivables  transferred  (or  purported  to  be  transferred)  to  the  Transferor  pursuant  to  the Purchase Agreement.        "Records "  means  all  Contracts  and  other  documents,  books,  records  and  other  information (including, without limitation, computer programs, tapes, discs, punch cards, data  processing software and related property) maintained with respect to Receivables and the related  Obligors.         "Reference  Rate " has, for each Class Investor or the Administrative Agent, as applicable,  the meaning set forth in the applicable Side Letter between the applicable Class Agent and the  Transferor.         "Register " has the meaning set forth in Section 13.03(d ).         "Reinvestment " has the meaning set forth in Section 3.01(a ).                                       98 70  Redline                                       21 

 

      "Related  Bank  Investor " means with respect to any Class Conduit, any Class Agent or any  Class,  each  Bank  Investor  listed  as  a  Bank  Investor  for  the  related  Class  as  set  forth  on Schedule I  hereto.        "Related  Class  Conduit " means, with respect to any Bank Investor, any Class Agent or any Class, each Class Conduit which is listed as a Class Conduit for the related Class as set forth on Schedule I  hereto.        "Related   Party "  means,  with  respect  to  any  Person,  such  Person's Affiliates  and  the officers, directors, managers, agents and employees of such Person and its Affiliates.        "Related  Security " means with respect to any Pool Receivable, all of the Transferor's and the Seller's rights, title and interest in, to and under:               (a)   the merchandise (including returned or repossessed merchandise), if any,       the sale of which by the applicable Originator gave rise to such Receivable;               (b)  all other security interests or liens and property subject thereto from time       to time, if any, purporting to secure payment of such Receivable, whether pursuant to the       Contract related to such Receivable or otherwise, together with all financing statements       signed by an Obligor describing any collateral securing such Receivable;              (c)   all  guarantees,  indemnities,  warranties,  insurance  (and  proceeds  and       premium refunds thereof) or other agreements or arrangements of any kind from time to       time supporting or securing payment of such Receivable whether pursuant to the Contract       related to such Receivable or otherwise;              (d)   all Records related to such Receivable; and              (e)   all rights and remedies of the Transferor under the Purchase Agreement       and the Originator Sale Agreement, together with all financing statements filed by the       Transferor against the Seller and each Originator in connection therewith; and              (f)   all Collections on and Proceeds of any of the foregoing.        "Repurchase " has the meaning set forth in the Purchase Agreement.        "Repurchase Event " has the meaning set forth in the Purchase Agreement.        "Required  Capital  Amount " means, at any time of determination, an amount equal to the Total Reserves at such time.        "Responsible   Officer "  means,  with  respect  to  any  Person,  the  president,  the  chief  executive  officer,  the  chief  financial  officer,  treasurer,  assistant  treasurer  or  chief  accounting  officer of such Person.                                       98 70  Redline                                       22 

 

      "Retained Interest " has the meaning set forth in Section 7.03(n ).         "S&P "  means  S&P  Global  Ratings  and  any  successor  thereto  that  is  a  nationally recognized statistical rating organization.        "Sanctions "  means  any  economic  or  financial  sanctions  or  trade  embargoes  imposed,  administered or enforced by (a) the U.S. federal government (including without limitation the  Office of Foreign Assets Control of the U.S. Department of the Treasury), (b) the United Nations  Security Council, the European Union or Her Majesty's Treasury of the United Kingdom or (c)  Canada, including but not limited to, the economic or  financial  sanctions  or  trade  embargoes  contemplated  by  the  provisions  of  the United  Nations  Act (Canada),  the Special  Economic  Measures Act  (Canada), and any other economic sanctions laws administered by Foreign Affairs  and International Trade Canada or the Department of Public Safety Canada.         "Sanctioned  Country " means, at any time, a country, region or territory to the extent that  such country, region or territory itself is the subject of Sanctions that broadly prohibit dealings  with such country, region or territory (as of the Amendment Date, the Crimea region of Ukraine,  Cuba, Iran, North Korea and Syria).         "Sanctioned Person " means, at any time, any individual or entity (a) appearing on a list of  Persons  with  whom trade or commerce is expressly restricted by Applicable Law pursuant to  Sanctions, (b) located, organized or resident in a Sanctioned Country, (c) with whom dealings  are  currently  prohibited  by  any  Sanctions  or  (d)  is  controlled  or  50%  or  more  owned  by  any  individual or entity described in the foregoing clauses (a) , (b)  or (c) .        "Scheduled  Termination  Date " means August  8 April  16 , 2019 2021 , it being understood that the parties hereto may from time to time extend the Scheduled Termination Date by written agreement.        "Scotia Bank " has the meaning set forth in the preamble  to this Agreement.         "Segregated Account " has the meaning set forth in Section 4.03.         "Servicing Fee " means the fee referred to in Section 8.06(a ) of this Agreement.        "SEC " means the U.S. Securities and Exchange Commission.         "Secured   Parties "  means  each  Credit  Party,  each  Indemnified  Party  and  each  Affected  Person.         "Securities   Act " means the Securities Act of 1933, as amended or otherwise modified from time to time.        "Seller "  has  the  meaning  set  forth  in  the  Purchase  Agreement,  as  the  same  may  be  modified from time to time with the prior written consent of the Administrative Agent.                                       98 70  Redline                                       23 

 

      "Settlement  Date " means (i) prior to the Termination Date, the Monthly Settlement Date  and  (ii)  on  and  after  the  Termination  Date,  each  day  selected  from  time  to  time  by  the  Administrative  Agent  (with  the  consent  or  at  the  direction  of  each  Class  Agent)  (it  being  understood that the Administrative Agent (with the consent  or  at  the  direction  of  each  Class  Agent) may select such Settlement Date to occur as frequently as daily) or, in the absence of such  selection, the Monthly Settlement Date.         "Side Letter " has the meaning set forth in Section 2.05(a ).         "Solvent " means, with respect to any Person and as of any particular date, (i) the present  fair value of the assets of such Person exceeds the liabilities of such Person as such liabilities  become  absolute  and  matured,  (ii)  the  fair  value  of  the  assets  of  such  Person  exceeds  the  probable liability on such Person's debts as such debts become absolute and matured, (iii) such  Person is able to pay its debts as they mature and (iv) such Person's capital is not unreasonably  small for the business in which it is engaged.         "Special   Concentration   Limit "  means,  for  any  Obligor  or  Financing  Party  while  such  Obligor  or  Financing  Party  is  a  Special  Obligor,  the  percentage  applicable  to  such  Special  Obligor  and  designated  as  the  "Special  Concentration  Limit"  in  the  written  approval  of  such  Obligor or Financing Party as a Special Obligor by the Agent and the Class Agents.         "Special  Obligor " means an Obligor or Financing Party which upon the request of the  Transferor is approved in writing by the Agent and each Class Agent as a "Special Obligor" and  with respect to which none of the Administrative Agent or any Class Agent shall have revoked  such designation, such revocation to be effective upon three (3) Business Days' written notice  from  the  Administrative  Agent  or  a  Class  Agent,  as applicable,  to  the  Collection  Agent,  the  Transferor, the Administrative Agent (if such notice is not given by the Administrative Agent)  and  each  Class  Agent  and  which  revocation  shall  be given  in  good  faith  and  based  upon  reasonable criteria.         "Subsidiary "  means,  as  to  any  Person,  a  corporation,  partnership,  limited  liability company or other entity of which shares of stock of each class or other interests having ordinary voting  power  (other  than  stock  or  other  interests  having  such  power  only  by  reason  of  the happening of a contingency) to elect a majority of the board of directors or other managers of such entity are at the time owned, or management of which is otherwise controlled:  (a) by such Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and one or more Subsidiaries of such Person.        "Taxes "  means  all  present  or  future  taxes,  levies,  imposts,  duties,  deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Official Body, including any interest, additions to tax or penalties applicable thereto.         "Tech Data " has the meaning set forth in the preamble  to this Agreement.                                        98 70  Redline                                       24 

 

      "Termination  Date " means the earliest to occur of (a) the Scheduled Termination Date, (b)  the  date  on  which  the  "Termination  Date"  is  declared  or  deemed  to  have  occurred  under Section  9.01 and (c) the date designated by the Transferor as the "Termination Date" pursuant to  Section 2.04(b ).        "Termination   Event " has the meaning set forth in Section  9.01.  For the avoidance of  doubt, a Termination Event shall occur only after applicable cure periods, if any, specified in  Section  9.01  have  expired,  and  any  Termination  Event  that  occurs  shall  be  deemed  to  be continuing at all times thereafter unless and until waived in accordance with Section 13.01.        "Total  Reserves " means, at any time of determination, an amount equal to the product of  (a) the Net Receivables Pool Balance and (b) the sum of (i) the Yield and Servicing Reserve  Percentage , and  (ii) the greater of (A) the sum  of  the  Dynamic Loss Reserve Percentage or  (B) the  Concentration  Reserve  Percentage  and  (iii)  the  greater  of  (A)  the and  the  Dynamic Dilution Reserve Percentage or (B) the sum  of  the  Concentration  Reserve  Percentage  and  the  Minimum Dilution Reserve Percentage.        "Transaction Documents " means this Agreement, the Purchase Agreement, the Originator Sale  Agreement,  each  Lock-Box  Agreement,  each  Side Letter,  the  Cash  Pooling  and Management Agreement , the  First  Amendment  and all of the other instruments, documents and other  agreements  executed  and  delivered  by  any  Originator,  Tech  Data  or  the  Transferor  in connection with any of the foregoing which has been designated as a "Transaction Document" for purposes of this Agreement with the consent of the Administrative Agent, in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time.         "Transferor " has the meaning set forth in the preamble  to this Agreement.         "Transferor's  Net  Worth " means, at any time of determination, an amount equal to (i) the sum  of  (A)  the  Outstanding  Balance  of  all  Pool  Receivables  at  such  time,  plus   (B)  cash  Collections held by the Transferor, minus  (ii) the sum of (A) the Aggregate Capital at such time, plus  (B) the Aggregate Interest at such time, plus  (C) the aggregate accrued and unpaid Fees at such time, plus  (D) without duplication, the aggregate accrued and unpaid other Obligations at  such time.         "UCC "  means  the  Uniform  Commercial  Code  as  from  time  to  time  in  effect  in  the  applicable jurisdiction.         "U.S.  Person " means a "United States person" within the meaning of Section 7701(a)(30) of the Code.        "U.S. Tax Compliance Certificate " has the meaning set forth in Section 12.04(f)(ii)(D ).         "Volcker Rule " has the meaning set forth in Section 6.01(n ).        "Withholding  Agent " means the Transferor, the Collection Agent or the Administrative Agent.                                      98 70  Redline                                       25 

 

      "Yield and Servicing Reserve Percentage " means 1.00%.        SECTION 1.02   Other   Interpretative   Matters .   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,  California,  Florida  or  Delaware,  as  applicable,  and  not  specifically  defined  herein,  are  used  herein  as  defined  in  such   Article  9.   Unless  otherwise  expressly  indicated,  all  references  herein  to  "Article,"  "Section,"  "Schedule,"  "Exhibit"  or  "Annex"  shall  mean  articles  and  sections  of,  and  schedules,  exhibits  and  annexes  to,  this  Agreement.   For  purposes  of  this  Agreement,  unless the  context  otherwise  requires:  (a)  references to any amount as on deposit or outstanding on any particular date means such amount  at the close of business on such day; (b) the words "hereof," "herein" and "hereunder" and words  of similar import refer to this Agreement as a whole and not to any particular provision of this  Agreement (and the words "thereof," "therein" and "thereunder" have a corresponding meaning  when  used  with  other  agreements  or  documents);  (c) the  term  "including"  means  "including  without limitation"; (d) references to any Applicable Law where a particular date or timeframe is  relevant refer to that Applicable Law as amended or otherwise modified and as in effect on such  date or within such timeframe and, if applicable, includes  any  successor  Applicable  Law; (e)  references  to  any  agreement  where  a  particular  date  or  timeframe  is  relevant  refer  to  that  agreement  as  amended  or  otherwise  modified  and  as  in  effect  on  such  date  or  within  such  timeframe; (f) references to any Person include that Person's permitted successors and assigns;  (g) headings and captions are for purposes of reference only and shall not otherwise affect the  meaning  or  interpretation  of  any  provision  hereof; (h)  unless  otherwise  provided,  in  the  calculation of time from a specified date to a later specified date, the term "from" means "from  and including", and the terms "to" and "until" each means "to but excluding"; (i) terms in one  gender include the parallel terms in the neuter and opposite gender; (j) references to any amount  as on deposit or outstanding on any particular date means such amount at the close of business  on such day; and (k) the term "or" is not exclusive.                                    ARTICLE II                              TERMS OF THE LOANS        SECTION 2.01   Loan  Facility .  Upon a request by the Transferor pursuant to Section 2.02(a ), and on the terms and subject to the conditions hereinafter set forth, the Class Conduits, ratably,  in  accordance  with  the  aggregate  of  the  Commitments of the Related Bank Investors with respect to each such Class Conduit, severally and not jointly, may, in their sole discretion, make Loans to the Transferor on a revolving basis, and if and to the extent any Class Conduit does not make any such requested Loan or if any Class does not include a Class Conduit, the Related Bank Investor(s) for such Class Conduit or the Bank Investor for such Class, as the case may  be,  shall,  ratably  in  accordance  with  their  respective  Commitments,  severally  and  not jointly,  make  such  Loans  to  the  Transferor,  in  either  case,  from  time  to  time  until  the Termination Date.  Under no circumstances shall any Class Investor be obligated to make any such Loan to the extent that, after giving effect to such Loan and all other Loans being made on such date:                                       98 70  Redline                                       26 

 

                  (i)   the Aggregate Capital would exceed the Facility Limit;                    (ii)  the sum of (A) the Capital of such Class Investor,  plus   (B)  the        aggregate outstanding Capital of each other Class Investor in its Class, would exceed the        Class Commitment of such Class Investor's Class;                     (iii) if such Class Investor is a Bank Investor, the aggregate outstanding        Capital of such Bank Investor would exceed its Commitment; or                     (iv)  the Aggregate Capital would exceed the Borrowing Base.         SECTION 2.02   Procedures  for  Credit  Extensions .  (a) Each Loan hereunder shall be  made  on  at  least  one  (1)  Business  Day's  prior  written  request  from  the  Transferor  to  the  Administrative Agent and each Class Agent in the form of a Loan Request attached hereto as  Exhibit  A .  Each such Loan Request shall be delivered no later than 3:00 p.m. (New York City time)  on  the  Business  Day  prior  to  the  proposed  date  of  such  Credit  Extension  (it   being understood  that any such Loan Request delivered after such time shall be deemed to have been made  on  the  following  Business  Day);  provided ,  however ,  that  the  Transferor  may  deliver  a same-day Loan Request on up to four (4) Business Days during any one week, in which case the Transferor must deliver the Loan Request by not later than 10:00 a.m. (New York City time) on the date of such Credit Extension, and the Transferor shall deliver such Loan Request directly to each  Class  Investor.   Each  such  Loan  Request  shall specify  (i)  the  amount  of  the  Loan(s) requested (which shall not be less than $5,000,000 on an aggregate basis for all Classes and shall be an integral multiple of $1,000,000, and in the case of any same-day Credit Extension, not greater than $100,000,000), (ii) the allocation of such amount among the Classes (which shall be ratable based on the Class Commitments), (iii) the account to which the proceeds of such Loan shall  be  distributed  and  (iv)  the  date such Credit Extension is to be made (which shall be a Business Day).              (b)   On the date of each Loan, the Class Investors shall (or in the case of any Class Conduit, may), upon satisfaction of the applicable conditions set forth in Article  V and in  accordance with the other conditions set forth in this Article  II, make available to the Transferor in  same  day  funds  an  aggregate  amount  equal  to  the amount of such Loans requested, at the account set forth in the related Loan Request.  Each request for a Loan shall be irrevocable and binding on the Transferor.              (c)   With respect to any Class, if at any time prior to the Termination Date, the related Class Conduit elects not to make a Loan requested by the Transferor in accordance with Sections   2.01   and  2.02, the Transferor shall have the right to require  such  Class  Conduit  to assign all of its interest in the Loans made by such Class Conduit to its Related Bank Investor, with notice to the related Class Agent and the Administrative Agent.  In the event of any such election by the Transferor, the assignment shall be effective on the Business Day following such request, with the same force and effect as an assignment duly entered into pursuant to Section 13.03(a ),  and  the  Administrative  Agent  shall  update  the  Register  and  give  notice  of  such  assignment pursuant to Section 13.03(d ).                                      98 70  Redline                                       27 

 

            (d)   Each Bank Investor's obligation shall be several, such that the failure of any Bank Investor to make available to the Transferor any funds in connection with any Loan shall not relieve any other Bank Investor of any obligation hereunder to make funds available on the  date  such  Loans  are  requested  (it   being   understood ,  that  no  Bank  Investor  shall  be responsible for the failure of any other Bank Investor to make funds available to the Transferor in connection with any Loan hereunder).              (e)   The  Transferor shall repay in full the outstanding Capital of each Class Investor on the Maturity Date.  Prior thereto, the Transferor shall prepay the outstanding Capital of each Class Investor to the extent required pursuant to Section  2.03 and on each Settlement  Date in accordance with the priorities set forth in Section 3.01(b ), and may voluntarily prepay the outstanding Capital of each Class Investor in accordance with Section 2.04.              (f)   If  the  Transferor  and  the  Administrative  Agent  agree  in  writing  that  a Bank  Investor  is  no  longer  a  Defaulting  Lender,  the  Administrative  Agent  will  so  notify  the parties  hereto,  whereupon  as  of  the  effective  date specified in such notice and subject to any conditions set forth therein, that Bank Investor will, to the extent applicable, purchase at par that portion  of  outstanding  Loans  of  the  other  Class  Investors  or  take  such  other  actions  as  the Administrative Agent may determine to be necessary to cause the Loans to be held pro rata by each Class in accordance with the Commitments of such Class, whereupon such Bank Investor will cease to be a Defaulting Lender; provided  that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Transferor while that Bank Investor  was  a  Defaulting  Lender;  and  provided ,  further ,  that  except  to  the  extent  otherwise expressly agreed by the affected parties, no such cure of Defaulting Lender status will constitute a waiver or release of any claim of any party hereunder arising from that Bank Investor's having been a Defaulting Lender.        SECTION 2.03   Mandatory Prepayments .              (a)   If at any time on or prior to the Termination Date, a Responsible Officer of the Transferor obtains knowledge that a Borrowing Base Deficit exists, then the Transferor shall within one (1) Business Day repay the outstanding Capital of each Class Investor (ratably, based on  the  aggregate  outstanding  Capital  of  each  Class Investor  at  such  time),  from  previously received Collections, an aggregate amount equal to the amount that, when applied in reduction of the Aggregate Capital, will cure such Borrowing Base Deficit.  The Transferor shall make such prepayment to each Class Agent's Account in immediately available funds.              (b)   The  Transferor  shall  repay  all  of  the  outstanding  Capital  of  each  Class Investor  (together  with  any  accrued  Interest  and  Fees  in  respect  of  such  Capital)  if  the Administrative  Agent  notifies  the  Transferor  of  a  material  breach  of  any  representation  or warranty made or deemed made pursuant to Article  VI of this Agreement and Transferor shall  fail  to  cure  such  breach  within  fifteen  (15)  days  (or,  in  the  case  of  the  representations  and  warranties in Section  6.01(d ), three (3) days) of such notice.  The Transferor shall make such                                       98 70  Redline                                       28 

 

prepayment  to  each  Class  Agent's  Account  in  immediately  available  funds  on  such  fifteenth (15th) day (or third (3rd) day, if applicable).        SECTION 2.04   Voluntary Prepayments .               (a)   The  Transferor,  in  its  discretion,  shall  have  the  right  to  make  a prepayment,  in  whole  or  in  part,  of  the  outstanding  Capital  of  each  Class  Investor,  which prepayment  shall  be  applied  in  reduction  of  the  Aggregate  Capital  after  notice  to  the Administrative Agent and each Class Agent, not later than 3:00 p.m. (New York City time) on the Business Day prior to the proposed date of such voluntary prepayment; provided , that the  Transferor may make a same-day voluntary payment on up to four (4) Business Days during any  one week (any such same-day voluntary payment not to exceed $70,000,000), in which case, the  Transferor shall provide notice thereof not later than 10:00 a.m. (New York City time) on the  Business Day of such voluntary payment to the Administrative Agent and each Class Agent.  Any  such  prepayment  will  reduce  the  Capital  of  each Class on a pro rata basis based on the  outstanding Capital of each such Class.  All accrued  Interest and Fees relating to the Capital  prepaid pursuant to this Section  2.04(a ) shall be due and payable on the following Settlement Date in accordance with Section 2.05(b ).              (b)   The  Transferor  may, upon not less than thirty (30)  days'  prior  written notice to the Administrative Agent and each Class Agent, terminate in whole or permanently reduce in part the Facility Limit and the Commitments in an amount up to the amount by which the  Facility  Limit  exceeds  the  Aggregate  Capital;  provided ,  that  (i)  any  partial  reduction  of  Commitments shall be in an aggregate minimum amount of $20,000,000 and integral multiples  of $10,000,000 in excess of that amount, and (ii) no Termination Event or Potential Termination  Event  shall  have  occurred  and  be  continuing  or  would  result  from  any  such  termination  or  reduction.  Any partial reduction of the Facility Amount and the Commitments will reduce the  Commitments of each Class on a pro rata basis based on the outstanding Commitments of each  such Class.  All Fees relating to the portion of the Commitment so reduced shall be due and  payable  on  the  following  Settlement  Date  in  accordance  with  Section   2.05(b ).   In  connection with  any  termination  of  the  Facility  Limit  and  the Commitments  in  whole  pursuant  to  this Section  2.04(b ), the Transferor may designate any date occurring on or after such termination in whole (subject to payment of all outstanding Obligations hereunder) as the Termination Date.        SECTION 2.05   Interest and Fees .              (a)   On  each  Settlement  Date,  the  Transferor  shall,  in  accordance  with  the  terms and priorities for payment set forth in Section  3.01, pay to each applicable Class Agent, each  applicable  Class  Investor  and/or  the Administrative  Agent  certain  fees  (collectively,  the "Fees ") in the amounts set forth in the side letter agreements from time to time entered into, among the Transferor, the members of the applicable Class or Classes (or their respective Class Agents on their behalf) and/or the Administrative Agent  (each  such  side  letter  agreement,  as amended, restated, supplemented or otherwise modified from time to time, collectively being referred  to  herein  as  the  "Side   Letter "),  except  that  no  Undrawn  Fee  (as  defined  in  the  Side Letter) will accrue with respect to any Class during the period in which any member of such Class is a Defaulting Lender.                                      98 70  Redline                                       29 

 

            (b)   The Capital of each Class Investor shall accrue interest on each day when such Capital remains outstanding at the then applicable Interest Rate for such Class Investor. The  Transferor  shall  pay  all  Interest  and  Fees  accrued  during  each  Interest  Period  on  the immediately following Settlement Date in accordance with the terms and priorities for payment set forth in Section 3.01.        SECTION 2.06   Eurodollar  Rate  Protection;  Illegality .  If any Class Agent determines,  with respect to its Class Investors that have extended Loans accruing Interest by reference to the  Eurodollar Rate, that:               (a)   it  is  unable  to  obtain  on  a  timely  basis  the  information  necessary  to  determine any Eurodollar Rate applicable to the Capital held by the related Class;               (b)   it is unable to obtain matching deposits in the London interbank market to  fund the Capital held by the related Class;               (c)   the  Eurodollar  Rate  will  not  adequately  reflect the  cost  of  funding  or  maintaining the Capital; or               (d)   any  Change  in  Law  makes  it  unlawful,  or  any  central  bank  or  other  Official  Body  asserts  that  it  is  unlawful,  to  fund or  maintain  the  Capital  by  reference  to  a  Eurodollar Rate;   then, in each case, such Class Agent shall forthwith notify the Administrative Agent and the  Transferor of the existence of such circumstances, and until such Class Agent has notified the  Administrative Agent and the Class Agent that such circumstances no longer exist, Interest on  the Capital held by the related Class shall accrue at the Base Rate.         SECTION 2.07   Records  of  Loans .  Each Class Agent shall record in its records, the  date and amount of each Loan made by the Class Investors in its Class hereunder, the interest  rate with respect thereto, the Interest accrued thereon and each repayment and payment thereof.  Subject to Section  13.03(d ), such records shall be conclusive and binding absent manifest error. The failure to so record any such information or any error in so recording any such information shall  not  affect  the  obligations  of  the  Transferor hereunder  or  under  the  other  Transaction Documents.                                    ARTICLE III             SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS         SECTION 3.01   Settlement Procedures .               (a)   The Collection Agent shall set aside and hold in trust for the exclusive  benefit  of  the  Transferor  and  the  Secured  Parties (or   segregate   in   a   separate   account   in accordance   with   Section  4.03),  all  Collections  on  Pool  Receivables  that  are  received  by  the  Collection Agent or the Transferor (including receipt of Deemed Collections or cash payment to                                      98 70  Redline                                       30 

 

effect  a  Repurchase)  or  received  in  any  Lock-Box  or  Lock-Box  Account  for  application  in accordance with the priority of payments set forth in Section  3.01(b ); provided , that (i) for so  long as no Collection Agent Ratings Event, Collection Agent Default or Termination Event has  occurred and is continuing, any such Collections may be commingled by the Collection Agent  with funds of the Collection Agent and its Affiliates  prior  to  the  applicable  Settlement  Date,  solely  for  the  purpose  of  investing  in  short-term  cash  management  investments;  provided ,  however , that no such commingling or any loss or gain attributable to any such investment shall derogate from the Collection Agent's obligations hereunder to distribute all Collections, or an amount equal thereto, in accordance with the priority of payments set forth in Section  3.01(b )  and (ii)  the Collection Agent may from time to time release to the Transferor from Collections any amounts permitted to be released under Section  5.03 and applied by the Transferor as (A) a cash payment towards the purchase price for any Receivables acquired by the Transferor under the Purchase Agreement (each such release, a "Reinvestment ") or (B) repayments or extensions  of  credit  in  accordance  with  the  Cash  Pooling  and  Management  Agreement  (each,  a  "Cash Pooling Transfer ").              (b)   On  each  Settlement  Date,  the  Collection  Agent  (or,  following  its assumption  of  exclusive  control  of  the  Lock-Box  Accounts,  the  Administrative  Agent)  shall distribute such Collections in the following order of priority:                     (i)  first ,  to  each  Lock-Box  Bank,  the  amount  of  any  fees,  costs  or       expenses permitted to be debited or withdrawn by such Lock-Box Bank from a Lock-Box       Account pursuant to the terms of the applicable Lock-Box Agreement, to the extent such       fees, costs or expenses have not already been debited or withdrawn;                    (ii)  second ,  to  the  Collection Agent for the payment of the accrued       Servicing Fees payable for the immediately preceding Interest Period, plus, if applicable,       the  amount  of  Servicing  Fees  payable  for  any  prior Interest  Period  to  the  extent  such       amount has not been distributed to the Collection Agent;                    (iii) third , to each applicable Credit Party (ratably, based on the amount        then  due  and  owing),  all  accrued  and  unpaid  Fees  due  to  such  Credit  Party  for  the        immediately preceding Interest Period, plus, if applicable, the amount of any such Fees        payable for any prior Interest Period to the extent such amount has not been distributed to        such Credit Party;                     (iv)  fourth ,  to  each  applicable  Credit  Party  (ratably,  based  on  the       amount then due and owing), all accrued and unpaid Interest due to such Credit Party for       the immediately preceding Interest Period, plus, if applicable, the amount of any such       Interest  payable  for  any  prior  Interest  Period  to  the  extent  such  amount  has  not  been       distributed to such Class Investor or Credit Party;                    (v)   fifth , if any Borrowing Base Deficit exists, to each Class Investor        (ratably, based on the aggregate outstanding Capital of each Class Investor at such time),        to repay the outstanding Capital of each Class Investor, an aggregate amount equal to the                                       98 70  Redline                                       31 

 

      amount  that,  when  applied  in  reduction  of  the  Aggregate  Capital,  will  cure  such       Borrowing Base Deficit;                    (vi)  sixth , on and after the Termination Date, to each Class Investor       (ratably, based on the aggregate outstanding Capital of each Class Investor), to repay the       outstanding Capital of each such Class Investor until paid in full;                    (vii) seventh , to each Credit Party, each Affected Person and each Lock-       Box  Bank  (ratably,  based  on  the  amounts  due  and  owing  at  such  time),  all  other       Obligations then due and owing by the Transferor to such Person (including any amounts       payable under Article XII or any Lock-Box Agreement);                    (viii) eighth ,  prior  to  the  Termination  Date,  at  the  election  of  the        Transferor and in accordance with Section  2.04, to the payment of all or any portion of       the  outstanding  Capital  of  the  Class  Investors  at  such  time  (ratably,  based  on  the       aggregate outstanding Capital of each Class Investor at such time); and                     (ix)  ninth , the remaining balance, if any, to the Transferor.              (c)   All payments or distributions to be made by the Collection  Agent,  the Transferor  and  any  other  Person  to  the  Administrative  Agent  or  the  Class  Investors  (or  their respective related Affected Persons), shall be paid or distributed to the related Class Agent at its Class  Agent's  Account.   Each  Class  Agent,  upon  its receipt  in  the  applicable  Class  Agent's Account of any such payments or distributions, shall distribute such amounts to the applicable Class Investors and Affected Persons within its Class ratably; provided  that if such Class Agent shall have received insufficient funds to pay all of the above amounts in full on any such date, such Class Agent shall pay such amounts to the applicable Class Investors and Affected Persons within its Class in accordance with the priority of payments set forth above, and with respect to any such category above for which there are insufficient funds to pay all amounts owing on such date, ratably (based on the amounts in such categories owing to each such Person in such Class) among all such Persons in such Class entitled to payment thereof.              (d)   If and to the extent the Administrative Agent, any  Credit  Party  or  any Affected Person shall be required for any reason to return to the Transferor or any underlying Obligor (including to any trustee, receiver, custodian or similar official thereof as a result of any Event of Bankruptcy with respect to the Transferor or such Obligor) any amount received on its behalf hereunder, such amount shall be deemed not to have been so received but rather to have been retained by the Transferor and, accordingly, the Administrative Agent, such Credit Party or such Affected Person, as the case may be, shall have a claim (which claim may be contingent or subject to defenses) against the Transferor for such amount.              (e)   If on any day the Seller is required to make a cash payment of Deemed Collections  to  the  Transferor  or  effect  a  Repurchase  under  the  Purchase  Agreement,  the Transferor shall deposit (or cause to be deposited) the amount of such Deemed Collections or the repurchase price for such Repurchase to a Lock-Box Account for application as Collections in accordance with Section  3.01(b ).  The Transferor shall promptly enforce the Seller's obligations                                      98 70  Redline                                       32 

 

to pay Deemed Collections or, if requested by the Administrative Agent, effect a Repurchase, in each case, in accordance with the terms of the Purchase Agreement.               (f)   Except as otherwise required by Applicable Law or the relevant Contract,  all Collections received from a Pool Obligor in payment of any Pool Receivable shall be applied  to the Receivables of such Obligor in the order of the age of such Receivables, starting with the  oldest such Receivable, unless such Obligor designates in writing its payment for application to  specific Receivables.         SECTION 3.02   Payments  and  Computations,  Etc.   (a) All amounts to be paid by the  Transferor or the Collection Agent to the Administrative Agent, any Credit Party or any Affected  Person hereunder shall be initiated by wire transfer no later than 1:00 p.m. (New York City time)  on the day when due in same day funds to the applicable Class Agent's Account.              (b)   Each  of  the  Transferor  and  the  Collection  Agent shall,  to  the  extent permitted by Applicable Law, pay interest on any amount not paid by it when due hereunder, at an interest rate per  annum  equal to 1.00% per annum above the greater of the Base Rate or the  otherwise applicable Interest Rate, payable on demand.               (c)   All  computations  of  interest  under  subsection   (b)   above  and  all  computations of Interest, Fees and other amounts 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.  Whenever  any  payment  or  deposit  to  be  made  hereunder shall be due on a day other than a  Business Day, such payment or deposit shall be made on the next succeeding Business Day and  such extension of time shall be included in the computation of such payment or deposit.               (d)   All calculations of the Outstanding Balance of any Pool Receivables (and  accordingly, the Net Receivables Pool Balance and the Borrowing Base) shall be reduced by any  amounts owed by the Transferor, any Originator or the Seller to the related Obligor.         SECTION 3.03   Delivery  of  Periodic  Reports .  (a)  Prior to the twentieth (20 th ) day of each  month,  the  Collection  Agent  shall  prepare  and forward  to  each  Class  Agent  and  the Administrative Agent (i) a Periodic Report (including without limitation, a settlement statement and a certification as to the Net Receivables Pool Balance) together with an aging of all Pool Receivables,  as  of  the  close  of  business  of  the  Collection  Agent  on  the  last  day  of  the immediately  preceding  month,  (ii)  if  requested  by  any of the Class Agents, a listing by Pool Obligor of all Pool Receivables together with an aging of such Pool Receivables and (iii) such other  information  as  any  Class  Agent  or  the  Administrative  Agent  may  reasonably  request, which may include collection, payment rate, default and delinquency data with respect to any one or more Special Obligors.              (b)   Notwithstanding anything in the foregoing Section   3.03(a ),  if  the  long- term  debt  rating  of  Tech  Data  shall  be  "BB"  or  below  from  S&P  or  "Ba2"  or  below  from Moody's,  the  Collection  Agent  shall  prepare  and  forward  to  each  Class  Agent  and  the Administrative Agent a Periodic Report (including without limitation, a settlement statement and                                       98 70  Redline                                       33 

 

a certification as to the Net Receivables Pool Balance and the calculation thereof) prior to the first (1 st ) Business Day of each week.        SECTION 3.04   Ratable Payments .  If any Credit Party, whether by setoff or otherwise,  has payment made to it with respect to any Obligations in a greater proportion than that received  by any other Credit Party entitled to receive a ratable share of such Obligations in accordance  with  Section   3.01(b ),  such Credit Party agrees, promptly upon demand, to  purchase  for  cash without recourse or warranty a portion of such Obligations held by the other Credit Parties so that after such purchase each Credit Party will hold the appropriate ratable proportion of such Obligations;  provided  that if all or any portion of such excess amount is thereafter recovered from such Credit Party, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.        SECTION 3.05   Right of Setoff .  Without in any way limiting the provisions of Section 3.04, each Credit Party is hereby authorized (in addition to any other rights it may have), at any time after the occurrence of the Termination Date or during the continuance of a Termination Event or a Potential Termination Event for its Class, to setoff, appropriate and apply (without presentment, demand, protest or other notice which are hereby expressly waived) any deposits and any other indebtedness held or owing by such Credit Party (including by any branches or agencies  of  such  Credit  Party)  to,  or  for  the  account  of,  the  Transferor,  against  any  non- contingent Obligations then owed by the Transferor hereunder; provided  that such Credit Party  shall notify each other party hereto promptly following such setoff, and any subsequent payments  made  by  the  Transferor  under  Section  3.01 shall be adjusted to correct for any non-pro rata  exercise of the rights under this Section  3.05, as reasonably determined by the Administrative  Agent.                                    ARTICLE IV                  SECURITY INTEREST; SEGREGATED ACCOUNT         SECTION 4.01   Security Interest .               (a)   As  security  for  the  performance  by  the  Transferor  of  all  the  terms,  covenants and agreements on the part of the Transferor to be performed under this Agreement or  any other Transaction Document, including the punctual payment when due of the Aggregate  Capital and all Interest in respect of the Loans and all other Obligations, the Transferor hereby  grants to the Administrative Agent for its benefit and the ratable benefit of the Secured Parties, a  continuing security interest in all of the Transferor's right, title and interest in, to and under all of  the  following,  whether  now  or  hereafter  owned,  existing  or  arising  (collectively,  the  "Collateral "):  (i)  all  Pool  Receivables,  (ii)  all  Related  Security  with  respect  to  such  Pool Receivables, (iii) all Collections with respect to such Pool Receivables, (iv) the Lock-Boxes and Lock-Box Accounts and all amounts on deposit therein, and all certificates and instruments, if any, from time to time evidencing such Lock-Boxes and Lock-Box Accounts and amounts on deposit therein, (v) all rights (but none of the obligations) of the Transferor under the Purchase Agreement,  (vi)  without  duplication  of  the  foregoing,  all  of  its  accounts,  general  intangibles (including  payment  intangibles),  deposit  accounts, investment  property,  financial  assets,                                      98 70  Redline                                       34 

 

instruments, chattel paper and letter-of-credit rights, (vii) all supporting obligations relating to the foregoing and (viii) all proceeds of, and all amounts received or receivable under any or all of, the foregoing.  Each party hereto acknowledges and agrees that the security interest and liens granted in the Collateral under and pursuant to the  Original  Agreement  shall  continue  in  full force and effect, and this Section  4.01(a ) shall be deemed to be a continuation and reaffirmation, and not a replacement or novation, of the security interest  and  liens  granted in the Collateral under and pursuant to the Original Agreement.              (b)   The  Administrative  Agent  (for  the  benefit  of  the  Secured  Parties)  shall have,  with  respect  to  all  the  Collateral,  and  in  addition  to  all  the  other  rights  and  remedies available to the Administrative Agent (for the benefit of the Secured Parties), all the rights and remedies  of  a  secured  party  under  any  applicable  UCC.   Each  of  the  Transferor  and  the Administrative  Agent  hereby  authorizes  the  filing  of  financing  statements  and  financing statement  amendments  (including  continuation  statements)  in  each  jurisdiction  the Administrative Agent deems necessary and appropriate to perfect and maintain the perfection of the security interest of the Administrative Agent (for the benefit of the Secured Parties) in the Collateral.  Such financing statements may describe the collateral covered thereby, (i) in the case of  any  financing  statement  against  the  Transferor, as  "all  of  the  debtor's  personal  property  or assets" or words to that effect, and (ii) in the case of any financing statement against the Seller or any  Originator,  as  set  forth  in  the  Purchase  Agreement  or  the  Originator  Sale  Agreement,  as applicable, or in an Exhibit or Annex thereto, in each case, notwithstanding that such wording may be broader in scope than the collateral described in this Agreement, the Purchase Agreement or the Originator Sale Agreement, as applicable.              (c)   Without limiting the generality of Section  4.01(b ), each of the Transferor  and the Administrative Agent hereby authorizes the filing of, and the Transferor shall cause to be  filed:  (i) financing statement amendments to (X) financing statement #0031397 filed against the  Transferor  with  the  Secretary  of  State  of  the  State  of  Delaware  and  (Y)  financing  statement  #200000118812 filed against Tech Data with the Secretary of State of the State of Florida (the  "Existing   Financing   Statements "),  amending  collateral  descriptions  to  reflect  the  addition  of AVT  TS  as  an  Originator  (in  a  manner  consistent  with  Section   4.01(b ))  and  amending  the  identity  of  the  secured  party  to  reflect  the  appointment of Scotia Bank as the Administrative  Agent for the benefit of the Secured Parties and (ii) on the Amendment Date (or within two (2)  Business  Days  thereafter),  initial  financing  statements  against  AVT  TS  with  the  Secretary  of  State  of  the  State  of  Delaware,  against  Tech  Data  with  the  Secretary  of  State  of  the  State  of  Florida  and  against  the  Transferor  with  the  Secretary  of  State  of  the  State  of  Delaware,  each  identifying the Administrative Agent for the benefit of the Secured Parties as the secured party or  secured  party  assignee  and  identifying  the  applicable  collateral  in  a  manner  consistent  with  Section   4.01(b )  (such  financing  statements,  the  "Amendment   Financing   Statements ").   For  so long as this Agreement is in effect or any Obligations remain outstanding, the Transferor shall cause  the  Existing  Financing  Statements  and  the  Amendment  Financing  Statements  to  be continued on such date or dates as may be necessary to continue such financing statements under the  applicable  UCC,  and  shall  not  authorize  either the  Existing  Financing  Statements  or  the Amendment Financing Statements to be terminated.                                       98 70  Redline                                       35 

 

            (d)   The authorizations set forth in Sections  4.01(b)  and (c ) above are intended  to satisfy all requirements for the authorization of filing the financing statements described in  such  sections  under  Article  9  of  any  applicable  enactment  of  the  UCC,  including,  without  limitation, Section 9-509 thereof.         SECTION 4.02   Protection   of   Security   Interest   of   the   Administrative   Agent   for   the benefit  of  the  Secured  Parties .  (a)  The Transferor agrees that it will, and will cause the Seller  and  any  Originator  to,  from  time  to  time,  at  its  expense,  promptly  execute  and  deliver  all  instruments and documents and take all actions as may be necessary or as the Administrative  Agent  or  any  Class  Agent  may  reasonably  request  in order  to  perfect  or  protect  the  Administrative Agent's interest in the Collateral or to enable the Administrative Agent or any of  the  Class  Investors  to  exercise  or  enforce  any  of  their  respective  rights  hereunder.   Without  limiting the foregoing, the Transferor will, and will cause the Seller and any Originator to, upon  the  reasonable  request  of  the  Administrative  Agent or any of the Class Investors, in order to  accurately reflect this financing transaction, (x) execute and file such financing or continuation  statements or amendments thereto or assignments thereof as may be reasonably requested by the  Administrative  Agent  or  any  of  the  Class  Investors and  (y)  mark  its,  the  Seller's  and  any  Originator's  respective  master  data  processing  records  and  other  documents  with  a  legend  describing  the  conveyance  of  the  Receivables  and  related  property  to  the  Transferor  and  the  security interest granted to the Administrative Agent, for the benefit of the Class Investors, in the  applicable  portion  of  the  Collateral  in  the  manner required  by  Section   7.01(n )  and  Section 7.03(k ).  The Transferor shall, and will cause the Seller to, upon the reasonable request of the  Administrative Agent  or any of the Class Investors, obtain such additional search reports as the  Administrative Agent or any of the Class Investors shall request.  In addition to complying with  the  procedures  set  forth  Section   7.02(g )  and  Section   7.04(g ),  any  filings  under  the  UCC  or  otherwise that are occasioned by any change in name or location of any Originator, the Seller or  the Transferor shall be made at the expense of Transferor.              (b)   The  Collection  Agent  shall  instruct  (or  cause  the  instruction  of)  all Obligors and Financing Parties to cause all Collections to be deposited directly with a Lock-Box Bank.  Any Lock-Box Account maintained by a Lock-Box Bank pursuant to the related Lock- Box Agreement shall be subject to the control of the Administrative Agent in accordance with such Agreement.  No account may be added or terminated as a Lock-Box Account and no bank may be added or terminated as a Lock-Box Bank except in accordance with Sections  7.02(e)  and  7.04(e ).  If the Transferor receives any Collections or Deemed Collections, the Transferor shall immediately remit such Collections to a Lock-Box Account.  Any Collections that are received by  any  Originator,  the  Seller  or  the  Collection  Agent  shall  be  immediately,  but  in  any event within forty-eight (48) hours of receipt, deposited into a Lock-Box Account.        SECTION 4.03   Segregated  Account .  The Administrative Agent may, at any time, in its  discretion  and  at  the  expense  of  the  Transferor,  designate  a  segregated  account,  which segregated account will be subject to the control of the Administrative Agent for the benefit of the Secured Parties (such account, the "Segregated  Account ").  The Segregated Account may: (a)  be  established  at  the  Administrative  Agent,  (b)  be  held  directly  in  the  name  of  the Administrative  Agent  for  the  benefit  of  the  Secured  Parties  and  (c)  restrict  or  prohibit  the                                      98 70  Redline                                       36 

 

Collection  Agent  or  any  of  its  Affiliates  from  making  withdrawals,  subject  to  permitted withdrawals  (i)  to  Seller  to  pay  for  Receivables  purchased  under  the  Purchase  Agreement  in accordance with the Transaction Documents, upon certification by the Seller of the Outstanding Balance of such Receivables and the purchase price therefor and (ii) for voluntary prepayments of Capital in accordance with Section  2.04 .  Upon the occurrence of a Collection Agent Ratings  Event, a Collection Agent Default or a Termination Event,  the  Collection  Agent shall obtain  confirmation of the account details of the Segregated Account from the Administrative Agent,  and  shall  thereafter  remit  daily,  within  forty-eight  (48)  hours  of  receipt,  to  the  Segregated  Account, all Collections received with respect to any Receivables and all other amounts received  in respect of the Collateral.  Amounts on deposit in the Segregated Account shall be applied on  each Settlement Date in accordance with Section  3.01(b) .  On the Final Payout Date, any funds  remaining on deposit in the Segregated Account shall be released to the Transferor.                                    ARTICLE V            CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS         SECTION 5.01   Conditions   Precedent   to   Effectiveness   and   the   Refinancing   Credit Extension .   This  Agreement  shall  become  effective  as  of  the Amendment  Date  when  (a)  the  Administrative Agent shall have received each of the documents, agreements (in fully executed  form), opinions of counsel, lien search results, UCC filings, certificates and other deliverables  listed  on  the  closing  memorandum  attached  as  Annex   I   hereto,  in  each  case,  in  form  and  substance acceptable to the Administrative Agent and (b) all fees and expenses due and payable  by  the  Transferor  on  the  Amendment  Date  to  the  Credit  Parties  have  been  paid  in  full  in  accordance with the terms of the Transaction Documents.         SECTION 5.02   Conditions Precedent to All Credit Extensions .  Each Credit Extension hereunder on or after the Amendment Date shall be subject to the conditions precedent that:              (a)   the Transferor shall have delivered to the Administrative Agent and each Class Agent a Loan Request for such Loan in accordance with Section 2.02(a );              (b)   the Collection Agent shall have delivered to the Administrative Agent and each Class Agent a pro forma Periodic Report, reflecting the Aggregate Capital, Total Reserves and the Borrowing Base, each as calculated after giving effect to the proposed Credit Extension;              (c)   none of the conditions specified in Section  2.01(i ) through (iv ) shall exist after giving effect to such Credit Extension;              (d)   on the date of such Credit Extension the following statements shall be true and correct (and upon the occurrence of such Credit Extension, the Transferor and the Collection Agent shall be deemed to have represented and warranted that such statements are then true and correct):                     (i)  the  representations  and  warranties  of  the  Transferor  and  the        Collection Agent contained in Sections  6.01  and 6.02 are true and correct in all material                                      98 70  Redline                                       37 

 

      respects on and as of the date of such Credit Extension as though made on and as of such       date unless such representations and warranties by their terms refer to an earlier date, in       which case they shall be true and correct in all material respects on and as of such earlier       date;                    (ii)  no Termination Event or Potential Termination Event has occurred       and is continuing, and no Termination Event or Potential Termination Event would result       from such Credit Extension;                    (iii) no Borrowing Base Deficit exists or would exist after giving effect       to such Credit Extension; and              (e)   no Termination Date shall have occurred.        SECTION 5.03   Conditions   Precedent   to   All   Reinvestments   and   Cash   Pooling Transfers .  Each  Reinvestment  and  each  Cash  Pooling  Transfer hereunder  on  or  after  the  Amendment Date shall be subject to the conditions precedent that:               (a)   (i) after giving effect to such Reinvestment, or Cash Pooling Transfer, as  applicable, the Collection Agent shall be holding in trust for the benefit of the Secured Parties or  shall have segregated in a separate account approved by the Administrative Agent, an amount of  Collections sufficient to pay the sum of all accrued and unpaid Servicing Fees, Interest, Fees and  all other non-contingent Obligations that would be due and payable on the following Settlement  Date and (ii) no Borrowing Base Deficit shall exist;               (b)   the Transferor shall (i) use such Reinvestment solely to pay the purchase  price  for  Pool  Receivables  purchased  by  the  Transferor  in  accordance  with  the  terms  of  the  Purchase Agreement or (ii) apply such Cash Pooling Transfer as a repayment or extension of  credit pursuant to the Cash Pooling and Management Agreement; and               (c)   on the date of such Reinvestment or Cash Pooling Transfer the following  statements shall be true and correct (and upon the occurrence  of  such  Reinvestment  or  Cash  Pooling Transfer, the Transferor and the Collection Agent shall be deemed to have represented  and warranted that such statements are then true and correct):                     (i)   the  representations  and  warranties  of  the  Transferor  and  the        Collection Agent contained in Sections  6.01  and 6.02 are true and correct in all material       respects on and as of the date of such Reinvestment or Cash Pooling Transfer as though       made on and as of such date unless such representations and warranties by their terms       refer to an earlier date, in which case they shall be true and correct in all material respects       on and as of such earlier date;                    (ii)  no  Termination  Event  has  occurred  and  is  continuing,  and  no        Termination Event would result from such Reinvestment or Cash Pooling Transfer; and                     (iii) the Termination Date shall not have occurred.                                       98 70  Redline                                       38 

 

                                  ARTICLE VI                      REPRESENTATIONS AND WARRANTIES        SECTION 6.01   Representations   and   Warranties   of   the   Transferor .   The  Transferor represents and warrants as of the Amendment Date, as of each day on which a Credit Extension or Reinvestment or Cash Pooling Transfer shall have occurred and as of each Settlement Date occurring prior to the Final Payout Date or the Termination Date:              (a)   Corporate   Existence;   Compliance   with   Law .   The  Transferor  (i)  is  duly organized,  validly  existing,  and  in  good  standing  under  the  laws  of  the  jurisdiction  of  its organization, (ii) has the corporate power or other organizational power and authority and the legal right to own and operate its property and to conduct its business, and (iii) is in compliance with all Applicable Law except where the failure to be in compliance would not have a Material Adverse Effect.              (b)   Corporate   and   Governmental   Authorization;   Contravention .   The execution, delivery and performance by the Transferor of each Transaction Document to which the Transferor is a party are within the Transferor's corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, Official Body or official thereof (except as contemplated by Section  4.01 hereof), and do not contravene, or  constitute  a  default  under,  any  provision  of  Applicable  Law  or  of  the  certificate  of incorporation  or  bylaws  of  the  Transferor  or  of  any  agreement,  judgment,  injunction,  order, decree or other instrument binding upon the Transferor or result in the creation or imposition of any Adverse Claim on the assets of the Transferor.              (c)   Binding  Effect .  Each Transaction Document to which the Transferor is a party constitutes the legal, valid and binding obligation of the Transferor, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally.              (d)   Perfection Representations .                     (i)   This  Agreement  constitutes  a  "security  agreement"  under  the        applicable  UCC  and  is  effective  to  create  a  valid  and  continuing  security  interest  (as        defined in the applicable UCC) in the Transferor's right, title and interest in, to and under        the Collateral.                     (ii)  The security interest of the Administrative Agent (for the benefit of        the Secured Parties) in the Collateral has been perfected.                     (iii) The Receivables included in any calculation of the Borrowing Base        constitute "accounts" or "general intangibles" within the meaning of Section 9-102 of the        UCC.                                       98 70  Redline                                       39 

