EXHIBIT 10.37
EXECUTION COPY
RECEIVABLES SALE AGREEMENT
Dated as of December 31, 2002
by and among
INSIGHT DIRECT USA, INC.,
COMARK CORPORATE SALES, INC.,
INSIGHT SERVICES CORPORATION,
COMARK GOVERNMENT AND EDUCATION SALES, INC.
and
COMARK, INC.,
as Originators
and
INSIGHT RECEIVABLES, LLC,
as Buyer
RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of December 31, 2002, is
by and among Insight Direct USA, Inc., an Arizona corporation ("Insight
Direct"), Comark Corporate Sales, Inc., an Illinois corporation ("Comark
Corporate Sales"), Insight Services Corporation, an Arizona corporation ("ISC"),
Comark Government and Education Sales, Inc., an Illinois corporation ("CGE") and
Comark, Inc., an Illinois corporation ("Comark") (each of Insight Direct, Comark
Corporate Sales, ISC, CGE and Comark, an "Originator" and collectively, the
"Originators"), and Insight Receivables, LLC, an Illinois limited liability
company ("Buyer"). Unless defined elsewhere herein, capitalized terms used in
this Agreement shall have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Each Originator now owns, and from time to time hereafter will own,
Receivables. Each Originator wishes to sell and assign to Buyer, and Buyer
wishes to purchase from each Originator, all of such Originator's right, title
and interest in and to such Receivables, together with the Related Security and
Collections with respect thereto.
The Originators and Buyer intend the transactions contemplated
hereby to be true sales of the Receivables from the Originators to Buyer,
providing Buyer with the full benefits of ownership of the Receivables, and the
Originators and Buyer do not intend these transactions to be, or for any purpose
to be characterized as, loans from Buyer to the Originators.
Following the purchase of Receivables from the Originators, Buyer
will sell undivided interests therein and in the associated Related Security and
Collections pursuant to that certain Receivables Purchase Agreement dated as of
December 31, 2002 (as the same may from time to time hereafter be amended,
supplemented, restated or otherwise modified, the "Purchase Agreement") among
Buyer, Insight Enterprises, Inc., as Servicer, Jupiter Securitization
Corporation ("Jupiter"), the financial institutions from time to time party
thereto as "Financial Institutions" and Bank One, NA (Main Office Chicago) or
any successor agent appointed pursuant to the terms of the Purchase Agreement,
as agent for Jupiter and such Financial Institutions (in such capacity, the
"Agent").
ARTICLE I
AMOUNTS AND TERMS
Section 1.1 Purchase of Receivables.
(a) Effective on the date hereof, in consideration for the Purchase
Price and upon the terms and subject to the conditions set forth herein, each
Originator does hereby sell, assign, transfer, set-over and otherwise convey to
Buyer, without recourse (except to the extent expressly provided herein), and
Buyer does hereby purchase from each Originator, all of such Originator's right,
title and interest in and to all Receivables originated by such Originator and
existing as of the close of business on the Business Day immediately prior to
the date hereof and all Receivables originated by such Originator thereafter
arising through and including the Amortization Date, together, in each case,
with all Related Security relating thereto and all Collections thereof. In
accordance with the preceding sentence, on the date hereof Buyer shall acquire
all of each Originator's right, title and interest in and to all Receivables
originated by such Originator existing as of the close of business on the
Business Day immediately prior to the date hereof and thereafter arising through
and including the Amortization Date, together with all Related Security relating
thereto and all Collections thereof; provided, that, Buyer shall be obligated to
pay the Purchase Price therefor in accordance with Section 1.2. In connection
with the payment of the Purchase Price for any Receivables purchased hereunder,
Buyer may request that each Originator deliver, and each Originator shall
deliver, such approvals, opinions, information, reports or documents as Buyer
may reasonably request.
(b) It is the intention of the parties hereto that the Purchase of
Receivables made hereunder shall constitute a "sale of accounts" (as such term
is used in Article 9 of the UCC), which sale is absolute and irrevocable and
provides Buyer with the full benefits of ownership of the Receivables. Except
for the Purchase Price Credits owed to such Originator pursuant to Section 1.3,
the sale of Receivables hereunder is made without recourse to such Originator;
provided, however, that (i) each Originator shall be liable to Buyer for all
representations, warranties and covenants made by such Originator pursuant to
the terms of the Transaction Documents to which such Originator is a party, and
(ii) such sale does not constitute and is not intended to result in an
assumption by Buyer or any assignee thereof of any obligation of such Originator
or any other Person arising in connection with the Receivables originated by
such Originator, the related Contracts and/or other Related Security or any
other obligations of such Originator. In view of the intention of the parties
hereto that the Purchase of Receivables made hereunder shall constitute a sale
of such Receivables rather than loans secured thereby, each Originator agrees
that it will, on or prior to the date hereof and in accordance with Section
4.1(e)(ii), xxxx its master data processing records relating to the Receivables
originated by it with a legend acceptable to Buyer and to the Agent (as Buyer's
assignee), evidencing that Buyer has purchased such Receivables as provided in
this Agreement and to note in its financial statements that its Receivables have
been sold to Buyer. Upon the request of Buyer or the Agent (as Buyer's
assignee), each Originator will execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices, as may be necessary or appropriate to perfect and
maintain the perfection of Buyer's ownership interest in the Receivables and the
Related Security and Collections with respect thereto, or as Buyer or the Agent
(as Buyer's assignee) may reasonably request.
Section 1.2 Payment for the Purchase.
(a) The Purchase Price for the Purchase of Receivables of each
Originator that are in existence on the close of business on the Business Day
immediate preceding the date hereof (the "Initial Cutoff Date") shall be payable
in full by Buyer to such Originator on the date hereof, and shall be paid to
such Originator in the following manner:
(i) by delivery of immediately available funds, to the extent
of funds made available to Buyer in connection with its subsequent sale of
an interest in such Receivables to the Purchasers under the Purchase
Agreement or other cash on hand; and
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(ii) the balance by delivery of the proceeds of a subordinated
revolving loan from such Originator to Buyer (a "Subordinated Loan") in an
amount not to exceed the least of (A) the remaining unpaid portion of such
Purchase Price and (B) the maximum Subordinated Loan that could be
borrowed without rendering Buyer's Net Worth less than the Required
Capital Amount. Each Originator is hereby authorized by Buyer to endorse
on the schedule attached to the Subordinated Note an appropriate notation
evidencing the date and amount of each advance thereunder, as well as the
date of each payment with respect thereto, provided that the failure to
make such notation shall not affect any obligation of Buyer thereunder.
The Purchase Price for each Receivable coming into existence after the Initial
Cutoff Date shall be due and owing in full by Buyer to the Originator of such
Receivable or its designee on the date each such Receivable came into existence
(except that Buyer may, with respect to any such Purchase Price, offset against
such Purchase Price any amounts owed by such Originator to Buyer hereunder and
which have become due but remain unpaid) and shall be paid to such Originator in
the manner provided in the following paragraphs (b), (c), (d) and (e).
(b) With respect to any Receivables coming into existence after the
Initial Cutoff Date, Buyer shall pay the Purchase Price therefor in the
following manner:
(i) first, by delivery of immediately available funds, to the
extent of funds available to Buyer from its subsequent sale of an interest
in the Receivables to the Agent for the benefit of the Purchasers under
the Purchase Agreement or other cash on hand; and
(ii) second, the balance of such Purchase Price by delivery of
the proceeds of a Subordinated Loan, provided that the making of any such
Subordinated Loan shall be subject to the provisions set forth in Section
1.2(a)(ii).
Subject to the limitations set forth in Section 1.2(a)(ii), each Originator
irrevocably agrees to advance each Subordinated Loan requested by Buyer on or
prior to the Amortization Date. The Subordinated Loans shall be evidenced by,
and shall be payable in accordance with the terms and provisions of the
Subordinated Note and shall be payable solely from funds which Buyer is not
required under the Purchase Agreement to set aside for the benefit of, or
otherwise pay over to, the Purchasers.
(c) From and after the Amortization Date, no Originator shall be
obligated to (but may, at its option) sell Receivables to Buyer unless such
Originator reasonably determines that the Purchase Price therefor will be
satisfied with funds available to Buyer from sales of interests in the
Receivables pursuant to the Purchase Agreement, Collections, proceeds of
Subordinated Loans or otherwise.
