EXHIBIT 10.38
EXECUTION COPY
RECEIVABLES PURCHASE AGREEMENT
dated as of December 31, 2002
Among
INSIGHT RECEIVABLES, LLC, as Seller,
INSIGHT ENTERPRISES, INC., as Servicer,
THE ENTITIES PARTY HERETO FROM TIME TO TIME AS
FINANCIAL INSTITUTIONS
JUPITER SECURITIZATION CORPORATION
and
BANK ONE, NA (MAIN OFFICE CHICAGO)
as Agent
RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement dated as of December 31, 2002 is
among Insight Receivables, LLC, an Illinois limited liability company
("Seller"), Insight Enterprises, Inc., a Delaware corporation ("Insight"), as
initial Servicer (the Servicer together with Seller, the "Seller Parties" and
each a "Seller Party"), the entities listed on Schedule A to this Agreement
(together with any of their respective successors and assigns hereunder, the
"Financial Institutions"), Jupiter Securitization Corporation ("Jupiter") and
Bank One, NA (Main Office Chicago), as agent for the Purchasers hereunder or any
successor agent hereunder (together with its successors and assigns hereunder,
the "Agent"). Unless defined elsewhere herein, capitalized terms used in this
Agreement shall have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Purchaser Interests to the
Purchasers from time to time.
Jupiter may, in its absolute and sole discretion, purchase Purchaser
Interests from Seller from time to time.
In the event that Jupiter declines to make any purchase, the
Financial Institutions shall, at the request of Seller, purchase Purchaser
Interests from time to time. In addition, the Financial Institutions have agreed
to provide a liquidity facility to Jupiter in accordance with the terms hereof.
Bank One, NA (Main Office Chicago) has been requested and is willing
to act as Agent on behalf of Jupiter and the Financial Institutions in
accordance with the terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
(a) Upon the terms and subject to the conditions hereof, Seller may,
at its option, sell and assign Purchaser Interests to the Agent for the benefit
of one or more of the Purchasers. In accordance with the terms and conditions
set forth herein, Jupiter may, at its option, instruct the Agent to purchase on
behalf of Jupiter, or if Jupiter shall decline to purchase, the Agent shall
purchase, on behalf of the Financial Institutions, Purchaser Interests from time
to time in an aggregate amount not to exceed at such time the lesser of (i) the
Purchase Limit and (ii) the aggregate amount of the Back-Up Commitments during
the period from the date hereof to but not including the Facility Termination
Date.
(b) Seller may, upon at least 5 Business Days' notice to the Agent,
terminate in whole or reduce in part, ratably among the Financial Institutions,
the unused portion of the
Purchase Limit; provided that each partial reduction of the Purchase Limit shall
be in an amount equal to $5,000,000 or a larger multiple of $1,000,000.
Section 1.2 Increases. Seller shall provide the Agent with at least
three Business Days' prior notice in a form set forth as Exhibit II hereto of
each Incremental Purchase (a "Purchase Notice"). Each Purchase Notice shall be
subject to Section 6.2 hereof and, except as set forth below, shall be
irrevocable and shall specify the requested Purchase Price (which shall not be
less than $5,000,000) and date of purchase (which, in the case of any
Incremental Purchase (after the initial Incremental Purchase hereunder), shall
only be on a Settlement Date) and, in the case of an Incremental Purchase to be
funded by the Financial Institutions, the requested Discount Rate and Tranche
Period. Following receipt of a Purchase Notice, the Agent will determine whether
Jupiter agrees to make the purchase. If Jupiter declines to make a proposed
purchase, Seller may cancel the Purchase Notice or, in the absence of such a
cancellation, the Incremental Purchase of the Purchaser Interest will be made by
the Financial Institutions. On the date of each Incremental Purchase, upon
satisfaction of the applicable conditions precedent set forth in Article VI,
Jupiter or the Financial Institutions, as applicable, shall deposit to the
Facility Account, in immediately available funds, no later than 12:00 noon
(Chicago time), an amount equal to (i) in the case of Jupiter, the aggregate
Purchase Price of the Purchaser Interests Jupiter is then purchasing or (ii) in
the case of a Financial Institution, such Financial Institution's Back-Up Pro
Rata Share of the aggregate Purchase Price of the Purchaser Interests the
Financial Institutions are purchasing.
Section 1.3 Decreases. Seller shall provide the Agent with prior
written notice in conformity with the Required Notice Period (a "Reduction
Notice") of any proposed reduction of Aggregate Capital from Collections. Such
Reduction Notice shall designate (i) the date (the "Proposed Reduction Date")
upon which any such reduction of Aggregate Capital shall occur (which date shall
give effect to the applicable Required Notice Period), and (ii) the amount of
Aggregate Capital to be reduced, which reduction shall be applied ratably to the
Purchaser Interests of Jupiter and the Financial Institutions in accordance with
the amount of Capital (if any) owing to Jupiter, on the one hand, and the amount
of Capital (if any) owing to the Financial Institutions (ratably, based on the
amount of Capital owing to such Financial Institutions), on the other hand (the
"Aggregate Reduction"). Only one (1) Reduction Notice shall be outstanding at
any time.
Section 1.4 Payment Requirements. All amounts to be paid or
deposited by any Seller Party pursuant to any provision of this Agreement shall
be paid or deposited in accordance with the terms hereof no later than noon
(Chicago time) on the day when due in immediately available funds, and if not
received before noon (Chicago time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Purchaser they shall
be paid to the Agent, for the account of such Purchaser, at 1 Bank Xxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000 until otherwise notified by the Agent. All computations
of Yield, per annum fees calculated as part of any CP Costs, per annum fees
hereunder and per annum fees under the Fee Letter shall be made on the basis of
a year of 360 days for the actual number of days elapsed. If any amount
hereunder shall be payable on a day which is not a Business Day, such amount
shall be payable on the next succeeding Business Day.
2
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Notwithstanding any limitation on recourse
contained in this Agreement, Seller shall immediately pay to the Agent when due,
for the account of the relevant Purchaser or Purchasers on a full recourse
basis, (i) such fees as set forth in the Fee Letter (which fees shall be
sufficient to pay all fees owing to the Financial Institutions), (ii) all CP
Costs, (iii) all amounts payable as Yield, (iv) all amounts payable as Deemed
Collections (which shall be immediately due and payable by Seller and applied to
reduce outstanding Aggregate Capital hereunder in accordance with Sections 2.2
and 2.3 hereof), (v) all amounts required pursuant to Section 2.6, (vi) all
amounts payable pursuant to Article X, if any, (vii) except as otherwise
provided in Section 8.6 of this Agreement, all Servicer costs and expenses,
including the Servicing Fee, in connection with servicing, administering and
collecting the Receivables, (viii) all Broken Funding Costs and (ix) all Default
Fees (collectively, the "Obligations"). If any Person fails to pay any of the
Obligations when due, such Person agrees to pay, on demand, the Default Fee in
respect thereof until paid. Notwithstanding the foregoing, no provision of this
Agreement or the Fee Letter shall require the payment or permit the collection
of any amounts hereunder in excess of the maximum permitted by applicable law.
If at any xxxx Xxxxxx receives any Collections or is deemed to receive any
Collections, Seller shall immediately pay such Collections or Deemed Collections
to the Servicer for application in accordance with the terms and conditions
hereof and, at all times prior to such payment, such Collections or Deemed
Collections shall be held in trust by Seller for the exclusive benefit of the
Purchasers and the Agent.
Section 2.2 Collections Prior to Amortization. Prior to the
Amortization Date, any Collections and/or Deemed Collections received by the
Servicer shall be set aside and held in trust by the Servicer for the payment of
any accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in
this Section 2.2. If at any time any Collections are received by the Servicer
prior to the Amortization Date, (i) the Servicer shall set aside the Termination
Percentage (hereinafter defined) of Collections evidenced by the Purchaser
Interests of each Terminating Financial Institution and (ii) Seller hereby
requests and the Purchasers (other than any Terminating Financial Institutions)
hereby agree to make, simultaneously with such receipt, a reinvestment (each a
"Reinvestment") with that portion of the balance of each and every Collection
received by the Servicer that is part of any Purchaser Interest (other than any
Purchaser Interests of Terminating Financial Institutions), such that after
giving effect to such Reinvestment, the amount of Capital of such Purchaser
Interest immediately after such receipt and corresponding Reinvestment shall be
equal to the amount of Capital immediately prior to such receipt. On each
Settlement Date prior to the occurrence of the Amortization Date, the Servicer
shall remit to the Agent's account the amounts set aside during the preceding
Settlement Period that have not been subject to a Reinvestment and apply such
amounts (if not previously paid in accordance with Section 2.1) first, to reduce
unpaid Obligations and second, to reduce the Capital of all Purchaser Interests
of Terminating Financial Institutions, applied ratably to each Terminating
Financial Institution according to its respective Termination Percentage. If
such Capital and Obligations shall be reduced to zero, any additional
Collections received by the Servicer (i) if applicable, shall be remitted to the
Agent's account no later than noon (Chicago time) to the extent required to fund
any Aggregate Reduction on such Settlement Date and (ii)
3
any balance remaining thereafter shall be remitted from the Servicer to Seller
on such Settlement Date. Each Terminating Financial Institution shall be
allocated a ratable portion of Collections from the date of any assignment by
Jupiter pursuant to Section 13.6 (the "Termination Date") until such Terminating
Financing Institution's Capital shall be paid in full. This ratable portion
shall be calculated on the Termination Date of each Terminating Financial
Institution as a percentage equal to (i) Capital of such Terminating Financial
Institution outstanding on its Termination Date, divided by (ii) the Aggregate
Capital outstanding on such Termination Date (the "Termination Percentage").
Each Terminating Financial Institution's Termination Percentage shall remain
constant prior to the Amortization Date. On and after the Amortization Date,
each Termination Percentage shall be disregarded, and each Terminating Financial
Institution's Capital shall be reduced ratably with all Financial Institutions
in accordance with Section 2.3.
Section 2.3 Collections Following Amortization. On the Amortization
Date and on each day thereafter, the Servicer shall set aside and hold in trust,
for the holder of each Purchaser Interest, all Collections received on such day
and an additional amount for the payment of any accrued and unpaid Obligations
owed by Seller and not previously paid by Seller in accordance with Section 2.1.
On and after the Amortization Date, the Servicer shall, at any time upon the
request from time to time by (or pursuant to standing instructions from) the
Agent (i) remit to the Agent's account the amounts set aside pursuant to the
preceding sentence, and (ii) apply such amounts to reduce the Capital associated
with each such Purchaser Interest and any other Aggregate Unpaids.
Section 2.4 Application of Collections. If there shall be
insufficient funds on deposit for the Servicer to distribute funds in payment in
full of the aforementioned amounts pursuant to Section 2.2 or 2.3 (as
applicable), the Servicer shall distribute funds:
first, to the payment of the Servicer's reasonable out-of-pocket
costs and expenses in connection with servicing, administering and
collecting the Receivables, including the Servicing Fee, if Seller or one
of its Affiliates is not then acting as the Servicer,
second, to the reimbursement of the Agent's costs and expenses
(including reasonable fees of legal counsel) of collection and enforcement
of this Agreement,
third, ratably to the payment of all accrued and unpaid fees under
the Fee Letter, CP Costs and Yield,
fourth, (to the extent applicable) to the ratable reduction of the
Aggregate Capital (without regard to any Termination Percentage),
fifth, for the ratable payment of all other unpaid Obligations,
provided that to the extent such Obligations relate to the payment of
Servicer costs and expenses, including the Servicing Fee, when Seller or
one of its Affiliates is acting as the Servicer, such costs and expenses
will not be paid until after the payment in full of all other Obligations,
and
sixth, after the Aggregate Unpaids have been indefeasibly reduced to
zero, to Seller.
4
Collections applied to the payment of Aggregate Unpaids shall be
distributed in accordance with the aforementioned provisions, and, giving effect
to each of the priorities set forth in Section 2.4 above, shall be shared
ratably (within each priority) among the Agent and the Purchasers in accordance
with the amount of such Aggregate Unpaids owing to each of them in respect of
each such priority.
Section 2.5 Payment Recission. No payment of any of the Aggregate
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly
pay to the Agent (for application to the Person or Persons who suffered such
recission, return or refund) the full amount thereof, plus the Default Fee from
the date of any such recission, return or refunding.
Section 2.6 Maximum Purchaser Interests. Seller shall ensure that
the Purchaser Interests of the Purchasers shall at no time exceed in the
aggregate 100%. If the aggregate of the Purchaser Interests of the Purchasers
exceeds 100%, Seller shall pay to the Agent within three (3) Business Days after
Seller's knowledge thereof, an amount to be applied to reduce the Aggregate
Capital (as allocated by the Agent), such that after giving effect to such
payment the aggregate of the Purchaser Interests equals or is less than 100%.
Section 2.7 Clean Up Call. In addition to Seller's rights pursuant
to Section 1.3, Seller shall have the right (after providing two (2) Business
Days written notice to the Agent), at any time following the reduction of the
Aggregate Capital to a level that is less than 25.0% of the original Purchase
Limit, to repurchase from the Purchasers all, but not less than all, of the then
outstanding Purchaser Interests. The purchase price in respect thereof shall be
an amount equal to the Aggregate Unpaids through the date of such repurchase,
payable in immediately available funds. Such repurchase shall be without
representation, warranty or recourse of any kind, on the part of, or against any
Purchaser or the Agent.
ARTICLE III
CP FUNDING
Section 3.1 CP Costs. Seller shall pay CP Costs with respect to the
Capital associated with each Purchaser Interest of Jupiter for each day that any
Capital in respect of such Purchaser Interest is outstanding. Each Purchaser
Interest funded substantially with Pooled Commercial Paper will accrue CP Costs
each day on a pro rata basis, based upon the percentage share the Capital in
respect of such Purchaser Interest represents in relation to all assets held by
Jupiter and funded substantially with Pooled Commercial Paper.
Section 3.2 CP Costs Payments. On each Settlement Date, Seller shall
pay to the Agent (for the benefit of Jupiter) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of the Capital associated with all
Purchaser Interests of Jupiter for the immediately preceding Accrual Period in
accordance with Article II.
5
Section 3.3 Calculation of CP Costs. On the fifth (5th) Business Day
immediately preceding each Settlement Date, Jupiter shall calculate the
aggregate amount of CP Costs for the applicable Accrual Period and shall notify
Seller of such aggregate amount.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each Purchaser Interest
of the Financial Institutions shall accrue Yield for each day during its Tranche
Period at either the LIBO Rate or the Prime Rate in accordance with the terms
and conditions hereof. Until Seller gives notice to the Agent of another
Discount Rate in accordance with Section 4.4, the initial Discount Rate for any
Purchaser Interest transferred to the Financial Institutions pursuant to the
terms and conditions hereof shall be the Prime Rate. If the Financial
Institutions acquire by assignment from Jupiter any Purchaser Interest pursuant
to Article XIII, each Purchaser Interest so assigned shall each be deemed to
have a new Tranche Period commencing on the date of any such assignment.
Section 4.2 Yield Payments. On the Settlement Date for each
Purchaser Interest of the Financial Institutions, Seller shall pay to the Agent
(for the benefit of the Financial Institutions) an aggregate amount equal to the
accrued and unpaid Yield for the entire Tranche Period of each such Purchaser
Interest in accordance with Article II.
Section 4.3 Selection and Continuation of Tranche Periods.
(a) With consultation from (and approval by) the Agent, Seller shall
from time to time request Tranche Periods for the Purchaser Interests of the
Financial Institutions, provided that, if at any time the Financial Institutions
shall have a Purchaser Interest, Seller shall always request Tranche Periods
such that at least one Tranche Period shall end on the date specified in clause
(A) of the definition of Settlement Date.
(b) Seller or the Agent, upon notice to and consent by the other
received at least three (3) Business Days prior to the end of a Tranche Period
(the "Terminating Tranche") for any Purchaser Interest, may, effective on the
last day of the Terminating Tranche: (i) divide any such Purchaser Interest into
multiple Purchaser Interests, (ii) combine any such Purchaser Interest with one
or more other Purchaser Interests that have a Terminating Tranche ending on the
same day as such Terminating Tranche or (iii) combine any such Purchaser
Interest with a new Purchaser Interests to be purchased on the day such
Terminating Tranche ends, provided, that in no event may a Purchaser Interest of
Jupiter be combined with a Purchaser Interest of the Financial Institutions.
Section 4.4 Financial Institution Discount Rates. Seller may select
the LIBO Rate or the Prime Rate for each Purchaser Interest of the Financial
Institutions. Seller shall by noon (Chicago time): (i) at least three (3)
Business Days prior to the expiration of any Terminating Tranche with respect to
which the LIBO Rate is being requested as a new Discount Rate and (ii) at least
one (1) Business Day prior to the expiration of any Terminating Tranche with
respect to which the Prime Rate is being requested as a new Discount Rate, give
the Agent irrevocable notice of the new Discount Rate for the Purchaser Interest
associated with such
6
Terminating Tranche. Until Seller gives notice to the Agent of another Discount
Rate, the initial Discount Rate for any Purchaser Interest transferred to the
Financial Institutions pursuant to the terms and conditions hereof shall be the
Prime Rate.
Section 4.5 Suspension of the LIBO Rate.
(a) If any Financial Institution notifies the Agent that it has
determined that funding its Pro Rata Share of the Purchaser Interests of the
Financial Institutions at a LIBO Rate would violate any applicable law, rule,
regulation, or directive of any governmental or regulatory authority, whether or
not having the force of law, or that (i) deposits of a type and maturity
appropriate to match fund its Purchaser Interests at such LIBO Rate are not
available or (ii) such LIBO Rate does not accurately reflect the cost of
acquiring or maintaining a Purchaser Interest at such LIBO Rate, then the Agent
shall suspend the availability of such LIBO Rate and require Seller to select
the Prime Rate for any Purchaser Interest accruing Yield at such LIBO Rate.
(b) If less than all of the Financial Institutions give a notice to
the Agent pursuant to Section 4.5(a), each Financial Institution which gave such
a notice shall be obliged, at the request of Seller, Jupiter or the Agent, to
assign all of its rights and obligations hereunder to (i) another Financial
Institution or (ii) another funding entity nominated by Seller or the Agent that
is acceptable to Jupiter and willing to participate in this Agreement through
the Liquidity Termination Date in the place of such notifying Financial
Institution; provided that (i) the notifying Financial Institution receives
payment in full, pursuant to an Assignment Agreement, of an amount equal to such
notifying Financial Institution's Pro Rata Share of the Capital and Yield owing
to all of the Financial Institutions and all accrued but unpaid fees and other
costs and expenses payable in respect of its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, and (ii) the replacement Financial
Institution otherwise satisfies the requirements of Section 12.1(b).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of The Seller Parties.
Each Seller Party hereby represents and warrants to the Agent and the
Purchasers, as to itself, as of the date hereof and as of the date of each
Incremental Purchase and the date of each Reinvestment that:
(a) Corporate Existence and Power. Such Seller Party is a
corporation or limited liability company duly organized, validly existing and in
good standing under the laws of its state of incorporation or formation. Such
Seller Party is duly qualified to do business and is in good standing as a
foreign corporation or limited liability company, and has and holds all
corporate or limited liability company power and all governmental licenses,
authorizations, consents and approvals required to carry on its business in each
jurisdiction in which its business is conducted except where the failure to so
qualify or to so have or hold could not reasonably be expected to have a
Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and Delivery.
The execution and delivery by such Seller Party of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder
7
and, in the case of Seller, Seller's use of the proceeds of purchases made
hereunder, are within its corporate or company powers and authority and have
been duly authorized by all necessary corporate or company action on its part.
This Agreement and each other Transaction Document to which such Seller Party is
a party has been duly executed and delivered by such Seller Party.
(c) No Conflict. The execution and delivery by such Seller Party of
this Agreement and each other Transaction Document to which it is a party, and
the performance of its obligations hereunder and thereunder do not contravene or
violate (i) its certificate or articles of incorporation or by-laws or
certificate of formation or limited liability company agreement, (ii) any law,
rule or regulation applicable to it, (iii) any restrictions under any agreement,
contract or instrument to which it is a party or by which it or any of its
property is bound that is material to the operation of its business, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not result in the creation or imposition of any Adverse
Claim on assets of such Seller Party or its Subsidiaries (except as created
hereunder); and no transaction contemplated hereby requires compliance with any
bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party and the performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Seller Party's knowledge, threatened, against or
affecting such Seller Party, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect. Such Seller Party is not in default with respect to any order of
any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction
Document to which such Seller Party is a party constitute the legal, valid and
binding obligations of such Seller Party enforceable against such Seller Party
in accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore furnished by
such Seller Party or any of its Affiliates to the Agent or the Purchasers for
purposes of or in connection with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by such Seller Party or any of its Affiliates to
the Agent or the Purchasers will be, true and accurate in every material respect
on the date such information is stated or certified and does not and will not
knowingly contain any material misstatement of fact or omit to state a material
fact or any fact necessary to make the statements contained therein not
misleading; provided, that any such information constituting projections or pro
forma financial information contained in such materials are based upon good
faith estimates and assumptions believed by the party providing the same to be
reasonable at the time made, it being recognized by the Agent and the Purchasers
8
that such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results.
(h) Use of Proceeds. No proceeds of any purchase hereunder will be
used (i) for a purpose that violates, or would be inconsistent with, Regulation
T, U or X promulgated by the Board of Governors of the Federal Reserve System
from time to time or (ii) to acquire any security in any transaction which is
subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as
amended.
(i) Good Title. Immediately prior to each purchase hereunder, Seller
shall be the legal and beneficial owner of the Receivables and Related Security
with respect thereto, free and clear of any Adverse Claim, except as created by
the Transaction Documents. There have been duly filed all financing statements
or other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect Seller's ownership
interest in each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to, and shall, upon each
purchase hereunder, transfer to the Agent for the benefit of the relevant
Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or
Purchasers shall acquire from Seller) a valid and perfected first priority
undivided percentage ownership or security interest in each Receivable existing
or hereafter arising and in the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim, except as created by the
Transactions Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect the Agent's (on
behalf of the Purchasers) ownership or security interest in the Receivables, the
Related Security and Collections.
(k) Places of Business and Locations of Records; Jurisdiction of
Organization. The principal places of business and chief executive office of
such Seller Party and the offices where it keeps all of its Records are located
at the address(es) listed on Exhibit III or such other locations of which the
Agent has been notified in accordance with Section 7.2(a) in jurisdictions where
all action required by Section 14.4(a) has been taken and completed. Seller is
an Illinois limited liability company. Seller's Federal Employer Identification
Number and Illinois organizational number are correctly set forth on Exhibit
III.
