Document:

exv10w2

 

Exhibit 10.2

EXECUTION COPY

AMENDMENT NO. 7

TO

RECEIVABLES PURCHASE AGREEMENT

          THIS AMENDMENT NO. 7 TO RECEIVABLES PURCHASE AGREEMENT dated as of September 7, 2006 (this
“Amendment”) is entered into among INSIGHT RECEIVABLES, LLC (the “Seller”), INSIGHT
ENTERPRISES, INC. (“Insight” and the “Servicer”), JPMORGAN CHASE BANK, N.A.
(successor by merger to Bank One, NA (Main Office Chicago)), as a Financial Institution and as
Agent (in its capacity as Agent, the “Agent”), and JUPITER SECURITIZATION COMPANY LLC
(formerly Jupiter Securitization Corporation) (“Jupiter”). Capitalized terms used herein
but not defined herein shall have the meanings provided in the Receivables Purchase Agreement
defined below.

W I T N E S S E T H

          WHEREAS, the parties hereto are parties to that certain Receivables Purchase Agreement dated
as of December 31, 2002 (as amended, restated, supplemented or otherwise modified from time to
time, the “Receivables Purchase Agreement”);

          WHEREAS, the parties hereto have agreed to amend the Receivables Purchase Agreement on the
terms and conditions hereafter set forth;

          NOW, THEREFORE, in consideration of the premises set forth above, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:

          SECTION 1. Amendment. Subject to the fulfillment of the conditions precedent set
forth in Section 2 below, the Receivables Purchase Agreement is hereby amended as follows:

          1.1 Section 5.1(o) of the Receivables Purchase Agreement is hereby amended by deleting
the reference therein to “the Pledge Agreement” and substituting “the Credit Agreement” therefor.

          1.2 Section 5.1(u) of the Receivables Purchase Agreement is hereby amended by deleting
each reference therein to “Monthly Report” and substituting “Report” therefor.

          1.3 Clause (a)(i) of Section 6.2 of the Receivables Purchase Agreement is
hereby amended by deleting the reference therein to “Monthly Reports” and substituting “Reports”
therefor.

          1.4 Clause (a)(ii) of Section 6.2 of the Receivables Purchase Agreement is
hereby amended by inserting the phrase “or Weekly Report” immediately after the reference therein
to “Monthly Report”.

          1.5 Section 7.1(a)(i) of the Receivables Purchase Agreement is amended and restated
in its entirety as follows:

 

 

     (i) Annual Reporting. Within 90 days after the end of each of
its respective fiscal years, audited consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows for Insight
and its consolidated subsidiaries as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by KPMG LLP or other independent public
accountants of recognized national standing (without a “going concern” or
like qualification or exception and without any qualification or exception
as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of Insight and its consolidated
subsidiaries on a consolidated basis in accordance with GAAP consistently
applied; provided, that the Seller Parties shall be deemed to have
delivered the foregoing to the Agent if such information has been filed with
the Securities and Exchange Commission and is available on the EDGAR site at
www.sec.gov or any successor government site that is freely and readily
available to the Agent without charge, or has been made available on
Insight’s website www.insight.com, and the delivery date therefor shall be
deemed to be the first day on which such information is available to the
Agent on one of such web pages; provided, further, that
Insight will promptly notify the Agent of each posting to such sites upon
the occurrence thereof. In order to provide such notices promptly, Insight
agrees that it shall register the Agent in the appropriate Insight databases
necessary to cause such notices to be sent automatically (including, without
limitation, by e-mail to e-mail addresses agreed upon by the Agent) on the
applicable filing dates.

          1.6 Section 7.1(a)(ii) of the Receivables Purchase Agreement is amended and restated
in its entirety as follows:

     (ii) Within 45 days after the end of each of the first three fiscal
quarters of its respective fiscal years, unaudited consolidated balance
sheets of Insight and related unaudited consolidated statements of
operations, stockholders’ equity, and cash flows as of the end of and for
such fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end
of) the previous fiscal year, together with internally prepared balance
sheets, statements of income and retained earnings and statements of cash
flows for Seller, all certified by the chief executive officer, president,
chief financial officer, treasurer or senior vice president of finance of
Insight or Seller, as applicable, as presenting fairly in all material
respects the financial condition and results of operations of Insight and
its consolidated Subsidiaries on a consolidated basis or the Seller, as
applicable, in accordance with GAAP consistently applied, subject to normal
year-end audit adjustments and the absence of footnotes; provided,
that the foregoing shall be deemed to have been delivered to the Agent if
such

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information has been filed with the Securities and Exchange Commission
and is available on the EDGAR site at www.sec.gov or any successor
government site that is freely and readily available to the Agent without
charge, or has been made available on Insight’s website www.insight.com, and
the delivery date therefor shall be deemed to be the first day on which such
information is available to the Agent on one of such web pages;
provided, further, that Insight will promptly notify the
Agent of each posting to such sites upon the occurrence thereof. In order
to provide such notices promptly, Insight agrees that it shall register the
Agent in the appropriate Insight databases necessary to cause such notices
to be sent automatically (including, without limitation, by e-mail to e-mail
addresses agreed upon by the Agent) on the applicable filing dates.

     1.7 Section 7.1(a)(viii) of the Receivables Purchase Agreement is hereby amended and
restated in its entirety as follows:

(viii) [Reserved].

     1.8 Section 8.5 of the Receivables Purchase Agreement is hereby amended and restated
in its entirety as follows:

     Section 8.5 Reports. The Servicer shall prepare and forward to the
Agent (i) on Wednesday of each week (or if such day is not a Business Day, the
immediately succeeding Business Day) during a Weekly Reporting Period and, following
the occurrence and during the continuance of an Amortization Event or a Potential
Amortization Event (but not before), at such times as the Agent shall request, a
Weekly Report, (ii) on the twelfth (12th) day of each month (or if such
day is not a Business Day, the immediately succeeding Business Day) and, following
the occurrence and during the continuance of an Amortization Event or a Potential
Amortization Event (but not before), at such times as the Agent shall request, a
Monthly Report, and (iii) at such times as the Agent shall request, a listing by
Obligor of all Receivables together with an aging of such Receivables.