(d) On each day prior to the Amortization Date (unless Buyer or the
Agent shall otherwise direct), the Collections received in respect of
Receivables theretofore transferred by the Originators to Buyer hereunder
("Applied Collections"), shall, on and as of the date of receipt thereof, be (i)
deemed applied toward the Purchase Price of any Receivables of the Originators
arising on such date and then being transferred to Buyer pursuant to the terms
hereof,
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to the extent of any such Purchase Price, (ii) then, in respect of any balance
remaining, deemed applied toward the Purchase Price of any other Receivables of
any of the Originators arising during such Calculation Period and in respect of
which the Purchase Price shall not theretofore have been paid, to the extent of
any such Purchase Price, and (iii) in respect of any balance remaining, held by
or for the benefit of Buyer until the earlier to occur of (A) application toward
the Purchase Price for any Purchase occurring on any later date and (B) the next
following Settlement Date, in which case such amount shall be remitted to Buyer.
(e) Although the Purchase Price for each Receivable originated by an
Originator shall be due and payable in full by Buyer to such Originator on the
date hereof (in the case of each Receivable purchased on the date hereof) or on
the date such Receivable came into existence (in the case of each subsequent
purchase), and payment of such Purchase Price shall be made from Applied
Collections, to the extent available, as provided in Section 1.2(d), final
settlement of the Purchase Price between Buyer and such Originator shall be
effected on a monthly basis on Settlement Dates with respect to all Receivables
coming into existence during the same Calculation Period and based on the
information contained in the Monthly Report delivered by the Servicer pursuant
to Article VIII of the Purchase Agreement for the Calculation Period then most
recently ended. On each Settlement Date, Buyer and each Originator shall cause a
reconciliation to be made in respect of all Purchases that shall have been made
during the Calculation Period then most recently ended. To the extent that the
aggregate amount of Applied Collections during such Calculation Period shall
have been less than the aggregate Purchase Price in respect of all Purchases
made by Buyer from such Originator during such month, Buyer shall pay the
balance due in respect of such aggregate Purchase Price in the manner described
in Section 1.2(a). To the extent that the aggregate amount of Applied
Collections with respect to such Originator during such Calculation Period shall
have been greater than the aggregate Purchase Price in respect of all Purchases
made by Buyer from such Originator during such Calculation Period, such excess
shall be applied to a reduction in the outstanding balance of the Subordinated
Loan owing by Buyer to such Originator in an amount equal to such excess, and
any remaining portion of such excess shall be retained by or paid over to Buyer.
Although settlement shall be effected on Settlement Dates, increases or
decreases in the amount owing under the Subordinated Loans made pursuant to
Section 1.2(b) shall be deemed to have occurred and shall be effective as of the
last Business Day of the Calculation Period to which such settlement relates.
(f) At all times prior to the Amortization Date, notwithstanding any
delay in the making of any payment of the Purchase Price in respect of any
Purchase, all right, title and interest of each Originator in and to each
Receivable originated by it shall be sold, assigned and otherwise transferred to
Buyer effective immediately and automatically upon the creation of such
Receivable, without any further action of any type or kind being required on the
part of any Person. The monthly settlement and reconciliation contemplated in
this Section 1.2 has been devised solely for the administrative convenience of
the parties hereto. Buyer and each Originator may at any time, as may agreed
between themselves, elect to effect settlement and reconciliation on a more (but
not less) frequent basis.
Section 1.3 Purchase Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable is:
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(i) reduced as a result of any defective or rejected goods or
services, any discount or any adjustment or otherwise by the applicable
Originator (other than cash Collections on account of such Receivable),
(ii) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a
related transaction or an unrelated transaction), or
(b) any of the representations and warranties set forth in Article
II were not true with respect to any Receivable at the time of its sale
hereunder,
then, in such event, Buyer shall be entitled to a credit (each, a "Purchase
Price Credit") against the Purchase Price otherwise payable to the applicable
Originator hereunder equal to (A) in the case of any reduction, discount or
adjustment pursuant to Section 1.3(a)(i) or any reduction (but not cancellation)
pursuant to Section 1.3(a)(ii), the amount of such reduction, discount or
adjustment, and (B) in all other circumstances set forth in Sections 1.3(a) or
(b), the Outstanding Balance of such Receivable. If such Purchase Price Credit
exceeds the Original Balance of the Receivables originated by the applicable
Originator coming into existence on any day, then such Originator shall pay the
remaining amount of such Purchase Price Credit in cash not later than the next
Settlement Date, provided that if the Amortization Date has not occurred, such
Originator shall be allowed to deduct the remaining amount of such Purchase
Price Credit from any indebtedness owed to it under its Subordinated Note.
Section 1.4 Payments and Computations, Etc. All amounts to be paid
or deposited by Buyer hereunder shall be paid or deposited in accordance with
the terms hereof on the day when due in immediately available funds to the
account of each Originator designated from time to time by such Originator or as
otherwise directed by such Originator. In the event that any payment owed by any
Person hereunder becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. If any Person fails
to pay any amount hereunder when due, such Person agrees to pay, on demand, the
Default Fee in respect thereof until paid in full; provided, however, that such
Default Fee shall not at any time exceed the maximum rate permitted by
applicable law. All computations of interest payable hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed.
Section 1.5 Transfer of Records.
(a) In connection with the Purchase of Receivables hereunder, each
Originator hereby sells, transfers, assigns and otherwise conveys to Buyer all
of such Originator's right and title to and interest in the Records relating to
all Receivables sold hereunder, without the need for any further documentation
in connection with the Purchase. In connection with such transfer, each
Originator hereby grants to each of Buyer, the Agent and the Servicer an
irrevocable, non-exclusive license to use, without royalty or payment of any
kind, all software used by such Originator to account for the Receivables, to
the extent necessary to administer the Receivables, whether such software is
owned by such Originator or is owned by others and used by such Originator under
license agreements with respect thereto, provided that should the consent of any
licensor of such software to such grant of the license described herein be
required, such
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Originator hereby agrees that upon the request of Buyer (or the Agent as Buyer's
assignee), such Originator will use its reasonable efforts to obtain the consent
of such third-party licensor. The license granted hereby shall be irrevocable,
and shall terminate on the date that the Aggregate Unpaids have been repaid in
full and this Agreement terminates in accordance with its terms.
(b) Each Originator (i) shall take such action requested by Buyer
and/or the Agent (as Buyer's assignee), from time to time hereafter, that may be
necessary or appropriate to ensure that Buyer and its assigns under the Purchase
Agreement have an enforceable ownership interest in the Records relating to the
Receivables purchased from such Originator hereunder, and (ii) shall use its
reasonable efforts to ensure that Buyer, the Agent and the Servicer each has an
enforceable right (whether by license or sublicense or otherwise) to use all of
the computer software used to account for the Receivables and/or to recreate
such Records.
Section 1.6 Characterization. If, notwithstanding the intention of
the parties expressed in Section 1.1(b), any sale by an Originator to Buyer of
Receivables hereunder shall be characterized as a secured loan and not a sale or
such sale shall for any reason be ineffective or unenforceable, then this
Agreement shall be deemed to constitute a security agreement under the UCC and
other applicable law. For this purpose and without being in derogation of the
parties' intention that the sale of Receivables hereunder shall constitute a
true sale thereof, each Originator hereby grants to Buyer a duly perfected
security interest in all of such Originator's right, title and interest in, to
and under all Receivables now existing and hereafter arising, all Collections,
Related Security and Records with respect thereto, all other rights and payments
relating to the Receivables, each Lock-Box and Collection Account, all proceeds
of the foregoing and all other assets in which the Buyer has acquired, may
hereafter acquire and/or purports to have acquired an interest under this
Agreement, to secure the prompt and complete payment of a loan deemed to have
been made in an amount equal to the Purchase Price of the Receivables generated
by such Originator together with all of the other obligations of such Originator
hereunder, which security interest shall be prior to all other Adverse Claims
thereto. After the occurrence and during the continuance of an Amortization
Event, Buyer and its assigns shall have, in addition to the rights and remedies
which they may have under this Agreement, all other rights and remedies provided
to a secured creditor after default under the UCC and other applicable law,
which rights and remedies shall be cumulative.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Originators. On the
date of the initial Purchase and on each subsequent date that any Receivable is
originated by such Originator, each Originator hereby represents and warrants to
Buyer as to such Originator and the Receivables then being transferred by such
Originator to Buyer hereunder that:
(a) Corporate Existence and Power. Such Originator is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation, and is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in its which its business
is conducted except where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect, and has and holds all corporate
power
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and all governmental licenses, authorizations, consents and approvals required
to carry on its business in each jurisdiction in which its business is conducted
(collectively, "Approvals") other than such Approvals the failure of which to
obtain 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 Originator of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and, such Originator's use of the proceeds
of the Purchase made hereunder, are within its corporate powers and authority
and have been duly authorized by all necessary corporate action on its part.
