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TRANSFER AND ADMINISTRATION AGREEMENT
BY AND AMONG
CSI FUNDING INC.,
as Transferor,
COMPUCOM SYSTEMS, INC.,
as Collection Agent,
ENTERPRISE FUNDING CORPORATION,
as Company,
AND
NATIONSBANK, N.A.,
as Agent
Dated as of April 1, 1996
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms . . . . . . . . . . . . . . . 1
SECTION 1.2. Other Terms . . . . . . . . . . . . . . . . . . . . 25
SECTION 1.3. Computation of Time Periods . . . . . . . . . . . . 26
ARTICLE II
TRANSFERS AND SETTLEMENTS
SECTION 2.1. Facility. . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.2. Transfers; Company Certificate;
Eligible Receivables. . . . . . . . . . . . . . . . 27
SECTION 2.3. Selection of Tranche Periods and Tranche Rates. . . 29
SECTION 2.4. Discount, Fees and Other Costs and Expenses . . . . 30
SECTION 2.5. Non-Liquidation Settlement and
Reinvestment Procedures . . . . . . . . . . . . . . 31
SECTION 2.6. Liquidation Settlement Procedures . . . . . . . . . 32
SECTION 2.7. Fees. . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.8. Protection of Ownership Interest
of the Company. . . . . . . . . . . . . . . . . . . 33
SECTION 2.9. Deemed Collections; Application of Payments . . . . 34
SECTION 2.10. Payments and Computations, Etc. . . . . . . . . . . 36
SECTION 2.11. Reports.. . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.12. Collection Account. . . . . . . . . . . . . . . . . 36
SECTION 2.13. Call Provision. . . . . . . . . . . . . . . . . . . 37
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. . . . . . . . . . . 38
SECTION 3.2. Reaffirmation of Representations
and Warranties by the Transferor. . . . . . . . . . 42
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ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing.. . . . . . . . . . . . . . . 43
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of each
of Transferor and the Collection Agent. . . . . . . 46
SECTION 5.2. Negative Covenants. . . . . . . . . . . . . . . . . 51
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Collection Agent . . . . . . . . . . 54
SECTION 6.2. Duties of Collection Agent. . . . . . . . . . . . . 54
SECTION 6.3. Rights After Designation of New
Collection Agent. . . . . . . . . . . . . . . . . . 57
SECTION 6.4. Responsibilities of each of the
Transferor and CompuCom . . . . . . . . . . . . . . 58
ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. Termination Events. . . . . . . . . . . . . . . . . 59
SECTION 7.2. Termination . . . . . . . . . . . . . . . . . . . . 61
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses. . . . . 65
SECTION 8.3. Other Costs, Expenses and Related Matters . . . . . 68
SECTION 8.4. Reconveyance Under Certain Circumstances. . . . . . 68
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ARTICLE IX
THE AGENT AND THE BANK COMMITMENT
SECTION 9.1. Authorization and Action. . . . . . . . . . . . . . 70
SECTION 9.2. Agent's Reliance, Etc.. . . . . . . . . . . . . . . 71
SECTION 9.3. Credit Decision . . . . . . . . . . . . . . . . . . 72
SECTION 9.4. Indemnification of the Agent. . . . . . . . . . . . 73
SECTION 9.5. Successor Agent . . . . . . . . . . . . . . . . . . 73
SECTION 9.6. Payments by the Agent . . . . . . . . . . . . . . . 74
SECTION 9.7. Bank Commitment; Assignment to Bank Investors . . . 74
SECTION 9.8 Master Security and Administration Agreement. . . . 78
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Term of Agreement . . . . . . . . . . . . . . . . . 80
SECTION 10.2. Waivers; Amendments . . . . . . . . . . . . . . . . 80
SECTION 10.3. Notices . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 10.4. Governing Law; Submission to
Jurisdiction; Integration . . . . . . . . . . . . . 82
SECTION 10.5. Severability; Counterparts. . . . . . . . . . . . . 82
SECTION 10.6. Successors and Assigns. . . . . . . . . . . . . . . 83
SECTION 10.7. [RESERVED]. . . . . . . . . . . . . . . . . . . . . 83
SECTION 10.8. Confidentiality . . . . . . . . . . . . . . . . . . 83
SECTION 10.9. No Bankruptcy Petition Against the Company. . . . . 84
SECTION 10.10. Limited Recourse; Waiver of Setoff. . . . . . . . . 84
SECTION 10.11. Grant of Security Interest. . . . . . . . . . . . . 85
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EXHIBITS
EXHIBIT A Form of Contract
EXHIBIT B Credit and Collection Policy
EXHIBIT C Form of Investor Report
EXHIBIT D Form of Transfer Certificate
EXHIBIT E Form of Settlement Statement
EXHIBIT F List of Actions and Suits
EXHIBIT G Schedule of Locations of Records
EXHIBIT H List of Subsidiaries, Divisions
and Tradenames-
EXHIBIT I [Reserved]
EXHIBIT J Form of Secretary's Certificate
EXHIBIT K Form of Company Certificate
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TRANSFER AND ADMINISTRATION AGREEMENT
TRANSFER AND ADMINISTRATION AGREEMENT (as amended, supplemented or
otherwise modified and in effect from time to time, this "AGREEMENT"), dated as
of April 1, 1996, among CSI FUNDING INC., a Delaware corporation, as transferor
(in such capacity, the "TRANSFEROR"), COMPUCOM SYSTEMS, INC., a Delaware
corporation, as collection agent (in such capacity, the "COLLECTION AGENT"),
ENTERPRISE FUNDING CORPORATION, a Delaware corporation (the "COMPANY") and
NATIONSBANK, N.A., as agent for the benefit of the Company and the Bank
Investors (the "AGENT").
PRELIMINARY STATEMENT
WHEREAS, the Transferor desires to convey, transfer and assign, from
time to time, undivided percentage interests in the RPA Interest, and the
Company desires to accept such conveyance, transfer and assignment of such
undivided percentage interests, subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"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.
"ADMINISTRATIVE SECURED PARTY" means NationsBank of Texas, N.A., and
its successors and permitted assigns pursuant to the Master Security and
Administration Agreement.
"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. A Person shall be deemed to control another
Person if the controlling Person 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 voting stock, by contract or otherwise.
"AFFILIATED OBLIGOR" means any Obligor which is an Affiliate of
another Obligor.
"AGENT" means NationsBank, N.A., in its capacity as agent for the
Company and the Bank Investors, and any successor thereto appointed pursuant to
Article IX.
"AGGREGATE UNPAIDS" means, at any time, an amount equal to the sum of
(i) the aggregate accrued and unpaid Discount with respect to all Tranche
Periods at such time, (ii) the Net Investment at such time, and (iii) all other
amounts owed (whether due or accrued) hereunder by Transferor to the Company at
such time.
"ARRANGEMENT FEE" means the fee payable by the Transferor to the Agent
pursuant to Section 2.7 hereof, the terms of which are set forth in the Fee
Letter.
"ASSIGNMENT" shall have the meaning specified in Section 9.7(a).
"ASSIGNMENT AMOUNT" with respect to a Bank Investor shall mean an
amount equal to the lesser of (i) such Bank Investor's Pro Rata Share of the Net
Investment plus any amounts which remain unpaid pursuant to Section 9.7(d)
hereof and (ii) such Bank Investor's unused Commitment.
"BANK INVESTORS" means NationsBank, N.A., and any assignee thereof
pursuant to Article IX.
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"BASE RATE" or "BR" means, a rate per annum equal to the greater of
(i) the prime rate of interest announced by the Liquidity Provider from time to
time, changing when and as said prime rate changes (such rate not necessarily
being the lowest or best rate charged by the Liquidity Provider) and (ii) the
rate 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, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by the
Liquidity Provider from three Federal funds brokers of recognized standing
selected by it plus, in the case of this clause (ii), 1.50%.
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day on
which banks in New York, New York, Charlotte, North Carolina or Dallas, Texas
are authorized or required by law to close, and, when used with respect to the
determination of any Eurodollar Rate or any notice with respect thereto, any
such day which is also a day for trading by and between banks in United States
dollar deposits in the London interbank market.
"BR TRANCHE" means a Tranche as to which Discount is calculated at the
Base Rate.
"BR TRANCHE PERIOD" means, with respect to a BR Tranche, prior to the
Termination Date, a period of up to 30 days requested by the Transferor and
agreed to by the Company or the Liquidity Provider, as the case may be,
commencing on a Business Day requested by the Transferor and agreed to by the
Company or the Liquidity Provider, as the case may be, and after the Termination
Date, a period of one day. If such BR Tranche Period would end on a day which
is not a Business Day, such BR Tranche Period shall end on the next succeeding
Business Day.
"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 generally accepted accounting principles.
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"CD RATE" shall mean, with respect to any CD Tranche Period, a rate
which is .75% in excess of a rate per annum equal to the sum (rounded upward to
the nearest 1/100 of 1%) of (A) the rate obtained by dividing (x) the
Certificate of Deposit Rate for such CD Tranche Period by (y) a percentage equal
to 100% minus the stated maximum rate for all reserve requirements as specified
in Regulation D (including without limitation any marginal, emergency,
supplemental, special or other reserves) that would be applicable during such
Tranche Period to a negotiable certificate of deposit in excess of $100,000,
with a maturity approximately equal to such Tranche Period, of any member bank
of the Federal Reserve System plus (B) the then daily net annual assessment rate
(rounded upward, if necessary, to the nearest 1/100 of 1%) as estimated by the
Liquidity Provider for determining the current annual assessment payable by the
Liquidity Provider to the Federal Deposit Insurance Corporation for insuring
such certificates of deposit.
"CD TRANCHE" means a Tranche as to which Discount is calculated at the
CD Rate.
"CD TRANCHE PERIOD" means, with respect to a CD Tranche, prior to the
Termination Date, a period of up to one month requested by the Transferor and
agreed to by the Company or the Liquidity Provider, as the case may be,
commencing on a Business Day requested by the Transferor and agreed to by the
Company or the Liquidity Provider, as the case may be, and after the
Termination Date, a period of one day. If such CD Tranche Period would end on a
day which is not a Business Day, such CD Tranche Period shall end on the next
succeeding Business Day.
"CERTIFICATE OF DEPOSIT RATE" means, with respect to any CD Tranche
Period, the average of the bid rates determined by the Liquidity Provider to be
bid rates per annum, at approximately 10:00 a.m. (New York City time) on the
Business Day before the first day of the CD Tranche Period for which such CD
Rate is to be applicable, of two or more New York certificate of deposit dealers
of recognized standing selected by the Liquidity Provider for the purchase in
New York from the Liquidity Provider at face value of certificates of deposit of
the Liquidity Provider in an aggregate amount approximately comparable to the
amount of the CD Tranche to
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which such CD Rate is to be applicable and with a maturity approximately equal
to the applicable CD Tranche Period.
"CLOSING DATE" means the effective date of the initial Ownership
Certification under the Master Security and Administration Agreement.
"COLLATERAL AGENT" has the meaning specified in Section 10.6(b).
"COLLECTIONS" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all Finance Charges, if any, and cash proceeds of Related Security
with respect to such Receivable, and any Deemed Collections of such Receivable.
"COLLECTION ACCOUNT" means the account no. 653035022, established by
the Transferor and maintained at NationsBank, N.A.
"COLLECTION AGENT" means at any time the Person then authorized
pursuant to Section 6.1 to service, administer and collect Receivables.
"COMMERCIAL PAPER" means the promissory notes of the Company issued by
the Company in the commercial paper market.
"COMMITMENT" means for each Bank Investor, the commitment of such Bank
Investor to make acquisitions from the Transferor or the Company in accordance
herewith in an amount not to exceed the dollar amount set forth opposite such
Bank Investor's signature on the signature page hereto under the heading
"Commitment".
"COMMITMENT TERMINATION DATE" means April 2, 1997, or such later date
to which the Commitment Termination Date may be extended by the Transferor, the
Agent and the Bank Investors not later than sixty (60) days prior to the then
current Commitment Termination Date.
"COMPANY CERTIFICATE" means the certificate issued to the Company
pursuant to Section 2.2 hereof.
5
"COMPUCOM" means CompuCom Systems, Inc., a Delaware corporation, and
its successors and assigns.
"CONCENTRATION AMOUNT" means for any Designated Obligor, (a) 2% of the
product of (x) the RPA Interest Percentage and (y) the aggregate Outstanding
Balance of Eligible Receivables at such time; PROVIDED, HOWEVER, that with
respect to any Designated Obligor and its affiliates whose long term unsecured
debt obligations are rated at least "A1" by Moody's and at least "A+" by
Standard & Poor's and with respect to which rating neither Moody's nor Standard
& Poor's shall have made a public announcement anticipating a downgrading of
such Designated Obligor's long term unsecured debt obligations to a rating less
than the aforementioned ratings ("A1/A+ RATED OBLIGORS"), 5% of the product of
(x) the RPA Interest Percentage and (y) the aggregate Outstanding Balance of all
Eligible Receivables at such time; or (b) such other amount with respect to a
Designated Obligor determined by the Company in the reasonable exercise of its
good faith judgment and disclosed in a written notice delivered to the
Transferor.
"CONTRACT" means an agreement or invoice in substantially the form of
one of the forms set forth in Exhibit A or otherwise approved by the Company,
and any documents related thereto, pursuant to or under which an Obligor shall
be obligated to pay CompuCom for merchandise purchased or services rendered.
"CP RATE" means, with respect to any CP Tranche Period, the rate
equivalent to the rate (or if more than one rate, the weighted average of the
rates) at which Commercial Paper having a term equal to such CP Tranche Period
may be sold by any placement agent or commercial paper dealer entering into a
commercial paper dealer agreement with the Company; PROVIDED, HOWEVER, that if
the rate (or rates) as agreed between any such agent or dealer and the Company
is a discount rate, then the rate (or if more than one rate, the weighted
average of the rates) resulting from the Company's converting such discount rate
(or rates) to an interest-bearing equivalent rate per annum.
"CP TRANCHE" means a Tranche as to which Discount is calculated at a
CP Rate.
6
"CP TRANCHE PERIOD" means, with respect to a CP Tranche, a period of
days not to exceed 120 days commencing on a Business Day requested by the
Transferor and agreed to by the Company pursuant to Section 2.3. If such CP
Tranche Period would end on a day which is not a Business Day, such CP Tranche
Period shall end on the next succeeding Business Day.
"CREDIT AND COLLECTION POLICY" shall mean CompuCom's credit and
collection policy or policies and practices, relating to Contracts and
Receivables existing on the date hereof and referred to in Exhibit B attached
hereto, as modified from time to time in compliance with Section 5.2(c).
"CREDIT SUPPORT AGREEMENT" means the agreement between the Company and
the Credit Support Provider evidencing the obligation of the Credit Support
Provider to provide credit support to the Company in connection with the
issuance by the Company of Commercial Paper.
"CREDIT SUPPORT PROVIDER" means the Person or Persons who will provide
credit support to the Company in connection with the issuance by the Company of
Commercial Paper.
"CURRENT MATURITIES OF LONG-TERM DEBT" means that amount of principal
due to be repaid within one-year, for debts that were incurred for a time period
of greater than one-year.
"DEALER FEE" means the fee payable by the Transferor to the Agent,
pursuant to Section 2.4 hereof, the terms of which are set forth in the Fee
Letter.
"DEBT TO TANGIBLE NET WORTH RATIO" has the meaning specified in the
NationsBank FSA as in effect on the date hereof (without regard to any
amendments, supplements or modifications thereto after the date hereof).
"DEEMED COLLECTIONS" means any Collections on any Receivable deemed to
have been received by the Transferor pursuant to Section 2.9(a) or (b).
"DEFAULTED RECEIVABLE" means a Receivable: (i) as to which any
payment, or part thereof, remains unpaid for 91 days or more from the original
due date for such
7
Receivable; (ii) as to which an Event of Bankruptcy has occurred with respect to
the Obligor thereof; (iii) which has been identified by the Collection Agent as
uncollectible; or (iv) which, consistent with the Credit and Collection Policy,
should be written off as uncollectible.
"DELINQUENCY RATIO" means, with respect to any date of determination,
the ratio (expressed as a percentage) computed by dividing (i) the aggregate
Outstanding Balance of all Delinquent Receivables as of such date by (ii) the
aggregate Outstanding Balance of all Receivables as of such date less Defaulted
Receivables as of such date.
"DELINQUENT RECEIVABLE" means a Receivable: (i) as to which any
payment, or part thereof, remains unpaid for more than 30 days from the original
due date for such Receivable and (ii) which is not a Defaulted Receivable.
"DESIGNATED OBLIGOR" means, at any time, each Obligor; PROVIDED,
HOWEVER, that any Obligor shall cease to be a Designated Obligor upon notice to
the Transferor from the Company exercising its reasonable discretion, delivered
at any time.
"DILUTION RATIO" means, for any period of determination, the ratio
(expressed as a percentage) computed by dividing (i) the aggregate balance of
Receivables subject to any credits, rebates, discounts, disputes, warranty
claims, repossessed or returned goods, charge back allowances and other dilutive
factors, and any other billing or other adjustment by the Transferor or the
Collection Agent, provided to Obligors in respect of Receivables during the
preceding month by (ii) the aggregate Outstanding Balance of all Receivables
which were originated during the month one month preceding the period of
determination.