     1.9 Section 9.1(g)(ii) of the Receivables Purchase Agreement is hereby amended and
restated in its entirety as follows:

     (ii) the weighted average of the Delinquency Ratios for the three most recently
ended Fiscal Months shall exceed 10.5%;

     1.10 Section 9.1(l) of the Receivables Purchase Agreement is hereby amended and
restated in its entirety as follows:

     (l) The Total Leverage Ratio, determined as of the end of each Fiscal Quarter
of Insight, shall exceed 2.50 to 1.00.

     1.11 Section 9.1(m) of the Receivables Purchase Agreement is hereby amended and
restated in its entirety as follows:

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     (m) The Fixed Charge Ratio, determined as of the end of each Fiscal Quarter of
Insight, shall be less than 1.25 to 1.00.

          1.12 Section 10.4 of the Receivables Purchase Agreement is hereby amended and restated
in its entirety as follows:

     Section 10.4 [Reserved.]

          1.13 The definition of “Capital Expenditures” set forth in Exhibit I to the
Receivables Purchase Agreement is amended and restated in its entirety as follows:

     “Capital Expenditures” means, without duplication, any expenditures for
any purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of Insight and its Subsidiaries
prepared in accordance with GAAP, excluding (i) expenditures of insurance proceeds
to rebuild or replace any asset after a casualty loss and (ii) leasehold improvement
expenditures for which Insight or a Subsidiary is reimbursed promptly by the lessor.

          1.14 The definition of “Capitalized Lease” set forth in Exhibit I to the Receivables
Purchase Agreement is amended and restated in its entirety as follows:

     “Capitalized Lease” of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.

          1.15 The definition of “Capitalized Lease Obligations” set forth in Exhibit I to the
Receivables Purchase Agreement is amended and restated in its entirety as follows:

     “Capitalized Lease Obligations” of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.

          1.16 The definition of “Concentration Limit” set forth in Exhibit I to the Receivables
Purchase Agreement is amended and restated in its entirety as follows:

     “Concentration Limit” means, at any time, for any Obligor, an amount
equal to the greater of (i) the Outstanding Balance of all Eligible Receivables at
such time multiplied by 3.33% and (ii) such other amount (a “Special
Concentration Limit”), if any, for such Obligor designated by the Agent as
indicated on Exhibit XI hereto; provided, that in the case of an
Obligor and any Affiliate of such Obligor, the Concentration Limit shall be
calculated as if such Obligor and such Affiliate are one Obligor; and
provided, further, that Jupiter or the Required Financial
Institutions may, upon not less than three Business Days’ notice to Seller, cancel
any Special Concentration Limit.

          1.17 The definition of “Consolidated EBITDA” set forth in Exhibit I to the Receivables
Purchase Agreement is amended and restated in its entirety as follows:

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     “Consolidated EBITDA” means the sum of (a) Consolidated Net Income plus
(b) to the extent deducted from revenues in determining Consolidated Net Income, (i)
Consolidated Interest Expense, (ii) expense for taxes paid or accrued, (iii)
depreciation, (iv) amortization, (v) any extraordinary non-cash or nonrecurring
non-cash charges or losses incurred other than in the ordinary course of business,
(vi) any non-cash charges arising from compensation expense as a result of the
adoption of Financial Accounting Standards Board Statement 123 (Revised 2004),
“Share-Based Payment”, which requires certain stock-based compensation to be
recorded as expense within Insight’s consolidated statement of operations and (vii)
costs, expenses and fees incurred in connection with the Transactions (as defined in
the Credit Agreement) consummated on the Effective Date, minus (c)(i) to the extent
included in Consolidated Net Income, any extraordinary non-cash or nonrecurring
non-cash gains realized other than in the ordinary course of business and (ii) the
amount of any subsequent cash payments in respect of any non-cash charges described
in the preceding clause (b)(vi), all calculated for Insight and its
Subsidiaries on a consolidated basis.

          1.18 The definition of “Consolidated Funded Indebtedness” set forth in Exhibit I to
the Receivables Purchase Agreement is amended and restated in its entirety as follows:

     “Consolidated Funded Indebtedness” means, at any time, the sum (without
duplication) of (i) the aggregate principal amount of Consolidated Indebtedness
owing by Insight and its Subsidiaries or for which such Persons are liable which has
actually been funded and is outstanding at such time, whether or not such amount is
due or payable at such time, plus (ii) the aggregate stated or face amount of all
letters of credit at such time for which any of Insight and its Subsidiaries is the
account party or is otherwise liable (unless cash collateralized with cash and/or
cash equivalents in a manner permitted hereunder) plus (iii) the aggregate amount of
Capitalized Lease Obligations owing by Insight and its Subsidiaries or for which
such Persons are otherwise liable plus (iv) the aggregate of all amounts owing by
Insight and its Subsidiaries or for which such Persons are otherwise liable with
respect to judgments or settlements arising in connection with trials, arbitrations,
mediations, litigation or other forums for dispute resolution.

          1.19 The definition of “Credit Agreement” set forth in Exhibit I to the Receivables
Purchase Agreement is amended and restated in its entirety as follows:

     “Credit Agreement” means that certain Amended and Restated Credit
Agreement dated as of September 7, 2006, among Insight, as borrower, the “European
Borrowers” party thereto, the “Lenders” from time to time party thereto, J.P. Morgan
Europe Limited, as European Agent, and the Administrative Agent, as amended,
restated, supplemented or otherwise modified from time to time.

          1.20 The definition of “Default” set forth in Exhibit I to the Receivables Purchase
Agreement is amended and restated in its entirety as follows:

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     “Default” has the meaning set forth in the Credit Agreement.

          1.21 The definition of “Dilution Horizon Ratio” set forth in Exhibit I to the
Receivables Purchase Agreement is amended and restated in its entirety as follows:

     “Dilution Horizon Ratio” means, on any date, a percentage equal to (i)
the aggregate Outstanding Balance (in each case, at the time of creation) of all
Receivables created during the two (2) most recently ended Fiscal Months, divided by
(ii) the Net Eligible Receivables Balance as at the last day of the most recently
ended Fiscal Month.