This Agreement and each other Transaction Document to which such Originator is a
party has been duly executed and delivered by such Originator.
(c) No Conflict. The execution and delivery by such Originator of
this Agreement and each other Transaction Document to which it is a party, and
the performance of its obligations hereunder and thereunder do not contravene or
violate (i) its certificate or articles of incorporation or by-laws (or
equivalent organizational documents), (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 Originator or its Subsidiaries (except as created hereunder);
and no transaction contemplated hereby requires compliance with any bulk sales
act or similar law.
(d) Governmental Authorization. Other than the filing of the
financing statements required hereunder and as set forth on Schedule 2.1(d), 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 Originator of this Agreement and each other Transaction
Document to which it is a party and the performance of its obligations hereunder
and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Originator's knowledge, threatened, against or
affecting such Originator, 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 Originator is not in default with respect to any order of
any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction
Document to which such Originator is a party constitute the legal, valid and
binding obligations of such Originator enforceable against such Originator in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore furnished by
such Originator or any of its Affiliates to Buyer (or its assigns) for purposes
of or in connection with this Agreement, any of the other Transaction Documents
or any transaction contemplated hereby
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or thereby is, and all such information hereafter furnished by such Originator
or any of its Affiliates to Buyer (or its assigns) will be, true and accurate in
every material respect on the date such information is stated or certified and
does not and will not, at the time the same is so furnished, be otherwise
misleading in light of the circumstances under which such information was
furnished; 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 Buyer 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 Price payment to
such Originator 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 13 or 14 of the Securities
Exchange Act of 1934, as amended.
(i) Good Title. Immediately prior to each purchase of a Receivable
hereunder from such Originator, such Originator shall be the legal and
beneficial owner of each such Receivable 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 such Originator's
ownership interest in each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to transfer to Buyer (and
Buyer shall acquire from such Originator) legal and equitable title to, with the
right to sell and encumber each Receivable existing and hereafter arising,
together with 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 Buyer's ownership interest in the Receivables, the
Related Security and the Collections.
(k) Places of Business. The principal places of business and chief
executive office of such Originator and the offices where it keeps all of its
Records are located at the address(es) listed on Exhibit II or such other
locations of which Buyer has been notified in accordance with Section 4.2(a) in
jurisdictions where all action required by Section 4.2(a) has been taken and
completed. Insight Direct is an Arizona corporation. Comark Corporate Sales is
an Illinois corporation. ISC is an Arizona corporation. CGE is an Illinois
corporation. Comark is an Illinois corporation. The Federal Employer
Identification Number and organizational identification number of each
Originator is correctly set forth on Exhibit II.
(l) Collections. The conditions and requirements set forth in
Section 4.1(j) 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 such Originator at each Collection Bank and the post
office box number of each Lock-Box, are listed on Exhibit III.
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(m) Material Adverse Effect. Since June 30, 2002, no event has
occurred that could reasonably be expected to have a Material Adverse Effect.
(n) Names. In the past five (5) years, such Originator has not used
any corporate names, trade names or assumed names other than the name in which
it has executed this Agreement, other than as listed on Exhibit II.
(o) Ownership of Buyer. Insight Receivables Holding, LLC, an
Illinois limited liability company owns, directly or indirectly, 100% of the
issued and outstanding membership interests of Buyer, free and clear of any
Adverse Claim. Such membership interests are validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
equity securities of Buyer.
(p) Not a Holding Company or an Investment Company. Such Originator
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 Originator is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(q) Compliance with Law. Except where the failure of such Originator
to comply with any applicable laws, rules or regulations could not reasonably be
expected to have a Material Adverse Effect, such Originator has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject. 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 Originator
has complied in all material respects with the Credit and Collection Policy with
regard to each Receivable and the related Contract, and has not made any change
to such Credit and Collection Policy except such material change as to which
Buyer (or its assigns) has been notified in accordance with Section 4.1(a)(vii).
(s) Payments to Originator. With respect to each Receivable
transferred to Buyer hereunder, the Purchase Price received by such Originator
constitutes reasonably equivalent value in consideration therefor and such
transfer was not made for or on account of an antecedent debt. No transfer by
such Originator of any Receivable hereunder 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 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
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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
Receivables Balance as an Eligible Receivable on the date of its purchase
hereunder was an Eligible Receivable on such date.
(v) Accounting. The manner in which such Originator accounts for the
transactions contemplated by this Agreement does not jeopardize the
characterization of the transactions contemplated herein as being true sales.
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Initial Purchase. The initial
Purchase under this Agreement is subject to the conditions precedent that (a)
Buyer shall have received on or before the date of such purchase those documents
listed on Schedule A and (b) all of the conditions to the initial purchase under
the Purchase Agreement shall have been satisfied or waived in accordance with
the terms thereof.
Section 3.2 Conditions Precedent to Subsequent Payments. Buyer's
obligation to pay for Receivables coming into existence after the Initial Cutoff
Date shall be subject to the further conditions precedent that (c) the Facility
Termination Date shall not have occurred; and (b) Buyer (or its assigns) shall
have received such other approvals, opinions or documents as it may reasonably
request. Each Originator represents and warrants that the representations and
warranties set forth in Article II are true and correct on and as of the date
each Receivable came into existence as though made on and as of such date (or to
the extent such representations and warranties specifically relate to an earlier
date, then such representations and warranties were true, correct and complete
in all material respects as of such earlier date); provided, however, that
notwithstanding the foregoing conditions precedent, upon payment of the Purchase
Price for any Receivable (whether by payment of cash, through an increase in the
amounts outstanding under the Subordinated Note, by offset of amounts owed to
Buyer and/or by capital contributions), title to such Receivable and the Related
Security and Collections with respect thereto shall vest in Buyer, whether or
not the conditions precedent to Buyer's obligation to pay for such Receivable
were in fact satisfied. The failure of any Originator to satisfy any of the
foregoing conditions precedent, however, shall give rise to a right of Buyer to
rescind the related purchase and direct such Originator to pay to Buyer an
amount equal to the Purchase Price payment that shall have been made with
respect to any Receivables related thereto.
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Originators. Until the date on
which this Agreement terminates in accordance with its terms, each Originator
hereby covenants as set forth below:
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(a) Financial Reporting. Such Originator will maintain, for itself
and each of its Subsidiaries, a system of accounting established and
administered in accordance with generally accepted accounting principles, and
furnish to Buyer (or its assigns):
(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 such Originator and its
consolidated subsidiaries for such fiscal year certified by KPMG or other
independent public accountants of nationally recognized standing.
(ii) Quarterly Reporting. Within 45 days after the close of
the first three (3) quarterly periods of each of its respective fiscal
years, consolidated balance sheets of such Originator 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, all certified by its chief financial officer.
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in substantially
the form of Exhibit IV signed by such Originator's Authorized Officer and
dated the date of such annual financial statement or such quarterly
financial statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to the shareholders of such Originator copies of all
financial statements, reports and proxy statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies
of all registration statements and annual, quarterly, monthly or other
regular reports which such Originator or any of its Subsidiaries files
with the Securities and Exchange Commission.
(vi) Copies of Notices. Promptly upon its receipt of any
notice, request for consent, financial statements, certification, report
or other communication under or in connection with any Transaction
Document from any Person other than Buyer, 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 indicating such change or
amendment.
(viii) Other Information. Promptly, from time to time, such
other information, documents, records or reports relating to the
Receivables or the condition or operations, financial or otherwise, of
such Originator as Buyer (or its assigns) may from time to time reasonably
request in order to protect the interests of Buyer (and its assigns) under
or as contemplated by this Agreement.
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(b) Notices. Such Originator will notify the Buyer (or its assigns)
in writing of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:
(i) 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 Originator.
(ii) Judgment and Proceedings. (1) The entry of any judgment
or decree against such Originator or any of its Subsidiaries if the
aggregate amount of all judgments and decrees then outstanding against
such Originator and its Subsidiaries exceeds $5,000,000, or (2) the
institution of any litigation, arbitration proceeding or governmental
proceeding against such Originator which, if determined adversely to such
Originator, could reasonably be expected to have a Material Adverse
Effect.
(iii) Material Adverse Effect. The occurrence of any event or
condition that has, or could reasonably be expected to have, a Material
Adverse Effect.
(iv) Defaults Under Other Agreements. The occurrence of a
default or an event of default under any other financing arrangement
pursuant to which such Originator is a debtor or an obligor.
(c) Compliance with Laws and Preservation of Corporate Existence.
Such Originator 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 or awards to which it may be subject which have not been
stayed by appropriate proceedings. Such Originator will preserve and maintain
its corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where its business is conducted, except
where the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect.
