Exhibit 10(K)
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CSI FUNDING, INC.,
as Transferor,
COMPUCOM SYSTEMS, INC.
as Servicer,
PNC BANK, NATIONAL ASSOCIATION
as Agent,
MARKET STREET CAPITAL CORPORATION
as Initial Series 1999-1
Certificateholder,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
on behalf of the Certificateholders
__________________
SERIES 1999-1 SUPPLEMENT
Dated as of May 7, 1999
as amended and restated as of August 20, 1999
to
COMPUCOM RECEIVABLES MASTER TRUST I
POOLING AND SERVICING AGREEMENT
Dated as of May 7, 1999
as amended and restated as of August 20, 1999
__________________
VARIABLE FUNDING ACCOUNTS RECEIVABLE TRUST CERTIFICATES
SERIES 1999-1
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TABLE OF CONTENTS
Page
ARTICLE I
DESIGNATION OF CERTIFICATES; PURCHASE AND SALE
OF THE SERIES 1999-1 INVESTOR CERTIFICATES
SECTION 1.1 Designation........................................................................ 1
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SECTION 1.2 The Series 1999-1 Certificates..................................................... 1
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SECTION 1.3 Purchases of Interests in the Series 1999-1 Certificates........................... 2
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SECTION 1.4 Delivery........................................................................... 2
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SECTION 1.5 Procedure for Initial Issuance and for Increasing Each Series
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1999-1 Certificateholder's Invested Amount......................................... 2
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SECTION 1.6 Procedure for Decreasing Each Series 1999-1 Certificateholder's
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Invested Amount.................................................................... 3
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SECTION 1.7 Reductions of the Commitments...................................................... 4
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SECTION 1.8 Interest; Commitment Fee, Etc...................................................... 4
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SECTION 1.9 Certificate Rate Limitation........................................................ 6
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ARTICLE II
AGREEMENT MODIFICATIONS
SECTION 2.1 Agreement Modifications............................................................ 6
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ARTICLE III
DISTRIBUTIONS AND REPORTS
SECTION 3.1 Distributions..................................................................... 16
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SECTION 3.2 Reports, Statements and Notices................................................... 16
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ARTICLE IV
CHANGE IN CIRCUMSTANCES
SECTION 4.1 Requirements of Law............................................................... 18
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SECTION 4.2 Taxes............................................................................. 20
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SECTION 4.3 Indemnity......................................................................... 22
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SECTION 4.4 Limitation........................................................................ 23
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i
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS......... 27
Section 4.01 Rights of Certificateholders......................................... 27
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Section 4.02 Establishment of Collection Account.................................. 28
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Section 4.03 Collections and Allocations.......................................... 29
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Section 4.04 Daily Allocations of Collections Allocated to a Series............... 31
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Section 4.05 Determination of Interest Distributable on Investor Certificates..... 31
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Section 4.06 Determination of Principal Distributable on Investor Certificates.... 31
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Section 4.07 Distributions from Series Collection Sub-subaccounts................. 32
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Section 4.08 Funds Unrelated to Receivables....................................... 32
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ARTICLE V
DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS.................................... 32
Section 5.01 Distributions........................................................ 32
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Section 5.02 Monthly Investor Certificateholders' Statement; Annual Tax
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Statement............................................................ 32
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ARTICLE VI
THE CERTIFICATES................................................................... 33
Section 6.01 The Certificates..................................................... 33
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Section 6.02 Authentication of Certificates....................................... 34
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Section 6.03 Registration of Transfer and Exchange of Certificates................ 34
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Section 6.04 Mutilated, Destroyed, Lost or Stolen Certificates.................... 36
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Section 6.05 Persons Deemed Owners................................................ 36
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Section 6.06 Appointment of Paying Agent.......................................... 37
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Section 6.07 Access to List of Certificateholders' Names and Addresses............ 37
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Section 6.08 Authenticating Agent................................................. 38
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Section 6.09 New Issuances........................................................ 39
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Section 6.10 Book-Entry Certificates.............................................. 40
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Section 6.11 Notices to Clearing Agency........................................... 41
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Section 6.12 Definitive Certificates.............................................. 41
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Section 6.13 Letter of Representations............................................ 42
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ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR........................................... 42
Section 7.01 Liability of the Transferor......................................... 42
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Section 7.02 Merger or Consolidation of, or Assumption of the Obligations of,
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the Transferor...................................................... 42
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ii
TABLE OF CONTENTS
(continued)
Page
SECTION 8.12 Limitation of Payments by Transferor.............................................. 34
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SECTION 8.13 No Bankruptcy Petition............................................................ 34
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SECTION 8.14 The Trustee....................................................................... 34
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SECTION 8.15 Consent to Jurisdiction........................................................... 35
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SECTION 8.16 Credit Agreements................................................................. 35
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ARTICLE IX
DEFINITIONS
SECTION 9.1 Definitions....................................................................... 35
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SCHEDULES
Schedule 1 Commitments
Schedule 2 List of Trust Accounts
Schedule 3 Initial Invested Amount
EXHIBITS
Exhibit A Form of Notice of Increase
Exhibit B Form of Notification of Obligors
Exhibit C Form of Commitment Transfer Supplement
Exhibit D Form of Series 1999-1 Investor Certificate
iii
Section 11.08 Successor Trustee........................................59
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Section 11.09 Merger or Consolidation of Trustee.......................60
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Section 11.10 Appointment of Co-Trustee or Separate Trustee............60
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Section 11.11 Tax Returns..............................................61
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Section 11.12 Trustee May Enforce Claims Without Possession of
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Certificates......................................................62
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Section 11.13 Suits for Enforcement....................................62
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Section 11.14 Rights of Certificateholders to Direct Trustee...........62
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Section 11.15 Representations and Warranties of Trustee................63
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Section 11.16 Maintenance of Office or Agency..........................63
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Section 11.17 Statements, Certificates and Reports.....................63
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ARTICLE XII
TERMINATION............................................................64
Section 12.01 Termination of Trust.....................................64
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Section 12.02 Optional Purchase and Series Termination Date of Investor
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Certificates of any Series........................................64
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Section 12.03 Final Payment............................................65
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Section 12.04 Transferor's Termination Rights..........................66
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ARTICLE XIII
MISCELLANEOUS PROVISIONS...............................................67
Section 13.01 Amendment................................................67
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Section 13.02 Protection of Right, Title and Interest of Trust.........68
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Section 13.03 Limitation on Rights of Certificateholders...............69
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Section 13.04 Governing Law............................................70
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Section 13.05 Notices..................................................70
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Section 13.06 Severability of Provisions...............................70
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Section 13.07 Assignment...............................................71
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Section 13.08 Certificates Nonassessable and Fully Paid................71
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Section 13.09 Further Assurances.......................................71
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Section 13.10 No Waiver; Cumulative Remedies...........................71
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Section 13.11 Counterparts.............................................71
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Section 13.12 Third-Party Beneficiaries................................71
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Section 13.13 Actions by Certificateholders............................71
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Section 13.14 Merger and Integration...................................72
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Section 13.15 Headings.................................................72
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Section 13.16 Enhancement Providers....................................72
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Section 13.17 Schedules and Exhibits...................................73
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Section 13.18 Assignment of Related Property...........................73
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Section 13.19 No Proceedings...........................................73
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Section 13.20 Texas Limited Liability Company Act......................73
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iv
(b) The Series 1999-1 Certificates shall, upon issue, be executed and
delivered by the Transferor to the Trustee for authentication and redelivery as
provided in Section 1.4 hereof and Section 6.01 of the Agreement.
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SECTION 1.3 Purchases of Interests in the Series 1999-1 Certificates.
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(a) Initial Purchase. Subject to the terms and conditions of this Supplement,
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the Initial Series 1999-1 Certificateholder hereby agrees (A) to purchase on the
Issuance Date a Series 1999-1 Certificate in an amount equal to the Initial
Invested Amount and (B) to maintain the Invested Amount of its Series 1999-1
Certificate during the Revolving Period, subject to decrease during the
Revolving Period, in accordance with the provisions of this Supplement. Payments
by the Initial Series 1999-1 Certificateholder in respect of its Series 1999-1
Certificate shall be made in immediately available funds on the Issuance Date to
the Agent for payment to the Transferor.
(b) Maximum Invested Amount. Notwithstanding anything to the contrary
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contained in this Supplement, at no time shall the Invested Amount of any Series
1999-1 Certificateholder exceed such Series 1999-1 Certificateholder's
Commitment at such time.
SECTION 1.4 Delivery. On the Issuance Date, the Transferor shall sign
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on behalf of the Trust and shall deliver to the Trustee pursuant to Section 6.01
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of the Agreement, and the Trustee, upon receipt, shall so authenticate the
initial Series 1999-1 Certificate in the name of the Initial Series 1999-1
Certificateholder and with a Commitment Percentage of 100% and deliver such
Series 1999-1 Certificate to the Initial Series 1999-1 Certificateholder. The
Trustee shall mark on its books the actual Invested Amount of each Series 1999-1
Certificateholder outstanding on any date of determination, which, absent
manifest error, shall constitute prima facie evidence of such outstanding
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Invested Amount from time to time.
SECTION 1.5 Procedure for Initial Issuance and for Increasing Each
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Series 1999-1 Certificateholder's Invested Amount. (a) Subject to Section 1.5(b)
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of this Supplement, on the Issuance Date, the Initial Series 1999-1
Certificateholder agrees to purchase a Series 1999-1 Certificate in accordance
with Section 1.3(a) of this Supplement and on any Payment Date during the
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Revolving Period, each Series 1999-1 Certificateholder agrees that the Series
1999-1 Aggregate Invested Amount may be increased by increasing pro rata based
upon Commitment Percentage each Series 1999-1 Certificateholder's Invested
Amount (an "Increase"), up to an amount, with respect to each such Series 1999-1
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Certificateholder, not exceeding such Series 1999-1 Certificateholder's
Commitment, upon the request of the Servicer or the Transferor on behalf of the
Trust (each date on which an increase in the Series 1999-1 Aggregate Invested
Amount occurs hereunder being herein referred to as the "Increase Date"
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applicable to such Increase); provided, however, that the Servicer or the
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Transferor, as the case may be, shall have given the Agent irrevocable written
notice (effective upon receipt) (with a copy thereof to the Trustee and, as
applicable, the Transferor or the Servicer), substantially in the form of
Exhibit A hereto, of such request no later than two Business Days prior to such
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Increase Date. Such notice shall state (x) the Issuance Date or the Increase
Date, as the case may be which, in the case of an
2
THIS POOLING AND SERVICING AGREEMENT, dated as of May 7, 1999 as amended
and restated as of August 20, 1999, is by and among CSI FUNDING, INC., a
Delaware corporation, as Transferor, COMPUCOM SYSTEMS, INC., a Delaware
corporation, as Servicer, and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association, as Trustee.
This Pooling and Servicing Agreement shall be applicable to the maintenance
of the Trust and the governance of the Transferor Certificate and, upon the
execution of any Supplement, shall apply also to the issuance of any Series of
Certificates issued thereby.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, for the benefit of the
Certificateholders and for the benefit of any Enhancement Provider with respect
to any Series to the extent provided herein:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. For all purposes of this Agreement, except as
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otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Annex X which is
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incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
"Agreement" means this Pooling and Servicing Agreement as it may from time
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to time be amended, supplemented or otherwise modified in accordance with the
terms hereof, including by any Supplement.
Section 1.02 Other Definitional Provisions.
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(a) All terms defined in any Supplement or this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto to thereto, accounting terms not defined in Annex X or
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otherwise defined herein, and accounting terms partly defined in Annex X or
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otherwise defined herein, to the extent not defined, shall have the respective
meanings given to them under GAAP. To the extent that the definitions of
accounting terms herein or in Annex X are inconsistent with the meanings of such
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terms under GAAP, the definitions contained herein or in Annex X shall control.
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(c) The agreements, representations and warranties of CompuCom in this
Agreement in its capacity as Servicer shall be deemed to be the agreements,
representations and warranties of CompuCom solely in such capacity.
(d) The words "hereof," "herein" and "hereunder" and words of similar
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import when used in this Agreement or any Supplement shall refer to such
Supplement or this Agreement, as the case may be, as a whole and not to any
particular provision of such Supplement or this Agreement, as the case may be;
and Section, Schedule and Exhibit references contained in this Agreement or any
Supplement are references to Sections, Schedules and Exhibits in or to this
Agreement or such Supplement unless otherwise specified.
(e) The word "including" (and with correlative meaning "include") means
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including without limiting the generality of any description preceding such
term.
Section 1.03 Calculations and Payments. Unless otherwise specified herein,
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expressions of a time of day refer to such time in New York, New York. Except as
otherwise specified in this Agreement or in a Supplement, amounts payable
hereunder shall be paid in immediately available funds. Whenever any reference
is made to an amount or time the determination or calculation of which is
governed by this Section 1.03, the provisions of this Section 1.03 shall be
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applicable to such determination or calculation, whether or not reference is
specifically made to this Section 1.03, unless some other method of
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determination or calculation is expressly specified in the particular provision.
ARTICLE II
CONVEYANCE OR RECEIVABLES; ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Receivables. By execution of this Agreement the
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Transferor does hereby assign, transfer and otherwise convey to the Trust from
time to time, without recourse (except as specifically provided herein), and
without any other formal or other written instrument of assignment, all of the
Transferor's right, title and interest in, to and under (i) all Receivables
existing on the date of execution hereof and all Receivables thereafter
generated (but excluding Reconveyed Receivables), (ii) all Related Property,
(iii) all monies due or to become due with respect thereto and (iv) all
Collections and other proceeds (as defined in the UCC) of any of the foregoing.
Such property, together with (x) all monies relating to the Receivables on
deposit in the Collection Account and any other Series Accounts and (y) the
benefits of any Enhancements shall constitute the assets of the Trust (the
"Trust Assets"). Notwithstanding anything to the contrary in this Agreement, the
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Trust Assets shall not include proceeds (as defined in the UCC) of returned
inventory. The foregoing transfer, assignment and conveyance does not constitute
and is not intended to result in the creation, or an assumption by the Trust,
the Trustee, any Enhancement Provider or any Investor Certificateholder, of any
obligation of CompuCom, the Transferor or any other Person in connection with
the Receivables or under any
2
Payment Date, of the Monthly Interest Amount for the Series 1999-1
Certificates payable on such Payment Date with respect to the related
Accrual Period.
(b) The Trustee (acting at the written direction of the Servicer,
pursuant to a Settlement Statement or otherwise) shall pay to the Agent, for the
account of the Initial Series 1999-1 Certificateholder a commitment fee (the
"Commitment Fee") with respect to each Accrual Period, on each Payment Date in
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an amount equal to the product of (A) the Commitment Fee Percentage, times (B)
the daily average Liquidity Commitment Amount during the Accrual Period, times
(C) a fraction the numerator of which is the number of days in the related
Accrual Period and the denominator of which is three hundred sixty. The
"Commitment Fee" with respect to any other Series 1999-1 Certificateholder shall
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mean the amount described in a fee letter among such Series 1999-1
Certificateholder, the Transferor and the Agent. To the extent that on any
Payment Date funds distributed to the Agent pursuant to Section 4.07(b)(iii) of
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the Agreement as set forth in this Supplement are insufficient to pay the
Commitment Fee due on such date, the Trustee shall pay the Agent the amount of
any such deficiency out of funds otherwise distributable to the Transferor
pursuant to Section 4.03(a)(ii) of the Agreement until such Commitment Fee is
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paid in full.
(c) The Trustee (acting at the written direction of the Servicer,
pursuant to a Settlement Statement or otherwise) shall pay to the Agent for the
pro rata account of the Series 1999-1 Certificateholders in accordance with
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their Commitment Percentages a program fee (the "Program Fee") with respect to
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each Accrual Period, on each Payment Date in an amount equal to the product of
(A) the Program Fee Percentage, times (B) the daily average Series 1999-1
Aggregate Invested Amount during such Accrual Period, times (C) a fraction the
numerator of which is the number of days in the related Accrual Period and the
denominator of which is three hundred sixty. To the extent that on any Payment
Date funds distributed to the Agent pursuant to Section 4.07(b)(ii) of the
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Agreement as set forth in this Supplement are insufficient to pay the Program
Fee due on such date, the Trustee shall pay the Agent the amount of any such
deficiency out of funds otherwise distributable to the Transferor pursuant to
Section 4.03(a)(ii) of the Agreement until such Program Fee is paid in full.
