Document:

ex10_2.htm

 

Exhibit 10.2

Execution Version

 

 

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

among

 

CASTLE PINES CAPITAL LLC

 

as an Administrative Agent

 

and

 

WELLS FARGO CAPITAL FINANCE, LLC

 

As an Administrative Agent, as Syndication Agent and as Collateral Agent

 

and

 

CASTLE PINES CAPITAL LLC

AND THE OTHER LENDERS PARTY

HERETO FROM TIME TO TIME

 

as Lenders

 

and

 

CALENCE, LLC, INSIGHT DIRECT USA, INC.,

AND INSIGHT PUBLIC SECTOR, INC.,

 

as Resellers

 

June 23, 2016

 

  

  

  

Table of Contents

Page

 

	
1.

	 	
Effective Date

	 	
1

	  	 	  	 	  
	
2.

	 	
Definitions; Rules of Construction

	 	
1

	  	 	
2.1

	 	
Listed Definitions

	 	
1

	  	 	
2.2

	 	
Other Definitions

	 	
1

	  	 	
2.3

	 	
References to Required Lenders; Minimum Exposure

	 	
1

	  	 	
2.4

	 	
Accounting Terms

	 	
1

	  	 	
2.5

	 	
Meaning of Satisfactory

	 	
2

	  	 	
2.6

	 	
Computation of Time Periods

	 	
2

	  	 	
2.7

	 	
General

	 	
2

	  	 	
2.8

	 	
Certificates of Resellers and Borrowing Agent, Advance Requests; Borrowing Agent

	 	
2

	  	 	
2.9

	 	
Pro Forma Calculations

	 	
3

	  	 	  	 	  
	
3.

	 	
Lenders’ Facility

	 	
3

	  	 	
3.1

	 	
Channel Finance Loans

	 	
3

	  	 	  	 	
3.1.1

	 	
Channel Finance Loan Facility Generally

	 	
3

	  	 	  	 	
3.1.2

	 	
Interim Channel Finance Loan Advances

	 	
4

	  	 	  	 	
3.1.3

	 	
Terminations of Vendor Agreements

	 	
4

	  	 	  	 	
3.1.4

	 	
Limitations on Interim Channel Finance Loan Advances

	 	
5

	  	 	  	 	
3.1.5

	 	
Operation of Aggregate Channel Finance Loan Facility and Interim Channel Finance Loan Facility

	 	
5

	  	 	  	 	
3.1.6

	 	
Channel Finance Loan Approvals

	 	
5

	  	 	  	 	
3.1.7

	 	
Inventory not Available for Channel Finance Loans and Interim Channel Finance Loans

	 	
6

	  	 	  	 	
3.1.8

	 	
Repurchase Agreements

	 	
6

	  	 	  	 	
3.1.9

	 	
Channel Finance Loan Pay Down Provision

	 	
6

	  	 	
3.2

	 	
Termination/Maturity/Renewal

	 	
6

	  	 	
3.3

	 	
Expansion Facility

	 	
7

	  	 	
3.4

	 	
Promise to Pay

	 	
8

	  	 	  
	
4.

	 	
Interest

	 	
8

	  	 	
4.1

	 	
Free Channel Finance Period

	 	
8

	  	 	
4.2

	 	
Rate After Maturity.

	 	
8

	  	 	
4.3

	 	
Interest Payable to Administrative Agents and CPC as Lender Only

	 	
8

	  	 	
4.4

	 	
Interest on Channel Finance Loans Payable to Lenders (other than CPC); Administrative Agent Deficiency Amount

	 	
9

	  	 	
4.5

	 	
Taxes

	 	
10

	  	 	
4.6

	 	
Usury

	 	
12

	  	 	
4.7

	 	
Capital Adequacy

	 	
13

	  	 	  	 	  
	
5.

	 	
Funding of Channel Finance Loans

	 	
13

	  	 	
5.1

	 	
Fundings

	 	
13

	  	 	  	 	
5.1.1

	 	
Advances

	 	
13

	  	 	  	 	
5.1.2

	 	
All Fundings Ratable

	 	
13

	  	 	
5.2

	 	
Collections and Distributions to Lenders by Administrative Agents

	 	
14

	  	 	
5.3

	 	
Settlement Dates

	 	
14

	  	 	
5.4

	 	
Repayment of the Interim Channel Finance Loan

	 	
14

 

  

i

  

 

	  	 	
5.5

	 	
Administrative Agents’ Availability Assumption

	 	
15

	  	 	  	 	  
	
6.

	 	
Payments

	 	
16

	  	 	
6.1

	 	
Scheduled Payments on Loans; Applications to Loans

	 	
16

	  	 	  	 	
6.1.1

	 	
Interest

	 	
16

	  	 	  	 	
6.1.2

	 	
Principal

	 	
16

	  	 	
6.2

	 	
Optional Prepayment

	 	
17

	  	 	
6.3

	 	
Manner of Payments and Timing of Application of Payments

	 	
17

	  	 	  	 	
6.3.1

	 	
Payment Requirement

	 	
17

	  	 	  	 	
6.3.2

	 	
Application of Payments and Proceeds

	 	
17

	  	 	
6.4

	 	
Returned Instruments

	 	
17

	  	 	
6.5

	 	
Compelled Return of Payments or Proceeds

	 	
17

	  	 	
6.6

	 	
Due Dates Not on Business Days

	 	
18

	  	 	
6.7

	 	
Application of Funds Post-Maturity

	 	
18

	  	 	  	 	  
	
7.

	 	
Procedure for Obtaining Advances

	 	
18

	  	 	
7.1

	 	
Initial Advance

	 	
18

	  	 	
7.2

	 	
Channel Finance Loan Advances

	 	
19

	  	 	
7.3

	 	
Disbursement

	 	
19

	  	 	  	 	  
	
8.

	 	
Conditions of Lending.

	 	
19

	  	 	
8.1

	 	
Effective Date

	 	
19

	  	 	
8.2

	 	
The Expansion Facility Effective Date

	 	
20

	  	 	
8.3

	 	
Each Credit Event

	 	
21

	  	 	  	 	  
	
9.

	 	
Representations and Warranties

	 	
21

	  	 	
9.1

	 	
Organization; Powers

	 	
21

	  	 	
9.2

	 	
Authorization; Enforceability

	 	
21

	  	 	
9.3

	 	
Governmental Approvals; No Conflicts

	 	
22

	  	 	
9.4

	 	
Financial Condition; No Material Adverse Change

	 	
22

	  	 	
9.5

	 	
Properties; Insurance

	 	
22

	  	 	
9.6

	 	
Litigation, Environmental and Labor Matters

	 	
23

	  	 	
9.7

	 	
Compliance with Laws and Agreements

	 	
23

	  	 	
9.8

	 	
Investment Company Status

	 	
23

	  	 	
9.9

	 	
Taxes

	 	
23

	  	 	
9.10

	 	
ERISA

	 	
24

	  	 	
9.11

	 	
Subsidiaries; Ownership of Capital Stock

	 	
24

	  	 	
9.12

	 	
Solvency

	 	
24

	  	 	
9.13

	 	
Disclosure

	 	
24

	  	 	
9.14

	 	
Regulation U

	 	
24

	  	 	
9.15

	 	
Lien in Collateral

	 	
24

	  	 	
9.16

	 	
Material Subsidiaries

	 	
24

	  	 	
9.17

	 	
OFAC

	 	
25

	  	 	
9.18

	 	
Patriot Act

	 	
25

	  	 	  	 	  
	
10.

	 	
Affirmative Covenants

	 	
25

	  	 	
10.1

	 	
Financial Statements and Other Information

	 	
25

	  	 	
10.2

	 	
Notices of Material Events

	 	
27

	  	 	
10.3

	 	
Existence; Conduct of Business

	 	
28

	  	 	
10.4

	 	
Payment of Taxes

	 	
28

	  	 	
10.5

	 	
Maintenance of Properties; Insurance

	 	
28

 

  

ii

  

 

	  	 	
10.6

	 	
Books and Records; Inspection Rights

	 	
28

	  	 	
10.7

	 	
Compliance With Laws

	 	
28

	  	 	
10.8

	 	
Use of Proceeds

	 	
29

	  	 	
10.9

	 	
Subsidiary Collateral Documents; Subsidiary Guarantors

	 	
29

	  	 	  	 	  
	
11.

	 	
Negative Covenants

	 	
30

	  	 	
11.1

	 	
Indebtedness

	 	
30

	  	 	
11.2

	 	
Liens

	 	
32

	  	 	
11.3

	 	
Fundamental Changes

	 	
34

	  	 	
11.4

	 	
Investments, Loans, Advances, Guarantees and Acquisitions

	 	
35

	  	 	
11.5

	 	
Swap Agreements

	 	
37

	  	 	
11.6

	 	
Restricted Payments

	 	
37

	  	 	
11.7

	 	
Transactions with Affiliates

	 	
37

	  	 	
11.8

	 	
Restrictive Agreements; Receivables Entities

	 	
38

	  	 	
11.9

	 	
Sale and Leaseback Transactions

	 	
39

	  	 	
11.10

	 	
Financial Covenants

	 	
39

	  	 	
11.11

	 	
JPMorgan Loan Documents

	 	
39

	  	 	  	 	  
	
12.

	 	
Events of Default

	 	
39

	  	 	
12.1

	 	
Events of Default

	 	
39

	  	 	
12.2

	 	
Cross-Default

	 	
42

	  	 	
12.3

	 	
Miscellaneous

	 	
42

	  	 	
12.4

	 	
Joint and Several

	 	
42

	  	 	  	 	  
	
13.

	 	
Administrative Agents, Collateral Agent and Lenders

	 	
43

	  	 	
13.1

	 	
Appointment, Powers, and Immunities

	 	
43

	  	 	
13.2

	 	
Reliance by Administrative Agents

	 	
43

	  	 	
13.3

	 	
Employment of Administrative Agents, Collateral Agents and Counsel

	 	
44

	  	 	
13.4

	 	
Defaults

	 	
44

	  	 	
13.5

	 	
Rights as Lender

	 	
44

	  	 	
13.6

	 	
Indemnification

	 	
44

	  	 	
13.7

	 	
Notification of Lenders

	 	
45

	  	 	
13.8

	 	
Non-Reliance on Agent and Other Lenders

	 	
45

	  	 	
13.9

	 	
Resignation

	 	
46

	  	 	
13.10

	 	
Mergers into Receivables Sellers

	 	
46

	  	 	
13.11

	 	
Restrictions on Actions by Lenders; Sharing of Payments

	 	
46

	  	 	  	 	  
	
14.

	 	
General

	 	
47

	  	 	
14.1

	 	
Lenders’ Right to Cure

	 	
47

	  	 	
14.2

	 	
Rights Not Exclusive

	 	
47

	  	 	
14.3

	 	
Survival of Agreements

	 	
47

	  	 	
14.4

	 	
Assignments

	 	
48

	  	 	  	 	
14.4.1

	 	
Permitted Assignments

	 	
48

	  	 	  	 	
14.4.2

	 	
Register; Consequences and Effect of Assignments

	 	
48

	  	 	  	 	
14.4.3

	 	
Administrative Agents to Retain Copies of Assignments and Acceptances

	 	
49

	  	 	  	 	
14.4.4

	 	
Notice to Resellers of Assignment

	 	
50

	  	 	  	 	
14.4.5

	 	
Assignment to Federal Reserve Bank

	 	
50

	  	 	  	 	
14.4.6

	 	
Information

	 	
50

	  	 	  	 	
14.4.7

	 	
Sale of Participations

	 	
50

	  	 	  	 	
14.4.8

	 	
Participant Register

	 	
50

	  	 	
14.5

	 	
Payment of Expenses

	 	
50

 

  

iii

  

 

	  	 	
14.6

	 	
General Indemnity

	 	
51

	  	 	
14.7

	 	
Changes in Accounting Principles

	 	
52

	  	 	
14.8

	 	
Loan Records

	 	
52

	  	 	
14.9

	 	
Other Security and Guaranties

	 	
53

	  	 	
14.10

	 	
Loan Obligations Payable in Dollars

	 	
53

	  	 	
14.11

	 	
Confidentiality

	 	
53

	  	 	
14.12

	 	
Reserved

	 	
54

	  	 	
14.13

	 	
Jury Trial Waiver; Service of Process; Forum

	 	
54

	  	 	  	 	
14.13.1

	 	
Jury Trial Waiver

	 	
54

	  	 	  	 	
14.13.2

	 	
Choice of Forum

	 	
54

	  	 	  	 	
14.13.3

	 	
Service of Process

	 	
54

	  	 	  	 	  
	
15.

	 	
Portal

	 	
54

	  	 	  	 	  
	
16.

	 	
Reserved

	 	
55

	  	 	  	 	  
	
17.

	 	
Miscellaneous

	 	
55

	  	 	
17.1

	 	
Notices

	 	
55

	  	 	
17.2

	 	
Amendments and Modifications; Waivers and Consents; All Lenders

	 	
55

	  	 	
17.3

	 	
Replacement of Lenders

	 	
56

	  	 	
17.4

	 	
Course of Dealing

	 	
57

	  	 	
17.5

	 	
Rights Cumulative

	 	
57

	  	 	
17.6

	 	
Successors and Assigns

	 	
57

	  	 	
17.7

	 	
Severability

	 	
57

	  	 	
17.8

	 	
Counterparts

	 	
57

	  	 	
17.9

	 	
Governing Law; No Third Party Rights

	 	
57

	  	 	
17.10

	 	
Counterpart Facsimile Execution

	 	
57

	  	 	
17.11

	 	
No Other Agreements

	 	
58

	  	 	
17.12

	 	
Waiver of Right to Seek Punitive and Exemplary Damages

	 	
58

	  	 	
17.13

	 	
Negotiated Transaction

	 	
58

	  	 	
17.14

	 	
Incorporation By Reference

	 	
58

	  	 	
17.15

	 	
Customer Identification - USA Patriot Act Notice

	 	
58

	  	 	
17.16

	 	
No Novation; References to this Agreement in Loan Documents

	 	
58

 

	
EXHIBIT A  LENDERS’ FACILITIES AND PRO-RATA SHARES

	
1

	  	  
	
EXHIBIT B  DEFINITIONS

	
1

	  	  
	
EXHIBIT C  DOCUMENTS AND REQUIREMENTS LIST

	
1

	  	  
	
EXHIBIT D  COMPLIANCE CERTIFICATE

	
1

	  	  
	
EXHIBIT E  FORM OF ASSIGNMENT AND ACCEPTANCE

	
1

	  	  
	
SCHEDULE 2  SUBSIDIARY GUARANTORS

	
2

	  	  
	
SCHEDULE 9.6  LITIGATION

	
3

	  	  
	
SCHEDULE 9.11  SUBSIDIARIES; OWNERSHIP OF CAPITAL STOCK

	
4

  

iv

  

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 23, 2016, is entered into by and among CALENCE, LLC, a Delaware limited liability company, INSIGHT DIRECT USA, INC., an Illinois corporation, and INSIGHT PUBLIC SECTOR, INC., an Illinois corporation (each a “Reseller” and collectively, the “Resellers”), CASTLE PINES CAPITAL LLC, a Delaware limited liability company (as an individual administrative agent, or as a lender, as the context may require, “CPC”), WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company (in its capacity as the collateral agent for the benefit of Holders of Secured Obligations, the “Collateral Agent,” as syndication agent and in its capacity as an individual administrative agent, “WFCF” and, together with CPC, in its capacity as an administrative agent, “Administrative Agents”), CPC as lender and the other lenders listed on Exhibit A of this Agreement and the signature pages hereto (and their respective successors and permitted assigns), as “Lenders”.

 

STATEMENT OF PURPOSE

 

The Resellers, the lenders party thereto, the Administrative Agents and the Collateral Agent executed and delivered that certain Amended and Restated Credit Agreement dated as of April 26, 2012 (as amended, restated or otherwise modified prior to the date hereof, the “Existing Credit Agreement”).

 

The Resellers have requested, and, subject to the terms and conditions hereof, the Administrative Agents, the Collateral Agent and the Lenders have agreed to amend and restate the Existing Credit Agreement on the terms and conditions of this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, such parties hereby agree as follows:

 

1.           Effective Date.  This Agreement is effective June 23, 2016.

 

2.           Definitions; Rules of Construction.

 

2.1           Listed Definitions.  Capitalized words defined in the attached Exhibit B have such defined meanings wherever used in this Agreement and the other Loan Documents.

 

2.2           Other Definitions.  If a capitalized word in this Agreement is not defined in Exhibit B, it shall have such meaning as defined elsewhere herein, or if not defined elsewhere herein, the meaning defined in the UCC.

 

2.3           References to Required Lenders; Minimum Exposure.  Subject to the provisions of Section 5.5.1 with regards to a Defaulting Lender, the words “Required Lenders” mean any two or more Lenders whose shares of Lenders’ Exposure at the relevant time aggregate more than 50% (subject to the terms of Section 5.5.3).  CPC, in its capacity as a Lender, agrees at all times to hold a Pro-Rata Share of the Aggregate Channel Finance Loan Facility at least equal to or greater than the Pro-Rata Share of the Aggregate Channel Finance Loan Facility of each other Lender individually; provided, however, after an acceleration of the Loan Obligations or during an Event of Default, CPC, in its capacity as a Lender, shall be permitted to assign all or any portion of its Commitments and Loans pursuant to Section 14.4 hereunder, and the foregoing restriction shall not be applicable after any such assignment.

 

2.4           Accounting Terms.  Unless the context otherwise requires, accounting terms herein that are not defined herein shall be determined under GAAP. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of

 

  

  

  

amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Parent Guarantor or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.  The definitions set forth in the Loan Documents and any financial or other covenant calculations required by the Loan Documents shall be computed to exclude any change to lease accounting rules from those in effect on the Effective Date.

 

2.5           Meaning of Satisfactory.  Whenever herein a document or matter is required to be satisfactory to Administrative Agents or satisfactory to Lenders or satisfactory to Required Lenders, unless expressly stated otherwise such document must be reasonably satisfactory to Administrative Agents, Lenders or Required Lenders (as applicable) in both form and substance, and unless expressly stated otherwise Administrative Agents, Lenders or Required Lenders (as applicable) shall have the commercially reasonable discretion to determine whether the document or matter is satisfactory.

 

2.6           Computation of Time Periods.  In computing or defining periods of time from a specified date to a later specified date, and in computing the accrual of interest or fees, the word “from” means “from and including” and the words “to” and “until” shall each mean “to but excluding”.  Periods of days referred to in this Agreement shall be counted in calendar days unless Business Days are expressly prescribed, and references in this Agreement to months and years are to calendar months and calendar years unless otherwise specified.

 

2.7           General.  Unless the context of this Agreement clearly requires otherwise:  (i) references to the plural include the singular and vice versa; (ii) references to any Person include such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement; (iii) references to one gender include all genders; (iv) “including” is not limiting; (v) “or” has the inclusive meaning represented by the phrase “and/or;” (vi) the words “hereof,” “herein,” “hereby,” “hereunder” and similar terms in this Agreement refer to this Agreement as a whole, including its Exhibits, and not to any particular provision of this Agreement; (vii) the word “Section” or “section” and “Page” or “page” refer to a section or page, respectively, of, and the word Exhibit refers to an Exhibit to, this Agreement unless it expressly refers to something else; (viii) reference to any agreement, document, or instrument (including this Agreement and any other Loan Document or other agreement, document or instrument defined herein), means such agreement, document, or instrument as amended, amended and restated, modified, restated, reaffirmed, confirmed and/or replaced and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof, and includes all attachments thereto and documents incorporated therein, if any; and (ix) general and specific references to any Law means such Law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time.  Section captions and the Table of Contents are for convenience only and shall not affect the interpretation or construction of this Agreement or the other Loan Documents.

 

2.8           Certificates of Resellers and Borrowing Agent, Advance Requests; Borrowing Agent.  Each of the Resellers hereby appoints Insight Direct USA, Inc. as “Borrowing Agent.” Because the operations and business activities of the Resellers are integrated and interdependent, at any particular time it is impractical to determine which of the Resellers will directly receive the proceeds of an Interim Channel Finance Loan Advance or a Channel Finance Loan Advance.  Each of the Resellers hereby directs the Administrative Agents to disburse the proceeds of each Interim Channel Finance Loan Advance and a Channel Finance Loan Advance to or at the direction of the Borrowing Agent, and such distribution will,

 

  

2

  

in all circumstances, be deemed to be made to each of the Resellers.  From time to time, Borrowing Agent shall further direct the disbursement of the Interim Channel Finance Loan Advances and Channel Finance Loan Advances for the account of each Reseller, and each Reseller represents and warrants that the subsequent receipt and use of such proceeds by any particular Reseller inures to the economic benefit directly and indirectly of all other Resellers.  For so long as the Loan Obligations remain outstanding or any Facility is in effect, each Reseller hereby covenants and agrees, and hereby grants to the Borrowing Agent an absolute and irrevocable power of attorney coupled with interest, and irrevocably designates, appoints, authorizes and directs the Borrowing Agent to (a) execute and deliver written requests for Advances, (b) make any other deliveries required to be delivered periodically hereunder to Administrative Agents and/or any Lender, (c) act as its Borrowing Agent, and Administrative Agents and each Lender are entitled to rely on any such document or certificate signed by the Borrowing Agent, and (d) otherwise take all other actions otherwise contemplated by this Section, and to act on behalf of such Resellers for purposes of giving and receiving notices and certifications under this Agreement or any other Loan Document.  The Administrative Agents are entitled to rely and act on the instructions of the Borrowing Agent.

 

2.9           Pro Forma Calculations.

 

(a)           For purposes of any calculation of the Minimum Receivables Test, Total Leverage Ratio or Fixed Charge Coverage Ratio or Consolidated EBITDA or consolidated assets for purposes of determinations of Material Subsidiaries, in the event that any Specified Transaction has occurred during the Test Period for which the Minimum Receivables Test, Total Leverage Ratio or Fixed Charge Coverage Ratio or Consolidated EBITDA or consolidated assets for purposes of determination of Material Subsidiaries is being calculated or, except for purposes of determining whether an Event of Default has occurred under Section 11.10 has occurred, following the end of such Test Period but prior to the date that financial statements have been delivered pursuant to Section 10.1(a) or (b), such calculation shall be made on a Pro Forma Basis; provided, that, with respect to any Limited Conditionality Acquisition, except for purposes of determining whether an Event of Default has occurred under Section 11.10, all subsequent financial ratio tests required to be complied with under this Agreement in order to take any action shall, until the consummation of such Limited Conditionality Acquisition (or the termination of the definitive agreement with respect thereto), be required to be complied with both (1) on an actual basis without giving effect to such Limited Conditionality Acquisition and all relevant related pro forma events and (2) on a Pro Forma Basis giving effect to such Limited Conditionality Acquisition and all relevant related pro forma events (it being understood and agreed that nothing in this proviso shall require any condition to a Limited Conditionality Acquisition that is not required pursuant to the definition of “Permitted Acquisition”).

 

(b)           Whenever any test is required to be complied with on a Pro Forma Basis with reference to Section 11.10 for purposes of taking any action prior to the date of delivery of financial statements for the fiscal quarter ending June 30, 2016, such calculation shall be made based on the required covenant levels in effect for such Section as of and for the Test Period ending June 30, 2016.

 

3.           Lenders’ Facility.  Subject to the terms and conditions hereof, and in reliance upon the Representations and Warranties:

 

3.1           Channel Finance Loans.

 

3.1.1           Channel Finance Loan Facility Generally.  Subject to the terms herein, each Lender shall, by funding such Lender’s Pro-Rata Share thereof as provided for herein, make available to Resellers such Lender’s Pro-Rata Share (as provided on Exhibit A hereto) of Channel Finance Loan Advances in a principal amount not to exceed, in the aggregate, the Aggregate Channel Finance Loan

 

  

3

  

Facility Limit.  Each Lender’s Channel Finance Loan Facility is its Pro-Rata Share of the Aggregate Channel Finance Loan Facility, provided that in no event will a Lender be obligated to fund any amount in excess of such Lender’s Commitment.  All Channel Finance Loan Advances for Channel Financed Inventory will be made directly to Approved Vendors and not to Resellers.  CPC may issue Approvals such that the sum of the aggregate amount of Approvals outstanding and the aggregate principal amount of Channel Finance Loan Advances outstanding may exceed the Aggregate Channel Finance Loan Facility Limit subject to Resellers’ obligation to pay down pursuant to Section 3.1.9, if applicable.  Subject to the terms of this Agreement, payments and prepayments that are applied to reduce the Aggregate Channel Finance Loans may be re-borrowed through subsequent Channel Finance Loan Advances, subject to the terms and conditions of this Agreement and the other Loan Documents.  While an Event of Default exists under Section 12.1(a), (b), or (j) as to which an Administrative Agent has actual knowledge, no further Approvals will be issued while any such Event of Default exists and is continuing and, except with respect to unfunded Approvals for Channel Finance Loan Advances issued prior to an Administrative Agent’s knowledge of such Event of Default, no further Channel Finance Loan Advances shall be made while any such Event of Default exists and is continuing.  Each Lender shall be obligated to fund its Pro-Rata Share of all Channel Finance Loan Advances for Approvals once issued (except any Approvals issued contrary to the terms of the preceding sentence) regardless as to whether at the time of issuance there is an Existing Default or after the date of issuance of any Approval an Event of Default occurs.  No Channel Finance Loan Facility will be evidenced by promissory notes.

 

3.1.2           Interim Channel Finance Loan Advances.  In order to reduce the frequency of fundings of Channel Finance Loan Advances by Lenders, but subject to the limitations (a) in Section 3.1.4, (b) of each Lender’s Commitment, and (c) elsewhere herein, CPC may, in its absolute discretion, make Interim Channel Finance Loan Advances (as a sub-limit of the Aggregate Channel Finance Loan Facility) for the account of and benefit of Resellers with respect to an Approval issued by CPC from time to time from the Effective Date, to the effective date of the termination of the Aggregate Channel Finance Loan Facility.  While outstanding, an Interim Channel Finance Loan, for purposes of calculation of outstanding Loan Obligations, shall be excluded from the definition of an “Aggregate Channel Finance Loan”.  While an Event of Default exists under Section 12.1(a), (b), (d) or (j) as to which the Administrative Agents have actual knowledge, no further Interim Channel Finance Loan Advances shall be made while any such Event of Default exists and is continuing.  Subject to the limitations in Section 3.1.4 and elsewhere herein, payments and prepayments that are applied to reduce the Interim Channel Finance Loans may be reborrowed for new Inventory purchases through Interim Channel Finance Loan Advances.  The Interim Channel Finance Loan Facility will not be evidenced by promissory notes.

 

3.1.3           Terminations of Vendor Agreements.

 

(i)           Upon termination of a Vendor Agreement or upon a material adverse change with respect to a Vendor Agreement, Administrative Agents may in their absolute discretion, cease to fund requests for Approvals and cease to make Channel Finance Loan Advances with respect to such Vendor (each, a “Vendor Termination”).  If a Vendor Agreement is terminated by a Vendor, CPC agrees to provide written notice to Borrowing Agent of such termination within one Business Day of CPC’s receipt of such termination notice (each, a “Pre-termination Notice”) from the Vendor, and Resellers agree that if there is no Existing Default, the provision to Borrowing Agent by CPC of the same period of pre-termination notice as provided to CPC by the applicable terminating Vendor shall be given and is reasonable and sufficient.

 

(ii)           If a Vendor Termination occurs due to the termination of a Vendor Agreement by CPC, Resellers agree that if there is no Existing Default, 60 days’ prior written notice of such Vendor Termination shall be given to the Borrowing Agent by

  

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CPC and is reasonable and sufficient.  During either notice period described above, CPC may make Interim Channel Finance Loan Advances as provided in Section 3.1.2 above,  and Lenders will continue to fund Channel Finance Loan Advances for Approvals (which have not been cancelled by CPC prior to the shipment of Inventory by the terminating Vendor) issued on or before the expiration of such notice period and in either case, repayment shall be in accordance with the applicable Transaction Statement and Monthly Billing Statement.

 

(iii)           Resellers will not be relieved from any obligation to Administrative Agents or the Lenders arising out of Channel Finance Loan Advances or Interim Channel Finance Loan Advances made before the effective termination date of the Vendor Termination or made after the effective termination date of the Vendor Termination in connection with Approvals issued on or before such effective termination date, which Approvals have not been cancelled by CPC prior to the shipment of Inventory by the terminating Vendor.  Notwithstanding a termination of a Vendor Agreement as described above, Administrative Agents and Lenders will retain all of their rights, interests and remedies hereunder and in all Collateral until Resellers have indefeasibly paid all of the Loan Obligations in full in cash.

 

3.1.4           Limitations on Interim Channel Finance Loan Advances.  The maximum amount of the Interim Channel Finance Loan amount on any date shall be Fifty Million Dollars ($50,000,000).  CPC shall not be obligated to make any particular Interim Channel Finance Loan Advance, the making of any particular Interim Channel Finance Loan Advance at any particular time being absolutely discretionary.  Administrative Agents will not without the prior written consent of each Lender, knowingly make any Interim Channel Finance Loan Advance which would cause the aggregate principal amount of the Interim Channel Finance Loans plus the principal amount of Aggregate Channel Finance Loans to exceed the limitations set forth herein as of the date immediately prior to the making of any such Interim Channel Finance Loan Advance.  CPC shall not be obligated to fund any Interim Channel Finance Loan Advances after the effective date of termination of the Aggregate Channel Finance Loan Facility or the Interim Channel Finance Loan Facility.

 

3.1.5           Operation of Aggregate Channel Finance Loan Facility and Interim Channel Finance Loan Facility.  Subject to the terms of this Agreement, the Aggregate Channel Finance Loan Facility and Interim Channel Finance Loan Facility may be used by Resellers from time to time to purchase Channel Financed Inventory from Cisco Systems, Inc., Ingram Micro Inc., Tech Data Corp., Comstor, a division of Westcon Group North America, Inc., Dell Inc., and SYNNEX Corporation and any other Vendor approved by Administrative Agents in their sole discretion (each an “Approved Vendor” and, collectively, the “Approved Vendors”).

 

3.1.6           Channel Finance Loan Approvals.  Each Reseller and each Lender acknowledge and agree that:  (i) CPC may issue Approvals on a date that is prior to the date of the funding of any Channel Finance Loan Advance or Interim Channel Finance Loan Advance that are based on such Approvals; (ii) other than for Approvals issued in contravention of Section 3.1.1 herein (which shall be null, void, and of no legal effect), once an Approval has been issued, then Administrative Agents may, and may require the Lenders, to fund the related Advance at any time, notwithstanding (A) any Default or Event of Default that may arise on or prior to the date of any such Advance, (B) whether the Loan Obligations have been accelerated, (C) whether the Facilities have been terminated, or (D) whether any such Advance shall occur after the effective date of termination of the Aggregate Channel Finance Loan Facility for an Approval issued on or prior to such date; and (iii) each Lender shall be obligated to fund its Pro-Rata Share of any such Advance once an Approval has been issued for such Advance and

 

  

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after receipt of an invoice by CPC from the applicable Approved Vendor regardless of whether such Advance has been funded by CPC.

 

3.1.7           Inventory not Available for Channel Finance Loans and Interim Channel Finance Loans.  Only Approved Vendors will be eligible to receive proceeds of Channel Finance Loan Advances and Interim Channel Finance Loans for Channel Financed Inventory.  Administrative Agents may, at any time and with reasonable written notice to Borrowing Agent, elect not to finance any inventory sold by particular Approved Vendors, including any Approved Vendors who are in default of their obligations to CPC or with respect to which CPC or Administrative Agents deem themselves reasonably insecure.  Except with respect to Approvals issued by CPC on or before the effective date of the termination of the Aggregate Channel Finance Loan Facility, Lenders shall not be obligated to fund any Channel Finance Loan Advances after such date.

 

3.1.8           Repurchase Agreements.  CPC has entered into agreements with the Vendors who are expected to receive proceeds of the Channel Finance Loan Advances and the Interim Channel Finance Loan Advances (each being a “Vendor Agreement” and collectively, the “Vendor Agreements”).  None of Administrative Agents, CPC nor any Lender makes any representation or warranty regarding the Vendor Agreements, including, without limitation regarding the enforceability thereof, whether any particular item of Inventory purchased by Resellers is subject to repurchase rights, or any repurchase rights that may be set forth therein.  Each Lender and each Reseller acknowledge and agree that CPC may take or refrain from taking any actions under or in connection with the Vendor Agreements in CPC’s commercially reasonable judgment.  No Vendor is a third party beneficiary of this Agreement or the other Loan Documents.

 

3.1.9           Channel Finance Loan Pay Down Provision.  Regardless of the payment terms pertaining to any Loans or anything contained in this Agreement to the contrary, if at the time of any determination, the sum of the principal amount of Resellers’ total outstanding Loan Obligations exceeds the Aggregate Channel Finance Loan Facility Limit, Resellers will immediately pay to the Administrative Agents the sum of such excess.

 

3.2           Termination/Maturity/Renewal.

 

3.2.1            At any time there is an Existing Default irrespective of any provision in this Agreement to the contrary, Administrative Agents may, and at the request of the Required Lenders shall, by notice to the Borrowing Agent, terminate the Facilities, accelerate the Loan Obligations or take such other actions as they may be permitted to take hereunder (including under Section 12.1), the other Loan Documents or at law or in equity.  Notwithstanding a termination, Administrative Agents and Lenders will retain all of their rights, interests and remedies hereunder and in all Collateral until the Loan Obligations have been indefeasibly paid in full in cash.

 

3.2.2            Resellers may, at any time, elect to terminate or permanently reduce, in whole or in part, the Facilities, provided that, (i) in the case of a termination in full, Resellers pay to the Administrative Agents, for the ratable benefit of Lenders (a) the outstanding principal amount of the Aggregate Channel Finance Loans, plus (b) all accrued interest with respect to such Loans, if any, to the date set for termination of the Aggregate Channel Finance Loans, and (ii) in the case of a permanent reduction, Resellers pay to the Administrative Agents, for the ratable benefit of Lenders, (a) the outstanding principal amount of the Loans in excess of the Aggregate Channel Finance Loan Facility Limit as adjusted pursuant to this Section 3.2.2, plus (b) all accrued interest with respect to such Loans, if any, to the date set for such reduction.

 

  

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Notwithstanding a termination pursuant to the provisions of Section 3.2.1 and Section 3.2.2, (i) Administrative Agents and Lenders will retain all of their rights, interests and remedies hereunder and in all Collateral until Reseller has indefeasibly paid all of the Loan Obligations in full in cash and (ii) all the provisions hereunder that by their terms expressly survive the termination of the Agreement shall survive.

 

3.2.3            If the Facilities are not sooner terminated as contemplated by this Agreement, then, notwithstanding anything contained in this Agreement to the contrary, the Facilities shall automatically terminate on the Termination Date (defined below) unless no less than 60 days prior to the Termination Date, Administrative Agents, Resellers, and all of the Lenders affirmatively agree in writing, in each of their respective sole and absolute discretion, to renew the Channel Finance Loan Facility and the Interim Channel Finance Loan Facility for an additional twelve-month period on the terms and conditions contained herein (a “Renewal”).  If no Renewal has occurred, “Termination Date” means June 23, 2021, provided that if one or more Renewals have occurred, “Termination Date” means the date which is the last day of the twelve-month period for which the Facilities were extended pursuant to the Renewal which occurred most recently.  None of the Administrative Agents nor any Lender shall be obligated to provide Resellers with notice (written or oral) of a Termination Date.  If written evidence of a Renewal is not executed by the Administrative Agents, all of the Lenders and Resellers as required herein, then this Agreement and the Loan Documents shall terminate on the Termination Date without further action or notice by any party hereto.

 

3.3           Expansion Facility.

 

(a)           Anything in this Agreement to the contrary notwithstanding, at any time and from time to time prior to the Termination Date, Borrowing Agent may, by written notice to the Administrative Agents (which the Administrative Agents shall promptly furnish to each Lender), request that one or more Persons (which may include any Lender, as provided below) offer to increase such Lender’s Commitment or to make a Commitment (if such Person is not already a Lender) (such increased and/or additional Commitments being, an “Accordion Increase”); it being understood that if such offer is to be made by a Person that is not already a Lender, the Administrative Agents shall have consented to such Person being a Lender hereunder to the extent such consent would be required pursuant to Section 14.4.1.1 in the event of an assignment to such Person.  No Lender shall have any obligation to increase such Lender’s Commitment, such decision to be made by such Lender in its sole discretion.  In no event shall the aggregate amount of the Accordion Increases pursuant to this Section 3.3(a) exceed $25,000,000 (the “Accordion Maximum Amount”).  The Parent Guarantor or the Resellers may arrange for one or more banks or other financial institutions, which may include any Lender, to extend applicable Commitments or increase their existing applicable Commitments in an aggregate amount equal to the Accordion Maximum Amount.  In the event that one or more of such Persons offer to increase or enter into such Commitments, and such Persons, the Borrowing Agent, the Resellers and the Administrative Agents agree as to the amount of such Commitments to be allocated to the respective Persons making such offers and the fees (if any) to be payable by the Resellers in connection therewith, the Administrative Agents shall replace Exhibit A.  The Administrative Agents, such Persons and the Resellers shall execute and deliver an appropriate amendment to this Agreement (or other appropriate documentation reasonably acceptable to the Administrative Agents and the Resellers to effectuate the Accordion Increase) which amendment or other documentation shall specify, among other things, the procedures for reallocating any outstanding Channel Finance Loan Advances, and the Resellers shall deliver such other items and satisfy such other conditions set forth in Section 8.2 hereof, provided, that no consent of any Lender not participating in such Accordion Increase shall be required.

 

(b)           Notwithstanding the foregoing, (i) no increase in Commitments (or in the Commitment of any Lender) or addition of a new Lender shall become effective under this Section 3.3 if

 

  

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any Default or Event of Default has occurred and is continuing on the date of the effectiveness of any such increase or would arise after giving effect thereto, and (ii) this Section 3.3 shall supersede any provisions in Section 17.2 to the contrary.

 

(c)           As an increase in the Aggregate Channel Finance Loan Facility, Channel Finance Advances and subsequent Channel Finance Loans arising as a result of each Accordion Increase shall rank pari passu with the right of payment with Channel Finance Loans existing at the time of each Accordion Increase.

 

3.4           Promise to Pay.  Resellers hereby promise to pay to the Lenders and Administrative Agents the Loan Obligations (including principal, interest, fees, costs, and expenses) in Dollars in full as and when due and payable under the terms of this Agreement and the other Loan Documents.

 

4.           Interest.

 

4.1           Free Channel Finance Period.  In connection with financing a particular item of inventory for Resellers, CPC will send Borrowing Agent a Transaction Statement identifying such Channel Financed Inventory and the Payment Due Date (each being a “Transaction Statement”) on which date the Resellers will pay to Administrative Agents the principal amount of the Loan Obligations relating thereto, without interest.  CPC may, without the consent of the Lenders or the Required Lenders, change any aspect or portion of any Transaction Statement. Administrative Agents may change the terms of any future financing and the date for repayment of future Loan Obligations by giving Borrowing Agent prior written notice specifying such change. Notwithstanding anything in this Agreement to the contrary, Administrative Agents agree that: (i) the Payment Due Date set forth in any Transaction Statement shall not be any earlier than it is required to be pursuant to the terms of the agreement with the applicable Approved Vendor; and (ii) if Administrative Agents receive a notice from any Approved Vendor that the terms of the agreement with such Approved Vendor has changed such that the Payment Due Date of a Reseller on any future Transaction Statement will be revised to be earlier than on any prior Transaction Statement, Administrative Agents shall provide the Borrowing Agent with written notice of such change within one Business Day of Administrative Agents receiving such notice from such Approved Vendor.

 

4.2           Rate After Maturity.

 

  Interest shall accrue on the Aggregate Channel Finance Loans outstanding after their Maturity or Reseller’s failure to pay any Loan Obligations on the applicable Payment Due Date at a rate per annum equal to the Prime Rate plus 1.25% (the “Default Rate”).

 

4.3           Interest Payable to Administrative Agents and CPC as Lender Only.

 

4.3.1            Resellers will pay to CPC, for its own account, the interest (on the Interim Channel Finance Loans and the Aggregate Channel Finance Loans) due after Maturity of the applicable Loans as provided in Section 4.2 at a rate equal to the Default Rate.  All discounts and subsidies from a Vendor shall be for the sole account of CPC.

 

4.3.2            CPC will send Borrowing Agent a billing statement identifying accrued interest (if any) due to CPC, for its own account, on the Interim Channel Finance Loans and the Aggregate Channel Finance Loans (the “Monthly Billing Statement”) within five Business Days after the end of each calendar month.  Except as otherwise provided in a Monthly Billing Statement, the charges specified in each Monthly Billing Statement will be due and payable monthly in arrears beginning on the tenth Business Day of the first calendar month after the Effective Date and continuing on the tenth Business Day of each calendar month thereafter, and upon Maturity of the Loan Obligations.

 

  

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4.3.3            The interest (if any) shown in each Monthly Billing Statement will:  (a) be computed based on a 360 day year; (b) be calculated by multiplying the Daily Charge (as defined below) by the actual number of days in the applicable billing period; and (c) accrue from the Payment Due Date until Administrative Agents receive full payment as provided in this Agreement for each item of such Collateral, regardless of any period during which any finance charge subsidy shall be paid or payable by any third party.  The “Daily Charge” is the product of the Daily Rate (as defined below) multiplied by the Average Daily Balance (as defined below).  The “Daily Rate” is the quotient of the annual rate provided in Section 4.2 divided by 360.  The “Average Daily Balance” is the quotient of (i) the sum of the outstanding principal of Aggregate Channel Finance Loans plus the outstanding principal of Interim Channel Finance Loans on each day of a billing period for each item of Collateral identified on a Transaction Statement or in the Monthly Billing Statement, divided by (ii) the actual number of days in such billing period.

 

4.4           Interest on Channel Finance Loans Payable to Lenders (other than CPC); Administrative Agent Deficiency Amount.

 

  Administrative Agents, Resellers and each Lender acknowledge and agree that the rate of return paid on any Channel Finance Loan or Interim Channel Finance Loan is dependent on numerous factors, including discounts and subsidies offered by the Vendors.  Accordingly, Administrative Agents, Resellers and each Lender agree that due to the difficulty in determining the actual rate of return on any particular Channel Finance Loan or Interim Channel Finance Loan or with respect to any particular invoice underlying any such Loan, CPC shall pay to each Lender (other than CPC) interest on such Lender’s Pro-Rata Share of each Channel Finance Loan Advance at a rate per annum equal to the Adjusted LIBOR Rate plus the Applicable Rate, provided, that on the Effective Date, the Applicable Rate shall be 1.25%, and, if Section 4.2 is applicable, at the Default Rate, and CPC shall pay such interest as provided in the second sentence of Section 6.1.1 from the date of funding by such Lender to CPC of such Lender’s Pro-Rata Share of such Channel Finance Loan Advance to the date of repayment of such Channel Finance Loan Advance; provided, however, if an Event of Default under Section 12.1(a) occurs, then until such Event of Default has been cured to the satisfaction of the Required Lenders or waived in writing by the Required Lenders, to the extent there exists an Administrative Agent Deficiency Amount (defined below) which is greater than zero, Administrative Agents may suspend the making of payments of principal and interest on the Channel Finance Loans to each Lender (other than CPC) or reduce the amount of such payments on the Channel Finance Loans to each Lender (other than CPC) on a pro-rata basis (based on the principal amount of Channel Finance Loans outstanding) and setoff such amounts against the Administrative Agent Deficiency Amount until the Administrative Agent Deficiency Amount is reduced to zero, or to the extent necessary to prevent the Administrative Agent Deficiency Amount from becoming greater than zero.  The “Administrative Agent Deficiency Amount” at any time is a Dollar amount equal to (a) the cumulative amount of interest distributed by Administrative Agents to the Lenders (other than CPC) solely with respect to each specific Transaction Statement for which an Event of Default exists as outlined above in this Section 4.4 under the portion of the Aggregate Channel Finance Loans attributable to Lenders (other than CPC) for the period commencing with the date interest begins accruing on the Payment Due Date (excluding any interest distributed which is attributable to the period of time during the free floor plan period); provided, however, that in no event shall any interest paid to the Lenders (other than CPC) relating to any Loan Obligations arising under a specific Transaction Statement during any period for which no Event of Default exists or existed be included in the calculation under this clause (a), minus (b) the cumulative amount of interest collected from Resellers by Administrative Agents solely with respect to each specific Transaction Statement for which an Event of Default exists as outlined above in this Section 4.4 under the portion of the Aggregate Channel Finance Loans attributable to Lenders (other than CPC) for the period commencing with the Payment Due Date (excluding any interest distributed which is attributable to the period of time during the free floor plan period) through the date of calculation.  Notwithstanding anything to the contrary contained herein, no Reseller shall have any obligation to any Lender, CPC or any Agent under the provisions of this Section 4.4.

 

  

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4.5           Taxes.

 

4.5.1           Any and all payments by or on account of any obligation of each Reseller hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes unless a tax deduction is required by applicable law; provided that if any Reseller shall be required by applicable law to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agents and the Lenders receive an amount equal to the sum they would have received had no such deductions been made, (ii) such Reseller shall make such deductions and (iii) such Reseller shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

4.5.2           In addition, each Reseller shall pay any Other Taxes related to such Reseller to the relevant Governmental Authority in accordance with applicable law.

 

4.5.3           The relevant Reseller shall indemnify the Administrative Agents and each Lender, within 10 days after written demand therefor, which demand shall be accompanied by documentation reasonably satisfactory to establish the nature of the amounts for which demand is being made, and the fact and amount of the payment thereof, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agents and such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of such Reseller hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.

 

4.5.4           As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Reseller to a Governmental Authority, such Reseller shall deliver to the Administrative Agents the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment (to the extent available), a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agents.

 

(i)           Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Resellers and the Administrative Agents, at the time or times reasonably requested by the Resellers or the Administrative Agents, such properly completed and executed documentation reasonably requested by the Resellers or the Administrative Agents as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Resellers or the Administrative Agents, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Resellers or the Administrative Agents as will enable the Resellers or the Administrative Agents to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Without limiting the generality of the foregoing, in the case of any Lender that is a US Person, such Lender shall deliver to the Resellers and the Administrative Agents on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of any Reseller or the Administrative Agents), executed originals of Internal Revenue Service Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.

 

(ii)           Each Lender agrees that if any form or certification it previously delivered pursuant to clause 4.5.4(i) above expires or becomes obsolete or inaccurate in any material respect, it

 

  

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shall update such form or certification or promptly notify the applicable Reseller and the Administrative Agents in writing of its legal inability to do so.

 

(iii)           If an Administrative Agent is entitled to an exemption from or reduction of withholding tax with respect to any payment under this Agreement made by a Reseller to such Administrative Agent under the law of the jurisdiction in which such Reseller is located such Administrative Agent shall deliver to such Reseller, at the time or times prescribed by applicable law and at the time or times reasonably requested by such Reseller, any such properly completed and executed documentation prescribed by applicable law and reasonably requested by such Reseller as may permit such payments to be made without withholding or at a reduced rate of withholding tax.  Without limiting the generality of the foregoing, if an Administrative Agent is entitled to any payment under this Agreement, it shall deliver to the Resellers executed originals of Internal Revenue Service Form W-9 certifying that such Administrative Agent is exempt from U.S. federal backup withholding tax.

 

4.5.5           Each Lender, on the date it becomes a Lender hereunder, will designate lending offices for the Loans to be made by it (a “Facility Office”) such that, on such date, it (directly or through a Reseller) will not be subject to or liable for any withholding tax that is imposed by the United States of America, (or any political subdivision thereof) on payments by a Reseller from an office within such jurisdiction.

 

4.5.6           If an Administrative Agent or a Lender receives a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by a Reseller or with respect to which a Reseller has paid additional amounts pursuant to this Section 4.5, it shall pay over such refund to such Reseller (but only to the extent of indemnity payments made, or additional amounts paid, by such Reseller under this Section 4.5 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of such Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund, and only to the extent that the amount of such refund is both reasonably identifiable and quantifiable by such Lender without imposing on such Lender an unacceptable administrative burden); provided, that such Reseller, upon the request of the Administrative Agents or such Lender, agrees to repay the amount paid over to such Reseller (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Administrative Agent or such Lender in the event such Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This Section shall not be construed to require the Administrative Agents or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to any Reseller or any other Person.

 

4.5.7           Each Lender shall severally indemnify the applicable Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes or Other Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified such Administrative Agent for such Indemnified Taxes or Other Taxes and without limiting the obligation of the Loan Parties to do so), and (ii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by such Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the applicable Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes each Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by such Administrative Agent to the Lender from any other source against any amount due to such Administrative Agent under this Section 4.5.7.

 

  

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4.5.8           If a payment made to a Lender under any Loan Document would be subject to withholding Tax imposed by the United States of America under FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Resellers and the Administrative Agents at the time or times prescribed by law and at such time or times reasonably requested by any Reseller or the Administrative Agents such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by any Reseller or any Administrative Agent as may be necessary for the applicable Reseller and the Administrative Agents to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 4.5.8, “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

4.6           Usury.  It is the intention of the parties hereto to conform strictly to applicable usury laws and, anything herein to the contrary notwithstanding, the obligations of Resellers hereunder shall be subject to the limitation that payments of interest or of other amounts constituting interest under applicable Laws shall not be required to the extent that receipt thereof would be in excess of the Highest Lawful Rate, or otherwise contrary to provisions of law applicable to the recipient limiting rates of interest which may be charged or collected by the recipient.  Accordingly, if the transactions or the amount paid or otherwise agreed to be paid for the use, forbearance or detention of money under this Agreement would exceed the Highest Lawful Rate or otherwise be usurious under applicable Laws (including without limitation the federal and state laws of the United States of America, or of any other jurisdiction whose laws may be mandatorily applicable) with respect to the recipient of any such amount, then, notwithstanding anything to the contrary in this Agreement, it is agreed as follows as to the recipient of any such amount:

 

(a)           the provisions of this Section 4.6 shall govern and control over any other provision in this Agreement, and each provision set forth therein is hereby so limited;

 

(b)           the aggregate of all consideration which constitutes interest under applicable Laws that is contracted for, charged or received under this Agreement, shall under no circumstances exceed the maximum amount of interest allowed by applicable Laws (such maximum lawful interest rate, if any, with respect to such recipient herein called the “Highest Lawful Rate”), and all amounts owed under this Agreement, shall be held subject to reduction and:  (i) the amount of interest which would otherwise be payable to the recipient hereunder shall be automatically reduced to the amount allowed under applicable Laws, and (ii) any unearned interest paid in excess of the Highest Lawful Rate shall be credited to the payor by the recipient (or, if such consideration shall have been paid in full, refunded to the payor);

 

(c)           all sums paid, or agreed to be paid for the use, forbearance and detention of the money under this Agreement, shall, to the extent permitted by applicable Laws, be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full so that the actual rate of interest is uniform throughout the full term thereof; and

 

(d)           if at any time the interest, together with any other fees, late charges and other sums payable pursuant to or in connection with this Agreement, and deemed interest under applicable Laws, exceeds that amount which would have accrued at the Highest Lawful Rate, the amount of interest and any such fees, charges and sums to accrue to the recipient of such interest, fees, charges and sums pursuant to this Agreement shall be limited, notwithstanding anything to the contrary herein, to that amount which would have accrued at the Highest Lawful Rate for the recipient, but any subsequent reductions, as applicable, shall not reduce the interest to accrue hereunder below the recipient’s Highest Lawful Rate until the total amount of interest payable to the recipient (including all consideration which

 

  

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constitutes interest) equals the amount of interest which would have been payable to the recipient (including all consideration which constitutes interest), plus the amount of fees which would have been received but for the effect of this Section 4.6.

 

4.7           Capital Adequacy.

 

4.7.1           If, after the date hereof, any Lender or Administrative Agent shall have reasonably determined that the adoption after the date hereof of any applicable Law regarding capital adequacy or any change after the date hereof therein or in the interpretation or administration thereof after the date hereof by any governmental authority, central bank, or comparable agency charged with the interpretation or administration thereof, or any request or directive after the date hereof regarding capital adequacy (whether or not having the force of law) of any such governmental authority, central bank, or comparable agency, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender’s obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change, request, or directive (taking into consideration its policies with respect to capital adequacy), then from time to time upon demand the Resellers shall pay to such Lender such additional amount or amounts as will reasonably compensate such Lender for such reduction.

 

4.7.2           Each Lender shall promptly notify the Borrowing Agent and the Administrative Agents of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section 4.7 and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the reasonable judgment of such Lender, be otherwise disadvantageous to it.  Any Lender claiming compensation under this Section 4.7 shall furnish to the Borrowing Agent and the Administrative Agents a statement setting forth the additional amount or amounts to be paid to it hereunder which shall be conclusive in the absence of manifest error.  In determining such amount, such Lender may use any reasonable averaging and attribution methods.  Each Lender agrees, with respect to the provisions of this Section 4.7, to treat Resellers in a manner substantially similar to that of its other similarly situated customers.

 

5.           Funding of Channel Finance Loans.

 

5.1           Fundings.

 

5.1.1           Advances.  Other than if an Interim Channel Finance Loan Advance will be made by CPC, not later than 10:00 a.m. (Local Time) on each Advance Date for a Channel Finance Loan Advance, Administrative Agents shall promptly notify each Lender of the aggregate amount of the Channel Finance Loan Advances to be remitted to Approved Vendors.  In each case then, each Lender shall make immediately available to Administrative Agents by 12:00 p.m. (Local Time) on the Advance Date funds consisting solely of Dollars in the amount of its Pro-Rata Share of such Channel Finance Loan Advances, rounded to the nearest penny, in accordance with such remittance instructions as may be given by Administrative Agents to Lenders from time to time.

 

5.1.2           All Fundings Ratable.  All fundings of Advances (other than Interim Channel Finance Loan Advances) shall be made by Lenders as provided herein in accordance with their Pro-Rata Shares of the Aggregate Channel Finance Loan Facility.  Except as otherwise expressly provided herein, a Lender shall not be obligated to fund Channel Finance Loan Advances that would result in its Channel Finance Loans exceeding its Channel Finance Loan Facility or make available any more than its Pro-Rata Share of any Advance.  Prior to 12:00 p.m. (Local Time) on the last Business Day of each calendar week (a “Settlement Date”), based on funds collected pursuant to Section 6.1.2 as of 3:00 p.m. (Local Time) on

 

  

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the Business Day immediately preceding such Settlement Date (under all circumstances, including without limitation, during the existence of any Event of Default), each Lender shall, to the extent it does not hold its Pro-Rata Share of the outstanding Aggregate Channel Finance Loans (including, without limitation, any amounts for which an Approval has been issued), purchase from or sell to one or more other Lenders, at par, which may occur by a funding through the Administrative Agents, that portion of its Loans as is necessary for it to thereafter hold its Pro-Rata Share of the outstanding Aggregate Channel Finance Loans.  In order that the foregoing settlement among the Lenders can be effected on each Settlement Date, the Administrative Agents shall, on or before 10:00 a.m. (Local Time) on such Settlement Date, (i) notify each Lender who shall purchase Loans of the principal amount of the Loan to be purchased, and each Lender shall make immediately available to Administrative Agents by 12:00 p.m. (Local Time) on such Settlement Date, funds consisting solely of Dollars in the amount of such principal amount of the Loans to be purchased in accordance with such remittance instructions as may be given by Administrative Agents to Lenders from time to time, and (ii) notify each Lender who shall sell a Loan, of the principal amount of the Loan to be sold, and the Administrative Agents shall make immediately available to Lenders by 12:00 p.m. (Local Time) on such Settlement Date funds consisting solely of Dollars in the amount of such principal amount of the Loan to be sold in accordance with such remittance instructions as may be given by Lenders to the Administrative Agents from time to time.

 

5.2           Collections and Distributions to Lenders by Administrative Agents.

 

  Except as otherwise provided in this Agreement, including the other provisions of this Agreement pertaining to interest on the Channel Finance Loans and the Interim Channel Finance Loans and the provisions of Section 4.4 pertaining to the suspension or reduction of payments of principal and interest to the Lenders under certain circumstances, all payments of principal received by Administrative Agents for the account of Lenders shall be distributed by Administrative Agents to Lenders in accordance with their Pro-Rata Shares of the outstanding Loan Obligations at the time of such distribution, by wire transfer of same day funds to Lenders as provided in this Agreement on the Settlement Date following the date when received, unless received after 3:00 p.m. (Local Time) on a Business Day immediately preceding a Settlement Date, in which case they shall be so distributed on the Settlement Date.  Such distributions shall be made according to instructions that each Lender may give to Administrative Agents from time to time.  All amounts received by any Lender on account of the Loan Obligations, other than amounts received from the Administrative Agents pursuant to the terms of this Agreement, including amounts received by way of setoff, shall be paid over promptly to Administrative Agents for distribution to Lenders as provided above in this Section.

 

5.3           Settlement Dates.

 

  Administrative Agents may, at any time, in their sole discretion, cause the Settlement Date to occur more frequently, including, without limitation, each Business Day of each week.  Administrative Agents shall notify each Lender that a given Business Day shall be a Settlement Date by no later than 1:00 p.m. (Local Time) on the Business Day immediately preceding any such date; provided, however, if the Settlement Date occurs more frequently than once a week, then once Administrative Agents give such notice, no further notices shall be required.

 

5.4           Repayment of the Interim Channel Finance Loan.

 

5.4.1           CPC may in its absolute discretion on any Business Day give notice to Lenders of the amount of the Interim Channel Finance Loan after application of all payments to be applied thereto as provided elsewhere herein.  Such notice shall be given no later than Noon (Local Time) and may include a demand that the Interim Channel Finance Loan be fully paid by the Lenders.  If CPC demands that the Interim Channel Finance Loan be fully paid by the Lenders, then prior to 1:00 p.m. (Local Time) on such date, Lenders shall remit funds to CPC sufficient to reduce the Interim Channel Finance Loan to zero.  The aggregate of such remittances shall be treated, respectively, as a Channel Finance Loan Advance, and the Aggregate Channel Finance Loans increased accordingly (in the case of payments on

 

  

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the Interim Channel Finance Loan).  Each such remittance by a Lender shall be made in accordance with its Pro-Rata Share of the Aggregate Channel Finance Loan Facility and shall be made notwithstanding that (i) any conditions to Advances in Section 8 may not be then satisfied, (ii) there is an Existing Default, or (iii) such remittances by Lenders may be made after Maturity of the Loan Obligations.  Notwithstanding anything to the contrary contained herein, no Reseller shall have any obligation to any Lender, CPC or any Agent under the provisions of this Section 5.4.1.

 

5.4.2           If for any reason, including the commencement of a proceeding in bankruptcy with respect to any Reseller, remittances by Lenders as provided above cannot be made on the date otherwise required above, then each Lender shall be deemed automatically to have purchased from CPC as of such date an undivided interest and participation in the Interim Channel Finance Loan equal to such Lender’s Pro-Rata Share, so as to cause such Lender to share in the Interim Channel Finance Loan in accordance with its Pro-Rata Share.  Each Lender shall remit its Pro-Rata Share of the Interim Channel Finance Loan to CPC promptly on demand.  All interest payable by Resellers (if any) with respect to such Lender’s Pro-Rata Share of the Interim Channel Finance Loan shall be for the account of CPC to the date such remittance is made by such Lender, and shall be for the account of and remitted by CPC to such Lender as a participant from such date.  Further, until such remittance is made, such Lender shall pay to CPC, on demand, interest on such Lender’s Pro-Rata Share of the Interim Channel Finance Loan at the Federal Funds Rate, and such Lender shall be subject to the restrictions contained in Section 5.5.

 

5.5           Administrative Agents’ Availability Assumption.

 

5.5.1           Unless Administrative Agents have been given written notice by a Lender prior to an Advance Date that such Lender does not intend to make immediately available to Administrative Agents such Lender’s Pro-Rata Share of the Advance which Administrative Agents may be obligated to make on the Advance Date, including, without limitation, any Advance that may be made based on the issuance of an Approval, Administrative Agents may assume that such Lender has made the required amount available to Administrative Agents on the Advance Date and Administrative Agents may, in reliance upon such assumption, make available to Resellers a corresponding amount.  Upon the occurrence of (a) the failure of any Lender to make immediately available its Pro-Rata Share of any Channel Finance Loan Advance (whether based on the issuance of an Approval or otherwise) or the Interim Channel Finance Loan (whether based on the issuance of an Approval or otherwise) or any other amount then owing hereunder by a Lender upon demand or (b) any Lender  becoming the subject of a Bankruptcy Event, such Lender shall be deemed to be a “Defaulting Lender”. If such corresponding amount is not in fact made immediately available to Administrative Agents by such Defaulting Lender on the Advance Date, Administrative Agents shall be entitled to recover such corresponding amount on demand from such Defaulting Lender.  If such Defaulting Lender does not pay such corresponding amount immediately upon Administrative Agents’ demand therefor, then Administrative Agents shall promptly notify Borrowing Agent and the other Lenders and Resellers shall pay such corresponding amount to Administrative Agents within one (1) Business Day.  Administrative Agents shall also be entitled to recover, either from such Defaulting Lender or Resellers, interest on such corresponding amount for each day from the date such corresponding amount was made available by Administrative Agents to Resellers to the date such corresponding amount is recovered by Administrative Agents, at a rate per annum equal to either (i) if paid by such Lender, the cost to Administrative Agents of funding such amount at the Federal Funds Rate, or (ii) if paid by Resellers, the applicable rate for the Advance in question determined from the request therefor.  Each Lender shall be obligated only to fund its Pro-Rata Share of an Advance subject to the terms and conditions hereof, regardless of the failure of another Lender to fund its Pro-Rata Share thereof.

 

5.5.2           Each remittance or payment or Advance required to be made by a Lender shall be made in accordance with its Pro-Rata Share and shall be made notwithstanding that (i) any conditions to

 

  

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Advances in Section 8 may not be then satisfied, (ii) there is an Existing Default, (iii) the aggregate amount of such remittances by Lenders would result in the Aggregate Channel Finance Loan, plus the Interim Channel Finance Loan exceeding the value of the Aggregate Channel Finance Loan Facility, or (iv) such remittances by Lenders may be made after the effective date of termination of the Aggregate Channel Finance Loan Facility; provided, however, that in no event shall any Lender be required to make any such remittance that would result in the Channel Finance Loan of such Lender exceeding such Lender’s Channel Finance Loan Facility.

 

5.5.3           In addition, with respect to any Defaulting Lender, until a payment or Advance is paid to Administrative Agents (with interest as described above), (i) such Defaulting Lender shall permit the Administrative Agents the unconditional and irrevocable right of setoff against any amounts (including, without limitation, payments of principal, interest, and fees, as well as indemnity payments) received by Administrative Agents hereunder for the benefit of any such Defaulting Lender, and (ii) if such failure to pay shall continue for a period of three Business Days, result in any such Defaulting Lender forfeiting any right to vote on any matter that the Lenders are permitted to vote for hereunder (and the calculation of any requisite vote shall exclude such Defaulting Lender’s interest in the Lenders’ Exposure); provided, however, once such a failure is cured, then such Lender shall, subsequent thereto, have all rights hereunder; provided, further, however, if any Lender shall fail to make such a payment within the three Business Day period specified in clause (ii) above (other than by reason of events beyond the reasonable control of such Lender) three or more times during the term hereof, such Lender shall permanently forfeit its right to vote hereunder (and the calculation of any requisite vote shall exclude such Defaulting Lender’s interest in the Lenders’ Exposure).