(d) Audits. Such Originator will furnish to Buyer (or its assigns)
from time to time such information with respect to it and the Receivables as
Buyer (or its assigns) may reasonably request. Such Originator will, from time
to time during regular business hours as requested by Buyer (or its assigns),
upon reasonable notice and at the sole cost of such Originator, permit Buyer (or
its assigns) or their respective agents or representatives (and shall cause each
Originator to permit Buyer (or its assigns) or their respective 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 such Person's performance under any of the
Transaction Documents or
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such Person's performance under the Contracts and, in each case, with any of the
officers or employees of such Person having knowledge of such matters.
(e) Keeping and Marking of Records and Books.
(i) Such Originator will maintain and implement administrative
and operating procedures as such Originator shall deem appropriate in its
good faith business judgment (including, without limitation, an ability to
recreate records evidencing Receivables in the event of the destruction of
the originals thereof), and keep and maintain all documents, books,
records and other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation, records
adequate to permit the immediate identification of each new Receivable and
all Collections of and adjustments to each existing Receivable).
(ii) Such Originator will (A) on or prior to the date hereof,
xxxx its master data processing records and other books and records
relating to the Receivables with a legend, acceptable to Buyer (or its
assigns), describing Buyer's ownership interests in the Receivables and
further describing the Purchaser Interests of the Agent (on behalf of the
Purchasers) under the Purchase Agreement and (B) upon the request of Buyer
(or its assigns), (x) xxxx each Contract with a legend describing Buyer's
ownership interests in the Receivables and further describing the
Purchaser Interests of the Agent (on behalf of the Purchasers) and (y)
deliver to Buyer (or its assigns) all Contracts (including, without
limitation, all multiple originals of any such Contract) relating to the
Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Such
Originator will timely and fully (i) perform and comply with all provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables, and (ii) comply in all material respects with the
Credit and Collection Policy in regard to each Receivable and the related
Contract.
(g) Ownership. Such Originator will take all necessary action to
establish and maintain, irrevocably in Buyer, legal and equitable title to the
Receivables, the Related Security and the Collections, free and clear of any
Adverse Claims other than Adverse Claims in favor of Buyer (and its assigns)
(including, without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect Buyer's interest in such
Receivables, Related Security and Collections and such other action to perfect,
protect or more fully evidence the interest of Buyer as Buyer (or its assigns)
may reasonably request).
(h) Purchasers' Reliance. Such Originator acknowledges that the
Agent and the Purchasers are entering into the transactions contemplated by the
Purchase Agreement in reliance upon Buyer's identity as a legal entity that is
separate from Insight Enterprises, Inc. and any Affiliates thereof, including
each of the Originators (each an "Insight Entity"). Therefore, from and after
the date of execution and delivery of this Agreement, such Originator will take
all reasonable steps including, without limitation, all steps that Buyer or any
assignee of Buyer may from time to time reasonably request to maintain Buyer's
identity as a separate legal entity and to
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make it manifest to third parties that Buyer is an entity with assets and
liabilities distinct from those of such 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, such Originator (i) will not
hold itself out to third parties as liable for the debts of Buyer nor purport to
own the Receivables and other assets acquired by Buyer, (ii) will take all other
actions necessary on its part to ensure that Buyer is at all times in compliance
with the covenants set forth in Section 7.1(i) of the Purchase Agreement and
(iii) will cause all tax liabilities arising in connection with the transactions
contemplated herein or otherwise to be allocated between such Originator and
Buyer on an arm's-length basis and in a manner consistent with the procedures
set forth in U.S. Treasury Regulations Sections 1.1502-33(d) and 1.1552-1.
(i) Collections. Except as may be required under Section 8.2(b) of
the Purchase Agreement, such Originator will cause (1) all proceeds from all
Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account and (2) each Lock-Box and Collection Account to be subject at all times
to a Collection Account Agreement that is in full force and effect. In the event
any payments relating to Receivables are remitted directly to such Originator or
any Affiliate of such Originator, such Originator will remit (or will cause all
such payments to be remitted) directly to a Collection Bank for deposit into a
Collection Account within two (2) Business Days following receipt thereof and,
at all times prior to such remittance, such Originator will itself hold or, if
applicable, will cause such payments to be held in trust for the exclusive
benefit of Buyer and its assigns. Such Originator will transfer exclusive
ownership, dominion and control of each Lock-Box and Collection Account to
Buyer, and will not grant the right to take dominion and control of any Lock-Box
or Collection Account at a future time or upon the occurrence of a future event
to any Person, except to Buyer (or its assigns) as contemplated by this
Agreement and the Purchase Agreement.
(j) Taxes. Such Originator will file all tax returns and reports
required by law to be filed by it and promptly pay all taxes and governmental
charges at any time owing except for taxes being diligently contested in good
faith and for which adequate reserves have been established. Such Originator
will pay when due any taxes payable in connection with the Receivables,
exclusive of taxes on or measured by income or gross receipts of Buyer and its
assigns.
Section 4.2 Negative Covenants of Originators. Until the date on
which this Agreement terminates in accordance with its terms, each Originator
hereby covenants that:
(a) Name Change, Offices and Records. Such Originator will not
change its name, identity or corporate 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 Buyer (or its assigns) at least thirty (30) days' prior written notice
thereof and (ii) delivered to Buyer (or its assigns) all financing statements,
instruments and other documents requested by Buyer (or its assigns) in
connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Such Originator will
not add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless Buyer (or its
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assigns) 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 such
Originator may make changes in instructions to Obligors regarding payments if
such new instructions require such Obligor to make payments to another existing
Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy.
Such Originator will not make any change to the Credit and Collection Policy
that could adversely affect the collectibility of the Receivables or decrease
the credit quality of any newly created Receivables without the Buyer's prior
written consent. Such Originator 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 except for such modifications such Originator shall deem appropriate in
its good faith business judgment and which could not reasonably be expected to
have a Material Adverse Effect.
(d) Sales, Liens. Such Originator will not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, or create or suffer to exist any Adverse Claim upon (including,
without limitation, the filing of any financing statement) or with respect to,
any Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of Buyer provided
for herein), and such Originator will defend the right, title and interest of
Buyer in, to and under any of the foregoing property, against all claims of
third parties claiming through or under such Originator. Such Originator shall
not create or suffer to exist any mortgage, pledge, security interest,
encumbrance, lien, charge or other similar arrangement on any of its inventory,
unless agreed to in advance in writing by Buyer (and its assigns).
(e) Accounting for Purchase. Such Originator will not, and will not
permit any Affiliate to, account for or treat (whether in financial statements
or otherwise) the transactions contemplated hereby in any manner other than the
sale of the Receivables and the Related Security by such Originator to Buyer or
in any other respect account for or treat the transactions contemplated hereby
in any manner other than as a sale of the Receivables and the Related Security
by such Originator to Buyer except to the extent that such transactions are not
recognized on account of consolidated financial reporting in accordance with
generally accepted accounting principles.
ARTICLE V
AMORTIZATION EVENTS
Section 5.1 Amortization Events. The occurrence of any one or more
of the following events shall constitute an Amortization Event:
(a) Any Originator 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
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(other than as referred to in clause (i) of this paragraph (a)) or any other
Transaction Document to which it is a party and such failure shall continue for
three (3) consecutive Business Days after such Originator has notice thereof.
(b) Any representation, warranty, certification or statement made by
any Originator in this Agreement, any other Transaction Document or in any other
document delivered pursuant hereto or thereto shall prove to have been incorrect
in any material respect when made or deemed made.
(c) Failure of any Originator to pay any "Specified Indebtedness"
when due; or the default by 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
Specified Indebtedness of 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.
(d) (i) 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 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 Originator,
either such proceeding shall remain undismissed or unstayed for a period of
sixty (60) days or any of the relief sought in such proceedings shall be granted
or (iii) any Originator or any of its Subsidiaries shall take any corporate
action to authorize any of the actions set forth in the foregoing clauses (i) or
(ii) of this subsection (d).
(e) A Change of Control shall occur.
(f) One or more final judgments for the payment of money in an
amount in excess of $10,000,000, individually or in the aggregate, shall be
entered against any Originator on claims not covered by insurance or as to which
the insurance carrier has denied its responsibility, and such judgment shall
continue unsatisfied and in effect for fifteen (15) consecutive days without a
stay of execution.