(l) Collections. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. The names and addresses of all Collection Banks, together with the
account numbers of the Collection Accounts of Seller at each Collection Bank and
the post office box number of each Lock-Box, are listed on Exhibit IV. Seller
has not granted any Person, other than the Agent as contemplated by this
Agreement, dominion and control of any Lock-Box or Collection Account, or the
right to take dominion and control of any such Lock-Box or Collection Account at
a future time or upon the occurrence of a future event.
9
(m) Material Adverse Effect. (i) The initial Servicer represents and
warrants that since June 30, 2002, no event has occurred that could reasonably
be expected to have a material adverse effect on the financial condition or
operations of the initial Servicer and its Subsidiaries or the ability of the
initial Servicer to perform its obligations under this Agreement, and (ii)
Seller represents and warrants that since the date of this Agreement, no event
has occurred that would have a material adverse effect on (A) the financial
condition or operations of Seller, (B) the ability of Seller to perform its
obligations under the Transaction Documents, or (C) the collectibility of the
Receivables generally or any material portion of the Receivables.
(n) Names. In the past five (5) years, Seller has not used any
company names, trade names or assumed names other than the name in which it has
executed this Agreement.
(o) Ownership of Seller. The Member owns, directly or indirectly,
100% of the issued and outstanding membership interests of Seller, free and
clear of any Adverse Claim other than the Adverse Claim in favor of the
Administrative Agent as contemplated by the Pledge Agreement. Such membership
interests are validly issued, fully paid and nonassessable, and there are no
options, warrants or other rights to acquire equity securities of Seller.
(p) Not a Holding Company or an Investment Company. Such Seller
Party is not a "holding company" or a "subsidiary holding company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or any successor statute. Such Seller Party is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(q) Compliance with Law. Such Seller Party has complied in all
material respects with all applicable laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject. Each
Receivable, together with the Contract related thereto, does not contravene any
laws, rules or regulations applicable thereto (including, without limitation,
laws, rules and regulations relating to truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices
and privacy), and no part of such Contract is in violation of any such law, rule
or regulation.
(r) Compliance with Credit and Collection Policy. Such Seller Party
has complied in all material respects with the Credit and Collection Policy with
regard to each Receivable and the related Contract, and has not made any change
to such Credit and Collection Policy, except such material change as to which
the Agent has been notified in accordance with Section 7.1(a)(vii).
(s) Payments to Originators. With respect to each Receivable
transferred to Seller under the Receivables Sale Agreement, Seller has given
reasonably equivalent value to the applicable Originator in consideration
therefor and such transfer was not made for or on account of an antecedent debt.
No transfer by any Originator of any Receivable under the Receivables Sale
Agreement is or may be voidable under any section of the Bankruptcy Reform Act
of 1978 (11 U.S.C. Sections 101 et seq.), as amended.
(t) Enforceability of Contracts. Each Contract with respect to each
Receivable is effective to create, and has created, a legal, valid and binding
obligation of the
10
related Obligor to pay the Outstanding Balance of the Receivable created
thereunder and any accrued interest thereon, enforceable against the Obligor in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(u) Eligible Receivables. Each Receivable included in the Net
Eligible Receivables Balance as an Eligible Receivable on the date of its
purchase under the Receivables Sale Agreement was an Eligible Receivable on such
purchase date and, as of the date of each Monthly Report or any other report
delivered pursuant to Section 8.5 or Section 6.2(a)(ii), each Receivable
included in the Net Eligible Receivables Balance on such Monthly Report or other
report was an Eligible Receivable.
(v) Net Eligible Receivables Balance. Seller has determined that,
immediately after giving effect to each purchase hereunder, the Net Eligible
Receivables Balance is equal to or greater than the sum of (i) the Aggregate
Capital, plus (ii) the Aggregate Reserves.
(w) Accounting. The manner in which such Seller Party accounts for
the transactions contemplated by this Agreement and the Receivables Sale
Agreement does not jeopardize the true sale analysis.
(x) Purpose. Seller has determined that, from a business viewpoint,
the purchase of the Receivables and related interests thereto from Insight under
the Receivables Sale Agreement, and the sale of Purchaser Interests to the
Purchasers and the other transactions contemplated herein, are in the best
interests of Seller.
(y) Financial Statements. The September 30, 2002 consolidated
financial statements of Insight and its Subsidiaries heretofore delivered to the
Agent and the Purchasers were prepared in accordance with generally accepted
accounting principles in effect on the date such statements were prepared
(except for the absence of footnotes and subject to year end audit adjustments)
and fairly present in all material respects the consolidated financial condition
and operations of Insight and its Subsidiaries at such date and the consolidated
results of their operations for the period then ended.
Section 5.2 Financial Institution Representations and Warranties.
Each Financial Institution hereby represents and warrants to the Agent and
Jupiter:
(a) Existence and Power. Such Financial Institution is a corporation
or a banking association duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, and has all
corporate power to perform its obligations hereunder.
(b) No Conflict. The execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or
11
decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on its assets. This Agreement has
been duly authorized, executed and delivered by such Financial Institution.
(c) Governmental Authorization. No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder.
(d) Binding Effect. This Agreement constitutes the legal, valid and
binding obligation of such Financial Institution enforceable against such
Financial Institution in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law).
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Incremental Purchase.
The initial Incremental Purchase of a Purchaser Interest under this Agreement is
subject to the conditions precedent that (a) the Agent shall have received on or
before the date of such purchase those documents listed on Schedule B and (b)
the Agent shall have received all fees and expenses required to be paid on such
date pursuant to the terms of this Agreement and the Fee Letter.
Section 6.2 Conditions Precedent to All Purchases and Reinvestments.
Each purchase of a Purchaser Interest (other than pursuant to Section 13.1) and
each Reinvestment shall be subject to the further conditions precedent that (a)
in the case of each such purchase or Reinvestment: (i) the Servicer shall have
delivered to the Agent on or prior to the date of such purchase, in form and
substance satisfactory to the Agent, all Monthly Reports as and when due under
Section 8.5 and (ii) upon the Agent's reasonable request, the Servicer shall
have delivered to the Agent at least three (3) days prior to such purchase or
Reinvestment an interim report in the form of a Monthly Report showing the
amount of Eligible Receivables; (b) the Facility Termination Date shall not have
occurred; (c) the Agent shall have received such other approvals, opinions or
documents as it may reasonably request and (d) on the date of each such
Incremental Purchase or Reinvestment, the following statements shall be true
(and acceptance of the proceeds of such Incremental Purchase or Reinvestment
shall be deemed a representation and warranty by Seller that such statements are
then true):
(i) the representations and warranties set forth in Section 5.1 are
true and correct on and as of the date of such Incremental Purchase or
Reinvestment as though made on and as of such date (or, to the extent such
representations and warranties specifically relate to an earlier date,
that such representations and warranties were true, correct and complete
in all material respects on and as of such earlier date);
(ii) no event has occurred and is continuing, or would result from
such Incremental Purchase or Reinvestment, that will constitute an
Amortization Event, and no
12
event has occurred and is continuing, or would result from such
Incremental Purchase or Reinvestment, that would constitute a Potential
Amortization Event; and
(iii) the Aggregate Capital does not exceed the Purchase Limit and
the aggregate Purchaser Interests do not exceed 100%.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent within
thirty (30) days after the Agent shall have obtained knowledge of such failure,
to rescind the related purchase and direct Seller to pay to the Agent for the
benefit of the Purchasers an amount equal to the Collections prior to the
Amortization Date that shall have been applied to the affected Reinvestment.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of The Seller Parties. Until the
date on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:
(a) Financial Reporting. Such Seller Party will maintain, for itself
and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Agent:
(i) Annual Reporting. Within 90 days after the close of each of its
respective fiscal years, audited, consolidated financial statements (which
shall include balance sheets, statements of income and retained earnings
and a statement of cash flows) for Insight and its consolidated
subsidiaries for such fiscal year certified in a manner acceptable to the
Agent by KPMG or other independent public accountants acceptable to the
Agent.
(ii) Quarterly Reporting. Within 45 days after the close of the
first three (3) quarterly periods of its respective fiscal years,
consolidated balance sheets of Insight and its consolidated subsidiaries
as at the close of each such period and consolidated statements of income
and retained earnings and a statement of cash flows for such Persons for
the period from the beginning of such fiscal year to the end of such
quarter, together with internally prepared balance sheets, statements of
income and retained earnings and statements of cash flows for Seller, all
certified by the chief financial officer of Insight or Seller, as
applicable.
(iii) Compliance Certificate. Together with the financial statements
required hereunder, a compliance certificate in substantially the form of
Exhibit V signed by such
13
Seller Party's Authorized Officer and dated the date of such annual
financial statement or such quarterly financial statement, as the case may
be.
(iv) Statements and Reports. Promptly upon the furnishing thereof to
the shareholders or members of such Seller Party copies of all financial
statements, reports and proxy statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports which Insight or any of its Subsidiaries files with the Securities
and Exchange Commission.
(vi) Copies of Notices. Promptly upon its receipt of any notice,
request for consent, financial statements, certification, report or other
communication under or in connection with any Transaction Document from
any Person other than the Agent or Jupiter, copies of the same.
(vii) Change in Credit and Collection Policy. At least thirty (30)
days prior to the effectiveness of any material change in or material
amendment to the Credit and Collection Policy, a copy of the Credit and
Collection Policy then in effect and a notice (A) indicating such change
or amendment, and (B) if such proposed change or amendment would be
reasonably likely to adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created
Receivables, requesting the Agent's consent thereto.
(viii)Borrowing Base Certificates. Promptly upon the delivery
thereof to the Administrative Agent, copies of all Borrowing Base
Certificates required to be delivered pursuant to the Credit Agreement.
(ix) Other Information. Promptly, from time to time, such other
information, documents, records or reports relating to the Receivables or
the condition or operations, financial or otherwise, of such Seller Party
as the Agent may from time to time reasonably request in order to protect
the interests of the Agent and the Purchasers under or as contemplated by
this Agreement.
(b) Notices. Such Seller Party will notify the Agent in writing of
any of the following promptly upon learning of the occurrence thereof,
describing the same and, if applicable, the steps being taken with respect
thereto:
(i) Amortization Events or Potential Amortization Events. The
occurrence of each Amortization Event and each Potential Amortization
Event, by a statement of an Authorized Officer of such Seller Party.
(ii) Judgment and Proceedings. (A) (1) The entry of any judgment or
decree against the Servicer or any of its respective Subsidiaries if the
aggregate amount of all judgments and decrees then outstanding against the
Servicer and its Subsidiaries exceeds $10,000,000, and (2) the institution
of any litigation, arbitration proceeding or governmental proceeding
against the Servicer which, if adversely determined to the Servicer, could
reasonably be expected to have a Material Adverse Effect; and (B) the
14
entry of any judgment or decree or the institution of any litigation,
arbitration proceeding or governmental proceeding against Seller.
(iii) Material Adverse Effect. The occurrence of any event or
condition that has had, or could reasonably be expected to have, a
Material Adverse Effect.
(iv) Termination Date. The occurrence of the "Termination Date"
under and as defined in the Receivables Sale Agreement.
(v) Defaults Under Other Agreements. The occurrence of a default or
an event of default under any other financing arrangement pursuant to
which such Seller Party is a debtor or an obligor.
(c) Compliance with Laws and Preservation of Corporate Existence.
Such Seller Party will comply in all respects with (i) all applicable laws,
rules and regulations to which it may be subject except (A) where the necessity
of compliance therewith is contested in good faith by appropriate proceedings
and (B) where the failure to comply could not reasonably be expected to have a
Material Adverse Effect, and (ii) all applicable orders, writs, judgments,
injunctions, decrees and awards to which it may be subject which have not been
stayed by appropriate proceedings. Such Seller Party will preserve and maintain
its corporate or limited liability company existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified in good standing or active status as a foreign corporation or limited
liability company in each jurisdiction where its business is conducted except
where the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect.
(d) Audits. Such Seller Party will furnish to the Agent from time to
time such information with respect to it and the Receivables as the Agent may
reasonably request. Such Seller Party will, from time to time during regular
business hours as requested by the Agent upon reasonable notice and at the sole
cost of such Seller Party, permit the Agent, or its agents or representatives
(and cause each Originator to permit the Agent or its agents or
representatives), (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of such Person relating to the
Receivables and the Related Security, including, without limitation, the related
Contracts, and (ii) to visit the offices and properties of such Person for the
purpose of examining such materials described in clause (i) above, and to
discuss matters relating to such Person's financial condition or the Receivables
and the Related Security or any Person's performance under any of the
Transaction Documents or any Person's performance under the Contracts and, in
each case, with any of the officers or employees of Seller or the Servicer
having knowledge of such matters.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will (and will cause each Originator to) 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
15
(including, without limitation, records adequate to permit the immediate
identification of each new Receivable and all Collections of and
adjustments to each existing Receivable). The Servicer will (and will
cause each Originator to) give the Agent notice of any material change in
the administrative and operating procedures referred to in the previous
sentence.
(ii) Such Seller Party will (and will cause each Originator to) (A)
on or prior to the date hereof, xxxx its master data processing records
and other books and records relating to the Purchaser Interests with a
legend, acceptable to the Agent, describing the Purchaser Interests and
(B) upon the request of the Agent (x) xxxx each Contract with a legend
describing the Purchaser Interests and (y) deliver to the Agent all
Contracts (including, without limitation, all multiple originals of any
such Contract) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Such
Seller Party will (and will cause each Originator to) timely and fully (i)
perform and comply with all provisions, covenants and other promises required to
be observed by it under the Contracts related to the Receivables, and (ii)
comply in all material respects with the Credit and Collection Policy in regard
to each Receivable and the related Contract.
(g) Performance and Enforcement of Receivables Sale Agreement.
Seller will perform its obligations and undertakings under and pursuant to the
Receivables Sale Agreement, will purchase Receivables thereunder in strict
compliance with the terms thereof and will enforce the rights and remedies
accorded to Seller under the Receivables Sale Agreement. Seller will take all
actions to perfect and enforce its rights and interests (and the rights and
interests of the Agent and the Purchasers as assignees of Seller) under the
Receivables Sale Agreement as the Agent may from time to time reasonably
request, including, without limitation, making claims to which it may be
entitled under any indemnity, reimbursement or similar provision contained in
the Receivables Sale Agreement.
(h) Ownership. Seller will (or will cause each Originator to) take
all necessary action to (i) vest legal and equitable title to the Receivables,
the Related Security and the Collections purchased by Seller under the
Receivables Sale Agreement irrevocably in Seller, free and clear of any Adverse
Claims other than Adverse Claims in favor of the Agent and the Purchasers
(including, without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect Seller's interest in such
Receivables, Related Security and Collections and such other action to perfect,
protect or more fully evidence the interest of Seller therein as the Agent may
reasonably request), and (ii) establish and maintain, in favor of the Agent, for
the benefit of the Purchasers, a valid and perfected first priority undivided
percentage ownership interest (and/or a valid and perfected first priority
security interest) in all Receivables, Related Security and Collections to the
full extent contemplated herein, free and clear of any Adverse Claims other than
Adverse Claims in favor of the Agent for the benefit of the Purchasers
(including, without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect the Agent's (for the benefit of the
Purchasers) interest in such Receivables, Related
16
Security and Collections and such other action to perfect, protect or more fully
evidence the interest of the Agent for the benefit of the Purchasers as the
Agent may reasonably request).
(i) Purchasers' Reliance. Seller acknowledges that the Purchasers
are entering into the transactions contemplated by this Agreement in reliance
upon Seller's identity as a legal entity that is separate from Insight, each
Originator and any Affiliate thereof (each an "Insight Entity"). Therefore, from
and after the date of execution and delivery of this Agreement, Seller shall
take all reasonable steps, including, without limitation, all steps that the
Agent may from time to time reasonably request, to maintain Seller's identity as
a separate legal entity and to make it manifest to third parties that Seller is
an entity with assets and liabilities distinct from those of any Insight Entity
and not just a division of an Insight Entity. Without limiting the generality of
the foregoing and in addition to the other covenants set forth herein, Seller
will:
(A) conduct its own business in its own name and require that
all full-time employees of Seller, if any, identify themselves as
such and not as employees of any Insight Entity (including, without
limitation, by means of providing appropriate employees with
business or identification cards identifying such employees as
Seller's employees);
(B) compensate all employees, consultants and agents, if any,
directly, from Seller's own funds, for services provided to Seller
by such employees, consultants and agents and, to the extent any
employee, consultant or agent of Seller is also an employee,
consultant or agent of an Insight Entity, allocate the compensation
of such employee, consultant or agent between Seller and such
Insight Entity, as applicable, on a basis that reflects the services
rendered to Seller and such Insight Entity, as applicable;
(C) clearly identify its offices (by signage or otherwise) as
its offices and, if such office is located in the offices of an
Insight Entity, Seller shall lease such office at a fair market
rent;
(D) have a separate telephone number, which will be answered
only in its name and separate stationery, invoices and checks in its
own name;
(E) conduct all transactions with each Insight Entity
(including, without limitation, any delegation of its obligations
hereunder as Servicer) strictly on an arm's-length basis, allocate
all overhead expenses (including, without limitation, telephone and
other utility charges) for items shared between Seller and such
Insight Entity on the basis of actual use to the extent practicable
and, to the extent such allocation is not practicable, on a basis
reasonably related to actual use;
(F) at all times have a Board of Directors consisting of three
members, at least one member of which is an Independent Director;
(G) observe all limited liability company formalities as a
distinct entity, and ensure that all corporate actions relating to
(A) the selection,
17
maintenance or replacement of the Independent Director, (B) the
dissolution or liquidation of Seller or (C) the initiation of,
participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving Seller,
are duly authorized by unanimous vote of its Board of Directors
(including the Independent Director);
(H) maintain Seller's books and records separate from those of
any Insight Entity and otherwise readily identifiable as its own
assets rather than assets of any Insight Entity;
(I) prepare its financial statements separately from those of
any Insight Entity and insure that any consolidated financial
statements of each Insight Entity thereof that include Seller and
that are filed with the Securities and Exchange Commission or any
other governmental agency have notes clearly stating that Seller is
a separate corporate entity and that its assets will be available
first and foremost to satisfy the claims of the creditors of Seller;
(J) except as herein specifically otherwise provided, maintain
the funds or other assets of Seller separate from, and not
commingled with, those of any Insight Entity and only maintain bank
accounts or other depository accounts to which Seller alone is the
account party, into which Seller alone makes deposits and from which
Seller alone (or the Agent hereunder) has the power to make
withdrawals;
(K) pay all of Seller's operating expenses from Seller's own
assets (except for certain payments by an Insight Entity or other
Persons pursuant to allocation arrangements that comply with the
requirements of this Section 7.1(i));
(L) operate its business and activities such that: it does not
engage in any business or activity of any kind, or enter into any
transaction or indenture, mortgage, instrument, agreement, contract,
lease or other undertaking, other than the transactions contemplated
and authorized by this Agreement and the Receivables Sale Agreement;
and does not create, incur, guarantee, assume or suffer to exist any
indebtedness or other liabilities, whether direct or contingent,
other than (1) as a result of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the
ordinary course of business, (2) the incurrence of obligations under
this Agreement, (3) the incurrence of obligations, as expressly
contemplated in the Receivables Sale Agreement, to make payment to
the Originators thereunder for the purchase of Receivables from the
Originators under the Receivables Sale Agreement, and (4) the
incurrence of operating expenses in the ordinary course of business
of the type otherwise contemplated by this Agreement;
(M) maintain its limited liability company agreement in
conformity with this Agreement, such that it does not amend,
restate, supplement or otherwise modify its certificate of formation
or limited liability company agreement in any respect that would
impair its ability to comply with the terms or
18
provisions of any of the Transaction Documents, including, without
limitation, Section 7.1(i) of this Agreement;
(N) maintain the effectiveness of, and continue to perform
under the Receivables Sale Agreement, such that it does not amend,
restate, supplement, cancel, terminate or otherwise modify the
Receivables Sale Agreement, or give any consent, waiver, directive
or approval thereunder or waive any default, action, omission or
breach under the Receivables Sale Agreement or otherwise grant any
indulgence thereunder, without (in each case) the prior written
consent of the Agent;
(O) maintain its limited liability company separateness such
that it does not merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction
or in a series of transactions, and except as otherwise contemplated
herein) all or substantially all of its assets (whether now owned or
hereafter acquired) to, or acquire all or substantially all of the
assets of, any Person, nor at any time create, have, acquire,
maintain or hold any interest in any Subsidiary;
(P) maintain at all times the Required Capital Amount (as
defined in the Receivables Sale Agreement) and refrain from making
any dividend, distribution, redemption of membership interests or
payment of any subordinated indebtedness which would cause the
Required Capital Amount to cease to be so maintained; and
(Q) take such other actions as are necessary on its part to
ensure that the facts and assumptions set forth in the opinion
issued by Xxxxxxx & Xxxxx LLP, as counsel for Seller, in connection
with the closing or initial Incremental Purchase under this
Agreement and relating to substantive consolidation issues, and in
the certificates accompanying such opinion, remain true and correct
in all material respects at all times.
(j) Collections. Such Seller Party will cause (1) all proceeds from
all Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account and (2) each Lock-Box and Collection Account to be subject at all times
to a Collection Account Agreement that is in full force and effect. In the event
any payments relating to Receivables are remitted directly to Seller or any
Affiliate of Seller, Seller will remit (or will cause all such payments to be
remitted) directly to a Collection Bank and deposited into a Collection Account
within two (2) Business Days following receipt thereof, and, at all times prior
to such remittance, Seller will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of the Agent and the
Purchasers. Seller will maintain exclusive ownership, dominion and control
(subject to the terms of this Agreement) of each Lock-Box and Collection Account
and shall not grant the right to take dominion and control of any Lock-Box or
Collection Account at a future time or upon the occurrence of a future event to
any Person, except to the Agent as contemplated by this Agreement.
19
(k) Taxes. Such Seller Party will file all tax returns and reports
required by law to be filed by it and will promptly pay all taxes and
governmental charges at any time owing except for taxes being diligently
contested in good faith and for which adequate reserves have been established.