          1.22 The definition of “Dilution Reserve Floor” set forth in Exhibit I to the
Receivables Purchase Agreement is amended and restated in its entirety as follows:

     “Dilution Reserve Floor” means 11%.

          1.23 The definition of “Dynamic Dilution Reserve Ratio” set forth in Exhibit I to the
Receivables Purchase Agreement is amended and restated in its entirety as follows:

     “Dynamic Dilution Reserve Ratio” means, on any date, the amount
determined pursuant to the following formula:

{(2.00 x ED) + ((DS – ED) x (DS/ED))} x DHR

where:

	 	 	 	 	 	 	 
	 

	 	ED
	 	=
	 	on such date, the average of the Dilution Ratios for the
twelve (12) Fiscal Months then most recently ended.
	 
	 	 	 	 	 	 
	 

	 	DS
	 	=
	 	on such date, the highest Dilution Ratio for any Fiscal Month
during the twelve (12) Fiscal Months then most recently ended.
	 
	 	 	 	 	 	 
	 

	 	DHR
	 	=
	 	the Dilution Horizon Ratio on such date.

          1.24 Clauses (i), (iii), (vi) and (viii) of the definition of “Eligible Receivable”
set forth in Exhibit I to the Receivables Purchase Agreement are amended and restated in
their entirety, respectively, as follows:

     (i) the Obligor of which (a) is (1) a resident of the United States or Canada,
(2) a corporation or other business organization organized under the laws of the
United States or Canada or any political subdivision thereof and has its chief
executive office in the United States or Canada, or (3) is a government of any state
(or any governmental subdivision or agency thereof) of the United States other than
an Ineligible State; (b) is not an Affiliate of any of the parties hereto; and (c)
is not a Designated Obligor;

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     (iii) which is not a Charged-Off Receivable, a Delinquent Receivable or a
Canadian Receivable; provided, that, Canadian Receivables with
Outstanding Balances which, in the aggregate, constitute no more than 1% of the
aggregate Outstanding Balance of all Receivables, may be Eligible Receivables;

     (vi) which is an “account” or “chattel paper” within the meaning of Section
9-105 and Section 9-106, respectively, of the UCC of all applicable jurisdictions
and in respect of which the perfection of a security interest therein is governed by
Article 9 of the UCC of all applicable jurisdictions;

     (viii) which arises under a Contract in writing, which (a) together with such
Receivable, is in full force and effect and constitutes the legal, valid and binding
obligation of the related Obligor enforceable against such Obligor in accordance
with its terms subject to no offset, counterclaim or other defense and (b) is
governed by the laws of any state of the United States;

          1.25 The definition of “Fee Letter” set forth in Exhibit I to the Receivables Purchase
Agreement is amended and restated in its entirety as follows:

     “Fee Letter” means that certain Amended and Restated Fee Letter, dated
as of September 7, 2006, among Seller, the Agent and Jupiter, as it may be amended,
restated, supplemented or otherwise modified and in effect from time to time.

          1.26 The definition of “Indebtedness” set forth in Exhibit I to the Receivables
Purchase Agreement is amended and restated in its entirety as follows:

     “Indebtedness” of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of
such Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such Person in respect of
the deferred purchase price property or services (excluding current accounts payable
incurred in the ordinary course of business), (e) all Indebtedness of others secured
by any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capitalized Lease Obligations of such Person, (h)
Off-Balance Sheet Liabilities of such Person, (i) all Attributable Debt of such
Person under Sale and Leaseback Transactions, (j) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit and
letters of guaranty (unless cash collateralized with cash and/or cash equivalents in
a manner permitted hereunder), (k) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances, (l) with respect to any Subsidiary of
Insight, any Disqualified Equity Interests of such Person and (m) all Net
Mark-to-Market Exposure of such Person under all Swap Agreements. The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent

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such Person is liable therefor as a result of such Person’s ownership interest
in or other relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

          1.27 The definition of “Lien” set forth in Exhibit I to the Receivables Purchase
Agreement is amended and restated in its entirety as follows:

     “Lien” means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on
or of such asset and (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating to
such asset.

          1.28 The definition of “Liquidity Termination Date” set forth in Exhibit I to the
Receivables Purchase Agreement is amended and restated in its entirety as follows:

     “Liquidity Termination Date” means September 7, 2009.

          1.29 The definition of “Loss Horizon Ratio” set forth in Exhibit I to the Receivables
Purchase Agreement is amended and restated in its entirety as follows:

     “Loss Horizon Ratio” means, as of any date, a ratio equal to (i) the
aggregate Outstanding Balance (in each case, at the time of creation) of all
Receivables created during the three (3) most recently ended Fiscal Months divided
by (ii) the Net Eligible Receivables Balance as at the last day of the most recently
ended Fiscal Month.

          1.30 The definition of “Loss Percentage Floor” set forth in Exhibit I to the
Receivables Purchase Agreement is amended and restated in its entirety as follows:

     “Loss Percentage Floor” means 10.0%.

          1.31 The definition of “Loss Reserve Percentage” set forth in Exhibit I to the
Receivables Purchase Agreement is amended and restated in its entirety as follows:

     “Loss Reserve Percentage” means, as of any date, the greater of (i) the
Loss Percentage Floor and (ii) the percentage obtained by multiplying (a) 2.00
times (b) the Loss Ratio (as determined as of the last day of the Fiscal
Month then most recently ended) times (c) the Loss Horizon Ratio (as
determined as of the last day of the Fiscal Month then most recently ended).

          1.32 The definition of “Monthly Report” set forth in Exhibit I to the Receivables
Purchase Agreement is amended and restated in its entirety as follows:

     “Monthly Report” means a report, in substantially the form of
Exhibit X hereto (appropriately completed), furnished by the Servicer to the
Agent pursuant to clause (ii) of Section 8.5.