Section 5.2 Remedies. Upon the occurrence and during the
continuation of an Amortization Event, Buyer may take any of the following
actions: (i) 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 Originator;
provided, however, that upon the occurrence of Amortization Event described in
Section 5.1(d), or of an actual or deemed entry of an order for relief with
respect to any
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Originator 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 Originator and (ii) to the fullest
extent permitted by applicable law, declare that the Default Fee shall accrue
with respect to any amounts then due and owing to Buyer by any Originator. The
aforementioned rights and remedies shall be in addition to all other rights and
remedies of Buyer and its assigns available under this Agreement, by operation
of law, at equity or otherwise, all of which are hereby expressly preserved,
including, without limitation, all rights and remedies provided under the UCC,
all of which rights shall be cumulative.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnities by Originators. Without limiting any other
rights that Buyer may have hereunder or under applicable law, each Originator
hereby agrees to indemnify Buyer and its assigns, officers, directors, agents
and employees (each an "Indemnified Party") from and against any and all
damages, losses, claims, taxes, liabilities, costs, expenses and for all other
amounts payable, including reasonable attorneys' fees (which attorneys may be
employees of Buyer) and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts") awarded against or incurred by any of them
arising out of or as a result of this Agreement or the acquisition, either
directly or indirectly, by Buyer of an interest in the Receivables, excluding,
however:
(i) 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;
(ii) Indemnified Amounts to the extent the same includes
losses in respect of Receivables that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related Obligor;
or
(iii) taxes imposed by the 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 Intended
Characterization;
provided, however, that nothing contained in this sentence shall limit the
liability of such Originator or limit the recourse of Buyer to such Originator
for amounts otherwise specifically provided to be paid by such Originator under
the terms of this Agreement. Without limiting the generality of the foregoing
indemnification, such Originator shall indemnify Buyer for Indemnified Amounts
(including, without limitation, losses in respect of uncollectible receivables,
regardless of whether reimbursement therefor would constitute recourse to such
Originator) relating to or resulting from:
(A) any representation or warranty made by such
Originator (or any officers of any such Originator) under or in
connection with this Agreement, any other Transaction Document or
any other information or report delivered by
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any such Person pursuant hereto or thereto, which shall have been
false or incorrect when made or deemed made;
(B) the failure by such 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 such Originator to keep or perform any
of its obligations, express or implied, with respect to any
Contract;
(C) any failure of such Originator to perform its
duties, covenants or other obligations in accordance with the
provisions of this Agreement or any other Transaction Document;
(D) any products liability, personal liability or damage
suit, or similar claim arising out of or in connection with
merchandise, insurance or services that are the subject of any
Contract or any Receivable;
(E) 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;
(F) the commingling of Collections of Receivables at any
time with other funds;
(G) 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 the
Purchase, the ownership of the Receivables or any other
investigation, litigation or proceeding relating to such Originator
in which any Indemnified Party becomes involved as a result of any
of the transactions contemplated hereby;
(H) 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;
(I) any Amortization Event described in Section 5.1(d);
(J) any failure to vest and maintain vested in Buyer, or
to transfer to Buyer, legal and equitable title to, and ownership
of, the Receivables, the Related Security and the Collections, free
and clear of any Adverse Claim;
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(K) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivable, the Related Security and Collections with
respect thereto, and the proceeds of any thereof, whether at the
time of the Purchase or at any subsequent time;
(L) any action or omission by such Originator which
reduces or impairs the rights of Buyer with respect to any
Receivable or the value of any such Receivable; and
(M) any attempt by any Person to void any Purchase
hereunder under statutory provisions or common law or equitable
action.
Section 6.2 Other Costs and Expenses. The Originators, jointly and
severally, shall pay to Buyer 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. The Originators, jointly and severally, shall pay to Buyer
any and all reasonable costs and expenses of Buyer, if any, including reasonable
counsel fees and expenses in connection with the enforcement of this Agreement
and the other documents delivered hereunder and in connection with any
restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following an Amortization Event.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of Buyer (or its assigns) in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law. Any
waiver of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing signed by each Originator and Buyer and, to
the extent required under the Purchase Agreement, the Agent and the Financial
Institutions or the Required Financial Institutions.
Section 7.2 Notices. All communications and notices provided for
hereunder shall be in writing (including bank wire, telecopy or electronic
facsimile transmission or similar writing) and shall be given to the other
parties hereto at their respective addresses or telecopy numbers set forth on
the signature pages hereof or at such other address or telecopy number as such
Person may hereafter specify for the purpose of notice to each of the other
parties hereto. Each such notice or other communication shall be effective (i)
if given by telecopy, upon the
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receipt thereof, (ii) if given by mail, three (3) Business Days after the time
such communication is deposited in the mail with first class postage prepaid or
(iii) if given by any other means, when received at the address specified in
this Section 7.2.
Section 7.3 Protection of Ownership Interests of Buyer.
(a) Each Originator agrees that from time to time, at its expense,
it will promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that Buyer (or its assigns) may
request, to perfect, protect or more fully evidence the interests of the Buyer
hereunder and the Purchaser Interests under the Purchase Agreement, or to enable
Buyer (or its assigns) to exercise and enforce their rights and remedies
hereunder. Upon the occurrence and during the continuation of an Amortization
Event, Buyer (or its assigns) may, at such Originator's sole cost and expense,
direct such Originator to notify the Obligors of Receivables of the ownership
interests of Buyer under this Agreement and may also direct that payments of all
amounts due or that become due under any or all Receivables be made directly to
Buyer or its designee.
(b) If any Originator fails to perform any of its obligations
hereunder, Buyer (or its assigns) may (but shall not be required to) perform, or
cause performance of, such obligation, and Buyer's (or such assigns') costs and
expenses incurred in connection therewith shall be payable by such Originator as
provided in Section 6.2. Each Originator irrevocably authorizes Buyer (and its
assigns) at any time and from time to time in the sole discretion of Buyer (or
its assigns), and appoints Buyer (and its assigns) as its attorney(ies)-in-fact,
to act on behalf of such Originator (i) to file financing statements identifying
such Originator as debtor or seller necessary or desirable in Buyer's (or its
assigns') sole discretion to perfect and to maintain the perfection and priority
of the interest of Buyer in the Receivables and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Receivables as a financing statement in such offices as
Buyer (or its assigns) in their sole discretion deem necessary or desirable to
perfect and to maintain the perfection and priority of Buyer's interests in the
Receivables. This appointment is coupled with an interest and is irrevocable.
Section 7.4 Confidentiality.
(a) Each Originator shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of this Agreement and the
other confidential 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 Originator and its officers and employees may disclose such
information to such Originator's external accountants and attorneys and as
required by any applicable law or order of any judicial or administrative
proceeding (including, without limitation, filings required to be made with the
Securities and Exchange Commission and disclosures required to be made to
regulators and investors).
(b) Anything herein to the contrary notwithstanding, each Originator
hereby consents to the disclosure of any nonpublic information with respect to
it (i) to Buyer, the Agent, the Financial Institutions or Jupiter by each other,
(ii) by Buyer, the Agent or the Purchasers to
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any prospective or actual assignee or participant of any of them or (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, NA 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 7.5 Bankruptcy Petition. The Originators and Buyer each
hereby covenants and agrees that, prior to the date that is one year and one day
after the payment in full of all outstanding senior Indebtedness of 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.
Section 7.6 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 7.7 CONSENT TO JURISDICTION. EACH ORIGINATOR 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 ORIGINATOR HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST ANY
ORIGINATOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
ANY ORIGINATOR AGAINST BUYER (OR ITS ASSIGNS) 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
ORIGINATOR PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A UNITED STATES
FEDERAL COURT OR AN ILLINOIS STATE COURT SETTING IN CHICAGO, ILLINOIS.
Section 7.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
21
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY
DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER.
Section 7.9 Integration; Binding Effect; Survival of Terms.
(a) This Agreement, the Subordinated Notes and each Collection
Account Agreement contain the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of
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 an
Originator pursuant to Article II, (ii) the indemnification and payment
provisions of Article VI, and Section 7.5 shall be continuing and shall survive
any termination of this Agreement.
Section 7.10 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.
22
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 DIRECT USA, INC., as an
Originator
By:____________________________________
Name:
Title:
Address: c/o Insight Enterprises, Inc.
0000 X. Xxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: General Counsel and Chief
Financial Officer
Fax: (000) 000-0000 and (000) 000-0000
COMARK CORPORATE SALES, INC., as an
Originator
By:____________________________________
Name:
Title:
Address: c/o Insight Enterprises, Inc.
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 Sale Agreement
COMARK GOVERNMENT AND EDUCATION SALES,
INC., as an Originator
By:____________________________________
Name:
Title:
Address: c/o Insight Enterprises, Inc.
0000 X. Xxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: General Counsel and Chief
Financial Officer
Fax: (000) 000-0000 and (000) 000-0000
INSIGHT SERVICES CORPORATION, as an
Originator
By:____________________________________
Name:
Title:
Address: c/o Insight Enterprises, Inc.