Seller will pay when due any taxes payable in connection with the Receivables,
exclusive of taxes on or measured by income or gross receipts of Jupiter, the
Agent or any Financial Institution.
(l) Insurance. Seller will maintain in effect, or cause to be
maintained in effect, at Seller's own expense, such casualty and liability
insurance as Seller shall deem appropriate in its good faith business judgment.
The Agent, for the benefit of the Purchasers, shall be named as an additional
insured with respect to all such liability insurance maintained by Seller.
Seller will pay or cause to be paid, the premiums therefor and deliver to the
Agent evidence satisfactory to the Agent of such insurance coverage. Copies of
each policy shall be furnished to the Agent and any Purchaser in certificated
form upon the Agent's or such Purchaser's request. The foregoing requirements
shall not be construed to negate, reduce or modify, and are in addition to,
Seller's obligations hereunder.
(m) Payment to the Originators. With respect to any Receivable
purchased by Seller from any Originator, such sale shall be effected under, and
in strict compliance with the terms of, the Receivables Sale Agreement,
including, without limitation, the terms relating to the amount and timing of
payments to be made to the applicable Originator in respect of the purchase
price for such Receivable.
Section 7.2 Negative Covenants of The Seller Parties. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:
(a) Name Change, Offices and Records. Such Seller Party will not
change its name, identity, corporate or limited liability company structure
(within the meaning of Section 9-507 of the UCC) or jurisdiction of organization
or relocate its chief executive office or any office where Records are kept
unless it shall have: (i) given the Agent at least thirty (30) days' prior
written notice thereof and (ii) delivered to the Agent all financing statements,
instruments and other documents requested by the Agent in connection with such
change or relocation.
(b) Change in Payment Instructions to Obligors. Except as may be
required by the Agent pursuant to Section 8.2(b), such Seller Party will not add
or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
provided, however, that the Servicer may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy.
Such Seller Party will not, and will not permit any Originator to, make any
change to the Credit and
20
Collection Policy that could adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created Receivables
without the Agent's prior written consent. Except as provided in Section 8.2(d),
the Servicer will not, and will not permit any Originator to, extend, amend or
otherwise modify the terms of any Receivable or any Contract related thereto
other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation of law
or otherwise) or otherwise dispose of, or grant any option with respect to, or
create or suffer to exist any Adverse Claim upon (including, without limitation,
the filing of any financing statement) or with respect to, any Receivable,
Related Security or Collections, or upon or with respect to any Contract under
which any Receivable arises, or any Lock-Box or Collection Account, or assign
any right to receive income with respect thereto (other than, in each case, the
creation of the interests therein in favor of the Agent and the Purchasers
provided for herein), and Seller will defend the right, title and interest of
the Agent and the Purchasers in, to and under any of the foregoing property,
against all claims of third parties claiming through or under Seller or any
Originator. Seller will not create or suffer to exist any mortgage, pledge,
security interest, encumbrance, lien, charge or other similar arrangement on any
of its inventory, the financing or lease of which gives rise to any Receivable.
(e) Net Eligible Receivables Balance. At no time prior to the
Amortization Date shall Seller permit the Net Eligible Receivables Balance to be
less than an amount equal to the sum of (i) the Aggregate Capital plus (ii) the
Aggregate Reserves.
(f) Termination Date Determination. Seller will not designate the
Termination Date (as defined in the Receivables Sale Agreement), or send any
written notice to the Originators in respect thereof, without the prior written
consent of the Agent, except with respect to the occurrence of such Termination
Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer.
(a) The servicing, administration and collection of the Receivables
shall be conducted by such Person (the "Servicer") so designated from time to
time in accordance with this Section 8.1. Insight is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Servicer pursuant to
the terms of this Agreement. The Agent may, at any time following the occurrence
and during the continuance of an Amortization Event or Potential Amortization
Event, designate as Servicer any Person to succeed Insight or any successor
Servicer.
(b) Without the prior written consent of the Agent and the Required
Financial Institutions, Insight shall not be permitted to delegate any of its
duties or responsibilities as Servicer to any Person other than (i) Seller, (ii)
the applicable Originator with respect to the Receivables originated by such
Originator and (iii) with respect to certain Charged-Off Receivables, outside
collection agencies in accordance with its customary practices. Neither the
21
Seller nor any Originator shall be permitted to further delegate to any other
Person any of the duties or responsibilities of the Servicer delegated to it by
Insight. If at any time the Agent shall designate as Servicer any Person other
than Insight, all duties and responsibilities theretofore delegated by Insight
to Seller may, at the discretion of the Agent, be terminated forthwith on notice
given by the Agent to Insight and to Seller.
(c) Notwithstanding the foregoing subsection (b), (i) unless the
Agent shall have designated a Person other than Insight to act as Servicer
pursuant to Section 8.1, Insight shall be and remain primarily liable to the
Agent and the Purchasers for the full and prompt performance of all duties and
responsibilities of the Servicer hereunder and (ii) the Agent and the Purchasers
shall be entitled to deal exclusively with Insight in matters relating to the
discharge by the Servicer of its duties and responsibilities hereunder. The
Agent and the Purchasers shall not be required to give notice, demand or other
communication to any Person other than Insight in order for communication to the
Servicer and its sub-servicer or other delegate with respect thereto to be
accomplished. Insight, at all times that it is the Servicer, shall be
responsible for providing any sub-servicer or other delegate of the Servicer
with any notice given to the Servicer under this Agreement.
Section 8.2 Duties of Servicer.
(a) The Servicer shall take or cause to be taken all such actions as
may be necessary or advisable to collect each Receivable from time to time, all
in accordance with applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Credit and Collection Policy.
(b) The Servicer will instruct all Obligors to pay all Collections
directly to a Lock-Box or Collection Account. The Servicer shall effect a
Collection Account Agreement substantially in the form of Exhibit VI with each
bank party to a Collection Account at any time. In the case of any remittances
received in any Lock-Box or Collection Account that shall have been identified,
to the satisfaction of the Servicer, to not constitute Collections or other
proceeds of the Receivables or the Related Security, the Servicer shall promptly
remit such items to the Person identified to it as being the owner of such
remittances. From and after the date the Agent delivers to any Collection Bank a
Collection Notice pursuant to Section 8.3, the Agent may request that the
Servicer, and the Servicer thereupon promptly shall instruct all Obligors with
respect to the Receivables, to remit all payments thereon to a new depositary
account specified by the Agent and, at all times thereafter, Seller and the
Servicer shall not deposit or otherwise credit, and shall not permit any other
Person to deposit or otherwise credit to such new depositary account any cash or
payment item other than Collections.
(c) The Servicer shall administer the Collections in accordance with
the procedures described herein and in Article II. The Servicer shall set aside
and hold in trust for the account of Seller and the Purchasers their respective
shares of the Collections in accordance with Article II. The Servicer shall,
upon the request of the Agent, segregate, in a manner acceptable to the Agent,
all cash, checks and other instruments received by it from time to time
constituting Collections from the general funds of the Servicer or Seller prior
to the remittance thereof in accordance with Article II. If the Servicer shall
be required to segregate Collections pursuant to the preceding sentence, the
Servicer shall segregate and deposit with a bank
22
designated by the Agent such allocable share of Collections of Receivables set
aside for the Purchasers on the first Business Day following receipt by the
Servicer of such Collections, duly endorsed or with duly executed instruments of
transfer.
(d) The Servicer may, in accordance with the Credit and Collection
Policy, extend the maturity of any Receivable or adjust the Outstanding Balance
of any Receivable as the Servicer determines 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
Charged-Off Receivable or limit the rights of the Agent or the Purchasers under
this Agreement. Notwithstanding anything to the contrary contained herein, after
the occurrence and during the continuation of an Amortization Event, the Agent
shall have the absolute and unlimited right to direct the Servicer to commence
or settle any legal action with respect to any Receivable or to foreclose upon
or repossess any Related Security.
(e) The Servicer shall hold in trust for Seller and the Purchasers
all Records that (i) evidence or relate to the Receivables, the related
Contracts and Related Security or (ii) are otherwise necessary or desirable to
collect the Receivables and shall, as soon as practicable upon demand of the
Agent, deliver or make available to the Agent all such Records, at a place
selected by the Agent. The Servicer shall, as soon as practicable following
receipt thereof turn over to Seller any cash collections or other cash proceeds
received with respect to Indebtedness not constituting Receivables. The Servicer
shall, from time to time at the request of any Purchaser, furnish to the
Purchasers (promptly after any such request) a calculation of the amounts set
aside for the Purchasers pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness owed by
it to any Originator, Insight or Seller shall, except as otherwise specified by
such Obligor or otherwise required by contract or law and unless otherwise
instructed by the Agent, be applied as a Collection of any Receivable of such
Obligor (starting with the oldest such Receivable) to the extent of any amounts
then due and payable thereunder before being applied to any other receivable or
other obligation of such Obligor.
Section 8.3 Collection Notices. Following the occurrence and during
the continuance of an Amortization Event or a Potential Amortization Event, the
Agent is authorized at any time to date and to deliver to the Collection Banks
the Collection Notices. Seller hereby transfers to the Agent for the benefit of
the Purchasers, effective when the Agent delivers such notice, the exclusive
ownership and control of each Lock-Box and the Collection Accounts. In case any
authorized signatory of Seller whose signature appears on a Collection Account
Agreement shall cease to have such authority before the delivery of such notice,
such Collection Notice shall nevertheless be valid as if such authority had
remained in force. Seller hereby authorizes the Agent, and agrees that the Agent
shall be entitled to (i) endorse Seller's name on checks and other instruments
representing Collections, (ii) enforce the Receivables, the related Contracts
and the Related Security and (iii) take such action as shall be necessary or
desirable to cause all cash, checks and other instruments constituting
Collections of Receivables to come into the possession of the Agent rather than
Seller.
Section 8.4 Responsibilities of Seller. Anything herein to the
contrary notwithstanding, the exercise by the Agent and the Purchasers of their
rights hereunder shall not
23
release the Servicer, any of the Originators, Insight or Seller from any of
their duties or obligations with respect to any Receivables or under the related
Contracts. The Purchasers shall have no obligation or liability with respect to
any Receivables or related Contracts, nor shall any of them be obligated to
perform the obligations of Seller.
Section 8.5 Reports. The Servicer shall prepare and forward to the
Agent (i) on the twelfth (12th) day of each month (or if such day is not a
Business Day, the immediately succeeding Business Day) and, following the
occurrence and during the continuance of an Amortization Event or a Potential
Amortization Event (but not before), at such times as the Agent shall request, a
Monthly Report and (ii) at such times as the Agent shall request, a listing by
Obligor of all Receivables together with an aging of such Receivables.
Section 8.6 Servicing Fees. In consideration of Insight's agreement
to act as Servicer hereunder, the Purchasers hereby agree that, so long as
Insight shall continue to perform as Servicer hereunder, Seller shall pay over
to Insight a fee (the "Servicing Fee") on the first day of each month, in
arrears for the immediately preceding month, equal to 1.0% per annum times the
average daily Net Eligible Receivables Balance during such period, as
compensation for its servicing activities.
ARTICLE IX
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or more
of the following events shall constitute an Amortization Event:
(a) Any Seller Party shall fail (i) to make any payment or deposit
required hereunder when due, or (ii) to perform or observe any term, covenant or
agreement hereunder (other than as referred to in clause (i) of this paragraph
(a) and paragraph 9.1(e)) and such failure shall continue for three (3)
consecutive Business Days after such Seller Party has notice thereof.
(b) Any representation, warranty, certification or statement made by
any Seller Party in this Agreement, any other Transaction Document or in any
other document delivered pursuant hereto or thereto shall prove to have been
incorrect when made or deemed made.
(c) (i) The failure of the Seller to pay any Indebtedness when due;
or (ii) the failure of the Servicer, Insight or any Originator to pay any
"Specified Indebtedness" when due; or the default by any Seller Party, Insight
or any Originator in the performance of any term, provision or condition
contained in any agreement under which any Specified Indebtedness was created or
is governed, the effect of which is to cause, or to permit the holder or holders
of such Specified Indebtedness to cause, such Specified Indebtedness to become
due prior to its stated maturity; or any such Specified Indebtedness of the
Servicer, Insight or any Originator shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled payment) prior to
the date of maturity thereof. "Specified Indebtedness" means Indebtedness which,
individually or in the aggregate with other Indebtedness, has an aggregate
principal amount or face value in excess of $5,000,000.
24
(d) (i) Any Seller Party, any Originator or any of its Subsidiaries
shall generally not pay its debts as such debts become due or shall admit in
writing its inability to pay its debts generally or shall make a general
assignment for the benefit of creditors; or (ii) any proceeding shall be
instituted by or against any Seller Party, any Originator or any of its
Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property and, in the case of any
such proceeding instituted against such Person, either such proceeding shall
remain undismissed or unstayed for a period of sixty (60) days or an order for
relief shall have been entered in such proceedings or a receiver, trustee or
similar official shall have been appointed in such proceedings; or (iii) any
Seller Party, any Originator or any of its Subsidiaries shall take any corporate
action to authorize any of the actions set forth in clauses (i) or (ii) above in
this subsection (d).
(e) Seller, Insight or any Originator shall (i) fail to perform or
observe any term, covenant or agreement under the Receivables Sale Agreement, or
(ii) fail to enforce its rights under the Receivables Sale Agreement after the
occurrence of any such failure described in clause (i).
(f) Seller shall fail to comply with the terms of Section 2.6
hereof.
(g) As at the end of any Fiscal Month:
(i) the weighted average of the Default Ratios for the three
most recently ended Fiscal Months shall exceed 0.5%;
(ii) the weighted average of the Delinquency Ratios for the
three most recently ended Fiscal Months shall exceed
7.5% ; or
(iii) the weighted average of the Dilution Ratios for the
three most recently ended Fiscal Months shall exceed
5.25%.
For purposes of this Section 9.1(g), the "weighted average" of each
of the ratios referenced above for any three Fiscal Month Period
shall be determined by adding the numerators of such ratio for each
of such three Fiscal Months and dividing that sum by the sum of the
denominators of such ratio for each of such three Fiscal Months.
(h) A Change of Control shall occur.
(i) (i) One or more final judgments for the payment of money shall
be entered against Seller or (ii) one or more final judgments for the payment of
money in an amount in excess of $25,000,000, individually or in the aggregate,
shall be entered against the Servicer on claims not covered by insurance or as
to which the insurance carrier has denied its responsibility, and such judgment
shall continue unsatisfied and in effect for fifteen (15) consecutive days
without a stay of execution.
25
(j) A "Termination Date" under and as defined in the Receivables
Sale Agreement shall occur under the Receivables Sale Agreement or any
Originator shall for any reason cease to transfer, or cease to have the legal
capacity to transfer, or otherwise be incapable of transferring Receivables to
Seller under the Receivables Sale Agreement.
(k) This Agreement shall terminate in whole or in part (except in
accordance with its terms), or shall cease to be effective or to be the legally
valid, binding and enforceable obligation of Seller, or the Agent for the
benefit of the Purchasers shall cease to have a valid and perfected first
priority security interest in the Receivables, the Related Security and the
Collections with respect thereto and the Collection Accounts.
(l) The ratio, determined as of the end of any Fiscal Quarter, of
(i) Consolidated Funded Indebtedness to (ii) Consolidated EBITDA for the then
most-recently ended four Fiscal Quarters shall be greater than 2.50 to 1.00 (the
"Leverage Ratio"). The Leverage Ratio shall be calculated as of the last day of
each Fiscal Quarter of Insight based upon (a) for Consolidated Funded
Indebtedness, Consolidated Funded Indebtedness as of the last day of each such
Fiscal Quarter and (b) for Consolidated EBITDA, the actual amount as of the last
day of each Fiscal Quarter for the most recently ended four consecutive Fiscal
Quarters; provided, that the Leverage Ratio shall be calculated, with respect to
Permitted Acquisitions, on a pro forma basis using historical financial
statements and containing reasonable adjustments satisfactory to the Agent,
broken down by fiscal quarter in Insight's reasonable judgment. When calculating
Consolidated EBITDA under this Section 9.1(l) through the period ending June 30,
2003, Insight may include amounts related to historical Comark EBITDA as set
forth in pro-forma consolidated financial statements or other pro-forma
consolidated financial information appearing in Form 8-K filings or footnotes
set forth in Form 10-Q filings made from time to time through such period by
Insight with the United States Securities and Exchange Commission; provided,
however, that the inclusion of such amounts and the derivations thereof are
subject to the Agent's consent and approval.
(m) The ratio, determined as of the end of each Fiscal Quarter for
the then most-recently ended four Fiscal Quarter period of (i) Consolidated
EBITDA during such period minus Consolidated Capital Expenditures during such
period minus expenses for taxes paid or taxes accrued during such period to (ii)
Consolidated Interest Expense during such period plus the scheduled amortization
of the principal portion of Indebtedness during such period (other than amounts
owing in connection with Receivables Purchase Facilities permitted under the
Credit Agreement), including, without limitation Capitalized Lease Obligations,
all calculated for Insight and its Subsidiaries on a consolidated basis, shall
be less than 2.00 to 1.00. When calculating Consolidated EBITDA under this
Section 9.1(m) through the period ending June 30, 2003, Insight may include
amounts related to historical Comark EBITDA as set forth in pro-forma
consolidated financial statements or other pro-forma consolidated financial
information appearing in Form 8-K filings or footnotes set forth in Form 10-Q
filings made from time to time through such period by Insight with the United
States Securities and Exchange Commission; provided, however, that the inclusion
of such amounts and the derivations thereof are subject to the Agent's consent
and approval.
(n) Insight shall at any time fail to have Consolidated Tangible Net
Worth of at least (i) $235,708,000 minus (ii) amounts, which in the aggregate
may not exceed $50,000,000
26
at any time, expended by Insight in connection with repurchases or redemptions
of its capital stock permitted under Section 6.10 of the Credit Agreement plus
(iii) 75% of Consolidated Net Income (if positive) earned in each Fiscal Quarter
beginning with the Fiscal Quarter ending December 31, 2002 plus (iv) the amount
of all Net Cash Proceeds resulting from issuances of Insight's or any
Subsidiary's capital stock. Schedule 9.1(n) sets forth the calculation of
Consolidated Tangible Net Worth as of September 30, 2002. The methodology for
such calculation, subject to changes in Agreement Accounting Principles, other
changes agreed to by the Agent and Insight in writing, and the terms of this
Section 9.1(n), shall be used to determine Consolidated Tangible Net Worth for
each Fiscal Quarter occurring after the Fiscal Quarter ending September 30,
2002.
(o) The UCC-1 financing statement naming Comark as debtor and Fleet
Business Credit Corporation as secured party that is of record with the
Secretary of State of Illinois shall not have been terminated or amended in a
manner acceptable to the Agent by January 31, 2003.
Section 9.2 Remedies. Upon the occurrence and during the
continuation of an Amortization Event, the Agent may, or upon the direction of
the Required Financial Institutions shall, take any of the following actions:
(i) replace the Person then acting as Servicer, (ii) declare the Amortization
Date to have occurred, whereupon the Amortization Date shall forthwith occur,
without demand, protest or further notice of any kind, all of which are hereby
expressly waived by each Seller Party; provided, however, that upon the
occurrence of an Amortization Event described in Section 9.1(d)(ii), or of an
actual or deemed entry of an order for relief with respect to any Seller Party
under the Federal Bankruptcy Code, the Amortization Date shall automatically
occur, without demand, protest or any notice of any kind, all of which are
hereby expressly waived by each Seller Party, (iii) to the fullest extent
permitted by applicable law, declare that the Default Fee shall accrue with
respect to any of the Aggregate Unpaids outstanding at such time, (iv) deliver
the Collection Notices to the Collection Banks, and (v) notify Obligors of the
Purchasers' interest in the Receivables. The aforementioned rights and remedies
shall be without limitation, and shall be in addition to all other rights and
remedies of the Agent and the Purchasers otherwise available under any other
provision of this Agreement, by operation of law, at equity or otherwise, all of
which are hereby expressly preserved, including, without limitation, all rights
and remedies provided under the UCC, all of which rights shall be cumulative.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnities by The Seller Parties. Without limiting any
other rights that the Agent or any Purchaser may have hereunder or under
applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to)
the Agent and each Purchaser and their respective assigns, officers, directors,
agents and employees (each an "Indemnified Party") from and against any and all
damages, losses, claims, taxes, liabilities, costs, expenses and for all other
amounts payable, including reasonable attorneys' fees (which attorneys may be
employees of the Agent or such Purchaser) and disbursements (all of the
foregoing being collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them arising out of or as a result
27
of this Agreement or the acquisition, either directly or indirectly, by a
Purchaser of an interest in the Receivables, and (B) the Servicer hereby agrees
to indemnify (and pay upon demand to) each Indemnified Party for Indemnified
Amounts awarded against or incurred by any of them arising out of the Servicer's
activities as Servicer hereunder excluding, however, in all of the foregoing
instances under the preceding clauses (A) and (B):
(a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from bad
faith, gross negligence or willful misconduct on the part of the Indemnified
Party seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in
respect of Receivables that are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor; or
(c) taxes imposed by the United States or the jurisdiction in which
such Indemnified Party's principal executive office is located, on or measured
by the overall net income of such Indemnified Party to the extent that the
computation of such taxes is consistent with the characterization for income tax
purposes of the acquisition by the Purchasers of Purchaser Interests as a loan
or loans by the Purchasers to Seller secured by the Receivables, the Related
Security, the Collection Accounts and the Collections;
provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Purchasers to any
Seller Party for amounts otherwise specifically provided to be paid by such
Seller Party under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, Seller or Servicer, as applicable, shall
indemnify each Indemnified Party for Indemnified Amounts (including, without
limitation, losses in respect of uncollectible receivables, regardless of
whether reimbursement therefor would constitute recourse to Seller or the
Servicer) relating to or resulting from:
(i) any representation or warranty made by any Seller Party or any
Originator (or any officers of any such Person) under or in connection
with this Agreement, any other Transaction Document or any other
information or report delivered by any such Person pursuant hereto or
thereto, which shall have been false or incorrect when made or deemed
made;
(ii) the failure by Seller, the Servicer or any Originator to comply
with any applicable law, rule or regulation with respect to any Receivable
or Contract related thereto, or the nonconformity of any Receivable or
Contract included therein with any such applicable law, rule or regulation
or any failure of any Originator to keep or perform any of its
obligations, express or implied, with respect to any Contract;
(iii) any failure of Seller, the Servicer or any Originator to
perform its duties, covenants or other obligations in accordance with the
provisions of this Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage suit, or
other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any
Receivable;
28
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of an Obligor) of an Obligor to the payment of any Receivable
(including, without limitation, a defense based on such Receivable or the
related Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the merchandise or service related to
such Receivable or the furnishing or failure to furnish such merchandise
or services;
(vi) the commingling of Collections of Receivables at any time with
other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, the use of the proceeds of an
Incremental Purchase or a Reinvestment, the ownership of the Purchaser
Interests or any other investigation, litigation or proceeding relating to
Seller, the Servicer or any Originator in which any Indemnified Party
becomes involved as a result of any of the transactions contemplated
hereby;
(viii) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being immune from
civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event described in Section 9.1(d);
(x) any failure of Seller to acquire and maintain legal and
equitable title to, and ownership of any Receivable and the Related
Security and Collections with respect thereto from Insight, free and clear
of any Adverse Claim (other than as created hereunder); or any failure of
Seller to give reasonably equivalent value to an Originator under the
Receivables Sale Agreement in consideration of the transfer by such
Originator of any Receivable, or any attempt by any Person to void such
transfer under statutory provisions or common law or equitable action;
(xi) any failure to vest and maintain vested in the Agent for the
benefit of the Purchasers, or to transfer to the Agent for the benefit of
the Purchasers, legal and equitable title to, and ownership of, a first
priority perfected undivided percentage ownership interest (to the extent
of the Purchaser Interests contemplated hereunder) or security interest in
the Receivables, the Related Security and the Collections, free and clear
of any Adverse Claim (except as created by the Transaction Documents);
(xii) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
Receivable, the Related Security and Collections with respect thereto, and
the proceeds of any thereof, whether at the time of any Incremental
Purchase or Reinvestment or at any subsequent time;
(xiii) any action or omission by any Seller Party which reduces or
impairs the rights of the Agent or the Purchasers with respect to any
Receivable or the value of any such Receivable;
29
(xiv) any attempt by any Person to void any Incremental Purchase or
Reinvestment hereunder under statutory provisions or common law or
equitable action; and
(xv) the failure of any Receivable included in the calculation of
the Net Eligible Receivables Balance as an Eligible Receivable to be an
Eligible Receivable at the time so included.