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(d) Calculations of the Alternate Base Rate under this Supplement shall
be made on the basis of a 365-day (or, where applicable, a 366-day) year. CP
Rates, Eurodollar Rates, Commitment Fees and Program Fees shall be calculated on
the basis of a 360-day year for actual days elapsed. Each determination of the
Certificate Rate, the Commitment Fee and the Program Fee (and the components
thereof) by the Agent shall be conclusive and binding upon each of the parties
hereto in the absence of manifest error.
(e) In the event, and on each occasion, that on the day two Business
Days prior to the commencement of any Accrual Period when not funding at the CP
Rate the Agent shall have determined that dollar deposits in the principal
amounts of the related LIBOR Rate Tranche are not generally available in the
London interbank market, or that the rates at which such dollar deposits are
being offered will not adequately and fairly reflect the cost to any Series
1999-1
5
Certificateholder or Program Support Provider of making or maintaining such
LIBOR Rate Tranche during such Accrual Period, or that reasonable means do not
exist for ascertaining the Eurodollar Rate, the Agent shall, as soon as
practicable thereafter, give written or telecopy notice of such determination to
the Transferor, the Servicer and the Series 1999-1 Certificateholders. In the
event of any such determination, until the Agent shall have advised the
Transferor, the Servicer and the Series 1999-1 Certificateholders that the
circumstances giving rise to such notice no longer exist, any LIBOR Rate Tranche
shall be deemed to be a Prime Rate Tranche. Each such determination by the Agent
hereunder shall be conclusive absent manifest error.
SECTION 1.9 Certificate Rate Limitation. Notwithstanding anything herein
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to the contrary, if at any time any Certificate Rate, together with all fees,
charges and other amounts which are treated as interest on the Series 1999-1
Certificates, under applicable law (collectively the "Charges"), shall exceed
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the maximum lawful rate (the "Maximum Rate") which may be contracted for,
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charged, taken, received or reserved by the Series 1999-1 Certificateholders in
accordance with the terms hereof, then such Certificate Rate, together with all
Charges payable in respect of the Series 1999-1 Certificates, shall be limited
to the Maximum Rate and, to the extent lawful, such Certificate Rate and Charges
that would have been payable in respect of the Series 1999-1 Certificates, but
were not payable as a result of the operation of this Section, shall be
cumulated and the Certificate Rate and Charges payable to such Series 1999-1
Certificateholders in respect of other periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Series 1999-1 Certificateholders.
ARTICLE II
AGREEMENT MODIFICATIONS
SECTION 2.1 Agreement Modifications.
The following terms of the Agreement are hereby modified only with respect
to this Supplement and the Series 1999-1 Investor Certificates as follows:
Section 2.05(c) is modified to add the phrase ", the Agent" after the
phrase "any request of the Trustee" where it appears therein. The cost and
expense of the Agent or its agents or representatives incurred in connection
with any visit or examination described in Section 2.05(c) shall be the
responsibility of the Transferor.
Section 3.01(e) is modified to add the phrase "and the Series 1999-1
Certificateholders consent thereto" immediately before the period at the end of
the second sentence thereof.
Section 3.03 is modified by adding the following new paragraph (v)
immediately after paragraph (u) thereof:
6
(v) No Material Adverse Change. Since December 31, 1998 there has
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been no material adverse change in CompuCom's financial condition,
business, properties or operations.
Section 3.04(a) is modified to add the phrase "or the Agent" after the
phrase "the Trustee" each place it appears in the first and second sentences
thereof.
Article III is modified by adding the following new Section 3.11 to the end
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thereof:
Section 3.11 Program Costs. So long as CompuCom is the Servicer, the
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Servicer shall pay from its servicing compensation all Program Costs as they
arise.
Section 4.02 is modified to add the following:
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(d) Establishment of Trust Accounts. (i) The Trustee shall cause to
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be established and maintained in the name of the Trustee, on behalf of the
Trust, (x) for the benefit of the Series 1999-1 Certificateholders and (y) for
the benefit, subject to the prior and senior interest of the Series 1999-1
Certificateholders, of the holder of the Transferor Certificate, (A) a
subaccount of the Collection Account (the "Series 1999-1 Collection
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Subaccount"), which subaccount is the Series Collection Subaccount with respect
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to Series 1999-1; (B) two subaccounts of the Series 1999-1 Collection
Subaccount: (1) the Series 1999-1 Principal Collection Sub-subaccount, and (2)
the Series 1999-1 Non-Principal Collection Sub-subaccount (respectively, the
"Series 1999-1 Principal Collection Sub-subaccount" and the "Series 1999-1 Non-
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Principal Collection Sub-subaccount"); (C) a subaccount of the Series 1999-1
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Principal Collection Sub-subaccount (the "Series 1999-1 Principal Collection
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Subordinated Sub-subaccount"); and (D) a subaccount of the Series 1999-1 Non-
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Principal Collection Sub-subaccount (the "Series 1999-1 Accrued Interest Sub-
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subaccount"). The subaccounts and sub-subaccounts established pursuant to this
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Section 4.02(d)(i) and listed on Schedule 2 attached to the Supplement with
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respect to Series 1999-1 shall be referred to collectively as the "Trust
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Accounts". Each Trust Account shall bear a designation indicating that the funds
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deposited therein are held for the benefit of the Persons (and for each such
Person, to the extent) set forth in clauses (x) and (y) above. The Trustee, on
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behalf of the Series 1999-1 Certificateholders, shall possess all right, title
and interest in all funds from time to time on deposit in, and all Eligible
Investments credited to, the Trust Accounts and in all proceeds thereof. The
Trust Accounts shall be under the sole dominion and control of the Trustee for
the exclusive benefit of the Persons (and, for each such Person to the extent)
set forth in clauses (x) and (y) above.
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(ii) All Eligible Investments in the Trust Accounts shall be held by the
Trustee, on behalf of the Series 1999-1 Certificateholders, for the exclusive
benefit of the Persons (and, for each such Person, to the extent) set forth in
clauses (x) and (y) of Section 4.02(d)(i) above. Funds on deposit in a Trust
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Account shall, at the direction of the Servicer, be invested together with funds
held in other Trust Accounts. After giving effect to any distribution to the
Transferor pursuant to Section 4.04(c), amounts on deposit and available for
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investment in the Trust Accounts shall be
7
invested by the Trustee at the written direction of the Servicer in Eligible
Investments that mature, or that are payable or redeemable upon demand of the
holder thereof, so that funds will be available on or prior to the Business Day
immediately preceding the related Payment Date. If the Trustee does not receive
written direction from the Servicer, any such amounts on deposit shall be
invested in the investments described in subclause (iv) of the definition of
Eligible Investments.
Section 4.03(a)(i) is modified in its entirety to read as follows:
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(i) The Servicer will allocate, pay or deposit all Collections with
respect to the Receivables for each Business Day as described in this Article
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IV. Except as provided below, no later than the Business Day following the
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receipt of any Collections (or, in the case of checks received directly by the
Servicer, two Business Days after receipt), the Servicer shall deposit (or cause
to be deposited) such Collections into the Concentration Account and shall
allocate and transfer such Collections as required by Section 4.03(a)(ii) below.
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In the event a Servicer Default or an Early Amortization Event shall have
occurred, the Servicer shall cause (unless the Control Party and the Servicer
shall have agreed in writing that the Servicer need not comply with this
sentence for the period or periods set forth in such agreement) all Collections
to be remitted directly (without deposit into the Concentration Account) to the
Collection Master Subaccount within two Business Days after receipt of such
Collections.
Section 4.04 is modified in its entirety to read as follows:
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Section 4.04. Daily Allocations. (a) The portion of Collections allocated
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to the Series 1999-1 Investor Certificates pursuant to this Article IV shall be
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allocated and distributed as set forth in this Article IV by the Trustee based
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solely on the information provided it by the Servicer in the Daily Report (upon
which the Trustee may conclusively rely unless otherwise notified by the Control
Party).
(b)(i) On each Business Day, (x) an amount equal to the Accrued Expense
Amount for such day shall be transferred by the Trustee from the Series 1999-1
Collection Subaccount to the Series 1999-1 Non-Principal Collection Sub-
subaccount and (y) an amount equal to the Monthly Interest Amount for such day
shall be transferred by the Trustee from the Series 1999-1 Non-Principal
Collection Sub-subaccount to the Series 1999-1 Accrued Interest Sub-subaccount.
(ii) Following the transfers pursuant to clause (i) above, on each Business
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Day any remaining funds on deposit in the Series 1999-1 Collection Subaccount
shall be transferred by the Trustee to the Series 1999-1 Principal Collection
Sub-subaccount.
(c)(i) On each Business Day during the Revolving Period (including Payment
Dates), after giving effect to all allocations of Collections on such Business
Day, amounts on deposit in the Series 1999-1 Principal Collection Sub-subaccount
shall (but only to the extent that the Trustee has received a Daily Report which
reflects the receipt of the Collections on deposit
8
therein) be distributed as indicated on the Daily Report by the Trustee in the
following order of priority: (A) to be retained in the Series 1999-1 Principal
Collection Sub-subaccount to the extent the Series 1999-1 Target Receivables
Amount exceeds the Series 1999-1 Allocated Receivables Amount; (B) to any
Successor Servicer, any Additional Servicing Fee due and arising; (C) to the
Series 1999-1 Certificateholders to the extent of any Commitment Fees and
Program Fees that were accrued and unpaid as of the previous Payment Date; (D)
if CompuCom is not the Servicer, to the payment of all accrued and unpaid
Program Costs; (E) to the Agent to the extent of any accrued and unpaid Article
IV Costs; and (F) subject to the last sentence of Section 4.04(d), (x) to the
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Transferor in accordance with the directions contained in the Daily Report or
(y) at the election of the Transferor by written notice to the Servicer, the
Agent and the Trustee, (A) to be retained in the Series 1999-1 Principal
Collection Sub-subaccount, an amount specified in such notice (which amount may
be distributed at the direction of the Transferor) or (B) to the Series
Principal Collection Sub-subaccount of another Series.
(ii) On each Business Day during the Early Amortization Period (including
Payment Dates) (after giving effect to all allocations of Collections on such
Business Day and transfers pursuant to Sections 4.04(d) and (e)), amounts on
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deposit in the Series 1999-1 Principal Collection Sub-subaccount shall (but only
to the extent that the Trustee has received a Daily Report which reflects the
receipt of the Collections on deposit therein) be distributed as indicated on
the Daily Report by the Trustee in the following order of priority: (A) to be
retained in the Series 1999-1 Principal Collection Sub-subaccount, an amount up
to the Series 1999-1 Aggregate Invested Amount; (B) to any Successor Servicer,
any Additional Servicing Fee due and arising; and (C) the remainder of such
funds shall be distributed by the Trustee in accordance with clauses (B) through
-----------
(E) of Section 4.04(c)(i) above.
--- ------------------
(d) On each Business Day during the Early Amortization Period (including
Payment Dates), the Trustee shall transfer from the Series 1999-1 Principal
Collection Sub-subaccount to the Series 1999-1 Principal Collection Subordinated
Sub-subaccount out of amounts deposited into the Series 1999-1 Principal
Collection Sub-subaccount (prior to any withdrawal pursuant to Section 4.04(c)
---------------
above) the product of (i) the Series 1999-1 Subordinated Percentage and (ii) the
amount of funds deposited into the Series 1999-1 Principal Collection Sub-
subaccount on such day (other than funds transferred to the Series 1999-1
Principal Collection Sub-subaccount pursuant to Section 4.04(e) below). Upon
---------------
termination of the Early Amortization Period, amounts remaining on deposit in
the Series 1999-1 Principal Collection Subordinated Sub-subaccount shall be
transferred to the Series 1999-1 Principal Collection Sub-subaccount to the
extent of the Adjusted Invested Amount and the remainder shall be distributed in
accordance with clauses (B) through (E) of Section 4.04(c)(i) above. The Trustee
----------- --- ------------------
shall not distribute any funds from the Series 1999-1 Principal Collection Sub-
subaccount and the Series 1999-1 Principal Collection Subordinated Sub-
subaccount to the Transferor (x) if any Prospective Early Amortization Event has
occurred and is continuing or (y) during the Early Amortization Period until the
Adjusted Invested Amount has been reduced to zero and all other amounts owing
under this Supplement have been paid in full.
9
Agreement constitutes a valid sale or contribution to the Transferor of all
of the right, title and interest of CompuCom in and to the Receivables now
existing or hereafter created and in the Related Property and all monies
due or to become due with respect thereto (other than proceeds (as such
term is defined in the UCC) of returned inventory) and all proceeds (as
defined in the UCC) of each Receivable and the Related Property.
(B) Upon the filing of the financing statements described in Section
-------
2.01 and, in the case of the Receivables hereafter created and the proceeds
----
thereof (other than proceeds (as such term is defined in the UCC) of
returned inventory), upon the creation thereof, the Trust shall have a
first priority perfected security interest (as such term is defined in the
UCC) in such property free and clear of any Lien or interest of any Person,
except as otherwise contemplated by this Agreement. Except as otherwise
provided in this Agreement, neither the Transferor nor any Person claiming
through or under the Transferor has any claim to or interest in the
Collection Account or any Series Account. Nothwithstanding anything to the
contrary in this Agreement, the Trust shall have no interest in, to and
under proceeds (as defined in the UCC) of returned inventory relating to
the Receivables.
(b) Notice of Breach. The representations and warranties set forth in this
----------------
Section 2.04 shall survive the transfer and assignment of the Trust Assets to
------------
the Trust. Upon discovery by the Transferor, the Servicer or a Responsible
Officer of the Trustee of a breach of any of the representations and warranties
set forth in this Section 2.04, the Person discovering such breach shall give
------------
written notice to the other parties hereto within three Business Days of such
discovery.
(c) Transfer Upon Breach of Warranty. In the event of a breach with
--------------------------------
respect to a Receivable of any of the representations and warranties set forth
in Section 2.03(i) or 2.04(a) (other than Section 2.04(a)(iv)(A)), and (I) as a
--------------- ------- -----------------------
result thereof such Receivable is an Ineligible Receivable, and the exclusion of
such Receivable from the Aggregate Eligible Unpaid Balance would cause the
Aggregate Eligible Unpaid Balance to be less than the Aggregate Target
Receivables Amount, or (II) such breach has a material adverse effect on the
Investors' Interest of any Series in any Receivable, in each case as determined
without regard to any Enhancement with respect to any Series, and such material
adverse effect continues for 30 days after the earlier to occur of the discovery
of such breach by the Transferor or the Servicer or receipt of written notice of
such breach by the Transferor or the Servicer, then the Transferor shall cause
such Receivable to be removed from the Trust (a "Reconveyed Receivable"),
---------------------
without the need of any formal or other instrument of assignment, prior to the
second Business Day next following (x) the day on which such Aggregate Target
Deficiency Amount exists or (y) such 30th day, as the case may be, by making or
causing to be made (on a pro rata basis based on their respective Target
Deficiency Amounts (if any)) a deposit in the Series Principal Collection
Sub-subaccount of each outstanding Series in immediately available funds in an
aggregate amount equal to the Transfer Deposit Amount for such Reconveyed
Receivable. Such deposit(s) shall be considered a payment in full of the
Reconveyed Receivable during the Settlement Period to which such
8
Section 4.07 is modified in its entirety to read as follows:
------------
Section 4.07 Distributions. (a) On each Payment Date, the Servicer shall
-------------
direct the Trustee to distribute (and the Trustee shall distribute) to the
Series 1999-1 Certificateholders, from amounts on deposit in the Series 1999-1
Accrued Interest Sub-subaccount to the extent funds are available, an amount
equal to the sum of (i) the Monthly Interest Amount payable on such Payment Date
less any portion of such Monthly Interest Amount resulting from an increase in
the Eurodollar Rate because of an increase in the Eurodollar Rate Reserve
Percentage, plus (ii) the amount of any Monthly Interest Amount previously due
----
but not distributed to the Series 1999-1 Certificateholders on a prior Payment
Date less any portion of such Monthly Interest Amount resulting from an increase
in the Eurodollar Rate because of an increase in the Eurodollar Rate Reserve
Percentage, plus (iii) the amount of any Additional Interest for such Payment
----
Date and any Additional Interest previously due but not distributed to the
Series 1999-1 Certificateholders on a prior Payment Date; plus (iv) any portion
----
of the Monthly Interest Amount in clauses (i) or (ii) above which is not payable
pursuant to such clauses because such amount results from an increase in the
Eurodollar Rate because of an increase in the Eurodollar Rate Reserve
Percentage; provided, however, that during the Early Amortization Period or if
-------- -------
the Series 1999-1 Allocated Receivables Amount is less than the Series 1999-1
Target Receivables Amount, no amounts will be distributed pursuant to clauses
-------
(iii) or (iv) until repayment in full of the Series 1999-1 Aggregate Invested
-------------
Amount and all amounts payable pursuant to clauses (i) and (ii) above have been
paid.