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 Sale Agreement
COMARK, INC., as an Originator
By:____________________________________
Name:
Title:
Address: c/o Insight Enterprises, Inc.
0000 X. Xxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: General Counsel and Chief
Financial Officer
Fax: (000) 000-0000 and (000) 000-0000
INSIGHT RECEIVABLES, LLC, as Buyer
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
Signature Page to Receivables Sale Agreement
EXHIBIT I
DEFINITIONS
This is Exhibit I to the Agreement (as hereinafter defined). As used
in the Agreement and the Exhibits, Schedules and Annexes thereto, capitalized
terms have the meanings set forth in this Exhibit I (such meanings to be equally
applicable to the singular and plural forms thereof). If a capitalized term is
used in the Agreement, or any Exhibit, Schedule or Annex thereto, and not
otherwise defined therein or in this Exhibit I, such term shall have the meaning
assigned thereto in Exhibit I to the Purchase Agreement.
"Agent" has the meaning set forth in the Preliminary Statements to
the Agreement.
"Agreement" means the Receivables Sale Agreement, dated as of
December 31, 2002, among the Originators and Buyer, as the same may be amended,
restated or otherwise modified.
"Amortization Date" means the earliest to occur of (i) the Facility
Termination Date, (ii) the Business Day immediately prior to the occurrence of
an Amortization Event set forth in Section 5.1(d), (iii) the Business Day
specified in a written notice from Buyer to the Originators following the
occurrence of any other Amortization Event, and (iv) the date which is 30 days
after Buyer's receipt of written notice from an Originator that it wishes to
terminate the facility evidenced by this Agreement.
"Amortization Event" has the meaning set forth in Section 5.1 of the
Agreement.
"Approvals" has the meaning set forth in Section 2.1(a) of the
Agreement.
"Authorized Officer" means, with respect to an Originator, each of
its Treasurer, the Senior Vice President of Insight Direct Worldwide, Inc. or
the Senior Vice President of Finance of Insight Enterprises, Inc.
"Base Rate" means a rate per annum equal to the prime rate of
interest announced by Bank One, NA (Main Office Chicago) or its parent from time
to time (which is not necessarily the lowest rate charged to any customer),
changing when and as such rate changes.
"Business Day" means any day on which banks are not authorized or
required to close in New York, New York, Phoenix, Arizona or Chicago, Illinois
and The Depository Trust Company of New York is open for business.
"Buyer" has the meaning set forth in the preamble to the Agreement.
"Calculation Period" means, with respect to each Originator, each
"Fiscal Month" (as defined in the Purchase Agreement) or portion thereof of such
Originator which elapses during the term of the Agreement. The first Calculation
Period shall commence on the date of the Purchase of Receivables hereunder and
the final Calculation Period shall terminate on the Amortization Date.
Exh. I-1
"Change of Control" means the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 50% or more of the outstanding shares of voting stock
of any Originator.
"Credit and Collection Policy" means the Originators' credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in Exhibit V, as modified from time to time in
accordance with the Agreement.
"Default Fee" means a per annum rate of interest equal to the sum of
(i) the Base Rate, plus (ii) 2% per annum.
"Dilutions" means, at any time, the aggregate amount of reductions
or cancellations described in Section 1.3(a) of the Agreement.
"Discount Factor" means a percentage calculated to provide Buyer
with a reasonable return on its investment in the Receivables after taking
account of (i) the time value of money based upon the anticipated dates of
collection of the Receivables and the cost to Buyer of financing its investment
in the Receivables during such period and (ii) the risk of nonpayment by the
Obligors. The Originators and Buyer may agree from time to time to change the
Discount Factor based on changes in one or more of the items affecting the
calculation thereof, provided that any change to the Discount Factor shall take
effect as of the commencement of a Calculation Period, shall apply only
prospectively and shall not affect the Purchase Price payment in respect of
Purchase which occurred during any Calculation Period ending prior to the
Calculation Period during which the Originators and Buyer agree to make such
change.
"Federal Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as amended and any successor statute thereto.
"Insight Entity" has the meaning set forth in Section 4.1(h) of the
Agreement.
"Intended Characterization" means, for income tax purposes, the
characterization of the acquisition by the Purchasers of Purchaser Interests
under the Purchase Agreement as a loan or loans by the Purchasers to Buyer
secured by the Receivables, the Related Security and the Collections.
"Jupiter" has the meaning set forth in the Preliminary Statements to
the Agreement.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of any Originator and its Subsidiaries taken
as a whole, (ii) the ability of any Originator to perform its obligations under
the Agreement or any other Transaction Document, (iii) the legality, validity or
enforceability of the Agreement or any other Transaction Document, (iv) any
Originator's, Buyer's, the Agent's or any Purchaser's interest in the
Receivables generally or in any significant portion of the Receivables, the
Related Security or Collections with respect thereto, or (v) the collectibility
of the Receivables generally or of any material portion of the Receivables.
Exh. I-2
"Net Worth" means as of the last Business Day of each Calculation
Period preceding any date of determination, the excess, if any, of (a) the
aggregate Outstanding Balance of the Receivables at such time, over (b) the sum
of (i) the Aggregate Capital outstanding at such time, plus (ii) the aggregate
outstanding principal balance of the Subordinated Loans (including any
Subordinated Loan proposed to be made on the date of determination).
"Original Balance" means, with respect to any Receivable, the
Outstanding Balance of such Receivable on the date it was purchased by Buyer.
"Originators" has the meaning set forth in the Preliminary
Statements to the Agreement.
"Potential Amortization Event" means an event which, with the
passage of time or the giving of notice, or both, would constitute an
Amortization Event.
"Purchase" means the purchase under the Agreement by Buyer from each
Originator of the Receivables, the Related Security and the Collections related
thereto, together with all related rights in connection therewith.
"Purchase Agreement" has the meaning set forth in the Preliminary
Statements to the Agreement.
"Purchase Price" means, with respect to any Purchase from any
Originator on any date, the aggregate price to be paid by Buyer to such
Originator for the Receivables of such Originator that are the subject of such
Purchase in accordance with Section 1.2 of the Agreement for the Receivables,
Collections and Related Security being sold to Buyer by such Originator on such
date, which price shall equal (i) the product of (x) the Original Balance of
such Receivables, multiplied by (y) one minus the Discount Factor then in
effect, minus (ii) any Purchase Price Credits to be credited against the
Purchase Price otherwise payable to such Originator in accordance with Section
1.3 of the Agreement.
"Purchase Price Credit" has the meaning set forth in Section 1.3 of
the Agreement.
"Purchaser" means Jupiter or a Financial Institution, as applicable.
"Receivable" means the indebtedness and other obligations owed to
each Originator (at the time it arises, and before giving effect to any transfer
or conveyance under the Agreement) or Buyer (after giving effect to the
transfers under the Agreement) or in which the Buyer or an Originator has a
security interest or other interest, including, without limitation, any such
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 such Originator and 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
Exh. I-3
a Receivable regardless of whether the account debtor or such Originator treats
such indebtedness, rights or obligations as a separate payment obligation.
"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 such 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, and
(vi) all proceeds of any of the foregoing.
"Required Capital Amount" means, as of any date of determination, an
amount equal to twenty-five million dollars ($25,000,000).
"Settlement Date" means the 15th day of each month (or if such day
is not a Business Day, the next succeeding Business Day).
"Subordinated Loan" has the meaning set forth in Section 1.2(a) of
the Agreement.
"Subordinated Note" means a promissory note in substantially the
form of Exhibit VI hereto as more fully described in Section 1.2 of the
Agreement, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"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.
Exh. I-4
"Transaction Documents" means, collectively, this Agreement, each
Collection Account Agreement, the Subordinated Note and all other instruments,
documents and agreements executed and delivered in connection herewith.
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles. All terms
used in Article 9 of the UCC in any applicable jurisdiction, and not
specifically defined herein, are used herein as defined in such Article 9.
Exh. I-5
EXHIBIT II
PLACES OF BUSINESS; LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S); OTHER NAMES
1. Insight Direct USA, Inc.
Chief executive office: 0000 Xxxxx Xxxx, Xxxxx, XX 00000.
Location of records: Some corporate records are located at 0000 Xxxx Xxxx
Xxxxx, Xxxxx, XX 00000.
Business locations: 00000 X 00xx Xxxxxx, Xxxxxxx, XX 00000.