Section 10.2 Increased Cost and Reduced Return. If after the date
hereof, any Funding Source shall be charged any fee, expense or increased cost
on account of the adoption of any applicable law, rule or regulation (including
any applicable law, rule or regulation regarding capital adequacy) or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof (including, without limitation, any
interpretation of Accounting Research Bulletin No. 51 by the Financial
Accounting Standards Board), or compliance with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency (a "Regulatory Change"): (i) that subjects any Funding Source
to any charge or withholding on or with respect to any Funding Agreement or a
Funding Source's obligations under a Funding Agreement, or on or with respect to
the Receivables, or changes the basis of taxation of payments to any Funding
Source of any amounts payable under any Funding Agreement (except for changes in
the rate of tax on the overall net income of a Funding Source or taxes excluded
by Section 10.1) or (ii) that imposes, modifies or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of a Funding Source, or credit
extended by a Funding Source pursuant to a Funding Agreement or (iii) that
imposes any other condition the result of which is to increase the cost to a
Funding Source of performing its obligations under a Funding Agreement, or to
reduce the rate of return on a Funding Source's capital as a consequence of its
obligations under a Funding Agreement, or to reduce the amount of any sum
received or receivable by a Funding Source under a Funding Agreement or to
require any payment calculated by reference to the amount of interests or loans
held or interest received by it, then, upon demand by the Agent within six (6)
months after the Agent has knowledge of the event giving rise to such demand,
together with a certificate setting forth in reasonable detail the Agent's
computations supporting such demand, Seller shall pay to the Agent, for the
benefit of the relevant Funding Source, such amounts charged to such Funding
Source or such amounts to otherwise compensate such Funding Source for such
increased cost or such reduction.
Section 10.3 Other Costs and Expenses. Seller shall pay to the Agent
and Jupiter all reasonable costs and out-of-pocket expenses in connection with
the preparation, execution, delivery and administration of this Agreement, the
transactions contemplated hereby and the other documents to be delivered
hereunder, including without limitation, the cost of Jupiter's auditors auditing
the books, records and procedures of Seller (provided, that prior to the
occurrence of any Amortization Event or Potential Amortization Event, Seller
shall only be required to pay for the cost of one such audit per calendar year),
reasonable fees and out-of-pocket expenses of legal counsel for Jupiter and the
Agent (which such counsel may be employees of Jupiter or the Agent) with respect
thereto and with respect to advising Jupiter and the Agent as to their
respective rights and remedies under this Agreement. Seller shall pay to the
Agent any and all reasonable costs and expenses of the Agent and the Purchasers,
if any,
30
including reasonable counsel fees and expenses in connection with the
enforcement of this Agreement and the other documents delivered hereunder and in
connection with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following an Amortization
Event.
Section 10.4 Accounting. Except as provided to the contrary herein,
all accounting terms used in the calculation of any financial covenant or test
shall be interpreted and all accounting determinations hereunder in the
calculation of any financial covenant or test shall be made in accordance with
Agreement Accounting Principles. If any changes in generally accepted accounting
principles are hereafter required or permitted and are adopted by Insight or any
of its Subsidiaries with the agreement of its independent certified public
accountants and such changes result in a change in the method of calculation of
any of the financial covenants, tests, restrictions or standards herein or in
the related definitions or terms used therein ("Accounting Changes"), the
parties hereto agree, at Insight's request, to enter into negotiations, in good
faith, in order to amend such provisions in a credit neutral manner so as to
reflect equitably such changes with the desired result that the criteria for
evaluating Insight's and its Subsidiaries' financial condition shall be the same
after such changes as if such changes had not been made; provided, however,
until such provisions are amended in a manner reasonably satisfactory to the
Agent and the Required Financial Institutions, no Accounting Change shall be
given effect in such calculations. In the event such amendment is entered into,
all references in this Agreement to Agreement Accounting Principles shall mean
generally accepted accounting principles, including the Accounting Change, as of
the date of such amendment. Notwithstanding the foregoing, all financial
statements to be delivered by Insight pursuant to Section 7.1 shall be prepared
in accordance with generally accepted accounting principles in effect at such
time.
ARTICLE XI
THE AGENT
Section 11.1 Authorization and Action. Each Purchaser hereby
designates and appoints Bank One to act as its agent hereunder and under each
other Transaction Document, and authorizes the Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the Agent by
the terms of this Agreement and the other Transaction Documents together with
such powers as are reasonably incidental thereto. The Agent shall not have any
duties or responsibilities, except those expressly set forth herein or in any
other Transaction Document, or any fiduciary relationship with any Purchaser,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns. The
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible payment in full of all Aggregate Unpaids.
Each Purchaser hereby authorizes the Agent to file each of the Uniform
Commercial Code financing statements
31
and to execute the Collection Account Agreements on behalf of such Purchaser
(the terms of which shall be binding on such Purchaser).
Section 11.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and each other Transaction Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 11.3 Exculpatory Provisions. Neither the Agent nor any of
its directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by any Seller Party contained in this Agreement, any other
Transaction Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement, or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Transaction Document or any other document furnished in connection
herewith or therewith, or for any failure of any Seller Party to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article VI, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith. The Agent shall
not be under any obligation to any Purchaser to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement or any other Transaction Document, or to
inspect the properties, books or records of the Seller Parties. The Agent shall
not be deemed to have knowledge of any Amortization Event or Potential
Amortization Event unless the Agent has received notice from Seller or a
Purchaser.
Section 11.4 Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Seller), independent
accountants and other experts selected by the Agent. The Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other Transaction Document unless it shall first receive such
advice or concurrence of Jupiter or the Required Financial Institutions or all
of the Purchasers, as applicable, as it deems appropriate and it shall first be
indemnified to its satisfaction by the Purchasers, provided that unless and
until the Agent shall have received such advice, the Agent may take or refrain
from taking any action, as the Agent shall deem advisable and in the best
interests of the Purchasers. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Jupiter or
the Required Financial Institutions or all of the Purchasers, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.
Section 11.5 Non-Reliance on Agent and Other Purchasers. Each
Purchaser expressly acknowledges that neither the Agent, nor any of its
officers, directors, employees,
32
agents, attorneys-in-fact or affiliates has made any representations or
warranties to it and that no act by the Agent hereafter taken, including,
without limitation, any review of the affairs of any Seller Party, shall be
deemed to constitute any representation or warranty by the Agent. Each Purchaser
represents and warrants to the Agent that it has and will, independently and
without reliance upon the Agent or any other Purchaser and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of Seller and made its own
decision to enter into this Agreement, the other Transaction Documents and all
other documents related hereto or thereto.
Section 11.6 Reimbursement and Indemnification. The Financial
Institutions agree to reimburse and indemnify the Agent and its officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller Parties (i) for
any amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Seller Parties hereunder and (ii) for any other expenses
incurred by the Agent, in its capacity as Agent and acting on behalf of the
Purchasers, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.
Section 11.7 Agent in its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with Seller or any Affiliate of Seller as though the Agent were
not the Agent hereunder. With respect to the acquisition of Purchaser Interests
pursuant to this Agreement, the Agent shall have the same rights and powers
under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Agent, and the terms "Financial
Institution," "Purchaser," "Financial Institutions" and "Purchasers" shall
include the Agent in its individual capacity.
Section 11.8 Successor Agent. The Agent may, upon five days' notice
to Seller and the Purchasers, and the Agent will, upon the direction of all of
the Purchasers (other than the Agent, in its individual capacity) resign as
Agent. If the Agent shall resign, then the Required Financial Institutions
during such five-day period shall appoint from among the Purchasers a successor
agent. If for any reason no successor Agent is appointed by the Required
Financial Institutions during such five-day period, then effective upon the
termination of such five day period, the Purchasers shall perform all of the
duties of the Agent hereunder and under the other Transaction Documents and
Seller and the Servicer (as applicable) shall make all payments in respect of
the Aggregate Unpaids directly to the applicable Purchasers and for all purposes
shall deal directly with the Purchasers. After the effectiveness of any retiring
Agent's resignation hereunder as Agent, the retiring Agent shall be discharged
from its duties and obligations hereunder and under the other Transaction
Documents and the provisions of this Article XI and Article X shall continue in
effect for its benefit with respect to any actions taken or omitted to be taken
by it while it was Agent under this Agreement and under the other Transaction
Documents.
33
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments.
(a) Seller and each Financial Institution hereby agree and consent
to the complete or partial assignment by Jupiter of all or any portion of its
rights under, interest in, title to and obligations under this Agreement to (i)
the Financial Institutions pursuant to Section 13.1, (ii) to any commercial
paper issuing conduit for which Bank One serves as administrative agent or (iii)
with the prior written consent of the Seller (which consent shall not be
unreasonably withheld), to any other Person, and upon such assignment, Jupiter
shall be released from its obligations so assigned. Further, Seller and each
Financial Institution hereby agree that any assignee of Jupiter of this
Agreement or all or any of the Purchaser Interests of Jupiter shall have all of
the rights and benefits under this Agreement as if the term "Jupiter" explicitly
referred to such party, and no such assignment shall in any way impair the
rights and benefits of Jupiter hereunder. Neither Seller nor the Servicer shall
have the right to assign its rights or obligations under this Agreement.
(b) Any Financial Institution may at any time and from time to time
assign to one or more Persons ("Purchasing Financial Institutions") all or any
part of its rights and obligations under this Agreement pursuant to an
assignment agreement, substantially in the form set forth in Exhibit VII hereto
(the "Assignment Agreement") executed by such Purchasing Financial Institution
and such selling Financial Institution. The consent of Jupiter shall be required
prior to the effectiveness of any such assignment. Each assignee of a Financial
Institution must (i) have a short-term debt rating of A-1 or better by Standard
& Poor's Ratings Group and P-1 by Xxxxx'x Investor Service, Inc. and (ii) agree
to deliver to the Agent, promptly following any request therefor by the Agent or
Jupiter, an enforceability opinion in form and substance satisfactory to the
Agent and Jupiter. Upon delivery of the executed Assignment Agreement to the
Agent, such selling Financial Institution shall be released from its obligations
hereunder to the extent of such assignment. Thereafter the Purchasing Financial
Institution shall for all purposes be a Financial Institution party to this
Agreement and shall have all the rights and obligations of a Financial
Institution under this Agreement to the same extent as if it were an original
party hereto and no further consent or action by Seller, the Purchasers or the
Agent shall be required.
(c) Each of the Financial Institutions agrees that in the event that
it shall cease to have a short-term debt rating of A-1 or better by Standard &
Poor's Ratings Group and P-1 by Xxxxx'x Investor Service, Inc. (an "Affected
Financial Institution"), such Affected Financial Institution shall be obliged,
at the request of Jupiter or the Agent, to assign all of its rights and
obligations hereunder to (x) another Financial Institution or (y) another
funding entity nominated by the Agent and acceptable to Jupiter, and willing to
participate in this Agreement through the Liquidity Termination Date in the
place of such Affected Financial Institution; provided that the Affected
Financial Institution receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such Financial Institution's Pro Rata Share of
the Aggregate Capital and Yield owing to the Financial Institutions and all
accrued but unpaid fees and other costs and expenses payable in respect of its
Pro Rata Share of the Purchaser Interests of the Financial Institutions.
34
Section 12.2 Participations. Any Financial Institution may, in the
ordinary course of its business at any time sell to one or more Persons (each a
"Participant") participating interests in its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, its obligation to pay Jupiter its
Acquisition Amounts or any other interest of such Financial Institution
hereunder. Notwithstanding any such sale by a Financial Institution of a
participating interest to a Participant, such Financial Institution's rights and
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, Jupiter and the Agent shall continue to deal
solely and directly with such Financial Institution in connection with such
Financial Institution's rights and obligations under this Agreement. Each
Financial Institution agrees that any agreement between such Financial
Institution and any such Participant in respect of such participating interest
shall not restrict such Financial Institution's right to agree to any amendment,
supplement, waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification described in Section 14.1(b)(i).
ARTICLE XIII
LIQUIDITY FACILITY
Section 13.1 Transfer to Financial Institutions. Each Financial
Institution hereby agrees, subject to Section 13.4, that immediately upon
written notice from Jupiter delivered on or prior to the Liquidity Termination
Date, it shall acquire by assignment from Jupiter, without recourse or warranty,
its Pro Rata Share of one or more of the Purchaser Interests of Jupiter as
specified by Jupiter. Each such assignment by Jupiter shall be made pro rata
among all of the Financial Institutions, except for pro rata assignments to one
or more Terminating Financial Institutions pursuant to Section 13.6. Each such
Financial Institution shall, no later than 1:00 p.m. (Chicago time) on the date
of such assignment, pay in immediately available funds (unless another form of
payment is otherwise agreed between Jupiter and any Financial Institution) to
the Agent at an account designated by the Agent, for the benefit of Jupiter, its
Acquisition Amount. Unless a Financial Institution has notified the Agent that
it does not intend to pay its Acquisition Amount, the Agent may assume that such
payment has been made and may, but shall not be obligated to, make the amount of
such payment available to Jupiter in reliance upon such assumption. Jupiter
hereby sells and assigns to the Agent for the ratable benefit of the Financial
Institutions, and the Agent hereby purchases and assumes from Jupiter, effective
upon the receipt by Jupiter of the Jupiter Transfer Price, the Purchaser
Interests of Jupiter which are the subject of any transfer pursuant to this
Article XIII.
Section 13.2 Transfer Price Reduction Yield. If the Adjusted
Liquidity Price is included in the calculation of the Jupiter Transfer Price for
any Purchaser Interest, each Financial Institution agrees that the Agent shall
pay to Jupiter the Reduction Percentage of any Yield received by the Agent with
respect to such Purchaser Interest.
Section 13.3 Payments to Jupiter. In consideration for the reduction
of the Jupiter Transfer Prices by the Jupiter Transfer Price Reductions,
effective only at such time as the aggregate amount of the Capital of the
Purchaser Interests of the Financial Institutions equals the Jupiter Residual,
each Financial Institution hereby agrees that the Agent shall not distribute to
the Financial Institutions and shall immediately remit to Jupiter any Yield,
Collections or
35
other payments received by it to be applied pursuant to the terms hereof or
otherwise to reduce the Capital of the Purchaser Interests of the Financial
Institutions.
Section 13.4 Limitation on Commitment to Purchase from Jupiter.
Notwithstanding anything to the contrary in this Agreement, no Financial
Institution shall have any obligation to purchase any Purchaser Interest from
Jupiter, pursuant to Section 13.1 or otherwise, if:
(i) Jupiter shall have voluntarily commenced any proceeding or filed
any petition under any bankruptcy, insolvency or similar law seeking the
dissolution, liquidation or reorganization of Jupiter or taken any
corporate action for the purpose of effectuating any of the foregoing; or
(ii) involuntary proceedings or an involuntary petition shall have
been commenced or filed against Jupiter by any Person under any
bankruptcy, insolvency or similar law seeking the dissolution, liquidation
or reorganization of Jupiter and such proceeding or petition shall have
not been dismissed.
Section 13.5 Defaulting Financial Institutions. If one or more
Financial Institutions defaults in its obligation to pay its Acquisition Amount
pursuant to Section 13.1 (each such Financial Institution shall be called a
"Defaulting Financial Institution" and the aggregate amount of such defaulted
obligations being herein called the "Jupiter Transfer Price Deficit"), then upon
notice from the Agent, each Financial Institution other than the Defaulting
Financial Institutions (a "Non-Defaulting Financial Institution") shall promptly
pay to the Agent, in immediately available funds, an amount equal to the lesser
of (x) such Non-Defaulting Financial Institution's proportionate share (based
upon the relative Liquidity Commitments of the Non-Defaulting Financial
Institutions) of the Jupiter Transfer Price Deficit and (y) the unused portion
of such Non-Defaulting Financial Institution's Liquidity Commitment. A
Defaulting Financial Institution shall forthwith upon demand pay to the Agent
for the account of the Non-Defaulting Financial Institutions all amounts paid by
each Non-Defaulting Financial Institution on behalf of such Defaulting Financial
Institution, together with interest thereon, for each day from the date a
payment was made by a Non-Defaulting Financial Institution until the date such
Non-Defaulting Financial Institution has been paid such amounts in full, at a
rate per annum equal to the Federal Funds Effective Rate plus two percent (2%).
In addition, without prejudice to any other rights that Jupiter may have under
applicable law, each Defaulting Financial Institution shall pay to Jupiter
forthwith upon demand, the difference between such Defaulting Financial
Institution's unpaid Acquisition Amount and the amount paid with respect thereto
by the Non-Defaulting Financial Institutions, together with interest thereon,
for each day from the date of the Agent's request for such Defaulting Financial
Institution's Acquisition Amount pursuant to Section 13.1 until the date the
requisite amount is paid to Jupiter in full, at a rate per annum equal to the
Federal Funds Effective Rate plus two percent (2%).
Section 13.6 Terminating Financial Institutions.
(a) Each Financial Institution hereby agrees to deliver written
notice to the Agent not more than 30 Business Days and not less than 5 Business
Days prior to the Liquidity Termination Date indicating whether such Financial
Institution intends to renew its Back-Up
36
Commitment and Liquidity Commitment hereunder. If any Financial Institution
fails to deliver such notice on or prior to the date that is 5 Business Days
prior to the Liquidity Termination Date, such Financial Institution will be
deemed to have declined to renew its Back-Up Commitment and Liquidity Commitment
(each Financial Institution which has declined or has been deemed to have
declined to renew its Back-Up Commitment and Liquidity Commitment hereunder, a
"Non-Renewing Financial Institution"). The Agent shall promptly notify Jupiter
and the Seller Parties of each Non-Renewing Financial Institution and Jupiter,
in its sole discretion, may (A) to the extent of Commitment Availability,
declare that such Non-Renewing Financial Institution's Back-Up Commitment and
Liquidity Commitment shall, to such extent, automatically terminate on a date
specified by Jupiter on or before the Liquidity Termination Date or (B) upon one
(1) Business Days' notice to such Non-Renewing Financial Institution assign to
such Non-Renewing Financial Institution on a date specified by Jupiter its Pro
Rata Share of the aggregate Purchaser Interests then held by Jupiter, subject
to, and in accordance with, Section 13.1. In addition, Jupiter may, in its sole
discretion, at any time (x) to the extent of Commitment Availability, declare
that any Affected Financial Institution's Back-Up Commitment and Liquidity
Commitment shall automatically terminate on a date specified by Jupiter or (y)
assign to any Affected Financial Institution on a date specified by Jupiter its
Pro Rata Share of the aggregate Purchaser Interests then held by Jupiter,
subject to, and in accordance with, Section 13.1 (each Affected Financial
Institution or each Non-Renewing Financial Institution is hereinafter referred
to as a "Terminating Financial Institution"). The parties hereto expressly
acknowledge that any declaration of the termination of any Back-Up Commitment
and Liquidity Commitment, any assignment pursuant to this Section 13.6 and the
order of priority of any such termination or assignment among Terminating
Financial Institutions shall be made by Jupiter in its sole and absolute
discretion.
(b) Upon any assignment to a Terminating Financial Institution as
provided in this Section 13.6, any remaining Back-Up Commitment and Liquidity
Commitment of such Terminating Financial Institution shall automatically
terminate. Upon reduction to zero of the Capital of all of the Purchaser
Interests of a Terminating Financial Institution (after application of
Collections thereto pursuant to Sections 2.2 and 2.3) all rights and obligations
of such Terminating Financial Institution hereunder shall be terminated and such
Terminating Financial Institution shall no longer be a "Financial Institution"
hereunder; provided, however, that the provisions of Article X shall continue in
effect for its benefit with respect to Purchaser Interests held by such
Terminating Financial Institution prior to its termination as a Financial
Institution.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Waivers and Amendments.