(b) On each Payment Date, the Servicer shall direct the Trustee to apply
(and the Trustee shall apply) funds on deposit in the Series 1999-1 Non-
Principal Collection Sub-subaccount after the distributions referred to in
Section 4.07(a) on such Payment Date in the following order of priority to the
---------------
extent funds are available:
(i) an amount equal to the Monthly Trustee Fee shall be paid to
the Trustee;
(ii) an amount equal to the Servicing Fee for the Accrual Period
ending on such Payment Date shall be paid to the Servicer (less any amount
payable to the Trustee pursuant to this Agreement or to a Lock-Box Bank or
Wire Transfer Receipt Account Bank on account of customary fees and
returned items which shall be paid to the Trustee or any Lock-Box Bank or
Wire Transfer Receipt Account Bank); provided, that if CompuCom is the
--------
Servicer, the amounts required to be paid pursuant to clauses (ii) through
-------
(v) below shall be paid prior to the Servicing Fee;
---
(iii) an amount equal to the lesser of (a) Transition Costs and (b)
$100,000 shall be paid to any Successor Servicer;
(iv) an amount equal to the Program Fee for the Accrual Period
ending on such Payment Date, plus any portion of the Program Fee previously
due but not distributed to the Agent, shall be paid to the Agent;
11
(v) an amount equal to the Commitment Fee for the Accrual Period
ending on such Payment Date, plus any portion of the Commitment Fee
previously due but not distributed to the Agent, shall be paid to the
Agent; and
(vi) an amount equal to the Transition Costs not paid pursuant to
subsection (iii) above shall be paid to any Successor Servicer;
provided, however, (A) during the Early Amortization Period, no funds shall be
-------- -------
applied pursuant to clauses (iv) through (vi) above until repayment in full of
------------ ----
the Series 1999-1 Aggregate Invested Amount and (B) during the Revolving Period,
no funds shall be applied pursuant to clauses (ii) through (vi) above unless the
------------ ----
Series 1999-1 Allocated Receivables Amount equals or exceeds the Series 1999-1
Target Receivables Amount.
Any remaining amount on deposit in the Series 1999-1 Non-Principal
Collection Sub-subaccount not applied pursuant to clauses (i) through (vi) above
----------- ----
shall be deposited in the Transferor Collection Subaccount; provided, however,
-------- -------
that during the Early Amortization Period or if the Series 1999-1 Allocated
Receivables Amount is less than the Series 1999-1 Target Receivables Amount,
such remaining amounts shall be deposited in the Series 1999-1 Principal
Collection Sub-subaccount for distribution in accordance with Section
-------
4.07(c)(ii) below.
-----------
(c)(i) On each Payment Date during the Revolving Period, the Servicer shall
direct the Trustee to apply (and the Trustee shall apply) amounts on deposit in
the Series 1999-1 Principal Collection Sub-subaccount in accordance with Section
-------
4.04(c)(i);
----------
(ii) On each Payment Date during the Early Amortization Period, the Trustee
will apply amounts retained on deposit in the Series 1999-1 Principal Collection
Sub-subaccount pursuant to Section 4.04(c)(ii) as of the last day of the related
-------------------
Settlement Period in the following order of priority:
(1) an amount equal to the Series 1999-1 Monthly Principal Payment for
such Payment Date shall be distributed to the Series 1999-1
Certificateholders;
(2) an amount equal to the Additional Servicing Fee, if any, due and
arising shall be distributed to the Successor Servicer; and
(3) the remaining amount on deposit in the Series 1999-1 Principal
Collection Sub-subaccount as of the last day of the related Settlement
Period shall be applied in accordance with clauses (B) through (E) of
----------- ---
Section 4.04(c)(i).
------------------
Article III is amended by adding the following section at the end thereof:
-----------
Section 7.04 Liabilities. The Transferor agrees to pay, directly to the
-----------
injured party, subject to the next sentence, the entire amount of any losses,
claims, damages or liabilities (other than those incurred by a 1999-1
Certificateholder as a result of defaults on the Receivables and
12
shall be at the cost and expense of the party or parties making such examination
or visit except as otherwise provided in any Enhancement Agreement and except as
set forth in any Supplement.
(d) Continuous Perfection; Computer Records. The Transferor shall not
---------------------------------------
change its name, identity or structure in any manner which might make any
financing or continuation statement filed hereunder misleading within the
meaning of Section 9-402(7) of the UCC (or any other then applicable provision
of the UCC) unless the Transferor shall have given the Trustee at least 90 days'
prior written notice thereof and shall have taken all action 60 days prior to
making such change (or made arrangements to take such action substantially
simultaneously with such change if it is impossible to take such action in
advance) necessary or advisable to amend such financing statement or
continuation statement so that it is not misleading. The Transferor shall not
change its chief executive office or change the location of its principal
records concerning the Receivables, the Related Property or the Collections from
the locations specified in Section 2.03(j) unless it has given the Trustee at
---------------
least 30 days' prior written notice of its intention to do so and has taken such
action as is necessary or advisable to cause the interest of the Trustee in the
Receivables and the other Trust Assets to continue to be perfected with the
priority required by this Agreement. The Transferor will at all times maintain
its principal executive office and any other office at which it maintains
records relating to the Receivables and the Related Property within the United
States of America. The Transferor will at all times, at its expense, indicate on
its books and records (including any computer files) that all Receivables and
Related Property have been transferred to the Trust pursuant to this Agreement.
(e) Extension or Amendment of Receivables. Provided no Early Amortization
-------------------------------------
Event shall have occurred and be continuing, and subject to Section 3.09, the
------------
Transferor shall only extend, amend or otherwise modify the terms of any
Receivable, or amend, modify or waive any term or condition of any Contracts
related thereto, or permit the Servicer to do any of the foregoing, in
accordance with the Credit and Collection Policy.
(f) Reports. The Transferor shall furnish to the Trustee and to each
-------
Rating Agency as soon as possible and in any event within two Business Days
after the occurrence of each Early Amortization Event or the Transferor's
knowledge of a Prospective Early Amortization Event, the statement of one of the
officers of the Transferor primarily responsible for administering the
transactions contemplated by this Agreement setting forth the details of such
Early Amortization Event or Prospective Early Amortization Event and the action
taken, or which the Transferor proposes to take, with respect thereto.
11
1999-1 Allocated Receivables Amount is less than the Series 1999-1 Target
Receivables Amount for one Business Day and Majority Series 1999-1
Certificateholders affirmatively vote to cause the Amortization Period to
commence or (iii) the Series 1999-1 Allocated Receivables Amount is less
than the Series 1999-1 Target Receivables Amount for one to five Business
Days and Series 1999-1 Certificateholders having, in the aggregate, more
than 66.67% of the Aggregate Commitment Amount do not vote to continue the
Revolving Period notwithstanding such event within ten Business Days of the
occurrence of such event;
(xi) CompuCom shall cease to own all of the outstanding capital
stock of the Transferor, free and clear of all Liens, other than a Lien
arising under the Credit Agreement;
(xii) the Series 1999-1 Aggregate Invested Amount is not paid in
full on the Scheduled Maturity Date;
(xiii) the average of the Sales-Based Default Ratios as of the three
most recent Determination Dates shall exceed 7%;
(xiv) a Purchase Termination Event shall occur and be continuing;
(xv) any event that has had, or could reasonably be expected to
have, a Material Adverse Effect shall occur and, solely in the case of a
material adverse effect described in clause (i) of the definition thereof
----------
with respect to CompuCom, such circumstance has continued for more than 90
days;
(xvi) the Series 1999-1 Certificates are not rated at least "AA" by
S&P on or before August 31, 1999; or
(xvii) the Delinquency Ratio as of any Cut-Off Date shall exceed 10%;
provided, however, that if the Aggregate Eligible Unpaid Balance is at
-------- -------
least 142% of the Series 1999-1 Target Receivables Amount on such Cut-Off
Date, the circumstance described in this subparagraph (xvii) for such Cut-
Off Date shall not constitute an Early Amortization Event; or
(xviii) the average of the Delinquency Ratios as of the three most
recent Determination Dates shall not exceed 15%.
In clause (a) of Section 9.01, the phrase "subparagraphs (i), (ii) or
---------- ------------ ----------------- ----
(iii)" is deleted and the phrase "subparagraphs (i), (ii), (iii), (viii), (ix),
----- ----------------- ---- ----- ------ ----
(x), (xi), (xiii), (xiv), (xv), (xvi), and (xvii)" is substituted therefor.
--- ---- ------ ----- ---- ----- ------
In clause (b) of Section 9.01, the phrase "subparagraphs (iv), (v), (vi) or
---------- ------------ ------------------ --- ----
(vii)" is deleted and the phrase "subparagraphs (iv), (v), (vi), (vii), or
----- ------------------ --- ---- -----
(xviii)" is substituted therefor.
-------
14
The following new clause (c) is hereby added to Section 9.01:
---------- ------------
(c) in the case of any event described in subparagraph (xii), an Early
------------------
Amortization Event with respect to Series 1999-1 shall occur without any notice
or other action on the part of any Control Party or any Certificateholder
immediately upon the occurrence of such event.
Article X is hereby modified as follows:
---------
Section 10.01 is hereby modified by deleting "or" after the semicolon at
-------------
the end of clause (c), and adding the following new clauses (e), (f) and (g):
---------- ---------------- ---
(e) if, while CompuCom is the Servicer, at the end of the most recent
fiscal quarter of CompuCom its Tangible Net Worth is less than the sum of
(a) $120,000,000, plus (b) 75% of cumulative Consolidated Net Income for
the period beginning on the Closing Date for the Series 1999-1 and ending
on the date of calculation (provided that if Consolidated Net Income is
less than zero for any Fiscal Year, or for the completed portion of the
then-current Fiscal Year, Consolidated Net Income for such Fiscal Year or
portion shall be deemed to be zero) plus (c) 100% of the net cash proceeds
received by CompuCom after the Closing Date for the Series 1999-1 as a
result of any offering of equity securities (or securities convertible into
or exchangeable for equity securities) plus (d) an amount equal to the
Tangible Net Worth of any Person that becomes a Subsidiary of CompuCom
after the Closing Date for the Series 1999-1 or any Person (other than
CompuCom or a Subsidiary) is merged with or consolidated with or into
CompuCom or any Subsidiary after the Closing Date for the Series 1999-1 or
any Person substantially all of the assets of which were acquired by
CompuCom or any Subsidiary after the Closing Date for the Series 1999-1, in
each case to the extent the purchase price paid therefor by CompuCom or the
applicable Subsidiary is paid in equity securities of CompuCom or any
Subsidiary.
(f) A default shall have occurred and be continuing under the Credit
Agreement or any instrument or agreement evidencing, securing or providing
for the issuance of indebtedness for borrowed money in excess of $1,000,000
of, or guaranteed by, CompuCom or any Subsidiary thereof, which default is
a payment default or if unremedied, uncured, or unwaived (with or without
the passage of time or the giving of notice or both) would permit
acceleration of the maturity of such indebtedness and such default shall
have continued unremedied, uncured or unwaived for a period long enough to
permit such acceleration; or any default under any agreement or instrument
relating to the purchase of receivables of CompuCom or any Subsidiary
thereof (other than this Agreement), if the effect of such default is to
terminate, or permit the termination of, the commitment of any party to
such agreement or instrument to purchase receivables or the right of
CompuCom or such Subsidiary to reinvest in receivables the principal amount
paid by any party to such agreement or instrument for an interest in
receivables.
(g) if CompuCom breaches the covenants of Section 8.16 hereof.
15
Section 10.01 is further modified to add the following after the last
-------------
paragraph thereof:
Notwithstanding anything to the contrary in this Agreement, during the
continuance of an Early Amortization Event, the Control Party shall have the
right (i) to deliver a Termination Notice and designate as a Successor Servicer
a party of the Control Party's choice, which Successor Servicer shall be
approved by the Trustee, which approval shall not be unreasonably withheld, and
(ii) to instruct the Trustee to take other actions acceptable to the Control
Party in respect to the servicing of the Receivables, including (x) notification
of Obligors, in substantially the form attached hereto as Exhibit B, and (y)
---------
after consultation with CompuCom, initiation of lawsuits against Obligors solely
with respect to Receivables which have not been paid for at least 90 days after
the Due Date for such Receivables.
ARTICLE III
DISTRIBUTIONS AND REPORTS
SECTION 3.1 Distributions. The Trustee shall distribute to the Agent by
-------------
wire transfer an amount equal to the amount to be distributed to the Series
1999-1 Certificateholders as contemplated by Section 5.01 of the Agreement by
------------
11:00 a.m. (New York City time) on each Payment Date in accordance with Section
-------
8.4 hereof.
---
SECTION 3.2 Reports, Statements and Notices. In addition to their
-------------------------------
obligations under the Agreement, the Transferor and the Servicer agree as
follows:
(a) Daily Reports. If requested by the Agent, the Servicer shall
-------------
provide the Agent with a Daily Report on the same day that it provides the
same to the Trustee in accordance with Section 3.04(b)(ii) of the
-------------------
Agreement. The Agent shall make copies of the Daily Report available to
the Series 1999-1 Certificateholders at their reasonable request at the
Agent's office in Pittsburgh, Pennsylvania.
(b) Monthly Settlement Statements. The Servicer shall provide the
-----------------------------
Agent and each Rating Agency with a Settlement Statement on the same day
that it provides the same to the Trustee in accordance with Section 3.04(c)
---------------
of the Agreement. The Agent shall forward a copy of each Settlement
Statement to any Series 1999-1 Certificateholder upon request by such
Series 1999-1 Certificateholder.
(c) Early Amortization Event/Distribution of Principal Notices.
----------------------------------------------------------
Upon the occurrence of an Early Amortization Event with respect to Series
1999-1, the Transferor or the Servicer, as the case may be, shall give
prompt written notice thereof to the Trustee, each Rating Agency and the
Agent within one Business Day of obtaining knowledge thereof. As promptly
as reasonably practicable after its receipt of notice of the occurrence of
any Early Amortization Event with respect to Series 1999-1, the Agent shall
give notice thereof to each Series 1999-1 Certificateholder. In addition,
two Business Days preceding each day on which a distribution of principal
is to be made
16
during the Early Amortization Period, the Servicer shall provide to the
Agent and each Rating Agency and shall direct the Agent to send notice to
each Series 1999-1 Certificateholder, which notice shall set forth the
amount of principal to be distributed on the related date to the Series
1999-1 Certificateholders with respect to the outstanding Series 1999-1
Certificates.
(d) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within 46 days after the end of each of the first three quarters of
each fiscal year CompuCom will furnish to the Agent and the Trustee (unless
the following information is readily available on-line, in which case no
copies need to be delivered unless requested by the Agent or the Trustee)
copies of the financial statements of CompuCom and its Subsidiaries
prepared on a consolidated basis, consisting of at least a balance sheet as
at the close of such quarter and statements of earnings for such quarter
and for the period from the beginning of the fiscal year to the close of
such quarter, in each case in conformity with GAAP (except for footnote
disclosures) and fairly presenting the consolidated financial position and
results of operations of CompuCom and its Subsidiaries for such period,
duly certified by the principal financial officer of CompuCom.
