Exhibit 10.1
28 March, 2003
AMENDMENT AND RESTATEMENT AGREEMENT
relating to an
ASSET BACKED LOAN AGREEMENT
between
ROCHFORD, INC.
as Borrower
and
IKON CAPITAL PLC
as Originator and Servicer
and
PARK AVENUE RECEIVABLES CORPORATION
as Conduit Lender
and
CERTAIN APA BANKS
and
JPMORGAN CHASE BANK
as Funding Agent
WEIL, GOTSHAL & MANGES
ONE SOUTH PLACE LONDON EC2M 2WG
020 7903 1000
WWW.WEIL.COM
THIS AMENDMENT AND RESTATEMENT AGREEMENT is made on the 28th day of March 2003.
BETWEEN:
(1) ROCHFORD, INC. (the "Borrower");
(2) IKON CAPITAL PLC (the "Originator" and "Servicer");
(3) PARK AVENUE RECEIVABLES CORPORATION (the "Conduit Lender");
(4) CERTAIN APA BANKS; and
(5) JPMORGAN CHASE BANK (the "Funding Agent").
WHEREAS:
(A) The Borrower, the Originator, the Servicer, the Conduit Lender, certain
APA Banks and the Funding Agent are parties to an Asset Backed Loan
Agreement dated 30 March 2001 (the "Agreement").
(B) The parties hereto have agreed to amend and restate the Agreement in
the manner set out herein.
IT IS AGREED as follows:
1 INTERPRETATION
In these presents:
1.1 "Effective Date" means 28 March, 2003.
1.2 Words and expressions used herein shall bear the same meaning as
in the Agreement unless otherwise defined herein.
1.3 Clause headings are for ease of reference only and do not form part of
these presents.
2 AMENDMENTS TO THE AGREEMENT
2.1 The parties hereto agree that, as from (and including) the Effective Date,
the Agreement shall have been so amended and supplemented that the Agreement
shall henceforth be read and construed as though it had been duly executed in
the form set out in Schedule A to these presents.
3 CONTINUATION OF AGREEMENT
3.1 Each of the parties hereto represents that:
(i) it has the power to enter into and has duly authorised the execution and
delivery of these presents; and
(ii) its obligations hereunder constitute its legal, valid and binding
obligations.
3.2 Nothing in these presents shall operate as a waiver of any right or remedy
of any party under any provision of the Agreement or the Agreement as amended
hereby nor to excuse any
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delay or omission in the performance of the Agreement
nor to impair any right or remedy arising thereunder or in respect thereof.
3.3 As from the Effective Date the Agreement (including the use of "Agreement"
in the Agreement) shall be read and construed in all respects as incorporating
the changes made by these presents but otherwise all terms and conditions of the
Agreement shall remain unchanged and in full force and effect in all respects.
4 COUNTERPARTS
These presents may be executed in any number of counterparts and by different
parties hereto in separate counterparts each of which, when executed and
delivered, shall constitute an original, but all counterparts together shall
constitute but one and the same instrument.
5 GOVERNING LAW AND JURISDICTION
These presents shall be governed, construed and interpreted in accordance with
the laws of the State of New York.
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AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
CONDUIT LENDER: PARK AVENUE RECEIVABLES CORPORATION
By:
Name:
Title:
BORROWER: ROCHFORD, INC.
By:
Name:
Title:
ORIGINATOR: IKON CAPITAL PLC
By:
Name:
Title:
SERVICER: IKON CAPITAL PLC
By:
Name:
Title:
FUNDING AGENT: JPMORGAN CHASE BANK
By:
Name:
Title:
APA BANKS: JPMORGAN CHASE BANK
Name:
Title:
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SCHEDULE A
ASSET BACKED LOAN AGREEMENT
Dated as of 30 March, 2001
By and Among
ROCHFORD, INC.
as Borrower
and
IKON CAPITAL PLC
as Originator and Servicer
and
PARK AVENUE RECEIVABLES CORPORATION
as Conduit Lender
and
CERTAIN APA BANKS
and
JPMORGAN CHASE BANK
as Funding Agent
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...........................................1
SECTION 1.1 Certain Defined Terms.................................1
SECTION 1.2 Other Terms...........................................1
SECTION 1.3 Computation of Time Periods...........................1
ARTICLE II LOANS AND SETTLEMENTS.................................2
SECTION 2.1 Facility..............................................2
SECTION 2.2 Loans; Certificates; Eligible Receivables.............2
SECTION 2.3 Settlement Procedures.................................4
SECTION 2.4 Payment of Fees and Interest..........................6
SECTION 2.5 Selection of Tranche Periods and Tranche Rates........6
SECTION 2.6 Payments and Computations, Etc........................7
SECTION 2.7 Increased Costs.......................................8
SECTION 2.8 Requirements of Law...................................8
SECTION 2.9 Inability to Determine Eurodollar Rate................9
SECTION 2.10 Breakage Costs........................................9
SECTION 2.11 Reduction and Increase of the Funding Limits.........10
SECTION 2.12 Taxes................................................10
SECTION 2.13 Illegality...........................................11
SECTION 2.14 Security Interest....................................12
SECTION 2.15 Hedging..............................................13
ARTICLE III REPRESENTATIONS AND WARRANTIES; COVENANTS;
TRIGGER EVENTS ......................................13
SECTION 3.1 Representations and Warranties; Covenants............13
SECTION 3.2 Reaffirmation of Representations and Warranties
by the Borrower .....................................13
SECTION 3.3 Trigger Events.......................................13
ARTICLE IV INDEMNIFICATION......................................13
SECTION 4.1 Indemnities by the Borrower..........................13
SECTION 4.2 Recourse for Interest................................15
ARTICLE V ADMINISTRATION AND COLLECTION OF RECEIVABLES.........15
SECTION 5.1 Designation of Servicer..............................15
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TABLE OF CONTENTS
(continued)
Page
SECTION 5.2 Duties of Servicer.......................................15
SECTION 5.3 Certain Rights of the Funding Agent......................16
SECTION 5.4 Rights and Remedies......................................16
SECTION 5.5 Further Actions..........................................17
SECTION 5.6 Covenants of the Servicer and the Originator.............17
SECTION 5.7 Indemnities by the Servicer..............................17
ARTICLE VI MISCELLANEOUS............................................18
SECTION 6.1 Term of Agreement........................................18
SECTION 6.2 Amendments, Etc..........................................18
SECTION 6.3 Notices, Etc.............................................19
SECTION 6.4 Assignability............................................20
SECTION 6.5 Costs, Expenses and Taxes................................21
SECTION 6.6 No Proceedings; Limitation on Payments...................22
SECTION 6.7 Confidentiality..........................................23
SECTION 6.8 GOVERNING LAW............................................23
SECTION 6.9 Execution in Counterparts................................23
SECTION 6.10 Tax Treatment............................................23
SECTION 6.11 Agent Conflict Waiver....................................23
EXHIBIT I DEFINITIONS .....................................................26
EXHIBIT II CONDITIONS PRECEDENT...........................................40
EXHIBIT III REPRESENTATIONS AND WARRANTIES................................43
EXHIBIT IV COVENANTS .....................................................47
EXHIBIT V TRIGGER EVENTS .................................................53
EXHIBIT VI PLACE OF BUSINESS/RECORDS......................................55
ANNEX A FORM OF CONTRACT .................................................56
ANNEX B FORM OF SERVICER REPORT...........................................57
ANNEX C-1 FORM OF REVOLVING CREDIT NOTE...................................58
ANNEX C-2 FORM OF LOAN CERTIFICATE........................................59
ANNEX D FORM OF PAYDOWN NOTICE............................................60
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ASSET BACKED LOAN AGREEMENT
(as amended, supplemented or otherwise modified and
in effect from time to time, this "Agreement")
Dated as of 30 March, 2001
IKON CAPITAL PLC, a company incorporated in England and Wales (together with its
successors and assigns, the "Originator", and in its capacity as servicer,
together with its successors and assigns in such capacity, the "Servicer"),
ROCHFORD, INC., a Delaware Corporation (together with its successors and
assigns, the "Borrower"), PARK AVENUE RECEIVABLES CORPORATION, a Delaware
Corporation (together with its successors and assigns, "PARCO" or the "Conduit
Lender"), the APA BANKS from time to time party hereto (the "APA Banks") and
JPMORGAN CHASE BANK, a New York state banking corporation as PARCO's funding
agent (in such capacity, the "Funding Agent").
PRELIMINARY STATEMENTS
WHEREAS, the Borrower has requested that the Conduit Lender and the APA Banks,
make available for the purposes specified in this Agreement a revolving loan
facility; and
WHEREAS, the Conduit Lender and APA Banks are willing to make available to the
Borrower a revolving loan facility upon the terms and subject to the conditions
set forth herein; and
WHEREAS, the Borrower has agreed to secure its obligations to the Conduit Lender
and the APA Banks in connection with such financing with security interests in,
and liens on, certain Receivables assets, as more specifically provided for
here; and
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. Capitalized terms used herein shall
have the meanings assigned to such terms in, or incorporated by reference into,
Exhibit 1 attached hereto, which Exhibit 1 is incorporated by reference herein.
References in Exhibits to "the Agreement" refer to this Agreement, as amended,
modified or supplemented from time to time.
SECTION 1.2 Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of New York and not specifically defined herein, are
used herein as defined in such Article 9.
SECTION 1.3 Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including", the words "to"
and "until" each mean "to but excluding," and the word "within" means "from and
excluding a specified date and to and including a later specified date".
Furthermore, all references to a specific time or times shall be references to
such time in New York, New York unless otherwise specified.