 

                  (iv)  The  Transferor  owns  and  has  good  and  marketable  title  to  the       Receivables and Related Security included in the Collateral free and clear of any Adverse       Claim, other than De Minimis Tax Liens that are released  within  ninety  (90)  days  of       discovery thereof by the applicable Originator.                    (v)   All  appropriate  financing  statements,  financing statement        amendments and continuation statements have been filed in the proper filing office in the        appropriate  jurisdictions  under  Applicable  Law  in  order  to  perfect  (or  continue  the        perfection of) (x) the sale of any Receivables and related property from any applicable        Originator to the Seller pursuant to the Originator Sale Agreement, (y) the sale of the        Pool Receivables and Related Security from the Seller to the Transferor pursuant to the        Purchase Agreement and (z) the Administrative Agent's security interest in the Collateral.                     (vi)  Other  than  the  security  interest  granted  to  the  Administrative        Agent pursuant to this Agreement, the Transferor has not pledged, assigned, sold, granted        a security interest in, or otherwise conveyed any of the Collateral except as permitted by        this Agreement and the other Transaction Documents.  The Transferor has not authorized        the filing of and is not aware of any financing statements filed against the Transferor that        include  a  description  of  collateral  covering  the  Collateral  other  than  any  financing        statement (i) in favor of the Administrative Agent, (ii) that has been terminated or (iii)        that has been addressed in a manner consented to in writing by the Administrative Agent.               (e)   Accuracy   of   Information .   All  information  heretofore  furnished  by  the  Transferor  (including  without  limitation,  the  Periodic  Reports,  Loan  Requests,  certificates,  reports, statements, documents and other information) to any Class Investor, any Class Agent or  the Administrative Agent pursuant to any provision of this Agreement or any other Transaction  Document  was,  at  the  time  the  same  were  so  furnished,  true  and  accurate  in  every  material  respect.               (f)   Tax Status .  The Transferor has filed all federal, state and other tax returns  required  to  be  filed  and  has  paid  or  made  adequate provision  for  the  payment  of  all  taxes,  assessments  and  other  governmental  charges  shown  thereon,  except  (i)  such  items  which  are  being  or  will  promptly  be  contested  in  good  faith  by  appropriate  proceedings  diligently  conducted and for which adequate reserves have been provided in accordance with GAAP, or (ii)  where a failure to file a return or pay a tax would not, individually or in the aggregate, materially  adversely affect the ability of Tech Data or the Transferor to perform its obligations under this  Agreement.               (g)   Action, Suits .  There are no actions, suits or proceedings pending, or to the knowledge of the Transferor threatened, against or affecting the Transferor or any Affiliate of the Transferor or their respective properties, in or before any court, arbitrator or other body, which may materially adversely affect the financial condition of the Transferor or materially adversely affect the ability of Transferor to perform its obligations under this Agreement.                                       98 70  Redline                                       40 

 

            (h)   Use of Proceeds .  No proceeds of any Credit Extension will be used by the  Transferor 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)   Place   of   Business .  The principal place of business and chief executive office of the Transferor are located at the address of the Transferor indicated in Section  13.02 hereof and the offices where the Transferor keeps all its Records, are located at the address(es) described  on  Schedule   IV   or  such  other  locations  notified  to  the  Administrative  Agent  in  accordance  with  Section   7.01(q )  hereof  in  jurisdictions  where  all  action  required  by  Sections 4.01  and 4.02 hereof has been taken and completed.              (j)   Offices;  Legal  Name .  The Transferor's sole jurisdiction of organization is  the State of Delaware and it is a "registered organization" within the meaning of the Delaware  UCC.  The legal name of the Transferor is Tech Data Finance SPV, Inc.               (k)   Calculation  of  Net  Receivables  Pool  Balance .  Each Receivable included as an Eligible Receivable in the calculation of the Net Receivables Pool Balance as of any date was an Eligible Receivable, and the Net Receivables Pool Balance as of such date was properly calculated  in  accordance  with  the  definition  thereof  (including  with  respect  to  applicable adjustments  relating  to  the  calculation  of  Outstanding  Balances  or  Excess  Concentration Amounts).              (l)   Borrowing Base Deficit .  No Borrowing Base Deficit exists.               (m)   No  Termination  Event .  No event has occurred and is continuing and no condition exists which constitutes a Termination Event or a Potential Termination Event or if either such event has occurred, the Transferor has notified the Administrative Agent in writing of either such event immediately upon learning of the occurrence thereof, describing the same and if applicable, the steps being taken by the Person(s) affected with respect thereto.              (n)   Not   an   Investment   Company .   The  Transferor  is  not  an  "investment  company" registered or required to be registered under the Investment Company Act, and is not a  "covered fund" under Section 13 of the U.S. Bank Holding Company Act of 1956, as amended,  and the applicable rules and regulations thereunder (the "Volcker Rule "). In determining that it is not a "covered fund" under the Volcker Rule, although other exemptions or exclusions under the Investment Company Act may apply, the Transferor relies on the exemption from the definition of "investment company" set forth in Section 3(c)(5) of the Investment Company Act and does not rely solely on the exemption from the definition of "investment company" set forth in Section 3(c)(1) and/or 3(c)(7) of the Investment Company Act.              (o)   ERISA .  The Transferor and each of its ERISA Affiliates is in compliance in all material respects with ERISA and no ERISA lien exists on any of the Receivables.  The Transferor is not aware of any judgment lien or tax lien filings against the Transferor that have not been addressed in a manner consented to in writing by the Administrative Agent and each                                       98 70  Redline                                       41 

 

Class  Agent  except  for  liens  that,  individually  or in  the  aggregate,  could  not  reasonably  be expected to have a Material Adverse Effect.              (p)   Lock-Box   Accounts .   The  names  and  addresses  of  all  the  Lock-Box Banks, together with the account numbers of the Lock-Box Accounts at such Lock-Box Banks, are  specified  in  Schedule   II   hereto  (or  at  such  other  Lock-Box  Banks  and/or  with  such  other Lock-Box Accounts as have been notified to the Administrative Agent and for which Lock-Box Agreements  have  been  executed  in  accordance  with  Section  4.02  hereof  and delivered to the  Collection Agent).  All Obligors and Financing Parties have been instructed to make payment to  a Lock-Box Account and only Collections are deposited  into  the  Lock-Box  Accounts.   Each  Lock-Box  Account  is  a  "deposit  account"  within  the meaning  of  the  applicable  UCC,  the  Administrative  Agent  has  "control"  over  such  Lock-Box  Account  within  the  meaning  of  the  applicable UCC, and (other than De Minimis Tax Liens that are released within ninety (90) days  of discovery thereof by the applicable Originator) there are no Adverse Claims in respect of any  Lock-Box Accounts or in respect of any amounts on deposit therein.               (q)   Nonconsolidation .   The  Transferor  is  operated in such manner that the separate corporate existence of the Transferor, on the one hand, and Tech Data or any Affiliate thereof, on the other hand, shall not be disregarded and, without limiting the generality of the foregoing:                     (i)   the Transferor is a limited purpose corporation whose activities are        restricted in its Certificate of Incorporation to activities related to purchasing or otherwise        acquiring  receivables  and  related  property  (including  the  Pool  Receivables  and  the        Related Security) and related assets and rights and conducting any related or incidental        business or activities it deems necessary or appropriate to carry out its primary purpose,        including entering into agreements like the Transaction Documents;                    (ii)  the Transferor has not engaged, and does not presently engage, in       any activity other than those activities expressly permitted hereunder and under the other       Transaction Documents, nor has the Transferor entered into any agreement other than this       Agreement, the other Transaction Documents to which it is a party, and with the prior       written consent of each Class Agent and the Administrative Agent, any other agreements       necessary to carry out more effectively the provisions and purposes hereof or thereof;                    (iii) (A) the Transferor maintains its own deposit account or accounts,       separate from those of any of its Affiliates, with commercial banking institutions, (B) the       funds  of  the  Transferor  are  not  and  have  not  been  diverted to any other Person or for       other than the corporate use of the Transferor (subject to the following clause  (C) ) and        (C), except as may be expressly permitted by this Agreement or the other Transaction        Documents, the funds of the Transferor are not and have not been commingled with those        of any of its Affiliates;                     (iv)  to  the  extent  that  the  Transferor  contracts  or does  business  with        vendors or service providers where the goods and services provided are partially for the        benefit of any other Person, the costs incurred in so doing are fairly allocated to or among                                      98 70  Redline                                       42 

 

      the Transferor and such entities for whose benefit the goods and services are provided,       and each of the Transferor and each such entity bears its fair share of such costs; and all       material transactions between the Transferor and any of its Affiliates shall be only on an       arm's-length basis;                    (v)   the Transferor maintains a principal executive and administrative       office through which its business is conducted and a telephone number and stationery, if       any, through which all business correspondence and communication  are  conducted,  in       each case separate from those of Tech Data and its Affiliates;                    (vi)  the  Transferor  conducts  its  affairs  strictly  in  accordance  with  its       certificate  of  incorporation  and  observes  all  necessary,  appropriate  and  customary       corporate  formalities,  including  (A)  holding  all  regular  and  special  stockholders'  and       directors'  meetings  appropriate  to  authorize  all  corporate  action  (which,  in  the  case  of       regular  stockholders'  and  directors'  meetings,  are held  at  least  annually),  (B)  keeping       separate and accurate minutes of such meetings, (C) passing all resolutions or consents       necessary  to  authorize  actions  taken  or  to  be  taken,  and  (D)  maintaining  accurate  and       separate books, records and accounts, including intercompany transaction accounts;                    (vii) all decisions with respect to its business and daily operations are       independently  made  by  the  Transferor  (although  the officer  making  any  particular       decision may also be an employee, officer or director of an Affiliate of the Transferor)       and are not dictated by any Affiliate of the Transferor;                    (viii) the Transferor acts solely in its own corporate name and through       its  own  authorized  officers  and  agents,  and  no  Affiliate  of  the  Transferor  shall  be       appointed to act as its agent, except as expressly contemplated by this Agreement;                    (ix)  no  Affiliate  of  the  Transferor  advances  funds  to  the  Transferor,       other than as is otherwise provided herein or in the other Transaction Documents, and no       Affiliate  of  the  Transferor  otherwise  supplies  funds  to,  or  guaranties  debts  of,  the       Transferor; provided , however , that an Affiliate of the Transferor may provide funds or       other assets to the Transferor in connection with the capitalization of the Transferor;                    (x)   other  than  organizational  expenses  and  as  expressly  provided       herein  and  in  the  other  Transaction  Documents,  the Transferor  pays  all  expenses,       indebtedness and other obligations incurred by it;                    (xi)  the Transferor does not guarantee, and is not otherwise liable, with       respect to any obligation of any of its Affiliates;                    (xii) any  financial  reports  required  of  the  Transferor  comply  with       generally  accepted  accounting  principles  and  are  issued  separately  from,  but  may  be       consolidated with, any reports prepared for any of its Affiliates;                                        98 70  Redline                                       43 

 

                  (xiii) at all times the Transferor is adequately capitalized to engage in       the transactions contemplated in its certificate of incorporation;                    (xiv) the financial statements and books and records of the Transferor       and Tech Data reflect the separate corporate existence of the Transferor;                    (xv)  the Transferor does not act as agent for Tech Data or any Affiliate       thereof, but instead presents itself to the public as a corporation separate from each such       member  and  independently  engaged  in  the  business  of  purchasing  and  financing  the       Receivables;                    (xvi) the  Transferor  maintains  a  three-person  board of  directors,       including at least one independent director, as provided  in  its  certificate  or  articles  of       incorporation; provided  that it will not be a breach of this clause if the Transferor fails to        have  an  independent  director  as  a  result  of  the  death,  disability,  or  incapacity  of  the        existing independent director or the failure of such director to satisfy the criteria for an        independent  director  set  forth  in  its  certificate  or  articles  of  incorporation  if  the        Transferor  promptly  notifies  the  Administrative  Agent  of  such  death,  disability,        incapacity or failure and appoints a new independent director reasonably acceptable to        the Administrative Agent; and                     (xvii) the  certificate  of  incorporation  of  the  Transferor  requires  the        affirmative vote of the independent director before a voluntary petition under Section 301        of the Bankruptcy Code may be filed by the Transferor, and the Transferor to maintain        correct and complete books and records of account and minutes of the meetings and other        proceedings of its stockholders and board of directors.               (r)   Opinions .  The facts regarding the Transferor, the Collection Agent, each Originator,  the  Pool  Receivables,  the  Related  Security  and  the  related  matters  set  forth  or assumed  in  the  opinions  of  Cleary  Gottlieb  Steen  & Hamilton  LLP  relating  to  true  sale  and substantive  non-consolidation  matters,  delivered  in  connection  with  this  Agreement  and  the Transaction Documents as of the Amendment Date, are true and correct in all material respects.               (s)   Compliance   with   Credit   and   Collection   Policy .   The  Transferor  has  complied in all material respects with the applicable Credit and Collection Policy with regard to  each Pool Receivable and the related Contract, and has not made any material changes to such  Credit and Collection Policy, except such material change as to which the Administrative Agent  has been notified.               (t)   Accounting .   The  manner  in  which  the  Transferor  or  any  Originator accounts for the transactions contemplated by this Agreement, the Purchase Agreement or the Originator  Sale  Agreement,  as  applicable,  does  not jeopardize  the  true  sale  or  absolute conveyance analysis of any sales of Pool Receivables by (i) any Originator to the Seller pursuant to the Originator Sale Agreement or (ii) by the Seller to the Transferor pursuant to the Purchase Agreement.                                      98 70  Redline                                       44 

 

            (u)   Anti-Corruption   Laws   and   Sanctions;   Use   of   Proceeds .   The  Transferor  has  conducted  its  businesses  in  material  compliance  with  Anti-Corruption  Laws  and  has  instituted and maintained policies and procedures designed to promote and achieve compliance  with  such  laws.  Neither  the  Transferor  nor,  to  the knowledge  of  the  Transferor,  any  director,  officer or Affiliate thereof, is a Sanctioned Person.  No proceeds obtained under this Agreement  or  the  transactions  contemplated  hereby  have  been  (i)  directly  or  indirectly  used,  or  made  available  to  any  individual  or  entity,  in  any  manner  that  would  result  in  a  violation  by  any  individual  or  entity (including   any   individual   or   entity   participating   in   the   transactions contemplated  by  the  Transaction  Documents,  whether  as  Administrative  Agent,  a  Class  Agent,  a Class  Investor  or  otherwise)  of Sanctions or (ii) directly or indirectly used for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, or  would  create  a  material  breach  of  other  similar anti-corruption  legislation  in  other jurisdictions.              (v)   Ordinary  Course  of  Business .  Each payment made by or on behalf of the  Transferor to the Credit Parties under this Agreement will have been (i) in payment of a debt  incurred by the Transferor in the ordinary course of business or financial affairs of the Transferor  and (ii) made in the ordinary course of business or financial affairs of the Transferor.               (w)   Solvency .  The Transferor is Solvent.              (x)   Nature  of  Receivables .  Each Receivable is an "eligible asset" as defined in Rule 3a-7 under the Investment Company Act.              (y)   Interests   in   Transferor .   The  Transferor  is  a  consolidated  subsidiary  of Tech  Data  under  GAAP.   As  of  the  Amendment  Date,  the  Transferor  does  not  have  any securities or other interests issued or outstanding other than the equity interests in the Transferor owned by Tech Data and the Loans made under this Agreement.  Any document, instrument, certificate or notice delivered to any Class Investor hereunder shall be  deemed  a  representation and warranty by the Transferor to the extent that such document, instrument,  certificate  or  notice  contains  any  statement  of  fact,  which  shall  not  include forward-looking statements.        SECTION 6.02   Representations  and  Warranties  of  the  Collection  Agent .  Tech Data,  as the Collection Agent, represents and warrants as of the Amendment Date, as of each day on  which a Credit Extension or Reinvestment or Cash Pooling Transfer shall have occurred and as  of each Settlement Date occurring prior to the Final Payout Date or the Termination Date:               (a)   Corporate   Existence;   Compliance   with   Law .   Tech  Data  (i)  is  a  corporation  duly  organized,  validly  existing  and  in  good  standing  under  the  laws  of  its  jurisdiction  of  incorporation,  (ii)  has  all  corporate  power  and  all  governmental  licenses,  authorizations, consents and approvals required to carry on its business in each jurisdiction in  which its business is now conducted, and (iii) is in compliance with all Applicable Law, except,                                       98 70  Redline                                       45 

 

in the case of clauses  (ii)  and  (iii) , where the failure to do so would not have a Material Adverse  Effect.               (b)   Corporate   and   Governmental   Authorization;   Contravention .   The execution, delivery and performance by Tech Data of each Transaction Document to which Tech Data  is  a  party  are  within  Tech  Data's  corporate  powers,  have  been  duly  authorized  by  all necessary corporate action, require no action by or in respect of, or filing with, any Official Body or  official  thereof  (except  for  the  filing  of  UCC  financing  statements  in  connection  with  the Purchase  Agreement),  and  do  not  contravene,  or  constitute  a  default  under,  any  provision  of Applicable  Law  or  of  the  certificate  of  incorporation  or  bylaws  of  Tech  Data  or  of  any agreement, judgment, injunction, order, decree or other instrument binding upon Tech Data or result in the creation or imposition of any Adverse Claim on the assets of Tech Data or any of its Subsidiaries.              (c)   Binding   Effect .   Each  Transaction  Document  to  which  Tech  Data  is a  party constitutes the legal, valid and binding obligation of Tech Data, enforceable in accordance  with their respective terms, subject to applicable bankruptcy, insolvency, moratorium or other  similar laws affecting the rights of creditors.               (d)  Accuracy  of  Information .  All information heretofore furnished by Tech Data to the Transferor, any Class Agent, any Class Investor or the Administrative Agent pursuant to any provision of this Agreement or any other Transaction Document was, at the time the same were so furnished, true and accurate in every material respect.              (e)   Tax   Status .   Tech  Data  has  filed  all  federal,  state  and  other  tax  returns  required  to  be  filed  and  has  paid  or  made  adequate provision  for  the  payment  of  all  taxes,  assessments  and  other  governmental  charges  shown  thereon,  except  (i)  such  items  which  are  being  or  will  promptly  be  contested  in  good  faith  by  appropriate  proceedings  diligently  conducted and for which adequate reserves have been provided in accordance with GAAP, or (ii)  where a failure to file a return or pay a tax would not, individually or in the aggregate, materially  adversely affect the ability of Tech Data or the Transferor to perform its obligations under this  Agreement.               (f)   Action,  Suits .  Except as disclosed in the Exchange Act Reports, there are  no actions, suits or proceedings pending, or to the knowledge of Tech Data threatened, against or  affecting  Tech  Data  or  any  of  its  Subsidiaries  or  their  respective  properties,  in  or  before  any  court, arbitrator or other body, which may materially adversely affect the financial condition of  Tech Data and its Subsidiaries taken as a whole or materially adversely affect the ability of Tech  Data to perform its obligations under this Agreement.               (g)   Opinions .  The facts regarding the Collection Agent, its relationship with its Affiliates and the transfer of Pool Receivables and the Related Security contemplated by this Agreement and the other Transaction Documents set forth or assumed in the opinions of Cleary Gottlieb Steen & Hamilton LLP relating to true sale and substantive non-consolidation matters, delivered  in  connection  with  this  Agreement  and  the  Transaction  Documents  as  of  the Amendment Date, are true and correct in all material respects.                                      98 70  Redline                                       46 

 

            (h)   Credit   and   Collection   Policy .  Since June 24, 2016, there have been no  material  changes  in  Tech  Data's  Credit  and  Collection  Policy;  since  such  date,  no  material  adverse change has occurred in the overall rate of collection of the Receivables.               (i)   Collections   and   Servicing .   Since  June  24,  2016,  there  has  been  no material adverse change in the ability of Tech Data to service and collect the Receivables.              (j)   Place   of   Business .  The principal place of business and chief executive office of Tech Data are located at the address of Tech Data indicated in Section 13.02 hereof and  the offices where Tech Data keeps all its Records, are located at the address(es) described on  Schedule   IV  or such other locations notified to the Administrative  Agent  in  accordance  with Section   7.03(m )  hereof  in  jurisdictions  where  all  action  required  by  Sections   4.01   and  4.02 hereof has been taken and completed.              (k)   Offices;  Legal  Name .  Tech Data's sole jurisdiction of organization is the  State of Florida and it is a "registered organization" within the meaning of the Florida UCC.  The  legal name of Tech Data is Tech Data Corporation.               (l)   No  Termination  Event .  No event has occurred and is continuing and no condition exists which constitutes a Termination Event or a Potential Termination Event or if either such event has occurred, Tech Data has notified the Administrative Agent in writing of either such event immediately upon learning of the occurrence thereof, describing the same and if applicable, the steps being taken by the Person(s) affected with respect thereto.              (m)   Not  an  Investment  Company .  Tech Data is not an "investment company" registered or required to be registered under the Investment Company Act.              (n)   ERISA .  Tech Data is in compliance in all material respects with ERISA  and  no  lien  exists  in favor of the Pension Benefit Guaranty  Corporation  on  any  of  the  Pool  Receivables.               (o)   Anti-Corruption  Laws  and  Sanctions;  Use  of  Proceeds .  Tech Data and its  Subsidiaries have conducted their businesses in material compliance with Anti-Corruption Laws  and have instituted and maintained policies and procedures  designed  to  promote  and  achieve  compliance with such laws. Neither Tech Data, nor any of its Subsidiaries, nor, to the knowledge  of  Tech  Data  and  its  Subsidiaries,  any  director,  officer  or  Affiliate  thereof,  is  a  Sanctioned  Person.  No  proceeds  obtained  under  this  Agreement  or  the  transactions  contemplated  hereby  have been (i) directly or indirectly used, or made available to any individual or entity, in any  manner that would result in a violation by any individual or entity (including  any  individual  or entity  participating  in  the  transactions  contemplated  by  the  Transaction  Documents,  whether  as Administrative  Agent,  a  Class  Agent,  a  Class  Investor  or  otherwise)  of Sanctions or (ii) directly  or  indirectly  used  for  any  purpose  which  would  breach  the  United  States  Foreign  Corrupt  Practices  Act  of  1977,  the  UK  Bribery  Act  2010,  or would  create  a  material  breach  of  other  similar anti-corruption legislation in other jurisdictions.                                       98 70  Redline                                       47 

 

                                 ARTICLE VII                                   COVENANTS        SECTION 7.01   Affirmative   Covenants   of   the   Transferor .   At  all  times  from  the Amendment Date until the Final Payout Date:              (a)   Payment   of   Principal   and   Interest .   The  Transferor  shall  duly  and  punctually pay Capital, Interest, Fees and all other amounts payable by the Transferor hereunder  in accordance with the terms of this Agreement.               (b)   Reports .  The Transferor shall deliver to the Administrative Agent and  each Class Agent:                     (i)   Annual  Reporting .  Within ninety-five (95) days after the close of       each of its fiscal years, for itself unaudited balance sheets as at the close of such fiscal       year and profit and loss statements for the period from the beginning of such fiscal year       to the end of such fiscal year, all certified by one of its Responsible Officers.                    (ii)  Quarterly  Reporting .  Within fifty (50) days after the close of the       first three quarterly periods of each of its fiscal years, for itself unaudited balance sheets       as at the close of each such period and profit and loss statements and for the period from       the beginning of such fiscal year to the end of such quarter, all certified by one of its       Responsible Officers.                    (iii) Periodic   Reports .   Periodic  Reports  in  accordance  with  Section       3.03.                    (iv)  Compliance  Certificate .  Within ninety-five (95) days of the close        of each of its fiscal years and within fifty (50) days of the close of each of the first three        fiscal quarters of each of its fiscal years, a compliance certificate signed by one of its        Responsible Officers stating that no Termination Event or Potential Termination Event        exists,  or  if  any  Termination  Event  or  Potential  Termination  Event  exists,  stating  the        nature and status thereof.                     (v)   Notice   of   Termination   Events   or   Potential   Termination   Events .       Promptly upon (but in any event within two (2) Business Days of) a Responsible Officer       of  the  Transferor  learning  of  the  occurrence  of  any  Termination  Event  or  Potential       Termination Event, a statement of the chief financial officer or chief accounting officer of       the Transferor setting forth details of such Termination Event or Potential Termination       Event and the action which the Transferor proposes to take with respect thereto.                     (vi)  Change  in  Credit  and  Collection  Policy .  Within fifteen (15) days        after the date any material change in or amendment to a Credit and Collection Policy is                                       98 70  Redline                                       48 

 

      made, a copy of the Credit and Collection Policy then in effect indicating such change or       amendment.                    (vii) ERISA .  Promptly after the filing or receiving thereof, copies of all       reports  and  notices  with  respect  to  any  "reportable  event"  (as defined in Article IV of       ERISA) which the Transferor, Tech Data or any domestic Affiliate of the Transferor files       under  ERISA  with  the  Internal  Revenue  Service,  the Pension  Benefit  Guaranty       Corporation or the U.S. Department of Labor or which the Transferor, Tech Data or any       domestic  Affiliates  of  the  Transferor  receives  from  the  Internal  Revenue  Service,  the       Pension Benefit Guaranty Corporation or the U.S. Department of Labor.                    (viii) Other   Information .   Such  other  information  (including        non-financial  information)  as  the  Administrative  Agent  or  any  Class  Agent  may  from        time to time reasonably request.               (c)   Conduct   of   Business .   The  Transferor  will  carry  on  and  conduct  its  business in substantially the same manner and in substantially the same fields of enterprise as it  is presently conducted and do all things necessary to remain duly incorporated, validly existing  and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain  all  requisite  authority  to  conduct  its  business  in each  jurisdiction  in  which  its  business  is  conducted.               (d)   Compliance  with  Laws .  The Transferor will comply in all respects with all Applicable Law, except in such instances in which the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.              (e)   Furnishing  of  Information  and  Inspection  of  Records .  The Transferor will furnish to the Administrative Agent from time to time such information with respect to the Pool Receivables as the Administrative Agent may reasonably request, including, without limitation, listings  identifying  the  Obligor  and  the  Outstanding  Balance  for  each  Pool  Receivable.   The Transferor will at any time and from time to time during regular business hours upon forty-eight (48) hours prior written notice, permit the Administrative Agent, or its agents or representatives, (i) to examine and make copies of and abstracts from all Records and (ii) to visit the offices and properties  of  the  Transferor  or  Tech  Data,  as  applicable,  for  the  purpose  of  examining  such Records, and to discuss matters relating to the Pool Receivables or the Transferor's performance hereunder with any of the officers, directors, employees or independent public accountants of the Transferor having knowledge of such matters.              (f)   Keeping  of  Records  and  Books  of  Account .  The Transferor 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 daily identification of each new Receivable and all Collections of and adjustments to each existing Receivable); provided , that the Transferor shall not be required to keep and maintain such records with respect to any Receivables for a period of more than                                      98 70  Redline                                       49 

 

sixty (60) days after such Receivables shall have been paid in full by the Obligors thereof.  The Transferor will give the Administrative Agent notice of any material change in the administrative and operating procedures referred to in the previous sentence.               (g)   Performance   and   Compliance   with   Receivables   and   Contracts .   The  Transferor will at its expense timely and fully perform and comply in all material respects with  all provisions, covenants and other promises required to be observed by it under the Contracts  related to the Pool Receivables, if any.              (h)   Credit  and  Collection  Policies .  The Transferor will comply in all material respects with the applicable Credit and Collection Policy in regard to each Pool Receivable and the related Contract.              (i)   Collections .  The Transferor shall instruct, or cause to be instructed, all  Obligors and Financing Parties to cause all Collections to be deposited directly to a Lock-Box  Account.               (j)   Collections   Received   by   Transferor .  The Transferor shall hold in trust,  and deposit, immediately, but in any event not later  than  forty-eight  (48)  hours  of  its  receipt  thereof,  to  a  Lock-Box  Account  all  Collections  received from time to time by the Transferor  (including without limitation, in the case of the Transferor, all Deemed Collections).               (k)   Sale   Treatment .   The  Transferor  shall  not  (i)  account  for  (including  for  accounting and tax purposes), or otherwise treat, the transactions contemplated by the Purchase  Agreement  in  any  manner  other  than  as  a  sale,  contribution  or  other  absolute  conveyance  of  Receivables  and  related  property by Tech Data to the Transferor, or (ii) treat the transactions  contemplated hereby in any manner other than as a financing by the Class Investors secured by a  lien on the Collateral in favor of the Administrative Agent on behalf of the Secured Parties.  In  addition the Transferor shall disclose (in a footnote or otherwise) in all of its financial statements  (including  any  such  financial  statements  consolidated  with  any  other  Persons'  financial  statements) the existence and nature of the transaction contemplated hereby and by the Purchase  Agreement and the interest of the Transferor (in the case of Tech Data's financial statements) and  the Administrative Agent, on behalf of the Secured Parties, in the Collateral.               (l)   Organizational   Documents .   The  Transferor  shall  only  amend,  alter, change  or  repeal  its  Certificate  of  Incorporation  with  the  prior  written  consent  of  the Administrative Agent and each Class Agent.              (m)   Minimum    Net   Worth .  The Transferor shall at all times maintain a net worth in accordance with GAAP which is not less than an amount equal to the greatest of (A) the sum of (i) the outstanding balance of all Defaulted Receivables at such time, (ii) the Outstanding Balance of all Delinquent Receivables at such time and (iii) the sum of the Outstanding Balance of the three largest Receivables of the non-investment grade Obligors, (B) the Required Capital Amount and (C) 7.5% of the Facility Limit.                                       98 70  Redline                                       50 

 

            (n)   Legends .   At  all  times  from  and  after  the  Amendment  Date  (and  with respect to the Pool Receivables for which AVT TS is the Originator, within two (2) months of the Amendment Date), the Transferor shall cause each and every (a) electronic representation of any Pool Receivable (whether in disk, tape or other medium), as well as any paper printout of any  such  electronic  records,  to  be  clearly  marked  with  the  following  legend:  "ANY PROSPECTIVE  PURCHASER  OF  THE  ACCOUNTS  DESCRIBED  HEREIN  OR  ANY SECURED  PARTY  WITH  RESPECT  THERETO  IS  HEREBY  NOTIFIED  THAT  AN INTEREST IN THESE ACCOUNTS HAS BEEN SOLD OR TRANSFERRED TO A THIRD PARTY LENDER, PURCHASER OR SECURED PARTY." and (b) original physical copy of each Contract with respect to any Pool Receivable constituting "chattel paper" or an "instrument" within the meaning of Article 9 of the UCC to be clearly  marked with the following legend: "ANY  PROSPECTIVE  PURCHASER  OF  THE  CHATTEL  PAPER  OR        INSTRUMENT REPRESENTED  HEREBY  OR  ANY  SECURED  PARTY  WITH  RESPECT  THERETO  IS HEREBY NOTIFIED THAT AN INTEREST IN THIS CHATTEL PAPER OR INSTRUMENT HAS BEEN SOLD OR TRANSFERRED TO A THIRD PARTY LENDER, PURCHASER OR SECURED PARTY." In each case, such legend shall be in bold, in type face at least as large as 10 point and shall be entirely in capital letters.              (o)   Insurance .  The Transferor will maintain or cause to be maintained with financially sound and reputable insurers, insurance with respect to its properties and business, against loss or damage of the kinds customarily insured against by reputable companies in the same  or  similar  businesses,  such  insurance  to  be  of  such  types  and  in  such  amounts  as  is customary for such companies under similar circumstances; provided , however , that in any event the  Transferor  shall  use  its  best  efforts  to  maintain,  or  cause  to  be  maintained,  insurance  in amounts and with coverages not materially less favorable to the Transferor as in effect on the Amendment Date.              (p)   Compliance  with  Anti-Corruption  Laws .  The Transferor will conduct its  business  in  material  compliance  with  Anti-Corruption  Laws  and  maintain  policies  and  procedures designed to promote and achieve compliance with such laws.               (q)   Notices .  The Transferor (or the Collection Agent on its behalf) will notify  the  Administrative  Agent  and  each  Class  Agent  in  writing  of  any  of  the  following  events  promptly upon (but in no event later than two (2) Business Days after) a Responsible Officer  learning of the occurrence thereof, with such notice describing the same, and if applicable, the  steps being taken by the Person(s) affected with respect thereto:                     (i)   Notice   of   Termination   Events .   A  statement  of  a  Responsible       Officer  of  the  Transferor  describing  any  Termination  Event  or  Potential  Termination       Event that has occurred and is continuing and the action, if any, which the Transferor       proposes to take with respect thereto.                    (ii)  Litigation .  The institution of any litigation, arbitration proceeding       or  governmental  proceeding  against  the  Transferor, the  Collection  Agent  or  any                                       98 70  Redline                                       51 

 

      Originator, which with respect to any Person other than the Transferor, would reasonably       be expected to have a Material Adverse Effect.                    (iii) Adverse  Claim .  Any Person shall obtain an Adverse Claim upon       the Collateral or any portion thereof (including with respect to any Lock-Box, Lock-Box       Account and any Collections).                    (iv)  Name  Changes .  At least thirty (30) days (or such shorter period       agreed to by the Administrative Agent in writing) before any change in any Originator's       or the Transferor's name, jurisdiction of organization, place of business or, if more than       one,  chief  executive  office,  or  any  office  where  Records  are kept or any other change       requiring  the  amendment  of  UCC  financing  statements,  a  notice  setting  forth  such       changes and the proposed effective date thereof.                    (v)   Change   in   Accounting   Policy .   Any  material  change  in  any        accounting policy of the Transferor or any Originator that would reasonably be expected        to  affect  the  transactions  contemplated  by  this  Agreement  or  any  other  Transaction        Document (it being understood that any change to the manner in which any Originator        accounts for the Pool Receivables shall be deemed "material" for such purpose).                     (vi)  Repurchase Event .  Promptly after the occurrence thereof, notice of       the occurrence of a Repurchase Event.                    (vii) Purchase   Agreement   Termination   Event;   Termination   of   Sales       under   Originator   Sale   Agreement .   The  occurrence  of  the  Purchase  Agreement       Termination Event or the termination of any sales of Receivables by any Originator under       the Originator Sale Agreement.                    (viii) Material   Adverse   Effect .   Promptly  after  the  occurrence  thereof,        notice of any occurrence that does or would reasonably be expected to have a Material        Adverse Effect.         SECTION 7.02   Negative   Covenants   of   the   Transferor .   At  all  times  from  the Amendment Date until the Final Payout Date:              (a)   No  Sales,  Liens,  Etc .  Except as otherwise provided herein, the Transferor  will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or, to  the  extent  of  its  knowledge,  suffer  to  exist  any  Adverse  Claim  upon  (or  the  filing  of  any  financing statement) or with respect to (x) any of the Collateral, (y) any inventory or goods, the  sale of which may give rise to a Pool Receivable or any Pool Receivable or related Contract, or  (z) any account which concentrates in a Lock-Box Bank to which any Collections of any Pool  Receivable are sent, or assign any right to receive income in respect thereof.  Notwithstanding  the foregoing, the Transferor may sell, assign (by operation of law or otherwise) or otherwise  dispose of, or create or suffer to exist an Adverse Claim on any (i) goods or inventory held on  consignment solely with respect to the consignor's interest; and (ii) Pool Receivable for which  Transferor has procured credit insurance, all Collections to be received thereon, and all Related                                      98 70  Redline                                       52 

 

Security and Proceeds in respect of or in connection with such insured Pool Receivable, where (a) such credit insurance has paid all or part of the Outstanding Balance of such Pool Receivable; (b) such Pool Receivable (i.e., the portion of such Receivable covered by the credit insurance as well as the portion not covered by such credit insurance) has been written off by the Transferor and the Collection Agent in accordance with the applicable Credit and Collection Policy; and (c) if a Termination Event shall have occurred, the Administrative Agent shall have consented to such release in writing.              (b)   No   Extension   or   Amendment   of   Receivables .   Except  as  otherwise permitted in Article  VIII hereof, the Transferor will not extend, amend or otherwise modify the  terms of any Pool Receivable, or amend, modify or waive any term or condition of any Contract  related thereto.               (c)   No  Change  in  Business  or  Credit  and  Collection  Policy .  The Transferor will  not  engage  in  any  business  other  than  acquiring  accounts  receivable  from  Tech  Data pursuant  to  the  Purchase  Agreement,  financing  such acquisition  pursuant  hereto  and  other activities incidental thereto.  The Transferor will not make any change in a Credit and Collection Policy,  which  change  would  impair  the  collectibility  of  the  Pool  Receivables  in  a  material respect.              (d)   No  Mergers,  Etc .  The Transferor will not (i) consolidate or merge with or into any other Person, or (ii) sell, lease or transfer all or substantially all of its assets to any other person.              (e)   Change  in  Payment  Instructions  to  Obligors .  The Transferor will not add  or terminate any bank as a Lock-Box Bank or any account as a Lock-Box Account to or from  those listed in Schedule  II  hereto or make any change in its instructions to Obligors or Financing  Parties regarding payments to be made to any Lock-Box Account, unless (i) such instructions are  to deposit such payments to another existing Lock-Box Account or (ii) the Administrative Agent  shall have received written notice of such addition, termination or change at least thirty (30) days  prior thereto and the Administrative Agent shall have received a Lock-Box Agreement executed  by each new Lock-Box Bank or an existing Lock-Box Bank with respect to each new Lock-Box  Account, as applicable.               (f)   Deposits   to   Lock-Box   Accounts .   The  Transferor  will  not  deposit  or  otherwise credit, or cause or permit to be so deposited or credited, to any Lock-Box Account  cash  or  cash  proceeds  other  than  Collections  of  Pool  Receivables  or  other  proceeds  of  the  Collateral; provided , that with respect to Collections of Receivables that were repurchased from the Transferor, the Transferor shall have two (2) Business Days to remove any such Collections from the applicable Lock-Box Account.              (g)   Change  of  Name,  Etc.   The Transferor will not change its name, identity  or structure or the location of its chief executive office or its jurisdiction of organization, unless  at least ten (10) days prior to the effective date of any such change the Transferor delivers to the  Administrative  Agent  (i)  such  documents,  instruments  or  agreements,  executed  by  the  Transferor, necessary to reflect such change and to continue the perfection of the Administrative                                      98 70  Redline                                       53 

 

Agent's  security  interests  in  the  Collateral  and  (ii)  new  or  revised  Lock-Box  Agreements executed by the Lock-Box Banks which reflect such change and enable the Administrative Agent to continue to exercise its rights contained in Sections 4.01  and 4.02 hereof.              (h)   Amendment   to   Purchase   Agreement .   The  Transferor  will  not  amend, modify  or  supplement  the  Purchase  Agreement,  the  Originator  Sale  Agreement  or  any  other Transaction Document, or waive any provision thereof, or enter into any consent with respect thereto, in each case except with the prior written consent of the Administrative Agent and the Majority Class Agents; nor shall the Transferor take, or permit the Seller or any Originator to take, any other action under the Purchase Agreement or the Originator Sale Agreement that could have a Material Adverse Effect on the Administrative Agent or any Class Investor or which is inconsistent with the terms of this Agreement.              (i)   Separate  Business;  Nonconsolidation .  The Transferor shall not (i) engage  in any business not permitted by its Certificate of Incorporation as in effect on the Amendment  Date or (ii) conduct its business or act in any other manner which is inconsistent with Section 6.01(q ) or Section  6.01(r ).   The officers and directors of the Transferor (as appropriate) shall make decisions with respect to the business and daily operations of the Transferor independent of and not dictated by Tech Data or any other controlling Person.              (j)   Other   Agreements .   The  Transferor  shall  not  enter  into  any  other  agreements except this Agreement, the other Transaction Documents and the Lease Agreement,  unless the Administrative Agent consents in writing.              (k)   Other Indebtedness .  The Transferor shall not incur any Indebtedness other than  (i)  as  permitted  by  the  Transaction  Documents and  (ii)  Indebtedness  existing  under  the Lease Agreement.              (l)   Anti-Corruption  Laws  and  Sanctions .  The Transferor shall not directly or  indirectly (a) use the proceeds of any Credit Extension for any purpose which would breach the United   States   Foreign   Corrupt   Practices   Act   of   1977   or   the   UK   Bribery   Act   2010,   or   would create  a  material  breach  of  other  similar  anti-corruption  legislation  in  other  jurisdictions or (b) use  the  proceeds  of  any  Credit  Extension,  or  lend,  contribute  or  otherwise  make  available  such proceeds  to  any  individual  or  entity,  to  fund  any  activities  of  or  business  with  any  individual  or entity,  or  in  any  country  or  territory,  that,  at  the  time  of  such  funding,  is  a  Sanctioned  Person  or  a Sanctioned  Country,  or  in  any  other  manner,  in  each  case  as  would  result  in  a  violation  by  any individual   or   entity   (including   any   individual   or   entity   participating   in   the   transactions contemplated  by  the  Transaction  Documents,  whether  as  Administrative  Agent,  a  Class  Agent,  a Class Investor or otherwise) of Sanctions.              (m)   Other   Interests .   The  Transferor  shall  not  during  the  term  of  this Agreement  issue  any  securities  or  other  interests  except with the prior written consent of the Administrative Agent and each Class Agent.        SECTION 7.03   Affirmative   Covenants   of   Tech   Data .   At  all  times  from  the  Amendment Date until the Final Payout Date:                                      98 70  Redline                                       54 

 

            (a)   Financial   Reporting .   Tech  Data  will  maintain,  for  itself,  a  system  of  accounting  established  and  administered  in  accordance  with  generally  accepted  accounting  principles, and furnish to the Administrative Agent (who shall forward such information to the  Class Agents):                     (i)   Annual  Reporting .  Within  ninety-five (95) days after the close of        each  of  its  fiscal  years,  an  audit  report  certified  by  independent  certified  public        accountants prepared in accordance with generally accepted accounting principles on a        consolidated and consolidating basis (consolidating statements need not be certified by        such accountants) for itself including balance sheets as of the end of such period, and the        related consolidated and consolidating statements of income or operations, shareholders'        equity and cash flows for such fiscal year, which report shall be prepared in accordance        with  generally  accepted  auditing  standards  and  shall  not  be  subject  to  any  "going        concern"  or  like  qualification  or  exception  or  any qualification  or  exception  as  to  the        scope  of  such  audit.  For  the  purposes  of  the  foregoing,  Tech  Data  shall  appoint        independent certified public accountants of nationally recognized standing.                     (ii)  Quarterly  Reporting .  Within fifty (50) days after the close of the       first  three  quarterly  periods  of  each  of  its  fiscal  years,  for  itself  consolidated  and       consolidating  unaudited  balance  sheets  as  at  the  close  of  each  such  period  and       consolidated and consolidating statements of income or operations, shareholders' equity       and cash flows for the period from the beginning of such fiscal year to the end of such       quarter, all certified by one of its Responsible Officers.                     (iii) Compliance   Certificate .  Together  with  the  financial  statements        required  hereunder,  a  compliance  certificate  signed by one of its Responsible Officers        stating  that  no  Termination  Event  or  Potential  Termination  Event  exists,  or  if  any        Termination Event or Potential Termination Event exists, stating the nature and status        thereof  and  containing  a  computation  of,  and  showing  compliance  with,  each  of  the        financial ratios and restrictions contained in this Agreement.                     (iv)  Periodic   Reports .   Periodic  Reports  in  accordance  with  Section       3.03.                    (v)   Shareholders   Statements   and   Reports .   Promptly  upon  the       furnishing thereof to the shareholders of Tech Data, copies of all financial statements,       reports and proxy statements so furnished and not otherwise required to be delivered to       the Administrative Agent pursuant hereto.                    (vi)  SEC   Filings .   Promptly  upon  the  filing  thereof,  copies  of  all       registration statements and annual, quarterly, monthly or other regular reports which Tech       Data or any subsidiary files with the Securities and Exchange Commission.                                        98 70  Redline                                       55 

 

                  (vii) Other   Information .   Such  other  information  (including        non-financial  information)  as  the  Administrative  Agent  or  any  Class  Agent  may  from        time to time reasonably request.   Documents required to be delivered pursuant to the foregoing clauses (i), (ii), (v) and (vi)  may be  delivered electronically and if so delivered, shall be deemed to have been delivered on the date  (i) on which Tech Data posts such documents, or provides a link thereto on Tech Data's website,  with notice to the Administrative Agent, (ii) on which such documents are posted on Tech Data's  behalf  on  an  internet  or  intranet  website,  if  any, to  which  each  Class  Investor  and  the  Administrative  Agent  have  access  (whether  a  commercial,  third  party  website  or  whether  sponsored  by  the  Administrative  Agent),  with  notice  to  the  Administrative  Agent  or  (iii)  on  which such documents are available on the EDGAR Database.               (b)   Conduct   of   Business .   Tech  Data  will,  and  will  cause  each  of  its Subsidiaries  to,  carry  on  and  conduct  its  business in  substantially  the  same  manner  and  in substantially  the  same  fields  of  enterprise  as  it  is  presently  conducted  and  to  do  all  things necessary  to  remain  duly  incorporated,  validly  existing  and  in  good  standing  as  a  domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except to the extent that any failure with respect to the foregoing does not have a Material Adverse Effect on the business or operations  of  Tech  Data  or  the  performance  by  Tech Data  under  any  of  the  Transaction Documents.              (c)   Compliance   with   Laws .   Tech  Data  will,  and  will  cause  each  of  its  Subsidiaries to, comply with all Applicable Law, except in such instances in which the failure to  comply therewith could not reasonably be expected to have a Material Adverse Effect.              (d)   Furnishing   of   Information   and   Inspection   of   Records .   Tech  Data  will furnish to the Transferor and the Administrative Agent from time to time such information with respect to the Pool Receivables as the Transferor or the Administrative Agent may reasonably request,  including,  without  limitation,  listings  identifying  the  Obligor  and  the  Outstanding Balance for each Pool Receivable.  Tech Data will at any time and from time to time during regular business hours upon forty-eight (48) hours prior written notice, permit the Administrative Agent, or its agents or representatives, (i) to examine and make copies of and abstracts from all Records and (ii) to visit the offices and properties of Tech Data for the purpose of examining such Records, and to discuss matters relating to Pool Receivables or Tech Data's performance hereunder with any of the officers, directors, employees or independent public accountants of Tech Data having knowledge of such matters.              (e)   Keeping  of  Records  and  Books  of  Account . Tech Data will maintain and  implement administrative and operating procedures (including, without limitation, an ability to  recreate  records  evidencing  Pool  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 Pool Receivables (including, without limitation,  records adequate to permit the daily identification of each new Receivable and all Collections of                                      98 70  Redline                                       56 

 

and  adjustments  to  each  existing  Pool  Receivable); provided ,  that  Tech  Data  shall  not  be  required to keep and maintain such records with respect to any Pool Receivables for a period of  more  than  sixty  (60)  days  after  such  Pool  Receivables  shall  have  been  paid  in  full  by  the  Obligors thereof.  Tech Data will give the Administrative Agent notice of any material change in  the administrative and operating procedures referred to in the previous sentence.              (f)   Performance and Compliance with Receivables and Contracts .  Tech Data, at its expense, will, and will cause each Originator to, timely and fully perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Pool Receivables and all purchase orders and other agreements related to such Pool Receivables.              (g)   Credit   and   Collection   Policies .   Tech  Data  will  comply  in  all  material  respects with the applicable Credit and Collection Policy in regard to each Pool Receivable and  the related Contract.               (h)   Collections .  Tech Data shall instruct all Obligors and Financing Parties to  cause all Collections to be deposited directly to a Lock-Box Account.               (i)   Collections   Received   by   Tech   Data .  Tech Data shall hold in trust, and deposit, immediately, but in any event not later than forty-eight (48) hours of its receipt thereof, to a Lock-Box Account all Collections received from time to time by Tech Data.              (j)   Sale Treatment .  Tech Data shall not account for (including for accounting  and tax purposes), or otherwise treat, the transactions contemplated by the Purchase Agreement  in any manner other than as a sale, contribution or other absolute conveyance of Receivables and  related  property  by  Tech  Data  to  the  Transferor  or the  transactions  contemplated  by  the  Originator  Sale  Agreement  in  any  manner  other than as a sale, contribution or other absolute  conveyance of Receivables and related property by the applicable Originator to Tech Data.               (k)   Legends .   At  all  times  from  and  after  the  Amendment  Date  (and  with respect to the Pool Receivables for which AVT TS is the Originator, within two (2) months of the  Amendment  Date),  the  Collection  Agent  shall  cause  each  and  every  (a)  electronic representation of any Pool Receivable (whether in disk, tape or other medium), as well as any paper printout of any such electronic records, to be clearly marked with the following legend: "ANY PROSPECTIVE PURCHASER OF THE ACCOUNTS DESCRIBED HEREIN OR ANY SECURED  PARTY  WITH  RESPECT  THERETO  IS  HEREBY  NOTIFIED  THAT  AN INTEREST IN THESE ACCOUNTS HAS BEEN SOLD OR TRANSFERRED TO A THIRD PARTY LENDER, PURCHASER OR SECURED PARTY." and (b) original physical copy of each Contract with respect to any Pool Receivable constituting "chattel paper" or an "instrument" within the meaning of Article 9 of the UCC to be clearly  marked  with the following legend: "ANY  PROSPECTIVE  PURCHASER  OF  THE  CHATTEL  PAPER  OR        INSTRUMENT REPRESENTED  HEREBY  OR  ANY  SECURED  PARTY  WITH  RESPECT  THERETO  IS HEREBY NOTIFIED THAT AN INTEREST IN THIS CHATTEL PAPER OR INSTRUMENT HAS BEEN SOLD OR TRANSFERRED TO A THIRD PARTY LENDER, PURCHASER OR                                       98 70  Redline                                       57 

 