(e) Annual Financial Statements. As soon as available and in any
---------------------------
event within 91 days after the end of each fiscal year CompuCom will
furnish to the Agent and the Trustee (unless the following information is
readily available on-line, in which case no copies need to be delivered
unless requested by the Agent or the Trustee) copies of the audited
financial statements of CompuCom and its Subsidiaries prepared on a
consolidated basis, consisting of at least a balance sheet of CompuCom and
its Subsidiaries for such year and statements of earnings for such fiscal
year, in each case in conformity with GAAP and fairly presenting the
consolidated financial position and results of operations of CompuCom and
its Subsidiaries for such period, together with the report of its
independent auditors on such financial statements.
(f) Annual Holders' Tax Statement. On or before January 31 of each
-----------------------------
calendar year, beginning with calendar year 2000, the Trustee shall deliver
to the Paying Agent, which shall thereupon furnish to each Person who at
any time during the preceding calendar year was a Series 1999-1
Certificateholder, a statement prepared by the Servicer containing the
information as specified in Section 5.02(b) of the Agreement.
---------------
(g) Litigation. Each of Transferor and CompuCom will furnish to the
----------
Agent, as soon as possible and in any event within three Business Days of
Transferor's or CompuCom's actual knowledge thereof, notice of (i) any
litigation, investigation or proceeding which may exist at any time which
could be reasonably expected to have a Material Adverse Effect and (ii) any
material adverse development in previously disclosed litigation.
17
(h) Change in Credit and Collection Policy. Each of the Transferor
--------------------------------------
and CompuCom will furnish to the Agent, prior to its effective date, notice
of any material change in the Credit and Collection Policy.
(i) Other Information. Each of Transferor and CompuCom will furnish
-----------------
to the Agent copies of all other notices, requests and information
furnished to the Trustee under the Agreement and such other information
respecting the Receivables or the condition or operations, financial or
otherwise, of CompuCom or the Transferor or any of its Affiliates as the
Agent may from time to time reasonably request.
ARTICLE IV
CHANGE IN CIRCUMSTANCES
SECTION 4.1 Requirements of Law. (a) Notwithstanding any other
-------------------
provision herein, if after the Issuance Date the adoption of or any change in
any law or in the interpretation or application thereof or compliance by any
Series 1999-1 Certificateholder or other Affected Party with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Series 1999-1 Certificateholder or other
Affected Party to any tax of any kind whatsoever with respect to the
Transaction Documents or change the basis of taxation of payments to any
Series 1999-1 Certificateholder or other Affected Party in respect thereof
(except for Non-Excluded Taxes covered by Section 4.2 of this Supplement
-----------
and changes in the rate of taxes on the overall or branch net income of
such Series 1999-1 Certificateholder or franchise taxes assessed in lieu of
a tax on overall or branch net income of such Series 1999-1
Certificateholder);
(ii) shall impose, modify or deem applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Series 1999-1 Certificateholder or other Affected Party;
and the result of any of the foregoing is to increase the cost to such Series
1999-1 Certificateholder or other Affected Party by an amount which such Series
1999-1 Certificateholder or other Affected Party deems to be material, of
making, converting into, continuing or maintaining any portion of the Invested
Amount, or providing funding or any commitment under any Program Support
Agreement or to reduce any amount receivable hereunder or under any Program
Support Agreement in respect thereof, then, in any such case, the Trustee will
pay to such Series 1999-1 Certificateholder or such other Affected Party, as the
case may be, upon written demand, from amounts otherwise distributable to the
Transferor pursuant to Section 4.03(a)(ii) of the Agreement or pursuant to
-------------------
Section 4.04(c)(i) of this
------------------
18
Supplement, such additional amount or amounts as will compensate such Series
1999-1 Certificateholder or such other Affected Party, as the case may be, for
such additional costs incurred or reduced amount receivable.
(b) If any Series 1999-1 Certificateholder or other Affected Party shall
have determined after the Issuance Date that the adoption of or any change in
any law, rule, regulation or guideline regarding capital adequacy or in the
interpretation, administration or application thereof, or compliance by such
Series 1999-1 Certificateholder or other Affected Party or any corporation
controlling such Series 1999-1 Certificateholder or other Affected Party with
any request or directive regarding capital adequacy (whether or not having the
force of law) from any Governmental Authority made subsequent to the date hereof
shall or would have the effect of reducing the rate of return on such Series
1999-1 Certificateholder's, such other Affected Party's or such corporation's
capital as a consequence of its obligations hereunder or under any Program
Support Agreement to a level below that which such Series 1999-1
Certificateholder, such other Affected Party or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Series 1999-1 Certificateholder's, such other Affected Party's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Series 1999-1 Certificateholder or such other Affected Party to be
material, then from time to time, the Trustee shall promptly pay to such Series
1999-1 Certificateholder or such other Affected Party, as the case may be, upon
written demand, from amounts otherwise distributable to the Transferor pursuant
to Section 4.03(a)(ii) of the Agreement or pursuant to Section 4.04(c)(i) of
------------------- ------------------
this Supplement, such additional amount or amounts as will compensate such
Series 1999-1 Certificateholder or such other Affected Party, as the case may
be, for such reduction.
(c) If any Series 1999-1 Certificateholder or other Affected Party becomes
entitled to claim any additional amounts pursuant to Section 4.1(a) or (b)
-------------- ---
above, it shall promptly notify the Transferor (with a copy to the Agent) of the
event by reason of which it has become so entitled. A certificate as to any
additional amounts payable pursuant to this Section 4.1 submitted by such Series
-----------
1999-1 Certificateholder or such other Affected Party to the Transferor (with a
copy to the Agent and the Trustee) shall be conclusive in the absence of
manifest error. The agreements in this Section 4.1 shall survive the
-----------
termination of this Supplement and the Agreement and the payment of all amounts
payable hereunder.
(d) Failure or delay on the part of any Series 1999-1 Certificateholder or
other Affected Party to demand compensation for any increased costs or reduction
in amounts receivable or reduction in return on capital shall not constitute a
waiver of such Person's right to demand such compensation. The protection of
this Section 4.1 shall be available to each Series 1999-1 Certificateholder and
-----------
each other Affected Party regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, agreement, guideline
or other change or conditions which shall have occurred or been imposed.
SECTION 4.2 Taxes. (a) All payments under this Supplement to the Agent
-----
or to any Series 1999-1 Certificateholder shall be made free and clear of, and
without deduction or
19
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority ("Taxes"), excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Agent or any Series 1999-1
Certificateholder as a result of a present or former connection between the
Agent or such Series 1999-1 Certificateholder and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Agent or such Series 1999-1 Certificateholder having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Supplement). If any such non-excluded Taxes ("Non-Excluded Taxes") are required
------------------
to be withheld from any amounts payable to the Agent or any Series 1999-1
Certificateholder hereunder, the amounts so payable to the Agent or such Series
1999-1 Certificateholder shall be increased by the Transferor to the extent
necessary to yield to the Agent or such Series 1999-1 Certificateholder (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Supplement; provided,
--------
however, that the Transferor shall not be required to increase any such amounts
-------
payable to any Series 1999-1 Certificateholder that is not created in or
organized under the laws of the United States of America or a state thereof if
such Series 1999-1 Certificateholder fails to comply with the requirements of
paragraph (c) of this Section 4.2. Whenever any Non-Excluded Taxes are paid by
------------- -----------
the Transferor as promptly as possible thereafter the Transferor shall send to
the Agent for its own account or for the account of such Series 1999-1
Certificateholder, as the case may be, a certified copy of an original official
receipt received by the Transferor showing payment thereof. If the Transferor
fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority
or fails to remit to the Agent the required receipts or other required
documentary evidence, the Transferor shall indemnify the Agent and the Series
1999-1 Certificateholders for any incremental taxes, interest or penalties that
may become payable by the Agent or any Series 1999-1 Certificateholder as a
result of any such failure; such indemnification shall be paid promptly by the
Transferor upon receipt of a written demand from the Agent or any such Series
1999-1 Certificateholder from amounts otherwise distributable to the Transferor
pursuant to Section 4.03(a)(ii) of the Agreement or pursuant to Section
------------------- -------
4.04(c)(i) of this Supplement. The agreements in this Section 4.2 shall survive
---------- -----------
the termination of this Supplement and the payment of the Series 1999-1
Aggregate Invested Amount and all other amounts payable hereunder.
(b) The Transferor will indemnify the Agent or any Series 1999-1
Certificateholder for the full amount of Non-Excluded Taxes (including any Non-
Excluded Taxes imposed on amounts payable under this Section 4.2, but excluding
-----------
any Non-Excluded Taxes imposed with respect to any Series 1999-1
Certificateholder not organized under the laws of the United States of America
or a state thereof if such Series 1999-1 Certificateholder fails to comply with
the requirement of paragraph (c) of this Section 4.2) paid by the Agent or such
-----------
Series 1999-1 Certificateholder and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto; such indemnification
shall be paid promptly by the Trustee upon receipt of a written demand therefor
from the Agent or any such Series 1999-1 Certificateholder from amounts
otherwise distributable to the Transferor pursuant to Section 4.03(a)(ii) of the
-------------------
Agreement or pursuant to Section 4.04(c)(i) of this Supplement.
------------------
20
(c) Each Series 1999-1 Certificateholder will, prior to the date on which
the first interest payment on the Series 1999-1 Certificate is due to such
holder:
(i) deliver to the Transferor and the Agent (A) if such Series 1999-
1 Certificateholder is created in or organized under the laws of a
jurisdiction outside the United States, two duly completed copies of United
States Internal Revenue Service Form 1001 or new Form W-8BEN or Internal
Revenue Service Form 4224 or new Form W-8ECI, or successor applicable form,
as the case may be, and (B) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be, before the first Interest
Payment Date (or in the case of an Acquiring Series 1999-1
Certificateholder or an Initial Assignee, the date on which it acquires its
interest);
(ii) deliver to the Transferor and the Agent two further copies of
any such form or certification on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously delivered by it
to the Transferor; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Transferor or
the Agent or as may be required to confirm the availability of any
applicable exemption from United States Federal, state or local withholding
taxes;
unless in any such case any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be required which
renders all such forms inapplicable or which would prevent such Series 1999-1
Certificateholder from duly completing and delivering any such form with respect
to it and such Series 1999-1 Certificateholder so advises the Transferor and the
Agent. Each Series 1999-1 Certificateholder so organized or incorporated shall
be deemed to have certified at the time it first becomes a Series 1999-1
Certificateholder, and thereafter to the extent provided by law, (i) in the case
of a Form 1001 or new Form W-8BEN or Form 4224 or new Form W-8ECI, that it is
entitled to receive payments under the Agreement and this Supplement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax. Each Person that shall become a Series 1999-1
Certificateholder or a Participant pursuant to Section 8.9 of this Supplement
-----------
shall, upon the effectiveness of the related transfer, be required to provide
all of the forms and statements required pursuant to this Section 4.2, provided
-----------
that in the case of a Participant such Participant shall furnish all such
required forms and statements to the Series 1999-1 Certificateholder from which
the related participation shall have been purchased.
(d) Notwithstanding anything to the contrary herein, each of the Agent,
Servicer, Transferor or transferring Series 1999-1 Certificateholder shall be
entitled to withhold any amount that it determines in its sole discretion is
required to be withheld pursuant to Section 1446 of the Code and such amount
shall be deemed to have been paid for all purposes of the Agreement.
21
(e) Each Series 1999-1 Certificateholder and each beneficial owner
of Series 1999-1 Certificates agrees that, with respect to all taxes set forth
in Section 3.07 of the Agreement, it will report its interest in the Series
------------
1999-1 Certificates in a manner consistent with the intended characterization as
debt referred to in Section 3.07 of the Agreement.
------------
(f) Each Participant which has complied with the provisions of
Section 8.9(c) hereof shall be deemed to be a Series 1999-1 Certificateholder
--------------
for purposes of this Section 4.2.
-----------
SECTION 4.3 Indemnity. The Transferor and the Servicer severally agree
---------
to indemnify each Series 1999-1 Certificateholder and each other Affected Party
and to hold each Series 1999-1 Certificateholder and each other Affected Party
harmless from any loss or expense which such Series 1999-1 Certificateholder or
such other Affected Party may sustain or incur as a consequence of (a) default
by the Transferor in drawing down the Increase Amount after the Transferor has
given irrevocable notice requesting the same in accordance with the provisions
of this Supplement or (b) default by the Transferor in making any prepayment in
connection with a Decrease after the Transferor has given irrevocable notice
thereof in accordance with the provisions of Section 1.6 of this Supplement or
-----------
(c) the making of a prepayment of any portion of the Series 1999-1 Aggregate
Invested Amount on any day other than a Payment Date regardless of cause
(including commencement of the Early Amortization Period or issuance of a Series
subsequent to Series 1999-1). Such indemnification may include an amount equal
to the amount of interest which would have accrued on the amount so prepaid or
not so borrowed for the period from the date of such prepayment or of such
failure to borrow to the last day of the Accrual Period in each case at the
applicable rate of interest provided for herein; provided that any payments made
--------
by the transferor pursuant to this Section shall be made the Trustee promptly
upon receipt of a written demand from such Series 1999-1 Certificateholder) or
other Affected Person from amounts otherwise distributable to the Transferor
pursuant to Section 4.03(a)(ii) of the Agreement or pursuant to Section
------------------- -------
4.04(c)(i) of this Supplement; provided, further that to the extent that any
---------- --------
Series 1999-1 Certificateholder actually earns interest on the amount so prepaid
during such Accrual Period and the Transferor pays the foregoing amount, such
Series 1999-1 Certificateholder shall turn over such earned interest to the
Transferor. This covenant shall survive the termination of this Supplement and
the payment of all amounts payable hereunder. A certificate as to any
additional amounts payable pursuant to the foregoing sentence submitted by any
Series 1999-1 Certificateholder or other Affected Person to the Transferor, the
Servicer, the Agent and the Trustee shall be conclusive absent manifest error.
SECTION 4.4 Limitation. The obligations of the Transferor under this
----------
Article IV shall be limited by Section 8.12 of this Supplement.
---------- ------------
22
ARTICLE V
REPRESENTATIONS AND WARRANTIES
23
SECTION 5.1 Representations and Warranties of the Transferor and the
--------------------------------------------------------
Servicer. The Transferor and the Servicer each hereby represents and warrants to
--------
the Trustee, the Agent and each of the Series 1999-1 Certificateholders that
each and every of their respective representations and warranties contained in
the Agreement is true and correct in all material respects as of the Issuance
Date and as of the date of each Increase, it being understood and agreed that,
notwithstanding any other provision hereof, any limitation of remedies set forth
in the Agreement with respect to any breach of any such representations and
warranties are incorporated by reference herein.
SECTION 5.2 Obligations Unaffected. The obligations of the Transferor and
----------------------
the Servicer to the Agent and the Series 1999-1 Certificateholders under this
Supplement shall not be affected by reason of any invalidity, illegality or
irregularity of any of the Receivables or any sale of any of the Receivables.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1 Conditions Precedent to Effectiveness of Supplement. This
---------------------------------------------------
Supplement will become effective on the date (the "Effective Date") on which the
--------------
following conditions precedent have been satisfied:
(a) Documents. The Agent shall have received (i) an original
---------
counterpart of this Supplement executed by the other parties hereto and
(ii) a photocopy of the other Transaction Documents executed by the parties
thereto.
(b) Corporate Documents; Corporate Proceedings of the Transferor and
----------------------------------------------------------------
Servicer. The Agent shall have received from the Transferor and the
--------
Servicer complete copies of:
(i) the certificate of incorporation including all amendments
thereto, of such Person, certified as of a recent date by the
Secretary of State of Delaware;
(ii) a certificate of the Secretary or Assistant Secretary of
such Person dated the Issuance Date and certifying (A) that attached
thereto is a true and complete copy of the by-laws of such Person, as
in effect on the Issuance Date and at all times since a date prior to
the date of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of the resolutions in
form and substance reasonably satisfactory to the Agent, of the Board
of Directors of such Person or committees thereof authorizing the
execution, delivery and performance of the Transaction Documents to
which it is a party and the transactions contemplated thereby, and
that such resolutions have not been amended, modified, revoked or
rescinded and are in full force and effect, (C) that
24
the certificate of incorporation of such Person has not been amended
since the date of the last amendment thereto shown on the certificate
of good standing (or its equivalent) furnished pursuant to clause (c)
----------
below and (D) as to the incumbency and specimen signature of each
officer executing this Supplement or any other document delivered in
connection herewith on behalf of such Person; and
(iii) a certificate of another officer as the incumbency and
specimen signature of the Secretary or Assistant Secretary executing
the certificate pursuant to clause (ii) above.