 

6.           Payments.

 

6.1           Scheduled Payments on Loans; Applications to Loans.

 

6.1.1           Interest. CPC will send to Borrowing Agent a Monthly Billing Statement describing all interest (if any) accrued on the Aggregate Channel Finance Loans and the Interim Channel Finance Loans.  Subject to the terms of Sections 4.3 and 4.4 and elsewhere in this Agreement, interest on the Channel Finance Loans payable by CPC to the Lenders (other than CPC) shall be distributed by Administrative Agents monthly in arrears (with the right of set off in favor of Administrative Agents and CPC as set forth in Section 4.4) beginning on the tenth Business Day of the first calendar month after the Effective Date and continuing on the tenth Business Day of each calendar month thereafter, and Maturity of the Loan Obligations.

 

6.1.2           Principal. Resellers will pay Administrative Agents (a) the principal amount of the Channel Finance Loans and the Interim Channel Finance Loans on the applicable Payment Due Date and (b) such principal amount of Indebtedness payable by Resellers hereunder arising from Channel Financed Inventory promptly after the date (if any) that such Channel Financed Inventory is lost, stolen or damaged (collectively, the “Loss Date”).  Such payments shall be applied as follows:  payments shall be paid or applied by the Administrative Agents first, to the Interim Channel Finance Loans then due to CPC and, thereafter, to the Aggregate Channel Finance Loans then due of the Lenders; provided, however, that the provisions of this sentence may not be used to create an Event of Default where such Event of Default does not independently exist.  All payments by the Resellers hereunder shall be made without setoff or counterclaim, by wire transfer or electronic data interchange (“EDI”) no later than noon, Local Time, on the Payment Due Date or the Loss Date, as applicable, to the Collection Account or as otherwise agreed between the parties (the “Due Date”).  For purposes of calculating interest, payment shall be deemed to have been applied by Administrative Agents against the principal of and/or interest on any Loan Obligations on the Business Day, when before noon Local Time, Resellers have transmitted payment by wire transfer or EDI.  Resellers acknowledge that the date defined as the Payment Due Date falls on the

 

  

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same day of each week to establish a consistent payment date.  Any third party discount, rebate, bonus or credit granted to Resellers for any Channel Financed Inventory will not reduce the Loan Obligations until Administrative Agents have received payment therefor in cash.  Resellers will:  (A) pay Administrative Agents Loan Obligations when due even if any Channel Financed Inventory is defective or fails to conform to any warranties extended by any third party; (B) not assert against Administrative Agents any claim or defense Resellers have against any third party; and (C) indemnify and hold Administrative Agents harmless against all claims and defenses asserted by any buyer of any Channel Financed Inventory.  Resellers waive all rights of setoff Resellers may have against Administrative Agents.  Administrative Agents will have the continuing exclusive right to apply and reapply any and all payments received from Resellers or on a Reseller’s behalf in such manner as Administrative Agents may deem advisable notwithstanding any entry by Administrative Agents upon its books and records, provided, however, that the provisions of this sentence may not be used to create an Event of Default where such Event of Default does not independently exist.

 

6.2           Optional Prepayment.  Subject to the limitations in the following sentences, Resellers may wholly prepay any Loan that is included in any Aggregate Channel Finance Loan or Interim Channel Finance Loan, at any time and may make a partial prepayment thereon from time to time, without penalty or premium.  All such prepayments, unless otherwise expressly stated in writing by Borrowing Agent to Administrative Agents prior to the making of such prepayment, will be deemed made on the Interim Channel Finance Loan if due until it is reduced to zero, thereafter to the Aggregate Channel Finance Loans if due, until such Loans are reduced to zero, and (with, in each case, the payment of any and all penalties and premiums due hereunder in connection therewith), and will be applied to reduce the Channel Finance Loans of each Lender, as appropriate, in accordance with their respective Pro-Rata Shares.

 

6.3           Manner of Payments and Timing of Application of Payments.

 

6.3.1           Payment Requirement.  Unless expressly provided to the contrary elsewhere herein, Resellers shall make each payment on the Loan Obligations to Administrative Agents for the account of Lenders (based on each Lender’s Pro-Rata Share) as required under the Loan Documents to the Collection Account of the Administrative Agents on the Payment Due Date, without deduction, set-off or counterclaim.  All such payments will be distributed by Administrative Agents to Lenders as provided in Section 5.2 for application to the Loan Obligations as provided herein.

 

6.3.2           Application of Payments and Proceeds.  The amount so distributed to a Lender will be applied by such Lender to the relevant Loan Obligation on the Business Day when received.

 

6.4           Returned Instruments.

 

  If a payment is made by ACH, check, draft or other instrument and the ACH item, check, draft or other instrument is returned unpaid, (a) any application of the payment to the Loan Obligations will be reversed and will be treated as never having been made and (b) Resellers will also pay to Administrative Agents, for their own account, such fees as Administrative Agents generally charge their customers for each check, ACH or wire transfer returned unpaid for insufficient funds (such payment repays Administrative Agents’ estimated administrative costs; it does not waive any Default or Event of Default caused by such returned unpaid check, ACH or wire transfer).

 

6.5           Compelled Return of Payments or Proceeds.

 

  If an Administrative Agent or any Lender is for any reason compelled to surrender any payment or any proceeds of the Collateral because such payment or the application of such proceeds is for any reason invalidated, declared fraudulent, set aside, or determined to be void or voidable as a preference, an impermissible setoff, or a diversion of trust funds, then this Agreement and the Loan Obligations to which such payment or proceeds was applied or intended to be applied shall be revived as if such application was never made; and Resellers shall be liable

 

  

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to pay to such Administrative Agent or such Lender, and shall indemnify such Administrative Agent and/or such Lender for and hold such Administrative Agent and/or such Lender harmless from any loss with respect to, the amount of such payment or proceeds surrendered.  This Section shall be effective notwithstanding any contrary action that such Administrative Agent and/or such Lender may take in reliance upon its receipt of any such payment or proceeds.  Any such contrary action so taken by such Administrative Agent and/or such Lender shall be without prejudice to such Administrative Agent and/or such Lender’s rights under this Agreement and shall be deemed to have been conditioned upon the application of such payment or proceeds having become final and indefeasible.  The provisions of this Section shall survive termination of the Facilities and the indefeasible payment and satisfaction of all of the Loan Obligations.

 

6.6           Due Dates Not on Business Days.  If any payment required hereunder becomes due on a date that is not a Business Day, then such due date shall be deemed to be the immediately preceding Business Day.

 

6.7           Application of Funds Post-Maturity.  Any funds received by Lenders or Administrative Agents for the benefit of Lenders with respect to any Loan Obligation after its Maturity or acceleration thereof, including proceeds of Collateral, shall be applied as follows:  (i) first, to reimburse to Administrative Agents all unreimbursed costs and expenses paid or incurred by Administrative Agents that are payable or reimbursable by Resellers hereunder; (ii) second, to reimburse Lenders based on their respective Pro-Rata Shares for any amounts due to Lenders under Section 14.6; (iii) third, to reimburse to Lenders based on their respective Pro- Rata Shares for unreimbursed costs and expenses paid or incurred by Lenders (including costs and expenses incurred by an Administrative Agent as a Lender that are not reimbursable as provided in the first clause) that are payable or reimbursable by Resellers hereunder; (iv) fourth, to the payment of interest accrued on the Interim Channel Finance Loans to CPC; (v) fifth, to the payment of interest accrued on the Loans to each of Lenders based on their respective Pro-Rata Shares; (vi) sixth, pari passu to the payment of the Loans of each of Lenders and (vii) seventh, to the payment of the other Loan Obligations based on each Lender’s respective Pro-Rata Shares.  Any remaining amounts shall be applied to payment of all the other Obligations payable by any Loan Party to Administrative Agents.  Any further remaining amounts shall be paid to Resellers or such other Persons as shall be legally entitled thereto.  Except as expressly provided otherwise herein, Lenders may apply, and reverse and reapply, payments and proceeds of the Collateral to the Loan Obligations in such order and manner as Lenders determine in their absolute discretion, provided, however, that the provisions of this sentence may not be used to create an Event of Default where such Event of Default does not independently exist.  Resellers hereby irrevocably waive the right to direct the application of payments and proceeds of the Collateral.  Notwithstanding the foregoing, the Administrative Agents and the Lenders may apply:  (i) at any time, payments to reduce interest charges payable by Resellers first and then principal, regardless of any Reseller’s instructions; and (ii) principal payments to the oldest (earliest) invoice for Channel Financed Inventory financed by Administrative Agents and Lenders under the Aggregate Channel Finance Loan Facility (including the Interim Channel Finance Loan Facility), but, in any event, all principal payments will first be applied to such Channel Financed Inventory financed by Administrative Agents and Lenders under the Aggregate Channel Finance Loan Facility (including the Interim Channel Finance Loan Facility) which is sold, lost, stolen, damaged, rented, leased, or otherwise disposed of or unaccounted for, provided, however, that the provisions of this sentence may not be used to create an Event of Default where such Event of Default does not independently exist.

 

7.           Procedure for Obtaining Advances.

 

7.1           Initial Advance.  Provided that all conditions thereto hereunder are satisfied and subject to the limitations contained herein, Lenders will fund and Administrative Agents will make initial Advances on the Effective Date in the following manner:  Lenders will fund and Administrative Agents will make the

 

  

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initial Channel Finance Loan Advance as directed by Borrowing Agent in a written direction delivered to Administrative Agents which Channel Finance Loan Advance shall include but not be limited to the repayment of all Indebtedness owing to CPC under the terms of the Existing Credit Agreement.  Resellers, Administrative Agents and Lenders further acknowledge and agree that with respect to the initial Channel Finance Loan Advance paid to CPC, Resellers shall repay the Loan Obligations arising under such initial Channel Finance Loan Advance pursuant to the Transaction Statements previously issued by CPC, which Transaction Statements set forth the applicable Payment Due Dates for the Loan Obligations identified therein.

 

7.2           Channel Finance Loan Advances.  A request from an Approved Vendor (with respect to Resellers) to CPC to finance Channel Financed Inventory will be deemed to be a request from the Resellers for a Channel Finance Loan Advance or an Interim Channel Finance Loan Advance, as the case may be.  CPC may treat every request for a Channel Finance Loan Advance as a request for an Interim Channel Finance Loan Advance to the extent the requested amount does not exceed the Interim Channel Finance Loan Facility and as a request for a Channel Finance Loan Advance in the amount of the excess (to the extent the requested amount does not exceed the Aggregate Channel Finance Loan Facility Limit when added to the Aggregate Channel Finance Loans and the Interim Channel Finance Loans).

 

7.3           Disbursement.

 

  Provided that all conditions precedent herein to a requested Advance or, if applicable, an Interim Channel Finance Loan Advance, have been satisfied, including, without limitation, the requirements of any agreements with any Approved Vendors, Administrative Agents or CPC, as applicable, will make the amount of such requested Advance available to the appropriate Approved Vendor when due to such Approved Vendor, in immediately available funds in Dollars.  Subject to the terms of Section 8 and the other provisions of this Agreement, Channel Finance Loan Advances and Interim Channel Finance Loan Advances will be funded in accordance with CPC’s procedures.

 

8.           Conditions of Lending.

 

8.1           Effective Date.

 

  This Agreement and the obligations of CPC to make Interim Channel Finance Loan Advances and each Lender to make the initial Channel Finance Loan Advances hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 17.2):

 

(a)           The Administrative Agents (or their counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence reasonably satisfactory to the Administrative Agents (which may include telecopy or electronic mail transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

 

(b)           The Administrative Agent shall have received, in form and substance reasonably acceptable to them, a fully executed copy of a reaffirmation of the Security Agreements, Pledge Agreements (described in clause (i) through (iii) of the definition thereof), Parent Guarantor Guarantee Agreement, and Subsidiary Guarantee Agreement.

 

(c)           The Administrative Agents shall have received a favorable written opinion (addressed to the Administrative Agents and the Lenders and dated the Effective Date) of Skadden, Arps, Slate, Meagher & Flom LLP, special New York counsel for the Resellers, in form and substance reasonably satisfactory to the Administrative Agents and covering such matters relating to the Resellers and the Loan Documents as the Administrative Agents shall reasonably request.  The Resellers hereby request such counsel to deliver such opinion.

 

  

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(d)           The Administrative Agents shall have received the agreements, documents and instruments set forth in Exhibit C hereto.

 

(e)           The Administrative Agents shall have received (i) a certificate, dated the Effective Date and signed by a Financial Officer of each Reseller, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 8.3 and (ii) a certificate, dated the Effective Date and signed by a Financial Officer of the Parent Guarantor, certifying that as of the Effective Date, both before and after giving effect to (a) the Transactions to be consummated on the Effective Date and (b) the payment and accrual of all fees, costs and expenses in connection therewith, the Resellers, the Parent Guarantor and the Domestic Subsidiaries, on a consolidated basis, are and will be Solvent.

 

(f)           The Lenders shall have received the financial statements referenced in Sections 9.4(a) and (c).

 

(g)           The Administrative Agents shall have received, in form and substance reasonably acceptable to them, fully executed copies of an amendment to the JPMorgan Chase Bank Intercreditor Agreement.

 

(h)           The Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the U.S.A. Patriot Act.

 

8.2           The Expansion Facility Effective Date.

 

This Agreement and the obligations of the Lenders participating in the Accordion Increase to effect any Accordion Increase hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived by each Lender providing an Accordion Increase):

 

(a)           The Administrative Agents (or their counsel) shall have received from Borrowing Agent a request in form reasonably satisfactory to Administrative Agents to effect any Accordion Increase.

 

(b)           New or existing Lenders have been identified and fees (if any) to such Lenders providing the Accordion Increase have been paid.

 

(c)           The Administrative Agents have received if requested by Administrative Agents or required by the Lenders participating in the Accordion Increase, in form and substance reasonably acceptable to them, a fully executed copy of such reaffirmation of, amendment to, or amended and restated Security Agreements, Pledge Agreements (described in clause (i) through (iii) of the definition thereof), Parent Guarantor Guarantee Agreement, and Subsidiary Guarantee Agreement.

 

(d)           The Administrative Agents shall have received, if requested by Administrative Agents or required by the Lenders participating in the Accordion Increase, a favorable written opinion (addressed to the Administrative Agents and the Lenders and dated the effective date of the applicable Accordion Increase) of Skadden, Arps, Slate, Meagher & Flom LLP, special New York counsel for the Resellers, in form and substance reasonably satisfactory to the Administrative Agents and covering such matters relating to the Resellers and the Loan Documents as the Administrative Agents shall reasonably request.

 

  

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(e)           The Administrative Agents shall have received the agreements, documents and instruments set forth in Exhibit C hereto as may be requested by Administrative Agents or required by the Lenders.

 

(f)           The Lenders participating in the Accordion Increase shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the U.S.A. Patriot Act as may be requested by Administrative Agents or required by the Lenders participating in the Accordion Increase.

 

8.3           Each Credit Event.

 

The obligation of CPC to make an Interim Channel Finance Loan Advance and each Lender to make a Channel Finance Loan Advance is subject to the satisfaction of the following conditions:

 

(a)           The representations and warranties of the Loan Parties set forth in each Loan Document shall be true and correct in all material respects on and as of the date of such Loan, except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct in all material respects on and as of such earlier date.

 

(b)           At the time of and immediately after giving effect to such Loan, no Default shall have occurred and be continuing.

 

(c)           With regards to a Channel Finance Loan Advance or Interim Channel Finance Loan Advance, an Approval has been issued by CPC.

 

Each Loan shall be deemed to constitute a representation and warranty by the Resellers on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

 

9.           Representations and Warranties.

 

  Each Reseller represents and warrants to the Lenders that:

 

9.1           Organization; Powers.  Each of the Resellers and the Domestic Subsidiaries that are  Material Subsidiaries is duly organized, validly existing and in good standing (to the extent that such concept is applicable in the relevant jurisdiction) under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing (to the extent such concept is applicable) in, every jurisdiction where such qualification is required; provided, that this provision shall not restrict any transaction otherwise permitted under Section 11.3.

 

9.2           Authorization; Enforceability.  The Transactions are within each Loan Party’s corporate or other organizational powers and have been duly authorized by all necessary corporate (or other organizational) and, if required, stockholder or shareholder action.  Each Loan Document has been duly executed and delivered by each Loan Party party thereto and constitutes a legal, valid and binding obligation of each such Loan Party, enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

  

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9.3           Governmental Approvals; No Conflicts.  The Transactions (i) do not require any material consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (ii) will not violate in any material respect any applicable law or regulation applicable to the Resellers, the Parent Guarantor or the Domestic Subsidiaries and will not violate the charter, by-laws or other organizational or constitutional documents of the Resellers, the Parent Guarantor or any of the Domestic Subsidiaries or any order of any Governmental Authority, (iii) except as would not reasonably be expected to have a Material Adverse Effect, will not violate or result in a default under any indenture, agreement or other instrument binding upon any of the Resellers, the Parent Guarantor or any of the Domestic Subsidiaries, or give rise to a right thereunder to require any payment to be made by the Resellers, the Parent Guarantor or any of the Subsidiaries, and (iv) will not result in the creation or imposition of any Lien on any assets of any of the Resellers, the Parent Guarantor or any of the Domestic Subsidiaries (other than the Liens created by the Collateral Documents).

 

9.4           Financial Condition; No Material Adverse Change.

 

(a)           The Resellers have heretofore furnished to the Lenders a consolidated balance sheet and statements of income, stockholders equity and cash flows for the Parent Guarantor and its Subsidiaries as of and for the fiscal year ended December 31, 2015, reported on by KPMG LLP, independent public accountants.  Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Parent Guarantor and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP.

 

(b)           Since December 31, 2015, there has been no material adverse change in the business, assets, property or financial condition of the Parent Guarantor and its Subsidiaries, taken as a whole.

 

(c)           The Parent Guarantor has heretofore furnished to the Lenders forecasted consolidated balance sheets and statements of income and cash flows for the five-year period beginning on January 1, 2016, in each case prepared on a basis consistent with the financial statements described in Section 9.4(a) and the estimates and assumptions stated therein, all of which the Resellers and the Parent Guarantor believe as of the date hereof to be reasonable and, as of the Effective Date, reflect the Parent Guarantor’s good faith and reasonable estimates of the future financial performance of the Parent Guarantor and its Subsidiaries for such period; provided that (i) such forecasts are subject to significant uncertainties and contingencies, which may be beyond the Parent Guarantor’s and its Subsidiaries’ control, (ii) no assurances are given that the results forecasted in any such projections will be realized and (iii) the actual results may differ from the forecasted results set forth in such projections and such differences may be material.

 

9.5           Properties; Insurance.

 

(a)           Each of the Resellers, the Parent Guarantor and the Material Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business, except (i) for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes or (ii) as would not reasonably be expected to have a Material Adverse Effect.

 

(b)           Each of the Resellers, the Parent Guarantor and the Domestic Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Resellers, the Parent Guarantor and the Domestic Subsidiaries does not infringe upon the rights of any other Person, except where failure to so own or be

 

  

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licensed, or such infringements that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

(c)           Each of the Resellers, the Parent Guarantor and the Domestic Subsidiaries maintains, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations; provided, that each of the Resellers, the Parent Guarantor and the Domestic Subsidiaries may self-insure in the ordinary course of business to the same extent as other companies engaged in similar businesses and owning similar properties in the same general areas in which the Resellers, the Parent Guarantor and the Domestic Subsidiaries, as applicable, operates.

 

9.6           Litigation, Environmental and Labor Matters.

 

(a)           There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Resellers, threatened in writing against the Resellers, the Parent Guarantor or any of the Domestic Subsidiaries (i) that would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) except as set forth on Schedule 9.6, that purport to affect or pertain to this Agreement, any other Loan Document or the consummation of the Transactions.

 

(b)           Except with respect to any matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, neither any of the Resellers, the Parent Guarantor, nor any of the Subsidiaries (i) have failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) have become subject to any Environmental Liability, (iii) have received notice of any claim with respect to any Environmental Liability or (iv) know of any basis for any Environmental Liability.

 

(c)           There are no labor controversies pending against or, to the knowledge of the Resellers, threatened in writing against any of the Resellers, the Parent Guarantor or any of the Subsidiaries which would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

9.7           Compliance with Laws and Agreements.  Each of the Resellers, the Parent Guarantor and the Domestic Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all agreements and other instruments in connection with any inventory factoring facilities (other than the Facilities) binding upon it or its property, in each case, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.  No Default has occurred and is continuing.

 

9.8           Investment Company Status.  Neither any of the Resellers, the Parent Guarantor nor any of the Domestic Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

 

9.9           Taxes.  Each of the Resellers, the Parent Guarantor and the Domestic Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Reseller, Parent Guarantor or such Domestic Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP (to the extent required thereby), or (b) to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect.

 

  

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9.10           ERISA.  No ERISA Event has occurred, and no ERISA Event with respect to any Plan is reasonably expected to occur, that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, would reasonably be expected to result in a Material Adverse Effect.

 

9.11           Subsidiaries; Ownership of Capital Stock.  As of the Effective Date, Schedule 9.11 sets forth all of the Resellers’ directly-owned Domestic Subsidiaries and the Parent Guarantor’s directly owned Domestic Subsidiaries, the jurisdiction of organization of each such Subsidiary and the identity of the holders of all shares or other interests of each class of Equity Interests of each such Subsidiary.

 

9.12           Solvency.  As of the Effective Date, both before and after giving effect to (a) the Transactions to be consummated on the Effective Date and (b) the payment and accrual of all fees, costs and expenses in connection therewith, the Resellers, the Parent Guarantor and the Domestic Subsidiaries, on a consolidated basis, are and will be Solvent.

 

9.13           Disclosure.  None of the reports, financial statements, certificates or other written information (excluding projections, financial estimates, forecasts and other forward-looking information, and other information of a general economic or industry specific nature) furnished by or on behalf of the Resellers to any Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished or publicly available in periodic and other reports, proxy statements and other materials filed by the Parent Guarantor or any Domestic Subsidiary with the Securities and Exchange Commission), taken as a whole, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information, the Resellers represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time (it being understood and agreed that (i) such projected financial information is subject to significant uncertainties and contingencies, which may be beyond the Resellers’, the Parent Guarantor’s and the Subsidiaries’ control, (ii) no assurances are given that the results forecasted in any such projected financial information will be realized and (iii) the actual results may differ from the forecasted results set forth in such projected financial information and such differences may be material).

 

9.14           Regulation U.  No part of the proceeds of any Loan have been used or will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulation U.

 

9.15           Lien in Collateral.  The provisions of this Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Collateral Agent, for the benefit of the Holders of Secured Obligations, and, to the extent required by the Security Agreements, such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations and having priority over all other Liens on the Collateral except in the case of (a) Permitted Encumbrances and other Liens permitted under this Agreement and (b) Liens perfected only by possession (including possession of any certificate of title) to the extent the Collateral Agent has not obtained or does not maintain possession of such Collateral.

 

9.16           Material Subsidiaries.  Each Compliance Certificate delivered hereunder designates as Material Subsidiaries direct and indirect Domestic Subsidiaries of the Parent Guarantor and direct Foreign Subsidiaries of the Parent Guarantor, the Resellers and the Subsidiary Guarantors that, as of the end of the applicable fiscal quarter (in the case of a Compliance Certificate delivered pursuant to Section 10.1(c)) or as of the date of the applicable Permitted Acquisition after giving effect to such acquisition on a Pro Forma Basis (in the case of a Compliance Certificate which shall be delivered in connection with a

 

  

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Permitted Acquisition), together with the Parent Guarantor and the UK Subsidiary, (i) generated at least 75% of Consolidated EBITDA during the most recent four fiscal quarter period for which financial statements have been provided by the Parent Guarantor pursuant to Section 10.1 and (ii) owned assets (other than Equity Interests in Subsidiaries) representing at least 75% of the consolidated assets of the Parent Guarantor and its Subsidiaries as of the end of such period; provided that any Domestic Subsidiary which is the direct owner of any Equity Interests in a Material Subsidiary shall constitute a Material Subsidiary hereunder.

 

9.17           OFAC.  No Loan Party nor any of its Subsidiaries is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC.  (a) No Loan Party nor any of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities.  No proceeds of any loan made hereunder will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity; and

 

(b) the Parent Guarantor has implemented and maintains in effect policies and procedures designed to ensure compliance by the Parent Guarantor, its Subsidiaries and their respective directors, officers, employees and agents with applicable Sanctions.

 

9.18           Patriot Act.  To the extent applicable, each Loan Party is in compliance, in all material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”).  No part of the proceeds of the loans made hereunder will be used by any Loan Party or any of their Affiliates, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

10.           Affirmative Covenants.  Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, the Resellers covenant and agree with the Lenders that:

 

10.1           Financial Statements and Other Information.  The Resellers and the Parent Guarantor will furnish to the Administrative Agents (who shall deliver to each Lender):

 

(a)           within 90 days after the end of each fiscal year of the Parent Guarantor, the Parent Guarantor’s audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows 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 (other than any such qualification with respect to the Loan Obligations or the obligations under the JPMorgan Credit Agreement being treated as short-term indebtedness resulting solely from the Termination Date or the maturity date of the JPMorgan Credit Agreement occurring one year from the time such opinion is delivered) 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 the Parent Guarantor and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied; provided, that the Resellers and the Parent Guarantor shall be deemed to have delivered the foregoing to the Administrative Agents and the

 

  

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Lenders 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 Administrative Agents and the Lenders without charge, or has been made available on the Parent Guarantor’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 Administrative Agents and the Lenders on one of such web pages; provided, further, that the Resellers will promptly notify the Administrative Agents (who shall notify the Lenders) of each posting to such sites upon the occurrence thereof.  In order to provide such notices promptly, the Resellers agree to cause the Administrative Agents to be registered in the appropriate databases necessary to cause such notices to be sent automatically (including, without limitation, by e-mail to e-mail addresses agreed upon by the Administrative Agents) on the applicable filing dates;

 

(b)           within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Parent Guarantor, the Parent Guarantor’s unaudited consolidated balance sheet and related unaudited statements of operations, 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, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Parent Guarantor and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes; provided, that the Resellers and the Parent Guarantor shall be deemed to have delivered the foregoing to the Administrative Agents and the Lenders 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 Administrative Agents and the Lenders without charge, or has been made available on the Parent Guarantor’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 Administrative Agents and the Lenders on one of such web pages; provided, further, that the Resellers will promptly notify the Administrative Agents (who shall notify the Lenders) of each posting to such sites upon the occurrence thereof.  In order to provide such notices promptly, the Resellers will cause the Administrative Agents to be registered in the appropriate databases necessary to cause such notices to be sent automatically to the Administrative Agents (including, without limitation, by e-mail to e-mail addresses agreed upon by the Administrative Agents) on the applicable filing dates;

 

(c)           concurrently with any delivery of financial statements under clause (a) or (b) above, a Compliance Certificate (i) certifying as to whether a Default has occurred and is continuing and, if a Default has occurred and is continuing, specifying the details thereof and any action taken or proposed to be taken with respect thereto, and (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 11.10 to the extent set forth in the form of Compliance Certificate attached hereto as Exhibit D;

 

(d)           within 90 days after the beginning of each fiscal year of the Parent Guarantor, consolidated financial projections for the Parent Guarantor and its Subsidiaries for such fiscal year prepared in good faith;

 

(e)           promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Parent Guarantor or any Domestic Subsidiary with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with national securities exchanges, or distributed by the Parent Guarantor to its shareholders generally, as the case may be; provided, that the Resellers and the Parent Guarantor shall be deemed to have delivered the foregoing to the Administrative Agents and the

 

  

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Lenders 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 Administrative Agents and the Lenders without charge, or has been made available on the Parent Guarantor’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 Administrative Agents and the Lenders on one of such web pages; provided, further, that the Resellers will promptly notify the Administrative Agents (who shall notify the Lenders) of each posting to such sites upon the occurrence thereof.  In order to provide such notices promptly, the Resellers will register the Administrative Agents in the appropriate databases necessary to cause such notices to be sent automatically to the Administrative Agents (including, without limitation, by e-mail to e-mail addresses agreed upon by the Administrative Agents) on the applicable filing dates;

 

(f)           promptly following any request in writing therefore, all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the U.S.A. Patriot Act;

 

(g)           promptly following any request in writing therefor, such other information regarding the operations, business affairs or financial condition of the Parent Guarantor or any Domestic Subsidiary, or compliance with the terms of this Agreement, as any Administrative Agent or any Lender (through the Administrative Agents) may reasonably request; and

 

(h)           concurrently with any delivery of financial statements under clauses (a) and (b) above, for any Test Period where the calculations of the Minimum Receivables Test, the Total Leverage Ratio, the Fixed Charge Coverage Ratio, Consolidated EBITDA or consolidated assets for purposes of determinations of Material Subsidiaries have been calculated on a Pro Forma Basis, the Parent Guarantor shall provide to the Administrative Agents calculations in reasonable detail prepared by a Financial Officer that demonstrate the pro forma effect of such Specified Transactions on the Minimum Receivables Test, the Total Leverage Ratio and the Fixed Charge Coverage Ratio and Consolidated EBITDA and consolidated assets for purposes of determinations of Material Subsidiaries for such Test Period.

 

10.2           Notices of Material Events.  The Resellers will furnish to the Administrative Agents (who shall deliver to each Lender) prompt written notice of the following:

 

(a)           the occurrence of any Default;

 

(b)           the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting any of the Resellers or any Affiliate thereof, as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect;

 

(c)           the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect; and

 

(d)           any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the applicable Reseller setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

 

  

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10.3           Existence; Conduct of Business.  Each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries that are Material Subsidiaries, will do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business, except for such rights, licenses, permits, privileges and franchises the loss of which, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, amalgamation, consolidation, liquidation or dissolution or other transaction permitted under Section 11.3.

 

10.4           Payment of Taxes.  Each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries, will pay its Tax liabilities, that, if not paid, would result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Resellers, the Parent Guarantor or such Domestic Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP (to the extent required thereby) and (c) the failure to make payment pending such contest would not reasonably be expected to result in a Material Adverse Effect.

 

10.5           Maintenance of Properties; Insurance.  Each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries that are Material Subsidiaries, will (a) keep and maintain all property material to the conduct of its business in good working order and condition (ordinary wear and tear and casualty events excepted) except where the failure to do so, individually or in the aggregate, would not result in a Material Adverse Effect, and (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations; provided, that each of the Resellers, the Parent Guarantor and the Domestic Subsidiaries may self-insure in the ordinary course of business to the same extent as other companies engaged in similar businesses and owning similar properties in the same general areas in which each such Reseller or each such Subsidiary, as applicable, operates.

 

10.6           Books and Records; Inspection Rights.  Each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries, will keep proper books of record and account in which full, true and correct entries in all material respects are made of all material dealings and transactions in relation to its business and activities.  Each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries, will permit any representatives designated by the Administrative Agents, upon reasonable prior notice and during reasonable business hours, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested (provided that in no event shall there be more than one such visit or inspection per calendar year except during the continuance of an Event of Default).  Notwithstanding anything to the contrary in this Section 10.6, none of the Resellers, the Parent Guarantor nor any of the Domestic Subsidiaries will be required to disclose, permit the inspection, examination or making of extracts, or discussion of, any documents, information or other matter that (i) constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to the Administrative Agents (or its designated representative) is then prohibited by law or any agreement binding on any of the Resellers, Parent Guarantor or any of the Domestic Subsidiaries or (iii) is subject to attorney-client or similar privilege constitutes attorney work-product.  The Administrative Agents shall, upon the request of any Lender, provide to such Lender the written report, if any, prepared by the Administrative Agents with respect to any such visit or inspection.  The Administrative Agents shall give the Resellers and the Parent Guarantor the opportunity to participate in any discussions with its accountants.

 

10.7           Compliance With Laws.  Each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries, will comply with all laws, rules, regulations and orders of any Governmental Authority

 

  

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applicable to it or its property except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

10.8           Use of Proceeds.  Each Reseller will, and will cause its Domestic Subsidiaries to, use the proceeds of the Loans for the acquisition of Channel Financed Inventory, general intangibles and working capital associated therewith.  No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of the Regulations of the Board, including Regulations T, U and X.

 

10.9           Subsidiary Collateral Documents; Subsidiary Guarantors.  The Resellers or the Parent Guarantor shall execute or shall cause to be executed:

 

(a)           following the date on which (i) any Person becomes a Domestic Subsidiary that is a Material Subsidiary of the Parent Guarantor pursuant to a Permitted Acquisition or (ii) any Domestic Subsidiary that is initially designated as a Material Subsidiary pursuant to Section 9.16, in each case within thirty (30) days (or such longer period as the Administrative Agents shall agree) following such date, (a) a Pledge Agreement (or supplement thereto) in favor of the Collateral Agent for the benefit of the Holders of Secured Obligations with respect to all of the Equity Interests of such Domestic Subsidiary owned by any Loan Party in substantially the form of the Pledge Agreement(s) reaffirmed on the Effective Date; (b) a supplement to the Subsidiary Guarantee Agreement pursuant to which such Domestic Subsidiary shall become a Subsidiary Guarantor; (c) a Subsidiary Security Agreement in substantially the form reaffirmed on the Effective Date (or a supplement thereto) pursuant to which such Domestic Subsidiary shall grant the Collateral Agent for the benefit of the Holders of Secured Obligations, a first priority perfected security interest in substantially all of its assets as and to the extent provided therein, subject to Permitted Encumbrances and other Liens permitted under this Agreement, and the other documents required thereby; (d) a Subsidiary Pledge Agreement in substantially the form reaffirmed on the Effective Date (or a supplement thereto) pursuant to which such Domestic Subsidiary shall grant the Collateral Agent for the benefit of the Holders of Secured Obligations, a first priority perfected security interest in the Equity Interests of its direct Domestic Subsidiaries, subject to Permitted Encumbrances and other Liens permitted under this Agreement, and the other documents required thereby; and (e) subject to the terms of the JPMorgan Chase Bank Intercreditor Agreement, if requested by the Administrative Agents or the Required Lenders, Collateral Documents in respect of such Domestic Subsidiary’s owned real property located in the United States with a value in excess of $10,000,000 (per property) that is acquired after the Effective Date (other than any such real property subject to a Lien permitted under Section 11.2(d) or 11.2(e), in each case to provide the Collateral Agent with a first priority perfected security interest therein and Lien thereon, subject to permitted encumbrances and other Liens permitted under this Agreement; and

 

(b)           in any such case as provided above in this Section 10.9 and subject to the terms of the JPMorgan Chase Bank Intercreditor Agreement, the Resellers shall deliver or cause to be delivered to the Collateral Agent all such Pledge Agreements, supplements to the Subsidiary Guarantee Agreement, Security Agreements and other Collateral Documents, together with appropriate corporate resolutions and other documentation (including opinions, UCC financing statements, real estate title insurance policies, environmental reports, the stock certificates representing the equities subject to such pledge, stock powers with respect thereto executed in blank, and such other documents as shall be reasonably requested by the Administrative Agents to perfect the Lien of such pledge) in each case in form and substance reasonably satisfactory to the Administrative Agents, and the Administrative Agents shall be reasonably satisfied that the Collateral Agent has a first priority perfected pledge of the Collateral related thereto, in each case, subject to the exceptions and limitations set forth in the Loan Documents and Permitted Encumbrances and other Liens permitted under this Agreement.

 

  

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(c)           Notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, no Receivables Entity shall be required to enter into the Subsidiary Guarantee Agreement, the Subsidiary Security Agreement, the Subsidiary Pledge Agreement or any other Collateral Document or otherwise guaranty the Secured Obligations or grant security interests in its property to the Collateral Agent hereunder or in connection herewith.

 

11.           Negative Covenants.  Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, the Resellers covenant and agree with the Lenders that:

 

11.1           Indebtedness.  Each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries will not create, incur, assume or permit to exist any Indebtedness, except:

 

(a)           the Secured Obligations;

 

(b)           indebtedness up to $350,000,000 plus incremental facilities up to an additional $175,000,000 under the JPMorgan Credit Agreement and the other JPMorgan Loan Documents and extensions, renewals, refinancings, and replacements of any such Indebtedness shall be permitted that (unless such excess amount is separately permitted under Section 11.1) do not increase the outstanding principal amount thereof (other than by the amount of any unpaid accrued or capitalized interest thereon or any fees, premiums, or expenses incurred in the extensions, renewals, refinancings, and replacements thereof);

 

(c)           Indebtedness existing on the date hereof and set forth in Schedule 11.1 and extensions, renewals, refinancings, and replacements of any such Indebtedness that (unless such excess amount is separately permitted under Section 11.1) do not increase the outstanding principal amount thereof (other than by the amount of any unpaid accrued or capitalized interest thereon or any fees, premiums, or expenses incurred in the extensions, renewals, refinancings, and replacements thereof);

 

(d)           Indebtedness owing by (i) the Parent Guarantor to any Subsidiary, or (ii) any Subsidiary to the Parent Guarantor or any other Subsidiary;

 

(e)           Guarantees by the Parent Guarantor of Indebtedness owing by a Subsidiary, or (ii) to the extent not governed by clause (i), a Subsidiary of Indebtedness owing by the Parent Guarantor or any other Subsidiary; provided that (A) the Indebtedness so Guaranteed is permitted by this Section 11.1 and (B) Guarantees by the any Loan Party of Indebtedness of any Foreign Subsidiary shall be subject to Section 11.4;

 

(f)           Indebtedness of the Parent Guarantor or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capitalized Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (other than by the amount of any unpaid, accrued or capitalized interest thereon or any fees, premiums or interest expenses incurred in the extensions, renewals and replacements thereof); provided, that (i) such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (f) shall not exceed $25,000,000 at any time outstanding;

 

  

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(g)           Indebtedness of the Parent Guarantor or any Subsidiary incurred pursuant to Permitted Receivables Facilities; provided, that the Attributable Receivables Indebtedness thereunder shall not exceed an aggregate principal amount of $250,000,000 at any time outstanding;

 

(h)           Indebtedness of the Parent Guarantor or any of its Subsidiaries incurred pursuant to Vendor Trade Programs;

 

(i)           Attributable Debt in respect of Sale and Leaseback Transactions permitted by Section 11.9;

 

(j)           Indebtedness of an Acquired Entity existing at the time of the related Permitted Acquisition or other investment permitted under Section 11.4 which was not incurred in contemplation of such Permitted Acquisition or other investment, so long as, determined on a Pro Forma Basis, the addition of such Indebtedness to the consolidated Indebtedness of the Parent Guarantor and its Subsidiaries does not cause an Event of Default under Section 11.10 or any other term or provision of this Agreement;

 

(k)           Indebtedness incurred by the Parent Guarantor or any of its Subsidiaries arising from agreements providing for indemnification related to sales or goods or adjustment of purchase price or similar obligations in any case incurred in connection with the disposition of any business, assets or Subsidiary of the Parent Guarantor;

 

(l)           Indebtedness of the Parent Guarantor or any of its Subsidiaries in respect of workers’ compensation claims, property casualty or liability insurance, take-or-pay obligations in supply arrangements, self-insurance obligations, performance, bid, customs, government, judgment, appeal and surety bonds and other obligations of a similar nature, in each case in the ordinary course of business;

 

(m)           Indebtedness representing deferred compensation to employees of the Parent Guarantor or any of its Subsidiaries incurred in the ordinary course of business;

 

(n)           Indebtedness in the form of earn-outs, indemnification, incentive, non-compete, consulting or other similar arrangements and other contingent payments in respect of Permitted Acquisitions or other investments permitted by Section 11.4;

 

(o)           Indebtedness of the Parent Guarantor or any of its Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn by the Parent Guarantor or such Subsidiary in the ordinary course of business against insufficient funds, so long as such Indebtedness is promptly repaid;

 

(p)           Indebtedness in respect of Swap Agreements not prohibited hereunder;

 

(q)           Indebtedness of any Loan Party incurred pursuant to a Contract Payment Sale;

 

(r)           Indebtedness owing by Foreign Subsidiaries to non-Affiliates, so long as the aggregate outstanding principal amount thereof at no time exceeds $30,000,000, together with (but without duplication of) all Guarantees thereof by the Parent Guarantor or any Subsidiary thereof;

 

(s)           Indebtedness arising in favor of depositary institutions in respect of currency fluctuations or overdrafts under any Cash Pooling Arrangement, so long as the aggregate outstanding principal amount thereof at no time exceeds $10,000,000;

 

  

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(t)           other unsecured Indebtedness not governed by clauses (a) through (s) of this Section 11.1 so long as (i) (A) the Total Leverage Ratio does not exceed the applicable maximum Total Leverage Ratio set forth in Section 11.10 minus 0.25 and (B) the Parent Guarantor shall be in compliance with the financial covenants set forth in Section 11.10(b) and (c), in each case, determined on a Pro Forma Basis after giving effect to such incurrence and the application of proceeds thereof, recomputed as of the last day for the most recently ended fiscal quarter of the Parent Guarantor for which financial statements are available and (ii) the final scheduled maturity of such Indebtedness is not prior to the date that is 91 days after the Termination Date;

 

(u)           other Indebtedness not governed by clauses (a) through (t) of this Section 11.1 so long as the aggregate outstanding principal amount thereof at no time exceeds $50,000,000;

 

(v)           Indebtedness owing to any insurance company in connection with the financing of any insurance premiums permitted by such insurance company in the ordinary course of business; and

 

(w)           all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (v) above.

 

For purposes of determining compliance with this Section 11.1, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (w) above, the Resellers shall, in their sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses.

 

11.2           Liens.  Each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries will not create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, except:

 

(a)           Liens arising pursuant to the terms of this Agreement and the other Loan Documents;

 

(b)           Permitted Encumbrances;

 

(c)           any Lien on any property or asset of the Parent Guarantor or any Subsidiary existing on the date hereof and set forth in Schedule 11.2; provided that (i) such Lien shall not apply to any other property or asset of the Parent Guarantor or any Subsidiary (other than improvements, accessions, proceeds, dividends or distributions in respect thereof and assets fixed or appurtenant thereto) and (ii) except as otherwise permitted hereunder, such Lien shall secure only those obligations which it secures on the date hereof;

 

(d)           any Lien existing on any property or asset prior to the acquisition thereof by the Parent Guarantor or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be and (ii) such Lien shall not apply to any other property or assets of the Parent Guarantor or any Subsidiary;

 

(e)           Liens on fixed or capital assets acquired, constructed or improved by the Parent Guarantor or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by clause (f) of Section 11.1, (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or

 

  

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improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Parent Guarantor or any Subsidiary (other than improvements, accessions, proceeds, dividends or distributions in respect thereof and assets fixed or appurtenant thereto); provided that individual financings provided by a lender may be cross collateralized to other financings provided by such lender or its affiliates so long as such financings and Liens are otherwise permitted hereunder;

 

(f)           Liens arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien permitted under clauses (c), (d) or (e) above; provided, that (i) such Indebtedness is not secured by any additional assets and (ii) except as otherwise permitted hereunder, the amount of such Indebtedness secured by any such Lien is not increased (other than by the amount of any unpaid accrued or capitalized interest thereon or any fees, premiums, or expenses incurred in the extensions, renewals, refinancings and replacements thereof);

 

(g)           Liens arising out of Sale and Leaseback Transactions permitted by Section 11.9;

 

(h)           Liens in connection with or to secure Indebtedness permitted under Section 11.1 that arise under Permitted Receivables Facilities or Vendor Trade Programs so long as the parties to each such Permitted Receivables Facility or Vendor Trade Program are bound by, and such Liens are subject to, the Intercreditor Agreement;

 

(i)           Liens that are contractual rights of set-off;

 

(j)           licenses, sublicenses, leases or subleases granted to or from others that do not interfere in any material respect with the business of the Parent Guarantor and its Subsidiaries taken as a whole;

 

(k)           Liens in favor of customs and revenue authorities arising as a matter of law to secure the payment of customs duties in connection with the importation of goods;

 

(l)           Liens on Contract Payments (and related equipment, as applicable) and related proceeds arising in favor of a Contract Payment Purchaser in connection with a Contract Payment Sale;

 

(m)           Liens securing Indebtedness permitted under Section 11.1(b) and other obligations secured by the Liens pursuant to the JPMorgan Loan Documents so long as such Liens are subject to the Intercreditor Agreement and the JPMorgan Chase Bank Intercreditor Agreement (or another intercreditor agreement substantially identical thereto or otherwise reasonably satisfactory to the Collateral Agent);

 

(n)           Liens on deposit accounts subject to Cash Pooling Arrangements securing Indebtedness permitted under Section 11.1(r);

 

(o)           other Liens securing obligations in an aggregate outstanding principal amount at any time not to exceed $50,000,000;

 

(p)           assignments or sales of any accounts receivable permitted under Section 11.3 (e), (f), (k) or (m); and

 

(q)           any interest or title of a lessor under leases (other than leases constituting Capitalized Lease Obligations) entered into by any of the Parent Guarantor or any Subsidiary as lessees in the ordinary course of business.

 

  

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11.3           Fundamental Changes.  The Parent Guarantor will not, and will not permit any Domestic Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise make any disposition of its property or the Equity Interests of any of its Domestic Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that:

 

(a)           the Parent Guarantor and its Subsidiaries may purchase and sell inventory in the ordinary course of business;

 

(b)           the Parent Guarantor and its Subsidiaries may sell, transfer or otherwise dispose of excess, damaged, obsolete or worn out assets and scrap in the ordinary course of business;

 

(c)           the Parent Guarantor and its Subsidiaries may enter into and consummate Permitted Acquisitions and other investments permitted by Section 11.4; (provided that any such Person or division or line of business so acquired is engaged in a type of business that complies with the requirements of the last sentence of this Section 11.3);

 

(d)            (i) any Person may merge into the Parent Guarantor in a transaction where the Parent Guarantor is the survivor thereof, (ii) any Person (other than the Parent Guarantor) may merge into a Subsidiary Guarantor where a Subsidiary Guarantor is the survivor thereof, (iii) any Person, Reseller or any Subsidiary Guarantor may merge into any Reseller where a Reseller is the survivor thereof, (iv) any Person (other than a Loan Party) may merge into any Foreign Subsidiary and (v) any Subsidiary that is not a Loan Party may merge into any other Subsidiary so long as if such other Subsidiary is a Loan Party, then the entity surviving such a merger is a Loan Party;

 

(e)           (i) the Parent Guarantor may sell or transfer assets to any Reseller or any Subsidiary Guarantor, (ii) any Subsidiary may sell or transfer assets to the Parent Guarantor, any Reseller or any Subsidiary Guarantor, and (iii) to the extent not governed by clauses (i) through (iii) above, any Subsidiary that is not a Loan Party may sell or transfer assets to the Parent Guarantor or any other Subsidiary;

 

(f)           the Parent Guarantor or any Subsidiary may (i) sell Receivables under Permitted Receivables Facilities (subject to the limitation that the Attributable Receivables Indebtedness thereunder shall not exceed an aggregate outstanding principal amount of $250,000,000) and (ii) sell or discount, in each case without recourse and in the ordinary course of business, overdue accounts receivable arising in the ordinary course of business, in connection with the compromise or collection thereof consistent with customary industry practice (and not as part of any bulk sale or financing of receivables);

 

(g)           if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing, any Subsidiary that is not a Reseller may liquidate or dissolve if the Parent Guarantor determines in good faith that such liquidation or dissolution is in the best interests of the Parent Guarantor and is not materially disadvantageous to the Lenders; provided, in addition to the foregoing, Calence may liquidate or dissolve if (i) prior to such liquidation or dissolution, Calence has sold or transferred to one or more Resellers (or any other Person, to the extent such transfer to such other Person is specifically permitted under this Section 11) all or the substantial portion of its assets pursuant to Section 11.3(e)(ii) above, (ii) at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing, and (iii) the Parent Guarantor determines in good faith that such liquidation or dissolution is in the best interests of the Parent Guarantor and is not materially disadvantageous to the Lenders;

 

  

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(h)           the Parent Guarantor or any Subsidiary may (i) sell or dispose of cash or Permitted Investments in the ordinary course of business, (ii) license intellectual property in the ordinary course of business and (iii) dispose of or abandon intellectual property that is, in the reasonable judgment of the Parent Guarantor, no longer economically practicable to maintain or useful in the conduct of the business of the Parent Guarantor and its Subsidiaries taken as a whole;

 

(i)           any sale of assets pursuant to a Sale and Leaseback Transaction permitted by Section 11.9;

 

(j)           any lease or sub-lease of property in the ordinary course of business that would not materially interfere with the required use of such property by the Parent Guarantor or its Subsidiaries;

 

(k)           any sale or assignment of Contract Payments (and related leased equipment, and related receivables and proceeds as applicable) and any lease of such related equipment pursuant to a Contract Payment Sale;

 

(l)           any Subsidiary may enter into and consummate any merger, dissolution, liquidation or consolidation, the purpose of which is to effect an asset sale or other disposition otherwise permitted under this Section 11.3; and

 

(m)           the Parent Guarantor or any Subsidiary may engage in a sale, lease, or transfer or other disposition of any assets not described above so long as such assets, when taken together with all other assets sold, leased, transferred or otherwise disposed of pursuant to this clause (m) in any fiscal year, does not constitute a Substantial Portion of the assets of the Parent Guarantor and its Subsidiaries.

 

In addition to the foregoing, each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries will not engage to any material extent in any business if as a result thereof the general nature of the business of the Resellers, the Parent Guarantor and any of the Domestic Subsidiaries taken as a whole would be substantially changed from the general nature of the business of the Resellers, the Parent Guarantor and the Domestic Subsidiaries on the Effective Date.

 

11.4           Investments, Loans, Advances, Guarantees and Acquisitions  Each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries will not purchase, hold or acquire any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (each, an “Investment”), except:

 

(a)           Permitted Acquisitions; provided, that the Parent Guarantor shall comply with Section 10.9 following any such Permitted Acquisition within the times required thereby;

 

(b)           Permitted Investments;

 

(c)           existing Investments in Domestic Subsidiaries and other investments in existence on the date hereof and described in Schedule 11.4;

 

(d)           Investments made by the Parent Guarantor and the Subsidiaries in Equity Interests in their respective Subsidiaries; provided that the aggregate amount of such investments by the Parent Guarantor and Subsidiary Guarantors in Foreign Subsidiaries (together with outstanding intercompany loans and other Investments permitted under the first proviso to paragraph (e) below and

 

  

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outstanding Guarantees permitted under the first proviso to paragraph (f) below) shall not exceed $150,000,000 at any time outstanding;

 

(e)           loans or advances and other Investments made by the Parent Guarantor to or in any Subsidiary and made by any Subsidiary to or in the Parent Guarantor or any other Subsidiary; provided that the amount of such loans and advances and other Investments made by the Loan Parties to or in Foreign Subsidiaries (together with outstanding investments permitted under the first proviso to paragraph (d) above and outstanding Guarantees permitted under the first proviso to paragraph (f) below) shall not exceed $150,000,000 at any time outstanding;

 

(f)           Guarantees constituting Indebtedness permitted by Section 11.1; provided that the aggregate principal amount of Indebtedness of Foreign Subsidiaries that is Guaranteed by the Loan Parties (together with outstanding investments permitted under the first proviso to paragraph (d) above and outstanding intercompany loans permitted under the first proviso to paragraph (e) above) shall not exceed $150,000,000 at any time outstanding;

 

(g)           Guarantees by the Parent Guarantor or any Domestic Subsidiary of operating leases or of other obligations that do not constitute Indebtedness, in each case entered into by the Parent Guarantor or any Subsidiary in the ordinary course of business;

 

(h)           accounts receivable and extensions of trade credit in the ordinary course of business;

 

(i)           Investments of the Parent Guarantor or any Domestic Subsidiary under Swap Agreements permitted hereunder;

 

(j)           loans and advances to employees, officers and directors of the Parent Guarantor or any of its Domestic Subsidiaries in the ordinary course of business in an aggregate principal amount (for the Parent Guarantor and all Domestic Subsidiaries) not to exceed $2,500,000 at any one time outstanding;

 

(k)           Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

 

(l)           Investments in payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business not to exceed $2,500,000 at any one time outstanding;

 

(m)           other Investments (whether in capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing), loans or advances, Guarantees or other investments and interests) not exceeding $50,000,000 at any time outstanding (determined as the amount originally advanced, loaned or otherwise invested, less any returns on the respective investment not to exceed the original amount invested);

 

(n)           so long as no Default exists at the time thereof, other Investments by Parent Guarantor and its Subsidiaries (whether in capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing), loans or advances, Guarantees or other investments and interests) so long as on the date of such Investment, giving effect to any such Investment, the Total Leverage Ratio does not exceed 2.25 to 1.0 (determined on a Pro Forma

 

  

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Basis after giving effect to the applicable Investment, recomputed as of the last day of the most recently ended fiscal quarter of the Parent Guarantor for which financial statements are available);

 

(o)           promissory notes and other noncash consideration received by the Parent Guarantor or any Subsidiary in connection with any disposition permitted hereunder;

 

(p)           so long as no Default exists at the time thereof, Investments to the extent that payment for such Investments is made with Qualified Equity Interests of the Parent Guarantor or with net proceeds of any issuance of Qualified Equity Interests of the Parent Guarantor; and

 

(q)           intercompany advances arising from their cash management, tax and accounting operations.

 

11.5           Swap Agreements.  Each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries will not enter into any Swap Agreement except for (a) Swap Agreements entered into to hedge or mitigate risks to which the Parent Guarantor or any Domestic Subsidiary has actual exposure (other than those in respect of Equity Interests of the Parent Guarantor or any of its Domestic Subsidiaries), and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates with respect to any interest-bearing liability or investment of the Parent Guarantor or any Domestic Subsidiary.

 

11.6           Restricted Payments.  None of the Resellers or the Parent Guarantor will, and none will permit any of its Domestic Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (a) the Parent Guarantor may declare and make Restricted Payments with respect to its Equity Interests payable solely in additional shares of its common stock, (b) (i) Subsidiaries may declare and make Restricted Payments ratably with respect to their Equity Interests, and (ii) a Subsidiary may make distributions to allow for the payment of any U.S. federal, state, local, or non-U.S. Taxes (including UK Tax) that are due and payable by any group of corporations that includes the Subsidiary and with which the Subsidiary joins in filing any consolidated, combined, unitary, or similar tax returns, determined as if the Subsidiary filed such tax returns separately as the parent of an affiliated (or similar) group that included the Subsidiary and its subsidiaries, (c) so long as no Default exists at the time thereof, the Parent Guarantor may redeem, repurchase, acquire or retire (i) any of its outstanding Equity Interests during the term of this Agreement so long as the Total Leverage Ratio is less than 2.25 to 1.00 (determined on a Pro Forma Basis after giving effect to the applicable redemption, repurchase, acquisition or retirement, recomputed as of the last day of the most recently ended fiscal quarter of the Parent Guarantor for which financial statements are available) and (ii) to the extent the Parent Guarantor is unable to satisfy the Total Leverage Ratio requirement set forth in the foregoing clause (i), any of its outstanding Equity Interests during the term of this Agreement in an aggregate amount not to exceed $100,000,000 (with the understanding that this $100,000,000 basket is separate from the basket provided in the foregoing clause (i) and only available when the clause (i) basket is unavailable), and (d) the Parent Guarantor may declare and pay distributions and dividends on its Equity Interests; provided, that, with respect to the foregoing clause (d), (1) no Default shall exist immediately before or immediately after giving effect to such distributions and dividends or be created as a result thereof and (2) each cash dividend declared by the Parent Guarantor shall be made within 90 days of the declaration thereof.

 

11.7           Transactions with Affiliates.  None of the Resellers or the Parent Guarantor will, and none will permit any of its Domestic Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that (i) are in the ordinary course of business and (ii) are on terms substantially as favorable to the applicable Reseller, the Parent Guarantor or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b)

 

  

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transactions between or among the Resellers, the Parent Guarantor and any of its Subsidiaries not involving any other Affiliate that are otherwise permitted hereunder, (c) transactions between or among the Loan Parties not involving any other Affiliate, (d) reasonable and customary fees and indemnities paid to members of the boards of directors or other governing body of the Resellers, the Parent Guarantor and its Subsidiaries, (e) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and stock ownership or other employee benefit plans or programs approved by the board of directors of the Parent Guarantor (including an authorized committee thereof), (f) the grant of stock options, restricted stock, other stock-based awards or similar rights to officers, employees, consultants and directors of the Parent Guarantor pursuant to plans approved by the board of directors of the Parent Guarantor (including an authorized committee thereof) and the payment of amounts or the issuance of securities pursuant thereto; and (g) any transaction expressly permitted under this Article 11.

 

11.8           Restrictive Agreements; Receivables Entities.  Each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries will not directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Resellers, the Parent Guarantor or any Domestic Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets in favor of the Collateral Agent, or (b) the ability of any Domestic Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Resellers, the Parent Guarantor or any other Domestic Subsidiary or to Guarantee Indebtedness of the Resellers, the Parent Guarantor or any other Domestic Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by this Agreement or any other Loan Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 11.8 (but shall apply to any extension or renewal of, or any amendment or modification in each case expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary or other assets pending such sale, provided such restrictions and conditions apply only to the Subsidiary or other assets that are to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (v) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to a Permitted Receivables Facility or Vendor Trade Programs or to customary provisions contained in joint venture agreements and other similar agreements applicable to joint ventures entered into in the ordinary course of business, (vi) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof, (vii) the foregoing shall not apply to restrictions and conditions imposed by the JPMorgan Loan Documents, (viii) the foregoing shall not apply to restrictions and conditions contained in agreements of any Person that becomes a Subsidiary or is merged into or consolidated with the Parent Guarantor or any Subsidiary or agreements assumed from any Person in connection with the acquisition of assets by the Parent Guarantor or any Subsidiary of such Person after the date hereof, provided that such agreements exist at the time such Person becomes a Subsidiary or such agreements are assumed and in each case are not created in contemplation of or in connection with such Person becoming a Subsidiary or the agreements being assumed, and (ix) the foregoing shall not apply to restrictions or conditions imposed by an agreement evidencing Indebtedness permitted under this Agreement so long as such restrictions and conditions permit the financings evidenced by the Loan Documents (including all grants of Collateral in connection herewith and all payments of principal, interest, fees, costs and expenses required hereby), and so long as such restrictions and conditions, taken as a whole, are not more restrictive or limiting than those set forth in the Loan Documents (with the understanding that customary covenants in public debt or Rule 144A offerings shall not be deemed to be more restrictive).  No Receivables Entity shall be bound by any provision of this Article 11 so long as it constitutes a Receivables Entity and is subject to a Permitted Receivables Facility.

 

  

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11.9           Sale and Leaseback Transactions.  Each of the Resellers, the Parent Guarantor and each of the Domestic Subsidiaries will not enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except for (i) those properties listed in Schedule 11.9, (ii) those assets approved by the Administrative Agents in their reasonable discretion, and (iii) any other sale or transfer of any fixed or capital assets by the Parent Guarantor or any Subsidiary; provided, however, that the aggregate outstanding principal amount of Attributable Debt resulting from such transactions under this clause (iii) shall not exceed $50,000,000 at any time.

 

11.10           Financial Covenants.

 

(a)           Maximum Total Leverage Ratio.  The Resellers shall not permit the Total Leverage Ratio, as of the last day of each fiscal quarter of the Parent Guarantor to exceed 3.00 to 1.00, provided that, after a Qualified Acquisition has been consummated, the Resellers shall not permit the Total Leverage Ratio to exceed (i) 3.50 to 1.00 as of the last day of any fiscal quarter for the four fiscal quarter period beginning with the fiscal quarter in which a Qualified Acquisition is consummated (the “First Period”), (ii) 3.25 to 1.00 as of the last day of any fiscal quarter for the four fiscal quarter period immediately succeeding the First Period and (iii) reverting to 3.00 to 1.00 as of the last day of any fiscal quarter ending thereafter.

 

(b)           Minimum Fixed Charge Coverage Ratio. The Resellers shall not permit the Fixed Charge Coverage Ratio, as of the last day of each fiscal quarter of the Parent Guarantor, to be less than 1.25 to 1.00.

 

(c)           Minimum Receivables Test.  As of the last day of each fiscal quarter of the Parent Guarantor, the Receivables Amount shall not be less than or equal to the aggregate outstanding principal amount of Consolidated Funded Indebtedness (which, for the avoidance of doubt, shall not include outstanding Channel Finance Loans) at such time (the “Minimum Receivables Test”).

 

11.11            JPMorgan Loan Documents.  The Parent Guarantor shall cause (i) the Bank Collateral (as defined in the Intercreditor Agreement) to be identical in scope to the Collateral (other than with respect to Foreign Assets) and (ii) the obligors on the Bank Obligations (as defined in the Intercreditor Agreement) to be identical in scope to the obligors on the Secured Obligations (other than with respect to Foreign Subsidiaries).  The Parent Guarantor shall provide the Administrative Agents with a copy of any new material JPMorgan Loan Document or any material amendment, waiver, consent, or other modification to or under any material JPMorgan Loan Document no later than five (5) Business Days after its effectiveness (or such longer period as the Administrative Agents may agree).