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ARTICLE II
LOANS AND SETTLEMENTS
SECTION 2.1 Facility. (a) Upon the terms and subject to the conditions set
forth herein and in the other Transaction Documents, (i) PARCO may, in its sole
discretion and prior to the occurrence of a PARCO Termination Event, make loans
(in Dollars) to the Borrower, from time to time prior to the Termination Date,
in an aggregate principal amount at any one time outstanding up to but not
exceeding the amount of the Funding Limit ("Loans"), but if PARCO shall have
notified the Funding Agent that it has elected not to advance such Loan, the APA
Banks shall, subject to the terms of this Agreement, advance the Loan (in an
Approved Currency) not to be advanced by PARCO. By honouring any Notice of
Borrowing hereunder, neither of the Conduit Lender nor any APA Banks assumes or
shall have any obligations or liability under any of the Contracts, all of which
shall remain the obligations and liabilities of the Originator. The Borrower may
borrow, repay, prepay and reborrow Loans pursuant to this Article II.
(b) Maximum Lender Funding Limit. Notwithstanding anything to the
contrary contained in this Agreement, at no time shall the
Outstanding Loans with respect to the Conduit Lender and the
APA Banks exceed the Funding Limit at such time.
SECTION 2.2 Loans; Certificates; Eligible Receivables.
(a) Incremental Borrowings. (i) Prior to the Termination Date,
upon the terms and subject to the conditions set forth herein
and in the other Transaction Documents,
(x) the Borrower may, at its option from time to time,
request a borrowing from the Conduit Lender (prior to the
occurrence of a PARCO Termination Event) and from the APA
Banks (if PARCO has elected not to advance such Loan or
following the occurrence of a PARCO Termination Event); and
(y) PARCO may, at its option from time to time (prior
to the occurrence of a PARCO Termination Event), and the APA
Banks (if PARCO has elected not to advance such Loan or
following the occurrence of a PARCO Termination Event) shall,
honour such request for borrowing from the Borrower, such
borrowing to be secured by the security interest in Section
2.14 (each, an "Incremental Borrowing");
provided, however, that (i) after giving effect to such
Incremental Borrowing and the advance to the Borrower of such
Loan Amount, the Dollar Equivalent of the Outstanding Balance
of all Eligible Receivables is not less than the Required
Balance, (ii) after giving effect to such Incremental
Borrowing and the advance to the Borrower of such Loan Amount,
the amount of the Outstanding Loans shall not exceed the
Funding Limit; and (iii) provided, further, that after giving
effect to such Incremental Borrowing and the advance to the
Borrower of such Loan Amount, the representations and
warranties set forth in Section 3.1 shall be true and correct
as of the date of such Incremental Borrowing and the advance
to the Borrower of such Loan Amount.
(ii) The Borrower shall deliver to the Funding Agent by telefax a
duly completed Notice of Borrowing (such telefax to be
confirmed by telephone to the Funding Agent promptly
thereafter) in respect of each Incremental Borrowing at least
three (3) Business Days prior to the proposed date of any
Incremental Borrowing. Each such notice shall specify (x) the
Loan Amount (which shall be
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at least $1,000,000 or integral multiples of $100,000 in
excess thereof) or, to the extent that the then available
unused portion of the Facility Limit is less than such amount,
such lesser amount equal to such available portion of the
Facility Limit; (y) the desired date of such Incremental
Borrowing, which shall be a Business Day; and (z) the desired
Tranche Period(s) and allocations of the Outstanding Loans of
such Incremental Borrowing thereto as required by Section 2.13
(each, a "Notice of Borrowing"). The Borrower shall be limited
to a maximum of one Incremental Borrowing on each Settlement
Date in any single calendar month, without prior consent of
the Funding Agent. Each Incremental Borrowing shall be subject
to a condition precedent that the Servicer shall have
delivered to the Funding Agent, in form and substance
satisfactory to it, a completed Servicer Report with respect
to the prior Business Day, together with such other additional
information as the Funding Agent, on behalf of the Conduit
Lender, may reasonably request. The Funding Agent will
promptly notify by telephone, confirmed by telefax, the
Conduit Lender of such receipt of any Notice of Borrowing and
the Loan Amount.
(iii) Each notice of proposed Incremental Borrowing shall be
irrevocable and binding on the Borrower, and the Borrower
shall, subject to the immediately following sentence,
indemnify each Lender against any loss or expense incurred by
such Lender, either directly or indirectly, as a result of any
failure by the Borrower to complete such Incremental
Borrowing, including, without limitation, any loss or expense
incurred by such Lender, either directly or indirectly, by
reason of the liquidation or reemployment of funds acquired by
such Lender (including, without limitation, funds obtained by
issuing Commercial Paper or promissory notes, obtaining
deposits as loans from third parties and reemployment of
funds), to fund such Incremental Borrowing. The obligation of
the Borrower pursuant to this Section 2.2(a)(iii) shall be
payable at such time as funds are actually received by, or are
available to, the Borrower in excess of funds necessary to pay
in full all accrued and payable Interest and Program Fees and,
to the extent funds are not available to pay such obligations,
the claims relating thereto shall not constitute a claim
against the Borrower but shall continue to accrue.
(iv) The Borrower shall execute a Revolving Credit Note for the
benefit of each Lender. The Loans made by each Lender shall be
evidenced by the Revolving Credit Note payable to the order of
such Lender. Upon any increase in the Funding Limit of any
Lender pursuant to Section 2.10 hereof, the Borrower will
immediately deliver to such Lender a new Revolving Credit
Note, having a maximum principal amount equal to the amount of
such Funding Limit as so increased in exchange for the
Revolving Credit Note of such Lender outstanding prior to such
increase.
(v) On the Closing Date, the Funding Agent, on behalf of the
Lenders, shall deliver written confirmation to the Borrower of
the Loan Amount, the Tranche Period(s) and the Tranche Rate(s)
relating to such Loan. Upon receipt of such confirmation, the
Borrower shall deliver to the Funding Agent, acting on behalf
of the Lenders, the Loan Certificate in the form of Annex C
hereto (the "Loan Certificate"). The Funding Agent shall
indicate the amount of the Incremental Borrowing together with
the date thereof on the grid attached to the Loan Certificate.
On the date of each subsequent Incremental Borrowing the
Funding Agent shall send such confirmation to the Borrower, of
the Loan Amount, the Tranche Period(s), the Loan Date and the
Tranche Rate(s) applicable
3
to such Incremental Borrowing. The Funding Agent, shall
indicate the amount of the Incremental Borrowing together with
the date thereof as well as any decrease in the amount of the
Outstanding Loans on the Loan Certificate. The Revolving
Credit Note and the Loan Certificate shall evidence the
Incremental Borrowings. On the day of an Incremental
Borrowing, the Conduit Lender or the APA Banks, as applicable
shall make available to the Borrower's account at the location
indicated in Section 6.3 hereof, in immediately available
funds, an amount equal to the Loan Amount for such Incremental
Borrowing made available by the Conduit Lender or the APA
Banks, as applicable.
(b) Reinvestment Loans. On each Business Day occurring after the Closing Date
and prior to the Termination Date, the Conduit Lender may lend or, following
a PARCO Termination Event or if PARCO elects not to advance such amount, the
APA Banks shall lend to the Borrower, secured in accordance with Section
2.14, to the extent that Collections are available for such Loan in
accordance with Section 2.3 hereof, such that, after giving effect to such
Loan, the amount of the Outstanding Loans at the close of business on such
Business Day shall be equal to the amount of the Outstanding Loans at the
close of business on the Business Day immediately preceding such Business Day
plus the Loan Amount of any Incremental Borrowing made on such day, if any.
(c) All Loans. Each Loan shall be secured by a security interest in accordance
with Section 2.14.
SECTION 2.3 Settlement Procedures. (a) Collection of the Receivables shall
be administered by the Servicer, in accordance with the terms of this Agreement.
The Borrower shall provide to the Servicer on a timely basis all information
needed for such administration.
(b) The Servicer shall, on each day on which Collections are received by it,
set aside and hold in trust for the Lenders such Collections and shall
deposit into the Funding Agent's Account,
(i) on the last day of each Tranche Period, from such Collections, an
amount equal to accrued and unpaid Interest and any fees owed to the
Funding Agent pursuant to Section 2.4(a) in respect of the relevant
Tranche;
(ii) on each Settlement Date, an amount equal to the Collection Fee
accrued but unpaid during the preceding Settlement Period; and
(iii) on each Business Day on or after the occurrence of a Termination
Date, from such Collections, an amount equal to all Collections.
Notwithstanding the foregoing, unless a Trigger Event or Potential
Trigger Event has occurred, for so long as the Originator is the Servicer, the
Servicer shall not be required to set aside Collections, but may commingle the
Collections with its own funds and make the deposits required to the Funding
Agent's Account pursuant to this paragraph (b) on the dates required. For so
long as the Originator is the Servicer, the Servicer shall not be required to
deposit the Collection Fee to the Funding Agent's Account as required by clause
(ii) of this paragraph (b) but may retain such fee from the Collections
remaining after the deposits required pursuant to clause (i) of this paragraph
(b).
(c)(i)Upon receipt of funds deposited into the Funding Agent's Account pursuant
to subsection (b)(i) or (b)(ii) above, the Funding Agent shall distribute
such funds, together with any funds received in respect of the PARCO Cap,
as follows: Pro Rata
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to each Lender in payment of accrued but unpaid Interest on the
Outstanding Loans and to the Funding Agent in respect of any fees owed
pursuant to Section 2.4(a).
(ii) Subject to (c)(i) above, upon receipt of funds deposited into the
Funding Agent's Account pursuant to subsection (b)(ii) above, the
Funding Agent shall distribute such funds, in an amount equal to the
accrued but unpaid Collection Fee, to the Servicer on account of the
Collection Fee.
(iii) Upon receipt of funds deposited into the Funding Agent's Account
pursuant to subsection (b)(iii) above, the Funding Agent shall
distribute such funds as follows: first, to the Funding Agent for
distribution to each Lender in reduction to zero of all Outstanding
Loans, second, to the Funding Agent for the account of each Lender,
the Funding Agent or any Affected Person, as applicable, in payment
of any other amounts owed by the Borrower hereunder, and third, to
the Originator for its own account.