-----------
(c) Good Standing Certificates. The Agent shall have received copies
--------------------------
of certificates of good standing, dated as of a recent date from the
Secretary of State or other appropriate authority, with respect to each of
the Transferor and the Servicer in Delaware and Texas.
(d) Filings, Registrations and Recordings. Any documents (including,
-------------------------------------
without limitation, financing statements) required to be filed in order (i)
to perfect the sale of the Receivables by CompuCom to the Transferor
pursuant to the Receivables Contribution and Sale Agreement and (ii) to
create, in favor of the Trustee, a perfected ownership/security interest in
the Trust Assets under the Agreement with respect to which an
ownership/security interest may be perfected by a filing under the UCC or
other comparable statute shall, in each case, have been properly prepared
and executed for immediate filing or have been filed in each necessary
public office and such filings are the only filings required in order to
perfect the sale of the Receivables to the Transferor under the Receivables
Contribution and Sale Agreement or to the Trust under the Agreement, as the
case may be, in such jurisdictions. The Agent shall have received evidence
reasonably satisfactory to it of each such filing, registration or
recordation and reasonably satisfactory evidence of the payment of any
necessary fee, tax or expense relating thereto.
(e) Lien Searches. The Agent shall have received the results of a
------------
recent search by a Person satisfactory to the Agent, of UCC and other
filings with respect to the Transferor and CompuCom.
(f) Legal Opinions. The Agent shall have received opinions of counsel
--------------
to the Transferor and the Servicer, dated the Issuance Date, as to
corporate, tax, bankruptcy, perfection and other matters in form and
substance reasonably acceptable to the Agent and its counsel.
(g) Fee Letter. The Agent shall have received the Fee Letter duly
----------
executed by the Transferor and CompuCom, and any fees required to be paid
on or before the Issuance Date shall have been paid in full.
25
(h) Liquidity Agreement. The Liquidity Loan Agreement shall have been
-------------------
duly executed and delivered by the parties thereto.
(i) Settlement Statement. A Settlement Statement as of April 30,
--------------------
1999, or the most recently available if April 30, 1999 data is not reasonably
available.
(j) Terminations. Executed terminations/reconveyances evidencing
------------
release/relinquishment of all prior creditors and Enterprise Funding Corp. of
all interest in the Receivables and other Trust Assets.
ARTICLE VII
THE AGENT
SECTION 7.1 Appointment. Each Series 1999-1 Certificateholder hereby
-----------
irrevocably designates and appoints the Agent as the agent of such Series 1999-1
Certificateholder under this Supplement and each such Series 1999-1
Certificateholder irrevocably authorizes the Agent, in such capacity, to take
such action on its behalf under the provisions of this Supplement and to
exercise such powers and perform such duties as are expressly delegated to the
Agent by the terms of this Supplement, together with such other powers as are
reasonably incidental thereto. Each Series 1999-1 Certificateholder hereby
irrevocably designates and appoints the Agent to receive any payments relating
to the Series 1999-1 Certificates on its behalf. Notwithstanding any provision
to the contrary elsewhere in this Supplement, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Series 1999-1 Certificateholder, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Supplement or otherwise exist against the Agent.
SECTION 7.2 Delegation of Duties. The Agent may execute any of its duties
--------------------
under this Supplement by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel (who may be counsel for the Transferor or the
Servicer), independent public accountants and other experts selected by it
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
SECTION 7.3 Exculpatory Provisions. Neither the Agent nor any of its
----------------------
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with the Agreement or this Supplement (x) with the
consent or at the request of the Majority Series 1999-1 Certificateholders or
(y) in the absence of its own gross negligence or willful misconduct or (ii)
responsible in any manner to any of the Series 1999-1 Certificateholders for any
statements, representations or warranties made by the Transferor, CompuCom, the
Servicer or any officer thereof contained in this Supplement or any other
Transaction Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the
26
Agent under or in connection with, this Supplement or any other Transaction
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Supplement or any other Transaction Document or for any
failure of the Transferor, CompuCom or the Servicer to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any
Series 1999-1 Certificateholder to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of, this
Supplement or any other Transaction Document, or to inspect the properties,
books or records of the Transferor, CompuCom or the Servicer.
SECTION 7.4 Reliance by Agent. The Agent shall be entitled to rely, and
-----------------
shall be fully protected in relying, upon any Certificate, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Transferor or the Servicer), independent accountants
and other experts selected by the Agent and shall not be liable for any action
taken or omitted to be taken by it in good faith in accordance with the advice
of such counsel, accountants or experts. The Agent may deem and treat the payee
of any Certificate as the owner thereof for all purposes unless a written notice
of assignment, negotiation or transfer thereof shall have been filed with the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Supplement or any other Transaction Document unless it shall
first receive such advice or concurrence of the Majority Series 1999-1
Certificateholders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Series 1999-1 Certificateholders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Supplement and the
other Transaction Documents in accordance with a request of the Majority Series
1999-1 Certificateholders, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Series 1999-1
Certificateholders.
SECTION 7.5 Notice of Servicer Default or Early Amortization Event or
---------------------------------------------------------
Prospective Early Amortization Event. The Agent shall not be deemed to have
------------------------------------
knowledge or notice of the occurrence of any Servicer Default with respect to
the Servicer or any Early Amortization Event or Prospective Early Amortization
Event hereunder unless the Agent has received written notice from a Series 1999-
1 Certificateholder, the Transferor or the Servicer referring to the Agreement
or this Supplement, describing such Servicer Default or Early Amortization Event
or Prospective Early Amortization Event and stating that such notice is a
"notice of a Servicer Default with respect to the Servicer" or a "notice of an
Early Amortization Event or Prospective Early Amortization Event", as the case
may be. In the event that the Agent receives such a notice, the Agent shall give
notice thereof to the Series 1999-1 Certificateholders, the Trustee, the
Transferor and the Servicer. Subject to the provisions of the Agreement, the
Agent shall take such action with respect to such Servicer Default or Early
Amortization Event or Prospective Early Amortization Event as shall be
reasonably directed by the Majority Series 1999-1 Certificateholders, provided
--------
that unless and until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action,
27
with respect to such Servicer Default or Early Amortization Event or Prospective
Early Amortization Event as it shall deem advisable in the best interests of the
Series 1999-1 Certificateholders.
SECTION 7.6 Non-Reliance on Agent and Other Series 1999-1
---------------------------------------------
Certificateholders. Each Series 1999-1 Certificateholder expressly acknowledges
------------------
that neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Agent hereinafter taken, including any review of the
affairs of the Transferor, CompuCom or the Servicer, shall be deemed to
constitute any representation or warranty by the Agent to any Series 1999-1
Certificateholder. Each Series 1999-1 Certificateholder represents to the Agent
that it has, independently and without reliance upon the Agent or any other
Series 1999-1 Certificateholder, and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Transferor, CompuCom and the Servicer and made its own
decision to enter into this Supplement. Each Series 1999-1 Certificateholder
also represents that it will, independently and without reliance upon the Agent
or any other Series 1999-1 Certificateholder, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Supplement and the other Transaction Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Transferor, CompuCom and the Servicer. Except for notices, reports and other
documents expressly required to be furnished to the Series 1999-1
Certificateholders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Series 1999-1 Certificateholder with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Transferor,
CompuCom or the Servicer which may come into the possession of the Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
SECTION 7.7 Indemnification. The Series 1999-1 Certificateholders agree to
---------------
indemnify the Agent in its capacity as such (to the extent not reimbursed by the
Transferor and the Servicer and without limiting the obligation of the
Transferor and the Servicer to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
(or, if indemnification is sought after the Commitment Termination Date, ratably
in accordance with their Commitment Percentages immediately prior to such date),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of, the Commitments,
this Supplement any of the other Transaction Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Series 1999-1
Certificateholder shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Agent's gross
negligence or willful
28
misconduct. The agreements in this Section shall survive the payment of all
amounts payable hereunder.
SECTION 7.8 Agent in Its Individual Capacity. The Agent and its Affiliates
--------------------------------
may make loans to, accept deposits from and generally engage in any kind of
business with the Transferor, the Servicer, CompuCom or any of their Affiliates
as though the Agent were not the Agent hereunder. With respect to any Series
1999-1 Certificate held by the Agent, the Agent shall have the same rights and
powers under this Supplement and the other Transaction Documents as any Series
1999-1 Certificateholder and may exercise the same as though it were not the
Agent, and the terms "Series 1999-1 Certificateholder" and "Series 1999-1
Certificateholders" shall include the Agent in its individual capacity.
SECTION 7.9 Successor Agent. The Agent may resign as Agent upon 10 days'
---------------
notice to the Series 1999-1 Certificateholders. If the Agent shall resign as
Agent under this Supplement, then the Majority Series 1999-1 Certificateholders
shall appoint from among the Series 1999-1 Certificateholders a successor agent
for the Series 1999-1 Certificateholders, which successor agent shall be
approved by the Transferor, the Control Party and the Servicer (which approval
shall not be unreasonably withheld). Each such successor agent shall succeed to
the rights, powers and duties of the Agent, and the term "Agent" means such
successor agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any other
Person. After any retiring Agent's resignation as Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Supplement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Ratification of Agreement. As supplemented by this Supplement,
-------------------------
the Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Supplement shall be read, taken and construed as one and
the same instrument.
SECTION 8.2 Governing Law. THIS SUPPLEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 8.3 Further Assurances. Each of the Transferor, the Servicer and
------------------
the Trustee agrees, from time to time, to do and perform any and all acts and to
execute any and all further instruments reasonably requested by the Agent (i)
more fully to effect the purposes of this Supplement, including in the case of
the Transferor and the Servicer, the execution of any UCC
29
financing statements or similar documents or notices or continuation statements
relating to the Receivables and the other Trust Assets for filing under the
provisions of the UCC of any applicable jurisdiction; and (ii) to facilitate the
transfer of the Series 1999-1 Certificate by the Initial Certificateholder to
Market Street Funding Corporation, and the confirmation of outstanding
commercial paper ratings by the Rating Agencies, including, in the case of the
Transferor and the Servicer, the execution and delivery of such opinions,
certificates or other documents as may reasonably by requested by the Initial
Certificateholder.
SECTION 8.4 Payments. Each payment to be made hereunder to the Agent shall
--------
be made on the required payment date in lawful money of the United States and in
immediately available funds to such account or accounts as the Agent shall
designate in writing to the Trustee. On each Payment Date or other date
specified herein, the Agent shall remit in like funds to each Series 1999-1
Certificateholder its applicable pro rata share (based on each such Series 1999-
1 Certificateholder's Invested Amount) of each such payment received by the
Agent for the account of the Series 1999-1 Certificateholders (it being
understood that pursuant to the Agreement as set forth in this Supplement,
certain payments may be made to a particular Series 1999-1 Certificateholder
rather than pro rata to all Series 1999-1 Certificateholders).
SECTION 8.5 Costs and Expenses; Claims Against the Transferor. The
-------------------------------------------------
Transferor and the Servicer agree severally to pay all reasonable out-of-pocket
costs and expenses of the Agent (including, without limitation, reasonable fees
and disbursements of counsel to the Agent) in connection with (i) the
preparation, execution and delivery of this Supplement and amendments or waivers
of any Transaction Documents and (ii) the enforcement by the Agent of the
obligations and liabilities of the Transferor and the Servicer under the
Agreement or this Supplement (unless such enforcement is finally denied on the
merits by a court having jurisdiction over such matter). Any payments required
to be made by the Transferor pursuant to this Section, any payment of Commitment
Fees, Program Fees, any costs or expenses incurred in connection with any visit
or examination described in Section 2.05(c), any Additional Servicing Fee, and
any amounts payable pursuant to Section 7.04 shall be made solely from funds
available to the Transferor which are not otherwise needed to be applied to the
payment of any amounts pursuant to the Agreement or any Supplement and shall not
constitute a claim against the Transferor to the extent that insufficient funds
exist to make such payment.
SECTION 8.6 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Trustee, the Agent or any Series 1999-1
Certificateholder, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 8.7 Severability. If any provision hereof is void or unenforceable
------------
in any jurisdiction, such voidness or unenforceability shall not affect the
validity or enforceability of (i)
30
such provision in any other jurisdiction or (ii) any other provision hereof in
such or any other jurisdiction.
SECTION 8.8 Notices. (a) All notices, requests and demands to or upon any
-------
party hereto to be effective shall be given (i) in the case of the Transferor,
the Servicer and the Trustee, in the manner set forth in Section 13.05 of the
-------------
Agreement and (ii) in the case of the Agent and each Series 1999-1
Certificateholder, in writing (including a confirmed transmission by telecopy),
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made when delivered by hand or three days after being deposited in
the mail, postage prepaid, one Business Day after being sent by overnight
courier or, in the case of telecopy notice, when received, (A) in the case of
the Agent and the Initial Series 1999-1 Certificateholder, at their respective
addresses set forth in Schedule 8.8; or (B) to such other address as may be
------------
hereafter notified by the respective parties hereto.
(b) All instructions given by the Servicer to the Trustee pursuant to this
Supplement shall be in writing, and may be included in a Daily Report or
Settlement Statement.
SECTION 8.9 Successors and Assigns. (a) This Supplement shall be binding
----------------------
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that neither the Transferor nor the Servicer may
assign or transfer any of its rights under this Supplement without the prior
written consent of the Control Party.
(b) Any Series 1999-1 Certificateholder may, upon the satisfaction of all
applicable requirements under the Agreement (including Section 6.03), in the
------------
ordinary course of its business and in accordance with applicable law, at any
time sell to one or more financial institutions or other entities
("Participants") participations in its Series 1999-1 Certificate and its rights
------------
hereunder pursuant to documentation in form and substance satisfactory to such
Series 1999-1 Certificateholder and the Participant. In the event of any such
sale by a Series 1999-1 Certificateholder to a Participant, such Series 1999-1
Certificateholder's obligations under this Supplement shall remain unchanged and
such Series 1999-1 Certificateholder shall remain solely responsible for the
performance thereof. The Transferor agrees that each Series 1999-1
Certificateholder is entitled, in its own name, to enforce for the benefit of,
or as agent for, any Participant any and all rights, claims and interest of such
Participant in respect of the Trust and the Transferor's obligations under this
Supplement. A Participant shall have the right to receive Article IV Costs
(other than amounts payable under Section 4.2 of this Supplement) but only to
-----------
the extent that the related selling Series 1999-1 Certificateholder would have
had such right absent the sale of the related participation. The Trustee shall
have no liability with respect to any Participant.
(c) The Initial Series 1999-1 Certificateholder may freely assign or
transfer its Certificate to Market Street Funding Corporation or any other CP
Conduit (an "Initial Assignee") of which an affiliate of PNC Bank Corp. serves
as agent or administrator without regard to any restrictions in this Agreement.
