REMITTANCE AND INTERCREDITOR
AGREEMENT
THIS AGREEMENT, dated as of September 30, 2005,
is made by Avnet Partner Solutions, a division of Avnet, Inc.
(“Avnet”), for the benefit of Wells Fargo Bank,
National Association (with all its participants, successors and
assigns, “Wells Fargo”), acting through its Wells Fargo
Business Credit operating division.
SANZ INC., formerly known as Storage Area
Networks, Inc., a Colorado corporation (the
“Borrower”), is now or hereafter may be indebted to
Wells Fargo on account of loans or the other extensions of credit
or financial accommodations from Wells Fargo to the Borrower, or to
any other person under the guaranty or endorsement of the
Borrower.
Avnet has made or may make loans or grant other
financial accommodations to the Borrower.
As a condition to making any loan or extension
of credit to the Borrower, Wells Fargo has required that Avnet
subordinate the payment of Avnet’s loans and other financial
accommodations to the payment of any and all indebtedness of the
Borrower to Wells Fargo. Assisting the Borrower in obtaining credit
accommodations from Wells Fargo and subordinating its interests
pursuant to the terms of this Agreement are in Avnet’s best
interest.
Wells Fargo agrees to allow the Escrow Agent to
remit certain sums to Avnet as documented in the Escrow Agreement
and directly relating to the Avnet Priority Accounts as more fully
set forth herein.
ACCORDINGLY, in consideration of the mutual
covenants and undertakings herein contained, and in consideration
of the loans and other financial accommodations that have been made
and may hereafter be made by Wells Fargo for the benefit of the
Borrower, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Wells
Fargo and Avnet hereby agrees as follows:
1.
Definitions
. As used herein, the following
terms have the meanings set forth below:
“Avnet Indebtedness” means all
obligations of the Borrower to make full and timely payment of the
invoices issued by Avnet, and each and every other debt, liability
and obligation of every type and description which the Borrower may
now or at any time hereafter owe to Avnet, whether such debt,
liability or obligation now exists or is hereafter created or
incurred, and whether it is or may be direct or indirect, due or to
become due, absolute or contingent, primary or secondary,
liquidated or unliquidated, or joint, several or joint and
several.
“Avnet Priority Accounts” means
Borrower’s accounts identified by the Escrow Agreement,
defined below, to secure payment on the Avnet Indebtedness, which
accounts have been approved in advance by Wells Fargo (in its sole
discretion) as having priority as evidenced by a subordination
letter in the form of Exhibit A attached hereto.
“Avnet Security Agreement” means the
Security Agreement, dated as of September __, 2005, by and between
the Borrower and Avnet, together with all renewals, extensions and
modifications thereof and any other security agreement that may be
accepted by Avnet from time to time.
“Borrower Default” means a Default
or Event of Default as defined in any agreement or instrument
evidencing, governing, or issued in connection with the Wells Fargo
Indebtedness, including, but not limited to, the Credit Agreement,
or any default under or breach of any such agreement or
instrument.
“Collateral” means all collateral
now or hereafter securing payment of the Wells Fargo Indebtedness,
including all proceeds thereof.
“Credit Agreement” means that
certain Credit and Security Agreement dated as of May 31, 2001, by
and between the Borrower and Wells Fargo as the same has been and
may hereafter be amended, supplemented or restated from time to
time.
“Escrow Agreement” shall mean the
escrow agreement(s) entered into from time to time by Borrower,
Avnet and the Escrow Agent to secure payment from Borrower on the
Avnet Indebtedness.
“Escrow Agent” shall mean Wells
Fargo Bank, National Association, acting through its Corporate
Trust and Escrow Services department, as escrow agent under the
Escrow Agreement(s).
“Lien” means any security interest,
mortgage, deed of trust, pledge, lien, charge, encumbrance, title
retention agreement or analogous instrument or device, including
the interest of each lessor under any capitalized lease and the
interest of any bondsman under any payment or performance bond, in,
of or on any assets or properties of a Person, whether now owned or
hereafter acquired and whether arising by agreement or operation of
law.
“Person” means any individual,
corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
“Wells Fargo Indebtedness” means
each and every debt, liability and obligation of every type and
description which the Borrower may now or at any time hereafter owe
to Wells Fargo, whether such debt, liability or obligation now
exists or is hereafter created or incurred, and whether it is or
may be direct or indirect, due or to become due, absolute or
contingent, primary or secondary, liquidated or unliquidated, or
joint, several or joint and several, all interest thereon, and all
fees, costs and other charges related thereto (including all
interest, fees, costs and other charges accruing after the
commencement of any case, proceeding or other action relating to
the bankruptcy, insolvency or reorganization of the Borrower,
whether or not allowed in such proceeding or other action, and
whether or not Wells Fargo is deemed to be unsecured or
under-secured), all renewals, extensions and modifications thereof
and any notes issued in whole or partial substitution
therefor.
2.
Subordination
. Excluding the Avnet Priority
Accounts, the payment of all of the Avnet Indebtedness is hereby
expressly subordinated to the extent and in the manner hereinafter
set forth to the payment in full of the Wells Fargo Indebtedness;
and regardless of any priority otherwise available to Avnet by law
or by agreement, Wells Fargo shall hold a first priority Lien in
the Collateral, and any Lien claimed therein by Avnet shall be and
remain fully subordinate for all purposes to the Lien of Wells
Fargo therein for all purposes whatsoever. The Avnet Indebtedness
(excluding the Avnet Priority Accounts) shall continue to be
subordinated to the Wells Fargo Indebtedness even if the Wells
Fargo Indebtedness is deemed unsecured, under-secured,
subordinated, avoided or disallowed under the United States
Bankruptcy Code or other applicable law. However, and at all times
under this Agreement, the security interest of Avnet in the Avnet
Priority Accounts shall be prior and superior to the security
interest of Wells Fargo in the Avnet Priority Accounts, and Wells
Fargo’s security interest in the Avnet Priority Accounts
shall be subordinate to the security interest of Avnet
therein.
3.
Payments . Until all of the Wells Fargo Indebtedness has
been paid in full and Wells Fargo has released its Lien in the
Collateral, Avnet shall not, without Wells Fargo’s prior
written consent, demand, receive or accept any payment from the
Borrower in respect of the Avnet Indebtedness, or exercise any
right of or permit any setoff in respect of the Avnet Indebtedness,
except that Avnet may accept (i) payments required to be paid under
the invoices issued by Avnet, so long as no Borrower Default has
occurred and is continuing or will occur as a result of or
immediately following any such payment; and (ii) remittances in
accordance with the Escrow Agreement on the Avnet Priority
Account(s). The Escrow Agreement will require the Escrow Agent to
promptly remit to Avnet the amounts agreed upon by the Borrower and
Avnet in the Escrow Agreement when such monies are received in the
Avnet Priority Account(s).
4.
Receipt of Prohibited
Payments . If Avnet
receives any payment on the Avnet Indebtedness that Avnet is not
entitled to receive under the provisions of this Agreement, Avnet
will hold the amount so received in trust for Wells Fargo and will
forthwith turn over such amount to Wells Fargo (endorsement by
Avnet when necessary) for application to then existing Wells Fargo
Indebtedness (whether or not due), in such manner of application as
Wells Fargo may deem appropriate. If Avnet exercises any right of
setoff which Avnet is not permitted to exercise under the
provisions of this Agreement, Avnet will promptly pay over to Wells
Fargo, in immediately available funds, an amount equal to the
amount of the claims or obligations offset.
5.
Action on Avnet
Indebtedness . Excluding
Avnet Priority Accounts, Avnet will not commence any action or
proceeding ag