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          1.33 The definition of “Operating Lease” set forth in Exhibit I to the Receivables
Purchase Agreement is amended and restated in its entirety as follows:

     “Operating Lease” of a Person means any lease of an asset (other than a
Capitalized Lease) by such Person as lessee which has an original term (including
any required renewals and any renewals effective at the option of the lessor) of one
year or more.

          1.34 The definition of “Permitted Acquisition” set forth in Exhibit I to the
Receivables Purchase Agreement is amended and restated in its entirety as follows:

     “Permitted Acquisition” means (a) subject to the satisfaction of the
terms and conditions in Section 4.01 of the Credit Agreement, the Spectrum
Acquisition, and (b) any other acquisition (whether by purchase, merger,
consolidation or otherwise but excluding in any event a Hostile Acquisition) or
series of related acquisitions by Insight or any Subsidiary of all or substantially
all the assets of, or more than fifty percent (50%) of the Equity Interests in, a
Person or division or line of business of a Person if, at the time of and
immediately after giving effect thereto, (i) no Default has occurred and is
continuing or would arise after giving effect thereto, (ii) such Person or division
or line of business is engaged in a type of business that complies with the
requirements of the last sentence of Section 6.03 of the Credit Agreement,
(iii) the Total Leverage Ratio of Insight shall not exceed 2.00 to 1.00 and the
Fixed Charge Coverage Ratio shall not be less than 1.25 to 1.00, in each case
determined on a pro forma basis reasonably acceptable to the Administrative Agent
after giving effect to such acquisition, recomputed as of the last day of the most
recently ended Fiscal Quarter of Insight for which financial statements are
available, as if such acquisition (and any related incurrence or repayment of
Indebtedness, with any new Indebtedness being deemed to be amortized over the
applicable testing period in accordance with its terms) had occurred on the first
day of each relevant period for testing such compliance and (iv) Insight shall have
delivered a Compliance Certificate (as defined in the Credit Agreement) not less
than fifteen (15) days (or such shorter period as the Administrative Agent shall
agree) prior to the consummation of such acquisition demonstrating compliance with
the foregoing clause (iii) and setting forth the Material Subsidiaries (as
defined in the Credit Agreement) after giving effect to such acquisition.

          1.35 The definition of “Purchase Limit” set forth in Exhibit I to the Receivables
Purchase Agreement is amended and restated in its entirety as follows:

     “Purchase Limit” means $225,000,000.

          1.36 Clause (iii) of the definition of “Purchase Price” set forth in Exhibit I
to the Receivables Purchase Agreement is amended by deleting the reference therein to “Monthly
Report” and substituting “Report” therefor.

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          1.37 The definition of “Servicer Reserve” set forth in Exhibit I to the Receivables
Purchase Agreement is amended and restated in its entirety as follows:

     “Servicer Reserve” means, on any date, an amount equal to 0.75%
multiplied by the Net Eligible Receivables Balance as of the close of business of
the Servicer on such date.

          1.38 The definition of “Subsidiary” set forth in Exhibit I to the Receivables Purchase
Agreement is amended and restated in its entirety as follows:

     “Subsidiary” means any subsidiary of Insight (after giving effect to
the Spectrum Acquisition); provided, that Persons that would be required in
accordance with GAAP to be consolidated with Insight, but which are not otherwise
controlled by Insight shall be “Subsidiaries” hereunder solely for the purpose of
making calculations under Section 9.1(l) and (m) hereof, but shall
not be “Subsidiaries” hereunder for purposes of any representation, warranty or
other covenant hereunder.

          1.39 The definition of “Yield Reserve” set forth in Exhibit I to the Receivables
Purchase Agreement is amended and restated in its entirety as follows:

     “Yield Reserve” means, on any date, an amount equal to 0.75% multiplied
by the Net Eligible Receivables Balance as of the close of business of the Servicer
on such date.

          1.40 The last paragraph of Exhibit I to the Receivables Purchase Agreement is amended
and restated in its entirety as follows:

     All terms used in Article 9 of the UCC in the State of Illinois, and not
specifically defined herein, are used herein as defined in such Article 9. Except
as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to time;
provided that, if Insight notifies the Agent that Insight and the Seller
request an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Agent notifies Insight and the Seller that
the Required Financial Institutions request an amendment to any provision hereof for
such purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before such
change shall have become effective until such notice shall have been withdrawn or
such provision amended in accordance herewith.

          1.41 Exhibit I to the Receivables Purchase Agreement is amended to insert the
following definitions in alphabetical order therein:

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     “Acquired Entity” means the assets or Person acquired in connection
with a Permitted Acquisition or other investment permitted under Section
6.04 of the Credit Agreement.

     “Acquired Entity EBITDA” means, with respect to any Acquired Entity
subject to a Permitted Acquisition, for any period, the net income (or loss) of such
Person and its Subsidiaries calculated on a consolidated basis for such period plus,
to the extent deducted from revenues in determining the net income (or loss) of such
Person and its Subsidiaries as described above, (i) for any period, the interest
expense of such Person and its Subsidiaries calculated on a consolidated basis for
such period, (ii) expense for taxes paid or accrued, (iii) depreciation, (iv)
amortization and (v) any extraordinary non-cash or nonrecurring non-cash charges or
losses incurred other than in the ordinary course of business minus to the extent
added to revenues in determining the net income (or loss) of such Person and its
Subsidiaries as described above, any extraordinary non-cash or nonrecurring non-cash
gains realized other than in the ordinary course of business. Such amounts shall be
derived by Insight from financial statements of the Acquired Entity delivered to the
Agent and the Administrative Agent prior to the consummation of such Permitted
Acquisition (which financial statements shall be audited through the end of the most
recently ended fiscal year and, for each subsequent fiscal quarter, shall be
prepared by the Acquired Entity on a basis consistent with such audited financial
statements) and shall be subject to the consent of the Administrative Agent acting
in good faith; provided, that when calculating Acquired Entity EBITDA with
respect to the Spectrum Acquisition through the period ending September 30, 2007,
Insight may use amounts related to historical Spectrum EBITDA as set forth in
pro-forma consolidated financial statements or other pro-forma consolidated
financial information appearing in Form 8-K filings or footnotes set forth in Form
10-Q filings made from time to time through such period by Insight with the
Securities and Exchange Commission.