(d) For the purposes of this Section 2.3:
(i) Upon discovery by the Originator or the Funding Agent of a breach of
any of the representations or warranties made or deemed made by the
Originator in paragraph (h) of Exhibit III with respect to any
Receivable or the Related Security, such party shall give prompt
written notice thereof to the other party, as soon as practicable
and in any event within three (3) Business Days following such
discovery. The Borrower shall be deemed to have received on such day
a Collection in full of such Receivable and all other Receivables
relating to the same Contract, in the amount of the Outstanding
Balance of such Contract plus Interest accrued and to accrue thereon
through the end of the then current Settlement Period, and the
amount of each such Collection shall be applied as provided in this
Section 2.3; and
(ii) if and to the extent the Funding Agent or any Lender shall be
required for any reason to pay over to an Obligor any amount
received on its behalf hereunder, such amount shall be deemed not to
have been so received but rather to have been retained by the
Borrower and, accordingly, the Funding Agent or the Lender, as the
case may be, shall have a claim against the Borrower for such
amount, payable when and to the extent that any distribution from or
on behalf of such Obligor is made in respect thereof.
(e) Except as provided in paragraph (i) of Section 2.3(d), or as otherwise
required by applicable law or the relevant Contract, all Collections
received from an Obligor of any Receivables shall be applied to the
Receivables of such Obligor in the order of the age of the due but unpaid
amounts with respect to such Receivables, starting with the oldest such
due but unpaid amount, unless such Obligor designates its payment for
application to specific Receivables.
(f) The Originator shall forthwith deliver to the Servicer an amount equal to
the Collections deemed received by the Originator pursuant to Section
2.3(d)(i) above and the Servicer shall hold or distribute such Collections
in accordance with Section 2.3(b). If Collections are then being paid to
the Funding Agent, the Servicer shall forthwith cause such deemed
Collections to be paid to the Funding Agent. If a Trigger Event or
Potential Trigger Event has occurred, so long as the Originator shall hold
any Collections or deemed Collections required to be paid to the Servicer
or the Funding Agent, it shall hold such Collections in trust
5
and separate and apart from its own funds and shall clearly mark its
records to reflect such trust.
(g) The Borrower may reduce the Outstanding Loans upon delivery of a notice in
the form of Annex D at least ten Business Days (in the case of reductions
in excess of $25,000,000) or at least two Business Days (in the case of
reductions of $25,000,000 or less) before the proposed date of such
reduction, to the Lenders and the Funding Agent, by remitting to the
Funding Agent's Account (i) cash and (ii) instructions to apply such cash
to the Pro Rata reduction (with respect to each Lender) of the Outstanding
Loans and Interest accrued and to accrue thereon (until such cash can be
used to pay commercial paper notes); provided that the Originator has
complied with the Adverse Selection Test and the other requirements of
Section 8.2 of the Debenture. The Borrower shall pay all breakage and
other costs related to such Outstanding Loan reduction; provided, however,
that each of the Lenders and the Funding Agent shall use its reasonable
best efforts to minimize any breakage costs.
SECTION 2.4 Payment of Fees and Interest. (a) Fees. The Borrower shall pay
to the Funding Agent certain fees in the amounts and on the dates set forth in a
separate fee agreement of even date herewith (as amended, supplemented or
otherwise modified, the "Fee Letter") between the Borrower, the Lenders and the
Funding Agent.
(b) Interest. On the last day of each Tranche Period, the Borrower shall pay
to the Funding Agent, on behalf of the relevant Lender, an amount equal to
the accrued and unpaid Interest for such Tranche Period and, in the event
any portion of the Loans has been funded by the Conduit Lender, an amount
equal to the discount (without duplication) accrued on PARCO's Commercial
Paper, to the extent such Commercial Paper was issued in order to fund the
Loan, in a face amount in excess of the cash portion of the Loan Amount of
an Incremental Borrowing; provided that (i) in the event of any repayment
or prepayment of a Base Rate Tranche or a Eurodollar Tranche, accrued
Interest on the principal amount repaid or prepaid shall be payable on the
date of such repayment or prepayment and (ii) in the event of any
conversion of a Base Rate Tranche or a Eurodollar Tranche, accrued
interest on such Base Rate Tranche or Eurodollar Tranche shall be payable
on the effective date of such conversion. Interest shall accrue with
respect to each Tranche on each day occurring during the Tranche Period
related thereto.
(c) Collection Fee. The Servicer shall be entitled to receive a fee (the
"Collection Fee") of one-twelfth of 1% per month on the average daily
Outstanding Loans from the date of the first Incremental Borrowing until
the date on which such Outstanding Loans are reduced to zero, payable on
each Settlement Date. The Collection Fee shall be payable solely from
Collections pursuant to, and subject to the priority of payment set forth
in, Section 2.3.
SECTION 2.5 Selection of Tranche Periods and Tranche Rates. (a) CP Rate
and CP Tranche Periods. At all times hereafter, but prior to the Termination
Date and not with respect to any portion of the Loans made by any of the APA
Banks, the Borrower (with the consent of the Originator) may, subject to the
Conduit Lender's approval and the limitations described below, request CP
Tranche Periods and allocate a portion of the Outstanding Loans to each selected
CP Tranche Period, so that the aggregate amounts allocated to outstanding CP
Tranche Periods at all times shall equal the Outstanding Loans held by the
Conduit Lender. At least three (3) Business Days prior to the expiration of any
then existing Tranche Period, the Borrower shall give the Funding Agent
irrevocable notice by telephone, confirmed by facsimile or telecopy, of the new
requested CP Tranche Period(s), and the Funding Agent shall, as soon as
reasonably practicable and in no event later than the close of business on the
day such notice is received, deliver such notice to the Conduit Lender and
Funding Agent; provided, however, that
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the Funding Agent may select any such new CP Tranche Period if (i) the Borrower
fails to provide such notice to the Funding Agent on a timely basis or (ii) the
Funding Agent determines that the CP Tranche Period requested by the Borrower is
unavailable or for any reason commercially undesirable. The Tranche Rate for any
CP Tranche Periods for the Conduit Lender shall be the CP Rate for the Conduit
Lender. The Conduit Lender confirms that it is its intention to allocate all or
substantially all of the portion of the Outstanding Loans held by it to one or
more CP Tranche Periods; provided that the Funding Agent may determine, with
respect to the related Lender, from time to time, that funding such portion of
the Outstanding Loans by means of one or more CP Tranche Periods is not possible
or is not desirable for any reason.
(b) Eurodollar Rate and Base Rate; Eurodollar Tranches and Base Rate Tranches.
At all times with respect to any portion of the Loans made by the APA
Banks prior to the Termination Date, the initial Tranche Period applicable
to such portion of the Outstanding Loans allocable thereto shall (x) to
the extent the Funding Agent has received, from the Funding Agent on
behalf of the Borrower, at least three (3) Business Days prior notice of
the first day of such Tranche Period, such Tranche Period may be a
Eurodollar Tranche, and (y) to the extent the Funding Agent has received,
from the Funding Agent on behalf of the Borrower, less than three (3)
Business Days prior notice of the first day of such Tranche Period, such
Tranche shall be a Base Rate Tranche. Thereafter (but prior to the
Termination Date or the occurrence and continuation of a Trigger Event or
Potential Trigger Event, with respect to such portion, and with respect to
any other portion of the Loans made by the APA Banks, the Tranche Period
applicable thereto shall be, at the Borrower's option, either a Base Rate
Tranche or a Eurodollar Tranche. The Borrower shall give the Funding
Agent, irrevocable notice by telephone, confirmed by telefax, of the new
requested Eurodollar Tranche at least three (3) Business Days prior to the
expiration of any then existing Tranche Period. Any Tranche Period
maintained by the APA Banks which is outstanding on the Termination Date
(excluding for these purposes the Scheduled Termination Date) shall end on
the Termination Date.
SECTION 2.6 Payments and Computations, Etc. (a) The Borrower shall repay
the principal amount of all Outstanding Loans no later than the date upon which
a Termination Date is declared or automatically occurs relating to a Trigger
Event pursuant to Section 3.3. Unless otherwise specified herein, all amounts to
be paid or deposited by the Borrower or the Servicer hereunder to or for the
account of the Funding Agent or any Lender shall be paid or deposited no later
than 11:00 a.m. (New York City time) on the day when due in same day funds to
the Funding Agent's Account. Upon receipt of funds deposited into the Funding
Agent's Account, the Funding Agent shall distribute such funds to the Persons
entitled thereto in accordance with the provisions of this Agreement or retain
such funds for its own account, as appropriate.
(a) (b) The Borrower shall, to the extent permitted by law, pay interest on
any amount not paid or deposited by the Borrower (whether as Servicer (in
the case of the Originator) or otherwise) when due hereunder or upon the
occurrence of a Trigger Event or Potential Trigger Event at an interest
rate per annum equal to 2% per annum above the Base Rate, payable on
demand.
(c) Unless otherwise specified herein, all computations of interest under
subsection (b) above and all computations of Interest, fees, and other
amounts hereunder shall be made on the basis of a year of 360 days for the
actual number of days elapsed. Whenever any payment or deposit to be made
hereunder shall be due on a day other than a Business Day, such payment or
deposit shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of such payment or
deposit.
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(d) If at any time the Dollar Equivalent of the aggregate Outstanding Balance of
all Eligible Receivables is less than the Required Balance, then the Borrower
shall immediately pay to the Funding Agent, for the benefit of the Lenders, from
previously received Collections, an amount equal to the amount which, when
either deposited into the Funding Agent's Account or applied directly in
reduction of the Outstanding Loans, will result in the Dollar Equivalent of the
aggregate Outstanding Balance of all Eligible Receivables being equal to or
greater than the Required Balance. The Borrower shall instruct the Funding Agent
as to whether such funds are to be deposited in the Funding Agent's Account or
applied directly in the reduction of Outstanding Loans. To the extent such funds
are applied in reduction of the Outstanding Loans, the Tranche Periods shall be
selected by the Funding Agent. Amounts deposited in the Funding Agent's Account
pursuant to the immediately preceding sentence may, at the request of the
Borrower, be withdrawn by the Funding Agent and distributed to the Borrower, or
at the Borrower's direction, if, and to the extent, such withdrawal would not
cause the Dollar Equivalent of the aggregate Outstanding Balance of all Eligible
Receivables to be less than the Required Balance.