"DILUTION RESERVE" means, at any time, an amount equal to the product
of (i) 1.5, (ii) the highest Dilution Ratio as of the last day for any of the
preceding twelve (12) calendar months and (iii) the sum of the Net Investment,
the Loss Reserve, the Discount Reserve and the Servicing Fee Reserve at such
time.
8
"DISCOUNT" means, with respect to any Tranche Period:
(TR x TNI x AD)
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360
Where:
TR = the Tranche Rate applicable to such Tranche Period.
TNI = the portion of the Net Investment allocated to such Tranche Period.
AD = the actual number of days during such Tranche Period.
PROVIDED, HOWEVER, that no provision of this Agreement shall require the payment
or permit the collection of Discount in excess of the maximum permitted by
applicable law; and PROVIDED, FURTHER, that Discount shall not be considered
paid by any distribution if at any time such distribution is rescinded or must
be returned for any reason.
"DISCOUNT RESERVE" means, at any time, an amount equal to:
TD + LY
Where:
TD = the sum of the unpaid Discount for all Tranche Periods; and
LY = the Liquidation Yield.
"EARLY COLLECTION FEE" means, for any Tranche Period (such Tranche
Period to be determined without regard to the last sentence in Section 2.3(a))
during which the portion of the Net Investment that was allocated to such
Tranche Period is reduced, the excess, if any, of (i) the additional Discount
that would have accrued during such Tranche Period if such reductions had not
occurred, minus (ii) the income received by the Company from investing the
proceeds of such reductions.
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"ELIGIBLE INVESTMENTS" shall mean (a) negotiable instruments or
securities represented by instruments in bearer or registered or in book-entry
form which evidence (i) obligations fully guaranteed by the United States of
America; (ii) time deposits in, or bankers acceptances issued by, any depositary
institution or trust company incorporated under the laws of the United States of
America or any state thereof and subject to supervision and examination by
Federal or state banking or depositary institution authorities; PROVIDED,
HOWEVER, that at the time of investment or contractual commitment to invest
therein, the certificates of deposit or short-term deposits, if any, or long-
term unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such institution or
trust company) of such depositary institution or trust company shall have a
credit rating from Moody's and S&P of at least "P-1" and "A-1", respectively, in
the case of the certificates of deposit or short-term deposits, or a rating not
lower than one of the two highest investment categories granted by Moody's and
by S&P; (iii) certificates of deposit having, at the time of investment or
contractual commitment to invest therein, a rating from Moody's and S&P of at
least "P-1" and "A-1", respectively; (iv) investments in money market funds
rated in the highest investment category or otherwise approved in writing by the
applicable rating agencies, (b) demand deposits in any depositary institution or
trust company referred to in (a)(ii) above, (c) commercial paper (having
original or remaining maturities of no more than 30 days) having, at the time of
investment or contractual commitment to invest therein, a credit rating from
Moody's and S&P of at least "P-1" and "A-1", respectively, (d) Eurodollar time
deposits having a credit rating from Moody's and S&P of at least "P-1" and
"A-1", respectively, and (e) repurchase agreements involving any of the Eligible
Investments described in clauses (a)(i), (a)(iii) and (d) hereof so long as the
other party to the repurchase agreement has at the time of investment therein, a
rating from Moody's and S&P of at least "P-1" and "A-1", respectively.
"ELIGIBLE RECEIVABLE" means, at any time, any Receivable:
(i) which is subject to a valid sale and assignment of the RPA
Interest from CompuCom
10
to the Transferor under the Receivables Purchase Agreement and
with respect to which interest the Transferor has agreed to
transfer, or has transferred to the Company, good title to a
portion of such RPA Interest pursuant to this Agreement thereto,
free and clear of all liens (except as permitted pursuant to the
Master Security and Administrative Agreement);
(ii) which is subject to a valid first perfected security interest and
assignment from CompuCom to the Administrative Secured Party
pursuant to the Master Security and Administration Agreement;
(iii) the Obligor, who is a United States resident, is not an Affiliate
of any of CompuCom, the Transferor or the Company, is a
Designated Obligor, and is not a government or a governmental
subdivision or agency;
(iv) which is required to be paid in full not more than 30 days of the
original billing date therefor and does not represent a payment
obligation by an Obligor to Client Link Inc.;
(v) which is not a Defaulted Receivable at the time of the initial
creation of an interest in such Receivable;
(vi) which is an "eligible asset" as defined in Rule 3a-7 under the
Investment Company Act of 1940, as amended;
(vii) which is not more than 30 days delinquent at the time of initial
creation of an interest in such Receivable;
(viii) which is an "account" within the meaning of Section 9-106 of the
UCC of all applicable jurisdictions;
11
(ix) which is denominated and payable only in United States dollars in
the United States;
(x) which arises under a Contract which, together with such
Receivable, is in full force and effect and constitutes the
legal, valid and binding obligation of the related Obligor
enforceable against such Obligor in accordance with its terms and
is not subject to offset, counterclaim or other defense;
(xi) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations
applicable thereto;
(xii) which (a) satisfies all applicable requirements of the Credit and
Collection Policy and (b) complies with such other reasonable
criteria and requirements as the Transferor or the Company may
from time to time specify to CompuCom following five (5) days'
notice;
(xiii) which was generated in the ordinary course of CompuCom's business
and represents amounts payable in respect of goods delivered or
services performed;
(xiv) the Obligor of which has been directed to make all payments to a
Lockbox in accordance with the Master Security and Administration
Agreement; and
(xv) as to which the Company has not notified the Transferor that the
Company has reasonably determined that such Receivable, or class
of Receivables, is not acceptable for purchase hereunder because
of the nature of the business of the Obligor, or because of a
potential conflict of interest between the interests of CompuCom
or the Transferor and the Company.
"ESTIMATED MATURITY PERIOD" shall mean, at any time, the period,
rounded upward to the nearest whole
12
number of days, equal to the weighted average number of days until due of the
Receivables as calculated by the Collection Agent in good faith and set forth in
the most recent Monthly Report, such calculation to be based on the assumptions
that (a) each Receivable within a particular aging category, (as set forth in
the Investor Report) will be paid on the last day of such aging category and (b)
the last day of the last such aging category coincides with the last date on
which any Outstanding Balance of any Receivables would be written off as
uncollectible or charged against any applicable reserve or similar account in
accordance with the objective requirements of the Credit and Collection Policy
and CompuCom's normal accounting practices applied on a basis consistent with
those reflected in CompuCom's financial statements; PROVIDED, HOWEVER, that if
the Company shall reasonably disagree with any such calculation, the Company may
recalculate the Estimated Maturity Period, and such recalculation, in the
absence of manifest error, shall be conclusive.
"EURODOLLAR RATE" means, with respect to any Eurodollar Tranche
Period, a rate which is .625% in excess of a rate per annum equal to the sum
(rounded upwards, if necessary, to the next higher 1/100 of 1%) of (A) the rate
obtained by dividing (i) the applicable LIBOR Rate by (ii) a percentage equal to
100% minus the reserve percentage used for determining the maximum reserve
requirement as specified in Regulation D (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) that is applicable
to the Liquidity Provider during such Eurodollar Tranche Period in respect of
eurocurrency or eurodollar funding, lending or liabilities (or, if more than one
percentage shall be so applicable, the daily average of such percentage for
those days in such Eurodollar Tranche Period during which any such percentage
shall be applicable) plus (B) the then daily net annual assessment rate (rounded
upwards, if necessary, to the nearest 1/100 of 1%) as estimated by the Liquidity
Provider for determining the current annual assessment payable by the Liquidity
Provider to the Federal Deposit Insurance Corporation in respect of
eurocurrency or eurodollar funding, lending or liabilities.
"EURODOLLAR TRANCHE" means a Tranche as to which Discount is
calculated at the Eurodollar Rate.
13
"EURODOLLAR TRANCHE PERIOD" means, with respect to a Eurodollar
Tranche, prior to the Termination Date, a period of up to one month requested by
the Transferor and agreed to by the Company or the Liquidity Provider, as the
case may be, commencing on a Business Day requested by the Transferor and agreed
to by the Company; PROVIDED, HOWEVER, that if such Eurodollar Tranche Period
would expire on a day which is not a Business Day, such Eurodollar Tranche
Period shall expire on the next succeeding Business Day; PROVIDED, FURTHER, that
if such Eurodollar Tranche Period would expire on (a) a day which is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Eurodollar Tranche Period shall expire on the next
preceding Business Day or (b) a Business Day for which there is no numerically
corresponding day in the applicable subsequent calendar month, such Eurodollar
Tranche Period shall expire on the last Business Day of such month.
"EVENT OF BANKRUPTCY", with respect to any Person, shall mean (i) that
such Person shall generally not be able to 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 any proceeding shall
be instituted by or against such Person seeking to adjudicate it as 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
or (ii) if such Person is a corporation, such Person or any Subsidiary shall
take any corporate action to authorize any of the actions set forth in the
preceding clause (i).
"FACILITY FEE" means the fee payable by the Transferor to the Company
pursuant to Section 2.7 hereof, the terms of which are set forth in the Fee
Letter.
"FEE LETTER" means the letter agreement dated the date hereof between
the Transferor and the Company, as amended, supplemented or otherwise modified
and in effect from time to time.
14
"FINANCE CHARGES" means, with respect to a Contract, any finance,
interest, late or similar charges owing by an Obligor pursuant to such Contract.
"FIXED CHARGE COVERAGE RATIO" means a fraction, the numerator of which
is the sum of Net Income, Depreciation and Amortization (each as defined in
GAAP) and the denominator of which is Current Maturities of Long-term Debt.
"GUARANTY" of a Person means any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation 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 other creditor
of such other Person against loss, including, without limitation, any comfort
letter, operating agreement or take-or-pay contract and shall include, without
limitation, the contingent liability of such Person in connection with any
application for a letter of credit.
"INCREMENTAL TRANSFER" means a Transfer which is made pursuant to
Section 2.2(a).
"INDEBTEDNESS" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property other than accounts payable arising in the ordinary course of such
Person's business on terms customary in the trade, (iii) obligations, whether or
not assumed, secured by liens or payable out of the proceeds or production from
property now or hereafter owned or acquired by such Person, (iv) obligations
which are evidenced by notes, acceptances, or other instruments, (v) Capitalized
Lease obligations and (vi) obligations for which such Person is obligated
pursuant to a Guaranty.
"INDEMNIFIED AMOUNTS" has the meaning specified in Section 8.1.
"INDEMNIFIED PARTIES" has the meaning specified in Section 8.1.
"INTEREST COVERAGE RATIO" means a fraction, the numerator of which is
Net Income before Interest Expense
15
and taxes and the denominator of which is Interest Expense.
"INTEREST EXPENSE" means amounts due in the current period to the
Company's lenders for the use of borrowed funds, exclusive of principal.
"INVESTOR REPORT" means a report, in substantially the form of Exhibit
C or in such other form as is mutually agreed to by CompuCom and the Company,
furnished by the Collection Agent to the Company and the Agent pursuant to
Section 2.11.
"LAW" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body.
"LIBOR RATE" shall mean, with respect to any Eurodollar Tranche
Period, the rate at which deposits in dollars are offered to the Liquidity
Provider in the London interbank market at approximately 11:00 a.m. (London
time) two Business Days before the first day of such Eurodollar Tranche Period
in an amount approximately equal to the Eurodollar Tranche to which the
Eurodollar Rate is to apply and for a period of time approximately equal to the
applicable Eurodollar Tranche Period.
"LIQUIDATION YIELD" means, at any time, an amount equal to:
(RVF x LBR x NI) x (EM X 1.5)
--------
360
Where:
RVF = the Rate Variance Factor.
LBR = the Base Rate which is applicable to the liquidation period of the Net
Investment at such time.
NI = the Net Investment.
EM = the Estimated Maturity Period of the Receivables.
16
"LIQUIDITY PROVIDER AGREEMENT" means the agreement between the Company
and the Liquidity Provider evidencing the obligation of the Liquidity Provider
to provide liquidity support to the Company in connection with the issuance by
the Company of Commercial Paper.
"LIQUIDITY PROVIDER" means the Person or Persons who will provide
liquidity support to the Company in connection with the issuance by the Company
of Commercial Paper.
"LOCKBOX" has the meaning specified in the definition of "Lockbox" in
the Master Security and Administration Agreement.
"LOCK-BOX AGREEMENT" has the meaning specified in the Master Security
and Administration Agreement.
"LOSS PERCENTAGE" means on any day the greatest of (i) 5 times the
highest Loss-to-Liquidation Ratio as of the last day of the 12 calendar months
preceding the then current month, (ii) 3 times the highest Concentration Amount
of all Designated Obligors (exclusive of A1/A+ Rated Obligors) and (iii) 10
percent.
"LOSS RESERVE" means, on any day, an amount equal to:
LP x (NI + DR + SFR)
Where:
LP = the Loss Percentage at the close of business of the Collection Agent
on such day.
NI = the Net Investment at the close of business of the Collection Agent on
such day.
DR = the Discount Reserve at the close of business of the Collection Agent
on such day.
SFR = the Servicing Fee Reserve at the close of business of the Collection
Agent on such day.
Notwithstanding the foregoing, the Loss Reserve shall at all times be at least
equal to $7,500,000.
17
"LOSS-TO-LIQUIDATION RATIO" means, for any period of determination,
the ratio (expressed as a percentage) computed by dividing (i) the aggregate
Outstanding Balance of all Receivables which became Defaulted Receivables during
such period, by (ii) the aggregate amount of cash Collections (excluding Deemed
Collections) received by the Collection Agent during such period.
"MAJORITY INVESTORS" has the meaning specified in Section 9.1(a).
"MASTER SECURITY AND ADMINISTRATION AGREEMENT" means that certain
Master Security and Administration Agreement, dated as of April 1, 1996, by and
among CompuCom, the Administrative Secured Party, the Transferor, NationsBank of
Texas, N.A. and the Company, as the same may from time to time be amended,
supplemented or otherwise modified and in effect.
"MAXIMUM NET INVESTMENT" means $100,000,000.
"MAXIMUM PERCENTAGE FACTOR" means 98%.
"MOODY'S" means Moody's Investors Service, Inc.
"NET ASSET TEST" shall mean, in connection with any assignment by the
Company to the Bank Investors of an interest in the Net Investment pursuant to
Section 9.7 hereof, that on the day immediately prior to the day on which such
assignment is to take effect, the Net Receivables Balance shall be greater than
the Net Investment.
"NET INCOME" has the meaning specified in the NationsBank FSA as in
effect on the date hereof (without regard to any amendments, supplements or
modifications thereto after the date hereof).
"NET INVESTMENT" means the sum of the amounts paid to the Transferor
for each Incremental Transfer less the aggregate amount of Collections received
and applied by the Company to reduce such Net Investment pursuant to Section 2.6
or Section 2.9; PROVIDED that the Net Investment shall be restored in the amount
of any Collections so received and applied if at any time the distribution of
such Collections is rescinded or must otherwise be returned for any reason
PROVIDED FURTHER that the Net In-
18
vestment may be increased by the amount described in Section 9.7(g) as
described therein.
"NET RECEIVABLES BALANCE" means, at any time, the RPA Interest
Percentage of (a) the Outstanding Balance of the Eligible Receivables at such
time reduced by (b) the sum of (i) the aggregate Outstanding Balance of all
Eligible Receivables which are Defaulted Receivables, (ii) the aggregate
Outstanding Balance of all Eligible Receivables of each Obligor with respect to
which 50% or more of such Obligor's Receivables are more than ninety (90) days
past due, (iii) for a particular Obligor on any date of determination, the
amount (if positive) by which either (x) if the aggregate amount due and owing
by CompuCom to such Obligor exceeds the aggregate amount due and owing by such
Obligor to CompuCom, then the amount due and owing by such Obligor to CompuCom
or (y) if the aggregate amount due and owing by an Obligor to CompuCom exceeds
the aggregate amount due and owing by CompuCom to such Obligor, then the amount
due and owing by CompuCom to such Obligor, (iv) credits which are aged more than
ninety (90) days MINUS (B) for each Designated Obligor, the amount by which (x)
the aggregate Outstanding Balance of Eligible Receivables related to such
Designated Obligor exceeds (y) the Concentration Amount with respect to such
Designated Obligor (this clause (iv) calculated in the aggregate for all
Designated Obligors).
"OBLIGOR" means a Person obligated to make payments for the provision
of goods and services pursuant to a Contract.
"OFFICIAL BODY" shall mean any government or political subdivision or
any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"OTHER TRANSFEROR" means any Person other than the Transferor that has
entered into a receivables purchase agreement or transfer and administration
agreement with the Company.
"OUTSTANDING BALANCE" of any Receivable at any time shall mean the
then outstanding principal amount thereof including any accrued and outstanding
Finance Charges related thereto.
19
"PERCENTAGE FACTOR" shall mean the percentage computed at any time of
determination as follows:
NI + LR + DLR + DR + SFR
------------------------
NRB
Where:
NI = the Net Investment at the time of such computation.
LR = the Loss Reserve at the time of such computation.
DLR = the Dilution Reserve at the time of such computation.
DR = the Discount Reserve at the time of such computation.