Prior to 1997, Insight Direct USA, Inc. was located at 0000 X. Xxxxxxxxx,
Xxxxx, XX 00000; 0000 Xxxx 0xx Xxxxxx, Xxxxx, XX 00000; 0000 Xxxx 0xx
Xxxxxx, Xxxxx, XX 00000; and 0000 Xxxx 0xx Xxxxxx, Xxxxx, XX 00000.
Federal Employer Identification Number: 00-0000000
Arizona Organizational Number: 0206715-9
Corporate, Partnership Trade and Assumed Names: (i) Insight Direct USA,
Inc. d/b/a Insight, (ii) xxx.xxxxxxx.xxx, (iii) xxxxxxx.xxx, (iv)
800-INSIGHT, (v) f/k/a Insight Distribution Network, Inc. and (vi) f/k/a
Insight Direct, Inc.
2. Comark Corporate Sales, Inc.
Chief executive office: 000 Xxxxx Xx., Xxxxxxxxxxxx, XX 00000.
Location of records: 000 Xxxxx Xx., Xxxxxxxxxxxx, XX 00000.
Business locations: 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000
(Franklin County); 00000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000
(Waukesha County); 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 (Dane
County); 000 X. Xxx Xxxxxx Xxxx, Xxxxx 000, Xxxx, XX 00000 (Oakland
County); 0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000 (Xxxxxxx County);
0000 Xxxxxx Xxxx, Xxxxx 00, Xxxxxxxxxx, XX 00000; 000 Xxxxxxxxx Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, XX (XxXxxx Xxxxxx); 000 Xx. Xxxxxxx Xxxx,
Xxxxxxxxxx, XX 00000 (Allegheny County); 00000 Xxxxxx Xxxxxxx, Xxxxxxx, XX
75001(Dallas County).
Federal Employer Identification Number: 00-0000000
Exh. II-1
Illinois Organizational Number: 57773863
Corporate, Partnership Trade and Assumed Names: Comark Corporate Sales,
Inc. d/b/a Comark Technology Services
3. Insight Services Corporation
Chief executive office: 0000 Xxxxx Xxxx, Xxxxx, XX 00000.
Location of records: Some corporate records are located at 0000 Xxxx Xxxx
Xxxxx, Xxxxx, XX 00000.
Business locations: 0000 Xxxxx Xxxx, Xxxxx, XX 00000.
Federal Employer Identification Number: 00-0000000
Arizona Organizational Number: 0963695-5
Corporate, Partnership Trade and Assumed Names: Insight Services
Corporation d/b/a InsightCo IT Services
4. Comark Government and Education Sales, Inc.
Chief executive office: 0000 Xxxxxxxxxx Xxxxxxxxx Xxxxx, Xxxxx X,
Xxxxxxxxx, XX 00000 (Fairfax County).
Location of records: Some records are also kept at 000 Xxxxx Xx.,
Xxxxxxxxxxxx, XX 00000.
Business locations: 00X Xxxxxx Xxxxx, Xxx.000, Xxxxxxx, XX 00000; 0000-X
Xxxxxxxxxx Xxxx. Xx., Xxxxxxxxx, XX 00000; 0000 Xxxxxx Xxxxx, Xxx 000,
Xxxxxx, XX 00000; 000 X. Xxxxxx Xxx., Xxxx Xxxxx, XX 00000; Atrium Office
Building 0000 Xxxxxxx Xxxx. X, Xxx 000, Xx. Xxxx, XX 00000; 000 X. 0xx
Xxxxxx Xxxxxxxxxxx, XX 00000; 0000 X. Xxxxx Xxxxx Xx., Xxxxx 000, Xxxxx,
XX 00000; and 00000 XX 00xx Xxx. Xxx 000, Xxxxxx, XX 00000; 000 Xxxxx
Xxxxxx, Xxxxxx, XX 00000 (Albany County)
Federal Employer Identification Number: 00-0000000
Illinois Organizational Number: 57773871
Exh. II-2
Corporate, Partnership Trade and Assumed Names: none
5. Comark, Inc.
Chief executive office: 000 Xxxxx Xx., Xxxxxxxxxxxx, XX 00000.
Location of records: 000 Xxxxx Xx., Xxxxxxxxxxxx, XX 00000.
Business locations: 00000 XX 00xx Xxx. Xxx 000, Xxxxxx, XX 00000; 000
Xxxxxx Xxxx Xxxxxx, Xxxxx 0, Xxxxxxx, XX 00000 (Shelby County); 0000
Xxxxxxx Xxxxx, Xxxxx 0000 Xxxx, XX (Dakota County); 0 X. Xxxxxxxxx Xxxx,
Xxxxx X0, Xxxxxxxxx, XX (Xxxxxx Xxxxxx); 0000 Xxxxxxxxx 00xx Xxxxxx,
Xxxxx, XX 00000 (Dade County); 00 Xxxxxxxx Xxxxxx, Xxxx Xxxxxx, XX 00000
(Xxxxxx County); 0000 Xxxxxx Xxxxx, Xxxxxxx Xxxx, XX 00000 (DuPage
County); 0000 Xxxxxx Xxxx, Xxxxxxx Xxxx, XX 00000 (DuPage County).
Federal Employer Identification Number: 00-0000000
Illinois Organizational Number: 51134311
Corporate, Partnership Trade and Assumed Names: Comark, Inc. d/b/a PC
Wholesale
Exh. II-3
EXHIBIT III
LOCK-BOXES; COLLECTION ACCOUNTS; COLLECTION BANKS
Lock-Box Related Collection Account
--------------------------------------- ----------------------------------------
Lockbox 2457-0446 (Insight Direct USA, Account numbers 0177-6871, 0177-8412
Inc./Insight Services Corporation) and 2142-4806 maintained at Bank One,
maintained at Bank One, 201 North 000 Xxxxx Xxxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxx Avenue, 21st Floor, Phoenix, AZ Xxxxxxx, XX 00000 (Insight Direct XXX,
00000 Inc./Insight Services Corporation)
Lockbox 70191 maintained at Network Account number 0000000 maintained at
Place, Xxxxxxx, XX 00000-0000 (PC Bank One, 1 Bank One Plaza, Chicago,
Wholesale) and Lockbox 70212 maintained IL 60670 (Comark, Inc. Master Account
at Network Place, Chicago, IL and Comark Corporate Sales, Inc.)
60673-1702 (Comark Corporation Sales,
Inc./Comark Government and Education
Sales, Inc.)
N/A Account Number 0000000 maintained at
Bank One, 0 Xxxx Xxx Xxxxx, Xxxxxxx,
XX 00000 (Comark Government and
Education Sales, Inc.)
Exh. III-3
EXHIBIT IV
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished pursuant to that certain
Receivables Sale Agreement dated as of December 31, 2002, among Insight Direct
USA, Inc., an Arizona corporation, Comark Corporate Sales, Inc., an Illinois
corporation, Insight Services Corporation, an Arizona corporation, Comark, Inc.,
an Illinois corporation (each an "Originator") and Insight Receivables, LLC, an
Illinois limited liability company (the "Buyer") (the "Agreement"). Capitalized
terms used and not otherwise defined herein are used with the meanings
attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of [Name of Originator].
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of [Name of Originator] and its Subsidiaries during
the accounting period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
an Amortization Event or a 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 below.
4. Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which [Name of Originator] 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 _______,
20__.
[NAME OF APPLICABLE ORIGINATOR]
By: _______________________________
Name
Exh. IV-1
EXHIBIT V
CREDIT AND COLLECTION POLICIES
Attached
Exh. V-1
EXHIBIT VI
FORM OF SUBORDINATED NOTE
SUBORDINATED NOTE
December 31, 2002
1. Note. FOR VALUE RECEIVED, the undersigned, INSIGHT RECEIVABLES,
LLC, an Illinois limited liability company ("SPV"), hereby unconditionally
promises to pay to the order of [NAME OF APPLICABLE ORIGINATOR], a [____]
corporation ("Originator"), in lawful money of the United States of America and
in immediately available funds, on the date following the Amortization Date
which is one year and one day after the date on which (i) the Outstanding
Balance of all Receivables sold under the "Sale Agreement" referred to below has
been reduced to zero and (ii) Originator has paid to the Buyer all indemnities,
adjustments and other amounts which may be owed thereunder in connection with
the Purchases (the "Collection Date"), the aggregate unpaid principal sum
outstanding of all "Subordinated Loans" made from time to time by Originator to
SPV pursuant to and in accordance with the terms of that certain Receivables
Sale Agreement dated as of December 31, 2002 among Originator, [Names of other
Originators] and SPV (as amended, restated, supplemented or otherwise modified
from time to time, the "Sale Agreement"). Reference to Section 1.2 of the Sale
Agreement is hereby made for a statement of the terms and conditions under which
the loans evidenced hereby have been and will be made. All terms which are
capitalized and used herein and which are not otherwise specifically defined
herein shall have the meanings ascribed to such terms in the Sale Agreement.