 

12.           Events of Default.

 

12.1           Events of Default.  If any of the following events (“Events of Default”) shall occur:

 

(a)           Resellers shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise and such failure shall continue unremedied for a period of three Business Days;

 

(b)           Resellers shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Section) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;

 

  

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(c)           any representation or warranty made or deemed made by or on behalf of the Resellers, the Parent Guarantor or any Domestic Subsidiary in or in connection with this Agreement or any other Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification hereof or waiver hereunder, shall prove to have been incorrect in any material respect when made or deemed made;

 

(d)           any Reseller, the Parent Guarantor or any Domestic Subsidiary shall fail to observe or perform any covenant or agreement contained in Section 10.2(a), 10.3 (solely with respect to a Reseller’s existence), 10.9or in Section 11;

 

(e)           any Reseller, the Parent Guarantor or any Domestic Subsidiary shall fail to observe or perform any covenant or agreement contained in this Agreement or in any other Loan Document (other than those specified in clause (a), (b) or (d) of this Section), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agents to the Borrowing Agent;

 

(f)           any Reseller, the Parent Guarantor or any Domestic Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable (subject to any applicable grace period with respect thereto, if any, set forth in the agreement evidencing such Material Indebtedness);

 

(g)           any event or condition (other than, with respect to Indebtedness consisting of a Swap Agreement, termination events or equivalent events pursuant to the terms of such Swap Agreement not arising as a result of a default by the Parent Guarantor or any Subsidiary thereunder) occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to (i) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, (ii) Indebtedness which has been converted into Qualified Equity Interests in accordance with its terms and such conversion is permitted hereunder, (iii) any breach or default that is (x) remedied by the Parent Guarantor or the applicable Subsidiary or (y) waived (including in the form of an amendment) by the required holders of the applicable item of Indebtedness, in either case, (x) prior to acceleration of Loans and Commitments pursuant to this Section 12 and (y) so long as after giving effect to such waiver or remedy the holders of the applicable item of Indebtedness or any trustee or agent on its or their behalf may no longer cause such Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity, or (iv) any voluntary termination of the JPMorgan Credit Agreement pursuant to Section 2.08 thereof;

 

(h)           an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of the Resellers, the Parent Guarantor or any Domestic Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, administrator, administrative receiver, trustee, custodian, sequestrator, conservator or similar official for any Reseller, the Parent Guarantor or any Domestic Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed or unwithdrawn for 90 days or an order or decree approving or ordering any of the foregoing shall be;

 

  

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(i)           any Reseller, the Parent Guarantor or any Domestic Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, administrative receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Section, (iii) apply for or consent to the appointment of a receiver, administrator, administrative receiver, trustee, custodian, sequestrator, conservator or similar official for any Reseller, the Parent Guarantor, or any Domestic Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment or arrangement for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

 

(j)           any Reseller, the Parent Guarantor or any Domestic Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

 

(k)           one or more final judgments for the payment of money in an aggregate amount in excess of $20,000,000 (to the extent not paid or covered by a valid and binding policy of insurance with respect to which the related insurer has been notified of a claim for payment and has not disputed such claim) shall be rendered against any Reseller, the Parent Guarantor or any Domestic Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed;

 

(l)           an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred and are continuing, would reasonably be expected to result in liability of the Resellers, the Parent Guarantor and the Domestic Subsidiaries in an aggregate amount exceeding $20,000,000;

 

(m)           a Change in Control shall occur;

 

(n)           any material provision of any Loan Document shall fail to remain in full force or effect against any Reseller, the Parent Guarantor or any Domestic Subsidiary or any action shall be taken or shall be failed to be taken by any Reseller, the Parent Guarantor or any Domestic Subsidiary to discontinue or to assert the invalidity or unenforceability of, or which results in the discontinuation or invalidity or unenforceability of, any Loan Document or any Lien in favor of the Collateral Agent under the Loan Documents (with respect to Collateral having an aggregate book value in excess of $20,000,000), or such Lien (with respect to Collateral having an aggregate book value in excess of $20,000,000) shall not have the priority contemplated by the Loan Documents in each case except (i) the sale, transfer or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents, (ii) any action taken by the Collateral Agent to release any such security interest in compliance with the provisions of the Agreement or any other Loan Document or (iii) as result of the Collateral Agent’s failure to maintain possession of any stock certificates or other instruments delivered to it under a Loan Document.

 

then, and in every such event (other than an event with respect to a Loan Party described in clause (h) or (i) of this Section), and at any time thereafter during the continuance of such event, the Administrative Agents may, and at the request of the Required Lenders shall, by notice to the Borrowing Agent, take either or both of the following actions, at the same or different times:  (i) Administrative Agents may suspend any obligations to fund Advances under this Agreement and may cancel any outstanding Approvals immediately, (ii) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (iii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any such principal or face amount not so declared to be due and payable or required to be

 

  

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prepaid may thereafter be declared to be due and payable or required to be prepaid), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Resellers accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Resellers; and in case of any event with respect to a Loan Party described in clause (h) or (i) of this Section, the Commitments shall automatically terminate, any outstanding Approvals shall automatically be canceled and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Resellers accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Resellers.

 

If Resellers shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise, Administrative Agents may suspend any obligations to fund Advances under this Agreement and may cancel any outstanding Approvals immediately.

 

12.2           Cross-Default.  An Event of Default under this Agreement will automatically and immediately constitute a default under every other Loan Document without regard to any requirement therein for the giving of notice or the passing of time.

 

12.3           Miscellaneous.  Upon the occurrence and during the continuance of an Event of Default, Administrative Agents, Collateral Agent or Lenders may (and Administrative Agents shall at the direction of the Required Lenders) exercise any other rights and remedies available to Administrative Agents, Collateral Agent or Lenders under the Loan Documents or otherwise available to Administrative Agents, Collateral Agent or Lenders at law or in equity.  At Administrative Agents’ request, or without request if an Event of Default has occurred, Resellers shall instruct Approved Vendors to pay Vendor Credits directly to Administrative Agents for application to the Loan Obligations.  In the event that Approved Vendors fail to pay Vendor Credits to Administrative Agents as so directed, Resellers shall, promptly upon receipt, pay all Vendor Credits to Administrative Agents for application to Loan Obligations.

 

12.4           Joint and Several.  Each Obligation and liability of each Reseller to Administrative Agents, and each Lender, including, without limitation, the Loan Obligations, are the joint and several obligations of each Reseller, and Administrative Agents, and any Lender may proceed directly against any Reseller, or all Resellers, or any Subsidiary Guarantor, or any Guarantor, or any Collateral, or all of the foregoing, or any one of the foregoing or any combination of the foregoing, without first proceeding against Resellers or any Collateral, or without joining all Persons liable or potentially liable for any portion of the Loan Obligations in one action.  Each Reseller shall be jointly and severally liable as primary obligor and not merely as surety for repayment of all Loan Obligations arising under the Loan Documents.  Such joint and several liability shall apply to each Reseller regardless of whether any Advance was only requested by or on behalf of or made to any other Reseller or the proceeds of any Advance were used only by or on behalf of any other Reseller or any indemnification Obligation or any other Obligation arose only as a result of the action of any other Reseller.  If any Reseller makes a payment in respect of the Loan Obligations hereunder and under the other Loan Documents, such Reseller shall have the rights of contribution described in this Section below against the other Reseller or Resellers; provided that such Reseller shall not exercise its right of contribution until all of the Loan Obligations are fully and indefeasibly paid and satisfied, and the Facility is terminated, and Lenders have no further obligation to extend credit to or for the account of any Reseller; provided, however, that Collateral Agent is hereby granted, for the benefit of Holders of Secured Obligations, a Lien in such right of contribution and may enforce such right during an Existing Default.  It is the intent of each Reseller, Administrative Agents, the Collateral Agent and the Lenders that each Reseller’s maximum obligation to repay the Loan Obligations hereunder and under the other Loan Documents shall not exceed the greater of (i) the amount actually

 

  

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borrowed or received directly or indirectly by such Reseller with respect thereto and (ii) the amount which is $1.00 less than the amount which, if recorded by such Reseller as a liability, would render such Reseller not Solvent.

 

13.           Administrative Agents, Collateral Agent and Lenders.

 

13.1           Appointment, Powers, and Immunities.  Each of WFCF and CPC is hereby appointed as an Administrative Agent and WFCF is hereby appointed as Collateral Agent hereunder and under each of the other Loan Documents.  Each Lender hereby irrevocably appoints and authorizes each Administrative Agent, jointly and severally, and the Collateral Agent to act as its agent under this Agreement and the other Loan Documents with such powers and discretion as are specifically delegated to the Administrative Agents and the Collateral Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto.  In its capacity, the Administrative Agent is a “representative” of the Holders of Secured Obligations within the meaning of the term “secured party” as defined in the New York Uniform Commercial Code.  Each Administrative Agent (which term as used in this sentence and in Section 14.5 and the first sentence of Section 14.6 hereof shall include its Affiliates and its own and its Affiliates’ officers, directors, employees, representatives, and agents) and the Collateral Agent:  (a) shall not have any duties or responsibilities except those expressly set forth in this Agreement and shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible to the Lenders for any recital, statement, representation, or warranty (whether written or oral) made in or in connection with any Loan Document or any certificate or other document referred to or provided for in, or received by any of them under, any Loan Document, or for the value, validity, effectiveness, genuineness, enforceability, or sufficiency of any Loan Document, or any other document referred to or provided for therein or for any failure by any Reseller, the Parent Guarantor or any Domestic Subsidiary or any other Person to perform any of its obligations thereunder; (c) shall not be responsible for or have any duty to ascertain, inquire into, or verify the performance or observance of any covenants or agreements by any Reseller, the Parent Guarantor or any Domestic Subsidiary or the satisfaction of any condition or to inspect the property (including the books and records) of any Reseller, the Parent Guarantor or any Domestic Subsidiary or Affiliates; (d) unless directed in writing by the Required Lenders, shall not be required to initiate or conduct any litigation or collection proceedings under any Loan Document (other than normal collection procedures from the Lockboxes); and (e) shall not be responsible for any action taken or omitted to be taken by it under or in connection with any Loan Document, except for its own gross negligence or willful misconduct.  Subject to the foregoing and the other provisions of this Article 13, each of the Administrative Agents and the Collateral Agent agree to maintain a standard of care with respect to their respective separate duties hereunder in a manner similar to the maintenance of their own loan facilities. Each Administrative Agent and Collateral Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care.

 

13.2           Reliance by Administrative Agents.  The Administrative Agents and the Collateral Agent shall be entitled to rely upon any certification, notice, instrument, writing, or other communication (including, without limitation, any thereof by telephone or telecopy) believed by them to be genuine and correct and to have been signed, sent or made by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel (including counsel for the Resellers, the Parent Guarantor or any Domestic Subsidiary), independent accountants, and other experts selected by the Administrative Agents or the Collateral Agent.  As to any matters not expressly provided for by this Agreement, the Administrative Agents and the Collateral Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding on all of the Lenders; provided, however, that the Administrative Agents and the Collateral Agent shall not be required to take any action that exposes the Administrative Agents or the Collateral Agent to personal

 

  

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liability or that is contrary to any Loan Document or applicable Law or unless they shall first be indemnified to their satisfaction by the Lenders against any and all liability and expense which may be incurred by them by reason of taking any such action.

 

13.3           Employment of Administrative Agents, Collateral Agents and Counsel.  Administrative Agents and the Collateral Agent may execute any of its duties hereunder by or through employees, agents, and attorneys-in-fact and shall not be liable to any Lender, except with respect to money or securities received by it or such agents or attorneys-in-fact, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care.  Administrative Agents and the Collateral Agent shall be entitled to advice of counsel concerning all matters pertaining to the agency hereby created and their duties hereunder and shall not be liable to any Lender for acting or failing to act as advised by such counsel, except where doing so violates an express obligation of Administrative Agents or the Collateral Agent under the Loan Documents.

 

13.4           Defaults.  The Administrative Agents and the Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of an Event of Default unless the Administrative Agents or the Collateral Agent have received written notice from a Lender or the Resellers specifying such Event of Default and stating that such notice is a “Notice of Default”.  In the event that the Administrative Agents or the Collateral Agent receive such a written notice of the occurrence of an Event of Default, the Administrative Agents or the Collateral Agent shall promptly give notice thereof to the Lenders.  The Administrative Agents shall (subject to Section 13.2 hereof) take such action with respect to such Event of Default as shall be directed by the Required Lenders, provided that, unless and until the Administrative Agents or the Collateral Agent shall have received such directions, the Administrative Agents and the Collateral Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as they shall deem advisable in the best interest of the Lenders.

 

13.5           Rights as Lender.  With respect to its Facilities and the Loans made by it, CPC (and any successor acting as an Administrative Agent) in its capacity as a Lender hereunder shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as an Administrative Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include CPC in its individual capacity as a Lender.  CPC (and any successor acting as Administrative Agent) and its Affiliates may (without having to account therefor to any Lender) accept deposits from, lend money to, provide services to, and generally engage in any kind of lending, trust, or other business with any Reseller, the Parent Guarantor or any Domestic Subsidiary or Affiliates or any Guarantor as if it were not acting as an Administrative Agent, and CPC (and any successor acting as an Administrative Agent) and its Affiliates may accept fees and other consideration from any Reseller, the Parent Guarantor or any Domestic Subsidiary or Affiliates or any Guarantor for services in connection with this Agreement or otherwise without having to account for the same to Lenders.

 

13.6           Indemnification.  The Lenders agree to reimburse and indemnify the Administrative Agents and the Collateral Agent (to the extent not reimbursed under the terms of Section 14.6, but without limiting the obligations of the Resellers under such Section) in accordance with their respective Pro-Rata Shares, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including reasonable attorneys’ fees), or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against the Administrative Agents or the Collateral Agent (including by any Lender) in any way relating to or arising out of any Loan Document or the transactions contemplated thereby or any action taken or omitted by the Administrative Agents or the Collateral Agent under any Loan Document; provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the Person to be indemnified.  Without limitation of the foregoing, each Lender agrees to reimburse the Administrative Agents and the Collateral

 

  

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Agent promptly upon demand for its Pro-Rata Share of any costs or expenses payable by the Resellers to Administrative Agents or the Collateral Agent under this Agreement or the other Loan Documents, to the extent that the Administrative Agents or the Collateral Agent are not promptly reimbursed for such costs and expenses by the Resellers.  If Lenders reimburse Administrative Agents or the Collateral Agent and Administrative Agents or the Collateral Agent subsequently receive reimbursement from the Resellers, Administrative Agents or the Collateral Agent shall promptly remit to the Lenders (without interest) their Pro-Rata Share of such reimbursement received from the Resellers.  The agreements contained in this Section shall survive payment in full of the Loans and all other amounts payable under this Agreement and the termination of the Facilities.  If the Administrative Agents or the Collateral Agent are for any reason compelled to surrender any payment or any proceeds of the Collateral because such payment or the application of such proceeds is for any reason invalidated, declared fraudulent, set aside, or determined to be void or voidable as a preference, an impermissible set-off, or a diversion of trust funds, then this Agreement and the Loan Obligations to which such payment or proceeds was applied or intended to be applied shall be revived as if such application was never made, and to the extent Administrative Agents or the Collateral Agent have been compelled to surrender any such payment or proceeds which have been distributed by Administrative Agents or the Collateral Agent to a Lender and Resellers have not repaid such amounts immediately upon demand by Administrative Agents, such Lender shall be liable to pay to Administrative Agents and the Collateral Agent the amount of any such payments or proceeds so received by such Lender and surrendered by Administrative Agents or the Collateral Agent, and shall indemnify Administrative Agents and the Collateral Agent for and hold Administrative Agents and the Collateral Agent harmless from any loss with respect to payments or proceeds received by such Lender and surrendered by Administrative Agents or the Collateral Agent.

 

13.7           Notification of Lenders.  Each Lender agrees to use commercially reasonable efforts (but no Lender shall have liability to any other Lender or Administrative Agents for failure to use such commercially reasonable efforts, unless such failure is due to a Lender’s willful misconduct in not using such commercially reasonable efforts), upon becoming actually aware of anything which has or is reasonably likely to have a Material Adverse Effect on the Resellers, the Parent Guarantor or any Domestic Subsidiary, including any Guarantor, to promptly notify Administrative Agents thereof.  Administrative Agents shall promptly deliver to each Lender copies of every written notice, demand, report (including any financial report), or other writing which Administrative Agents give to or receive from Resellers or any Lender, or of which CPC, in its capacity as a Lender otherwise becomes actually aware, and which itself (a) constitutes, or which contains information about, something that has or is reasonably likely to have a Material Adverse Effect on the Resellers, the Parent Guarantor or any Domestic Subsidiary, including any Guarantor, or (b) is otherwise delivered to Administrative Agents by Resellers pursuant to the Loan Documents and is deemed material information by Administrative Agents in their sole discretion.  Any Lender may specifically request certain information regarding the Resellers, the Parent Guarantor or any Domestic Subsidiary which it reasonably believes is in the possession of Administrative Agents.  Administrative Agents and its directors, officers, agents, and employees shall have no liability to any Lender for failure to deliver any such item to such Lender unless the failure constitutes gross negligence or willful misconduct.

 

13.8           Non-Reliance on Agent and Other Lenders.  Each Lender agrees that it has, independently and without reliance on the Administrative Agents or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Resellers, the Parent Guarantor and the Domestic Subsidiaries, if any, and its own decision to enter into this Agreement and that it will, independently and without reliance upon the Administrative Agents or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under the Loan Documents.  Except for notices, reports, and other documents and information expressly required to be furnished to the Lenders by the Administrative Agents hereunder, the Administrative Agents shall not have any duty or responsibility to

 

  

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provide any Lender with any credit or other information concerning the affairs, financial condition, or business of the Resellers, the Parent Guarantor or any Domestic Subsidiaries or Affiliates or any of the Guarantors that may come into the possession of the Administrative Agents or any of their Affiliates.

 

13.9           Resignation.  The Administrative Agents and Collateral Agent (individually an “Agent” and collectively, the “Agents”) may resign at any time by giving notice thereof to the Lenders and the Borrowing Agent.  Upon any such resignation, the Required Lenders shall have the right to appoint a successor to the applicable resigning Agent(s) with Borrowing Agent’s prior written consent which shall not be unreasonably withheld or delayed; provided, however, that if there is an Existing Default under Sections 12.1(a), (b), (h), (i), or (j) and, solely with respect to a breach of (i) Section 10.1, clause (e) of Section 12.1, and (ii) Section 11.10, clause (d) of Section 12.1, either at the time of resignation or appointment, then Borrowing Agent’s written consent shall not be required.  Effective with such resignation, the resigning Agent shall assign (at Resellers’ sole cost and expense) all Liens in the Collateral, security documents and UCC filings, and do all other things reasonably necessary so as to assign and transfer the Liens in the Collateral (including, all documents effectuating or evidencing such Liens) to any successor Administrative Agent, Administrative Agents or Collateral Agent, as the case may be.  The applicable successor Agent(s) appointed by the Required Lenders shall be a Lender.  If no applicable Agent(s) shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Agent’s giving of notice of resignation, then the remaining Administrative Agent, if any, and if none, the remaining retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Agent(s) which shall be a commercial bank or other financial institution organized under the laws of the United States of America or any State thereof having combined capital and surplus of at least $300,000,000.  Upon the acceptance of any appointment as Agent hereunder by a successor, such successor shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges, and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder.  After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Section shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.  Should the Administrative Agent that also serves as Collateral Agent and Syndication Agent resign, such Agent shall also be deemed to have resigned as Collateral Agent and Syndication Agent.

 

13.10           Mergers into Receivables Sellers.  The Resellers may request that the Collateral Agent release its security interest in Receivables originated by any Subsidiary merging into a Receivables Seller.  If the Resellers deliver a written certification to the Collateral Agent certifying that (i) there is no Existing Default, (ii) the applicable Subsidiary (or its successor) has merged (or substantially concurrently therewith is merging) with a Receivables Seller, with a Receivables Seller being the survivor thereof, and (iii) such Receivables, once released from the Collateral Agent’s security interest, will qualify as eligible receivables (subject to the requirements and conditions for qualification contained in the applicable Permitted Receivables Facility Documents) under a Permitted Receivables Facility, then the Collateral Agent shall promptly after its receipt of such written certification release its security interest in such Receivables.  Prior to giving effect to any such release, the Collateral Agent shall be entitled to receive copies of the documentation evidencing any such merger (including documentation certified by the applicable secretary of state or comparable Governmental Authority).  No such release shall occur if there is an Existing Default.

 

13.11           Restrictions on Actions by Lenders; Sharing of Payments.

 

(a)           Each of the Lenders agrees that it shall not, without the express written consent of Administrative Agents, and that it shall, to the extent it is lawfully entitled to do so, upon the written request of either Administrative Agent, at any time when there is an Existing Default, set off against the Loan Obligations, any amounts owing by such Lender to Resellers or any deposit accounts of Resellers

 

  

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now or hereafter maintained with such Lender.  Each of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by Administrative Agents, take or cause to be taken any action, including, the commencement of any legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral securing Secured Obligations under this Agreement.  Nothing contained in this Agreement or any other Loan Document shall impair the right of any Lender to exercise any right of set off or counterclaim it may have against any Reseller and to apply the amount subject to such exercise to the payment of indebtedness of any Reseller unrelated to this Agreement or the other Loan Documents.

 

(b)           If, at any time after the occurrence of an Event of Default and during the continuance thereof, any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any payments with respect to the Loan Obligations, except for any such proceeds or payments received by such Lender from Administrative Agents pursuant to the terms of this Agreement, or (ii) payments from Administrative Agents in excess of such Lender’s ratable portion of all such distributions by Administrative Agents, such Lender promptly shall (1) turn the same over to Administrative Agents, in kind, and with such endorsements as may be required to negotiate the same to Administrative Agents, or in immediately available funds, as applicable, for the account of all of the Lenders and for application to the Loan Obligations in accordance with the applicable provisions of this Agreement, or (2) purchase, without recourse or warranty, an undivided interest and participation in the Loan Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their Pro-Rata Shares; provided, however, that to the extent that such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.

 

14.           General.

 

14.1           Lenders’ Right to Cure.  Administrative Agents may (but shall not be obligated to), from time to time, in their absolute discretion, for any Reseller’s accounts and at such Reseller’s expense, pay (or, with the consent of Required Lenders, make a Channel Finance Loan Advance to pay) any amount or do any act required of such Reseller hereunder or requested by Administrative Agents or Required Lenders to preserve, protect, maintain or enforce the Loan Obligations, the Collateral or Collateral Agent’s Liens therein for the benefit of Holders of Secured Obligations, and which such Reseller fails to pay or do after having been provided five days’ written notice of such failure by the Administrative Agents, including payment of any judgment against such Reseller, insurance premiums, Taxes, warehouse charges, finishing or processing charges, landlord’s claims, and any other Lien upon or with respect to the Collateral.  All payments that Administrative Agents make pursuant to this Section and all out-of-pocket costs and expenses that Administrative Agents pay or incur in connection with any action taken by them hereunder shall be a part of the Loan Obligations, the repayment of which shall be secured by the Collateral.  Any payment made or other action taken by Administrative Agents pursuant to this Section shall be without prejudice to any right to assert an Event of Default hereunder and to pursue other available rights and remedies with respect thereto.

 

14.2           Rights Not Exclusive.  Every right granted to each Administrative Agent, the Collateral Agent and each Lender hereunder or under any other Loan Document or allowed to it at law or in equity shall be deemed cumulative and may be exercised from time to time.

 

14.3           Survival of Agreements.  All covenants and agreements made herein and in the other Loan Documents shall survive the execution and delivery of this Agreement and other Loan Documents and the making of every Advance.  All agreements, obligations and liabilities of Resellers under this Agreement

 

  

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concerning the payment of money to Administrative Agents and Lenders, including Resellers’ obligations under Sections 14.5 and 14.6, but excluding the obligation to repay the Loans and interest accrued thereon, shall survive the repayment in full of the Loans and interest accrued thereon, whether or not indefeasible and the termination of the Facilities.

 

14.4           Assignments.

 

14.4.1           Permitted Assignments.  At any time after the Effective Date, any Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Facilities and its Loans), provided that the terms of assignment satisfy the following requirements:

 

14.4.1.1                  Administrative Agents shall have consented to the assignment, which consent shall not be unreasonably withheld or delayed; provided, however, that if the Facilities have been terminated and the Loan Obligations accelerated by the Required Lenders, then Administrative Agents’ consent shall not be required; and provided further, however, an assignment from a Lender to an Affiliate of such Lender shall not require the prior written consent of Administrative Agents, but such Lender shall give prior written notice of such assignment to Administrative Agents and such assignment shall otherwise be subject to all of the terms and provisions of this Section and this Agreement.

 

14.4.1.2                  If there is no Existing Default under Sections 12.1(a), (b), (h), (i), or (j) and, solely with respect to a breach of (i) Section 10.1, clause (e) of Section 12.1, and (ii) Section 11.10, clause (d) of Section 12.1, and the Facilities have not been terminated, unless such assignment is to a Lender, an Administrative Agent, or any Affiliate of the foregoing, the Borrowing Agent shall have consented to the assignment, which consent shall not be unreasonably withheld or delayed.

 

14.4.1.3                  The minimum aggregate Facility which shall be assigned (which shall include the applicable portion of the assigning Lender’s Channel Finance Loan Facility (and in the case of CPC, the Interim Channel Finance Loan Facility)) is Fifteen Million Dollars ($15,000,000) or such lesser amount which constitutes such Lender’s entire Facility; provided, however, after giving effect to such an assignment, unless the assigning Lender has assigned all of its Facilities hereunder, the assigning Lender shall retain no less than Ten Million Dollars ($10,000,000) in Facilities hereunder; and provided further, however, that no such minimum shall apply between a Lender and its Affiliates, or between one Lender and another Lender or to an assignment of all of a Lender’s rights and obligations under this Agreement.

 

14.4.1.4                  The assignee shall have an office located in the United States and is otherwise an Eligible Assignee.

 

Upon execution, delivery, and acceptance of such Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of such assignment, have the obligations, rights, and benefits of a Lender hereunder and the assigning Lender shall, to the extent of such assignment, relinquish its rights and be released from its obligations under this Agreement.  If the assignee is not incorporated under the laws of the United States of America or a State thereof, it shall deliver to the Resellers and the Administrative Agents certification as to the exemption from deduction or withholding of Taxes in accordance with Section 4.5.

 

14.4.2           Register; Consequences and Effect of Assignments.

 

  

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14.4.2.1                  From and after the effective date specified in any Assignment and Acceptance, the assignee shall be deemed and treated as a party to this Agreement and, to the extent that rights and obligations hereunder held by the assignor have been assigned or negotiated to the assignee pursuant to such Assignment and Acceptance, to have the rights and obligations of a Lender hereunder as fully as if such assignee had been named as a Lender in this Agreement, and the assignor shall, to the extent that rights and obligations hereunder have been assigned or negotiated by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its future obligations under this Agreement.

 

14.4.2.2                  By executing and delivering an Assignment and Acceptance, the assignor thereunder and the assignee confirm to and agree with each other and the other parties hereto substantially as follows:  (i) the assignment made under such Assignment and Acceptance is made without recourse; (ii) such assignor makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Resellers, the Parent Guarantor or any Domestic Subsidiary or Guarantor or the performance or observance by any Reseller, the Parent Guarantor or any Domestic Subsidiary or Guarantor of any of its Loan Obligations; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the most recent financial statement delivered pursuant to Sections 10.1(a) and (b) and such other Loan Documents and other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon Administrative Agents, such assignor, or any other Lender, and based on such documents and information as it deems appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee appoints and authorizes Administrative Agents to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Administrative Agents by the terms hereof and thereof, together with such powers as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

 

14.4.2.3                  One of the Administrative Agents shall maintain at its address referred to herein a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Facility of, and principal amount of Loans owing to, each Lender from time to time (the “Register”).  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Resellers, the Administrative Agents and the Lenders shall treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Resellers or any Lender at any reasonable time and from time to time upon reasonable prior notice.  Upon its receipt of an Assignment and Acceptance executed by the parties thereto, the Administrative Agents shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit E hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the parties thereto and to Resellers.

 

14.4.3           Administrative Agents to Retain Copies of Assignments and Acceptances.  One of the Administrative Agents shall maintain a copy of each Assignment and Acceptance delivered to and accepted by them.

 

  

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14.4.4           Notice to Resellers of Assignment.  Upon their receipt of an Assignment and Acceptance executed by an assigning Lender, if Administrative Agents accept the assignment contemplated thereby, Administrative Agents shall give prompt notice thereof to Resellers.

 

14.4.5           Assignment to Federal Reserve Bank.  Notwithstanding any other provision set forth in this Agreement, any Lender may at any time assign and pledge all or any portion of its Loans to any Federal Reserve Bank as collateral security pursuant to Regulation A of the Board and any Operating Circular issued by such Federal Reserve Bank, or any Federal Home Loan Bank.  No such assignment shall release the assigning Lender from its obligations hereunder.

 

14.4.6           Information.  Subject to Section 14.11, any Lender or Administrative Agents may furnish any information concerning the Resellers, the Parent Guarantor or any of the Domestic Subsidiaries in the possession of such Lender or Administrative Agents, as the case may be, from time to time to assignees, affiliates or participants (including prospective assignees and participants); provided that such assignees, affiliates and participants shall be subject to the confidentiality obligations applicable to Lenders and Administrative Agents hereunder.

 

14.4.7           Sale of Participations.  Upon the consent of the Administrative Agents, each Lender may sell participations to one or more Persons in all or a portion of its rights and obligations under this Agreement; provided, however, that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the participant shall be entitled to the benefit of the right of setoff contained in this Agreement, (iv) the amount of the participation shall be in a minimum amount of $3,000,000 or such lesser amount which constitutes such Lender’s entire Facility, and (v) Resellers, the other Lenders and Administrative Agents shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and such Lender shall retain the sole right to enforce the obligations of Resellers relating to its Loans and its funding of Advances and to approve any amendment, modification, or waiver of any provision of this Agreement (other than amendments, modifications, or waivers that forgive the amount of principal of the Loans).  The sale of any such participations which require the Resellers to file a registration statement with the Securities and Exchange Commission or under the securities Laws of any State shall not be permitted.  Notwithstanding the foregoing, any Lender may sell such participations as it may be required to do under any applicable Law or as otherwise instructed to do so by any Governmental Authority.

 

14.4.8           Participant Register.

 

 Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Resellers, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Advances, Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any Commitments or Loans or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Advance, Channel Finance Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agents (in their capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

14.5           Payment of Expenses.  Resellers agree to pay or reimburse to Administrative Agents and the Collateral Agent all of Administrative Agents’ or Collateral Agent’s reasonable and documented out-of-

 

  

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pocket costs incurred in connection with the enforcement of Administrative Agents’ and Collateral Agent’s rights and remedies under the Loan Documents after an Event of Default; any amendment of or supplementation to any of the Loan Documents; and any waiver, consent or forbearance with respect to any Event of Default; provided that in the case of attorney’s fees, Resellers shall only be obligated to pay or reimburse the reasonable and documented out-of-pocket costs and expenses of one counsel to the Administrative Agents, the Collateral Agent and the Lenders taken as a whole (and up to one local counsel, taken as a whole, in each applicable jurisdiction), and if a Lender or its counsel determines that it would create actual or potential conflicts of interest to not have individual counsel and informs Resellers of such conflict, one single counsel for all such Lenders subject to the conflict, taken as a whole.  In addition, Resellers shall pay to Administrative Agents, upon receipt of notification from Administrative Agents, Administrative Agents’ customary fees to send or receive electronic transfers of funds.  All costs and fees which Resellers are obligated to pay or reimburse Administrative Agents or the Collateral Agent are Loan Obligations payable to Administrative Agents and the Collateral Agent and are payable on demand (accompanied by reasonable back-up documentation thereof) by Administrative Agents or the Collateral Agent.

 

14.6           General Indemnity.

 

14.6.1            Resellers agree to indemnify and hold harmless each Administrative Agent, the Collateral Agent, each Lender and each of their affiliates and their respective officers, directors, employees, attorneys, representatives, agents, and advisors (each, an “Indemnified Party”) from and against any and all claims, damages, losses, liabilities, costs, and expenses (including, without limitation, reasonable attorneys’ fees) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation, or proceeding or preparation of defense in connection therewith) the Loan Documents, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Loans (including, without limitation, any payments made by Administrative Agents to any Person (other than Resellers) including, without limitation, any indemnity payments by Administrative Agents thereunder), or the manufacture, storage, transportation, release or disposal of any Hazardous Material on, from, over or affecting any of the Collateral or any of the assets, properties, or operations of any Reseller, the Parent Guarantor or any Domestic Subsidiary or any predecessor in interest, directly or indirectly, except to the extent such claim, damage, loss, liability, cost, or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct.  In the case of an investigation, litigation or other proceeding to which the indemnity in this Section applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by a Reseller, its directors, shareholders or creditors or an Indemnified Party or any other Person or any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated.  The Resellers agree not to assert and agrees that it will not direct the Parent Guarantor or any Domestic Subsidiary to assert any claim against any Indemnified Party, on any theory of liability, for special, indirect, consequential, or punitive damages arising out of or otherwise relating to the Loan Documents, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Loans.  Resellers shall pay, indemnify and hold harmless the Indemnified Parties for, from and against, and shall promptly reimburse the Indemnified Parties for, any and all claims, damages, liabilities, losses, costs and expenses (including reasonable attorneys’ fees and expenses and amounts paid in settlement) incurred, paid or sustained by the Indemnified Parties, arising out of or relating to the enforcement by Administrative Agents or the Collateral Agent of any of their rights with respect thereto.  Resellers covenant and agree to assume liability for and to protect, indemnify and hold harmless the Administrative Agents, the Collateral Agent and each of the Lenders from any and all liabilities, obligations, damages, penalties, claims, causes of action, costs, charges and expenses (including without limitation, attorneys’ fees), which may be incurred by, imposed or asserted against the Administrative Agents, the Collateral Agent or any Lender,

 

  

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howsoever arising or incurred because of, out of, or in connection with the disbursements of Interim Channel Finance Loan Advances or Channel Finance Loan Advances; provided, however, the liability of the Resellers pursuant to this indemnity shall not extend to any liability, obligation, damage, penalty, claim, cause of action, cost, charge or expense found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct.  Resellers:  (i) are obligated to pay any Loan Obligation even if any Collateral is defective or fails to conform to any warranties extended by any third party; (ii) shall not assert against Administrative Agents, the Collateral Agent, any Lender or any other Indemnified Party any claim or defense Resellers have against any third party; and (iii) shall indemnify and hold Administrative Agents, the Collateral Agent, any Lender and any other Indemnified Party harmless against all claims and defenses asserted by any buyer of the Channel Financed Inventory relating to the condition of, or any representations regarding, any of the Channel Financed Inventory.  Resellers irrevocably waive all rights of offset and counterclaims it may have against Administrative Agents, the Collateral Agent or any Lender except counterclaims arising in the case of Administrative Agents’, the Collateral Agent’s or any Lender’s willful misconduct or gross negligence; provided, however, that in no event shall any Reseller be required to indemnify such Indemnified Parties for more than one counsel to the Administrative Agent (and up to one local counsel in each applicable jurisdiction and regulatory counsel) and one counsel for all of the other Lenders (and up to one local counsel in each applicable jurisdiction and regulatory counsel), unless a Lender or its counsel determines that it would create actual or  potential conflict of interest to not have individual counsel, in which case each Lender may have its own counsel which shall be reimbursed in accordance with the foregoing.

 

14.6.2            The obligations of Resellers under this Section 14.6 shall survive the termination of the Facilities, the indefeasible full payment and satisfaction of all of the Loan Obligations, and the release of the Collateral.  All amounts, obligations and liabilities referred to in Section 14.6.1 shall be deemed to be a part of the Loan Obligations and shall be paid to Administrative Agents on demand.  To the extent that any of the indemnities required from Resellers under this Section are unenforceable because they violate any Law or public policy, Resellers shall pay the maximum amount which it is permitted to pay under applicable Law.

 

14.7           Changes in Accounting Principles.  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 the Parent Guarantor notifies the Administrative Agents that the Parent Guarantor requests 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 Administrative Agents notify the Parent Guarantor that the Required Lenders 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.

 

14.8           Loan Records.  The date and amount of all Advances to Resellers and payments of amounts due from Resellers under the Loan Documents will be recorded in the records that Administrative Agents normally maintain for such types of transactions.  The failure to record, or any error in recording, any of the foregoing shall not, however, affect the obligation of Resellers to repay the Loans and other amounts payable under the Loan Documents.  Resellers shall have the burden of proving that such records are not correct.  Resellers agree that Administrative Agents’ and any Lender’s books and records showing the Loan Obligations and the transactions pursuant to this Agreement shall be admissible in any action or proceeding arising therefrom, and shall constitute prima facie proof thereof (absent manifest error), irrespective of whether any Loan Obligation is also evidenced by a promissory note or other instrument.  Any statement sent by Administrative Agents or a Lender to a Reseller, the Parent Guarantor or a

 

  

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Domestic Subsidiary shall be deemed correct, accurate and binding on the Resellers and an account stated (except for reversals and reapplications of payments as provided in Section 6.5 and corrections of errors discovered by Administrative Agents or a Lender) (absent manifest error), unless Resellers notify Administrative Agents in writing to the contrary within 60 days after such statement is rendered.  In the event a timely written notice of objections is given by Resellers, only the items to which exception is expressly made will be considered to be disputed by Resellers

 

14.9           Other Security and Guaranties.  Administrative Agents or any Lender may, without notice or demand and without affecting Resellers’ obligations hereunder, from time to time, for the benefit of the other Lenders and Administrative Agents (based upon each Lender’s Pro-Rata Share):  (a) take from any Person and hold collateral (other than the Collateral) for the payment of all or any part of the Loan Obligations and exchange, enforce and release such collateral or any part thereof; and (b) accept and hold any endorsement or Guarantee of payment of all or any part of the Loan Obligations and release or substitute any such endorser or Guarantor, or any Person who has given any Lien in any other collateral as security for the payment of all or any part of the Loan Obligations, or any other Person in any way obligated to pay all or any part of the Loan Obligations.

 

14.10           Loan Obligations Payable in Dollars.  All Loan Obligations shall be payable only in Dollars.

 

14.11           Confidentiality.  Administrative Agents may obtain from any Vendor any credit, financial or other information regarding Resellers that such Vendor may from time to time possess.  Each Administrative Agent, the Collateral Agent and each Lender agrees that it will not disclose to third Persons any information that it obtains about a Reseller, the Parent Guarantor or a Domestic Subsidiary or their operations or finances that constitutes non-public information.  Each Administrative Agent and any Lender may, however, disclose such information to their Affiliates, to each other, to each other’s Affiliates, and to all of the officers, attorneys, auditors, accountants, bank examiners, agents and representatives of the foregoing who have a need to know such information in connection with the administration, interpretation or enforcement of the Loan Documents or the lending and collection activity contemplated therein or to the extent required by Law or a Governmental Authority (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential and in the case of any disclosure to the to the extent required by Law or a Governmental Authority, such Administrative Agent or such Lender, as applicable, agrees (except with respect to any audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising examination or regulatory authority), to the extent practicable and not prohibited by applicable law, to inform the Parent Guarantor promptly thereof prior to disclosure).  Each Administrative Agent or any Lender may also disclose such information in any documents that it files in any legal proceeding or otherwise to pursue, enforce or preserve its rights under the Loan Documents.  Each Administrative Agent may also disclose credit, financial, or other information on Resellers in such Administrative Agent’s possession to the Lenders, Vendors and potential Vendors, or any Persons liable for the Loan Obligations; provided, however, each Administrative Agent will use its commercially reasonably efforts not to provide copies of Parent Guarantor’s financial statements to any such Vendors or potential Vendors without Borrowing Agent’s prior written consent, although in the event an Administrative Agent does provide copies of Parent Guarantor’s financial statements to any such Vendors or potential Vendors, it shall have no liability for such disclosure.  Administrative Agents’ and Lenders’ nondisclosure obligation shall not apply to any information that (i) is disclosed to an Administrative Agent or any Lender by a third Person not affiliated with or employed by a Reseller who does not, to such Administrative Agent’s or such Lender’s knowledge, have a commensurate duty of nondisclosure, or (ii) is or becomes publicly known other than as a result of disclosure by an Administrative Agent or a Lender.

 

  

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14.12           Reserved.

 

14.13           Jury Trial Waiver; Service of Process; Forum.

 

14.13.1                      Jury Trial Waiver.  ANY LEGAL PROCEEDING WITH RESPECT TO ANY DISPUTE (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, or (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM IN RESPECT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER OR NOT SOUNDING IN CONTRACT OR TORT OR OTHERWISE, WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE WITHOUT A JURY.  EACH RESELLER, EACH ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND EACH LENDER WAIVE ANY RIGHT TO A JURY TRIAL IN ANY SUCH PROCEEDING.  EACH RESELLER, EACH ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND EACH LENDER FURTHER AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT EITHER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

14.13.2                      Choice of Forum.  Subject only to the exception in the next sentence, Resellers, Administrative Agents, Collateral Agent and each Lender hereby agree to the non-exclusive jurisdiction of any local, state or federal court located within the borough of Manhattan, New York, and waives any objection based on venue or forum non conveniens with respect to any action instituted therein, and agrees that any dispute concerning the relationship between Administrative Agents, Collateral Agent, Lenders, and Resellers or the conduct of any of them in connection with this Agreement or otherwise shall be heard only in the courts described above.  Notwithstanding the foregoing:  (1) Administrative Agents or any Lender shall have the right to bring any action or proceeding against a Reseller or its property in any courts of any other jurisdiction Administrative Agents or any Lender deem necessary or appropriate in order to realize on the Collateral, real estate or other security for the Loan Obligations, and (2) each party hereto acknowledges that any appeals from the courts described in the immediately preceding sentence may have to be heard by a court located outside those jurisdictions.

 

14.13.3                      Service of Process.  Each Reseller, each Administrative Agent, the Collateral Agent and each Lender hereby waives personal service of any and all process upon it and consents that all such service of process may be made by registered mail (return receipt requested) directed to such party at its address set forth on the signature pages hereof, and service so made shall be deemed to be completed five (5) days after the same shall have been so deposited in the U.S. mail.  Nothing in this Section shall affect the right of Administrative Agents or any Lender to serve legal process in any other manner permitted by Law.

 

15.           Portal.  CPC, as an Administrative Agent, may, from time to time at its sole option, permit Resellers to access and use one or more internet web sites (the “Portal”) to obtain items or information and take other actions in connection with this Agreement, subject to the following:

 

A.           Resellers shall access and use the Portal solely through duly authorized employees of a Reseller to whom CPC has issued a user name and password (an “Authorized Employee”);

 

  

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B.           submission of a user name and password to access and use the Portal, constitutes Resellers’, and the applicable Authorized Employee’s, representation that the person submitting such user name and password is the specific person identified by such user name and password and that such person is, at the time of such access and use, a Reseller’s employee duly authorized to act for and on behalf of a Reseller; and

 

C.           CPC, as an Administrative Agent, may, from time to time at its sole option and without notice or liability:

 

1.           amend the terms for use of the Portal by posting amended terms on the Portal (and such amended terms shall automatically be effective upon posting), and

 

2.           suspend or revoke a Reseller’s and/or an Authorized Employee’s access to, and use of the Portal and/or modify, update or discontinue all or any portion of the Portal.

 

16.           Reserved.

 

17.           Miscellaneous.

 

17.1           Notices.  All notices, consents, requests and demands to or upon the respective parties hereto shall be in writing, and shall be deemed to have been given or made when delivered in person to those Persons listed on the signature pages hereof or four (4) days after the date when deposited in the United States mail, postage prepaid, or, in the case of the overnight courier services, one Business Day after delivery to the overnight courier service, or in the case of notice by electronic or facsimile transmission, when sent, verification received, in each case addressed as set forth on the signature pages hereof, or to such other address as either party may designate by notice to the other in accordance with the terms of this Section.  No notice given to or demand made on any Reseller by Administrative Agents or any Lender in any instance shall entitle any Reseller to notice or demand in any other instance.

 

17.2           Amendments and Modifications; Waivers and Consents; All Lenders.  Unless otherwise provided herein, no amendment to or modification of any provision of this Agreement, or of any of the other Loan Documents shall be effective unless it is in writing and signed by authorized officers of Resellers and Required Lenders (or Administrative Agents with the consent of the Required Lenders).  Unless otherwise provided herein, no waiver of, or consent to any departure by a Reseller from, the requirements of any provision of this Agreement or any of the other Loan Documents shall be effective unless it is in writing and signed by authorized officers or representatives of Required Lenders (or Administrative Agents with the consent of the Required Lenders).  Any such amendment, modification, waiver or consent shall be effective only in the specific instance and for the purpose for which given.

 

The foregoing notwithstanding, no such amendment, modification or consent shall, unless signed by authorized officers of Resellers (or the manager of the applicable Reseller) and authorized officers or representatives of all Lenders directly and adversely affected thereby:

 

(a)           reduce or forgive the repayment of principal of any Advance due to such Lender,

 

(b)           postpone or delay the Termination Date of such Lender’s Loans,

 

(c)           change the percentage referred to in the definition of Required Lenders herein,

 

  

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(d)           release a Reseller from its obligations under the Loan Documents (except as a result of a transaction permitted by Section 11.3),

 

(e)           change any provisions of this Agreement requiring ratable distributions to Lenders,

 

(f)           reduce the interest rate payable to  Lenders (other than CPC) for Channel Finance Loan Advances under Section 4.4 without the consent of such Lender,

 

(g)           exchange, waive, or release the Liens in all or substantially all of the Collateral (except as expressly permitted hereby), or

 

(h)           change the provisions of Section 6.7;

 

provided, however that no amendment to this Section 17.2 shall be effective, unless signed by authorized officers of Resellers (or the manager of the applicable Reseller) and authorized officers or representatives of all Lenders; and provided further, however, that to the extent not permitted by Section 11.3, Administrative Agents and the Collateral Agent may, in their absolute discretion and without the consent of any Lender or any Reseller, the Parent Guarantor or any Domestic Subsidiary or any Guarantor, permit a Reseller or such other applicable Person to exchange, waive or release the Liens in any of the Collateral so long as the fair market value of the Collateral which is exchanged or for which the Liens are waived or released does not exceed $50,000 in each instance and $100,000 in the aggregate per calendar year.  In addition, the Dollar amount of the Channel Finance Loan Facility of any Lender may not be increased without the consent of such Lender and the Administrative Agents; and if the aggregate amount of any Facility is increased, then only the consent of the Lenders participating in any such increase, the Administrative Agents and the Resellers shall be required.  No notice to or demand on a Reseller in any instance shall entitle such Reseller to any other or further notice or demand in another similar or different instance.  No failure by Administrative Agents, the Collateral Agent or any Lender to exercise, and no delay by Administrative Agents, the Collateral Agent or any Lender in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Administrative Agents or any Lender of any right, remedy, power or privilege hereunder preclude any other exercise thereof, or the exercise of any other right, remedy, power or privilege existing under any Law or otherwise.

 

17.3           Replacement of Lenders.

 

(a)           If any action to be taken by the Lenders, Administrative Agents or Collateral Agent hereunder requires the unanimous consent, authorization, or agreement of all Lenders or the consent of all Lenders directly and adversely affected thereby, and a Lender disapproves of the action or fails to give its consent, authorization, or agreement (such Lender, a “Non-Consenting Lender”), or (ii) if any Lender requests a payment pursuant to Section 4.5 or 4.7 herein (such Lender, together with any Non-Consenting Lender, a “Holdout Lender”), then the Borrowing Agent, upon at least one (1) Business Day’s prior notice to the Holdout Lender, may replace the Holdout Lender with one or more substitute Lenders (each, a “Replacement Lender”), and the Holdout Lender shall have no right to refuse to be replaced hereunder.  Such notice to replace the Holdout Lender shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.

 

(b)           Prior to the effective date of such replacement, the Holdout Lender and each Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the Holdout Lender being repaid its share of the outstanding Loan Obligations without any premium or penalty of any kind whatsoever.  If the Holdout Lender shall refuse or fail to execute and deliver any such

 

  

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Assignment and Acceptance prior to the effective date of such replacement, the Holdout Lender shall be deemed to have executed and delivered such Assignment and Acceptance.  The replacement of any Holdout Lender shall be made in accordance with the terms of Section 14.4.  Until such time as the Replacement Lenders shall have acquired all of the Loan Obligations, the commitments, and the other rights and obligations of the Holdout Lender hereunder and under the other Loan Documents, the Holdout Lender shall remain obligated to make the Holdout Lender’s Pro-Rata Share of Advances.  Upon replacement of a Holdout Lender with a Replacement Lender, the Replacement Lender shall assume and be bound by the terms and conditions of this Agreement and the other Loan Documents.

 

17.4           Course of Dealing.  Acceptance of or acquiescence in a course of performance or course of dealing rendered or taken under or with respect to this Agreement or the other Loan Documents will not be relevant in any respect to determine the meaning of this Agreement or the other Loan Documents, or the obligations or liabilities of the parties hereto under this Agreement or the other Loan Documents, even though the accepting or acquiescing party had knowledge of the nature of the performance and opportunity for objection.

 

17.5           Rights Cumulative.  Each of the rights and remedies of Administrative Agents and Lenders under this Agreement shall be in addition to all of their other rights and remedies under applicable Law, and nothing in this Agreement shall be construed as limiting any such rights or remedies.

 

17.6           Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that Resellers may not assign, delegate or transfer any of its rights or obligations under this Agreement without the prior written consent of Administrative Agents and each Lender.  With respect to a Reseller’s successors and assigns, such successors and assigns shall include any receiver, trustee or debtor-in-possession of or for such Reseller.

 

17.7           Severability.  Any provision of this Agreement which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or lack of authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction unless the ineffectiveness of such provision would result in such a material change as to cause completion of the transactions contemplated hereby to be unreasonable.

 

17.8           Counterparts.  This Agreement may be executed by the parties hereto on any number of separate counterparts, and all such counterparts taken together shall constitute one and the same instrument.  It shall not be necessary in making proof of this Agreement to produce or account for more than one counterpart signed by the party to be charged.

 

17.9           Governing Law; No Third Party Rights.  This Agreement and the rights and obligations of the parties hereunder shall be governed by and construed and interpreted in accordance with the Laws of the State of New York.  This Agreement is solely for the benefit of the parties hereto and their respective successors and assigns, and no other Person shall have any right, benefit, priority or interest under, or because of the existence of, this Agreement.

 

17.10           Counterpart Facsimile Execution.  For purposes of this Agreement, a document (or signature page thereto) signed and transmitted by facsimile machine or other electronic image scan transmission (e.g., “pdf” or “tif” via e-mail) is to be treated as an original document.  The signature of any Person thereon, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature on an original document.

 

  

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17.11           No Other Agreements.  There are no other agreements (other than the Loan Documents) between Administrative Agents, the Collateral Agent, Lenders, and Resellers, oral or written, concerning the subject matter of the Loan Documents, and all prior agreements concerning the same subject matter, including any proposal or commitment letter or term sheets, are merged into the Loan Documents and thereby extinguished.

 

17.12           Waiver of Right to Seek Punitive and Exemplary Damages.  Each Reseller, each Administrative Agent, the Collateral Agent and each Lender hereby irrevocably waives forever any right to obtain or claim for punitive or exemplary damages from any other party to this Agreement.

 

17.13           Negotiated Transaction.  Each Reseller, each Administrative Agent, the Collateral Agent and each Lender represent each to the others that in the negotiation and drafting of this Agreement and the other Loan Documents they have been represented by and have relied upon the advice of counsel of their choice.  Resellers, the Collateral Agent and Administrative Agents affirm that their counsel have both had substantial roles in the drafting and negotiation of this Agreement and each Lender affirms that its counsel has participated in the drafting and negotiation of this Agreement; therefore, this Agreement will be deemed drafted by Resellers, Administrative Agents, the Collateral Agent and Lenders, and the rule of construction to the effect that any ambiguities are to be resolved against the drafter will not be employed in the interpretation of this Agreement.

 

17.14           Incorporation By Reference.  All of the terms of the other Loan Documents are incorporated in and made a part of this Agreement by this reference.

 

17.15           Customer Identification - USA Patriot Act Notice.  Each Administrative Agent and each Lender hereby notifies the Resellers and each Guarantor that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001 (as amended from time to time (including any successor statute) and together with all rules promulgated thereunder, collectively, the “Act”), it is required to obtain, verify and record information that identifies the Resellers and any Guarantor, which information includes the name and address of any Reseller and any Guarantor and other information that will allow Administrative Agents and each Lender to identify each Reseller and each Guarantor in accordance with the Act.

 

17.16           No Novation; References to this Agreement in Loan Documents.

 

(a)           It is the express intent of the parties hereto that this Agreement (i) shall re-evidence the Resellers’ indebtedness under the Existing Credit Agreement, (ii) is entered into in substitution for, and except as provided in Section 7.1 hereof, not in payment of, the obligations of the Resellers under the Existing Credit Agreement, and (iii) is in no way intended to constitute a novation of any of the Resellers’ indebtedness which was evidenced by the Existing Credit Agreement or any of the other Loan Documents. Subject to Section 7.1 hereof, Loans made and Secured Obligations incurred under the Existing Credit Agreement which are outstanding on the Effective Date and not immediately repaid  in connection with the reallocations described below shall continue, after giving effect to the reallocations described below, as Loans and Secured Obligations under (and shall be governed by the terms of) this Agreement. Without limiting the foregoing, upon the effectiveness hereof: the Administrative Agents shall make such reallocations of each Lender’s “Commitment” under the Existing Credit Agreement as necessary in order that such Lender’s Commitment hereunder reflects such Lender’s pro rata share of the Loans.

 

(b)           Upon the effectiveness of this Agreement, on and after the date hereof, each reference in any other Loan Document to the Existing Credit Agreement (including any reference therein to “the

 

  

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Credit Agreement,” “thereunder,” “thereof,” “therein” or words of like import referring thereto) shall mean and be a reference to this Agreement.

 

 

{remainder of page intentionally left blank; signature pages follow}

 

  

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by appropriate duly authorized officers as of the Effective Date.

 

CASTLE PINES CAPITAL LLC,

as Administrative Agent and a Lender

 

WELLS FARGO CAPITAL FINANCE, LLC

as Administrative Agent and Collateral Agent

 

By:       /s/ John Hanley                       

           Name:  John Hanley

Title:  Senior Vice President

 

Applicable Lending Office/Notice Address – Administrative Agents:

c/o Castle Pines Capital LLC,

116 Inverness Drive East, Suite 375

Englewood, CO  80112

Attn:  Mr. John Hanley

FAX # (303) 209-1906

TEL # (303) 209-1941

 

Signature Page to

Second Amended and Restated Syndicated Credit Agreement

  

  

  

BRANCH BANKING AND TRUST COMPANY,

as a Lender

 

 

By:       /s/  Kelley Rumps                                         

Name:  Kelley Rumps

Title:     Senior Vice President

 

Notice Address for Lender:

 

Robert Besser

1880 Century Partk, Ste. 400

Los Angeles, CA  90067

 

Signature Page to

Second Amended and Restated Syndicated Credit Agreement

  

  

  

BANK OF AMERICA, N.A.,

as a Lender

 

 

 

By:       /s/ Kenneth J. Tebelman                            

Name:  Kenneth J. Tebelman

Title:    Vice President

 

Notice Address for Lender:

 

Kenneth J. Tebelman

Vice President

201 E. Washington Str, 22nd Flor

Phoenix, AZ 85004

Phone: 602-523-2034

Fax: 415-796-5654

Signature Page to

Second Amended and Restated Syndicated Credit Agreement

  

  

  

ZB, N.A. dba National Bank of Arizona

 

 

as a Lender

 

 

 

By:       /s/ Sabina Aaronson                                  

Name:  Sabina Aaronson

Title:    Vice President

 

Notice Address for Lender:

 

Sabina Anthony

Vice President

6001 North 24th Street

Phoenix, AZ 85016

Phone: 602-212-6433

Fax:: 602-351-3833

 

With a copy to:

 

[_________________________]

One South Main Street

 11th Floor

Salt Lake City, UT 84133

Attn: Kami Peterson, Vice President

Phone: 801-229-8817

Fax: 801-844-5946

Signature Page to

Second Amended and Restated Syndicated Credit Agreement

  

  

  

BANK OF THE WEST,

as a Lender

 

 

 

By:      /s/ Kevin Gillette                                                    

Name:  Kevin Gillette

Title:    CBG Market Manager, Director

 

Notice Address for Lender:

 

Kevin Gillette

CBG Market Manager, Director

7272 East Indian Road

Scottsdale, AZ  85251

Phone: 480-425-4412

Signature Page to

Second Amended and Restated Syndicated Credit Agreement

  

  

  

BOKF, NA dba Bank of Arizona,

as a Lender

 

 

 

By:       /s/ James Wessel                                                 

Name:  James Wessel

Title:    Senior Vice President

 

Notice Address for Lender:

 

Christine A. Nowaczyk

Senior Vice President

16767 N. Perimeter Drive

Suite 200

Scottsdale, AZ 85260

Phone: 602-808-5332

Fax: 602-808-5377

 

With a copy to:

 

Kim Schnoebelen

Assistant Vice President

16767 N. Perimeter Dr

Suite 200

Scottsdale, AZ

Phone: 602-808-5343

Fax: 602-808-5377

Signature Page to

Second Amended and Restated Syndicated Credit Agreement

  

  

  

COMERICA BANK,

as a Lender

 

 

 

By:       /s/ Liz V. Gonzalez                                     

Name:  Liz V. Gonzalez

Title:    Assistant Vice President

 

Notice Address for Lender:

 

Fatima Arshad

Vice President

611 Anton Boulevard, 4th Floor

Costa Mesa, CA 92626

Phone: 303-357-6112

Fax: 714-433-3234

 

With a copy to:

 

Douglas M. Kilbourne, Esq.

150 West Jefferson, Suite 2500

Detroit, MI 48226

Phone: 313-496-7642

Fax: 313-496-8451

Signature Page to

Second Amended and Restated Syndicated Credit Agreement

  

  

  

CALENCE, LLC, as a Reseller

By:  Insight Direct USA, Inc., its Manager

 

 

 

By:        /s/ Lynn Willden                                           

Name:  Lynn Willden

Title:    Treasurer

 

INSIGHT DIRECT USA, INC., as a Reseller

 

 

 

By:       /s/ Lynn Willden                                               

Name:  Lynn Willden

Title:    Treasurer

 

INSIGHT PUBLIC SECTOR, INC., as a Reseller

 

 

By:       /s/ Lynn Willden                                               

Name:  Lynn Willden

Title:    Treasurer

 

Notice Address for Borrowing Agent:

 

 

INSIGHT DIRECT USA, INC.

 

c/o Insight Enterprises, Inc.

6820 South Harl Avenue

Tempe, Arizona 85283

Attn: Glynis Bryan

Phone: (480) 333-3390

Fax: (480) 760-8894

 

With a copy to:

 

6820 South Harl Avenue

Tempe, Arizona 85283

Attn: General Counsel

Phone: (480) 333-3049

Fax: (480) 760-8341

 

Signature Page to

Second Amended and Restated Syndicated Credit Agreement

  

  

  

EXHIBIT A

 

LENDERS’ FACILITIES AND PRO-RATA SHARES

 

 

CHANNEL FINANCE LOAN FACILITY

 

	
LENDER

	
CHANNEL FINANCE LOAN

FACILITY

	
PRO-RATA

SHARE

	
Castle Pines Capital LLC

	
$193,500,000

	
59.54%

	
Branch Banking And Trust Company

	
$17,000,000

	
5.23%

	
Bank of America, N.A.

	
$35,000,000

	
10.77%

	
ZB, N.A. dba National Bank of Arizona

	
$25,000,000

	
7.69%

	
Bank of the West

	
$22,500,000

	
6.92%

	
BOKF, dba Bank of Arizona

	
$17,000,000

	
5.23%

	
Comerica Bank

	
$15,000,000

	
4.62%

	
Total

	
$325,000,000

	
100.00%

  

A-1

 

EXHIBIT B

 

DEFINITIONS

 

As used in this Agreement, each of the following capitalized terms means:

 

ACCORDION INCREASE – is defined in Section 3.3(a).

 

ACCORDION maximum amount – is defined in Section 3.3(a).

 

Account – as to any Person, means the right of such Person to payment for goods sold or leased or for services rendered by such Person.

 

Account Debtor – means the obligor on any Account.

 

Acquired Entity – means the assets or Person acquired in connection with a Permitted Acquisition or other investment permitted under Section 11.4.

 

Adjusted LIBOR Rate – means an interest rate per annum equal to (a) the LIBOR Rate for a one-month period multiplied by (b) the Statutory Reserve Rate.

 

Administrative Agents – means each of Wells Fargo Capital Finance, LLC, a Delaware limited liability company, and Castle Pines Capital LLC, a Delaware limited liability company, in its respective capacity as an Administrative Agent under this Agreement, and each of their respective successors and assigns in such capacity.

 

Administrative Agent Deficiency Amount – is defined in Section 4.4.

 

Advance – means the principal amount of the obligations for which Resellers are liable to Lenders under this Agreement, which may arise from sums Lenders have loaned or advanced or assumed or committed to loan or advance or assume (after issuance of a Transaction Statement) to or on behalf of Resellers pursuant to this Agreement.

 

Advance Date – means the date on which an Advance is made pursuant to this Agreement.

 

Affiliate – means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

Agents – is defined in Section 13.9.

 

Aggregate Channel Finance Loans – means the outstanding principal balance of all Channel Finance Loan Advances.

 

Aggregate Channel Finance Loan Facility – means the aggregate line of credit made available by the Lenders as stated in Section 3.1.1 as increased by the Accordion Increase, to fund Channel Finance Loan Advances.

 

Aggregate Channel Finance Loan Facility Limit – means Three Hundred Twenty-Five Million Dollars ($325,000,000), as may be reduced pursuant to the terms of Section 3.2.2 of this Agreement or increased pursuant to Section 3.3 of this Agreement.

  

B-1

  

Agreement and this Agreement – means this Second Amended and Restated Credit Agreement (including each exhibit or schedule hereto, whether or not physically attached to this document).

 

Applicable Lending Office – for each Administrative Agent and each Lender and for each Loan, means the “Applicable Lending Office” of such Administrative Agent or such Lender (or of an affiliate of such Lender) designated for such Loan on the signature pages hereof or such other office of such Lender (or an affiliate of such Administrative Agent or such Lender) as such Administrative Agent or such Lender may from time to time specify to the Administrative Agents (in the case of another Lender) and the Resellers by written notice in accordance with the terms hereof as the office by which its Loans are to be made and maintained.

 

Applicable Rate -- means, for any day, with respect to any Adjusted LIBOR Loan as the case may be, the applicable rate per annum set forth below under the caption “Adjusted LIBOR Spread”, based upon the Total Leverage Ratio as reflected in the then most recently delivered quarterly or annual financials as required under Section 10.1:

 

	
Pricing Level:

	 	
Total Leverage Ratio:

	  	
Adjusted LIBOR Spread:

	 	 	 	 	 
	
Level I

	 	
Less than 1.00 to 1.00

	  	
1.25%

	 	 	 	 	 
	
Level II

	 	
Equal to or greater than 1.00 to 1.00 but less than 1.50 to 1.00

	  	
1.50%

	 	 	 	 	 
	
Level III

	 	
Equal to or greater than 1.50 to 1.00 but less than 2.00 to 1.00

	  	
1.75%

	 	 	 	 	 
	
Level IV

	 	
Equal to or greater than 2.00 to 1.00 but less than 2.50 to 1.00

	  	
2.00%

	 	 	 	 	 
	
Level V

	 	
Equal to or greater than 2.50 to 1.00

	  	
2.25%

 

Notwithstanding the foregoing, during the period beginning on the Effective Date and ending on the date of delivery of the applicable financials for the fiscal quarter of the Parent Guarantor ending June 30, 2016, the Applicable Rate shall be based on Pricing Level I, and thereafter, the Applicable Rate shall be determined in accordance with the preceding table and provisions.

 

Approval – means CPC’s approval to finance particular Inventory for Resellers which is evidenced by CPC’s issuing a financing approval number to the Vendor of such Inventory.  “Approval” also means (i) any open-to-buy authorization given by CPC to a Vendor, pursuant to which CPC may authorize such Vendor to assume CPC’s approval to finance inventory until CPC affirmatively withdraws such authorization, and (ii) any Approval for which CPC has not made an Interim Channel Finance Loan Advance or the Lenders have not made a Channel Finance Loan Advance as a result of CPC’s not receiving the invoice from the Vendor for the Inventory which is subject to the Approval.

 

Approved Vendor – is defined in Section 3.1.5.

 

Assignment And Acceptance – means an Assignment and Acceptance in the form attached hereto as Exhibit E.

 

  

B-2

  

Attributable Debt in respect of a Sale and Leaseback Transaction that is a Capitalized Lease Obligation means, at any date of determination, the amount of Indebtedness represented thereby according to the definition of “Capitalized Lease Obligation.”