SFR = the Servicing Fee Reserve at the time of such computation.
NRB = the Net Receivables Balance at the time of such computation.
Notwithstanding the foregoing computation, the Percentage Factor shall
not exceed one hundred percent (100%). The Percentage Factor shall be
calculated by the Collection Agent on the day of the initial Incremental
Transfer hereunder. Thereafter, until the Termination Date, the Collection
Agent shall daily recompute the Percentage Factor and report such recomputations
to the Company weekly in the Investor Report or as requested by the Company.
The Percentage Factor shall remain constant from the time as of which any such
computation or recomputation is made until the time as of which the next such
recomputation shall be made, notwithstanding any additional Receivables arising,
any Incremental Transfer made pursuant to Section 2.2(a) or any reinvestment
Transfer made pursuant to Section 2.2(b) and 2.5 during any period between
computations of the Percentage Factor. The Percentage Factor, as calculated at
the close of business on the Business Day immediately preceding the Termination
Date, shall remain constant at all times thereafter until such time as the
Company shall have received the Aggregate Unpaids, at which time the Per-
20
centage Factor shall be recomputed in accordance with Section 2.6.
"PERSON" means any corporation, natural person, firm, joint venture,
partnership, trust, unincorporated organization, enterprise, government or any
department or agency of any government.
"POTENTIAL TERMINATION EVENT" means an event which but for the lapse
of time or the giving of notice, or both, would constitute a Termination Event
which is impossible to cure.
"PROCEEDS" means "proceeds" as defined in Section 9-306(1) of the UCC.
"PROGRAM FEE" means the fee payable by the Transferor to the Company
pursuant to Section 2.7 hereof, the terms of which are set forth in the Fee
Letter.
"PRO RATA SHARE" means, for a Bank Investor, the Commitment of such
Bank Investor divided by the sum of the Commitments of all Bank Investors.
"PURCHASED INTEREST" means the Company's interest in the RPA Interest
in the Receivables acquired by the Liquidity Provider through purchase pursuant
to the terms of the Liquidity Provider Agreement.
"RATE VARIANCE FACTOR" means the number, computed from time to time in
good faith by the Company, that reflects the largest potential variance (from
minimum to maximum) in selected interest rates over a period of time selected by
the Company from time to time, set forth in a written notice by the Company to
the Transferor and the Collection Agent.
"RECEIVABLE" means the indebtedness owed to CompuCom by any Obligor,
an RPA Interest in which shall have been sold to the Transferor pursuant to the
Receivables Purchase Agreement (without giving effect to any purchase hereunder
by the Company at any time) under a Contract whether constituting an account,
chattel paper, instrument or general intangible, arising in connection with the
sale of merchandise or services by CompuCom, and includes the right to payment
of any Finance Charges and other obligations of such Obligor with respect
thereto.
21
Notwithstanding the foregoing, once a Receivable has been deemed collected
pursuant to Section 2.9 hereof, it shall no longer constitute a Receivable
hereunder.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Receivables
Purchase Agreement, dated as of April 1, 1996, between CompuCom and the
Transferor, as the same may from time to time be amended, supplemented or
otherwise modified and in effect.
"RECORDS" means all Contracts and other documents, books, records and
other information (including, without limitation, computer programs, tapes,
discs, punch cards, data processing software and related property and rights)
maintained by the Collection Agent with respect to Receivables and the related
Obligors.
"REINVESTMENT TERMINATION DATE" means the second Business Day after
the delivery by the Company to the Transferor of written notice that the Company
has elected to commence the amortization of its interest in the Net Investment.
"RELATED SECURITY" means with respect to any Receivable:
(i) the merchandise (including returned merchandise,
subject to the applicable provisions of Section 9-306 of the UCC), if any, the
sale of which by CompuCom gave rise to such Receivable;
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure payment of such
Receivable, pursuant to the Contract related to such Receivable, together with
all financing statements signed by an Obligor describing any collateral securing
such Receivable;
(iii) all guarantees, insurance or other agreements or
arrangements of any kind from time to time supporting or securing payment of
such Receivable pursuant to the Contract related to such Receivable;
22
(iv) all Records; and
(v) all proceeds (as defined in Section 9-306 of the UCC)
of the foregoing.
"RPA INTEREST" means the undivided interest in all Receivables,
Related Security and Collections thereof sold by CompuCom to the Transferor
pursuant to the Receivables Purchase Agreement, which shall at any time equal
the RPA Interest Percentage of the Outstanding Balance of all Receivables.
"RPA INTEREST PERCENTAGE" means, on any date of determination, the
percentage, determined pursuant to Section 3.3 of the Receivables Purchase
Agreement, representing the undivided interest of the Transferor in, to and
under each and every Receivable existing at such time. Prior to the occurrence
of a Termination Event, the RPA Interest Percentage shall be recalculated by the
Collection Agent for each calendar month and shall be reported to the Agent in
the first weekly report of each month delivered to the Agent pursuant to Section
2.11(b). Following the occurrence of a Termination Event, the RPA Interest
Percentage shall remain fixed as of the date of the occurrence of the
Termination Event.
"SECTION 8.2 COSTS" has the meaning specified in Section 8.2(d).
"SERVICING FEE" shall mean the fee payable monthly by the Company to
the Collection Agent, with respect to a Tranche, in an amount equal to 0.50% per
annum on the amount of the Net Investment allocated to such Tranche pursuant to
Section 2.3. Such fee shall accrue from the date of the initial purchase of an
ownership interest in the RPA Interest to the later of the Termination Date or
the date on which the Net Investment is reduced to zero. On or prior to the
Termination Date, such fee shall be payable only from Collections pursuant to,
and subject to the priority of payments set forth in, Section 2.5. After the
Termination Date, such fee shall be payable only from Collections pursuant to,
and subject to the priority of payments set forth in, Section 2.6.
"SERVICING FEE RESERVE" means at any time an amount equal to the
product of (A) the aggregate Outstanding Balance of Receivables at such time,
(B) the
23
Servicing Fee percentage and (C) a fraction having as the numerator, the sum of
(x) 1.5 times the Estimated Maturity Period PLUS (y) 30, and as the denominator,
360.
"STANDARD & POOR'S" or "S&P" means Standard & Poor's Ratings Services.
"SUBSIDIARY" of a Person means any corporation more than 50% of the
outstanding voting securities of which shall at any time be owned or controlled,
directly or indirectly, by such Person or by one or more Subsidiaries of such
Person or any similar business organization which is so owned or controlled.
"TERMINATION DATE" means the earliest of (i) that Business Day
designated by the Transferor to the Company as the Termination Date at any time
following 60 days' written notice to the Company, (ii) the date of termination
of the commitment of the Liquidity Provider under the Liquidity Provider
Agreement, (iii) the date of termination of the commitment of the Credit Support
Provider under the Credit Support Agreement, (iv) the day on which the Agent
delivers to the Transferor a notice of termination pursuant to the occurrence of
a Termination Event, (v) April 1, 1998, (vi) two (2) Business Days prior to the
Commitment Termination Date or (vii) unless the Transferred Interest shall have
been assigned (or concurrently is so assigned) to the Bank Investors pursuant to
Section 9.7 hereof, the day on which a Reinvestment Termination Date shall
occur.
"TERMINATION EVENT" means an event described in Section 7.1.
"TRANCHE" means a portion of the Net Investment allocated to a Tranche
Period pursuant to Section 2.3.
"TRANCHE PERIOD" means a CP Tranche Period, a BR Tranche Period, a CD
Tranche Period or a Eurodollar Tranche Period.
"TRANCHE RATE" means the CP Rate, the Base Rate, the CD Rate or the
Eurodollar Rate.
"TRANSACTION COSTS" has the meaning specified in Section 8.3(a).
24
"TRANSACTION DOCUMENTS" means this Agreement, the Receivables Purchase
Agreement, the Master Security and Administration Agreement and all documents
related thereto.
"TRANSFER" means a conveyance, transfer and assignment by the
Transferor to the Company of a portion of the RPA Interest hereunder pursuant to
Section 2.2.
"TRANSFER CERTIFICATE" has the meaning specified in Section 2.2(a).
"TRANSFER DATE" means, with respect to each Transfer, the Business Day
on which such Transfer is made.
"TRANSFER PRICE" means with respect to any Incremental Transfer, the
amount paid to the Transferor by the Company as described in the Transfer
Certificate.
"TRANSFERRED INTEREST" means, at any time of determination, an
undivided percentage ownership interest in the RPA Interest in (i) each and
every then outstanding Receivable, (ii) all Related Security with respect to
each such Receivable, (iii) all Collections with respect thereto, and (iv) other
Proceeds of the foregoing, equal to the Percentage Factor at such time, and only
at such time (without regard to prior calculations). To the extent that the
Transferred Interest shall decrease as a result of a recalculation of the
Percentage Factor, the Company shall be considered to have reconveyed to the
Transferor an undivided percentage ownership interest in the RPA Interest,
together with Related Security and Collections, in an amount equal to such
decrease.
"UCC" means, with respect to any state, the Uniform Commercial Code as
from time to time in effect in such state.
SECTION 1.2. OTHER TERMS. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Master Security and Administration Agreement. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles. All terms used in Article 9 of the UCC in the
State of
25
New York, and not specifically defined herein, are used herein as defined in
such Article 9.
SECTION 1.3. COMPUTATION OF TIME PERIODS. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding."
26
ARTICLE II
TRANSFERS AND SETTLEMENTS
SECTION 2.1. FACILITY. Upon the terms and subject to the
conditions herein set forth, the Transferor may, at its option, convey, transfer
and assign to the Company, and the Company may accept such conveyance, transfer
and assignment from the Transferor, without recourse except as provided herein,
undivided percentage ownership interests in the RPA Interest from time to time.
SECTION 2.2. TRANSFERS; COMPANY CERTIFICATE; ELIGIBLE
RECEIVABLES. (a) INCREMENTAL TRANSFERS. Upon the terms and subject to the
conditions herein set forth, the Transferor may, at its option, convey, transfer
and assign to the Company, and the Company may accept such conveyance, transfer
and assignment from the Transferor, without recourse except as provided herein,
undivided percentage ownership interests in the RPA Interest, together with
Related Security and Collections with respect thereto (each, an "INCREMENTAL
TRANSFER") from time to time prior to the occurrence of the Termination Date for
an aggregate Transfer Price not to exceed the Maximum Net Investment; PROVIDED
that the Company shall not accept any such transfer if it is unable to obtain
funds therefor in the commercial paper market or under the Liquidity Provider
Agreement. The Transferor shall by notice given by telecopy offer to convey,
transfer and assign to the Company undivided percentage ownership interests in
the RPA Interest at least three (3) Business Days prior to the proposed date of
transfer.
Each such notice shall specify the desired Transfer Price (which shall
be at least $5,000,000 or integral multiples of $1,000,000 in excess thereof)
and the desired date of such Incremental Transfer, together with the desired
Tranche Period (or range) related thereto as required by Section 2.3. The
Company, if it accepts such offer, shall accept such offer to convey, transfer
and assign interests in the RPA Interest by notice given to the Transferor by
telephone or telecopy. Each notice of proposed Transfer shall be irrevocable
and binding on the Transferor and the Transferor shall indemnify the Company
against any loss or expense incurred by
27
the Company, either directly or through the Liquidity Provider Agreement as a
result of any failure by the Transferor to complete such Incremental Transfer
including, without limitation, any loss or expense incurred by the Company,
either directly or pursuant to the Liquidity Provider Agreement, by reason of
the liquidation or reemployment of funds acquired by the Company or the
Liquidity Provider (including, without limitation, funds obtained by issuing
commercial paper or promissory notes or obtaining deposits as loans from third
parties) for the Company to fund such Incremental Transfer.
On the date of the initial Incremental Transfer, the Company shall
deliver written confirmation to the Transferor of the Transfer Price, the
Tranche Period(s) and the Tranche Rate(s) relating to such Transfer and the
Transferor shall deliver to the Company the Transfer Certificate in the form of
Exhibit D hereto (the "TRANSFER CERTIFICATE"). The Company shall indicate the
amount of the initial Incremental Transfer together with the date thereof on the
grid attached to the Transfer Certificate. On the date of each subsequent
Incremental Transfer, the Company shall send written confirmation to the
Transferor of the Transfer Price, the Tranche Period(s), the Transfer Date and
the Tranche Rate(s) applicable to such Incremental Transfer. The Company shall
indicate the amount of the Incremental Transfer together with the date thereof
as well as any decrease in the Net Investment on the grid attached to the
Transfer Certificate. The Transfer Certificate shall evidence the Incremental
Transfers. As soon as is practicable following each Incremental Transfer, the
Company shall deposit to the Transferor's account at the location indicated in
Section 10.3, in immediately available funds, an amount equal to the Transfer
Price for such Incremental Transfer.
(b) REINVESTMENT TRANSFERS. On each Business Day occurring
after the initial Incremental Transfer and prior to the Termination Date, the
Transferor hereby agrees to convey, transfer and assign to the Company, and in
consideration of the Transferor's agreement to maintain at all times prior to
the Termination Date a Net Receivables Balance in an amount at least sufficient
to maintain the Percentage Factor at an amount not greater than the Maximum
Percentage Factor, the Company hereby agrees to purchase from the Transferor
28
undivided percentage ownership interests in the RPA Interest, to the extent that
Collections are available for such Transfer in accordance with Section 2.5, such
that after giving effect to such Transfer, the amount of the Company's Net
Investment at the close of the Company's business on such Business Day shall be
equal to the amount of the Company's Net Investment at the close of the
Company's business on the Business Day immediately preceding such Business Day
plus the Transfer Price of any Incremental Transfer made on such day, if any.
The Company may deliver a Reinvestment Termination Notice to the Transferor
(with a copy thereof to the Collection Agent) at any time.
(c) ALL TRANSFERS. Each Transfer shall constitute a purchase of
an undivided percentage ownership interest in the RPA Interest then existing and
which arises at any time after the date of such Transfer. The Company's
aggregate undivided percentage ownership interest in the RPA Interest shall
equal the Percentage Factor in effect from time to time.
(d) COMPANY CERTIFICATE. The Transferor shall issue to the
Company the Company Certificate, in the form of Exhibit K, on or prior to the
date hereof.
(e) PERCENTAGE FACTOR. The Percentage Factor shall be initially
computed as of the opening of business of the Collection Agent on the date of
the initial Incremental Transfer hereunder. Thereafter, until the Termination
Date, the Percentage Factor shall be automatically recomputed by the Collection
Agent as of the close of business of the Collection Agent on each day (other
than a day after the Termination Date). The Percentage Factor shall remain
constant from the time as of which any such computation or recomputation is made
until the time as of which the next such recomputation, if any, shall be made.
The Percentage Factor, as computed as of the day immediately preceding the
Termination Date, shall remain constant at all times on and after such
Termination Date until the date on which the Net Investment shall become zero.
SECTION 2.3. SELECTION OF TRANCHE PERIODS AND TRANCHE RATES.
29
(a) At all times hereafter, but prior to the occurrence of a
Termination Event, the Transferor shall, subject to the Company's approval and
the limitations described below, request Tranche Periods and allocate a portion
of the Net Investment to each selected Tranche Period, so that the aggregate
amounts allocated to outstanding Tranche Periods at all times shall equal the
Net Investment. The Transferor shall give the Company irrevocable notice by
telephone of the new requested Tranche Period(s) at least three (3) Business
Days prior to the expiration of any then existing Tranche Period; PROVIDED,
HOWEVER, that the Company may select, in its sole discretion, any such new
Tranche Period if (i) the Transferor fails to provide such notice on a timely
basis or (ii) the Company determines, in its sole discretion, that the Tranche
Period requested by the Transferor is unavailable or for any reason commercially
undesirable. The Company confirms that it is its intention to allocate all or
substantially all of the Net Investment to one or more CP Tranche Periods;
PROVIDED that the Company may determine, from time to time, in its sole
discretion, that funding such Net Investment by means of one or more CP Tranche
Periods is not desirable for any reason. If the Liquidity Provider acquires a
Transferred Interest with respect to the RPA Interest pursuant to the terms of
the Liquidity Provider Agreement, the Liquidity Provider may exercise the right
of selection granted to the Company hereby. The Tranche Rate applicable to any
such Purchased Interest may be the BR Rate, the CD Rate or the Eurodollar Rate,
as determined by the Liquidity Provider. In the case of any Tranche Period
outstanding upon the occurrence of a Termination Event or on the date of the
assignment of the Transferred Interest to the Bank Investors pursuant to Section
9.7, such Tranche Period shall end on the date of such occurrence.
(b) At all times on and after the occurrence of a Termination
Event, the Company or the Liquidity Provider, as applicable, shall select all
Tranche Periods and Tranche Rates applicable thereto; PROVIDED, that if the Bank
Investors are assigned the Transferred Interest pursuant to Section 9.7, one
Tranche Period, with a Tranche Rate determined pursuant to the letter agreement
referred to in Section 9.7, with successive periods of one day, shall thereafter
exist.
30
SECTION 2.4. DISCOUNT, FEES AND OTHER COSTS AND EXPENSES.