     “Adjusted Consolidated EBITDA” means, as of any date of determination
and without duplication: (i) Consolidated EBITDA for Insight and its consolidated
Subsidiaries for the four fiscal quarter period then most recently ended, plus (ii)
Acquired Entity EBITDA for such period for each Permitted Acquisition consummated on
or after the Effective Date. Effective upon the consummation of a Permitted
Acquisition (including the Spectrum Acquisition), Adjusted Consolidated EBITDA shall
be adjusted to include Acquired Entity EBITDA for the applicable Acquired Entity.

     “Attributable Debt” in respect of a Sale and Leaseback Transaction
means, at any date of determination, (a) if such Sale and Leaseback Transaction is a
Capitalized Lease Obligation, the amount of Indebtedness represented thereby
according to the definition of “Capitalized Lease Obligations,” and (b) in all other
instances, the present value (discounted at the interest rate implicit in such
transaction, determined in accordance with GAAP) of the total obligations of the
lessee for rental payments during the remaining term of the lease included in such

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Sale and Leaseback Transaction (including any period for which such lease has
been extended).

     “Attributable Receivables Indebtedness” at any time means the principal
amount of Indebtedness which (a) if a Receivables Purchase Facility is structured as
a secured lending agreement, constitutes the principal amount of such Indebtedness
or (b) if a Receivables Purchase Facility is structured as a purchase agreement,
would be outstanding at such time under the Receivables Purchase Facility if the
same were structured as a secured lending agreement rather than a purchase
agreement.

     “Canadian Receivable” means a Receivable the Obligor of which is a
resident of Canada.

     “Control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

     “Disqualified Equity Interests” means Equity Interests that (a) require
the payment of any cash dividends prior to the date that is 91 days after the
Maturity Date (as defined in the Credit Agreement), (b) mature or are mandatorily
redeemable (other than solely for Qualified Equity Interests) or subject to
mandatory repurchase or redemption or repurchase at the option of the holders
thereof (other than solely for Qualified Equity Interests), in each case in whole or
in part and whether upon the occurrence of any event, pursuant to a sinking fund
obligation on a fixed date or otherwise, prior to the date that is 91 days after the
Maturity Date (other than (i) upon termination of the Commitments (as defined in the
Credit Agreement) and payment in full of the Obligations (as defined in the Credit
Agreement) then due and owing or (ii) upon a “change in control”, provided,
that any payment required pursuant to this clause (ii) is contractually subordinated
in right of payment to the Obligations on terms reasonably satisfactory to the
Administrative Agent) or (c) are convertible or exchangeable, automatically or at
the option of any holder thereof, into any Indebtedness, Equity Interests or other
assets other than Qualified Equity Interests prior to the date that is 91 days after
the Maturity Date.

     “Effective Date” has the meaning set forth in the Credit Agreement.

     “Equity Interests” means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial interests
in a trust or other equity ownership interests in a Person, and any warrants,
options or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

     “Fixed Charge Coverage Ratio” means, as of the end of any fiscal
quarter of Insight, the ratio of (a)(i) Consolidated EBITDA during the four fiscal
quarter period then ended minus (ii) Consolidated Capital Expenditures
during such

12

 

period minus (iii) cash dividends or distributions paid by Insight on
its Equity Interests during such period plus (iv) Consolidated Rentals
during such period to (b)(i) Consolidated Interest Expense during such period
plus (ii) Consolidated Rentals during such period plus (iii)
expenses for taxes paid or taxes accrued during such period (calculated for Insight
and its Subsidiaries on a consolidated basis) plus (iv) the scheduled
amortization of the principal portion of Indebtedness during such period (other than
amounts owing in connection with Receivables Purchase Facilities permitted under the
Credit Agreement), including, without limitation, Capitalized Lease Obligations
(calculated for Insight and its Subsidiaries on a consolidated basis).

     “Guarantee” of or by any Person (the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any other
Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect, (a)
to purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds for
the purchase of) any security for the payment thereof, (b) to purchase or lease
property, securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain working
capital, equity capital or any other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such Indebtedness or
other obligation or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness or obligation;
provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

     “Hostile Acquisition” means (a) the acquisition of the Equity Interests
of a Person through a tender offer or similar solicitation of the owners of such
Equity Interests which has not been approved (prior to such acquisition) by the
board of directors (or any other applicable governing body) of such Person or by
similar action if such Person is not a corporation and (b) any such acquisition as
to which such approval has been withdrawn.

     “Ineligible State” means, unless otherwise consented to in writing by
the Agent, with respect to any Receivable, (i) Delaware, (ii) the District of
Columbia, (iii) Hawaii, (iv) Kansas, (v) Maine, (vi) Maryland, (vii) Minnesota,
(viii) New York, (ix) North Carolina and (x) any state in respect of which (a) there
are restrictions on the assignment of a Receivable owing by such state (or on the
assignment of any Related Security with respect to such Receivable) or any
governmental subdivision or agency of such state pursuant to statute, judicial
precedent, the related Contract or otherwise, or (b) there are any actions required
to be taken or conditions required to be satisfied, whether pursuant to statute,
judicial precedent, the related Contract or otherwise, before such Receivable (or
any Related Security with respect to such Receivable) may be assigned that have not
yet been taken or satisfied.

13

 

     “Net Mark-to-Market Exposure” of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Swap Agreements. “Unrealized losses” means the
fair market value of the cost to such Person of replacing such Swap Agreement as of
the date of determination (assuming such Swap Agreement were to be terminated as of
that date), and “unrealized profits” means the fair market value of the gain to such
Person of replacing such Swap Agreement as of the date of determination (assuming
such Swap Agreement were to be terminated as of that date).