SECURED PARTY." In each case, such legend shall be in bold, in type face at least as large as 10 point and shall be entirely in capital letters.              (l)   Compliance   with   Anti-Corruption   Laws .   Tech  Data  will  conduct  its business  in  material  compliance  with  Anti-Corruption  Laws  and  maintain  policies  and procedures designed to promote and achieve compliance with such laws.              (m)   Notices .  The Collection Agent will notify the Administrative Agent and each Class Agent in writing of any of the following events promptly upon (but in no event later than two (2) Business Days after) a Responsible Officer learning of the occurrence thereof, with such notice describing the same, and if applicable, the steps being taken by the Person(s) affected with respect thereto:                    (i)   Notice   of   Termination   Events .   A  statement  of  a  Responsible       Officer  of  the  Collection  Agent  describing  any  Termination  Event  or  Potential       Termination Event that has occurred and is continuing and the action, if any, which the       Collection Agent proposes to take with respect thereto.                    (ii)  Litigation .  The institution of any litigation, arbitration proceeding       or  governmental  proceeding  against  the  Transferor, the  Collection  Agent  or  any       Originator which would reasonably be expected to have a Material Adverse Effect.                    (iii) Adverse  Claim .  Any Person shall obtain an Adverse Claim upon       the Collateral or any portion thereof (including with respect to any Lock-Box, Lock-Box       Account and any Collections).                    (iv)  Name  Changes .  At least thirty (30) days (or such shorter period       agreed to by the Administrative Agent in writing) before any change in any Originator's       or the Transferor's name, jurisdiction of organization, place of business or, if more than       one,  chief  executive  office,  or  any  office  where  Records  are kept or any other change       requiring  the  amendment  of  UCC  financing  statements,  a  notice  setting  forth  such       changes and the proposed effective date thereof.                    (v)   Change   in   Accounting   Policy .   Any  material  change  in  any        accounting policy of the Collection Agent that would reasonably be expected to affect the        transactions contemplated by this Agreement or any other Transaction Document.                     (vi)  Purchase   Agreement   Termination   Event;   Termination   of   Sales       under   the   Originator   Sale   Agreement .   The  occurrence  of  the  Purchase  Agreement       Termination Event or the termination of any sales of Receivables by any Originator under       the Originator Sale Agreement.                    (vii) Material   Adverse   Effect .   Promptly  after  the  occurrence  thereof,        notice of any occurrence that does or would reasonably be expected to have a Material        Adverse Effect.                                       98 70  Redline                                       58 

 

            (n)   Risk   Retention  Compliance   with   EU   Securitization   Regulation .   Tech Data, on behalf of itself and each other Originator, as "originators" for purposes of the Capital Requirements   (Risk   Retention) EU   Securitization   Regulation ,  makes  the  following representations, warranties and covenants for the purpose of permitting certain Credit Parties to comply with the Capital Requirements (Risk Retention) EU Securitization Regulation :                    (i)   For purposes of the Capital   Requirements   (Risk   Retention) EU       Securitization  Regulation , Tech Data has established and is managing the programme or       securitisation  scheme  contemplated  by  this  Agreement  and  the  other  Transaction       Documents.                    (ii)  It  shall  hold  and  maintain,  for  so  long  as  any Loans  are       outstanding, a material net economic interest of not less than five percent (5%) of the       aggregate  outstanding  balance  of  the  Pool  Receivables  (such  interest,  the  "Retained       Interest "),  which  Retained  Interest  takes  the  form  of  a  first  loss position tranche   in       accordance with the text of paragraph 13(d) of Article 405 6 of the CRR EU Securitization       Regulation , represented by Tech Data's ownership of all  of  the an  equity interest in the       Transferor  and  the  associated  indirect  rights  to  residual  cash  flow  under  Section       3.01(b)(ix )  in   an   amount   that   satisfies   the   requirements   in   the   definition   of   Retained       Interest .                    (iii) It shall neither assign nor sell, nor enter into nor permit any of its        affiliates to enter into any credit risk mitigation, short position or any other credit risk        hedge  with  respect  to  the  Retained  Interest  in  a  manner that would be contrary to the       CRR  EU Securitization Regulation .                    (iv)  Tech  Data  shall  at  all  times  own,  directly  or  indirectly,  an  equity       interest   in   the   Transferor   that   satisfies   the   requirements   in   the   definition   of   Retained       Interest.                    (iv v) It shall confirm in each Periodic Report that it continues to comply       with  subsections   (i)   through  (iii)   above,  and  shall  promptly  notify  the  Administrative        Agent and each Class Agent of any failure to so comply with subsections  (i)  through (iii)       above.                    (vvi ) It shall promptly notify the Administrative Agent and each Class       Agent of any change to the form of the Retained Interest.                    (vi)  Subject   to   compliance   with   Applicable   Law,   it   shall   promptly       furnish   to   the   Administrative   Agent   and   each   Class   Agent   such   other   information,       documents,  tapes,  data,  records  or  reports  respecting  the  Pool  Receivables,  the  Collateral       and  the  transactions  contemplated  by  the  Transaction  Documents  as  the  Administrative       Agent   or   such   Class   Agent   may   from   time   to   time   reasonably  request  for  purposes  of       complying with due diligence and monitoring obligations under the Capital Requirements       (Risk Retention).                                      98 70  Redline                                       59 

 

                  (vii) Tech   Data   agrees   that   it   will   comply   with   the   EU   Securitization       Regulation  to  the  extent  applicable  to  it.   Tech  Data  covenants  that  it  shall,  from  time  to       time  upon  request  by  the  Administrative  Agent  or  any  Class  Agent :  (A)  provide  to  the       Administrative   Agent   or   such   Class   Agent,   as   applicable,   all   information   which   it       requests   in   order   for   it   to   comply   with   its   obligations   under   Article   5   of   the   EU       Securitization   Regulation   to   the   extent   that   such   information   is   (i)   in   Tech   Data ’s       possession  and  Tech  Data  can  provide  such  information  in  the  format  requested  by  the       Administrative   Agent   or   any   Class   Agent   using   reasonable   efforts   without   material       expense  or  (ii)  not  in  Tech  Data ’s possession  but  Tech  Data  can  obtain  such  information       using   reasonable   efforts   without   material   expense ;  provided,   that   if   providing   such       information in the format requested or obtaining such information would involve material       expense but the Administrative Agent or such Class Agent, as applicable, agrees to pay it,       then   Tech   Data   shall   provide   or   obtain   such   information;   provided,   further,   that   Tech       Data  shall  not  be  obligated  to  provide  any  information  to  the  extent  that  it  is  restricted       from  disclosure  pursuant  to  a  duty  of  confidentiality  and,  by  using  its  reasonable  efforts,       was   not   able   to   obtain   the   consent   for   the   disclosure   of   such   information;    and   (B)       negotiate  in  good  faith  any  further  agreements,  not  otherwise  provided  for  hereunder,  as       may   be   reasonably   required   by   the   Administrative   Agent   or   such   Class   Agent,   as       applicable,  in  order  to  achieve  compliance  with  any  applicable  obligations  under  the  EU       Securitization  Regulation  in  relation  to  the  Transaction  Documents  and  the  transactions       contemplated hereby.                    (viii) Either   (i)   each   Receivable   has   been,   and   will   be,   originated       pursuant to a sound and well-defined credit granting criteria, and each Originator has, and       shall   maintain,   clearly   established   criteria   and   processes   for   approving,   amending,       modifying,  renewing  and  financing  the  Receivables  ( “Originations  and  Revisions ”) and       each   Originator   has   effective   systems   in   place   to  apply  those  criteria  and  processes  to       ensure   that   any   such   Originations   and   Revisions  are  granted  and  approved  based  on  a       thorough  assessment  of  each  Obligor ’s creditworthiness  or  (ii)  no  Receivable  has  been       originated in the form of a loan.        SECTION 7.04   Negative  Covenants  of  Tech  Data .  At all times from the Amendment  Date until the Final Payout Date:              (a)    No Sales, Liens, Etc .  Except as otherwise provided herein, Tech Data will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or, to the extent of its knowledge, suffer to exist any Adverse Claim upon (or the filing of any financing statement) or with respect to (x) any of the Collateral, (y) any inventory or goods, the sale of which may give rise to a Pool Receivable or any Pool Receivable or related Contract, or (z) any account  which  concentrates  in  a  Lock-Box  Bank  to  which  any  Collections  of  any  Pool Receivable are sent, or assign any right to receive income in respect thereof. Notwithstanding the foregoing, Tech Data may sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist an Adverse Claim on any goods or inventory held on consignment solely with respect to the consignor's interest.                                       98 70  Redline                                       60 

 

            (b)   No   Extension   or   Amendment   of   Receivables .   Except  as  otherwise permitted in Article VIII hereof, Tech Data will not extend, amend or otherwise modify the terms  of any Pool Receivable, or amend, modify or waive any term or condition of any Contract related  thereto.               (c)   No  Change  in  Business  or  Credit  and  Collection  Policy .  Tech Data will not make any change in the character of its business or in a Credit and Collection Policy, which change  would,  in  either  case,  impair  the  collectibility  of  the  Pool  Receivables  in  a  material respect.              (d)   No  Mergers,  Etc .  Tech Data will not (i) consolidate or merge with or into any other Person if such action shall result in a Potential Termination Event or a Termination Event  or  Tech  Data  shall  not  be  the  surviving  entity  or  (ii)  sell,  lease  or  transfer  all  or substantially all of its assets to any other person.               (e)   Change  in  Payment  Instructions  to  Obligors .  Tech Data will not add or  terminate any bank as a Lock-Box Bank or any account as a Lock-Box Account to or from those  listed  in  Schedule   II  hereto or make any change in its instructions to Obligors and Financing  Parties regarding payments to be made to any Lock-Box Account, unless (i) such instructions are  to deposit such payments to another existing Lock-Box Account or (ii) the Administrative Agent  shall have received written notice of such addition, termination or change at least thirty (30) days  prior thereto and the Administrative Agent shall have received a Lock-Box Agreement executed  by each new Lock-Box Bank or an existing Lock-Box Bank with respect to each new Lock-Box  Account, as applicable.               (f)   Deposits  to  Lock-Box  Accounts .  Tech Data will not deposit or otherwise  credit, or cause or permit to be so deposited or credited, to any Lock-Box Account cash or cash  proceeds  other  than  Collections  of  Pool  Receivables  or  other  proceeds  of  the  Collateral;  provided ,  that  with  respect  to  Collections  of  Receivables  that  were  repurchased  from  the  Transferor, Tech Data shall have two (2) Business Days to remove, or cause to be removed, any  such Collections from the applicable Lock-Box Account.               (g)   Change   of   Name,   Etc.   Tech Data will not change its name, identity or  structure or location of its chief executive office or its jurisdiction of organization, unless at least ten (10) days prior to the effective date of any such change Tech Data delivers to the Transferor and the Administrative Agent (i) such documents, instruments or agreements, executed by the Transferor,  as  are  necessary  to  reflect  such  change  and  to  continue  the  perfection  of  the Transferor's  ownership  interest  in  the  Pool  Receivables  and  (ii)  new  or  revised  Lock-Box Agreements  executed  by  the  Lock-Box  Banks  which  reflect  such  change  and  enable  the Administrative Agent on behalf of the Secured Parties to continue to exercise its rights contained in Sections 4.01  and 4.02 hereof.              (h)   Anti-Corruption   Laws   and   Sanctions .   Tech  Data  shall  not  directly  or  indirectly (a) use the proceeds of any Credit Extension for any purpose which would breach the United   States   Foreign   Corrupt   Practices   Act   of   1977   or   the   UK   Bribery   Act   2010,   or   would                                      98 70  Redline                                       61 

 

create  a  material  breach  of  other  similar  anti-corruption  legislation  in  other  jurisdictions or (b) use  the  proceeds  of  any  Credit  Extension,  or  lend,  contribute  or  otherwise  make  available  such proceeds  to  any  individual  or  entity,  to  fund  any  activities  of  or  business  with  any  individual  or entity,  or  in  any  country  or  territory,  that,  at  the  time  of  such  funding,  is  a  Sanctioned  Person  or  a Sanctioned  Country,  or  in  any  other  manner,  in  each  case  as  would  result  in  a  violation  by  any individual   or   entity   (including   any   individual   or   entity   participating   in   the   transactions contemplated  by  the  Transaction  Documents,  whether  as  Administrative  Agent,  a  Class  Agent,  a Class Investor or otherwise) of Sanctions.        SECTION 7.05   Financial Covenants of the Collection Agent .              (a)   Consolidated  Total  Leverage  Ratio . The Collection Agent shall not permit the Consolidated Total Leverage Ratio, as of the last day of each fiscal quarter of the Collection Agent, to be greater than, (i) 4.75 to 1.00 starting with the first fiscal quarter of the Collection Agent ending after the AVT TS Acquisition Closing Date and for the following two full fiscal quarters of the Collection Agent ending after the AVT TS Acquisition Closing Date, (ii) 4.25 to 1.00 for the third and fourth full fiscal quarters of the Collection Agent ending after the AVT TS Acquisition Closing Date, or (iii) 4.00 to 1.00 for the fifth full fiscal quarter of the Collection Agent ending after the AVT TS Acquisition Closing Date and each subsequent fiscal quarter of the Collection Agent.              (b)   Consolidated   Interest   Coverage   Ratio .  The  Collection  Agent  shall  not  permit the Consolidated Interest Coverage Ratio, as of the last day of each fiscal quarter of the  Collection Agent, to be less than 3.00 to 1.00.               (c)   Certain   Defined   Terms .  The following terms used in this Section  7.05  have the following meanings:                     (i)   "Attributable  Indebtedness " means, on any date:  (A) in respect of       any capital lease of any Person, the capitalized amount thereof that would appear on a       balance sheet of such Person prepared as of such date in accordance with GAAP; (B) in       respect  of  any  Real  Estate  Financing  Facility  that is  characterized  as  a  lease,  the       capitalized amount of the remaining lease payments under the relevant lease that would       appear  on  a  balance  sheet  of  such  Person  prepared  in  accordance  with  GAAP  if  such       lease  were  accounted  for  as  a  capital  lease,  calculated  as  of  November  2,  2016,  with       respect to any Real Estate Financing Facility outstanding on November 2, 2016, or the       date  of  the  closing  of  any  Real  Estate  Financing  Facility  entered  into  subsequent  to       November 2, 2016, and recalculated at the time of any refinancing, renewal, increase or       repayment  of  any  Real  Estate  Financing  Facility;  and  (C)  in  respect  of  any  asset       securitization  transaction  of  any  Person,  (1)  the  actual  amount  of  any  unrecovered       investment of purchasers or transferees of assets so transferred, plus (2) in the case of any       other payment, recourse, repurchase, hold harmless, indemnity or similar obligation of       such Person or any of its Subsidiaries in respect of assets transferred or payments made in       respect thereof, other than limited recourse provisions that are customary for transactions       of such type and that neither (x) have the effect of limiting the loss or credit risk of such       purchasers or transferees with respect to payment or performance by the obligors of the                                      98 70  Redline                                       62 

 

      assets so transferred nor (y) impair the characterization of the transaction as a true sale or       absolute  conveyance under applicable laws (including bankruptcy or insolvency laws),       the capitalized amount of such obligation that would appear on a balance sheet of such       Person prepared on such date in accordance with GAAP if such sale or transfer or assets       were accounted for as a secured loan.                    (ii)  "AVT   TS   Acquisition "  means  the  acquisition  by  Tech  Data  of       AVT  TS  from  Avnet,  Inc.  under  the  terms  of  the  that  certain  Interest  Purchase       Agreement,  dated  as  of  September  19,  2016  by  and  between  Avnet,  Inc.  and  the       Collection Agent, together with all schedules and exhibits thereto.                    (iii) "AVT TS Acquisition Closing Date " means February 27, 2017.                    (iv)  "AVT   TS   Acquisition   Transactions "  means  (i)  the  AVT  TS        Acquisition, and (ii) any debt or equity financings incurred or issued in connection with        the AVT TS Acquisition, including under the Collection  Agent  Revolver  or  the  Term        Loan Credit Agreement, dated as of November 2, 2016, as amended by Amendment No.        1, dated as of February 15, 2017, with Bank of America, N.A., as administrative agent, in        each  case,  including  the  incurrence  of  debt  thereunder  on  or  about  the  AVT  TS        Acquisition Closing Date.                     (v)   "Collection   Agent   Revolver "  means  the  Second  Amended  and        Restated  Revolving  Credit  Agreement,  dated  as  of  November  2,  2016,  among  the        Collection Agent, as borrower, each lender from time to time party thereto, and Bank of        America, N.A., as administrative agent, swing line lender, and an L/C issuer, as in effect        on  November  2,  2016  and  without  giving  effect  to  any  subsequent  amendments  or        modifications that have not been consented to in writing by the Administrative Agent and        the Majority Class Agents.                     (vi)  "Consolidated  EBITDA " means, for any period, for the Collection        Agent and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net        Income  for  such period plus the following to the extent  deducted  in  calculating  such        Consolidated  Net  Income:  (A)  Consolidated  Interest Charges  for  such  period,  (B)  the        provision  for  federal,  state,  local  and  foreign  income  taxes  payable  by  the  Collection        Agent  and  its  Subsidiaries  for  such  period,  (C)  the  amount  of  depreciation  and        amortization  expense  for  such  period,  (D)  cash  extraordinary  or  nonrecurring  losses,        expenses, fees and charges (including cash losses, expenses, fees and charges incurred in        connection with any issuance of debt or equity, acquisitions, investments, restructuring        activities, asset sales or divestitures permitted hereunder  and  any  cash  integration  and        restructuring  costs  in  connection  with  the  AVT  TS  Acquisition  Transactions)  not  to        exceed  $160  million  in  the  aggregate  for  all  periods,  (E)  non-cash  stock  based        compensation expense, and (F) other non-recurring expenses of the Collection Agent and        its Subsidiaries reducing such Consolidated Net Income which do not represent a cash        item.                                       98 70  Redline                                       63 

 

                  (vii) "Consolidated   Funded   Indebtedness "  means,  as  of  any  date  of        determination, for the Collection Agent and its Subsidiaries on a consolidated basis, the        sum of (A) the outstanding principal amount of all obligations, whether current or long-        term,  for  borrowed  money  and  all  obligations evidenced  by  bonds,  debentures,  notes,        loan agreements or other similar instruments (which amount, for the avoidance of doubt,        includes only the drawn portion of any line of credit or revolving credit facility), (B) all        purchase  money  Indebtedness,  (C)  all  direct  obligations  arising  under  letters  of  credit        (including standby and commercial), bankers' acceptances, bank guaranties, surety bonds        and similar instruments, (D) all obligations in respect of the deferred purchase price of        property  or  services  (other  than  trade  accounts  payable  in  the  ordinary  course  of        business), (E) all Attributable Indebtedness in respect of capital leases, obligations under        the  Real  Estate  Financing  Facilities  and  asset  securitization  transactions,  (F)  without        duplication,  all  Guarantees  with  respect  to  outstanding  Indebtedness  of  the  types        specified in clauses  (A)  through  (E)  above of Persons other than the Collection Agent or       any Subsidiary, and (G) all Indebtedness of the types referred to in clauses  (A)  through       (F)  above of any partnership or joint venture (other than a joint venture that is itself a        corporation or limited liability company) in which the Collection Agent or a Subsidiary is        a  general  partner  or  joint  venturer,  unless  such  Indebtedness  is  expressly  made  non-        recourse to the Collection Agent or such Subsidiary. "Consolidated Funded Indebtedness"        of a Person shall not include (x) any true sale by such Person of accounts receivable, as        determined in accordance with GAAP, which sale is not, and is not made in connection        with, an obligation under any Real Estate Financing  Facility  or  an  asset  securitization        transaction and (y) any obligation arising under a sale and lease back transaction that is        an operating lease.                     (viii) "Consolidated   Interest   Charges "  means,  for  any  period,  for  the        Collection Agent and its Subsidiaries on a consolidated basis, the sum of (A) all interest,        premium payments, debt discount, fees, charges and related expenses of the Collection        Agent and its Subsidiaries in connection with borrowed money or in connection with the        deferred  purchase  price  of  assets,  in  each  case  to the  extent  treated  as  interest  in        accordance with GAAP, and (B) the portion of rent expense of the Collection Agent and        its Subsidiaries with respect to such period under capital leases that is treated as interest        in accordance with GAAP.                     (ix)  "Consolidated  Interest  Coverage  Ratio " means, as of any date of        determination,  the  ratio  of  (A)  Consolidated  EBITDA  for  the  period  of  the  four  prior        fiscal quarters ending on such date to (B) Consolidated Interest Charges for such four        fiscal quarter period; provided, notwithstanding anything to the contrary herein or in any        other  Transaction  Document,  for  purposes  of  calculating  the  Consolidated  Interest        Coverage Ratio, Consolidated EBITDA will not be calculated on a Pro Forma Basis.                     (x)   "Consolidated  Net  Income " means the consolidated net income of        the Collection Agent and its Subsidiaries, plus or minus minority interest of a Person, and        excluding any other gain or loss or credit of an extraordinary nature, all as determined in        accordance with GAAP.                                      98 70  Redline                                       64 

 

                  (xi)  "Consolidated   Total   Leverage   Ratio "  means,  with  respect  to  any        Test Period the ratio of (A) Consolidated Funded Indebtedness as of the last date of the        applicable Test Period to (B) Consolidated EBITDA for such Test Period.                     (xii) "Existing   Synthetic   Lease   Facility "  means  each  or  any  of  the       following facilities, each as amended, modified, supplemented or amended and restated       from time to time:  (A) Fourth Amended and Restated Lease Agreement dated as of June       27, 2013, between the Collection Agent and SunTrust Equity Funding, LLC; (B) Fourth       Amended and Restated Participation Agreement dated as of June 27, 2013 (the "SunTrust       Participation  Agreement ") between the Collection Agent, SunTrust Equity Funding, LLC       and various banks and lending institutions; and (C) the other Operative Agreements (as       defined in the SunTrust Participation Agreement).                    (xiii) "Pro   Forma   Basis "  means,  for  purposes  of  calculating        Consolidated EBITDA (other than a calculation of Consolidated EBITDA for purposes of        the  Consolidated  Interest  Coverage  Ratio),  any  acquisition  of  (A)  a  controlling  equity        interest in another Person (including the purchase of an option, warrant or convertible or        similar  type  security  to  acquire  such  a  controlling  interest  at  the  time  it  becomes        exercisable by the holder thereof), whether by purchase of such equity interest or upon        exercise of an option or warrant for, or conversion of securities into, such equity interest,        or (B) assets of another Person which constitute all or substantially all of the assets of        such Person or of a line or lines of business conducted by such Person (including, for the        avoidance  of  doubt,  the  AVT  TS  Acquisition)  with  an  aggregate  purchase  price  of        $100,000,000 or more shall be deemed to have occurred as of the first day of the most        recent  four  fiscal  quarter  period  preceding  the  date  of  such  transaction  for  which  the        Collection  Agent  was  required  to  deliver  financial statements  pursuant  to  Section       7.03(a)(i )  or  Section   7.03(a)(ii ).  In  connection  with  the  foregoing,  income  statement        items  attributable  to  the  Person  or  property  acquired  shall  be  included  to  the  extent        relating to any period applicable in such calculation to the extent (A) such items are not        otherwise  included  in  such  income  statement  items  for  the  Collection  Agent  and  its        Subsidiaries in accordance with GAAP or in accordance with any defined terms set forth        in  Section  1.01  or  this  Section   7.05(c )  and  (B)  such  items  are  supported  by  financial        statements or other information reasonably satisfactory to the Administrative Agent.                    (xiv) "Real   Estate   Financing   Facility "  means,  collectively  (A)  the       Existing  Synthetic  Lease  Facility;  (B)  any  successor  to  the  Existing  Synthetic  Lease       Facility  which  refinances  some  or  all  of  the  same  properties  of  the  Borrower  as  the       Existing Synthetic Lease Facility with rates of interest, yield and fees that may increase       or decrease in accordance with then applicable market conditions; and (C) one or more       arrangements that provide financing for any real property of the Collection Agent or its       Subsidiaries, that impose no Adverse Claims other than on the real property financed by       such  arrangements,  which  are  on  such  terms  and  conditions  as  are  reasonable  and       customary  for  such  transactions,  and  which  create  obligations  with  an  Attributable       Indebtedness  of  not  more  than  the  fair  market  value  of  the  properties  so  financed;       provided that any operating lease other than those described in clauses  (A),  (B)  and  (C)                                      98 70  Redline                                       65 

 

      above  shall  not  be  treated  as  a  Real  Estate  Financing  Facility  for  the  purposes  of this       Section 7.05.                    (xv)  "Test   Period "  means,  at  any  date  of  determination,  the  most       recently completed four consecutive fiscal quarters of the Collection Agent ending on or       prior to such date              (d)   Financial  Covenant  Amendments .  If the Collection Agent enters into any  amendment  or  other  modification  to  the  Collection  Agent  Revolver  or  any  successor  or  replacement credit agreement, in each case, that contains or amends any financial covenant, the  Collection  Agent  shall  provide  a  copy  of  such  amendment  or  successor  or  replacement  agreement (each, a "Financial Covenant Amendment ") to the Administrative Agent.  In the event the Administrative Agent determines that the financial covenants contained in this Section  7.05  are less favorable than any financial covenants as amended by, or contained in, any Financial  Covenant Amendment, then if requested by the Administrative Agent, the parties hereto shall  enter into an amendment to this Agreement to make the financial covenants in this Section  7.05  no  less  favorable  (except  as  otherwise  consented  to  by  the  Administrative  Agent)  than  the  financial covenants as amended by, or contained in, such Financial Covenant Amendment.                                   ARTICLE VIII                       ADMINISTRATION AND COLLECTION                                OF RECEIVABLES        SECTION 8.01   Appointment of the Collection Agent .               (a)   The servicing and administering of Collections on the Pool Receivables shall be conducted by the Person so designated from time to time as the Collection Agent in accordance  with  this  Section  8.01.   Tech  Data  is  hereby  designated  as,  and  hereby  agrees  to  perform the duties and obligations of, the Collection Agent pursuant to the terms hereof.  Upon  the occurrence of a Collection Agent Default or a Termination Event, the Administrative Agent  may (with the consent of the Majority Class Agents) and shall (at the direction of the Majority  Class Agents) designate as Collection Agent any Person (including itself) to succeed Tech Data  or  any  successor  Collection  Agent,  on  the  condition  in  each  case  that  any  such  Person  so  designated shall agree to perform the duties and obligations of the Collection Agent pursuant to  the  terms  hereof.   For  the  avoidance  of  doubt,  the Administrative  Agent  shall  not  have  any  obligation to designate itself as, or to become, a successor Collection Agent except in its sole  discretion.               (b)   Upon the designation of a successor Collection Agent as set forth in clause (a)  above, the removed Collection Agent agrees that, to the extent permitted by Applicable Law,  it will terminate its activities as Collection Agent hereunder in a manner that the Administrative  Agent reasonably determines will facilitate the transition of the performance of such activities to  the new Collection Agent, and shall cooperate with and assist such new Collection Agent. Such  cooperation shall, to the extent permitted by Applicable Law, include access to and transfer of  records  (including  all  applicable  Contracts)  related  to  Pool  Receivables  and  use  by  the  new                                      98 70  Redline                                       66 

 

Collection Agent of all licenses (or the obtaining of new licenses), hardware or software, in each case, that are necessary to service the Pool Receivables and the Related Security.               (c)   Tech  Data  acknowledges  that,  in  making  its  decision  to  execute  and deliver this Agreement, the Administrative Agent and each member in each Class have relied on Tech Data's agreement to act as Collection Agent hereunder. Accordingly, Tech Data agrees that it  will  not  voluntarily  resign  as  Collection  Agent without  the  prior  written  consent  of  the Administrative Agent and the Majority Class Agents.              (d)   The  Collection  Agent  may  not  delegate  any  of  its  rights,  duties  or obligations  hereunder,  or  designate  a  substitute  Collection  Agent,  without  the  prior  written consent of the Administrative Agent; provided , that the Collection Agent may delegate its duties  and obligations hereunder to AVT TS with respect to the Receivables for which AVT TS is the  applicable Originator, and the Collection Agent may hereafter delegate its duties and obligations  to any additional Originator which is an Affiliate of Tech Data and which becomes party to the  Originator Sale Agreement from time to time, with respect to Receivables originated by such  Originator.  Notwithstanding any delegation of any duties or obligations of the Collection Agent,  the Collection Agent shall continue to remain solely liable for the performance of its duties and  obligations as Collection Agent hereunder and the Credit Parties shall have the right to look  solely to the Collection Agent for performance.         SECTION 8.02   Duties   of   the   Collection   Agent .  The Collection Agent shall take or cause to be taken all such action as may be necessary or appropriate to service and administer the collection of each Pool Receivable from time to time, all in accordance with this Agreement and all  Applicable  Law,  with  commercially  reasonable  care and diligence, in accordance with the applicable Credit and Collection Policy in a manner consistent in all material respects with the past practices of the Originators (after taking into consideration the transactions contemplated by the  Transaction Documents).  The Collection Agent shall  set  aside,  for  the  accounts  of  each Class, the amount of Collections to which each such Class is entitled in accordance with Article III  hereof.   So  long  as  no  Termination  Event  shall have  occurred  and  be  continuing,  the Collection Agent may, in accordance with the applicable Credit and Collection Policy, extend the maturity of Receivables, but not more than sixty (60) days beyond the original maturity date, and otherwise extend the maturity or adjust the Outstanding Balance and take such other actions (including modifications, waivers or restructurings of Pool Receivables and related Contracts) as the  Collection  Agent  may  determine  to  be  appropriate  to  maximize  Collections  thereof; provided ,  however ,  that  such  extension  or  adjustment  shall  not  alter  the  status  of  such Receivable as a Delinquent Receivable or a Defaulted Receivable; provided , further , that with  respect  to  an  aggregate  Outstanding  Balance  of  Pool  Receivables  that  does  not  at  any  time  exceed  $5,000,000,  the Collection Agent may extend the  maturity  more  than  sixty  (60)  days  beyond the original maturity date (which extension shall not alter the status of such Receivable  as a Delinquent Receivable or a Defaulted Receivable).  If a Termination Event has occurred and  is  continuing,  the  Collection  Agent  may  modify,  waive  or  restructure  a  Pool  Receivable  (or  reflect any related adjustments) only upon the prior written consent of the Administrative Agent.  The Transferor shall deliver, or cause to be delivered, all Records that evidence or relate to the  Pool Receivables or the Collateral to, or at the direction of, the Administrative Agent, which                                       98 70  Redline                                       67 

 

Records and documents shall in turn be delivered to the Collection Agent to be held in trust for the  Transferor  and  the  Administrative  Agent  (for  the  benefit  of  the  Secured  Parties). Notwithstanding anything to the contrary contained herein, the Administrative Agent shall have the absolute and unlimited right to direct the Collection Agent to commence or settle any legal action to enforce collection of any Pool Receivable that is a Defaulted Receivable or to foreclose upon  or  repossess  any  Related  Security  with  respect  to  such  Defaulted  Receivable.   The Collateral Agent shall not make the Administrative Agent or any of the Credit Parties a party to any litigation without the prior written consent of such Person.         SECTION 8.03  Lock-Box Account Arrangements .               (a)   In the event a Collection Agent Ratings Event occurs, Tech Data and the  Transferor shall, and shall cause each Originator to, within sixty (60) days, cause all Lock-Box  Accounts to be established in the name of the Transferor rather than in the name of Tech Data,  Seller or any Originator, and in each case, cause such Lock-Box Accounts to be subject to the  continued security interest and control of the Administrative Agent.               (b)   Upon  the  occurrence  and  during  the  continuance  of  a  Collection  Agent  Default or a Termination Event, the Administrative Agent may (with the consent of the Majority  Class Agents) and shall (upon the direction of the Majority Class Agents) at any time thereafter  give notice to each Lock-Box Bank that the Administrative Agent is exercising its rights under  the Lock-Box Agreements to do any or all of the following: (a) to have the exclusive ownership  and control of the Lock-Box Accounts transferred to the Administrative Agent (for the benefit of  the Secured Parties) and to exercise exclusive dominion and control over the funds deposited  therein, (b) to have the proceeds that are sent to the respective Lock-Box Accounts redirected  pursuant to the Administrative Agent's instructions rather than deposited in the applicable Lock-  Box Account and (c) to take any or all other actions permitted under the applicable Lock-Box  Agreement.  The Transferor hereby agrees that if the Administrative Agent at any time takes any  action set forth in the preceding sentence, the Administrative Agent shall have exclusive control  (for  the  benefit  of  the  Secured  Parties)  of  the  proceeds  (including  Collections)  of  all  Pool  Receivables  and  the  Transferor  hereby  further  agrees  to  take  any  other  action  reasonably  requested  by  the  Administrative  Agent  for  the  purpose  of  transferring  such  control.   Any  proceeds of Pool Receivables received by the Transferor or the Collection Agent thereafter shall  be sent promptly to, or as otherwise instructed by, the Administrative Agent (and until so sent,  shall be deemed to be held in trust for the benefit of the Administrative Agent (for the benefit of  the Secured Parties)).         SECTION 8.04   Certain Enforcement Rights .              (a)   At  any  time  following  the  occurrence  and  during the  continuation  of  a Collection Agent Default or Termination Event:                    (i)   The Administrative Agent may direct that payment of all amounts       payable under any Pool Receivable be made directly to the Administrative Agent or its       designee for the benefit of the Secured Parties.                                       98 70  Redline                                       68 

 

                  (ii)  Tech Data shall, at the Administrative Agent's request and at Tech       Data's  expense,  give  notice  of  the  Administrative  Agent's  security  interest  in  the       Receivables  and  of  the  Transferor's  ownership  of  the  Pool  Receivables  to  each  Pool       Obligor  and  direct  that  payments  be  made  directly  to  the  Administrative  Agent  or  its       designee for the benefit of the Secured Parties.                    (iii) Tech  Data  shall,  at  the  Administrative  Agent's  request,  (A)       assemble all of the Records, and shall make the same  available  to the Administrative       Agent at a place selected by the Administrative Agent or its designee, and (B) segregate       all  cash,  checks  and  other  instruments  received  by it  from  time  to  time  constituting       Collections of Pool Receivables in a manner acceptable to the Administrative Agent and       shall, promptly upon receipt, remit all such cash, checks and instruments, duly endorsed       or with duly executed instruments of transfer, to the Administrative Agent or its designee       for the benefit of the Secured Parties.                    (iv)  The Transferor and Tech Data hereby authorize the Administrative       Agent to take any and all steps in the Transferor's or Tech Data's name and on behalf of       the  Transferor  or  Tech  Data  necessary  or  desirable,  in  the  determination  of  the       Administrative Agent, to collect all amounts due under  any  and  all  Pool  Receivables,       including, without limitation, endorsing the Transferor's or Tech Data's name on checks       and other instruments representing Collections and enforcing such Pool Receivables and       the related Contracts against the related Pool Obligor.        SECTION 8.05   Responsibilities   of   the   Transferor .   Anything  herein  to  the  contrary notwithstanding, the Transferor, Tech Data and each other Originator shall (i) perform all of their respective obligations under the Contracts related to the Pool Receivables, if any, to the same extent as if interests in such Pool Receivables had not been pledged hereunder, and the exercise by the Administrative Agent or any other Credit Party of their respective rights hereunder shall not relieve the Transferor, Tech Data or any Originator from such obligations and (ii) pay when due any Taxes, including any sales taxes payable in connection with the Pool Receivables and their creation and satisfaction.  None of the Credit Parties shall have any obligation or liability with respect to any Pool Receivable, any Contract or any other Collateral, nor shall any of them be obligated to perform any of the obligations of the Transferor, the Collection Agent or any Originator thereunder.        SECTION 8.06   Servicing Fee .              (a)   For its services hereunder, the Collection Agent shall be entitled to a fee (the  "Servicing   Fee ")  equal  to  0.75%  per  annum  of  the  daily  average  outstanding  Capital. Accrued  Servicing  Fees  shall  be  payable  from  Collections to the extent of available funds in accordance with Section 3.01(b ).              (b)   If the Collection Agent ceases to be Tech Data or an Affiliate thereof, the Servicing Fee shall be the greater of: (i) the amount calculated pursuant to clause  (a)  above and  (ii) an alternative amount specified by the successor Collection Agent and agreed to in writing by                                      98 70  Redline                                       69 

 

the Administrative Agent not to exceed 110% of the reasonable and appropriate out-of-pocket costs  and  expenses  incurred  by  such  successor  Collection  Agent  in  connection  with  the performance of its obligations as Collection Agent hereunder.         SECTION 8.07  Inspection Rights .  At any reasonable time and from time to time at the reasonable  request  of  the  Administrative  Agent  or  any  Class  Agent,  during  the  Collection Agent's normal business hours and upon five (5) Business Days' prior notice to the Transferor, the  Transferor  shall  direct  the  Collection  Agent  to  permit  such  person  as  the  Administrative Agent or any Class Agent may designate, at the cost and expense of the Collection Agent, to inspect and take copies and abstracts from the financial books and records maintained by the Collection Agent, and to visit the properties of the Collection Agent utilized in the collection, processing or servicing of the Receivables for the purpose of examining such Records, and to discuss the Collection Agent's affairs with its officers, employees and independent accountants, in each case, having knowledge of such matters; provided, however, as long as no Termination Event has occurred and is continuing, the Administrative Agent or any Class Agent may make such request only one time per calendar year; provided , further , if a Termination Event shall have occurred  and  be  continuing,  the  Administrative  Agent  or  any  Class  Agent  may  make  such request  at  any  time.   In  connection  with  all  audits  performed  under  this  Agreement,  the Administrative Agent and each Class Agent shall use reasonable efforts to coordinate the staffing and timing of such audits in order to minimize the cost and expense thereof and to the extent possible have such audits conducted by all parties at the same time. The Administrative Agent shall  also  solicit  input from each Class Agent with  respect  to  the  scope  of  such  coordinated audits. The Transferor shall direct the Collection Agent to authorize such officers, employees and independent accountants to discuss with the Administrative Agent, the Class Agents, and the Class Investors, acting on a coordinated basis, the affairs of the Collection Agent. The Collection Agent shall, upon receipt of a written invoice therefor, reimburse the Administrative Agent for all  reasonable  out  of-pocket  fees,  costs  and  expenses  incurred  by  or  on  behalf  of  the Administrative Agent, any Class Agent and any Class Investor in connection with each annual audit or visit and, if applicable, each audit or visit during the occurrence and continuation of a Termination  Event.  Any  audit  or  visit  provided  for in  this  paragraph  shall  be  conducted  in accordance with the Collection Agent's rules respecting safety and security on its premises and, as long as no Termination Event has occurred and is continuing, without materially disrupting operations.                                    ARTICLE IX                              TERMINATION EVENTS         SECTION 9.01   Termination   Events .   The  occurrence  of  any  one  or  more  of  the  following events shall constitute a Termination Event:               (a)   (i)   the  Collection  Agent  shall  fail  to  perform or  observe  any  term,  covenant or agreement hereunder (other than as referred to in clause  (ii)  of this Section  9.01(a )),  or  either  the  Collection  Agent  or  the  Transferor  shall  fail  to  observe  or  perform  any  term,  covenant or agreement on the part of the Collection Agent or the Transferor to be performed  under Section  4.01 or Section  4.02 (other than as referred to in clause  (ii)  of this Section  9.01(a ))                                      98 70  Redline                                       70 

 

and, in each case, such failure shall remain unremedied for fifteen (15) days or (ii) either the Collection Agent or the Transferor shall fail to make any payment or deposit to be made by it hereunder  when  due  or  either  the  Collection  Agent  or  the  Transferor  shall  fail  to  observe  or perform any term, covenant or agreement on the part of the Collection Agent or the Transferor to be performed under Section 4.02(b ) hereof;              (b)   any representation, warranty, certification or statement made by Tech Data or  the  Transferor  in this Agreement or in any other document delivered pursuant hereto shall prove to have been incorrect in any material respect when made or deemed made;              (c)   (i)  the Transferor shall default in the observance or performance of the terms, covenants, conditions or agreements on the Transferor's part to be performed or observed under  Section   7.01(b)(v ),  Section   7.01(i ),  Section   7.01(j ),  Section   7.01(k ),  Section   7.01(l ), Section   7.01(m ),  Section   7.01(n ),  Section   7.01(o ),  Section   7.02(a ),  Section   7.02(c ),  Section 7.02(d ),  Section   7.02(e ),  Section   7.02(f ),  Section   7.02(g ),  Section   7.02(h ),  Section   7.02(i ),  Section  7.02(j ) Section  7.02(k ) or Section  7.02(m ) hereof, (ii) the Transferor shall fail to pay any Capital,  Interest,  Fees or other Obligations when and as required to be paid hereunder within three (3) Business Days after the same becomes due or (iii) the Transferor shall default in the observance or performance of the terms, covenants, conditions or agreements on the Transferor's part  to  be  performed  or  observed  under  Section   7.01(b)(i ),  Section   7.01(b)(ii ),  Section 7.01(b)(iii ),  Section   7.01(b)(iv ),  Section   7.01(b)(vi ),  Section   7.01(c ),  Section   7.01(d ),  Section 7.01(e ),  Section   7.01(f ),  Section   7.01(g ),  Section   7.01(h ),  Section   7.01(p ),  Section   7.01(q ),  Section  7.02(b ) or Section  7.02(l ) hereof and such failure shall remain unremedied for fifteen  (15) days;               (d)   (i)  Tech Data shall default in the observance or performance of the terms,  covenants,  conditions  or  agreements  on  Tech  Data's part  to  be  performed  or  observed  under  Section   7.03(h ),  Section   7.03(i ),  Section   7.03(j ),  Section   7.03(k ),  Section   7.04(a ),  Section 7.04(c ), Section  7.04(d ), Section  7.04(e ), Section  7.04(f ), Section  7.04(g ) or Section  7.05 or (ii) Tech Data shall default in the observance or performance of the terms, covenants, conditions or agreements on Tech Data's part to be performed under Section  7.03(a ), Section  7.03(b ), Section 7.03(c ),  Section   7.03(d ),  Section   7.03(e ),  Section   7.03(f ),  Section   7.03(g ),  Section   7.03(l ),  Section   7.03(m ),  Section   7.03(n )  or  Section   7.04(b )  hereof  and  such  failure  shall  remain  unremedied for fifteen (15) days;               (e)   the Transferor or Tech Data shall default in the observance or performance of any other term, covenant, condition or agreement on the Transferor's or Tech Data's part to be performed or observed under this Agreement and such default shall continue for thirty (30) days after the earlier of (i) the date that such written notice thereof is given to the Transferor or Tech Data, as applicable, by the Administrative Agent or (ii) the date the Transferor or Tech Data, as applicable, becomes aware of such default;              (f)   failure  of  Tech  Data  or  any  Subsidiary  of  Tech  Data  to  pay  any Indebtedness greater than $50,000,000 when due; or the default by Tech Data or any Subsidiary of Tech Data in the performance of any term, provision or condition contained in any agreement under which any Indebtedness greater than $50,000,000 was created or is governed, the effect of                                      98 70  Redline                                       71 

 

which  is  to  cause,  or  to  permit  the  holder  or  holders  of  such  Indebtedness  greater  than $50,000,000  to  cause,  such  Indebtedness  to  become  due  prior  to  its  stated  maturity;  or  any Indebtedness greater than $50,000,000 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;               (g)   any  Event  of  Bankruptcy  shall  occur with respect to the Transferor, the Collection Agent, Tech Data or any Subsidiary of either the Transferor or Tech Data;               (h)   the Administrative Agent, on behalf of the Secured Parties shall, for any  reason, fail or cease to have a valid and perfected first priority security interest in the Collateral  free and clear of any Adverse Claims; provided , that the existence of De Minimis Tax Liens shall not constitute a Termination Event if such De Minimis Tax Liens are released within ninety (90) days of discovery thereof by the Transferor, any Originator or the Collection Agent;              (i)   Tech Data shall enter into any transaction or merger whereby it is not the surviving entity; or the Transferor shall no longer be wholly owned by Tech Data;              (j)   there shall have occurred any material adverse change in the operations of Tech Data since May 31, 2017, or any other event shall have occurred which materially affects Tech Data's ability to either collect the Pool Receivables or to perform under this Agreement or under the Purchase Agreement, or any Originator's ability to perform under the Originator Sale Agreement;              (k)   a  Borrowing  Base  Deficit  shall  occur,  and  shall not  have  been  cured  within  one  (1)  full  Business  Day  following  the  Transferor's  or  the  Collection  Agent's  actual  knowledge or receipt of notice thereof (provided  that in such case the Termination Event caused thereby shall be deemed to have occurred at the start of such one (1) full Business Day period);              (l)   any of the following shall occur:                    (i)   the  average  Default  Ratios  for  any  three  consecutive  calendar       months exceeds 2.50%;                    (ii)  the average Delinquency Ratios for any three consecutive calendar       months exceeds 4.75%; or                    (iii) the  average  Dilution  Ratios  for  any  two  consecutive  calendar        months exceeds 6.00%;               (m)   a Collection Agent Default shall have occurred and be continuing; or               (n)   a Purchase Agreement Termination Event shall have occurred.         SECTION 9.02   Termination .  (a)  Upon the occurrence of any Termination Event the  Administrative  Agent  may  by  notice  to  the  Transferor  and  the  Collection  Agent  declare  the  Termination Date to have occurred; provided , however , that in the case of any event described in Section  9.01(g ), Section  9.01(h ), Section  9.01(i ) or Section  9.01(k ) above, the Termination Date                                      98 70  Redline                                       72 

 

shall be deemed to have occurred automatically upon the occurrence of such event.  Upon any such declaration or automatic occurrence, the Administrative Agent shall have, in addition to all other  rights  and  remedies  under  this  Agreement  or  otherwise,  all  other  rights  and  remedies provided under the UCC of the applicable jurisdiction and other Applicable Law, all of which rights shall be cumulative. Any proceeds from liquidation of the Collateral shall be applied in the order of priority set forth in Section 3.01(b ).              (b)   At  all  times  after  the  declaration  or  automatic occurrence  of  the Termination  Date  pursuant  to  Section   9.02(a ),  the  Interest  Rate  applicable  to  the  Aggregate Capital for all existing and future Credit Extensions shall be increased to the Default Rate.              (c)   At  any  time  following  the  occurrence  of  a  Termination  Event,  the Administrative Agent may notify any Obligor of the interest of the Administrative Agent (for the benefit of the Secured Parties) in the Receivables and the other Collateral.                                    ARTICLE X                          THE ADMINISTRATIVE AGENT        SECTION 10.01  Authorization   and   Action .   Each  Credit  Party  hereby  appoints  and  authorizes the Administrative Agent to take such action as agent on its behalf and to exercise  such powers under this Agreement as are delegated to the Administrative Agent by the terms  hereof,  together  with  such  powers  as  are  reasonably  incidental  thereto.   The  Administrative  Agent  shall  not  have  any  duties  other  than  those  expressly  set  forth  in  the  Transaction  Documents,  and  no  implied  obligations  or  liabilities  shall  be  read  into  any  Transaction  Document, or otherwise exist, against the Administrative Agent.  The Administrative Agent does  not assume, nor shall it be deemed to have assumed, any obligation to, or relationship of trust or  agency with, the Transferor or any Affiliate thereof or any Credit Party except for any obligations  expressly  set  forth  herein.   Notwithstanding  any  provision  of  this  Agreement  or  any  other  Transaction Document, in no event shall the Administrative Agent ever be required to take any  action which exposes the Administrative Agent to personal liability or which is contrary to any  provision of any Transaction Document or Applicable Law.         SECTION 10.02  Administrative   Agent's   Reliance,   Etc.    Neither  the  Administrative Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them as Administrative Agent under or in connection with this Agreement  or  any  of  the  other  Transaction  Documents,  except  for  its  or  their  own  gross negligence or willful misconduct.  Without limiting the foregoing, the Administrative Agent: (i) may consult with legal counsel (including counsel for the Transferor or the Collection Agent), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel,  accountants  or  experts;  (ii)  makes  no  warranty  or  representation  to  any  Credit  Party (whether  written  or  oral)  and  shall  not  be  responsible  to  any  Credit  Party for any statements, warranties  or  representations  (whether  written  or  oral)  made  by  any  other  Person  in  or  in connection with this Agreement; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any                                      98 70  Redline                                       73 

 

of  the  other  Transaction  Documents  on  the  part  of  any  other  party  thereto  or  to  inspect  the property  (including  the  books  and  records)  of  the  Transferor,  the  Collection  Agent,  any Originator or any Affiliate thereof; (iv) shall not be responsible to any Credit Party for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any of the other Transaction Documents or any other instrument or document furnished pursuant hereto or thereto; and (v) shall be entitled to rely upon, and shall incur no liability under or in respect of this Agreement or any of the other Transaction Documents by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by facsimile or e-mail) believed by it to be genuine and signed or sent by the proper party or parties.        SECTION 10.03  Administrative   Agent   and   Affiliates .   With  respect  to  any  Credit Extension or interests therein owned by any Credit Party that is also the Administrative Agent, such  Credit Party shall have the same rights and powers  under  this  Agreement  as  any  other Credit Party and may exercise the same as though it were not the Administrative Agent.  The Administrative Agent and any of its Affiliates may generally engage in any kind of business with the  Transferor  or  any  Affiliate  thereof  and  any  Person  who  may  do  business  with  or  own securities of the Transferor or any Affiliate thereof, all as if the Administrative Agent were not the  Administrative  Agent  hereunder  and  without  any duty  to  account  therefor  to  any  other Secured Party.        SECTION 10.04  Indemnification  of  Administrative  Agent .  Each Bank Investor agrees  to indemnify the Administrative Agent (to the extent not reimbursed by the Transferor or any  Affiliate thereof), ratably according to the respective Pro Rata Percentage of such Bank Investor,  from  and  against  any  and  all  liabilities,  obligations,  losses,  damages,  penalties,  actions,  judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may  be imposed on, incurred by, or asserted against the Administrative Agent in any way relating to  or  arising  out  of  this  Agreement  or  any  other  Transaction  Document  or  any  action  taken  or  omitted by the Administrative Agent under this Agreement or any other Transaction Document;  provided  that no Bank Investor shall be liable for any portion  of such liabilities, obligations,  losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting  from the Administrative Agent's gross negligence or willful misconduct.        SECTION 10.05  Delegation  of  Duties .  The Administrative Agent may execute any of  its duties through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning  all matters pertaining to such duties.  The Administrative Agent shall not be responsible for the  negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.         SECTION 10.06  Action   or   Inaction   by   Administrative   Agent .   The  Administrative Agent  shall  in  all  cases  be  fully  justified  in  failing  or  refusing  to  take  action  under  any Transaction  Document  unless  it  shall  first  receive such  advice  or  concurrence  of  the  Class Agents or the Majority Class Agents, as the case may be, and assurance of its indemnification by the Bank Investors, as it deems appropriate.  The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Transaction Document in accordance with a request or at the direction of the Class Agents or the Majority Class Agents, as the case may be, and such request or direction and any action taken or failure to                                      98 70  Redline                                       74 