Notwithstanding the limitation on recourse under Section 2.1, the Transferor
shall pay, as and when due in accordance with this Agreement, all fees
hereunder, Discount, all amounts payable pursuant to Article VIII hereof, if
any, and the Servicing Fee. On the last day of each Tranche Period, the
Transferor shall pay to the Company an amount equal to the accrued and unpaid
Discount for such Tranche Period together with an amount equal to the discount
accrued on the Company's Commercial Paper notes to the extent such notes were
issued in order to fund the Transferred Interest in an amount in excess of the
Transfer Price of an Incremental Transfer; PROVIDED that any such excess amount
will not exceed $100,000 in connection with any such Incremental Transfer. The
Transferor shall pay to the Company, on each day on which Commercial Paper is
issued by the Company, the Dealer Fee. Discount shall accrue with respect to
each Tranche on each day occurring during the Tranche Period related thereto.
Nothing in this Agreement shall limit in any way the obligations of the
Transferor to pay the amounts set forth in this Section 2.4.
SECTION 2.5. NON-LIQUIDATION SETTLEMENT AND REINVESTMENT PROCEDURES.
On each day after the date of any Incremental Transfer, but prior to the
Termination Date, and provided that no Potential Termination Event shall have
occurred and be continuing, the Collection Agent shall out of the Percentage
Factor of the RPA Interest Percentage of Collections received and distributed to
the Transferor on or prior to such day and not previously applied or accounted
for: (i) set aside and hold in trust for the Company (or deposit into the
Collection Account if so required pursuant to Section 2.12) an amount equal to
all Discount and the Servicing Fee accrued through such day and not so
previously set aside or paid and (ii) apply the balance of such Percentage
Factor of the RPA Interest Percentage of Collections remaining after application
of the RPA Interest Percentage of Collections as provided in clause (i) of this
Section 2.5 to the Transferor, for the benefit of the Company to the purchase of
additional undivided percentage interests in the RPA Interest pursuant to
Section 2.2(b). On the last day of each Tranche Period, from the amounts set
aside as described in clause (i) of the first sentence of this Section 2.5, the
Collection Agent shall deposit to the Company's account, an amount equal to the
accrued and
31
unpaid Discount for such Tranche Period and shall deposit to its account an
amount equal to the accrued and unpaid Servicing Fee for such Tranche Period.
As provided in Section 6.2(b), the Collection Agent shall remit to the
Transferor, as soon as practicable after receipt, such portion of Collections
not allocated to the Company.
SECTION 2.6. LIQUIDATION SETTLEMENT PROCEDURES. If on the
Termination Date, the Percentage Factor is greater than the Maximum Percentage
Factor, then the Transferor shall immediately pay to the Company from previously
received Collections distributed to the Transferor in respect of the RPA
Interest, an amount equal to the amount such that, when applied in reduction of
the Net Investment, will result in a Percentage Factor less than or equal to the
Maximum Percentage Factor. Such amount shall be applied by the Company to the
reduction of the Net Investment of Tranche Periods selected by the Company. On
the Termination Date and on each day thereafter, and on and after the date on
which the Agent delivers to the Transferor notice that a Potential Termination
Event has occurred, the Collection Agent shall set aside and hold in trust for
the Company (or deposit into the Collection Account if so required pursuant to
Section 2.12) all Collections received by the Transferor in respect of the RPA
Interest on such day. On the Termination Date or the day on which the Agent
delivers to the Transferor notice that a Potential Termination Event has
occurred, the Collection Agent shall deposit to the Company's account any
remaining amounts set aside pursuant to Section 2.5(i) above. On the last day
of each Tranche Period to occur on or after the Termination Date or during the
continuance of a Potential Termination Event, the Collection Agent shall deposit
to the Company's account, the amounts set aside pursuant to the preceding
sentence, together with any remaining amounts set aside pursuant to Section
2.5(i) prior to the Termination Date or the day on which a Potential Termination
Event occurs but not to exceed the sum of (i) the accrued Discount for such
Tranche Period, (ii) the portion of the Net Investment allocated to such Tranche
Period, and (iii) the aggregate of all other Aggregate Unpaids then owed
(whether due or accrued) hereunder by Transferor to the Company. On such day,
the Collection Agent shall deposit to its account, from the amounts set aside
pursuant to the preceding sentence which remain after payment
32
in full of the aforementioned amounts, the accrued Servicing Fee for such
Tranche Period.
If there shall be insufficient funds on deposit for the Collection
Agent to distribute funds in payment in full of the aforementioned amounts, the
Collection Agent shall distribute funds FIRST, in payment of the accrued
Discount, SECOND, in payment of all fees and expenses payable to the Company
hereunder, THIRD, if the Transferor is not the Collection Agent, to the
Collection Agent's account, in payment of the Servicing Fee payable to the
Collection Agent, FOURTH, in reduction of the Net Investment allocated to such
Tranche Period, FIFTH, in payment of all other amounts payable to the Company
and SIXTH, if the Transferor is the Collection Agent, to its account as
Collection Agent, in payment of the Servicing Fee payable to the Transferor as
Collection Agent. Following the date on which the Net Investment has been
reduced to zero, all accrued Discount and Servicing Fees have been paid in full
and all other Aggregate Unpaids have been paid in full, (i) the Collection Agent
shall recompute the Percentage Factor, (ii) the Company shall be considered to
have reconveyed to the Transferor any interest in the RPA Interest (including
the Transferred Interest), (iii) the Collection Agent shall pay to Transferor
any remaining Collections set aside and held by the Collection Agent pursuant to
the second sentence of this Section 2.6 and (iv) the Company shall execute and
deliver to the Transferor, at the Transferor's expense, such documents or
instruments as are necessary to terminate the Company's interest in the RPA
Interest. Any such documents shall be prepared by or on behalf of the
Transferor.
SECTION 2.7. FEES. Notwithstanding any limitation on recourse
contained in this Agreement, the Transferor shall pay the following non-
refundable fees:
(a) On the last day of each month, to the Company, the Program
Fee and the Facility Fee as set forth in the Fee Letter.
(b) On the date of execution hereof, to the Agent, the
Arrangement Fee as set forth in the Fee Letter.
33
SECTION 2.8. PROTECTION OF OWNERSHIP INTEREST OF THE COMPANY. (a)
Each of the Transferor and the Collection Agent agrees that from time to time,
at its expense, it will promptly execute and deliver all instruments and
documents and take all actions as may be necessary or as the Agent may
reasonably request in order to perfect or protect the Transferred Interest or to
enable the Agent to exercise or enforce any of its rights hereunder. Without
limiting the foregoing, each of the Transferor and CompuCom will, upon the
request of the Agent, in order to accurately reflect this purchase and sale
transaction, (1) execute and file such financing or continuation statements or
amendments thereto or assignments thereof (as permitted pursuant to Section 10.6
hereof) as may be requested by the Company or the Administrative Secured Party
and (2) mark its master data processing records and other documents with a
legend describing the purchase hereunder of the Transferred Interest. The
Transferor shall, upon request of the Agent, obtain such additional search
reports as the Agent shall request. To the fullest extent permitted by
applicable law, the Agent shall be permitted to sign and file continuation
statements and amendments thereto and assignments thereof without the
Transferor's signature. Carbon, photographic or other reproduction of this
Agreement or any financing statement shall be sufficient as a financing
statement. Neither the Transferor nor CompuCom shall change its name, identity
or corporate structure (within the meaning of Section 9-402(7) of the UCC as in
effect in the States of New York and Texas) or relocate its chief executive
office or any office where Records are kept unless it shall have: (i) given the
Agent at least thirty (30) days prior notice thereof and (ii) prepared at
Transferor's expense and delivered to the Agent all financing statements,
instruments and other documents necessary to preserve and protect the
Transferred Interest or requested by the Agent in connection with such change or
relocation. Any filings under the UCC or otherwise that are occasioned by such
change in name or location shall be made at the expense of Transferor.
(b) The Collection Agent shall instruct all Obligors to remit
all Collections in accordance with the Master Security and Administration
Agreement. The provisions of this Section 2.8 are expressly subject to
34
the terms of the Master Security and Administration Agreement.
SECTION 2.9. DEEMED COLLECTIONS; APPLICATION OF PAYMENTS. (a) If on
any day the Outstanding Balance of a Receivable is either (x) reduced as a
result of any defective, rejected or returned goods or services, any cash
discount, credit, rebate, allowance or other dilution factor, any billing
adjustment or other adjustment, or (y) reduced or canceled as a result of a
setoff or offset in respect of any claim by any Person (whether such claim
arises out of the same or a related transaction or an unrelated transaction),
the Transferor shall be deemed (for the limited purposes of this Agreement) to
have received on such day a collection of such Receivable in the amount of the
RPA Interest Percentage of such reduction or cancellation, and the Transferor
shall pay to the Collection Agent an amount equal to the Percentage Factor of
the RPA Interest in such reduction or cancellation, and such amount shall be
applied by the Collection Agent as a Collection in accordance with Section 2.5
or 2.6, as applicable. The Net Investment shall be reduced by the amount of
such payment actually received by the Company.
(b) If on any day any of the representations or warranties in
Article III is no longer true with respect to a Receivable, the Transferor shall
be deemed to have received on such day a Collection of the RPA Interest in such
Receivable in full and the Transferor shall on such day pay to the Collection
Agent an amount equal to the aggregate Percentage Factor of the RPA Interest in
the Outstanding Balance of such Receivable and such amount shall be allocated to
the Company and applied by the Collection Agent as a Collection allocable to the
Transferred Interest in accordance with Section 2.5 or 2.6, as applicable. The
Net Investment shall be reduced by the amount of such payment actually received
by the Company.
(c) At any time following the termination of the Master Security
and Administration Agreement, any payment by an Obligor in respect of any
indebtedness owed by it to the Transferor or CompuCom shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and unless
otherwise instructed by the Company, be applied as a Collection of the RPA
Interest in any Receivable of such Obligor included in the Trans-
35
ferred Interest (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 indebtedness of such Obligor.
SECTION 2.10. PAYMENTS AND COMPUTATIONS, ETC. All amounts to be paid
or deposited by the Transferor or the Collection Agent hereunder shall be paid
or deposited in accordance with the terms hereof no later than 12:00 noon (New
York City time) on the day when due in immediately available funds; if such
amounts are payable to the Company (or any assign thereof) they shall be paid or
deposited in the account of the Agent indicated by the Agent from time to time
in writing. The Transferor shall, to the extent permitted by law, pay to the
Company upon demand, interest on all amounts not paid or deposited when due to
the Company hereunder at a rate equal to 2% per annum plus the Base Rate. All
computations of discount, interest and all per annum fees hereunder shall be
made on the basis of a year of 360 days for the actual number of days (including
the first but excluding the last day) elapsed. Any computations of amounts
payable by the Transferor hereunder to the Company, the Liquidity Provider or
the Credit Support Provider shall be binding absent manifest error.
SECTION 2.11. REPORTS. (a) Prior to the 15th day of each month, the
Collection Agent shall prepare and forward to the Agent (i) an Investor Report
as of the end of the last day of the immediately preceding month, (ii) if
requested in writing by the Company or the Agent, a listing by Obligor of all
Receivables together with an aging of such Receivables and (iii) such other
information as the Company or the Agent may reasonably request.
(b) On or prior to the third Business Day of each calendar week, the
Collection Agent shall prepare and forward to the Agent a certification as to
the RPA Interest Percentage for such calendar month, the RPA Interest, the Net
Receivables Balance and the Percentage Factor in the form of Exhibit E hereto
(calculated as of the last Business Day of the prior week).
SECTION 2.12. COLLECTION ACCOUNT. There shall be established on the
day of the initial Incremental Transfer hereunder and maintained, for the
benefit of the Company, with the Agent, a segregated account (the "COL-
36
LECTION ACCOUNT"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Company. The Collection Agent
shall remit daily within twenty-four (24) hours of receipt to the Collection
Account all amounts received by the Collection Agent with respect to the RPA
Interest in Collections; PROVIDED, HOWEVER, the Collection Agent shall be
permitted to make payments to the Company on the last day of each Tranche Period
instead of depositing funds into the Collection Account on a daily basis for so
long as, and only for so long as no default has occurred in the performance by
the Collection Agent of its obligations hereunder and no other Termination Event
has occurred hereunder. Funds on deposit in the Collection Account (other than
investment earnings) shall be invested by the Collection Agent in Eligible
Investments that will mature so that such necessary funds will be available
prior to the last day of each successive Tranche Period following such
investment. On the last day of each calendar month, all interest and earnings
(net of losses and investment expenses) on funds on deposit in the Collection
Account shall be retained in the Collection Account and be available to make any
payments required to be made hereunder (including Discount) to the Company. On
the date on which the Net Investment is zero and all amounts payable hereunder
have been paid to the Company, any funds remaining on deposit in the Collection
Account shall be paid to the Transferor.
SECTION 2.13. CALL PROVISION. Upon thirty (30) days' prior written
notice to the Agent, the Transferor shall have the right to purchase the
Transferred Interest from the Company for a price equal to all Aggregate Unpaids
at such time. Such purchase price shall be paid in immediately available funds
in the manner specified in Section 2.10.
37
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES. Each of the Transferor
and CompuCom, as applicable as to itself and not as to the other, represents and
warrants to the Company that:
(a) CORPORATE EXISTENCE AND POWER. Each of the Transferor and
CompuCom is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has all corporate power
and all material governmental licenses, authorizations, consents and approvals
required to carry on its business in all jurisdictions in which the failure to
obtain such licenses or approvals would materially and adversely affect its
business as it is now conducted.
(b) CORPORATE AND GOVERNMENTAL AUTHORIZATION; CONTRAVENTION.
The execution, delivery and performance by each of the Transferor and CompuCom
of this Agreement, the Receivables Purchase Agreement, the Fee Letter, the
Company Certificate and the Transfer Certificate are within each of their
respective corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with, any
governmental body, agency or official (except as contemplated by Section 2.8),
and do not contravene, or constitute a material default under, any provision of
applicable law or regulation or of the Certificate of Incorporation or Bylaws of
the Transferor or CompuCom, as applicable, or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Transferor or
CompuCom or result in the creation or imposition of any lien on assets of the
Transferor or CompuCom, respectively, or any of its respective Subsidiaries
(except as contemplated by Section 2.8).
(c) BINDING EFFECT. Each of this Agreement, the Receivables
Purchase Agreement, the Fee Letter and the Company Certificate constitutes and
the Transfer Certificate upon payment by the Company of the Transfer Price set
forth therein will constitute the legal, valid and binding obligation of the
Transferor, enforceable in
38
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the rights of creditors.
(d) PERFECTION. Immediately preceding each Transfer hereunder,
the Transferor shall be the owner of the RPA Interest, free and clear of all
liens, encumbrances, security interests, preferences or other security
arrangement of any kind or nature whatsoever, except for those liens created
pursuant to the transactions contemplated hereby and Permitted Subordinated
Interests as defined in the Master Security and Administration Agreement and
subject to the terms of the Master Security and Administration Agreement. On or
prior to the sale of the RPA Interest by CompuCom to the Transferor pursuant to
the Receivables Purchase Agreement, and each Transfer hereunder and each
recomputation of the Transferred Interest, all financing statements and other
documents required to be recorded or filed in order to perfect and protect the
Transferred Interest against all creditors of and purchasers from the Transferor
or CompuCom, as applicable (other than any financing statements or assignments
of financing statements contemplated by the Transaction Documents) will have
been duly filed in each filing office necessary for such purpose and all filing
fees and taxes, if any, payable in connection with such filings shall have been
paid in full.
(e) ACCURACY OF INFORMATION. All information heretofore
furnished by the Transferor and CompuCom (including without limitation, the
Investor Reports, any reports delivered pursuant to Section 2.11 and the
Transferor's financial statements) to the Company or the Agent for purposes of
or in connection with this Agreement or any transaction contemplated hereby is,
and all such information hereafter furnished by the Transferor and CompuCom to
the Company or the Agent will be, true and accurate in every material respect,
on the date such information is stated or certified.
(f) TAX RETURNS. The Transferor has filed all tax returns
(federal, state and local) required to be filed and has paid or made adequate
provision for the payment of all taxes, assessments and other governmental
charges.
39
(g) ACTION, SUITS. Except as set forth in Exhibit F, there are
no actions, suits or proceedings pending, or to the knowledge of the Transferor
threatened, against or affecting the Transferor or CompuCom or any Affiliate
thereof or their respective properties, in or before any court, arbitrator or
other body, which may materially adversely affect the financial condition of the
Transferor, CompuCom or their Subsidiaries taken as a whole or materially
adversely affect the ability of each of the Transferor or CompuCom to perform
its obligations under this Agreement.
(h) USE OF PROCEEDS. No proceeds of any Transfer will be used
by the Transferor to acquire any security in any transaction which is subject to
Section 13 or 14 of the Securities Exchange Act of 1934, as amended.
(i) PLACE OF BUSINESS. The principal place of business and
chief executive office of the Transferor are located at the address of the
Transferor indicated in Section 10.3 hereof and the offices where the Transferor
keeps all its Records, are located at the address(es) described on Exhibit G or
such other locations notified to the Company in accordance with Section 2.8 in
jurisdictions where all action required by Section 2.8 has been taken and
completed.