Any Series 1999-1 Certificateholder may, upon satisfaction of all applicable
requirements of the Agreement (including Section 6.03, provided that, in the
------------ --------
case of
31
any assignment to a Program Support Provider, no Opinion of Counsel or
representation letter shall be required to be delivered) as amended by this
Supplement, in the ordinary course of its business and in accordance with
applicable law, at any time sell all or any part of its rights and obligations
under this Supplement and the related Series 1999-1 Certificate to (i) its
Affiliates or to any other Series 1999-1 Certificateholder, (ii) upon prior
written notice to the Agent, one or more of its Program Support Providers and
(iii) with the prior written consent of the Agent and, unless an Early
Amortization Event has occurred and is continuing, the Transferor, which consent
shall not be unreasonably withheld, one or more banks or other entities (an
"Acquiring Series 1999-1 Certificateholder"), in each case (other than an
-----------------------------------------
assignment to a Program Support Provider) pursuant to a commitment transfer
supplement, substantially in the form of Exhibit C to this Supplement (the
---------
"Commitment Transfer Supplement"), executed by such Acquiring Series 1999-1
------------------------------
Certificateholder, such assigning Series 1999-1 Certificateholder, the Agent
and, in the case of clause (iii) above, the Transferor (if the Transferor's
------------
consent is required), and delivered to the Agent for its acceptance and
recording in the Register. Upon such execution, delivery, acceptance and
recording, from and after the Transfer Issuance Date determined pursuant to such
Commitment Transfer Supplement, (x) the Acquiring Series 1999-1
Certificateholder thereunder shall be deemed to be a party hereto and, to the
extent provided in such Commitment Transfer Supplement, have the rights and
obligations of a Series 1999-1 Certificateholder hereunder with a Commitment as
set forth therein and (y) the transferring Series 1999-1 Certificateholder
thereunder shall, to the extent provided in such Commitment Transfer Supplement,
be released from its obligations under this Supplement. Such Commitment Transfer
Supplement shall be deemed to amend this Supplement (including Schedule 1
----------
attached hereto) to the extent, and only to the extent, necessary to reflect the
addition of such Acquiring Series 1999-1 Certificateholder as a "Series 1999-1
Certificateholder" party to this Supplement and the resulting adjustment of
Commitment Percentages arising from the purchase by such Acquiring Series 1999-1
Certificateholder of all or a portion of the rights and obligations of such
transferring Series 1999-1 Certificateholder under this Supplement and the
Series 1999-1 Certificates. Any Series 1999-1 Certificateholder may pledge, or
grant a security interest in, its rights hereunder to, or for the benefit of,
any Program Support Provider.
(d) The Agent shall maintain at its address referred to in Section 8.8 of
-----------
this Supplement a copy of each Commitment Transfer Supplement delivered to it.
(e) Upon its receipt of a Commitment Transfer Supplement executed by a
transferring Series 1999-1 Certificateholder and an Acquiring Series 1999-1
Certificateholder, the Agent shall (i) promptly accept such Commitment Transfer
Supplement, (ii) on the Transfer Issuance Date determined pursuant thereto
record the information contained therein in the Register and give notice of such
acceptance and recordation to the Series 1999-1 Certificateholders, the
Servicer, the Transferor and the Trustee and (iii) prepare a revised Schedule 1
----------
to this Supplement in order to reflect the reduced Commitment of the applicable
transferring Series 1999-1 Certificateholder and the new or increased Commitment
of the applicable Acquiring Series 1999-1 Certificateholder, and Schedule 1 of
----------
this Supplement shall be deemed to be automatically superseded by such revised
Schedule 1 and the Agent shall distribute such revised Schedule 1 promptly to
---------- ----------
the Transferor, the Servicer, the Trustee and each Series 1999-1
Certificateholder.
32
(f) The Transferor and the Servicer each authorizes each Series 1999-1
Certificateholder to disclose to any Participant or Acquiring Series 1999-1
Certificateholder (each, a "Transferee") and any prospective Transferee any and
----------
all financial information in such Series 1999-1 Certificateholder's possession
concerning the Transferor, the Servicer or the Receivables which has been
delivered to such Series 1999-1 Certificateholder by the Transferor or the
Servicer pursuant to this Supplement or which has been delivered to such Series
1999-1 Certificateholder by or on behalf of the Transferor in connection with
such Series 1999-1 Certificateholder's credit evaluation of the Transferor, the
Servicer, the Trust and the Trust Assets prior to becoming a party to this
Supplement; provided, however, if any such information is subject to a
-------- -------
confidentiality agreement between such Series 1999-1 Certificateholder and the
Transferor or the Servicer, the Transferee or prospective Transferee shall have
agreed to be bound by the terms and conditions of such confidentiality agreement
and, if the Transferor's consent is required pursuant to paragraph (c) above,
-------------
the Transferor has so consented to such Acquiring Series 1999-1
Certificateholders.
(g) If, pursuant to this Section, any interest in this Supplement or the
Series 1999-1 Certificates is transferred to any Transferee which is created in
or organized under the laws of any jurisdiction other than the United States or
any State thereof, the transferring Series 1999-1 Certificateholder shall cause
such Transferee, concurrently with the effectiveness of such transfer, (i) to
represent to the transferring Series 1999-1 Certificateholder (for the benefit
of the transferring Series 1999-1 Certificateholder, the Agent, the Transferor
and the Servicer) that under applicable law and treaties no taxes will be
required to be withheld by the Agent, the Transferor, the Servicer or the
transferring Series 1999-1 Certificateholder with respect to any payments to be
made to such Transferee in respect of the Series 1999-1 Certificates, (ii) to
furnish to the transferring Series 1999-1 Certificateholder (and, in the case of
any Acquiring Series 1999-1 Certificateholder not registered in the Register,
the Agent and the Transferor) either U.S. Internal Revenue Service Form 4224 or
new Form W-8ECI or U.S. Internal Revenue Service Form 1001 or new Form W-8BEN
(wherein such Transferee claims entitlement to complete exemption from U.S.
federal withholding tax on all interest payments hereunder), (iii) to agree (for
the benefit of the transferring Series 1999-1 Certificateholder, the Agent, the
Transferor and the Servicer) to provide the transferring Series 1999-1
Certificateholder (and, in the case of any Acquiring Series 1999-1
Certificateholder not registered in the Register, the Agent, the Transferor and
the Servicer) a new Form 4224 or Form W-8ECI or Form 1001 or Form W-8BEN upon
the expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Transferee, and to comply from
time to time with all applicable U.S. laws and regulations with regard to such
withholding tax exemption unless any change in treaty, law or regulation has
occurred prior to the date on which any such delivery would otherwise be
required which renders such forms inapplicable or which would prevent such
Participant from duly completing and delivering any such form with respect to it
and such Participant so advises that transferring Series 1999-1
Certificateholder, the Transferor and the Agent; provided, that such failure to
--------
provide such forms does not have a material adverse effect on the Transferor,
the Servicer or the Trust.
33
SECTION 8.10 Counterparts. This Supplement may be executed in any number of
------------
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original, and all of which
taken together shall constitute one and the same agreement.
SECTION 8.11 Adjustments. If any Series 1999-1 Certificateholder (a
-----------
"Benefitted Series 1999-1 Certificateholder") shall at any time receive in
------------------------------------------
respect of its Invested Amount any distribution of principal, interest,
Commitment Fees, Program Fees or other fees, or any interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by set-
off, or otherwise) in a greater proportion than any such distribution received
by any other Series 1999-1 Certificateholder, if any, in respect of such other
Series 1999-1 Certificateholder's Invested Amount, or interest thereon, such
Benefitted Series 1999-1 Certificateholder shall purchase for cash from the
other Series 1999-1 Certificateholders such portion of each such other Series
1999-1 Certificateholder's interest in the Series 1999-1 Certificates, or shall
provide such other Series 1999-1 Certificateholders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Series 1999-1 Certificateholder to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Series 1999-1
Certificateholders; provided, however, that if all or any portion of such excess
-------- -------
payment or benefits is thereafter recovered from such Benefitted Series 1999-1
Certificateholder, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Transferor agrees that each Series 1999-1 Certificateholder so purchasing a
portion of the Series 1999-1 Certificateholders' Interest may exercise all
rights of payment (including rights of set-off) with respect to such portion as
fully as if such Series 1999-1 Certificateholder were the direct holder of such
portion.
SECTION 8.12 Limitation of Payments by Transferor. Notwithstanding any
------------------------------------
other provision of the Agreement or this Supplement (but subject to Section 7.04
------------
of the Agreement), the Transferor's obligations under the Agreement and this
Supplement shall be limited to the funds available to the Transferor which have
been properly distributed to the Transferor pursuant to the Agreement and any
Supplement and neither the Agent nor any Series 1999-1 Certificateholder shall
have any actionable claim against the Transferor for failure to satisfy such
obligation because it does not have funds available therefor from amounts
properly distributed.
SECTION 8.13 No Bankruptcy Petition. The Agent, each Series 1999-1
----------------------
Certificateholder and each Participant, if any, hereby covenants and agrees
that, prior to the date which is one year and one day after the later of (i) the
last day of the Early Amortization Period and (ii) the last day of the
amortization period or early amortization period of any other outstanding
Series, it will not institute against, or join any other Person in instituting
against, the Transferor or the Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other similar proceedings
under any federal or state bankruptcy or similar law. Each of the Transferor,
the Servicer, the Agent and the Trustee hereby covenants and agrees that, prior
to the date that is one year and one day after all indebtedness of the Initial
Series 1999-1 Certificateholder or any Series 1999-1 Certificateholder that is a
CP Conduit is paid in full, it will not institute against, or join any other
Person in instituting against, the Initial Series 1999-1
34
Certificateholder or such CP Conduit any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under any federal or state bankruptcy or similar law. The Initial Series 1999-1
Certificateholder and each other Series 1999-1 Certificateholder that is a CP
Conduit, shall have no obligation to pay any amounts payable by it hereunder or
under any other Transaction Document (collectively, "Expense Claims"), and such
Expense Claims shall not constitute a claim, as defined in ss.101 of the United
States Bankruptcy Reform Act of 1978 (11 U.S.C. ss.101, et seq.), as amended
against such Series 1999-1 Certificateholder unless or until such Series 1999-1
Certificateholder has received amounts sufficient to pay such Expense Claims and
such amounts are available to pay such Expense Claims pursuant to such Series
1999-1 Certificateholder's program documentation.
SECTION 8.14 The Trustee. The Trustee shall not be responsible in any
-----------
manner whatsoever for or in respect of the validity or sufficiency of this
Supplement or for or in respect of the Preliminary Statement contained herein,
which Preliminary Statement is made solely by the Transferor.
SECTION 8.15 Consent to Jurisdiction. EACH OF THE SERVICER AND THE
-----------------------
TRANSFEROR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY LITIGATION BASED HEREON OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THE AGREEMENT OR THIS SUPPLEMENT AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION. EACH OF THE SERVICER AND THE TRANSFEROR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH OF
THE SERVICER AND THE TRANSFEROR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT EITHER THE SERVICER OR THE TRANSFEROR HAS
OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, EACH OF THE TRANSFEROR AND THE SERVICER HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE AGREEMENT OR THIS SUPPLEMENT.
SECTION 8.16 Credit Agreements. CompuCom agrees that it shall not enter
-----------------
into any credit facility or similar agreement (including the Credit Agreement or
any amendment to any of
35
them) with any lender unless (i) the Agent shall have informed CompuCom that
such agreement is reasonably acceptable to the Agent and (ii) such credit
facility or similar agreement does not provide for or result in any lien on
behalf of, or interest in favor of, the lenders thereunder or any other Person
in the Trust Assets.
ARTICLE IX
DEFINITIONS
SECTION 9.1 Definitions. The following words and phrases shall have the
-----------
following meanings with respect to Series 1999-1 and the definitions of such
terms are applicable to the singular as well as the plural form of such terms
and to the masculine as well as the feminine and neuter genders of such terms:
"Accrual Period" means the period from and including a Payment Date to but
--------------
excluding the next Payment Date; provided that the first Accrual Period will be
--------
the period from and including the Issuance Date to but excluding the next
Payment Date.
"Accrued Expense Amount" means, for each Business Day during an Accrual
----------------------
Period, the sum of (i) the portion of the Monthly Interest Amount allocable to
such Business Day, (ii) one-fifth of the Servicing Fee due on the succeeding
Payment Date (in the aggregate up to such Servicing Fee), (iii) the Program Fee
for such Business Day, (iv) the portion of the Monthly Trustee Fee and
Transition Costs allocable to such Business Day and (v) the Commitment Fee for
such Business Day; provided, however, that if by the fifth Business Day of an
-------- -------
Accrual Period, the entire amount of (A) the Monthly Interest Amount, (B) the
Servicing Fee, (C) the Program Fee, (D) the Monthly Trustee Fee and Transitions
Cost and (E) the Commitment Fee, in each case for such Accrual Period, shall not
have been transferred to the Series 1999-1 Non-Principal Collection Sub-
subaccount, the Accrued Expense Amount for such Business Day (and each Business
Day thereafter until paid) shall also include the amount of such shortfall.
"Acquiring Series 1999-1 Certificateholder" shall have the meaning assigned
-----------------------------------------
in Section 8.9(c) of this Supplement.
--------------
"Additional Interest" has the meaning specified in Section 4.05(b) of the
------------------- ---------------
Agreement as set forth in this Supplement.
"Additional Servicing Fee" for each Accrual Period means, if CompuCom is
------------------------
not the Servicer and the Servicing Fee Percentage exceeds 1.0%, the excess of
(a) the Servicing Fee (calculated as if clause (ii) of the definition of
-----------
Servicing Fee did not include the words "as in effect on the Issuance Date")
over (b) the Servicing Fee (calculated without changing clause (ii) of the
-----------
definition of Servicing Fee).
36
"Adjusted Invested Amount" means, on any day the Series 1999-1 Aggregate
------------------------
Invested Amount at the close of business on such day minus the amount on deposit
-----
in the Series 1999-1 Principal Collection Sub-subaccount (after giving effect to
any withdrawal therefrom).
"Affected Party" means each Series 1999-1 Certificateholder, each Program
--------------
Support Provider, any assignee or Participant of any Series 1999-1
Certificateholder or any Program Support Provider, the Agent and any successor
thereto and sub-agent thereof.
"Aggregate Allocated Receivables Amount" means the sum of the Series 1999-1
--------------------------------------
Allocated Receivables Amount plus the series allocated receivables amounts
specified in the Supplements for any outstanding Series other than Series 1999-
1.
"Aggregate Commitment Amount" means, with respect to any Business Day, the
---------------------------
aggregate amount of the Commitments of all Series 1999-1 Certificateholders on
such date, as reduced from time to time pursuant to Section 1.7 of this
-----------
Supplement.
"Agreement" has the meaning specified in the preamble to this Supplement.
---------
"Alternate Base Rate" means, on any date, a fluctuating rate of interest
-------------------
per annum equal to the higher of
---------
(a) the rate of interest most recently announced by the Agent in
Pittsburgh, Pennsylvania, as its prime rate; and
(b) the Federal Funds Rate most recently determined by the Agent plus
0.50% per annum.
---------
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Agent in connection with extensions of credit.
"Amortization Period Commencement Date" for the Series 1999-1 Certificates
-------------------------------------
shall mean the Commitment Termination Date.
"Article IV Costs" means any amounts due pursuant to Article IV of this
---------------- ----------
Supplement.
"Available Commitment" means, with respect to any Business Day, the (i)
--------------------
Aggregate Commitment Amount on such Business Day minus (ii) the Series 1999-1
-----
Aggregate Invested Amount on such Business Day.
"Benefitted Series 1999-1 Certificateholder" shall have the meaning
------------------------------------------
assigned in Section 8.11 of this Supplement.
------------
"Board" means the Board of Governors of the Federal Reserve System of the
-----
United States and any successor thereto.
37
"Business Day" shall mean any day other than (a) a Saturday or a Sunday,
------------
(b) any other day on which the Servicer is closed, as specified on the list
furnished by the Servicer pursuant to Section 3.03(n) of the Agreement, (c) any
---------------
other day on which banking institutions or trust companies in the State of New
York generally or the City of New York, New York, the Commonwealth of
Pennsylvania generally or the City of Pittsburgh, Pennsylvania, or the State of
Minnesota generally or the City of Minneapolis, Minnesota are authorized or
obligated by law, executive order or governmental decree to be closed, or (d)
any other day on which The Depository Trust Company is closed.
"Certificate Rate" for any Accrual Period (i) in the case of any Invested
----------------
Amount of the Series 1999-1 Aggregate Invested Amount funded by a Liquidity
Funding through a Liquidity Agreement entered into by the Initial Series 1999-1
Certificateholder, the sum of the Eurodollar Rate for such Accrual Period, plus
1.75%, (ii) in the case of any portion of the Series 1999-1 Aggregate Invested
Amount funded by any other Liquidity Funding, the sum of the Eurodollar Rate for
such Accrual Period, plus 3.00% and (iii) in the case of any portion of the
----
Series 1999-1 Aggregate Invested Amount funded by Commercial Paper Notes, the CP
Rate for such Accrual Period; provided, however, that on any day during an
-------- -------
Accrual Period when any Early Amortization Event or Prospective Early
Amortization Event has occurred and is continuing, the Certificate Rate shall
mean the Alternative Base Rate in effect on such day plus 3.00%.