     “Off-Balance Sheet Liability” of a Person means, without duplication,
(a) any Attributable Receivables Indebtedness of such Person, (b) any Attributable
Debt of such Person under Sale and Lease Back Transactions and (c) the principal
component of (i) any repurchase obligation or liability of such Person with respect
to Receivables (as defined in the Credit Agreement) or notes receivable sold by such
Person, (ii) any liability under any so-called “synthetic lease” or “tax ownership
operating lease” transaction entered into by such Person or (iii) any obligation
arising with respect to any other transaction which is the functional equivalent of
or takes the place of borrowing but which does not constitute a liability on the
consolidated balance sheets of such Person, but excluding from this clause
(iii) all Operating Leases.

     “Qualified Equity Interests” means any Equity Interests that do not
constitute Disqualified Equity Interests.

     “Report” means each Monthly Report and each Weekly Report.

     “Sale and Leaseback Transaction” means any sale or other transfer of
any asset by a Person with the intent to lease such asset as lessee.

     “Spectrum” means Software Spectrum, Inc., a Delaware corporation.

     “Spectrum Acquisition” means the acquisition by Insight of all of the
issued and outstanding Equity Interests of Spectrum on the terms and conditions set
forth in the Spectrum Acquisition Agreement.

     “Spectrum Acquisition Agreement” means that certain Stock Purchase
Agreement, dated as of July 20, 2006, among Insight, Level 3 Communications, Inc.
and Technology Spectrum, Inc., as amended, restated, supplemented or otherwise
modified from time to time.

     “subsidiary” means, with respect to any Person (the “parent”)
at any date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other

14

 

corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the parent
and one or more subsidiaries of the parent.

     “Swap Agreement” means any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures of
economic, financial or pricing risk or value or any similar transaction or any
combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of Insight or the Subsidiaries
shall be a Swap Agreement.

     “Total Leverage Ratio” means, as of the end of any Fiscal Quarter of
Insight, the ratio of Consolidated Funded Indebtedness at such time to Adjusted
Consolidated EBITDA for the four Fiscal Quarter period then most recently ended.

     “Weekly Report” means a report, in substantially the form of
Exhibit IX hereto (appropriately completed), furnished by the Servicer to
the Agent pursuant to clause (i) of Section 8.5.

     “Weekly Reporting Period” means any period beginning as of the last day
of any Fiscal Quarter in respect of which the Total Leverage Ratio as of the end of
such Fiscal Quarter was equal to or greater than 2.25 to 1.00 and ending as of the
last day of the next Fiscal Quarter in respect of which the Total Leverage Ratio as
of the end of such Fiscal Quarter is less than 2.25 to 1.0.

          1.42 Exhibit I to the Receivables Purchase Agreement is amended to delete the
definitions of “Acquisition”, “Acquisition Purchase Price”, “Agreement Accounting Principles”,
“Borrowing Base Certificate”, “Closing Date”, “Consolidated Tangible Net Worth”, “Credit Agreement
Facility Termination Date”, “Credit Extension”, “Guaranty”, “Government Receivable”, “Lenders”,
“Leverage Ratio”, “Pledge Agreement” and “Required Lenders” therefrom in their entirety.

          1.43 Exhibit IX to the Receivables Purchase Agreement is amended and restated in its
entirety in the form of Exhibit IX hereto.

          1.44 Exhibit XI to the Receivables Purchase Agreement is amended and restated in its
entirety in the form of Exhibit XI hereto.

15

 

          1.45 Schedule A to the Receivables Purchase Agreement is amended and restated in its
entirety in the form of Schedule A hereto.

          SECTION 2. Conditions Precedent. This Amendment shall become effective as of the
close of business on the date first above written, subject to the satisfaction of the conditions
precedent that (i) Jupiter and the Agent shall have received payment of all fees due and payable to
them as of the date hereof under the Fee Letter defined below and (ii) the Agent shall have
received each of the following:

     (a) counterparts of this Amendment, executed by each of the parties hereto;

     (b) a Reaffirmation of Performance Undertaking in the form attached hereto (the
“Reaffirmation”), executed by Insight;

     (c) counterparts of that certain Amended and Restated Fee Letter, dated as of the date
hereof (the “Fee Letter”), among the Seller, Jupiter and the Agent;

     (d) Certificate of the Secretary of the Seller certifying (A) a copy of the Articles of
Organization of the Seller (attached thereto), (B) a copy of the Limited Liability Company
Agreement of the Seller (attached thereto), (C) a copy of the resolutions of the Board of
Directors of the Seller (attached thereto) authorizing the execution and delivery of this
Amendment and the Fee Letter and the performance of this Amendment, the Receivables Purchase
Agreement, as amended by this Amendment and the Fee Letter, and (D) the names and signatures
of the officers authorized on its behalf to execute this Amendment and the Fee Letter;

     (e) Good Standing Certificate for the Seller, issued by the Secretary of State of
Illinois.

     (f) Certificate of the Secretary of Insight certifying (A) a copy of the Bylaws of
Insight (attached thereto), (B) a copy of the Limited Liability Company Agreement of Insight
(attached thereto), (C) a copy of the resolutions of the Board of Directors of Insight
(attached thereto) authorizing the execution and delivery of this Amendment and the
Reaffirmation and the performance of this Amendment, the Receivables Purchase Agreement, as
amended by this Amendment and the Performance Undertaking, and (D) the names and signatures
of the officers authorized on its behalf to execute this Amendment and the Reaffirmation;

     (g) Good Standing Certificate for Insight issued by the Secretary of State of Delaware;
and

     (h) such other documents as the Agent may reasonably request.

          SECTION 3. Representations and Warranties. Each of the Seller and the Servicer hereby
represents and warrants that (i) this Amendment constitutes its legal, valid and binding
obligation, enforceable against such party in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general equitable

16

 

principles (whether enforcement is sought by proceedings in equity or at law) and the implied
covenants of good faith and fair dealing; and (ii) before and after giving effect to this
Amendment, the representations and warranties of each such party, respectively, set forth in
Article 5 of the Receivables Purchase Agreement are true and correct in all material
respects with the same effect as if made on the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date. The Seller further represents
and warrants that before and after giving effect to this Amendment, no event has occurred and is
continuing that constitutes an Amortization Event or a Potential Amortization Event.