 

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

 

Authorized Employee – is defined in Section 15.

 

Average Daily Balance – is defined in Section 5.5.3.

 

Bankruptcy Code – means Title 11 of the United States Code, as amended or replaced from time to time.

 

Bankruptcy Event –means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business, appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such  ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality), to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

 

Board - means the Board of Governors of the Federal Reserve System of the United States of America.

 

Borrowing Agent – is defined in Section 2.8.

 

Business Day – means a day other than a Saturday, Sunday, or other day on which commercial banks are authorized or required to close under the Laws of either the United States or the State of Colorado.

 

Calence – means Calence, LLC, a Delaware limited liability company.

 

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 the Parent Guarantor 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 the Parent Guarantor or a Subsidiary is reimbursed promptly by the lessor.

 

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

 

  

B-3

  

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.

 

Cash Pooling Arrangements means cash pooling arrangements maintained by the Foreign Subsidiaries of the Parent Guarantor in the ordinary course of business in order to manage currency fluctuations and overdrafts among deposit accounts of such Subsidiaries.

 

Change of Control – means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of Equity Interests representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Parent Guarantor; or (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Parent Guarantor by Persons who were neither (i) (x) nominated by the board of directors of the Parent Guarantor, (y) appointed by the board of directors of the Parent Guarantor or (z) approved by the board of directors of the Parent Guarantor for consideration by the shareholders for election nor (ii) appointed by directors so nominated, appointed or approved.

 

Channel Financed Inventory – means a Reseller’s Inventory which has been originally financed under the terms of this Agreement from Approved Vendors in which Collateral Agent has a first priority, perfected Lien (subject to no other Lien, other than Permitted Encumbrances) that is unsold and not leased by such Reseller and is in such Reseller’s possession and control as of the date of determination, excluding any Inventory reported by such Reseller as demonstration items or Inventory that is obsolete or otherwise unmerchantable.

 

Channel Finance Loan – means any Lender’s Pro-Rata Share of the Aggregate Channel Finance Loans.

 

Channel Finance Loan Advance – means an Advance by Lenders under the Aggregate Channel Finance Loan Facility.

 

Channel Finance Loan Facility – means the line of credit made available by each Lender as stated in Section 3.1.1 to fund Channel Finance Loan Advances.

 

Code -- means the Internal Revenue Code of 1986, as amended from time to time.

 

Collateral – means any and all property owned, leased or operated by a Loan Party covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a Lien in favor of the Collateral Agent, on behalf of the Holders of Secured Obligations, to secure the Secured Obligations.

 

Collateral Agent – means Wells Fargo Capital Finance, LLC, a Delaware limited liability company, in its capacity as Collateral Agent under this Agreement, and each of its successors and assigns in such capacity.

 

Collateral Documents – means the Security Agreements, the Pledge Agreements, the Intellectual Property Security Agreements, and all other security agreements, mortgages, deeds of trust, pledges, assignments, financing statements and all other written matter whether now or hereafter executed by any Loan Party that are intended to create or evidence Liens on the assets of any Loan Party to secure the Secured Obligations.

 

  

B-4

  

Collection Account – means that certain bank account designated by the Administrative Agents, information for which has been separately provided to Resellers or such other bank account as the Administrative Agents may from time to time specify to Resellers by written notice in accordance with the terms hereof.

 

Commitment – means, with respect to each Lender, the commitment of such Lender to make Channel Finance Loans and to acquire participations in Interim Channel Finance Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Channel Finance Loan Facility exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 3.2, and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 14.4.  The initial amount of each Lender’s Commitment is set forth on Exhibit A, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.  The aggregate amount of the Commitments on the Effective Date is $325,000,000.

 

Compliance Certificate – means a certificate of a Financial Officer of the Parent Guarantor substantially in the form of Exhibit D.

 

Consolidated Capital Expenditures – means, with reference to any period, the Capital Expenditures of the Parent Guarantor and its Subsidiaries calculated on a consolidated basis for such period.

 

Consolidated EBITDA – means, for any Test Period, the sum of (a) Consolidated Net Income for such Test Period plus (b) to the extent deducted in determining Consolidated Net Income for such Test Period, (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 compensation charge arising from any grant of stock, stock options or other equity-based awards, (vii) any cash expenses or charges related to any issuance of Equity Interests, Permitted Acquisition or other acquisition, disposition, recapitalization or the incurrence, prepayment, amendment, modification, restructuring or refinancing of Indebtedness, in each case, (x) solely to the extent such transaction is not prohibited by this Agreement and (y) whether or not such transaction is consummated, in an aggregate amount not to exceed $15,000,000 during any Test Period, (viii) cash costs, expenses and fees incurred in connection with the Transactions and (ix) cash restructuring charges (including in connection with headcount reductions, costs related to the closure, consolidation and integration of facilities, IT infrastructure and legal entities, severance costs and retention bonuses) in an amount, when aggregated with the amount of any increase to Consolidated EBITDA pursuant to clause (y) of the last sentence of the definition of “Pro Forma Basis,” not to exceed 10% of Consolidated EBITDA for such Test Period (calculated prior to giving effect to any increase pursuant to this clause (ix) or clause (y) of the last sentence of the definition of “Pro Forma Basis”) minus (c)(i) to the extent included in Consolidated Net Income for such Test Period, 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 the Parent Guarantor and its Subsidiaries on a consolidated basis.

 

Consolidated Funded Indebtedness – means, at any time, the sum (without duplication) of (i) the aggregate principal amount of Consolidated Indebtedness owing by the Parent Guarantor and its Subsidiaries 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 the Parent Guarantor and its Subsidiaries is the account party (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 the Parent Guarantor and its Subsidiaries (it being understood that Consolidated Funded Indebtedness shall not include amounts outstanding under this

 

  

B-5

  

Agreement, any Vendor Trade Program or any Contract Payment Sale Indebtedness, in each case, so long as such amounts are not bearing interest payable by a Loan Party).

 

Consolidated Indebtedness – means, at any time, the Indebtedness of the Parent Guarantor and its Subsidiaries calculated on a consolidated basis as of such time.

 

Consolidated Interest Expense – means, with reference to any period, the interest expense of the Parent Guarantor and its Subsidiaries calculated on a consolidated basis for such period, including, without limitation, yield or any other financing costs resembling interest which are payable under any Permitted Receivables Facility.

 

Consolidated Net Income – means, with reference to any period, the net income (or loss) of the Parent Guarantor and its Subsidiaries calculated on a consolidated basis for such period.

 

Consolidated Rentals – means, with reference to any period, the Rentals of the Parent Guarantor and its Subsidiaries calculated on a consolidated basis for such period.

 

Contract Payment –has the meaning set forth in the definition of “Contract Payment Sale”.

 

Contract Payment Purchaser– has the meaning set forth in the definition of “Contract Payment Sale”.

 

Contract Payment Sale –means a transaction in which a Loan Party enters into a lease, managed services arrangement or software licensing agreement with a U.S. state or federal Governmental Authority or other Person pursuant to which (i) such Loan Party will lease certain equipment, provide certain managed services or license certain software to such Governmental Authority or other Person, (ii) such Governmental Authority or other Person is obligated to make a series of payments to such Loan Party during the term of such lease, managed services arrangement or software license (each such payment, a “Contract Payment”), (iii) such Loan Party sells or assigns a portion or all of such Contract Payments (and, in the case of a lease or managed services arrangement, the related equipment) and related proceeds to a third-party (a “Contract Payment Purchaser”) and (iv) such Loan Party is involved in the administration and servicing of such Contract Payments for such Contract Payment Purchaser during the term of such lease, managed services arrangement or software license.

 

Contract Payment Sale Indebtedness –means any remaining obligations of any Loan Party in respect of any Contract Payment Sale transaction that are recorded as a liability on the consolidated balance sheet of the Parent Guarantor and its Subsidiaries.

 

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.

 

Daily Charge – is defined in Section 4.3.3.

 

Daily Rate – is defined in Section 4.3.3.

 

Default – means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

 

Default Rate – is defined in Section 4.2.

 

  

B-6

  

Defaulting Lender – is defined in Section 5.5.1.

 

Disqualified Equity Interests – means Equity Interests that (a) require the payment of any cash dividends prior to the date that is 91 days after April 26, 2017, (b) mature or are mandatorily redeemable (other than solely for Qualified Equity Interests and cash in lieu of fractional shares of such Equity Interest) or subject to mandatory repurchase or redemption or repurchase at the option of the holders thereof (other than solely for Qualified Equity Interests and cash in lieu of fractional shares of such Equity Interest), 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 April 26, 2017 (other than (i) upon termination of the Commitments and payment in full of the Loan Obligations then due and owing or (ii) upon a “change in control” or asset sale, provided, that any payment required pursuant to this clause (ii) is subject to the prior repayment in full of the Loan Obligations or is otherwise contractually subordinated in right of payment to the Loan Obligations on terms reasonably satisfactory to the Administrative Agents) 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 April 26, 2017; provided, however, that if an Equity Interest in any Person is issued to any employee or pursuant to any plan for the benefit of employees of the Parent Guarantor or any of its Subsidiaries or by any such plan to such employees, such Equity Interest shall not constitute a Disqualified Equity Interest solely because it may be required to be repurchased by the Parent Guarantor or any of its Subsidiaries in order to satisfy applicable statutory or regulatory obligations of such Person or as a result of such employees’ termination, death or disability.

 

Dollars and the sign $ – mean lawful money of the United States.

 

Domestic Foreign Holding Company – means any Subsidiary incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia substantially all of the assets of which consist of Equity Interests in one or more Foreign Subsidiaries that are “controlled foreign corporations” within the meaning of Section 957 of the Code; provided, that such Subsidiary does not conduct any material business or activities other than the ownership of such Equity Interests in Foreign Subsidiaries.

 

Domestic Receivable - means any Receivable owed by an account debtor which is organized under the laws of the United States, any state thereof, or the District of Columbia.

 

Domestic Subsidiary – means any Subsidiary other than a Foreign Subsidiary and other than a Reseller.

 

Due Date – is defined in Section 6.1.2.

 

EDI – is defined in Section 6.1.2.

 

Effective Date – means the date when this Agreement is effective as provided in Section 1.

 

Eligible Assignee – means (i) a Lender (including any successor by merger); (ii) an Affiliate of a Lender; and (iii) subject to Section 14.4.1.1 and Section 14.4.1.2, any other Person approved by the Administrative Agents and the Resellers; provided, however, that neither any Reseller, any Guarantor, any Affiliate of any Reseller or any Guarantor nor any Defaulting Lender shall qualify as an “Eligible Assignee.”

 

Environmental Laws – means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any

 

  

B-7

  

Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters related to the foregoing.

 

Environmental Liability – means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Reseller, the Parent Guarantor or any Domestic Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

Equity Interests – means shares of capital stock, partnership interests and entitlements, 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.

 

ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder.

 

ERISA Affiliate means any trade or business (whether or not incorporated) that, together with the Parent Guarantor, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

 

ERISA Event – means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure with respect to any Plan to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Parent Guarantor or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Parent Guarantor or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Parent Guarantor or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal of the Parent Guarantor or any of its ERISA Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by the Parent Guarantor or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Parent Guarantor or any ERISA Affiliate of any notice, concerning the imposition upon the Parent Guarantor or any of its ERISA Affiliates of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

 

Event of Default – is defined in Section 12.1.

 

Exchange Rate - means, on any day, for purposes of determining the US Dollar Equivalent of any other currency, the rate at which such other currency may be exchanged into US Dollars, as set forth at approximately 11:00 a.m., Local Time, on such date on the Reuters World Currency Page for such currency.  In the event that such rate does not appear on any Reuters World Currency Page, the Exchange Rate with respect to such currency shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agents and the Resellers, or, in the absence of such an agreement, such Exchange Rate shall instead be calculated on the

 

  

B-8

  

basis of the arithmetical mean of the buy and sell spot rates of exchange of the Administrative Agents for such foreign currency on the London market at 11:00 a.m., Local Time, on such date for the purchase of US Dollars with such currency, for delivery two Business Days later; provided, that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agents may use any reasonable method it deems appropriate to determine such rate, and such determination shall be presumed correct absent manifest error.

 

Excluded Taxes – means, with respect to any Lender or Administrative Agent, (a) Taxes (i) imposed on (or measured by) its net income by the United States of America (or any political subdivision thereof), or by the jurisdiction under which such recipient is organized or incorporated or, in the case of any Lender, in which its principal office or any lending office from which it makes Loans hereunder is located (ii) or that are Other Connection Taxes, (b) any branch profit taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (a) above, (c) any withholding tax that is attributable to such Lender’s or Administrative Agent’s (as the case may be) failure to comply with Section 4.5.4, or (d) any tax that is imposed under FATCA or any withholding tax that is imposed by the United States of America (or any political subdivision thereof) on payments by a Reseller from an office within such jurisdiction and would apply as of the date such Lender becomes a party to this Agreement, or in the case of the portion of such withholding taxes applicable on an additional interest on a Loan acquired hereunder, the date of such acquisition, or relates to payments received by a new lending office designated by such Lender and is in effect and would apply at the time such lending office is designated, except, in the case of clause (d) above, to the extent that such withholding tax shall have resulted from the making of any payment by a Reseller to a location other than the office designated by the Administrative Agents or such Lender for the receipt of payments of the applicable type from the applicable Reseller.

 

Existing Default – means, as of any date, an Event of Default which has occurred and is continuing as of such date.

 

Facility – means the Interim Channel Finance Loan Facility of CPC and the Channel Finance Loan Facility of a Lender.  “Facilities” means all of the foregoing Facilities.

 

Facility Office – is defined in Section 4.5.5.

 

FATCA –means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code, and any intergovernmental agreements entered into in respect of any of the foregoing (together with the portions of any law, regulations, rules or practices implementing such intergovernmental agreements).

 

Federal Funds Rate – means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Wells Fargo Bank, N.A. on such day on such transactions as determined by the Administrative Agents.

 

Financial Officer – means any of the following officers of the Resellers, the Parent Guarantor or the Domestic Subsidiaries, as applicable:  chief executive officer, president, chief financial officer, treasurer, chief accounting officer, manager or senior vice president of finance.

 

  

B-9

  

Fixed Charge Coverage Ratio – means, as of the last day of any fiscal quarter of the Parent Guarantor, the ratio of (a)(i) Consolidated EBITDA during the Test Period then ended minus (ii) Consolidated Capital Expenditures during such Test Period minus (iii) cash dividends or distributions (excluding any repurchase of its Equity Interests made by the Parent Guarantor in accordance with Section 11.6) paid by the Parent Guarantor on its Equity Interests during such Test Period plus (iv) Consolidated Rentals during such Test Period, to (b)(i) Consolidated Interest Expense during such Test Period plus (ii) Consolidated Rentals during such Test Period plus (iii) expenses for taxes paid or taxes accrued during such Test Period (calculated for the Parent Guarantor and its Subsidiaries on a consolidated basis) plus (iv) any scheduled amortization of the principal portion of Indebtedness during such Test Period (other than amounts owing in connection with Permitted Receivables Facilities), including, without limitation, Capitalized Lease Obligations (calculated for the Parent Guarantor and its Subsidiaries on a consolidated basis).

 

Foreign Assets – means (i) the Equity Interests issued by Foreign Subsidiaries and (ii) the assets of Foreign Subsidiaries.

 

Foreign Receivables – means any Receivable other than a Domestic Receivable.

 

Foreign Subsidiary – means (a) any Subsidiary that is not organized or incorporated under the laws of the United States of America, any State thereof or the District of Columbia, (b) any Domestic Foreign Holding Company or (c) any Subsidiary the Equity Interests of which are directly or indirectly owned by any “controlled foreign corporation” within the meaning of Section 957 of the Code or any Domestic Foreign Holding Company.

 

GAAP – means generally accepted accounting principles in the United States of America.

 

Governmental Authority – means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, including, without limitation, any supra-national bodies such as the European Union or the European Central Bank and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

 

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.

 

Guarantor – each Person who from time to time executes and delivers to Collateral Agent for the benefit of Lenders a Guarantee of part or all of the Loan Obligations.

 

  

B-10

  

Hazardous Material – means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

Holders of Secured Obligations – means the holders of the Secured Obligations from time to time and shall refer to (i) each Lender in respect of its Loans, (ii) the Administrative Agents and the Lenders in respect of all other present and future obligations and liabilities of the Resellers, the Parent Guarantor or any Subsidiary Guarantor of every type and description arising under or in connection with this Agreement or any other Loan Document, (iii) each Person benefiting from indemnities made by the Resellers, the Parent Guarantor or any Subsidiary Guarantor hereunder or under other Loan Documents, and (iv) their respective successors, transferees and assigns.

 

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.

 

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 (i) current accounts payable incurred in the ordinary course of business and (ii) any bona-fide earn-out obligation until such obligation becomes (or should become) a liability on the balance sheet of such Person in accordance with GAAP and it not paid after being due and payable), (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 obligations, liabilities or indebtedness of the type described in clauses (a) through (e) and (g) through (l) of this definition, (g) all Capitalized Lease Obligations of such Person, (h) the principal component of 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), (i) the principal component of all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (j) Attributable Receivables Indebtedness, (k) all Attributable Debt of such Person under Sale and Leaseback Transactions, (l) with respect to any Subsidiary of the Parent Guarantor, any Disqualified Equity Interests of such Person and (m) all Net Mark-to-Market Exposure of such Person under all Swap Agreements; provided that the term “Indebtedness” shall not include (i) deferred or prepaid revenue or (ii) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the seller.  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 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.  For all purposes hereof, Indebtedness of the Parent Guarantor and its Subsidiaries shall exclude intercompany liabilities arising from their cash management, tax, and accounting operations and intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any rollover or extensions of terms) and made in the ordinary course of business; provided that the intercompany liabilities of Subsidiaries that are not Loan Parties which are owed to Loan Parties shall be excluded solely to the extent the aggregate outstanding principal amount of such liabilities does not exceed $20,000,000.

 

  

B-11

  

Indemnified Taxes – means Taxes other than Excluded Taxes and Other Taxes imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document.

 

Initial Subsidiary Guarantor – means each Domestic Subsidiary of the Parent Guarantor listed on Schedule 2.

 

Intellectual Property Security Agreements – means each intellectual property security document executed by the Loan Parties in favor of the Collateral Agent as of the Effective Date and such other intellectual property security documents as any Loan Party may from time to time hereafter execute in favor of the Collateral Agent.

 

Intercreditor Agreement – means that certain Third Amended and Restated Intercreditor Agreement dated as of April 26, 2012, by and among the Collateral Agent, JPMorgan Chase Bank, N.A., as Administrative Agent under the JPMorgan Credit Agreement, JPMorgan Chase Bank, N.A., as Agent for certain Securitization Parties described therein, IBM Credit Corporation and Hewlett Packard Company, as amended from time to time.

 

Interim Channel Finance Loan – means CPC’s aggregate Interim Channel Finance Loan Advances.

 

Interim Channel Finance Loan Advance – means an Advance made by CPC under the Interim Channel Finance Loan Facility.

 

Interim Channel Finance Loan Facility – means the line of credit made available by CPC as stated in Section 3.1.2 to fund Interim Channel Finance Loan Advances.

 

Inventory – means goods owned, leased or held by a Person for sale, lease, sublease or resale or furnished or to be furnished under contracts for services, and raw materials, goods/work in process, materials, component parts and supplies used or consumed, or held for use or consumption in such Person’s business.

 

Investment - is defined in Section 11.4.

 

IRS – means the Internal Revenue Service.

 

JPMorgan Chase Bank Intercreditor Agreement – means that certain Amended and Restated Intercreditor Agreement dated April 26, 2012, by and among the Parent Guarantor, the Collateral Agent and JPMorgan Chase Bank, N.A., as administrative agent under the JPMorgan Credit Agreement as amended from time to time, including on the date hereof.

 

JPMorgan Credit Agreement – means that certain Fourth Amended and Restated Credit Agreement dated as of the date hereof among Insight Enterprises, Inc., the European Borrowers (as defined therein), the Lenders party thereto, Wells Fargo Bank, National Association as Syndication Agent, and JPMorgan Chase Bank, N.A., as Administrative Agent.

 

JPMorgan Loan Documents – means the JPMorgan Credit Agreement and the other “Loan Documents” (as defined in the JPMorgan Credit Agreement).

 

Law – means any statute, rule, regulation, order, judgment, award or decree of any Governmental Authority.

 

  

B-12

  

Lender – any one of the Persons who are signatories to this Agreement and obligated as lenders or any Person who takes an assignment from any of such signatories of all or a portion of its rights and obligations as a lender under this Agreement pursuant to Section 14.4.1 and an Assignment and Acceptance as provided therein.

 

Lenders’ Exposure – means the sum of the Aggregate Channel Finance Loans.

 

LIBOR Rate – means, with respect to any Channel Finance Loan for any interest period, the rate per annum for a period equal to the one month LIBOR Rate per annum, as determined by Administrative Agents, as appearing on Bloomberg L.P.’s (the “Service”) Page BBAM1/(Official BBA USD Dollar LIBOR Fixings) (or on any successor or substitute page of such Service) 2 Business Days prior to the date of determination.  If for any reason such rate is not available on the Service, the term “LIBOR Rate” means, the rate per annum appearing on Reuters Screen LIBOR Page as the London Interbank Offered Rate for deposits in Dollars; provided that if the LIBOR Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.

 

Lien – means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge in the nature of a security interest 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.

 

LIMITED CONDITIONALITY ACQUISITION – means any acquisition by the Parent Guarantor or any Subsidiary of all or substantially all of the Equity Interests or more than 50% of the Equity Interests in a Person or assets or business of another Person or assets constituting a business unit, line of business or division of such Person (a) that is permitted by this Agreement and (b) the consummation of which is not conditioned upon the availability of, or on obtaining, third party financing or in connection with which any fee or expense would be payable by the Parent Guarantor or its Subsidiaries to the seller or target in the event financing to consummate the acquisition is not obtained as contemplated by the Limited Conditionality Acquisition Agreement.

 

LIMITED CONDITIONALITY ACQUISITION AGREEMENT – means, with respect to any Limited Conditionality Acquisition, the definitive acquisition documentation in respect thereof.

 

Loan – means an Interim Channel Finance Loan, or a Channel Finance Loan.

 

Loan Documents – means this Agreement, the Parent Guarantor Guarantee Agreement, the Subsidiary Guarantee Agreement, the Collateral Documents, the Intercreditor Agreement, the JPMorgan Chase Bank Intercreditor Agreement, any documents between the Administrative Agents and the Resellers relating to the Aggregate Channel Finance Loan Facility, or the Interim Channel Finance Loan Facility, and all other agreements, reaffirmations, certificates, documents, instruments and other writings executed in connection herewith, whether entered into, on, or after the Effective Date, and from time to time.

 

Loan Obligations – means the due and punctual payment of (a) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans made to the Resellers, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, and (b) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Resellers, the Parent

 

  

B-13

  

Guarantor and the Subsidiary Guarantors under this Agreement and the other Loan Documents. For the avoidance of doubt, any interest payable to the Lenders under Section 4.4 of this Agreement shall not constitute “Loan Obligations.”

 

Loan Parties – means the Resellers, the Parent Guarantor and the Subsidiary Guarantors.

 

Local Time – means, (a) with respect to a determination of the Exchange Rate, (i) New York City time in the case of a denomination in US Dollars and (ii) local time in the case of a denomination of an alternative currency (it being understood that such local time shall mean London, England time unless otherwise notified by the Administrative Agents) and (b) with respect to all other provisions of the Loan Documents, Denver, Colorado, time (as changed from time to time in accordance with the terms hereof), provided, however, such time pursuant to this clause (b) shall be a time zone located in the continental United States.

 

Loss Date – is defined in Section 6.1.2.

 

Material Adverse Effect – means a material adverse effect on (a) the business, assets, property or financial condition of the Parent Guarantor and its Domestic Subsidiaries, taken as a whole, or (b) the validity or enforceability of this Agreement or any other Loan Document or the rights or remedies of the Administrative Agents, the Collateral Agent and the Lenders hereunder and thereunder.

 

Material Indebtedness – means (a) Indebtedness or other obligations outstanding under the JPMorgan Credit Agreement and (b) any other Indebtedness (other than the Loans), or obligations in respect of one or more Swap Agreements, of any one or more of the Resellers, the Parent Guarantor or any Domestic Subsidiary in an aggregate principal amount exceeding $25,000,000.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Resellers, the Parent Guarantor or any Domestic Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Resellers, the Parent Guarantor or such Domestic Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

 

Material Subsidiary – means any direct or indirect Domestic Subsidiary of the Parent Guarantor or any direct Foreign Subsidiary of any Loan Party, in each case set forth on Schedule 9.16 or designated as a Material Subsidiary in a Compliance Certificate delivered by the Borrowing Agent pursuant to this Agreement.

 

Maturity – as to all Loan Obligations, means the time when such Loan Obligations becomes payable in full, whether at the Termination Date, because of acceleration or otherwise.

 

MINIMUM RECEIVABLES TEST – is defined in Section 11.10(c).

 

Monthly Billing Statement – is defined in Section 4.3.2.

 

Multiemployer Plan -- means a multiemployer plan as defined in Section 4001(a)(3) of ERISA with respect to which the Parent Guarantor or any of its ERISA Affiliates may have any liability, contingent or otherwise.

 

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

 

  

B-14

  

such Swap Agreement as of the date of determination (assuming such Swap Agreement were to be terminated as of that date).

 

Non-Consenting Lender – is defined in Section 17.3(a).

 

Obligation – as to any Person, means any Indebtedness of such Person, any guaranty by such Person of any Indebtedness of another Person, and any contractual requirement enforceable against such Person that does not constitute Indebtedness of such Person or a guaranty by such Person but which would involve the expenditure of money by such Person if complied with or enforced.

 

OFAC - means The Office of Foreign Assets Control of the U.S. Department of the Treasury.

 

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.

 

Other Connection Taxes – means, with respect to any Lender or Administrative Agent, Taxes imposed as a result of a present or former connection between such Lender or Administrative Agent (as the case may be) and the jurisdiction imposing such Tax (other than connections arising from such Lender or Administrative Agent (as the case may be) having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

Other Taxes – means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.

 

PARENT Guarantor – means Insight Enterprises, Inc., a Delaware corporation.

 

Parent Guarantor Guarantee Agreement – means that certain Amended and Restated Parent Guarantor Guaranty, dated April 26, 2012, between the Parent Guarantor and the Collateral Agent, for the benefit of the Holders of Secured Obligations, as reaffirmed on the date hereof.

 

Parent Guarantor Pledge Agreement – means that certain Amended and Restated Pledge Agreement, dated April 26, 2012, between the Parent Guarantor and the Collateral Agent, for the benefit of the Holders of Secured Obligations, as reaffirmed on the date hereof.

 

Parent Guarantor Security Agreement – means that certain Amended and Restated Security Agreement, dated April 26, 2012, between the Parent Guarantor and the Collateral Agent, for the benefit of the Holders of Secured Obligations, as reaffirmed on the date hereof.

 

Patriot Act - is defined in Section 9.18.

 

Payment Due Date – means that date identified as the “Payment Due Date” on the applicable Transaction Statement.

 

Permitted Acquisition – means any acquisition (whether by purchase, merger, consolidation or otherwise but excluding in any event a Hostile Acquisition) or series of related acquisitions by the Parent Guarantor or any Subsidiary of all or substantially all the assets of, or more than fifty percent (50%) of the

 

  

B-15

  

Equity Interests in, a Person or assets or business of another Person or assets constituting a business unit, line of business or division of such 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 (provided, that solely with respect to Limited Conditionality Acquisitions, such no Default condition shall be required to be satisfied only at the time of entry into the applicable Limited Conditionality Acquisition Agreement), (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 11.3, (iii) immediately after giving effect to such acquisition (or, in the case of a Limited Conditionality Acquisition, at the time of entry into the related Limited Conditionality Acquisition Agreement) the Parent Guarantor and the Subsidiaries are in compliance with the covenants contained in Section 11.10, in each case determined on a Pro Forma Basis recomputed as of the last day of the most recently ended fiscal quarter of the Parent Guarantor 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) in the case of any acquisition with respect to which the aggregate consideration exceeds $100,000,000, the Parent Guarantor shall have delivered a certificate not less than five (5) days (or such shorter period as the Administrative Agents shall agree) prior to the consummation of such acquisition (or, in the case of a Limited Conditionality Acquisition, prior to the entering into the Limited Conditionality Acquisition Agreement) demonstrating compliance with the foregoing clause (iii) and setting forth the Material Subsidiaries after giving effect to such acquisition.

 

Permitted Encumbrance – means:

 

(a)           Liens for taxes that are not yet overdue for a period of more than 30 days or are being contested in compliance with Section 10.4;

 

(b)           carriers’, suppliers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlords’ and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 60 days or are being contested in good faith by appropriate actions diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person to the extent required in accordance with GAAP;

 

(c)           pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security or employment laws or regulations;

 

(d)           Liens securing the performance of bids, tenders, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

 

(e)           Liens securing or otherwise arising in respect of judgments that do not constitute an Event of Default under clause (k) of Section 12.1;

 

(f)           easements, zoning restrictions, rights-of-way, use restrictions, minor defects or irregularities in title, reservations (including reservations in any original grant from any government of any water or mineral rights or interests therein) and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Parent Guarantor and its Subsidiaries, taken as a whole;

 

  

B-16

  

(g)           Liens in favor of payor banks having a right of setoff, revocation, refund or chargeback with respect of money or instruments of the Parent Guarantor or any Subsidiary on deposit with or in possession of such bank;

 

(h)           deposits securing liability to insurance carriers under insurance or self-insurance arrangements;

 

(i)           any encumbrance or restriction with respect to the transfer of the Equity Interests in any joint venture or similar arrangement pursuant to the terms thereof;

 

(j)           Liens created pursuant to the general conditions of a bank operating in the Netherlands based on the general conditions drawn by the Netherlands Banker’s Association (Nederlands Vereniging van Banken) and the Dutch Consumers Union (Consumentenbond); and

 

(k)           Liens created under the Loan Documents.

 

Permitted Investments – means:

 

(a)           direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

 

(b)           direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, any member state of the European Union (or by any agency thereof to the extent such obligations are backed by the full faith and credit of such member state), in each case maturing within one year from the date of acquisition thereof;

 

(c)           investments in commercial paper maturing within one year from the date of acquisition thereof and rated, at such date of acquisition, at least A-2 by S&P or P-2 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally;

 

(d)           investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

 

(e)           fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;

 

(f)           money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, and (ii) are rated AAA by S&P or Aaa by Moody’s;

 

(g)           in the case of any Foreign Subsidiary, high quality, short term liquid Investments made by such Foreign Subsidiary in the ordinary course of managing its surplus cash position in investments in any OECD country of similar quality as those described in clauses (a) through (f) above; and

 

(h)           demand deposit accounts maintained in the ordinary course of business.

 

  

B-17

  

Permitted Receivables Facility - means the receivables facility or facilities created under the Permitted Receivables Facility Documents, providing for the sale, pledge or other transfer by the Parent Guarantor and/or one or more other Receivables Sellers of Permitted Receivables Facility Assets (thereby providing financing to the Parent Guarantor and the Receivables Sellers) to the Receivables Entity (either directly or through another Receivables Seller), which in turn shall sell, pledge or otherwise transfer interests in the respective Permitted Receivables Facility Assets to third-party investors pursuant to the Permitted Receivables Facility Documents (with the Receivables Entity permitted to issue investor certificates, purchased interest certificates or other similar documentation evidencing interests in the Permitted Receivables Facility Assets) in return for the cash used by the Receivables Entity to purchase the Permitted Receivables Facility Assets from the Parent Guarantor and/or the respective Receivables Sellers, in each case as more fully set forth in the Permitted Receivables Facility Documents.

 

Permitted Receivables Facility Assets - means (a) Receivables (whether now existing or arising in the future) of the Parent Guarantor and its Subsidiaries which are sold, pledged or otherwise transferred to the Receivables Entity pursuant to the Permitted Receivables Facility and any related assets which are also so sold, pledged or otherwise transferred to the Receivables Entity and all proceeds thereof and (b) loans to the Parent Guarantor and its Subsidiaries secured by Receivables (whether now existing or arising in the future) of the Parent Guarantor and its Subsidiaries which are made pursuant to the Permitted Receivables Facility.

 

Permitted Receivables Facility Documents - means each of the documents and agreements entered into in connection with the Permitted Receivables Facility, including all documents and agreements relating to the issuance, funding and/or purchase of certificates and purchased interests, all of which documents and agreements (in the case of material documents and agreements) shall be in form and substance reason­ably satisfactory to the Administrative Agents in all material respects, in each case as such documents and agreements may be amended, restated, amended and restated, modified, supplemented, refinanced or replaced from time to time so long as (a) any such amendments, modifications, supplements, refinancings or replace­ments do not impose any conditions or requirements on the Parent Guarantor or any of its Subsidiaries that are more restrictive in any material respect than those in existence immediately prior to any such amendment, modification, supplement, refinancing or replace­ment, and (b) any such amendments, modifications, supplements, refinancings or replacements are not adverse in any material way to the interests of the Lenders.  The Administrative Agents and the Lenders hereby acknowledge that all Permitted Receivables Facility Documents in effect on the Effective Date with respect to the Permitted Receivables Facility to which Insight Receivables, LLC is a party are satisfactory in form and substance.

 

Person – means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

Plan – means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Parent Guarantor or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

Pledge Agreements – means (i) the Resellers Pledge Agreement, (ii) the Parent Guarantor Pledge Agreement, (iii) the Subsidiary Pledge Agreement, and (iv) such other pledge agreements as may from time to time be made by the Parent Guarantor or any other Loan Party in favor of the Collateral Agent for the benefit of the Holders of Secured Obligations.

 

Pre-termination Notice – is defined in Section 3.1.3(i).

 

  

B-18

  

Prime Rate – means a fluctuating interest rate per annum equal to the prime, base or reference rates of interest announced publicly from time to time (whether or not charged in each instance) by Wells Fargo Bank, N.A. or any successor thereof (or any other financial institution chosen by the Administrative Agents, including Administrative Agents) as such bank’s prime, base, or reference rate, which rate may not be the lowest rate of interest charged by such institution, Administrative Agents, or any Lender to its respective customers or a favored rate and may not correspond with future increases or decreases in interest rates charged by other lenders or market interest rates in general.

 

Pro Forma Basis - means, as to any Person, for all Specified Transactions that occur subsequent to the commencement of an applicable Test Period except as set forth in Section 2.9(a), all calculations of the Minimum Receivables Test, the Total Leverage Ratio and the Fixed Charge Coverage Ratio and Consolidated EBITDA and consolidated assets for purposes of determinations of Material Subsidiaries will give pro forma effect to such Specified Transactions as if such Specified Transactions occurred on the first day of such Test Period.  Whenever any calculation is made on a Pro Forma Basis hereunder, such calculation shall be made in good faith by a Financial Officer of the Parent Guarantor; provided that no such calculation shall include cost savings or synergies unless such cost savings and synergies are either (x) in compliance with Regulation S-X under the Securities Act of 1933, as amended or (y) based on actions taken or to be taken within 12 months of the relevant transaction and in an amount for any Test Period, when aggregated with the amount of any increase to Consolidated EBITDA for such Test Period pursuant to clause (b)(ix) of the definition of “Consolidated EBITDA,” that does not exceed 10% of Consolidated EBITDA for such Test Period (calculated prior to giving effect to any increase pursuant to this clause (y) or clause (b)(ix) of the definition of “Consolidated EBITDA”).

 

Pro-Rata Share – means, as of the date of any determination, with respect to all matters as to a particular Lender (including the indemnification obligations arising under Section 13.6 of this Agreement), the percentage obtained by dividing (i) such Lender’s Commitment, by (ii) the aggregate amount of Commitments of all Lenders; provided, however, that in the event the Commitments have been terminated or reduced to zero, Pro-Rata Share shall be the percentage obtained by dividing (A) the outstanding principal amount of such Lender’s Advances, by (B) the outstanding principal amount of all Advances, as each pro-rata share may increase or decrease depending upon the size of the applicable Channel Finance Loan Facility of such Lender as the applicable Channel Finance Loan Facility of such Lender may be changed from time to time in accordance with the provisions of this Agreement.

 

Qualified Acquisition - means a Permitted Acquisition (a) with an aggregate consideration equal to or greater than the US Dollar Equivalent of $100,000,000, of which the Qualifying Amount has been financed with Consolidated Funded Indebtedness, (b) where any Domestic Subsidiary so acquired is, to the extent required under this Facility, joined as a Reseller or a Guarantor under this Facility by the times required hereby and (c) pursuant to which a Financial Officer of the Parent Guarantor has delivered written notice to the Administrative Agents not less than five (5) days (or such shorter period as the Administrative Agents shall agree) prior to the consummation of such acquisition of the Parent Guarantor’s election to treat such acquisition as a Qualified Acquisition and certifying that such acquisition will qualify as a Qualified Acquisition.

 

Qualifying Amount – means an aggregate principal amount of Indebtedness greater than or equal to the US Dollar Equivalent of $50,000,000; provided that for any acquisition (x) by a Foreign Subsidiary of the Parent Guarantor or (y) where substantially all the assets acquired (either via an acquisition of the Equity Interests of a Person or the purchase of its assets) are not located in the United States, the aggregate principal amount of such Indebtedness shall not exceed the US Dollar Equivalent of $150,000,000.

 

  

B-19

  

 

Qualified Equity Interests – means any Equity Interests that do not constitute Disqualified Equity Interests.

 

Receivables – means all accounts receivable (including, without limitation, all rights to payment created by or arising from sales or licenses of goods or general intangibles (such as software), leases of goods or the rendition of services rendered no matter how evidenced whether or not earned by performance).

 

Receivables Amount – means, as of the last day of any fiscal quarter of the Parent Guarantor, on a consolidated basis and without duplication, an amount equal to (a) 80% multiplied by the aggregate total book value of the Parent Guarantor’s and its Domestic Subsidiaries’ Domestic Receivables on such date, plus (b) 60% multiplied by the sum of the aggregate total book value of (i) the Parent Guarantor’s and its Domestic Subsidiaries’ Foreign Receivables and (ii) the Parent Guarantor’s Foreign Subsidiaries’ Receivables on such date.

 

Receivables Entity – means a wholly-owned Subsidiary of the Parent Guarantor which engages in no activities other than in connection with the financing of accounts receivable of the Receivables Sellers and which is designated (as provided below) as the “Receivables Entity” (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Parent Guarantor or any other Subsidiary of the Parent Guarantor (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Parent Guarantor or any other Subsidiary of the Parent Guarantor in any way (other than pursuant to Standard Securitization Undertakings) or (iii) subjects any property or asset of the Parent Guarantor or any other Subsidiary of the Parent Guarantor, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings, (b) with which neither the Parent Guarantor nor any of its Subsidiaries has any contract, agreement, arrangement or understanding (other than pursuant to the Permitted Receivables Facility Documents (including with respect to fees payable in the ordinary course of business in connection with the servicing of accounts receivable and related assets)) on terms less favorable to the Parent Guarantor or such Subsidiary than those that might be obtained at the time from persons that are not Affiliates of the Parent Guarantor, and (c) to which neither the Parent Guarantor nor any other Subsidiary of the Parent Guarantor has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.  Except with respect to Insight Receivables, LLC, an Illinois limited liability company, which is hereby designated as a Receivables Entity, any such designation shall be evidenced to the Administrative Agents by delivery to the Administrative Agents of an officer’s certificate of the Parent Guarantor certifying that such designation complied with the foregoing conditions.

 

Receivables Sellers means the Parent Guarantor and its Subsidiaries (other than the Receivables Entity) that are from time to time party to the Permitted Receivables Facility Documents.

 

Register – is defined in Section 14.4.2.3.

 

Related Parties – means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, trustees, employees, agents and advisors of such Person and such Person’s Affiliates.

 

Rentals – of a Person means the aggregate fixed amounts payable by such Person under any Operating Lease.

 

Renewal – is defined in Section 3.2.3.

 

  

B-20

  

Representations and Warranties – means the representations and warranties made by each Reseller with respect to itself, the Parent Guarantor and other Subsidiaries in Section 9, and the representations and warranties made in any certificate, report, opinion or other document delivered by Resellers pursuant to the Loan Documents.

 

Required Lenders – is defined in Section 2.3.

 

Reseller(s) – is defined in the Preamble.

 

Resellers Pledge Agreement – means that certain Amended and Restated Pledge Agreement, dated as of April 26, 2012, between the Resellers and the Collateral Agent, for the benefit of the Holders of Secured Obligations.

 

Resellers Security Agreement – means that certain Amended and Restated Security Agreement, dated as of April 26, 2012 between the Resellers and the Collateral Agent, for the benefit of the Holders of Secured Obligations.

 

Restricted Payment –means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Parent Guarantor or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Parent Guarantor or any Subsidiary thereof or any option, warrant or other right to acquire any such Equity Interest in the Parent Guarantor or any Subsidiary thereof.

 

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.

 

Sanctions – means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom, or other relevant sanctions authority.

 

Sanctioned Entity - means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.

 

Sanctioned Person - means a person named on the list of Specially Designated Nationals maintained by OFAC.

 

Secured Obligations – means the Loan Obligations.

 

Security Agreements – means the (i) Reseller Security Agreement, (ii) Parent Guarantor Security Agreement and (iii) the Subsidiary Security Agreement.

 

Settlement Date – is defined in Section 5.1.2.

 

Solvent – means, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person; (b) the present fair salable value of the assets of such Person is not less than the amount

 

  

B-21

  

that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (d) such Person is not engaged in a business or transaction, and is not about to engage in a business or transaction, for which such Person’s property would constitute an unreasonably small capital.  The amount of contingent liabilities (such as litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that can be reasonably be expected to become an actual or matured liability.

 

SPECIFIED TRANSACTION - means any sale, transfer or disposition outside the ordinary course of business involving the sale, transfer or disposition of assets with an aggregate  book value in excess of $25,000,000 and any Permitted Acquisition or other acquisition permitted hereunder or occurring prior to the Effective Date involving an aggregate consideration in excess of $25,000,000 (or any similar transaction or transactions).

 

Standard Securitization Undertakings - means representations, warranties, covenants and indemnities entered into by the Parent Guarantor or any Subsidiary thereof in connection with the Permitted Receivables Facility which are reasonably customary in an accounts receivable financing transaction.

 

State – means any State of the United States.

 

Statutory Reserve Rate – means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve liquid asset, fees or similar requirements (including any marginal, special, emergency or supplemental reserves) or established by any central bank, monetary authority, or the Board or other Governmental Authority for any category of deposits or liabilities customarily used to fund loans, expressed in the case of each requirement as a decimal. with respect to the Adjusted LIBOR Rate.  Such reserve liquid asset, fees, or similar requirements shall include those imposed pursuant to Regulation D of the Board.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve, liquid asset or similar requirement.

 

“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 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.

 

Subsidiary – means any subsidiary of the Parent Guarantor; provided, that Persons that would be required in accordance with GAAP to be consolidated with the Parent Guarantor, but which are not otherwise controlled by the Parent Guarantor shall be “Subsidiaries” hereunder solely for the purpose of making calculations under Section 11.10 hereof, but shall not be “Subsidiaries” hereunder for purposes of any representation, warranty or other covenant hereunder.

 

Subsidiary Guarantee Agreement – means that certain Amended and Restated Subsidiary Guaranty, dated as of April 26, 2012, among the Subsidiary Guarantors and the Collateral Agent, for the benefit of the Holders of Secured Obligations.

 

  

B-22

  

Subsidiary Guarantors – means each Initial Subsidiary Guarantor and each other Person that becomes party to a Subsidiary Guarantee Agreement as a Subsidiary Guarantor, and the permitted successors and assigns of each such Person.

 

Subsidiary Pledge Agreement – means that certain Amended and Restated Domestic Subsidiary Pledge Agreement, dated as of April 26, 2012, among the Subsidiary Guarantors and the Collateral Agent, for the benefit of the Holders of Secured Obligations.

 

Subsidiary Security Agreement – means that certain Amended and Restated Subsidiary Security Agreement, dated as of April 26, 2012, among certain of the Subsidiary Guarantors and the Collateral Agent, for the benefit of the Holders of Secured Obligations.

 

SUBSTANTIAL PORTION – means, with respect to the assets of the Parent Guarantor and its Subsidiaries, assets that represent more than 10.0% of the consolidated assets of the Parent Guarantor and its Subsidiaries or assets that are responsible for more than 10.0% of the consolidated net sales or of the consolidated net income of the Parent Guarantor and its Subsidiaries, in each case, as would be shown in the consolidated financial statements of the Parent Guarantor and its Subsidiaries as at the end of the four fiscal quarter period ending with the fiscal quarter immediately prior to the fiscal quarter in which such determination is made (or if financial statements have not been delivered hereunder for that fiscal quarter which ends the four fiscal quarter period, then the financial statements delivered hereunder for the quarter ending immediately prior to that quarter).

 

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 the Parent Guarantor or the Subsidiaries shall be a Swap Agreement.

 

Syndication Agent – means Wells Fargo Capital Finance, LLC, a Delaware limited liability company, in its capacity as Syndication Agent under this Agreement, and each of its successors and assigns in such capacity.

 

Tax – means any and all present or future taxes, levies, imposts, duties, deductions, fees, assessments, charges or withholdings imposed by any Governmental Authority.

 

Termination Date – is defined in Section 3.2.3.

 

Test Period – means each period of four consecutive fiscal quarters of the Parent Guarantor then most recently ended.

 

Total Leverage Ratio – means, as of the last day of any fiscal quarter of the Parent Guarantor, the ratio of Consolidated Funded Indebtedness at such time to Consolidated EBITDA for the Test Period ended on such day.

 

Transactions – means the execution, delivery and performance by the Resellers of this Agreement, the execution, delivery and performance by the Resellers, the Parent Guarantor and the applicable Subsidiaries of all other Loan Documents, the borrowing of Loans and the use of the proceeds thereof.

 

Transaction Statement – is defined in Section 4.1.

 

  

B-23

  

UCC – means the Uniform Commercial Code as in effect from time to time in the State of New York or such other similar statute as in effect from time to time in New York or any other appropriate jurisdiction.

 

United States -- when used in a geographical sense, means all the states of the United States of America and the District of Columbia; and when used in a legal jurisdictional sense, the government of the country that is the United States of America.

 

UK Subsidiary – means Insight Direct (UK) Ltd., a company organized under the laws of England, together with its successors and permitted assigns.

 

US Dollar Equivalent - means, on any date of determination, with respect to a Qualified Acquisition or the determination of a Qualifying Amount, (a) for any amount in US Dollars, such amount, and (b) for any amount in non-US Dollars, the equivalent in US Dollars determined by the Administrative Agents applying the Exchange Rate.

 

US Person – means any Person that is a "United States Person" as defined in Section 7701(a)(30) of the Code.

 

Vendor – means a Person that sells inventory to a Reseller or to an Account Debtor of a Reseller.

 

Vendor Agreement – is defined in Section 3.1.8.

 

Vendor credits – means all of a Reseller’s rights to any price protection payments, rebates, discounts, credits, factory holdbacks, incentive payments and other amounts which at any time are due such Reseller from an Approved Vendor.

 

Vendor Termination – is defined in Section 3.1.3(i).

 

Vendor Trade Programs – means those certain inventory finance transactions from time to time entered into by the Parent Guarantor or its Affiliates with Castle Pines Capital LLC or its Affiliates, IBM Credit Corporation or its Affiliates, Hewlett Packard Corporation or its Affiliates or any other Person reasonably acceptable to the Administrative Agents.

 

  

B-24

  

EXHIBIT C

 

DOCUMENTS AND REQUIREMENTS LIST

 

All documents designated on that certain Closing Checklist previously delivered to Resellers by Administrative Agents which includes, but is not limited to, the following documents:

 

Officer’s Certificates for Resellers, with organizational documents, resolutions and current certificates of status from the secretary of state (or other applicable Governmental Authority) of such Resellers’ jurisdiction of organization.

 

Officer’s Certificates for other Loan Parties, with organizational documents, resolutions and current certificates of status from the secretary of state (or other applicable Governmental Authority) of such Loan Parties’ jurisdiction of organization.

 

Current UCC Searches for each Loan Party.

 

  

C-1

  

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

FORM OF COMPLIANCE CERTIFICATE

Pursuant to Section 10.1(c) of that certain Second Amended and Restated Credit Agreement effective June 23, 2016 among Calence, LLC, a Delaware limited liability company, Insight Direct USA, Inc., an Illinois corporation, and Insight Public Sector, Inc., an Illinois corporation (each a “Reseller” and collectively, the “Resellers”), Wells Fargo Capital Finance, LLC, as an Administrative Agent, as Syndication Agent and as Collateral Agent and Castle Pines Capital LLC, for itself as a Lender and as an Administrative Agent, and the other Lenders party thereto, as it may be amended, modified, amended and restated, restated or replaced from time to time (the “Credit Agreement”), the Parent Guarantor, through a Financial Officer, hereby delivers this Compliance Certificate (this “Certificate”) to the Administrative Agents, together with the financial statements being delivered to the Administrative Agent pursuant to Section 10.1[(a)][(b)] of the Credit Agreement for the accounting period as at, and for the [fiscal year] [fiscal quarter and the then elapsed portion of the fiscal year] of the Parent Guarantor ending on, ____________, ____ (the “Financial Statements”).  Capitalized terms used herein and in the Schedules attached hereto shall have the meanings set forth in the Credit Agreement.  Subsection references herein relate to subsections of the Credit Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

1.           I am the duly appointed [_____________] of the Parent Guarantor and constitute a Financial Officer under (and as defined in) the Credit Agreement.

 

2.           I have reviewed the terms of the Credit Agreement, and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of Parent Guarantor 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 a Default 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 Parent Guarantor has taken, is taking, or proposes to take with respect to each such condition or event:

 

	
  

 

	
  

 

	
  

 

 

5.           Schedule I attached hereto sets forth financial data and computations evidencing Parent Guarantor’s compliance with certain financial covenants of the Credit Agreement related to the information set forth on the Financial Statements, all of which data and computations are true and correct in all material respects.

 

  

D-1

  

 

6.           Schedule II attached hereto sets forth the Material Subsidiaries as of ___________, _____.  Such Subsidiaries, together with Parent Guarantor and the UK Subsidiary, (i) generated at least 75% of Consolidated EBITDA during the four fiscal quarter period ended on such date and (ii) owned assets (other than Equity Interests in Subsidiaries) representing at least 75% of the consolidated assets of Parent Guarantor and its Subsidiaries as of such date; provided that any Domestic Subsidiary which is the direct owner of any Equity Interests in a Material Subsidiary shall constitute a Material Subsidiary hereunder.  Schedule III attached hereto sets forth financial data and computations evidencing compliance with the foregoing all of which data and computations are true and correct in all material respects.  The following Subsidiaries set forth on Schedule II have not been specified as Material Subsidiaries on a previous Compliance Certificate:

 

	
  

 

	
  

 

	
  

 

 

 

7.           Schedule IV attached hereto contains a report setting forth the current Receivables of Parent Guarantor and its Subsidiaries as of the fiscal quarter ending on ___________, _____.

 

[8.         [A] Specified Transaction[s] [has] [have] occurred during the Test Period where the calculations of the Minimum Receivables Test, the Total Leverage Ratio, the Fixed Charge Coverage Ratio, Consolidated EBITDA or consolidated assets have been calculated on a Pro Forma Basis for purposes of determinations of Material Subsidiaries, and attached as Schedule V are the calculations in reasonable detail that demonstrate the pro forma effect of such Specified Transaction[s] on the Minimum Receivables Test, the Total Leverage Ratio and the Fixed Charge Coverage Ratio and Consolidated EBITDA and consolidated assets for purposes of determinations of Material Subsidiaries for such Test Period.]

 

9.           The information set forth herein is accurate as of _____________, 20__, and the Financial Statements delivered herewith fairly present in all material respects the financial position and the results of operations and cash flows for Parent Guarantor and its Subsidiaries as of such date and for the periods ending on such date in accordance with GAAP, [subject to year-end audit adjustments and the absence of footnotes]1.

 

________________________

 

1 Include bracketed language for unaudited financial statements.

 

  

D-2

  

The foregoing certifications, together with the computations set forth in Schedules I and III and the list of Material Subsidiaries of Parent Guarantor attached as Schedule II hereto in support hereof, are made and delivered this _____ day of __________, 20__.

 

INSIGHT ENTERPRISES, INC., as Parent Guarantor

 

 

By: _________________________________________

 

Title: ________________________________________

 

  

D-3

  

SCHEDULE I TO COMPLIANCE CERTIFICATE

Compliance as of __________, _____

with certain provisions of the Credit Agreement

The computations set forth in this Schedule I are designed to facilitate the calculation of financial covenants and certain other provisions in the Credit Agreement relating to the information set forth in Parent Guarantor’s consolidated financial statements delivered with this Certificate.  The use of abbreviated terminology and/or descriptions in the computations below are not in any way intended to override or eliminate the more detailed descriptions for such computations set forth in the relevant provisions of the Credit Agreement, all of which shall be deemed to control.  In addition, the failure to identify any specific provisions or terms of the Credit Agreement in this Schedule I does not in any way affect their applicability during the periods covered by such financial statements or otherwise, which shall in all cases be governed by the Credit Agreement.  For purposes of this Schedule I, the “Measurement Quarter” shall be the fiscal quarter of Parent Guarantor ending on the date set forth above.

 

	
I.

	
FINANCIAL COVENANTS

	
  

	
A.

	
TOTAL LEVERAGE RATIO (Section 11.10(a))

1.           Consolidated Funded Indebtedness (as of the end of the Measurement Quarter)1

	
a.

	
outstanding principal amount of Consolidated Indebtedness of Parent Guarantor and its Subsidiaries which has actually been funded

	  	
$_________

	  	  	  	  
	
b.

	
plus aggregate face amount of all letters of credit for which Parent Guarantor and its Subsidiaries are the account party (unless cash collateralized)

	
+

	
$_________

	  	  	  	  
	
c.

	
plus Capitalized Lease Obligations of Parent Guarantor and its Subsidiaries

	  	
$_________

	  	
+

	  	  
	  	  	  	  
	
d.

	
= Consolidated Funded Indebtedness

	
=

	
$_________

	
  

	
2.

	
Consolidated EBITDA (for the Test Period)

	
a.

	
net income (or loss) of Parent Guarantor and its Subsidiaries on a consolidated basis

	  	
$_________

	  	  	  	  
	
b.

	
plus interest expense of Parent Guarantor and its Subsidiaries on a consolidated basis (including, without limitation, yield and other financing costs resembling interest payable under any Permitted Receivables Facility)

	
+

	
$_________

	  	  	  	  
	
c.

	
plus expense for taxes paid or accrued

	
+

	
$_________

	  	  	  	  
	
d.

	
plus depreciation

	
+

	
$_________

__________________________

2 Shall not include amounts outstanding under the Channel Finance Credit Agreement or any Vendor Trade Program or any Contract Payment Sale Indebtedness, in each case, so long as such amounts are not bearing interest payable by a Loan Party.

 

  

D-4

  

	
e.

	
plus amortization

	
+

	
$_________

	  	  	  	  
	
f.

	
plus any extraordinary non-cash or nonrecurring non-cash charges or losses incurred other than in the ordinary course of business

	
+

	
$_________

	  	  	  	  
	
g.

	
plus any non-cash compensation charges arising from any grant of stock, stock options or other equity-based awards

	
+

	
$_________

	  	  	  	  
	
h.

	
plus any cash expenses or charges related to any issuance of Equity Interests, Permitted Acquisition or other acquisition, disposition, recapitalization or the incurrence, prepayment, amendment, modification, restructuring or refinancing of Indebtedness, in each case, whether or not such transaction is consummated, in an aggregate amount not to exceed $15,000,000 during any Test Period

	
+

	
$_________

	  	  	  	  
	
i.

	
plus cash costs, expenses and fees incurred in connection with the Transactions

	
+

	
$_________

	  	  	  	  
	
j.

	
plus cash restructuring charges (including in connection with headcount reductions, costs related to the closure, consolidation and integration of facilities IT infrastructure and legal entities, severance costs and retention bonuses) in an amount, when aggregated with the amount of any increase to Consolidated EBITDA pursuant to clause (y) of the last sentence of the definition of “Pro Forma Basis,” not to exceed 10% of Consolidated EBITDA for such Test Period (calculated prior to giving effect to any increase pursuant to this paragraph or clause (y) of the last sentence of the definition of “Pro Forma Basis”

	
+

	
$_________

	  	  	  	  
	
k.

	
minus any extraordinary non-cash or nonrecurring non-cash gains realized other than in the ordinary course of business

	
-

	
$_________

	  	  	  	  
	
l.

	
minus the amount of any subsequent cash payments in respect of any non-cash charges described in I.A.2.g. above

	
-

	
$_________

	  	  	  	  
	
m.

	
=   Consolidated EBITDA

	
=

	
$_________

 

	 	3.	Total Leverage Ratio (Ratio of I.A.1.d. to I.A.2.m.)	____ to 1.00

 

	 	 	 

  

D-5

  

	 	
4.

	
Maximum Total Leverage Ratio

	
[3.00]1 to 1.00

	 	  	  	  
	 	  	
The Total Leverage Ratio in I.A.3. shall not exceed the Maximum Total Leverage Ratio in I.A.4:

	  

 

	
  

	
B.

	
MINIMUM FIXED CHARGE COVERAGE RATIO (Section 11.10(b))

	
  

	
1.

	
COVERAGE AMOUNT (for the Test Period)

	
a.

	
Consolidated EBITDA (I.A.2.m.)

	  	
$_________

	  	  	  	  
	
b.

	
minus Consolidated Capital Expenditures for the Parent Guarantor and its Subsidiaries

	
-

	
$_________

	  	  	  	  
	
c.

	
minus cash dividends or distributions paid by the Parent Guarantor on its Equity Interests (other than repurchases of its Equity Interests by Parent Guarantor made in accordance with Section 11.6 of the Credit Agreement)

	
-

	
$_________

	  	  	  	  
	
d.

	
plus fixed amounts payable by Parent Guarantor and its Subsidiaries under Operating Leases

	
-

	
$_________

	  	  	  	  
	
e.

	
=   Coverage Amount

	
=

	
$_________

	
  

	
2.

	
FIXED CHARGES (for the Test Period)

	
a.

	
interest expense of Parent Guarantor and its Subsidiaries (I.A.2.b. above)

	  	
$_________

	  	  	  	  
	
b.

	
plus fixed amounts payable by Parent Guarantor and its Subsidiaries under operating leases

	
+

	
$_________

	  	  	  	  
	
c.

	
plus expenses for taxes paid or accrued

	
+

	
$_________

	  	  	  	  
	
d.

	
plus scheduled amortization of the principal portion of Indebtedness (including Capitalized Lease Obligations but excluding amounts owing in respect of Permitted Receivables Facilities)

	
+

	
$_________

	  	  	  	  
	
e.

	
=   Fixed Charges

	
=

	
$_________

__________________________

3 After the consummation of a Qualified Acquisition, the maximum Total Leverage Ratio shall not exceed (i) 3.50 to 1.00 for the four fiscal quarter period beginning with the fiscal quarter in which such Qualified Acquisition is consummated (the “First Period”), (ii) 3.25 to 1.00 as of the last day of any fiscal quarter for the four fiscal quarter period immediately succeeding the First Period and (iii) reverting to 3.00 to 1.00 as of the last day of any fiscal quarter ending thereafter.

 

  

D-6

  

	 	
3.

	
Fixed Charge Coverage Ratio (Ratio of I.B.1.e. to I.B.2.e.)

	
____ to 1.00

	 	  	  	  
	 	
4.

	
Minimum Fixed Charge Coverage Ratio

	
1.25 to 1.00

	 	  	  	  
	 	  	
The Fixed Charge Coverage Ratio in I.B.3. shall not be less than the Minimum Fixed Charge Coverage Ratio in I.B.4.

	  
	 	  	  	  
	 	  	
Is the total set forth on line I.B.3. less than the amount set forth on line I.B.4.

	
[Yes] / [No]

	
  

	
C.

	
MINIMUM RECEIVABLES AMOUNT (Section 11.10(c))

	
  

	
1.

	
RECEIVABLES AMOUNT (as of the end of the Measurement Quarter)

	
a.

	
aggregate total book value of Parent Guarantor’s and its Domestic Subsidiaries’ Domestic Receivables on such date multiplied by 0.8

	  	
$_________

	  	  	  	  
	
b.

	
aggregate total book value of

	  	  
	  	  	  	  
	  	
(i) Parent Guarantor’s and its Domestic Subsidiaries’ Foreign Receivables on such date multiplied by 0.6

	  	
$_________

	  	  	  	  
	  	
(ii) Parent Guarantor’s Foreign Subsidiaries’ Receivables on such date multiplied by 0.6

	
+

	
$_________

	  	  	  	  
	
c.

	
= Receivables Amount (I.C.1.a. plus I.C.1.b.(i) plus (I.C.1.b.(ii))

	
=

	
$_________

	  	  	  	  
	
d.

	
Consolidated Funded Indebtedness (I.A.1.d.)

	
=

	
$_________

	  	  	  	  
	
The minimum Receivables Amount in I.C.1.c. shall not be less than or equal to the aggregate amount of Consolidated Funded Indebtedness in I.A.1.d

	  	  	  	  
	
Is the total set forth on line I.C.1.c. less than or equal to in the amount set forth on line I.A.1.d.

	  	
[Yes] / [No]

 

  

D-7

  

 

SCHEDULE II TO COMPLIANCE CERTIFICATE

 

Material Subsidiaries

 

  

D-8

  

SCHEDULE III TO COMPLIANCE CERTIFICATE

 

Material Subsidiaries

 

I.           Consolidated EBITDA Test

	
A.

	
Consolidated EBITDA of Parent Guarantor, the UK Subsidiary and the Material

	  
	  	
Subsidiaries set forth on Schedule II for the Test Period

	
$_________

	  	  	  
	
B.

	
Percentage, taken by dividing amount in Item I.A by amount of Consolidated EBITDA for the Test Period

	  
	 	
_______%

	  
	  	  	  
	
C.

	
Required percentage:

	
75%

II.           Consolidated Assets Test

	
A.

	
Assets of Parent Guarantor, the UK Subsidiary and the Material Subsidiaries

	  
	  	
set forth on Schedule II as of the Test Period

	
$_________

	  	  	  
	
B.

	
Consolidated assets of Parent Guarantor and its Subsidiaries as of the end of the Test Period

	  
	 	 	$_________
	  	  	  
	
C.

	
Percentage taken by dividing amount in Item II.A by amount in Item II.B

	  
	 	 	_______%
	  	  	  
	
D.

	
Required percentage:

	
75%

  

D-9

  

SCHEDULE IV TO COMPLIANCE CERTIFICATE

 

Receivables Report

 

 

See Attached.