 

act  pursuant  thereto  shall  be  binding  upon  all  Credit  Parties.   The  Credit  Parties  and  the Administrative Agent agree that unless any action to be taken by the Administrative Agent under a Transaction Document (i) specifically requires the advice or concurrence of all Class Agents or (ii) may be taken by the Administrative Agent alone or without any advice or concurrence of any Class  Agent,  then  the  Administrative  Agent  may  take  action  based  upon  the  advice  or concurrence of the Majority Class Agents.        SECTION 10.07  Notice  of  Termination  Events;  Action  by  Administrative  Agent .  The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Potential Termination Event or Termination Event unless the Administrative Agent has received notice  from  any  Credit  Party  or  the  Transferor  stating  that  a  Potential  Termination  Event  or Termination Event has occurred hereunder and describing such Potential Termination Event or Termination Event.  If the Administrative Agent receives such a notice, it shall promptly give notice  thereof  to  each  Class  Agent,  whereupon  each Class  Agent  shall  promptly  give  notice thereof  to  its  respective  Class  Conduit(s)  and  Related  Bank  Investor(s).   The  Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, concerning a Potential Termination Event or Termination Event or any other matter hereunder as the Administrative Agent deems advisable and in the best interests of the Secured Parties.        SECTION 10.08  Non-Reliance on Administrative Agent and Other Parties .  Each Credit Party  expressly  acknowledges  that  neither  the  Administrative  Agent  nor  any  of  its  directors, officers, agents or employees has made any representations or warranties to it and that no act by the Administrative Agent hereafter taken, including any review of the affairs of the Transferor or any  Affiliate  thereof,  shall  be  deemed  to  constitute  any  representation  or  warranty  by  the Administrative Agent.  Each Credit Party represents and warrants to the Administrative Agent that, independently and without reliance upon the Administrative Agent or any other Credit Party and based on such documents and information as it has deemed appropriate, it has made and will continue to make its own appraisal of, and investigation into, the business, operations, property, prospects, financial and other conditions and creditworthiness of the Transferor, each Originator or  the  Collection  Agent  and  the  Pool  Receivables  and  its  own  decision  to  enter  into  this Agreement  and  to  take,  or  omit,  action  under  any  Transaction  Document.   Except  for  items expressly required to be delivered under any Transaction Document by the Administrative Agent to any Credit Party, the Administrative Agent shall not have any duty or responsibility to provide any  Credit  Party  with  any  information  concerning  the  Transferor,  any  Originator  or  the Collection  Agent  that  comes  into  the  possession  of the  Administrative  Agent  or  any  of  its directors, officers, agents, employees, attorneys-in-fact or Affiliates.         SECTION 10.09 Successor Administrative Agent .              (a)   The Administrative Agent may, upon at least thirty (30) days' notice to the Transferor, the Collection Agent and each Class Agent, resign as Administrative Agent.  Except as provided below, such resignation shall not become effective until a successor Administrative Agent is appointed by the Majority Class Agents as a successor Administrative Agent and has accepted such appointment.  If no successor Administrative Agent shall have been so appointed by the Majority Class Agents, within thirty (30) days after the departing Administrative Agent's giving  of  notice  of  resignation,  the  departing  Administrative  Agent  may,  on  behalf  of  the                                      98 70  Redline                                       75 

 

Secured Parties, appoint a successor Administrative Agent as successor Administrative Agent.  If no successor Administrative Agent shall have been so appointed by the Majority Class Agents within sixty (60) days after the departing Administrative Agent's giving of notice of resignation, the  departing  Administrative  Agent may, on behalf of the Secured Parties, petition a court of competent  jurisdiction  to  appoint  a  successor  Administrative  Agent.   For  so  long  as  no Termination Event or Potential Termination Event has occurred and is continuing, the Transferor shall have the right to approve any successor Administrative Agent appointed hereunder, such approval not to be unreasonably withheld or delayed.               (b)   Upon  such  acceptance  of  its  appointment  as  Administrative  Agent  hereunder  by  a  successor  Administrative  Agent,  such  successor  Administrative  Agent  shall  succeed  to  and  become vested with all the rights and  duties  of  the  resigning  Administrative  Agent,  and  the  resigning  Administrative  Agent  shall  be  discharged  from  its  duties  and  obligations  under  the  Transaction  Documents.   After  any  resigning  Administrative  Agent's  resignation hereunder, the provisions of this Article X and Article XII shall inure to its benefit as  to any actions taken or omitted to be taken by it while it was the Administrative Agent.                                    ARTICLE XI                                THE CLASS AGENTS        SECTION 11.01  Authorization  and  Action .  Each Credit Party that belongs to a Class hereby appoints and authorizes the Class Agent for such Class to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to such Class Agent by the terms hereof, together with such powers as are reasonably incidental thereto.  No Class Agent shall have any duties other than those expressly set forth in the Transaction Documents, and no implied obligations or liabilities shall be read into any Transaction Document, or otherwise exist, against any Class Agent.  No Class Agent assumes, nor shall it be deemed to have assumed, any obligation to, or relationship of trust or agency with the Transferor or any Affiliate thereof, any Class  Investor  except  for  any  obligations  expressly  set  forth  herein.   Notwithstanding  any provision  of  this  Agreement  or  any  other  Transaction Document, in no event shall any Class Agent ever be required to take any action which exposes such Class Agent to personal liability or which is contrary to any provision of any Transaction Document or Applicable Law.         SECTION 11.02 Class  Agent's  Reliance,  Etc.   No Class Agent nor any of its directors,  officers, agents or employees shall be liable for any action taken or omitted to be taken by it or  them as a Class Agent under or in connection with this  Agreement  or  any  other  Transaction  Documents in the absence of its or their own gross negligence or willful misconduct.  Without  limiting  the  generality  of  the  foregoing,  a  Class  Agent:  (a)  may  consult  with  legal  counsel  (including  counsel  for  the  Administrative  Agent,  the  Transferor  or  the  Collection  Agent),  independent public accountants and other experts selected by it and shall not be liable for any  action taken or omitted to be taken in good faith by it in accordance with the advice of such  counsel,  accountants  or  experts;  (ii)  makes  no  warranty  or  representation  to  any  Credit  Party  (whether  written  or  oral)  and  shall  not  be  responsible  to  any  Credit Party for any statements,  warranties  or  representations  (whether  written  or  oral)  made  by  any  other  Person  in  or  in  connection with this Agreement; (iii) shall not have any duty to ascertain or to inquire as to the                                      98 70  Redline                                       76 

 

performance or observance of any of the terms, covenants or conditions of this Agreement or any of  the  other  Transaction  Documents  on  the  part  of  any  other  party  thereto  or  to  inspect  the property  (including  the  books  and  records)  of  the  Transferor,  the  Collection  Agent,  any Originator or any Affiliate thereof; (iv) shall not be responsible to any Credit Party for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any of the other Transaction Documents or any other instrument or document furnished pursuant hereto or thereto; and (v) shall be entitled to rely upon, and shall incur no liability under or in respect of this Agreement or any of the other Transaction Documents by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by facsimile or e-mail) believed by it to be genuine and signed or sent by the proper party or parties.        SECTION 11.03  Class  Agent  and  Affiliates .  With respect to any Credit Extension or  interests therein owned by any Credit Party that is also a Class Agent, such Credit Party shall  have  the  same  rights  and  powers  under  this  Agreement as any other Class Investor and may  exercise the same as though it were not a Class Agent.  A Class Agent and any of its Affiliates  may generally engage in any kind of business with the Transferor or any Affiliate thereof and any  Person who may do business with or own securities of the Transferor or any Affiliate thereof or  any of their respective Affiliates, all as if such Class Agent were not a Class Agent hereunder  and without any duty to account therefor to any other Secured Party.         SECTION 11.04  Indemnification   of   Class   Agents .  Each Bank Investor in any Class  agrees  to  indemnify  the  Class  Agent  for  such  Class (to  the  extent  not  reimbursed  by  the  Transferor  or  any  Affiliate  thereof),  ratably  according  to  the  proportion  of  the  Pro  Rata  Percentage of such Bank Investor to the aggregate Pro Rata Percentages of all Bank Investors in  such  Class,  from  and  against  any  and  all  liabilities,  obligations,  losses,  damages,  penalties,  actions, judgments, suits, costs, expenses or disbursements  of  any  kind  or  nature  whatsoever  which may be imposed on, incurred by, or asserted against such Class Agent in any way relating  to or arising out of this Agreement or any other Transaction Document or any action taken or  omitted by such Class Agent under this Agreement or any other Transaction Document; provided that  no  Bank  Investor  shall  be  liable  for  any  portion  of  such  liabilities,  obligations,  losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Class Agent's gross negligence or willful misconduct.        SECTION 11.05  Delegation  of  Duties .  Each Class Agent may execute any of its duties through  agents  or  attorneys-in-fact  and  shall  be  entitled  to  advice  of  counsel  concerning  all matters pertaining to such duties.  No Class Agent shall  be  responsible  for  the  negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.        SECTION 11.06  Notice   of   Termination   Events .  No Class Agent shall be deemed to  have knowledge or notice of the occurrence of any Potential Termination Event or Termination  Event unless such Class Agent has received notice from  the  Administrative  Agent,  any other  Class  Agent,  any  other  Credit  Party,  the  Collection  Agent  or  the  Transferor  stating  that  a  Potential Termination Event or Termination Event has occurred hereunder and describing such  Potential Termination Event or Termination Event.  If a Class Agent receives such a notice, it  shall promptly give notice thereof to the Credit Parties in its Class and to the Administrative                                      98 70  Redline                                       77 

 

Agent (but only if such notice received by such Class Agent was not sent by the Administrative Agent).   A  Class  Agent  may  take  such  action  concerning  a  Potential  Termination  Event  or Termination Event as may be directed by Bank Investors in its Class representing a majority of the Commitments in such Class (subject to the other provisions of this Article XI), but until such  Class Agent receives such directions, such Class Agent may (but shall not be obligated to) take  such action, or refrain from taking such action, as such Class Agent deems advisable and in the  best interests of the Class Conduits and Bank Investors in its Class.         SECTION 11.07  Non-Reliance   on   Class   Agent   and   Other   Parties .  Each Credit Party expressly acknowledges that neither the Class Agent for its Class nor any of such Class Agent's directors, officers, agents or employees has made any representations or warranties to it and that no act by such Class Agent hereafter taken, including any review of the affairs of the Transferor or any Affiliate thereof, shall be deemed to constitute any representation or warranty by such Class Agent.  Each Credit Party represents and warrants to the Class Agent for its Class that, independently  and  without  reliance  upon  such  Class Agent,  any  other  Class  Agent,  the Administrative Agent or any other Credit Party and based on such documents and information as it  has  deemed  appropriate,  it  has  made  and  will  continue  to  make  its  own  appraisal  of,  and investigation into, the business, operations, property, prospects, financial and other conditions and creditworthiness of the Transferor or any Affiliate thereof and the Pool Receivables and its own decision to enter into this Agreement and to take, or omit, action under any Transaction Document.  Except for items expressly required to be delivered under any Transaction Document by  a  Class  Agent  to  any  Credit  Party  in  its  Class, no  Class  Agent  shall  have  any  duty  or responsibility  to  provide  any  Credit  Party  in  its  Class  with  any  information  concerning  the Transferor or any Affiliate thereof that comes into the possession of such Class Agent or any of its directors, officers, agents, employees, attorneys-in-fact or Affiliates.         SECTION 11.08 Successor   Class   Agent .  Any Class Agent may, upon at least thirty (30) days' notice to the Administrative Agent, the Transferor, the Collection Agent and the Credit Parties  in  its  Class,  resign  as  Class  Agent  for  its  Class.   Such  resignation  shall  not  become effective until a successor Class Agent is appointed by the Class Investor(s) in such Class.  Upon such acceptance of its appointment as Class Agent for such Class hereunder by a successor Class Agent, such successor Class Agent shall succeed to and become vested with all the rights and duties of the resigning Class Agent, and the resigning Class Agent shall be discharged from its duties  and  obligations  under  the  Transaction  Documents.   After  any  resigning  Class  Agent's resignation hereunder, the provisions of this Article  XI and Article  XII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was a Class Agent.        SECTION 11.09  Reliance   on   Class   Agent .  Unless otherwise advised in writing by a  Class Agent or by any Credit Party in such Class Agent's Class, each party to this Agreement  may assume that (i) such Class Agent is acting for the benefit and on behalf of each of the Credit  Parties in its Class, as well as for the benefit of each assignee or other transferee from any such  Person and (ii) each action taken by such Class Agent has been duly authorized and approved by  all necessary action on the part of the Credit Parties in its Class.                                        98 70  Redline                                       78 

 

                                 ARTICLE XII                INDEMNIFICATION; EXPENSES; RELATED MATTERS        SECTION 12.01  Indemnities by the Transferor .               (a)   Without limiting any other rights which the Administrative Agent or any  of the Class Investors may have hereunder or under applicable law, the Transferor hereby agrees  to  indemnify  each  Class  Agent,  each  Class  Investor,  the  Administrative  Agent,  any  Program  Support Provider and any related commercial paper issuer that finances a Class Conduit and any  successors  and  any  permitted  assigns  and  their  respective  officers,  directors  and  employees  (collectively,  "Indemnified   Part ies ")  from  and  against  any  and  all  damages,  losses,  claims, liabilities, costs and expenses, including, without limitation, reasonable attorneys' fees (which attorneys may be employees of any Indemnified Party) and disbursements (all of the foregoing being collectively referred to as "Indemnified  Amount s") awarded against or incurred by any of them  arising  out  of  or  as  a  result  of  this  Agreement  or  the  use  of  proceeds  of  any  Credit Extensions  or  the  security  interest  in  respect  of  any  Pool  Receivable  or  any  other  Collateral excluding, however, (i) Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of such Indemnified Party or (ii) recourse (except as otherwise specifically  provided  in  this  Agreement)  for  uncollectible  Pool  Receivables  or  (iii)  claims or losses arising from Credit Risk Losses.  Without limiting  the  generality  of  the  foregoing, the Transferor  shall  indemnify  each  Indemnified  Party  for  Indemnified  Amounts  relating  to  or resulting from:                    (i)   reliance on any representation or warranty made by the Transferor       (or  any  officers  of  the  Transferor)  under  or  in  connection  with  this  Agreement,  any       Periodic Report or any other information or report delivered by the Transferor pursuant       hereto, which shall have been false or incorrect in any material respect when made or       deemed made;                    (ii)  the failure by the Transferor to comply with any Applicable Law        with respect to any Pool Receivable or the related Contract, or the nonconformity of any        Receivable or the related Contract with any such Applicable Law;                     (iii) the failure to maintain a first priority perfected security interest in        favor of the Administrative Agent on behalf of the Secured Parties in the Collateral, free        and clear of any Adverse Claim;                     (iv)  the  failure  to  file,  or  any  delay  in  filing,  financing  statements,        continuation statements, or other similar instruments or documents under the UCC of any        applicable jurisdiction or other applicable laws with respect to any of the Collateral;                     (v)   any  dispute,  claim,  offset  or  defense  (other  than  discharge  in        bankruptcy) of any Pool Obligor to the payment of any Pool Receivable included in the        Collateral (including, without limitation, a defense based on such Pool Receivable or the                                      98 70  Redline                                       79 

 

      related  Contract  not  being  legal,  valid  and  binding  obligation  of  such  Pool  Obligor       enforceable against it in accordance with its terms), or any other claim resulting from the       sale  of  merchandise  or  services  related  to  such  Pool  Receivable  or  the  furnishing  or       failure to furnish such merchandise or services;                    (vi)  any  failure  of  Tech  Data,  as  Collection  Agent  or  otherwise,  to        perform its duties or obligations in accordance with the provisions of Article VIII; or                     (vii) any products liability claim or personal injury or property damage        suit  or  other  similar  or  related  claim  or  action  of  whatever  sort  arising  out  of  or  in        connection with merchandise or services which are the subject of any Pool Receivable;   provided , however , that if any Class Conduit enters into agreements for the extension of credit against receivables from one or more Other Transferors, such Class Conduit shall allocate such Indemnified Amounts which are incurred in connection with any type of credit support provided by a Program Support Provider to the Transferor and each Other Transferor.              (b)   All amounts owed by the Transferor under this Section 12.01 shall be paid  by  the  Transferor,  in  accordance  with  Section   3.01(b ),  beginning  on  the  Settlement  Date following the calendar month during which the Transferor and the Administrative Agent have received written demand of the related Indemnified Amounts from the Class Agent related to the Indemnified Party or its Class Agent on its behalf.  Any indemnification or contribution under this Section shall survive any assignment or termination of this Agreement.                                        98 70  Redline                                       80 

 

      SECTION 12.02  Indemnification by the Collection Agent .               (a)   Without limiting any other rights which the Administrative Agent or any  of the Class Agents or Class Investors or the other Indemnified Parties may have hereunder or  under Applicable Law, Tech Data hereby agrees to indemnify the Indemnified Parties from and  against any and all Indemnified Amounts arising out of or resulting from (whether directly or  indirectly)  (a)  the  failure  of  any  information  contained  in  any  Periodic  Report  (to  the  extent  provided or prepared by Tech Data) to be true and correct, or the failure of any other information  provided  to  any  Indemnified  Party  by,  or  on  behalf of,  the  Collection  Agent  to  be  true  and  correct, (b) the failure of any representation, warranty or statement made or deemed made by  Tech  Data  (or  any  of  its  officers)  under  or  in  connection  with  this  Agreement  or  any  other  Transaction Document to have been true and correct as of the date made or deemed made, (c) the  failure by Tech Data to comply with any Applicable Law with respect to any Pool Receivable or  the related Contract, (d) any dispute, claim, offset or defense of the applicable Pool Obligor to  the  payment  of  any  Pool  Receivable  resulting  from  or  related  to  the  collection  activities  in  respect  of  such  Pool  Receivable,  or  (e)  any  failure  of  Tech  Data  to  perform  its  duties  or  obligations  in  accordance  with  the  provisions  of  this  Agreement  or  any  other  Transaction  Document.               (b)   All amounts owed by the Collection Agent under this Section  12.02 shall be payable on demand.  Any indemnification or contribution under this Section shall survive any assignment or termination of this Agreement.        SECTION 12.03  Increased Costs .               (a)   Increased Costs Generally .  If any Change in Law shall:                     (i)   impose,  modify  or  deem  applicable  any  reserve,  special  deposit,        compulsory loan, insurance charge or similar requirement against assets of, deposits with        or  for  the  account  of,  or  credit  extended  by,  any  Affected  Person  (except  any  reserve        requirement reflected in any Eurodollar Rate);                     (ii)  subject  any  Affected  Person  to  any  Taxes  (other  than  (A)        Indemnified Taxes, (B) clauses  (b)  through (d)  of Excluded Taxes and (C) Connection        Income Taxes) on its loans, commitments or other obligations, or its deposits, reserves,        other liabilities or capital attributable thereto; or                     (iii) impose on any Affected Person or the London interbank  market        any  other  condition,  cost  or  expense  (other  than  Taxes)  affecting  the  Collateral,  this        Agreement, any other Transaction Document, any Program Support Agreement, or any        Loan  made  by,  or  supported  by,  such  Affected  Person  or  any  letter  of  credit  or        participation therein;   and the result of any of the foregoing shall be to increase the cost to such Affected Person of (A)  acting as the Administrative Agent, a Class Agent or a Class Investor hereunder or as a Program  Support Provider with respect to a Class Investor for the transactions contemplated hereby or (B)                                      98 70  Redline                                       81 

 

making,  converting  to,  continuing,  funding  or  maintaining  any  Loan  (or  of  maintaining  its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Affected Person hereunder (whether of principal, interest or otherwise), then, beginning on the Settlement Date following the calendar month during which the Transferor received written demand therefor, the Transferor will pay to such Affected Person, in accordance with Section 3.01(b ), such additional amount or amounts as will compensate such Affected Person for such  additional costs or expenses incurred or reduction suffered.               (b)   Capital Requirements .  If any Affected Person determines that any Change  in Law regarding capital or liquidity requirements has or would have the effect of reducing the  rate  of  return  on  such  Affected  Person's  capital  as  a  consequence  of  this  Agreement,  or  the  Commitments of, or the Loans made or supported by, such Affected Person, in each case to a  level below that which such Affected Person could have achieved but for such Change in Law  (taking into consideration such Affected Person's policies with respect to capital adequacy and  liquidity), then, beginning on the Settlement Date following the calendar month during which the  Transferor received written request therefor, setting forth in reasonable detail the calculation of  such reduced rate of return, the Transferor will pay to such Affected Person, in accordance with  Section 3.01(b ), such additional amount or amounts as will compensate such Affected Person for any such reduction suffered; provided , that such amounts shall only be payable by the Transferor to  such  Affected  Person  so  long  as  (a)  such  Affected  Person  is  charging  such  amounts  to similarly situated borrowers or (b) an Official Body has indicated to the Affected Person that the Commitments of, or the Loans made or supported by, such  Affected  Person,  or  other  similar transactions are, subject to such Change in Law.              (c)   Certificates  for  Reimbursement .  A certificate of a Class Agent on behalf  of the related Affected Person setting forth the amount or amounts necessary to compensate such  Affected Person as specified in clause  (a)  or (b)  of this Section and delivered to the Transferor  shall be conclusive absent manifest error; provided, that the Affected Person or the Class Agent,  as applicable, shall have prepared such certificate with due care and in good faith and that such  certificate  sets  forth  in  reasonable  detail  the  basis  and  calculation  of  such  amounts.   The  Transferor shall pay such Affected Person the amount shown as due on any such certificate on  the Settlement Date following its receipt thereof in accordance with Section 3.01(b ).               (d)   Delay  in  Requests .  Failure or delay on the part of any Affected Person to  demand compensation pursuant to this Section shall not  constitute  a  waiver  of such Affected  Person's right to demand such compensation; provided  that the Transferor shall not be required  to compensate an Affected Person pursuant to this Section for any increased costs or expenses  incurred or reductions suffered more than nine (9) months prior to the date that such Affected  Person (or its related Class Agent or Class Investor on its behalf) notifies the Transferor of the  Change  in  Law  giving  rise  to  such  increased  costs  or  expenses  or  reductions  and  of  such  Affected Person's intention to claim compensation therefor; provided  further  that, if the Change  in Law giving rise to such increased costs or expenses or reductions is retroactive, then the nine-  month  period  referred  to  above  shall  be  extended  to  include  the  period  of  retroactive  effect  thereof.                                       98 70  Redline                                       82 

 

      SECTION 12.04  Taxes .              (a)   Withholding  of  Taxes;  Gross-Up . Each payment by the Transferor under  this  Agreement  or  any  other  Transaction  Document  to  any  Affected  Person  shall  be  made  without deduction or withholding for any Taxes, except as required by Applicable Law imposed  by an Official Body. If any Applicable Law (as determined in the good faith discretion of an  applicable Withholding Agent) requires the deduction or withholding of any Tax from any such  payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to  make  such  deduction  or  withholding  and  shall  timely  pay  the  full  amount  of  deducted  or  withheld Taxes to the relevant Official Body in accordance with Applicable Law.  If any such  Tax is an Indemnified Tax, then the amount payable by  the  Transferor  shall  be  increased  as  necessary so that, after such deduction or withholding has been made (including such deductions  and withholdings applicable to additional amounts payable under this Section), the applicable  Affected Person receives an amount equal to the amount it would have received had no such  deduction or withholding been made.               (b)  Payment  of  Other  Taxes  by  the  Transferor .  The Transferor shall timely pay  or  cause  to  be  paid  any  Other  Taxes  to  the  relevant  Official  Body  in  accordance  with Applicable  Law,  or,  at  the  option  of  the  Administrative  Agent,  timely  reimburse  it  for  the payment of, any Other Taxes imposed by an Official Body.              (c)   Evidence  of  Payments . As soon as practicable after any payment of Taxes by  or  on  behalf  of  the  Transferor  to  an  Official  Body  pursuant  to  this  Section  12.04,  the Transferor shall deliver to the Administrative Agent and each applicable Class Agent the original or a certified copy of a receipt issued by such Official Body evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent and the applicable Class Agent.              (d)   Indemnification   by   the   Transferor .  The  Transferor  shall  indemnify  each Affected Person receiving any payment under any Transaction Document for any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts paid or payable under this paragraph) payable or paid by such Affected Person or required to be withheld or  deducted  from  a  payment  to  such  Affected  Person and  any  reasonable  expenses  arising therefrom  or  with  respect  thereto,  whether  or  not  such  Indemnified  Taxes  were  correctly  or legally imposed or asserted by the relevant Official Body.  The indemnity under this paragraph shall be paid by the Transferor beginning on the Settlement Date following the calendar month during which the Transferor receives a certificate from the related Class Agent of such Affected Person (with a copy to the Administrative Agent) stating the amount of any Indemnified Taxes so paid or payable by such Affected Person and describing in reasonable detail the basis for the indemnification  claim.  Such  certificate  shall  be  conclusive  of  the  amount  so  paid  or  payable absent manifest error.              (e)   Indemnification  of  the  Administrative  Agent  by  Affected  Persons .  Each  Class Agent Bank Investor shall severally indemnify the Administrative Agent, within ten (10)  days after demand therefor (i) for any Taxes attributable to such Class Agent, such Bank Investor  or their related Affected Persons (but, in the case of any Indemnified Taxes, only to the extent                                      98 70  Redline                                       83 

 

that the Transferor has not already indemnified (or is not already scheduled to indemnify) the Administrative  Agent  for  such  Indemnified  Taxes  and  without  limiting  the  obligation  of  the Transferor to do so), (ii) any Taxes attributable to the failure of such Class Agent, such Bank Investor  or  their  related  Affected  Persons  to  comply  with  Section   13.03(g )  relating  to  the  maintenance  of a Participant Register and (iii) any Excluded Taxes attributable to such Class  Agent, such Bank Investor or their related Affected Persons, in each case, that are payable or  paid  by  the  Administrative  Agent  in  connection  with  any  Transaction  Document,  and  any  reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were  correctly or legally imposed or asserted by the relevant Official Body.  A certificate as to the  amount of such payment or liability delivered to any Class Agent by the Administrative Agent  shall be conclusive absent manifest error.  Each Class Agent and each Class Investor, on behalf  of themselves and their related Affected Persons hereby authorizes the Administrative Agent to  set off and apply any and all amounts at any time owing to such Affected Persons under any  Transaction  Document  or  otherwise  payable  by  the  Administrative  Agent  to  such  Affected  Persons from any other source against any amount due to the Administrative Agent under this  paragraph (e) .              (f)   Status  of  Affected  Persons . (i) Any Affected Person that is entitled to an  exemption from, or reduction of, any applicable withholding Tax with respect to any payments  under  any  Transaction  Document  shall  deliver  to  each Withholding Agent, on or prior to the  Amendment Date and (so long as it remains eligible to do so) at the time or times reasonably  requested  by  such  Withholding  Agent,  such  properly completed  and  executed  documentation  reasonably  requested  by  such  Withholding  Agent  as  will  permit  such  payments  to  be  made  without, or at a reduced rate of, withholding. In addition,  any  Affected  Person  receiving  any  payment under any Transaction Document, if reasonably requested by any Withholding Agent,  shall deliver such other documentation prescribed by Applicable Law or reasonably requested by  such Withholding Agent as will enable such Withholding  Agent  to  determine  whether  or  not  such  Affected  Person  is  subject  to  any  backup  withholding  or  information  reporting  requirements.  Notwithstanding  anything  to  the  contrary  in  the  preceding  two  sentences,  the  completion, execution and submission of such documentation (other than such documentation  set forth in clauses  (A)  through (E)  of this paragraph  (g)(ii)  below) shall not be required if in such  Affected Person's reasonable judgment such completion, execution or submission would subject such Affected Person to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Affected Person.  Upon the reasonable request of any Withholding Agent, an Affected Person shall update any form or certification previously delivered  pursuant  to  this  Section   12.04(f ).  If  any  form  or  certification  previously  delivered pursuant to this Section  12.04(f ) expires or becomes obsolete or inaccurate in any respect with respect to any Affected Person, such Affected Person shall promptly (and in any event within ten (10) days after such expiration, obsolescence or inaccuracy) notify each Withholding Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so. Notwithstanding any other provision of this paragraph, a Withholding Agent shall not be required to deliver any form pursuant to this paragraph that it is not legally able to deliver.                                        98 70  Redline                                       84 

 

                  (ii)  Without  limiting  the  generality  of  the  foregoing,  each  Affected       Person  receiving  any  payment  under  any  Transaction Document  shall,  if  it  is  legally       eligible  to  do so, deliver to each Withholding Agent (in such number of copies as is       reasonably requested by such Withholding Agent) on or prior to the date on which such       Affected Person becomes a party hereto (or if not a party hereto, on or prior to the date on       which it would, contingently or otherwise, become entitled to any payments hereunder)       and  from  time  to  time  thereafter  upon  the  reasonable  request  of  the  Transferor  or  the       Administrative Agent, duly completed and executed copies of whichever of the following       is applicable:                           (A)  in the case of an Affected Person that is a U.S. Person, IRS                   Form W-9 certifying that such Class Investor is exempt from U.S. Federal                   backup withholding tax;                          (B)   in the case of an Affected Person that is a Foreign Lender                   claiming the benefits of an income tax treaty to which the United States of                   America  is  a  party  (1)  with  respect  to  payments  of interest  under  this                   Agreement,  IRS  Form  W-8BEN-E  establishing  an  exemption  from,  or                   reduction  of,  U.S.  Federal  withholding  Tax  pursuant  to  the  "interest"                   article  of  such  tax  treaty  and  (2)  with  respect  to any  other  applicable                   payments  under  this  Agreement,  IRS  Form  W-8BEN-E  establishing  an                   exemption from, or reduction of, U.S. Federal withholding Tax pursuant                   to the "business profits" or "other income" article of such tax treaty;                          (C)   in the case of an Affected Person that is a Foreign Lender                   for  which  payments  under  this  Agreement  constitute income  that  is                   effectively  connected  with  such  Affected  Person's  conduct  of a trade or                   business in the United States of America, IRS Form W-8ECI;                          (D)   in the case of an Affected Person that is a Foreign Lender                   claiming the benefits of the exemption for portfolio interest under Section                   881(c) of the Code, both (1) IRS Form W -8BEN-E and (2) a certificate to                   the effect that such Affected Person is not (x) a "bank" within the meaning                   of Section 881(c)(3)(A) of the Code, (y) a "10 percent shareholder" of the                   Transferor within the meaning of Section 881(c)(3)(B) of the Code or (z) a                   "controlled foreign corporation" described in Section 881(c)(3)(C) of the                   Code (each, a "U.S. Tax Compliance Certificate ");                          (E)   in the case of an Affected Person that is a Foreign Lender                   and is not the beneficial owner of payments made under this Agreement                   (including a partnership or a participating Class Investor), (1) an IRS Form                   W-8IMY  on  behalf  of  itself  and  (2)  the  relevant  forms  prescribed  in                   clauses  (A) , (B) , (C) , (D)  and (F)  of this paragraph  (g)(ii)  that would be                   required  of  each  such  beneficial  owner,  partner  of such  partnership  or                   participant  if  such  beneficial  owner,  partner  or  participant  were  a  Class                                      98 70  Redline                                       85 

 

                  Investor; provided  that if such Class Investor is a partnership and one or                   more of its partners are claiming the exemption for portfolio interest under                   Section 881(c) of the Code, such Class Investor may provide a U.S. Tax                   Compliance Certificate on behalf of such partners; or                          (F)   any  other  form  prescribed  by  law  as  a  basis  for claiming                    exemption from, or a reduction of, U.S. Federal withholding Tax, together                    with such supplementary documentation as shall be necessary to enable                    each Withholding Agent to determine the amount of Tax (if any) required                    by Applicable Law to be withheld.                     (iii) If a payment received by an Affected Person under any Transaction        Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such        Affected  Person  were  to  fail  to  comply  with  the  applicable  reporting  requirements  of        FATCA  (including  those  contained  in  Section  1471(b)  or  1472(b)  of  the  Code,  as        applicable), such Affected Person shall deliver to any Withholding Agent, at the time or        times  prescribed  by  law  and  at  such  time  or  times  reasonably  requested  by  such        Withholding  Agent,  such  documentation  prescribed  by  applicable  law  (including  as        prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation        reasonably  requested  by  such  Withholding  Agent  as  may  be  necessary  for  such        Withholding Agent to comply with its obligations under FATCA, to determine that such        Affected Person has or has not complied with such Affected Person's obligations under        FATCA and, as necessary, to determine the amount to deduct and withhold from such        payment.  Solely for purposes of this clause  (f)(iii) , "FATCA" shall include any and all        amendments  made  to  FATCA  after  the  date  of  this  Agreement  and  any  fiscal  or        regulatory  legislation,  rules  or  practices  adopted pursuant  to  any  intergovernmental        agreement entered into in connection with FATCA.               (g)   Treatment  of  Certain  Refunds . If any Affected Person determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including additional amounts paid pursuant to this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such Affected Person and without interest (other than any interest paid by the relevant Official Body with respect to such refund).  In the event such Affected Person is required to repay such refund to the relevant Official Body, such indemnifying party shall repay to such Affected Person, upon the request of the related Class Agent on behalf of such Affected Person (or in the event such indemnifying party  is  the  Transferor,  in  accordance  with  Section  3.01(b ) beginning on the Settlement Date  following  the  calendar  month  during  which  the  Transferor  has  received  such  request),  the  amount of the refund paid by such Affected Person  to such indemnifying party pursuant to the  prior  sentence  (plus  any  penalties,  interest  or  other  charges  imposed  by  the  relevant  Official  Body).  Notwithstanding anything to the contrary in this paragraph, in no event will any Affected  Person be required to pay any amount to any indemnifying party pursuant to this paragraph if  such payment would place such Affected Person in a less favorable position (on a net after-Tax                                       98 70  Redline                                       86 

 

basis)  than  such  Affected  Person  would  have  been  in the Tax subject to indemnification and giving  rise  to  such  refund  had  not  been  deducted,  withheld  or  otherwise  imposed  and  the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any Affected Person to make available its Tax returns  (or  any  other  information  relating  to  its  Taxes  that  it  deems  confidential)  to  the indemnifying party or any other Person.              (h)   Survival .  Each party's obligations under this Section  12.04 shall survive  the resignation or replacement of the Administrative Agent or any assignment of rights by, or the  replacement  of,  any  Credit  Party,  the  termination  of  the  Commitments  and  the  repayment,  satisfaction or discharge of all the Obligations and the Collection Agent's obligations hereunder.               (i)   Intended  Tax  Treatment .  Notwithstanding anything to the contrary herein or in any other Transaction Document, all parties to this Agreement covenant and agree to treat each Loan under this Agreement as debt (and all Interest as interest) for all federal, state, local and franchise tax purposes and agree not to take any position on any tax return inconsistent with the foregoing.              (j)   References  to  Applicable  Law .  All references to Applicable Law in this Section 12.04 shall be deemed to include FATCA.        SECTION 12.05  Replacement   Persons .   If  (i)  the  Transferor  receives  a  claim  for  reimbursement or compensation under Section 12.03 by any Class Investor or any other Affected Person relating to a Class Investor, or if the Transferor is required to pay any Indemnified Taxes or additional amounts to any Class Investor or any Official Body for the account of any Class Investor  pursuant  to  Section  12.04 and, in each case, payment thereof is not waived  by  such Class Investor or Affected Person, as applicable, (ii) any Class Investor becomes a Defaulting Lender or (iii) any Class Investor becomes a Non-Extending Lender, then the Transferor may, at its sole expense and effort, upon notice to such Class Investor and the Administrative Agent, require  such  Class  Investor  to  assign  and  delegate,  without  recourse  (in  accordance  with  and subject  to  the  restrictions  contained  in,  and  consents  required  by,  Section  13.03),  all  of  its  interests,  rights  (other  than  its  existing  rights  to  reimbursement,  indemnification  or  other  payments  pursuant  to  this  Article  XII)  and  obligations  under  this  Agreement  and  the  related Transaction  Documents  to  an  assignee  pursuant  to  Section  13.03  that  shall  assume  such obligations  (which  assignee  may  be  another  Class  Investor,  if  a  Class  Investor  accepts  such assignment); provided  that:              (a)   the Transferor shall have paid to the Administrative Agent the assignment  fee (if any) specified in Section 13.03;              (b)   such Class Investor shall have received payment of an amount equal to the outstanding principal of its Capital, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Transaction Documents from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Transferor (in the case of all other amounts);                                       98 70  Redline                                       87 

 

            (c)   in  the  case  of  any  such  assignment  resulting  from  a  claim  for  compensation under Section  12.03 or payments required to be made pursuant to Section  12.04, such assignment will result in a reduction in such compensation or payments thereafter;              (d)   such assignment does not conflict with Applicable Law; and              (e)   in the case of any assignment resulting from a Class Investor becoming a Non-Extending Lender, the applicable assignee shall have consented to the applicable extension of the Scheduled Termination Date.  A  Class  Investor  shall  not  be  required  to  make  any such  assignment  or  delegation  if,  prior thereto, as a result of a waiver by such Class Investor or otherwise, the circumstances entitling the Transferor to require such assignment and delegation cease to apply.        SECTION 12.06  Costs   and   Expenses .   In  addition  to  the  rights  of  indemnification  granted under Section  12.01 hereof, the Transferor agrees to pay (or if applicable, reimburse), in  accordance with Section  3.01(b ) beginning on the Settlement Date following the calendar month during which the Transferor has received written demand therefor, all reasonable out of pocket expenses (including, without limitation, attorneys', accountants', rating agencies', and other third parties' fees and expenses, any filing fees and expenses incurred by officers or employees of any Credit Party) or intangible, documentary or recording taxes incurred by or on behalf of any of the Credit Parties (i) in connection with the preparation, negotiation, execution and delivery of this Agreement,  the  other  Transaction  Documents  and  any documents  or  instruments  delivered pursuant hereto and thereto and the transactions contemplated hereby or thereby (including the perfection or protection of the security interest granted hereunder) and (ii) from time to time (A) relating to any amendments, waivers or consents under this Agreement or the other Transaction Documents,  (B)  arising  in  connection  with  any  Credit  Party's  enforcement  or  preservation  of rights (including the perfection and protection of the security interest granted hereunder), or (C) arising in connection with any audit, dispute, disagreement, litigation or preparation for litigation involving this Agreement or any of the other Transaction Documents.                                   ARTICLE XIII                                 MISCELLANEOUS        SECTION 13.01  Amendments, Etc.              (a)   No  failure  on  the  part  of  any  Credit  Party  to  exercise,  and  no  delay  in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.              (b)   Except as set forth below, no amendment or waiver of any provision of this  Agreement  or  consent  to  any  departure  by  any  party  from  any  such  provision  shall  be effective unless in writing and signed by the Transferor, the Administrative Agent, each Class                                      98 70  Redline                                       88 

 

Conduit (so long as such Class Conduit holds any Capital) and the Majority Class Agents, and each waiver or consent granted hereunder shall be effective only in the specific instance and for the specific purpose for which given; provided , that:                    (i)   no  such  amendment  or  waiver  shall,  without  the  prior  written        consent of all Bank Investors (including any Defaulting Lender), amend, modify or waive        any provision of this Agreement in any way which would reduce or impair Collections or        the repayment of its Capital, Interest, Fees or other fees payable hereunder to the Bank        Investors; or                     (ii)  no  such  amendment  or  waiver  shall,  without  the prior  written        consent  of  each  Bank  Investor  (including  any  Defaulting  Lender)  directly  affected        thereby,  amend,  modify  or  waive  any  provision  of  this  Agreement  in  any  way  which        would:                           (A)   increase  the  Servicing  Fees  (other  than  as  permitted                    pursuant to Section 8.06(b ));                          (B)   modify  any  provision  of  this  Agreement,  the  Purchase                   Agreement  or  the  Originator  Sale  Agreement  relating  to  the  timing  of                   payments  required  to  be  made  by  the  Transferor,  the  Seller  or  any                   Originator,  as  applicable,  or  the  application  of  the  proceeds  of  such                   payments;                          (C)   permit  the  appointment  of  any  Person  (other  than  the                   Administrative Agent) as successor Collection Agent; or                          (D)   release  any  Collateral  from  the  lien  provided  by  this                    Agreement (other than as expressly contemplated herein).   In addition, this Agreement may be amended: (x) by the Administrative Agent, the Transferor,  the Collection Agent and the Class Investors and the Class Agent of the applicable Class to (A)  increase the Commitment of such Class (and correspondingly increase the Facility Limit), (B)  add a Class, (C) add a Related Class Conduit or a Related Bank Investor for such Class or (D)  any  combination  of  the  foregoing;  and  (y)  by  the  Administrative  Agent,  with  notice  to  the  Transferor, the Collection Agent and the Class Agents, to update Schedule  I  hereto to reflect any  of the amendments contemplated in the preceding clause  (x) , the effects of any assignment in accordance with Section  13.03(e ) or the effects of any reduction in Commitments pursuant to Section 2.04(b ).        SECTION 13.02  Notices,  Etc.   All notices and other communications hereunder shall,  unless  otherwise  stated  herein,  be  in  writing  (which  shall  include  facsimile  and  e-mail  communication) and delivered, to each party hereto, at its address set forth under its name on  Schedule   III  hereto or at such other address as shall be designated by such party in a written notice to the other parties hereto.  Notices and communications by facsimile or e-mail shall be                                       98 70  Redline                                       89 

 

effective  when  sent,  and  notices  and  communications  sent  by  other  means  shall  be  effective when received.        SECTION 13.03  Assignments .              (a)   Assignment  by  Class  Conduits .  Each Class Conduit may assign all or any  portion of its rights hereunder (including, without limitation, all or any portion of its Loans), with  notice to the Administrative Agent:                     (i)   to  any  Program  Support  Provider  of  such  Class  Conduit,  any        related  commercial  paper  issuer,  or  any  trustee  of such  Class  Conduit  or  any  related        commercial paper issuer, in each case without the consent of any other party;                    (ii)  to any other Class Investor with prior notice to the Transferor but        without the consent of any other party; or                     (iii) to  any  other  Person,  with  the  prior  written  consent  of  the        Transferor  (such  consent  not  to  be  unreasonably  withheld,  conditioned  or  delayed;        provided ,  however , that such consent shall not be required if a Termination  Event  or       Potential  Termination  Event  has  occurred  and  is  continuing),  and  the  prior  written       consent of the Administrative Agent.              (b)   Assignment   by   Bank   Investors .   Each  Bank  Investor  may  assign  to  any  Person all or a portion of its rights and obligations hereunder (including, without limitation, all or  any portion of its Commitment or its Loans), with notice to the Administrative Agent; provided ,  however  that                    (i)   except for an assignment by a Bank Investor to either an Affiliate        of such Bank Investor or any other Bank Investor, each such assignment shall require the        prior written consent of the Transferor (such consent not to be unreasonably withheld,        conditioned or delayed; provided , however , that such consent shall not be required if a       Termination Event or a Potential Termination Event has occurred and is continuing) and       the prior written consent of the Administrative Agent;                    (ii)  each such assignment shall be of a constant, and  not  a  varying,       percentage of all rights and obligations under this Agreement;                    (iii) the portion of the Commitment being assigned pursuant  to  each       such assignment shall not be less than the lesser of (A) $10,000,000 and (B) all of the       assigning Bank Investor's Commitment; and                    (iv)  the parties to each such assignment shall execute and deliver to the       Administrative Agent, for its acceptance and recording in the Register, an Assignment       and Acceptance Agreement.  Upon  such  execution,  delivery,  acceptance  and  recording  from  and  after  the  effective  date specified in such Assignment and Acceptance Agreement, (x) the assignee thereunder shall be a                                      98 70  Redline                                       90 

 

party to this Agreement, and to the extent that rights and obligations under this Agreement have been assigned to it pursuant to such Assignment and Acceptance Agreement, have the rights and obligations of a Bank Investor hereunder and (y) the assigning Bank Investor shall, to the extent that rights and obligations have been assigned by it pursuant to such Assignment and Acceptance Agreement, relinquish such rights and be released from such obligations under this Agreement (and,  in  the  case  of  an  Assignment  and  Acceptance  Agreement  covering  all or the remaining portion of an assigning Bank Investor's rights and obligations under this Agreement, such Bank Investor shall cease to be a party hereto).              (c)   Assignment  by  Class  Agents .  Each Class Agent may assign its rights and obligations hereunder, with notice to the Administrative Agent:  (i) to any of its Affiliates, (ii) to an  assignee  Class  Agent  in  connection  with  the  assignment  of  all  rights  and  obligations associated with such Class Agent's Class pursuant to Sections 13.03(b)  and, if applicable Section 13.03(a ) and (iii) to any other Person, with the prior written  consent  of  the  Transferor  (such consent not to be unreasonably withheld, conditioned or delayed; provided , however , that such consent shall not be required if a Termination Event or Potential Termination Event has occurred and is continuing), and the prior written consent of the Administrative Agent.               (d)  Register .  The Administrative Agent shall, acting solely for this purpose as an agent of the Transferor, maintain at its address referred to on Schedule  III  of this Agreement  (or such other address of the Administrative Agent notified by the Administrative Agent to the  other  parties  hereto)  a  copy  of  each  Assignment  and Acceptance Agreement delivered to and  accepted by it and a register for the recordation of the names and addresses of the Bank Investors  and the Class Conduits, the Commitment of each Bank Investor and the aggregate outstanding  Capital (and stated interest) of the Loans of each Class Conduit and Bank Investor from time to  time  (the  "Register ").   The  entries  in  the  Register  shall  be  conclusive  and  binding  for  all  purposes,  absent  manifest  error,  and  the  Transferor,  the  Collection  Agent,  the Administrative  Agent, the Class Agents, and the other Credit Parties  shall  treat  each  Person  whose  name  is  recorded  in  the  Register  as  a  Bank  Investor  or Class Conduit, as the case may be, under this  Agreement for all purposes of this Agreement.  The Register shall be available for inspection by  the Transferor, the Collection Agent, any Class Agent, any Class Conduit or any Bank Investor at  any reasonable time and from time to time upon reasonable prior notice.               (e)   Procedure .   Following  any  assignment  effected  pursuant  to  Sections 13.03(a)   through  (c ),  the  Administrative  Agent  shall,  promptly  following  its  receipt  of  all  necessary  information:   (i)  reflect  the  effect  of  such assignment in the Register; and (ii) give  notice thereof to the Transferor, the Collection Agent and each Class Agent, together with an  updated Schedule I reflecting the effect of such assignment, and if applicable, any changes in the  Maximum  Commitments  among  the  parties  to  the  related  Assignment  and  Acceptance  Agreement.               (f)   Participations .  Each Bank Investor may sell participations to one or more participants (each, a "Participant ") in or to all or a portion of its rights and/or obligations under  this  Agreement  (including,  without  limitation,  all or  a  portion  of  its  Commitment  and  the  interests in the Loans owned by it); provided , however , that:                                       98 70  Redline                                       91 

 

                  (i)   such Bank Investor's obligations under this Agreement (including,       without limitation, its Commitment to the Transferor hereunder) shall remain unchanged;                    (ii)  such Bank Investor shall remain solely responsible  to  the  other       parties to this Agreement for the performance of such obligations;                    (iii) the  Transferor,  the  Collection  Agent  and  each Credit  Party  shall       continue  to  deal  solely  and directly with such Bank  Investor  in  connection  with  such       Bank Investor's rights and obligations under this Agreement;                    (iv)  such Participant shall be entitled to the benefits of Section 12.04(a )        but to no greater amount than the participating Class Investor would have been entitled to        receive; provided , that such Participant agrees to be subject to the provisions of Section       12.05  as  if it were an assignee under Section  13.03, and such Participant will provide       such Class Investor with the applicable tax forms that it would have been required to       provide under Section 12.04(f ) if it were a Class Investor hereunder; and                    (v)   any agreement or instrument pursuant to which such Bank Investor       sells such a participation shall provide that such Bank Investor shall retain the sole right       to enforce this Agreement and to approve any amendment, modification or waiver of any       provision  of  this  Agreement  or  any  other  Transaction  Document  (except  that  such       agreement  or  instrument  may  provide  that  such  Bank Investor  will  not,  without  the       consent of the Participant, agree to any amendment, modification or waiver described in       Section 13.01(b ) that affects such Participant).              (g)   Participant  Register .  Each Bank Investor that sells a participation shall, acting solely for this purpose as an agent of the Transferor, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant's interest in the Loans or other obligations  under  this  Agreement  (the  "Participant Register "); provided  that no Bank Investor shall have any obligation to disclose all or any portion  of the Participant Register (including the identity of any Participant or any information relating to  a Participant's interest in any Commitments, Loans or its other obligations under this Agreement)  to  any  Person  except  to  the  extent  that  such  disclosure  is  necessary  to  establish  that  such  Commitment, Loan or other obligation is in registered  form  under  Section  5f.103-1(c)  of  the  United States Treasury Regulations.  The entries in the Participant Register shall be conclusive  absent manifest error, and such Bank Investor shall treat each Person whose name is recorded in  the Participant Register as the owner of such participation for all purposes of this Agreement  notwithstanding  any  notice  to  the  contrary.   For  the  avoidance  of  doubt,  the  Administrative  Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a  Participant Register.               (h)   Assignment  by  the  Administrative  Agent .  The Administrative Agent may  assign its rights and obligations hereunder (i) to any of its Affiliates and (ii) to any other Person,  with the prior written consent of the Transferor (such consent not to be unreasonably withheld,                                       98 70  Redline                                       92 