          SECTION 4. Reference to and Effect on the Receivables Purchase Agreement.

          4.1 Upon the effectiveness of this Amendment, (i) each reference in the Receivables Purchase
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement, as amended hereby, and (ii) each
reference to the Receivables Purchase Agreement in any other Transaction Document or any other
document, instrument or agreement executed and/or delivered in connection therewith, shall mean and
be a reference to the Receivables Purchase Agreement as amended hereby.

          4.2 Except as specifically amended above, the terms and conditions of the Receivables
Purchase Agreement, of all other Transaction Documents and any other documents, instruments and
agreements executed and/or delivered in connection therewith, shall remain in full force and effect
and are hereby ratified and confirmed.

          4.3 The execution, delivery and effectiveness of this Amendment shall not operate as a waiver
of any right, power or remedy of the Agent or Jupiter under the Receivables Purchase Agreement or
any other Transaction Document or any other document, instrument or agreement executed in
connection therewith, nor constitute a waiver of any provision contained therein, in each case
except as specifically set forth herein.

          SECTION 5. Costs and Expenses. The Seller agrees to pay on demand all reasonable
costs and expenses of the Agent, Jupiter and the Financial Institutions in connection with the
preparation, execution and delivery of this Amendment and the other instruments and documents to be
delivered in connection herewith, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent, Jupiter and the Financial Institutions with
respect thereto and with respect to advising the Agent, Jupiter and the Financial Institutions as
to their respective rights and responsibilities hereunder and thereunder.

          SECTION 6. Execution in Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument.

          SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, BUT NOT LIMITED TO, 735 ILCS SECTION 105/5-1 ET
SEQ., BUT

17

 

OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS) OF THE STATE OF ILLINOIS.

          SECTION 8. Section Titles. The section titles contained in this Amendment are and
shall be without substance, meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto.

[Signature pages follow]

18

 

          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized as of the date first above written.

	 	 	 	 	 
	 	INSIGHT RECEIVABLES, LLC

 	 
	 	By:  	/s/ Stanley Laybourne
 	 
	 	 	Name:  	Stanley Laybourne 	 
	 	 	Title:  	Director 	 
	 
	 	INSIGHT ENTERPRISES, INC.

 	 
	 	By:  	/s/ Stanley Laybourne
 	 
	 	 	Name:  	Stanley Laybourne 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

 

 

	 	 	 	 	 
	 	JUPITER SECURITIZATION COMPANY LLC 

(formerly Jupiter Securitization Corporation)

 	 
	 	By:  	JPMorgan Chase Bank, N.A., its attorney-in-fact
 	 
	 	 	 
	 	By:  	
/s/ Adam J. Klimek	 
	 	 	Name:  	Adam J. Klimek 	 
	 	 	Title:  	Vice President 	 
	 
	 	JPMORGAN CHASE BANK, N.A.

(successor by merger to Bank One, NA (Main Office

Chicago)), as a Financial Institution and as Agent

 	 
	 	By:  	/s/
Adam J. Klimek	 
	 	 	Name:  	Adam J. Klimek 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to

Reaffirmation of Performance UndertakingExhibit 10.1

 

    

    Exhibit 10.1

     

    Form
      of Bank Plan of Merger

     

    

    THIS
      BANK
      PLAN OF MERGER (“Bank Plan of Merger”) dated September __, 2006, is by and
      between COMMUNITYBANKS, a Pennsylvania bank and trust company (“Community”) and
      BUCS FEDERAL BANK, a federal savings association (“BUCS”). 

     

    BACKGROUND

     

    A.
       Community
      is a wholly-owned subsidiary of Community Banks, Inc., a Pennsylvania
      corporation (“CMTY”). 

     

    B.
       BUCS
      is a
      wholly-owned subsidiary of BUCS Financial Corp, a Maryland corporation (“BFC”).

     

    C. CMTY
      and
      BFC have executed an Agreement dated September __, 2006 (the “Agreement”). The
      Agreement provides for the merger of BUCS with and into Community, with
      Community surviving such merger, but only after closing of the “Merger” provided
      for in the Agreement. After closing of the “Merger,” Community and BUCS will
      each be direct wholly-owned subsidiaries of CMTY. This Bank Plan of Merger
      is
      being executed by Community and BUCS pursuant to the Agreement. 

     

    D. Capitalized
      terms used in this Bank Plan of Merger that are not otherwise defined herein
      shall have the meanings given them in the Agreement.

     

    In
      consideration of the premises and of the mutual covenants and agreements herein
      contained, and in accordance with the applicable laws and regulations of the
      United States of America, the State of Maryland and the Commonwealth of
      Pennsylvania, Community and BUCS, intending to be legally bound hereby, agree:
      

     

    ARTICLE
      I - MERGER

     

    Subject
      to the terms and conditions of this Bank Plan of Merger, and in accordance
      with
      the applicable laws and regulations of the United States of America, the State
      of Maryland and the Commonwealth of Pennsylvania, on the Effective Date (as
      that
      term is defined in Article V hereof): 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (a)
       BUCS
      shall merge with and into Community, under the charter of Community;

     

    (b)
       the
      separate existence of BUCS shall cease; and 

     

    (c)
       Community
      shall be the surviving bank.

     

    Such
      transaction is referred to herein as the “Bank Merger,” and Community, as the
      surviving bank in the Bank Merger, is referred to herein as the “Surviving
      Bank.” 

     

    ARTICLE
      II - NAME AND BUSINESS OF BANK

     

    The
      name
      of the Surviving Bank shall be Community. The business of the Surviving Bank
      shall be that of a state, non-member bank with trust powers. This business
      shall
      be conducted by the Surviving Bank at its main office which shall be located
      at
      150 Market Square, Millersburg, Pennsylvania, and its legally established
      branches and other facilities. 