 

  

D-10

  

SCHEDULE V TO COMPLIANCE CERTIFICATE

 

Pro Forma Calculations

 

  

D-11

  

EXHIBIT E

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

DATED ___________, ____

 

Reference is made to the Second Amended and Restated Credit Agreement effective June 23, 2016 among Calence, LLC, a Delaware limited liability company, Insight Direct USA, Inc., an Illinois corporation, and Insight Public Sector, Inc., an Illinois corporation (each a “Reseller” and collectively, the “Resellers”), Wells Fargo Capital Finance, LLC, as an Administrative Agent, as Syndication Agent and as Collateral Agent and Castle Pines Capital LLC, for itself as a Lender and as an Administrative Agent, and the other Lenders party thereto, as it may be amended, modified, amended and restated, restated or replaced from time to time (the “Credit Agreement”).  Unless otherwise defined herein, capitalized terms used in this Assignment and Assumption have the meanings defined in the Credit Agreement.

 

The “Assignor” and the “Assignee” referred to on Schedule 1 agree as follows:

 

1.           The Assignor hereby sells and assigns to the Assignee, without recourse and without representation or warranty except as expressly set forth herein, and the Assignee hereby purchases and assumes from the Assignor, an interest in and to the Assignor’s rights and obligations under the Credit Agreement and the other Loan Documents as of the date hereof equal to the percentage interest specified on Schedule 1 of all outstanding rights and obligations under the Credit Agreement and the other Loan Documents.  After giving effect to such sale and assignment, the Assignee’s Facility and the amount of the Loans owing to the Assignee will be as set forth on Schedule 1.

 

2.           The Assignor (i) represents and warrants that (a) it has received the prior written consent of the Administrative Agents and (b) it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any other instrument or document furnished pursuant thereto; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Reseller, the Parent Guarantor, any Domestic Subsidiary or any Guarantor, or the performance or observance by any Reseller, the Parent Guarantor, any Domestic Subsidiary or any Guarantor of any of its obligations under the Loan Documents or any other instrument or document furnished pursuant thereto.

 

3.           The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 14.4.2.2 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Administrative Agents, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes each Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement as are delegated to the Administrative Agents by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; (v) agrees that it will perform in accordance with their terms all of the obligations that by the terms of the Credit Agreement are required to be performed by it as a Lender; and (vi) attaches any U.S. Internal Revenue Service or other forms required under the Credit Agreement.

 

  

E-1

  

4.           Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agents for acceptance and recording by the Administrative Agent.  The effective date for this Assignment and Acceptance (the “Effective Date”) shall be the date of acceptance hereof by the Administrative Agents, unless otherwise specified on Schedule 1.

 

5.           Upon such acceptance and recording by the Administrative Agent, as of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement.

 

6.           Upon such acceptance and recording by the Administrative Agents, from and after the Effective Date, the Administrative Agent shall make all payments under the Credit Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and fees with respect thereto) to the Assignee.  The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Effective Date directly between themselves.

 

7.           Assignor represents and warrants that is has paid an assignment and a processing fee of $5,000 to Administrative Agents.

 

8.           This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York.

 

9.           This Assignment and Acceptance 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 taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance.

 

IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this Assignment and Acceptance to be executed by their officers thereunto duly authorized as of the date specified thereon.

 

  

E-2

  

SCHEDULE 1

 

to

 

ASSIGNMENT AND ACCEPTANCE

 

	
Percentage of Assignor’s interest assigned:

	 	
____%

	
Assigned Facility:

	 	
$

	
Aggregate outstanding principal amount of Loans assigned:

	 	
$

	
Principal amount of Channel Finance Loans payable to Assignee:

	 	
$

	
Principal amount of Channel Finance Loans payable to Assignor:

	 	
$

	
 

Effective Date (if other than date of acceptance by Administrative Agent):

	 	
*_________, ____

 

	  	
[NAME OF ASSIGNOR], as Assignor

	 	 	 	 
	 	 	 	 
	  	
By:

	 	  
	  	
Title:  

	 	  
	  	
Dated:  ______________, 20____

	  	  	 	  
	  	
[NAME OF ASSIGNEE], as Assignee

	  	  	 	  
	  	  	 	  
	  	
By:

	 	  
	  	
Title:  

	 	  
	 	Domestic Lending Office: 	 

 

*This date should be no earlier than five Business Days after the delivery of this Assignment and Acceptance to the Administrative Agents.

 

Accepted and Approved

this ____day of ____________, ____

 

ADMINISTRATIVE AGENTS:

 

 

By: _____________________________________

Title: ____________________________________

 

 

By: _____________________________________

Title: ____________________________________

  

  

1

  

 

RESELLERS:

By: Insight Direct USA, Inc., as Borrowing Agent

 

By: _____________________________________

Title: ____________________________________

 

  

2

  

SCHEDULE 2

Initial Subsidiary Guarantors

	  	
SUBSIDIARY

	
JURISDICTION AND TYPE OF ORGANIZATION

	
1.

	
Insight Direct Worldwide, Inc.

	
Arizona corporation

	
2.

	
Insight North America, Inc.

	
Arizona corporation

	
3.

	
Insight Canada Holdings, Inc.

	
Arizona corporation

	
4.

	
Insight Receivables Holding, LLC

	
Illinois limited liability company

	
5.

	
Insight Technology Solutions, Inc.

	
Delaware corporation

  

  

  

SCHEDULE 9.6

Litigation

None.

  

  

  

SCHEDULE 9.11

Subsidiaries

	  	
SUBSIDIARY

	
JURISDICTION OF ORGANIZATION

	
HOLDER OF EQUITY INTERESTS

	
1.

	
Insight Direct Worldwide, Inc.

	
Arizona

	
100% Insight Enterprises, Inc.

	
2.

	
Insight North America, Inc.

	
Arizona

	
100% Insight Direct Worldwide, Inc.

	
3.

	
Insight Canada Holdings, Inc.

	
Arizona

	
100% Insight North America, Inc.

	
4.

	
Insight Public Sector, Inc.

	
Illinois

	
100% Insight North America, Inc.

	
5.

	
Insight Direct USA, Inc.

	
Illinois

	
100% Insight North America, Inc.

	
6.

	
Insight Receivables Holding, LLC

	
Illinois

	
0.17% Insight Enterprises, Inc.;

96.13% Insight Direct USA, Inc.;

3.70% Insight Public Sector, Inc.

	
7.

	
Insight Receivables, LLC

	
Illinois

	
100% Insight Receivables Holding, LLC

	
8.

	
Insight Consulting Services, LLC

	
Arizona

	
100% Insight Direct USA, Inc.

	
9.

	
Insight Stadium Services, LLC

	
Arizona

	
100% Insight Direct USA, Inc.

	
10.

	
Calence, LLC

	
Delaware

	
100% Insight Direct USA, Inc.

	
11.

	
Calence Physical Security Solutions LLC

	
Arizona

	
100% Calence, LLC

	
12.

	
Insight Technology Solutions, Inc.

	
Delaware

	
100% Insight Enterprises, Inc.

	
13.

	
BlueMetal Architects, Inc.

	
Delaware

	
100% Insight Direct USA, Inc.

 

  

  

  

SCHEDULE 9.16

Initial Material Subsidiaries

	  	
SUBSIDIARY

	
JURISDICTION OF ORGANIZATION

	
1.

	
Calence, LLC

	
Delaware

	
2.

	
Insight Direct USA, Inc.

	
Illinois

	
3.

	
Insight North America, Inc.

	
Arizona

	
4.

	
Insight Public Sector, Inc.

	
Illinois

	
5.

	
Insight Receivables, LLC

	
Illinois

	
6.

	
Insight Technology Solutions SAS

	
France

	
7.

	
Insight Technology Solutions GmbH

	
Germany

	
8.

	
Insight Direct Canada, Inc.

	
Canada

	
9.

	
Insight Canada Inc.

	
Canada

	
10.

	
Insight Enterprises UK, Ltd.

	
United Kingdom

	
11.

	
Insight Direct Worldwide, Inc.

	
Arizona

	
12.

	
Insight Receivables Holding, LLC

	
Illinois

	
13.

	
Insight Technology Solutions, Inc.

	
Delaware

	
14.

	
Insight Canada Holdings, Inc.

	
Arizona

	
15.

	
3683371 Canada, Inc.

	
Canada

  

  

  

SCHEDULE 11.1

Existing Indebtedness

 

	
1.

	
Indebtedness disclosed on the Company’s December 31, 2015 financial statements not otherwise permitted under Section 11.1(b) through (w).

 

	
2.

	
Limited Guaranty, dated February 15, 2010, by Insight Enterprises, Inc. in favor of HSBC Bank plc., with respect to treasury management services and foreign exchange exposure arising in the ordinary course of business.

 

	
3.

	
Master Continuing Guaranty, dated as of November 30, 2006, by Insight Enterprises, Inc. in favor of Bank of America, N.A, as amended, with respect to treasury management services and foreign exchange exposure arising in the ordinary course of business.

 

	
4.

	
  Bank Guarantee by Insight Direct USA, Inc. in favor of Bank of America, NA (cash collateralized letter of credit in the amount of 1,039,124.81 USD).

 

	
5.

	
Guaranty – Multiple Subsidiaries, dated as of November 18, 2009, by Insight Enterprises, Inc. in favor of JPMorgan Chase Bank, N.A, as amended, with respect to treasury management services and foreign exchange exposure arising in the ordinary course of business.

 

	
6.

	
Indebtedness under that certain Term Lease Master Agreement dated March 2, 2016, including financing schedules through the date of this agreement, between Insight Direct USA, Inc. and Cisco Systems Capital Corporation, with a balance outstanding of $1,529,609 as of March 31, 2016.

 

  

  

  

SCHEDULE 11.2

Existing Liens

	
1.

	
Liens on fixed assets obtained in conjunction with and securing the Indebtedness set forth in item number 6 of Schedule 11.1.

 

	
2.

	
Liens consisting of cash collateral with respect to item number 4 on Schedule 11.1.

 

  

  

  

 SCHEDULE 11.4

Existing Investments

	
1.

	
Investments disclosed in the Company’s 10-K filing for the fiscal year ended December 31, 2015 and not otherwise permitted under Section 11.4(a), (b) or (d) through (q).

 

	
2.

	
Single Currency Term Facility Agreement, dated August 21, 2009, between Insight Technology Solutions LLC (Russia), as borrower, and Insight Enterprises B.V., as amended.  Balance as of March 31, 2016, is $2,550,283.  Total line is $20,000,000.

 

	
3.

	
Global Corporate Continuing Guaranty by Insight Enterprises, Inc. in favor of Hewlett-Packard Company and certain of its affiliates in respect of obligations of certain of its Subsidiaries under Vendor Trade Programs, as amended.

 

	
4.

	
Limited Guaranty, dated February 15, 2010, by Insight Enterprises, Inc. in favor of HSBC Bank plc., with respect to treasury management services and foreign exchange exposure arising in the ordinary course of business.

 

	
5.

	
Master Continuing Guaranty, dated as of November 30, 2006, by Insight Enterprises, Inc. in favor of Bank of America, N.A, as amended, with respect to treasury management services and foreign exchange exposure arising in the ordinary course of business.

 

	
6.

	
Guaranty – Multiple Subsidiaries, dated as of November 18, 2009, by Insight Enterprises, Inc. in favor of JPMorgan Chase Bank, N.A., as amended, with respect to treasury management services and foreign exchange exposure arising in the ordinary course of business.

 

  

  

  

SCHEDULE 11.8

Restrictive Agreements

None.

 

  

  

  

SCHEDULE 11.9

Sale and Leaseback Transactions

 

	
  

	
1.

	
6820 South Harl Avenue, Tempe, AZ  85283

	
  

	
2.

	
910 West Carver Road, Tempe, AZ 85284

	
  

	
3.

	
8123 South Hardy Ave, Tempe, AZ  85284

	
  

	
4.

	
5410 Decarie, Montreal, QC, H3X 4B2ex10_3.htm

 

Exhibit 10.3

 

Execution Version

AMENDMENT

THIS AMENDMENT (this “Amendment”), dated as of June 23, 2016 (the “Effective Date”), is entered into among INSIGHT RECEIVABLES, LLC (“Insight Receivables”), INSIGHT ENTERPRISES, INC. (“Insight”, the “Servicer” or the “Performance Guarantor”), GOTHAM FUNDING CORPORATION (a “Conduit” or a “Purchaser”), THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, individually (“BTMU” or a “Purchaser”) and as Managing Agent for the Gotham Purchaser Group,  GOTHAM FUNDING CORPORATION (a “Purchaser”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, individually (“WFB” or a “Purchaser”) and as agent for the Purchasers (in such capacity, the “Agent”).  Capitalized terms used herein but not defined herein shall have the meanings provided in the Receivables Purchase Agreement defined below.

 

WHEREAS, Insight Receivables, the Servicer, the Purchasers and the Agent 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 prior to the date hereof, the “Receivables Purchase Agreement”); and

 

WHEREAS, the parties to this Amendment wish to amend the Receivables Purchase Agreement on the terms and conditions hereinafter 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.  Amendments.  Subject to the fulfillment of the conditions precedent set forth in Section 3 below, the Receivables Purchase Agreement is hereby amended in accordance with Exhibit A hereto:  (a) by deleting each term thereof which is lined-out and (b) by inserting each term thereof which is double-underlined, in each case in the place where such term appears therein.  For the avoidance of doubt, notwithstanding anything to the contrary contained in any prior amendment or amendments to the Receivables Purchase Agreement, the Receivables Purchase Agreement set forth in Exhibit A hereto reflects the current agreement of the parties hereto as to all of the terms and provisions of the Receivables Purchase Agreement as of the Effective Date.

 

SECTION 2.  Representations.  Each Seller Party hereby represents and warrants to the Agent and the Purchasers, as to itself, as of the Effective Date hereof that:

 

(a)           Power and Authority; Due Authorization, Execution and Delivery.  The execution and delivery by such Seller Party of this Amendment, and the performance of its obligations under the Receivables Purchase Agreement as amended hereby are within its corporate or company powers and authority and have been duly authorized by all necessary corporate or company action on its part.  This Amendment has been duly executed and delivered by such Seller Party.

 

(b)           Binding Effect.  This Amendment constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

 

  

  

  

 

SECTION 3.  Conditions Precedent.  This Amendment shall become effective as of the close of business on the Effective Date, subject to the satisfaction of the conditions precedent that (a) each of the representations set forth in Section 2 above is true and correct on and as of the Effective Date as though made on and as of such date (or, to the extent such representations and warranties specifically relate to an earlier date, that each of such representations and warranties was true, correct and complete in all material respects on and as of such earlier date), (b) the Agent shall have received (i) counterparts of this Amendment executed by each of the parties hereto, (ii) counterparts of an Assignment Agreement, effective as of the date hereof, duly executed by PNC Bank, National Association, as assignor, in favor of The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Gotham Funding Corporation; (iii) counterparts of an Eighth Amended and Restated Fee Letter, dated as of the date hereof, duly executed by WFB, BTMU and Insight Receivables, and each of the Purchasers shall have received payment of its fees due thereunder; and (iv) counterparts of an Agent’s Fee Letter, duly executed by WFB and Insight Receivables, and payment of its fee due thereunder.

 

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 hereby, the terms and conditions of the Receivables Purchase Agreement shall remain in full force and effect, and are hereby ratified and confirmed.  The Undertaking is also hereby ratified and confirmed.

 

SECTION 5.  Costs and Expenses.  Insight Receivables agrees to pay on demand all reasonable costs and expenses of the Agent 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 with respect thereto and with respect to advising the Agent and the Purchasers party hereto 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.  Delivery of an executed counterpart of this Amendment by facsimile or other electronic transmission (i.e., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart hereof and deemed an original.

 

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 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.

 

2

Amendment to RPA

  

  

  

 

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/ Lynn Willden

	  	
Name:   

	
Lynn Willden

	  	
Title:

	
Treasurer

	  	  	  
	  	  	  
	  	  	  
	  	
INSIGHT ENTERPRISES, INC., as Servicer and Performance Guarantor

	  	  	  
	  	  	  
	  	  	  
	  	
By:

	
/s/ Lynn Willden

	  	
Name:

	
Lynn Willden

	  	
Title:

	
Treasurer

 

 

3

Amendment to RPA

  

  

  

 

	  	
GOTHAM FUNDING CORPORATION

	  	  	  
	 	 	 
	  	  	  
	  	
By:

	
/s/ David V. DeAngelis

	  	
Name:   

	
David V. DeAngelis

	  	
Title:

	
Vice President

	  	  	  
	  	  	  
	 	 	 
	  	
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., individually and as Managing Agent for the Gotham Purchaser Group

	  	  	  
	  	  	  
	  	  	  
	  	
By:

	
/s/ Christopher Pohl

	  	
Name:

	
Christopher Pohl

	  	
Title:

	
Managing Director

 

 

4

Amendment to RPA

  

  

  

	  	
WELLS FARGO BANK, NATIONAL ASSOCIATION, individually and as Agent

	  	  	  
	  	  	  
	  	
By:

	
/s/ Ryan Tozier

	  	
Name:   

	
Ryan Tozier

	  	
Title:

	
Vice President

 

 

5

Amendment to RPA

  

  

  

 

EXHIBIT A TO OMNIBUS AMENDMENT

 

 

 

 

 

RECEIVABLES PURCHASE AGREEMENT

 

dated as of December 31, 2002

 

Among

 

INSIGHT RECEIVABLES, LLC, as Seller,

 

INSIGHT ENTERPRISES, INC., as Servicer,

 

THE ENTITIES PARTY HERETO FROM TIME TO TIME AS

 

PURCHASERSCONDUITS,

 

THE ENTITIES PARTY HERETO FROM TIME TO TIME AS FINANCIAL INSTITUTIONS,

THE ENTITIES PARTY HERETO FROM TIME TO TIME AS

MANAGING AGENTS

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as successor Agent

 

  

  

 

RECEIVABLES PURCHASE AGREEMENT

 

 

This Receivables Purchase Agreement, dated as of December 31, 2002, is among Insight Receivables, LLC, an Illinois limited liability company (“Seller”), Insight Enterprises, Inc., a Delaware corporation (“Insight”), as initial Servicer (the Servicer together with Seller, the “Seller Parties” and each a “Seller Party”), PNC Bank, National Association (“PNC”), Wells Fargo Bank, National Association (“Wells Fargo”), each of the other financial institutionsthe entities from time to time party hereto (as Conduits (the “Conduits”), the entities from time to time party hereto as Financial Institutions (the “Financial Institutions” and together with PNC and Wells Fargothe Conduits, the “Purchasers”), the entities from time to time party hereto as Managing Agents (the “Managing Agents”), and Wells Fargo Bank, National Association,  as successor agent for the Purchasers hereunder or any further successor agent hereunder (together with its successors and assigns hereunder, the “Agent”).  Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I.

 

PRELIMINARY STATEMENTS

 

Seller desires to transfer and assign Purchaser Interests to the Agent for the benefit of theone or more Purchasers from time to time.

 

The Purchasers severally agree that they shall, subject to the terms and conditions of this Agreement, purchase Purchaser Interests through the Agent from time to time.

 

ARTICLE I

 

PURCHASE ARRANGEMENTS

 

Section 1.1          Same-Day Purchase Facility.

 

(a)           Upon the terms and subject to the conditions hereof, Seller may, at its option, sell and assign Same-Day Purchaser Interests to the Agent for the ratable benefit of the Purchasers.  In accordance with the terms and conditions set forth herein, each of the Purchasers severally agrees to purchase, through the Agent, such Purchaser’s Percentage of such Purchaser Interests from time to timesole benefit of Wells Fargo in an aggregate amount at any one time outstanding not to exceed (i) for all Purchasers, the Purchase Limit at such time, and (ii) for any Purchaser, its Commitment at such time.the Same-Day Commitment, by providing the Agent with written notice in a form set forth as Exhibit II-A hereto of each Incremental Purchase (a “Same-Day Purchase Notice”) no later than 1:00 p.m. (New York time) on the Business Day of such Incremental Purchase via the Agent’s electronic “C.E.O.” portal.  Each Same-Day Purchase Notice shall be subject to Section 6.2 hereof, shall be irrevocable by Seller and shall specify the requested Purchase Price (which shall not be less than $1,000,000) for the offered Same-Day Purchaser Interest.  A Same-Day Purchase Notice that is received after 1:00 p.m. (New York time) on a Business Day shall be deemed received on the next Business Day.  On the date of each Incremental Purchase of Same-Day Purchaser Interests, upon satisfaction of the applicable conditions precedent set forth in Article VI, Wells Fargo shall wire transfer to the Facility Account, in immediately available funds, no later than 4:00 p.m. (New York time), an amount equal to the Purchase Price for such Same-Day Purchaser Interest.

 

(b)           Seller shall provide the Agent with written notice in a form set forth as Exhibit II-C (a “Same-Day Reduction Notice”) of any proposed reduction of the Capital of the Same-Day Purchaser Interests from Collections no later than 1:00 p.m. (New York time) on the Business Day of each proposed reduction, and the Agent will promptly notify Wells Fargo of such Same-Day Reduction Notice after receipt thereof.  Such Same-Day Reduction Notice shall designate (i) the date (the “Proposed Same-Day Reduction Date”) upon which any such reduction of the Capital of Same-Day Purchaser Interests shall occur (which date shall give effect to the notice period set forth above), and (ii) the aggregate amount of Capital to be reduced (the “Aggregate Same-Day Reduction”), which shall be distributed solely to Wells Fargo.  Only one (1) Same-Day Reduction Notice shall be outstanding at any time.  A Same-Day Reduction Notice received after 1:00 p.m. (New York time) on a Business Day shall be deemed to have been received on the next Business Day.

 

(bc)           Seller may, upon at least 5 Business Days’ irrevocable written notice to the PurchasersWells Fargo, terminate in whole or reduce in part the unused portion of the Purchase Limit.  Upon any reduction of the Purchase Limit, the Commitments shall be permanently reduced by a corresponding aggregate amount in accordance with their respective PercentagesSame-Day Commitment; provided, however, that in no event may the Same-Day Commitment be reduced below the aggregate outstanding Capital of the Same-Day Purchaser Interests.  Each reduction in the Purchase LimitSame-Day Commitment shall be in an aggregate amount equal to $5,000,0001,000,000 or a larger multiple of $1,000,000500,000.

 

Section 1.2          Standard Purchase Facility.

 

Section 1.2          Increases.  Seller shall provide the Purchasers with notice, in accordance with Section 14.2,(a) Upon the terms and subject to the conditions hereof, Seller may, at its option, sell and assign Purchaser Interests to the Agent for the benefit of the Purchaser Groups, by providing the Agent and the Managing Agent(s) with a written notice in a form set forth as Exhibit IIII-B hereto of each Incremental Purchase (a “(a “Standard Purchase Notice”) no later than 11:00 a6:00 p.m. (ChicagoNew York time) on the Business Day prior to the date of such Incremental Purchase.  Each Purchase Notice shall be subject to Section 6.2 hereof and, except as set forth below, shall be irrevocable and shall specify the requested Purchase Price (which shall not be less than $5,000,000 in the aggregate) and the date of purchase.  A which notice, in the case of the Agent, shall be delivered the Agent’s electronic “C.E.O.” portal. A Standard Purchase Notice received after 11:00 a6:00 p.m. (ChicagoNew York time) on a Business Day shall be deemed received on the next Business Day. Following receipt of each Standard Purchase Notice, the Managing Agents will promptly advise their respective Purchaser Groups, of the contents of such Standard Purchase Notice.  For each Purchaser  Group that includes a Conduit, such Conduit may, at its option, instruct its Managing Agent to cause the Agent to purchase on such Conduit’s behalf, or if any Conduit shall decline to purchase, its Managing Agent (or if there is no Conduit in a Purchaser Group, the Managing Agent for such Purchaser Group) shall cause the Agent to purchase on behalf of the Financial Institution(s) in such Purchaser Group, its Purchaser Group’s Pro Rata Share of such Standard Purchaser Interests from time to time in an aggregate amount not to exceed at such time the aggregate amount of its Purchaser Group’s Standard Commitments.  On the date of each Incremental Purchase under this Section 1.2(a), upon satisfaction of the applicable conditions precedent set forth in Article VI, each PurchaserConduit or the Financial Institution(s) in its Purchaser Group, as applicable (or if there is no Conduit in a Purchaser Group, the Financial Institution(s) in such Purchaser Group) shall wire transfer to the Facility Account, in immediately available funds, no later than 11:00 a2:00 p.m. (ChicagoNew York time), an amount equal to such Purchaser’s(i) in the case of any Conduit, such Conduit’s Purchaser Group’s Pro Rata Share of the aggregate Purchase Price for such Incremental Purchase or (ii) in the case of a Financial Institution, such Financial Institution’s Percentage of its related Purchaser Group’s Pro Rata Share of the aggregate Purchase Price for such Incremental Purchase.

 

Section 1.3          Decreases.(b)  Seller shall provide the PurchasersAgent and the Managing Agent(s) with written notice, in accordance with Section 14.2 (a “a form set forth as Exhibit II-D (a “Standard Reduction Notice”), of any proposed reduction of Aggregate Capital from Collections no later than 12:00 noon (Chicago time) on the6:00 p.m. (New York time) at least one (1) Business Day ofbefore each proposed reduction.  Such Reduction Notice shall designate (i) the date (the “Proposed Standard Reduction Date”) upon which any such reduction of Aggregate Capital shall occur (which date shall give effect to the notice period set forth above), and (ii) the amount of Aggregate Capital of the Standard Purchaser Interests to be reduced (the “Aggregate Standard Reduction”), which reduction shall be distributed ratably to each Purchaser Group in accordance with its Percentagetheir Pro Rata Shares and shall be applied by each Managing Agent ratably to the Standard Purchaser Interests of the Purchasers in such Managing Agent’s Purchaser Group in accordance with the amount of Capital (if any) owing to such Purchasers.  Only one (1) Standard Reduction Notice shall be outstanding at any time.  A Standard Reduction Notice received after 12:00 noon (Chicago6:00 p.m. (New York time) on a Business Day shall be deemed received on the next Business Day.

 

(c)           Seller may, upon at least 5 Business Days’ notice to the Agent, which notice shall be promptly delivered by the Agent to each Managing Agent, terminate in whole or reduce in part the unused portion of the Standard Commitments ratably amongst the Purchaser Groups in accordance with their respective Pro Rata Shares (and within each Purchaser Group, ratably to the Financial Institutions in accordance with their respective Percentages);  provided, however, that in no event may the Standard Commitments be reduced below the aggregate outstanding Capital of the Standard Purchaser Interests.  Each reduction in the Standard Commitments shall be in an aggregate amount equal to $5,000,000 or a larger multiple of $1,000,000.

 

(d)           For the avoidance of doubt, it is hereby acknowledged and agreed that (i) the Same-Day Purchaser Interests shall rank pari passu with the Standard Purchaser Interests in all respects, and (ii) each Purchase shall consist solely of Standard Purchaser Interests or Same-Day Purchaser Interests.

 

Section 1.41.3     Payment Requirements.  All amounts to be paid or deposited by any Seller Party pursuant to any provision of this Agreement shall be paid or deposited in accordance with the terms hereof no later than noon (Chicago2:00 p.m. (New York time) on the day when due in immediately available funds, and if not received before noon (Chicagoby 2:00 p.m. (New York time) shall be deemed to be received on the next succeeding Business Day.  If such amounts are payable to a Purchaser  they shall be paid to its related Managing Agent, for the account of such Purchaser, at its address listed beneath its signature on its signature page to this Agreement until otherwise notified by such PurchaserManaging Agent.  All computations of Yield, per annum fees calculated as part of any CP Costs, per annum fees hereunder and per annum fees under the Fee Letters shall be made on the basis of a year of 360 days for the actual number of days elapsed.  If any amount hereunder shall be payable on a day which is not a Business Day, such amount shall be payable on the next succeeding Business Day.

 

 

ARTICLE II

 

PAYMENTS AND COLLECTIONS

 

Section 2.1         Payments.  Notwithstanding any limitation on recourse contained in this Agreement, Seller shall immediately pay to the Purchaserseach Managing Agent when due, for the account of the related Purchaser(s) in its Purchaser Group on a full recourse basis, (i) such fees as set forth in the applicable Fee Letters (which fees shall be sufficient to pay all fees owing to the Purchasers), (ii) all amounts payable as YieldCP Costs, (iii) all amounts payable as Yield, (iv) all amounts payable as Deemed Collections (which shall be immediately due and payable by Seller and applied to reduce outstanding Aggregate Capital hereunder in accordance with Sections 2.2 and 2.3 hereof), (ivv) all amounts required pursuant to Section 2.6, (vvi) all amounts payable pursuant to Article X, if any, (vivii) except as otherwise provided in Section 8.6 of this Agreement, all Servicer costs and expenses, including the Servicing Fee,  in connection with servicing, administering and collecting the Receivables, (viiviii) all Broken Funding Costs and (viiiix) all Default Fees (collectively, the “Obligations”).  If any Person fails to pay any of the Obligations when due, such Person agrees to pay, on demand, the Default Fee in respect thereof until paid.  Notwithstanding the foregoing, no provision of this Agreement or the Fee Letters shall require the payment or permit the collection of any amounts hereunder in excess of the maximum permitted by applicable law.  If at any time Seller receives any Collections or is deemed to receive any Collections, Seller shall immediately pay such Collections or Deemed Collections to the Servicer for application in accordance with the terms and conditions hereof and, at all times prior to such payment, such Collections or Deemed Collections shall be held in trust by Seller for the exclusive benefit of the Purchasers, the Managing Agents and the Agent.

 

Section 2.2         Collections Prior to Amortization.   Prior to the Amortization Date, any Collections and/or Deemed Collections received by the Servicer shall be set aside and held in trust by the Servicer for the payment of any accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in this Section 2.2.  If at any time any Collections are received by the Servicer prior to the Amortization Date, (i) the Servicer shall set aside the Termination Percentage (hereinafter defined) of Collections evidenced by the Purchaser Interests of each Terminating PurchaserFinancial Institution and (ii) Seller hereby requests and the applicable Purchaser or Purchasers (other than any Terminating PurchasersFinancial Institutions) hereby agree to make, simultaneously with such receipt, a reinvestment (each a “Reinvestment”) with that portion of the balance of each and every Collection received by the Servicer that is part of any Purchaser Interest (other than any Purchaser Interests of Terminating PurchasersFinancial Institutions), such that after giving effect to such Reinvestment, the amount of Capital of such Purchaser Interest immediately after such receipt and corresponding Reinvestment shall be equal to the amount of Capital immediately prior to such receipt.  On each Settlement Date prior to the occurrence of the Amortization Date, the Servicer shall remit to each Purchaser’sManaging Agent’s respective account its Purchaser Group’s Pro Rata Share of the amounts set aside during the period since the immediately prior Settlement Date that have not been subject to a Reinvestment and apply such amounts (if not previously paid in accordance with Section 2.1) first, to reduce unpaid Obligations and second, to reduce the Capital of all Purchaser Interests of Terminating PurchasersFinancial Institutions, applied ratably to each Terminating PurchaserFinancial Institution according to its respective Termination Percentage.  If such Capital and Obligations shall be reduced to zero, any additional Collections received by the Servicer (i) if applicable, shall be remitted to each Purchaser’sManaging Agent’s respective account no later than noon (Chicago1:00 p.m. (New York time) to the extent required to fund any Aggregate Same-Day Reduction onor Aggregate Standard Reduction notified by Seller for such Settlement Date and (ii) any balance remaining thereafter shall be remitted from the Servicer to Seller on such Settlement Date.  Each Terminating PurchaserFinancial Institution shall be allocated a ratable portion of Collections from the date of its becoming a Terminating PurchaserFinancial Institution (the “Termination Date”) until such Terminating Financing Institution’s Capital shall be paid in full.  This ratable portion shall be calculated on the Termination Date of each Terminating Purchaser as a percentageFinancial Institution as a Percentage equal to (i) Capital of such Terminating PurchaserFinancial Institution outstanding on its Termination Date, divided by (ii) the Aggregate Capital outstanding on such Termination Date (the “Termination Percentage”).  Each Terminating Purchaser’sFinancial Institution’s Termination Percentage shall remain constant prior to the Amortization Date.  On and after the Amortization Date, each Termination Percentage shall be disregarded, and each Terminating Purchaser’sFinancial Institution’s Capital shall be reduced ratably with all PurchasersFinancial Institutions in accordance with Section 2.3.

 

Section 2.3         Collections Following Amortization.  On the Amortization Date and on each day thereafter, the Servicer shall set aside and hold in trust, for the holder of each Purchaser Interest, all Collections received on such day and an additional amount for the payment of any accrued and unpaid Obligations owed by Seller and not previously paid by Seller in accordance with Section 2.1.  On and after the Amortization Date, the Servicer shall, at any time upon the request from time to time by (or pursuant to standing instructions from) the Agent or any PurchaserManaging Agent (i) remit to each Purchaser’sManaging Agent’s respective account, in accordance with the Percentages of the Purchasers,its Purchaser Group’s Pro Rata Share of the amounts set aside pursuant to the preceding sentence, and (ii) apply such amounts to ratably reduce the Capital associated with each such Purchaser Interest and any other Aggregate Unpaids.

 

Section 2.4         Application of Collections.  If there shall be insufficient funds on deposit for the Servicer to distribute funds in payment in full of the aforementioned amounts pursuant to Section 2.2 or 2.3 (as applicable), the Servicer shall distribute funds:

 

first, to the payment of the Servicer’s reasonable out-of-pocket costs and expenses in connection with servicing, administering and collecting the Receivables, including the Servicing Fee, if Seller or one of its Affiliates is not then acting as the Servicer,

 

second, to the reimbursement of the Agent’s and the Purchaser’sManaging Agents’ costs and expenses (including reasonable fees of legal counsel) of collection and enforcement of this Agreement,

 

third, ratably to the payment of all accrued and unpaid fees under the Fee Letters, CP Costs and Yield, ratably in accordance with the respective amounts thereof owing to each Purchaser Group,

 

fourth, (to the extent applicable) to the ratable reduction of the Aggregate Capital (without regard to any Termination Percentage), provided, however, that prior to the Amortization Date, Seller shall be entitled to designate whether it wishes to reduce the Capital of the Same-Day Purchaser Interests, the Capital of the Standard Purchaser Interests, or the Capital of all Purchaser Interests, and if Seller designates only one type of Purchaser Interest to be reduced, the holder(s) of the other type of Purchaser Interest shall not be entitled to share in any payment under this clause fourth,

 

fifth, for the ratable payment of all other unpaid Obligations, and

 

fourth, (to the extent applicable) to the ratable reduction of the Aggregate Capital (without regard to any Termination Percentage),

 

fifth, for the ratable payment of all other unpaid Obligations, provided that to the extent such Obligations relate to the payment of Servicer costs and expenses, including the Servicing Fee, when Seller or one of its Affiliates is acting as the Servicer, such costs and expenses will not be paid until after the payment in full of all other Obligations, and

 

sixth, after the Aggregate Unpaids have been indefeasibly reduced to zero, to Seller.

 

Collections applied to the payment of Aggregate Unpaids shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth in this Section 2.4, and except as provided in fourth above, shall be shared ratably (within each priority) among the Agent, the Managing Agents and the Purchasers in accordance with the amount of such Aggregate Unpaids owing to each of them in respect of each such priority.

 

Section 2.5         Payment Rescission.  No payment of any of the Aggregate Unpaids shall be considered paid or applied hereunder to the extent that, at any time, all or any portion of such payment or application is rescinded by application of law or judicial authority, or must otherwise be returned or refunded for any reason.  Seller shall remain obligated for the amount of any payment or application so rescinded, returned or refunded, and shall promptly pay each Purchaserto the Agent and each Managing Agent, as applicable (for application to the Person or Persons who suffered such rescission, return or refund) the full amount thereof, plus the Default Fee from the date of any such rescission, return or refunding.

 

Section 2.6         Maximum Purchaser Interests and AggregateCapital.

 

(a)           Seller shall ensure that at no time shall (i) the aggregate of all Purchaser Interests of the Purchasers exceed in the aggregate 100% or, (ii) the Aggregateaggregate Capital exceeds the Purchase Limit.  If the aggregate of theof all Same-Day Purchaser Interests of the Purchasersexceed the Same-Day Commitment, or (iii) the aggregate Capital of all Standard Purchaser Interests exceed the sum of the Standard Commitments.

 

(b)           If the aggregate of all Purchaser Interests exceeds 100%, Seller shall pay to the Purchasersapplicable Managing Agent(s) within one (1) Business Day after Seller’s knowledge thereof, an amount to be applied to reduce the Aggregate Capital (allocated to each PurchaserManaging Agent based on its Percentagerelated Purchaser Group’s Pro Rata Share), such that after giving effect to such payment (and the application thereof to reduce the Aggregate Capital) the aggregate of the Purchaser Interests equals or is less than 100%.

 

(c)           If the Aggregateaggregate Capital of all Same-Day Purchaser Interests exceeds the Purchase LimitSame-Day Commitment, Seller shall pay to the PurchasersWells Fargo within one (1) Business Day after Seller’s knowledge thereof, an amount to be applied to reduce the Aggregateaggregate Capital (allocated to eachof its Same-Day Purchaser based on its Percentage)Interests, such that after giving effect to such payment the Aggregate Capital equals or is less than the Purchase Limit, such excess is eliminated.

 

(d)           If the aggregate Capital of all Standard Purchaser Interests exceeds the aggregate amount of the Standard Commitments, Seller shall pay to the Managing Agents within one (1) Business Day, an amount to be applied to reduce such aggregate Capital (allocated to each Managing Agent based on its related Purchaser Group’s Pro Rata Share), such that after giving effect to such payment, the aggregate Capital of the Standard Purchaser Interests equals or is less than the sum of the Standard Commitments.

 

Section 2.7         Clean UpClean-Up Call.  In addition to Seller’s rights pursuant to Section 1.3Sections 1.1(c) and 1.2(c), Seller shall have the right (after providing two (2) Business Days’ written notice to the PurchasersAgent, which notice shall be promptly delivered by the Agent to the Managing Agents), at any time following the reduction of the Aggregate Capital to a level that is less than 25.0% of the original Purchase Limitaggregate amount of the Standard Commitments plus the Same-Day Commitment, to repurchase from the Purchasers all, but not less than all, of the then outstanding Purchaser Interests.  The purchase price in respect thereof shall be an amount equal to the Aggregate Unpaids through the date of such repurchase, payable in immediately available funds.  Such repurchase shall be without representation, warranty or recourse of any kind, on the part of, or against any Purchaser, any Managing Agent or the Agent.

 

 

ARTICLE III

 

[RESERVED]CP FUNDING

 

Section 3.1         CP Costs.  Seller shall pay CP Costs with respect to the Capital associated with each Standard Purchaser Interest of each Conduit for each day that any Capital in respect of such Standard Purchaser Interest is outstanding.  Each Standard Purchaser Interest directly or indirectly funded substantially with Pooled Commercial Paper issued directly or indirectly by a Conduit will accrue CP Costs each day on a pro rata basis, based upon the percentage share the Capital of such Standard Purchaser Interest represents in relation to all assets held by such Conduit or its Related CP Issuer and directly or indirectly funded substantially with Pooled Commercial Paper.

 

Section 3.2         CP Costs Payments.  On each Monthly Settlement Date, Seller shall pay to each Managing Agent of a Purchaser Group with a Conduit (for the benefit of the Conduit(s) in its related Purchaser Group) an aggregate amount equal to all accrued and unpaid CP Costs in respect of the Capital associated with all Standard Purchaser Interests of such Conduits for the immediately preceding Accrual Period in accordance with Article II.

 

Section 3.3         Calculation of CP Costs.  On the fifth (5th) Business Day immediately preceding each Monthly Settlement Date, each Conduit shall calculate the aggregate amount of CP Costs in respect of the Capital associated with all Standard Purchaser Interests of such Conduit for the applicable Accrual Period and shall notify its related Managing Agent of such aggregate amount.  Upon receipt of such calculations from its Conduit for the applicable Accrual Period, such Managing Agent shall promptly forward to Seller a summary of such calculations.

 

ARTICLE IV

 

FINANCIAL INSTITUTION FUNDING

 

Section 4.1         Financial Institution Funding.  Each Same-Day Purchaser Interest of Wells Fargo, and each Standard Purchaser Interest of the Financial Institutions, shall accrue Yield for each day during its Tranche Period at a rate equal to the Discount Rate in accordance with the terms and conditions hereof.  Until any PurchaserManaging Agent gives notice to Seller of the suspension of the LIBO Rate in accordance with Section 4.34.5, and prior to the occurrence and continuation of an Amortization Event, the Discount Rate for any Purchaser Interest held by a Financial Institution pursuant to the terms and conditions hereof shall be the LIBO Rate.  From and after the giving of the notice described in Section 4.34.5, and after the occurrence and continuation of an Amortization Event, the Discount Rate for any Purchaser Interest held by the applicable Financial Institution shall be the Alternate Base Rate. If a Financial Institution acquires by assignment from its related Conduit any Purchaser Interest pursuant to a Liquidity Agreement, each Purchaser Interest so assigned shall each be deemed to have a new Tranche Period commencing on the date of any such assignment.

 

Section 4.2         Yield Payments.  On the Monthly Settlement Date (a) for each Purchaser Interest of the Financial Institutions (other than Financial Institutions in the Wells Fargo Purchaser Group), Seller shall pay to each applicable Managing Agent (for the benefit of the Financial Institutions in its related Purchaser Group) an aggregate amount equal to the accrued and unpaid Yield for the entire Tranche Period of each such Purchaser Interest in accordance with Article II and (b) for each Purchaser Interest of the Financial Institutions in the Wells Fargo Purchaser Group, Seller shall pay to the applicableManaging Agent in the Wells Fargo Purchaser Group (for the benefit of the Financial Institutions in such Purchaser Group) an aggregate amount equal to the accrued and unpaid Yield for the most recently ended Accrual Period in respect of the portion of Capital held by suchthe Wells Fargo Purchaser Group during such Accrual Period in accordance with Article II.

 

Section 4.3         Selection and Continuation of Tranche Periods.

 

(a)           With consultation from (and approval by) each related Managing Agent, Seller shall from time to time request Tranche Periods for the Purchaser Interests of the Financial Institutions in each Purchaser Group (other than the Wells Fargo Purchaser Group), provided that, if at any time such Financial Institutions shall have a Purchaser Interest, Seller shall always request Tranche Periods such that at least one Tranche Period with respect to Purchaser Interests held by each such Financial Institution shall end on the date specified in clause (A) of the definition of Monthly Settlement Date.

 

(b)           Seller or any Managing Agent (other than the Managing Agent in the Wells Fargo Purchaser Group), upon notice to and consent by the other received at least three (3) Business Days prior to the end of a Tranche Period (the “Terminating Tranche”) for any Purchaser Interest, may, effective on the last day of the Terminating Tranche:  (i) divide any such Purchaser Interest into multiple Purchaser Interests, (ii) combine any such Purchaser Interest with one or more other Purchaser Interests that have a Terminating Tranche ending on the same day as such Terminating Tranche or (iii) combine any such Purchaser Interest with new Purchaser Interests to be purchased on the day such Terminating Tranche ends, provided, that in no event may a Purchaser Interest of a Conduit be combined with a Purchaser Interest of a Financial Institution and in no event may a Purchaser Interest of one Purchaser Group be combined with a Purchaser Interest of another Purchaser Group.

 

Section 4.4          [Reserved]

 

Section 4.34.5    Suspension of the LIBO Rate.  (a) If any PurchaserFinancial Institution notifies Sellerits related Managing Agent that it has determined that funding its PercentagePurchaser Group’s Pro Rata Share of the Purchaser Interests at a LIBO Rate would violate any applicable law, rule, regulation, or directive of any governmental or regulatory authority, whether or not having the force of law, or that (i) deposits of a type and maturity appropriate to match fund its Purchaser Interests at such LIBO Rate are not available or (ii) such LIBO Rate does not accurately reflect the cost of acquiring or maintaining a Purchaser Interest at such LIBO Rate, then such PurchaserManaging Agent shall suspend the availability of such LIBO Rate and any Purchaser Interest accruing Yield at such LIBO Rate shall accrue interest at the Alternate Base Rate.

 

(b)           If less than all of the PurchasersFinancial Institutions give a notice to Sellerthe Managing Agents pursuant to Section 4.34.5(a), each PurchaserFinancial Institution which gave such a notice shall be obliged, at the request of Seller, or such Financial Institution’s Managing Agent (on behalf of the related Conduit, if any), to assign all of its rights and obligations hereunder to (i) another Financial Institution that is acceptable to such related Conduit (if any) or (ii) another funding entity nominated by Seller that is acceptable to such related Conduit (if any) and willing to participate in this Agreement and the related Liquidity Agreement through the StatedLiquidity Termination Date in the place of such notifying PurchaserFinancial Institution; provided that (i) the notifying PurchaserFinancial Institution receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such notifying Purchaser’sFinancial Institution’s share of the Capital and Yield owing to it and all accrued but unpaid fees and other costs and expenses payable in respect of its Purchaser Interests, and (ii) the replacement PurchaserFinancial Institution otherwise satisfies the requirements of Section 12.1(b).

 

Section 4.6         Liquidity Agreement Fundings.  The parties hereto acknowledge that a Conduit may put all or any portion of its Purchaser Interests to the Financial Institutions in its Purchaser Group at any time pursuant such Conduit’s related Liquidity Agreement to finance or refinance the necessary portion of its Purchaser Interests through a funding under such Liquidity Agreement to the extent available.  The fundings under the Liquidity Agreement will accrue interest at the Discount Rate in accordance with Section 4.1.  Regardless of whether a funding of Purchaser Interests by the Financial Institutions constitutes the direct purchase of a Purchaser Interest hereunder, an assignment under the related Liquidity Agreement of a Purchaser Interest originally funded by a Conduit or the sale of one or more participations under the related Liquidity Agreement in a Purchaser Interest originally funded by a Conduit, each Financial Institution participating in a funding of a Purchaser Interest shall have the rights and obligations of a “Purchaser” hereunder with the same force and effect as if it had directly purchased such Purchaser Interest from Seller hereunder.

 

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

Section 5.1         Representations and Warranties of Thethe Seller Parties.  Each Seller Party hereby represents and warrants to the Agent, the Managing Agents and the Purchasers, as to itself, as of the date hereof and as of the date of each Incremental Purchase and the date of each Reinvestment that:

 

(a)           Corporate Existence and Power.  Such Seller Party is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of its state of incorporation or formation.  Such Seller Party is duly qualified to do business and is in good standing as a foreign corporation or limited liability company, and has and holds all corporate or limited liability company power and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted except where the failure to so qualify or to so have or hold could not reasonably be expected to have a Material Adverse Effect.

 

(b)           Power and Authority; Due Authorization, Execution and Delivery.  The execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder and, in the case of Seller, Seller’s use of the proceeds of purchases made hereunder, are within its corporate or company powers and authority and have been duly authorized by all necessary corporate or company action on its part.  This Agreement and each other Transaction Document to which such Seller Party is a party has been duly executed and delivered by such Seller Party.

 

(c)           No Conflict.  The execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder do not contravene or violate (i) its certificate or articles of incorporation or by-laws or certificate of formation or limited liability company agreement, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or by which it or any of its property is bound that is material to the operation of its business, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on assets of such Seller Party or its Subsidiaries (except as created hereunder); and no transaction contemplated hereby requires compliance with any bulk sales act or similar law.

 

(d)           Governmental Authorization.  Other than the filing of the financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder.

 

(e)           Actions, Suits.  There are no actions, suits or proceedings pending, or to the best of such Seller Party’s knowledge, threatened, against or affecting such Seller Party, or any of its properties, in or before any court, arbitrator or other body, that could reasonably be expected to have a Material Adverse Effect.  Such Seller Party is not in default with respect to any order of any court, arbitrator or governmental body.

 

(f)           Binding Effect.  This Agreement and each other Transaction Document to which such Seller Party is a party constitute the legal, valid and binding obligations of such Seller Party enforceable against such Seller Party in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

 

(g)           Accuracy of Information.  All information heretofore furnished by such Seller Party or any of its Affiliates to the Agent, the Managing Agents or the Purchasers for purposes of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by such Seller Party or any of its Affiliates to the Agent, the Managing Agents or the Purchasers will be, true and accurate in every material respect on the date such information is stated or certified and does not and will not knowingly contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading; provided, that any such information constituting projections or pro forma financial information contained in such materials are based upon good faith estimates and assumptions believed by the party providing the same to be reasonable at the time made, it being recognized by the Agent and the Purchasers that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results.

 

(h)           Use of Proceeds.  No proceeds of any purchase hereunder will be used (i) for a purpose that violates, or would be inconsistent with, Regulation T, U or X promulgated by the Board of Governors of the Federal Reserve System from time to time or (ii) to acquire any security in any transaction which is subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.

 

(i)           Good Title.  Immediately prior to each purchase hereunder, Seller shall be the legal and beneficial owner of the Receivables and Related Security with respect thereto, free and clear of any Adverse Claim, except as created by the Transaction Documents.  There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Seller’s ownership interest in each Receivable, its Collections and the Related Security.

 

(j)           Perfection.  This Agreement, together with the filing of the financing statements contemplated hereby, is effective to, and shall, upon each purchase hereunder, transfer to the Agent for the benefit of the Purchasers (and the Agent for the benefit of such Purchasers shall acquire from Seller) a valid and perfected first priority undivided percentage ownership or security interest in each Receivable existing or hereafter arising and in the Related Security and Collections with respect thereto, free and clear of any Adverse Claim, except as created by the Transactions Documents.  There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the Agent’s (on behalf of the Purchasers) ownership or security interest in the Receivables, the Related Security and Collections.

 

(k)           Places of Business and Locations of Records; Jurisdiction of Organization.  The principal places of business and chief executive office of such Seller Party and the offices where it keeps all of its Records are located at the address(es) listed on Exhibit III or such other locations of which the Agent and the PurchasersManaging Agents have been notified in accordance with Section 7.2(a) in jurisdictions where all action required by Section 14.4(a) has been taken and completed.  Seller is an Illinois limited liability company.  Seller’s Federal Employer Identification Number and Illinois organizational number are correctly set forth on Exhibit III.

 

(l)           Collections.  The conditions and requirements set forth in Section 7.1(j) and Section 8.2 have at all times been satisfied and duly performed.  The names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts of Seller at each Collection Bank and the post office box number of each Lock-Box, are listed on Exhibit IV.  Seller has not granted any Person, other than the Agent as contemplated by this Agreement, dominion and control of any Lock-Box or Collection Account, or the right to take dominion and control of any such Lock-Box or Collection Account at a future time or upon the occurrence of a future event.

 

(m)           Material Adverse Effect.  (i) The initial Servicer represents and warrants that since June 30December 31, 20022015, no event has occurred that could reasonably be expected to have a material adverse effect on the financial condition or operations of the initial Servicer and its Subsidiaries or the ability of the initial Servicer to perform its obligations under this Agreement, and (ii) Seller represents and warrants that since the date of this Agreement, no event has occurred that would have a material adverse effect on (A) the financial condition or operations of Seller, (B) the ability of Seller to perform its obligations under the Transaction Documents, or (C) the collectibility of the Receivables generally or any material portion of the Receivables.

 

(n)           Names.  In the past five (5) years, Seller has not used any company names, trade names or assumed names other than the name in which it has executed this Agreement.

 

(o)           Ownership of Seller.  The Member owns, directly or indirectly, 100% of the issued and outstanding membership interests of Seller, free and clear of any Adverse Claim other than the Adverse Claim in favor of (i) the Administrative Agent as contemplated by the Credit Agreement and (ii) the FloorplanChannel Finance Collateral Agent as contemplated by the FloorplanChannel Finance Credit Agreement.

 

(p)           Not an Investment Company.  Such, Covered Fund, Etc.  Seller Party is not (i) an “investment company” or a company “controlled by an investment company” within the meaning of the Investment Company Act of 1940, as amended, or any successor statute. (the “Investment Company Act”), nor (ii) a “covered fund” under Section 13 of the U.S. Bank Holding Company Act of 1956, as amended, and the applicable rules and regulations thereunder.  In determining that Seller is not a covered fund, Seller is entitled to rely on the exemption from the definition of “investment company” set forth in Section 3(c)(5) of the Investment Company Act.

 

(q)           Compliance with Law.  Such Seller Party has complied in all material respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject.  Each Receivable, together with the Contract related thereto, does not contravene any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy), and no part of such Contract is in violation of any such law, rule or regulation.

 

(r)           Compliance with Credit and Collection Policy.  Such Seller Party has complied in all material respects with the Credit and Collection Policy with regard to each Receivable and the related Contract, and has not made any change to such Credit and Collection Policy, except such material change as to which the PurchasersManaging Agents have been notified in accordance with Section 7.1(a)(vii).

 

(s)           Payments to Originators.  With respect to each Receivable transferred to Seller under the Receivables Sale Agreement, Seller has given reasonably equivalent value to the applicable Originator in consideration therefor and such transfer was not made for or on account of an antecedent debt.  No transfer by any Originator of any Receivable under the Receivables Sale Agreement is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 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 similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

 

(u)           Eligible Receivables.  Each Receivable included in the Net Eligible Receivables Balance as an Eligible Receivable on the date of its purchase under the Receivables Sale Agreement was an Eligible Receivable on such purchase date and, as of the date of each Report or any other report delivered pursuant to Section 8.5 or Section 6.2(a)(ii), each Receivable included in the Net Eligible Receivables Balance on such Report or other report was an Eligible Receivable.

 

(v)           Net Eligible Receivables Balance.  Seller has determined that, immediately after giving effect to each purchase hereunder, the Net Eligible Receivables Balance is equal to or greater than the sum of (i) the Aggregate Capital, plus (ii) the Aggregate Reserves.

 

(w)           Accounting.  The manner in which such Seller Party accounts for the transactions contemplated by this Agreement and the Receivables Sale Agreement does not jeopardize the true sale analysis.

 

(x)           Purpose.  Seller has determined that, from a business viewpoint, the purchase of the Receivables and related interests thereto from Insight under the Receivables Sale Agreement, and the sale of Purchaser Interests to the Purchasers and the other transactions contemplated herein, are in the best interests of Seller.

 

(y)           Financial Statements.  The September 30, 2002December 31, 2015 consolidated financial statements of Insight and its Subsidiaries heretofore delivered to the Agent, Managing Agents and the Purchasers were prepared in accordance with generally accepted accounting principles in effect on the date such statements were prepared (except for the absence of footnotes and subject to year-end audit adjustments) and fairly present in all material respects the consolidated financial condition and operations of Insight and its Subsidiaries at such date and the consolidated results of their operations for the period then ended.

 

(z)           Payments in Ordinary Course.  Each remittance of Collections by the Seller to the Agent, the Managing Agents or the Purchasers hereunder will have been made (i) in payment of a debt incurred in the ordinary course of business or financial affairs and (ii) in the ordinary course of business or financial affairs.

 

(aa)           OFAC.  No Seller Party (i) is an “enemy” or an “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act of the United States (50 U.S.C. App. §§ 1 et seq.), as amended, (ii) is in violation of (A) the Trading with the Enemy Act, as amended, (B) any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto or (C) the PATRIOT Act, (iii) is a Sanctioned Person or Sanctioned Country, (ii) has its assets located in Sanctioned Countries, or (iii) derives income from investments in, or transactions with, Sanctioned Persons or Sanctioned Countries.  No part of the proceeds of any of the purchases, including without limitation, Incremental Purchases and Reinvestments, made hereunder will be used directly or indirectly to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country.

 

(aa)           Anti-Corruption Laws and Sanctions.  Policies and procedures have been implemented and maintained by or on behalf of each of the Seller Parties that are designed to achieve compliance by the Seller Parties and their respective Subsidiaries, directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, giving due regard to the nature of such Person’s business and activities, and each of the Seller Parties, their respective Subsidiaries and their respective officers and employees and, to the knowledge of each of the Seller Parties, its respective officers, employees, directors and agents acting in any capacity in connection with or directly benefitting from the credit facility established hereby, are in compliance with Anti-Corruption Laws and applicable Sanctions, in each case in all material respects.  None of (a) the Seller Parties or any of their respective Subsidiaries or, to the knowledge of the Seller Parties, as applicable, any of their respective directors, officers, employees, or agents that will act in any capacity in connection with or directly benefit from the credit facility established hereby, is a Sanctioned Person, and (b) the Seller Parties nor any of their respective Subsidiaries is organized or resident in a Sanctioned Country.  No purchase of any Purchaser Interest or use of proceeds thereof by any Seller Party in any manner permitted under the Transaction Documents will violate Anti-Corruption Laws or applicable Sanctions.

 

(bb)           Liquidity Coverage Ratio.  Seller has not, does not and will not during the term of this Agreement (i) issue any obligations that (A) constitute asset-backed commercial paper, or (B) are securities required to be registered under the Securities Act of 1933 (the “33 Act”) or that may be offered for sale under Rule 144A or a similar exemption from registration under the 33 Act or the rules promulgated thereunder, or (ii) issue any other debt obligations or equity interests other than the Subordinated Notes (as defined in the Receivables Sale Agreement), the equity interests issued to its parent, or debt obligations substantially similar to the obligations of the Seller under this Agreement that are (A) issued to other banks or asset-backed commercial paper conduits in privately negotiated transactions, and (B) subject to transfer restrictions substantially similar to the transfer restrictions set forth in this Agreement.  Seller further represents and warrants that its assets and liabilities are consolidated with the assets and liabilities of Insight for purposes of GAAP.

 

Section 5.2         Financial Institution Representations and Warranties.  Each Financial Institution that is in a Purchaser Group that contains a Conduit hereby represents and warrants to the Agent and the Managing Agent in its related Purchaser Group:

 

(a)           Existence and Power.  Such Financial Institution is a corporation or a banking association duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, and has all corporate power to perform its obligations hereunder.

 

(b)           No Conflict.  The execution and delivery by such Financial Institution of this Agreement and the performance of its obligations hereunder are within its corporate powers, have been duly authorized by all necessary corporate action, do not contravene or violate (i) its certificate or articles of incorporation or association or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on its assets.  This Agreement has been duly authorized, executed and delivered by such Financial Institution.

 

(c)           Governmental Authorization.  No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by such Financial Institution of this Agreement and the performance of its obligations hereunder.

 

(d)           Binding Effect.  This Agreement constitutes the legal, valid and binding obligation of such Financial Institution enforceable against such Financial Institution in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law).

 

ARTICLE VI

 

CONDITIONS OF PURCHASES

 

Section 6.1         Conditions Precedent to Initial Incremental Purchase.  The initial Incremental Purchase of a Purchaser Interest under this Agreement is subject to the conditions precedent that (a) the Agent and the PurchasersManaging Agents shall have received on or before the date of such purchase those documents listed on Schedule B and (b) the Agent and the PurchasersManaging Agents shall have received all fees and expenses required to be paid on such date pursuant to the terms of this Agreement and the Fee Letters.

 

Section 6.2         Conditions Precedent to All Purchases and Reinvestments.  Each Incremental Purchase and each Reinvestment shall be subject to the further conditions precedent that (a) in the case of each such Incremental Purchase or Reinvestment:  (i) the Servicer shall have delivered to the Agent and the PurchasersManaging Agents on or prior to the date of such purchase, in form and substance satisfactory to the Agent, all Reports as and when due under Section 8.5 and (ii) upon the Agent’s or any Purchaser’sManaging Agent’s reasonable request, the Servicer shall have delivered to the Agent and the PurchasersManaging Agents at least three (3) days prior to such purchase or Reinvestment an interim report in the form of a Monthly Report, Weekly Report or Daily Report showing the amount of Eligible Receivables; (b) the Facility Termination Date shall not have occurred; (c) each PurchaserManaging Agent shall have received such other approvals, opinions or documents as it may reasonably request and (d) on the date of each such Incremental Purchase or Reinvestment, the following statements shall be true (and acceptance of the proceeds of such Incremental Purchase or Reinvestment shall be deemed a representation and warranty by Seller that such statements are then true):

 

(i)           the representations and warranties set forth in Section 5.1 are true and correct on and as of the date of such Incremental Purchase or Reinvestment as though made on and as of such date (or, to the extent such representations and warranties specifically relate to an earlier date, that such representations and warranties were true, correct and complete in all material respects on and as of such earlier date);

 

(ii)           no event has occurred and is continuing, or would result from such Incremental Purchase or Reinvestment, that will constitute an Amortization Event, and no event has occurred and is continuing, or would result from such Incremental Purchase or Reinvestment, that would constitute a Potential Amortization Event; and

 

(iii)           the Aggregateaggregate of all Purchaser Interests does not exceed in the aggregate 100%, the aggregate Capital of all Same-Day Purchaser Interests does not exceed the Purchase LimitSame-Day Commitment, and the aggregate Capital of all Standard Purchaser Interests dodoes not exceed 100%the sum of the Standard Commitments.

 

It is expressly understood that each Reinvestment shall, unless otherwise directed by the Agent or any Purchaser, occur automatically on each day that the Servicer shall receive any Collections without the requirement that any further action be taken on the part of any Person and notwithstanding the failure of Seller to satisfy any of the foregoing conditions precedent in respect of such Reinvestment.  The failure of Seller to satisfy any of the foregoing conditions precedent in respect of any Reinvestment shall give rise to a right of the Agent or any PurchaserManaging Agent, which right may be exercised at any time on demand of the Agent or any such PurchaserManaging Agent within thirty (30) days after the Agent or any such PurchaserManaging Agent shall have obtained knowledge of such failure, to rescind the related purchase and direct Seller to pay to the applicable Managing Agent for the benefit of the Purchasers in its Purchaser Group an amount equal to the Collections prior to the Amortization Date that shall have been applied to the affected Reinvestment.

 

ARTICLE VII

 

COVENANTS

 

Section 7.1         Affirmative Covenants of The Seller Parties.  Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, each Seller Party hereby covenants, as to itself, as set forth below:

 

(a)           Financial Reporting.  Such Seller Party will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish or cause to be furnished to the Agent and the PurchasersManaging Agents:

 

(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 and the PurchasersManaging Agents 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 and the PurchasersManaging Agents 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 and the PurchasersManaging Agents on one of such web pages; provided, further, that Insight will promptly notify the Agent and the PurchasersManaging Agents 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 and the PurchasersManaging Agents 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 and the PurchasersManaging Agents) on the applicable filing dates, and Purchasersthe Managing Agents agree to self-subscribe to receive such notices on Insight’s website.

 

(ii)           Within 45 days after the end of each of the first three fiscal quartersFiscal Quarters of its respective fiscal years, unaudited consolidated balance sheets of Insight and related unaudited consolidated statements of operations, and cash flows as of the end of and for such fiscal quarterFiscal 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 and statements of income for Seller, all certified by an Authorized Officer 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 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 and the PurchasersManaging Agents 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 and the PurchasersManaging Agents 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 and the PurchasersManaging Agents on one of such web pages; provided, further, that Insight will promptly notify the Agent and the PurchasersManaging Agents 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 and the PurchasersManaging Agents 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 and the PurchasersManaging Agents) on the applicable filing dates, and Purchasersthe Managing Agents agree to self-subscribe to receive such notices on Insight’s website.

 

(iii)           Compliance Certificate.  Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibits V-A and V-B, as applicable, signed by such Seller Party’s Authorized Officer and dated the date of such annual financial statement or such quarterly financial statement, as the case may be.