(j) GOOD TITLE. Upon each Transfer and each recomputation of
the Transferred Interest, the Company shall acquire a valid and perfected first
priority undivided percentage ownership interest to the extent of the
Transferred Interest or a first priority perfected security interest in the RPA
Interest free and clear of any Adverse Claim (subject to the provisions of the
Master Security and Administration Agreement).
(k) TRADENAMES, ETC. As of the date hereof: (i) the
Transferor's chief executive office is located at the address for notices set
forth in Section 10.3 hereof; (ii) the Transferor has only the subsidiaries and
divisions listed on Exhibit H hereto; and (iii) the Transferor has, within the
last five (5) years, operated only under the tradenames identified in Exhibit H
hereto, and, within the last five (5) years, has not changed its name, merged
with or into or consolidated with any other corporation or been the subject of
any
40
proceeding under Title 11, United States Code (Bankruptcy), except as disclosed
in Exhibit H hereto.
(l) NATURE OF RECEIVABLES. Each Receivable included as an
Eligible Receivable on any report or statement delivered to or for the benefit
of the Company pursuant hereto shall satisfy the definition of "Eligible
Receivable" hereunder.
(m) COVERAGE REQUIREMENT; AMOUNT OF RECEIVABLES. The Percentage
Factor does not exceed the Maximum Percentage Factor. The RPA Interest in the
Receivables is not less than the sum of the (i) Net Investment, (ii) Discount
Reserve, (iii) Dilution Reserve, (iv) Loss Reserve and (v) Servicing Fee
Reserve. As of March 31, 1996, the aggregate Outstanding Balance of the
Receivables in existence was $260,957,215 and the Net Receivables Balance was
$237,268,215.
(n) CREDIT AND COLLECTION POLICY. Since November 21, 1995,
there have been no material changes in the Credit and Collection Policy; since
such date, no material adverse change has occurred in the overall rate of
collection of the Receivables.
(o) COLLECTIONS AND SERVICING. Since November 21, 1995, there
has been no material adverse change in the ability of CompuCom to service and
collect the Receivables.
(p) NO TERMINATION EVENT. No event has occurred and is
continuing and no condition exists which constitutes a Termination Event or a
Potential Termination Event.
(q) NOT AN INVESTMENT COMPANY. The Transferor is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or is exempt from all provisions of such Act.
(r) ERISA. Each of the Transferor and the CompuCom is in
compliance in all material respects with ERISA and no lien in favor of the
Pension Benefit Guaranty Corporation on any of the Receivables exists.
(s) LOCKBOXES. The account numbers of the Lockboxes have been
provided to the Administrative
41
Secured Party in accordance with the Master Security and Administration
Agreement. All Obligors have been instructed to make payment to a Lockbox in
accordance with the Master Security and Administration Agreement.
(t) BINDING EFFECT OF RECEIVABLES AND CONTRACT. Each Receivable
and related Contract constitutes a legal, valid and binding obligation of the
Obligor enforceable against the Obligor, subject to the effect of bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights generally
(whether considered in a proceeding at law or in equity).
(u) NO RESTRICTION ON TRANSFER. No Contract requires the prior
written consent of an Obligor or contains another restriction relating to the
transfer or assignment of rights of payment under such Contract which is legally
enforceable (other than a consent or waiver of such restriction that has been
obtained prior to the Closing Date).
SECTION 3.2. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES BY THE
TRANSFEROR. On each day that a Transfer is made hereunder, the Transferor and
CompuCom, as applicable, by accepting the proceeds of such Transfer, whether
delivered to the Transferor pursuant to Section 2.2(a) or Section 2.2(b), shall
be deemed to have certified that all representations and warranties described in
Section 3.1 are correct on and as of such day as though made on and as of such
day. Each Incremental Transfer shall be subject to the further condition
precedent that prior to the date of such Incremental Transfer, the Collection
Agent shall have delivered to the Agent, in form and substance satisfactory to
the Agent, a completed Investor Report dated within three (3) days prior to the
date of such Incremental Transfer, together with a listing by Obligor, if
requested, and such additional information as may be reasonably requested by the
Agent; and each of the Transferor and CompuCom shall be deemed to have
represented and warranted that such conditions precedent have been satisfied.
42
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. CONDITIONS TO CLOSING. On or prior to the date of
execution hereof, the Transferor and CompuCom, as applicable, shall deliver
to the Company the following documents, instruments and fees all of which
shall be in a form and substance acceptable to the Company:
(a) A copy of the Resolutions of the Board of Directors of the
Transferor certified by its Secretary approving the Agreement and the other
documents to be delivered by the Transferor hereunder.
(b) The Articles of Incorporation of the Transferor certified by
the Secretary of State or other similar official of the Transferor's
jurisdiction of incorporation.
(c) A Good Standing Certificate for the Transferor issued by the
Secretary of State or a similar official of the Transferor's jurisdiction of
incorporation and certificates of qualification as a foreign corporation issued
by the Secretaries of State or other similar officials of each jurisdiction
where such qualification is material to the transactions contemplated by this
Agreement.
(d) A Certificate of the Secretary of the Transferor certifying
(i) the names and signatures of the officers authorized on its behalf to execute
this Agreement, the Company Certificate, the Transfer Certificate, the Fee
Letter and any other documents to be delivered by it hereunder (on which
certificates the Company may conclusively rely until such time as the Company
shall receive from the Transferor a revised certificate meeting the requirements
of this clause (d)(i)) and (ii) that attached thereto is a true, correct and
complete copy of the Transferor's By-Laws.
(e) Copies of proper financing statements (Form UCC-1), dated a
date reasonably near to the date of the initial Incremental Transfer naming the
Transferor as the debtor in favor of the Agent or other similar instruments or
documents as may be necessary or in the reason-
43
able opinion of the Company desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the Company's ownership
interest in the RPA Interest.
(f) Copies of proper termination statements (Form UCC-3), if
any, necessary to terminate all security interests and other rights of any
person in Receivables or the RPA Interest previously granted by either the
Transferor or CompuCom, except those evidenced by or permitted by the terms of
the Master Security and Administration Agreement and the other Permitted
Subordinated Interests (defined therein).
(g) Certified copies of request for information or copies (Form
UCC-11) (or a similar search report certified by parties acceptable to the
Agent) dated a date reasonably near the date of the initial Incremental Transfer
listing all effective financing statements which name either of Transferor or
CompuCom (under its present name and any previous name) as debtor and which are
filed in jurisdictions in which the filings were made pursuant to item (e) above
together with copies of such financing statements (none of which, except for
filings pursuant to the Master Security and Administration Agreement, shall
cover any Receivables or Contracts).
(h) Executed copies of the Lock-Box Agreements, the Receivables
Purchase Agreement and the Master Security and Administration Agreement, and
documents related thereto.
(i) Opinions of Morgan, Lewis & Bockius LLP, special counsel to
the Transferor and CompuCom regarding, among other things, enforceability,
security interest matters and true sale and nonconsolidation matters, in form
and substance satisfactory to the Company and its counsel.
(j) A certificate of the Transferor in substantially the form of
Exhibit J hereto executed by the Secretary or Assistant Secretary of the
Transferor.
(k) A computer tape setting forth all Receivables and the
Outstanding Balances thereon and such other information as the Company may
reasonably request.
44
(l) An executed copy of the Fee Letter.
(m) The Transfer Certificate, duly executed by the Transferor.
(n) The Company Certificate, duly executed by the Transferor and
appropriately completed.
(o) The Arrangement Fee in accordance with Section 2.7(b).
(p) An Investor Report for February, 1996.
(q) Such other documents as the Company shall reasonably
request.
45
ARTICLE V
COVENANTS
SECTION 5.1. AFFIRMATIVE COVENANTS OF EACH OF TRANSFEROR AND THE
COLLECTION AGENT. At all times from the date hereof to the later to occur of
(i) the Termination Date or (ii) the date on which the Net Investment is zero
and all Aggregate Unpaids shall have been paid in full, unless the Company
shall otherwise consent in writing:
(a) FINANCIAL REPORTING. The Transferor and the Collection
Agent will each maintain, for itself and each Subsidiary, a system of accounting
established and administered in accordance with generally accepted accounting
principles, and the Transferor shall furnish to the Agent:
(i) ANNUAL REPORTING. Within ninety (90) days after the
close of each of CompuCom's fiscal years, audited financial statements,
prepared in accordance with generally accepted accounting principles on a
consolidated basis for CompuCom and its Subsidiaries, including balance
sheets as of the end of such period, related statements of operations,
shareholder's equity and cash flows, accompanied by an audit report
certified by independent certified public accountants, acceptable to the
Agent, which report shall be unqualified as to going concern and scope of
audit and shall state that such consolidated financial statements present
fairly the financial position of CompuCom and its Subsidiaries at the dates
indicated and the results of their operations and their cash flow for the
periods indicated is in conformity with generally accepted accounting
principles, prepared in accordance with generally accepted auditing
standards and any management letter prepared by said accountants.
(ii) QUARTERLY REPORTING. Within forty-five (45) days
after the close of the first three quarterly periods of each of
46
CompuCom's fiscal years, for CompuCom and its Subsidiaries, consolidated
unaudited balance sheets as at the close of each such period and
consolidated related statements of operations, shareholder's equity and
cash flows for the period from the beginning of such fiscal year to the
end of such quarter, all certified by its chief financial officer.
(iii) COMPLIANCE CERTIFICATE. Together with the financial
statements required hereunder, a compliance certificate signed by its chief
financial officer, vice president (finance) or treasurer stating that no
Termination Event or Potential Termination Event exists, or if any
Termination Event or Potential Termination Event exists, stating the nature
and status thereof and showing the computation of, and showing compliance
with, each of the financial ratios and restrictions set forth in Section
5.3.
(iv) SHAREHOLDERS STATEMENTS AND REPORTS. Promptly upon
the furnishing thereof to the shareholders of CompuCom, copies of all
financial statements, reports and proxy statements so furnished.
(v) S.E.C. FILINGS. Promptly upon the filing thereof,
copies of all registration statements and annual, quarterly, monthly or
other regular reports which CompuCom or any subsidiary files with the
Securities and Exchange Commission.
(vi) CHANGE IN CREDIT AND COLLECTION POLICY AND DEBT
RATINGS. Within ten (10) days after the date any material change in or
amendment to the Credit and Collection Policy is made, a copy of the Credit
and Collection Policy then in effect indicating such change or amendment.
Within five (5) days after the date of any change in CompuCom's public or
private debt ratings, if any, a written certification of CompuCom's public
and private debt ratings after giving effect to any such change.
47
(vii) CREDIT AND COLLECTION POLICY. Within ninety (90)
days after the close of each of its fiscal years, a complete copy of the
Credit and Collection Policy then in effect.
(b) The Transferor will notify the Agent in writing of any of
the following immediately upon learning of the occurrence thereof, describing
the same and, if applicable, the steps being taken by the Person(s) affected
with respect thereto:
(i) NOTICE OF TERMINATION EVENTS OR POTENTIAL TERMINATION
EVENTS. As soon as possible, and in any event within two (2) days after
the date on which the Transferor becomes aware of, or should have known of,
the occurrence of each Termination Event or each Potential Termination
Event, a statement of the chief financial officer or chief accounting
officer of the Transferor setting forth details of such Termination Event
or Potential Termination Event and the action which the Transferor proposes
to take with respect thereto.
(ii) LITIGATION. The institution of any litigation,
arbitration proceeding or governmental proceeding against (x) the
Transferor or (y) CompuCom which in the case of CompuCom may result in a
Material Adverse Effect.
(iii) JUDGMENT. The entry of any judgment or decree
against (x) the Transferor or (y) CompuCom or any of its Subsidiaries if,
in the case of this clause (y), the aggregate amount of all judgments or
decrees then outstanding against CompuCom or any of its Subsidiaries
exceeds $5,000,000 after deducting (A) the amount with respect to which
CompuCom or any of its Subsidiaries is insured and (B) the amount for which
CompuCom or such Subsidiary is otherwise indemnified if the terms of such
indemnification are satisfactory to the Company.
48
(iv) OTHER INFORMATION. Such other information including
non-financial information) as the Agent may from time to time reasonably
request.
(c) CONDUCT OF BUSINESS. Each of the Transferor and CompuCom
will, and will cause each of its Subsidiaries to, carry on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted and do all things necessary to remain
duly incorporated, validly existing and in good standing as a domestic
corporation in its jurisdiction of incorporation and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted. Each of the Transferor and CompuCom, as applicable, will conduct its
business substantially in compliance with the factual assumptions set forth in
the opinion of Morgan, Lewis & Bockius LLP of even date herewith regarding the
sale and nonconsolidation matters.
(d) COMPLIANCE WITH LAWS. Each of the Transferor and CompuCom
will, and will cause each of its Subsidiaries to, comply in all material
respects with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject.
(e) FURNISHING OF INFORMATION AND INSPECTION OF RECORDS. Each
of the Transferor and the Collection Agent will furnish to the Company from time
to time such information with respect to the Receivables as the Company may
reasonably request, including, without limitation, listings identifying the
Obligor and the Outstanding Balance for each Receivable. Each of the Transferor
and the Collection Agent will at any time and from time to time during regular
business hours upon commercially reasonable notice in advance permit the
Company, or its agents or representatives, (i) to examine and make copies of and
abstracts from all Records and (ii) to visit the offices and properties of each
of the Transferor and the Collection Agent for the purpose of examining such
Records, and to discuss matters relating to Receivables or each of the
Transferor's and the Collection Agent's performance hereunder with any of the
officers, directors, employees or independent public accountants of
49
each of the Transferor and the Collection Agent having knowledge of such
matters.
(f) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Each of the
Transferor and the Collection Agent will 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 daily
identification of each new Receivable and all Collections of and adjustments to
each existing Receivable). Each of the Transferor and the Collection Agent will
give the Company notice of any material change in the administrative and
operating procedures referred to in the previous sentence.
(g) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS.
Each of the Transferor and CompuCom, at its expense, will timely and fully
perform and comply with all material provisions, covenants and other promises
required to be observed by it under the Contracts related to the Receivables.
(h) CREDIT AND COLLECTION POLICIES. Each of the Transferor and
CompuCom will comply in all material respects with the Credit and Collection
Policy in regard to each Receivable and the related Contract.
(i) COLLECTIONS. Each of the Transferor and CompuCom shall
instruct all Obligors to remit all Collections directly to a Lockbox in
accordance with the Master Security and Administration Agreement.
(j) SEPARATE BUSINESS. The Transferor shall at all times (i) to
the extent the Transferor's office is located in the offices of CompuCom or any
Affiliate of CompuCom, pay fair market rent for its executive office space
located in the offices of CompuCom or any Affiliate of CompuCom, (ii) maintain
the Transferor's books, financial statements, accounting records and other
corporate documents and records separate from those of CompuCom or any other
entity, (iii) not commingle the Transferor's assets with those of
50
CompuCom or any other entity, (iv) act solely in its corporate name and through
its own authorized officers and agents, (v) make investments directly or by
brokers engaged and paid by the Transferor or its agents (PROVIDED that if any
such agent is an Affiliate of CompuCom it shall be compensated at a fair market
rate for its services), (vi) separately manage the Transferor's liabilities from
those of CompuCom or any Affiliates of CompuCom and pay its own liabilities,
including all administrative expenses, from its own separate assets, and (vii)
pay from the Transferor's assets all obligations and indebtedness of any kind
incurred by the Transferor. The Transferor shall abide by all corporate
formalities, including the maintenance of current minute books, and the
Transferor shall cause its financial statements to be prepared in accordance
with generally accepted accounting principles in a manner that indicates the
separate existence of the Transferor and its assets and liabilities. The
Transferor shall (i) not incur indebtedness other than in connection with the
transactions contemplated by this Agreement and incidental indebtedness not to
exceed $9,500 in the aggregate, (ii) not assume the liabilities of CompuCom or
any Affiliate of CompuCom, and (iii) not make loans to or guarantee the
liabilities of CompuCom or any Affiliate of CompuCom. The officers and
directors of the Transferor (as appropriate) shall make decisions with respect
to the business and daily operations of the Transferor independent of and not
dictated by any controlling entity.
(k) INVENTORY. CompuCom shall on or prior to April 25, 1996 obtain
written confirmation, in form and substance acceptable to the Agent, from each
of Apple Computer, Inc. and Compaq Computer Corporation that any security
interest in inventory granted to such Person by CompuCom does not extend to
accounts receivable created upon the sale of inventory in which such Person has
a security interest.
SECTION 5.2. NEGATIVE COVENANTS. During the term of this Agreement,
unless the Company shall otherwise consent in writing:
(a) NO SALES, LIENS, ETC. Except as otherwise provided herein
and in the Master Security and Administration Agreement, the Transferor will not
sell, assign (by operation of law or otherwise) or otherwise
51
dispose of, or create or suffer to exist any Adverse Claim upon (or the filing
of any financing statement) or with respect to, the RPA Interest or upon or with
respect to any Lockbox, or assign any right to receive income in respect
thereof.
(b) NO EXTENSION OR AMENDMENT OF RECEIVABLES. Except as
otherwise permitted in Section 6.2, each of the Transferor and the Collection
Agent will not extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related thereto.
(c) NO CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Each
of the Transferor and the Collection Agent will not make any change in the
character of its business or in the Credit and Collection Policy, which change
would, in either case, materially impair the collectibility of any Receivable.