----
"Commercial Paper Notes" means short term promissory notes issued or to be
----------------------
issued by a Series 1999-1 Certificateholder, or the proceeds of which are loaned
to a Series 1999-1 Certificateholder, to fund its investments in accounts
receivable or other financial assets.
"Commitment" means, as to any Series 1999-1 Certificateholder, its
----------
obligation to maintain and, subject to certain conditions, increase, its
Invested Amount, in an aggregate amount not to exceed at any one time
outstanding the amount set forth opposite such Series 1999-1 Certificateholder's
name on Schedule 1 to this Supplement (as such Schedule 1 may be revised from
---------- ----------
time to time in accordance with this Supplement) under the caption "Commitment",
as such amount may be reduced from time to time as provided herein;
collectively, as to all Series 1999-1 Certificateholders, the "Commitments".
"Commitment Fee" shall have the meaning assigned in Section 1.8(b) of this
-------------- --------------
Supplement.
"Commitment Fee Percentage" shall have the meaning set forth in the Fee
-------------------------
Letter.
"Commitment Percentage" means, as to any Series 1999-1 Certificateholder
---------------------
and as of any date, the percentage equivalent of a fraction, the numerator of
which is such Series 1999-1 Certificateholder's Commitment as set forth on
Schedule 1 to this Supplement (as such Schedule 1 may be revised from time to
---------- ----------
time in accordance with this Supplement) and the denominator of which is the
Aggregate Commitment Amount as of such date.
"Commitment Reduction" shall have the meaning assigned in Section 1.7(a) of
-------------------- --------------
this Supplement.
38
"Commitment Termination Date" means the earliest of (a) the Scheduled
---------------------------
Maturity Date, (b) the date on which the Commitments are terminated in whole
pursuant to Section 1.7 of this Supplement and (c) the date of termination
-----------
(whether by scheduled expiration, termination or default or otherwise) of any
Program Support Provider's commitment under any Program Support Agreement.
"Commitment Transfer Supplement" shall have the meaning assigned in Section
------------------------------ -------
8.9(c) of this Supplement.
------
"Consolidated Net Income" means, with respect to CompuCom and its
-----------------------
Subsidiaries for any period, the net income (or loss) of CompuCom and its
Subsidiaries for such period, plus restructuring charges incurred in CompuCom
1998 Fiscal Year, excluding any gains from asset sales otherwise than in the
ordinary course of business, any extraordinary gains and any gains from
discontinued operations and any items of extraordinary loss, including net loss
on any asset sales otherwise than in the ordinary course of business.
"Consolidated Subsidiaries" means at any date any Subsidiary or other
-------------------------
entity the accounts of which would be consolidated with those of CompuCom in its
consolidated financial statements if such statements were prepared as of such
date.
"Control Party" with respect to the Series 1999-1 Certificates means the
-------------
Majority Series 1999-1 Certificateholders.
"CP Conduit" means Market Street Funding Corporation or a special purpose
----------
entity that is in the business of issuing commercial paper.
"CP Rate" means, for any period means the sum of (i) the rate equivalent to
-------
the rate (or if more than one rate, the weighted average of rates) at which
Commercial Paper Notes outstanding during such period and to be issued to fund
or maintain the Invested Amount may be sold by any placement agent or commercial
paper dealer selected by the Initial Series 1999-1 Certificateholder or a
Program Support Provider, as agreed between each such agent or dealer and the
Initial Series 1999-1 Certificateholder or such Program Support Provider and
notified by the Initial Series 1999-1 Certificateholder to the Agent and the
Servicer; provided, however, if the rate (or rates) as agreed between any such
-------- -------
agent or dealer and the Initial Series 1999-1 Certificateholder with regard to
any period is a discount rate (or rates), the "CP Rate" for such period shall be
-------
the rate (or if more than one rate, the weighted average of the rates) resulting
from converting such discount rate (or rates) to an interest-bearing equivalent
rate (or rates) per annum, plus (ii), without duplication, the commissions and
----
charges charged as a percentage of such face amount and converted to an
interest-bearing equivalent rate per anum.
"CP Rate Tranche" means a portion of the Series 1999-1 Aggregate Invested
---------------
Amount for which the interest is calculated by reference to the CP Rate.
39
"Credit Agreement" means the Inventory and Working Capital Financing
----------------
Agreement, dated as of May 7, 1999, among CompuCom, the various financial
institutions party thereto and IBM Credit Corporation, as it may be amended,
supplemented or otherwise modified from time to time.
"Cut-Off Date" means the last day of each calendar month.
------------
"Debt" of any Person means at any date, without duplication, (i) all
----
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property,
except accounts payable arising in the ordinary course of business, (iv) all
obligations of such Person as lessee under capital leases, (v) all Debt of
others secured by a Lien on any asset of such Person, whether or not such Debt
is assumed by such Person, (vi) all Debt of others guaranteed by such Person,
and (vii) all non-contingent obligations of such Person to reimburse or prepay
any Person in respect of amounts paid under a letter of credit, banker's
acceptance or similar instrument.
"Determination Date" means, with respect to a Payment Date, the third
------------------
Business Day prior to such Payment Date.
"Delinquency Ratio" means, as of any Cut-Off Date, the ratio,
-----------------
expressed as a percentage, of (i) the aggregate Unpaid Balance of all Delinquent
Receivables on such Cut-Off Date divided by (ii) the aggregate Unpaid Balance of
----------
all Eligible Receivables on such Cut-Off Date.
"Dilution Reserve Percentage" as measured on any date means the
---------------------------
greater of (i) 7% and (ii) a percentage determined in accordance with the
following formula:
[(SF x ED) + ((DS-ED) x DS/ED)] x DHR where:
SF = the Stress Factor, which shall be 2.25;
ED = the "Expected Dilution", which shall be equal to the
-----------------
twelve-month rolling average Sales-Based Dilution
Ratio, expressed as a percentage;
DS = the "Dilution Spike", which shall be equal to the
--------------
highest one month Sales-Based Dilution Ratio over
the immediately preceding twelve months, expressed
as a percentage; and
DHR = the "Dilution Horizon Ratio", which shall be equal
----------------------
to the sales for the two months ending on the
related Cut-Off Date divided by the Aggregate
Eligible Unpaid Balance as of the such Cut-Off Date.
"Dynamic Loss Reserve Percentage" shall be measured as an amount
-------------------------------
calculated pursuant to the following formula:
40
DLRP = LR x LH x SF
where:
-----
DLRP = the Dynamic Loss Reserve Percentage;
LR = the Loss Ratio, which shall be equal to the highest
average of the Sales-Based Default Ratios for any
three consecutive calendar months during the previous
twelve calendar months;
LH = the Loss Horizon, which shall be equal to the
cumulative sales over the previous three months
divided by the Aggregate Eligible Unpaid Balance; and
----------
SF = the Stress Factor, which shall be 2.25.
"Early Amortization Period" means, with respect to Series 1999-1, the
-------------------------
period from the declaration or occurrence of an Early Amortization Event or the
Commitment Termination Date to the earlier of (i) the date on which the Invested
Amount of Series 1999-1 (and all interest thereon) has been paid in full and
(ii) the Series Termination Date.
"Effective Date" shall have the meaning assigned in Section 6.1 of this
-------------- -----------
Supplement.
"Eurodollar Rate" means, for any Accrual Period, an interest rate per
---------------
annum (rounded upward to the nearest 1/16th of 1%) determined pursuant to the
following formula:
LIBOR
-----------------------------------------
100% - Eurodollar Rate Reserve Percentage
where "Eurodollar Rate Reserve Percentage" means, for any Accrual Period, the
maximum reserve percentage (expressed as a decimal, rounded upward to the
nearest 1/100th of 1%) in effect on the date LIBOR for such Accrual Period is
determined under regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
"Eurocurrency" funding (currently referred to as "Eurocurrency liabilities)
having a term comparable to such Accrual Period.
"Federal Funds Effective Rate" means, for any day, 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 on the next
succeeding Business Day by the Federal Reserve Bank of Cleveland, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Agent from three
federal funds brokers of recognized standing selected by it. If for any reason
the Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable
41
to ascertain the Federal Funds Effective Rate, including the inability or
failure of the Agent to obtain sufficient quotations in accordance with the
terms thereof, the Federal Funds Effective Rate shall mean the rate most
recently determined in accordance with the preceding sentence, until the
circumstances giving rise to such inability no longer exist.
"Fee Letter" means the fee letter, dated as of May 7, 1999, among
------------
CompuCom and the Agent, as it may be amended or supplemented from time to time.
"Fiscal Year" means the fiscal year of CompuCom and its Subsidiaries,
-------------
which period shall be the 12-month period ending on December 31 of each year.
References to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year 1998") refer to the Fiscal Year ending on December 31 of
such calendar year.
"Increase" shall have the meaning assigned in Section 1.5(a) of this
----------
Supplement.
"Increase Amount" shall have the meaning assigned in Section 1.5(a) of
-----------------
this Supplement.
"Increase Date" shall have the meaning assigned in Section 1.5(a) of
---------------
this Supplement.
"Initial Invested Amount" means the amount set forth on Schedule 3 to
-------------------------
this Supplement.
"Initial Series 1999-1 Certificateholder" shall have the meaning
-----------------------------------------
specified in the preamble to this Supplement.
"Invested Amount" means on any date of determination, an amount equal
-----------------
to (a) (i) with respect to the Initial Series 1999-1 Certificateholder, the
Initial Invested Amount or (ii) with respect to any Acquiring Series 1999-1
Certificateholder, the portion of the transferring Series 1999-1
Certificateholder's Invested Amount purchased by such Acquiring Series 1999-1
Certificateholder, plus (b) the aggregate amount of any increases in such Series
----
1999-1 Certificateholder's Invested Amount pursuant to Section 1.5 of this
-----------
Supplement, minus (c) the aggregate amount of any distributions to such Series
-----
1999-1 Certificateholder pursuant to Section 4.07(c) of the Agreement as set
---------------
forth in this Supplement.
"Invested Percentage" means, on any Business Day, the percentage (A)
---------------------
during the Revolving Period, obtained by dividing (i) the Series 1999-1
Allocated Receivables Amount as of the end of the immediately preceding Business
Day, by (ii) the Aggregate Eligible Unpaid Balance as of the end of the
immediately preceding Business Day (provided, that if during the Revolving
--------
Period an early amortization period or amortization period shall exist with
respect to any Series other than Series 1999-1, then the amount in this clause
------
(ii) shall be the greater of (1) the Aggregate Eligible Unpaid Balance as of the
----
end of the immediately preceding Business Day and (2) the sum of the numerators
used to calculate the Invested Percentages for all outstanding Series on the
Business Day for which such percentage is determined) and (B) during the Early
Amortization Period, obtained by dividing (x) the Series 1999-1 Allocated
Receivables Amount on the last day of the Revolving Period (provided, that if
--------
during the Early Amortization Period,
42
the early amortization periods of all other outstanding Series which were
outstanding prior to the commencement of the Early Amortization Period commence,
then, from and after the date on which the last of such Series commences its
early amortization period, the amount of this clause (x) shall be the Series
----------
1999-1 Allocated Receivables Amount on such date) by (y) the greater of (1) the
Aggregate Eligible Unpaid Balance as of the end of the immediately preceding
Business Day and (2) the sum of the numerators used to calculate the Invested
Percentages for all outstanding Series on the Business Day for which such
percentage is determined; provided that for purposes of this definition, the
--------
Adjusted Invested Amount shall be calculated assuming that the amount on deposit
in the Series 1999-1 Principal Collection Sub-subaccount is zero.
"Issuance Date" means May 7, 1999, which is the Series Issuance Date
-------------
for Series 1999-1.
"Issuer" means the Initial Series 1999-1 Certificateholder.
------
"Issuer CP" means commercial paper notes issued to fund the Issuer's
---------
Invested Amount.
"LIBOR" means the rate of interest per annum determined by the Agent to
-----
be the arithmetic mean (rounded upward to the nearest 1/16th of 1%) of the rates
of interest per annum notified to the Agent by each Reference Bank as the rate
of interest at which dollar deposits in the approximate amount of the Invested
Amount to be funded at the Eurodollar Rate during such Accrual Period would be
offered by major banks in the London interbank market to such Reference Bank at
its request at or abut 11:00 a.m. (London time) on the second Business Day
before the commencement of such Accrual Period.
"LIBOR Rate Tranche" means a portion of the Series 1999-1 Aggregate
------------------
Invested Amount for which the interest is calculated by reference to LIBOR.
"Liquidity Agreement" means either (i) the Liquidity Agreement, dated
-------------------
as of May 7, 1999, among Market Street Funding Corporation, the financial
institutions from time to time parties thereto as Liquidity Lenders, and PNC
Bank, National Association as the Liquidity Agent, as it may be amended or
supplemented from time to time or (ii) the Liquidity Loan Agreement among the
Issuer, the Liquidity Lenders from time to time parties thereto and PNC Bank,
National Association as Administrator, dated as of May 7, 1999.
"Liquidity Banks" means the financial institutions party to the
---------------
Liquidity Agreement as liquidity institutions.
"Liquidity Commitment Amount" means, at any time, the then aggregate
---------------------------
amount of the Liquidity Banks' commitments under the Liquidity Agreement.
"Liquidity Funding" means a funding pursuant to one or more Liquidity
-----------------
Agreements.
43
"Majority Series 1999-1 Certificateholders" means, on any day, Series
-----------------------------------------
1999-1 Certificateholders having, in the aggregate, more than 50% of the
Aggregate Commitment Amount.
"Maximum Commitment Amount" means on any date two hundred fifty million
-------------------------
dollars ($250,000,000) minus the aggregate amount of reductions in the
-----
Commitments pursuant to Section 1.7 of this Supplement.
-----------
"Miscellaneous Deficiency and Expense Amount" means on any Business
-------------------------------------------
Day, with respect to Series 1999-1, the sum of (i) (if CompuCom is not the
Servicer) all Program Costs which have been accrued and unpaid since the
preceding Business Day; (ii) any Commitment Fees and Program Fees due and
payable pursuant to this Supplement; and (iii) any Article IV Costs due and
payable pursuant to this Supplement.
"Monthly Interest Amount" for any Accrual Period means (i) the daily
-----------------------
average Series 1999-1 Aggregate Invested Amount during such Accrual Period,
times (ii) the Certificate Rate for such Accrual Period, times (iii) a fraction,
----- -----
the numerator of which is the number of days in such Accrual Period and the
denominator of which is 360.
"Monthly Trustee Fee" for any Accrual Period means an amount equal to
-------------------
$2,500 plus the reasonable out-of-pocket costs incurred by the Trustee during
such Accrual Period in the performance of its duties under this Agreement.
"Net Worth" means, as to any Person at any time, the excess of the
---------
total assets of such Person and its Subsidiaries at such time over the total
liabilities of such Person and its Subsidiaries at such time.
"Non-Excluded Taxes" shall have the meaning assigned in Section 4.2(a)
------------------ --------------
of this Supplement.
"Overconcentration Amount" means, at any date with respect to an
------------------------
Obligor, the excess of the aggregate Unpaid Balance of Eligible Receivables due
from such Obligor on such date over the Overconcentration Obligor Basis for such
Obligor on such date. In addition, with respect to Obligors that are
Governmental Authorities, the Overconcentration Amount means the excess of the
aggregate Unpaid Balance of Eligible Receivables due from such Obligors on such
date over 10% of the Aggregate Eligible Unpaid Balance on such date.