     

    ARTICLE
      III - ARTICLES OF INCORPORATION AND BYLAWS

     

    3.1
      Articles
      of Incorporation.
      On and
      after the Effective Date, the articles of Community, as in effect immediately
      prior to the Effective Date, shall automatically be and remain the articles
      of
      incorporation of the Surviving Bank, until changed in accordance with applicable
      law, such articles of incorporation, and the Surviving Bank’s bylaws.

     

    3.2
      Bylaws.
      On and
      after the Effective Date, the bylaws of Community, as in effect immediately
      prior to the Effective Date, shall automatically be and remain the bylaws of
      the
      Surviving Bank, until changed in accordance with applicable law, the Surviving
      Bank’s articles of association, and such bylaws. 

     

    ARTICLE
      IV - BOARD OF DIRECTORS AND OFFICERS

     

    4.1
      Board
      of Directors.
      On and
      after the Effective Date, the directors of Community duly elected and holding
      office immediately prior to the Effective Date shall be the directors of the
      Surviving Bank, each to hold office until his or her successor is elected and
      qualified or otherwise in accordance with applicable law, the articles of
      incorporation and bylaws of the Surviving Bank. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    4.2
      Officers.
      On and
      after the Effective Date, the officers of Community duly elected and holding
      office immediately prior to the Effective Date shall be the officers of the
      Surviving Bank, together with those officers of BUCS who have been offered
      and
      who have accepted positions of employment with Community, and such other
      officers as may be appointed from time to time, each to hold office until his
      or
      her successor is elected and qualified or otherwise in accordance with
      applicable law, the articles of association and bylaws of the Surviving Bank.
      

     

    ARTICLE
      V - CONVERSION OF SHARES

     

    5.1
      Community
      Capital Stock.
      Each
      share of Community capital stock issued and outstanding immediately prior to
      the
      Effective Date shall, on and after the Effective Date, continue to be issued
      and
      outstanding as a share of identical capital stock of the Surviving Bank.

     

    5.2
      BUCS
      Capital Stock.
      Each
      share of BUCS capital stock issued and outstanding immediately prior to the
      Effective Date shall, on the Effective Date, be cancelled, and no cash, stock
      or
      other property shall be delivered in exchange therefor. 

     

    ARTICLE
      VI - EFFECTIVE DATE OF THE MERGER

     

    The
      Bank
      Merger shall be effective at the time specified in the articles of merger filed
      with the Department of Banking of the Commonwealth of Pennsylvania (the
“Effective Date”), provided that in no event may the Bank Merger be effective
      unless or until any required consent from or notice to the Office of Thrift
      Supervision has been received or made and any requisite waiting period has
      expired. 

     

    ARTICLE
      VII - EFFECT OF THE MERGER 

     

    On
      the
      Effective Date the separate existence of BUCS shall cease, and all of the
      property (real, personal and mixed), rights, powers, duties and obligations
      of
      BUCS shall be taken and deemed to be transferred to and vested in the Surviving
      Bank, without further act or deed, as provided by applicable laws and
      regulations. The savings accounts of BUCS shall become savings accounts of
      the
      Surviving Bank on the same basis as prior to the Effective Date.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    ARTICLE
      VIII - CONDITIONS PRECEDENT 

     

    The
      obligations of Community and BUCS to effect the Bank Merger shall be subject
      to
      closing of the “Merger” provided for in the Agreement. 

     

    ARTICLE
      IX - TERMINATION

     

    This
      Bank
      Plan of Merger shall terminate automatically upon any termination of the
      Agreement in accordance with its terms; provided, however, that any such
      termination of this Bank Plan of Merger shall not relieve any party hereto
      from
      liability on account of a breach by such party of any of the terms hereof or
      thereof. 

     

    ARTICLE
      X - AMENDMENT

     

    This
      Bank
      Plan of Merger may be amended at any time prior to consummation of the Bank
      Merger, but only by an instrument in writing signed by duly authorized officers
      on behalf of the parties hereto. 

     

    ARTICLE
      XI - MISCELLANEOUS

     

    11.1
      Extensions;
      Waivers.
      Each
      party, by a written instrument signed by a duly authorized officer, may extend
      the time for the performance of any of the obligations or other acts of the
      other party hereto and may waive compliance with any of the covenants, or
      performance of any of the obligations, of the other party contained in this
      Bank
      Plan of Merger. 

     

    11.2
      Notices.
      Any
      notice or other communication required or permitted under this Bank Plan of
      Merger shall be given, and shall be effective, in accordance with the provisions
      of Section 8.06 of the Agreement. 

     

    11.3
      Captions.
      The
      headings of the several Articles herein are intended for convenience of
      reference only and are not intended to be part of, or to affect the meaning
      or
      interpretation of, this Bank Plan of Merger. 

     

    11.4
      Counterparts.
      For the
      convenience of the parties hereto, this Bank Plan of Merger may be executed
      in
      several counterparts, each of which shall be deemed the original, but all of
      which together shall constitute one and the same instrument. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    11.5
      Governing
      Law.
      This
      Bank Plan of Merger shall be governed by and construed in accordance with
      applicable laws of the United States of America and in accordance with the
      laws
      of the Commonwealth of Pennsylvania. 

     

    11.6
      Liquidation
      Account.
      The
      liquidation account established by BUCS in connection with its conversion from
      mutual to stock form shall be assumed by the Surviving Bank.

     

    IN
      WITNESS WHEREOF, Community and BUCS have caused this Bank Plan of Merger to
      be
      executed by their duly authorized officers on the date first written above,
      each
      pursuant to a resolution of its board of directors, acting by at least
      two-thirds of the Board. 

     

    
      	
              COMMUNITYBANKS

            	 	
              Attest:

            
	 	 	 
	 	 	 
	
              By:
                _____________________________

              Eddie L.
                Dunklebarger

              President
                and CEO

            	 	
              By:
                _____________________________

              Patricia E.
                Hoch, Senior VP and Secretary

            
	 	 	 
	 	 	 
	BUCS FEDERAL
              BANK    	 	Attest:
	 	 	 
	By:	 	 
	Herbert J.
              Moltzan,
              President and CEO    	 	 ,
              Secretary

    

     

    

    

    5

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