SECTION 2.7 Increased Costs. (a) If the Funding Agent, the Conduit Lender,
the APA Banks, any other entity which enters into a commitment to make Loans, or
any entity which provides credit enhancement or any of their respective
Affiliates (each an "Affected Person") determines that compliance with any law
or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Affected Person and such Affected Person determines that there shall be any
increase in the cost to the Lenders of agreeing to make or making, funding or
maintaining any Loan or to the funding thereof or any related liquidity facility
or credit enhancement facility (or any participation therein) and other
commitments of the same type, then, upon demand by such Affected Person (with a
copy to the Funding Agent), the Borrower shall immediately pay to the Funding
Agent, for the account of such Affected Person (as a third-party beneficiary),
from time to time as specified by such Affected Person, additional amounts
sufficient to compensate such Affected Person in the light of such
circumstances, to the extent that such Affected Person reasonably determines
such increase in capital to be allocable to the existence of any of such
commitments. A certificate as to such amounts submitted to the Borrower and the
Funding Agent by such Affected Person shall be conclusive and binding for all
purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements) in or in
the interpretation of any law or regulation or (ii) compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in
the cost to a Lender in respect of which Interest is computed by reference
to the Eurodollar Rate, then upon demand by such Lender (with a copy to
the Funding Agent), the Borrower shall immediately pay to the Funding
Agent, for the account of such Lender (as a third-party beneficiary), from
time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender for such increased costs. A certificate as to such
amounts submitted to the Borrower and the Funding Agent by a Lender shall
be conclusive and binding for all purposes, absent manifest error.
SECTION 2.8 Requirements of Law. In the event that any requirement of law
or any change therein or in the interpretation or application thereof by the
relevant governmental authority to a Lender after the date hereof or compliance
by a Lender with any request or directive (whether or not having the force of
law) from any central bank or other governmental authority:
8
(i) does or shall subject such Lender to any tax of any kind
whatsoever with respect to this Agreement or any other
Transaction Document or change the basis of taxation of
payments to the Lender on account of Collections, Interest or
any other amounts payable hereunder (excluding taxes imposed
on the income, profits or gains of such Lender, and franchise
taxes imposed on such Affected Person, by the jurisdiction
under the laws of which such Affected Person is organized or a
political subdivision thereof); or
(ii) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or
for the account of, purchases, advances or loans by, or other
credit extended by, or any other acquisition of funds by, any
office of such Lender which are not otherwise included in the
determination of the Eurodollar Rate or the Base Rate
hereunder;
and the result of any of the foregoing is to increase the cost to such Lender of
performing its obligations under the relevant Transaction Document or to reduce
any amount receivable hereunder, then, in any such case, the Borrower shall pay
such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such additional cost or reduced amount receivable. All such
amounts shall be payable as incurred. A certificate from such Lender or the
Funding Agent, as the case may be, to the Borrower certifying, in reasonably
specific detail, the basis for, calculation of, and amount of such additional
costs shall be conclusive in the absence of manifest error.
SECTION 2.9 Inability to Determine Eurodollar Rate. In the event that the
Funding Agent shall have determined prior to the first day of any Eurodollar
Tranche Period (which determination shall be conclusive and binding upon the
parties hereto) by reason of circumstances affecting the interbank Eurodollar
market, either (a) dollar deposits in the relevant amounts and for the relevant
Eurodollar Tranche Period are not available, (b) adequate and reasonable means
do not exist for ascertaining the Eurodollar Rate for such Eurodollar Tranche
Period or (c) the Eurodollar Rate determined pursuant hereto does not accurately
reflect the cost to the Lender (as conclusively determined by the Funding Agent)
of maintaining Loans during such Eurodollar Tranche Period, the Funding Agent
shall promptly give telephonic notice of such determination, confirmed in
writing, to the Borrower prior to the first day of such Eurodollar Tranche
Period. Until such notice has been withdrawn by the Funding Agent, no further
Tranches shall be funded or maintained at the Eurodollar Rate. The Funding Agent
agrees to withdraw any such notice as soon as reasonably practicable after the
Funding Agent is notified of a change in circumstances which makes such notice
inapplicable.
SECTION 2.10 Breakage Costs. If (a) any payment of Outstanding Loans as to
which Interest is computed by reference to the Eurodollar Rate or the CP Rate is
made by the Borrower to or for the account of any Lender other than on the last
day of a Tranche Period, as a result of a payment pursuant to Section 2.3 or for
any other reason, or (b) the Termination Date shall occur during any Settlement
Period, or (c) any payment of Outstanding Loans is made by the Borrower to a
Lender or an Affected Person other than on the last day of a Settlement Period,
the Borrower shall, upon demand by such Lender or Affected Person (with a copy
to the Funding Agent), immediately pay to the Funding Agent for the account of
such Lender or Affected Person (as a third-party beneficiary) any amounts
required to compensate such Lender or Affected Person for any additional losses,
costs or expenses which it may reasonably incur as a result of such payment,
including, without limitation, any loss (including loss of anticipated profits),
costs or expenses incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender or Affected Person to fund or
maintain its interest in the Loans. A
9
certificate as to such amounts submitted to the Borrower and the Funding Agent
by such Lender or Affected Person shall be conclusive and binding for all
purposes, absent manifest error.
SECTION 2.11 Reduction and Increase of the Funding Limits. (a) The
Borrower may, upon not less than five (5) days' irrevocable prior notice to the
Funding Agent and with the approval of the Originator, permanently reduce all or
any portion of the Funding Limit, provided that (i) any partial reduction of the
Funding Limit must be in an aggregate amount of $1,000,000 or any greater amount
that is an integral multiple of $1,000,000, and (ii) the Funding Agent shall
have promptly given the Servicer notice of any such reduction of the Funding
Limit.
(b) The Funding Limit of the Conduit Lender may be increased from time to time
to such amount as the Borrower and the Conduit Lender, may agree. Nothing
contained in this Agreement shall be deemed to obligate any party to agree
to any increase proposed by any other party. Any such increase shall be
effected by the Borrower, the Funding Agent and the Conduit Lender
entering into an appropriate document reflecting such increase, whereupon
the Borrower will deliver a new Revolving Credit Note to such Conduit
Lender in exchange for the Revolving Credit Note outstanding prior to such
increase. The Funding Agent will promptly give the Lenders, the Borrower
and the Servicer, notice of any increase of the Funding Limit. With
respect to any increase of the Funding Limit of the Conduit Lender, it
shall be a condition precedent to the effectiveness of any such increase
that the APA Banks effect a corresponding increase in their Commitments
under the related Asset Purchase Agreement.
SECTION 2.12 Taxes. (a) Any and all payments by the Borrower under this
Agreement shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding (i) in the case of each
Lender and the Funding Agent (A) taxes measured by its net income, profits or
gains and franchise taxes imposed on it, by the jurisdiction (or any political
subdivision thereof) under the laws of which such Lender or Funding Agent is
organized and (B) any United States withholding taxes payable with respect to
payments under this Agreement under laws (including any statute, treaty or
regulation) in effect on the Closing Date applicable to the Lender, as the case
may be, but not excluding any United States withholding payable as a result of
any change in such laws occurring after the Closing Date and (ii) in the case of
each Lender, taxes measured by its net income, profits or gains and franchise
taxes imposed on it, by the jurisdiction in which the Lender's Applicable
Lending Office is located (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If any Taxes shall be required by law to be deducted from or in
respect of any sum payable under this Agreement to any Lender or Funding Agent,
the sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.12) such Lender receives an amount equal to the sum it
would have received had no such deductions been made, (A) the Borrower shall pay
the full amount deducted to the taxing authority or other authority in
accordance with applicable law, and (B) the Borrower shall deliver to the
Funding Agent evidence of such payment; provided, however, that (x) if the
Borrower pays any additional amounts under this Section 2.12(a) (a "Tax
Payment"), and (y) a Lender determines that it has effectively obtained a refund
of taxes or a credit against taxes on its overall net income by reason of such
Tax Payment (a "Tax Credit"), and (z) such Lender is reasonably able to identify
such Tax Credit as being attributable to the Tax Payment, then such Lender shall
reimburse to the Borrower such proportion of such Tax Credit (net of such
Lender's reasonable costs and expenses in obtaining such Tax Credit) as such
Lender determines will leave such Lender, after such reimbursement, in no better
and no worse position than that in which it would have been if such Tax Payment
had not been required. The Borrower shall repay any amount paid to it pursuant
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hereto promptly upon receipt of notice from the relevant Lender if all or part
of the relevant Tax Credit is subsequently disallowed or cancelled. Nothing
herein contained shall interfere with the right of any Lender to arrange its tax
and other affairs in whatever manner it shall think fit, and no Lender shall be
under any obligation to disclose any information regarding the organization of
its affairs.
(b) In addition, the Borrower agree to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies of the United States, the United Kingdom or any political
subdivision thereof or any applicable foreign jurisdiction, and all
liabilities with respect thereto, which arise from any payment made under
this Agreement or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement.
(c) The Borrower will indemnify each Lender and the Funding Agent for the full
amount of Taxes excluding any Taxes imposed on or calculated by reference
to the overall income, profits or gains of the indemnified party,
including income, profits or gains attributable to any part of its
business (including any Taxes imposed by any jurisdiction on amounts
payable under this Section 2.12) paid by such Lender in respect of amounts
paid by the Borrower hereunder and any liability (including for penalties,
interest and expenses, subject to the indemnified party taking all
reasonable steps to avoid and mitigate the same) arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally
asserted, subject to the indemnified party taking all reasonable and
lawful steps to challenge any wrongful or incorrect assertions of
liability. This indemnification shall be made within thirty (30) days from
the date the Funding Agent, on behalf and at the direction of such Lender,
makes written demand therefor.