(d) USE OF PROCEEDS. No proceeds of any Transfer will be used
by the Transferor to purchase or carry any margin stock (as defined in
Regulation U of the Board of Governors of the Federal Reserve System) in
violation of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
(e) NO MERGERS, ETC. Each of the Transferor and CompuCom will
not (i) consolidate or merge with or into any other Person, or (ii) sell, lease
or transfer all or substantially all of its assets to any other Person; PROVIDED
that with respect to clause (i) above, CompuCom may merge with another Person if
CompuCom is the surviving corporation if such merger shall not result in an
Event of Default under the Master Security and Administration Agreement.
(f) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Each of the
Transferor and the Collection Agent will not add or terminate, or make any
change to, any Lockbox except in accordance with the Master Security and
Administration Agreement.
(g) DEPOSITS TO LOCKBOXES. Each of the Transferor and the
Collection Agent will not deposit or otherwise credit, or cause or permit to be
so deposited or credited, to any Lockbox cash or cash proceeds other
52
than in accordance with the Master Security and Administration Agreement.
(h) CHANGE OF NAME, ETC. Neither the Transferor nor CompuCom
will change its name, identity or corporate structure (within the meaning of
Section 9-402(7) of the UCC), nor relocate its chief executive office or any
office where Records are kept, unless it shall have: (i) given the Agent at
least thirty (30) days' prior written notice thereof and (ii) delivered to the
Company all UCC financing statements, instruments and other documents
(including, but not limited to, new or revised Lockbox Agreements) requested by
the Agent in connection with such change or relocation.
(i) CHANGES TO RECEIVABLES PURCHASE AGREEMENT. The Transferor
shall not agree to any amendment of or supplement to, or waiver of any provision
of, the Receivables Purchase Agreement without the prior written consent of the
Company.
(j) DIVIDEND RESTRICTION. The Transferor shall not make any
dividends or distributions in respect of its common stock without the prior
written consent of the Agent.
(k) VOLUNTARY PETITION. To the extent permitted by law, neither
the Transferor nor CompuCom will file a petition to commence a voluntary case
under the U.S. Bankruptcy Code (Title 11 USC) in any court of appropriate
jurisdiction within the Tenth Circuit of the United States.
53
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. APPOINTMENT OF COLLECTION AGENT. The servicing,
administering and collection of the Receivables shall be conducted by such
Person (the "COLLECTION AGENT") so designated from time to time in accordance
with this Section 6.1. Until the Agent gives notice to CompuCom of the
designation of a new Collection Agent, CompuCom is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Collection Agent
pursuant to the terms hereof. The Agent may, only upon the occurrence of a
default in the performance of the Collection Agent's obligations hereunder or
any other Termination Event designate as Collection Agent any Person (including
itself) to succeed CompuCom or any successor Collection Agent, on the condition
in each case that any such Person so designated shall agree to perform the
duties and obligations of the Collection Agent pursuant to the terms hereof.
Upon the occurrence of a Potential Termination Event or Termination Event, the
Agent may notify any Obligor of the Transferred Interest. The provisions of
this Section 6.1 are expressly subject to the provisions of the Master Security
and Administration Agreement.
SECTION 6.2. DUTIES OF COLLECTION AGENT.
(a) The Collection Agent shall take or cause to be taken all
such action 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. Each of the Transferor, the Company and the Bank Investors
hereby appoints as its agent the Collection Agent, from time to time designated
pursuant to Section 6.1, to enforce its respective rights and interests in and
under the Receivables, the Related Security and the Contracts. The Collection
Agent shall set aside for the account of the Transferor and the Company their
respective allocable shares of the Collections received by the Collection Agent
in respect of the RPA Interest in accordance with Sections 2.5 and 2.6. The
Collection Agent shall segregate and deposit to the Company's account the
Company's
54
allocable share of Collections received by the Collection Agent in respect of
the RPA Interest when required pursuant to Article II hereof. So long as no
Termination Event shall have occurred and be continuing, the Collection Agent
may, in accordance with the Credit and Collection Policy, extend the maturity of
Receivables, but not beyond sixty (60) days, and extend the maturity or adjust
the Outstanding Balance as the Collection Agent may determine 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 a Defaulted Receivable. The Collection Agent shall hold in trust
for the Transferor and the Company in accordance with their respective
interests, all Records which evidence or relate to Receivables or Related
Security. Subject to the provisions of the Master Security and Administration
Agreement, notwithstanding anything to the contrary contained herein, the Agent
shall have the right, acting in its reasonable discretion, to direct the
Collection Agent (whether the Collection Agent is CompuCom or any other Person)
to commence or settle any legal action to enforce collection of any Receivable
or to foreclose upon or repossess any Related Security.
(b) The Collection Agent shall hold, for the benefit of the
Transferor, Collections allocable to its portion of the RPA Interest received
MINUS the Percentage Factor of such Collections. On the last day of each
Tranche Period, the Collection Agent shall deduct from such Collections and pay
to the Company in reduction of the Net Investment any amounts due under Section
2.9 hereof and unpaid from the Transferor and turn the remainder of such
Collections over to the Transferor. In addition, the Collection Agent shall, as
soon as practicable following receipt thereof, turn over to the Transferor any
collections allocable to the RPA Interest of any indebtedness of any Obligor
which is not a Receivable. If CompuCom is not the Collection Agent, the
Collection Agent, by giving three (3) Business Days' prior written notice to the
Agent, may revise the percentage used to calculate the Servicing Fee so long as
the revised percentage will not result in a Servicing Fee that exceeds 110% of
the reasonable and appropriate out-of-pocket costs and expenses of such
Collection Agent incurred in connection with the performance of its obligations
hereunder as documented to the reasonable satis-
55
faction of the Company. The Collection Agent, if other than CompuCom, shall
as soon as practicable upon demand, deliver to CompuCom all Records in its
possession which evidence or relate to indebtedness allocable to the RPA
Interest of an Obligor which is not a Receivable.
(c) On or before 90 days after the end of each fiscal year of
the Collection Agent, beginning with the fiscal year ending December 31, 1996,
the Collection Agent shall cause a firm of independent public accountants (who
may also render other services to the Collection Agent or the Transferor) to
furnish a report to the Agent to the effect that they have (i) compared the
information contained in the Investor Reports delivered during such fiscal year
with the information contained in the Contracts and the Collection Agent's
records and computer systems for such period, and that, on the basis of such
examination and comparison, such firm is of the opinion that the information
contained in the Investor Reports reconciles with the information contained in
the Contracts and the Collection Agent's records and computer system and that
the servicing of the Receivables has been conducted in compliance with this
Agreement, (ii) conducted a confirmation of a sample, based on a sample size
provided by the Agent or otherwise agreed to by the Agent, of the Receivables
and verified that the Collection Agent's records and computer system used in
servicing the Receivables contained correct information with regard to due dates
and outstanding balances, (iii) verified that the Receivables treated by the
Collection Agent as Eligible Receivables and the calculation of the Net
Receivables Balance in fact satisfied the requirements of the definition thereof
contained herein, except, in each case for (a) such exceptions as such firm
shall believe to be immaterial (which exceptions need not be enumerated) and (b)
such other exceptions as shall be set forth in such statement, and (iv) obtained
no knowledge of any Termination Event or Potential Termination Event, or if, in
the opinion of such accountants, any Termination Event or Potential Termination
Event shall exist, stating the nature and status thereof
(d) The provisions of this Section 6.2 are expressly subject to
the terms of the Master Security and Administration Agreement.
56
SECTION 6.3. RIGHTS AFTER DESIGNATION OF NEW COLLECTION AGENT.
Subject to the provisions of the Master Security and Administration
Agreement, at any time following the designation of a Collection Agent (other
than CompuCom) pursuant to Section 6.1:
(i) The Agent may direct that payment of all amounts
payable under the RPA Interest be made directly to the Company or its
designee.
(ii) Each of the Transferor and the Collection Agent
shall, at the Company's request and at the Transferor's expense, give
notice of the Company's ownership of the RPA Interest to each Obligor and
direct that payments in respect thereof be made directly to the
Administrative Secured Party or, if no Person is acting in such capacity,
to the Agent or its designee.
(iii) Each of the Transferor and the Collection Agent
shall, at the Administrative Secured Party's request, (A) assemble all of
the Records, and shall make the same available to the Administrative
Secured Party or, if no Person is acting in such capacity, to the Agent at
a place selected by the Agent or its designee, and (B) segregate all cash,
checks and other instruments received by it from time to time constituting
Collections of Receivables in a manner acceptable to the Agent and shall,
promptly upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the
Administrative Secured Party or, if no Person is acting in such capacity,
to the Agent or its designee.
(iv) Each of the Transferor and the Collection Agent
hereby authorizes the Agent to take any and all steps in each of the
Transferor's and the Collection Agent's name and on behalf of each of the
Transferor and CompuCom necessary or desirable, in the determination of the
Agent, to collect all amounts due under the RPA Interest, including,
without
57
limitation, if no Person is acting as Administrative Secured Party,
endorsing the Transferor's name on checks and other instruments
representing Collections and enforcing such Receivables and the related
Contracts.
SECTION 6.4. RESPONSIBILITIES OF EACH OF THE TRANSFEROR AND COMPUCOM.
Anything herein to the contrary notwithstanding, each of the Transferor and
CompuCom shall (i) perform all of its obligations under the Contracts related to
the Receivables to the same extent as if interests in such Receivables had not
been sold hereunder and the exercise by the Company of its rights hereunder
shall not relieve each of the Transferor and CompuCom from such obligations and
(ii) pay when due any taxes, including without limitation, any sales taxes
payable in connection with the Receivables and their creation and satisfaction.
Neither the Company nor any Bank Investor shall have any obligation or liability
with respect to any Receivable or related Contracts, nor shall it be obligated
to perform any of the obligations of the Transferor or CompuCom thereunder.
58
ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. TERMINATION EVENTS. The occurrence of any one or more
of the following events shall constitute a Termination Event:
(a) (i) the Transferor, the Collection Agent or CompuCom shall
fail to perform or observe any term, covenant or agreement hereunder (other than
as referred to in clause (ii) of this Section 7.1(a) or the covenant set forth
in Section 5.1(k)) and such failure shall remain unremedied for ten (10) days,
or (ii) the Collection Agent shall fail to make any payment or deposit to be
made by it hereunder or under any other document delivered pursuant hereto when
due or the Collection Agent shall fail to observe or perform any term, covenant
or agreement on the Collection Agent's part to be performed under Section 2.8(b)
hereof; or
(b) any representation, warranty, certification or statement
made by either of the Transferor, the Collection Agent or CompuCom in this
Agreement or in any other document delivered pursuant hereto shall prove to have
been incorrect in any material respect when made or deemed made (PROVIDED that
any such breach with respect to a Receivable shall not constitute a Termination
Event hereunder if such breach shall have been cured by the Transferor pursuant
to Section 2.9 or 8.4); or
(c) either of the Transferor or CompuCom shall default in the
performance of any payment or undertaking (other than those covered by clause
(a) above) or to be performed or observed under any other provision hereof or in
the Receivables Purchase Agreement or under any other document delivered
pursuant hereto or thereto; or
(d) failure of either of the Transferor or CompuCom, as initial
Collection Agent, or any of their Subsidiaries to pay when due any amounts due
under any agreement under which any Indebtedness greater than $10,000,000 is
governed; or the default by either of the Transferor or CompuCom or any of their
Subsidiaries in the performance of any term, provision or condition contained in
any agreement under which any Indebtedness
59
greater than $10,000,000 was created or is governed, regardless of whether such
event is an "event of default" or "default" under any such agreement; or any
Indebtedness greater than $10,000,000 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; or
(e) any Event of Bankruptcy shall occur with respect to the
Transferor, the Collection Agent, CompuCom or any Subsidiary of either the
Transferor, the Collection Agent or CompuCom; or
(f) the Transferor shall, for any reason, fail to have a valid
ownership interest in the RPA Interest or the Administrative Secured Party
shall, for any reason, fail to have a valid and perfected first priority
security interest in the RPA Interest; or
(g) either CompuCom or the Transferor shall enter into any
transaction or merger whereby it is not the surviving entity; or
(h) there shall have occurred and be continuing any event or
condition which materially affects the Transferor's, CompuCom's or the
Collection Agent's ability to either collect the Receivables or to perform under
this Agreement or the Receivables Purchase Agreement; or
(i) the Liquidity Provider or the Credit Support Provider shall
have given notice that an event of default has occurred and is continuing under
its agreements with the Company; or
(j) the Commercial Paper issued by the Company shall not be
rated at least "A-2" by Standard & Poor's and at least "P-2" by Moody's; or
(k) (i) the Percentage Factor exceeds the Maximum Percentage
Factor unless the Transferor reduces the Net Investment on the next day,
bringing the Percentage Factor to less than or equal to 98% or (ii) the
Percentage Factor equals or exceeds 100% at any time or (iii) the Receivables
Purchase Agreement shall have terminated pursuant to Section 8.1 thereof; or
60
(l) the Company and the Agent, on the one hand, and the
Transferor and the Collection Agent, on the other hand, fail to agree with
respect to the certification of the RPA Interest pursuant to Section 2.2(a) of
the Master Security and Administration Agreement.
(m) the Dilution Ratio averaged for any three-month period
exceeds 7%; or
(n) the Loss to Liquidation Ratio averaged for any three-month
period exceeds 1.50%; or
(o) the Delinquency Ratio averaged for any three-month period
exceeds 15.0%; or
(p) the Administrative Secured Party notifies the Company or the
Agent that it intends to resign pursuant to Section 8.1(h) of the Master
Security and Administration Agreement and no successor thereto shall have been
obtained and become subject to such agreement prior to sixty (60) days of the
effectiveness of such notice; or
(q) CompuCom's Debt to Tangible Net Worth Ratio shall not exceed
4.0 to 1.0 as of the last day of any fiscal quarter; or
(r) CompuCom's Interest Coverage Ratio does not fall below 3.0
to 1 at any time; or
(s) CompuCom's Fixed Charge Coverage Ratio does not fall below
1.5 to 1 at any time; or
(t) if all or any part of the capital stock of the Transferor
held (beneficially or otherwise) by CompuCom or the Subordinated Note (as
defined in the Receivables Purchase Agreement) shall be pledged or otherwise be
subject to a security interest in favor of any Person, and such Person shall
commence any action to foreclose on any such pledge or security interest.
SECTION 7.2. TERMINATION. (a) If an event or condition specified
in Section 7.1 (other than an event or condition specified in Sections 7.1(i)
and (j)) occurs, the Agent may, by notice to the Transferor, declare a
Termination Event to have occurred and declare all outstanding Tranche
Periods to be ended and designate the
61
Base Rate plus 2% to be applicable to the Net Investment. If an event or
condition specified in Section 7.1(i) or (j) occurs, the Agent may, by notice to
the Transferor, declare a Termination Event to have occurred and declare all
outstanding Tranche Periods to be ended and shall designate the Base Rate to be
applicable to the Net Investment. In addition, if a Termination Event shall be
declared, the Transferor hereby requests that the Company assign the Transferred
Interest and all of its rights hereunder (other than its rights to receive
payments in respect of Discount accrued to the date of such assignment and other
fees, costs, expenses and indemnities due the Company hereunder) to the Bank
Investors. If an event or condition shall have occurred which constitutes a
Potential Termination Event, the Agent may, by notice to the Transferor, declare
such event or condition a Potential Termination Event.
(b) In addition, if any Termination Event occurs hereunder (i)
the Agent shall promptly notify the Transferor in writing whether it has
declared a Termination Event or a Potential Termination Event and whether it
will be exercising the remedies specified in this Section 7.2, (ii) the Company
and the Agent shall have all of the rights and remedies provided to a secured
creditor or a purchaser of accounts under the UCC by applicable law in respect
thereto (subject to the terms of the Master Security and Administration
Agreement), (iii) the Maximum Net Investment shall be reduced as of each
calendar date thereafter equal to the Net Investment as of such date, (iv) the
RPA Interest Percentage shall remain fixed as of the date of the Termination
Event and (v) no Commercial Paper will thereafter be issued.