(a) No failure or delay on the part of the Agent or any Purchaser in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law. Any
37
waiver of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing in accordance with the provisions of this
Section 14.1(b). Jupiter, Seller and the Agent, at the direction of the Required
Financial Institutions, may enter into written modifications or waivers of any
provisions of this Agreement, provided, however, that no such modification or
waiver shall:
(i) without the consent of each affected Purchaser, (A) extend the
Liquidity Termination Date or the date of any payment or deposit of
Collections by Seller or the Servicer, (B) reduce the rate or extend the
time of payment of Yield or any CP Costs (or any component of Yield or CP
Costs), (C) reduce any fee payable to the Agent for the benefit of the
Purchasers, (D) except pursuant to Article XII hereof, change the amount
of the Capital of any Purchaser, any Financial Institution's Pro Rata
Share (except pursuant to Sections 13.1 or 13.5) or any Financial
Institution's Bank-Up Commitment or Liquidity Commitment, (E) amend,
modify or waive any provision of the definition of Required Financial
Institutions or this Section 14.1(b), (F) consent to or permit the
assignment or transfer by Seller of any of its rights and obligations
under this Agreement, (G) change the definition of "Eligible Receivable,"
"Loss Horizon Ratio," "Loss Percentage Floor," "Loss Ratio," "Loss
Reserve," "Loss Reserve Percentage," "Dilution Horizon Ratio," " Dilution
Ratio," "Dilution Reserve," "Dilution Reserve Floor," "Dynamic Dilution
Reserve Ratio, " "Dilutions," "Delinquency Ratio," "Default Proxy Ratio,"
"Default Ratio," "Delinquent Receivable," "Servicer Reserve" or "Yield
Reserve" or (H) amend or modify any defined term (or any defined term used
directly or indirectly in such defined term) used in clauses (A) through
(G) above in a manner that would circumvent the intention of the
restrictions set forth in such clauses; or
(ii) without the written consent of the then Agent, amend, modify or
waive any provision of this Agreement if the effect thereof is to affect
the rights or duties of such Agent.
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of Seller, the Agent may amend this Agreement
solely to add additional Persons as Financial Institutions hereunder and (ii)
the Agent, the Required Financial Institutions and Jupiter may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII,
Section 14.13 or any other provision of this Agreement without the consent of
Seller, provided that such amendment has no negative impact upon Seller. Any
modification or waiver made in accordance with this Section 14.1 shall apply to
each of the Purchasers equally and shall be binding upon Seller, the Purchasers
and the Agent.
Section 14.2 Notices. Except as provided in this Section 14.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication
38
shall be effective (i) if given by telecopy, upon the receipt thereof, if given
by mail, three (3) Business Days after the time such communication is deposited
in the mail with first class postage prepaid or if given by any other means,
when received at the address specified in this Section 14.2. Seller hereby
authorizes the Agent to effect purchases and Tranche Period and Discount Rate
selections based on telephonic notices made by any Person whom the Agent in good
faith believes to be acting on behalf of Seller. Seller agrees to deliver
promptly to the Agent a written confirmation of each telephonic notice signed by
an authorized officer of Seller; provided, however, the absence of such
confirmation shall not affect the validity of such notice. If the written
confirmation differs from the action taken by the Agent, the records of the
Agent shall govern absent manifest error.
Section 14.3 Ratable Payments. If any Purchaser, whether by setoff
or otherwise, has payment made to it with respect to any portion of the
Aggregate Unpaids owing to such Purchaser (other than payments received pursuant
to Section 10.2 or 10.3 or repayments of Capital to a Terminating Financial
Institution prior to an Amortization Date pursuant to Section 2.2) in a greater
proportion than that received by any other Purchaser entitled to receive a
ratable share of such Aggregate Unpaids, such Purchaser agrees, promptly upon
demand, to purchase for cash without recourse or warranty a portion of such
Aggregate Unpaids held by the other Purchasers so that after such purchase each
Purchaser will hold its ratable proportion of such Aggregate Unpaids; provided
that if all or any portion of such excess amount is thereafter recovered from
such Purchaser, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, but without interest.
Section 14.4 Protection of Ownership Interests of the Purchasers.
(a) Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary, or that the Agent may reasonably request, to
perfect, protect or more fully evidence the Purchaser Interests, or to enable
the Agent or the Purchasers to exercise and enforce their rights and remedies
hereunder. At any time following the occurrence and during the continuance of an
Amortization Event or a Potential Amortization Event, the Agent may, or the
Agent may direct Seller or the Servicer to, notify the Obligors of Receivables,
at Seller's expense, of the ownership or security interests of the Purchasers
under this Agreement and may also direct that payments of all amounts due or
that become due under any or all Receivables be made directly to the Agent or
its designee. Seller or the Servicer (as applicable) shall, at any Purchaser's
request, withhold the identity of such Purchaser in any such notification.
(b) If any Seller Party fails to perform any of its obligations
hereunder, the Agent or any Purchaser may (but shall not be required to)
perform, or cause performance of, such obligations, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes
the Agent at any time and from time to time in the sole discretion of the Agent,
and appoints the Agent as its attorney-in-fact, to act on behalf of such Seller
Party (i) to file financing statements identifying Seller as debtor which are
necessary or desirable in the Agent's sole discretion to perfect and to maintain
the perfection and priority of the interest of the Purchasers in the Receivables
and (ii) to file a carbon, photographic or other reproduction of this Agreement
or any financing statement with respect to the Receivables as a financing
statement in such
39
offices as the Agent in its sole discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the interests of the
Purchasers in the Receivables. This appointment is coupled with an interest and
is irrevocable.
Section 14.5 Confidentiality.
(a) Each Seller Party and each Purchaser shall maintain and shall
cause each of its employees and officers to maintain the confidentiality of this
Agreement and the other confidential or proprietary information with respect to
the Agent and Jupiter and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that such Seller Party and such Purchaser and its
officers and employees may disclose such information to such Seller Party's and
such Purchaser's external accountants and attorneys and as required by any
applicable law or order of any judicial or administrative proceeding (including,
without limitation, filings with the Securities and Exchange Commission and
disclosures made to regulators and investors).
(b) Anything herein to the contrary notwithstanding, each Seller
Party hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Agent, the Financial Institutions or Jupiter by each
other, (ii) by the Agent or the Purchasers to any prospective or actual assignee
or participant of any of them and (iii) by the Agent to any rating agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to Jupiter or any entity organized for the purpose of purchasing, or
making loans secured by, financial assets for which Bank One acts as the
administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing. In addition, the Purchasers
and the Agent may disclose any such nonpublic information pursuant to any law,
rule, regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings (whether or not having the force or effect
of law).
Section 14.6 Bankruptcy Petition. Seller, the Servicer, the Agent
and each Financial Institution hereby covenants and agrees that, prior to the
date that is one year and one day after the payment in full of all outstanding
senior indebtedness of Jupiter or any Unconditional Liquidity Provider, it will
not institute against, or join any other Person in instituting against, Jupiter
or any such entity any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States.
Section 14.7 Limitation of Liability. Except with respect to any
claim arising out of the bad faith, willful misconduct or gross negligence of
Jupiter, the Agent or any Financial Institution, no claim may be made by any
Seller Party or any other Person against Jupiter, the Agent or any Financial
Institution or their respective Affiliates, directors, officers, employees,
attorneys or agents for any special, indirect, consequential or punitive damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement, or
any act, omission or event occurring in connection therewith; and each Seller
Party hereby waives, releases, and agrees not to xxx upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
40
Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS
(INCLUDING, BUT NOT LIMITED TO, 735 ILCS SECTION 105/5-1 ET SEQ., BUT OTHERWISE
WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS) EXCEPT TO THE EXTENT THAT THE
PERFECTION OF THE PURCHASERS' SECURITY INTEREST IN THE PURCHASER INTERESTS IS
GOVERNED BY THE LAW OF ANOTHER STATE, AS REQUIRED BY THE LAWS OF THE STATE OF
ILLINOIS.
Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING
PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION TO
THE EXTENT NECESSARY TO REALIZE ON THE INTERESTS OF THE PURCHASERS AND THE AGENT
IN ANY RECEIVABLES, RELATED SECURITY OR PROCEEDS THEREOF. ANY JUDICIAL
PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER OR ANY
AFFILIATE OF ANY SUCH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY
DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS AGREEMENT SHALL BE
BROUGHT ONLY IN A UNITED STATES FEDERAL COURT OR AN ILLINOIS STATE COURT SETTING
IN CHICAGO, ILLINOIS.
Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
Section 14.11 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain the
final and complete integration of all prior expressions by the parties hereto
with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
41
(b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns
(including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
Party pursuant to Article V, (ii) the indemnification and payment provisions of
Article X, and Sections 14.5 and 14.6 shall be continuing and shall survive any
termination of this Agreement.
Section 14.12 Counterparts; Severability; Section References. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
Section 14.13 Bank One Roles. Each of the Financial Institutions
acknowledges that Bank One acts, or may in the future act, (i) as administrative
agent for Jupiter or any Financial Institution, (ii) as issuing and paying agent
for the Commercial Paper, (iii) to provide credit or liquidity enhancement for
the timely payment for the Commercial Paper and (iv) to provide other services
from time to time for Jupiter or any Financial Institution (collectively, the
"Bank One Roles"). Without limiting the generality of this Section 14.13, each
Financial Institution hereby acknowledges and consents to any and all Bank One
Roles and agrees that in connection with any Bank One Role, Bank One may take,
or refrain from taking, any action that it, in its discretion, deems
appropriate, including, without limitation, in its role as administrative agent
for Jupiter, and the giving of notice to the Agent of a mandatory purchase
pursuant to Section 13.1.
Section 14.14 Characterization.
(a) Except as specifically provided in this Agreement, each sale of
a Purchaser Interest hereunder is made without recourse to Seller; provided,
however, that (i) Seller shall be liable to each Purchaser and the Agent for all
representations, warranties, covenants and indemnities made by Seller pursuant
to the terms of this Agreement, and (ii) such sale does not constitute and is
not intended to result in an assumption by any Purchaser or the Agent or any
assignee thereof of any obligation of Seller, Insight, any Originator or any
other person arising in connection with the Receivables, the Related Security,
or the related Contracts, or any other obligations of Seller, Insight or any
Originator.
(b) In addition to any ownership interest which the Agent may from
time to time acquire pursuant hereto, Seller hereby grants to the Agent for the
ratable benefit of the Purchasers a valid and perfected security interest in all
of Seller's right, title and interest in, to and under all Receivables now
existing or hereafter arising, the Collections, each Lock-Box,
42
each Collection Account, all Related Security, all other rights and payments
relating to such Receivables and the Receivables Sale Agreement (including,
without limitation, (a) all rights to indemnification arising thereunder, and
(b) all UCC financing statements filed pursuant thereto), all proceeds of any
thereof and all other assets in which the Agent on behalf of the Purchasers has
acquired, may hereafter acquire and/or purports to have acquired an interest
under this Agreement prior to all other liens on and security interests therein
to secure the prompt and complete payment of the Aggregate Unpaids. The Agent
and the Purchasers shall have, in addition to the rights and remedies that they
may have under this Agreement, all other rights and remedies provided to a
secured creditor under the UCC and other applicable law, which rights and
remedies shall be cumulative. The Seller hereby assigns its security interests
against the Originators under the Receivables Sale Agreement to the Agent for
the benefit of the Purchasers.
(c) In connection with Seller's transfer of its right, title and
interest in, to and under the Receivables Sale Agreement, Seller agrees that the
Agent shall have the right to enforce Seller's rights and remedies under the
Receivables Sale Agreement to receive all amounts payable thereunder or in
connection therewith, to consent to amendments, modifications or waivers
thereof, and to direct, instruct or request any action thereunder, but in each
case without any obligation on the part of the Agent or any Purchaser or any of
its or their respective Affiliates to perform any of the obligations of Seller
under the Receivables Sale Agreement. To the extent that Seller enforces
Seller's rights and remedies under the Receivables Sale Agreement from and after
the occurrence of an Amortization Event, and during the continuance thereof, the
Agent shall have the exclusive right to direct such enforcement by Seller.
SIGNATURE PAGES FOLLOW
43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
INSIGHT RECEIVABLES, LLC
By: Insight Receivables Holding, LLC, its
sole member
By:
-------------------------------------------
Name:
Title:
Address: 000 Xxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Copy to: Insight Receivables, LLC
0000 Xxxxx Xxxx Xxxxxx
Xxxxx, XX 00000
Fax: (000) 000-0000
INSIGHT ENTERPRISES, INC.
By:
-------------------------------------------
Name:
Title:
Address: 0000 X. Xxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: General Counsel and Chief Financial
Officer
Fax: (000) 000-0000 and (000) 000-0000
Signature Page to Receivables Purchase Agreement
JUPITER SECURITIZATION CORPORATION
By:
-------------------------------------------
Authorized Signatory
Address: c/o Bank One, NA (Main Office Chicago),
as Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
FAX: (000) 000-0000
BANK ONE, NA (MAIN OFFICE CHICAGO), as a Financial
Institution and as Agent
By:
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Authorized Signatory
Address: Bank One, NA (Main Office Chicago)
Asset Backed Finance
Suite IL1-0596, 1-21
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Signature Page to Receivables Purchase Agreement
EXHIBIT I
DEFINITIONS
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):
"Accrual Period" means each Fiscal Month, provided that the initial
Accrual Period hereunder means the period from (and including) the date of the
initial purchase hereunder to (and including) the last day of the Fiscal Month
thereafter.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the Closing Date, by which Insight or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage of voting
power) of the outstanding ownership interests of a partnership or limited
liability company of any Person.
"Acquisition Amount" means, on the date of any purchase from Jupiter
of one or more Purchaser Interests pursuant to Section 13.1, with respect to
each Financial Institution, the lesser of (a) such Financial Institution's Pro
Rata Share of the sum of (i) the lesser of (A) the Adjusted Liquidity Price of
each such Purchaser Interest and (B) the Capital of each such Purchaser Interest
and (ii) all accrued and unpaid CP Costs for each such Purchaser Interest and
(b) such Financial Institution's Unused Liquidity Commitment.
"Acquisition Purchase Price" means the total consideration and other
amounts payable in connection with any Acquisition, including, without
limitation, any portion of the consideration payable in cash, all Indebtedness,
liabilities and contingent obligations incurred or assumed in connection with
such Acquisition and all transaction costs and expenses incurred in connection
with such Acquisition, but exclusive of the value of any capital stock or other
equity interests of Insight or any Subsidiary issued as consideration for such
Acquisition.
"Adjusted Liquidity Price" means an amount equal to:
[GRAPH]
where:
Exh. I-1
RI = the undivided percentage interest evidenced by such
Purchaser Interest.
DC = the Deemed Collections.
NDR = the Outstanding Balance of all Receivables as to which
any payment, or part thereof, has not remained unpaid for 120 days or more from
the original invoice date for such payment.
LP = the Loss Percentage Floor.
Each of the foregoing shall be determined from the most recent Monthly Report
received from the Servicer.
"Administrative Agent" means Bank One, in its capacity as
administrative agent under the Credit Agreement.
"Adverse Claim" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"Affected Financial Institution" has the meaning specified in
Section 12.1(c).
"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 or any Subsidiary of such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities of the controlled Person or 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
stock, by contract or otherwise.
"Agent" has the meaning set forth in the preamble to this Agreement.
"Aggregate Capital" means, on any date of determination, the
aggregate amount of Capital of all Purchaser Interests outstanding on such date.
"Aggregate Reduction" has the meaning specified in Section 1.3.
"Aggregate Reserves" means, on any date of determination, the sum of
the Loss Reserve, the Yield Reserve, the Dilution Reserve and the Servicer
Reserve.
"Aggregate Unpaids" means, at any time, an amount equal to the sum
of all, Aggregate Capital and all other unpaid Obligations (whether due or
accrued) at such time.
"Agreement" means this Receivables Purchase Agreement, as it may be
amended or modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect in the United States from time to time,
applied in a manner consistent with
Exh. I-2
that used in preparing the financial statements of Insight referred to in
Section 5.1(y); provided, however, that except as provided in Section 10.4, with
respect to the calculation of the financial covenants set forth in Sections
9.1(l), 9.1(m), and 9.1(n) (and the defined terms used in such Sections),
"Agreement Accounting Principles" means generally accepted accounting principles
as in effect in the United States as of the Closing Date, applied in a manner
consistent with that used in preparing the financial statements of Insight
referred to in Section 5.1(y) hereof.
"Amortization Date" means the earliest to occur of (i) the day on
which any of the conditions precedent set forth in Section 6.2 are not
satisfied, (ii) the Business Day immediately prior to the occurrence of an
Amortization Event set forth in Section 9.1(d)(ii), (iii) the Business Day
specified in a written notice from the Agent following the occurrence of any
other Amortization Event and (iv) the date which is 30 days after the Agent's
receipt of written notice from Seller that it wishes to terminate the facility
evidenced by this Agreement.
"Amortization Event" has the meaning specified in Article IX.
"Assignment Agreement" has the meaning set forth in Section 12.1(b).
"Authorized Officer" means, with respect to any Person, its
president, corporate controller, treasurer or chief financial officer.
"Back-Up Commitment" means, for each Financial Institution, the
commitment of such Financial Institution to purchase Purchaser Interests from
Seller, in an amount not to exceed (a) in the aggregate, the amount set forth
opposite such Financial Institution's name under the Back-Up Commitment column
on Schedule A to this Agreement, as such amount may be modified in accordance
with the terms hereof (including, without limitation, any termination of Back-Up
and Liquidity Commitments pursuant to Section 13.6) and (b) with respect to any
individual purchase from the Seller hereunder, the lesser of (i) its Back-Up Pro
Rata Share of the Purchase Price therefor and (ii) its Unused Back-Up
Commitment.
"Back-Up Pro Rata Share" means, for each Financial Institution, a
percentage equal to (i) the Back-Up Commitment of such Financial Institution,
divided by (ii) the aggregate amount of all Back-Up Commitments of all Financial
Institutions hereunder, adjusted as necessary to give effect to the application
of the terms of Sections 13.5 or 13.6.
"Bank One" means Bank One, NA (Main Office Chicago) in its
individual capacity and its successors.
"Borrowing Base Certificate" has the meaning set forth in the Credit
Agreement.
"Broken Funding Costs" means for any Purchaser Interest which: (i)
has its Capital reduced without compliance by Seller with the notice
requirements hereunder or (ii) does not become subject to an Aggregate Reduction
following the delivery of any Reduction Notice or (iii) is assigned under
Article XIII or terminated prior to the date on which it was originally
scheduled to end; an amount equal to the excess, if any, of (A) the CP Costs or
Yield (as applicable) that would have accrued during the remainder of the
Tranche Periods or the tranche periods for Commercial Paper determined by the
Agent to relate to such Purchaser Interest (as applicable) subsequent to the
date of such reduction, assignment or termination (or in respect of
Exh. I-3
clause (ii) above, the date such Aggregate Reduction was designated to occur
pursuant to the Reduction Notice) of the Capital of such Purchaser Interest if
such reduction, assignment or termination had not occurred or such Reduction
Notice had not been delivered, over (B) the sum of (x) to the extent all or a
portion of such Capital is allocated to another Purchaser Interest, the amount
of CP Costs or Yield actually accrued during the remainder of such period on
such Capital for the new Purchaser Interest, and (y) to the extent such Capital
is not allocated to another Purchaser Interest, the income, if any, actually
received during the remainder of such period by the holder of such Purchaser
Interest from investing the portion of such Capital not so allocated. In the
event that the amount referred to in clause (B) exceeds the amount referred to
in clause (A), the relevant Purchaser or Purchasers agree to pay to Seller the
amount of such excess. All Broken Funding Costs shall be due and payable
hereunder upon demand.
"Business Day" means any day on which banks are not authorized or
required to close in New York, New York or Chicago, Illinois and The Depository
Trust Company of New York is open for business, and, if the applicable Business
Day relates to any computation or payment to be made with respect to the LIBO
Rate, any day on which dealings in dollar deposits are carried on in the London
interbank market.
"Capital" of any Purchaser Interest means, at any time, (A) the
Purchase Price of such Purchaser Interest, minus (B) the sum of the aggregate
amount of Collections and other payments received by the Agent which in each
case are applied to reduce such Capital in accordance with the terms and
conditions of this Agreement; provided that such Capital shall be restored (in
accordance with Section 2.5) in the amount of any Collections or other payments
so received and applied if at any time the distribution of such Collections or
payments are rescinded, returned or refunded for any reason.
"Capital Expenditures" means, without duplication, any expenditures
for any purchase or other acquisition of any asset which would be classified as
a fixed or capital asset on a consolidated balance sheet of Insight and its
Subsidiaries prepared in accordance with Agreement Accounting Principles,
excluding (i) expenditures of insurance proceeds to rebuild or replace any asset
after a casualty loss and (ii) leasehold improvement expenditures for which such
Person or a Subsidiary is reimbursed promptly by the lessor.
"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 Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Change of Control" means (i) the acquisition by any Person, or two
or more Persons acting in concert, of beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 50% or more of the outstanding shares of voting stock
of Insight, or (ii) the failure of Insight to maintain ownership (directly or
indirectly) of 100% of the outstanding shares of voting stock of each
Exh. I-4
Originator or (iii) the failure of the Member to maintain ownership of 100% of
the membership interests of the Seller.
"Charged-Off Receivable" means a Receivable: (i) as to which the
Obligor thereof has taken any action, or suffered any event to occur, of the
type described in Section 9.1(d) (as if references to Seller Party therein refer
to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) which, consistent with the Credit and Collection Policy, would
be written off Seller's books as uncollectible, (iv) which has been identified
by Seller as uncollectible or (v) as to which any payment, or part thereof,
remains unpaid for more than 120 days from the original invoice date for such
payment.
"Closing Date" means, with respect to the Credit Agreement, December
31, 2002.
"Collection Account" means each concentration account, depositary
account, lock-box account or similar account in which any Collections are
collected or deposited and which is listed on Exhibit IV.
"Collection Account Agreement" means an agreement substantially in
the form of Exhibit VI among the applicable Originator, Insight, Seller, the
Agent and a Collection Bank.
"Collection Bank" means, at any time, any of the banks holding one
or more Collection Accounts.
"Collection Notice" means a notice, in substantially the form of
Annex A to Exhibit VI, from the Agent to a Collection Bank.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all yield, Finance Charges or other related amounts accruing
in respect thereof and all cash proceeds of Related Security with respect to
such Receivable.
"Comark" means Comark, Inc., an Illinois corporation and its
successors.
"Commercial Paper" means promissory notes of Jupiter issued by
Jupiter in the commercial paper market.
"Commitment Availability" means at any time the positive difference
(if any) between (a) an amount equal to the aggregate amount of the Back-Up
Commitments minus (b) the Aggregate Capital at such time.