"Overconcentration Obligor Basis" for an Obligor means the percentage
-------------------------------
of the Aggregate Eligible Unpaid Balance at such date set forth below for the
applicable category of that Obligor (expressed as a dollar amount):
44
Minimum Long-Term or Short-Term
Unsecured Debt Rating
---------------------
S&P ▇▇▇▇▇'▇ Percentage*
--- ------- ----------
A-1 or A+ P-1 or A1 14%
A-2 or BBB+ P-2 or Baa1 7%
A-3 or BBB- P-3 or Baa3 4.67%
Less than A-3 or Less than P-3 or
BBB-/Unrated Baa3/Unrated 2.8%
provided, however, that all Obligors that are affiliates of each other having
-------- -------
identical long-term and short-term debt ratings (or whose long-term or short-
term senior unsecured debt are unrated) shall be deemed to be a single Obligor,
provided further, however, that the following Obligors shall have a percentage
-------- ------- -------
of 4%:
Deloitte & Touche LLP; and
Fidelity Investments.
The percentage applicable to any Obligor (or Obligor group, if
applicable) will be the percentage associated with the lower of such Obligor's
(or Obligor group's) short-term or long-term senior unsecured debt ratings (with
"unrated" being lowest) issued by S&P or ▇▇▇▇▇'▇. The ratings specified in the
table are minimums for each percentage category, so that a rating of an Obligor
not shown in the table falls in the category associated with the highest rating
shown in the table that is lower than such rating.
"Participants" shall have the meaning assigned in Section 8.9 of this
------------ -----------
Supplement.
"Past Due Receivable" means a Receivable that remains unpaid for more
-------------------
than 150 days but not more than 180 days from the original invoice date for such
payment, or that has been charged off before it has become 151 days past
invoice.
"Payment Date" means the fourteenth day of each month (or, if such day
------------
is not a Business Day, the next succeeding Business Day).
"Payment Date Interest Shortfall" has the meaning specified in Section
------------------------------- -------
4.05(b) of the Agreement as set forth in this Supplement.
-------
"Payment Date Shortfall" has the meaning set forth in Section 3.11 of
---------------------- ------------
the Agreement as set forth in this Supplement.
45
"Prime Rate Tranche" means that portion of the Series 1999-1 Aggregate
------------------
Invested Amount not allocated to a CP/LIBOR Rate Tranche and for which interest
is calculated by reference to the Alternate Base Rate.
"Program Costs" means, for any Business Day, the sum of (a) the product
-------------
of (i) all unpaid fees and expenses due and payable to counsel to, and
independent auditors of, the Transferor (other than fees and expenses payable on
or in connection with the closing of the issuance of the Series 1999-1 Investor
Certificates) on such Business Day and (ii) a fraction, the numerator of which
is the Series 1999-1 Aggregate Invested Amount on such Business Day and the
denominator of which is the sum of (1) the Aggregate Invested Amount on such
Business Day (except with respect to any Series of variable funding
certificates) and (2) the aggregate commitment amount (which, in the case of
Series 1999-1, is the Maximum Commitment Amount) with respect to any Series of
variable funding certificates on such Business Day, and if CompuCom is not the
Servicer, amounts otherwise payable by the Servicer for the Trustee's fees and
expenses pursuant to the Agreement.
"Program Fee" shall have the meaning set forth in Section 1.8(c) of
----------- --------------
this Supplement.
"Program Fee Percentage" shall have the meaning set forth in the Fee
----------------------
Letter.
"Program Support Agreement" means each Liquidity Agreement, each
-------------------------
agreement pursuant to which the Issuer obtains funding, through the issuance of
Commercial Paper Notes or otherwise, and each other agreement entered into by
the Issuer in connection with its securitization program.
"Program Support Provider" means each of each entity that issues
------------------------
Commercial Paper Notes, each Liquidity Bank and the Agent.
"Record Date" means with respect to any Payment Date, the last Business
-----------
Day of the immediately preceding Settlement Period.
"Reference Bank" means PNC Bank, National Association.
--------------
"Register" means a register maintained by the Agent for recording
--------
transfers of the Series 1999-1 Certificates.
"Sales-Based Default Ratio" means, as of any Cut-Off Date, the ratio,
-------------------------
expressed as a percentage, of (i) the aggregate Unpaid Balance of all Past Due
Receivables for the month ending on such Cut-Off Date, divided by (ii) the
----------
aggregate ▇▇▇▇▇▇▇▇ for the fifth preceding month.
"Sales-Based Dilution Ratio" as of any Cut-Off Date means (a) the
--------------------------
aggregate reduction attributable to Dilutions occurring in the Unpaid Balance of
Pool Receivables which Dilutions were granted during the month ending on such
Cut-Off Date; divided by (b) the aggregate
----------
46
amount of ▇▇▇▇▇▇▇▇ for the month immediately preceding the two months ending as
of such Cut-Off Date.
"Scheduled Maturity Date", with respect to the Series 1999-1 Investor
-----------------------
Certificates, means the Payment Date in April 2002, as such date may be extended
pursuant to a written agreement executed by all of the Series 1999-1
Certificateholders, a copy of which shall be provided by the Agent to the
Trustee.
"Series 1999-1" means the Variable Funding Accounts Receivable Trust
-------------
Certificates, Series 1999-1, the principal terms of which are set forth in this
Supplement.
"Series 1999-1 Accrued Interest Sub-subaccount" has the meaning
---------------------------------------------
specified in Section 4.02(d)(i) of the Agreement as set forth in this
------------------
Supplement.
"Series 1999-1 Aggregate Invested Amount" means, as of any date of
---------------------------------------
determination, the sum of the Invested Amounts of all Series 1999-1
Certificateholders at the close of business on such date.
"Series 1999-1 Allocated Receivables Amount" means, for any day, the
------------------------------------------
lesser of (a) the Series 1999-1 Target Receivables Amount on such day and (b)
the Aggregate Eligible Unpaid Balance on such day times the percentage
equivalent of a fraction the numerator of which is the Series 1999-1 Target
Receivables Amount on such day and the denominator of which is the Aggregate
Target Receivables Amount on such day.
"Series 1999-1 Certificateholder" or "Series 1999-1 Investor
------------------------------- ----------------------
Certificateholder" means any Holder of a Series 1999-1 Investor Certificate, it
-----------------
being understood that, subject to Section 9.1 of this Supplement, no Person
-----------
shall be a Series 1999-1 Certificateholder unless such Person is the Initial
Series 1999-1 Certificateholder or an Acquiring Series 1999-1 Certificateholder.
"Series 1999-1 Certificateholders' Interest" has the meaning specified
------------------------------------------
in Section 1.2 of this Supplement.
-----------
"Series 1999-1 Collection Subaccount" has the meaning specified in
-----------------------------------
Section 4.02(d)(i) of the Agreement as set forth in this Supplement.
------------------
"Series 1999-1 Investor Certificate" or "Series 1999-1 Certificate"
---------------------------------- -------------------------
means a Variable Funding Accounts Receivable Trust Certificate, Series 1999-1,
executed by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit D to this Supplement.
---------
"Series 1999-1 Monthly Principal Payment" has the meaning specified in
---------------------------------------
Section 4.06(a) of the Agreement as set forth in this Supplement.
---------------
47
"Series 1999-1 Non-Principal Collection Sub-subaccount" has the meaning
-----------------------------------------------------
specified in Section 4.02(d)(i) of the Agreement as set forth in this
------------------
Supplement.
"Series 1999-1 Principal Collection Sub-subaccount" has the meaning
-------------------------------------------------
specified in Section 4.02(d)(i) of the Agreement as set forth in this
------------------
Supplement.
"Series 1999-1 Principal Collection Subordinated Sub-subaccount" has
--------------------------------------------------------------
the meaning specified in Section 4.02(d)(i) of the Agreement as set forth in
------------------
this Supplement.
"Series 1999-1 Required Reserved Percentage" as of any day means the
------------------------------------------
sum of (i) the Dilution Reserve Percentage, (ii) the greater of (A) 14% and (B)
the Dynamic Loss Reserve Percentage and (iii) the Yield Reserve Percentage, in
each case as most recently calculated.
"Series 1999-1 Required Subordinated Amount" means, (i) on any day
------------------------------------------
during the Revolving Period, the sum of (a) the product of (1) the Adjusted
Invested Amount and (2) the percentage equivalent of a fraction the numerator of
which is the Series 1999-1 Required Reserved Percentage and the denominator of
which is one minus the Series 1999-1 Required Reserved Percentage and (b)
$110,000, and (ii) on any day during the Early Amortization Period, an amount
equal to the Series 1999-1 Required Subordinated Amount, in each case, on the
last Business Day of the Revolving Period.
"Series 1999-1 Subordinated Percentage" means the percentage equivalent
-------------------------------------
of a fraction the numerator of which is the Series 1999-1 Required Subordinated
Amount on the last Business Day of the Revolving Period and the denominator of
which is the sum of the Adjusted Invested Amount and Series 1999-1 Required
Subordinated Amount, in each case on the last day of the Revolving Period.
"Series 1999-1 Target Deficiency Amount" means for any day, the excess,
--------------------------------------
if any, of the Series 1999-1 Target Receivables Amount over the Series 1999-1
Allocated Receivables Amount. The Series 1999-1 Target Deficiency Amount is the
"Target Deficiency Amount" for purposes of Series 1999-1.
"Series 1999-1 Target Receivables Amount" means, on any day the sum of
---------------------------------------
(i) the Adjusted Invested Amount on such day and (ii) the Series 1999-1 Required
Subordinated Amount on such day. The Series 1999-1 Target Receivables Amount is
the "Target Receivables Amount" for purposes of Series 1999-1.
"Series Termination Date", with respect to Series 1999-1, means the
-----------------------
Payment Date in October 2002.
"Servicing Fee" for each Accrual Period means an amount equal to the
-------------
product of (i) one-twelfth, (ii) the Servicing Fee Percentage as in effect on
the Issuance Date and (iii) the Series 1999-1 Aggregate Invested Amount on the
first day of such Accrual Period.
48
"Servicing Fee Percentage", with respect to Series 1999-1, means 1.0%,
------------------------
subject to any increase pursuant to Section 3.02(b) of the Agreement.
---------------
"Specified Principal Terms" means, with respect to any Series, the
-------------------------
following Principal Terms: (a) the floating allocation percentage contained in
the Supplement with respect to such Series; (b) any amendments to the
definitions of Eligible Accounts or Eligible Receivables contained in the
Supplement with respect to such Series; (c) any Early Amortization Events; (d)
any amendment to the definition of the Control Party contained in the Supplement
with respect to such Series; (e) any Servicer Defaults contained in the
Supplement with respect to such Series; (f) the method for allocating principal
and interest to Certificateholders of such Series; (g) the level of
subordination provided by the Transferor's Interest with respect to such Series;
and (h) the date on which such Series will begin its amortization or
accumulation period, if any, and the related terms thereof.
"Statutory Reserve" means a fraction (expressed as a decimal), the
-----------------
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Agent or, if the Agent is not a bank, the Liquidity Agent (as such
term is defined in the Liquidity Agreement) (including any branch, Affiliate, or
other fronting office thereof) is subject, with respect to the Eurodollar Rate,
for Eurocurrency Liabilities (as defined in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Each LIBOR Rate Tranche shall be deemed to constitute Eurocurrency Liabilities
and to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Holder under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Supplement" has the meaning specified in the preamble hereto.
----------
"Tangible Net Worth means, as to any Person at any time, Net Worth of
------------------
such Person minus the value of goodwill, trademarks, trade names, copyrights,
patents, licenses, organizational expenses, research and development expenses
and similar intangibles and, with respect to Tangible Net Worth of CompuCom, any
write-up on the book value of any asset resulting from a revaluation thereof
subsequent to December 31, 1998.
"Transfer Issuance Date" has the meaning specified in the related
----------------------
Commitment Transfer Supplement.
"Transferee" has the meaning specified in Section 8.9(f) of this
---------- --------------
Supplement.
"Transaction Documents" means, collectively, the Agreement, the
---------------------
Receivables Contribution and Sale Agreement, this Supplement and the Series
1999-1 Investor Certificates.
49
"Transition Costs" means any documented expenses and allocated costs of
----------------
personnel reasonably incurred by any Successor Servicer in connection with a
transfer of servicing from the Servicer to such Successor Servicer.
"Trust Accounts" has the meaning specified in Section 4.02(d)(i) of the
-------------- ------------------
Agreement as set forth in this Supplement.
"Turnover Rate" means, as of any Cut-Off Date, the ratio (expressed as
-------------
a percentage) of (i) the aggregate Unpaid Balance of the Receivables as of such
Cut-Off Date, divided by (ii) the most recent three month average ▇▇▇▇▇▇▇▇ for
-------
the month ending on such Cut-Off Date.
"Yield Reserve Percentage" means, at any time, the product of (a)(A)
------------------------
the sum of (i) 1.5 times the Eurodollar Rate for the current Accrual Period,
-----
plus (ii) 3.60%, plus (iii) the Servicing Fee Percentage (B) divided by twelve
and (b) two times the most recently calculated Turnover Rate.
Unless the context otherwise requires, any reference to the Early
Amortization Period or the Revolving Period in this Supplement (including in the
amendments to the Agreement contained in Section 2.1 of this Supplement) shall
-----------
refer only to such periods as they relate to the Series 1999-1 Investor
Certificates.
In the event that any term or provision contained herein shall conflict
with or be inconsistent with any term or provision contained in the Agreement,
the terms and provisions of this Supplement shall govern. All capitalized terms
not otherwise defined herein are defined in the Agreement. All Article or
Section references herein means Articles or Sections of the Agreement as
modified by this Supplement, except as otherwise provided herein. Unless
otherwise stated herein, as the context otherwise requires or if such term is
otherwise defined in the Agreement, each capitalized term used herein shall
relate only to the Series 1999-1 Investor Certificates and no other Series of
Investor Certificates. The words "hereof," "herein" and "hereunder" and words of
------ ------ ---------
similar import when used in this Supplement shall refer to this Supplement or
the Agreement as a whole and not to any particular provision of this Supplement
or the Agreement, as the case may be; the word "including" (and with correlative
---------
meaning "include") means including without limiting the generality of any
-------
description preceding such term; the word "or" is not exclusive; and Section,
--
Schedule and Exhibit references contained in this Agreement or this Supplement
are references to Sections, Schedules and Exhibits in or to this Supplement
unless otherwise specified.
Unless otherwise specified in this Supplement, all accounting terms
used herein shall be interpreted, all accounting determinations hereunder shall
be made, and all financial statements required to be delivered hereunder shall
be prepared in accordance with generally accepted accounting principles as in
effect from time to time, applied on a basis consistent (except for immaterial
changes or changes concurred in by the independent public accountants of
CompuCom) with the most recent audited consolidated financial statements of
CompuCom and its Consolidated Subsidiaries delivered to the Agent.
50
[SIGNATURES FOLLOW]
51
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
be duly executed by their respective officers thereunto duly authorized as of
the date first above written.
CSI FUNDING, INC.,
as Transferor
By:_____________________________________
Name:___________________________________
Title:__________________________________
COMPUCOM SYSTEMS, INC.,
as Servicer
By:_____________________________________
Name:___________________________________
Title:__________________________________
S-1
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Corporate Trust Officer
S-2
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By:____________________________________
Name:__________________________________
Title:_________________________________
S-3
MARKET STREET CAPITAL
CORPORATION, as the Initial Series 1999-1
Certificateholder
By:____________________________________
Name:__________________________________
Title:_________________________________
S-4
SCHEDULE 1
to
Series 1999-1 Supplement
Commitments
-----------
Series 1999-1 Certificateholder Commitment
-------------------------------
Market Street Capital Corporation $250,000,000
SCHEDULE 2
to
Series 1999-1 Supplement
Trust Accounts
--------------
Series 1999-1 Accrued Interest Sub-subaccount 13521504
Series 1999-1 Collection Sub-account 13521500
Series 1999-1 Non-principal Collection Sub-subaccount ▇▇▇▇▇▇▇▇
Series 1999-1 Principal Collection Sub-subaccount 13521501
Series 1999-1 Principal Collections Subordinated Sub-subaccount ▇▇▇▇▇▇▇▇
Series 1999-1 Transferor Collection Sub-Account 13521505
SCHEDULE 3
to
Series 1999-1 Supplement
Initial Invested Amount
-----------------------
Market Street Capital Corporation $175,000,000