62
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. INDEMNITIES. Without limiting any other rights which
the Company or the Bank Investors may have hereunder or under applicable law,
the Transferor and CompuCom hereby agree to indemnify the Company, the Bank
Investors, the Agent, the Liquidity Provider and the Credit Support Provider
and any permitted assigns and their respective officers, directors and
employees (collectively, "INDEMNIFIED PARTIES") from and against any and all
damages, losses, claims, liabilities, costs and expenses, including
reasonable attorneys' fees (which such attorneys may be employees of the Bank
Investors, the Liquidity Provider, the Credit Support Provider or the Agent)
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 ownership, either directly or
indirectly, by the Company or the Bank Investors of the Transferred Interest
excluding, however, (i) Indemnified Amounts to the extent resulting from
gross negligence or willful misconduct on the part of an Indemnified Party or
(ii) recourse (except as otherwise specifically provided in this Agreement)
for uncollectible Receivables. Without limiting the generality of the
foregoing, CompuCom and Transferor shall indemnify each Indemnified Party for
Indemnified Amounts relating to or resulting from:
(a) any representation or warranty made by CompuCom, the
Collection Agent or the Transferor (or any of their respective officers) under
or in connection with this Agreement, the Receivables Purchase Agreement, the
Master Security and Administration Agreement, any Investor Report or any other
information or report delivered by either of them pursuant hereto, which shall
have been false or incorrect in any material respect when made or deemed made;
(b) the failure by CompuCom, the Collection Agent or the
Transferor to comply with any applicable law, rule or regulation with respect to
any Receivable or the related Contract, or the nonconformity of any
63
Receivable or the related Contract with any such applicable law, rule or
regulation;
(c) the failure to vest and maintain in the Transferor an
undivided percentage ownership interest to the extent of the RPA Interest in the
Receivables free and clear of any Adverse Claim (other than as expressly
permitted in the Master Security and Administration Agreement) or the failure to
vest and maintain vested in the Company an undivided percentage ownership
interest, to the extent of the Transferred Interest, or a first priority
perfected security interest, in the RPA Interest, free and clear of any Adverse
Claim (other than as expressly permitted in the Master Security and
Administration Agreement);
(d) the failure to file, or any delay in filing, financing
statements, continuation statements, or other similar instruments or documents
under the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivable, any part of which is included in the Transferred
Interest;
(e) any dispute, claim, offset or defense (other than discharge
in bankruptcy) of the Obligor to the payment of any Receivable, any part of
which is included in the Transferred Interest (including, without limitation, a
defense based on such Receivable or the related Contract not being 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 merchandise or
services related to such Receivable or the furnishing or failure to furnish such
merchandise or services;
(f) any failure of CompuCom or the Transferor, as Collection
Agent or otherwise, to perform its duties or obligations in accordance with the
provisions of Article VI; or
(g) any products liability claim or personal injury or property
damage suit or other similar or related claim or action of whatever sort arising
out of or in connection with merchandise or services which are the subject of
any Receivable;
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PROVIDED, HOWEVER, that if the Company enters into agreements for the purchase
of interests in receivables from one or more Other Transferors, the Company
shall allocate such Indemnified Amounts which are in connection with the
Liquidity Provider Agreement, the Credit Support Agreement or the credit support
furnished by the Credit Support Provider to the Transferor and CompuCom and each
Other Transferor; and PROVIDED, FURTHER, that if such Indemnified Amounts are
attributable to the Transferor and CompuCom and not attributable to any Other
Transferor, the Transferor and CompuCom shall be solely liable for such
Indemnified Amounts or if such Indemnified Amounts are attributable to Other
Transferors and not attributable to the Transferor and CompuCom, such Other
Transferors shall be solely liable for such Indemnified Amounts.
SECTION 8.2. INDEMNITY FOR TAXES, RESERVES AND EXPENSES. (a) If
after the date hereof, the adoption of any Law or bank regulatory guideline or
any amendment or change in the interpretation of any existing or future Law or
bank regulatory guideline by any Official Body charged with the administration,
interpretation or application thereof, or the compliance with any directive of
any Official Body (in the case of any bank regulatory guideline, whether or not
having the force of Law):
(i) shall subject any Indemnified Party to any tax, duty
or other charge with respect to this Agreement, the Transferred Interest,
the Receivables or payments of amounts due hereunder, or shall change the
basis of taxation of payments to any Indemnified Party of amounts payable
in respect of this Agreement, the Transferred Interest, the Receivables or
payments of amounts due hereunder or its obligation to advance funds under
the Liquidity Provider Agreement or the credit support furnished by the
Credit Support Provider or otherwise in respect of this Agreement, the
Transferred Interest or the Receivables (except for changes in the rate of
general corporate, franchise, net income or other income tax imposed on
such Indemnified Party);
(ii) shall impose, modify or deem applicable any reserve,
special deposit or
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similar requirement (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System) against
assets of, deposits with or for the account of, or credit extended by, any
Indemnified Party or shall impose on any Indemnified Party or on the United
States market for certificates of deposit or the London interbank market
any other condition affecting this Agreement, the Transferred Interest, the
Receivables or payments of amounts due hereunder or its obligation to
advance funds under the Liquidity Provider Agreement or the credit support
provided by the Credit Support Provider or otherwise in respect of this
Agreement, the Transferred Interest or the Receivables; or
(iii) imposes upon any Indemnified Party any other expense
(including, without limitation, reasonable attorneys' fees and expenses,
and expenses of litigation or preparation therefor in contesting any of the
foregoing) with respect to this Agreement, the Transferred Interest, the
Receivables or payments of amounts due hereunder or its obligation to
advance funds under the Liquidity Provider Agreement or the credit support
furnished by the Credit Support Provider or otherwise in respect of this
Agreement, the Transferred Interests or the Receivables,
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the Transferred Interest, the
Receivables, the obligations hereunder, the funding of any purchases hereunder,
the Liquidity Provider Agreement or the Credit Support Agreement, by an amount
deemed by such Indemnified Party to be material, then, within ten (10) days
after demand by the Agent, the Transferor or CompuCom shall pay to the Agent
such additional amount or amounts as will compensate such Indemnified Party for
such increased cost or reduction.
(b) If any Indemnified Party shall have determined that after
the date hereof, the adoption of any applicable Law or bank regulatory guideline
regarding capital adequacy, or any change therein, or any change in
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the interpretation thereof by any Official Body, or any directive regarding
capital adequacy (in the case of any bank regulatory guideline, whether or not
having the force of law) of any such Official Body, has or would have the effect
of reducing the rate of return on capital of such Indemnified Party (or its
parent) as a consequence of such Indemnified Party's obligations hereunder or
with respect hereto to a level below that which such Indemnified Party (or its
parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Indemnified Party to be material, then from time to time,
within ten (10) days after demand by the Agent, the Transferor and CompuCom
shall pay to the Agent such additional amount or amounts as will compensate such
Indemnified Party (or its parent) for such reduction.
(c) The Agent will promptly notify each of the Transferor and
CompuCom of any event of which it has knowledge, occurring after the date
hereof, which will entitle an Indemnified Party to compensation pursuant to this
Section. A notice by the Agent claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it on behalf of an
Indemnified Party hereunder shall be conclusive in the absence of manifest
error. In determining such amount, the Agent and any applicable Indemnified
Party may use any reasonable averaging and attributing methods.
(d) Anything in this Section 8.2 to the contrary
notwithstanding, if the Company enters into agreements for the acquisition of
interests in receivables from one or more Other Transferors, the Company shall
allocate the liability for any amounts under this Section 8.2 incurred by the
Company ("SECTION 8.2 COSTS") to the Transferor and CompuCom and each Other
Transferor; and PROVIDED, FURTHER, that if such Section 8.2 Costs are
attributable to the Transferor and CompuCom and not attributable to any Other
Transferor, the Transferor and CompuCom shall be solely liable for such Section
8.2 Costs or if such Section 8.2 Costs are attributable to Other Transferors and
not attributable to the Transferor and CompuCom, such Other Transferors shall be
solely liable for such Section 8.2 Costs.
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SECTION 8.3. OTHER COSTS, EXPENSES AND RELATED MATTERS. (a) Each of
the Transferor and CompuCom agrees, upon receipt of a written invoice, to pay or
cause to be paid, and to hold the Company, the Agent and the Bank Investors
harmless against liability for the payment of, all reasonable out-of-pocket
expenses (including, without limitation, attorneys', accountants' and other
third parties' fees and expenses, any filing fees and expenses incurred by
officers or employees of the Company, the Agent and any Bank Investor) incurred
by or on behalf of the Company, the Agent and the Bank Investors (i) in
connection with the negotiation, execution, delivery and preparation of this
Agreement, the Master Security and Administration Agreement and any documents or
instruments delivered pursuant hereto and thereto and the transactions
contemplated hereby and thereby (including, without limitation, the perfection
or protection of the Transferred Interest) and (ii) from time to time (x)
relating to any amendments, waivers or consents under this Agreement and the
Master Security and Administration Agreement, (y) arising in connection with the
Company's, any Bank Investor's, the Agent's or any agent of the Company's
enforcement or preservation of rights (including, without limitation, the
perfection and protection of the Transferred Interest under this Agreement and
the Master Security and Administration Agreement), or (z) arising in connection
with any audit, dispute, disagreement, litigation or preparation for litigation
involving this Agreement and/or the Master Security and Administration
Agreement; (all of such amounts, collectively, "TRANSACTION COSTS"); PROVIDED,
HOWEVER, that the parties hereto hereby agree to cooperate to minimize such
costs and to avoid duplication of efforts.
(b) The Transferor and CompuCom shall pay the Company on demand
any Early Collection Fee due on account of the reduction of a Tranche on a day
prior to the last day of its Tranche Period.
SECTION 8.4. RECONVEYANCE UNDER CERTAIN CIRCUMSTANCES. The
Transferor agrees to accept the reconveyance from the Company or the Bank
Investors of the Transferred Interest if the Agent notifies the Transferor of a
material breach of any representation or warranty made or deemed made pursuant
to Article III of this Agreement and the Transferor shall fail to cure such
breach within 15 days (or, in the case of the representa-
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tions and warranties in Sections 3.1(d) and 3.1(j), 3 days) of such notice.
The reconveyance price shall be paid by the Transferor to the Company or the
Agent in immediately available funds on such 15th day (or 3rd day, if
applicable) in an amount equal to the Aggregate Unpaids.
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ARTICLE IX
THE AGENT AND THE BANK COMMITMENT
SECTION 9.1. AUTHORIZATION AND ACTION. (a) The Company and each
Bank Investor hereby appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. In furtherance, and without limiting the
generality, of the foregoing, the Company and each Bank Investor hereby appoints
the Agent as its agent to execute and deliver all further instruments and
documents, and take all further action that the Agent may deem necessary or
appropriate or that the Company or a Bank Investor may reasonably request in
order to perfect, protect or more fully evidence the interests transferred or to
be transferred from time to time by the Transferor hereunder, or to enable any
of them to exercise or enforce any of their respective rights hereunder,
including, without limitation, the execution by the Agent as secured
party/assignee of such financing or continuation statements, or amendments
thereto or assignments thereof, relative to all or any of the Receivables now
existing or hereafter arising, and such other instruments or notices, as may be
necessary or appropriate for the purposes stated hereinabove. The Company and
the Bank Investors may direct the Agent to take any such incidental action
hereunder. With respect to other actions which are incidental to the actions
specifically delegated to the Agent hereunder, the Agent shall not be required
to take any such incidental action hereunder, but shall be required to act or to
refrain from acting (and shall be fully protected in acting or refraining from
acting) upon the direction of the Company or a Bank Investor; PROVIDED, HOWEVER,
that Agent shall not be required to take any action hereunder if the taking of
such action, in the reasonable determination of the Agent, shall be in violation
of any applicable law, rule or regulation or contrary to any provision of this
Agreement or shall expose the Agent to liability hereunder or otherwise. Upon
the occurrence and during the continuance of any Termination Event or Potential
Termination Event, the Agent shall take no action hereunder (other than
ministerial actions or such actions as are specifically provided for herein)
without the prior consent of the Majority Investors. Unless other-
70
wise provided herein, the Agent shall not authorize the release of any property
conveyed to the Agent by the Company or the Transferor hereunder without the
prior consent of all Bank Investors. The Agent shall not, without the prior
written consent of all Bank Investors, agree to (i) amend, modify or waive any
provision of this Agreement in any way which would (A) reduce or impair
Collections or the payment of Discount or fees payable under the related fee
letter or delay the scheduled dates for payment of such amounts, (B) increase
the Servicing Fee, (C) modify any provisions of this Agreement relating to the
timing of payments required to be made by the Transferor or the application of
the proceeds of such payments, or (D) the appointment of any Person (other than
the Agent) as successor Collection Agent. The Agent shall not agree to any
amendment of this Agreement which increases the dollar amount of a Bank
Investor's Commitment without the prior consent of such Bank Investor. In
addition, the Agent shall not agree to any amendment of this Agreement not
specifically contemplated by the two preceding sentences without the consent of
the related Majority Investors. "MAJORITY INVESTORS" shall mean, at any time,
Persons consisting of Bank Investors which hold Commitments aggregating in
excess of 51% of the Maximum Net Investment as of such date. In the event the
Agent requests the Company's or a Bank Investor's consent pursuant to the
foregoing provisions and the Agent does not receive a consent (either positive
or negative) from the Company or such Bank Investor within ten (10) Business
Days of the Company's or Bank Investor's receipt of such request, then the
Company or such Bank Investor (and its percentage interest hereunder) shall be
disregarded in determining whether the Agent shall have obtained sufficient
consent hereunder.
(b) The Agent shall exercise such rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
SECTION 9.2. AGENT'S RELIANCE, ETC. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them as Agent under or in connection with
this Agreement, except for its or their own gross negligence or willful
misconduct. Without limiting the
71
foregoing, the Agent: (i) may consult with legal counsel (including counsel for
the Transferor or CompuCom), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) shall make no warranty or representation to the
Company or any Bank Investor and shall not be responsible to the Company or any
Bank Investor for any statements, warranties or representations made in or in
connection with this Agreement; (iii) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Transferor, the Collection Agent
or CompuCom or to inspect the property (including the books and records) of the
Transferor, the Collection Agent or CompuCom; (iv) shall not be responsible to
the Company or any Bank Investor for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, or any
other instrument or document furnished pursuant hereto; and (v) shall incur no
liability under or in respect of this Agreement by acting upon any notice
(including notice by telephone), consent, certificate or other instrument or
writing (which may be by telex) believed by it to be genuine and signed or sent
by the proper party or parties.
SECTION 9.3. CREDIT DECISION. The Company and each Bank Investor
acknowledges that it has, independently and without reliance upon the Agent, any
of the Agent's Affiliates' any (other) Bank Investor or the Company (in the case
of any Bank Investors) and based upon such documents and information as it has
deemed appropriate, made its own evaluation and decision to enter into this
Agreement and, if it so determines, to accept the transfer of any undivided
ownership interest in Receivables hereunder. The Company and each Bank Investor
also acknowledges that it will, independently and without reliance upon the
Agent, any of the Agent's Affiliates, any (other) Bank Investor or the Company
(in the case of any Bank Investors) and based on such documents and information
as it shall deem appropriate at the time, continue to make its own decisions in
taking or not taking action under this Agreement.
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SECTION 9.4. INDEMNIFICATION OF THE AGENT. The Bank Investors agree
to indemnify the Agent (to the extent not reimbursed by the Transferor), ratably
in accordance with their Pro Rata Shares, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by the Agent under
this Agreement; PROVIDED that the Bank Investors shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct. Without limitation of the foregoing,
the Bank Investors agree to reimburse the Agent, ratably in accordance with
their Pro Rata Shares, promptly upon demand for any out-of-pocket expenses
(including counsel fees) incurred by the Agent in connection with the
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that such
expenses are incurred in the interests of or otherwise in respect of the Bank
Investors hereunder and to the extent that the Agent is not reimbursed for such
expenses by the Transferor.
SECTION 9.5. SUCCESSOR AGENT. The Agent may resign at any time by
giving written notice thereof to each Bank Investor, the Company and the
Transferor and may be removed at any time with cause by the Majority Investors.
Upon any such resignation or removal, the Bank Investors acting jointly shall
appoint a successor Agent. Each Bank Investor agrees that it shall not
unreasonably withhold or delay its approval of the appointment of a successor
Agent. If no such successor Agent shall have been so appointed by the Bank
Investors, and shall have accepted such appointment, within thirty (30) days
after the retiring Agent's giving of notice of resignation or the Majority
Investors' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Bank Investors, appoint a successor Agent which successor Agent shall be
either (i) a commercial bank organized under the laws of the United States or of
any state thereof and have a combined capital and surplus of at least
$50,000,000 or (ii) an Affiliate of such a bank.
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Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article IX shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
SECTION 9.6. PAYMENTS BY THE AGENT. Unless specifically allocated to
a Bank Investor pursuant to the terms of this Agreement, all amounts received by
the Agent on behalf of the Bank Investors shall be paid by the Agent to the Bank
Investors (at their respective accounts specified in their respective
Assignments) in accordance with their respective related PRO RATA interests in
the Net Investment on the Business Day received by the Agent, unless such
amounts are received after 12:00 noon (New York time) on such Business Day, in
which case the Agent shall use its reasonable efforts to pay such amounts to the
Bank Investors on such Business Day, but, in any event, shall pay such amounts
to the Bank Investors in accordance with their respective related PRO RATA
interests in the Net Investment not later than the following Business Day.
SECTION 9.7. BANK COMMITMENT; ASSIGNMENT TO BANK INVESTORS.