"Concentration Limit" means, at any time, for any Obligor, 3.0% of
the aggregate Outstanding Balance of all Eligible Receivables at such time, or
such other amount (a "Special Concentration Limit") for such Obligor designated
by the Agent as indicated on Exhibit XI hereto; provided, that in the case of an
Obligor and any Affiliate of such Obligor, the Concentration Limit shall be
calculated as if such Obligor and such Affiliate are one Obligor; and provided,
further, that Jupiter or the Required Financial Institutions may, upon not less
than three Business Days' notice to Seller, cancel any Special Concentration
Limit.
Exh. I-5
"Consolidated Capital Expenditures" means, with reference to any
period, the Capital Expenditures of Insight and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated EBITDA" means Consolidated Net Income plus, to the
extent deducted from revenues in determining Consolidated Net Income, (i)
Consolidated Interest Expense, (ii) expense for taxes paid or accrued, (iii)
depreciation, (iv) amortization and (v) any extraordinary non-cash or
nonrecurring non-cash charges or losses incurred other than in the ordinary
course of business, minus, to the extent included in Consolidated Net Income,
any extraordinary non-cash or nonrecurring non-cash gains realized other than in
the ordinary course of business, all calculated for Insight and its Subsidiaries
on a consolidated basis.
"Consolidated Funded Indebtedness" means, at any time, with respect
to any Person, the sum of (i) the aggregate dollar amount of Consolidated
Indebtedness owing by such Person or for which such Person is liable which has
actually been funded and is outstanding at such time, whether or not such amount
is due or payable at such time, plus (ii) the aggregate stated or face amount of
all Letters of Credit at such time for which such Person is the account party or
is otherwise liable plus (iii) the aggregate amount of Capitalized Lease
Obligations owing by such Person or for which such Person is otherwise liable,
plus (iv) the aggregate of all amounts owing by such Person or for which such
Person is otherwise liable with respect to judgments or settlements arising in
connection with trials, arbitrations, mediations, litigation or other forums for
dispute resolution.
"Consolidated Indebtedness" means at any time, with respect to any
Person, the Indebtedness of such Person and its Subsidiaries calculated on a
consolidated basis as of such time.
"Consolidated Interest Expense" means, with reference to any period,
the interest expense of Insight and its Subsidiaries calculated on a
consolidated basis for such period, including, without limitation, yield or any
other financing costs resembling interest which are payable under any
Receivables Purchase Facility.
"Consolidated Net Income" means, with reference to any period, the
net income (or loss) of Insight and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Tangible Net Worth" means at any time, with respect to
any Person, the consolidated stockholders' equity of such Person and its
Subsidiaries calculated on a consolidated basis in accordance with Agreement
Accounting Principles, but excluding at all times the net book value of all
items that are treated as intangibles under Agreement Accounting Principles.
"Contingent Obligation" of a Person means any agreement, undertaking
or arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter,
Exh. I-6
operating agreement, take-or-pay contract, application of a Letter of Credit or
the obligations of any such Person as general partner of a partnership with
respect to the liabilities of the partnership.
"Contract" means, with respect to any Receivable, any and all
instruments, agreements, invoices or other writings pursuant to which such
Receivable arises or which evidences such Receivable.
"CP Costs" means, for each day, the sum of (i) discount or yield
accrued on Pooled Commercial Paper on such day, plus (ii) any and all accrued
commissions in respect of placement agents and Commercial Paper dealers, and
issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day, plus (iii) other costs associated with funding small or
odd-lot amounts with respect to all receivable purchase facilities which are
funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income
net of expenses received on such day from investment of collections received
under all receivable purchase facilities funded substantially with Pooled
Commercial Paper, minus (v) any payment received on such day net of expenses in
respect of Broken Funding Costs related to the prepayment of any Purchaser
Interest of Jupiter pursuant to the terms of any receivable purchase facilities
funded substantially with Pooled Commercial Paper. In addition to the foregoing
costs, if Seller shall request any Incremental Purchase during any period of
time determined by the Agent in its sole discretion to result in incrementally
higher CP Costs applicable to such Incremental Purchase, the Capital associated
with any such Incremental Purchase shall, during such period, be deemed to be
funded by Jupiter in a special pool (which may include capital associated with
other receivable purchase facilities) for purposes of determining such
additional CP Costs applicable only to such special pool and charged each day
during such period against such Capital.
"Credit Agreement" means that certain Three-Year Revolving Credit
Agreement dated as of December 31, 2002 among Insight, as borrower, the
"Lenders" from time to time party thereto and the Administrative Agent, as
amended, restated, supplemented or otherwise modified from time to time.
"Credit Agreement Facility Termination Date" means the earlier of
(a) December 31, 2005 and (b) the date of termination in whole of the "Aggregate
Commitment" (under and as defined in the Credit Agreement) pursuant to Section
2.5 thereof or the "Commitments" (under and as defined in the Credit Agreement)
pursuant to Section 8.1 thereof.
"Credit and Collection Policy" means Seller's credit and collection
policies and practices relating to Contracts and Receivables existing on the
date hereof and summarized in Exhibit VIII hereto, as modified from time to time
in accordance with this Agreement.
"Credit Extension" means the making of an "Advance" or the issuance
of a "Facility LC", in each case, under and as defined in the Credit Agreement.
"Deemed Collections" means the aggregate of all amounts Seller shall
have been deemed to have received as a Collection of a Receivable. Seller shall
be deemed to have received a Collection in full of a Receivable if at any time
(i) the Outstanding Balance of any
Exh. I-7
such Receivable is either (x) reduced as a result of any defective or rejected
goods or services, any discount or any adjustment or otherwise by Seller (other
than cash Collections on account of the Receivables) or (y) reduced or canceled
as a result of a setoff in respect of any claim by any Person (whether such
claim arises out of the same or a related transaction or an unrelated
transaction) or (ii) any of the representations or warranties in Article V are
no longer true with respect to any Receivable.
"Default" means an event described in Article VII of the Credit
Agreement.
"Default Fee" means with respect to any amount due and payable by
Seller in respect of any Aggregate Unpaids, an amount equal to interest on any
such unpaid Aggregate Unpaids at a rate per annum equal to 2% above the Prime
Rate.
"Default Proxy Balance" means, as of the last day of any Fiscal
Month, the aggregate Outstanding Balance of all Receivables as to which any
payment, or part thereof, remains unpaid for more than 120 days but less than
151 days after the invoice date thereof.
"Default Proxy Ratio" means, for any Fiscal Month, the ratio
(expressed as a percentage) equal to (a) the greater of (i) zero and (ii) the
sum of (A) the Default Proxy Balance as of the last day of such Fiscal Month
plus (B) the aggregate Outstanding Balance of all Receivables that would have
been classified during such Fiscal Month as Charged-Off Receivables in
accordance with clauses (i), (ii), (iii) or (iv) of the definition of
"Charged-Off Receivable" plus (C) write-offs during such Fiscal Month, minus
Recoveries during such Fiscal Month divided by (b) the aggregate Outstanding
Balance (in each case, at the time of creation) of Receivables created during
the Fiscal Month which ended on the date four (4) Fiscal Months prior to the
last day of the current Fiscal Month.
"Default Ratio" means, for any Fiscal Month, a percentage equal to
(a) the greater of (i) zero and (ii) the sum of (A) the aggregate Outstanding
Balance of all Receivables that would have been classified during such Fiscal
Month as Charged-Off Receivables in accordance with clauses (i), (ii), (iii) or
(iv) of the definition of "Charged-Off Receivable" plus (B) write-offs during
such Fiscal Month, minus Recoveries during such Fiscal Month divided by (b) the
aggregate amount of Collections during such Fiscal Month.
"Defaulting Financial Institution" has the meaning set forth in
Section 13.5.
"Delinquency Ratio" means, at any time, a percentage equal to (i)
the aggregate Outstanding Balance of all Receivables as to which any payment, or
part thereof, remains unpaid for more than 90 days after the invoice date
thereof as at the last day of the most recently ended Fiscal Month divided by
(ii) the aggregate Outstanding Balance of all Receivables as at the last day of
the most recently ended Fiscal Month.
"Delinquent Receivable" means a Receivable as to which any payment,
or part thereof, remains unpaid for more than 90 days after the invoice date
therefor.
"Designated Obligor" means an Obligor indicated by the Agent to
Seller in writing.
Exh. I-8
"Dilution Horizon Ratio" means, on any date, a percentage equal to
(i) the aggregate Outstanding Balance (in each case, at the time of creation) of
all Receivables created during the two (2) most recently ended Fiscal Months,
divided by (ii) the aggregate Outstanding Balance of all Eligible Receivables as
at the last day of the most recently ended Fiscal Month.
"Dilution Ratio" means, for any Fiscal Month, a percentage equal to
(i) the aggregate amount of Dilutions which occurred during such Fiscal Month,
divided by (ii) the aggregate Outstanding Balance (in each case, at the time of
creation) of all Receivables created during the Fiscal Month which ended on the
date two (2) Fiscal Months prior to the last day of the current Fiscal Month.
"Dilution Reserve" means, on any date, an amount equal to (i) the
greater of (a) the Dynamic Dilution Reserve Ratio or (b) the Dilution Reserve
Floor, multiplied by (ii) the Net Eligible Receivables Balance as of such date.
"Dilution Reserve Floor" means 16%.
"Dilutions" means, at any time, the aggregate amount of reductions
or cancellations described in clause (i) of the definition of "Deemed
Collections".
"Discount Rate" means, the LIBO Rate or the Prime Rate, as
applicable, with respect to each Purchaser Interest of the Financial
Institutions.
"Dollar", "dollar" and "$" means the lawful currency of the United
States of America.
"Domestic Subsidiary" means any Subsidiary of any Person organized
under the laws of any state of the United States.
"Dynamic Dilution Reserve Ratio" means, on any date, the amount
determined pursuant to the following formula:
{(2.50 x ED) + ((DS - ED) x (DS/ED))} x DHR
where:
ED = on such date, the average of the Dilution Ratios for the
twelve (12) Fiscal Months then most recently ended.
DS = on such date, the highest Dilution Ratio for any Fiscal
Month during the twelve (12) Fiscal Months then most recently
ended.
DHR = the Dilution Horizon Ratio on such date.
"Eligible Receivable" means, at any time, a Receivable:
Exh. I-9
(i) the Obligor of which (a) is a resident of the United States or,
if a corporation or other business organization, is organized under the
laws of the United States or any political subdivision thereof and has its
chief executive office in the United States; (b) is not an Affiliate of
any of the parties hereto and (c) is not a Designated Obligor;
(ii) the Obligor of which is not the Obligor of any Delinquent
Receivables which in the aggregate constitute more than 25% of all
Receivables (measured by Outstanding Balance) of such Obligor;
(iii) which is not a Charged-Off Receivable, a Delinquent
Receivable, a Government Receivable; provided, that, Government
Receivables with Outstanding Balances which, in the aggregate, constitute
no more than 3% of the aggregate Outstanding Balance of all Receivables,
may be Eligible Receivables;
(iv) which is not a WM Receivable; provided, that, WM Receivables
with Outstanding Balances which, in the aggregate, constitute no more than
5% of the aggregate Outstanding Balance of all Receivables, may be
Eligible Receivables;
(v) which by its terms is due and payable within 60 days of the
original invoice date therefor and has not had its payment terms extended;
(vi) which is an "account" or "chattel paper" within the meaning of
Section 9-105 and Section 9-106, respectively, of the UCC of all
applicable jurisdictions;
(vii) which is denominated and payable only in United States dollars
in the United States;
(viii) which arises under a Contract in writing, which, together
with such Receivable, 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 subject to no offset,
counterclaim or other defense;
(ix) which arises under a Contract which (A) does not require the
Obligor under such Contract to consent to the transfer, sale or assignment
of the rights and duties of the applicable Originator or any of its
assignees under such Contract and (B) does not contain a confidentiality
provision that purports to restrict the ability of any Purchaser to
exercise its rights under this Agreement, including, without limitation,
its right to review the Contract;
(x) which arises under a Contract that contains an obligation to pay
a specified sum of money, contingent only upon the sale of goods or the
provision of services by the applicable Originator;
(xi) which, together with the Contract related thereto, does not
contravene any law, rule or regulation applicable thereto (including,
without limitation, any law, rule and regulation relating to truth in
lending, fair credit billing, fair credit reporting, equal credit
Exh. I-10
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;
(xii) which satisfies all applicable requirements of the Credit and
Collection Policy;
(xiii) which was generated in the ordinary course of the applicable
Originator's business;
(xiv) which arises solely from the sale of goods or the provision of
services to the related Obligor by the applicable Originator, and not by
any other Person (in whole or in part);
(xv) as to which the Agent has not notified the Seller that the
Agent has determined that such Receivable or class of Receivables is not
acceptable as an Eligible Receivable, including, without limitation,
because such Receivable arises under a Contract that is not acceptable to
the Agent;
(xvi) which is not subject to any right of rescission, set-off,
counterclaim, any other defense (including defenses arising out of
violations of usury laws) of the applicable Obligor against the applicable
Originator or any other Adverse Claim, and the Obligor thereon holds no
right as against such Originator to cause such Originator to repurchase
the goods or merchandise the sale of which shall have given rise to such
Receivable (except with respect to sale discounts effected pursuant to the
Contract, or defective goods returned in accordance with the terms of the
Contract);
(xvii) as to which the applicable Originator has satisfied and fully
performed all obligations on its part with respect to such Receivable
required to be fulfilled by it, and no further action is required to be
performed by any Person with respect thereto other than payment thereon by
the applicable Obligor;
(xviii) all right, title and interest to and in which has been
validly transferred by the Originators to Seller under and in accordance
with the Receivables Sale Agreement, and Seller has good and marketable
title thereto free and clear of any Adverse Claim (other than Adverse
Claims created by the Transaction Documents); and
(xix) no portion of which constitutes sales tax or late fees or
similar charges.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Facility Account" means Seller's Account No. 0060-9027 at Bank One.
"Facility Termination Date" means the earliest of (i) December 31,
2005, (ii) the Liquidity Termination Date and (iii) the Amortization Date.
"Federal Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy," as amended and any successor statute thereto.
Exh. I-11
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum for each day during such period equal to (a) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.
"Fee Letter" means that certain letter agreement dated as of the
date hereof among Seller, Insight, the Agent and Jupiter, as it may be amended
or modified and in effect from time to time.
"Finance Charges" means, with respect to a Contract, any finance,
interest, late payment charges or similar charges owing by an Obligor pursuant
to such Contract.
"Financial Institutions" has the meaning set forth in the preamble
in this Agreement.
"Financing" means, with respect to any Person, (i) the issuance or
sale by such Person of any equity interests in such Person, or (ii) the issuance
or sale by such Person of any Indebtedness other than Indebtedness described in
Sections 6.14.1 through 6.14.8 of the Credit Agreement; provided, however, that
the foregoing clause (ii) shall not permit the incurrence by Insight or any
Subsidiary of any Indebtedness if such incurrence is not otherwise permitted by
the Credit Agreement.
"Fiscal Month" means (a) with respect to Comark and its
Subsidiaries, each fiscal month of Comark and its Subsidiaries, each of which
consists of 4 consecutive calendar weeks (in the case of the first two Fiscal
Months of each Fiscal Quarter other than a 14-week Fiscal Quarter, in which only
the first Fiscal Month consists of 4 weeks) or 5 consecutive calendar weeks (in
the case of the third Fiscal Month in each Fiscal Quarter, and the second and
third Fiscal Months of each 14-week Fiscal Quarter) and (b) with respect to
Insight and its Subsidiaries (other than Comark and its Subsidiaries), each
calendar month.
"Fiscal Quarter" means (a) with respect to Comark and its
Subsidiaries, each fiscal quarter of Comark and its Subsidiaries, each of which
consists of 13 consecutive calendar weeks with the fourth Fiscal Quarter in
every fifth Fiscal Year consisting of 14 consecutive calendar weeks and (b) with
respect to Insight and its Subsidiaries (other than Comark and its
Subsidiaries), each calendar quarter.
"Fiscal Year" means (a) with respect to Comark and its Subsidiaries,
the fiscal year of Comark and its Subsidiaries, each of which consists of 52 or
53 consecutive calendar weeks, commencing with the first Sunday in January of
each calendar year and (b) with respect to Insight and its Subsidiaries (other
than Comark and its Subsidiaries), each calendar year.
"Funding Agreement" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of Jupiter.
Exh. I-12
"Funding Source" means (i) any Financial Institution or (ii) any
insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to Jupiter.
"GAAP" means generally accepted accounting principles in effect in
the United States of America as of the date of this Agreement.
"Government Receivable" means a Receivable the Obligor of which is a
government or a governmental subdivision or agency.
"Guaranty" means the Subsidiary Guaranty, dated as of December 31,
2002, made by certain Subsidiaries of Insight in favor of the Administrative
Agent for the benefit of the "Holders of Secured Obligations" (under and as
defined in the Credit Agreement), as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Incremental Purchase" means a purchase of one or more Purchaser
Interests which increases the total outstanding Aggregate Capital hereunder.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable 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, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.
"Independent Director" means a natural person who, for the five-year
period prior to his or her appointment as Independent Director has not been, and
during the continuation of his or her service as Independent Director is: (A)
not (i) an employee, director, stockholder, partner or officer of the Seller or
any of its Affiliates (other than his or her service as an Independent Director
of the Seller); (ii) a customer or supplier of the Seller or any of its
Affiliates; or (iii) any member of the immediate family of a person described in
(i) or (ii), and (B) has (i) prior experience as an independent director for a
corporation whose charter documents required the unanimous consent of all
independent directors thereof before such corporation could consent to the
institution of bankruptcy or insolvency proceedings against it or could file a
petition seeking relief under any applicable federal or state law relating to
bankruptcy and (ii) at least three years of employment experience with one or
more entities that provide, in the ordinary course of their respective
businesses, advisory, management or placement services to issuers of
securitization or structured finance instruments, agreements or securities.
"Insight" has the meaning set forth in the preamble to this
Agreement.
"Insight Entity" has the meaning set forth in Section 7.1(i).
Exh. I-13
"Intercreditor Agreement" means that certain Intercreditor Agreement
dated as of December 31, 2002 by and among Bank One, in its capacity as
"Administrative Agent" under the Credit Agreement, the Agent, IBM Credit
Corporation, Hewlett Packard Company, Compaq Computer Corporation and Textron
Financial Corporation, as amended, restated, supplemented or otherwise modified
from time to time.
"Jupiter" has the meaning set forth in the preamble to this
Agreement.
"Jupiter Residual" means the sum of the Jupiter Transfer Price
Reductions.
"Jupiter Transfer Price" means, with respect to the assignment by
Jupiter of one or more Purchaser Interests to the Agent for the benefit of one
or more of the Financial Institutions pursuant to Section 13.1, the sum of (i)
the lesser of (a) the Capital of each such Purchaser Interest and (b) the
Adjusted Liquidity Price of each such Purchaser Interest and (ii) all accrued
and unpaid CP Costs for each such Purchaser Interest.
"Jupiter Transfer Price Deficit" has the meaning set forth in
Section 13.5.
"Jupiter Transfer Price Reduction" means in connection with the
assignment of a Purchaser Interest by Jupiter to the Agent for the benefit of
the Financial Institutions, the positive difference (if any) between (i) the
Capital of such Purchaser Interest and (ii) the Adjusted Liquidity Price for
such Purchaser Interest.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lenders" means the lending institutions listed on the signature
pages of the Credit Agreement and their respective successors and assigns.
"Leverage Ratio" has the meaning set forth in Section 9.1(l).
"LIBO Rate" means the rate per annum equal to the sum of:
(i) (a) the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars appearing on Reuters Screen
FRBD as of 11:00 a.m. (London time) two Business Days prior to the first
day of the relevant Tranche Period, and having a maturity equal to such
Tranche Period, provided that, (i) if Reuters Screen FRBD is not available
to the Agent for any reason, the applicable LIBO Rate for the relevant
Tranche Period shall instead be the applicable British Bankers'
Association Interest Settlement Rate for deposits in U.S. dollars as
reported by any other generally recognized financial information service
as of 11:00 a.m. (London time) two Business Days prior to the first day of
such Tranche Period, and having a maturity equal to such Tranche Period,
and (ii) if no such British Bankers' Association Interest Settlement Rate
is available to the Agent, the applicable LIBO Rate for the relevant
Tranche Period shall instead be the rate determined by the Agent to be the
rate at which Bank One offers to place deposits in U.S. dollars with
first-class banks in the London interbank market at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such
Tranche Period, in the
Exh. I-14
approximate amount to be funded at the LIBO Rate and having a maturity
equal to such Tranche Period, divided by (b) one minus the maximum
aggregate reserve requirement (including all basic, supplemental, marginal
or other reserves) which is imposed against the Agent in respect of
Eurocurrency liabilities, as defined in Regulation D of the Board of
Governors of the Federal Reserve System as in effect from time to time
(expressed as a decimal), applicable to such Tranche Period plus
(ii) 1.25% per annum.
The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of
1%.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement, and, in the case of stock, stockholders agreements, voting trust
agreements and all similar arrangements).
"Liquidity Commitment" means, for each Financial Institution, the
commitment of such Financial Institution to purchase Purchaser Interests from
Jupiter in an amount not to exceed (a) in the aggregate, the amount set forth
opposite such Financial Institution's name under the Liquidity Commitment column
on Schedule A to this Agreement, as such amount may be modified in accordance
with the terms hereof, and (b) with respect to any individual purchase from
Jupiter, the lesser of (i) its Pro Rata Share of the Purchase Price therefor and
(ii) its Unused Liquidity Commitment.
"Liquidity Termination Date" means December 30, 2003.
"Lock-Box" means each locked postal box with respect to which a bank
who has executed a Collection Account Agreement has been granted exclusive
access for the purpose of retrieving and processing payments made on the
Receivables and which is listed on Exhibit IV.
"Loss Horizon Ratio" means, as of any date, a ratio equal to (i) the
aggregate Outstanding Balance (in each case, at the time of creation) of all
Receivables created during the three (3) most recently ended Fiscal Months
divided by (ii) the aggregate Outstanding Balance of all Eligible Receivables as
at the last day of the most recently ended Fiscal Month.
"Loss Percentage Floor" means 9.0%.
"Loss Ratio" means, as of any date, a percentage equal to the
highest average Default Proxy Ratio for any three consecutive Fiscal Months
during the twelve (12) Fiscal Months then most recently ended.
"Loss Reserve" means, on any date, an amount equal to the Loss
Reserve Percentage multiplied by the Net Eligible Receivables Balance as of such
date.