 

conditioned  or  delayed;  provided ,  however ,  that  such  consent  shall  not  be  required  if  a  Termination Event or Potential Termination Event has occurred and is continuing).               (i)   Assignments   by   the   Transferor   or   the   Collection   Agent .   Neither  the  Transferor nor, except as provided in Section  8.01, the Collection Agent may assign any of its  respective rights or obligations hereunder or any interest therein without the prior written consent  of the Administrative Agent and each Class Agent (such consent to be provided or withheld in  the sole discretion of such Person).               (j)  Pledge   to   a   Federal   Reserve   Bank .  Notwithstanding  anything  to  the  contrary  set  forth  herein,  (i)  any  Class  Investor, Program  Support  Provider  or  any  of  their  respective Affiliates may at any time pledge or grant a security interest in all or any portion of its  interest  in,  to  and  under  this  Agreement  (including,  without  limitation,  rights  to  payment  of  Capital and Interest) and any other Transaction Document to secure its obligations to a Federal  Reserve Bank, without notice to or the consent of the  Transferor,  the  Collection  Agent,  any  Affiliate thereof or any Credit Party; provided , however , that that no such pledge shall relieve such assignor of its obligations under this Agreement.              (k)   Disclosures  in  Connection  with  Assignments .  Each assignor of a Loan or any  interest  therein  may,  in  connection  with  the  assignment  or  participation,  disclose  to  the assignee or Participant any information relating to the Transferor and its Affiliates, including the Pool Receivables, furnished to such assignor by or on behalf of the Transferor and its Affiliates or  by  the  Administrative  Agent;  provided   that,  prior  to  any  such  disclosure,  the  assignee  or  Participant agrees to preserve the confidentiality of any confidential information relating to the  Transferor  and  its  Affiliates  received  by  it  from  any  of  the  foregoing  entities  in  a  manner  consistent with Section 13.05 and 13.06.         SECTION 13.04 No Proceedings; Limitation on Payments.              (a)   Each of the Transferor, the Administrative Agent, the Collection Agent, each Class Agent and each Class Investor hereby covenants and agrees (and each other Person who acquires any interest in a Loan shall be deemed to have covenanted and agreed) with each Class Conduit and with each other that, until the date that is one (1) year plus one day after the Commercial Paper or other outstanding senior indebtedness of such Class Conduit have been paid  in  full,  it  will  not  institute  or  cause  or  participate  in  the  institution  of  any  Event  of Bankruptcy against such Class Conduit.              (b)   Each  of  the  Collection  Agent,  each  Class  Agent  (other  than  the Administrative  Agent)  and  each  Class  Investor  hereby  covenants  and  agrees  (and  each  other Person who acquires any interest in a Loan shall be deemed to have covenanted and agreed) with the Transferor and with each other that, until the date that is one (1) year plus one day after the Final Payout Date, it will not institute or cause or participate in the institution of any Event of Bankruptcy against the Transferor.  The Administrative Agent hereby covenants and agrees that, until the date that is one (1) year plus one day after the Final Payout Date, it will not institute or cause or participate in the institution of any Event of Bankruptcy against the Transferor without the consent of the Majority Class Agents.                                      98 70  Redline                                       93 

 

            (c)   Notwithstanding  any  provisions  contained  in  this  Agreement  to  the contrary, a Class Conduit shall not, and shall be under no obligation to, pay any amount, if any, payable by it pursuant to this Agreement or any other  Transaction  Document  unless  (i)  such Class Conduit has received funds which may be used to make such payment and which funds are not required to repay such Class Conduit's Commercial  Paper  when  due  and  (ii)  after  giving effect to such payment, either (x) such Class Conduit could issue Commercial Paper to refinance all of its outstanding Commercial Paper (assuming such outstanding Commercial Paper matured at  such  time)  in  accordance  with  the  program  documents  governing  such  Class  Conduit's securitization program or (y) all of such Class Conduit's Commercial Paper is paid in full.  Any amount  which  any  Class  Conduit  does  not  pay  pursuant  to  the  operation  of  the  preceding sentence shall not constitute a claim (as defined in Section 101 of the Bankruptcy Code) against or company obligation of such Class Conduit for any such insufficiency unless and until such Class Conduit satisfies the provisions of clauses (i)  and (ii)  above.  Nothing in this Section 13.04  shall limit or subordinate the right of the Transferor to receive or make a claim for the remaining  balance of any Collections in accordance with Section  3.01(b ).  The provisions of this Section 13.04 shall survive any assignment or termination of this Agreement.         SECTION 13.05  Treatment   of   Certain   Information;   Confidentiality .   Each  of  the  Administrative  Agent,  the  Class  Investors  and  the  Class  Agents  agrees  to  maintain  the  confidentiality of the Information (as defined below), except that Information may be disclosed  (a) to its Affiliates and to its and its Affiliates' respective partners, directors, officers, employees,  agents,  advisors  and  representatives  (it  being  understood  that  the  Persons  to  whom  such  disclosure is made will be informed of the confidential nature of such Information and instructed  to keep such Information confidential), (b) to the extent requested by any regulatory authority  purporting  to  have  jurisdiction  over  it  (including any  self-regulatory  authority,  such  as  the  National Association of Insurance Commissioners), (c) to the extent required by applicable laws  or regulations or by any subpoena or similar legal process, (d) among the Administrative Agent  and the Bank Investors only, and in respect of Information  relating  to  the  Collection  Agent's  servicing  hereunder  and  the  Receivables  (including information  relating  to  defaults,  delinquencies,  collection,  payment  and/or  liquidation  rates  and  concentrations),  to  any  party  hereto,  (e)  in  connection  with  the  exercise  of  any remedies  hereunder  or  under  any  other  Transaction  Document  or  any  action  or  proceeding  relating  to  this  Agreement  or  any  other  Transaction Document or the enforcement of rights hereunder or thereunder, (f) subject to an  agreement  containing  provisions  substantially  the  same  as  those  of  this  Section,  to  (i)  any  assignee of or participant in, or any prospective assignee of or participant in, any of its rights or  obligations under this Agreement or (ii) any potential  Bank  Investor,  any  related  commercial  paper issuer that finances a Class Conduit or any related Program Support Provider, (g) solely in  respect of Information relating to the Collection Agent's servicing hereunder and the Receivables  (including information relating to defaults, delinquencies, collection, payment and/or liquidation  rates  and  concentrations),  to  any  nationally  recognized  statistical  rating  organization  in  compliance with Rule 17g-5 under the Securities Exchange Act of 1934 (or to any other rating  agency in compliance with any similar rule or regulation in any relevant jurisdiction), (h) with  the consent of the Collection Agent or the Transferor or (i) to the extent such Information (x)  becomes publicly available other than as a result of  a  breach  of  this  Section  or  (y)  becomes                                       98 70  Redline                                       94 

 

available to the Administrative Agent, any Class Investor, Class Agent or any of their respective Affiliates  on  a  nonconfidential  basis  from  a  source  other  than  the  Collection  Agent  or  the Transferor.        For purposes of this Section, "Information " means all information clearly identified at the  time of delivery as confidential and received from the Collection Agent or the Transferor relating  to the Collection Agent or the Transferor or any of their respective businesses, other than any  such information that is available to the Administrative Agent, any Class Investor or Class Agent  on a nonconfidential basis prior to disclosure by the Collection Agent or the Transferor.  Any  Person required to maintain the confidentiality of Information as provided in this Section shall be  considered to have complied with its obligation to do so if such Person has exercised the same  degree of care to maintain the confidentiality of such Information as such Person would accord to  its own confidential information.         Each  of  the  Administrative  Agent,  the  Class  Investors  and  the  Class  Agents  acknowledges that (a) the Information may include material non-public information concerning  the  Collection  Agent  or  the  Transferor,  as  the  case may be, (b) it has developed compliance  procedures  regarding  the  use  of  material  non-public  information  and  (c)  it  will  handle  such  material non-public information in accordance with Applicable Law, including Federal and state  securities Laws.         SECTION 13.06  Confidentiality   Agreement .   The  Transferor  and  Tech  Data  hereby agree  that  they  will  not  disclose  the  contents  of  this  Agreement  or  any  other  proprietary  or confidential information of any Class Agent, the Class Conduits, the Administrative Agent, any Bank Investor or any related Program Support Provider to any other Person except (i) its auditors and  attorneys,  employees  or  financial  advisors  (other  than  any  commercial  bank)  and  any nationally  recognized  rating  agency,  provided  such auditors,  attorneys,  employees,  financial advisors or rating agencies are informed of the highly confidential nature of such information or (ii)  as  otherwise  required  by  applicable  law  or  order  of  a  court  of  competent  jurisdiction. Notwithstanding  Section  13.05,  this  Section  13.06  or  any  provision in this Agreement to the  contrary, the Transferor, the Collection Agent, Tech Data, each Class Investor, each Class Agent,  the  Administrative  Agent,  each  Indemnified  Party  and  any  successor  or  assign  of  any  of  the  foregoing  (and  each  employee,  representative  or  other  agent  of  any  of  the  foregoing)  may  disclose  to  any  and  all  Persons,  without  limitation  of  any  kind,  the  "tax  treatment"  and  "tax  structure"  (in  each  case,  within  the  meaning  of  Treasury Regulation Section 1.6011-4) of the  transactions contemplated herein and all materials of any kind (including opinions or other tax  analyses) that are or have been provided to any of the foregoing relating to such tax treatment or  tax structure, and it is hereby confirmed that each of the foregoing have been so authorized since  the commencement of discussions regarding the transactions.         SECTION 13.07  GOVERNING    LAW .   THIS  AGREEMENT,  INCLUDING  THE  RIGHTS  AND  DUTIES  OF  THE  PARTIES  HERETO,  SHALL  BE  GOVERNED  BY,  AND  CONSTRUED  IN  ACCORDANCE  WITH,  THE  LAWS  OF  THE  STATE  OF  NEW  YORK  (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF                                       98 70  Redline                                       95 

 

THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF).        SECTION 13.08  Execution  in  Counterparts .  This Agreement may be executed in any  number of counterparts, each of which when so executed shall be deemed to be an original and  all of which when taken together shall constitute one and the same agreement.  Delivery of an  executed counterpart hereof by facsimile or other electronic means shall be equally effective as  delivery of an originally executed counterpart.         SECTION 13.09  Integration;   Binding   Effect;   Third-Party   Beneficiaries;   Survival   of Termination .   This  Agreement  and  the  other  Transaction  Documents  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.  This Agreement  shall be binding upon and inure to the benefit of the parties hereto and their respective successors  and  permitted  assigns.   The  Secured  Parties  are  express  third-party  beneficiaries  hereunder;  provided , that the rights of each such third-party beneficiary shall be subject to the compliance by such third-party beneficiary with the provisions of the Transaction Documents (including, to the extent applicable, the provisions of Section  12.04(f ) and Section  12.05 of this Agreement)  that  relate  to  such  rights.   No  other  third-party  beneficiary  rights  are  intended  or  conferred  hereunder.  This Agreement shall create and constitute the continuing obligations of the parties  hereto in accordance with its terms and shall remain in full force and effect until the Final Payout  Date;  provided ,  however ,  that  the  provisions  of  Sections   10.04,  10.06,  11.04,  12.01,  12.02, 12.03 , 12.04, 12.05, 12.06, 13.04, 13.05, 13.06, 13.07, 13.09, 13.11 and 13.12 shall survive any assignment or termination of this Agreement.        SECTION 13.10  CONSENT     TO   JURISDICTION .   (a)  EACH  PARTY  HERETO HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN NEW YORK CITY, NEW YORK IN  ANY  ACTION  OR  PROCEEDING  ARISING  OUT  OF  OR  RELATING  TO  THIS AGREEMENT, AND EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY  LAW,  IN  SUCH  FEDERAL  COURT.   THE  PARTIES  HERETO            HEREBY IRREVOCABLY  WAIVE,  TO  THE  FULLEST  EXTENT  THEY  MAY  EFFECTIVELY  DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION  OR  PROCEEDING.   THE  PARTIES  HERETO  AGREE  THAT  A  FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.              (b)   EACH OF THE PARTIES HERETO CONSENTS TO THE SERVICE OF  ANY  AND  ALL  PROCESS  IN  ANY  SUCH  ACTION  OR  PROCEEDING  BY  THE MAILING  OF  COPIES  OF  SUCH  PROCESS  TO  IT  AT  ITS  ADDRESS  SPECIFIED  IN SECTION   13.02.   NOTHING  IN  THIS  SECTION  13.10  SHALL  AFFECT  THE  RIGHT  OF                                       98 70  Redline                                       96 

 

ANY PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.        SECTION 13.11 WAIVER      OF   JURY   TRIAL .   EACH  PARTY  HERETO HEREBY  WAIVES,  TO  THE  MAXIMUM  EXTENT  PERMITTED  BY  APPLICABLE LAW, 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  OR  ANY  OTHER  TRANSACTION DOCUMENT.        SECTION 13.12  Limitation of Liability .              (a)   No claim may be made by the Transferor or any Affiliate thereof or any other  Person  against  any  Credit  Party  or  any  of  their  respective  incorporators,  stockholders, members, partners or Related Parties of any such Person or those of any of their Affiliates 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 other Transaction Document, or any act, omission or event occurring in connection herewith or therewith; and each of the Transferor and the Collection Agent 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.  None of the Credit Parties and their respective Affiliates shall have any liability to the Transferor or any Affiliate thereof or any  other  Person  asserting  claims  on  behalf  of  or  in  right  of  the  Transferor  or  any  Affiliate thereof in connection with or as a result of this Agreement or any other Transaction Document or the  transactions  contemplated  hereby  or  thereby,  except to the extent that any losses, claims, damages, liabilities or expenses incurred by the Transferor or any Affiliate thereof result from the  gross  negligence  or  willful  misconduct of such Credit  Party  in  performing  its  duties  and obligations hereunder and under the other Transaction Documents to which it is a party.              (b)   The obligations of each of the parties under this Agreement and each of  the Transaction Documents are solely the corporate or limited liability company obligations of  such Person, and no recourse shall be had against, and no personal liability whatsoever shall  attach to or be incurred by any incorporator, stockholder, member, partner or Related Party of  any such Person or those of any of their Affiliates by the enforcement of any assessment or by  any legal or equitable proceeding, by virtue of any statute or otherwise, and any and all personal  liability for breaches by any such Person of such obligations, either at common law or at equity,  or  by  statute,  rule  or  regulation,  is  hereby  expressly  waived  with  respect  to  every  such  incorporator,  stockholder,  member,  partner  or  Related  Party  as  a  condition  of  and  in  consideration for the execution of this Agreement.         SECTION 13.13  Intent   of   the   Parties .   The  parties  have  entered  into  this  Agreement  with the intention that the Loans and the obligations of the Transferor hereunder will be treated  under United States federal, and applicable state, local and foreign tax law as debt (the "Intended Tax  Treatment ").  The Transferor, the Collection Agent, the Administrative Agent and the other Credit Parties agree to file no tax return, or take any action, inconsistent with the Intended Tax                                      98 70  Redline                                       97 

 

Treatment unless required by law.  Each assignee and each Participant acquiring an interest in a Loan,  by  its  acceptance  of  such  assignment  or  participation,  agrees  to  comply  with  the immediately preceding sentence.        SECTION 13.14  USA  Patriot  Act .  Each of the Administrative Agent and each of the  other Credit Parties hereby notifies the Transferor and the Collection Agent that pursuant to the  requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26,  2001)  (the  "PATRIOT   Act "),  the  Administrative  Agent  and  the  other  Credit  Parties  may  be required to obtain, verify and record information that identifies the Transferor and the Collection Agent,  which  information  includes  the  name,  address,  tax  identification  number  and  other information regarding the Transferor and the Collection Agent that will allow the Administrative Agent  and  the  other  Credit  Parties  to  identify  the Transferor  and  the  Collection  Agent  in accordance with the PATRIOT Act. This notice is given in accordance with the requirements of the  PATRIOT  Act.   Each  of  the  Transferor  and  the  Collection  Agent  agrees  to  provide  the Administrative Agent and each other Credit Parties, from time to time, with all documentation and other information required by bank regulatory authorities under "know your customer" and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act.        SECTION 13.15  Severability .  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.        SECTION 13.16  Mutual   Negotiations .   This  Agreement  and  the  other  Transaction Documents are the product of mutual negotiations by the parties thereto and their counsel, and no party shall be deemed the draftsperson of this Agreement or any other Transaction Document or any provision hereof or thereof or to have provided the same.  Accordingly, in the event of any inconsistency  or  ambiguity  of  any  provision  of  this  Agreement  or  any  other  Transaction Document, such inconsistency or ambiguity shall not be interpreted against any party because of such party's involvement in the drafting thereof.        SECTION 13.17  Acknowledgment   and   Consent   to   Bail-In   of   EEA   Financial Institutions .  Notwithstanding anything to the contrary in any Transaction Document or in any  other  agreement,  arrangement  or  understanding  among  any  such  parties,  each  party  hereto  acknowledges that any liability of any EEA Financial Institution arising under any Transaction  Document,  to  the  extent  such  liability  is  unsecured,  may  be  subject  to  the  Write-Down  and  Conversion  Powers  of  an  EEA  Resolution  Authority  and  agrees  and  consents  to,  and  acknowledges and agrees to be bound by:               (a)   the  application  of  any  Write-Down  and  Conversion  Powers  by  an  EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and               (b)   the  effects  of  any  Bail-in  Action  on  any  such  liability,  including,  if applicable:                                      98 70  Redline                                       98 

 

                  (i)   a reduction in full or in part or cancellation of any such liability;                    (ii)  a conversion of all, or a portion of, such liability  into  shares  or        other instruments of ownership in such EEA Financial Institution, its parent undertaking,        or a bridge institution that may be issued to it or otherwise conferred on it, and that such        shares or other instruments of ownership will be accepted by it in lieu of any rights with        respect to any such liability under this Agreement or any other Transaction Document; or                     (iii) the variation of the terms of such liability in connection with the        exercise of the write-down and conversion powers of any EEA Resolution Authority.               (c)   The following additional defined terms shall apply  for  purposes  of  this  Section 13.17:                    (i)   "Bail-In   Action "  means  the  exercise  of  any  Write-Down  and       Conversion Powers by the applicable EEA Resolution Authority in respect of any liability       of an EEA Financial Institution.                    (ii)  "Bail-In   Legislation "  means,  with  respect  to  any  EEA  Member       Country implementing Article 55 of Directive 2014/59/EU of the European Parliament       and of the Council of the European Union, the implementing law for such EEA Member       Country from time to time which is described in the EU Bail-In Legislation Schedule.                    (iii) "EEA   Financial   Institution "  means  (a)  any  credit  institution  or        investment  firm  established  in  any  EEA  Member  Country  which  is  subject  to  the        supervision  of  an  EEA  Resolution  Authority,  (b)  any  entity  established  in  an  EEA        Member  Country  which  is  a  parent  of  an  institution described  in  clause   (a)   of  this       definition, or (c) any financial institution established in an EEA Member Country which       is a subsidiary of an institution described in clauses  (a)  or  (b)  of this definition and is        subject to consolidated supervision with its parent;                     (iv)  "EEA   Member   Country "  means  any  of  the  member states of the        European Union, Iceland, Liechtenstein, and Norway.                     (v)   "EEA   Resolution   Authority "  means  any  public  administrative        authority  or  any  person  entrusted  with  public  administrative  authority  of  any  EEA        Member Country (including any delegee) having responsibility for the resolution of any        EEA Financial Institution.                     (vi)  "EU   Bail-In   Legislation   Schedule "  means  the  EU  Bail-In       Legislation  Schedule  published  by  the  Loan  Market  Association  (or  any  successor       person), as in effect from time to time.                    (vii) "Write-Down  and  Conversion  Powers " means, with respect to any       EEA  Resolution  Authority,  the  write-down  and  conversion  powers  of  such  EEA       Resolution Authority from time to time under the Bail-In Legislation for the applicable                                      98 70  Redline                                       99 

 

      EEA Member Country, which write-down and conversion powers are described in the       EU Bail-In Legislation Schedule.                               [Signature Pages Follow]                                        98 70  Redline                                       100 

 

      IN  WITNESS  WHEREOF,  the  parties  have  caused  this  Agreement  to  be  executed  by their respective officers thereunto duly authorized, as of the date first above written.                                      TECH DATA FINANCE SPV, INC.    ,                                     as Transferor                                      By:                                      Name:                                     Title:                                      TECH DATA CORPORATION       ,                                     as Collection Agent                                      By:                                      Name:                                     Title:                                                                     Amended and Restated                                       S-1              Transfer and Adminsitration Agreement  Redline                                        1 

 

                                    THE BANK OF NOVA SCOTIA      ,                                     as Administrative Agent                                       By:                                      Name:                                     Title:                                       THE BANK OF NOVA SCOTIA      ,                                     as Class Agent for the Scotia Bank Class                                       By:                                      Name:                                     Title:                                       THE BANK OF NOVA SCOTIA      ,                                     as a Bank Investor for the Scotia Bank Class                                       By:                                      Name:                                     Title:                                       LIBERTY STREET FUNDING LLC      ,                                     as Class Conduit for the Scotia Bank Class                                       By:                                      Name:                                     Title:                                                                     Amended and Restated                                       S-2              Transfer and Adminsitration Agreement  Redline                                        2 

 

                                    PNC BANK, NATIONAL ASSOCIATION       ,                                     as Class Agent for the PNC Class                                       By:                                      Name:                                     Title:                                       PNC BANK, NATIONAL ASSOCIATION       ,                                     as a Bank Investor for the PNC Class                                       By:                                      Name:                                     Title:                                                                     Amended and Restated                                       S-3              Transfer and Adminsitration Agreement  Redline                                        3 

 

                                    THE  MUFG   BANK  OF TOKYO-MITSUBISHI                                     UFJ , LTD. , NEW YORK BRANCH   ,                                     as a Bank Investor for the BTMU MUFG  Class                                       By:                                      Name:                                     Title:                                       THE  MUFG   BANK  OF TOKYO-MITSUBISHI                                     UFJ , LTD. , NEW YORK BRANCH   ,                                     as a Class Agent for the BTMU MUFG  Class                                       By:                                      Name:                                     Title:                                       VICTORY RECEIVABLES CORPORATION         ,                                     as a Class Conduit of the BTMU MUFG  Class                                       By:                                      Name:                                     Title:                                                                     Amended and Restated                                       S-4              Transfer and Adminsitration Agreement  Redline                                        4 

 

                                    MIZUHO BANK, LTD.    ,                                     as Class Agent for the Mizuho Class                                       By:                                      Name:                                     Title:                                       MIZUHO BANK, LTD.    ,                                     as a Bank Investor for the Mizuho Class                                       By:                                      Name:                                     Title:                                                                     Amended and Restated                                       S-5              Transfer and Adminsitration Agreement  Redline                                        5 

 

                                    BNP PARIBAS   ,                                     as Class Agent for the BNP Class                                       By:                                      Name:                                     Title:                                      By:                                      Name:                                     Title:                                       BNP PARIBAS   ,                                     as a Bank Investor for the BNP Class                                       By:                                      Name:                                     Title:                                      By:                                      Name:                                     Title:                                      STARBIRD FUNDING CORPORATION        ,                                     as a Class Conduit of the BNP Class                                       By:                                      Name:                                     Title:                                                                     Amended and Restated                                       S-6              Transfer and Adminsitration Agreement  Redline                                        6 

 

                                  EXHIBIT A                              [Form of Loan Request]                               [Letterhead of Transferor]  [Date]  [Administrative Agent]  [Class Agents]        Re:   Loan Request  Ladies and Gentlemen:        Reference  is  hereby  made  to  that  certain  Amended  and  Restated  Transfer  and Administration Agreement, dated as of [____], 2017 among Tech Data Finance SPV, Inc. (the "Transferor "), Tech Data Corporation, as Collection Agent (the "Collection  Agent "), the Class  Investors  party  thereto,  the  Class  Agents  party  thereto  and  The  Bank  of  Nova  Scotia,  as  Administrative  Agent  (in  such  capacity,  the  "Administrative   Agent ")  (as  further  amended, supplemented or otherwise modified from time to time, the "Agreement ").  Capitalized terms  used in this Loan Request and not otherwise defined herein shall have the meanings assigned  thereto in the Agreement.         This letter constitutes a Loan Request pursuant to Section 2.02(a) of the Agreement.  The Transferor hereby request a Loan in the amount of [$_______] to be made on [_____, 20__] of which will be funded as follows:                              CLASS           AMOUNT                         Scotia Bank Class      $[___]                         BTMU MUFG  Class       $[___]                         PNC Class              $[___]                         Mizuho Class           $[___]                         BNP Class              $[___]        The proceeds of such Loan should be deposited to [Account number], at [Name, Address and ABA Number of Bank].  After giving effect to such Loan, the Aggregate Capital will be [$_______].                                      Exhibit A-1  Redline                                        1 

 

     The  Transferor  hereby  represents  and  warrants  as  of  the  date  hereof,  and  after  giving effect to such Credit Extension, as follows:              (i)   the  representations  and  warranties  of  the  Transferor  and  the  Collection       Agent contained in Sections 6.01 and 6.02 of the Agreement are true and correct in all       material respects on and as of the date of such Credit Extension as though made on and       as  of  such  date  unless  such  representations  and  warranties  by  their  terms  refer  to  an       earlier date, in which case they shall be true and correct in all material respects on and as       of such earlier date;              (ii)  no Termination Event or Potential Termination Event has occurred and is       continuing, and no Termination Event or Potential Termination Event would result from       such Credit Extension;              (iii) no Borrowing Base Deficit exists or would exist after giving effect to such       Credit Extension; and              (iv)  No Termination Date shall have occurred.                                     Exhibit A-2  Redline                                       2 

 

      IN WITNESS WHEREOF, the undersigned has executed this letter by its duly authorized officer as of the date first above written.                                      Very truly yours,                                      TECH DATA FINANCE SPV, INC.                                      By:                                      Name:                                     Title:                                      Exhibit A-3   Redline                                        3 

 

                                  EXHIBIT B                   [Form of Assignment and Acceptance Agreement]                             Dated as of ___________, 20__  Section 1 .           Commitment assigned:                                        $[_____]          Assignor's remaining Commitment:                            $[_____]          Capital allocable to Commitment assigned:                   $[_____]          Assignor's remaining Capital:                               $[_____]          Interest (if any) allocable to Capital assigned:            $[_____]          Interest (if any) allocable to Assignor's remaining Capital: $[_____]  Section 2.        Effective Date of this Assignment and Acceptance Agreement:   [__________]        Upon  execution  and  delivery  of  this  Assignment  and Acceptance  Agreement  by  the assignee and the assignor and the satisfaction of the other conditions to assignment specified in Section 13.03(b) of the Agreement (as defined below), from and after the effective date specified above,  the  assignee  shall  become a party to, and, to  the  extent  of  the  rights  and  obligations thereunder being assigned to it pursuant to this Assignment and Acceptance Agreement, shall have the rights and obligations of a Bank Investor under  that  certain  Amended  and  Restated Transfer  and  Administration  Agreement,  dated  as  of [____], 2017 among Tech Data Finance SPV, Inc., Tech Data Corporation, as Collection Agent, the Class Investors party thereto, the Class Agents party thereto and The Bank of Nova Scotia, as Administrative Agent (as further amended, supplemented or otherwise modified from time to time, the "Agreement ").  Capitalized terms used and not otherwise defined herein shall have the meanings assigned thereto in the Agreement.        By executing this Assignment and Acceptance Agreement, the assignee hereby covenants and agrees with each other party to the Agreement that:  (i) until the date that is one year plus one  day  after  the  Commercial  Paper  or  other  outstanding  senior  indebtedness  of  any  Class Conduit has been paid in full, it will not institute or cause or participate in the institution of any Event of Bankruptcy against such Class Conduit, and (ii) until the date that is one year plus one day after the Final Payout Date, it will not institute or cause or participate in the institution of any Event of Bankruptcy against the Transferor.  This covenant shall survive any termination of the Agreement.                               (Signature Pages Follow)                                      Exhibit B-1  Redline                                        1 

 

ASSIGNOR:                                 [_________]                                      By:                                     Name:                                     Title    ASSIGNEE:                                 [_________]                                      By:                                     Name:                                     Title                                      [Address]    Accepted          as           of          date           first         above  written:   THE             BANK               OF             NOVA               SCOTIA,  as Administrative Agent   By:  Name: Title:  TECH              DATA              FINANCE              SPV,             INC.  as Transferor  By:  Name: Title:                                      Exhibit B-2  Redline                                        2 

 

                                  EXHIBIT C                             Credit and Collection Policy                                      (Attached)                                      Exhibit C-1  Redline                                        1 

 

                                 EXHIBIT D                              Form of Periodic Report                                    (Attached)                                     Exhibit D-1  Redline                                       1Exhibit 4.1

 

 

ENPHASE ENERGY, INC.

 

AND

 

U.S. BANK NATIONAL ASSOCIATION,

 

as Trustee

 

INDENTURE

 

Dated as of June 5, 2019

 

1.00% Convertible Senior Notes due 2024

 

 

 

TABLE OF CONTENTS

 

 

	
 
    	
PAGE
    
	
 
    	
 
    
	
ARTICLE 1
    
	
DEFINITIONS
    
	
 
    	
 
    
	
Section 1.01.
    	
Definitions
    	
1
    
	
Section 1.02.
    	
References to Interest
    	
11
    
	
 
    	
 
    
	
ARTICLE 2
    
	
ISSUE,   DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
    
	
 
    	
 
    
	
Section 2.01.
    	
Designation and Amount
    	
12
    
	
Section 2.02.
    	
Form of Notes
    	
12
    
	
Section 2.03.
    	
Date and Denomination of Notes; Payments of   Interest and Defaulted Amounts
    	
13
    
	
Section 2.04.
    	
Execution, Authentication and Delivery of Notes
    	
14
    
	
Section 2.05.
    	
Exchange and Registration of Transfer of Notes; Restrictions   on Transfer; Depositary
    	
15
    
	
Section 2.06.
    	
Mutilated, Destroyed, Lost or Stolen Notes
    	
20
    
	
Section 2.07.
    	
Temporary Notes
    	
21
    
	
Section 2.08.
    	
Cancellation of Notes Paid, Converted, Etc.
    	
22
    
	
Section 2.09.
    	
CUSIP Numbers
    	
22
    
	
Section 2.10.
    	
Additional Notes; Repurchases
    	
22
    
	
 
    	
 
    
	
ARTICLE 3
    
	
SATISFACTION AND   DISCHARGE
    
	
 
    	
 
    
	
Section 3.01.
    	
Satisfaction and Discharge
    	
23
    
	
 
    	
 
    
	
ARTICLE 4
    
	
PARTICULAR   COVENANTS OF THE COMPANY
    
	
 
    	
 
    
	
Section 4.01.
    	
Payment of Principal and Interest
    	
23
    
	
Section 4.02.
    	
Maintenance of Office or Agency
    	
23
    
	
Section 4.03.
    	
Appointments to Fill Vacancies in Trustee’s   Office
    	
24
    
	
Section 4.04.
    	
Provisions as to Paying Agent
    	
24
    
	
Section 4.05.
    	
Existence
    	
25
    
	
Section 4.06.
    	
Rule 144A Information Requirement and Annual   Reports
    	
26
    
	
Section 4.07.
    	
Stay, Extension and Usury Laws
    	
27
    
	
Section 4.08.
    	
Compliance Certificate; Statements as to Defaults
    	
27
    
	
Section 4.09.
    	
Further Instruments and Acts
    	
28
    

 

i

 

	
ARTICLE 5
    
	
LISTS OF HOLDERS   AND REPORTS BY THE COMPANY AND THE TRUSTEE
    
	
 
    	
 
    
	
Section 5.01.
    	
Lists of Holders
    	
28
    
	
Section 5.02.
    	
Preservation and Disclosure of Lists
    	
28
    
	
ARTICLE 6
    
	
DEFAULTS AND   REMEDIES
    
	
 
    	
 
    
	
Section 6.01.
    	
Events of Default
    	
28
    
	
Section 6.02.
    	
Acceleration; Rescission and Annulment
    	
30
    
	
Section 6.03.
    	
Additional Interest
    	
31
    
	
Section 6.04.
    	
Payments of Notes on Default; Suit Therefor
    	
31
    
	
Section 6.05.
    	
Application of Monies Collected by Trustee
    	
33
    
	
Section 6.06.
    	
Proceedings by Holders
    	
33
    
	
Section 6.07.
    	
Proceedings by Trustee
    	
34
    
	
Section 6.08.
    	
Remedies Cumulative and Continuing
    	
35
    
	
Section 6.09.
    	
Direction of Proceedings and Waiver of Defaults   by Majority of Holders
    	
35
    
	
Section 6.10.
    	
Notice of Defaults
    	
35
    
	
Section 6.11.
    	
Undertaking to Pay Costs
    	
36
    
	
 
    	
 
    
	
ARTICLE 7
    
	
CONCERNING THE   TRUSTEE
    
	
 
    	
 
    
	
Section 7.01.
    	
Duties and Responsibilities of Trustee
    	
36
    
	
Section 7.02.
    	
Reliance on Documents, Opinions, Etc.
    	
38
    
	
Section 7.03.
    	
No Responsibility for Recitals, Etc.
    	
39
    
	
Section 7.04.
    	
Trustee, Paying Agents, Conversion Agents, Bid   Solicitation Agent or Note Registrar May Own Notes
    	
39
    
	
Section 7.05.
    	
Monies and Shares of Common Stock to Be Held in   Trust
    	
39
    
	
Section 7.06.
    	
Compensation and Expenses of Trustee
    	
39
    
	
Section 7.07.
    	
Officer’s Certificate as Evidence
    	
40
    
	
Section 7.08.
    	
Eligibility of Trustee
    	
40
    
	
Section 7.09.
    	
Resignation or Removal of Trustee
    	
41
    
	
Section 7.10.
    	
Acceptance by Successor Trustee
    	
42
    
	
Section 7.11.
    	
Succession by Merger, Etc.
    	
42
    
	
Section 7.12.
    	
Trustee’s Application for Instructions from the   Company
    	
43
    
	
 
    	
 
    
	
ARTICLE 8
    
	
CONCERNING THE HOLDERS
    
	
 
    	
 
    
	
Section 8.01.
    	
Action by Holders
    	
43
    
	
Section 8.02.
    	
Proof of Execution by Holders
    	
43
    
	
Section 8.03.
    	
Who Are Deemed Absolute Owners
    	
43
    
	
Section 8.04.
    	
Company-Owned Notes Disregarded
    	
44
    
	
Section 8.05.
    	
Revocation of Consents; Future Holders Bound
    	
44
    

 

ii

 

	
ARTICLE 9
    
	
HOLDERS’   MEETINGS
    
	
 
    	
 
    
	
Section 9.01.
    	
Purpose of Meetings
    	
45
    
	
Section 9.02.
    	
Call of Meetings by Trustee
    	
45
    
	
Section 9.03.
    	
Call of Meetings by Company or Holders
    	
45
    
	
Section 9.04.
    	
Qualifications for Voting
    	
46
    
	
Section 9.05.
    	
Regulations
    	
46
    
	
Section 9.06.
    	
Voting
    	
46
    
	
Section 9.07.
    	
No Delay of Rights by Meeting
    	
47
    
	
 
    	
 
    
	
ARTICLE 10
    
	
SUPPLEMENTAL   INDENTURES
    
	
 
    	
 
    
	
Section 10.01.
    	
Supplemental Indentures Without Consent of   Holders
    	
47
    
	
Section 10.02.
    	
Supplemental Indentures with Consent of Holders
    	
48
    
	
Section 10.03.
    	
Effect of Supplemental Indentures
    	
49
    
	
Section 10.04.
    	
Notation on Notes
    	
49
    
	
Section 10.05.
    	
Evidence of Compliance of Supplemental Indenture   to Be Furnished Trustee
    	
50
    
	
 
    	
 
    
	
ARTICLE 11
    
	
CONSOLIDATION,   MERGER, SALE, CONVEYANCE AND LEASE
    
	
 
    	
 
    
	
Section 11.01.
    	
Company May Consolidate, Etc. on Certain   Terms
    	
50
    
	
Section 11.02.
    	
Successor Corporation to Be Substituted
    	
50
    
	
Section 11.03.
    	
Opinion of Counsel to Be Given to Trustee
    	
51
    
	
 
    	
 
    
	
ARTICLE 12
    
	
IMMUNITY OF   INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
    
	
 
    	
 
    
	
Section 12.01.
    	
Indenture and Notes Solely Corporate Obligations
    	
51
    
	
 
    	
 
    
	
ARTICLE 13
    
	
[INTENTIONALLY   OMITTED]
    
	
 
    	
 
    
	
ARTICLE 14
    
	
CONVERSION OF   NOTES
    
	
 
    	
 
    
	
Section 14.01.
    	
Conversion Privilege
    	
52
    
	
Section 14.02.
    	
Conversion Procedure; Settlement Upon Conversion
    	
54
    
	
Section 14.03.
    	
Increased Conversion Rate   Applicable to Certain Notes Surrendered in Connection with Make-Whole   Fundamental Changes
    	
58
    
	
Section 14.04.
    	
Adjustment of Conversion Rate
    	
60
    
	
Section 14.05.
    	
Adjustments of Prices
    	
69
    
	
Section 14.06.
    	
Shares to Be Fully Paid
    	
69
    
	
Section 14.07.
    	
Effect of Recapitalizations, Reclassifications   and Changes of the Common Stock.
    	
70
    

 

iii

 

	
Section 14.08.
    	
Certain Covenants
    	
71
    
	
Section 14.09.
    	
Responsibility of Trustee
    	
72
    
	
Section 14.10.
    	
Notice to Holders Prior to Certain Actions
    	
72
    
	
Section 14.11.
    	
Stockholder Rights Plans
    	
73
    
	
 
    	
 
    
	
ARTICLE 15
    
	
REPURCHASE OF   NOTES AT OPTION OF HOLDERS
    
	
 
    	
 
    
	
Section 15.01.
    	
Intentionally Omitted
    	
73
    
	
Section 15.02.
    	
Repurchase at Option of Holders Upon a   Fundamental Change
    	
73
    
	
Section 15.03.
    	
Withdrawal of Fundamental Change Repurchase   Notice
    	
76
    
	
Section 15.04.
    	
Deposit of Fundamental Change Repurchase Price
    	
76
    
	
Section 15.05.
    	
Covenant to Comply with Applicable Laws Upon   Repurchase of Notes
    	
77
    
	
 
    	
 
    
	
ARTICLE 16
    
	
NO OPTIONAL   REDEMPTION
    
	
 
    	
 
    
	
Section 16.01.
    	
No Optional Redemption
    	
77
    
	
 
    	
 
    
	
ARTICLE 17
    
	
MISCELLANEOUS   PROVISIONS
    
	
 
    	
 
    
	
Section 17.01.
    	
Provisions Binding on Company’s Successors
    	
77
    
	
Section 17.02.
    	
Official Acts by Successor Corporation
    	
77
    
	
Section 17.03.
    	
Addresses for Notices, Etc.
    	
78
    
	
Section 17.04.
    	
Governing Law; Jurisdiction
    	
78
    
	
Section 17.05.
    	
Evidence of Compliance with Conditions Precedent;   Certificates and Opinions of Counsel to Trustee
    	
79
    
	
Section 17.06.
    	
Legal Holidays
    	
79
    
	
Section 17.07.
    	
No Security Interest Created
    	
80
    
	
Section 17.08.
    	
Benefits of Indenture
    	
80
    
	
Section 17.09.
    	
Table of Contents, Headings, Etc.
    	
80
    
	
Section 17.10.
    	
Authenticating Agent
    	
80
    
	
Section 17.11.
    	
Execution in Counterparts
    	
81
    
	
Section 17.12.
    	
Severability
    	
81
    
	
Section 17.13.
    	
Waiver of Jury Trial
    	
81
    
	
Section 17.14.
    	
Force Majeure
    	
81
    
	
Section 17.15.
    	
Calculations
    	
82
    
	
Section 17.16.
    	
U.S.A. Patriot Act
    	
82
    

 

iv

 

EXHIBIT

 

	
Exhibit A
    	
Form of Note
    	
A-1
    

 

v

 

INDENTURE, dated as of June 5, 2019, between ENPHASE ENERGY, INC., a Delaware corporation, as issuer (the “Company”, as more fully set forth in Section 1.01) and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee (the “Trustee”, as more fully set forth in Section 1.01).

 

W I T N E S S E T H:

 

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of its 1.00% Convertible Senior Notes due 2024 (the “Notes”), initially in an aggregate principal amount not to exceed $132,000,000, and in order to provide the terms and conditions upon which the Notes are to be authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Indenture; and

 

WHEREAS, the Form of Note, the certificate of authentication to be borne by each Note, the Form of Notice of Conversion, the Form of Fundamental Change Repurchase Notice and the Form of Assignment and Transfer to be borne by the Notes are to be substantially in the forms hereinafter provided; and

 

WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee or a duly authorized authenticating agent, as in this Indenture provided, the valid, binding and legal obligations of the Company, and this Indenture a valid agreement according to its terms, have been done and performed, and the execution of this Indenture and the issuance hereunder of the Notes have in all respects been duly authorized.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

That in order to declare the terms and conditions upon which the Notes are, and are to be, authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Notes by the Holders thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective Holders from time to time of the Notes (except as otherwise provided below), as follows:

 

ARTICLE 1
 DEFINITIONS

 

Section 1.01.  Definitions.  The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01.  The words “herein,” “hereof,” “hereunder,” and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.  The terms defined in this Article include the plural as well as the singular.

 

 

“Additional Interest” means all amounts, if any, payable pursuant to Section 4.06(d), Section 4.06(e) and Section 6.03, as applicable.

 

“Additional Shares” shall have the meaning specified in Section 14.03(a).

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For the purposes of this definition, “control,” when used with respect to any specified Person means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. Notwithstanding anything to the contrary herein, the determination of whether one Person is an “Affiliate” of another Person for purposes of this Indenture shall be made based on the facts at the time such determination is made or required to be made, as the case may be, hereunder.

 

“Bid Solicitation Agent” means the Company or the Person appointed by the Company to solicit bids for the Trading Price of the Notes in accordance with Section 14.01(b)(i).  The Trustee shall initially act as the Bid Solicitation Agent.

 

“Board of Directors” means the board of directors of the Company or a committee of such board duly authorized to act for it hereunder.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors, and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

“Business Day” means, with respect to any Note, any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.

 

“Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity.

 

“Cash Settlement” shall have the meaning specified in Section 14.02(a).

 

“Clause A Distribution” shall have the meaning specified in Section 14.04(c).

 

“Clause B Distribution” shall have the meaning specified in Section 14.04(c).

 

“Clause C Distribution” shall have the meaning specified in Section 14.04(c).

 

“close of business” means 5:00 p.m. (New York City time).

 

“Combination Settlement” shall have the meaning specified in Section 14.02(a).

 

“Commission” means the U.S. Securities and Exchange Commission.

 

2

 

“Common Equity” of any Person means Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.

 

“Common Stock” means the common stock of the Company, par value $0.00001 per share, at the date of this Indenture, subject to Section 14.07.

 

“Company” shall have the meaning specified in the first paragraph of this Indenture, and subject to the provisions of Article 11, shall include its successors and assigns.

 

“Company Order” means a written order of the Company, signed by (a) the Company’s Chief Executive Officer, Chief Financial Officer, President or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”) and (b) any such other Officer designated in clause (a) of this definition or the Company’s Treasurer or Assistant Treasurer or Secretary or any Assistant Secretary, and delivered to the Trustee.

 

“Conversion Agent” shall have the meaning specified in Section 4.02.

 

“Conversion Date” shall have the meaning specified in Section 14.02(c).

 

“Conversion Obligation” shall have the meaning specified in  Section 14.01.

 

“Conversion Price” means as of any time, $1,000, divided by the Conversion Rate as of such time.

 

“Conversion Rate” shall have the meaning specified in Section 14.01

 

“Corporate Trust Office” means the designated office of the Trustee at which at any time this Indenture shall be administered, which office at the date hereof is located at 1 California Street, Suite 1000, San Francisco, California 94111, Attention: Global Corporate Trust Services or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the designated corporate trust office of any successor trustee (or such other address as such successor trustee may designate from time to time by notice to the Holders and the Company).

 

“Custodian” means the Trustee, as custodian for The Depository Trust Company, with respect to the Global Notes, or any successor entity thereto.

 

“Daily Conversion Value” means, for each of the 40 consecutive Trading Days during the Observation Period, 2.5% of the product of (a) the Conversion Rate on such Trading Day and (b) the Daily VWAP for such Trading Day.

 

“Daily Measurement Value” means the Specified Dollar Amount (if any), divided by 40.

 

“Daily Settlement Amount,” for each of the 40 consecutive Trading Days during the Observation Period, shall consist of:

 

3

 

(a)                                 cash in an amount equal to the lesser of (i) the Daily Measurement Value and (ii) the Daily Conversion Value on such Trading Day; and

 

(b)                                 if the Daily Conversion Value on such Trading Day exceeds the Daily Measurement Value, a number of shares of Common Stock equal to (i) the difference between the Daily Conversion Value and the Daily Measurement Value, divided by (ii) the Daily VWAP for such Trading Day.

 

“Daily VWAP” means the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “ENPH  <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such Trading Day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company).  The “Daily VWAP” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.

 

“Default” means any event that is, or after notice or passage of time, or both, would be, an Event of Default.

 

“Defaulted Amounts” means any amounts on any Note (including, without limitation, the Fundamental Change Repurchase Price, principal and interest) that are payable but are not punctually paid or duly provided for.

 

“delivered”, “given”, “mailed”, “notify”, or “sent”, with respect to any notice to be delivered, given or mailed to a Holder pursuant to this Indenture, shall mean notice (x) given to the Depositary (or its designee) pursuant to the standing instructions from the Depositary or its designee, including by electronic mail in accordance with accepted practices or procedures at the Depositary (in the case of a Global Note) or (y) mailed to such Holder by first class mail, postage prepaid, at its address as it appears on the Note Register (in the case of a Physical Note), in each case in accordance with Section 17.03. Notice so “delivered” shall be deemed to include any notice to be “mailed” or “given,” as applicable, under this Indenture.

 

“Depositary” means, with respect to each Global Note, the Person specified in Section 2.05(c) as the Depositary with respect to such Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter, “Depositary” shall mean or include such successor.

 

“Distributed Property” shall have the meaning specified in Section 14.04(c).

 

“Effective Date” shall have the meaning specified in Section 14.03(b), except that, as used in Section 14.04 and Section 14.05, “Effective Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, reflecting the relevant share split or share combination, as applicable.

 

“Event of Default” shall have the meaning specified in Section 6.01.

 

4

 

“Ex-Dividend Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question, from the Company or, if applicable, from the seller of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Form of Assignment and Transfer” shall mean the “Form of Assignment and Transfer” attached as Attachment 3 to the Form of Note attached hereto as Exhibit A.

 

“Form of Fundamental Change Repurchase Notice” shall mean the “Form of Fundamental Change Repurchase Notice” attached as Attachment 2 to the Form of Note attached hereto as Exhibit A.

 

“Form of Note” shall mean the “Form of Note” attached hereto as Exhibit A.

 

“Form of Notice of Conversion” shall mean the “Form of Notice of Conversion” attached as Attachment 1 to the Form of Note attached hereto as Exhibit A.

 

“Fundamental Change” shall be deemed to have occurred at the time after the Notes are originally issued if any of the following occurs:

 

(a)                                 a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than the Company, its Wholly Owned Subsidiaries and the employee benefit plans of the Company and its Wholly Owned Subsidiaries, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group, has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Common Stock representing more than 50% of the voting power of the Common Stock;

 

(b)                                 the consummation of (A) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, securities or other property or assets; or (C) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one of the Company’s Wholly Owned Subsidiaries; provided, however, that a transaction described in clause (A) or (B) in which the holders of all classes of the Company’s Common Equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of Common Equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such transaction in substantially the same proportions as such ownership immediately prior to such transaction shall not be a Fundamental Change pursuant to this clause (b);

 

5

 

(c)                                  the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or

 

(d)                                 the Common Stock (or other common stock underlying the Notes) ceases to be listed or quoted on any of The New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or any of their respective successors);

 

provided, however, that any transaction that constitutes a Fundamental Change pursuant to both clause (a) and clause (b) above shall be deemed a Fundamental Change solely under clause (b) above; and provided, further that a transaction or transactions described in clauses (a) or (b) above shall not constitute a Fundamental Change if at least 90% of the consideration received or to be received by the common stockholders of the Company, excluding cash payments for fractional shares, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of The New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions and as a result of such transaction or transactions the Reference Property for the Notes become such consideration, excluding cash payments for fractional shares (subject to the provisions of Section 14.02(a)). If any transaction in which the Common Stock is replaced by the securities of another entity occurs, following completion of any related Make-Whole Fundamental Change Period (or, in the case of a transaction that would have been a Fundamental Change or a Make-Whole Fundamental Change but for the proviso immediately following clause (d) of this definition, following the effective date of such transaction) references to the Company in this definition shall instead be references to such other entity.

 

“Fundamental Change Company Notice” shall have the meaning specified in Section 15.02(c).

 

“Fundamental Change Repurchase Date” shall have the meaning specified in Section 15.02(a).

 

“Fundamental Change Repurchase Notice” shall have the meaning specified in Section 15.02(b)(i).

 

“Fundamental Change Repurchase Price” shall have the meaning specified in Section 15.02(a).

 

“Global Note” shall have the meaning specified in Section 2.05(b).

 

“Holder,” as applied to any Note, or other similar terms (but excluding the term “beneficial holder”), shall mean any Person in whose name at the time a particular Note is registered on the Note Register.

 

“Indenture” means this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented.

 

“Interest Payment Date” means each June 1 and December 1 of each year, beginning on December 1, 2019.

 

6

 

“Last Reported Sale Price” of the Common Stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is traded.  If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the “Last Reported Sale Price” shall be the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization.  If the Common Stock is not so quoted, the “Last Reported Sale Price” shall be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.

 

“Make-Whole Fundamental Change” means any transaction or event that constitutes a Fundamental Change (as defined above and determined after giving effect to any exceptions to or exclusions from such definition, but without regard to the proviso in clause (b) of the definition thereof).