(d) Within thirty (30) days after the date of any payment of Taxes or other
Taxes, the Borrower will furnish to the Funding Agent the original or a
certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in
this Section 2.11 shall survive the payment in full of the Loans.
(f) Any Lender claiming any additional amounts payable pursuant to this
Section 2.12 or, in the event that (i)(A) any Lender makes a claim under
Section 2.7 or Section 2.8, or (B) it becomes illegal for any Lender to
continue to fund or maintain any Eurodollar Tranche and (ii) the Funding
Agent notifies the Borrower pursuant to Section 2.13, such Lender shall,
and the Borrower (upon the Borrower's written request) shall, use its
reasonable efforts to mitigate or remove the circumstances giving rise to
such claim (consistent with its internal policy and legal and regulatory
restrictions), including changing the jurisdiction of its Applicable
Lending Office or substituting another financial institution reasonably
acceptable to the Borrower, if the making of such a change would avoid the
need for, or reduce the amount of, any such additional amounts which would
be payable or may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender
(other than minor costs and expenses of an administrative nature).
SECTION 2.13 Illegality. (a) Notwithstanding any other provision of this
Agreement, if any Lender determines that the introduction of or any change in or
in the interpretation of any law, treaty or governmental rule, regulation or
order after the date of this Agreement shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for such
Lender to make Eurodollar Rate Loans or to continue to fund or maintain Loans
based upon the Eurodollar Rate, then, on notice thereof and demand therefor by
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such Lender to the Borrower through the Funding Agent, (i) the obligation of
such Lender to make or to continue Loans based upon the Eurodollar Rate and to
convert Loans based upon the Base Rate into Loans based upon the Eurodollar Rate
shall be suspended, and each such Lender shall make Loans based upon the Base
Rate as part of any requested Incremental Borrowing based upon the Eurodollar
Rate and (ii) if the affected Loans based upon the Eurodollar Rate are then
outstanding, the Borrower shall immediately convert each such Loan into a Loan
based upon the Base Rate. If any such conversion occurs on a day which is not
the last day of the related Eurodollar Tranche Period, the Borrower shall pay to
such Lender such amounts, if any, as may be required to compensate such Lender.
If at any time after a Lender gives notice under this Section 2.13 such Lender
determines that it may lawfully make Loans based upon the Eurodollar Rate, such
Lender shall promptly give notice of that determination to the Borrower and the
Funding Agent. The Borrower's rights to request, and such Lender's obligation,
if any, to make Loans based upon the Eurodollar Rate shall thereupon be
restored.
(b) Each Lender agrees that, upon the occurrence of any event giving rise to
the operation of Section 2.13(a) with respect to such Lender, it will, if
requested by the Borrower and to the extent permitted by law or by the
relevant Official Body, endeavour in good faith to change the office at
which it books the Eurodollar Tranches hereunder if such change would make
it lawful for such Lender to continue to acquire or to maintain its
acquisition of Eurodollar Tranches hereunder; provided, however, that such
change may be made in such manner that such Lender, in its sole
determination, suffers no unreimbursed cost or expense or any other
disadvantage whatsoever.
SECTION 2.14 Security Interest. As collateral security for the performance
by the Borrower of all the terms, covenants and agreements on the part of the
Borrower (whether as Borrower or otherwise) to be performed under this Agreement
or any document delivered in connection with this Agreement in accordance with
the terms thereof, including the punctual payment when due of all obligations of
the Borrower hereunder or thereunder, whether for the payment of Outstanding
Loans, Interest, indemnification payments, fees, expenses or otherwise, the
Borrower hereby assigns to the Funding Agent for its benefit and the rateable
benefit of the Lenders, and hereby grants to and creates in favour of the
Funding Agent for its benefit and the rateable benefit of the Lenders, a present
and continuing security interest in, all of the Borrower's right, title and
interest in and to:
(a) the IKON Loan Agreement, including, without limitation, (i) all rights of
the Borrower to receive moneys due or to become due under or pursuant to
the IKON Loan Agreement, (ii) all security interests and property subject
thereto from time to time purporting to secure payment of monies due or to
become due under or pursuant to the IKON Loan Agreement, (iii) all rights
of the Borrower to receive proceeds of any insurance, indemnity, warranty
or guaranty with respect to the IKON Loan Agreement (except any rights
that might arise under the Support Agreement), (iv) claims of the Borrower
for damages arising out of or for breach of or default under the IKON Loan
Agreement, and (v) the right of the Borrower to compel performance and
otherwise exercise all remedies thereunder,
(b) the lien on all Receivables and the Related Security and Collections with
respect thereto,
(c) all amounts due from the cap provider under the PARCO Cap, and
(d) to the extent not included in the foregoing, all proceeds of any and all
of the foregoing.
12
SECTION 2.15 Hedging The Borrower hereby assigns to the Funding Agent the
right to enter into FX Hedging Agreements on the Borrower's behalf. The Funding
Agent shall, on behalf of the Borrower, enter into FX Hedging Agreements on such
terms and with such hedge counterparties as may be approved by the Funding
Agent. On the date of each Incremental Borrowing, the Borrower shall irrevocably
assign to the Funding Agent, on behalf of the Lenders, all of the Borrower's
rights and obligations under each FX Hedging Agreement relating to the
Receivables funded on the date of such Incremental Borrowing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
COVENANTS; TRIGGER EVENTS
SECTION 3.1 Representations and Warranties; Covenants. The Borrower hereby
makes the representations and warranties, and hereby agrees to perform and
observe the covenants, set forth in Part A of Exhibit III and Part A of Exhibit
IV, respectively, hereto. The Originator hereby makes the representations and
warranties, and hereby agrees to perform and observe the covenants, set forth in
Part B of Exhibit III and Part B of Exhibit IV, respectively, hereto.
SECTION 3.2 Reaffirmation of Representations and Warranties by the
Borrower. On each day that an Incremental Borrowing is made hereunder, the
Borrower, by delivery of a Notice of Borrowing and by accepting the proceeds of
such Incremental Borrowing, delivered to the Borrower pursuant to Section 2.2(a)
hereof, shall be deemed to have certified that all representations and
warranties described in Section 3.1 hereof are true and correct on and as of
such day as though made on and as of such day.
SECTION 3.3 Trigger Events. If any of the Trigger Events set forth in
Exhibit V hereto (excluding for the purposes of (y) only Trigger Events (c)
(only in so far as it relates to the Borrower and excluding representation (g)),
(d) (except in so far as it relates to paragraph (n) of Exhibit IV), (j) (in so
far as it relates to any material adverse change in the business, operations,
property or financial or other condition, taken as a whole, of the Borrower) and
(n)) shall occur and be continuing, the Funding Agent may, by notice to the
Borrower, take either or both of the following actions: (x) declare the
Termination Date to have occurred and (y) designate another Person to succeed
the Originator as the Servicer; provided that, automatically upon the occurrence
of any event (without any requirement for the passage of time or the giving of
notice) described in paragraph (g) or (m) of Exhibit V, the Termination Date
shall occur, the Originator (if it is then serving as the Servicer) shall cease
to be the Servicer, and the Funding Agent or its designee shall become the
Servicer. Upon any such declaration or designation or upon any such automatic
termination, the Lenders and the Funding Agent shall have, in addition to the
rights and remedies which they may have under this Agreement, all other rights
and remedies provided after default under the UCC of the appropriate
jurisdiction or jurisdictions and under other applicable law, which rights and
remedies shall be cumulative.
ARTICLE IV
INDEMNIFICATION
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SECTION 4.1 Indemnities by the Borrower. Without limiting any other rights
that the Funding Agent or any Lender or any of their respective Affiliates or
its agents (each, an "Indemnified Party") may have hereunder or under applicable
law, the Borrower hereby agrees to indemnify each Indemnified Party from and
against any and all claims, losses and liabilities (including reasonable
attorneys' fees) (all of the foregoing being collectively referred to as
"Indemnified Amounts") arising out of or resulting from this Agreement or the
Transaction Documents or in respect of any Receivable, Related Contract or
Related Security, excluding, however, (a) Indemnified Amounts to the extent
resulting from gross negligence or wilful misconduct on the part of such
Indemnified Party, (b) recourse (except as otherwise specifically provided in
this Agreement) for uncollectible Receivables or (c) any income taxes or
franchise taxes imposed on such Indemnified Party by the jurisdiction under the
laws of which such Indemnified Party is organized or any political subdivision
thereof, arising out of or as a result of this Agreement or in respect of any
Receivable, Related Contract or Related Security. Without limiting or being
limited by the foregoing, the Borrower shall pay on demand to each Indemnified
Party any and all amounts necessary to indemnify such Indemnified Party from and
against any and all Indemnified Amounts relating to or resulting from any of the
following:
(i) any representation or warranty or statement made by the
Borrower or (or any of its officers) under or in connection
with this Agreement and the other Transaction Documents which
shall have been incorrect in any material respect when made;
(ii) the failure by the Borrower to comply with any applicable law,
rule or regulation (including, without limitation, usury or
consumer law) with respect to any Receivable, the related
Contract or the Related Security; or the failure of any
Receivable or the related Contract to conform to any such
applicable law, rule or regulation;
(iii) the failure of the Funding Agent (for the benefit of the
Lenders) to acquire a valid and perfected security interest in
the Receivables and the Related Security and Collections in
respect thereof by way of sub-mortgage under Article 9 of the
UCC of any applicable jurisdiction, free and clear of any
Adverse Claim;
(iv) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the
UCC laws of any applicable jurisdiction or other applicable
laws with respect to any Receivables or the Related Security
and Collections in respect thereof, whether at the time of the
funding of an interest therein or at any subsequent time;
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of
any Receivable (including, without limitation, a defense based
on such Receivable or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable
against it in accordance with its terms), or any other claim
resulting from the lease or sale of the related Equipment or
services related to such Receivable or the furnishing or
failure to furnish such Equipment or other services or
alleging violation by the Borrower of any laws in connection
with such lease or sale activities;
(vi) any failure of the Borrower to perform its duties or
obligations in accordance with the provisions hereof or to
perform its duties or obligations under the Related Contracts;
14
(vii) any products or personal liability claim arising out of or in
connection with any Equipment or other merchandise, services
or activities which are the subject of any Related Contract;
(viii)the commingling by the Borrower or any of its Affiliates
(including without limitation the Originator in its capacity
as Servicer) of Collections of Receivables at any time with
other funds;
(ix) any investigation, litigation or proceeding related to this
Agreement or the Transaction Documents or in respect of any
Receivable, Related Security or Related Contract; or
(x) any fine, penalty, tax or other charge asserted against any
Indemnified Party by any governmental authority or agency or
any other Person resulting from any Obligor's use, possession
or ownership of any Equipment.