"Loss Reserve Percentage" means, as of any date, the greater of (i)
the Loss Percentage Floor and (ii) the percentage obtained by multiplying (a)
2.50 times (b) the Loss
Exh. I-15
Ratio (as determined as of the last day of the Fiscal Month then most recently
ended) times (c) the Loss Horizon Ratio (as determined as of the last day of the
Fiscal Month then most recently ended).
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of any Seller Party and its Subsidiaries taken
as a whole, (ii) the ability of any Seller Party to perform its obligations
under this Agreement, (iii) the legality, validity or enforceability of this
Agreement or any other Transaction Document, (iv) any Purchaser's interest in
the Receivables generally or in any significant portion of the Receivables, the
Related Security or the Collections with respect thereto, or (v) the
collectibility of the Receivables generally or of any material portion of the
Receivables.
"Member" means Insight Receivables Holding, LLC, an Illinois limited
liability company and its successors.
"Monthly Report" means a report, in substantially the form of
Exhibit X hereto (appropriately completed), furnished by the Servicer to the
Agent pursuant to Section 8.5.
"Net Cash Proceeds" means, with respect to any sale of Property or
any Financing by any Person, (a) cash (freely convertible into Dollars) received
by such Person or any Subsidiary of such Person from such sale of Property
(including cash received as consideration for the assumption or incurrence of
liabilities incurred in connection with or in anticipation of such sale of
Property) or Financing, after (i) provision for all income or other taxes
measured by or resulting from such sale of Property, (ii) payment of all
reasonable brokerage commissions and other fees and expenses related to such
sale of Property or Financing, and (iii) all amounts used to repay Indebtedness
secured by a Lien on any asset disposed of in such sale of Property which is or
may be required (by the express terms of the instrument governing such
Indebtedness) to be repaid in connection with such sale of Property (including
payments made to obtain or avoid the need for the consent of any holder of such
Indebtedness) or Financing.
"Net Eligible Receivables Balance" means, at any time, the aggregate
Outstanding Balance of all Eligible Receivables at such time reduced by the
aggregate amount by which the Outstanding Balance of all Eligible Receivables of
each Obligor and its Affiliates exceeds the Concentration Limit for such
Obligor.
"Non-Defaulting Financial Institution" has the meaning set forth in
Section 13.5.
"Non-Renewing Financial Institution" has the meaning set forth in
Section 13.6(a).
"Obligations" has the meaning set forth in Section 2.1.
"Obligor" means a Person obligated to make payments pursuant to a
Contract.
"Originator" means each of Insight Direct USA, Inc., an Arizona
corporation, Comark Corporate Sales, Inc., an Illinois corporation, Comark,
Comark Government and Education Sales, Inc., an Illinois corporation and Insight
Services Corporation, an Arizona
Exh. I-16
corporation or any other Subsidiary or Affiliate of Insight approved in writing
by the Agent from time to time.
"Outstanding Balance" means, with respect to any Receivable at any
time, the then outstanding principal balance thereof; provided, that with
respect to a WM Receivable, "Outstanding Balance" means an amount equal to the
product of 1.07 and the actual cost to the applicable Originator of providing
warranty or maintenance services to an Obligor.
"Participant" has the meaning set forth in Section 12.2.
"Performance Undertaking" means that certain Performance Undertaking
dated as of December 31, 2002 by Insight in favor of the Agent for the benefit
of the Purchasers, as amended, restated, supplemented or otherwise modified from
time to time.
"Permitted Acquisition" means Acquisitions meeting the following
requirements or otherwise approved by the Required Lenders under the Credit
Agreement:
(a) as of the date of the consummation of such Acquisition, no
Default or Unmatured Default shall have occurred and be continuing or
would result from such Acquisition, and the representation and warranty
contained in Section 5.11 of the Credit Agreement shall be true both
before and after giving effect to such Acquisition;
(b) such Acquisition is consummated on a non-hostile basis pursuant
to a negotiated acquisition agreement approved by the board of directors
or other applicable governing body of the seller or entity to be acquired,
and no material challenge to such Acquisition (excluding the exercise of
appraisal rights) shall be pending or threatened in writing by any
shareholder or director of the seller or entity to be acquired;
(c) the business to be acquired in such Acquisition is similar or
related to one or more of the lines of business in which Insight and its
Subsidiaries are engaged on the Closing Date;
(d) as of the date of the consummation of such Acquisition, all
material governmental and corporate approvals required in connection
therewith shall have been obtained;
(e) the Acquisition Purchase Price for each such Acquisition
together with the Acquisition Purchase Prices of all other Permitted
Acquisitions shall not exceed an amount equal to (a) $50,000,000 during
any period of twelve consecutive months; and (b) $100,000,000 during the
period beginning on the Closing Date and ending on the Credit Agreement
Facility Termination Date;
(f) with respect to each Permitted Acquisition with respect to which
the Acquisition Purchase Price shall be greater than $25,000,000, not less
than fifteen (15) days prior to the consummation of such Permitted
Acquisition, Insight shall have delivered to the Administrative Agent a
pro forma consolidated balance sheet, income statement and cash flow
statement of Insight and its Subsidiaries (the "Acquisition Pro Forma"),
based on Insight's most recent financial statements delivered pursuant to
Exh. I-17
Section 6.1.1 of the Credit Agreement and using historical financial
statements for the acquired entity provided by the seller(s) or which
shall be complete and shall fairly present, in all material respects, the
financial condition and results of operations and cash flows of Insight
and its Subsidiaries in accordance with Agreement Accounting Principles,
but taking into account such Permitted Acquisition and the funding of all
Credit Extensions in connection therewith, and such Acquisition Pro Forma
shall reflect that, on a pro forma basis, Insight would have been in
compliance with the financial covenants set forth in Sections 6.21, 6.22
and 6.23 of the Credit Agreement for the four Fiscal Quarter period
reflected in the compliance certificate most recently delivered to the
Administrative Agent pursuant to Section 6.1.3 of the Credit Agreement
prior to the consummation of such Permitted Acquisition (giving effect to
such Permitted Acquisition and all Credit Extensions funded in connection
therewith as if made on the first day of such period); and
(g) prior to each such Permitted Acquisition, Insight shall deliver
to the Administrative Agent a documentation, information and certification
package in form and substance acceptable to the Administrative Agent,
including, without limitation;
(i) all of the "Collateral Documents" (as such term is defined
in the Credit Agreement) necessary for the perfection of a first
priority security interest in all of the assets to be acquired or
the equity interests and assets of the entity to be acquired
together with opinions of counsel, in each case in form and
substance reasonably acceptable to the Administrative Agent;
(ii) a supplement to the Guaranty if the Permitted Acquisition
is an Acquisition of equities and the target company will not be
merged with Insight or any existing Domestic Subsidiary;
(iii) the financial statements of the target entity together
with any pro forma financial statements, projections, forecasts and
budgets prepared by Insight in connection therewith;
(iv) a copy of the acquisition agreement for such Acquisition,
together with drafts of the material schedules thereto;
(v) a copy of all documents, instruments and agreements with
respect to any Indebtedness to be incurred or assumed in connection
with such Acquisition; and
(vi) such other documents or information as shall be
reasonably requested by the Administrative Agent or any Lender.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Pledge Agreement" has the meaning set forth in the Credit
Agreement.
Exh. I-18
"Pooled Commercial Paper" means Commercial Paper notes of Jupiter
subject to any particular pooling arrangement by Jupiter, but excluding
Commercial Paper issued by Jupiter for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by Jupiter.
"Potential Amortization Event" means an event which, with the
passage of time or the giving of notice, or both, would constitute an
Amortization Event.
"Prime Rate" means a rate per annum equal to the prime rate of
interest announced from time to time by Bank One or its parent (which is not
necessarily the lowest rate charged to any customer), changing when and as said
prime rate changes.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Proposed Reduction Date" has the meaning set forth in Section 1.3.
"Pro Rata Share" means, for each Financial Institution, a percentage
equal to (i) the Back-Up Commitment of such Financial Institution, divided by
(ii) the aggregate amount of all Back-Up Commitments of all Financial
Institutions hereunder, adjusted as necessary to give effect to the application
of the terms of Sections 13.5 or 13.6.
"Purchase Limit" means $200,000,000.
"Purchase Notice" has the meaning set forth in Section 1.2.
"Purchase Price" means, with respect to any Incremental Purchase of
a Purchaser Interest, the amount paid to Seller for such Purchaser Interest
which shall not exceed the least of (i) the amount requested by Seller in the
applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the
applicable purchase date and (iii) the excess, if any, of the Net Eligible
Receivables Balance (less the Aggregate Reserves) on the applicable purchase
date over the aggregate outstanding amount of Aggregate Capital determined as of
the date of the most recent Monthly Report, taking into account such proposed
Incremental Purchase.
"Purchasers" means Jupiter and each Financial Institution.
"Purchaser Interest" means, at any time, an undivided percentage
ownership interest (computed as set forth below) associated with a designated
amount of Capital, selected pursuant to the terms and conditions hereof in (i)
each Receivable arising prior to the time of the most recent computation or
recomputation of such undivided interest, (ii) all Related Security with respect
to each such Receivable, and (iii) all Collections with respect to, and other
proceeds of, each such Receivable. Each such undivided percentage interest shall
equal:
[GRAPHIC]
where:
Exh. I-19
C = the Capital of such Purchaser Interest.
AR = the Aggregate Reserves.
NRB = the Net Eligible Receivables Balance.
Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Amortization Date, each Purchaser
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Purchaser Interest as computed (or deemed recomputed) as of the close of the
business day immediately preceding the Amortization Date shall remain constant
at all times thereafter.
"Purchasing Financial Institution" has the meaning set forth in
Section 12.1(b).
"Receivable" means all indebtedness and other obligations owed to
Seller or any Originator (at the time it arises, and before giving effect to any
transfer or conveyance under the Receivables Sale Agreement or hereunder) or in
which Seller or such Originator has a security interest or other interest,
including, without limitation, any indebtedness, obligation or interest
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale of goods or the rendering of services by the
applicable Originator, and further includes, without limitation, the obligation
to pay any Finance Charges with respect thereto. Indebtedness and other rights
and obligations arising from any one transaction, including, without limitation,
indebtedness and other rights and obligations represented by an individual
invoice, shall constitute a Receivable separate from a Receivable consisting of
the indebtedness and other rights and obligations arising from any other
transaction; provided, that any indebtedness, rights or obligations referred to
in the immediately preceding sentence shall be a Receivable regardless of
whether the account debtor or Seller treats such indebtedness, rights or
obligations as a separate payment obligation.
"Receivables Purchase Documents" means any series of receivables
purchase or sale agreements generally consistent with terms contained in
comparable structured finance transactions pursuant to which Insight or any of
its Subsidiaries, in their respective capacities as sellers or transferors of
any receivables, sell or transfer to SPVs all of their respective right, title
and interest in and to certain receivables for further sale or transfer (or
granting of Liens to other purchasers of or investors in such assets or
interests therein (and the other documents, instruments and agreements executed
in connection therewith), as any such agreements may be amended, restated,
supplemented or otherwise modified from time to time, or any replacement or
substitution therefor.
"Receivables Purchase Facility" means any securitization facility
made available to Insight or any of its Subsidiaries, pursuant to which
receivables of Insight or any of its Subsidiaries are transferred to one or more
SPVs, and thereafter to certain investors, pursuant to the terms and conditions
of the Receivables Purchase Documents.
"Receivables Sale Agreement" means that certain Receivables Sale
Agreement, dated as of the date hereof, between Insight and Seller, as the same
may be amended, restated or otherwise modified from time to time.
Exh. I-20
"Records" means, with respect to any Receivable, all Contracts and
other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
"Recoveries" means, with respect to a Receivable that (a) would have
been classified during any Fiscal Month as a Charged-Off Receivable in
accordance with clauses (i), (ii), (iii) or (iv) of the definition of
"Charged-Off Receivable" or (b) has been written off by the Seller, all amounts
received or collected by the Servicer or the Seller with respect to such
Receivable after such classification or write-off.
"Reduction Notice" has the meaning set forth in Section 1.3.
"Reduction Percentage" means, for any Purchaser Interest acquired by
the Financial Institutions from Jupiter for less than the Capital of such
Purchaser Interest, a percentage equal to a fraction the numerator of which is
the Jupiter Transfer Price Reduction for such Purchaser Interest and the
denominator of which is the Capital of such Purchaser Interest.
"Regulatory Change" has the meaning set forth in Section 10.2(a).
"Reinvestment" has the meaning set forth in Section 2.2.
"Related Security" means, with respect to any Receivable:
(i) all of the applicable Originator's interest in the
inventory and goods (including returned or repossessed inventory or
goods), if any, the sale, financing or lease of which by the
applicable Originator gave rise to such Receivable, and all
insurance contracts with respect thereto,
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure
payment of such Receivable, whether pursuant to the Contract related
to such Receivable or otherwise, together with all financing
statements and security agreements describing any collateral
securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant
to the Contract related to such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of Seller's right, title and interest in, to and
under the Receivables Sale Agreement in respect of such Receivable ,
and
Exh. I-21
(vii) all proceeds of any of the foregoing.
"Required Financial Institutions" means, at any time, (i) if Jupiter
holds any Purchaser Interests, the Agent and Financial Institutions with
Liquidity Commitments in excess of 66-2/3% of the aggregate of all Liquidity
Commitments, and (ii) if Jupiter holds no Purchaser Interests, Financial
Institutions with Commitments in excess of 66-2/3% of the aggregate of all
Liquidity Commitments.
"Required Lenders" means Lenders in the aggregate having at least
66.67% of the "Aggregate Commitment" (under and as defined in the Credit
Agreement) or, if the "Aggregate Commitment" has been terminated, Lenders in the
aggregate holding at least 66.67% of the "Aggregate Outstanding Credit Exposure"
(under and as defined in the Credit Agreement).
"Required Notice Period" means the number of days required notice
set forth below applicable to the Aggregate Reduction indicated below:
AGGREGATE REDUCTION REQUIRED NOTICE PERIOD
------------------- ----------------------
< $100,000,000 two (2) Business Days
Greater than $100,000,000 five (5) Business Days
"Seller" has the meaning set forth in the preamble to this
Agreement.
"Seller Parties" has the meaning set forth in the preamble to this
Agreement.
"Servicer" means at any time the Person (which may be the Agent)
then authorized pursuant to Article VIII to service, administer and collect
Receivables.
"Servicer Reserve" means, on any date, an amount equal to 0.5%
multiplied by the Net Eligible Receivables Balance as of the close of business
of the Servicer on such date.
"Servicing Fee" has the meaning set forth in Section 8.6.
"Settlement Date" means (A) the fifteenth (15th) day of each month
(or if such day is not a Business Day, the next succeeding Business Day), and
(B) the last day of the relevant Tranche Period in respect of each Purchaser
Interest of the Financial Institutions.
"Settlement Period" means (A) in respect of each Purchaser Interest
of Jupiter, the immediately preceding Accrual Period, and (B) in respect of each
Purchaser Interest of the Financial Institutions, the entire Tranche Period of
such Purchaser Interest.
"SPV" means any special purpose entity established for the purpose
of purchasing receivables in connection with a receivables securitization
transaction permitted under the terms of the Credit Agreement.
Exh. I-22
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, association, limited liability company, joint venture
or similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of Seller.
"Termination Date" has the meaning set forth in Section 2.2.
"Termination Percentage" has the meaning set forth in Section 2.2.
"Terminating Financial Institution" has the meaning set forth in
Section 13.6(a).
"Terminating Tranche" has the meaning set forth in Section 4.3(b).
"Tranche Period" means, with respect to any Purchaser Interest held
by a Financial Institution:
(a) if Yield for such Purchaser Interest is calculated on the basis
of the LIBO Rate, a period of one, two, three or six months, or such other
period as may be mutually agreeable to the Agent and Seller, commencing on a
Business Day selected by Seller or the Agent pursuant to this Agreement. Each
one, two, three of six month Tranche Period shall end on the day in the
applicable succeeding month which corresponds numerically to the beginning day
of such Tranche Period, provided, however, that if there is no such numerically
corresponding day in such succeeding month, such Tranche Period shall end on the
last Business Day of such succeeding month; or
(d) if Yield for such Purchaser Interest is calculated on the basis
of the Prime Rate, a period commencing on a Business Day selected by Seller and
agreed to by the Agent, provided no such period shall exceed one month.
If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Purchaser Interest which commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Tranche
Period shall end on the Amortization Date. The duration of each Tranche Period
which commences after the Amortization Date shall be of such duration as
selected by the Agent.
"Transaction Documents" means, collectively, this Agreement, each
Purchase Notice, the Receivables Sale Agreement, the Collection Account
Agreement, the Intercreditor Agreement, the Fee Letter, the Performance
Undertaking, the Subordinated Note (as defined in the Receivables Sale
Agreement) and all other instruments, documents and agreements executed and
delivered in connection herewith.
Exh. I-23
"UCC" means the Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.
"Unconditional Liquidity Provider" means a Financial Institution
that is identified by the Agent or by Bank One as an entity which will not under
any circumstance receive any Jupiter Transfer Price Reduction hereunder.
"Unmatured Default" means an event which but for the lapse of time
or the giving of notice, or both, would constitute a Default.
"Unused Back-up Commitment" means, with respect to any Financial
Institution at any time, such Financial Institution's Back-up Commitment at such
time minus such Financial Institution's Back-up Pro Rata Share of the Aggregate
Capital outstanding at such time.
"Unused Liquidity Commitment" means, with respect to any Financial
Institution at any time, such Financial Institution's Liquidity Commitment at
such time minus the aggregate Capital of such Financial Institution's Purchaser
Interests at such time.
"WM Receivable" means a Receivable which arises under a Contract
relating to the provision by an Originator of warranty or maintenance services
to an Obligor.
"Yield" means for each respective Tranche Period relating to
Purchaser Interests of the Financial Institutions, an amount equal to the
product of the applicable Discount Rate for each Purchaser Interest multiplied
by the Capital of such Purchaser Interest for each day elapsed during such
Tranche Period, annualized on a 360 day basis.
"Yield Reserve" means, on any date, an amount equal to 0.5%
multiplied by the Net Eligible Receivables Balance as of the close of business
of the Servicer on such date.
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 Illinois, and not specifically defined herein, are used herein as
defined in such Article 9.
Exh. I-24
EXHIBIT II
FORM OF PURCHASE NOTICE
[Date]
Bank One, NA (Main Office Chicago), as Agent
1 Bank One Plaza, 21st Floor
Asset-Backed Finance
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: ABF Treasury
Re: PURCHASE NOTICE
Ladies and Gentlemen:
Reference is hereby made to the Receivables Purchase Agreement,
dated as of December 31, 2002 by and among Insight Receivables, LLC, an Illinois
limited liability company (the "Seller"), Insight Enterprises, Inc., as
Servicer, the Financial Institutions, Jupiter Securitization Corporation
("Jupiter"), and Bank One, NA (Main Office Chicago), as Agent (the "Receivables
Purchase Agreement"). Capitalized terms used herein shall have the meanings
assigned to such terms in the Receivables Purchase Agreement.
The Agent is hereby notified of the following Incremental Purchase:
Purchase Price: $_____________________________
Date of Purchase: ______________________________
Requested Discount Rate: [LIBO Rate] [Prime Rate]
[Pooled Commercial Paper rate]
Please credit the Purchase Price in immediately available funds to
our Facility Account [and then wire-transfer the Purchase Price in immediately
available funds on the above-specified date of purchase to:
[Account Name]
[Account No.]
[Bank Name & Address]
[ABA #]
Reference:
Telephone advice to: [Name] @ tel. No. ( )
Exh. II-1
Please advise [Name] at telephone no ( ) _________________ if
Jupiter will not be making this purchase.
In connection with the Incremental Purchase to be made on the above
listed "Date of Purchase" (the "Purchase Date"), the Seller hereby certifies
that the following statements are true on the date hereof, and will be true on
the Purchase Date (before and after giving effect to the proposed Incremental
Purchase):
(i) the representations and warranties of the Seller set forth in
Section 5.1 of the Receivables Purchase Agreement are true and correct on and as
of the Purchase Date as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result from
the proposed Incremental Purchase, that will constitute an Amortization Event or
a Potential Amortization Event;
(iii) the Facility Termination Date has not occurred, the Aggregate
Capital does not exceed the Purchase Limit and the aggregate Purchaser Interests
do not exceed 100%; and
(iv) the amount of Aggregate Capital is $_________ after giving
effect to the Incremental Purchase to be made on the Purchase Date.
Very truly yours,
INSIGHT RECEIVABLES, LLC
By:
------------------------
Name:
Title:
Exh. II-2
EXHIBIT III
PLACES OF BUSINESS OF THE SELLER PARTIES;
LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)
ORGANIZATIONAL IDENTIFICATION NUMBER(S)
Places of Business and Location of Records:
Insight Receivables, LLC
000 Xxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Illinois Organizational Number: 0082933-1
FEIN: 00-0000000
Places of Business and Location of Records:
Insight Enterprises, Inc.
0000 Xxxx Xxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Delaware Organizational Number: 2264818
FEIN: 00-0000000
Exh. III-1
EXHIBIT IV
NAMES OF COLLECTION BANKS; COLLECTION ACCOUNTS
Lock-Box Related Collection Account
--------------------------------------- ----------------------------------------
Arizona lockbox 2457-0446 (Insight Insight Direct USA, Inc. wire
Direct USA, Inc./Insight Services (0177-6871), operating (0177-8412) and
Corporation) store (2142-4806)
Insight Services Corporation wire
(0177-6871), operating (0177-8412) and
store (2142-4806)
Chicago lockbox 70212 (Comark Corporate Comark, Inc. Master Account and Comark
Sales, Inc./Comark Government and Corporate Sales, Inc. 5240530
Education Sales, Inc).
Chicago lockbox 70191 (PC Wholesale) Comark, Inc. Master Account and Comark
Corporate Sales, Inc. 5240530
N/A Comark Government and Education Sales,
Inc. ZBA Account (0000000)
Exh. IV-1
EXHIBIT V
FORM OF COMPLIANCE CERTIFICATE
To: Bank One, NA (Main Office Chicago), as Agent
This Compliance Certificate is furnished pursuant to that certain
Receivables Purchase Agreement dated as of December 31, 2002 among Insight
Receivables, LLC (the "Seller"), Insight Enterprises, Inc. (the "Servicer"), the
Purchasers party thereto and Bank One, NA (Main Office Chicago), as agent for
such Purchasers (the "Agreement").