 

“Make-Whole Fundamental Change Period” shall have the meaning specified in Section 14.03(a).

 

“Market Disruption Event” means, for the purposes of determining amounts due upon conversion (a) a failure by the primary U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading to open for trading during its regular trading session or (b) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock.

 

“Maturity Date” means June 1, 2024.

 

“Measurement Period” shall have the meaning specified in Section 14.01(b)(i).

 

“Merger Event” shall have the meaning specified in Section 14.07(a).

 

“Note” or “Notes” shall have the meaning specified in the first paragraph of the recitals of this Indenture.

 

“Note Register” shall have the meaning specified in Section 2.05(a).

 

“Note Registrar” shall have the meaning specified in Section 2.05(a).

 

“Notice of Conversion” shall have the meaning specified in Section 14.02(b).

 

“Observation Period” with respect to any Note surrendered for conversion means: (i) if the relevant Conversion Date occurs prior to the Observation Period Threshold Date, the 40

 

7

 

consecutive Trading Day period beginning on, and including, the second Trading Day immediately succeeding such Conversion Date; and (ii) if the relevant Conversion Date occurs on or after the Observation Period Threshold Date, the 40 consecutive Trading Days beginning on, and including, the 41st Scheduled Trading Day immediately preceding the Maturity Date.

 

“Observation Period Threshold Date” means the date that is 45 Scheduled Trading Days preceding the Maturity Date.

 

“Offering Memorandum” means the preliminary offering memorandum dated May 29, 2019, as supplemented by the related pricing term sheet dated May 30, 2019, relating to the offering and sale of the Notes.

 

“Officer” means, with respect to the Company, the President, the Chief Executive Officer, the Chief Financial Officer, the Treasurer, the Secretary or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”).

 

“Officer’s Certificate,” when used with respect to the Company, means a certificate that is delivered to the Trustee and that is signed by an Officer of the Company.  Each such certificate shall include the statements provided for in Section 17.05 if and to the extent required by the provisions of such Section.  The Officer giving an Officer’s Certificate pursuant to Section 4.08 shall be the principal executive, financial or accounting officer of the Company.

 

“open of business” means 9:00 a.m. (New York City time).

 

“Opinion of Counsel” means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company, that is delivered to the Trustee, which opinion may contain customary exceptions and qualifications as to the matters set forth therein.  Each such opinion shall include the statements provided for in Section 17.05 if and to the extent required by the provisions of such Section 17.05.

 

“outstanding,” when used with reference to Notes, shall, subject to the provisions of Section 8.04, mean, as of any particular time, all Notes authenticated and delivered by the Trustee under this Indenture, except:

 

(a)                                 Notes theretofore canceled by the Trustee or accepted by the Trustee for cancellation;

 

(b)                                 Notes, or portions thereof, that have become due and payable and in respect of which monies in the necessary amount shall have been deposited in trust with the Trustee or with any Paying Agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent);

 

(c)                                  Notes that have been paid pursuant to Section 2.06 or Notes in lieu of which, or in substitution for which, other Notes shall have been authenticated and delivered pursuant to the terms of Section 2.06 unless proof satisfactory to the Trustee is presented that any such Notes are held by protected purchasers in due course;

 

8

 

(d)                                 Notes converted pursuant to Article 14 and required to be canceled pursuant to Section 2.08; and

 

(e)                                  Notes repurchased by the Company pursuant to the penultimate sentence of Section 2.10.

 

“Paying Agent” shall have the meaning specified in Section 4.02.

 

“Person” means an individual, a corporation, a limited liability company, an association, a partnership, a joint venture, a joint stock company, a trust, an unincorporated organization or a government or an agency or a political subdivision thereof.

 

“Physical Notes” means permanent certificated Notes in registered form issued in denominations of $1,000 principal amount and multiples thereof.

 

“Physical Settlement” shall have the meaning specified in Section 14.02(a).

 

“Predecessor Note” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 2.06 in lieu of or in exchange for a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note that it replaces.

 

“Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock (or other applicable security) have the right to receive any cash, securities or other property or in which the Common Stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors, by statute, by contract or otherwise).

 

“Reference Property” shall have the meaning specified in Section 14.07(a).

 

“Regular Record Date,” with respect to any Interest Payment Date, shall mean the May 15 or November 15 (whether or not such day is a Business Day) immediately preceding the applicable June 1 or December 1 Interest Payment Date, respectively.

 

“Resale Restriction Termination Date” shall have the meaning specified in Section 2.05(c).

 

“Responsible Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

 

9

 

“Restricted Securities” shall have the meaning specified in Section 2.05(c).

 

“Rule 144” means Rule 144 as promulgated under the Securities Act.

 

“Rule 144A” means Rule 144A as promulgated under the Securities Act.

 

“Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading.  If the Common Stock is not so listed or admitted for trading, “Scheduled Trading Day” means a Business Day.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Settlement Amount” has the meaning specified in Section 14.02(a)(iv).

 

“Settlement Method” means, with respect to any conversion of Notes, Physical Settlement, Cash Settlement or Combination Settlement, as elected (or deemed to have been elected) by the Company, in accordance with Article 14.

 

“Settlement Notice” has the meaning specified in Section 14.02(a)(iii).

 

“Significant Subsidiary” means a Subsidiary of the Company that meets the definition of “significant subsidiary” in Article 1, Rule 1-02(w) of Regulation S-X under the Exchange Act.

 

“Specified Dollar Amount” means, in respect of Notes as to which Combination Settlement applies, the maximum cash amount per $1,000 principal amount of such Notes to be received upon conversion as specified in the related Settlement Notice or as otherwise deemed elected by the Company.

 

“Spin-Off” shall have the meaning specified in Section 14.04(c).

 

“Stock Price” shall have the meaning specified in Section 14.03(c).

 

“Subsidiary” means, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such Person.

 

“Successor Company” shall have the meaning specified in Section 11.01(a).

 

“Trading Day” means a day on which (i) trading in the Common Stock (or other security for which a closing sale price must be determined) generally occurs on The NASDAQ Global Select Market or, if the Common Stock (or such other security) is not then listed on The NASDAQ Global Select Market, on the principal other U.S. national or regional securities

 

10

 

exchange on which the Common Stock (or such other security) is then listed or, if the Common Stock (or such other security) is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock (or such other security) is then traded and (ii) a Last Reported Sale Price for the Common Stock (or closing sale price for such other security) is available on such securities exchange or market; provided that if the Common Stock (or such other security) is not so listed or traded, “Trading Day” means a Business Day.

 

“Trading Price” of the Notes on any date of determination means the average of the secondary market bid quotations obtained by the Bid Solicitation Agent for $1,000,000 principal amount of Notes at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers the Company selects for this purpose; provided that if three such bids cannot reasonably be obtained by the Bid Solicitation Agent but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Bid Solicitation Agent, that one bid shall be used. If the Bid Solicitation Agent cannot reasonably obtain at least one bid for $1,000,000 principal amount of Notes from a nationally recognized securities dealer on any determination date, then the Trading Price per $1,000 principal amount of Notes on such determination date shall be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate.

 

“transfer” shall have the meaning specified in Section 2.05(c).

 

“Trigger Event” shall have the meaning specified in Section 14.04(c).

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, as it was in force at the date of execution of this Indenture; provided, however, that in the event the Trust Indenture Act of 1939 is amended after the date hereof, the term “Trust Indenture Act” shall mean, to the extent required by such amendment, the Trust Indenture Act of 1939, as so amended.

 

“Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder.

 

“unit of Reference Property” shall have the meaning specified in Section 14.07(a).

 

“Valuation Period” shall have the meaning specified in Section 14.04(c).

 

“Wholly Owned Subsidiary” means, with respect to any Person, any Subsidiary of such Person, except that, solely for purposes of this definition, the reference to “more than 50%” in the definition of “Subsidiary” shall be deemed replaced by a reference to “100%”.

 

Section 1.02.  References to Interest.  Unless the context otherwise requires, any reference to interest on, or in respect of, any Note in this Indenture shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of Section 4.06(d), Section 4.06(e) and Section 6.03. Unless the context otherwise requires, any express mention of Additional Interest in any provision hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made.

 

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ARTICLE 2
 ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

 

Section 2.01.  Designation and Amount.  The Notes shall be designated as the “1.00% Convertible Senior Notes due 2024.” The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is initially limited to $132,000,000, subject to Section 2.10 and except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of other Notes to the extent expressly permitted hereunder. The Notes to be issued on the date of this Indenture will be represented by one or more Global Notes.

 

Section 2.02.  Form of Notes.  The Notes and the Trustee’s certificate of authentication to be borne by such Notes shall be substantially in the respective forms set forth in Exhibit A, the terms and provisions of which shall constitute, and are hereby expressly incorporated in and made a part of this Indenture.  To the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

 

Any Global Note may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Indenture as may be required by the Custodian or the Depositary, or as may be required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange or automated quotation system upon which the Notes may be listed or traded or designated for issuance or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Notes are subject.

 

Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends or endorsements as the Officer(s) executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, or to conform to usage or to indicate any special limitations or restrictions to which any particular Notes are subject.

 

Each Global Note shall represent such principal amount of the outstanding Notes as shall be specified therein and shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be increased or reduced to reflect repurchases, cancellations, conversions, transfers or exchanges permitted hereby.  Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in such manner and upon instructions given by the Holder of such Notes in accordance with this Indenture.  Payment of principal (including the Fundamental Change

 

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Repurchase Price, if applicable) of, and accrued and unpaid interest on, a Global Note shall be made to the Holder of such Note on the date of payment, unless a record date or other means of determining Holders eligible to receive payment is provided for herein.

 

Section 2.03.  Date and Denomination of Notes; Payments of Interest and Defaulted Amounts.  (a) The Notes shall be issuable in registered form without coupons in denominations of $1,000 principal amount and multiples thereof.  Each Note shall be dated the date of its authentication and shall bear interest from the date specified on the face of such Note.  Accrued interest on the Notes shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.

 

(b)         The Person in whose name any Note (or its Predecessor Note) is registered on the Note Register at the close of business on any Regular Record Date with respect to any Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date.  The principal amount of any Note (x) in the case of any Physical Note, shall be payable at the office or agency of the Company maintained by the Company for such purposes in the United States of America, which shall initially be the Corporate Trust Office and (y) in the case of any Global Note, shall be payable by wire transfer of immediately available funds to the account of the Depositary or its nominee.   The Company shall pay interest (i) on any Physical Notes (A) to Holders holding Physical Notes having an aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of these Notes at their address as it appears in the Note Register and (B) to Holders holding Physical Notes having an aggregate principal amount of more than $5,000,000, either by check mailed to each such Holder or, upon application by such a Holder to the Note Registrar not later than the relevant Regular Record Date, by wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Note Registrar to the contrary or (ii) on any Global Note by wire transfer of immediately available funds to the account of the Depositary or its nominee.

 

(c)          Any Defaulted Amounts shall forthwith cease to be payable to the Holder on the relevant payment date but shall accrue interest per annum at the rate borne by the Notes from, and including, such relevant payment date, and such Defaulted Amounts together with such interest thereon shall be paid by the Company, at its election in each case, as provided in clause (i) or (ii) below:

 

(i)             The Company may elect to make payment of any Defaulted Amounts to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on a special record date for the payment of such Defaulted Amounts, which shall be fixed in the following manner.  The Company shall notify the Trustee in writing of the amount of the Defaulted Amounts proposed to be paid on each Note and the date of the proposed payment (which shall be not less than 25 days after the receipt by the Trustee of such notice, unless the Trustee shall consent to an earlier date), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Amounts or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when deposited to be held in trust for the

 

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benefit of the Persons entitled to such Defaulted Amounts as in this clause provided.  Thereupon the Company shall fix a special record date for the payment of such Defaulted Amounts which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment, and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Company shall promptly notify the Trustee in writing of such special record date and the Trustee, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Amounts and the special record date therefor to be delivered to each Holder at its address as it appears in the Note Register, or by electronic means to the Depositary in the case of Global Notes, not less than 10 days prior to such special record date.  Notice of the proposed payment of such Defaulted Amounts and the special record date therefor having been so delivered, such Defaulted Amounts shall be paid to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on such special record date and shall no longer be payable pursuant to the following clause (ii) of this Section 2.03(c).

 

(ii)          The Company may make payment of any Defaulted Amounts in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after written notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

Section 2.04.  Execution, Authentication and Delivery of Notes.  The Notes shall be signed in the name and on behalf of the Company by the manual or facsimile signature of its Chief Executive Officer, President, Chief Financial Officer, Treasurer, Secretary or any of its Executive or Senior Vice Presidents.

 

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes, and the Trustee in accordance with such Company Order shall authenticate and deliver such Notes, without any further action by the Company hereunder.

 

Only such Notes as shall bear thereon a certificate of authentication substantially in the form set forth on the form of Note attached as Exhibit A hereto, executed manually by an authorized signatory of the Trustee (or an authenticating agent appointed by the Trustee as provided by Section 17.10), shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose.  Such certificate by the Trustee (or such an authenticating agent) upon any Note executed by the Company shall be conclusive evidence that the Note so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture.

 

In case any Officer of the Company who shall have signed any of the Notes shall cease to be such Officer before the Notes so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Notes nevertheless may be authenticated and

 

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delivered or disposed of as though the person who signed such Notes had not ceased to be such Officer of the Company; and any Note may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Note, shall be the Officers of the Company, although at the date of the execution of this Indenture any such person was not such an Officer.

 

Section 2.05.  Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary.  (a) The Company shall cause to be kept at the Corporate Trust Office a register (the register maintained in such office or in any other office or agency of the Company designated pursuant to Section 4.02, the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes.  Such register shall be in written form or in any form capable of being converted into written form within a reasonable period of time.  The Trustee is hereby initially appointed the “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided.  The Company may appoint one or more co-Note Registrars in accordance with Section 4.02.

 

Upon surrender for registration of transfer of any Note to the Note Registrar or any co-Note Registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.05, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture.

 

Notes may be exchanged for other Notes of any authorized denominations and of a like aggregate principal amount, upon surrender of the Notes to be exchanged at any such office or agency maintained by the Company pursuant to Section 4.02.  Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes that the Holder making the exchange is entitled to receive, bearing registration numbers not contemporaneously outstanding.

 

All Notes presented or surrendered for registration of transfer or for exchange, repurchase or conversion shall (if so required by the Company, the Trustee, the Note Registrar or any co-Note Registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and duly executed, by the Holder thereof or its attorney-in-fact duly authorized in writing.

 

No service charge shall be imposed by the Company, the Trustee, the Note Registrar, any co-Note Registrar or the Paying Agent for any exchange or registration of transfer of Notes, but the Company may require a Holder to pay a sum sufficient to cover any documentary, stamp or similar issue or transfer tax required in connection therewith as a result of the name of the Holder of new Notes issued upon such exchange or registration of transfer being different from the name of the Holder of the old Notes surrendered for exchange or registration of transfer.

 

None of the Company, the Trustee, the Note Registrar or any co-Note Registrar shall be required to exchange or register a transfer of (i) any Notes surrendered for conversion or, if a portion of any Note is surrendered for conversion, such portion thereof surrendered for conversion or (ii) any Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn) in accordance with Article 15.

 

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All Notes issued upon any registration of transfer or exchange of Notes in accordance with this Indenture shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.

 

(b)         So long as the Notes are eligible for book-entry settlement with the Depositary, unless otherwise required by law, subject to the fourth paragraph from the end of Section 2.05(c) all Notes shall be represented by one or more Notes in global form (each, a “Global Note”) registered in the name of the Depositary or the nominee of the Depositary.  The transfer and exchange of beneficial interests in a Global Note that does not involve the issuance of a Physical Note shall be effected through the Depositary (but not the Trustee or the Custodian) in accordance with this Indenture (including the restrictions on transfer set forth herein) and the procedures of the Depositary therefor.

 

(c)          Every Note that bears or is required under this Section 2.05(c) to bear the legend set forth in this Section 2.05(c) (together with any Common Stock issued upon conversion of the Notes that is required to bear the legend set forth in Section 2.05(d), collectively, the “Restricted Securities”) shall be subject to the restrictions on transfer set forth in this Section 2.05(c) (including those contained in the legend set forth below), unless such restrictions on transfer shall be eliminated or otherwise waived by written consent of the Company, and the Holder of each such Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer.  As used in this Section 2.05(c) and Section 2.05(d), the term “transfer” encompasses any sale, pledge, transfer or other disposition whatsoever of any Restricted Security.

 

Until the date (the “Resale Restriction Termination Date”) that is the later of (1) the date that is one year after the last date of original issuance of the Notes, or such shorter period of time as permitted by Rule 144 or any successor provision thereto, and (2) such later date, if any, as may be required by applicable law, any certificate evidencing such Note (and all securities issued in exchange therefor or substitution thereof, other than Common Stock, if any, issued upon conversion thereof, which shall bear the legend set forth in Section 2.05(d), if applicable) shall bear a legend in substantially the following form (unless such Notes have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company in writing, with notice thereof to the Trustee):

 

THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

 

(1)                                 REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

 

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(2)                                 AGREES FOR THE BENEFIT OF ENPHASE ENERGY, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

 

(A)                               TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

 

(B)                               PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

 

(C)                               TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

 

(D)                               PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

No transfer of any Note prior to the Resale Restriction Termination Date will be registered by the Note Registrar unless the applicable box on the Form of Assignment and Transfer has been checked.

 

Any Note (or security issued in exchange or substitution therefor) (i) as to which such restrictions on transfer shall have expired in accordance with their terms, (ii) that has been transferred pursuant to a registration statement that has become effective or been declared effective under the Securities Act and that continues to be effective at the time of such transfer or (iii) that has been sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, may, upon surrender of such Note for exchange to the Note Registrar in accordance with the provisions of this Section 2.05, be exchanged for a new Note or Notes, of like tenor and aggregate principal amount, which shall not bear the restrictive legend required by this Section 2.05(c) and shall not be assigned a

 

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restricted CUSIP number. The Company shall be entitled to instruct the Custodian in writing to so surrender any Global Note as to which any of the conditions set forth in clause (i) through (iii) of the immediately preceding sentence have been satisfied, and, upon such instruction, the Custodian shall so surrender such Global Note for exchange; and any new Global Note so exchanged therefor shall not bear the restrictive legend specified in this Section 2.05(c) and shall not be assigned a restricted CUSIP number.  The Company shall promptly notify the Trustee upon the occurrence of the Resale Restriction Termination Date and promptly after a registration statement, if any, with respect to the Notes or any Common Stock issued upon conversion of the Notes has been declared effective under the Securities Act.

 

Notwithstanding any other provisions of this Indenture (other than the provisions set forth in this Section 2.05(c)), a Global Note may not be transferred as a whole or in part except (i) by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary and (ii) for exchange of a Global Note or a portion thereof for one or more Physical Notes in accordance with the second immediately succeeding paragraph.

 

The Depositary shall be a clearing agency registered under the Exchange Act.  The Company initially appoints The Depository Trust Company to act as Depositary with respect to each Global Note.  Initially, each Global Note shall be issued to the Depositary, registered in the name of Cede & Co., as the nominee of the Depositary, and deposited with the Trustee as custodian for Cede & Co.

 

If (i) the Depositary notifies the Company at any time that the Depositary is unwilling or unable to continue as depositary for the Global Notes and a successor depositary is not appointed within 90 days, (ii) the Depositary ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days or (iii) an Event of Default with respect to the Notes has occurred and is continuing and a beneficial owner of any Note requests that its beneficial interest therein be issued as a Physical Note, the Company shall execute, and the Trustee, upon receipt of an Officer’s Certificate and a Company Order for the authentication and delivery of Notes, shall authenticate and deliver (x) in the case of clause (iii), a Physical Note to such beneficial owner in a principal amount equal to the principal amount of such Note corresponding to such beneficial owner’s beneficial interest and (y) in the case of clause (i) or (ii), Physical Notes to each beneficial owner of the related Global Notes (or a portion thereof) in an aggregate principal amount equal to the aggregate principal amount of such Global Notes in exchange for such Global Notes, and upon delivery of the Global Notes to the Trustee such Global Notes shall be canceled.

 

Physical Notes issued in exchange for all or a part of the Global Note pursuant to this Section 2.05(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, or, in the case of clause (iii) of the immediately preceding paragraph, the relevant beneficial owner, shall instruct the Trustee.  Upon execution and authentication, the Trustee shall deliver such Physical Notes to the Persons in whose names such Physical Notes are so registered.

 

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At such time as all interests in a Global Note have been converted, canceled, repurchased or transferred, such Global Note shall be, upon receipt thereof, canceled by the Trustee in accordance with standing procedures and existing instructions between the Depositary and the Custodian.  At any time prior to such cancellation, if any interest in a Global Note is exchanged for Physical Notes, converted, canceled, repurchased or transferred to a transferee who receives Physical Notes therefor or any Physical Note is exchanged or transferred for part of such Global Note, the principal amount of such Global Note shall, in accordance with the standing procedures and instructions existing between the Depositary and the Custodian, be appropriately reduced or increased, as the case may be, and an endorsement shall be made on such Global Note, by the Trustee or the Custodian, at the direction of the Trustee, to reflect such reduction or increase.

 

None of the Company, the Trustee or any agent of the Company or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Note or maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

 

(d)         Until the Resale Restriction Termination Date, any stock certificate representing Common Stock issued upon conversion of such Note shall bear a legend in substantially the following form (unless such Note or such Common Stock has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or such Common Stock has been issued upon conversion of Notes that have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company with written notice thereof to the Trustee and any transfer agent for the Common Stock):

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

 

(1)                                 REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

 

(2)                                 AGREES FOR THE BENEFIT OF ENPHASE ENERGY, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE OF THE SERIES OF NOTES UPON THE CONVERSION OF WHICH THIS SECURITY WAS ISSUED OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY

 

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SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

 

(A)                               TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

 

(B)                               PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

 

(C)                               TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

 

(D)                               PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRANSFER AGENT FOR THE COMPANY’S COMMON STOCK RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

Any such Common Stock (i) as to which such restrictions on transfer shall have expired in accordance with their terms, (ii) that has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer or (iii) that has been sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, may, upon surrender of the certificates representing such shares of Common Stock for exchange in accordance with the procedures of the transfer agent for the Common Stock, be exchanged for a new certificate or certificates for a like aggregate number of shares of Common Stock, which shall not bear the restrictive legend required by this Section 2.05(d).

 

(e)          Any Note or Common Stock issued upon the conversion or exchange of a Note that is repurchased or owned by any Affiliate of the Company (or any Person who was an Affiliate of the Company at any time during the three months immediately preceding) may not be resold by such Affiliate (or such Person, as the case may be) unless registered under the Securities Act or resold pursuant to an exemption from the registration requirements of the Securities Act in a transaction that results in such Note or Common Stock, as the case may be, no longer being a “restricted security” (as defined under Rule 144). The Company shall cause any Note that is repurchased or owned by it to be surrendered to the Trustee for cancellation in accordance with Section 2.08.

 

Section 2.06.  Mutilated, Destroyed, Lost or Stolen Notes.  In case any Note shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon its

 

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written request the Trustee or an authenticating agent appointed by the Trustee shall authenticate and deliver, a new Note, bearing a registration number not contemporaneously outstanding, in exchange and substitution for the mutilated Note, or in lieu of and in substitution for the Note so destroyed, lost or stolen.  In every case the applicant for a substituted Note shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless from any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company, to the Trustee and, if applicable, to such authenticating agent evidence to their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof.

 

The Trustee or such authenticating agent may authenticate any such substituted Note and deliver the same upon the receipt of such security or indemnity as the Trustee, the Company and, if applicable, such authenticating agent may require.  No service charge shall be imposed by the Company, the Trustee, the Note Registrar, any co-Note Registrar or the Paying Agent upon the issuance of any substitute Note, but the Company may require a Holder to pay a sum sufficient to cover any documentary, stamp or similar issue or transfer tax required in connection therewith as a result of the name of the Holder of the new substitute Note being different from the name of the Holder of the old Note that became mutilated or was destroyed, lost or stolen.  In case any Note that has matured or is about to mature or has been surrendered for required repurchase or is about to be converted in accordance with Article 14 shall become mutilated or be destroyed, lost or stolen, the Company may, in its sole discretion, instead of issuing a substitute Note, pay or authorize the payment of or convert or authorize the conversion of the same (without surrender thereof except in the case of a mutilated Note), as the case may be, if the applicant for such payment or conversion shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, evidence satisfactory to the Company, the Trustee and, if applicable, any Paying Agent or Conversion Agent of the destruction, loss or theft of such Note and of the ownership thereof.

 

Every substitute Note issued pursuant to the provisions of this Section 2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be found at any time, and shall be entitled to all the benefits of (but shall be subject to all the limitations set forth in) this Indenture equally and proportionately with any and all other Notes duly issued hereunder.  To the extent permitted by law, all Notes shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement, payment, conversion or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement, payment, conversion or repurchase of negotiable instruments or other securities without their surrender.

 

Section 2.07.  Temporary Notes.  Pending the preparation of Physical Notes, the Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon written request of the Company, authenticate and deliver temporary Notes (printed or lithographed).  Temporary Notes shall be issuable in any authorized denomination, and

 

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substantially in the form of the Physical Notes but with such omissions, insertions and variations as may be appropriate for temporary Notes, all as may be determined by the Company.  Every such temporary Note shall be executed by the Company and authenticated by the Trustee or such authenticating agent upon the same conditions and in substantially the same manner, and with the same effect, as the Physical Notes.  Without unreasonable delay, the Company shall execute and deliver to the Trustee or such authenticating agent Physical Notes (other than any Global Note) and thereupon any or all temporary Notes (other than any Global Note) may be surrendered in exchange therefor, at each office or agency maintained by the Company pursuant to Section 4.02 and the Trustee or such authenticating agent shall authenticate and deliver in exchange for such temporary Notes an equal aggregate principal amount of Physical Notes.  Such exchange shall be made by the Company at its own expense and without any charge therefor.  Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits and subject to the same limitations under this Indenture as Physical Notes authenticated and delivered hereunder.

 

Section 2.08.  Cancellation of Notes Paid, Converted, Etc.  The Company shall cause all Notes surrendered for the purpose of payment, repurchase, registration of transfer or exchange or conversion, if surrendered to any Person other than the Trustee (including any of the Company’s agents, Subsidiaries or Affiliates), to be surrendered to the Trustee for cancellation.  All Notes delivered to the Trustee shall be canceled promptly by it.  Except for any Notes surrendered for registration of transfer or exchange, or as otherwise expressly permitted by any of the provisions of this Indenture, no Notes shall be authenticated in exchange for any Notes surrendered to the Trustee for cancellation.  The Trustee shall dispose of canceled Notes in accordance with its customary procedures and, after such disposition, shall deliver a certificate of such disposition to the Company, at the Company’s written request in a Company Order.

 

Section 2.09.  CUSIP Numbers.  The Company in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in all notices issued to Holders as a convenience to such Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or on such notice and that reliance may be placed only on the other identification numbers printed on the Notes. The Company shall promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

 

Section 2.10.  Additional Notes; Repurchases.  The Company may, without the consent of the Holders and notwithstanding Section 2.01, reopen this Indenture and issue additional Notes hereunder with the same terms as the Notes initially issued hereunder (other than differences in the issue price and interest accrued prior to the issue date of such additional Notes and, if applicable, restrictions on transfer of such additional Notes (including pursuant to Section 2.05 hereunder)) in an unlimited aggregate principal amount; provided that no Event of Default has occurred and is continuing; provided further that if any such additional Notes are not fungible with the Notes initially issued hereunder for U.S. federal income tax purposes, such additional Notes shall have one or more separate CUSIP numbers.  Prior to the issuance of any such additional Notes, the Company shall deliver to the Trustee a Company Order, an Officer’s Certificate and an Opinion of Counsel, such Officer’s Certificate and Opinion of Counsel to cover such matters applicable to the issuance of Additional Notes, in addition to those required by Section 17.05.  In addition, the Company may, to the extent permitted by law, and directly or

 

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indirectly (regardless of whether such Notes are surrendered to the Company), repurchase Notes in the open market or otherwise, whether by the Company or its Subsidiaries or through a private or public tender or exchange offer or through counterparties to private agreements, including by cash-settled swaps or other derivatives.  The Company shall cause any Notes so repurchased (other than Notes repurchased pursuant to cash-settled swaps or other derivatives) to be surrendered to the Trustee for cancellation in accordance with Section 2.08 and such Notes shall no longer be considered outstanding under this Indenture upon their surrender to the Trustee.

 

ARTICLE 3
 SATISFACTION AND DISCHARGE

 

Section 3.01.  Satisfaction and Discharge.  This Indenture shall upon request of the Company contained in an Officer’s Certificate cease to be of further effect, and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (a) (i) all Notes theretofore authenticated and delivered (other than (x) Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.06 and (y) Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 4.04(d)) have been delivered to the Trustee for cancellation; or (ii) the Company has deposited with the Trustee or delivered to Holders, as applicable, after the Notes have become due and payable, whether on the Maturity Date, any Fundamental Change Repurchase Date, upon conversion or otherwise, cash or cash and shares of Common Stock, if any (solely to satisfy the Company’s Conversion Obligation, if applicable) sufficient to pay all of the outstanding Notes and all other sums due and payable under this Indenture by the Company; and (b) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.  Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.06 shall survive.

 

ARTICLE 4
 PARTICULAR COVENANTS OF THE COMPANY

 

Section 4.01.  Payment of Principal and Interest.  The Company covenants and agrees that it will cause to be paid the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes.

 

Section 4.02.  Maintenance of Office or Agency.  The Company will maintain in the United States of America so designated by the Trustee, an office or agency where the Notes may be surrendered for registration of transfer or exchange or for presentation for payment or repurchase (“Paying Agent”) or for conversion (“Conversion Agent”) and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served.  The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Company shall fail to maintain any such 

 

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required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office or the office or agency of the Trustee in the United States of America so designated by the Trustee as a place where Notes may be presented for payment or for registration of transfer.

 

The Company may also from time to time designate as co-Note Registrars one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the United States of America so designated by the Trustee as a place for such purposes.  The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.  The terms “Paying Agent” and “Conversion Agent” include any such additional or other offices or agencies, as applicable.

 

The Company hereby initially designates the Trustee as the Paying Agent, Note Registrar, Custodian and Conversion Agent and the Corporate Trust Office (or such office as the Trustee may designate in writing) as the office or agency in the United States of America where Notes may be surrendered for registration of transfer or exchange or for presentation for payment or repurchase or for conversion and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served.

 

Section 4.03.  Appointments to Fill Vacancies in Trustee’s Office.  The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.09, a Trustee, so that there shall at all times be a Trustee hereunder.

 

Section 4.04.  Provisions as to Paying Agent.  (a) If the Company shall appoint a Paying Agent other than the Trustee, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 4.04:

 

(i)             that it will hold all sums held by it as such agent for the payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes in trust for the benefit of the Holders of the Notes;

 

(ii)          that it will give the Trustee prompt notice of any failure by the Company to make any payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes when the same shall be due and payable; and

 

(iii)       that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.

 

The Company shall, on or before each due date of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes, deposit with the Paying Agent a sum sufficient to pay such principal (including the Fundamental Change Repurchase Price, if applicable) or accrued and unpaid interest, and (unless 

 

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such Paying Agent is the Trustee) the Company will promptly notify the Trustee of any failure to take such action; provided that if such deposit is made on the due date, such deposit must be received by the Paying Agent by 11:00 a.m., New York City time, on such date.

 

(b)         If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes, set aside, segregate and hold in trust for the benefit of the Holders of the Notes a sum sufficient to pay such principal (including the Fundamental Change Repurchase Price, if applicable) and accrued and unpaid interest so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes when the same shall become due and payable.

 

(c)          Anything in this Section 4.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay, cause to be paid or deliver to the Trustee all sums or amounts held in trust by the Company or any Paying Agent hereunder as required by this Section 4.04, such sums or amounts to be held by the Trustee upon the trusts herein contained and upon such payment or delivery by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability but only with respect to such sums or amounts. Upon the occurrence of any event specified in Section 6.01(i) or Section 6.01(j), the Trustee shall automatically become the Paying Agent.

 

(d)         Subject to applicable abandoned property laws, any money and shares of Common Stock deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, accrued and unpaid interest on and the consideration due upon conversion of any Note and remaining unclaimed for two years after such principal (including the Fundamental Change Repurchase Price, if applicable), interest or consideration due upon conversion has become due and payable shall be paid to the Company on request of the Company contained in an Officer’s Certificate, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money and shares of Common Stock, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The Borough of Manhattan, The City of New York, notice that such money and shares of Common Stock remain unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money and shares of Common Stock then remaining will be repaid or delivered to the Company.

 

Section 4.05.  Existence.  Subject to Article 11, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

 

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Section 4.06.  Rule 144A Information Requirement and Annual Reports.  (a)  At any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company shall, so long as any of the Notes or the shares of Common Stock issuable upon conversion thereof shall, at such time, constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the Trustee and will, upon written request, provide to any Holder, beneficial owner or prospective purchaser of such Notes or the shares of Common Stock issuable upon conversion of such Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes or shares of Common Stock pursuant to Rule 144A.

 

(b)         The Company shall file with the Trustee, within 15 days after the same are required to be filed with the Commission (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act), copies of any documents or reports that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (excluding any such information, documents or reports, or portions thereof, subject to confidential treatment and any correspondence with the Commission).  Any such document or report that the Company files with the Commission via the Commission’s EDGAR system shall be deemed to be filed with the Trustee for purposes of this Section 4.06(b) at the time such documents are filed via the EDGAR system, it being understood that the Trustee shall not be responsible for determining whether such filings have been made.

 

(c)          Delivery of the reports and documents described in subsection (b) above to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely on an Officer’s Certificate).

 

(d)         If, at any time during the six-month period beginning on, and including, the date that is six months after the last date of original issuance of the Notes, the Company fails to timely file any document or report that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods thereunder and other than reports on Form 8-K), or the Notes are not otherwise freely tradable pursuant to Rule 144 by Holders other than the Company’s Affiliates or Holders that were the Company’s Affiliates at any time during the three months immediately preceding (as a result of restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes), the Company shall pay Additional Interest on the Notes.  Such Additional Interest shall accrue on the Notes at the rate of 0.50% per annum of the principal amount of such Notes outstanding for each day during such period for which the Company’s failure to file has occurred and is continuing or such Notes are not otherwise freely tradable pursuant to Rule 144 during such period by Holders other than the Company’s Affiliates (or Holders that have been the Company’s Affiliates at any time during the three months immediately preceding) without restrictions pursuant to U.S. securities laws or the terms of this Indenture or such Notes.  As used in this Section 4.06(d), documents or reports that the Company is required to “file” with the Commission pursuant to Section 13 or 15(d) of the Exchange Act does not include documents or reports that the Company furnishes to the Commission pursuant to Section 13 or 15(d) of the Exchange Act.

 

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(e)          If, and for so long as, the restrictive legend on the Notes specified in Section 2.05(c) has not been removed, the Notes are assigned a restricted CUSIP number or such Notes are not otherwise freely tradable pursuant to Rule 144 by Holders other than the Company’s Affiliates or Holders that were the Company’s Affiliates at any time during the three months immediately preceding (without restrictions pursuant to U.S. securities laws or the terms of this Indenture or such Notes) as of the 375th day after the last date of original issuance of the Notes, the Company shall pay Additional Interest on the Notes at a rate equal to 0.50% per annum of the principal amount of Notes outstanding until the restrictive legend on such Notes has been removed in accordance with Section 2.05(c), such Notes are assigned an unrestricted CUSIP number and such Notes are freely tradable pursuant to Rule 144 by Holders other than the Company’s Affiliates (or Holders that were the Company’s Affiliates at any time during the three months immediately preceding) (without restrictions pursuant to U.S. securities laws or the terms of this Indenture or such Notes).

 

(f)           Additional Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes.

 

(g)          The Additional Interest that is payable in accordance with Section 4.06(d) or Section 4.06(e) shall be in addition to, and not in lieu of, any Additional Interest that may be payable as a result of the Company’s election pursuant to Section 6.03.

 

(h)         If Additional Interest is payable by the Company pursuant to Section 4.06(d) or Section 4.06(e), the Company shall deliver to the Trustee an Officer’s Certificate to that effect stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is payable.  Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Additional Interest is payable.  If the Company has paid Additional Interest directly to the Persons entitled to it, the Company shall deliver to the Trustee an Officer’s Certificate setting forth the particulars of such payment. The Trustee shall not at any time be under any duty or responsibility to any Holder to determine the Additional Interest or calculate the amount of Additional Interest owed, or the method employed in such calculation of Additional Interest.

 

Section 4.07.  Stay, Extension and Usury Laws.  The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law that would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of this Indenture; and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

Section 4.08.  Compliance Certificate; Statements as to Defaults.  The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company (beginning with the fiscal year ending on December 31, 2019) an Officer’s Certificate stating whether the signers thereof have knowledge of any failure by the Company to comply with all

 

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conditions and covenants then required to be performed under this Indenture and, if so, specifying each such failure and the nature thereof.

 

In addition, the Company shall deliver to the Trustee, as soon as possible, and in any event within 30 days after the occurrence of any Event of Default or Default, an Officer’s Certificate setting forth the details of such Event of Default or Default, its status and the action that the Company is taking or proposing to take in respect thereof.

 

Section 4.09.  Further Instruments and Acts.  Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.

 

ARTICLE 5
 LISTS OF HOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE

 

Section 5.01.  Lists of Holders.  The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee, semi-annually, not more than 15 days after each January 15 and July 15 in each year beginning with July 15, 2019, and at such other times as the Trustee may request in writing, within 30 days after receipt by the Company of any such request (or such lesser time as the Trustee may reasonably request in order to enable it to timely provide any notice to be provided by it hereunder), a list in such form as the Trustee may reasonably require of the names and addresses of the Holders as of a date not more than 15 days (or such other date as the Trustee may reasonably request in order to so provide any such notices) prior to the time such information is furnished, except that no such list need be furnished so long as the Trustee is acting as Note Registrar.

 

Section 5.02.  Preservation and Disclosure of Lists.  The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the Holders contained in the most recent list furnished to it as provided in Section 5.01 or maintained by the Trustee in its capacity as Note Registrar, if so acting.  The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.

 

ARTICLE 6
 DEFAULTS AND REMEDIES

 

Section 6.01.  Events of Default.  Each of the following events shall be an “Event of Default” with respect to the Notes:

 

(a)         default in any payment of interest on any Note when due and payable, and the default continues for a period of 30 days;

 

(b)         default in the payment of principal of any Note when due and payable on the Maturity Date, upon any required repurchase, upon declaration of acceleration or otherwise;

 

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(c)          failure by the Company to comply with its obligation to convert the Notes in accordance with this Indenture upon exercise of a Holder’s conversion right;

 

(d)         failure by the Company to issue a Fundamental Change Company Notice in accordance with Section 15.02(c) or notice of a Make-Whole Fundamental Change in accordance with Section 14.03(b), in each case when due;

 

(e)          failure by the Company to comply with its obligations under Article 11;

 

(f)           failure by the Company for 60 days after written notice from the Trustee or the Holders of at least 25% in principal amount of the Notes then outstanding has been received by the Company to comply with any of its other agreements contained in the Notes or this Indenture;

 

(g)          default by the Company or any Subsidiary of the Company with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $5,000,000 (or its foreign currency equivalent) in the aggregate of the Company and/or any such Subsidiary, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal of any such indebtedness when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise and, in the cases of clauses (i) and (ii), such acceleration shall not have been rescinded or annulled or such failure to pay or default shall not have been cured or waived, or such indebtedness is not paid or discharged, as the case may be, within 30 days of such acceleration or failure to pay, as applicable;

 

(h)         a final judgment or judgments for the payment of $5,000,000 (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) in the aggregate rendered against the Company or any Subsidiary of the Company, which judgment is not discharged, bonded, paid, waived or stayed within 60 days after (i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which all rights to appeal have been extinguished;

 

(i)             the Company or any Significant Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to the Company or any such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any such Significant Subsidiary or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or

 

(j)            an involuntary case or other proceeding shall be commenced against the Company or any Significant Subsidiary seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary or 

 

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any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 30 consecutive days.

 

Section 6.02.  Acceleration; Rescission and Annulment.  If one or more Events of Default shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), then, and in each and every such case (other than an Event of Default specified in Section 6.01(i) or Section 6.01(j) with respect to the Company), unless the principal of all of the Notes shall have already become due and payable, either the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding determined in accordance with Section 8.04, by notice in writing to the Company (and to the Trustee if given by Holders), may declare 100% of the principal of, and accrued and unpaid interest on, all the Notes to be due and payable immediately, and upon any such declaration the same shall become and shall automatically be immediately due and payable, anything in this Indenture or in the Notes contained to the contrary notwithstanding.  If an Event of Default specified in Section 6.01(i) or Section 6.01(j) with respect to the Company occurs and is continuing, 100% of the principal of, and accrued and unpaid interest, if any, on, all Notes shall become and shall automatically be immediately due and payable.

 

The immediately preceding paragraph, however, is subject to the conditions that if, at any time after the principal of the Notes shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay installments of accrued and unpaid interest upon all Notes and the principal of any and all Notes that shall have become due otherwise than by acceleration (with interest on overdue installments of accrued and unpaid interest, and on such principal at the rate borne by the Notes at such time) and amounts due to the Trustee pursuant to Section 7.06, and if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) any and all existing Events of Default under this Indenture, other than the nonpayment of the principal of and accrued and unpaid interest, if any, on Notes that shall have become due solely by such acceleration, shall have been cured or waived pursuant to Section 6.09, then and in every such case (except as provided in the immediately succeeding sentence) the Holders of a majority in aggregate principal amount of the Notes then outstanding, by written notice to the Company and to the Trustee, may waive all Defaults or Events of Default with respect to the Notes and rescind and annul such declaration and its consequences and such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent Default or Event of Default, or shall impair any right consequent thereon.  Notwithstanding anything to the contrary herein, no such waiver or rescission and annulment shall extend to or shall affect any Default or Event of Default resulting from (i) the nonpayment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, any Notes, (ii) a failure to repurchase any Notes when required or (iii) a failure to pay or deliver, as the case may be, the consideration due upon conversion of the Notes.

 

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Section 6.03.  Additional Interest.  Notwithstanding anything in this Indenture or in the Notes to the contrary, to the extent the Company elects, the sole remedy for an Event of Default relating to the Company’s failure to comply with its obligations as set forth in Section 4.06(b) shall, for the first 270 days after the occurrence of such an Event of Default (and, for the avoidance of doubt, giving effect to the 60-day period set forth in Section 6.01(f)), consist exclusively of the right to receive Additional Interest on the Notes at a rate equal to (i) 0.25% per annum of the principal amount of the Notes outstanding for each day during the first 90 calendar days after the occurrence of such an Event of Default during which such Event of Default is continuing (or, if earlier, the date on which such Event of Default is cured or waived as provided for in this Indenture) and (ii) 0.50% per annum of the principal amount of the Notes outstanding for each day from, and including, the 91st calendar day to, and including, the 270th calendar day after the occurrence of such an Event of Default during which such Event of Default is continuing (or, if earlier, the date on which such Event of Default is cured or waived as provided for in this Indenture). Additional Interest payable pursuant to this Section 6.03 shall be in addition to, not in lieu of, any Additional Interest payable pursuant to Section 4.06(d) or Section 4.06(e). If the Company so elects, such Additional Interest shall be payable in the same manner and on the same dates as regular interest on the Notes.  On the 271st day after such Event of Default (if the Event of Default relating to the Company’s failure to comply with its obligations as set forth in Section 4.06(b) is not cured or waived prior to such 271st day), the Notes shall be immediately subject to acceleration as provided in Section 6.02.  In the event the Company does not elect to pay Additional Interest following an Event of Default in accordance with this Section 6.03 or the Company elected to make such payment but does not pay the Additional Interest when due, the Notes shall be immediately subject to acceleration as provided in Section 6.02.

 

In order to elect to pay Additional Interest as the sole remedy during the first 270 days after the occurrence of any Event of Default described in the immediately preceding paragraph, the Company must notify all Holders of the Notes, the Trustee and the Paying Agent in writing of such election prior to the occurrence of such Event of Default.  Upon the failure to timely give such notice, the Notes shall be immediately subject to acceleration as provided in Section 6.02.

 

Section 6.04.  Payments of Notes on Default; Suit Therefor.  If an Event of Default described in clause (a) or (b) of Section 6.01 shall have occurred, the Company shall, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of the Notes, the whole amount then due and payable on the Notes for principal and interest, if any, with interest on any overdue principal and interest, if any, at the rate borne by the Notes at such time, and, in addition thereto, such further amount as shall be sufficient to cover any amounts due to the Trustee under Section 7.06.  If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Notes, wherever situated.

 

In the event there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Notes under Title 11 of the United 

 

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States Code, or any other applicable law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or such other obligor, the property of the Company or such other obligor, or in the event of any other judicial proceedings relative to the Company or such other obligor upon the Notes, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 6.04, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal and accrued and unpaid interest, if any, in respect of the Notes, and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents and to take such other actions as it may deem necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceedings relative to the Company or any other obligor on the Notes, its or their creditors, or its or their property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after the deduction of any amounts due to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian or similar official is hereby authorized by each of the Holders to make such payments to the Trustee, as administrative expenses, and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for reasonable compensation, expenses, advances and disbursements, including agents and counsel fees, and including any other amounts due to the Trustee under Section 7.06, incurred by it up to the date of such distribution.  To the extent that such payment of reasonable compensation, expenses, advances and disbursements out of the estate in any such proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, monies, securities and other property that the Holders of the Notes may be entitled to receive in such proceedings, whether in liquidation or under any plan of reorganization or arrangement or otherwise.

 

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting such Holder or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Trustee without the possession of any of the Notes, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Notes.

 

In any proceedings brought by the Trustee (and in any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) the Trustee 

 

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shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any Holders of the Notes parties to any such proceedings.

 

In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of any waiver pursuant to Section 6.09 or any rescission and annulment pursuant to Section 6.02 or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company, the Holders and the Trustee shall, subject to any determination in such proceeding, be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company, the Holders and the Trustee shall continue as though no such proceeding had been instituted.

 

Section 6.05.  Application of Monies Collected by Trustee.  Any monies collected by the Trustee pursuant to this Article 6 with respect to the Notes shall be applied in the following order, at the date or dates fixed by the Trustee for the distribution of such monies, upon presentation of the several Notes, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid:

 

First, to the payment of all amounts due the Trustee under Section 7.06;

 

Second, in case the principal of the outstanding Notes shall not have become due and be unpaid, to the payment of interest on, and any cash due upon conversion of, the Notes in default in the order of the date due of the payments of such interest and cash due upon conversion, as the case may be, with interest (to the extent that such interest has been collected by the Trustee) upon such overdue payments at the rate borne by the Notes at such time, such payments to be made ratably to the Persons entitled thereto;

 

Third, in case the principal of the outstanding Notes shall have become due, by declaration or otherwise, and be unpaid to the payment of the whole amount (including, if applicable, the payment of the Fundamental Change Repurchase Price and any cash for any fractional shares due upon conversion) then owing and unpaid upon the Notes for principal and interest, if any, with interest on the overdue principal and, to the extent that such interest has been collected by the Trustee, upon overdue installments of interest at the rate borne by the Notes at such time, and in case such monies shall be insufficient to pay in full the whole amounts so due and unpaid upon the Notes, then to the payment of such principal (including, if applicable, the Fundamental Change Repurchase Price and the cash for any fractional shares due upon conversion) and interest without preference or priority of principal over interest, or of interest over principal or of any installment of interest over any other installment of interest, or of any Note over any other Note, ratably to the aggregate of such principal (including, if applicable, the Fundamental Change Repurchase Price and any cash due for any fractional shares upon conversion) and accrued and unpaid interest; and

 

Fourth, to the payment of the remainder, if any, to the Company.

 

Section 6.06.  Proceedings by Holders.  Except to enforce the right to receive payment of principal (including, if applicable, the Fundamental Change Repurchase Price) or interest when due, or the right to receive payment or delivery of the consideration due upon conversion, no

 

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Holder of any Note shall have any right by virtue of or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, or for the appointment of a receiver, trustee, liquidator, custodian or other similar official, or for any other remedy hereunder, unless:

 

(a)         such Holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as herein provided;

 

(b)         Holders of at least 25% in aggregate principal amount of the Notes then outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder;

 

(c)          such Holders shall have offered to the Trustee such security or indemnity satisfactory to it against any loss, liability or expense to be incurred therein or thereby;

 

(d)         the Trustee for 60 days after its receipt of such notice, request and offer of such security or indemnity, shall have neglected or refused to institute any such action, suit or proceeding; and

 

(e)          no direction that, in the opinion of the Trustee, is inconsistent with such written request shall have been given to the Trustee by the Holders of a majority of the aggregate principal amount of the Notes then outstanding within such 60-day period pursuant to Section 6.09,

 

it being understood and intended, and being expressly covenanted by the taker and Holder of every Note with every other taker and Holder and the Trustee that no one or more Holders shall have any right in any manner whatever by virtue of or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other Holder, or to obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders (except as otherwise provided herein).  For the protection and enforcement of this Section 6.06, each and every Holder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

 

Notwithstanding any other provision of this Indenture and any provision of any Note, the right of any Holder to receive payment or delivery, as the case may be, of (x) the principal (including the Fundamental Change Repurchase Price, if applicable) of, (y) accrued and unpaid interest, if any, on, and (z) the consideration due upon conversion of, such Note, on or after the respective due dates expressed or provided for in such Note or in this Indenture, or to institute suit for the enforcement of any such payment or delivery, as the case may be, on or after such respective dates against the Company shall not be impaired or affected without the consent of such Holder.

 

Section 6.07.  Proceedings by Trustee.  In case of an Event of Default, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as are necessary to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the

 

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exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

 

Section 6.08.  Remedies Cumulative and Continuing.  Except as provided in the last paragraph of Section 2.06, all powers and remedies given by this Article 6 to the Trustee or to the Holders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the Holders of the Notes, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any Holder of any of the Notes to exercise any right or power accruing upon any Default or Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such Default or Event of Default or any acquiescence therein; and, subject to the provisions of Section 6.06, every power and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders.