 

(iv)           Statements and Reports.  Promptly upon the furnishing thereof to the shareholders or members of such Seller Party copies of all financial statements, reports and proxy statements so furnished; provided, that the Seller Parties shall be deemed to have delivered the foregoing to the Agent and the PurchasersManaging Agents 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 and the PurchasersManaging Agents 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 and the PurchasersManaging Agents on one of such web pages; provided, further, that Insight will promptly notify the Agent and the PurchasersManaging Agents 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 and the PurchasersManaging Agents 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 and the PurchasersManaging Agents) on the applicable filing dates, and Purchasersthe Managing Agents agree to self-subscribe to receive such notices on Insight’s website.

 

(v)           S.E.C. Filings.  Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which Insight or any of its Subsidiaries files with the Securities and Exchange Commission; provided, that the Seller Parties shall be deemed to have delivered the foregoing to the Agent and the PurchasersManaging Agents 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 and the PurchasersManaging Agents 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 and the PurchasersManaging Agents on one of such web pages; provided, further, that Insight will promptly notify the Agent and the PurchasersManaging Agents 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 and the PurchasersManaging Agents 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 and the PurchasersManaging Agents) on the applicable filing dates, and Purchasersthe Managing Agents agree to self-subscribe to receive such notices on Insight’s website.

 

(vi)           Copies of Notices.  Promptly upon its receipt of any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Person other than the Agent, any Managing Agent or any Purchaser, copies of the same.

 

(vii)           Change in Credit and Collection Policy.  At least thirty (30) days prior to the effectiveness of any material change in or material amendment to the Credit and Collection Policy, a copy of the Credit and Collection Policy then in effect and a notice (A) indicating such change or amendment, and (B) if such proposed change or amendment would be reasonably likely to adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables, requesting each Purchaser’s consent thereto.

 

(viii)           [Reserved].

 

(ix)           Other Information.  Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the condition or operations, financial or otherwise, of such Seller Party as the Agent or any Purchaser may from time to time reasonably request in order to protect the interests of the Agent, the Managing Agents and the Purchasers under or as contemplated by this Agreement.

 

(b)           Notices.  Such Seller Party will notify the Agent in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:

 

(i)           Amortization Events or Potential Amortization Events.  The occurrence of each Amortization Event and each Potential Amortization Event, by a statement of an Authorized Officer of such Seller Party.

 

(ii)           Judgment and Proceedings.  (A) (1) The entry of any judgment or decree against the Servicer or any of its respective Subsidiaries if the aggregate amount of all judgments and decrees then outstanding against the Servicer and its Subsidiaries exceeds $15,000,00025,000,000, and (2) the institution of any litigation, arbitration proceeding or governmental proceeding against the Servicer which, if adversely determined to the Servicer, could reasonably be expected to have a Material Adverse Effect; and (B) the entry of any judgment or decree or the institution of any litigation, arbitration proceeding or governmental proceeding against Seller.

 

(iii)           Material Adverse Effect.  The occurrence of any event or condition that has had, or could reasonably be expected to have, a Material Adverse Effect.

 

(iv)           Termination Date.  The occurrence of the “Termination Date” under and as defined in the Receivables Sale Agreement.

 

(v)           Defaults Under Other Agreements.  (A) The occurrence of a default or an event of default under any other financing arrangement pursuant to which the Seller is a debtor or an obligor or (B) the occurrence of a default or an event of default under any financing arrangement pursuant to which the Servicer is a debtor or an obligor and relating to Specified Indebtedness.

 

(vi)           Appointment of Independent Director. The decision to appoint a new director of the Seller as an “Independent Director” for purposes of this Agreement, such notice to (A) be issued not less than ten (10) days prior to the effective date of such appointment and (B) certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Director.”

 

(c)           Compliance with Laws and Preservation of Corporate Existence.  Such Seller Party will comply in all respects with (i) all applicable laws, rules and regulations to which it may be subject except (A) where the necessity of compliance therewith is contested in good faith by appropriate proceedings and (B) where the failure to comply could not reasonably be expected to have a Material Adverse Effect, and (ii) all applicable orders, writs, judgments, injunctions, decrees and awards to which it may be subject which have not been stayed by appropriate proceedings.  Such Seller Party will preserve and maintain its corporate or limited liability company existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing or active status as a foreign corporation or limited liability company in each jurisdiction where its business is conducted except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.

 

(d)           Audits.  Such Seller Party will furnish to the Agent and each PurchaserManaging Agent from time to time such information with respect to it and the Receivables as the Agent or any PurchaserManaging Agent may reasonably request.  Such Seller Party will, from time to time during regular business hours as requested by the Agent or any PurchaserManaging Agent upon reasonable notice and at the sole cost of such Seller Party, permit the Agent, the PurchasersManaging Agents or their agents or representatives (and cause each Originator to permit the Agent, the PurchasersManaging Agents or their agents or representatives), (i) to examine and make copies of and abstracts from all Records in the possession or under the control of such Person relating to the Receivables and the Related Security, including, without limitation, the related Contracts, and (ii) to visit the offices and properties of such Person for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to such Person’s financial condition or the Receivables and the Related Security or any Person’s performance under any of the Transaction Documents or any Person’s performance under the Contracts and, in each case, with any of the officers or employees of Seller or the Servicer having knowledge of such matters.  To the extent it is reasonably possible to do so, any such visitations, examinations and discussions shall be conducted concurrently so as to minimize interference with the operations of such Seller Party.

 

(e)           Keeping and Marking of Records and Books.

 

(i)           The Servicer will (and will cause each Originator to) maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable).  The Servicer will (and will cause each Originator to) give the Agent and each PurchaserManaging Agent notice of any material change in the administrative and operating procedures referred to in the previous sentence.

 

(ii)           Such Seller Party will (and will cause each Originator to) (A) on or prior to the date hereof, mark its master data processing records and other books and records relating to the PurchaserManaging Agent Interests with a legend, acceptable to the Agent and the PurchasersManaging Agents, describing the Purchaser Interests and (B) upon the request of the Agent or any PurchaserManaging Agent (x) mark each Contract with a legend describing the Purchaser Interests and (y) deliver to the Agent all Contracts (including, without limitation, all multiple originals of any such Contract) relating to the Receivables.

 

(f)           Compliance with Contracts and Credit and Collection Policy.  Such Seller Party will (and will cause each Originator to) timely and fully (i) perform and comply with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and (ii) comply in all material respects with the Credit and Collection Policy in regard to each Receivable and the related Contract.

 

(g)           Performance and Enforcement of Receivables Sale Agreement.  Seller will perform its obligations and undertakings under and pursuant to the Receivables Sale Agreement, will purchase Receivables thereunder in strict compliance with the terms thereof and will enforce the rights and remedies accorded to Seller under the Receivables Sale Agreement.  Seller will take all actions to perfect and enforce its rights and interests (and the rights and interests of the Agent, the Managing Agents and the Purchasers as assignees of Seller) under the Receivables Sale Agreement as the Agent, any Managing Agent or any Purchaser may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in the Receivables Sale Agreement.

 

(h)           Ownership.  Seller will (or will cause each Originator to) take all necessary action to (i) vest legal and equitable title to the Receivables, the Related Security and the Collections purchased by Seller under the Receivables Sale Agreement irrevocably in Seller, free and clear of any Adverse Claims other than Adverse Claims in favor of the Agent, the Managing Agents and the Purchasers (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Seller’s interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of Seller therein as the Agent, any Managing Agent or any Purchaser may reasonably request), and (ii) establish and maintain, in favor of the Agent, for the benefit of the Managing Agents and the Purchasers, a valid and perfected first priority undivided percentage ownership interest (and/or a valid and perfected first priority security interest) in all Receivables, Related Security and Collections to the full extent contemplated herein, free and clear of any Adverse Claims other than Adverse Claims in favor of the Agent for the benefit of the Managing Agents and the Purchasers (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the Agent’s (for the benefit of the Managing Agents and the Purchasers) interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of the Agent for the benefit of the Managing Agents and the Purchasers as the Agent, any Managing Agent or any Purchaser may reasonably request).

 

(i)           Purchasers’ Reliance.  Seller acknowledges that the Purchasers are entering into the transactions contemplated by this Agreement in reliance upon Seller’s identity as a legal entity that is separate from Insight, each Originator and any Affiliate thereof (each an “Insight Entity”).  Therefore, from and after the date of execution and delivery of this Agreement, Seller shall take all reasonable steps, including, without limitation, all steps that the Agent or any PurchaserManaging Agent may from time to time reasonably request, to maintain Seller’s identity as a separate legal entity and to make it manifest to third parties that Seller is an entity with assets and liabilities distinct from those of any Insight Entity and not just a division of an Insight Entity.  Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, Seller will:

 

(A)           conduct its own business in its own name and require that all full-time employees of Seller, if any, identify themselves as such and not as employees of any Insight Entity (including, without limitation, by means of providing appropriate employees with business or identification cards identifying such employees as Seller’s employees);

 

(B)           compensate all employees, consultants and agents, if any, directly, from Seller’s own funds, for services provided to Seller by such employees, consultants and agents and, to the extent any employee, consultant or agent of Seller is also an employee, consultant or agent of an Insight Entity, allocate the compensation of such employee, consultant or agent between Seller and such Insight Entity, as applicable, on a basis that reflects the services rendered to Seller and such Insight Entity, as applicable;

 

(C)           clearly identify its offices (by signage or otherwise) as its offices and, if such office is located in the offices of an Insight Entity, Seller shall lease such office at a fair market rent;

 

(D)           have a separate telephone number, which will be answered only in its name and separate stationery, invoices and checks in its own name;

 

(E)           conduct all transactions with each Insight Entity (including, without limitation, any delegation of its obligations hereunder as Servicer) strictly on an arm’s-length basis, allocate all overhead expenses (including, without limitation, telephone and other utility charges) for items shared between Seller and such Insight Entity on the basis of actual use to the extent practicable and, to the extent such allocation is not practicable, on a basis reasonably related to actual use;

 

(F)           at all times have a Board of Directors consisting of three members, at least one member of which is an Independent Director;

 

(G)           observe all limited liability company formalities as a distinct entity, and ensure that all corporate actions relating to (A) the selection, maintenance or replacement of the Independent Director, (B) the dissolution or liquidation of Seller or (C) the initiation of, participation in, acquiescence in or consent to any bankruptcy, insolvency, reorganization or similar proceeding involving Seller, are duly authorized by unanimous vote of its Board of Directors (including the Independent Director);

 

(H)           maintain Seller’s books and records separate from those of any Insight Entity and otherwise readily identifiable as its own assets rather than assets of any Insight Entity;

 

(I)           prepare its financial statements separately from those of any Insight Entity and insure that any consolidated financial statements of each Insight Entity thereof that include Seller and that are filed with the Securities and Exchange Commission or any other governmental agency have notes clearly stating that Seller is a separate corporate entity and that its assets will be available first and foremost to satisfy the claims of the creditors of Seller;

 

(J)           except as herein specifically otherwise provided, maintain the funds or other assets of Seller separate from, and not commingled with, those of any Insight Entity and only maintain bank accounts or other depository accounts to which Seller alone is the account party, into which Seller alone makes deposits and from which Seller alone (or the Agent hereunder) has the power to make withdrawals;

 

(K)           pay all of Seller’s operating expenses from Seller’s own assets (except for certain payments by an Insight Entity or other Persons pursuant to allocation arrangements that comply with the requirements of this Section 7.1(i));

 

(L)           operate its business and activities such that:   it does not engage in any business or activity of any kind, or enter into any transaction or indenture, mortgage, instrument, agreement, contract, lease or other undertaking, other than the transactions contemplated and authorized by this Agreement and the Receivables Sale Agreement; and does not create, incur, guarantee, assume or suffer to exist any indebtedness or other liabilities, whether direct or contingent, other than (1) as a result of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, (2) the incurrence of obligations under this Agreement, (3) the incurrence of obligations, as expressly contemplated in the Receivables Sale Agreement, to make payment to the Originators thereunder for the purchase of Receivables from the Originators under the Receivables Sale Agreement, and (4) the incurrence of operating expenses in the ordinary course of business of the type otherwise contemplated by this Agreement;

 

(M)           maintain its limited liability company agreement in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its certificate of formation or limited liability company agreement in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 7.1(i) of this Agreement and (2) at all times that this Agreement is in effect, it provides for (x) not less than ten (10) days’ prior written notice to the Agent of the replacement or appointment of any director that is to serve as an Independent Director for purposes of this Agreement, and (y) the condition precedent to giving effect to such replacement or appointment that the Seller certify that the designated Person satisfied the criteria set forth in the definition herein of “Independent Director”;

 

(N)           maintain the effectiveness of, and continue to perform under the Receivables Sale Agreement, such that it does not amend, restate, supplement, cancel, terminate or otherwise modify the Receivables Sale Agreement, or give any consent, waiver, directive or approval thereunder or waive any default, action, omission or breach under the Receivables Sale Agreement or otherwise grant any indulgence thereunder, without (in each case) the prior written consent of the Agent and each PurchaserManaging Agent;

 

(O)           maintain its limited liability company separateness such that it does not merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions, and except as otherwise contemplated herein) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, any Person, nor at any time create, have, acquire, maintain or hold any interest in any Subsidiary;

 

(P)           maintain at all times the Required Capital Amount (as defined in the Receivables Sale Agreement) and refrain from making any dividend, distribution, redemption of membership interests or payment of any subordinated indebtedness which would cause the Required Capital Amount to cease to be so maintained; and

 

(Q)           take such other actions as are necessary on its part to ensure that the facts and assumptions set forth in the opinion issued by Quarles & Brady LLP, as counsel for Seller, in connection with the closing or initial Incremental Purchase under this Agreement and relating to substantive consolidation issues, and in the certificates accompanying such opinion, remain true and correct in all material respects at all times.

 

(j)           Collections.  Such Seller Party will cause (1) all proceeds from all Lock-Boxes (other than collections with respect to Excluded Receivables, which such Seller Party will cause to be directly deposited into a separate account of Insight Direct identified by Insight Direct) to be directly deposited by a Collection Bank into a Collection Account and (2) each Lock-Box and Collection Account to be subject at all times to a Collection Account Agreement that is in full force and effect. In the event any payments relating to Receivables are remitted directly to Seller or any Affiliate of Seller, Seller will remit (or will cause all such payments to be remitted) directly to a Collection Bank and deposited into a Collection Account within two (2) Business Days following receipt thereof, and, at all times prior to such remittance, Seller will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Agent, the Managing Agents and the Purchasers.  Seller will maintain exclusive ownership, dominion and control (subject to the terms of this Agreement) of each Lock-Box and Collection Account and shall not grant the right to take dominion and control of any Lock-Box or Collection Account at a future time or upon the occurrence of a future event to any Person, except to the Agent as contemplated by this Agreement.  Each Seller Party will cause each payment under an Excluded Receivable to be made to an account other than a Collection Account.

 

(k)           Taxes.

 

(i)       Seller will (A) file all tax returns and reports required by law to be filed by it and will promptly pay all taxes and governmental charges at any time owing, except for taxes being diligently contested in good faith and for which adequate reserves have been established and (B) pay when due any taxes payable in connection with the Receivables, exclusive of taxes on or measured by income or gross receipts of the Conduits, the  Agent, the Managing Agents or any PurchaserFinancial Institution.

 

(ii)       Servicer will file all tax returns and reports required by law to be filed by it and will promptly pay all taxes and governmental charges at any time owing that, if not filed or paid, would result in a Material Adverse Effect, except for taxes being diligently contested in good faith and for which adequate reserves have been established.

 

(l)           Insurance.  Seller will maintain in effect, or cause to be maintained in effect, at Seller’s own expense, such casualty and liability insurance as Seller shall deem appropriate in its good faith business judgment.  The Agent, for the benefit of the Managing Agents and the Purchasers, shall be named as an additional insured with respect to all such liability insurance maintained by Seller.  Seller will pay or cause to be paid, the premiums therefor and deliver to the Agent and each PurchaserManaging Agent evidence satisfactory to the Agent and the PurchasersManaging Agents of such insurance coverage.  Copies of each policy shall be furnished to the Agent and any PurchaserManaging Agent in certificated form upon the Agent’s or such Purchaser’sManaging Agent’s request.  The foregoing requirements shall not be construed to negate, reduce or modify, and are in addition to, Seller’s obligations hereunder.

 

(m)           Payment to the Originators.  With respect to any Receivable purchased by Seller from any Originator, such sale shall be effected under, and in strict compliance with the terms of, the Receivables Sale Agreement, including, without limitation, the terms relating to the amount and timing of payments to be made to the applicable Originator in respect of the purchase price for such Receivable.

 

(n)           Anti-Corruption Laws and Sanctions.  Policies and procedures will be maintained and enforced by or on behalf of the Seller Parties that are designed in good faith and in a commercially reasonable manner to promote and achieve compliance, in the reasonable judgment of such Seller Party, by such Seller Party and each of its Subsidiaries, if any,  and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, in each case giving due regard to the nature of such Person’s business and activities.

 

Section 7.2         Negative Covenants of The Seller Parties.  Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, each Seller Party hereby covenants, as to itself, that:

 

(a)           Name Change, Offices and Records.  Such Seller Party will not change its name, identity, corporate or limited liability company structure (within the meaning of Section 9-507 of the UCC) or jurisdiction of organization or relocate its chief executive office or any office where Records are kept unless it shall have:  (i) given the Agent and the PurchasersManaging Agents at least thirty (30) days’ prior written notice thereof (or such shorter period as the Agent shall agree) and (ii) delivered to the Agent and the PurchasersManaging Agents all financing statements, instruments and other documents requested by the Agent, any Managing Agent or any Purchaser in connection with such change or relocation.

 

(b)           Change in Payment Instructions to Obligors.  Except as may be required by the Agent pursuant to Section 8.2(b), such Seller Party will not add or terminate any bank as a Collection Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box or Collection Account, unless the Agent and the PurchasersManaging Agents shall have received, at least ten (10) days before the proposed effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Collection Bank or a Collection Account or Lock-Box, an executed Collection Account Agreement with respect to the new Collection Account or Lock-Box; provided, however, that the Servicer may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Collection Account.

 

(c)           Modifications to Contracts and Credit and Collection Policy.  Such Seller Party will not, and will not permit any Originator to, make any change to the Credit and Collection Policy that could adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables without each Purchaser’sManaging Agent’s prior written consent.  Except as provided in Section 8.2(d), the Servicer will not, and will not permit any Originator to, extend, amend or otherwise modify the terms of any Receivable or any Contract related thereto other than in accordance with the Credit and Collection Policy.

 

(d)           Sales, Liens.  Seller will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any Receivable, Related Security or Collections, or upon or with respect to any Contract under which any Receivable arises (other than rights to payments and related proceeds under any Contract, which rights have been sold to a Contract Payment Purchaser in connection with a Contract Payment Sale transaction), or any Lock-Box or Collection Account, or assign any right to receive income with respect thereto (other than, in each case, the creation of the interests therein in favor of the Agent, the Managing Agents and the Purchasers provided for herein), and Seller will defend the right, title and interest of the Agent and the Purchasers in, to and under any of the foregoing property, against all claims of third parties claiming through or under Seller or any Originator.  Seller will not create or suffer to exist any mortgage, pledge, security interest, encumbrance, lien, charge or other similar arrangement on any of its inventory, the financing or lease of which gives rise to any Receivable.

 

(e)           Net Eligible Receivables Balance.  At no time prior to the Amortization Date shall Seller permit the Net Eligible Receivables Balance to be less than an amount equal to the sum of (i) the Aggregate Capital plus (ii) the Aggregate Reserves.

 

(f)           Termination Date Determination.  Seller will not designate the Termination Date (as defined in the Receivables Sale Agreement), or send any written notice to the Originators in respect thereof, without the prior written consent of the Agent and each PurchaserManaging Agent, except with respect to the occurrence of such Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement.

 

(g)           Anti-Corruption Laws and Sanctions.  The Borrower will not request any Loan, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Loan (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding or financing any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, in each case to the extent doing so would violate any Sanctions, or (C) in any other manner that would result in liability to any party hereto under any applicable Sanctions or the violation of any Sanctions by any such Person.

 

 

ARTICLE VIII

 

ADMINISTRATION AND COLLECTION

 

Section 8.1         Designation of Servicer.

 

(a)           The servicing, administration and collection of the Receivables shall be conducted by such Person (the “Servicer”) so designated from time to time in accordance with this Section 8.1.  Insight is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms of this Agreement.  The Agent may, at any time following the occurrence and during the continuance of an Amortization Event or Potential Amortization Event, designate as Servicer any Person to succeed Insight or any successor Servicer.

 

(b)           Without the prior written consent of the Agent and each Purchaser,Managing Agent, Insight shall not be permitted to delegate any of its duties or responsibilities as Servicer to any Person other than (i) Seller, (ii) the applicable Originator with respect to the Receivables originated by such Originator and (iii) with respect to certain Charged-Off Receivables, outside collection agencies in accordance with its customary practices.  Neither Seller nor any Originator shall be permitted to further delegate to any other Person any of the duties or responsibilities of the Servicer delegated to it by Insight.  If at any time the Agent, in accordance with Section 8.1(a), shall designate as Servicer any Person other than Insight, all duties and responsibilities theretofore delegated by Insight to Seller may, at the discretion of the Agent, be terminated forthwith on notice given by the Agent to Insight and to Seller.

 

(c)           Notwithstanding the foregoing subsection (b), (i) unless the Agent shall have designated a Person other than Insight to act as Servicer pursuant to this Section 8.1, Insight shall be and remain primarily liable to the Agent, the Managing Agents and the Purchasers for the full and prompt performance of all duties and responsibilities of the Servicer hereunder and (ii) the Agent, the Managing Agents  and the Purchasers shall be entitled to deal exclusively with Insight in matters relating to the discharge by the Servicer of its duties and responsibilities hereunder.  The Agent, the Managing Agents and the Purchasers shall not be required to give notice, demand or other communication to any Person other than Insight in order for communication to the Servicer and its sub-servicer or other delegate with respect thereto to be accomplished.  Insight, at all times that it is the Servicer, shall be responsible for providing any sub-servicer or other delegate of the Servicer with any notice given to the Servicer under this Agreement.

 

Section 8.2         Duties of Servicer.

 

(a)           The Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect each Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy.

 

(b)           The Servicer will instruct all Obligors to pay all Collections directly to a Lock-Box or Collection Account.  The Servicer shall effect a Collection Account Agreement substantially in the form of Exhibit VI with each bank party to a Collection Account at any time.  In the case of any remittances received in any Lock-Box or Collection Account that shall have been identified, to the satisfaction of the Servicer, to not constitute Collections or other proceeds of the Receivables or the Related Security, the Servicer shall promptly remit such items to the Person identified to it as being the owner of such remittances, and in the case of Excluded Receivables, to a collection account of Insight Direct identified by Insight Direct.  From and after the date the Agent delivers to any Collection Bank a Collection Notice pursuant to Section 8.3, the Agent may request that the Servicer, and the Servicer thereupon promptly shall instruct all Obligors with respect to the Receivables, to remit all payments thereon to a new depositary account specified by the Agent and, at all times thereafter, Seller and the Servicer shall not deposit or otherwise credit, and shall not permit any other Person to deposit or otherwise credit to such new depositary account any cash or payment item other than Collections.  The Servicer will instruct all Obligors with respect to all Excluded Receivables to make all payments with respect to Excluded Receivables to locations other than a Lock-Box or Collection Account.

 

(c)           The Servicer shall administer the Collections in accordance with the procedures described herein and in Article II.  The Servicer shall set aside and hold in trust for the account of Seller and the, on the one hand, and the Agent, Managing Agents and Purchasers, on the other, their respective shares of the Collections in accordance with Article II.  The Servicer shall, upon the request of the Agent, segregate, in a manner acceptable to the Agent, all cash, checks and other instruments received by it from time to time constituting Collections from the general funds of the Servicer or Seller prior to the remittance thereof in accordance with Article II.  If the Servicer shall be required to segregate Collections pursuant to the preceding sentence, the Servicer shall segregate and deposit with a bank designated by the Agent such allocable share of Collections of Receivables set aside for the Purchasers on the first Business Day following receipt by the Servicer of such Collections, duly endorsed or with duly executed instruments of transfer.

 

(d)           The Servicer may, in accordance with the Credit and Collection Policy, extend the maturity of any Receivable or adjust the Outstanding Balance of any Receivable as the Servicer determines to be appropriate to maximize Collections thereof; provided, however, that such extension or adjustment shall not alter the status of such Receivable as a Delinquent Receivable or Charged-Off Receivable or limit the rights of the Agent or the Purchasers under this Agreement.  Notwithstanding anything to the contrary contained herein, after the occurrence and during the continuation of an Amortization Event, the Agent shall have the absolute and unlimited right to direct the Servicer to commence or settle any legal action with respect to any Receivable or to foreclose upon or repossess any Related Security.

 

(e)           The Servicer shall hold in trust for Seller and the Purchasers all Records that (i) evidence or relate to the Receivables, the related Contracts and Related Security or (ii) are otherwise necessary or desirable to collect the Receivables and shall, as soon as practicable upon demand of the Agent, deliver or make available to the Agent all such Records, at a place selected by the Agent.  The Servicer shall, as soon as practicable following receipt thereof turn over to Seller any cash collections or other cash proceeds received with respect to Indebtedness not constituting Receivables.  The Servicer shall, from time to time at the request of any Purchaser, furnish to the Purchasers (promptly after any such request) a calculation of the amounts set aside for the Purchasers pursuant to Article II.

 

(f)           Any payment by an Obligor in respect of any indebtedness owed by it to any Originator, Insight or Seller shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Agent, be applied as a Collection of any Receivable of such Obligor (starting with the oldest such Receivable) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other obligation of such Obligor.

 

Section 8.3         Collection Notices.  Following the occurrence and during the continuance of an Amortization Event or a Potential Amortization Event, the Agent is authorized at any time to date and to deliver to the Collection Banks the Collection Notices.  Seller hereby transfers to the Agent for the benefit of the Purchasers, effective when the Agent delivers such notice, the exclusive ownership and control of each Lock-Box and the Collection Accounts.  In case any authorized signatory of Seller whose signature appears on a Collection Account Agreement shall cease to have such authority before the delivery of such notice, such Collection Notice shall nevertheless be valid as if such authority had remained in force.  Seller hereby authorizes the Agent, and agrees that the Agent shall be entitled to (i) endorse Seller’s name on checks and other instruments representing Collections, (ii) enforce the Receivables, the related Contracts and the Related Security and (iii) take such action as shall be necessary or desirable to cause all cash, checks and other instruments constituting Collections of Receivables to come into the possession of the Agent rather than Seller.

 

Section 8.4         Responsibilities of Seller.  Anything herein to the contrary notwithstanding, the exercise by the Agent, the Managing Agents and the Purchasers of their rights hereunder shall not release the Servicer, any of the Originators, Insight or Seller from any of their duties or obligations with respect to any Receivables or under the related Contracts.  The Purchasers shall have no obligation or liability with respect to any Receivables or related Contracts, nor shall any of them be obligated to perform the obligations of Seller.

 

Section 8.5         Reports.  The Servicer shall prepare and forward to the Agent and each PurchaserManaging Agent (i) upon not less than ten (10) Business Days’ notice by the Agent, on Wednesday of each week, a Weekly Report, (ii) on the fifteenthtwentieth (1520th) 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 or any PurchaserManaging Agent shall request, a Monthly Report, (iii) at such times as the Agent or any PurchaserManaging Agent shall request, a listing by Obligor of all Receivables together with an aging of such Receivables and (iv) upon not less than ten (10) Business Days’ notice by the Agent, on each Business Day, a Daily Report.

 

Section 8.6         Servicing Fees.  In consideration of Insight’s agreement to act as Servicer hereunder, the Purchasers hereby agree that, so long as Insight shall continue to perform as Servicer hereunder, Seller shall pay over to Insight a fee (the “Servicing Fee”) on the first day of each month, in arrears for the immediately preceding month, equal to 1.0% per annum times the average daily Net Eligible Receivables Balance during such period, as compensation for its servicing activities.

 

ARTICLE IX

 

AMORTIZATION EVENTS

 

Section 9.1         Amortization Events.  The occurrence of any one or more of the following events shall constitute an Amortization Event:

 

(a)           Any Seller Party shall fail (i) to make any payment or deposit required hereunder when due, or (ii) to perform or observe any term, covenant or agreement hereunder (other than as referred to in clause (i) of this paragraph (a) and paragraph 9.1(e)) and such failure shall continue for three (3) consecutive Business Days after such Seller Party has notice thereof.

 

(b)           Any representation, warranty, certification or statement made by any Seller Party in this Agreement, any other Transaction Document or in any other document delivered pursuant hereto or thereto shall prove to have been incorrect when made or deemed made.

 

(c)           (i) The failure of Seller to pay any Indebtedness when due; or (ii) the failure of the Servicer, Insight or any Originator to pay any “Specified Indebtedness” (hereinafter defined) when due; or the default by any Seller Party, Insight or any Originator in the performance of any term, provision or condition contained in any agreement under which any Specified Indebtedness was created or is governed, the effect of which is to cause, or to permit the holder or holders of such Specified Indebtedness to cause, such Specified Indebtedness to become due prior to its stated maturity; or any such Specified Indebtedness of the Servicer, Insight or any Originator shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the date of maturity thereof. As used herein, “Specified Indebtedness” means Indebtedness which, individually or in the aggregate with other Indebtedness, has an aggregate principal amount or face value in excess of $25,000,000.

 

(d)           (i) Any Seller Party, any Originator or any of its Subsidiaries shall generally not pay its debts as such debts become due or shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors; or (ii) any proceeding shall be instituted by or against any Seller Party, any Originator or any of its Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property and, in the case of any such proceeding instituted against such Person, either such proceeding shall remain undismissed or unstayed for a period of sixty (60) days or an order for relief shall have been entered in such proceedings or a receiver, trustee or similar official shall have been appointed in such proceedings; or (iii) any Seller Party, any Originator or any of its Subsidiaries shall take any corporate action to authorize any of the actions set forth in clauses (i) or (ii) above in this subsection (d).

 

(e)           Seller, Insight or any Originator shall (i) fail to perform or observe any term, covenant or agreement under the Receivables Sale Agreement, or (ii) fail to enforce its rights under the Receivables Sale Agreement after the occurrence of any such failure described in clause (i).

 

(f)           Seller shall fail to comply with the terms of Section 2.6 hereof.

 

(g)           As at the end of any Fiscal Month:

 

(i)         the weighted average of the Default Ratios for the three mostrecently ended Fiscal Months shall exceed 7.0%;

 

	
  

	
(ii)

	
the weighted average of the Delinquency Ratios for the three most recently ended Fiscal Months shall exceed (x) 13.516.0%;

 

	
  

	
(iii)

	
the weighted average of the Dilution Trigger Ratios for the three most recently ended Fiscal Months shall exceed 6.00%.

 

For purposes of this Section 9.1(g), the “weighted average” of each of the ratios referenced above for any three Fiscal Month Period shall be determined by adding the numerators of such ratio for each of such three Fiscal Months and dividing that sum by the sum of the denominators of such ratio for each of such three Fiscal Months.

 

(h)           A Change of Control shall occur.

 

(i)           (i) (w) One or more judgments for the payment of money shall be rendered against Seller, (x) one or more nonmonetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect shall be rendered against Seller, (y) one or more judgments for the payment of money in an aggregate amount in excess of $15,000,00025,000,000 (to the extent not covered by a valid and binding policy of insurance in favor of the Servicer, the applicable Originator or the applicable Subsidiary with respect to which the related insurer has been notified of a claim for payment and has not disputed such claim) shall be rendered against the Servicer, any Originator, any of their Subsidiaries or any combination of the foregoing and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Servicer, any Originator or any of their Subsidiaries to enforce any such judgment, or (z) one or more nonmonetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, shall be rendered against the Servicer, any Originator, any of their Subsidiaries or any combination of the foregoing and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Servicer, any Originator or any of their Subsidiaries to enforce any such judgment.

 

(j)           A “Termination Date” under and as defined in the Receivables Sale Agreement shall occur under the Receivables Sale Agreement or any Originator shall for any reason cease to transfer, or cease to have the legal capacity to transfer, or otherwise be incapable of transferring Receivables to Seller under the Receivables Sale Agreement.

 

(k)           This Agreement shall terminate in whole or in part (except in accordance with its terms), or shall cease to be effective or to be the legally valid, binding and enforceable obligation of Seller, or the Agent, for the benefit of the Managing Agents and the Purchasers, shall cease to have a valid and perfected first priority security interest in the Receivables, the Related Security and the Collections with respect thereto and the Collection Accounts.

 

(l)           The Total Leverage Ratio, as of the last day of each Fiscal Quarter of Insight, shall exceed 2.75 to 1.00.exceeds 3.00 to 1.00; provided that after a Qualified Acquisition has been consummated, an Amortization Event shall occur only  if the Total Leverage Ratio exceeds (i) 3.50 to 1.00 as of the last day of any Fiscal Quarter for the four Fiscal Quarter period beginning with the Fiscal Quarter in which a Qualified Acquisition is consummated (the “First Period”), (ii) 3.25 to 1.00 as of the last day of any Fiscal Quarter for the four Fiscal Quarter period immediately succeeding the First Period or (iii) 3.00 to 1.00 as of the last day of any Fiscal Quarter ending thereafter.

 

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

 

(n)           The Asset Coverage Ratio,Receivables Amount as of the last day of each Fiscal Quarter of Insight, shall be less than 1.75 to 1.00or equal to the aggregate outstanding principal amount of Consolidated Funded Indebtedness at such time.

 

(o)           Any Person shall be appointed as an Independent Director of the Seller without prior notice thereof having been given to the Agent in accordance with Section 7.1(b)(vi).

 

Section 9.2         Remedies.  Upon the occurrence and during the continuation of an Amortization Event, the Agent may, or upon the direction of the Required PurchasersFinancial Institutions shall, take any of the following actions: (i) replace the Person then acting as Servicer, (ii) declare the Amortization Date to have occurred, whereupon the Amortization Date shall forthwith occur, without demand, protest or further notice of any kind, all of which are hereby expressly waived by each Seller Party; provided, however, that upon the occurrence of an Amortization Event described in Section 9.1(d)(ii), or of an actual or deemed entry of an order for relief with respect to any Seller Party under the Federal Bankruptcy Code, the Amortization Date shall automatically occur, without demand, protest or any notice of any kind, all of which are hereby expressly waived by each Seller Party, (iii) to the fullest extent permitted by applicable law, declare that the Default Fee shall accrue with respect to any of the Aggregate Unpaids outstanding at such time, (iv) deliver the Collection Notices to the Collection Banks, and (v) notify Obligors of the Purchasers’ interest in the Receivables.  The aforementioned rights and remedies shall be without limitation, and shall be in addition to all other rights and remedies of the Agent, the Managing Agents and the Purchasers otherwise available under any other provision of this Agreement, by operation of law, at equity or otherwise, all of which are hereby expressly preserved, including, without limitation, all rights and remedies provided under the UCC, all of which rights shall be cumulative.

 

ARTICLE X

 

INDEMNIFICATION

 

Section 10.1       Indemnities by The Seller Parties.  Without limiting any other rights that the Agent, the Managing Agents or any Purchaser may have hereunder or under applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to) the Agent and, each Managing Agent, each Purchaser and any Related CP Issuer and their respective assigns, officers, directors, agents and employees (each an “Indemnified Party”) from and against any and all damages, losses, claims, taxes, liabilities, costs, expenses and for all other amounts payable, including reasonable attorneys’ fees (which attorneys may be employees of the Agent or, such Managing Agent, such Purchaser or such Related CP Issuer) 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 a Purchaser of an interest in the Receivables, and (B) the Servicer hereby agrees to indemnify (and pay upon demand to) each Indemnified Party for Indemnified Amounts awarded against or incurred by any of them arising out of the Servicer’s activities as Servicer hereunder excluding, however, in all of the foregoing instances under the preceding clauses (A) and (B):

 

(a)           Indemnified Amounts to the extent a final judgment of a court of competent jurisdiction holds that such Indemnified Amounts resulted from bad faith, gross negligence or willful misconduct on the part of the Indemnified Party seeking indemnification;

 

(b)           Indemnified Amounts to the extent the same includes losses in respect of Receivables that are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or

 

(c)           taxes imposed by the United States or the jurisdiction in which such Indemnified Party’s principal executive office is located, on or measured by the overall net income of such Indemnified Party to the extent that the computation of such taxes is consistent with the characterization for income tax purposes of the acquisition by the Purchasers of Purchaser Interests as a loan or loans by the Purchasers to Seller secured by the Receivables, the Related Security, the Collection Accounts and the Collections;

 

provided, however, that nothing contained in this sentence shall limit the liability of any Seller Party or limit the recourse of the Purchasers to any Seller Party for amounts otherwise specifically provided to be paid by such Seller Party under the terms of this Agreement.  Without limiting the generality of the foregoing indemnification, Seller or Servicer, as applicable, shall indemnify each Indemnified Party for Indemnified Amounts (including, without limitation, losses in respect of uncollectible receivables, regardless of whether reimbursement therefor would constitute recourse to Seller or the Servicer) relating to or resulting from:

 

(i)           any representation or warranty made by any Seller Party or any Originator (or any officers of any such Person) under or in connection with this Agreement, any other Transaction Document or any other information or report delivered by any such Person pursuant hereto or thereto, which shall have been false or incorrect when made or deemed made;

 

(ii)           the failure by Seller, the Servicer or any Originator to comply with any applicable law, rule or regulation with respect to any Receivable or Contract related thereto, or the nonconformity of any Receivable or Contract included therein with any such applicable law, rule or regulation or any failure of any Originator to keep or perform any of its obligations, express or implied, with respect to any Contract;

 

(iii)           any failure of Seller, the Servicer or any Originator to perform its duties, covenants or other obligations in accordance with the provisions of this Agreement or any other Transaction Document;

 

(iv)           any products liability, personal injury or damage suit, or other similar claim arising out of or in connection with merchandise, insurance or services that are the subject of any Contract or any Receivable;

 

(v)           any dispute, claim, offset or defense (other than discharge in bankruptcy of an Obligor) of an Obligor to the payment of any Receivable (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or service related to such Receivable or the furnishing or failure to furnish such merchandise or services;

 

(vi)           the commingling of Collections of Receivables at any time with other funds;

 

(vii)           any investigation, litigation or proceeding related to or arising from this Agreement or any other Transaction Document, the transactions contemplated hereby, the use of the proceeds of an Incremental Purchase or a Reinvestment, the ownership of the Purchaser Interests or any other investigation, litigation or proceeding relating to Seller, the Servicer or any Originator in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby;

 

(viii)           any inability to litigate any claim against any Obligor in respect of any Receivable as a result of such Obligor being immune from civil and commercial law and suit on the grounds of sovereignty or otherwise from any legal action, suit or proceeding;

 

(ix)           any Amortization Event described in Section 9.1(d);

 

(x)           any failure of Seller to acquire and maintain legal and equitable title to, and ownership of any Receivable and the Related Security and Collections with respect thereto from Insight, free and clear of any Adverse Claim (other than as created hereunder); or any failure of Seller to give reasonably equivalent value to an Originator under the Receivables Sale Agreement in consideration of the transfer by such Originator of any Receivable, or any attempt by any Person to void such transfer under statutory provisions or common law or equitable action;

 

(xi)           any failure to vest and maintain vested in the Agent for the benefit of the Purchasers, or to transfer to the Agent for the benefit of the Purchasers, legal and equitable title to, and ownership of, a first priority perfected undivided percentage ownership interest (to the extent of the Purchaser Interests contemplated hereunder) or security interest in the Receivables, the Related Security and the Collections, free and clear of any Adverse Claim (except as created by the Transaction Documents);

 

(xii)           the failure to have filed, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Receivable, the Related Security and Collections with respect thereto, and the proceeds of any thereof, whether at the time of any Incremental Purchase or Reinvestment or at any subsequent time;

 

(xiii)           any action or omission by any Seller Party which reduces or impairs the rights of the Agent or the Purchasers with respect to any Receivable or the value of any such Receivable;

 

(xiv)           any attempt by any Person to void any Incremental Purchase or Reinvestment hereunder under statutory provisions or common law or equitable action; and

 

(xv)           the failure of any Receivable included in the calculation of the Net Eligible Receivables Balance as an Eligible Receivable to be an Eligible Receivable at the time so included.

 

Section 10.2       Increased Cost and Reduced Return.  (a)  If any Regulatory Change (i) subjects any Purchaser or any Funding Source to any charge or withholding on or with respect to any Funding Agreement or this Agreement or a Purchaser’s or Funding Source's obligations under a Funding Agreement or this Agreement, or on or with respect to the Receivables, or changes the basis of taxation of payments to any Purchaser or any Funding Source of any amounts payable under any Funding Agreement or this Agreement (except for changes in the rate of tax on the overall net income of a Purchaser or Funding Source or taxes excluded by Section 10.1 and attributed to a Purchaser’s or Funding Source’s failure to comply with  Section 12.7) or (ii) imposes, modifies or deems applicable any reserve, assessment, fee, tax, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or liabilities of a Funding Source or a Purchaser, or credit extended by a Funding Source or a Purchaser pursuant to a Funding Agreement or this Agreement or (iii) imposes any other condition the result of which is to increase the cost to a Funding Source or a Purchaser of performing its obligations under a Funding Agreement or this Agreement, or to reduce the rate of return on a Funding Source's or Purchaser’s capital as a consequence of its obligations under a Funding Agreement or this Agreement, or to reduce the amount of any sum received or receivable by a Funding Source or a Purchaser under a Funding Agreement or this Agreement, or to require any payment calculated by reference to the amount of interests or loans held or interest received by it, then, upon demand by the applicable PurchaserManaging Agent, Seller shall pay to such Managing Agent, for the benefit of the relevant Funding Source or Purchaser, such amounts charged to such Funding Source or Purchaser or such amounts to otherwise compensate such Funding Source or such Purchaser for such increased cost or such reduction.  The term “Regulatory Change” shall mean (i) the adoption after the date hereof of any applicable law, rule or regulation (including any applicable law, rule or regulation regarding capital adequacy) or any change therein after the date hereof, (ii) any change after the date hereof in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency, or (iii) the compliance, whether commenced prior to or after the date hereof, by any Purchaser with (x) the final rule titled Risk-Based Capital Guidelines; Capital Adequacy Guidelines; Capital Maintenance: Regulatory Capital; Impact of Modifications to Generally Accepted Accounting Principles; Consolidation of Asset-Backed Commercial Paper Programs; and Other Related Issues, adopted by the United States bank regulatory agencies on December 15, 2009, or any rules or regulations promulgated in connection therewith by any such agency, (y) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder, issued in connection therewith or in implementation thereof, and (z) all requests, rules, guidelines and directives (collectively, “Basel Directives”) promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or by the United States or foreign regulatory authorities to implement any Basel Directives.

 

(b)           A certificate of the applicable Purchaser or Funding Source setting forth the amount or amounts necessary to compensate such Purchaser or Funding Source pursuant to paragraph (a) of this Section 10.2 shall be delivered to the Seller and shall be conclusive absent manifest error.

 

(c)           If any Purchaser or any Funding Source has or anticipates having any claim for compensation from the Seller pursuant to clause (iii) of the definition of Regulatory Change appearing in paragraph (a) of this Section 10.2, and such Purchaser or Funding Source believes that having the facility publicly rated by one credit rating agency would reduce the amount of such compensation by an amount deemed by such Purchaser or Funding Source to be material, such Purchaser or Funding Source shall provide written notice to the Seller and the Servicer (a “Ratings Request”) that such Purchaser or Funding Source intends to request a public rating of the facility from one credit rating agency selected by such Purchaser or Funding Source and reasonably acceptable to the Seller, of at least “A”, or its equivalent (the “Required Rating”).  The Seller and the Servicer agree that they shall cooperate with such Purchaser’s or Funding Source’s efforts to obtain the Required Rating, and shall provide the applicable credit rating agency (either directly or through distribution to the Agent or the, applicable Managing Agent, Purchaser or Funding Source), any information requested by such credit rating agency for purposes of providing and monitoring the Required Rating.  The PurchasersManaging Agents shall pay (i) the initial fees payable to the credit rating agency for providing the rating, (ii) reasonable attorneys’ fees of counsel for PurchasersManaging Agents and the Seller, payable in connection with obtaining the rating, subject to a cap of $10,000 in the aggregate, and (iii) all ongoing fees payable to the credit rating agency for their continued monitoring of the rating, in each case allocated among the PurchasersManaging Agents based on the Pro Rata Share of their PercentagesPurchaser Groups.  Nothing in this Section 10.2(c) shall preclude any Purchaser or Funding Source from demanding compensation from the Seller pursuant to Section 10.2(a) hereof at any time and without regard to whether the Required Rating shall have been obtained, or shall require any Purchaser or Funding Source to obtain any rating on the facility prior to demanding any such compensation from the Seller.

 

Section 10.3       Other Costs and Expenses.  Seller shall pay to the Agent, the Managing Agents and the Purchasers all reasonable costs and out-of-pocket expenses in connection with the preparation, execution, delivery, amendment and administration of this Agreement, the transactions contemplated hereby and the other documents to be delivered hereunder, including without limitation, the cost of auditors auditing the books, records and procedures of Seller (provided, that prior to the occurrence of any Amortization Event or Potential Amortization Event, Seller shall only be required to pay for the cost of one such audit per calendar year), reasonable fees and out-of-pocket expenses of legal counsel for each Purchaser, each Managing Agent and the Agent (which such counsel may be employees of such Purchaser, such Managing Agent or the Agent) with respect thereto and with respect to advising such Purchaser, such Managing Agent and the Agent as to their respective rights and remedies under this Agreement.  Seller shall pay to the Agent, such Managing Agent and each Purchaser any and all reasonable costs and expenses of the Agent, each Managing Agent and such Purchaser, 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 XI

 

THE AGENT

 

Section 11.1        Authorization and Action.  Each Purchaser hereby designates and appoints (i) Wells Fargo to act as its agent hereunder and under each other Transaction Document, and (ii) the Managing Agent in its Purchaser Group to act as its agent hereunder and under each other Transaction Document, authorizes the Agent and such Purchaser’s Managing Agent, as the case may be, to take such actions as agent on its behalf and to exercise such powers as are delegated to the Agent or such Managing Agent by the terms of this Agreement and the other Transaction Documents together with such powers as are reasonably incidental thereto.  TheNeither the Agent nor the Managing Agents shall not have any duties or responsibilities, except those expressly set forth herein or in any other Transaction Document, or any fiduciary relationship with any Purchaser, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of the Agent shall be read into this Agreement or any other Transaction Document or otherwise exist for the Agent or the Managing Agents.  In performing its functions and duties hereunder and under the other Transaction Documents, (ix) the Agent shall act solely as agent for the Purchasers, and (ii) theeach Managing Agent shall notact solely as agent for the Conduit and Financial Institutions in its Purchaser Group, and (iii) neither the Agent nor any Managing Agent shall be deemed to have assumed any obligation or relationship of trust or agency with or for any Seller Party or any of such Seller Party’s successors or assigns.  TheNeither the Agent nor any Managing Agent shall not be required to take any action that exposes the Agent or such Managing Agent to personal liability or that is contrary to this Agreement, any other Transaction Document or applicable law.  The appointment and authority of the Agent and the Managing Agents hereunder shall terminate upon the indefeasible payment in full of all Aggregate Unpaids.  Each Purchaser hereby authorizes the Agent to file each of the Uniform Commercial Code financing statements and to execute the Collection Account Agreements on behalf of such Purchaser (the terms of which shall be binding on such Purchaser).

 

Section 11.2        Delegation of Duties.  The Agent and the Managing Agents may execute any of itstheir respective duties under this Agreement and each other Transaction Document by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  TheNeither the Agent nor any Managing Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

 

Section 11.3        Exculpatory Provisions.  None of the Agent, the Managing Agents or any of itstheir respective directors, officers, agents or employees shall be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in connection with this Agreement or any other Transaction Document (except for its, their or such Person’s own gross negligence or willful misconduct), or (ii) responsible in any manner to any of the Purchasers for any recitals, statements, representations or warranties made by any Seller Party contained in this Agreement, any other Transaction Document or any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, this Agreement, or any other Transaction Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, or any other Transaction Document or any other document furnished in connection herewith or therewith, or for any failure of any Seller Party to perform its obligations hereunder or thereunder, or for the satisfaction of any condition specified in Article VI, or for the perfection, priority, condition, value or sufficiency of any collateral pledged in connection herewith.  TheNeither the Agent nor any Managing Agent shall not be under any obligation to any Purchaser to ascertain or to inquire as to the observance or performance of any of the agreements or covenants contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Seller Parties.  TheNeither the Agent nor any Managing Agent shall not be deemed to have knowledge of any Amortization Event or Potential Amortization Event unless the Agent or such Managing Agent, as applicable, has received notice from a Seller Party or a Purchaser. No Managing Agent shall have any responsibility hereunder to any Purchaser other than the Purchasers in its Purchaser Group.

 

Section 11.4        Reliance by Agent. and the Managing Agents.

 

(a)  The Agent shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to Seller), independent accountants and other experts selected by the Agent.  The Agent shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Managing Agents, the Required Purchasers (Financial Institutions or all of the Purchasers, as applicable), as it deems appropriate and it shall first be indemnified to its satisfaction by the Purchasers, provided that unless and until the Agent shall have received such advice, the Agent may take or refrain from taking any action, as the Agent shall deem advisable and in the best interests of the Purchasers.  The Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request of the Managing Agents or the Required Financial Institutions or all of the Purchasers, as applicable, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Purchasers.

 

(b)           Each Managing Agent shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to Seller), independent accountants and other experts selected by such Managing Agent.  Each Managing Agent shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Purchasers in its related Purchaser Group as it deems appropriate and it shall first be indemnified to its satisfaction by the Purchasers, provided that unless and until such Managing Agent shall have received such advice, such Managing Agent may take or refrain from taking any action, as such Managing Agent shall deem advisable and in the best interests of the Purchasers in its related Purchaser Group.  Each Managing Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request of the Purchasers in its related Purchaser Group, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Purchasers.

 

Section 11.5        Non-Reliance on Agent and Other Purchasers.  Each Purchaser expressly acknowledges that none of the Agent, any other Purchaser northe Managing Agents or any of their respective officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Agent or any other PurchaserManaging Agent hereafter taken, including, without limitation, any review of the affairs of any Seller Party, shall be deemed to constitute any representation or warranty by the Agent or such other PurchaserManaging Agent.  Each Purchaser represents and warrants to the Agent and the other PurchasersManaging Agents that it has and will, independently and without reliance upon the Agent, any Managing Agent or any other Purchaser and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of Seller and made its own decision to enter into this Agreement, the other Transaction Documents and all other documents related hereto or thereto.

 

Section 11.6       Reimbursement and Indemnification.  The PurchasersFinancial Institutions agree to reimburse and indemnify the Agent, and itsthe Financial Institutions in each Purchaser Group agree to reimburse the Managing Agent for such Purchaser Group, and their respective officers, directors, employees, representatives and agents ratably according to their (a) Percentages (in the case of any reimbursement and indemnity obligations owing to its Managing Agent) or (b) Total Commitments (in the case of any reimbursement and indemnity obligations owing to the Agent), to the extent not paid or reimbursed by the Seller Parties (i) for any amounts for which the Agent, in its capacity as Agent, or any Managing Agent, acting in its capacity as a Managing Agent, is entitled to reimbursement by the Seller Parties hereunder and (ii) for any other expenses incurred by the Agent, in its capacity as Agent, or any Managing Agent, acting in its capacity as a Managing Agent, and acting on behalf of its related Purchasers, in connection with the administration and enforcement of this Agreement and the other Transaction Documents.

 

Section 11.7        Agent in itsand the Managing Agents in their Individual CapacityCapacities.  The Agent, each Managing Agent and each of itstheir respective Affiliates may make loans to, accept deposits from and generally engage in any kind of business with Seller or any Affiliate of Seller as though it were not the Agent or a Managing Agent hereunder.  With respect to the acquisition of Purchaser Interests pursuant to this Agreement, the Agent and each Managing Agent shall have the same rights and powers under this Agreement in its individual capacity as any other Purchaser and may exercise the same as though it were not the Agent or a Managing Agent, and the terms “Financial Institution,” “Purchaser,” “Financial Institutions” and “Purchasers” shall include the Agent and each Managing Agent in its individual capacity.

 

Section 11.8        Successor Agent.  The Agent may, upon five days’ notice to Seller and the Purchasers, and the Agent will, upon the direction of all of the Purchasers (other than the Agent, in its individual capacity) resign as Agent.  If the Agent shall resign, then the Required PurchasersFinancial Institutions during such five-day period shall appoint from among the remaining PurchasersManaging Agents a successor Agent.  If for any reason no successor Agent is appointed by the Required PurchasersFinancial Institutions during such five-day period, then effective upon the termination of such five day period, the PurchasersManaging Agents shall perform all of the duties of the Agent hereunder and under the other Transaction Documents and Seller and the Servicer (as applicable) shall make all payments in respect of the Aggregate Unpaids directly to the applicable PurchasersManaging Agents and for all purposes shall deal directly with the PurchasersManaging Agents.  After the effectiveness of any retiring Agent’s resignation hereunder as Agent, the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents and the provisions of this Article XI and Article X shall continue in effect for its benefit with respect to any actions taken or omitted to be taken by it while it was Agent under this Agreement and under the other Transaction Documents.

 

Section 11.9        Successor Managing Agent.  A Managing Agent may, upon five days’ notice to Seller, the Agent and the Purchasers in its Purchaser Group, and a Managing Agent will, upon the direction of all of the Purchasers in such Managing Agent’s Purchaser Group (other than such Managing Agent, in its individual capacity) resign as Managing Agent.  If a Managing Agent shall resign, then the Financial Institutions in such Managing Agent’s Purchaser Group shall appoint a successor managing agent during such five-day period.  If for any reason no successor Managing Agent is appointed by such Financial Institutions during such five-day period, then effective upon the termination of such five-day period, the Purchasers in such Managing Agent’s Purchaser Group shall perform all of the duties of the resigning Managing Agent hereunder and under the other Transaction Documents and Seller and the Servicer (as applicable) shall make all payments in respect of the Aggregate Unpaids directly to the applicable Purchasers and for all purposes shall deal directly with such Purchasers.  After the effectiveness of any retiring Managing Agent’s resignation hereunder, the retiring Managing Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents and the provisions of this Article XI and Article X shall continue in effect for its benefit with respect to any actions taken or omitted to be taken by it while it was a Managing Agent under this Agreement and under the other Transaction Documents.

 

ARTICLE XII

 

ASSIGNMENTS; PARTICIPATIONS

 

Section 12.1        Assignments.

 

(a)           Neither Seller nor the Servicer shall have the right to assign its rights or obligations under this Agreement.

 

(a)           Seller and each Financial Institution hereby agree and consent to the complete or partial assignment by any Conduit of all or any portion of its rights under, interest in, title to and obligations under this Agreement to (i) the Financial Institutions in its Purchaser Group pursuant to a Liquidity Agreement, (ii) to any commercial paper issuing conduit for which a Managing Agent serves as administrative agent or in a similar capacity or (iii) with the prior written consent of Seller (which consent shall not be unreasonably withheld or delayed), to any other Person; provided that Seller shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the related Managing Agent within 5 Business Days after having received notice thereof.  Upon such assignment, any such Conduit shall be released from its obligations so assigned.  Further, Seller and each Financial Institution hereby agree that any assignee of any Conduit of this Agreement of all or any of the Purchaser Interests of such Conduit shall have all of the rights and benefits under this Agreement as if the term “Conduit” explicitly referred to such party, and no such assignment shall in any way impair the rights and benefits of such Conduit hereunder.  Neither Seller nor the Servicer shall have the right to assign its rights or obligations under this Agreement.

 

(b)           Any PurchaserFinancial Institution may at any time and from time to time assign to one or more Persons (each a “Purchasing PurchaserFinancial Institutions”) all or any part of its rights and obligations under this Agreement pursuant to an assignment agreement, substantially in the form set forth in Exhibit VII hereto (an “Assignment Agreement”) executed by such Purchasing PurchaserFinancial Institution and such selling Financial Institution.  To the extent that any such Financial Institution is part of a Purchaser Group with a Conduit, the consent of such Conduit shall be required prior to the effectiveness of any such assignment.  Each assignee of a PurchaserFinancial Institution must (i) have a short-term debt rating of A-1 or better by S&P and P-1 by Moody’s and (ii) agree to deliver to its related Managing Agent and Conduit (if any), promptly following any request therefor by the such Managing Agent, an enforceability opinion in form and substance satisfactory to such Managing Agent and such Conduit.  Upon delivery by a PurchaserFinancial Institution of the executed Assignment Agreement to its related Managing Agent and the Agent, such selling PurchaserFinancial Institution shall be released from its obligations hereunder to the extent of such assignment.  Thereafter the Purchasing PurchaserFinancial Institution shall for all purposes be a PurchaserFinancial Institution party to this Agreement and shall have all the rights and obligations of a PurchaserFinancial Institution under this Agreement to the same extent as if it were an original party hereto and no further consent or action by Seller, the Purchasers, the related Managing Agent or the Agent shall be required.

 

(c)           Each of the PurchasersFinancial Institutions agrees that in the event that it shall cease to have a short-term debt rating of A-1 or better by S&P and P-1 by Moody’s (an “Affected PurchaserFinancial Institution”), such Affected PurchaserFinancial Institution shall be obliged, at the request of a Seller Partythe Conduit in its Purchaser Group or the applicable Managing Agent, to assign all of its rights and obligations hereunder to (x) another PurchaserFinancial Institution or (y) another funding entity nominated by such Seller PartyManaging Agent and acceptable to the related Conduit (if any), and willing to participate in this Agreement through the Liquidity Termination Date in the place of thesuch Affected PurchaserFinancial Institution; provided that the Affected PurchaserFinancial Institution receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such Purchaser’s Pro Rata Share of the Aggregate Capital and Yield owing to the Purchaser and all accrued by unpaid fees andFinancial Institution’s Capital, Yield and all accrued but unpaid fees under the Purchasers’ Fee Letter and its Purchaser Group’s Pro Rata Share other costs and expenses payable in respect of its Pro Rata Share of the Purchaser Interests of the Purchasers.

 

Section 12.2        Participations.  Any PurchaserFinancial Institution may, in the ordinary course of its business at any time sell to one or more Persons (each a “Participant”) participating interests in the Purchaser Interests of such PurchaserFinancial Institutions or any other interest of such PurchaserFinancial Institution hereunder.  Notwithstanding any such sale by a PurchaserFinancial Institution of a participating interest to a Participant, such Purchaser’sFinancial Institution’s rights and obligations under this Agreement shall remain unchanged, such PurchaserFinancial Institution shall remain solely responsible for the performance of its obligations hereunder, and Seller, the PurchasersConduits, the Managing Agents and the Agent shall continue to deal solely and directly with such PurchaserFinancial Institution in connection with such Purchaser’sFinancial Institution’s rights and obligations under this Agreement.  Each PurchaserFinancial Institution agrees that any agreement between such PurchaserFinancial Institution and any such Participant in respect of such participating interest shall not restrict such Purchaser’sFinancial Institution’s right to agree to any amendment, supplement, waiver or modification to this Agreement, except for any amendment, supplement, waiver or modification described in Section 14.1(b)(i).

 

Section 12.3        Extension of Stated Termination Date.  Seller may advise the PurchasersManaging Agents that represent Conduits in writing of itsSeller’s desire to extend the StatedLiquidity Termination Date for an additional 364 days, provided such request is made not more than 60 days prior to, and not less than 45 days prior to, the then current Stated Termination Date.  Each Purchasersuch Managing Agent, upon being so advised by Seller, shall notifypromptly notify each Financial Institution in its related Purchaser Group of any such request and each such Financial Institution shall notify its related Managing Agent and Conduit, Seller and the Agent of its decision to accept or decline the request for such extension no later than 30 days prior to the then current StatedLiquidity Termination Date (it being understood that each PurchaserFinancial Institution may accept or decline such request in its sole discretion and on such terms as it may elect, and the failure to so notify its related Managing Agent and Conduit, Seller and the Agent shall be deemed an election not to extend by such PurchaserFinancial Institution).  In the event that at least one PurchaserFinancial Institution agrees to extend the Stated Termination Date, the Seller Parties, the Agent and, the extending Purchaser or PurchasersFinancial Institutions and the applicable Managing Agent or Managing Agents shall enter into such documents as such extending PurchasersFinancial Institutions may deem necessary or appropriate to reflect such extension, and all reasonable costs and expenses incurred by such extending PurchasersFinancial Institutions, the Managing Agents and the Agent (including reasonable attorneys’ fees and disbursements) shall be paid by Seller.  In the event that any PurchaserFinancial Institution declines the request to extend the StatedLiquidity Termination Date (each such PurchaserFinancial Institution being referred to herein as a “Non-Renewing PurchaserFinancial Institution”), and the Commitment of such Non-Renewing PurchaserFinancial Institution is not assigned to another Person in accordance with the terms of this Article XII prior to the then current Stated Termination Date, the Purchase Limit shall be reduced by an amount equal to each such Non-Renewing Purchaser’sFinancial Institution’s Commitment on the then current StatedLiquidity Termination Date.

 

Section 12.4        Terminating PurchasersFinancial Institutions.

 

(a)           Any Affected PurchaserFinancial Institution or Non-Renewing PurchaserFinancial Institution which has not assigned its rights and obligations hereunder if requested pursuant to this Article XII shall be a “Terminating PurchaserFinancial Institution” for purposes of this Agreement as of the then current StatedLiquidity Termination Date (or, in the case of any Affected PurchaserFinancial Institution, such earlier date as declared by the Agent).

 

(b)           The Commitment of any PurchaserFinancial Institution shall terminate on the date it becomes a Terminating PurchaserFinancial Institution.  Upon reduction to zero of the Capital of all of the Purchaser Interests of a Terminating PurchaserFinancial Institution (after application of Collections thereto pursuant to Sections 2.2 and 2.4) all rights and obligations of such Terminating PurchaserFinancial Institution hereunder shall be terminated and such Terminating PurchaserFinancial Institution shall no longer be a “PurchaserFinancial Institution” hereunder; provided, however, that the provisions of Article X shall continue in effect for its benefit with respect to Purchaser Interests or the Commitment held by such Terminating PurchaserFinancial Institution prior to its termination as a PurchaserFinancial Institution.

 

Section 12.5        Federal Reserve.  Notwithstanding any other provision of this Agreement to the contrary, any PurchaserFinancial Institution may at any time pledge or grant a security interest in all or any portion of its rights (including, without limitation, any Purchaser Interest and any rights to payment of Capital and Yield) under this Agreement to secure obligations of such PurchaserFinancial Institution to a Federal Reserve Bank, without notice to or consent of Seller or the Agent; provided that no such pledge or grant of a security interest shall release a PurchaserFinancial Institution from any of its obligations hereunder, or substitute any such pledgee or grantee for such PurchaserFinancial Institution as a party hereto.