SECTION 4.2 Recourse for Interest. The Borrower hereby agrees to pay to
the Funding Agent, for Pro Rata distribution to each Lender on the last day of
each Settlement Period, any deficiency between (i) Collections applied to
payment of accrued but unpaid Interest on such last day pursuant to Section
2.3(b)(i), and (ii) the amount of accrued but unpaid Interest on such last day
on the Outstanding Loans.
ARTICLE V
ADMINISTRATION AND COLLECTION
OF RECEIVABLES AND ADMINISTRATION OF THE BORROWER
SECTION 5.1 Designation of Servicer. The servicing, administration and
collection of the Receivables shall be conducted by the Servicer so designated
hereunder from time to time. Until the Funding Agent gives notice to the
Borrower of the designation of a new Servicer, the Originator is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms hereof. The Funding Agent at any time may upon
the occurrence of a Trigger Event (but not otherwise) designate as Servicer any
Person (including itself) to succeed the Originator or any successor Servicer,
if such Person shall consent and agree to the terms hereof. The Servicer may,
with the prior consent of the Funding Agent, subcontract with any other Person
for the servicing, administration or collection of the Receivables. Any such
subcontract shall not affect the Servicer's liability for performance of its
duties and obligations pursuant to the terms hereof.
SECTION 5.2 Duties of Servicer. (a) The Servicer shall take or cause to be
taken all such actions as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy with respect to such Receivables. The Borrower and
the Funding Agent hereby appoint the Servicer, from time to time designated
pursuant to Section 5.1, as agent for themselves to enforce their respective
rights and interests in the Receivables, the Related Security and the related
Contracts. In performing its duties as Servicer, the Servicer shall exercise the
same care and apply the same policies as it would exercise and apply in respect
of Receivables which were not collateral for a loan and shall act in the best
interests of the Lenders.
(b) The Servicer shall administer the Collections in accordance with the
procedures described in Section 2.3.
15
(c) The Servicer shall hold in trust for the Borrower and each Lender in
accordance with their respective interests, all documents, instruments and
records (including, without limitation, computer tapes or disks) which
evidence or relate to Receivables.
(d) The Servicer shall, from time to time at the request of the Funding Agent,
furnish to the Funding Agent (promptly after any such request) a
calculation of the amounts set aside for the Funding Agent and the Lenders
pursuant to Section 2.3.
(e) Prior to the 13th calendar day of each month, the Servicer shall prepare
and forward to the Funding Agent a Servicer Report relating to the
Receivables outstanding on the last day of the immediately preceding
month.
SECTION 5.3 Certain Rights of the Funding Agent.
Following the occurrence of a Trigger Event or Potential Trigger Event,
(a) The Funding Agent may direct the Obligors that all payments under the
Related Contracts be made directly to the Funding Agent or its designee
for the benefit of the Lenders.
(b) At the Funding Agent's request and at the Borrower's expense, the Borrower
shall notify each Obligor of the interest of the Funding Agent in the
Receivables under this Agreement.
(c) At the Funding Agent's request and at the Borrower's expense, the Borrower
and the Servicer shall (A) assemble all of the documents, instruments and
other records (including, without limitation, computer tapes and disks)
that evidence or relate to the Receivables and the Related Contracts and
Related Security, or that are otherwise necessary or desirable to collect
the Receivables, and shall make the same available to the Funding Agent at
a place selected by the Funding Agent or its designee, and (B) segregate
all cash, checks and other instruments received by it from time to time
constituting Collections in a manner acceptable to the Funding Agent and,
promptly upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Funding
Agent or its designee.
(d) The Borrower authorizes the Funding Agent to take any and all steps in the
Borrower's name and on behalf of the Borrower that are necessary or
desirable, in the determination of the Funding Agent, to collect amounts
due under the Receivables, including, without limitation, endorsing the
Borrower's name on checks and other instruments representing Collections
and enforcing the Receivables and the Related Security and related
Contracts.
SECTION 5.4 Rights and Remedies. (a) If the Servicer fails to perform any
of its obligations under this Agreement, the Funding Agent may (but shall not be
required to) itself perform, or cause performance of, such obligation; and the
Funding Agent's costs and expenses incurred in connection therewith shall be
payable by the Borrower (if the Servicer that fails to so perform is the
Borrower or its designee).
(b) The Borrower and the Originator shall perform their respective obligations
under the Related Contracts to the same extent as if the Receivables had
not been secured and the exercise by the Funding Agent on behalf of the
Lenders of their rights under this Agreement shall not release the
Servicer or the Borrower from any of their duties or obligations with
respect to any Receivables or Related Contracts. Neither the Funding Agent
16
nor the Lenders shall have any obligation or liability with respect to any
Receivables or Related Contracts, nor shall any of them be obligated to
perform the obligations of the Originator thereunder.
(c) In the event of any conflict between the provisions of Article V of this
Agreement and Article VI of the IKON Loan Agreement, the provisions of
this Agreement shall control.
SECTION 5.5 Further Actions. The Originator agrees from time to time, at
its expense, to promptly execute and deliver all further instruments and
documents, and to take all further actions, that may be reasonably necessary or
desirable, or that the Funding Agent may reasonably request, to perfect, protect
or more fully evidence the Receivables secured by the Security Agreements, or to
enable the Lenders or the Funding Agent to exercise and enforce their respective
rights and remedies hereunder or under the Security Agreements. Without limiting
the foregoing, the Originator will upon the request of the Funding Agent (i)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments and documents, that may be reasonably
necessary or desirable, or that the Funding Agent may reasonably request, to
perfect, protect or evidence such interests in Receivables; (ii) segregate the
Related Contracts and other records in its lease files pertaining to each
Receivable; and (iii) mark its master data processing records evidencing such
Receivables and the Related Contracts, in each case in a manner reasonably
acceptable to the Funding Agent, evidencing that such Receivables have been
secured in accordance with the Security Agreements.
SECTION 5.6 Covenants of the Servicer and the Originator. (a) Audits. The
Servicer will, from time to time during regular business hours as requested by
the Funding Agent, permit the Funding Agent, or its agents or representatives
(including independent public accountants, which may be the Servicer's
independent public accountants), (i) to conduct periodic audits of the
Receivables, the Related Security and the related books and records and
collections systems of the Servicer, (ii) to examine and make copies of and
abstracts from all books, records and documents (including, without limitation,
computer tapes and disks) in the possession or under the control of the Servicer
relating to the Receivables and the Related Security, including, without
limitation, the Related Contracts, and (iii) to visit the offices and properties
of the Servicer for the purpose of examining such materials described in clause
(ii) above, and to discuss matters relating to the Receivables and the Related
Security or the Servicer's performance hereunder with any of the officers or
employees of the Servicer having knowledge of such matters, in each case subject
to the confidentiality provisions contained herein.
(b) Change in Credit and Collection Policy. The Originator will not make any
change in the Credit and Collection Policy that would impair the
collectibility of any Receivable or the ability of the Originator (if it
is acting as Servicer) to perform its obligations under this Agreement.
SECTION 5.7 Indemnities by the Servicer. Without limiting any other rights that
the Funding Agent, any Lender or any of their respective Affiliates (each, a
"Special Indemnified Party") may have hereunder or under applicable law, and in
consideration of its appointment as Servicer, the Servicer hereby agrees to
indemnify each Special Indemnified Party from and against any and all claims,
losses and liabilities (including reasonable attorneys' fees) (all of the
foregoing being collectively referred to as "Special Indemnified Amounts")
arising out of or resulting from any of the following (excluding, however, (a)
Special Indemnified Amounts to the extent resulting from gross negligence or
wilful misconduct on the part of such Special Indemnified Party, (b) recourse
for uncollectible Receivables or (c) any income taxes or any other tax or fee
measured by income incurred by such Special Indemnified Party arising out of or
as a result of this Agreement or in respect of any Receivable or any Contract):
17
(i) any representation or warranty or statement made or deemed
made by the Servicer under or in connection with this
Agreement which shall have been incorrect in any material
respect when made;
(ii) the failure by the Servicer to comply with any applicable law,
rule or regulation with respect to any Receivable or Contract;
or the failure of any Receivable or Contract to conform to any
such applicable law, rule or regulation;
(iii) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or other applicable laws
with respect to any Receivables, the Related Contracts and the
Related Security and Collections in respect thereof, whether
at the time of any funding thereof or reinvestment or at any
subsequent time;
(iv) any failure of the Servicer to perform its duties or
obligations in accordance with the provisions of this
Agreement;
(v) the commingling of Collections at any time by the Servicer
with other funds other than as specifically permitted herein;
(vi) any action or omission by the Servicer reducing or impairing
the rights of the Lenders with respect to any Receivable or
the value of any Receivable; or
(vii) any Collection Fees or other costs and expenses payable to any
replacement Servicer, to the extent in excess of the
Collection Fees payable to the Servicer hereunder; or
(viii)any claim brought by any Person other than a Special
Indemnified Party arising from any activity by the Servicer or
its Affiliates in servicing, administering or collecting any
Receivable.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Term of Agreement. This Agreement shall terminate on the date
following the Termination Date upon which the amount of Outstanding Loans has
been reduced to zero, and all accrued Interest, and all other amounts have been
paid in full, in each case, in cash; provided, however, that (i) the rights and
remedies of the Lender and the Funding Agent with respect to any representation
and warranty made or deemed to be made by the Borrower pursuant to this
Agreement and (ii) the agreements set forth in Sections 4.1, 5.7, 6.5, 6.6 and
6.7 hereof, shall be continuing and shall survive any termination of this
Agreement.