 

Section 6.09.  Direction of Proceedings and Waiver of Defaults by Majority of Holders. The Holders of a majority of the aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 8.04 shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Notes; provided, however, that (a) such direction shall not be in conflict with any rule of law or with this Indenture, and (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. The Trustee may refuse to follow any direction that it determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability. The Holders of a majority in aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 8.04 may on behalf of the Holders of all of the Notes waive any past Default or Event of Default hereunder and its consequences except (i) a default in the payment of accrued and unpaid interest, if any, on, or the principal (including any Fundamental Change Repurchase Price) of, the Notes when due that has not been cured pursuant to the provisions of Section 6.01, (ii) a failure by the Company to pay or deliver, as the case may be, the consideration due upon conversion of the Notes or (iii) a default in respect of a covenant or provision hereof which under Article 10 cannot be modified or amended without the consent of each Holder of an outstanding Note affected. Upon any such waiver the Company, the Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. Whenever any Default or Event of Default hereunder shall have been waived as permitted by this Section 6.09, said Default or Event of Default shall for all purposes of the Notes and this Indenture be deemed to have been cured and to be not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

 

Section 6.10.  Notice of Defaults.  The Trustee shall, within 90 days after a Responsible Officer receives written notice of the occurrence and continuance of a Default or otherwise has actual knowledge thereof, deliver to all Holders, notice of all such Defaults, unless such Defaults shall have been cured or waived before the giving of such notice; provided that, except in the case of a Default in the payment of the principal of (including the Fundamental Change 

 

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Repurchase Price, if applicable), or accrued and unpaid interest on, any of the Notes or a Default in the payment or delivery of the consideration due upon conversion, the Trustee shall be protected in withholding such notice if and so long as it in good faith determines that the withholding of such notice is in the interests of the Holders.

 

Section 6.11.  Undertaking to Pay Costs.  All parties to this Indenture agree, and each Holder of any Note by its acceptance thereof shall be deemed to have agreed, that any court may, in its discretion, require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section 6.11 (to the extent permitted by law) shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Notes at the time outstanding determined in accordance with Section 8.04, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or accrued and unpaid interest, if any, on any Note (including, but not limited to, the Fundamental Change Repurchase Price, if applicable, with respect to the Notes being repurchased as provided in this Indenture) on or after the due date expressed or provided for in such Note or to any suit for the enforcement of the right to convert any Note, or receive the consideration due upon conversion, in accordance with the provisions of Article 14.

 

ARTICLE 7
 CONCERNING THE TRUSTEE

 

Section 7.01.  Duties and Responsibilities of Trustee.  The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all Events of Default that may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture.  In the event an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs; provided that if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security satisfactory to it against any loss, liability or expense that might be incurred by it in compliance with such request or direction.

 

No provision of this Indenture shall be construed to relieve the Trustee from liability for its own grossly negligent action, its own grossly negligent failure to act or its own willful misconduct, except that:

 

(a)         prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default that may have occurred:

 

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(i)             the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(ii)          in the absence of bad faith, willful misconduct or gross negligence on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions that by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein);

 

(b)         the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was grossly negligent in ascertaining the pertinent facts;

 

(c)          the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a majority of the aggregate principal amount of the Notes at the time outstanding determined as provided in Section 8.04 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

 

(d)         whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section;

 

(e)          the Trustee shall not be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any co-Note Registrar with respect to the Notes;

 

(f)           if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred, unless a Responsible Officer of the Trustee had actual knowledge of such event;

 

(g)          in the absence of written investment direction from the Company, all cash received by the Trustee shall be placed in a non-interest bearing trust account, and in no event shall the Trustee be liable for the selection of investments or for investment losses incurred thereon or for losses incurred as a result of the liquidation of any such investment prior to its maturity date or the failure of the party directing such investments prior to its maturity date or the failure of the party directing such investment to provide timely written investment direction, and the Trustee

 

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shall have no obligation to invest or reinvest any amounts held hereunder in the absence of such written investment direction from the Company; and

 

(h)         in the event that the Trustee is also acting as Custodian, Note Registrar, Paying Agent, Conversion Agent, or transfer agent hereunder, the rights and protections afforded to the Trustee pursuant to this Article 7 shall also be afforded to such Custodian, Note Registrar, Paying Agent, Conversion Agent, or transfer agent.

 

None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers.

 

Section 7.02.  Reliance on Documents, Opinions, Etc.  Except as otherwise provided in Section 7.01:

 

(a)         the Trustee may conclusively rely and shall be fully protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, note, coupon or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;

 

(b)         any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officer’s Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;

 

(c)          the Trustee may consult with counsel and require an Opinion of Counsel and any advice of such counsel or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

 

(d)         the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation;

 

(e)          the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, custodians, nominees or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent, custodian, nominee or attorney appointed by it with due care hereunder; and

 

(f)           the permissive rights of the Trustee enumerated herein shall not be construed as duties.

 

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In no event shall the Trustee be liable for any special, indirect, consequential or punitive loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee has been advised of the likelihood of such loss or damage.  The Trustee shall not be charged with knowledge of any Default or Event of Default with respect to the Notes, unless either (1)a Responsible Officer shall have actual knowledge of such Default or Event of Default or (2) written notice of such Default or Event of Default shall have been given to the Trustee by the Company or by any Holder of the Notes.

 

Section 7.03.  No Responsibility for Recitals, Etc.  The recitals contained herein and in the Notes (except in the Trustee’s certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same.  The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes.  The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture. The Trustee shall have no responsibility for any information in any offering memorandum or other disclosure document prepared in connection with the issuance of the Notes.

 

Section 7.04.  Trustee, Paying Agents, Conversion Agents, Bid Solicitation Agent or Note Registrar May Own Notes.  The Trustee, any Paying Agent, any Conversion Agent, Bid Solicitation Agent (if other than the Company or any Affiliate thereof), subject to Section 2.05(e) and Section 2.10 or Note Registrar, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights it would have if it were not the Trustee, Paying Agent, Conversion Agent, Bid Solicitation Agent or Note Registrar.

 

Section 7.05.  Monies and Shares of Common Stock to Be Held in Trust.  All monies and any shares of Common Stock received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received.  Money and shares of Common Stock held by the Trustee in trust hereunder need not be segregated from other funds or property except to the extent required by law.  The Trustee shall be under no liability for interest on any money or shares of Common Stock received by it hereunder except as may be agreed from time to time by the Company and the Trustee.

 

Section 7.06.  Compensation and Expenses of Trustee.  The Company covenants and agrees to pay to the Trustee, in any capacity under this Indenture, from time to time, and the Trustee shall be entitled to, compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to in writing between the Trustee and the Company, and the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances reasonably incurred or made by the Trustee in accordance with any of the provisions of this Indenture in any capacity thereunder (including the reasonable compensation and the expenses and disbursements of its agents and counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as shall have been caused by its gross negligence, willful misconduct or bad faith.  The Company also covenants to indemnify the Trustee in any capacity under this Indenture and any other document or transaction entered into in connection herewith and its officers, directors, employees and agents and any authenticating agent for, and to hold them harmless against, any loss, claim, damage, 

 

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liability or expense incurred without gross negligence, willful misconduct or bad faith on the part of the Trustee, its officers, directors, agents or employees, or such agent or authenticating agent, as the case may be, as determined by a final, non-appealable decision of a court of competent jurisdiction, and arising out of or in connection with the acceptance or administration of this Indenture or in any other capacity hereunder, including the costs and expenses of defending themselves against any claim of liability in the premises. The obligations of the Company under this Section 7.06 to compensate or indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be secured by a senior claim to which the Notes are hereby made subordinate on all money or property held or collected by the Trustee, except, subject to the effect of Section 6.05, funds held in trust herewith for the benefit of the Holders of particular Notes, and, for the avoidance of doubt, such lien shall not be extended in a manner that would conflict with the Company’s obligations to its other creditors. The Trustee’s right to receive payment of any amounts due under this Section 7.06 shall not be subordinate to any other liability or indebtedness of the Company.  The obligation of the Company under this Section 7.06 shall survive the satisfaction and discharge of this Indenture and the earlier resignation or removal of the Trustee.  The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.  The indemnification provided in this Section 7.06 shall extend to the officers, directors, agents and employees of the Trustee.

 

Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee and its agents and any authenticating agent incur expenses or render services after an Event of Default specified in Section 6.01(i) or Section 6.01(j) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws.

 

Section 7.07.  Officer’s Certificate as Evidence.  Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence, willful misconduct and bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee, and such Officer’s Certificate, in the absence of gross negligence, willful misconduct and bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof.

 

Section 7.08.  Eligibility of Trustee.  There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act (as if, for this purpose, the Trust Indenture Act were applicable hereto) to act as such and has a combined capital and surplus of at least $50,000,000.  If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

 

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Section 7.09.  Resignation or Removal of Trustee.  (a) The Trustee may at any time resign by giving written notice of such resignation to the Company, and by delivering notice thereof to the Holders.  Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee.  If no successor trustee shall have been so appointed and have accepted appointment within 60 days after the giving of such notice of resignation to the Holders, the resigning Trustee may, upon ten Business Days’ notice to the Company and the Holders, petition any court of competent jurisdiction for the appointment of a successor trustee, or any Holder who has been a bona fide holder of a Note or Notes for at least six months (or since the date of this Indenture) may, subject to the provisions of Section 6.11, on behalf of himself or herself and all others similarly situated, petition any such court for the appointment of a successor trustee.  Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

 

(b)         In case at any time any of the following shall occur:

 

(i)             the Trustee shall cease to be eligible in accordance with the provisions of Section 7.08 and shall fail to resign after written request therefor by the Company or by any such Holder, or

 

(ii)          the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

 

then, in either case, the Company may by a Board Resolution remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 6.11, any Holder who has been a bona fide holder of a Note or Notes for at least six months (or since the date of this Indenture) may, on behalf of himself or herself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee.  Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

 

(c)          The Holders of a majority in aggregate principal amount of the Notes at the time outstanding, as determined in accordance with Section 8.04, may at any time remove the Trustee and nominate a successor trustee that shall be deemed appointed as successor trustee unless within ten days after notice to the Company of such nomination the Company objects thereto, in which case the Trustee so removed or any Holder, upon the terms and conditions and otherwise as in Section 7.09(a) provided, may petition any court of competent jurisdiction for an appointment of a successor trustee.

 

(d)         Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 7.09 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.10.

 

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Section 7.10.  Acceptance by Successor Trustee.  Any successor trustee appointed as provided in Section 7.09 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as Trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 7.06, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act.  Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers.  Any trustee ceasing to act shall, nevertheless, retain a senior claim to which the Notes are hereby made subordinate on all money or property held or collected by such trustee as such, except for funds held in trust for the benefit of Holders of particular Notes, to secure any amounts then due it pursuant to the provisions of Section 7.06.

 

No successor trustee shall accept appointment as provided in this Section 7.10 unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 7.08.

 

Upon acceptance of appointment by a successor trustee as provided in this Section 7.10, each of the Company and the successor trustee, at the written direction and at the expense of the Company shall deliver or cause to be delivered notice of the succession of such trustee hereunder to the Holders.  If the Company fails to deliver such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be delivered at the expense of the Company.

 

Section 7.11.  Succession by Merger, Etc.  Any corporation or other entity into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation or other entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee (including the administration of this Indenture), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that in the case of any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee such corporation or other entity shall be eligible under the provisions of Section 7.08.

 

In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee or authenticating agent appointed by such predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee or an authenticating agent appointed by such successor trustee may authenticate such Notes either in the name of any predecessor trustee hereunder or in the name of the successor trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have;

 

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provided, however, that the right to adopt the certificate of authentication of any predecessor trustee or to authenticate Notes in the name of any predecessor trustee shall apply only to its successor or successors by merger, conversion or consolidation.

 

Section 7.12.  Trustee’s Application for Instructions from the Company.  Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the Holders of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective.  The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any officer that the Company has indicated to the Trustee should receive such application actually receives such application, unless any such officer shall have consented in writing to any earlier date), unless, prior to taking any such action (or the effective date in the case of any omission), the Trustee shall have received written instructions in accordance with this Indenture in response to such application specifying the action to be taken or omitted.

 

ARTICLE 8
 CONCERNING THE HOLDERS

 

Section 8.01.  Action by Holders.  Whenever in this Indenture it is provided that the Holders of a specified percentage of the aggregate principal amount of the Notes may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action, the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, or (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with the provisions of Article 9, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Holders.  Whenever the Company or the Trustee solicits the taking of any action by the Holders of the Notes, the Company or the Trustee may, but shall not be required to, fix in advance of such solicitation, a date as the record date for determining Holders entitled to take such action.  The record date if one is selected shall be not more than fifteen days prior to the date of commencement of solicitation of such action.

 

Section 8.02.  Proof of Execution by Holders.  Subject to the provisions of Section 7.01, Section 7.02 and Section 9.05, proof of the execution of any instrument by a Holder or its agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee.  The holding of Notes shall be proved by the Note Register or by a certificate of the Note Registrar.  The record of any Holders’ meeting shall be proved in the manner provided in Section 9.06.

 

Section 8.03.  Who Are Deemed Absolute Owners.  The Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion Agent and any Note Registrar may 

 

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deem the Person in whose name a Note shall be registered upon the Note Register to be, and may treat it as, the absolute owner of such Note (whether or not such Note shall be overdue and notwithstanding any notation of ownership or other writing thereon made by any Person other than the Company or any Note Registrar) for the purpose of receiving payment of or on account of the principal (including any Fundamental Change Repurchase Price) of and (subject to Section 2.03) accrued and unpaid interest on such Note, for conversion of such Note and for all other purposes under this Indenture; and neither the Company nor the Trustee nor any Paying Agent nor any Conversion Agent nor any Note Registrar shall be affected by any notice to the contrary.  The sole registered holder of a Global Note shall be the Depositary or its nominee.  All such payments or deliveries so made to any Holder for the time being, or upon its order, shall be valid, and, to the extent of the sums or shares of Common Stock so paid or delivered, effectual to satisfy and discharge the liability for monies payable or shares deliverable upon any such Note.  Notwithstanding anything to the contrary in this Indenture or the Notes following an Event of Default, any holder of a beneficial interest in a Global Note may directly enforce against the Company, without the consent, solicitation, proxy, authorization or any other action of the Depositary or any other Person, such holder’s right to exchange such beneficial interest for a Note in certificated form in accordance with the provisions of this Indenture.

 

Section 8.04.  Company-Owned Notes Disregarded.  In determining whether the Holders of the requisite aggregate principal amount of Notes have concurred in any direction, consent, waiver or other action under this Indenture, Notes that are owned by the Company, by any Subsidiary thereof or by any Affiliate of the Company or any Subsidiary thereof shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent, waiver or other action only Notes that a Responsible Officer actually knows are so owned shall be so disregarded.  Notes so owned that have been pledged in good faith may be regarded as outstanding for the purposes of this Section 8.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to so act with respect to such Notes and that the pledgee is not the Company, a Subsidiary thereof or an Affiliate of the Company or a Subsidiary thereof.  In the case of a dispute as to such right, any decision or indecision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.  Upon request of the Trustee, the Company shall furnish to the Trustee promptly an Officer’s Certificate listing and identifying all Notes, if any, known by the Company to be owned or held by or for the account of any of the above described Persons; and, subject to Section 7.01, the Trustee shall be entitled to accept such Officer’s Certificate as conclusive evidence of the facts therein set forth and of the fact that all Notes not listed therein are outstanding for the purpose of any such determination.

 

Section 8.05.  Revocation of Consents; Future Holders Bound.  At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the Holders of the percentage of the aggregate principal amount of the Notes specified in this Indenture in connection with such action, any Holder of a Note that is shown by the evidence to be included in the Notes the Holders of which have consented to such action may, by filing written notice with the Trustee at its Corporate Trust Office and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Note.  Except as aforesaid, any such action taken by the Holder of any Note shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Note and of any Notes issued in 

 

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exchange or substitution therefor or upon registration of transfer thereof, irrespective of whether any notation in regard thereto is made upon such Note or any Note issued in exchange or substitution therefor or upon registration of transfer thereof.

 

ARTICLE 9
 HOLDERS’ MEETINGS

 

Section 9.01.  Purpose of Meetings.  A meeting of Holders may be called at any time and from time to time pursuant to the provisions of this Article 9 for any of the following purposes:

 

(a)         to give any notice to the Company or to the Trustee or to give any directions to the Trustee permitted under this Indenture, or to consent to the waiving of any Default or Event of Default hereunder (in each case, as permitted under this Indenture) and its consequences, or to take any other action authorized to be taken by Holders pursuant to any of the provisions of Article 6;

 

(b)         to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article 7;

 

(c)          to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 10.02; or

 

(d)         to take any other action authorized to be taken by or on behalf of the Holders of any specified aggregate principal amount of the Notes under any other provision of this Indenture or under applicable law.

 

Section 9.02.  Call of Meetings by Trustee.  The Trustee may at any time call a meeting of Holders to take any action specified in Section 9.01, to be held at such time and at such place as the Trustee shall determine.  Notice of every meeting of the Holders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting and the establishment of any record date pursuant to Section 8.01, shall be delivered to Holders of such Notes.  Such notice shall also be delivered to the Company.  Such notices shall be delivered not less than 20 nor more than 90 days prior to the date fixed for the meeting.

 

Any meeting of Holders shall be valid without notice if the Holders of all Notes then outstanding are present in person or by proxy or if notice is waived before or after the meeting by the Holders of all Notes then outstanding, and if the Company and the Trustee are either present by duly authorized representatives or have, before or after the meeting, waived notice.

 

Section 9.03.  Call of Meetings by Company or Holders.  In case at any time the Company, pursuant to a Board Resolution, or the Holders of at least 10% of the aggregate principal amount of the Notes then outstanding, shall have requested the Trustee to call a meeting of Holders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have delivered the notice of such meeting within 20 days after receipt of such request, then the Company or such Holders may determine the time 

 

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and the place for such meeting and may call such meeting to take any action authorized in Section 9.01, by delivering notice thereof as provided in Section 9.02.

 

Section 9.04.  Qualifications for Voting.  To be entitled to vote at any meeting of Holders a Person shall (a) be a Holder of one or more Notes on the record date pertaining to such meeting or (b) be a Person appointed by an instrument in writing as proxy by a Holder of one or more Notes on the record date pertaining to such meeting.  The only Persons who shall be entitled to be present or to speak at any meeting of Holders shall be the Persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.

 

Section 9.05.  Regulations.  Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders, in regard to proof of the holding of Notes and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit.

 

The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders as provided in Section 9.03, in which case the Company or the Holders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman.  A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Holders of a majority in aggregate principal amount of the Notes represented at the meeting and entitled to vote at the meeting.

 

Subject to the provisions of Section 8.04, at any meeting of Holders each Holder or proxyholder shall be entitled to one vote for each $1,000 principal amount of Notes held or represented by him or her; provided, however, that no vote shall be cast or counted at any meeting in respect of any Note challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding.  The chairman of the meeting shall have no right to vote other than by virtue of Notes held by it or instruments in writing as aforesaid duly designating it as the proxy to vote on behalf of other Holders.  Any meeting of Holders duly called pursuant to the provisions of Section 9.02 or Section 9.03 may be adjourned from time to time by the Holders of a majority of the aggregate principal amount of Notes represented at the meeting, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice.

 

Section 9.06.  Voting.  The vote upon any resolution submitted to any meeting of Holders shall be by written ballot on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the outstanding aggregate principal amount of the Notes held or represented by them.  The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting.  A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was delivered as provided in Section 9.02.  The record 

 

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shall show the aggregate principal amount of the Notes voting in favor of or against any resolution.  The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.

 

Any record so signed and verified shall be conclusive evidence of the matters therein stated.

 

Section 9.07.  No Delay of Rights by Meeting.  Nothing contained in this Article 9 shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Holders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders under any of the provisions of this Indenture or of the Notes. Nothing contained in this Article 9 shall be deemed or construed to limit any Holder’s actions pursuant to the applicable procedures of the Depositary so long as the Notes are Global Notes.

 

ARTICLE 10
 SUPPLEMENTAL INDENTURES

 

Section 10.01.  Supplemental Indentures Without Consent of Holders.  The Company, when authorized by the resolutions of the Board of Directors and the Trustee, at the Company’s expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:

 

(a)         to cure any ambiguity, omission, defect or inconsistency that does not adversely affect Holders;

 

(b)         to provide for the assumption by a Successor Company of the obligations of the Company under this Indenture pursuant to Article 11;

 

(c)          to add guarantees with respect to the Notes;

 

(d)         to secure the Notes;

 

(e)          to add to the covenants or Events of Default of the Company for the benefit of the Holders or surrender any right or power conferred upon the Company under this Indenture;

 

(f)           to make any other change that does not adversely affect the rights of any Holder (for the avoidance of doubt, any amendment to conform the terms of this Indenture or the Notes to the description contained in the Offering Memorandum in accordance with Section 10.01(m) below will not be deemed to be adverse to any Holder);

 

(g)          to increase the Conversion Rate as provided in this Indenture;

 

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(h)         to provide for the acceptance of appointment by a successor trustee pursuant to Section 7.09 or to facilitate the administration of the trusts under this Indenture by more than one trustee;

 

(i)             to provide for the conversion of Notes to satisfy the Company’s Conversion Obligation in accordance with the provisions of this Indenture;

 

(j)            in connection with any Merger Event, provide that the notes are convertible into Reference Property, subject to the provisions of Section 14.02, and make such related changes to the terms of the Notes to the extent expressly required or permitted by Article 14;

 

(k)         to provide for the issuance of additional Notes in accordance with the terms of this Indenture, to the extent that the Company deems such amendment necessary or advisable in connection with such issuance; provided that that no such amendment or supplement may impair the rights or interests of any Holder of Notes;

 

(l)             to comply with any requirement of the Commission in connection with the qualification of this Indenture under the Trust Indenture Act; or

 

(m)     to conform the provisions of this Indenture or the Notes to the “Description of Notes” section of the Offering Memorandum.

 

Upon the written request of the Company, the Trustee is hereby authorized to, and shall, subject to Section 10.05, join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations that may be therein contained, except that the Trustee shall not be obligated to, but may in its discretion, enter into any supplemental indenture that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Any supplemental indenture authorized by the provisions of this Section 10.01 may be executed by the Company and the Trustee without the consent of the Holders of any of the Notes at the time outstanding, notwithstanding any of the provisions of Section 10.02.

 

Section 10.02.  Supplemental Indentures with Consent of Holders.  With the consent (evidenced as provided in Article 8) of the Holders of at least a majority of the aggregate principal amount of the Notes then outstanding (determined in accordance with Article 8 and including, without limitation, consents obtained in connection with a repurchase of, or tender or exchange offer for, Notes), the Company, when authorized by the resolutions of the Board of Directors and the Trustee, at the Company’s expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or any supplemental indenture or of modifying in any manner the rights of the Holders; provided, however, that, without the consent of each Holder of an outstanding Note affected, no such supplemental indenture shall:

 

(a)         reduce the amount of Notes whose Holders must consent to an amendment;

 

(b)         reduce the rate of or extend the stated time for payment of interest on any Note;

 

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(c)          reduce the principal of or extend the Maturity Date of any Note;

 

(d)         make any change that adversely affects the conversion rights of any Notes;

 

(e)          reduce the Fundamental Change Repurchase Price of any Note or amend or modify in any manner adverse to the Holders the Company’s obligation to make such payments, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;

 

(f)           make any Note payable in a currency or at a place of payment other than that stated in the Note;

 

(g)          change the ranking of the Notes;

 

(h)         impair the right of any Holder to receive payment of principal and interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Note; or

 

(i)             make any change in this Article 10 that requires each Holder’s consent or in the waiver provisions in Section 6.02 or Section 6.09.

 

Upon the written request of the Company, and upon the filing with the Trustee of evidence of the consent of Holders as aforesaid and subject to Section 10.05, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

 

Holders do not need under this Section 10.02 to approve the particular form of any proposed supplemental indenture.  It shall be sufficient if such Holders approve the substance thereof.  After any such supplemental indenture becomes effective, the Company shall deliver to the Holders a notice briefly describing such supplemental indenture. However, the failure to give such notice to all the Holders, or any defect in the notice, will not impair or affect the validity of the supplemental indenture.

 

Section 10.03.  Effect of Supplemental Indentures.  Upon the execution of any supplemental indenture pursuant to the provisions of this Article 10, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitation of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the Holders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

Section 10.04.  Notation on Notes.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article 10 may, at the Company’s expense, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture.  If the Company or the Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any

 

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modification of this Indenture contained in any such supplemental indenture may, at the Company’s expense, be prepared and executed by the Company, authenticated by the Trustee (or  an authenticating agent duly appointed by the Trustee pursuant to Section 17.10) and delivered in exchange for the Notes then outstanding, upon surrender of such Notes then outstanding.

 

Section 10.05.  Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee.  In addition to the documents required by Section 17.05, the Trustee shall receive an Officer’s Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article 10 and is permitted or authorized by this Indenture and that the supplemental indenture constitutes the legal, valid and binding obligation of the Company enforceable in accordance with its terms.

 

ARTICLE 11
 CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

 

Section 11.01.  Company May Consolidate, Etc. on Certain Terms.  Subject to the provisions of Section 11.02, the Company shall not consolidate with, merge with or into, or sell, convey, transfer or lease all or substantially all of its properties and assets to another Person, unless:

 

(a)         the resulting, surviving or transferee Person (the “Successor Company”), if not the Company, shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Company (if not the Company) shall expressly assume, by supplemental indenture all of the obligations of the Company under the Notes and this Indenture; and

 

(b)         immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing under this Indenture.

 

For purposes of this Section 11.01, the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of one or more Subsidiaries of the Company to another Person, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of the Company to another Person.

 

Section 11.02.  Successor Corporation to Be Substituted.  In case of any such consolidation, merger, sale, conveyance, transfer or lease and upon the assumption by the Successor Company, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and accrued and unpaid interest on all of the Notes, the due and punctual delivery or payment, as the case may be, of any consideration due upon conversion of the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company, such Successor Company (if not the Company) shall succeed to and, except in the case of a lease of all or substantially all of the Company’s properties and assets, shall be substituted for the Company, with the same effect as if it had been named herein as the party of

 

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the first part.  Such Successor Company thereupon may cause to be signed, and may issue either in its own name or in the name of the Company any or all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon  the order of such Successor Company instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Notes that previously shall have been signed and delivered by the Officers of the Company to the Trustee for authentication, and any Notes that such Successor Company thereafter shall cause to be signed and delivered to the Trustee for that purpose.  All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof.  In the event of any such consolidation, merger, sale, conveyance or transfer (but not in the case of a lease), upon compliance with this Article 11 the Person named as the “Company” in the first paragraph of this Indenture (or any successor that shall thereafter have become such in the manner prescribed in this Article 11) may be dissolved, wound up and liquidated at any time thereafter and, except in the case of a lease, such Person shall be released from its liabilities as obligor and maker of the Notes and from its obligations under this Indenture and the Notes.

 

In case of any such consolidation, merger, sale, conveyance, transfer or lease, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as may be appropriate.

 

Section 11.03.  Opinion of Counsel to Be Given to Trustee.  No such consolidation, merger, sale, conveyance, transfer or lease shall be effective unless the Trustee shall receive an Officer’s Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance, transfer or lease and any such assumption and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, complies with the provisions of this Article 11 and that such supplemental indenture is the legal, valid, binding and enforceable obligation of such successor company.

 

ARTICLE 12
 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

 

Section 12.01.  Indenture and Notes Solely Corporate Obligations.  No recourse for the payment of the principal of or accrued and unpaid interest on any Note, nor the delivery of Common Stock upon conversion of any Note, nor for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Note, nor because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, Officer or director or Subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Notes.

 

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ARTICLE 13
 [INTENTIONALLY OMITTED]

 

ARTICLE 14
 CONVERSION OF NOTES

 

Section 14.01.  Conversion Privilege.  (a) Subject to and upon compliance with the provisions of this Article 14, each Holder of a Note shall have the right, at such Holder’s option, to convert all or any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof) of such Note (i) subject to satisfaction of the conditions described in Section 14.01(b), at any time prior to the close of business on the Business Day immediately preceding December 1, 2023 under the circumstances and during the periods set forth in Section 14.01(b), and (ii) regardless of the conditions described in Section 14.01(b), on or after December 1, 2023 and prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, in each case, at an initial conversion rate of 48.7781 shares of Common Stock (subject to adjustment as provided in this Article 14, the “Conversion Rate”) per $1,000 principal amount of Notes (subject to, and in accordance with, the settlement provisions of Section 14.02, the “Conversion Obligation”).

 

(b)             (i) Prior to the close of business on the Business Day immediately preceding December 1, 2023, a Holder may surrender all or any portion of its Notes for conversion at any time during the five Business Day period immediately after any five consecutive Trading Day period (the “Measurement Period”) in which the Trading Price per $1,000 principal amount of Notes, as determined following a request by a Holder of Notes in accordance with this subsection (b)(i), for each Trading Day of the Measurement Period was less than 98% of the product of the Last Reported Sale Price of the Common Stock on each such Trading Day and the Conversion Rate on each such Trading Day.  The Trading Prices shall be determined by the Bid Solicitation Agent pursuant to this subsection (b)(i) and the definition of Trading Price set forth in this Indenture.  The Company shall provide written notice to the Bid Solicitation Agent (if other than the Company) of the three independent nationally recognized securities dealers selected by the Company pursuant to the definition of Trading Price, along with appropriate contact information for each.  The Bid Solicitation Agent (if other than the Company) shall have no obligation to determine the Trading Price per $1,000 principal amount of Notes unless the Company has requested such determination, and the Company shall have no obligation to make such request (or, if the Company is acting as Bid Solicitation Agent, the Company shall have no obligation to determine the Trading Price per $1,000 principal amount of Notes) unless a Holder provides the Company with reasonable evidence that the Trading Price per $1,000 principal amount of Notes on any Trading Day would be less than 98% of the product of the Last Reported Sale Price of the Common Stock on such Trading Day and the Conversion Rate on such Trading Day, at which time the Company shall instruct the Bid Solicitation Agent (if other than the Company) to determine, or if the Company is acting as Bid Solicitation Agent, the Company shall determine, the Trading Price per $1,000 principal amount of Notes beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 principal amount of Notes is greater than or equal to 98% of the product of the Last Reported Sale Price of the Common Stock and

 

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the Conversion Rate.  If (x) the Company is not acting as Bid Solicitation Agent, and the Company does not instruct the Bid Solicitation Agent to determine the Trading Price per $1,000 principal amount of Notes when obligated as provided in the preceding sentence, or if the Company instructs the Bid Solicitation Agent to obtain bids and the Bid Solicitation Agent fails to make such determination, or (y) the Company is acting as Bid Solicitation Agent and the Company fails to make such determination when obligated as provided in the preceding sentence, then, in either case, the Trading Price per $1,000 principal amount of Notes shall be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate on each Trading Day of such failure.  If the Trading Price condition set forth above has been met, the Company shall so notify the Holders, the Trustee and the Conversion Agent (if other than the Trustee).  If, at any time after the Trading Price condition set forth above has been met, the Trading Price per $1,000 principal amount of Notes is greater than or equal to 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate for such date, the Company shall so notify the Holders of the Notes, the Trustee and the Conversion Agent (if other than the Trustee).

 

(ii)          If, prior to the close of business on the Business Day immediately preceding December 1, 2023, the Company elects to:

 

(A)       issue to all or substantially all holders of the Common Stock any rights, options or warrants entitling them, for a period of not more than 45 calendar days after the announcement date of such issuance, to subscribe for or purchase shares of the Common Stock at a price per share that is less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance; or

 

(B)       distribute to all or substantially all holders of the Common Stock the Company’s assets, securities or rights to purchase securities of the Company, which distribution has a per share value, as reasonably determined by the Board of Directors, exceeding 10% of the Last Reported Sale Price of the Common Stock on the Trading Day preceding the date of announcement for such distribution,

 

then, in either case, the Company shall notify all Holders of the Notes, the Trustee and the Conversion Agent (if other than the Trustee) at least 45 Scheduled Trading Days prior to the Ex-Dividend Date for such issuance or distribution.  Once the Company has given such notice, a Holder may surrender all or any portion of its Notes for conversion at any time until the earlier of (1) the close of business on the Business Day immediately preceding the Ex-Dividend Date for such issuance or distribution and (2) the Company’s announcement that such issuance or distribution will not take place, in each case, even if the Notes are not otherwise convertible at such time.

 

(iii)       If a transaction or event that constitutes a Fundamental Change or a Make-Whole Fundamental Change occurs prior to the close of business on the Business Day immediately preceding December 1, 2023, regardless of whether a Holder has the right to

 

53

 

require the Company to repurchase the Notes pursuant to Section 15.02, or if the Company is a party to a consolidation, merger, binding share exchange, or transfer or lease of all or substantially all of its assets that occurs prior to the close of business on the Business Day immediately preceding December 1, 2023, in each case, pursuant to which the Common Stock would be converted into cash, securities or other assets, all or any portion of a Holder’s Notes may be surrendered for conversion at any time from or after the date that is 45 Scheduled Trading Days prior to the anticipated effective date of the transaction (or, if later, the earlier of (x) the Business Day after the Company gives notice of such transaction and (y) the actual effective date of such transaction) until 35 Trading Days after the actual effective date of such transaction or, if such transaction also constitutes a Fundamental Change, until the related Fundamental Change Repurchase Date.  The Company shall notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) (x) as promptly as practicable following the date the Company publicly announces such transaction but in no event less than 45 Scheduled Trading Days prior to the anticipated effective date of such transaction or (y) if the Company does not have knowledge of such transaction at least 45 Scheduled Trading Days prior to the anticipated effective date of such transaction, within one Business Day of the date upon which the Company receives notice, or otherwise becomes aware, of such transaction, but in no event later than the actual effective date of such transaction.

 

(iv)      Prior to the close of business on the Business Day immediately preceding December 1, 2023, a Holder may surrender all or any portion of its Notes for conversion at any time during any calendar quarter commencing after the calendar quarter ending on September 30, 2019 (and only during such calendar quarter), if the Last Reported Sale Price of the Common Stock for at least 20 Trading Days (whether or not consecutive) during the period of 30 consecutive Trading Days ending on, and including, the last Trading Day of the immediately preceding calendar quarter is greater than or equal to 130% of the Conversion Price on each applicable Trading Day.  The Company shall determine at the beginning of each calendar quarter commencing after September 30, 2019 whether the Notes may be surrendered for conversion in accordance with this clause (iv) and shall notify the Holders, the Trustee and the Conversion Agent (if other than the Trustee) if the Notes become convertible in accordance with this clause (iv).

 

Section 14.02.  Conversion Procedure; Settlement Upon Conversion.  (a) Subject to this Section 14.02, Section 14.03(b) and Section 14.07(a), upon conversion of any Note, the Company shall pay or deliver, as the case may be, to the converting Holder, in respect of each $1,000 principal amount of Notes being converted, cash (“Cash Settlement”), shares of Common Stock, together with cash, if applicable, in lieu of delivering any fractional share of Common Stock in accordance with subsection (j) of this Section 14.02 (“Physical Settlement”) or a combination of cash and shares of Common Stock, together with cash, if applicable, in lieu of delivering  any fractional share of Common Stock in accordance with subsection (j) of this Section 14.02 (“Combination Settlement”), at its election, as set forth in this Section 14.02.

 

(i)             All conversions for which the relevant Conversion Date occurs on or after December 1, 2023 shall be settled using the same Settlement Method.

 

54

 

(ii)          Except for any conversions for which the relevant Conversion Date occurs on or after December 1, 2023, the Company shall use the same Settlement Method for all conversions with the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions with different Conversion Dates.

 

(iii)       If, in respect of any Conversion Date (or the period described in the third immediately succeeding set of parentheses, as the case may be), the Company elects to deliver a notice (the “Settlement Notice”) of the relevant Settlement Method in respect of such Conversion Date (or such period, as the case may be), and the Company has not previously irrevocably elected a Settlement Method as described under Section 14.02(a)(vi), the Company, through the Trustee, shall deliver such Settlement Notice to converting Holders no later than the close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions for which the relevant Conversion Date occurs on or after December 1, 2023, no later than December 1, 2023).  If the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, and the Company has not previously irrevocably elected a Settlement Method as described under Section 14.02(a)(vi), the Company shall no longer have the right to elect Cash Settlement or Physical Settlement and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be equal to $1,000.  Such Settlement Notice shall specify the relevant Settlement Method and in the case of an election of Combination Settlement, the relevant Settlement Notice shall indicate the Specified Dollar Amount per $1,000 principal amount of Notes.  If the Company delivers a Settlement Notice electing Combination Settlement in respect of its Conversion Obligation but does not indicate a Specified Dollar Amount per $1,000 principal amount of Notes in such Settlement Notice, the Specified Dollar Amount per $1,000 principal amount of Notes shall be deemed to be $1,000.

 

(iv)      The cash, shares of Common Stock or combination of cash and shares of Common Stock in respect of any conversion of Notes (the “Settlement Amount”) shall be computed as follows:

 

(A)       if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall deliver to the converting Holder in respect of each $1,000 principal amount of Notes being converted a number of shares of Common Stock equal to the Conversion Rate in effect on the Conversion Date;

 

(B)       if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Cash Settlement, the Company shall pay to the converting Holder in respect of each $1,000 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 40 consecutive Trading Days during the related Observation Period; and

 

55

 

(C)       if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount equal to the sum of the Daily Settlement Amounts for each of the 40 consecutive Trading Days during the related Observation Period.

 

(v)         The Daily Settlement Amounts (if applicable) and the Daily Conversion Values (if applicable) shall be determined by the Company promptly following the last day of the Observation Period.  Promptly after such determination of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of delivering any fractional share of Common Stock, the Company shall notify the Trustee and the Conversion Agent (if other than the Trustee) of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash payable in lieu of delivering fractional shares of Common Stock.  The Trustee and the Conversion Agent (if other than the Trustee) shall have no responsibility for any such determination.

 

(vi)      The Company may, unless the Company has previously elected (or is deemed to have elected) a Settlement Method, at any time prior to any Conversion Date for any Note, and without the consent of the Holders, irrevocably elect a Settlement Method to apply in respect of such Notes converted following the date of the Company’s election. The Company will inform Holders, through the Trustee, of such election and, if Combination Settlement applies, the Specified Dollar Amount.

 

(b)                                 Subject to Section 14.02(e), before any Holder of a Note shall be entitled to convert a Note as set forth above, such Holder shall (i) in the case of a Global Note, comply with the procedures of the Depositary in effect at that time and, if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 14.02(h) and (ii) in the case of a Physical Note (1) complete, manually sign and deliver an irrevocable notice to the Conversion Agent as set forth in the Form of Notice of Conversion (or a facsimile thereof) (a “Notice of Conversion”) at the office of the Conversion Agent and state in writing therein the principal amount of Notes to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock to be delivered upon settlement of the Conversion Obligation to be registered, (2) surrender such Notes, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent, (3) if required, furnish appropriate endorsements and transfer documents and (4) if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 14.02(h).  The Trustee (and if different, the Conversion Agent) shall notify the Company of any conversion pursuant to this Article 14 on the Conversion Date for such conversion.  No Notice of Conversion with respect to any Notes may be surrendered by a Holder thereof if such Holder has also delivered a Fundamental Change Repurchase Notice to the Company in respect of such Notes and has not validly withdrawn such Fundamental Change Repurchase Notice in accordance with Section 15.03.

 

56

 

If more than one Note shall be surrendered for conversion at one time by the same Holder, the Conversion Obligation with respect to such Notes shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted thereby) so surrendered.

 

(c)          A Note shall be deemed to have been converted immediately prior to the close of business on the date (the “Conversion Date”) that the Holder has complied with the requirements set forth in subsection (b) above.  Except as set forth in Section 14.03(b) and Section 14.07(a), the Company shall pay or deliver, as the case may be, the consideration due in respect of the Conversion Obligation on the second Business Day immediately following the relevant Conversion Date (or, in respect of any Conversion Date occurring after the Regular Record Date immediately preceding the Maturity Date, on the Maturity Date), if the Company elects Physical Settlement, or on the second Business Day immediately following the last Trading Day of the Observation Period, in the case of any other Settlement Method. If any shares of Common Stock are due to a converting Holder, the Company shall issue or cause to be issued, and deliver (if applicable) to the Conversion Agent or to such Holder, or such Holder’s nominee or nominees, the full number of shares of Common Stock to which such Holder shall be entitled, in book-entry format through the Depositary, in satisfaction of the Company’s Conversion Obligation.

 

(d)         In case any Note shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Note so surrendered a new Note or Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note, without payment of any service charge by the converting Holder but, if required by the Company or Trustee, with payment of a sum sufficient to cover any documentary, stamp or similar issue or transfer tax or similar governmental charge required by law or that may be imposed in connection therewith as a result of the name of the Holder of the new Notes issued upon such conversion being different from the name of the Holder of the old Notes surrendered for such conversion.

 

(e)          If a Holder submits a Note for conversion, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of any shares of Common Stock upon conversion, unless the tax is due because the Holder requests such shares to be issued in a name other than the Holder’s name, in which case the Holder shall pay that tax.  The Conversion Agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the Holder’s name until the Trustee receives a sum sufficient to pay any tax that is due by such Holder in accordance with the immediately preceding sentence.

 

(f)           Except as provided in Section 14.04, no adjustment shall be made for dividends on any shares of Common Stock issued upon the conversion of any Note as provided in this Article 14.

 

(g)          Upon the conversion of an interest in a Global Note, the Trustee, or the Custodian at the direction of the Trustee, shall make a notation on such Global Note as to the reduction in the principal amount represented thereby.  The Company shall notify the Trustee in writing of any conversion of Notes effected through any Conversion Agent other than the Trustee.

 

57

 

(h)         Upon conversion, a Holder shall not receive any separate cash payment for accrued and unpaid interest, if any, except as set forth below.  The Company’s settlement of the full Conversion Obligation shall be deemed to satisfy in full its obligation to pay the principal amount of the Note and accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date. As a result, accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited.  Upon a conversion of Notes into a combination of cash and shares of Common Stock, accrued and unpaid interest will be deemed to be paid first out of the cash paid upon such conversion (excluding cash payments for fractional shares). Notwithstanding the foregoing, if Notes are converted after the close of business on a Regular Record Date, Holders of such Notes as of the close of business on such Regular Record Date will receive the full amount of interest payable on such Notes on the corresponding Interest Payment Date notwithstanding the conversion.  Notes surrendered for conversion during the period from the close of business on any Regular Record Date to the open of business on the immediately following Interest Payment Date must be accompanied by funds equal to the amount of interest payable on the Notes so converted; provided that no such payment shall be required (1) for conversions following the Regular Record Date immediately preceding the Maturity Date; (2) if the Company has specified a Fundamental Change Repurchase Date that is after a Regular Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date; or (3) to the extent of any Defaulted Amounts, if any Defaulted Amounts exists at the time of conversion with respect to such Note.  Therefore, for the avoidance of doubt, all Holders of record on the Regular Record Date immediately preceding the Maturity Date shall receive the full interest payment due on the Maturity Date in cash regardless of whether their Notes have been converted following such Regular Record Date.

 

(i)             The Person in whose name the shares of Common Stock shall be issuable upon conversion shall be treated as a stockholder of record as of the close of business on the relevant Conversion Date (if the Company elects to satisfy the related Conversion Obligation by Physical Settlement) or the last Trading Day of the relevant Observation Period (if the Company elects to satisfy the related Conversion Obligation by Combination Settlement), as the case may be.  Upon a conversion of Notes, such Person shall no longer be a Holder of such Notes surrendered for conversion.

 

(j)            The Company shall not issue any fractional share of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Daily VWAP for the relevant Conversion Date (in the case of Physical Settlement) or based on the Daily VWAP for the last Trading Day of the relevant Observation Period (in the case of Combination Settlement). For each Note surrendered for conversion, if the Company has elected Combination Settlement, the full number of shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate Daily Settlement Amounts for the relevant Observation Period and any fractional shares remaining after such computation shall be paid in cash.

 

Section 14.03.  Increased Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Changes.  (a)  If the Effective Date of a Make-Whole Fundamental Change occurs prior to the Maturity Date and a Holder elects to convert its Notes in connection with such Make-Whole Fundamental Change, the Company shall, under the

 

58

 

circumstances described below, increase the Conversion Rate for the Notes so surrendered for conversion by a number of additional shares of Common Stock (the “Additional Shares”), as described below.  A conversion of Notes shall be deemed for these purposes to be “in connection with” such Make-Whole Fundamental Change if the relevant Notice of Conversion is received by the Conversion Agent from, and including, the Effective Date of the Make-Whole Fundamental Change up to, and including, the Business Day immediately prior to the related Fundamental Change Repurchase Date (or, in the case of a Make-Whole Fundamental Change that would have been a Fundamental Change but for the proviso in clause (b) of the definition thereof, the 35th Trading Day immediately following the Effective Date of such Make-Whole Fundamental Change) (such period, the “Make-Whole Fundamental Change Period”).

 

(b)         Upon surrender of Notes for conversion in connection with a Make-Whole Fundamental Change pursuant to Section 14.01, the Company shall, at its option, satisfy the related Conversion Obligation by Physical Settlement, Cash Settlement or Combination Settlement in accordance with Section 14.02; provided, however, that if, at the effective time of a Make-Whole Fundamental Change described in clause (b) of the definition of Fundamental Change, the Reference Property following such Make-Whole Fundamental Change is composed entirely of cash, for any conversion of Notes following the Effective Date of such Make-Whole Fundamental Change, the Conversion Obligation shall be calculated based solely on the Stock Price for the transaction and shall be deemed to be an amount of cash per $1,000 principal amount of converted Notes equal to the Conversion Rate (including any adjustment for Additional Shares), multiplied by such Stock Price.  In such event, the Conversion Obligation shall be paid to Holders in cash on the second Business Day following the Conversion Date.

 

(c)          The number of Additional Shares, if any, by which the Conversion Rate shall be increased shall be determined by reference to the table below, based on the date on which the Make-Whole Fundamental Change occurs or becomes effective (the “Effective Date”) and the price (the “Stock Price”) paid (or deemed to be paid) per share of the Common Stock in the Make-Whole Fundamental Change.  If the holders of the Common Stock receive in exchange for their Common Stock only cash in a Make-Whole Fundamental Change described in clause (b) of the definition of Fundamental Change, the Stock Price shall be the cash amount paid per share.  Otherwise, the Stock Price shall be the average of the Last Reported Sale Prices of the Common Stock over the five Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of the Make-Whole Fundamental Change.  The Board of Directors shall make appropriate adjustments to the Stock Price, in its good faith determination, to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date, Effective Date (as such term is used in Section 14.04) or expiration date of the event occurs during such five consecutive Trading Day period.

 

(d)         The Stock Prices set forth in the column headings of the table below shall be adjusted as of any date on which the Conversion Rate of the Notes is otherwise adjusted.  The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted.  The number of Additional Shares set forth in the table

 

59

 

below shall be adjusted in the same manner and at the same time as the Conversion Rate as set forth in Section 14.04.

 

(e)          The following table sets forth the number of Additional Shares of Common Stock by which the Conversion Rate shall be increased per $1,000 principal amount of Notes pursuant to this Section 14.03 for each Stock Price and Effective Date set forth below:

 

	
 
    	
 
    	
Stock Price
    	
 
    
	
Effective Date
    	
 
    	
$15.77
    	
 
    	
$17.00
    	
 
    	
$18.00
    	
 
    	
$19.00
    	
 
    	
$20.50
    	
 
    	
$24.00
    	
 
    	
$28.00
    	
 
    	
$35.00
    	
 
    	
$45.00
    	
 
    	
$60.00
    	
 
    
	
June 5,   2019
    	
 
    	
14.6334
    	
 
    	
12.4149
    	
 
    	
10.9038
    	
 
    	
9.6078
    	
 
    	
7.9906
    	
 
    	
5.2928
    	
 
    	
3.3754
    	
 
    	
1.5551
    	
 
    	
0.4576
    	
 
    	
0.0098
    	
 
    
	
June 1,   2020
    	
 
    	
14.6334
    	
 
    	
12.7457
    	
 
    	
11.1257
    	
 
    	
9.7424
    	
 
    	
8.0257
    	
 
    	
5.1968
    	
 
    	
3.2270
    	
 
    	
1.4164
    	
 
    	
0.3838
    	
 
    	
0.0028
    	
 
    
	
June 1,   2021
    	
 
    	
14.6334
    	
 
    	
12.6652
    	
 
    	
10.9420
    	
 
    	
9.4803
    	
 
    	
7.6825
    	
 
    	
4.7780
    	
 
    	
2.8237
    	
 
    	
1.1210
    	
 
    	
0.2386
    	
 
    	
0.0002
    	
 
    
	
June 1,   2022
    	
 
    	
14.6334
    	
 
    	
12.3391
    	
 
    	
10.4771
    	
 
    	
8.9140
    	
 
    	
7.0196
    	
 
    	
4.0597
    	
 
    	
2.1870
    	
 
    	
0.7099
    	
 
    	
0.0792
    	
 
    	
0.0000
    	
 
    
	
June 1,   2023
    	
 
    	
14.6334
    	
 
    	
11.4770
    	
 
    	
9.3869
    	
 
    	
7.6670
    	
 
    	
5.6458
    	
 
    	
2.8719
    	
 
    	
1.2487
    	
 
    	
0.2341
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    
	
June 1,   2024
    	
 
    	
14.6334
    	
 
    	
10.0454
    	
 
    	
6.7774
    	
 
    	
3.8535
    	
 
    	
0.0024
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    

 

The exact Stock Prices and Effective Dates may not be set forth in the table above, in which case:

 

(i)             if the Stock Price is between two Stock Prices in the table above or the Effective Date is between two Effective Dates in the table above, the number of Additional Shares by which the Conversion Rate shall be increased shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices and the earlier and later Effective Dates, as applicable, based on a 365-day year;

 

(ii)          if the Stock Price is greater than $60.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above pursuant to subsection (d) above), no Additional Shares shall be added to the Conversion Rate; and

 

(iii)       if the Stock Price is less than $15.77 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above pursuant to subsection (d) above), no Additional Shares shall be added to the Conversion Rate.