 

Section 12.6        Additional PurchasersPurchaser Groups.  Upon Seller’s request with approval of the Agent and each PurchaserManaging Agent, an additional Purchaser Group may be added to this Agreement at any time by the execution and delivery of a Joinder Agreement by the members of such proposed additional Purchaser Group, Seller, the Servicer, the Agent and each existing PurchaserManaging Agent, and execution and delivery of a reaffirmation of the Performance Undertaking, which execution and delivery shall not be unreasonably refused by such parties.  Upon the effective date of such Joinder Agreement, (i) each Person specified therein as a “PurchaserConduit” shall become a party hereto as a PurchaserConduit, entitled to the rights and subject to the obligations of a PurchaserConduit hereunder, (ii) each Person specified therein as a “Financial Institution” shall become a party hereto as a Financial Institution, entitled to the rights and subject to the obligations of a Financial Institution hereunder, (iii) each Person specified therein as a “Managing Agent” shall become a party hereto as a Managing Agent, entitled to the rights and subject to the obligations of a Managing Agent hereunder and (iiv) the Purchase Limit shall be increased by an amount equal to the Commitmentaggregate Commitments of the PurchaserFinancial Institutions party to such Joinder Agreement.

 

Section 12.7        Withholding Tax Exemption. (a)  At least five (5) Business Days prior to the first date on which any amount is payable hereunder for the account of any Purchaser, each Purchaser that is not a “United States person” for United States federal income tax purposes agrees that it will deliver to each of Seller and theits related Managing Agent a copy of a completed United States Internal Revenue Service Form W-8BEN-E, W-8ECI or W-8IMY with all necessary attachments or applicable successor forms, certifying in each case that such Purchaser is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes.  Each such Purchaser further undertakes to deliver to each of Seller and theits related Managing Agent a copy of such form (or a successor form) on or before the date that such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent forms so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by Seller or theits related Managing Agent, in each case certifying that such Purchaser is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes, unless any change in any treaty, law or regulation has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which prevents such Purchaser from duly completing and delivering any such form with respect to it and such Purchaser advises Seller and theits related Managing Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax.

 

(b)           Each Purchaser that is not a “United States person” for U.S. federal income tax purposes  agrees to indemnify and hold Seller, the Managing Agents, the Purchasers and the Agent harmless in respect of any loss, cost or expense incurred by Seller, any Managing Agent or the Agent as a result of, and agrees that, notwithstanding any other provision hereof, payments hereunder to such Purchaser may be subject to deduction or withholding without indemnification by Seller for, any United States federal income taxes, penalties, interest and other costs and losses incurred or payable by Seller, any Managing Agent or the Agent as a result of, (i) such Purchaser’s failure to submit any form that is required pursuant to this Section 12.7 or (ii) Seller’s, any Managing Agent’s, any Purchaser’s or the Agent’s reliance on any form that such Purchaser has provided pursuant to this Section 12.7 that is determined to be inaccurate in any material respect.

 

(c)           If a payment made to a Purchaser under this Agreement would be subject to U.S. federal withholding tax imposed by FATCA if such Purchaser were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the IRC, as applicable), such Purchaser shall deliver to the Seller and the Agent at the time or times prescribed by law and at such time or times reasonably requested by the Seller or the Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation reasonably requested by the Seller or the Agent as may be necessary for the Seller or the Agent to comply with their obligations under FATCA and to determine that such Purchaser has complied with such Purchaser’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.

 

ARTICLE XIII

 

[RESERVED]

 

ARTICLE XIV

 

MISCELLANEOUS

 

Section 14.1        Waivers and Amendments.

 

(a)           No failure or delay on the part of the Agent, any Managing Agent or any Purchaser in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy.  The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law.  Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given.

 

(b)           No provision of this Agreement may be amended, supplemented, modified or waived except in writing in accordance with the provisions of this Section 14.1(b).  The Conduits, Seller, the Servicer, the Managing Agents and the Agent, at the direction of the Required PurchasersFinancial Institutions, may enter into written modifications or waivers of any provisions of this Agreement, provided, however, that no such modification or waiver shall:

 

(i)           without the consent of each affected Purchaser, (A) extend the Liquidity Termination Date, the Stated Termination Date or the date of any payment or deposit of Collections by Seller or the Servicer, (B) reduce the rate or extend the time of payment of Yield or any CP Costs (or any component of Yield or CP Costs), (C) reduce any fee payable to any PurchaserManaging Agent for the benefit of the Purchasers, (D) except pursuant to Article XII hereof, change the amount of the Capital of any Purchaser, any Purchaser’s Percentage or itsFinancial Institution’s Percentage, any Purchaser Group’s Pro Rata Share (except pursuant to the Liquidity Agreement) or any Financial Institution’s Commitment, (E) change the amount of any Commitment, (F) amend, modify or waive any provision of the definition of Required PurchasersFinancial Institutions or this Section 14.1(b), (FG) consent to or permit the assignment or transfer by Seller of any of its rights and obligations under this Agreement, (GH) change the definition of “Aggregate Reserve,” “Dynamic Reserve,” “Eligible Receivable,” “Loss Horizon Ratio,” “Loss Percentage Floor,” “Loss Ratio,” “Loss Reserve,” “Loss Reserve Percentage,” “Dilution Horizon Ratio,” “Dilution Ratio,” “Dilution Reserve,” “Dilution Reserve Floor,” “Dynamic Dilution Reserve RatioPercentage,” “Dilutions,” “Delinquency Ratio,” “Default Ratio,” “Delinquent Receivable,” “ServicerReserve” or Floor,” “Reserve Floor Percentage,” “Servicing Reserve,” “Servicing Reserve Percentage,”  “Yield Reserve” or “Yield Reserve Percentage” or (H) amend or modify any defined term (or any defined term used directly or indirectly in such defined term) used in clauses (A) through (G) above in a manner that would circumvent the intention of the restrictions set forth in such clauses; or

 

(ii)           without the written consent of the then Agent or any Managing Agents, amend, modify or waive any provision of this Agreement if the effect thereof is to affect the rights or duties of the Agent or such Managing Agent, as applicable.

 

Notwithstanding the foregoing, (i) without the consent of the PurchasersFinancial Institutions, but with the consent of Seller, the Agent may amend this Agreement solely to add additional Persons as PurchasersFinancial Institutions hereunder and (ii) the Agent and, the Required PurchasersFinancial Institutions and the Conduits may enter into amendments to modify any of the terms or provisions of Article XI, Article XII, Section 14.13 or any other provision of this Agreement without the consent of Seller; provided that such amendment has no negative impact upon Seller.  Any modification or waiver made in accordance with this Section 14.1 shall apply to each of the Purchasers equally and shall be binding upon Seller, the Purchasers, the Managing Agents and the Agent.

 

Section 14.2       Notices.  AllExcept as provided in this Section 14.2, all communications and notices provided for hereunder shall be in writing (including bank wire, telecopy, or electronic facsimile transmission, electronic mail or similar writing) and shall be given to the other parties hereto at their respective addresses, or telecopy numbers or email addresses set forth on the signature pages hereof or at such other address, or telecopy number or email address 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 or electronic mail, upon the receipt thereof, if given by mail, three (3) Business Days after the time such communication is deposited in the mail with first class postage prepaid or if given by any other means, when received at the address specified in this Section 14.2. Seller hereby authorizes the Agent and each PurchaserManaging Agent to effect purchases and Tranche Period selections based on telephonic notices made by any Person whom the Agent or such PurchaserManaging Agent in good faith believes to be acting on behalf of Seller. Seller agrees to deliver promptly to the Agent and each PurchaserManaging Agent a written confirmation of each telephonic notice signed by an authorized officer of Seller via mail, electronic mail or telecopy; provided, however, the absence of such confirmation shall not affect the validity of such notice. If the written confirmation differs from the action taken by the Agent or any PurchaserManaging Agent, the records of the Agent or such PurchaserManaging Agent shall govern absent manifest error.

 

Section 14.3        Ratable Payments.  If any Purchaser, whether by setoff or otherwise, has payment made to it with respect to any portion of the Aggregate Unpaids owing to such Purchaser (other than payments received pursuant to Section 10.2 or 10.3 or repayments of Capital to a Terminating PurchaserFinancial Institution prior to an Amortization Date pursuant to Section 2.2) in a greater proportion than that received by any other Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such Purchaser agrees, promptly upon demand, to purchase for cash without recourse or warranty a portion of such Aggregate Unpaids held by the other Purchasers so that after such purchase each Purchaser will hold its ratable proportion of such Aggregate Unpaids; provided that if all or any portion of such excess amount is thereafter recovered from such Purchaser, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

 

Section 14.4        Protection of Ownership Interests of the Purchasers.

 

(a)           Seller agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that may be necessary, or that the Agent may reasonably request, to perfect, protect or more fully evidence the Purchaser Interests, or to enable the Agent, any Managing Agent or the Purchasers to exercise and enforce their rights and remedies hereunder.  At any time following the occurrence and during the continuance of an Amortization Event or a Potential Amortization Event, the Agent may, or the Agent may direct Seller or the Servicer to, notify the Obligors of Receivables, at Seller’s expense, of the ownership or security interests of the Purchasers under this Agreement and may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to the Agent or its designee.  Seller or the Servicer (as applicable) shall, at any Purchaser’s request, withhold the identity of such Purchaser in any such notification.

 

(b)           If any Seller Party fails to perform any of its obligations hereunder, the Agent, any Managing Agent or any Purchaser may (but shall not be required to) perform, or cause the performance of, such obligations, and the Agent’s, such Managing Agent’s or such Purchaser’s costs and expenses incurred in connection therewith shall be payable by Seller as provided in Section 10.3.  Each Seller Party irrevocably authorizes the Agent at any time and from time to time in the sole discretion of the Agent, and appoints the Agent as its attorney-in-fact, to act on behalf of such Seller Party (i) to file financing statements identifying Seller as debtor which are necessary or desirable in the Agent’s sole discretion to perfect and to maintain the perfection and priority of the interest of the Purchasers in the Receivables and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Receivables as a financing statement in such offices as the Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the interests of the Purchasers in the Receivables.  This appointment is coupled with an interest and is irrevocable.

 

Section 14.5        Confidentiality.

 

(a)           Each Seller Party and each Purchaser shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement and the other confidential or proprietary information with respect to the Agent, each Managing Agent and the other Purchasers and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that such Seller Party and such Purchaser and its officers and employees may disclose such information to such Seller Party’s and such Purchaser’s external accountants and attorneys and as required by any applicable law or order of any judicial or administrative proceeding (including, without limitation, filings with the Securities and Exchange Commission and disclosures made to regulators and investors).

 

(b)           Anything herein to the contrary notwithstanding, each Seller Party hereby consents to the disclosure of any nonpublic information with respect to it (i) to the Agent and, the PurchasersManaging Agents, the Financial Institutions or the Conduits by each other, and (ii) by the Agent and, the Managing Agents or the Purchasers to any prospective or actual assignee or participant of any of them and (iii) by the Agent or any Managing Agents to any rating agency (including, without limitation, in compliance with Rule 17g-5 under the Securities Exchange Act of 1934), Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to any Conduit or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which any Managing Agent acts as the administrative agent and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing.  In addition, the Purchasers, the Managing Agents and the Agent may disclose any such nonpublic information pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).

 

Section 14.6        Bankruptcy Petition.  Seller, the Servicer, the Agent, each Managing Agent and each Financial Institution hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any Conduit, it will not institute against, or join any other Person in instituting against, such Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.

 

Section 14.614.7      Limitation of Liability.  Except with respect to any claim arising out of the bad faith, willful misconduct or gross negligence of any Conduit, any Managing Agent, the Agent or any PurchaserFinancial Institution, no claim may be made by any Seller Party or any other Person against any Conduit, any Managing Agent, the Agent or any PurchaserFinancial Institution or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each Seller Party hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

 

Section 14.714.8      CHOICE OF LAW.  THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS (INCLUDING, BUT NOT LIMITED TO, 735 ILCS SECTION 105/5-1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS) EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE PURCHASERS’ SECURITY INTEREST IN THE PURCHASER INTERESTS IS GOVERNED BY THE LAW OF ANOTHER STATE, AS REQUIRED BY THE LAWS OF THE STATE OF ILLINOIS.

 

Section 14.814.9      CONSENT TO JURISDICTION.  EACH SELLER PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, ANY MANAGING AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION TO THE EXTENT NECESSARY TO REALIZE ON THE INTERESTS OF THE PURCHASERS AND THE AGENT IN ANY RECEIVABLES, RELATED SECURITY OR PROCEEDS THEREOF.  ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT, ANY MANAGING AGENT OR ANY PURCHASER OR ANY AFFILIATE OF ANY SUCH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A UNITED STATES FEDERAL COURT OR AN ILLINOIS STATE COURT SETTING IN CHICAGO, ILLINOIS.

 

Section 14.914.10      WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.

 

Section 14.1014.11      Integration; Binding Effect; Survival of Terms.

 

(a)           This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings.

 

(b)           This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).  This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms and shall remain in full force and effect until terminated in accordance with its terms; provided, however, that the rights and remedies with respect to (i) any breach of any representation and warranty made by any Seller Party pursuant to Article V, (ii) the indemnification and payment provisions of Article X, and SectionSections 14.3, and the provisions of Section14.5, 14.6, and 14.15 shall be continuing and shall survive any termination of this Agreement.

 

Section 14.1114.12      Counterparts; Severability; Section References.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement.  Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  Unless otherwise expressly indicated, all references herein to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and sections of, and schedules and exhibits to, this Agreement.

 

Section 14.13      Agent Roles.

 

(a)           Wells Fargo Roles.  Each of the Financial Institutions acknowledges that Wells Fargo acts, or may in the future act, (i) as administrative agent for the Purchasers, and (ii) to provide other services from time to time for any of the Purchasers or any Financial Institution (collectively, the “Wells Fargo Roles”).  Without limiting the generality of this Section 14.13(a), each Financial Institution hereby acknowledges and consents to any and all Wells Fargo Roles and agrees that in connection with any Wells Fargo Role, Wells Fargo may take, or refrain from taking, any action that it, in its discretion, deems appropriate.

 

(b)           Managing Agent Roles.  Each of the Financial Institutions acknowledges that each Person that serves as a Managing Agent hereunder acts, or may in the future act, (i) as Managing Agent for one or more Conduits, (ii) as issuing and paying agent for each such Conduit’s Commercial Paper, (iii) to provide credit or liquidity enhancement for the timely payment for such Conduit’s Commercial Paper and (iv) to provide other services from time to time for some or all of the Conduits in its Purchaser Group (collectively, the “Managing Agent Roles”).  Without limiting the generality of this Section 14.13(b), each Financial Institution hereby acknowledges and consents to any and all Managing Agent Roles and agrees that in connection with any Managing Agent Role, the applicable Managing Agent may take, or refrain from taking, any action that it, in its discretion, deems appropriate, including, without limitation, in its role as managing agent for the related Conduit, if any, and the giving of notice to the Agent or any Managing Agent of a mandatory purchase pursuant to its Liquidity Agreement.

 

Section 14.1214.14       Characterization.

 

(a)           Except as specifically provided in this Agreement, each sale of a Purchaser Interest hereunder is made without recourse to Seller; provided, however, that (i) Seller shall be liable to each Purchaser, each Managing Agent and the Agent for all representations, warranties, covenants and indemnities made by Seller pursuant to the terms of this Agreement, and (ii) such sale does not constitute and is not intended to result in an assumption by any Purchaser, any Managing Agent or the Agent or any assignee thereof of any obligation of Seller, Insight, any Originator or any other person arising in connection with the Receivables, the Related Security, or the related Contracts, or any other obligations of Seller, Insight or any Originator.

 

(b)           In addition to any ownership interest which the Agent and the Purchasers may from time to time acquire pursuant hereto, Seller hereby grants to the Agent for the ratable benefit of the Purchasers a valid and perfected security interest in all of Seller’s right, title and interest in, to and under all Receivables now existing or hereafter arising, the Collections, each Lock-Box, each Collection Account, all Related Security, all other rights and payments relating to such Receivables and the Receivables Sale Agreement (including, without limitation, (a) all rights to indemnification arising thereunder, and (b) all UCC financing statements filed pursuant thereto), all proceeds of any thereof and all other assets in which the Agent on behalf of the Purchasers has acquired, may hereafter acquire and/or purports to have acquired an interest under this Agreement prior to all other liens on and security interests therein to secure the prompt and complete payment of the Aggregate Unpaids.  The Agent and the Purchasers shall have, in addition to the rights and remedies that they may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other applicable law, which rights and remedies shall be cumulative. Seller hereby assigns its security interests against the Originators under the Receivables Sale Agreement to the Agent for the benefit of the Purchasers.

 

(c)           In connection with Seller’s transfer of its right, title and interest in, to and under the Receivables Sale Agreement, Seller agrees that the Agent on behalf of the Purchasers shall have the right to enforce Seller’s rights and remedies under the Receivables Sale Agreement to receive all amounts payable thereunder or in connection therewith, to consent to amendments, modifications or waivers thereof, and to direct, instruct or request any action thereunder, but in each case without any obligation on the part of the Agent or any Purchaser or any of its or their respective Affiliates to perform any of the obligations of Seller under the Receivables Sale Agreement.  To the extent that Seller enforces Seller’s rights and remedies under the Receivables Sale Agreement from and after the occurrence of an Amortization Event, and during the continuance thereof, the Agent shall have the exclusive right to direct such enforcement by Seller.

 

Section 14.15      Excess Funds.  Notwithstanding any provisions contained in this Agreement to the contrary, no Conduit shall be obligated to pay any amount pursuant to this Agreement unless (i) such Conduit has received funds which may be used to make such payment and which funds are not required to repay Commercial Paper when due and (ii) after giving effect to such payment, either (x) there is sufficient liquidity availability (determined in accordance with the program documents governing such Conduit’s securitization program) under all of such Conduit’s liquidity facilities to pay the face amount of all outstanding Commercial Paper when due or (y) all Commercial Paper of such Conduit is paid in full.  Any amount which any Conduit does not pay pursuant to the operation of the preceding sentence shall not constitute a claim (as defined in Section 101(5) of the Federal Bankruptcy Code) against or corporate obligation of such Conduit for any such insufficiency unless and until such Conduit satisfies the provisions of clauses (i) and (ii) above.

 

Section 14.1314.16      USA PATRIOT Act.  The Agent, each Managing Agent and each Purchaser hereby notifies the Seller that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies the Seller, which information includes the name and address of the Seller and other information that will allow the Agent, such Managing Agent or such Purchaser to identify the Seller in accordance with the PATRIOT Act.

 

SIGNATURE PAGES FOLLOW

 

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date hereof.

 

INSIGHT RECEIVABLES, LLC

 

By: Insight Receivables Holding, LLC, its sole member

By:__________________________________

Name:

Title:

	
  

	
Address:

	
444 Scott Drive

Bloomingdale, IL 60108

(Prior to 11/2014)

2250 Pinehurst Boulevard, Suite 200

Addison, IL 60101

(After 11/2014)

	
  

	
Copy to:

	
Insight Receivables, LLC

6820 South Harl Avenue

Tempe, AZ  85283

	
  

	
Fax:

	
(480) 760-7287

INSIGHT ENTERPRISES, INC.

 

By:__________________________________

Name:

Title:

	
  

	
Address:

	
6820 South Harl Avenue

Tempe, Arizona 85283

Attention:  General Counsel and Chief Financial Officer

Fax:           (480) 760-7162 and (480) 760-7003

 

Signature Page to Receivables Purchase Agreement

  

  

  

 

	  	
WELLS FARGO BANK, NATIONAL ASSOCIATION, 

as a Financial Institution, as a Managing Agent and as Agent

	  	  	  	  
	  	
as Agent and as a Purchaser

	  
	  	  	  	  
	  	
By:

	  	  
	  	
Name:

	  	  
	  	
Title:

	  	  
	  	
Address:    

	
Wells Fargo Bank, National Association

1100 Abernathy Rd., N.E.

Suite 1600

Atlanta, GA  30328-5657

Attn:  Ryan Tozier

Email:  Ryan.tozier@wellsfargo.com

Fax:  (866) 972-3558

	  

 

 

Signature Page to Receivables Purchase Agreement

  

  

  

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as a Financial Institution

PNC BANK, NATIONAL ASSOCIATION

as a Purchaser

By:_________________________________

Name:

Title:

Address:

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

1251 Avenue of the Americas

New York, New York 10020-1104  USA

Attention: Securitization Group

Email:  Securitization_reporting@us.mufg.jp; rhurst@us.mufg.jp

Telephone No.:  (212) 782-6957

Telecopier No.:  (212) 782-6448

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as a Managing Agent

By:_________________________________

Name:

Title:

Address:

PNC Bank, National Association

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

225 Fifth1251 Avenue, Floor 4 of the Americas

Pittsburgh, PA  15222

New York, New York 10020-1104  USA

Attention: Mark FalcioneSecuritization Group

Fax:  412-705-1225

Email:  Securitization_reporting@us.mufg.jp; rhurst@us.mufg.jp

Telephone No.:  (212) 782-6957

Telecopier No.:  (212) 782-6448

Signature Page to Receivables Purchase Agreement

  

  

  

 

 

	  	
GOTHAM FUNDING CORPORATION

	  	  	  
	  	  	  
	  	
By:  _________________________________

	  
	  	
Name:

	  
	  	
Title:

	  
	  	  	  
	  	
Address:

	  
	  	  	  
	  	
Gotham Funding Corporation

c/o Global Securitization Services, LLC

68 South Service Road, Suite 120

Melville, NY 11747

Telephone:  (631) 930-7216

Facsimile:  (212) 302-8767

Attention:  David V. DeAngelis

Email:  ddeangelis@gssnyc.com

 

with a copy to:

 

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

1251 Avenue of the Americas

New York, New York 10020-1104  USA

Attention: Securitization Group

Email:  Securitization_reporting@us.mufg.jp; rhurst@us.mufg.jp

 

Telephone No.:  (212) 782-6957

Telecopier No.:  (212) 782-6448

	  
	  	  	  

 

 

Signature Page to Receivables Purchase Agreement

  

  

  

EXHIBIT I

 

DEFINITIONS

 

As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“Accrual Period” means each Fiscal Month, provided that the initial Accrual Period hereunder means the period from (and including) the date of the initial purchase hereunder to (and including) the last day of the Fiscal Month thereafter.

 

“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 that, in the case of a Permitted Acquisition with respect to which the aggregate consideration exceeds $100,000,000, shall have been delivered to the Agent, the Purchasers 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 ended at least 90 days prior to the consummation of such Permitted Acquisition and, for each subsequent fiscal quarter ended at least 45 days prior to the consummation of such Permitted Acquisition, shall be prepared by the Acquired Entity on a basis consistent with such audited financial statements.

 

“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, Adjusted Consolidated EBITDA shall be adjusted to include Acquired Entity EBITDA for the applicable Acquired Entity.

 

“Administrative Agent” means JPMorgan Chase Bank, N.A. (including its branches and affiliates), in its capacity as administrative agent under the Credit Agreement.

 

“Adverse Claim” means a lien, security interest, charge or encumbrance, or other right or claim in, of or on any Person’s assets or properties in favor of any other Person.

 

“Affected PurchaserFinancial Institution” has the meaning specified in Section 12.1(c).

 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person or any Subsidiary of such Person.  A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise.

 

“Aged Credit Ineligible Amount” means, for each Obligor and Former Obligor on any day, (i) the amount of outstanding unapplied credits due to such Person from the applicable Originator on such day multiplied by (ii) the Aged Credit Ineligible Percentage with respect to such Person on such day.

 

“Aged Credit Ineligible Percentage” means, for each Obligor and Former Obligor, on any day (as determined by the Purchasers, in good faith and in their sole discretion):

 

(i)           with respect to each Obligor with respect to any outstanding Receivable on such day, 100%;

 

(ii)           with respect to each Former Obligor which has purchased goods or services from any Originator at any time during the two (2) year period immediately preceding such day, 75%;

 

(iii)           with respect to each Former Obligor which has purchased goods or services from any Originator at any time during the five (5) year period immediately preceding such day, but not at any time during the two (2) year period immediately preceding such day, 50%;

 

(iv)           with respect to each Former Obligor which has not purchased goods or services from any Originator at any time during the five (5) year period immediately preceding such day, 25%; and

 

(v)           with respect to each Former Obligor which has not purchased goods or services from any Originator at any time during the one (1) year period immediately preceding such day, and which is deceased, has dissolved or has otherwise ceased business operations, 0%.

 

“Agent” has the meaning set forth in the preamble to this Agreement.

 

“Agent’s Fee Letter” means that certain Agent’s Fee Letter dated as of June __, 2016 by and between Seller and the Agent, as the same may be amended, restated or otherwise modified or replaced from time to time.

 

“Aggregate Aged Credit Ineligible Amount” means, on any day, the aggregate of the Aged Credit Ineligible Amounts for all Obligors and Former Obligors on such day.

 

“Aggregate Capital” means, on any date of determination, the aggregate amount of Capital of all Purchaser Interests outstanding on such date.

 

“Aggregate Reduction” has the meaning specified in Section 1.3means an Aggregate Standard Reduction or an Aggregate Same-Day Reduction.

 

“Aggregate Reserves” means, on any date of determination, the sumhigher of (a) the Loss Reserve, the Yield Reserve, the DilutionDynamic Reserve and (b) the Servicer Reserve Floor.

 

“Aggregate Same-Day Reduction” has the meaning specified in Section 1.1(b).

 

“Aggregate Standard Reduction” has the meaning specified in Section 1.2(b).

 

“Aggregate Unpaids” means, at any time, an amount equal to the sum of all, Aggregate Capital and all other unpaid Obligations (whether due or accrued) at such time.

 

“Agreement” means this Receivables Purchase Agreement, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatestsum of (a) the greater of (i) the Prime Rate in effect onfor such day plus 3.90%, and (bii) theone-half of one percent (0.50%) above the Federal Funds Effective Rate in effect on such day, plus 4.40% and (cb) the one-month LIBO Rate in effect on such day (or, in each case, if such day is not a Business Day, the immediately preceding Business Day).  Any change inApplicable Margin.  For purposes of determining the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the one-month LIBO Rate shall be effective from and including the effective date of such changefor any day, changes in the Prime Rate or the Federal Funds Effective Rate shall be effective on the date of each such change.

 

“Amortization Date” means the earliest to occur of (i) the day on which any of the conditions precedent set forth in Section 6.2 are not satisfied, (ii) the Business Day immediately prior to the occurrence of an Amortization Event set forth in Section 9.1(d)(ii), (iii) the Business Day specified in a written notice from the Agent following the occurrence of any other Amortization Event pursuant to Section 9.2 hereof, (iv) the Business Day specified in a written notice from the Agent following the failure to obtain the Required Rating within 90 days following delivery of a Ratings Request to the Seller and the Servicer, and (iv) the date which is 30 days after the Agent’s receipt of written notice from Seller that it wishes to terminate the facility evidenced by this Agreement.

 

“Amortization Event” has the meaning specified in Article IX.

 

“Asset Coverage Ratio” means, as of the last day of any Fiscal Quarter of Insight, the ratio of (a) the aggregate total book value of Insight’s and its Subsidiaries’ Receivables and inventory (including, without limitation, Receivables and inventory subject to Permitted Receivables Facilities, Vendor Trade Programs, the Floorplan Loan Documents and Contract Payment Sale transactions) as of such date to (b) the sum of (i) the aggregate principal amount of Indebtedness or other obligations outstanding under the Loan Documents, all Permitted Receivables Facilities, the Floorplan Credit Agreement and all Vendor Trade Programs as of such date and (ii) the aggregate Contract Payment Sale Indebtedness of the Loan Parties as of such date.

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Loan Parties or their respective Subsidiaries from time to time concerning or relating to bribery or corruption, including, without limitation, the Foreign Corrupt Practices Act of 1977, as amended, and any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

 

“Assignment Agreement” has the meaning set forth in Section 12.1(b).

 

“Attributable Debt” in respect of a Sale and Leaseback Transaction that is a Capitalized Lease Obligation means, at any date of determination, the amount of Indebtedness represented thereby according to the definition of “Capitalized Lease Obligation.”

 

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

 

“Authorized Officer” means, with respect to any Person, its chief executive officer, president, chief financial officer, treasurer, chief accounting officer or senior vice president of finance.

 

“Broken Funding Costs” means for any Purchaser Interest which: (i) has its Capital reduced without compliance by Seller with the notice requirements hereunder or (ii) does not become subject to an Aggregate Reduction following the delivery of any Reduction Notice or (iii) is assigned to a Financial Institution pursuant to a Liquidity Agreement or terminated prior to the date on which it was originally scheduled to end; an amount equal to the excess, if any, of (A) the CP Costs or Yield (as applicable) that would have accrued during the remainder of Tranche Periods or the tranche periods for Commercial Paper determined by the applicable Managing Agent to relate to such Purchaser Interest (as applicable) subsequent to the date of such reduction, assignment or termination (or in respect of clause (ii) above, the date such Aggregate Reduction was designated to occur pursuant to the Reduction Notice) of the Capital of such Purchaser Interest if such reduction, assignment or termination had not occurred or such Reduction Notice had not been delivered, over (B) the sum of (x) to the extent all or a portion of such Capital is allocated to another Purchaser Interest, the amount of CP Costs or Yield actually accrued during the remainder of such period on such Capital for the new Purchaser Interest, and (y) to the extent such Capital is not allocated to another Purchaser Interest, the income, if any, actually received during the remainder of such period by the holder of such Purchaser Interest from investing the portion of such Capital not so allocated; as such computations in clause (B) are set forth in reasonable detail in a certificate delivered to Seller by the applicable PurchaserManaging Agent.  All Broken Funding Costs shall be due and payable hereunder upon demand.

 

“Business Day” means any day on which banks are not authorized or required to close in New York, New York or Chicago, Illinois, and The Depository Trust Company of New York is open for business, and, if the applicable Business Day relates to any computation or payment to be made with respect to the LIBO Rate, any day on which dealings in dollar deposits are carried on in the London interbank market.

 

“California Contingent Receivable” means a Receivable, the Obligor of which is the State of California, during any period wherein the Obligor thereof retains the contractual right to return the goods which are the subject of such Receivable to the applicable Originator for credit.

 

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

 

“Capital” of any Purchaser Interest means, at any time, (A) the Purchase Price of such Purchaser Interest, minus (B) the sum of the aggregate amount of Collections and other payments received by the applicable PurchaserManaging Agent which in each case are applied to reduce such Capital in accordance with the terms and conditions of this Agreement; provided that such Capital shall be restored (in accordance with Section 2.5) in the amount of any Collections or other payments so received and applied if at any time the distribution of such Collections or payments are rescinded, returned or refunded for any reason.

 

“Capital Expenditures” means, without duplication, any expenditures for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of Insight and its Subsidiaries prepared in accordance with 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.

 

“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.

 

“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.

 

“Change of Control” means (ia) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person, or two or more Persons acting in concert, of beneficial ownershipgroup (within the meaning of Rule 13d-3the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 50% or more of the outstanding shares of voting stock of Insight, or (ii)thereunder as in effect on the date hereof), of Equity Interests representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Insight; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of Insight by Persons who were neither (i) (x) nominated by the board of directors of Insight, (y) appointed by the board of directors of Insight or (z) approved by the board of directors of Insight for consideration by the shareholders for election, nor (ii) appointed by directors so nominated, appointed or approved; (c) the failure of Insight to maintain ownership (directly or indirectly) of 100% of the outstanding shares of voting stock of each Originator; or (iiid) the failure of the Member to maintain ownership of 100% of the membership interests of Seller.

 

“Channel Finance Collateral Agent” means Wells Fargo Capital Finance, LLC in its capacity as collateral agent under the Channel Finance Credit Agreement.

 

“Channel Finance Credit Agreement” means the Second Amended and Restated Credit Agreement, dated as of June 23, 2016, by and among Insight Public Sector, Inc., Insight Direct USA, Inc., Calence, LLC, the lenders party thereto from time to time, Castle Pines Capital, LLC, as an administrative agent, Wells Fargo Capital Finance, LLC, as an administrative agent, and the Channel Finance Collateral Agent, as amended, restated, supplemented or otherwise modified from time to time.

 

“Channel Finance Loan Documents” has the meaning set forth in the Credit Agreement.

 

“Charged-Off Receivable” means a Receivable as to which noany payment, or part thereof, remains unpaid for more than 90 days from the original due date for such payment: (i) as to which the Obligor thereof has taken any action, or suffered any event to occur, of the type described in Section 9.1(d) (as if references to Seller Party therein refer to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is deceased,; (iii) which, consistent with the Credit and Collection Policy, would be written off Seller’s books as uncollectible,; or (iv) which has been identified by Seller as uncollectible.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Collection Account” means each concentration account, depositary account, lock-box account or similar account maintained in the name of the Borrower in which any Collections are collected or deposited and which is listed on Exhibit IV.

 

“Collection Account Agreement” means an agreement substantially in the form of Exhibit VI among the applicable Originator, Insight, Seller, the Agent and a Collection Bank.

 

“Collection Bank” means, at any time, any of the banks holding one or more Collection Accounts.

 

“Collection Notice” means a notice, in substantially the form of Annex A to Exhibit VI, from the Agent to a Collection Bank.

 

“Collections” means, with respect to any Receivable, all cash collections and other cash proceeds in respect of such Receivable, including, without limitation, all yield, Finance Charges or other related amounts accruing in respect thereof and all cash proceeds of Related Security with respect to such Receivable.

 

“Commercial Paper” means promissory notes of any Conduit issued by such Conduit or its Related CP Issuer in the commercial paper market.

 

 “Commitment” means, for each Purchaser, the commitment of such Purchaser to purchase Purchaser Interests from Seller, in an amount not to exceed (a) in the aggregate, the amount set forth opposite such Purchaser’s name under the Commitment column on Schedule A to this Agreement or for any Purchaser party hereto pursuant to a Joinder Agreement or Assignment Agreement, the “Commitment” set forth therein, as such amount may be modified in accordance with the terms hereof (including, without limitation, any termination of Commitments pursuant to Section 12.3) and (b) with respect to any individual purchase from Seller hereunder, the lesser of (i) its Percentage of the Purchase Price therefor and (ii) its Unused Commitment.

 

“Commitment Availability” means at any time the positive difference (if any) between (a) an amount equal to the aggregate amount of the Commitments at such time minus (b) the Aggregate Capital at such time.

 

“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 5.00% and (ii) such other amount (a “Special Concentration Limit”), if any, for such Obligor 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 any PurchaserManaging Agent may, upon not less than three Business Days’ notice to Seller, cancel any Special Concentration Limit with respect to any Obligor.

 

“Conduit” means, as to any Purchaser Group, each of the Persons listed on Schedule A hereto as a “Conduit” for such Purchaser Group, or in any Assignment Agreement or Joinder Agreement as a “Conduit” for the applicable Purchaser Group, together with its respective successors and permitted assigns.

 

“Consolidated Capital Expenditures” means, with reference to any period, the Capital Expenditures of Insight and its Subsidiaries calculated on a consolidated basis for such period.

 

“Consolidated EBITDA” means, for any Test Period, the sum of (a) Consolidated Net Income for such Test Period plus (b) to the extent deducted in determining Consolidated  Net Income for such Test Period, (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 compensation charge arising from any grant of stock, stock options or other equity-based awards and, (vii) any cash expenses or charges related to any issuance of Equity Interests, Permitted Acquisition or other acquisition, disposition, recapitalization or the incurrence, prepayment, amendment, modification, restructuring or refinancing of Indebtedness, in each case, (x) solely to the extent such transaction is not prohibited by this Agreement and (y) whether or not such transaction is consummated, in an aggregate amount not to exceed $15,000,000 during any Test Period, (viii) cash costs, expenses and fees incurred in connection with the Transactions (as definedand (ix) cash restructuring charges (including in connection with headcount reductions, costs related to the closure, consolidation and integration of facilities, IT infrastructure and legal entities, severance costs and retention bonuses) in an amount, when aggregated with the amount of any increase to Consolidated EBITDA pursuant to clause (y) of the last sentence of the definition of “Pro Forma Basis” in the Credit Agreement) consummated on the Effective Date,, not to exceed 10% of Consolidated EBITDA for such Test Period (calculated prior to giving effect to any increase pursuant to this clause (ix) or clause (y) of the last sentence of the definition of “Pro Forma Basis”) minus (c)(i) to the extent included in Consolidated Net Income for such Test Period, 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.

 

“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 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 (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 (it being understood that Consolidated Funded Indebtedness shall not include amounts outstanding under the FloorplanChannel Finance Credit Agreement or any Vendor Trade Program or any Contract Payment Sale Indebtedness, in each case, so long as such amounts are not bearing interest payable by a Loan Party).

 

“Consolidated Indebtedness” means, at any time, the Indebtedness of Insight and its Subsidiaries calculated on a consolidated basis as of such time.

 

“Consolidated Interest Expense” means, with reference to any period, the interest expense of Insight and its Subsidiaries calculated on a consolidated basis for such period, including, without limitation, yield or any other financing costs resembling interest which are payable under any Permitted Receivables Facility.

 

“Consolidated Net Income” means, with reference to any period, the net income (or loss) of Insight and its Subsidiaries calculated on a consolidated basis for such period.

 

“Consolidated Rentals” means, with reference to any period, the Rentals of Insight and its Subsidiaries calculated on a consolidated basis for such period.

 

“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract, application of a Letter of Credit or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership.

 

“Contract” means, with respect to any Receivable, any and all instruments, agreements, invoices or other writings pursuant to which such Receivable arises or which evidences such Receivable.

 

“Contract Payment Purchaser” has the meaning set forth in the definition of “Contract Payment Sale”.

 

“Contract Payment Sale” means a transaction in which a Loan Party enters into a lease, managed services arrangement or software licensing agreement with a U.S. state or federal Governmental Authority or other Person pursuant to which (i) such Loan Party will lease certain equipment, provide certain managed services or license certain software to such Governmental Authority or other Person, (ii) such Governmental Authority or other Person is obligated to make a series of payments to such Loan Party during the term of such lease, managed services arrangement or software license (each such payment, a “Contract Payment”), (iii) such Loan Party sells or assigns a portion or all of such Contract Payments (and, in the case of a lease or managed services arrangement, the related equipment) and related proceeds to a third-party (a “Contract Payment Purchaser”) and (iv) such Loan Party is involved in the administration and servicing of such Contract Payments for such Contract Payment Purchaser during the term of such lease, managed services arrangement or software license.

 

“Contract Payment Sale Indebtedness” shall mean any remaining obligations of any Loan Party in respect of any Contract Payment Sale transaction that are recorded as a liability on the consolidated balance sheet of Insight and its Subsidiaries.

 

“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.

 

“CP Costs” means, with respect to Conduits in all Purchaser Groups, for each day, the sum of (i) discount or yield accrued on Pooled Commercial Paper on such day, plus (ii) any and all accrued commissions in respect of placement agents and Commercial Paper dealers, and issuing and paying agent fees incurred, in respect of such Pooled Commercial Paper for such day, plus (iii) other costs associated with funding small or odd-lot amounts with respect to all receivable purchase facilities which are directly or indirectly funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income net of expenses received on such day from investment of collections received under all receivable purchase facilities directly or indirectly funded substantially with such Pooled Commercial Paper, minus (v) any payment received on such day net of expenses in respect of Broken Funding Costs related to the prepayment of any Purchaser Interest of any Conduit pursuant to the terms of any receivable purchase facilities directly or indirectly funded substantially with Pooled Commercial Paper.  In addition to the foregoing costs, if Seller shall request any Incremental Purchase during any period of time determined by the applicable Managing Agent in its sole discretion to result in incrementally higher CP Costs applicable to such Incremental Purchase, the Capital associated with any such Incremental Purchase shall, during such period, be deemed to be funded by the related Conduit in such Managing Agent’s Purchaser Group in a special pool (which may include capital associated with other receivable purchase facilities) for purposes of determining such additional CP Costs applicable only to such special pool and charged each day during such period against such Capital.

 

“Credit Agreement” means that certain ThirdFourth Amended and Restated Credit Agreement, dated as of April 26June 23, 20122016, among Insight, as borrower, the “European Borrowers” party thereto, the “Lenders” from time to time party thereto, Wells Fargo Bank, National Association, as Syndication Agent, and the Administrative Agent, as amended, restated, supplemented or otherwise modified from time to time.

 

“Credit and Collection Policy” means Seller’s credit and collection policies and practices relating to Contracts and Receivables existing on the date hereof and summarized in Exhibit VIII hereto, as modified from time to time in accordance with this Agreement.

 

“Daily Report” means a report, in substantially the form of Exhibit XII attached hereto (appropriately completed), furnished by the Servicer to the Agent and each PurchaserManaging Agent pursuant to clause (iv) of Section 8.5.

 

“Deducted Receivables” means, collectively, the California Contingent Receivables, the Software Spectrum Government Receivables, and all Receivables the Obligor of which is Microsoft Corporation or any of its subsidiaries.

 

“Deemed Collections”  means the aggregate of all amounts Seller shall have been deemed to have received as a Collection of a Receivable.  Seller shall be deemed to have received a Collection in full of a Receivable if at any time (i) the Outstanding Balance of any such Receivable is either (x) reduced as a result of any defective or rejected goods or services, any discount or any adjustment or otherwise by Seller (other than cash Collections on account of the Receivables) or (y) reduced or canceled as a result of a setoff in respect of any claim by any Person (whether such claim arises out of the same or a related transaction or an unrelated transaction) or (ii) any of the representations or warranties in Article V are no longer true with respect to any Receivable.

 

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

 

“Default Fee” means with respect to any amount due and payable by Seller in respect of any Aggregate Unpaids, an amount equal to interest on any such unpaid Aggregate Unpaids at a rate per annum equal to 2.00% plus the Alternate Base Rate in effect on such day (or if such day is not a Business Day, the immediately preceding Business Day).

 

“Default Proxy Balance” means, as of the last day of any Fiscal Month, the aggregate Outstanding Balance of all Receivables (other than Deducted Receivables) as to which any payment, or part thereof, remains unpaid for more than 90 days but less than 121 days after the due date thereof.

 

“Default Ratio” means, for any Fiscal Month, a percentage equal to (a) the greater of (i) zero and (ii) the sum of (A) the Default Proxy Balance as of the last day of such Fiscal Month plus (B) the aggregate Outstanding Balance of all Receivables (other than Deducted Receivables) that would have been classified during such Fiscal Month as Charged-Off Receivables, divided by (b) the aggregate Outstanding Balance (in each case, at the time of creation) of Receivables (other than Deducted Receivables) created during the Fiscal Month which ended on the date four (4) Fiscal Months prior to the last day of the current Fiscal Month.

 

“Delinquency Ratio” means, at any time, a percentage equal to (i) the sum of (a) the aggregate Outstanding Balance of all Receivables (other than Deducted Receivables) as to which any payment, or part thereof, remains unpaid for more than 60 days after the due date thereof as at the last day of the most recently ended Fiscal Month plus (b) the aggregate absolute value of the amount of credits and credit memos with respect to any Receivable which remain unapplied for more than 60 days after the due date of such Receivable as at the last day of the most recently ended Fiscal Month, divided by (ii) the aggregate Outstanding Balance of all Receivables (other than Deducted Receivables) as at the last day of the most recently ended Fiscal Month.

 

“Delinquent Receivable” means a Receivable as to which any payment, or part thereof, remains unpaid for more than 60 days after the due date therefor.

 

“Designated Obligor” means an Obligor indicated by the PurchasersManaging Agents to Seller in writing.

 

“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 (other than Deducted Receivables) created during the two 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.

 

“Dilution Ratio” means, for any Fiscal Month, a percentage equal to (i) the aggregate amount of Dilutions (other than Dilutions with respect to Deducted Receivables) which occurred during such Fiscal Month, divided by (ii) the aggregate Outstanding Balance (in each case, at the time of creation) of all Receivables (other than Deducted Receivables) created during the Fiscal Month which ended on the date three (3) Fiscal Months prior to the last day of the current Fiscal Month; provided, however, that for purposes of calculating the Dynamic Dilution Reserve Ratio, the Dilution Ratio shall exclude Dilutions with respect to reductions for credited sales taxes.

 

“Dilution Reserve” means, on any date, an amount equal to (i) the greaterproduct of (a) the Dynamic Dilution Reserve Ratio or (b) the Dilution Reserve Floor, multiplied by (ii) the Net Eligible Receivables Balance as of such date.

 

“Dilution Reserve Floor” means 11%.

 

“Dilutions” means, at any time, the aggregate amount of reductions or cancellations described in clause (i) of the definition of “Deemed Collections”.

 

“Dilution Trigger Ratio” means, for any Fiscal Month, a percentage equal to (i) the aggregate amount of Dilutions (other than Dilutions with respect to Deducted Receivables) which occurred during such Fiscal Month, divided by (ii) the aggregate Outstanding Balance (in each case, at the time of creation) of all Receivables (other than Deducted Receivables) created during the Fiscal Month which ended on the date two (2) Fiscal Months prior to the last day of the current Fiscal Month.

 

“Discount Rate” means, with respect to each Purchaser Interest of the Financial Institutions and any Purchaser Interest of a Conduit, an undivided interest which has been assigned by such Conduit to a Financial Institution pursuant to a Liquidity Agreement, either the LIBO Rate or the Alternate Base Rate (as determined in accordance with Sections 4.1 and 4.34.5).

 

“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 (as defined in the Credit Agreement) (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” or asset sale, provided, that any payment required pursuant to this clause (ii) is subject to the prior repayment in full of the Obligations (as defined in the Credit Agreement)  or is otherwise contractually subordinated in right of payment to the Obligations (as defined in the Credit Agreement) 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 (as defined in the Credit Agreement); provided, however, that if an Equity Interest in any Person is issued pursuant to any plan for the benefit of employees of Insight or any of its Subsidiaries or by any such plan to such employees, such Equity Interest shall not constitute a Disqualified Equity Interest solely because it may be required to be repurchased by Insight or any of its Subsidiaries in order to satisfy applicable statutory or regulatory obligations of such Person.

 

“Dollar”, “dollar” and “$” means the lawful currency of the United States of America.

 

“Domestic Foreign Holding Company” means any Subsidiary incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia substantially all of the assets of which consist of Equity Interests in one or more Foreign Subsidiaries that are “controlled foreign corporations” within the meaning of Section 957 of the Code; provided that such Subsidiary does not conduct any material business or activities other than the ownership of such Equity Interests in Foreign Subsidiaries.

 

“Domestic Subsidiary” means any Subsidiary of any PersonReceivable” means any Receivable owed by an account debtor which is organized under the laws of any state of the United States, any state thereof, or the District of Columbia.

 

“Domestic Subsidiary” means any Subsidiary other than a Foreign Subsidiary.

 

“Dynamic Dilution Reserve RatioPercentage” means, on any date, the amountpercentage 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 three (3) month average Dilution Ratio for any Fiscal Month during the twelve (12) Fiscal Months then most recently ended.

	
  

	
DHR

	
=

	
the Dilution Horizon Ratio on such date.

“Dynamic Reserve” means, on any date of determination, the sum of (a) the Dilution Reserve, plus (b) the Loss Reserve, plus (c) the Yield Reserve, plus (d) the Servicing Reserve.

 

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

 

“Eligible Receivable” means, at any time, a Receivable:

 

(i)           the Obligor of which (a) is (1) a resident of the United States or Canada, or (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; and (d) is not a Sanctioned Person; provided, however, that Receivables described in the foregoing clause (a)(3) may be considered to be Eligible Receivables only so long as (x) the Total Leverage Ratio as of the calendar quarter then most recently ended is at least 0.25 less than the maximum Total Leverage Ratio permitted for such quarter under the Credit Agreement as amended from time to time, and (y) the aggregate Outstanding Balance of all such Receivables does not exceed 10% of the aggregate Outstanding Balance of all Receivables;

 

(ii)           the Obligor of which is not the Obligor of any Delinquent Receivables which in the aggregate constitute more than 35% of all Receivables (measured by Outstanding Balance) of such Obligor;

 

(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;

 

(iv)           which is not a WM Receivable; provided, that, WM Receivables with Outstanding Balances which, in the aggregate, constitute no more than 5% of the aggregate Outstanding Balance of all Receivables, may be Eligible Receivables;

 

(v)           which by its terms is due and payable within 90 days of the original invoice date therefor and has not had its payment terms extended; provided, however, that (i) no more than 50% of the aggregate Outstanding Balance of all Receivables may be due and payable more than 30 days and within 60 days after the original invoice date thereof and (ii) no more than 10% of the aggregate Outstanding Balance of all Receivables may be due and payable more than 60 days and within 90 days after the original invoice date thereof;

 

(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;

 

(vii)           which is denominated and payable only in United States dollars in the United States;

 

(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;

 

(ix)           which arises under a Contract which (A) does not require the Obligor under such Contract to consent to the transfer, sale or assignment of the rights and duties of the applicable Originator or any of its assignees under such Contract and (B) does not contain a confidentiality provision that purports to restrict the ability of any Purchaser to exercise its rights under this Agreement, including, without limitation, its right to review the Contract;

 

(x)           which arises under a Contract that contains an obligation to pay a specified sum of money, contingent only upon the sale of goods or the provision of services by the applicable Originator;

 

(xi)           which, together with the Contract related thereto, does not contravene any law, rule or regulation applicable thereto (including, without limitation, any law, rule and regulation relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no part of the Contract related thereto is in violation of any such law, rule or regulation;

 

(xii)           which satisfies all applicable requirements of the Credit and Collection Policy;

 

(xiii)           which was generated in the ordinary course of the applicable Originator’s business;

 

(xiv)           which arises solely from the sale and licensing of goods or general intangibles (such as software) or the provision of services to the related Obligor by the applicable Originator, and not by any other Person (in whole or in part);

 

(xv)           as to which no PurchaserManaging Agent has notified Seller that such PurchaserManaging Agent has determined that such Receivable or class of Receivables is not acceptable as an Eligible Receivable, including, without limitation, because such Receivable arises under a Contract that is not acceptable to such PurchaserManaging Agent;

 

(xvi)           which is not subject to any right of rescission, set-off, counterclaim, any other defense (including defenses arising out of violations of usury laws) of the applicable Obligor against the applicable Originator or any other Adverse Claim, and the Obligor thereon holds no right as against such Originator to cause such Originator to repurchase the goods or merchandise the sale of which shall have given rise to such Receivable (except with respect to sale discounts effected pursuant to the Contract, or defective goods returned in accordance with the terms of the Contract);

 

(xvii)           as to which the applicable Originator has satisfied and fully performed all obligations on its part with respect to such Receivable required to be fulfilled by it, and no further action is required to be performed by any Person with respect thereto other than payment thereon by the applicable Obligor;

 

(xviii)           all right, title and interest to and in which has been validly transferred by the Originators to Seller under and in accordance with the Receivables Sale Agreement, and Seller has good and marketable title thereto free and clear of any Adverse Claim (other than Adverse Claims created by the Transaction Documents);

 

(xix)           no portion of which constitutes sales tax or late fees or similar charges unless the Total Leverage Ratio as of the calendar quarter then most recently ended is at least 0.25 less than the maximum Total Leverage Ratio permitted for such quarter under the Credit Agreement as amended from time to time; and

 

(xx)           which is not an FOB Destination Receivable or a Deducted Receivable.

 

“Equity Interests” means shares of capital stock, partnership interests and entitlements, 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.

 

“Excluded Receivables” means any indebtedness or obligations owed to the Insight Global Finance division of Insight Direct USA, Inc. (formerly Insight Global Finance, Inc., an Arizona corporation), whether constituting an account, chattel paper, instrument or general intangible, arising in connection with the sale of goods and the rendering of services thereby and receivables from or with “bill-to” locations outside the United States that are remitted to a bank account outside the United States.

 

“Facility Account” means Seller’s Account No. 0060 9027 at JPMorgan Chase Bank, N.A.

 

“Facility Termination Date” means the earlierearliest of (i) the Stated Termination Date, (ii) the Liquidity Termination Date, and (iii) the Amortization Date.

 

“FATCA” means Sections 1471 through 1474 of the IRC and all regulations or official interpretations thereof.

 

“Federal Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as amended and any successor statute thereto.

 

“Federal Funds Effective Rate” means, for any period, a fluctuating interestday, the rate per annum for each day during such period equal to (a) the weighted average of the rates on overnightdetermined by the Federal Reserve Bank of New York based on federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published foron such day (or, if such day is not a Business Day, for the immediately preceding Business Day) and published as the federal funds effective rate by the Federal Reserve Bank of New York inon the Composite Closing Quotations for U.S. Government Securities; or (b)Business Day next succeeding such day, or, if such rate is not so published for any day whichthat is a Business Day, the average of the quotations at approximately 10:30 a.m. (Chicago time) for such day on such transactions received by the Agent from three federal funds brokers of recognized standing selected by it.rate otherwise established by the Lender in any reasonable manner as the rate per annum applicable to federal funds transactions.

 

“Fee Letter” means (i) that certain Seventh Amended and Restated Fee Letter, dated as of June 25, 2014, among Seller, the Agent and the Purchasers and (ii) any other letter designated as a “Fee Letter” therein and entered into between Seller and any of the parties hereto from time to time, in each case as such letter may be amended, restated, supplemented or otherwise modified and in effect from time to time.

 

“Fee Letters” means the Purchasers’ Fee Letter and the Agent’s Fee Letter.

 

“Finance Charges” means, with respect to a Contract, any finance, interest, late payment charges or similar charges owing by an Obligor pursuant to such Contract.

 

“Financial Institutions” means, as to any Purchaser Group, each of the Persons listed on Schedule A hereto as a “Financial Institution” for such Purchaser Group, or in any Assignment Agreement or Joinder Agreement as a “Financial Institution” for the applicable Purchaser Group, together with its respective successors and permitted assigns.

 

“Fiscal Month” means each calendar month.

 

“Fiscal Quarter” means each calendar quarter.

 

“Fiscal Year” means each calendar year.

 

“Fixed Charge Coverage Ratio” means, as of the last day of any Fiscal Quarter of Insight, the ratio of (a)(i) Consolidated EBITDA during the four Fiscal Quarter periodTest Period then ended minus (ii) Consolidated Capital Expenditures during such periodTest Period minus (iii) cash dividends or distributions (excluding any repurchase of its Equity Interests made by Insight in accordance with Section 6.06 of the Credit Agreement) paid by Insight on its Equity Interests during such periodTest Period plus (iv) Consolidated Rentals during such periodTest Period to (b)(i) Consolidated Interest Expense during such periodTest Period plus (ii) Consolidated Rentals during such periodTest Period plus (iii) expenses for taxes paid or taxes accrued during such periodTest Period (calculated for Insight and its Subsidiaries on a consolidated basis) plus (iv) any scheduled amortization of the principal portion of Indebtedness during such periodTest Period (other than amounts owing in connection with Permitted Receivables Facilities), including, without limitation, Capitalized Lease Obligations (calculated for Insight and its Subsidiaries on a consolidated basis).

 

“Floorplan Collateral Agent” means Wells Fargo Capital Finance, LLC (successor to Wells Fargo Foothill, LLC), in its capacity as collateral agent under the Floorplan Credit Agreement.

 

“Floorplan Credit Agreement” means the Amended and Restated Credit Agreement, dated as of April 26, 2012, by and among Insight Public Sector, Inc., Insight Direct USA, Inc., Calence, LLC, the lenders party thereto from time to time, Castle Pines Capital, LLC, as an administrative agent, Wells Fargo Capital Finance, LLC (successor to Wells Fargo Foothill, LLC), as an administrative agent, and the Floorplan Collateral Agent, as amended, restated, supplemented or otherwise modified from time to time.

 

“Floorplan Loan Documents” has the meaning set forth in the Credit Agreement.

 

 “FOB Destination Receivable” means a Receivable as to which the goods have not been delivered to the applicable Obligor.

 

“Foreign Receivable” means any Receivable other than a Domestic Receivable.

 

“Foreign Subsidiary” means (a) any Subsidiary that is not organized or existing under the laws of the United States of America, any State thereof or the District of Columbia, (b) any Domestic Foreign Holding Company or (c) any Subsidiary the Equity Interests of which are directly or indirectly owned by any “controlled foreign corporation” within the meaning of Section 957 of the Code or any Domestic Foreign Holding Company.

 

“Former Obligor” means, on any day, any Person who was previously an obligor with respect to any accounts receivable of any Originator, but who is not on such day an Obligor with respect to any outstanding Receivables and has not purchased any goods or services from any Originator within 12 months.

 

“Funding Agreement” means this Agreement and any agreement or instrument executed by any Funding Source with or for the benefit of a Conduit (including the Liquidity Agreement) or a Related CP Issuer.

 

“Funding Source” means (i) any Financial Institution, (ii) any Related CP Issuer or (iii) any insurance company, bank or other funding entity providing liquidity, credit enhancement or back-up purchase support or facilities to a Conduit.

 

“GAAP” means generally accepted accounting principles in effect in the United States of America as of the date of this Agreement.

 

“Gotham” means Gotham Funding Corporation.

 

“Group” means a Purchaser Group consisting of Gotham Funding Corporation and The Bank of Tokyo-Mitsubishi UFJ, Ltd., individually and as Gotham’s Managing Agent.

 

“Governmental Authority” means the government of the United States of America, the Netherlands, the United Kingdom, Japan or any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, including, without limitation, the European Union.

 

“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.

 

“Incremental Purchase” means a purchase of one or more Purchaser Interests which increases the total outstanding Aggregate Capital hereunder.

 

“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 obligations, liabilities or indebtedness of the type described in clauses (a) through (e) and (g) through (l) of this definition, (g) all Capitalized Lease Obligations of such Person, (h) the principal component of 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), (i) the principal component of all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (j) Attributable Receivables Indebtedness, (k) all Attributable Debt of such Person under Sale and Leaseback Transactions, (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 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.

 

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

 

 “Independent Director” means a natural person who (A) for the five-year period prior to his or her appointment as Independent Director has not been, and during the continuation of his or her service as Independent Director is not:  (i) an employee, director, stockholder, partner or officer of Seller or any of its Affiliates (other than his or her service as an Independent Director of Seller); (ii) a customer or supplier of Seller or any of its Affiliates; or (iii) any member of the immediate family of a person described in clause (i) or (ii), and (B) has (i) prior experience as an independent director for a corporation whose charter documents required the unanimous consent of all independent directors thereof before such corporation could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (ii) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities.

 

“Ineligible State” means, unless otherwise consented to in writing by the Purchasers, 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.

 

“Information Memorandum” has the meaning set forth in the Credit Agreement.

 

“Insight” has the meaning set forth in the preamble to this Agreement.

 

“Insight Entity” has the meaning set forth in Section 7.1(i).

 

“Intercreditor Agreement” means that certain Second Amended and Restated Intercreditor Agreement, dated as of September 17, 2008, by and among the Administrative Agent, the Agent, IBM Credit LLC, Hewlett Packard Company and the FloorplanChannel Finance Collateral Agent (as acknowledged by Insight and certain of its Subsidiaries) as amended, restated, supplemented or otherwise modified from time to time.

 

“IRC” means the Internal Revenue Code of 1986 and all regulations promulgated thereunder.

 

“Joinder Agreement” means a joinder agreement, substantially in the form of Exhibit XIII attached hereto, pursuant to which a new Purchaser Group becomes party to this Agreement.

 

“Letter of Credit” of a Person means a letter of credit or similar instrument which is issued upon the application of such Person or upon which such Person is an account party or for which such Person is in any way liable.

 

“LIBO Rate” means, on any day, LMIR on such day.:

 

(a) with respect to the Gotham Group the sum of the product of (A) the  greater of 0% and London Interbank Offered Rate (“LIBOR”) or a comparable or successor rate, which rate is reasonably approved by the Gotham Group’s Managing Agent, as quoted on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be reasonably designated by the Gotham Group’s Managing Agent from time to time) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, plus (ii) the rate per annum equal to the Applicable Margin; or

 

(b) with respect to the Wells Fargo Group (other than for purposes of calculating the Default Fee), LMIR on such day.

 

The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge in the nature of a security interest 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.

 

“Liquidity Agreement” means any agreement as may be in effect from time to time among a Conduit and the Financial Institutions within its Purchaser Group or any Funding Source providing for the commitment of such Financial Institution or such Funding Source to purchase from such Conduit at any time all or any portion of such Conduit’s Purchaser Interests.

 

“Liquidity Termination Date” means the Stated Termination Date as the same may be extended from time to time.

 

“LMIR” means, for any day, the greater of (a) 0%, and (b) the one-month “Eurodollar Rate” for U.S. dollar deposits as reported on the Reuters Screen LIBOR01 Page (or such other page as may replace Reuters Screen LIBOR01 Page).

 

“Loan Documents” has the meaning set forth in the Credit Agreement.

 

“Loan Party” has the meaning set forth in the Credit Agreement.

 

“Lock-Box” means each locked postal box with respect to which a bank who has executed a Collection Account Agreement has been granted exclusive access for the purpose of retrieving and processing payments made on the Receivables and which is listed on Exhibit IV.

 

“Loss Horizon Ratio” means, as of any date, a ratio equal to (i) the aggregate Outstanding Balance (in each case, at the time of creation) of all Receivables (other than Deducted Receivables) created during the three and one-half (3.5) Fiscal Months most recently ended divided by (ii) the Net Eligible Receivables Balance as at the last day of the most recently ended Fiscal Month.

 

“Loss Percentage Floor” means 15.0%.

 

“Loss Ratio” means, as of any date, a percentage equal to the highest average Default Ratio for any three consecutive Fiscal Months during the twelve (12) Fiscal Months then most recently ended.

 

“Loss Reserve” means, on any date, an amount equal to the Loss Reserve Percentage multiplied by the Net Eligible Receivables Balance as of such date.

 

“Loss Reserve Percentage” means, as of any date, the greater of (i) the Loss Percentage Floor and (ii) the percentage obtained by multiplying (a) 2.00 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).

 

“PurchaserManaging Agent” means, as to any Purchaser Group, each of the Persons listed on Schedule A hereto as a “Managing Agent” for such Purchaser” Group, or in any Assignment Agreement or Joinder Agreement as a “Managing Agent” for the applicable Purchaser” Group, together with its respective successors and permitted assigns.

 

“Managing Agent Roles” has the meaning set forth in Section 14.13.

 

 “Material Adverse Effect” means a material adverse effect on (i) the financial condition or operations of any Seller Party and its Subsidiaries taken as a whole, (ii) the ability of any Seller Party to perform its obligations under this Agreement, (iii) the legality, validity or enforceability of this Agreement or any other Transaction Document, (iv) any Purchaser’s interest in the Receivables generally or in any significant portion of the Receivables, the Related Security or the Collections with respect thereto, or (v) the collectibility of the Receivables generally or of any material portion of the Receivables.

 

“Member” means Insight Receivables Holding, LLC, an Illinois limited liability company and its successors.

 

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

 

“Monthly Settlement Date” means (A) the sixteenth (16thtwenty-first (21st) day of each month (or if such day is not a Business Day, the next succeeding Business Day), and (B) other than with respect to the Wells Fargo Purchaser Group, the last day of the relevant Tranche Period in respect of each Purchaser Interest of the Financial Institutions.

 

“Moody’s” means Moody’s Investors Service and its successors.

 

“Net Eligible Receivables Balance” means, at any time, (i) the aggregate Outstanding Balance of all Eligible Receivables at such time minus (ii) the Aggregate Aged Credit Ineligible Amount at such time minus (iii) the aggregate amount by which the Outstanding Balance of all Eligible Receivables of each Obligor and its Affiliates exceeds the Concentration Limit for such Obligor at such time minus (iv) the aggregate amount by which the Outstanding Balance of all Eligible Receivables originated by the Top Four Obligors exceeds the Top Four Concentration Limit at such time.