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected [______________] of Seller.
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of Seller and its Subsidiaries during the accounting period
covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes an
Amortization Event or Potential Amortization Event, as each such term is defined
under the Agreement, during or at the end of the accounting period covered by
the attached financial statements or as of the date of this Certificate, except
as set forth in paragraph 5 below.
4. Schedule I attached hereto sets forth financial data and computations
evidencing the compliance with Section 9.1(g) of the Agreement, all of which
data and computations are true, complete and correct.
5. Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which Seller has taken, is taking, or proposes to take
with respect to each such condition or event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this day of , .
INSIGHT RECEIVABLES, LLC
-----------------------------------
Name:
Title:
Exh. V-1
SCHEDULE I TO COMPLIANCE CERTIFICATE
A. Schedule of Compliance as of __________, ____ with Section ___ of the
Agreement. Unless otherwise defined herein, the terms used in this
Compliance Certificate have the meanings ascribed thereto in the
Agreement.
This schedule relates to the month ended:
Exh. V-2
EXHIBIT VI
FORM OF COLLECTION ACCOUNT AGREEMENT(1)
[On letterhead of Originator]
____________,________
[Lock-Box Bank/Concentration Bank/Depositary Bank]
Re: [Name of Originator]
Ladies and Gentlemen:
Reference is hereby made to each of the departmental post office
boxes listed on Schedule I hereto (each a, "Lock-Box") of which you have
exclusive control for the purpose of receiving mail and processing payments
therefrom pursuant to that certain [name of lock-box agreement) between you and
the undersigned (the "Company") dated _____(the "Agreement"). You hereby confirm
your agreement to perform the services described therein. Among the services you
have agreed to perform therein, is to endorse all checks and other evidences of
payment received in each of the Lock-Boxes, and credit such payments to the
Company's checking account no. _____ maintained with you in the name of the
Company (the "Lock-Box Account").
The Company hereby informs you that pursuant to that certain
Receivables Sale Agreement, dated as of ______ __, ___ between the Company and
[Seller] (the "Seller"), the Company has transferred all of its right, title and
interest in and to, and exclusive ownership and control of, the Lock-Box and the
Lock-Box Account to Seller. The Company and Seller hereby request that the name
of the Lock-Box Account be changed to "Insight Receivables, LLC"
The Company and Seller hereby irrevocably instruct you, and you
hereby agree, that upon receiving notice from Bank One, NA (Main Office Chicago)
("Bank One") in the form attached hereto as Annex A: (i) the name of the
Lock-Box Account will be changed to Bank One for itself and as agent (or any
designee of Bank One) and Bank One will have exclusive ownership of and access
to the Lock-Box and the Lock-Box Account, and neither the Company, Seller, nor
any of their respective affiliates will have any control of the Lock-Box or the
Lock-Box Account or any access thereto, (ii) you will either continue to send
the funds from the Lock-Box to the Lock-Box Account, or will redirect the funds
as Bank One may otherwise request, (iii) you will transfer monies on deposit in
the Lock-Box Account, at any time, as directed by Bank One, (iv) all services to
be performed by you under the Agreement will be performed on behalf of Bank One,
and (v) all correspondence or other mail which you have agreed to send to the
Company or Seller will be sent to Bank One at the following address:
--------
(1) Before using this form, check with the Law Department to determine whether
the applicable Financial Institution has agreed to an alternative form.
Exh. VI-1
Bank One, NA (Main Office Chicago)
21st Floor
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Credit Manager, Asset Backed
Securities Division
Moreover, upon such notice, Bank One for itself and as agent will
have all rights and remedies given to the Company (and Seller, as the Company's
assignee) under the Agreement. Seller agrees, however, to continue to pay all
fees and other assessments due thereunder at any time.
You hereby acknowledge that monies deposited in the Lock-Box Account
or any other account established with you by Bank One for the purpose of
receiving funds from the Lock-Box are subject to the liens of Bank One for
itself and as agent, and will not be subject to deduction, set-off, banker's
lien or any other right you or any other party may have against the Company or
Seller, except that you may debit the Lock-Box Account for any items deposited
therein that are returned or otherwise not collected and for all charges, fees,
commissions and expenses incurred by you in providing services hereunder, all in
accordance with your customary practices for the charge back of returned items
and expenses.
THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. This letter agreement may be executed in any
number of counterparts and all of such counterparts taken together will be
deemed to constitute one and the same instrument.
This letter agreement contains the entire agreement between the
parties, and may not be altered, modified, terminated or amended in any respect,
nor may any right, power or privilege of any party hereunder be waived or
released or discharged, except upon execution by all parties hereto of a written
instrument so providing. In the event that any provision in this letter
agreement is in conflict with, or inconsistent with, any provision of the
Agreement, this letter agreement will exclusively govern and control. Each party
agrees to take all actions reasonably requested by any other party to carry out
the purposes of this letter agreement or to preserve and protect the rights of
each party hereunder.
Exh. VI-2
Please indicate your agreement to the terms of this letter agreement
by signing in the space provided below. This letter agreement will become
effective immediately upon execution of a counterpart of this letter agreement
by all parties hereto.
Very truly yours,
[ORIGINATOR]
By:
-----------------------------
Name:
Title:
INSIGHT RECEIVABLES, LLC
By:
-----------------------------
Name:
Title:
Acknowledged and agreed to
this___day of___
[COLLECTION BANK]
By:
--------------------------
Name:
Title:
BANK ONE, NA (MAIN OFFICE CHICAGO), as
Agent
By:
--------------------------
Name:
Title:
Exh. VI-3
ANNEX A
FORM OF NOTICE
[On letterhead of Bank One]
___,___
[Collection Bank/Depositary Bank/Concentration Bank]
Re: [Originator/Insight Receivables, LLC]
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights pursuant to
that certain letter agreement among [Originator], Insight Receivables, LLC, you
and us, to have the name of, and to have exclusive ownership and control of,
account number ____ (the "Lock-Box Account") maintained with you, transferred to
us. [Lock-Box Account will henceforth be a zero-balance account, and funds
deposited in the Lock-Box Account should be sent at the end of each day
to__________________ .] You have further agreed to perform all other services
you are performing under that certain agreement dated_______________ between you
and [Originator] on our behalf.
We appreciate your cooperation in this matter.
Very truly yours,
BANK ONE, NA (MAIN OFFICE CHICAGO)
(for itself and as agent)
By: ______________________________
Title:
Exh. VI-4
EXHIBIT VII
FORM OF ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this "Assignment Agreement") is entered
into as of the ___ day of ____________, ____, by and between
_____________________ ("Assignor") and __________________ ("Assignee").
PRELIMINARY STATEMENTS
A. This Assignment Agreement is being executed and delivered in
accordance with Section 12.1(b) of that certain Receivables Purchase Agreement
dated as of December 31, 2002 by and among Insight Receivables, LLC, as Seller,
Insight Enterprises, Inc., as Servicer, Jupiter Securitization Corporation, Bank
One, NA (Main Office Chicago), as Agent, and the Financial Institutions party
thereto (as amended, modified or restated from time to time, the "Purchase
Agreement"). Capitalized terms used and not otherwise defined herein are used
with the meanings set forth or incorporated by reference in the Purchase
Agreement.
B. Assignor is a Financial Institution party to the Purchase
Agreement, and Assignee wishes to become a Financial Institution thereunder; and
C. Assignor is selling and assigning to Assignee an undivided
____________% (the "Transferred Percentage") interest in all of Assignor's
rights and obligations under the Purchase Agreement and the Transaction
Documents, including, without limitation, Assignor's Back-Up Commitment and
Liquidity Commitment and (if applicable) the Capital of Assignor's Purchaser
Interests as set forth herein.
AGREEMENT
The parties hereto hereby agree as follows:
1. The sale, transfer and assignment effected by this Assignment
Agreement shall become effective (the "Effective Date") two (2) Business Days
(or such other date selected by the Agent in its sole discretion) following the
date on which a notice substantially in the form of Schedule II to this
Assignment Agreement ("Effective Notice") is delivered by the Agent to Jupiter,
Assignor and Assignee. From and after the Effective Date, Assignee shall be a
Financial Institution party to the Purchase Agreement for all purposes thereof
as if Assignee were an original party thereto and Assignee agrees to be bound by
all of the terms and provisions contained therein.
2. If Assignor has no outstanding Capital under the Purchase
Agreement, on the Effective Date, Assignor shall be deemed to have hereby
transferred and assigned to Assignee, without recourse, representation or
warranty (except as provided in paragraph 6 below), and the Assignee shall be
deemed to have hereby irrevocably taken, received and assumed from Assignor, the
Transferred Percentage of Assignor's Back-Up Commitment and Liquidity Commitment
and all rights and obligations associated therewith under the terms of the
Exh. VII-1
Purchase Agreement, including, without limitation, the Transferred Percentage of
Assignor's future funding obligations under Section 4.1 of the Purchase
Agreement.
3. If Assignor has any outstanding Capital under the Purchase
Agreement, at or before 12:00 noon, local time of Assignor, on the Effective
Date Assignee shall pay to Assignor, in immediately available funds, an amount
equal to the sum of (i) the Transferred Percentage of the outstanding Capital of
Assignor's Purchaser Interests (such amount, being hereinafter referred to as
the "Assignee's Capital"); (ii) all accrued but unpaid (whether or not then due)
Yield attributable to Assignee's Capital; and (iii) accruing but unpaid fees and
other costs and expenses payable in respect of Assignee's Capital for the period
commencing upon each date such unpaid amounts commence accruing, to and
including the Effective Date (the "Assignee's Acquisition Cost"); whereupon,
Assignor shall be deemed to have sold, transferred and assigned to Assignee,
without recourse, representation or warranty (except as provided in paragraph 6
below), and Assignee shall be deemed to have hereby irrevocably taken, received
and assumed from Assignor, the Transferred Percentage of Assignor's Back-Up
Commitment and Liquidity Commitment and the Capital of Assignor's Purchaser
Interests (if applicable) and all related rights and obligations under the
Purchase Agreement and the Transaction Documents, including, without limitation,
the Transferred Percentage of Assignor's future funding obligations under
Section 4.1 of the Purchase Agreement.
4. Concurrently with the execution and delivery hereof, Assignor
will provide to Assignee copies of all documents requested by Assignee which
were delivered to Assignor pursuant to the Purchase Agreement.
5. Each of the parties to this Assignment Agreement agrees that at
any time and from time to time upon the written request of any other party, it
will execute and deliver such further documents and do such further acts and
things as such other party may reasonably request in order to effect the
purposes of this Assignment Agreement.
6. By executing and delivering this Assignment Agreement, Assignor
and Assignee confirm to and agree with each other, the Agent and the Financial
Institutions as follows: (a) other than the representation and warranty that it
has not created any Adverse Claim upon any interest being transferred hereunder,
Assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made by any other
Person in or in connection with the Purchase Agreement or the Transaction
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of Assignee, the Purchase Agreement or any other instrument
or document furnished pursuant thereto or the perfection, priority, condition,
value or sufficiency of any collateral; (b) Assignor makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Seller, any Obligor, any Seller Affiliate or the performance or
observance by the Seller, any Obligor, any Seller Affiliate of any of their
respective obligations under the Transaction Documents or any other instrument
or document furnished pursuant thereto or in connection therewith; (c) Assignee
confirms that it has received a copy of the Purchase Agreement and copies of
such other Transaction Documents, and other documents and information as it has
requested and deemed appropriate to make its own credit analysis and decision to
enter into this Assignment Agreement; (d) Assignee will, independently and
without reliance upon the Agent,
Exh. VII-2
Jupiter, the Seller or any other Financial Institution or Purchaser and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Purchase Agreement and the Transaction Documents; (e) Assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Transaction Documents as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
and (f) Assignee agrees that it will perform in accordance with their terms all
of the obligations which, by the terms of the Purchase Agreement and the other
Transaction Documents, are required to be performed by it as a Financial
Institution or, when applicable, as a Purchaser.
7. Each party hereto represents and warrants to and agrees with the
Agent that it is aware of and will comply with the provisions of the Purchase
Agreement, including, without limitation, Sections 4.1, 13.1 and 14.6 thereof.
8. Schedule I hereto sets forth the revised Back-Up Commitment and
Liquidity Commitment of Assignor and the Back-Up Commitment and Liquidity
Commitment of Assignee, as well as administrative information with respect to
Assignee.
9. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
10. Assignee hereby covenants and agrees that, prior to the date
which is one year and one day after the payment in full of all senior
indebtedness for borrowed money of Jupiter, it will not institute against, or
join any other Person in instituting against, Jupiter any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
Exh. VII-3
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective duly authorized officers of the
date hereof.
[ASSIGNOR]
By:
---------------------------
Title:
[ASSIGNEE]
By:
----------------------------
Title:
Exh. VII-4
SCHEDULE I TO ASSIGNMENT AGREEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
DATE: _______________, ____
TRANSFERRED PERCENTAGE: ________%
X-0 X-0 X-0 X-0 X-0 X-0
-------- ----------- ------------- ------------ ------------ ------------ ------------
ASSIGNOR BACK-UP BACK-UP LIQUIDITY LIQUIDITY OUTSTANDING RATABLE
COMMITMENT COMMITMENT COMMITMENT COMMITMENT CAPITAL SHARE OF
(PRIOR TO (AFTER (PRIOR TO (AFTER (IF ANY) OUTSTANDING
GIVING GIVING GIVING GIVING CAPITAL
EFFECT TO EFFECT TO EFFECT TO EFFECT TO
THE THE THE THE
ASSIGNMENT ASSIGNMENT ASSIGNMENT) ASSIGNMENT)
AGREEMENT) AGREEMENT)
-------- ---------- ---------- ------------ ------------ ------------ ------------
X-0 X-0 X-0 X-0
-------- ---------- ---------- ------------ ------------ ------------ ------------
ASSIGNEE BACK-UP LIQUIDITY OUTSTANDING RATABLE
COMMITMENT COMMITMENT CAPITAL SHARE OF
(AFTER (AFTER (IF ANY) OUTSTANDING
GIVING GIVING CAPITAL
EFFECT TO EFFECT TO
THE THE
ASSIGNMENT ASSIGNMENT)
AGREEMENT)
ADDRESS FOR NOTICES
___________________
___________________
Attention:
Phone:
Fax:
Exh. VII-5
SCHEDULE II TO ASSIGNMENT AGREEMENT
EFFECTIVE NOTICE
TO: , Assignor
-----------------------
-----------------------
-----------------------
-----------------------
TO: , Assignee
-----------------------
-----------------------
-----------------------
-----------------------
The undersigned, as Agent under the Receivables Purchase Agreement
dated as of December 31, 2002 by and among Insight Receivables, LLC, an Illinois
limited liability company, Insight Enterprises, Inc., as Servicer, Jupiter
Securitization Corporation, Bank One, NA (Main Office Chicago), as Agent, and
the Financial Institutions party thereto, hereby acknowledges receipt of
executed counterparts of a completed Assignment Agreement dated as of
____________, ____ between __________________, as Assignor, and
__________________, as Assignee. Terms defined in such Assignment Agreement are
used herein as therein defined.
1. Pursuant to such Assignment Agreement, you are advised that the
Effective Date will be ______________, ____.
2. Jupiter hereby consents to the Assignment Agreement as required
by Section 12.1(b) of the Receivables Purchase Agreement.
Exh. VII-6
[3. Pursuant to such Assignment Agreement, the Assignee is required
to pay $____________ to Assignor at or before 12:00 noon (local time of
Assignor) on the Effective Date in immediately available funds.]
Very truly yours,
BANK ONE, NA (MAIN OFFICE CHICAGO),
individually and as Agent
By:
-----------------------------
Title:
---------------------------
JUPITER SECURITIZATION CORPORATION
By:
-----------------------------
Authorized Signatory
Exh. VII-7
EXHIBIT VIII
CREDIT AND COLLECTION POLICY
Attached
Exh. VIII-1
EXHIBIT IX
[Reserved]
Exh. IX-1
EXHIBIT X
FORM OF MONTHLY REPORT
Attached
Exh. X-1
EXHIBIT XI
SPECIAL CONCENTRATION LIMITS
None
Exh. XI-1
SCHEDULE A
COMMITMENTS OF FINANCIAL INSTITUTIONS
FINANCIAL INSTITUTION BACK-UP COMMITMENT LIQUIDITY COMMITMENT
--------------------- ------------------ --------------------
Bank One, NA (Main Chicago $200,000,000 $204,000,000
Office)
Sch. A-1
SCHEDULE B
DOCUMENTS TO BE DELIVERED TO THE AGENT
ON OR PRIOR TO THE INITIAL PURCHASE
Attached
Sch. B-1
SCHEDULE 9.1(n)
METHODOLOGY FOR CALCULATING
CONSOLIDATED TANGIBLE NET WORTH OF INSIGHT ENTERPRISES, INC.
Computed as follows:
9/30/02 equity $450,556,000
Intangibles $188,658,000
Tangible equity $261,898,000
Multiplier 90%
Net $235,708,000
Sch. 9.1(n)-1
ARTICLE I
PURCHASE ARRANGEMENTS.......................................... 1
Section 1.1 Purchase Facility................................... 1
Section 1.2 Increases........................................... 2
Section 1.3 Decreases........................................... 2
Section 1.4 Payment Requirements................................ 2
ARTICLE II
PAYMENTS AND COLLECTIONS....................................... 3
Section 2.1 Payments............................................ 3
Section 2.2 Collections Prior to Amortization................... 3
Section 2.3 Collections Following Amortization.................. 4
Section 2.4 Application of Collections.......................... 4
Section 2.5 Payment Recission................................... 5
Section 2.6 Maximum Purchaser Interests......................... 5
Section 2.7 Clean Up Call....................................... 5
ARTICLE III
JUPITER CP FUNDING............................................. 5
Section 3.1 CP Costs............................................ 5
Section 3.2 CP Costs Payments................................... 5
Section 3.3 Calculation of CP Costs............................. 6
ARTICLE IV
F FINANCIAL INSTITUTION FUNDING................................ 6
Section 4.1 Financial Institution Funding....................... 6
Section 4.2 Yield Payments...................................... 6
Section 4.3 Selection and Continuation of Tranche Periods....... 6
Section 4.4 Financial Institution Discount Rates................ 6
Section 4.5 Suspension of the LIBO Rate......................... 7
ARTICLE V
REPRESENTATIONS AND WARRANTIES................................. 7
Section 5.1 Representations and Warranties of The Seller Parties 7
Section 5.2 Financial Institution Representations and Warranties 11
ARTICLE VI
CONDITIONS OF PURCHASES........................................ 12
Section 6.1 Conditions Precedent to Initial Incremental
Purchase............................................ 12
Section 6.2 Conditions Precedent to All Purchases and
Reinvestments....................................... 12
ARTICLE VII
COVENANTS..................................................... 13
Section 7.1 Affirmative Covenants of The Seller Parties........ 13
Section 7.2 Negative Covenants of The Seller Parties........... 20
i
ARTICLE VIII
ADMINISTRATION AND COLLECTION................................. 21
Section 8.1 Designation of Servicer............................ 21
Section 8.2 Duties of Servicer................................. 22
Section 8.3 Collection Notices................................. 23
Section 8.4 Responsibilities of Seller......................... 23
Section 8.5 Reports............................................ 24
Section 8.6 Servicing Fees..................................... 24
ARTICLE IX
AMORTIZATION EVENTS........................................... 24
Section 9.1 Amortization Events................................ 24
Section 9.2 Remedies........................................... 27
ARTICLE X
INDEMNIFICATION............................................... 27
Section 10.1 Indemnities by The Seller Parties.................. 27
Section 10.2 Increased Cost and Reduced Return.................. 30
Section 10.3 Other Costs and Expenses........................... 30
Section 10.4 Accounting......................................... 31
ARTICLE XI
THE AGENT..................................................... 31
Section 11.1 Authorization and Action........................... 31
Section 11.2 Delegation of Duties............................... 32
Section 11.3 Exculpatory Provisions............................. 32
Section 11.4 Reliance by Agent.................................. 32
Section 11.5 Non-Reliance on Agent and Other Purchasers......... 32
Section 11.6 Reimbursement and Indemnification.................. 33
Section 11.7 Agent in its Individual Capacity................... 33
Section 11.8 Successor Agent.................................... 33
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS................................... 34
Section 12.1 Assignments........................................ 34
Section 12.2 Participations..................................... 35
ARTICLE XIII
LIQUIDITY FACILITY............................................ 35
Section 13.1 Transfer to Financial Institutions................. 35
Section 13.2 Transfer Price Reduction Yield..................... 35
Section 13.3 Payments to Jupiter................................ 35
Section 13.4 Limitation on Commitment to Purchase from Jupiter.. 36
Section 13.5 Defaulting Financial Institutions.................. 36
Section 13.6 Terminating Financial Institutions................. 36
ARTICLE XIV
MISCELLANEOUS................................................. 37
ii
Section 14.1 Waivers and Amendments............................. 37
Section 14.2 Notices............................................ 38
Section 14.3 Ratable Payments................................... 39
Section 14.4 Protection of Ownership Interests of the
Purchasers......................................... 39
Section 14.5 Confidentiality.................................... 40
Section 14.6 Bankruptcy Petition................................ 40
Section 14.7 Limitation of Liability............................ 40
Section 14.8 CHOICE OF LAW...................................... 41
Section 14.9 CONSENT TO JURISDICTION............................ 41
Section 14.10 WAIVER OF JURY TRIAL............................... 41
Section 14.11 Integration; Binding Effect; Survival of Terms..... 41
Section 14.12 Counterparts; Severability; Section References..... 42
Section 14.13 Bank One Roles..................................... 42
Section 14.14 Characterization................................... 42
Exhibits and Schedules
Exhibit I Definitions
Exhibit II Form of Purchase Notice
Exhibit III Places of Business of the Seller Parties; Locations of Records; Federal
Employer Identification Number(s)
Exhibit IV Names of Collection Banks; Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI Form of Collection Account Agreement
Exhibit VII Form of Assignment Agreement
Exhibit VIII Credit and Collection Policy
Exhibit IX [Reserved]
Exhibit X Form of Monthly Report
Exhibit XI Special Concentration Limits
Schedule A Commitments
Schedule B Closing Documents
Schedule 9.1(n) Methodology of Calculating Consolidated Tangible Net Worth
iii