2. Interest. SPV further promises to pay interest on the outstanding
unpaid principal amount hereof from the date hereof until payment in full hereof
at a rate equal to the Base Rate; provided, however, that if SPV shall default
in the payment of any principal hereof, SPV promises to pay, on demand, interest
at the rate of the Base Rate plus 2.00% per annum on any such unpaid amounts,
from the date such payment is due to the date of actual payment. Interest shall
be payable on the first Business Day of each month in arrears; provided,
however, that SPV may elect on the date any interest payment is due hereunder to
defer such payment and upon such election the amount of interest due but unpaid
on such date shall constitute principal under this Subordinated Note. The
outstanding principal of any loan made under this Subordinated Note shall be due
and payable on the Collection Date and may be repaid or prepaid at any time
without premium or penalty.
3. Principal Payments. Originator is authorized and directed by SPV
to enter on the grid attached hereto, or, at its option, in its books and
records, the date and amount of each loan made by it which is evidenced by this
Subordinated Note and the amount of each payment of principal made by SPV, and
absent manifest error, such entries shall constitute prima facie evidence of the
accuracy of the information so entered; provided that neither the failure of
Originator to make any such entry or any error therein shall expand, limit or
affect the obligations of SPV hereunder.
Xxx. XX-0
0. Xxxxxxxxxxxxx. The indebtedness evidenced by this Subordinated
Note is subordinated to the prior payment in full of all of SPV's recourse
obligations under that certain Receivables Purchase Agreement dated as of
December 31, 2002 by and among SPV, Insight Enterprises, Inc., as Servicer,
various "Purchasers" from time to time party thereto, and Bank One, NA (Main
Office Chicago), as the "Agent" (as amended, restated, supplemented or otherwise
modified from time to time, the "Purchase Agreement"). The subordination
provisions contained herein are for the direct benefit of, and may be enforced
by, the Agent and the Purchasers and/or any of their respective assignees
(collectively, the "Senior Claimants") under the Purchase Agreement. Until the
date on which all "Capital" outstanding under the Purchase Agreement has been
repaid in full and all other obligations of SPV and/or the Servicer thereunder
and under the "Fee Letter" referenced therein (all such obligations,
collectively, the "Senior Claim") have been indefeasibly paid and satisfied in
full, Originator shall not demand, accelerate, xxx for, take, receive or accept
from SPV, directly or indirectly, in cash or other property or by set-off or any
other manner (including, without limitation, from or by way of collateral) any
payment or security of all or any of the indebtedness under this Subordinated
Note or exercise any remedies or take any action or proceeding to enforce the
same; provided, however, that (i) Originator hereby agrees that it will not
institute against SPV any proceeding of the type described in Section 5.1(d) of
the Sale Agreement unless and until the Collection Date has occurred and (ii)
nothing in this paragraph shall restrict SPV from paying, or Originator from
requesting, any payments under this Subordinated Note so long as SPV is not
required under the Purchase Agreement to set aside for the benefit of, or
otherwise pay over to, the funds used for such payments to any of the Senior
Claimants and further provided that the making of such payment would not
otherwise violate the terms and provisions of the Purchase Agreement. Should any
payment, distribution or security or proceeds thereof be received by Originator
in violation of the immediately preceding sentence, Originator agrees that such
payment shall be segregated, received and held in trust for the benefit of, and
deemed to be the property of, and shall be immediately paid over and delivered
to the Agent for the benefit of the Senior Claimants.
5. Bankruptcy; Insolvency. Upon the occurrence of any proceeding of
the type described in Section 5.1(d) of the Sale Agreement involving SPV as
debtor, then and in any such event the Senior Claimants shall receive payment in
full of all amounts due or to become due on or in respect of Capital and the
Senior Claim (including "CP Costs" and "Yield" as defined and as accruing under
the Purchase Agreement after the commencement of any such proceeding, whether or
not any or all of such CP Costs or Yield is an allowable claim in any such
proceeding) before Originator is entitled to receive payment on account of this
Subordinated Note, and to that end, any payment or distribution of assets of SPV
of any kind or character, whether in cash, securities or other property, in any
applicable insolvency proceeding, which would otherwise be payable to or
deliverable upon or with respect to any or all indebtedness under this
Subordinated Note, is hereby assigned to and shall be paid or delivered by the
Person making such payment or delivery (whether a trustee in bankruptcy, a
receiver, custodian or liquidating trustee or otherwise) directly to the Agent
for application to, or as collateral for the payment of, the Senior Claim until
such Senior Claim shall have been paid in full and satisfied.
6. Amendments. This Subordinated Note shall not be amended or
modified except in accordance with Section 7.1 of the Sale Agreement. The terms
of this Subordinated
Exh. VI-2
Note may not be amended or otherwise modified without the prior written consent
of the Agent for the benefit of the Purchasers.
7. GOVERNING LAW. THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED
AT CHICAGO, ILLINOIS, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF THE
STATE OF ILLINOIS. WHEREVER POSSIBLE EACH PROVISION OF THIS SUBORDINATED NOTE
SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL BE
PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
SUBORDINATED NOTE.
8. Waivers. All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor. Originator additionally expressly waives all notice of the
acceptance by any Senior Claimant of the subordination and other provisions of
this Subordinated Note and expressly waives reliance by any Senior Claimant upon
the subordination and other provisions herein provided.
9. Assignment. This Subordinated Note may not be assigned, pledged
or otherwise transferred to any party without the prior written consent of the
Agent, and any such attempted transfer shall be void.
INSIGHT RECEIVABLES, LLC
By: Insight Receivables Holding, LLC,
its sole member
By:______________________________
Title:
Exh. VI-3
Schedule
to
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
Amount of Amount of Unpaid Notation
Subordinated Principal Principal made
Date Loan Paid Balance by
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Exh. VI-4
SCHEDULE A
LIST OF DOCUMENTS TO BE DELIVERED TO BUYER PRIOR TO THE PURCHASE
Attached.
Sch. A-1
TABLE OF CONTENTS
Page
ARTICLE I
AMOUNTS AND TERMS........................................................... 1
Section 1.1 Purchase of Receivables...................................... 1
Section 1.2 Payment for the Purchase..................................... 2
Section 1.3 Purchase Price Credit Adjustments............................ 4
Section 1.4 Payments and Computations, Etc............................... 5
Section 1.5 Transfer of Records.......................................... 5
Section 1.6 Characterization............................................. 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES.............................................. 6
Section 2.1 Representations and Warranties of Originators................ 6
ARTICLE III
CONDITIONS OF PURCHASE...................................................... 10
Section 3.1 Conditions Precedent to Initial Purchase..................... 10
Section 3.2 Conditions Precedent to Subsequent Payments.................. 10
ARTICLE IV
COVENANTS................................................................... 10
Section 4.1 Affirmative Covenants of Originators......................... 10
Section 4.2 Negative Covenants of Originators............................ 14
ARTICLE V
AMORTIZATION EVENTS......................................................... 15
Section 5.1 Amortization Events.......................................... 15
Section 5.2 Remedies..................................................... 16
ARTICLE VI
INDEMNIFICATION............................................................. 17
Section 6.1 Indemnities by Originators................................... 17
Section 6.2 Other Costs and Expenses..................................... 19
ARTICLE VII
MISCELLANEOUS............................................................... 19
Section 7.1 Waivers and Amendments....................................... 19
Section 7.2 Notices...................................................... 19
Section 7.3 Protection of Ownership Interests of Buyer................... 20
Section 7.4 Confidentiality.............................................. 20
Section 7.5 Bankruptcy Petition.......................................... 21
i
Section 7.6 CHOICE OF LAW................................................ 21
Section 7.7 CONSENT TO JURISDICTION...................................... 21
Section 7.8 WAIVER OF JURY TRIAL......................................... 21
Section 7.9 Integration; Binding Effect; Survival of Terms............... 22
Section 7.10 Counterparts; Severability; Section References.............. 22
Exhibits and Schedules
EXHIBIT I -- Definitions
EXHIBIT II -- Principal Place of Business; Location(s) of Records;
Federal Employer Identification Number; Other Names
EXHIBIT III -- Lock-Boxes; Collection Accounts; Collection Banks
EXHIBIT IV -- Form of Compliance Certificate
EXHIBIT V -- Credit and Collection Policy
EXHIBIT VI -- Form of Subordinated Note
SCHEDULE A -- List of Documents to Be Delivered to Buyer Prior to
the Purchase
ii