 

“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).

 

“Non-Investment Grade Obligor” means any Obligor, the long-term senior unsecured debt of which is unrated by either S&P or Moody’s, or rated BB+ or less by S&P or Ba1 or less by Moody’s.

 

“Non-Renewing PurchaserFinancial Institution” has the meaning set forth in Section 12.3(a).

 

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

“Obligor” means a Person obligated to make payments pursuant to a Contract.

 

“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.

 

“Originator” means each of Insight Direct USA, Inc., an Illinois corporation, and Insight Public Sector, Inc., an Illinois corporation, or any other Subsidiary or Affiliate of Insight approved in writing by the Agent from time to time.

 

“Outstanding Balance” means, with respect to any Receivable at any time, the then outstanding principal balance thereof; provided, that with respect to a WM Receivable, “Outstanding Balance” means an amount equal to the product of 1.07 and the actual cost to the applicable Originator of providing warranty or maintenance services to an Obligor.

 

“Participant” has the meaning set forth in Section 12.2.

 

“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), as amended.

 

“Percentage” means, with respect to any Financial Institution in any Purchaser, a percentage Group, a Percentage equal to the Standard Commitment of such PurchaserFinancial Institution divided by the aggregate of the Standard Commitments of all PurchasersFinancial Institutions in such Purchaser Group; provided, however, that from and after the date of termination of the Standard Commitments, “Percentage” for each Purchaser shall mean a percentage equal to (x) the Capital of such Purchaser divided by (y) Aggregate Capitalshall be based on the Standard Commitments of such Financial Institutions immediately prior to such termination.

 

“Performance Undertaking” means that certain Amended and Restated Performance Undertaking dated as of September 3, 2003 by Insight in favor of the Agent for the benefit of the Purchasers, as amended, restated, supplemented or otherwise modified from time to time.

 

“Permitted Acquisition” means any 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 shall not exceed 2.50 to 1.00, the Fixed Charge Coverage Ratio shall not be less than 1.25 to 1.00 and the Asset Coverage Ratio shall be not less than 1.75 to 1.00, in each case determined on a pro forma basis (excluding any synergies or cost savings contemplated to occur pursuant to such Permitted Acquisition) 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) in the case of any acquisition with respect to which the aggregate consideration exceeds $100,000,000, Insight shall have delivered a Compliance Certificate (as defined in the Credit Agreement) not less than five (5) 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).

 

“Permitted Acquisition” has the meaning set forth in the Credit Agreement.

 

“Permitted Receivables Facilities” has the meaning set forth in the Credit Agreement.

 

“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

 

“Pooled Commercial Paper” means Commercial Paper notes of any Conduit or Related CP Issuer subject to any particular pooling arrangement by such Conduit or Related CP Issuer, but excluding Commercial Paper issued by such Conduit or Related CP Issuer for a tenor and in an amount specifically requested by any Person in connection with any agreement effected by such Conduit or Related CP Issuer (or any other Person that funds a purchase of assets or the making of any loan or other financial accommodation directly or indirectly with the proceeds of Commercial Paper issued by such Conduit or Related CP Issuer).

 

“Potential Amortization Event” means an event which, with the passage of time or the giving of notice, or both, would constitute an Amortization Event.

 

“Prime Rate” means a rate per annum equal to the prime rate of interest announced from time to time by Wells Fargo or its parent (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes.

 

“Property” of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.

 

“Proposed Same-Day Reduction Date” has the meaning set forth in Section 1.31.1(b).

 

“Purchase Limit” means $200,000,000.

 

“Purchase NoticeProposed Standard Reduction Date” has the meaning set forth in Section 1.2(b).

 

“Pro Rata Share” means:

 

(a)           For purposes of determining each Purchaser Group’s share of the Purchase Price for a Standard Purchaser Interest, a percentage equal to the ratio, expressed as a percentage, of the Standard Commitment of the Financial Institution in such Purchaser Group to the total of all Standard Commitments;

 

(b)           For purposes of determining each Purchaser Group’s share of any ongoing fees payable pursuant to the Purchasers’ Fee Letter, a percentage equal to the ratio, expressed as a percentage, of the Total Commitment of the Financial Institution in such Purchaser Group, to the aggregate of the Total Commitments of all Financial Institutions;

 

(c)           For purposes of determining each Purchaser Group’s share of any payment specifically identified to the Same-Day Purchaser Interests prior to the Facility Termination Date, 100% for the Wells Fargo Group and 0% for the Gotham Group;

 

(d)            For purposes of determining each Purchaser Group’s share of any payment specifically identified to the Standard Purchaser Interests prior to the Facility Termination Date, a percentage equal to the ratio, expressed as a percentage, of the Standard Commitment of the Financial Institution in such Purchaser Group, to the total of the Standard Commitments of all Financial Institutions; and

 

(e)           For purposes of determining each Purchaser’s Group’s share of any payment after the Facility Termination Date, a percentage equal to the ratio of such Purchaser Group’s outstanding Capital on the day prior to the Facility Termination Date, to the Aggregate Capital outstanding on such date.

 

“Purchase Limit” means, on any date of determination, the aggregate amount of the Standard Commitments plus the amount of the Same-Day Commitment.

 

“Purchase Price” means, with respect to any Incremental Purchase of a Purchaser Interest, the amount paid to Seller for such Purchaser Interest which shall not exceed the least of (i) the amount requested by Seller in the applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the applicable purchase date and (iii) the excess, if any, of the Net Eligible Receivables Balance (less the Aggregate Reserves) on the applicable purchase date over the aggregate outstanding amount of Aggregate Capital determined as of the date of the most recent Report, taking into account such proposed Incremental Purchase.

 

“Purchaser” has the meaning set forth in the preamble to this Agreement.

 

“Purchaser Group” means the Gotham Group or the Wells Fargo Group.

 

“Purchaser Interest” means, at any time, an undivided percentage ownership interest (computed as set forth below) associated with a designated amount of Capital, selected pursuant to the terms and conditions hereof in (i) each Receivable arising prior to the time of the most recent computation or recomputation of such undivided interest, (ii) all Related Security with respect to each such Receivable, and (iii) all Collections with respect to, and other proceeds of, each such Receivable.  Each such undivided percentage interest shall equal:

 

	  	
C

	  
	  	
NRB-AR

	  

where:

 

	
  

	
C

	
=

	
the Capital of such Purchaser Interest.

 

	
  

	
AR

	
=

	
the Aggregate Reserves.

 

	
  

	
NRB

	
=

	
the Net Eligible Receivables Balance.

 

Such undivided percentage ownership interest shall be initially computed on its date of purchase.  Thereafter, until the Amortization Date, each Purchaser Interest shall be automatically recomputed (or deemed to be recomputed) on each day prior to the Amortization Date.  The variable percentage represented by any Purchaser Interest as computed (or deemed recomputed) as of the close of the business day immediately preceding the Amortization Date shall remain constant at all times thereafter.  Each Purchaser Interest is either a Same-Day Purchaser Interest or a Standard Purchaser Interest.

 

“Purchasers’ Fee Letter” means that certain Eighth Amended and Restated Fee Letter, dated as of June 23, 2016, among Seller, the Agent and the Purchasers as such letter may be amended, restated, supplemented or otherwise modified and in effect from time to time.

 

“Purchasing PurchaserFinancial Institution” has the meaning set forth in Section 12.1(b).

 

“Qualified Acquisition” has the meaning set forth in the Credit Agreement.

 

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

 

“Ratings Request” has the meaning set forth in Section 10.2(c).

 

“Receivable” means all indebtedness and other obligations (other than indebtedness or obligations constituting Excluded Receivables) owed to Seller or any Originator (at the time it arises, and before giving effect to any transfer or conveyance under the  Receivables Sale Agreement or hereunder) or in which Seller or such Originator has a security interest or other interest, including, without limitation, any indebtedness, obligation or interest constituting an account, chattel paper, instrument or general intangible, arising in connection with the sale or licensing of goods or general intangibles (such as software), or the rendering of services by the applicable Originator, and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto.  Indebtedness and other rights and obligations arising from any one transaction, including, without limitation, indebtedness and other rights and obligations represented by an individual invoice, shall constitute a Receivable separate from a Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; provided, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless of whether the account debtor or Seller treats such indebtedness, rights or obligations as a separate payment obligation.

 

“Receivables Amount” means, as of the last day of any Fiscal Quarter of Insight, on a consolidated basis and without duplication, an amount equal to (a) 80% multiplied by the aggregate total book value of Insight’s and its Domestic Subsidiaries’ Domestic Receivables on such date, plus (b) 60% multiplied by the sum of the aggregate total book value of (i) Insight’s and its Domestic Subsidiaries’ Foreign Receivables and (ii) Insight’s Foreign Subsidiaries’ Receivables on such date.

 

“Receivables Sale Agreement” means that certain Amended and Restated Receivables Sale Agreement dated as of September 3, 2003, among Insight Direct USA, Inc., Insight Public Sector, Inc. and Seller, as the same may be amended , restated or otherwise modified from time to time.

 

“Records” means, with respect to any Receivable, all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to such Receivable, any Related Security therefor and the related Obligor.

 

“Reduction Notice” has the meaning set forth in Section 1.3.

 

“Regulatory Change” has the meaning set forth in Section 10.2(a)Reduction Notice” means a Same-Day Reduction Notice or a Standard Reduction Notice.

 

“Reinvestment” has the meaning set forth in Section 2.2.

 

“Regulatory Change” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation (including Regulation D) or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, including without limitation, any publications addressing the liquidity coverage ratio (“LCR”) or the supplementary leverage ratio (“SLR”),  shall in each case be deemed to be a “Regulatory Change”, regardless of the date enacted, adopted or issued.

 

“Related CP Issuer” means, with respect to any Conduit, an Affiliate of such Conduit that issues Commercial Paper to fund advances made to such Conduit, the proceeds of which are used by such Conduit to fund or maintain Purchaser Interests hereunder.

 

“Related Security” means, with respect to any Receivable:

 

(i)           all of the applicable Originator’s interest in the inventory and goods (including returned or repossessed inventory or goods), if any, the sale, financing or lease of which by the applicable Originator gave rise to such Receivable, and all insurance contracts with respect thereto,

 

(ii)           all other security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements and security agreements describing any collateral securing such Receivable,

 

(iii)           all guaranties, letters of credit, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise,

 

(iv)           all service contracts and other contracts and agreements associated with such Receivable,

 

(v)           all Records related to such Receivable,

 

(vi)           all of Seller’s right, title and interest in, to and under the Receivables Sale Agreement in respect of such Receivable , and

 

(vii)           all proceeds of any of the foregoing.

 

“Rentals” of a Person means the aggregate fixed amounts payable by such Person under any Operating Lease.

 

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

 

“Required PurchasersFinancial Institutions” means (a) at any time there are two or fewer Purchasers, all PurchasersFinancial Institutions, all of the Financial Institutions, and (b) at all other times, the PurchasersFinancial Institutions with Commitments in excess of 66-2/3% of the aggregate of all Commitments.

 

“Required Rating” has the meaning set forth in Section 10.2(c).

 

“Reserve Floor” means, for any Fiscal Month, the product of the Reserve Floor Percentage for such Fiscal Month multiplied by the Net Eligible Receivables Balance as of the last day of the Fiscal Month then most recently ended.

 

“Reserve Floor Percentage” means, for Fiscal Month, the sum (expressed as a percentage) of (a) 20% plus (b) the product of the average of the Dilution Ratios for the twelve (12) Fiscal Months then most recently ended and the Dilution Horizon Ratio, in each case, as of the last day of the Fiscal Month then most recently ended, plus (c) the Yield Reserve, plus (d) the Servicing Reserve.

 

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, and its successors.

 

“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.

 

“Same-Day Commitment” means the amount set forth on Schedule A hereto opposite Wells Fargo’s name under the column entitled “Same-Day Commitment.”

 

“Same-Day Purchase Notice” has the meaning set forth in Section 1.1(a).

 

“Same-Day Purchaser Interest” means a Purchaser Interest sold to Wells Fargo pursuant to ­Section 1.1(a)(i).

 

“Same-Day Reduction Notice” has the meaning set forth in Section 1.1(b).

 

“Sanctioned Country” means, at any time, a country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx, or as otherwise published from time to time.or territory which is the subject or target of any Sanctions, including, without limitation, as of the date hereof, Cuba, Crimea (Ukraine), Iran, Sudan, Syria and North Korea.

 

“Sanctioned Person” means, at any time, (a) aany Person named on the list of “Specially Designated Nationals and Blocked Persons”currently the subject or the target of any Sanctions, including any Person listed in any Sanctions-related list of designated Persons maintained by OFAC or the U.S. Department of State, available at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time, or (b) (i) an agency of the government of a Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by the U.S. Department of the Treasury’s Office of Foreign Assets ControlOFAC.

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time (a) by the US government, including those administered by OFAC, the US State Department, the US Department of Commerce or the US Department of the Treasury, (b) by the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom, or (c) by other relevant sanctions authorities to the extent compliance with the sanctions imposed by such other authorities would not entail a violation of applicable law.

 

“Seller” has the meaning set forth in the preamble to this Agreement.

 

“Seller Parties” has the meaning set forth in the preamble to this Agreement.

 

“Servicer” means at any time the Person (which may be the Agent) then authorized pursuant to Article VIII to service, administer and collect Receivables.

 

“ServicerServicing Reserve” means, on any date, an amount equal to 0.75%for any Fiscal Month, the product of the Servicing Reserve Percentage for such Fiscal Month multiplied by the Net Eligible Receivables Balance as of the close of business of the Servicer on such datelast day of the Fiscal Month then most recently ended.

 

“Servicing Reserve Percentage” means, on any date, the product (expressed as a percentage) of (a) 1% multiplied by (b) a fraction, the numerator of which is the highest Days Sales Outstanding for the most recent 12 months and denominator of which is 360.

 

“Servicing Fee” has the meaning set forth in Section 8.6.

 

“Settlement Date” means (A) the Business Day following receipt of each Daily Report or Weekly Report (as applicable) and (B) each Monthly Settlement Date.

 

“Settlement Period” means, (A) in respect of each Purchaser Interest of (i) the Conduits and (ii) the Financial Institutions in the Wells Fargo Purchaser Group, the immediately preceding Accrual Period, and (B) in respect of each Purchaser Interest of the Financial Institutions (other than the Financial Institutions in the Wells Fargo Purchaser Group), the entire Tranche Period of such Purchaser Interest.

 

“Software Spectrum Government Receivable” means any indebtedness or obligations owed by the federal government of the United States (or any governmental subdivision or agency thereof) to the Software Spectrum division of Insight Direct USA, Inc. (formerly Software Spectrum, Inc., a Delaware corporation).

 

“Specified Indebtedness” has the meaning set forth in Section 9.1(c).

 

“SPV” means any special purpose entity established for the purpose of purchasing receivables in connection with a receivables securitization transaction permitted under the terms of the Credit Agreement.

 

“Standard Commitment” means the amount set forth on Schedule A hereto opposite each Financial Institution’s name under the column entitled “Standard Commitment.”

 

“Standard Purchase Notice” has the meaning set forth in Section 1.2(a).

 

“Standard Purchaser Interest” means a Purchaser Interest sold to the Agent for the benefit of both Purchaser Groups pursuant to Section 1.2(a)(i).

 

“Standard Reduction Notice” has the meaning set forth in Section 1.2(b).

 

“Stated Termination Date” means June 23[__], 20172019 or such later date to which the Stated Termination Date may be extended in accordance with Section 12.3.

 

“Subsidiary” means any subsidiary of Insight; 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.

 

“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 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.

 

“Termination Date” has the meaning set forth in Section 2.2.

 

“Termination Percentage” has the meaning set forth in Section 2.2.

 

“Terminating PurchaserFinancial Institution” has the meaning set forth in Section 12.3(a).

 

 “Top Four Concentration Limit” means, at any time, for the Top Four Obligors, an amount equal to the aggregate Outstanding Balance of all Eligible Receivables at such time multiplied by 15.0%.

 

“Top Four Obligors” means the four Non-Investment Grade Obligors which, among all other Non-Investment Grade Obligors, have originated the highest Outstanding Balance of Receivables at such time.

 

“Terminating Tranche” has the meaning set forth in Section 4.3(b).

 

“Test Period” means each period of four consecutive Fiscal Quarters of Insight then most recently ended.

 

“Total Commitment” means (a) for Wells Fargo, an amount equal to the sum of its Standard Commitment plus its Same-Day Commitment, and (b) for any other Financial Institution, an amount equal to such other Financial Institution’s Standard Commitment.

 

“Total Leverage Ratio” means, as of the last day 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 recentlyTest Period ended on such day.

 

“Tranche Period” means, with respect to any Purchaser Interest held by a Financial Institution (other than a Financial Institution in the Wells Fargo Purchaser Group), including any Purchaser Interest or undivided interest therein which has been assigned to a Financial Institution pursuant to the Liquidity Agreement:

 

(a)           if Yield for such Purchaser Interest is calculated on a basis of the “LIBO Rate”, a period of one month or such other period as may be mutually agreeable to the applicable Managing Agent and Seller, commencing on a Business Day selected by Seller or the applicable Managing Agent pursuant to this Agreement.  Regardless of duration, each Tranche Period shall end on the day in the applicable succeeding month which corresponds numerically to the beginning day of such Tranche Period, provided, however, that if there is no such numerically corresponding day in such succeeding month, such Tranche Period shall end on the last Business Day of such succeeding month.

 

(b)           if Yield for such Purchaser Interest is calculated on a basis of the Alternate Base Rate, a period commencing on a Business Day selected by the applicable Managing Agent; provided no such period shall exceed one month.

 

If any Tranche Period would end on a day which is not a Business Day, such Tranche Period shall end on the next succeeding Business Day, provided, however, in the case of Tranche Periods corresponding to the LIBO Rate, that if such next succeeding Business Day falls in a new month, such Tranche Period shall end on the immediately preceding Business Day.  In the case of any Tranche Period for any Purchaser Interest which commences before the Amortization Date and would otherwise end on a date occurring after the Amortization Date, such Tranche Period shall end on the Amortization Date.  The duration of each Tranche Period which commences after the Amortization Date shall be of such duration as selected by the applicable Managing Agent.

 

“Transaction Documents” means, collectively, this Agreement, each Purchase Notice, the Receivables Sale Agreement, the Collection Account Agreement, the Intercreditor Agreement, anythe Fee LetterLetters, the Performance Undertaking, the Subordinated Note (as defined in the Receivables Sale Agreement) and all other instruments, documents and agreements executed and delivered in connection herewith.

 

“UCC” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

 

“Unmatured Default” means an event which but for the lapse of time or the giving of notice, or both, would constitute a Default.

 

“Unused Commitment” means, with respect to any PurchaserFinancial Institution at any time, such Purchaser’sFinancial Institution’s Total Commitment at such time minus such Purchaser’sFinancial Institution’s Purchaser Group’s aggregate Capital outstanding at such time.

 

“Vendor Trade Programs” means those certain inventory finance transactions from time to time entered into by Insight or its Affiliates with IBM Credit Corporation or its Affiliates, Hewlett Packard Corporation or its Affiliates or any other Person reasonably acceptable to the Agent.

 

“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.

 

“Wells Fargo” means Wells Fargo Bank, National Association.

 

“Wells Fargo Group” means a Purchaser Group consisting of Wells Fargo, individually and as its own Managing Agent.

 

“WM Receivable” means a Receivable which arises under a Contract relating to the provision by an Originator of warranty or maintenance services to an Obligor.

 

“Yield” means, for each Purchaser Interest for each day elapsed during such Accrual Periodof a Financial Institution, an amount equal to the product of the Discount Rate multiplied by the Capital of such Purchaser Interest for each day elapsed during such Tranche Period (or, in the case of the Financial Institutions in the Wells Fargo Purchaser Group, such Accrual Period), annualized on a 360- day basis.

 

“Yield Reserve” means, on any date, an amount equal to 0.75%for any Fiscal Month, the product of the Yield Reserve Percentage for such Fiscal Month multiplied by the Net Eligible Receivables Balance as of the close of business of the Servicer on such datelast day of the Fiscal Month then most recently ended.

 

“Yield Reserve Percentage” means, for any Fiscal Month, the product (expressed as a percentage) of (i) 1.5, times (ii) the Alternate Base Rate as of the last day of the Fiscal Month then most recently ended times a fraction, the numerator of which is the highest Days Sales Outstanding for the most recent 12 months and denominator of which is 360.

 

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 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 Seller that the Required PurchasersFinancial 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.

 

 

  

  

  

EXHIBIT IIII-A

 

FORM OF SAME-DAY PURCHASE NOTICE

 

[Date]

 

Wells Fargo Bank, National Association, individually and as Agent

1100 Abernathy Rd., N.E.

Suite 15001600

Atlanta, GA  30328-5657

Attn:  Ryan Tozier

Email:  ryan.tozier@wellsfargo.com

Re:  SAME-DAY PURCHASE NOTICE

Ladies and Gentlemen:

 

Reference is hereby made to the Receivables Purchase Agreement, dated as of December 31, 2002 by and among Insight Receivables, LLC, an Illinois limited liability company (the “Seller”), Insight Enterprises, Inc., as Servicer, the Purchasers and Managing Agents from time to time party thereto and Wells Fargo Bank, National Association, as successor Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Receivables Purchase Agreement”).  Capitalized terms used herein shall have the meanings assigned to such terms in the Receivables Purchase Agreement.

 

Wells Fargo is hereby notified of the following Incremental Purchase:

 

	
Type of Purchase:

	
Same-Day Purchaser Interest

	
Purchase Price:

	
$                                                                 

	
Date of Purchase:

	
Today

	
Requested Rate:

	
LMIR

 

Please wire-transfer the Purchase Price in immediately available funds to the Facility Account:

 

[Account Name]

[Account No.]

[Bank Name & Address]

[ABA #]

Reference: Insight Receivables, LLC

Telephone advice to: [Name] @ tel. no. ( )

 

In connection with the Incremental Purchase to be made on the above listed “Date of Purchase” (the “Purchase Date”), Seller hereby certifies that the following statements are true on the date hereof, and will be true on the Purchase Date (before and after giving effect to the proposed Incremental Purchase):

 

	
1.

	
The representations and warranties of Seller set forth in Section 5.1 of the Receivables Purchase Agreement are true and correct on and as of the Purchase Date as though made on and as of such date;

 

	
2.

	
No event has occurred and is continuing, or would result from the proposed Incremental Purchase, that will constitute an Amortization Event or a Potential Amortization Event;

 

	
3.

	
The Facility Termination Date has not occurred;

 

	
4.

	
The aggregate of all Purchaser Interests does not exceed in the aggregate 100%, the aggregate Capital of all Same-Day Purchaser Interests does not exceed the Same-Day Commitment, and the aggregate Capital of all Standard Purchaser Interests does not exceed the sum of the Standard Commitments; and

 

	
5.

	
The amount of aggregate Capital under the Standard Commitment is $_________ and, after giving effect to the Incremental Purchase to be made on the Purchase Date, the aggregate Capital under the Same-Day Commitment will be $______________.

 

Very truly yours,

 

 

INSIGHT RECEIVABLES, LLC

 

By:_____________________________

Name:

Title:

 

 

 

 

  

  

  

EXHIBIT II-B

 

FORM OF STANDARD PURCHASE NOTICE

 

[Date]

 

PNCWells Fargo Bank, National Association, individually and as Agent

1100 Abernathy Rd., N.E.

Suite 1600

Atlanta, GA  30328

Attention:  Ryan Tozier

Email:  ryan.tozier@wellsfargo.com

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, individually and as a Managing Agent for Gotham

225 Fifth1251 Avenue, Floor 4 of the Americas

Pittsburgh, PA  15222

Attn:  Michael Ferragonio

New York, New York 10020-1104  USA

Attention: Securitization Group,

Email:  Securitization_reporting@us.mufg.jp; rhurst@us.mufg.jp

	
  

	
Re:    STANDARD PURCHASE NOTICE

Ladies and Gentlemen:

 

Reference is hereby made to the Receivables Purchase Agreement, dated as of December 31, 2002 by and among Insight Receivables, LLC, an Illinois limited liability company (the “Seller”), Insight Enterprises, Inc., as Servicer, the Purchasers and Managing Agents from time to time party thereto and Wells Fargo Bank, National Association, as successor Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Receivables Purchase Agreement”).  Capitalized terms used herein shall have the meanings assigned to such terms in the Receivables Purchase Agreement.

 

The Agent is hereby notified of the following Incremental Purchase:

 

	
Type of Purchase:

	
Standard Purchaser Interest

	
Purchase Price:

	
$____________________________________

	
Date of Purchase:

	
____________________________________

	
Requested Rate:

	
LIBO Rate [CP/LMIR]

 

Please wire-transfer your respective Purchaser Group’s Standard Pro Rata Share of the Purchase Price in immediately available funds to the Facility Account:

 

[Account Name]

[Account No.]

[Bank Name & Address]

[ABA #]

Reference: Insight Receivables, LLC

Telephone advice to: [Name] @ tel. no. ( )

 

Please advise [Name] and telephone no. (   ) _________________ if your related Conduit will not be making this purchase].

 

In connection with the Incremental Purchase to be made on the above listed “Date of Purchase” (the “Purchase Date”), Seller hereby certifies that the following statements are true on the date hereof, and will be true on the Purchase Date (before and after giving effect to the proposed Incremental Purchase):

 

	
1.

	
theThe representations and warranties of Seller set forth in Section 5.1 of the Receivables Purchase Agreement are true and correct on and as of the Purchase Date as though made on and as of such date;

 

	
2.

	
noNo event has occurred and is continuing, or would result from the proposed Incremental Purchase, that will constitute an Amortization Event or a Potential Amortization Event;

 

	
3.

	
theThe Facility Termination Date has not occurred, the Aggregate Capital does not exceed the Purchase Limit and the aggregate Purchaser Interests do not exceed 100%; and

 

	
4.

	
The aggregate of all Purchaser Interests does not exceed in the aggregate 100%, the aggregate Capital of all Same-Day Purchaser Interests does not exceed the Same-Day Commitment, and the aggregate Capital of all Standard Purchaser Interests does not exceed the sum of the Standard Commitments; and

 

	
45.

	
theThe amount of Aggregateaggregate Capital under the Same-Day Commitment is $_________ and, after giving effect to the Incremental Purchase to be made on the Purchase Date, the aggregate Capital under the Standard Commitment will be $______________.

 

Very truly yours,

 

 

INSIGHT RECEIVABLES, LLC

 

By:________________________________

Name:

Title:

 

  

  

  

EXHIBIT II-C

 

FORM OF SAME-DAY REDUCTION NOTICE

 

[Date]

 

Wells Fargo Bank, National Association, individually and as Agent

1100 Abernathy Rd., N.E.

Suite 1600

Atlanta, GA  30328

Attn:  Ryan Tozier

Email:  ryan.tozier@wellsfargo.com

Re:  SAME-DAY REDUCTION NOTICE

Ladies and Gentlemen:

 

Reference is hereby made to the Receivables Purchase Agreement, dated as of December 31, 2002 by and among Insight Receivables, LLC, an Illinois limited liability company (the “Seller”), Insight Enterprises, Inc., as Servicer, the Purchasers and Managing Agents from time to time party thereto and Wells Fargo Bank, National Association, as successor Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Receivables Purchase Agreement”).  Capitalized terms used herein shall have the meanings assigned to such terms in the Receivables Purchase Agreement.

 

Wells Fargo is hereby notified of the following Same-Day Reduction:

 

	
Type of Reduction:

	
Same-Day Reduction

	
Amount:

	
$_______________________________

	
Proposed Same-Day Reduction Date:

	
Today

 

In connection with the Same-Day Reduction to be made on the above listed “Proposed Same-Day Reduction Date, Seller hereby certifies that the following statements are true on the date hereof:

 

	
1.

	
The aggregate of all Purchaser Interests does not exceed 100%, the aggregate Capital of all Same-Day Purchaser Interests does not exceed the Same-Day Commitment, and the aggregate Capital of all Standard Purchaser Interests does not exceed the sum of the Standard Commitments; and

 

	
2.

	
The amount of aggregate Capital under the Standard Commitment is $_________ and, after giving effect to the Same-Day Reduction to be made on the Same-Day Reduction Date, the aggregate Capital under the Same-Day Commitment will be $______________.

 

Very truly yours,

 

 

 

INSIGHT RECEIVABLES, LLC

 

By:           

Name:

Title:By:_____________________________

Name:

Title:

 

 

 

 

 

  

  

  

EXHIBIT II-D

 

FORM OF STANDARD REDUCTION NOTICE

 

[Date]

 

Wells Fargo Bank, National Association, individually and as Agent

1100 Abernathy Rd., N.E.

Suite 1600

Atlanta, GA  30328

Attention:  Ryan Tozier

Email:  ryan.tozier@wellsfargo.com

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, individually and as a Managing Agent for Gotham

1251 Avenue of the Americas

New York, New York 10020-1104  USA

Attention: Securitization Group,

Email:  Securitization_reporting@us.mufg.jp; rhurst@us.mufg.jp

	
  

	
Re:  STANDARD REDUCTION NOTICE

Ladies and Gentlemen:

 

Reference is hereby made to the Receivables Purchase Agreement, dated as of December 31, 2002 by and among Insight Receivables, LLC, an Illinois limited liability company (the “Seller”), Insight Enterprises, Inc., as Servicer, the Purchasers and Managing Agents from time to time party thereto and Wells Fargo Bank, National Association, as successor Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Receivables Purchase Agreement”).  Capitalized terms used herein shall have the meanings assigned to such terms in the Receivables Purchase Agreement.

 

The Agent is hereby notified of the following Standard Reduction:

 

	
Type of Reduction:

	
Standard Reduction

	
Aggregate Standard Reduction Amount:

	
$___________________________________

	
Wells’ Pro Rata Share

	
$___________________________________

	
BTMU/Gotham Pro Rata Share:

	
$___________________________________

	
Proposed Date of Standard Reduction:

	
___________________________________

 

In connection with the Standard Reduction to be made on the above listed Proposed Date of Standard Reduction, Seller hereby certifies that the following statements are true on the date hereof, and will be true on the Proposed Date of Standard Reduction (before and after giving effect to the proposed Standard Reduction:

 

	
1.

	
The aggregate of all Purchaser Interests does not exceed in the aggregate 100%, the aggregate Capital of all Same-Day Purchaser Interests does not exceed the Same-Day Commitment, and the aggregate Capital of all Standard Purchaser Interests does not exceed the sum of the Standard Commitments; and

 

	
2.

	
The amount of aggregate Capital under the Same-Day Commitment is $_________ and, after giving effect to the Standard Reduction to be made on the Proposed Standard Reduction Date the aggregate Capital under the Standard Commitment will be $______________, of which $___________ will be outstanding from Wells and $_______________ will be outstanding from [Gotham/the Gotham Group].

 

Very truly yours,

 

 

INSIGHT RECEIVABLES, LLC

 

By:__________________________________

Name:

Title:

 

  

  

  

EXHIBIT III

 

PLACES OF BUSINESS OF THE SELLER PARTIES;

LOCATIONS OF RECORDS;

FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)

ORGANIZATIONAL IDENTIFICATION NUMBER(S)

 

 

Places of Business and Location of Records:

Insight Receivables, LLC

444 Scott Drive

Bloomingdale, IL 60108

(Prior to 11/2014)

2250 Pinehurst Boulevard, Suite 200

Addison, IL 60101

(After 11/2014)

Illinois Organizational Number: 0082933-1

FEIN: 43-1988544

Places of Business and Location of Records:

Insight Enterprises, Inc.

6820 South Harl Avenue

Tempe, Arizona 85283

Delaware Organizational Number:  2264818

FEIN:  86-0766246

 

  

  

  

 

EXHIBIT IV

 

NAMES OF COLLECTION BANKS; COLLECTION ACCOUNTS

 

 

	
Collection Bank

	
Lock-Box

	
Related Collection Account

	
JPMorgan Chase Bank, N.A.

	
731071

	
816378541

	
JPMorgan Chase Bank, N.A.

	
731069

	
816338339

	
JPMorgan Chase Bank, N.A.

	
731072

	
816365761

	
JPMorgan Chase Bank, N.A.

	
N/A

	
640088456

 

  

  

  

EXHIBIT V-A

 

FORM OF MONTHLY COMPLIANCE CERTIFICATE

To:

Wells Fargo Bank, National Association, individually and as Agent

1100 Abernathy Rd., N.E.

Suite 15001600

Atlanta, GA  30328-5657

Attn:  Ryan Tozier

PNC Bank, National Association

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

225 Fifth1251 Avenue, Floor 4 of the Americas

Pittsburgh, PA  15222

 Attn:  Michael Ferragonio

New York, New York 10020-1104  USA

Attention: Securitization Group,

Email:  Securitization_reporting@us.mufg.jp

This Compliance Certificate is furnished pursuant to that certain Receivables Purchase Agreement dated as of December 31, 2002 among Insight Receivables, LLC (the “Seller”), Insight Enterprises, Inc. (the “Servicer”), the Purchasers and Managing Agents from time to time party thereto and Wells Fargo Bank, National Association, as successor Agent for such Purchasers (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”).

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

1.           I am the duly elected [______________] of Seller.

 

2.           I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of Seller and its Subsidiaries during the accounting period covered by the attached financial statements.

 

3.           The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Amortization Event or Potential Amortization Event, as each such term is defined under the Agreement, during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth in paragraph 5 below.

 

4.           Schedule I attached hereto sets forth financial data and computations evidencing the compliance with Section 9.1(g) of the Agreement, all of which data and computations are true, complete and correct.

 

5.           Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Seller has taken, is taking, or proposes to take with respect to each such condition or event:

 

	  
	  
	  

 

 

  

  

  

The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this ____________________Certificate in support hereof, are made and deliverd this ____________________ day of ____. _____.

 

 

INSIGHT RECEIVABLES, LLC

 

___________________________________

Name:

Title:

 

 

  

  

  

SCHEDULE I TO COMPLIANCE CERTIFICATE

 

Schedule of Compliance as of __________, ____ with Section ___ of the Agreement.  Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.

 

This schedule relates to the month ended:  ________

 

 

 

  

  

  

EXHIBIT V-B

FORM OF QUARTERLY COMPLIANCE CERTIFICATE

To:

Wells Fargo Bank, National Association, individually and as Agent

1100 Abernathy Rd., N.E.

Suite 1500

Atlanta, GA  30328-5657

Attn:  Ryan Tozier

PNC Bank, National Association

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

225 Fifth1251 Avenue, Floor 4 of the Americas

Pittsburgh, PA  15222

 Attn:  Michael Ferragonio

New York, New York 10020-1104  USA

Attention: Securitization Group,

Email:  Securitization_reporting@us.mufg.jp

This Compliance Certificate is furnished pursuant to that certain Receivables Purchase Agreement dated as of December 31, 2002 among Insight Receivables, LLC (the “Seller”), Insight Enterprises, Inc. (the “Servicer”), the Purchasers from time to time party thereto and Wells Fargo Bank, National Association, as successor agent for such Purchasers (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”).

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

6.           I am the duly elected [______________] of Seller.

 

7.           I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of Seller and its Subsidiaries during the accounting period covered by the attached financial statements.

 

8.           The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Amortization Event or Potential Amortization Event, as each such term is defined under the Agreement, during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth in paragraph 5 below.

 

9.           Schedule I attached hereto sets forth financial data and computations evidencing the compliance with Sections 9.1(l), (m) and (n) of the Agreement, all of which data and computations are true, complete and correct.

 

10.           Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Seller has taken, is taking, or proposes to take with respect to each such condition or event:

 

	  
	  
	  

 

 

 

  

  

  

The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this        day of                  ,         .

 

 

INSIGHT RECEIVABLES, LLC

 

___________________________________

Name:

Title:

 

 

  

  

  

SCHEDULE I TO COMPLIANCE CERTIFICATE

 

Schedule of Compliance as of __________, ____ with Sections _________________ of the Agreement.  Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.

 

 

  

  

  

EXHIBIT VI

FORM OF COLLECTION ACCOUNT AGREEMENT1

[On letterhead of Originator]

______, ______

 

[Lock-Box Bank/Concentration Bank/Depositary Bank]

 

	
  

	
Re:

	
[Name of Originator]

Ladies and Gentlemen:

 

 

Reference is hereby made to each of the departmental post office boxes listed on Schedule I hereto (each a, “Lock-Box”) of which you have exclusive control for the purpose of receiving mail and processing payments therefrom pursuant to that certain [name of lock-box agreement) between you and the undersigned (the “Company”) dated  (the “Agreement”).  You hereby confirm your agreement to perform the services described therein.  Among the services you have agreed to perform therein, is to endorse all checks and other evidences of payment received in each of the Lock-Boxes, and credit such payments to the Company’s checking account no. __________________________________ maintained with you in the name of the Company (the “Lock-Box Account”).

 

The Company hereby informs you that pursuant to that certain Receivables Sale Agreement, dated as of ______ __, ___ between the Company and [Seller] (the “Seller”), the Company has transferred all of its right, title and interest in and to, and exclusive ownership and control of, the Lock-Box and the Lock-Box Account to Seller.  The Company and Seller hereby request that the name of the Lock-Box Account be changed to “Insight Receivables, LLC”

 

The Company and Seller hereby irrevocably instruct you, and you hereby agree, that upon receiving notice from Wells Fargo Bank, National Association (“Wells Fargo”) in the form attached hereto as Annex A: (i) the name of the Lock-Box Account will be changed to Wells Fargo for itself and as agent (or any designee of Wells Fargo) and Wells Fargo will have exclusive ownership of and access to the Lock-Box and the Lock-Box Account, and neither the Company, Seller, nor any of their respective affiliates will have any control of the Lock-Box or the Lock-Box Account or any access thereto, (ii) you will either continue to send the funds from the Lock-Box to the Lock-Box Account, or will redirect the funds as Wells Fargo may otherwise request, (iii) you will transfer monies on deposit in the Lock-Box Account, at any time, as directed by Wells Fargo, (iv) all services to be performed by you under the Agreement will be performed on behalf of Wells Fargo, and (v) all correspondence or other mail which you have agreed to send to the Company or Seller will be sent to Wells Fargo at the following address:

 

Wells Fargo Bank, National Association

1100 Abernathy Rd., N.E.

Suite 15001600

Atlanta, GA  30328-5657

Attn:  Ryan Tozier

Moreover, upon such notice, Wells Fargo for itself and as agent will have all rights and remedies given to the Company (and Seller, as the Company’s assignee) under the Agreement.  Seller agrees, however, to continue to pay all fees and other assessments due thereunder at any time.

 

You hereby acknowledge that monies deposited in the Lock-Box Account or any other account established with you by Wells Fargo for the purpose of receiving funds from the Lock-Box are subject to the liens of Wells Fargo for itself and as agent, and will not be subject to deduction, set-off, banker’s lien or any other right you or any other party may have against the Company or Seller, except that you may debit the Lock-Box Account for any items deposited therein that are returned or otherwise not collected and for all charges, fees, commissions and expenses incurred by you in providing services hereunder, all in accordance with your customary practices for the charge back of returned items and expenses.

 

THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  This letter agreement may be executed in any number of counterparts and all of such counterparts taken together will be deemed to constitute one and the same instrument.

 

This letter agreement contains the entire agreement between the parties, and may not be altered, modified, terminated or amended in any respect, nor may any right, power or privilege of any party hereunder be waived or released or discharged, except upon execution by all parties hereto of a written instrument so providing.  In the event that any provision in this letter agreement is in conflict with, or inconsistent with, any provision of the Agreement, this letter agreement will exclusively govern and control.  Each party agrees to take all actions reasonably requested by any other party to carry out the purposes of this letter agreement or to preserve and protect the rights of each party hereunder.

_____________________________

  

1           Before using this form, check with the Law Department to determine whether the applicable Purchaser has agreed to an alternative form.

 

 

 

  

  

  

Please indicate your agreement to the terms of this letter agreement by signing in the space provided below.  This letter agreement will become effective immediately upon execution of a counterpart of this letter agreement by all parties hereto.

 

Very truly yours,

 

[ORIGINATOR]

 

By:_________________________________

Name:

Title:

 

INSIGHT RECEIVABLES, LLC

 

By:_________________________________

Name:

Title:

 

Acknowledged and agreed to

this ___ day of ____

 

[COLLECTION BANK]

 

By:____________________________________

Name:

Title:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent

 

By:____________________________________

Name:

Title:

 

 

  

  

  

ANNEX A

FORM OF NOTICE

 

[On letterhead of Wells Fargo]

 

_______, _____

 

[Collection Bank/Depositary Bank/Concentration Bank]

 

	
  

	
Re:

	
[Originator/Insight Receivables, LLC]

 

Ladies and Gentlemen:

 

We hereby notify you that we are exercising our rights pursuant to that certain letter agreement among [Originator], Insight Receivables, LLC, you and us, to have the name of, and to have exclusive ownership and control of, account number ________________ (the “Lock-Box Account”) maintained with you, transferred to us.  [Lock-Box Account will henceforth be a zero-balance account, and funds deposited in the Lock-Box Account should be sent at the end of each day to _____________.]  You have further agreed to perform all other services you are performing under that certain agreement dated ________________ between you and [Originator] on our behalf.

 

We appreciate your cooperation in this matter.

 

Very truly yours,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, (for itself and as Agent)

 

By:  ______________________________

Title:

 

 

 

  

  

  

EXHIBIT VII

 

FORM OF ASSIGNMENT AGREEMENT

 

THIS ASSIGNMENT AGREEMENT (this “Assignment Agreement”) is entered into as of the ___ day of ____________, ____, by and between _____________________ (“Assignor”) and __________________ (“Assignee”).

 

PRELIMINARY STATEMENTS

 

A.           This Assignment Agreement is being executed and delivered in accordance with Section 12.1(b) of that certain Receivables Purchase Agreement dated as of December 31, 2002 by and among Insight Receivables, LLC, as Seller, Insight Enterprises, Inc., as Servicer, the Purchasers from time to time party thereto and Wells Fargo Bank, National Association, as successor Agent (as amended, modified or restated from time to time, the “Purchase Agreement”).  Capitalized terms used and not otherwise defined herein are used with the meanings set forth or incorporated by reference in the Purchase Agreement.

 

B.           Assignor is a Purchaser[Conduit/Financial Institution] party to the Purchase Agreement, and Assignee wishes to become a Purchaser[Conduit/Financial Institution] thereunder; and

 

C.           Assignor is selling and assigning to Assignee an undivided ____________% (the “Transferred Percentage”) interest in all of Assignor’s rights and obligations under the Purchase Agreement and the Transaction Documents, including, without limitation, Assignor’s [Same-Day and Standard] Commitment[s] and (if applicable) the Capital of Assignor’s Purchaser Interests as set forth herein.

 

AGREEMENT

 

The parties hereto hereby agree as follows:

 

1.           The sale, transfer and assignment effected by this Assignment Agreement shall become effective (the “Effective Date”) two (2) Business Days (or such other date selected by the Agent in its sole discretion) following the date on which a notice substantially in the form of Schedule II to this Assignment Agreement (“Effective Notice”) is delivered by the Agent to the PurchasersManaging Agents, Assignor and Assignee.  From and after the Effective Date, Assignee shall be a Purchaser party to the Purchase Agreement for all purposes thereof as if Assignee were an original party thereto and Assignee agrees to be bound by all of the terms and provisions contained therein.

 

2.           If Assignor has no outstanding Capital under the Purchase Agreement, on the Effective Date, Assignor shall be deemed to have hereby transferred and assigned to Assignee, without recourse, representation or warranty (except as provided in paragraph 6 below), and the Assignee shall be deemed to have hereby irrevocably taken, received and assumed from Assignor, the Transferred Percentage of Assignor’s [Same Day and Standard] Commitment[s] and all rights and obligations associated therewith under the terms of the Purchase Agreement, including, without limitation, the Transferred Percentage of Assignor’s future funding obligations under Section 4.1 of the Purchase Agreement.

 

3.           If Assignor has any outstanding Capital under the Purchase Agreement, at or before 12:00 noon, local time of Assignor, on the Effective Date Assignee shall pay to Assignor, in immediately available funds, an amount equal to the sum of (i) the Transferred Percentage of the outstanding Capital of Assignor’s Purchaser Interests (such amount, being hereinafter referred to as the “Assignee’s Capital”); (ii) all accrued but unpaid (whether or not then due) Yield attributable to Assignee’s Capital; and (iii) accruing but unpaid fees and other costs and expenses payable in respect of Assignee’s Capital for the period commencing upon each date such unpaid amounts commence accruing, to and including the Effective Date (the “Assignee’s Acquisition Cost”); whereupon, Assignor shall be deemed to have sold, transferred and assigned to Assignee, without recourse, representation or warranty (except as provided in paragraph 6 below), and Assignee shall be deemed to have hereby irrevocably taken, received and assumed from Assignor, the Transferred Percentage of Assignor’s [Same-Day and Standard] Commitment[s]and the Capital of Assignor’s Purchaser Interests (if applicable) and all related rights and obligations under the Purchase Agreement and the Transaction Documents, including, without limitation, the Transferred Percentage of Assignor’s future funding obligations under Section 4.1 of the Purchase Agreement.

 

4.           Concurrently with the execution and delivery hereof, Assignor will provide to Assignee copies of all documents requested by Assignee which were delivered to Assignor pursuant to the Purchase Agreement.

 

5.           Each of the parties to this Assignment Agreement agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Assignment Agreement.

 

6.           By executing and delivering this Assignment Agreement, Assignor and Assignee confirm to and agree with each other, the Agent and the Purchasers as follows:  (a) other than the representation and warranty that it has not created any Adverse Claim upon any interest being transferred hereunder, Assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made by any other Person in or in connection with the Purchase Agreement or the Transaction Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of Assignee, the Purchase Agreement or any other instrument or document furnished pursuant thereto or the perfection, priority, condition, value or sufficiency of any collateral; (b) Assignor makes no representation or warranty and assumes no responsibility with respect to the financial condition of Seller, any Obligor, any Seller Affiliate or the performance or observance by Seller, any Obligor, any Seller Affiliate of any of their respective obligations under the Transaction Documents or any other instrument or document furnished pursuant thereto or in connection therewith; (c) Assignee confirms that it has received a copy of the Purchase Agreement and copies of such other Transaction Documents, and other documents and information as it has requested and deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (d) Assignee will, independently and without reliance upon the Agent, Seller or any other Purchaser and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Purchase Agreement and the Transaction Documents; (e) Assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Transaction Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (f) Assignee agrees that it will perform in accordance with their terms all of the obligations which, by the terms of the Purchase Agreement and the other Transaction Documents, are required to be performed by it as a Purchaser.

 

7.           Each party hereto represents and warrants to and agrees with the Agent that it is aware of and will comply with the provisions of the Purchase Agreement, including, without limitation, Sections 4.1 and 13.1 thereof.

 

8.           Schedule I hereto sets forth the revised [Same-Day and Standard] Commitment[s] of Assignor and the Commitment of Assignee, as well as administrative information with respect to Assignee.

 

9.           THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

 

 

  

  

  

IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to be executed by their respective duly authorized officers of the date hereof.

 

[ASSIGNOR]

 

By:____________________________

Title:

 

[ASSIGNEE]

 

By:____________________________

Title:

 

  

  

  

SCHEDULE I TO ASSIGNMENT AGREEMENT

 

LIST OF LENDING OFFICES, ADDRESSES

FOR NOTICES AND COMMITMENT AMOUNTS

 

Date: _______________, ____

 

Transferred Percentage:                                           ________%

 

	  	
A-1

	
A-2

	
A-3

	
A-4

	
B-1

	
B-2

	
Assignor

	
Standard Commitment (prior to giving effect to the Assignment Agreement)

	
Standard Commitment (after giving effect to the Assignment Agreement)

	
Same-Day Commitment (prior to giving effect to the Assignment Agreement)

	
Same-Day Commitment (after giving effect to the Assignment Agreement)

	
Outstanding Capital

(if any)

	
Ratable Share of Outstanding Capital

	  	  	  	  	  	  	  
	  	  	
A-2

	
A-3

	
A-4

	
B-1

	
B-2

	
Assignee

	  	
Standard Commitment (after giving effect to the Assignment Agreement)

	  	
Same-Day Commitment (after giving effect to the Assignment Agreement)

	
Outstanding Capital

(if any)

	
Ratable Share of Outstanding Capital

	  	  	  	  	  	  	  

 

Address for Notices

________________

________________

Attention:

Phone:

Fax:

 

 

  

  

  

SCHEDULE II TO ASSIGNMENT AGREEMENT

EFFECTIVE NOTICE

 

	
TO: 

	
________________________, Assignor

________________________

________________________

________________________

 

	
TO:

	
________________________, Assignee

________________________

________________________

________________________

 

The undersigned, as Agent under the Receivables Purchase Agreement dated as of December 31, 2002 by and among Insight Receivables, LLC, an Illinois limited liability company, Insight Enterprises, Inc., as Servicer, the Purchasers and Managing Agents from time to time party thereto and Wells Fargo Bank, National Association, as successor Agent hereby acknowledges receipt of executed counterparts of a completed Assignment Agreement dated as of ____________, ____ between __________________, as Assignor, and __________________, as Assignee.  Terms defined in such Assignment Agreement are used herein as therein defined.

 

Pursuant to such Assignment Agreement, you are advised that the Effective Date will be ______________, ____.

 

 

 

  

  

  

[3.           Pursuant to such Assignment Agreement, the Assignee is required to pay $____________ to Assignor at or before 12:00 noon (local time of Assignor) on the Effective Date in immediately available funds.]

 

Very truly yours,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, individually and as Agent

 

By:___________________________

Title:__________________________

 

 

[PURCHASER], as a Purchaser

 

By:__________________________

Title:_________________________

 

  

  

  

EXHIBIT VIII

 

CREDIT AND COLLECTION POLICY

 

 

Attached.

 

 

 

 

  

  

  

EXHIBIT IX

 

FORM OF WEEKLY REPORT

 

 

Attached

 

 

 

 

  

  

  

EXHIBIT X

 

FORM OF MONTHLY REPORT

 

 

Attached

 

 

 

  

  

  

EXHIBIT XI

SPECIAL CONCENTRATION LIMITS

 

For any Obligor, at any time, an amount equal to (i) the Outstanding Balance of Eligible Receivables at such time multiplied by (ii) the highest applicable “Special Concentration Percentage” determined by reference to such Obligor’s long-term, senior unsecured rating at such time as set forth below:

 

	
At any time the long-term, senior unsecured debt of such Obligor is rated:

 

	
Special Concentration Percentage:

	
AA- or higher by S&P and Aa3 or higher by Moody’s

	
15%

 

	
A+ or higher by S&P and A12 or higher by Moody’s

 

	
11.2512%

	
BBB-BBB+ or higher by S&P and

Baa31 or higher by Moody’s

 

	
7.5010%

	
BBB- or higher by S&P and Baa3 or higher by Moody’s

	
8%

 

	
Less than BBB- or unrated by S&P or S&P has withdrawn its rating on such debt or less than Baa3 or unrated by Moody’s or Moody’s has withdrawn its rating on such debt

 

	
5.005%

 

 

 

  

  

  

EXHIBIT XII

 

FORM OF DAILY REPORT

 

(Attached)

 

 

  

  

  

EXHIBIT XIII

 

FORM OF JOINDER AGREEMENT

 

Reference is hereby made to the Receivables Purchase Agreement, dated as of December 31, 2002 by and among Insight Receivables, LLC, an Illinois limited liability company (the “Seller”), Insight Enterprises, Inc., as Servicer, the Purchasers and Managing Agents from time to time party thereto, and Wells Fargo Bank, National Association, as successor Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Receivables Purchase Agreement”).  To the extent not defined herein, capitalized terms used herein have the meanings assigned to such terms in the Receivables Purchase Agreement.

 

__________________ (the “New Purchaser”), Seller, the Servicer and the Agent agree as follows:

 

1.           Pursuant to Section 12.6 of the Agreement, Seller has requested that the New Purchaser agree to become a “Purchaser” under the Agreement.

 

2.           The effective date (the “Effective Date”) of this Joinder Agreement shall be the later of (i) the date on which a fully executed copy of this Joinder Agreement is delivered to the Agent and (ii) the date of this Joinder Agreement.

 

3.           By executing and delivering this Joinder Agreement, the New Purchaser confirms to and agrees with each other party to the Agreement that (i) it has received a copy of the Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Joinder Agreement; (ii) it will, independently and without reliance upon the Agent, the other Purchasers or any of their respective Affiliates, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Agreement or any Transaction Document; (iii) it appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Agreement, the Transaction Documents and any other instrument or document pursuant thereto as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto and to enforce its respective rights and interests in and under the Agreement, the Transaction Documents, the Receivables, the Related Security and the Collections; (iv) it will perform all of the obligations which by the terms of the Agreement and the Transaction Documents are required to be performed by it as a Purchaser; (v) its address for notices shall be the office set forth beneath its name on the signature pages of this Joinder Agreement; and (vi) it is duly authorized to enter into this Joinder Agreement .

 

4.           On the Effective Date of this Joinder Agreement, the New Purchaser shall join in and be a party to the Agreement and, to the extent provided in this Joinder Agreement, shall have the rights and obligations of a Purchaser the Receivables Purchase Agreement.

 

5.           This Joinder Agreement may be executed by one or more of the parties on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

6.           This Joinder Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois.

 

IN WITNESS WHEREOF, the parties hereto have caused this Joinder Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written, such execution being made on Schedule I hereto.

 

 

[Remainder of page left intentionally blank]

 

 

  

  

  

Schedule I

to

Joinder Agreement

 

Dated ______ __, 20__

 

 

The “Commitment” with respect to the New Purchaser is:

 

[New Purchaser]                             $[______________]

 

 

	
NEW PURCHASER:

	
[NEW PURCHASER]

By:_______________________

Name:

Title:

 

Address for notices:

[Address]

 

 

 

  

  

  

Consented to this ___ day of ___________, 20__ by:

 

INSIGHT RECEIVABLES, LLC, as Seller

 

By:_______________________

     Name:

     Title:

 

 

INSIGHT ENTERPRISES, INC., as Servicer

 

By:_______________________

     Name:

     Title:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent

By:_______________________

     Name:

     Title:

 

 

[SIGNATURE BLOCK FOR EACH PURCHASER]

 

   as a Purchaser

 

By:_______________________

Name:

Title:

 

  

  

  

SCHEDULE A

 

SAME-DAY AND STANDARD COMMITMENTS

 

	
Purchaser Group

	
Conduit(s)

	
Financial Institution(s)

	
PurchaserManaging Agent

	
Same-Day Commitment

	
Standard Commitment

	
Group Total Commitment Limit

	
Gotham Purchaser Group

	
Gotham Funding Corporation

	
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

 

	
PNCThe Bank, National Association of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

	
n/a

	
$100,000,000

	
$90,000,000100,000,000

	
Wells Fargo Purchaser Group

	
N/A

	
Wells Fargo Bank, National Association

 

	
Wells Fargo Bank, National Association

	
$25,000,000

	
$125,000,000

	
$110,000,000150,000,000

	
TOTAL

	
$25,000,000

	
$225,000,000

	
$200,000,000250,000,000

 

  

  

  

SCHEDULE B

 

DOCUMENTS TO BE DELIVERED TO THE AGENT AND THE PURCHASERSMANAGING AGENTS

ON OR PRIOR TO THE INITIAL PURCHASE

Attached

 

 

 

  

  

  

TABLE OF CONTENTS

 

Page

	
ARTICLE I PURCHASE ARRANGEMENTS

	 	
1

	
Section 1.1

	 	
Same-Day Purchase Facility.

	 	
1

	
Section 1.2

	 	
IncreasesStandard Purchase Facility.

	 	
2

	
Section 1.3

	 	
Payment Requirements

	 	
3

	
ARTICLE II PAYMENTS AND COLLECTIONS

	 	
23

	
Section 2.1

	 	
Payments.

	 	
23

	
Section 2.2

	 	
Collections Prior to Amortization.

	 	
34

	
Section 2.3

	 	
Collections Following Amortization

	 	
35

	
Section 2.4

	 	
Application of Collections.

	 	
45

	
Section 2.5

	 	
Payment Rescission..

	 	
46

	
Section 2.6

	 	
Maximum Purchaser Interests and Aggregate Capital.

	 	
46

	
Section 2.7

	 	
Clean UpClean-Up Call.

	 	
56

	
ARTICLE III [RESERVED]CP FUNDING

	 	
57

	
Section 3.1

	 	
CP Costs

	 	
7

	
Section 3.2

	 	
CP Costs Payments

	 	
7

	
Section 3.3

	 	
Calculation of CP Costs.

	 	
7

	
ARTICLE IV FINANCIAL INSTITUTION FUNDING

	 	
57

	
Section 4.1

	 	
Financial Institution Funding..

	 	
57

	
Section 4.2

	 	
Yield Payments.

	 	
58

	
Section 4.3

	 	
Selection and Continuation of Tranche Periods.

	 	
8

	
Section 4.4

	 	
[Reserved]

	 	
8

	
Section 4.34.5

	 	
Suspension of the LIBO Rate.

	 	
58

	
Section 4.6

	 	
Liquidity Agreement Fundings

	 	
9

	
ARTICLE V REPRESENTATIONS AND WARRANTIES

	 	
69

	
Section 5.1

	 	
Representations and Warranties of the Seller Parties

	 	
69

	
Section 5.2

	 	
Financial Institution Representations and Warranties

	 	
14

	
ARTICLE VI CONDITIONS OF PURCHASES

	 	
1014

	
Section 6.1

	 	
Conditions Precedent to Initial Incremental Purchase.

	 	
1014

	
Section 6.2

	 	
Conditions Precedent to All Purchases and Reinvestments

	 	
1015

	
ARTICLE VII COVENANTS

	 	
1116

	
Section 7.1

	 	
Affirmative Covenants of The Seller Parties.

	 	
1116

	
Section 7.2

	 	
Negative Covenants of The Seller Parties.

	 	
1924

	
ARTICLE VIII ADMINISTRATION AND COLLECTION

	 	
2126

	
Section 8.1

	 	
Designation of Servicer.

	 	
2126

	
Section 8.2

	 	
Duties of Servicer.

	 	
2127

	
Section 8.3

	 	
Collection Notices..

	 	
2328

	
Section 8.4

	 	
Responsibilities of Seller.

	 	
2328

	
Section 8.5

	 	
Reports..

	 	
2328

	
Section 8.6

	 	
Servicing Fees

	 	
2328

	
ARTICLE IX AMORTIZATION EVENTS

	 	
2329

	
Section 9.1

	 	
Amortization Events.

	 	
2329

	
Section 9.2

	 	
Remedies.

	 	
2631

	
ARTICLE X INDEMNIFICATION

	 	
2631

	
Section 10.1

	 	
Indemnities by The Seller Parties.

	 	
2631

	
Section 10.2

	 	
Increased Cost and Reduced Return.

	 	
2834

	
Section 10.3

	 	
Other Costs and Expenses.

	 	
3035

	
ARTICLE XI THE AGENT

	 	
3035

	
Section 11.1

	 	
Authorization and Action.

	 	
3035

	
Section 11.2

	 	
Delegation of Duties..

	 	
3036

	
Section 11.3

	 	
Exculpatory Provisions.

	 	
3136

	
Section 11.4

	 	
Reliance by Agent and the Managing Agents.

	 	
3136

	
Section 11.5

	 	
Non-Reliance on Agent and Other Purchasers..

	 	
3137

	
Section 11.6

	 	
Reimbursement and Indemnification..

	 	
3237

	
Section 11.7

	 	
Agent in itsand the Managing Agents in their Individual Capacity.Capacities.

	 	
3238

	
Section 11.8

	 	
Successor Agent..

	 	
3238

	
Section 11.9

	 	
Successor Managing Agent.

	 	
38

	
ARTICLE XII ASSIGNMENTS; PARTICIPATIONS

	 	
3239

	
Section 12.1

	 	
Assignments.

	 	
3239

	
Section 12.2

	 	
Participations

	 	
3340

	
Section 12.3

	 	
Extension of Stated Termination Date

	 	
3340

	
Section 12.4

	 	
Terminating PurchasersFinancial Institutions.

	 	
3340

	
Section 12.5

	 	
Federal Reserve

	 	
3441

	
Section 12.6

	 	
Additional Purchasers Purchaser Groups

	 	
3441

	
Section 12.7

	 	
Withholding Tax Exemption.

	 	
3441

	
ARTICLE XIII [RESERVED]

	 	
3542

	
ARTICLE XIV MISCELLANEOUS

	 	
3542

	
Section 14.1

	 	
Waivers and Amendments.

	 	
3542

	
Section 14.2

	 	
Notices

	 	
3643

	
Section 14.3

	 	
Ratable Payments

	 	
3744

	
Section 14.4

	 	
Protection of Ownership Interests of the Purchasers.

	 	
3744

	
Section 14.5

	 	
Confidentiality.

	 	
3745

	
Section 14.6

	 	
Bankruptcy Petition

	 	
45

	
Section 14.614.7

	 	
Limitation of Liability

	 	
3845

	
Section 14.714.8

	 	
CHOICE OF LAW.

	 	
3846

	
Section 14.814.9

	 	
CONSENT TO JURISDICTION.

	 	
3846

	
Section 14.914.10

	 	
WAIVER OF JURY TRIAL.

	 	
3946

	
Section 14.1014.11

	 	
Integration; Binding Effect; Survival of Terms.

	 	
3946

	
Section 14.1114.12

	 	
Counterparts; Severability; Section References.

	 	
3947

	
Section 14.13

	 	
Agent Roles.

	 	
47

	
Section 14.1214.14

	 	
Characterization.

	 	
3947

	
Section 14.15

	 	
Excess Funds

	 	
48

	
Section 14.1314.16

	 	
USA PATRIOT Act

	 	
4022

Exhibits and Schedules

	
Exhibit I

	
Definitions

	
Exhibit IIII-A

	
Form of Same-Day Purchase Notice

	
Exhibit II-B

	
Form of Standard Purchase Notice

	
Exhibit II-C

	
Form of Same-Day Reduction Notice

	
Exhibit II-D

	
Form of Standard Reduction Notice

	
Exhibit III

	
Places of Business of the Seller Parties; Locations of Records; Federal Employer Identification Number(s), Organizational Identification Number(s)

	
Exhibit IV

	
Names of Collection Banks; Collection Accounts

	
Exhibit V-A

	
Form of Monthly Compliance Certificate

	
Exhibit V-B

	
Form of Quarterly Compliance Certificate

	
Exhibit VI

	
Form of Collection Account Agreement

	
Exhibit VII

	
Form of Assignment Agreement

	
Exhibit VIII

	
Credit and Collection Policy

	
Exhibit IX

	
Form of Weekly Report

	
Exhibit X

	
Form of Monthly Report

	
Exhibit XI

	
Special Concentration Limits

	
Exhibit XII

	
Form of Daily Report

	
Exhibit XIII

	
Form of Joinder Agreement

	
Schedule A

	
Same Day Commitments and Standard Commitments

	
Schedule B

	
Closing Documents

Schedule 9.1(n)        Methodology of Calculating Consolidated Tangible Net Worth

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