(a) BANK COMMITMENT. At any time on or prior to
the Commitment Termination Date, in the event that the Company does not effect
an Incremental Transfer as requested under Section 2.2, then, at any time
thereafter, the Transferor shall have the right to require the Company to assign
its interest in whole to the Bank Investors pursuant to an assignment and
assumption agreement (an "ASSIGNMENT") in accordance with this Section 9.7. In
addition, at any time on or prior to the Commitment Termination Date, (i) upon
the occurrence of a Termination Event or (ii) the Company elects to give notice
of a Reinvestment Termination Date, the Transferor hereby requests and directs
that the Company assign its interest in whole to the Bank Investors pursuant to
this Section 9.7, and the Transferor agrees to pay the amounts described in
Section 9.7(d) below. Provided that (i) the
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Net Asset Test is satisfied and (ii) the Transferor shall have paid to the
Company all amounts due as described in Section 9.7(d) (which amount may be
deemed paid by the Transferor through an increase in the Net Investment), upon
any such election by the Company or any such request by the Transferor, the
Company shall make such assignment and the Bank Investors shall accept such
assignment and shall assume all of the Company's obligations hereunder. In
connection with any assignment from the Company to the Bank Investors pursuant
to this Section 9.7, each Bank Investor shall, on the date of such assignment,
pay to the Company an amount equal to its Assignment Amount. In addition, at
any time on or prior to the Commitment Termination Date, the Transferor shall
have the right to request funding under this Agreement directly from the Bank
Investors; PROVIDED that at such time all conditions precedent set forth herein
for an Incremental Transfer shall be satisfied, and PROVIDED FURTHER that, in
connection with such funding by the Bank Investors, the Bank Investors accept
the assignment of all of the Company's interest in the Net Investment and assume
all of the Company's obligations hereunder.
(b) ASSIGNMENT. Upon any assignment pursuant to Section 9.7(a),
the Company shall deliver to each Bank Investor an Assignment, duly executed,
assigning to each such Bank Investor a PRO RATA interest in the Net Investment
plus amounts unpaid pursuant to Section 9.7(d) (which amounts may be applied to
increase the Net Investment), and the Company shall promptly execute and deliver
all further instruments and documents, and take all further action, that the
assignee may reasonably request, in order to protect, or more fully evidence the
assignee's right, title and interest in and to such interest and to enable the
Agent, on behalf of such assignee, to exercise or enforce any rights hereunder.
Upon any such assignment, (i) the assignee shall have all of the rights and
obligations of the Company hereunder with respect to such interest for all
purposes of this Agreement (it being understood that the Bank Investors, as
assignees, shall (x) be obligated to effect Incremental Transfers under Section
2.2 in accordance with the terms thereof unless a Termination Event has
occurred, notwithstanding that the Company was not so obligated and (y) not have
the right to elect the commencement of the amortization of the Net Investment
pursuant to the definition of "Termination Date", notwithstanding that the
75
Company had such right) and (ii) the Company shall relinquish its rights with
respect to such interest for all purposes of this Agreement. No such assignment
shall be effective unless a fully executed copy of the related Assignment shall
be delivered to the Agent and Transferor. All reasonable costs and expenses of
the Company and assignee incurred in connection with any assignment hereunder
shall be borne by the Transferor and not by the Company or any such assignee.
No Bank Investor may assign all or any portion of its interest in the Net
Investment, the RPA Interest, Collections, Related Security and Proceeds with
respect thereto and its rights and obligations hereunder to any Person unless
approved in writing by the Agent. No Bank Investor shall assign any portion of
its Commitment hereunder without also simultaneously assigning an equal portion
of its interest in the Liquidity Provider Agreement.
(c) EFFECTS OF ASSIGNMENT. By executing and delivering an
Assignment, the assignor and assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment, the assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other instrument or document
furnished pursuant hereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any such other instrument
or document; (ii) the assignor makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Transferor or
the performance or observance by the Transferor of any of its obligations under
this Agreement, or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement and
such other instruments, documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
to purchase such interest; (iv) such assignee will, independently and without
reliance upon the Agent, or any of its Affiliates, or the assignor and based on
such agreements, 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 this Agreement; (v) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and
76
to exercise such powers under this Agreement and any other instrument or
document furnished pursuant hereto or thereto as are delegated to the Agent by
the terms hereof or thereof, together with such powers as are reasonably
incidental thereto and to enforce its respective rights and interests in and
under this Agreement, the Receivables and the Related Security; (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 the assignee of the assignor; and (vii) such assignee agrees that it will
not institute against the Company any proceeding of the type referred to in
Section 10.9 prior to the date which is one year and one day after the payment
in full of all Commercial Paper issued by the Company.
(d) TRANSFEROR'S OBLIGATION TO PAY CERTAIN AMOUNTS. The
Transferor shall pay to the Company, prior to any assignment by the Company to
the Bank Investors pursuant to this Section 9.7, an aggregate amount equal to
all Discount accrued with respect to each Tranche Period, all Discount to accrue
through the end of each outstanding Tranche Period plus all other Aggregate
Unpaids (other than the Net Investment). To the extent that such Discount
relates to interest or discount on Commercial Paper issued to fund the Net
Investment, if the Transferor fails to make payment of such amounts at or prior
to the time of assignment by the Company to the Bank Investors, such amount
shall be paid by the Bank Investors to the Company as additional consideration
for the interests assigned to the Bank Investors, and the amount of the "Net
Investment" hereunder held by the Bank Investors shall be increased by an amount
equal to the additional amount so paid by the Bank Investors.
(e) ADMINISTRATION OF AGREEMENT AFTER ASSIGNMENT; DISCOUNT.
After any assignment by the Company to the Bank Investors pursuant to this
Section 9.7, all rights of the Collateral Agent set forth herein shall be deemed
to be afforded to the Agent on behalf of the Bank Investors instead of either
such party. After any such assignment, Discount hereunder shall be determined
in accordance with the terms of the Fee Letter dated the date hereof (as such
letter may be amended from time to time) between the Transferor and the Agent.
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(f) PAYMENTS. After any assignment by the Company to the Bank
Investors pursuant to this Section 9.7, all payments to be made hereunder by the
Transferor or the Collection Agent to the Bank Investors shall be made to the
Agent's account as such account shall have been notified to the Transferor and
the Collection Agent.
(g) DOWNGRADE OF BANK INVESTOR. If the short-term debt rating
of a Bank Investor shall be A-2 or P-2 from Standard & Poor's or Moody's,
respectively, with negative credit implications, such Bank Investor, upon
request of the Agent, shall, within thirty (30) days of such request, assign its
rights and obligations hereunder to another financial institution (which
institution's short-term debt shall be rated at least A-2 and P-2 from Standard
& Poor's and Moody's, respectively, and which shall not be so rated with
negative credit implications). If the short-term debt rating of a Bank Investor
shall be A-3 or P-3, or lower, from Standard & Poor's or Moody's, respectively,
such Bank Investor, upon request of the Agent, shall, within five (5) Business
Days of such request, assign its rights and obligations hereunder to another
financial institution (which institution's short- term debt shall be rated at
least A-2 and P-2 from Standard & Poor's and Moody's, respectively, and which
shall not be so rated with negative credit implications). In either such case,
if any such Bank Investor shall not have assigned its rights and obligations
under this Agreement within the applicable time period described above, the
Company shall have the right to require such Bank Investor to accept the
assignment of such Bank Investor's Pro Rata Share of the Net Investment, and
such assignment shall occur in accordance with the applicable provisions of this
Section 9.7. Such Bank Investor shall be obligated to pay to the Company, in
connection with such assignment, in addition to the Pro Rata Share of the Net
Investment, an amount equal to a pro rata portion of the interest component of
all outstanding Commercial Paper issued to fund the Net Investment, as
reasonably determined by the Agent.
SECTION 9.8. MASTER SECURITY AND ADMINISTRATION AGREEMENT.
The interest in the RPA Interest transferred under this Agreement at all
times shall be subject to the security interest and rights in favor of the
Administrative Secured Party under the Master Security and Administration
Agreement as provided therein. All
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terms and provisions of the Master Security and Administration Agreement which
are binding or otherwise applicable to the Company or the Transferred Interest
or any portion thereof, and all rights and remedies with respect thereto, are
binding and applicable to Agent, any successor Agent, the Collection Agent, any
successor Collection Agent, the Collateral Agent, any successor Collateral
Agent, the Bank Investors, the Liquidity Provider and the Credit Support
Provider, respectively, and all interests of any such Persons, to the extent of
their respective interests now or hereafter arising under or in connection with
this Agreement. Neither the Agent, any successor Agent, the Collection Agent,
any successor Collection Agent, the Collateral Agent, any successor Collateral
Agent, the Bank Investors, the Liquidity Provider or the Credit Support
Provider, respectively, shall be entitled to take or cause to be taken any
action with respect to the Receivables or any portion thereof which otherwise is
or would be prohibited or restricted by the Master Security and Administration
Agreement.
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ARTICLE X
MISCELLANEOUS
SECTION 10.1. TERM OF AGREEMENT. This Agreement shall terminate
following the Termination Date when the Net Investment has been reduced to
zero, all accrued Discount has been paid in full and all other Aggregate
Unpaids have been paid in full; PROVIDED, HOWEVER, that (i) the rights and
remedies of the Company with respect to any representation and warranty made
or deemed to be made by each of Transferor, the Collection Agent and CompuCom
pursuant to this Agreement, (ii) the indemnification and payment provisions
of Article VIII, and (iii) the agreement set forth in Section 10.9, shall be
continuing and shall survive any termination of this Agreement for a period
of three (3) years following such date in the case of clauses (i) and (ii)
above.
SECTION 10.2. WAIVERS; AMENDMENTS. No failure or delay on the part
of the Company 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 provision of this Agreement may be amended
if, but only if, such amendment is in writing and is signed by the parties
hereto.
SECTION 10.3. NOTICES. Except as provided below, all communications
and notices provided for hereunder shall be in writing (including bank wire,
telex, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other party at its address or telecopy number set forth
below or at such other address or telecopy number as such party may hereafter
specify for the purposes of notice to such party. Each such notice or other
communication shall be effective (i) if given by telecopy, when such telecopy
is transmitted to the telecopy number specified in this Section and
confirmation is received, (ii) if given by mail 3 Business Days following
such posting, or (iii) if given by any other means, when received at the
address
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specified in this Section. However, anything in this Section to the contrary
notwithstanding, the Transferor hereby authorizes the Company to effect
Transfers, Tranche Period and Tranche Rate selections based on telephonic
notices made by any Person which the Company in good faith believes to be acting
on behalf of the Transferor. The Transferor and the Company agree to deliver
promptly to the other a written confirmation of each telephonic notice signed by
an authorized officer of such party. However, the absence of such confirmation
shall not affect the validity of such notice.
If to the Company:
Enterprise Funding Corporation
c/o Merrill Lynch Money Markets Inc.
World Financial Center--South Tower
225 Liberty Street
New York, New York 10218
Telephone: (212) 236-7200
Telecopy: (212) 236-7584
(with a copy to the Agent)
If to the Transferor:
CSI Funding Inc.
10100 North central Expressway
Dallas, Texas 75231
Telecopy: (214) 265-5449
Payment Information:
NationsBank of Texas, N.A.
ABA: 111000025
Account 1291795475
If to the Administrative Secured Party:
NationsBank of Texas, N.A.
NationsBank Plaza, 6th floor
901 Main Street
Dallas, Texas 75202
Attention: Business Credit/Regional
Manager: URGENT
Telecopy: (214) 508-3501
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If to the Agent:
NationsBank, N.A.
NationsBank Corporate Center--10th Floor
Charlotte, North Carolina 28255
Attention: Michelle M. Heath--
Investment Banking
Telephone: (704) 386-7922
Telecopy: (704) 388-9169
Payment Information:
ABA: 053000196
Attention: Camille Zerbinos
Reference: CompuCom Expenses
SECTION 10.4. GOVERNING LAW; SUBMISSION TO JURISDICTION; INTEGRATION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF THE TRANSFEROR, THE COLLECTION
AGENT AND COMPUCOM HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK
STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. Each of the Transferor, the Collection Agent and CompuCom
hereby irrevocably waives, to the fullest extent it may effectively do so, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. Nothing in
this Section 10.4 shall affect the right of the Company to bring any action or
proceeding against the Transferor, the Collection Agent and CompuCom or their
property in the courts of other jurisdictions.
(b) This Agreement contains 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.
SECTION 10.5. SEVERABILITY; COUNTERPARTS. Bank Commitment; Assignment
to Bank Investors. This Agreement may be executed in any number of counter-
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parts 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.
SECTION 10.6. SUCCESSORS AND ASSIGNS. (a) This Agreement shall be
binding on the parties hereto and their respective successors and assigns;
PROVIDED, HOWEVER, that neither the Transferor, the Collection Agent nor
CompuCom may assign any of its rights or delegate any of its duties hereunder
without the prior written consent of the Company. No provision of this
Agreement shall in any manner restrict the ability of the Company to assign,
participate, grant security interests in, or otherwise transfer any portion
of the Transferred Interest.
(b) Each of the Transferor and CompuCom hereby agrees and
consents to the assignment by the Company from time to time of all or any part
of its rights under, interest in and title to this Agreement and the Transferred
interest to any Liquidity Provider or the Bank Investors. In addition, each of
the Transferor and CompuCom hereby agrees and consents to the complete
assignment by the Company of all of its rights (but not its obligations) under,
interest in and title to this Agreement and the Transferred Interest to
NationsBank, N.A., in its capacity as collateral agent (in such capacity, the
"COLLATERAL AGENT") for any Liquidity Provider, any Credit Support Provider and
the holders of Commercial Paper from time to time.
SECTION 10.7. [RESERVED]
SECTION 10.8. CONFIDENTIALITY. (a) Each of the Transferor, the
Collection Agent and CompuCom hereby consents to the disclosure of any
non-public information with respect to it to (i) either the Agent or the
Company by the other and (ii) the Liquidity Provider, the Credit
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Support Provider, any Bank Investor, or any nationally recognized rating agency
providing a rating for the Company's commercial paper.
(b) Each of the Transferor and the Company shall maintain, and
shall cause each of its officers, employees and agents to maintain, the
confidentiality of this Agreement, all documents related hereto and all other
confidential proprietary information with respect to, on the one hand, the
Company, the Agent, any Bank Investor, the Liquidity Provider or the Credit
Support Provider, and, on the other hand, CompuCom and the Transferor, and each
of their respective businesses obtained by them in connection with the
structuring, negotiation and execution of the transactions contemplated herein,
except for information that has become publicly available and has been disclosed
to (i) legal counsel, accountants and other professional advisors to the Company
and the Transferor by the other, (ii) as required by law, regulation or legal
process and (iii) in connection with any legal or regulatory proceeding to which
the Transferor or the Company, as applicable, is subject. Both the Company and
the Agent, on the one hand, and the Transferor and CompuCom, on the other hand,
hereby consent to the disclosure of information in the manner and to the Persons
set forth in clauses (i) through (iii) above.
SECTION 10.9. NO BANKRUPTCY PETITION AGAINST THE COMPANY. Each of
the Transferor, the Collection Agent and CompuCom hereby covenants and agrees
that, prior to the date which is one year and one day after the payment in
full of all outstanding Commercial Paper or other indebtedness of the
Company, it will not institute against, or join any other Person in
instituting against, the Company 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 10.10. LIMITED RECOURSE; WAIVER OF SETOFF.
(a) Notwithstanding anything to the contrary contained herein,
the obligations of the Company under this Agreement are solely the corporate
obligations of the Company and shall be payable at such time as funds are
received from the Transferor, CompuCom and other
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transferors or from any party to any agreement with the Company in accordance
with the terms thereof in excess of funds necessary to pay matured and maturing
Commercial Paper and, to the extent funds are not available to pay such
obligations, the claims relating thereto shall continue to accrue. Each party
hereto agrees that the payment of any claim (as defined in Section 101 of Title
11 of the Bankruptcy Code) of any such party shall be subordinated to the
payment in full of all Commercial Paper. No recourse shall be had for the
payment of any amount owing in respect of any obligation of, or claim against,
the Company arising out of or based upon this Agreement against any stockholder,
employee, officer, director or incorporator of the Company or any Affiliate
thereof or against any stockholder, employee, officer, director, incorporator or
Affiliate of the Agent; PROVIDED, HOWEVER, that the foregoing shall not relieve
any such person or entity from any liability they might otherwise have as a
result of fraudulent actions or omissions taken by them.
(b) Each of the Transferor and CompuCom hereby
agrees to waive any right of setoff which it may have or to which it may be
entitled against the Company and its assets.
SECTION 10.11. GRANT OF SECURITY INTEREST. The Transferor does
hereby grant to the Agent, on behalf of the Company and the Bank Investors, a
security interest in all of the Transferor's right, title and interest in, to
and under the Receivables, together with Related Security and Collections with
respect thereto, and that this Agreement shall constitute a security agreement
under applicable law. The Agent, on behalf of the Company and the Bank
Investors, hereby acknowledges that such security interest is subject to the
terms of the Master Security and Administration Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Transfer and Administration Agreement as of the date first written above.
ENTERPRISE FUNDING CORPORATION,
as Company
By: /s/ Martin J. McInerney
-------------------------
Name: Martin J. McInerney
Title: Vice President
CSI FUNDING INC.,
as Transferor
By: /s/ Robert J. Boutin
-------------------------
Name: Robert J. Boutin
Title: President
COMPUCOM SYSTEMS, INC.,
as Collection Agent
By: /s/ Robert J. Boutin
-------------------------
Name: Robert J. Boutin
Title: Senior Vice President and
Chief Financial Officer
NATIONSBANK, N.A., as Agent
and as Bank Investor
By: /s/ Michelle M. Heath
Commitment: -------------------------
$_________ Name: Michelle M. Heath
Title: Vice President
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