SECTION 6.2 Amendments, Etc. No failure or delay on the part of the
Funding Agent or any Lender in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other further exercise
thereof or the exercise of any other power, right or remedy. The rights and
remedies herein provided shall be cumulative and nonexclusive of any rights or
remedies provided by law. Any provision of this Agreement may be amended if, but
18
only if, such amendment is in writing and is signed by the Borrower, the
Servicer, the Originator, the Funding Agent and the Required APA Banks and PARCO
and, if such amendment is material, the Rating Agencies, to the extent required
by the terms and provisions of the commercial paper program of PARCO, have
provided written confirmation that such amendment will not result in a reduction
or withdrawal of the rating of the Commercial Paper; provided, however, that the
consent of all of the Lenders hereto shall be required for any amendment,
modification or supplement relating to (i) the definitions of "Eligible
Receivables", "Termination Date", "Required APA Banks", "Required Balance",
"Discount" and "Applicable Percentage" and any defined terms incorporated
therein, (ii) the reduction or postponement of the time for payment of any fee
or other amount payable to or on behalf of such Lenders or (iii) this Section
6.2 and provided, further, however that no such amendment or waiver shall,
without the consent of all the Lenders, consent to or permit the assignment or
transfer by the Borrower of any of its rights or obligations under this
Agreement.
SECTION 6.3 Notices, Etc. All notices, demands and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(which shall include electronic transmission), shall be personally delivered,
express couriered, electronically transmitted (in which case a hard copy shall
also be sent by regular mail) or mailed by registered or certified mail and
shall, unless otherwise expressly provided herein, be effective when received at
the address specified below for the listed parties or at such other address as
shall be specified in a written notice furnished to the other parties hereunder.
If to the Conduit Lender:
Park Avenue Receivables Corporation
c/o Global Securitization Services, LLC
114 West 47th Street, Suite 1715
New York, New York 10036
Attention: President
Telephone: (212) 302 5151
Telecopy: (212) 302 8767
With a copy to the Funding Agent.
If to the Borrower:
Rochford, Inc.
c/o J.H. Management Corporation
PO Box 4024
One International Place
Room 569
Boston, Massachusetts 02110
Attention: R Douglas Donaldson
Telephone: (617) 951 7690
Telecopy: (617) 951 7050
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If to the Originator and Servicer:
IKON Capital PLC
Ikon House
Ullswater Crescent
Coulsdon
Surrey CR5 2EQ
Attention: Philip Marshall
Telephone: 44 (0) 20 8668 7474
Telecopy: 44 (0) 20 8668 8877
with a copy to:
IKON Office Solutions, Inc.
70 Valley Stream Parkway
Malvern, PA 19355
USA
Attention: Kathy Burns
Telephone: 610 408 7165
Telecopy: 610 408 7022
If to Funding Agent and APA Banks:
JPMorgan Chase Bank
4 New York Plaza
6th Floor
New York, NY 10004
Attention: Christopher Lew
Telephone: (212) 623 5508
Telecopy:. (212) 623 5980
with a copy to:
JPMorgan Chase Bank
500 Stanton Christiana Road
Newark, DE 19713
Attention: Mark Connor
Telephone: (302) 634 4218
Telecopy: (302) 634-5490
SECTION 6.4 Assignability. (a) This Agreement and each Lender's rights and
obligations herein (including rights in the Receivables) shall be assignable by
each Lender and its successors and assigns if the Funding Agent shall have
received confirmation from each of the Rating Agencies that such assignment will
not result in the withdrawal or downgrade of the then-current ratings of PARCO's
outstanding Commercial Paper; provided, that no such confirmation shall be
required if such assignment is made by PARCO to any other Lender hereunder or to
any Lender that is a party to a liquidity facility supporting the Commercial
Paper. Each assignee of Receivable or any interest therein shall notify the
Funding Agent and the Borrower of any such assignment; provided, that no such
notice shall be required if such assignment is made by PARCO to any other Lender
hereunder or to any Lender that is a party to a liquidity facility supporting
the commercial paper notes of PARCO. Each assignor of Receivables may, in
connection with the assignment or participation, disclose to the assignee or
participant any information, relating to the Borrower or the Receivables which
was furnished to such assignor by
20
or on behalf of the Borrower or by the Funding Agent; provided that prior to any
such disclosure, the assignee or participant agrees to preserve the
confidentiality of any confidential information relating to the Borrower and the
Originator received by it from any of the foregoing entities.
(b) Without limiting the foregoing, the Conduit Lender may, from time to time
with prior or concurrent notice to the Borrower and the Funding Agent,
assign the Funding Limit and its rights and obligations under this
Agreement and any other Transaction Documents to which it is a party to a
Conduit Assignee with respect to the Conduit Lender; provided, however,
that any such assignment shall be subject to the condition precedent that
such assignment shall not result in adverse tax consequences or increased
costs to the Originator. Upon such assignment by the Conduit Lender to a
Conduit Assignee, (A) the related administrative or managing agent for
such Conduit Assignee will act as the Funding Agent for such Conduit
Assignee hereunder, (B) such Conduit Assignee and its liquidity support
provider(s) and credit support provider(s) and other related parties shall
have the benefit of all the rights and protections provided to the Conduit
Lender herein and in the other Transaction Documents (including, without
limitation, any limitation on recourse against such Conduit Assignee), (C)
such Conduit Assignee shall assume all of the Conduit Lender's obligations
hereunder or under any other Transaction Document and the Conduit Lender
shall be released from all such obligations, (D) all distributions in
respect of the Outstanding Loans with respect to the Conduit Lender shall
be made on behalf of such Conduit Assignee, (E) the definitions of the
term "Interest" shall be determined in the manner set forth in the
definition of "Interest" applicable to the Conduit Lender on the basis of
the interest rate or discount applicable to commercial paper issued by
such Conduit Assignee (rather than the Conduit Lender), (F) the defined
terms and other terms and provisions of this Agreement and the other
Transaction Documents shall be interpreted in accordance with the
foregoing, and (G) if requested by the Funding Agent with respect to the
Conduit Assignee, the parties will execute and deliver such further
agreements and documents and take such other actions as the Funding Agent
may reasonably request to evidence and give effect to the foregoing.
(c) This Agreement and the rights and obligations of the Funding Agent herein
shall be assignable by the Funding Agent and its successors and assigns;
provided that any costs incurred by the Funding Agent in connection with
such assignment shall be for the account of the Funding Agent.
(d) The Borrower may not assign its rights or obligations hereunder or any
interest herein without the prior written consent of the Funding Agent,
which consent will not be unreasonably withheld.
(e) Without limiting any other rights that may be available under applicable
law, the rights of the Lenders may be enforced through them or by their
agents.
SECTION 6.5 Costs, Expenses and Taxes. (a) In addition to the rights of
indemnification granted under Section 4.1 hereof, the Borrower agrees to pay on
demand all costs and expenses of the Funding Agent and the Lenders and their
respective Affiliates in connection with the preparation, execution, delivery,
amendment and administration (including periodic auditing of Receivables) of
this Agreement, or similar agreement relating to the Receivables and the other
documents and agreements to be delivered hereunder and thereunder, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Funding Agent, the Lenders and their respective Affiliates and agents
with respect thereto (in accordance with the Fee Letter) and with respect to
advising the Funding Agent, the Lenders and their respective Affiliates and
agents as to their rights and remedies under this Agreement and all costs and
expenses, if any (including reasonable counsel fees and expenses) of the Funding
Agent, the Lenders and their respective Affiliates and agents, in connection
with the enforcement of this
21
Agreement, and the other documents and agreements to be delivered hereunder and
the fees and expenses of the Rating Agencies.
(b) The Borrower shall pay any and all stamp and other taxes and fees payable
in connection with the execution, delivery, filing and recording of this
Agreement or the other documents or agreements to be delivered hereunder.
The Borrower agrees to save each Indemnified Party harmless from and
against any liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees, any and all stamp and other
taxes and fees payable in connection with the execution, delivery, filing
and recording of this Agreement or the other documents or agreements to be
delivered hereunder. The Borrower agrees to save each Indemnified Party
harmless from and against any liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes and fees.
SECTION 6.6 No Proceedings; Limitation on Payments. (a) Each party hereto
hereby covenants and agrees that it will not institute against, or join any
other person in instituting against, PARCO any proceeding of the type referred
to in paragraph (g) of Exhibit V so long as any Commercial Paper issued by PARCO
shall be outstanding and there shall not have elapsed one year plus one day
since the last day on which any such Commercial Paper shall have been
outstanding. Each of the Originator, the Funding Agent, each Lender, each
assignee of a Receivable or any interest therein and each entity which enters
into a commitment to acquire Receivables or interests therein hereby agrees that
it will not institute against, or join any other person in instituting against,
the Borrower any proceeding of the type referred to in paragraph (g) of Exhibit
V so long as any Commercial Paper issued by PARCO to finance the Outstanding
Loans shall be outstanding and there shall not have elapsed one year plus one
day since the last day on which any such Commercial Paper shall have been
outstanding.