 

Notwithstanding the foregoing, in no event shall the Conversion Rate per $1,000 principal amount of Notes exceed 63.4115 shares of Common Stock, subject to adjustment in the same manner as the Conversion Rate pursuant to Section 14.04.

 

(f)           Nothing in this Section 14.03 shall prevent an adjustment to the Conversion Rate pursuant to Section 14.04 in respect of a Make-Whole Fundamental Change.

 

Section 14.04.  Adjustment of Conversion Rate.  The Conversion Rate shall be adjusted from time to time by the Company if any of the following events occurs, except that the Company shall not make any adjustments to the Conversion Rate if Holders of the Notes participate (other than in the case of (x) a share split or share combination or (y) a tender or 

 

60

 

exchange offer), at the same time and upon the same terms as holders of the Common Stock and solely as a result of holding the Notes, in any of the transactions described in this Section 14.04, without having to convert their Notes, as if they held a number of shares of Common Stock equal to the Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.

 

(a)         If the Company exclusively issues shares of Common Stock as a dividend or distribution on shares of the Common Stock, or if the Company effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:

 

 

where,

 

CR0                              =                            the Conversion Rate in effect immediately prior to the open of the business on the Ex-Dividend Date of such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as applicable;

 

CR’                               =                            the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date or Effective Date, as applicable;

 

OS0                                =                            the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date or Effective Date (before giving effect to any such dividend, distribution, split or combination); and

 

OS’                                 =                            the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination.

 

Any adjustment made under this Section 14.04(a) shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately after the open of business on the Effective Date for such share split or share combination, as applicable.  If any dividend or distribution of the type described in this Section 14.04(a) is declared but not so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

 

(b)         If the Company issues to all or substantially all holders of the Common Stock any rights, options or warrants entitling them, for a period of not more than 45 calendar days after the announcement date of such issuance, to subscribe for or purchase shares of the Common Stock at a price per share that is less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Rate shall be increased based on the following formula:

 

61

 

 

where,

 

CR0                              =                            the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such issuance;

 

CR’                               =                            the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date;

 

OS0                                =                            the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date;

 

X                                            =                            the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and

 

Y                                            =                            the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants.

 

Any increase made under this Section 14.04(b) shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the close of business on the Record Date for such issuance.  To the extent that shares of the Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered.  If such rights, options or warrants are not so issued, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such Record Date for such issuance had not occurred.

 

For purposes of this Section 14.04(b) and for the purpose of Section 14.01(b)(ii)(A), in determining whether any rights, options or warrants entitle the holders of Common Stock to subscribe for or purchase shares of the Common Stock at less than such average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement for such issuance, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.

 

(c)                                  If the Company distributes shares of its Capital Stock, evidences of its indebtedness, other assets or property of the Company or rights, options or warrants to acquire its Capital Stock or other securities of the Company, to all or substantially all holders of the Common Stock, excluding (i) dividends, distributions or issuances as to which an adjustment was effected

 

62

 

pursuant to Section 14.04(a) or Section 14.04(b), (ii) dividends or distributions paid exclusively in cash as to which an adjustment was effected pursuant to Section 14.04(d), (iii) payments in respect of tender or exchange offers as to which an adjustment was effected pursuant to Section 14.04(e), (iv) distributions of Reference Property in a transaction described in Section 14.07 and (v) Spin-Offs as to which the provisions set forth below in this Section 14.04(c) shall apply (any of such shares of Capital Stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities, the “Distributed Property”), then the Conversion Rate shall be increased based on the following formula:

 

 

where,

 

CR0                              =                            the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;

 

CR’                               =                            the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date;

 

SP0                                  =                            the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

 

FMV                         =                            the fair market value (as determined by the Board of Directors) of the Distributed Property with respect to each outstanding share of the Common Stock on the Ex-Dividend Date for such distribution.

 

Any increase made under the portion of this Section 14.04(c) above shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution.  If such distribution is not so paid or made, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such distribution had not been declared.  Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Common Stock receive the Distributed Property, the amount and kind of Distributed Property such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for the distribution.  If the Board of Directors determines the “FMV” (as defined above) of any distribution for purposes of this Section 14.04(c) by reference to the actual or when-issued trading market for any securities, it shall in doing so consider the prices in such market over the same period used in computing the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution.

 

With respect to an adjustment pursuant to this Section 14.04(c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit

 

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of the Company, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Conversion Rate shall be increased based on the following formula:

 

 

where,

 

CR0                              =                            the Conversion Rate in effect immediately prior to the end of the Valuation Period;

 

CR’                               =                            the Conversion Rate in effect immediately after the end of the Valuation Period;

 

FMV0                    =                            the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in Section 1.01 as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the “Valuation Period”); and

 

MP0                             =                            the average of the Last Reported Sale Prices of the Common Stock over the Valuation Period.

 

The adjustment to the Conversion Rate under the preceding paragraph shall occur at the close of business on the last Trading Day of the Valuation Period; provided that (x) in respect of any conversion of Notes for which Physical Settlement is applicable, if the relevant Conversion Date occurs during the Valuation Period, references to “10” in the preceding paragraph shall be deemed to be replaced with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date of such Spin-Off to, and including, the Conversion Date in determining the Conversion Rate and (y) in respect of any conversion of Notes for which Cash Settlement or Combination Settlement is applicable, for any Trading Day that falls within the relevant Observation Period for such conversion and within the Valuation Period, references to “10” in the preceding paragraph shall be deemed to be replaced with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date of such Spin-Off to, and including, such Trading Day in determining the Conversion Rate as of such Trading Day.

 

For purposes of this Section 14.04(c) (and subject in all respect to Section 14.11), rights, options or warrants distributed by the Company to all holders of the Common Stock entitling them to subscribe for or purchase shares of the Company’s Capital Stock, including Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of the Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of the Common Stock, shall be deemed not to have been distributed  for purposes of this Section 14.04(c) (and no adjustment to the Conversion Rate under this Section 14.04(c) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate

 

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adjustment (if any is required) to the Conversion Rate shall be made under this Section 14.04(c).  If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Record Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof).  In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event (of the type described in the immediately preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 14.04(c) was made, (1) in the case of any such rights, options or warrants that shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by a holder or holders of Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Common Stock as of the date of such redemption or purchase, and (2) in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights, options and warrants had not been issued.

 

For purposes of Section 14.04(a),  Section 14.04(b) and this Section 14.04(c), if any dividend or distribution to which this Section 14.04(c) is applicable also includes one or both of:

 

(A)                               a dividend or distribution of shares of Common Stock to which Section 14.04(a) is applicable (the “Clause A Distribution”); or

 

(B)                               a dividend or distribution of rights, options or warrants to which Section 14.04(b) is applicable (the “Clause B Distribution”),

 

then, in either case, (1) such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a dividend or distribution to which this Section 14.04(c) is applicable (the “Clause C Distribution”) and any Conversion Rate adjustment required by this Section 14.04(c) with respect to such Clause C Distribution shall then be made, and (2) the Clause A Distribution and Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 14.04(a) and Section 14.04(b) with respect thereto shall then be made, except that, if determined by the Company (I) the “Ex-Dividend Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be the Ex-Dividend Date of the Clause C Distribution and (II) any shares of Common Stock included in the Clause A Distribution or Clause B Distribution shall be deemed not to be “outstanding immediately prior to the open of business on such Ex-Dividend Date or Effective Date” within the meaning of Section 14.04(a) or “outstanding immediately prior to the open of business on such Ex-Dividend Date” within the meaning of Section 14.04(b).

 

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(d)         If any cash dividend or distribution is made to all or substantially all holders of the Common Stock (excluding, for the avoidance of doubt, cash payments in respect of tender or exchange offers to which Section 14.04(e) shall apply), the Conversion Rate shall be adjusted based on the following formula:

 

 

where,

 

CR0                              =                            the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution;

 

CR’                               =                            the Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution;

 

SP0                                  =                            the Daily VWAP on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and

 

C                                            =                            the amount in cash per share the Company distributes to all or substantially all holders of the Common Stock.

 

Any increase pursuant to this Section 14.04(d) shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution.  If such dividend or distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the Board of Directors determines not to make or pay such dividend or distribution, to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.  Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, for each $1,000 principal amount of Notes, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash that such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate on the Ex-Dividend Date for such cash dividend or distribution.

 

(e)          If the Company or any of its Subsidiaries make a payment in respect of a tender or exchange offer for the Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be increased based on the following formula:

 

 

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where,

 

CR0                              =                            the Conversion Rate in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

 

CR’                               =                            the Conversion Rate in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

 

AC                                   =                            the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares of Common Stock purchased in such tender or exchange offer;

 

OS0                                =                            the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer);

 

OS’                                 =                            the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and

 

SP’                                   =                            the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires.

 

The adjustment to the Conversion Rate under this Section 14.04(e) shall occur at the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that (x) in respect of any conversion of Notes for which Physical Settlement is applicable, if the relevant Conversion Date occurs during the 10 Trading Days immediately following, and including, the Trading Day next succeeding the expiration date of any tender or exchange offer, references to “10” or “10th” in the preceding paragraph shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the date that such tender or exchange offer expires to, and including, the Conversion Date in determining the Conversion Rate and (y) in respect of any conversion of Notes for which Cash Settlement or Combination Settlement is applicable, for any Trading Day that falls within the relevant Observation Period for such conversion and within the 10 Trading Days immediately following, and including, the Trading Day next succeeding the expiration date of any tender or exchange offer, references to “10” or “10th” in the preceding paragraph shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next  succeeding the expiration date of such tender or exchange offer to, and including, such Trading Day in determining the Conversion Rate as of such Trading Day.

 

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(f)           Notwithstanding this Section 14.04 or any other provision of this Indenture or the Notes, if a Conversion Rate adjustment becomes effective, and a Holder that has converted its Notes on or after the relevant Ex-Dividend Date and on or prior to the related Record Date would be treated as the record holder of the shares of Common Stock as of the related Conversion Date as described under Section 14.02(i) based on an adjusted Conversion Rate for such Ex-Dividend Date, then, notwithstanding the Conversion Rate adjustment provisions in this Section 14.04, the Conversion Rate adjustment relating to such Ex-Dividend Date shall not be made for such converting Holder. Instead, such Holder shall be treated as if such Holder were the record owner of the shares of Common Stock on an unadjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.

 

(g)          Except as stated herein, the Company shall not adjust the Conversion Rate for the issuance of shares of the Common Stock or any securities convertible into or exchangeable for shares of the Common Stock or the right to purchase shares of the Common Stock or such convertible or exchangeable securities.

 

(h)         In addition to those adjustments required by clauses (a), (b), (c), (d) and (e) of this Section 14.04, and to the extent permitted by applicable law and subject to the applicable rules of any exchange on which any of the Company’s securities are then listed, the Company from time to time may increase the Conversion Rate by any amount for a period of at least 20 Business Days if the Board of Directors determines that such increase would be in the Company’s best interest.  In addition, to the extent permitted by applicable law and subject to the applicable rules of any exchange on which any of the Company’s securities are then listed, the Company may (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with a dividend or distribution of shares of Common Stock (or rights to acquire shares of Common Stock) or similar event.  Whenever the Conversion Rate is increased pursuant to either of the preceding two sentences, the Company shall deliver to the Holder of each Note a notice of the increase at least 15 days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

 

(i)             Notwithstanding anything to the contrary in this Article 14, the Conversion Rate shall not be adjusted:

 

(i)             upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in shares of Common Stock under any plan;

 

(ii)          upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of the Company’s Subsidiaries;

 

(iii)       upon the issuance of any shares of the Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described

 

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in clause (ii) of this subsection and outstanding as of the date the Notes were first issued (other than as set forth in Section 14.11);

 

(iv)      upon the repurchase of shares of Common Stock pursuant to an open-market share repurchase program, including pursuant to structured or derivative transactions such as accelerated share repurchase transactions or similar forward derivatives, or other buy-back transaction that is not a tender offer or exchange offer of the nature described in Section 14.04(e);

 

(v)         solely for a change in the par value of the Common Stock; or

 

(vi)      for accrued and unpaid interest, if any.

 

(j)            All calculations and other determinations under this Article 14 shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000th) of a share.

 

(k)         Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee (and the Conversion Agent if not the Trustee) an Officer’s Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment.  Unless and until a Responsible Officer of the Trustee shall have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect.  Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall deliver such notice of such adjustment of the Conversion Rate to each Holder.  Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

 

(l)             For purposes of this Section 14.04, the number of shares of Common Stock at any time outstanding shall not include shares of Common Stock held in the treasury of the Company so long as the Company does not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company, but shall include shares of Common Stock issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

 

Section 14.05. Adjustments of Prices.  Whenever any provision of this Indenture requires the Company to calculate the Last Reported Sale Prices, the Daily VWAPs, the Daily Conversion Values or the Daily Settlement Amounts over a span of multiple days (including, without limitation, the period, if any, the Stock Price for purposes of a Make-Whole Fundamental Change), the Company shall make appropriate adjustments to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date, Effective Date or expiration date, as the case may be of the event occurs, at any time during the period when the Last Reported Sale Prices, the Daily VWAPs, the Daily Conversion Values or the Daily Settlement Amounts or Stock Prices are to be calculated.

 

Section 14.06.  Shares to Be Fully Paid.  The Company shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of Common Stock to provide for conversion of the Notes from time to time as such Notes

 

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are presented for conversion (assuming delivery of the maximum number of Additional Shares pursuant to Section 14.03 and that at the time of computation of such number of shares, all such Notes would be converted by a single Holder and that Physical Settlement were applicable).

 

Section 14.07.  Effect of Recapitalizations, Reclassifications and Changes of the Common Stock.

 

(a)         In the case of:

 

(i)             any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination),

 

(ii)          any consolidation, merger or combination involving the Company,

 

(iii)       any sale, lease or other transfer to a third-party of the consolidated assets of the Company and the Company’s Subsidiaries substantially as an entirety or

 

(iv)      any statutory share exchange,

 

in each case, as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any such event, a “Merger Event”), then, at and after the effective time of such Merger Event, the right to convert each $1,000 principal amount of Notes shall be changed into a right to convert such principal amount of Notes into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such Merger Event would have owned or been entitled to receive (the “Reference Property,” with each “unit of Reference Property” meaning the kind and amount of Reference Property that a holder of one share of Common Stock is entitled to receive) upon such Merger Event and, prior to or at the effective time of such Merger Event, the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture permitted under Section 10.01(j) providing for such change in the right to convert each $1,000 principal amount of Notes; provided, however, that at and after the effective time of the Merger Event (A) the Company shall continue to have the right to determine the form of consideration to be paid or delivered, as the case may be, upon conversion of Notes in accordance with Section 14.02 and (B) (I) any amount payable in cash upon conversion of the Notes in accordance with Section 14.02 shall continue to be payable in cash, (II) any shares of Common Stock that the Company would have been required to deliver upon conversion of the Notes in accordance with Section 14.02 shall instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of Common Stock would have been entitled to receive in such Merger Event and (III) the Daily VWAP shall be calculated based on the value of a unit of Reference Property.

 

If the Merger Event causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form  of stockholder election), then (i) the Reference Property into which the Notes will be convertible shall be deemed to be actually received by the holders of Common Stock, and (ii) the unit of Reference Property for purposes of the immediately preceding paragraph shall refer to the

 

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consideration referred to in clause (i) attributable to one share of Common Stock.  If the holders of the Common Stock receive only cash in such Merger Event, then for all conversions for which the relevant Conversion Date occurs after the effective date of such Merger Event (A) the consideration due upon conversion of each $1,000 principal amount of Notes shall be solely cash in an amount equal to the Conversion Rate in effect on the Conversion Date (as may be increased by any Additional Shares pursuant to Section 14.03), multiplied by the price paid per share of Common Stock in such Merger Event and (B) the Company shall satisfy the Conversion Obligation by paying cash to converting Holders on the second Business Day immediately following the relevant Conversion Date. The Company shall notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) of such weighted average as soon as practicable after such determination is made.

 

Such supplemental indenture described in the second immediately preceding paragraph shall provide for anti-dilution and other adjustments that shall be as nearly equivalent as is possible to the adjustments provided for in this Article 14.  If, in the case of any Merger Event, the Reference Property includes shares of stock, securities or other property or assets (including cash or any combination thereof) of a Person other than the successor or purchasing corporation, as the case may be, in such Merger Event, then such supplemental indenture shall also be executed by such other Person and shall contain such additional provisions to protect the interests of the Holders of the Notes as the Board of Directors shall reasonably consider necessary by reason of the foregoing, including the provisions providing for the purchase rights set forth in Article 15.

 

(b)         When the Company executes a supplemental indenture pursuant to subsection (a) of this Section 14.07, the Company shall promptly file with the Trustee an Officer’s Certificate briefly stating the reasons therefor, the kind or amount of cash, securities or property or asset that will comprise a unit of Reference Property after any such Merger Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly deliver notice thereof to all Holders.  The Company shall cause notice of the execution of such supplemental indenture to be delivered to each Holder as provided for in this Indenture, within 20 days after execution thereof.  Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

 

(c)          The Company shall not become a party to any Merger Event unless its terms are consistent with this Section 14.07.  None of the foregoing provisions shall affect the right of a holder of Notes to convert its Notes into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, as set forth in Section 14.01 and Section 14.02 prior to the effective date of such Merger Event.

 

(d)         The above provisions of this Section shall similarly apply to successive Merger Events.

 

Section 14.08.  Certain Covenants.  (a) The Company covenants that all shares of Common Stock issued upon conversion of Notes will be fully paid and non-assessable by the Company and free from all taxes, liens and charges with respect to the issue thereof.

 

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(b)         The Company covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Notes hereunder require registration with or approval of any governmental authority under any federal or state law before such shares of Common Stock may be validly issued upon conversion, the Company will, to the extent then permitted by the rules and interpretations of the Commission, secure such registration or approval, as the case may be.

 

(c)          The Company further covenants that if at any time the Common Stock shall be listed on any national securities exchange or automated quotation system the Company will list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, any Common Stock issuable upon conversion of the Notes.

 

Section 14.09.  Responsibility of Trustee.  The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine the Conversion Rate (or any adjustment thereto) or whether any facts exist that may require any adjustment (including any increase) of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same.  The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities, property or cash that may at any time be issued or delivered upon the conversion of any Note; and the Trustee and any other Conversion Agent make no representations with respect thereto.  Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article.  Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 14.07 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Holders upon the conversion of their Notes after any event referred to in such Section 14.07 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 7.01, may accept (without any independent investigation) as conclusive evidence of the correctness of any such provisions, and shall be protected in conclusively relying upon, the Officer’s Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto. Neither the Trustee nor the Conversion Agent shall be responsible for determining whether any event contemplated by Section 14.01(b) has occurred that makes the Notes eligible for conversion or no longer eligible therefor until the Company has delivered to the Trustee and the Conversion Agent the notices referred to in Section 14.01(b) with respect to the commencement or termination of such conversion rights, on which notices the Trustee and the Conversion Agent may conclusively rely, and the Company agrees to deliver such notices to the Trustee and the Conversion Agent immediately after the occurrence of any such event or at such other times as shall be provided for in Section 14.01(b).

 

Section 14.10.  Notice to Holders Prior to Certain Actions.  In case of any:

 

(a)         action by the Company or one of its Subsidiaries that would require an adjustment in the Conversion Rate pursuant to Section 14.04 or Section 14.11;

 

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(b)         Merger Event; or

 

(c)          voluntary or involuntary dissolution, liquidation or winding-up of the Company or any of its Subsidiaries;

 

then, in each case (unless notice of such event is otherwise required pursuant to another provision of this Indenture), the Company shall cause to be filed with the Trustee and the Conversion Agent (if other than the Trustee) and to be delivered to each Holder as promptly as possible but in any event at least 20 days prior to the applicable date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such action by the Company or one of its Subsidiaries or, if a record is not to be taken, the date as of which the holders of Common Stock of record are to be determined for the purposes of such action by the Company or one of its Subsidiaries, or (ii) the date on which such Merger Event, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such Merger Event, dissolution, liquidation or winding-up.  Failure to give such notice, or any defect therein, shall not affect the legality or validity of such action by the Company or one of its Subsidiaries, Merger Event, dissolution, liquidation or winding-up.

 

Section 14.11.  Stockholder Rights Plans.  If the Company has a stockholder rights plan in effect upon conversion of the Notes, each share of Common Stock, if any, issued upon such conversion shall be entitled to receive the appropriate number of rights, if any, and the certificates representing the Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any such stockholder rights plan, as the same may be amended from time to time. However, if, prior to any conversion of Notes, the rights have separated from the shares of Common Stock in accordance with the provisions of the applicable stockholder rights plan so that the Holders would not be entitled to receive any rights in respect of Common Stock issuable upon conversion of the Notes, the Conversion Rate shall be adjusted at the time of separation as if the Company distributed to all or substantially all holders of the Common Stock Distributed Property as provided in Section 14.04(c), subject to readjustment in the event of the expiration, termination or redemption of such rights.

 

ARTICLE 15
 REPURCHASE OF NOTES AT OPTION OF HOLDERS

 

Section 15.01.  Intentionally Omitted.

 

Section 15.02.  Repurchase at Option of Holders Upon a Fundamental Change.  (a)  If a Fundamental Change occurs at any time, each Holder shall have the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes, or any portion thereof that is equal to $1,000 or a multiple of $1,000, on the date (the “Fundamental Change  Repurchase Date”) specified by the Company that is not less than 20 calendar days or more than 35 calendar days following the date of the Fundamental Change Company Notice at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon to, but excluding, the Fundamental Change Repurchase Date (the “Fundamental

 

73

 

Change Repurchase Price”), unless the Fundamental Change Repurchase Date falls after a Regular Record Date but on or prior to the Interest Payment Date to which such Regular Record Date relates, in which case the Company shall instead pay the full amount of accrued and unpaid interest to Holders of record as of such Regular Record Date, and the Fundamental Change Repurchase Price shall be equal to 100% of the principal amount of Notes to be repurchased pursuant to this Article 15.

 

(b)         Repurchases of Notes under this Section 15.02 shall be made, at the option of the Holder thereof, upon:

 

(i)             delivery to the Paying Agent by a Holder of a duly completed notice (the “Fundamental Change Repurchase Notice”) in the form set forth in Attachment 2 to the Form of Note attached hereto as Exhibit A, if the Notes are Physical Notes, or in compliance with the Depositary’s procedures for surrendering interests in Global Notes, if the Notes are Global Notes, in each case on or before the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date; and

 

(ii)          delivery of the Notes, if the Notes are Physical Notes, to the Paying Agent at any time after delivery of the Fundamental Change Repurchase Notice (together with all necessary endorsements for transfer) at the Corporate Trust Office of the Paying Agent, or book-entry transfer of the Notes, if the Notes are Global Notes, in compliance with the procedures of the Depositary, in each case such delivery being a condition to receipt by the Holder of the Fundamental Change Repurchase Price therefor.

 

The Fundamental Change Repurchase Notice in respect of any Notes to be repurchased shall state:

 

(i)             in the case of Physical Notes, the certificate numbers of the Notes to be delivered for repurchase;

 

(ii)          the portion of the principal amount of Notes to be repurchased, which must be $1,000 or a multiple thereof; and

 

(iii)       that the Notes are to be repurchased by the Company pursuant to the applicable provisions of the Notes and this Indenture;

 

provided, however, that if the Notes are Global Notes, the Fundamental Change Repurchase Notice must comply with appropriate Depositary procedures.

 

Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Fundamental Change Repurchase Notice contemplated by this Section 15.02 shall have the right to withdraw, in whole or in part, such Fundamental Change Repurchase Notice at any time prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 15.03.

 

The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or written notice of withdrawal thereof.

 

74

 

(c)          On or before the 20th calendar day after the occurrence of the effective date of a Fundamental Change, the Company shall provide to all Holders of Notes and the Trustee and the Paying Agent (in the case of a Paying Agent other than the Trustee) a notice (the “Fundamental Change Company Notice”) of the occurrence of the effective date of the Fundamental Change and of the repurchase right at the option of the Holders arising as a result thereof.  In the case of Physical Notes, such notice shall be by first class mail or, in the case of Global Notes, such notice shall be delivered in accordance with the applicable procedures of the Depositary.  Each Fundamental Change Company Notice shall specify:

 

(i)                  the events causing the Fundamental Change;

 

(ii)               the effective date of the Fundamental Change;

 

(iii)            the last date on which a Holder may exercise the repurchase right pursuant to this Article 15;

 

(iv)           the Fundamental Change Repurchase Price;

 

(v)              the Fundamental Change Repurchase Date;

 

(vi)           the name and address of the Paying Agent and the Conversion Agent, if applicable;

 

(vii)        if applicable, the Conversion Rate and any adjustments to the Conversion Rate;

 

(viii)     that the Notes with respect to which a Fundamental Change Repurchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Fundamental Change Repurchase Notice in accordance with the terms of this Indenture; and

 

(ix)           the procedures that Holders must follow to require the Company to repurchase their Notes.

 

No failure of the Company to give the foregoing notices and no defect therein shall limit the Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Notes pursuant to this Section 15.02.

 

At the Company’s request, the Trustee shall give such notice in the Company’s name and at the Company’s expense; provided, however, that, in all cases, the text of such Fundamental Change Company Notice shall be prepared by the Company, and the Company shall provide such text at least three (3) Business Days prior to the date such notice is required to be sent to the Holders.

 

(d)         Notwithstanding the foregoing, no Notes may be repurchased by the Company on any date at the option of the Holders upon a Fundamental Change if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to such date (except in the case of an acceleration resulting from a Default by the Company in the

 

75

 

payment of the Fundamental Change Repurchase Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Repurchase Price with respect to such Notes), or any instructions for book-entry transfer of the Notes in compliance with the procedures of the Depositary shall be deemed to have been canceled, and, upon such return or cancellation, as the case may be, the Fundamental Change Repurchase Notice with respect thereto shall be deemed to have been withdrawn.

 

Section 15.03.  Withdrawal of Fundamental Change Repurchase Notice.  (a)  A Fundamental Change Repurchase Notice may be withdrawn (in whole or in part) by means of a written notice of withdrawal delivered to the Paying Agent in accordance with this Section 15.03 at any time prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date, specifying:

 

(i)             the principal amount of the Notes with respect to which such notice of withdrawal is being submitted, which must be in principal amounts of $1,000 or a multiple in excess thereof,

 

(ii)          if Physical Notes have been issued, the certificate number of the Note in respect of which such notice of withdrawal is being submitted, and

 

(iii)       the principal amount, if any, of such Note that remains subject to the original Fundamental Change Repurchase Notice, which portion must be in principal amounts of $1,000 or a multiple of $1,000;

 

provided, however, that if the Notes are Global Notes, the notice must comply with appropriate procedures of the Depositary.

 

Section 15.04.  Deposit of Fundamental Change Repurchase Price.  (a)  The Company will deposit with the Trustee (or other Paying Agent appointed by the Company, or if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in Section 4.04) on or prior to 11:00 a.m., New York City time, on the Fundamental Change Repurchase Date an amount of money sufficient to repurchase all of the Notes to be repurchased at the appropriate Fundamental Change Repurchase Price.  Subject to receipt of funds and/or Notes by the Trustee (or other Paying Agent appointed by the Company), payment for Notes surrendered for repurchase (and not withdrawn prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date) will be made on the later of (i) the Fundamental Change Repurchase Date (provided the Holder has satisfied the conditions in Section 15.02) and (ii) the time of book-entry transfer or the delivery of such Note to the  Trustee (or other Paying Agent appointed by the Company) by the Holder thereof in the manner required by Section 15.02 by mailing checks for the amount payable to the Holders of such Notes entitled thereto as they shall appear in the Note Register; provided, however, that payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee.  The Trustee shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Fundamental Change Repurchase Price.

 

76

 

(b)         If by 11:00 a.m. New York City time, on the Fundamental Change Repurchase Date, the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to make payment on all the Notes or portions thereof that are to be repurchased on such  Fundamental Change Repurchase Date, then, with respect to the Notes that have been properly surrendered for repurchase and have not been validly withdrawn in accordance with the provisions of this Indenture, (i) such Notes will cease to be outstanding, (ii) interest will cease to accrue on such Notes (whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Trustee or Paying Agent) and (iii) all other rights of the Holders of such Notes will terminate (other than the right to receive the Fundamental Change Repurchase Price).

 

(c)          Upon surrender of a Note that is to be repurchased in part pursuant to Section 15.02, the Company shall execute and the Trustee shall authenticate and deliver to the Holder a new Note in an authorized denomination equal in principal amount to the unrepurchased portion of the Note surrendered.

 

Section 15.05.  Covenant to Comply with Applicable Laws Upon Repurchase of Notes.  In connection with any repurchase offer, the Company will, if required:

 

(a)         comply with the provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act;

 

(b)         file a Schedule TO or any other required schedule under the Exchange Act; and

 

(c)          otherwise comply with all federal and state securities laws in connection with any offer by the Company to repurchase the Notes;

 

in each case, so as to permit the rights and obligations under this Article 15 to be exercised in the time and in the manner specified in this Article 15.

 

ARTICLE 16
 NO OPTIONAL REDEMPTION

 

Section 16.01.  No Optional Redemption.  The Notes shall not be redeemable by the Company prior to the Maturity Date, and no sinking fund is provided for the Notes.

 

ARTICLE 17
 MISCELLANEOUS PROVISIONS

 

Section 17.01.  Provisions Binding on Company’s Successors.  All the covenants, stipulations, promises and agreements of the Company contained in this Indenture shall bind its successors and assigns whether so expressed or not.

 

Section 17.02.  Official Acts by Successor Corporation.  Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board,

 

77

 

committee or Officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation or other entity that shall at the time be the lawful sole successor of the Company.

 

Section 17.03.  Addresses for Notices, Etc.  Any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders on the Company shall be deemed to have been sufficiently given or made, for all purposes if given or served by being deposited postage prepaid by registered or certified mail in a post office letter box addressed (until another address is filed by the Company with the Trustee) to Enphase Energy, Inc., 1420 N. McDowell Blvd, Petaluma, CA 94954; Attention: General Counsel.  Any notice, direction, request or demand hereunder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or served by being deposited postage prepaid by registered or certified mail in a post office letter box addressed to the Corporate Trust Office or sent electronically in PDF format, upon receipt by the Trustee, whether sent by mail or electronically.

 

The Trustee, by notice to the Company, may designate additional or different addresses for subsequent notices or communications.

 

Any notice or communication delivered or to be delivered to a Holder of Physical Notes shall be mailed to it by first class mail, postage prepaid, at its address as it appears on the Note Register and shall be sufficiently given to it if so mailed within the time prescribed. Any notice or communication delivered or to be delivered to a Holder of Global Notes shall be delivered in accordance with the applicable procedures of the Depositary and shall be sufficiently given to it if so delivered within the time prescribed.  Notwithstanding any other provision of this Indenture or any Note, where this Indenture or any Note provides for notice of any event (including any Fundamental Change Company Notice) to a Holder of a Global Note (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the standing instructions from the Depositary or its designee, including by electronic mail in accordance with the Depositary’s applicable procedures.

 

Failure to mail or deliver a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.  If a notice or communication is mailed or delivered, as the case may be, in the manner provided above, it is duly given, whether or not the addressee receives it.

 

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice to Holders by mail, then such notification as  shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

 

Section 17.04.  Governing Law; Jurisdiction.  THIS INDENTURE AND EACH NOTE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS INDENTURE AND EACH NOTE, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

78

 

The Company irrevocably consents and agrees, for the benefit of the Holders from time to time of the Notes and the Trustee, that any legal action, suit or proceeding against it with respect to obligations, liabilities or any other matter arising out of or in connection with this Indenture or the Notes may be brought in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York City, New York and, until amounts due and to become due in respect of the Notes have been paid, hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam, generally and unconditionally with respect to any action, suit or proceeding for itself in respect of its properties, assets and revenues.

 

The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Indenture brought in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York City, New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

Section 17.05.  Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee.  Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officer’s Certificate and an Opinion of Counsel stating that such action is permitted by the terms of this Indenture and that all conditions precedent under the Indenture, if any, have been complied with.

 

Each Officer’s Certificate provided for, by or on behalf of the Company in this Indenture and delivered to the Trustee with respect to compliance with this Indenture (other than the Officer’s Certificates provided for in Section 4.08) and each Opinion of Counsel shall include (a) a statement that the person signing such certificate is familiar with the requested action and this Indenture; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statement contained in such certificate is based; (c) a statement that, in the judgment of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed judgment as to whether or not such action is permitted by this Indenture; and (d) a statement as to whether or not, in the judgment of such person, such action is permitted by this Indenture and that all conditions precedent thereto have been complied with.

 

Notwithstanding anything to the contrary in this Section 17.05, if any provision in this Indenture specifically provides that the Trustee shall or may receive an Opinion of Counsel in connection with any action to be taken by the Trustee or the Company hereunder, the Trustee shall be entitled to, or entitled to request (and refrain from acting until receipt), such Opinion of Counsel.

 

Section 17.06.  Legal Holidays.  In any case where any Interest Payment Date, Fundamental Change Repurchase Date or Maturity Date is not a Business Day, then any action to be taken on such date need not be taken on such date, but may be taken on the next succeeding

 

79

 

Business Day with the same force and effect as if taken on such date, and no interest shall accrue in respect of the delay.

 

Section 17.07.  No Security Interest Created.  Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.

 

Section 17.08.  Benefits of Indenture.  Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the Holders, the parties hereto, any Paying Agent, any Conversion Agent, any authenticating agent, any Note Registrar and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 17.09.  Table of Contents, Headings, Etc.  The table of contents and the titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

 

Section 17.10.  Authenticating Agent.  The Trustee may appoint an authenticating agent that shall be authorized to act on its behalf and subject to its direction in the authentication and delivery of Notes in connection with the original issuance thereof and transfers and exchanges of Notes hereunder, including under Section 2.04, Section 2.05, Section 2.06, Section 2.07, Section 10.04 and Section 15.04 as fully to all intents and purposes as though the authenticating agent had been expressly authorized by this Indenture and those Sections to authenticate and deliver Notes.  For all purposes of this Indenture, the authentication and delivery of Notes by the authenticating agent shall be deemed to be authentication and delivery of such Notes “by the Trustee” and a certificate of authentication executed on behalf of the Trustee by an authenticating agent shall be deemed to satisfy any requirement hereunder or in the Notes for the Trustee’s certificate of authentication.  Such authenticating agent shall at all times be a Person eligible to serve as trustee hereunder pursuant to Section 7.08.

 

Any corporation or other entity into which any authenticating agent may be merged or converted or with which it may be consolidated, or any corporation or other entity resulting from any merger, consolidation or conversion to which any authenticating agent shall be a party, or any corporation or other entity succeeding to the corporate trust business of any authenticating agent, shall be the successor of the authenticating agent hereunder, if such successor corporation or other entity is otherwise eligible under this Section 17.10, without the execution or filing of any paper or any further act on the part of the parties hereto or the authenticating agent or such successor corporation or other entity.

 

Any authenticating agent may at any time resign by giving written notice of resignation to the Trustee and to the Company.  The Trustee may at any time terminate the agency of any authenticating agent by giving written notice of termination to such authenticating agent and to the Company.  Upon receiving such a notice of resignation or upon such a termination, or in case at any time any authenticating agent shall cease to be eligible under this Section, the Trustee may

 

80

 

appoint a successor authenticating agent (which may be the Trustee), shall give written notice of such appointment to the Company and shall deliver notice of such appointment to all Holders.

 

The Company agrees to pay to the authenticating agent from time to time reasonable compensation for its services although the Company may terminate the authenticating agent, if it determines such agent’s fees to be unreasonable.

 

The provisions of Section 7.02, Section 7.03, Section 7.04, Section 8.03 and this Section 17.10 shall be applicable to any authenticating agent.

 

If an authenticating agent is appointed pursuant to this Section 17.10, the Notes may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

 

                                                  ,
 as Authenticating Agent, certifies that this is one of the Notes described
 in the within-named Indenture.

 

	
By:
    	
 
    	
 
    
	
Authorized Officer
    	
 
    

 

Section 17.11.  Execution in Counterparts.  This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

Section 17.12.  Severability.  In the event any provision of this Indenture or in the Notes shall be invalid, illegal or unenforceable, then (to the extent permitted by law) the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired.

 

Section 17.13.  Waiver of Jury Trial.  EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 17.14.  Force Majeure.  In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

81

 

Section 17.15.  Calculations.  Except as otherwise provided herein, the Company shall be responsible for making all calculations called for under the Notes.  These calculations include, but are not limited to, determinations of the Stock Price, the Last Reported Sale Prices of the Common Stock, the Daily VWAPs, the Daily Conversion Values, the Daily Settlement Amounts, accrued interest payable on the Notes and the Conversion Rate of the Notes.  The Company shall make all these calculations in good faith and, absent manifest error, the Company’s calculations shall be final and binding on Holders of Notes.  The Company shall provide a schedule of its calculations to each of the Trustee, the Paying Agent and the Conversion Agent, and each of the Trustee, the Paying Agent (if other than the Company) and the Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification.  The Trustee will forward the Company’s calculations to any Holder of Notes upon the request of that Holder at the sole cost and expense of the Company.

 

Section 17.16.  U.S.A. Patriot Act.  The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee.  The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

 

[Remainder of page intentionally left blank]

 

82

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first written above.

 

	
 
    	
ENPHASE   ENERGY, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Eric Branderiz
    
	
 
    	
 
    	
Name:
    	
Eric Branderiz
    
	
 
    	
 
    	
Title:
    	
Chief Financial   Officer
    
	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL ASSOCIATION, as
   Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Jason
    
	
 
    	
 
    	
Name:
    	
David Jason
    
	
 
    	
 
    	
Title:
    	
Vice President and   Trustee
    

 

[Signature Page to Indenture]

 

 

EXHIBIT A

 

[FORM OF FACE OF NOTE]

 

[INCLUDE FOLLOWING LEGEND IF A GLOBAL NOTE]

 

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREUNDER IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

[INCLUDE FOLLOWING LEGEND IF A RESTRICTED SECURITY]

 

[THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

 

(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

 

(2) AGREES FOR THE BENEFIT OF ENPHASE ENERGY, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

 

(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

 

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

 

A-1

 

(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

 

(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

NO AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF ENPHASE ENERGY, INC. OR PERSON THAT HAS BEEN AN AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF ENPHASE ENERGY, INC. DURING THE IMMEDIATELY PRECEDING THREE MONTHS MAY PURCHASE, OTHERWISE ACQUIRE OR HOLD THIS SECURITY OR A BENEFICIAL INTEREST HEREIN.]

 

A-2

 

Enphase Energy, Inc.

 

1.00% Convertible Senior Note due 2024

 

	
No. [RA-[·]]1
    	
Initially $[·],000,0002
    

 

CUSIP No. [·]3

 

Enphase Energy, Inc., a corporation duly organized and validly existing under the laws of the State of Delaware (the “Company,” which term includes any successor corporation or other entity under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to [CEDE & CO.]4[·]5, or registered assigns, the principal sum [as set forth in the “Schedule of Exchanges of Notes” attached hereto]6[of $[·]]7, which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $132,000,000 in aggregate at any time, in accordance with the rules and procedures of the Depositary, on June 1, 2024, and interest thereon as set forth below.

 

This Note shall bear interest at the rate of 1.00% per year from June 5, 2019, or from the most recent date to which interest has been paid or provided for to, but excluding, the next scheduled Interest Payment Date until June 1, 2024, unless earlier repurchased or converted pursuant to and in accordance with the provisions of the Indenture.  Accrued interest on this Note shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.  Interest is payable semi-annually in arrears on each June 1 and December 1, commencing on December 1, 2019, to Holders of record at the close of business on the preceding May 15 or November 15 (whether or not such day is a Business Day), respectively.  Additional Interest will be payable as set forth in Section 4.06(d), Section 4.06(e) and Section 6.03 of the within-mentioned Indenture, and any reference to interest on, or in respect of, any Note therein shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of such Section 4.06(d), Section 4.06(e) or Section 6.03, and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding Additional Interest in those provisions thereof where such express mention is not made.

 

1  Insert for 144A Global Note

 

2  Insert for a Global Note

 

3  Insert for Global Note

 

4  Insert for Global Note

 

5  Insert holder of Physical Note

 

6  Insert for Global Note

 

7  Insert for Physical Note

 

A-3

 

Any Defaulted Amounts shall accrue interest per annum at the rate borne by the Notes, from, and including, the relevant payment date to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company, at its election, in accordance with Section 2.03(c) of the Indenture.

 

The Company shall pay the principal of and interest on this Note, if and so long as such Note is a Global Note, in immediately available funds in lawful money of the United States at the time to the Depositary or its nominee, as the case may be, as the registered Holder of such Note.  As provided in and subject to the provisions of the Indenture, the Company shall pay the principal of any Notes (other than Notes that are Global Notes) at the office or agency designated by the Company for that purpose.  The Company has initially designated the Trustee as its Paying Agent and Note Registrar in respect of the Notes and its agency in the United States of America, as a place where Notes may be presented for payment or for registration of transfer and exchange.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions giving the Holder of this Note the right to convert this Note into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, on the terms and subject to the limitations set forth in the Indenture.  Such further provisions shall for all purposes have the same effect as though fully set forth at this place.

 

This Note, and any claim, controversy or dispute arising under or related to this Note, shall be construed in accordance with and governed by the laws of the State of New York.

 

In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control and govern.

 

This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture.

 

[Remainder of page intentionally left blank]

 

A-4

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.

 

	
 
    	
ENPHASE   ENERGY, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

	
Dated:
    	
 
    
	
 
    	
 
    
	
TRUSTEE’S   CERTIFICATE OF AUTHENTICATION
    	
 
    
	
 
    	
 
    
	
U.S. BANK NATIONAL   ASSOCIATION
    	
 
    
	
as Trustee,   certifies that this is one of the Notes described in the within-named   Indenture.
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Signatory
    	
 
    

 

[Signature Page to Global Note]

 

 

[FORM OF REVERSE OF NOTE]

 

Enphase Energy, Inc.
 1.00% Convertible Senior Note due 2024

 

This Note is one of a duly authorized issue of Notes of the Company, designated as its 1.00% Convertible Senior Notes due 2024 (the “Notes”), initially limited to the aggregate principal amount of $132,000,000, all issued or to be issued under and pursuant to an Indenture dated as of June 5, 2019 (the “Indenture”), between the Company and U.S. Bank National Association (the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Notes.  Additional Notes may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture.  Capitalized terms used in this Note and not defined in this Note shall have the respective meanings set forth in the Indenture.

 

In case certain Events of Default shall have occurred and be continuing, the principal of, and interest on, all Notes may be declared, by either the Trustee or Holders of at least 25% in aggregate principal amount of Notes then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and certain exceptions set forth in the Indenture.

 

Subject to the terms and conditions of the Indenture, the Company will make all payments and deliveries in respect of the Fundamental Change Repurchase Price on the Fundamental Change Repurchase Date and the principal amount on the Maturity Date, as the case may be, to the Holder who surrenders a Note to a Paying Agent to collect such payments in respect of the Note.  The Company will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts.

 

The Indenture contains provisions permitting the Company and the Trustee in certain circumstances, without the consent of the Holders of the Notes, and in certain other circumstances, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures modifying the terms of the Indenture and the Notes as described therein.  It is also provided in the Indenture that, subject to certain exceptions, the Holders of a majority in aggregate principal amount of the Notes at the time outstanding may on behalf of the Holders of all of the Notes waive any past Default or Event of Default under the Indenture and its consequences.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay or deliver, as the case may be, the principal (including the Fundamental Change Repurchase Price, if applicable) of, accrued and unpaid interest on, and the consideration due upon conversion of, this Note at the place, at the respective times, at the rate and in the lawful money or shares of Common Stock, as the case may be, herein prescribed.

 

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The Notes are issuable in registered form without coupons in denominations of $1,000 principal amount and multiples thereof.  At the office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations, without payment of any service charge but, if required by the Company or Trustee, with payment of a sum sufficient to cover any transfer or similar tax that may be imposed in connection therewith as a result of the name of the Holder of the new Notes issued upon such exchange of Notes being different from the name of the Holder of the old Notes surrendered for such exchange.

 

The Notes are not subject to redemption through the operation of any sinking fund or otherwise.

 

Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes or any portion thereof (in principal amounts of $1,000 or multiples thereof) on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price.

 

Subject to the provisions of the Indenture, the Holder hereof has the right, at its option, prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, to convert any Notes or portion thereof that is $1,000 or a multiple thereof, into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, at the Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.

 

Terms used in this Note and defined in the Indenture are used herein as therein defined.

 

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ABBREVIATIONS

 

The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:

 

TEN COM = as tenants in common

 

UNIF GIFT MIN ACT = Uniform Gifts to Minors Act

 

CUST = Custodian

 

TEN ENT = as tenants by the entireties

 

JT TEN  = joint tenants with right of survivorship and not as tenants in common

 

Additional abbreviations may also be used though not in the above list.

 

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SCHEDULE A8

 

SCHEDULE OF EXCHANGES OF NOTES

 

Enphase Energy, Inc.
 1.00% Convertible Senior Notes due 2024

 

The initial principal amount of this Global Note is [·] DOLLARS ($[·]).  The following increases or decreases in this Global Note have been made:

 

	
Date of exchange
    	
 
    	
Amount of
   decrease in
   principal amount
   of this Global Note
    	
 
    	
Amount of
   increase in
   principal amount
   of this Global Note
    	
 
    	
Principal amount
   of this Global Note
   following such
   decrease or
   increase
    	
 
    	
Signature of
   authorized
   signatory of
   Trustee or
   Custodian
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

8  Include if a Global Note.

 

R-4

 

ATTACHMENT 1

 

[FORM OF NOTICE OF CONVERSION]

 

To:  Enphase Energy, Inc.

 

To: U.S. Bank National Association
 [60 Livingston Ave
 St. Paul, MN 55107
 Attention: Corporate Trust Services]

 

The undersigned registered owner of this Note hereby exercises the option to convert this Note, or the portion hereof (that is $1,000 principal amount or a multiple thereof) below designated, into shares of Common Stock in accordance with the terms of the Indenture referred to in this Note, and directs that the shares of Common Stock issuable and deliverable upon such conversion, together with any cash for any fractional share, and any Notes representing any unconverted principal amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below.  If any shares of Common Stock or any portion of this Note not converted are to be issued in the name of a Person other than the undersigned, the undersigned will pay all documentary, stamp or similar issue or transfer taxes, if any in accordance with Section 14.02(d) and Section 14.02(e) of the Indenture.  Any amount required to be paid to the undersigned on account of interest accompanies this Note.  Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature(s)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature   Guarantee
    	
 
    

 

	
Signature(s) must   be guaranteed by an eligible Guarantor Institution
   (banks, stock brokers, savings and loan associations and credit unions) with   membership in an approved signature guarantee medallion program pursuant to   Securities and Exchange Commission Rule 17Ad-15 if shares of Common   Stock are to be issued, or
    	
 
    

 

1

 

	
Notes are to be   delivered, other than to and in the name of the registered holder.

 

Fill in for   registration of shares if to be issued, and Notes if to be delivered, other   than to and in the name of the registered holder:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Name)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Street Address)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(City, State and   Zip Code)
    	
 
    
	
Please print name   and address
    	
 
    
	
 
    	
 
    
	
 
    	
Principal amount   to be converted (if less than all):    $      ,000
    
	
 
    	
 
    
	
 
    	
NOTICE:  The above signature(s) of the   Holder(s) hereof must correspond with the name as written upon the face   of the Note in every particular without alteration or enlargement or any   change whatever.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Social Security or   Other Taxpayer Identification Number
    

 

2

 

ATTACHMENT 2

 

[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]

 

To:  Enphase Energy, Inc.

 

To: U.S. Bank National Association
 [60 Livingston Ave
 St. Paul, MN 55107
 Attention: Corporate Trust Services]

 

The undersigned registered owner of this Note hereby acknowledges receipt of a notice from Enphase Energy, Inc. (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and specifying the Fundamental Change Repurchase Date and requests and instructs the Company to pay to the registered holder hereof in accordance with Section 15.02 of the Indenture referred to in this Note (1) the entire principal amount of this Note, or the portion thereof (that is $1,000 principal amount or a multiple thereof) below designated, and (2) if such Fundamental Change Repurchase Date does not fall during the period after a Regular Record Date and on or prior to the corresponding Interest Payment Date, accrued and unpaid interest, if any, thereon to, but excluding, such Fundamental Change Repurchase Date.  Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.

 

In the case of Physical Notes, the certificate numbers of the Notes to be repurchased are as set forth below:

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature(s)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Social Security or   Other Taxpayer Identification Number
    
	
 
    	
 
    
	
 
    	
Principal amount   to be repurchased (if less than all):    $      ,000
    
	
 
    	
 
    
	
 
    	
NOTICE:  The above signature(s) of the   Holder(s) hereof must correspond with the name as written upon the face   of the Note in every particular without alteration or enlargement or any   change whatever.
    

 

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ATTACHMENT 3

 

[FORM OF ASSIGNMENT AND TRANSFER]

 

U.S. Bank National Association
 [60 Livingston Ave
 St. Paul, MN 55107
 Attention: Corporate Trust Services]

 

For value received                              hereby sell(s), assign(s) and transfer(s) unto                   (Please insert social security or Taxpayer Identification Number of assignee) the within Note, and hereby irrevocably constitutes and appoints                       attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises.

 

In connection with any transfer of the within Note occurring prior to the Resale Restriction Termination Date, as defined in the Indenture governing such Note, the undersigned confirms that such Note is being transferred:

 

o                                    To Enphase Energy, Inc. or a subsidiary thereof; or

 

o                                    Pursuant to a registration statement that has become or been declared effective under the Securities Act of 1933, as amended; or

 

o                                    Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or

 

o                                    Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended, or any other available exemption from the registration requirements of the Securities Act of 1933, as amended.

 

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Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature(s)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Signature   Guarantee
    	
 
    
	
 
    	
 
    
	
Signature(s) must   be guaranteed by an eligible Guarantor Institution (banks, stock brokers,   savings and loan associations and credit unions) with membership in an   approved signature guarantee medallion program pursuant to Securities and   Exchange Commission Rule 17Ad-15 if Notes are to be delivered, other   than to and in the name of the registered holder.
    	
 
    

 

NOTICE:  The signature on the assignment must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

 

2

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