(b) Notwithstanding anything in this Agreement or any other Transaction
Document to the contrary, PARCO shall have no obligation to pay any amount
required to be paid by it hereunder or thereunder in excess of any amount
available to PARCO after paying or making provision for the payment of its
Commercial Paper. All payment obligations of PARCO hereunder are
contingent on the availability of funds in excess of the amounts necessary
to pay its Commercial Paper; and each of the Borrower, the Originator, the
Funding Agent and the Lenders agree that they shall not have a claim under
Section 101(5) of the Bankruptcy Code if and to the extent that any such
payment obligation exceeds the amount available to PARCO to pay such
amount after paying or making provision for the payment of its Commercial
Paper. Notwithstanding anything in this Agreement or any other Transaction
Document to the contrary, the Borrower shall have no obligation to pay any
amount required to be paid by it hereunder or thereunder in excess of any
amount available to the Borrower after paying or making provision for the
payment of the items set forth in Section 2.3(c)(i), (ii) and the first
clause of (iii). All payment obligations of the Borrower hereunder are
contingent on the availability of funds in excess of the amounts necessary
to pay such items; and each of the Originator, the Funding Agent, the
Lenders and the Affected Persons agree that they shall not have a claim
under Section 101(5) of the Bankruptcy Code if and to the extent that any
such payment obligation exceeds the amount available to the Borrower to
pay such amounts after paying or making provision for the payment thereof.
(c) No recourse under any obligation, covenant or agreement of the Conduit
Lender contained in this Agreement shall be had against any incorporator,
stockholder, officer, director, member, manager, employee or agent of the
Conduit Lender, the Funding Agent or manager of the Conduit Lender or any
of its Affiliates (solely by virtue of such capacity) by the enforcement
of any assessment or by any legal or equitable proceedings by virtue of
any statute or otherwise; it being expressly agreed and understood that
this Agreement is solely a corporate obligation of the Conduit Lender, and
that no personal liability whatever shall attach
22
to or be incurred by any incorporator, stockholder, officer, director,
member, manager, employee or agent of the Conduit Lender, the Funding
Agent or the manager of the Conduit Lender or any of its Affiliates
(solely by virtue of such capacity) or any of them under or by reason of
any of the obligations, covenants or agreements of the Conduit Lender
contained in this Agreement, or implied therefrom, and that any and all
personal liability for breaches by the Conduit Lender of any such
obligations, covenants or agreements, either at common law or at equity,
or by statute, rule or regulation, of every such incorporator,
stockholder, officer, director, member, manager, employee or agent is
hereby expressly waived as a condition of and in consideration for the
execution of this Agreement; provided that the foregoing shall not
relieve any such Person from any liability it might otherwise have as a
result of fraudulent actions taken or fraudulent omissions made by them.
(d) No recourse under any obligation, covenant or agreement of the Borrower
contained in this Agreement shall be had against J.H. Management
Corporation ("JHM") or any incorporator, stockholder, officer, director or
employee of the Borrower or JHM, by the enforcement of any assessment or
by any legal or equitable proceeding, by virtue of any statute or
otherwise; it being expressly agreed and understood that this Agreement is
solely a corporate obligation of the Borrower, and that no personal
liability whatever shall attach to or be incurred by the incorporators,
stockholders, officers, directors or employees of the Borrower or JHM, or
any of them under or by reason of any of the obligations, covenants or
agreements of the Borrower contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by the
Borrower of any of such obligations, covenants or agreements either at
common law or at equity, or by statute or constitution, of JHM and every
such incorporator, stockholder, officer, director or employee is hereby
expressly waived as a condition of and in consideration for the execution
of this Agreement; provided, however, that nothing in this Section 6.6(d)
shall relieve any of the foregoing persons or entities from any liability
arising from his, her or its wilful misconduct or intentional
misrepresentation.
(e) The provisions of this Section 6.6 shall survive any termination of this
Agreement.
SECTION 6.7 Confidentiality. Unless otherwise required by applicable law,
rule, administrative order, decree or judicial process, the Borrower agrees to
maintain the confidentiality of this Agreement (and all drafts thereof) and any
information acquired respecting proprietary business information, trade secrets,
customer lists and individual customer information in communications with third
parties and otherwise; provided, that this Agreement may be disclosed (a) to
third parties to the extent such disclosure is made pursuant to a written
agreement of confidentiality in form and substance reasonably satisfactory to
the Funding Agent, (b) to the Borrower' legal counsel and auditors if they agree
to hold it confidential, (c) in connection with SEC filings (provided that such
filings only refer to a multi-seller asset-backed commercial paper conduit
sponsored by J.P. Morgan Chase and not specifically to PARCO), (d) with the
prior written consent of the other party, and (e) to the Rating Agencies.
SECTION 6.8 Governing Law; Submission to Jurisdiction
(a) This Agreement shall be governed by, and construed in accordance with the
laws of the State of New York (without giving effect to the conflict of
laws principles thereof). Each of the parties hereto hereby submits to the
non-exclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in
The City of New York for purposes of all legal proceedings arising out of
or relating to this Agreement or the transactions contemplated hereby.
Each of the parties hereto hereby irrevocably waives, to the fullest
extent it may effectively do so, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding brought
in such a court
23
and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Nothing in this Section
6.8 shall affect the right of any party hereto to bring any action or
proceeding against any party hereto or its respective properties in the
courts of other jurisdictions.
(b) Each of the parties hereto hereby waives any right to have a jury
participate in resolving any dispute, whether sounding in contract, tort
or otherwise among any of them arising out of, connected with, relating to
or incidental to the relationship between them in connection with this
Agreement or the other Transaction Documents.
(c) This Agreement contains the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire Agreement among the parties hereto
with respect to the subject matter hereof superseding all prior oral or
written understandings.
(d) The Originator shall appoint and at all times maintain an authorised agent
in the State of New York upon whom process may be served in any action
arising out of or based upon this Agreement or the transactions
contemplated hereby that may be instituted in the United States District
Court for the Southern District of New York and of any New York State
court sitting in The City of New York by any party to this Agreement.
SECTION 6.9 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 6.10 Tax Treatment. It is the intention of the Borrower and the
Funding Agent that for federal, state and local income and franchise tax
purposes, the Outstanding Loans will be treated as evidence of indebtedness of
the Borrower secured by the Receivables, the Related Security and Collections
and other proceeds thereof. The Borrower, the Funding Agent and the Conduit
Lender and the other Lenders, by entering into this Agreement, intend to treat
the Outstanding Loans as indebtedness.
SECTION 6.11 Agent Conflict Waiver. The Funding Agent acts in various
capacities with respect to the maintenance and administration of PARCO's
commercial paper program (including, as Funding Agent for PARCO, as issuing and
paying agent, as provider of other backup facilities, and as a provider of other
services or facilities from time to time, the "Agent Roles"). Each of the
parties hereto hereby acknowledges and consents to any and all Agent Roles,
waives any objections it may have to any actual or potential conflict of
interest caused by the Funding Agent acting as the Funding Agent for PARCO or as
a related APA Bank or as a liquidity or credit support provider under PARCO's
commercial paper program and acting as or maintaining any of the Agent Roles
and, subject to the terms hereof and the IKON Loan Agreement, agrees that in
connection with any Agent Role, the Funding Agent may take, or refrain from
taking, any action which it in its discretion deems appropriate.
The provisions of this Agreement and all related Transaction Documents
shall be construed to further such intentions of the parties hereto.
24
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CONDUIT LENDER: PARK AVENUE RECEIVABLES CORPORATION
By:
Name: ANDREW L. STIDD
Title: PRESIDENT
BORROWER: ROCHFORD, INC.
By:
Name: KAREN A. GRANQUIST
Title: SECRETARY
ORIGINATOR: IKON CAPITAL PLC
By:
Name: P. MARSHALL
Title: PRESIDENT
SERVICER: IKON CAPITAL PLC
By:
Name: P. MARSHALL
Title: PRESIDENT
FUNDING AGENT: JPMORGAN CHASE BANK
By:
Name: LARA GRAFF
Title: VICE PRESIDENT
APA BANKS: JPMORGAN CHASE BANK
Name: BRADLEY S. SCHWARTZ
Title: MANAGING DIRECTOR
25
EXHIBIT I
DEFINITIONS
As used in the Agreement (including its Exhibits), the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Adverse Claim" means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement.
"Adverse Selection Test" shall bear the meaning ascribed thereto in
Section 8.2 of the Debenture.
"Affected Person" has the meaning set forth in Section 2.6.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or is a director or officer of such Person.
"Aggregate Commitment" shall mean the Approved Currency Equivalent of
$127,500,000.
"Agreement" shall have the meaning assigned to such term in the
preamble.
"APA Banks" shall have the meaning assigned to such term in the
preamble.
"Applicable Lending Office" means, with respect to the Lender, its
domestic lending office in the case of a Base Rate Tranche, and its Eurodollar
lending office in the case of a Eurodollar Tranche.
"Applicable Margin" means (i) for purposes of calculating the
Eurodollar Rate at any time, a rate per annum equal to (x) the "Applicable Rate"
applicable to a "Eurocurrency Loan" based on the "Index Debt" rating at such
time, plus (y) 0.25%; and (ii) for purposes of calculating the Base Rate at any
time, a rate per annum equal to (a) the "Applicable Rate" applicable to an "ABR
Loan" based on the "Index Debt" rating at such time, plus (b) 0.25% (each such
term as defined in Section 1.01 of the Credit Agreement, dated as of May 24,
2002, among the Borrowers party thereto, the Lenders party hereto, J.P. Morgan
Bank Canada, JPMorgan Chase Bank, Bank of America, N.A. and Wachovia Bank,
National Association, as amended, supplemented or otherwise modified from time
to time).
"Applicable Multiplier" means (a) at any time and for so long as the
long-term senior, unsecured, unsubordinated credit rating assigned to Parent by
S&P or Moody's is BB+ or Bal or higher, respectively, three, (b) at any time and
for so long as the long-term senior, unsecured, unsubordinated credit rating
assigned to Parent by S&P or Moody's is below BB+ or Bal and above BB- or Ba3,
respectively, four and (c) at any time and for so long as the long-term senior,
unsecured, unsubordinated credit rating assigned to Parent by S&P or Moody's is
BB- or Ba3 or below, respectively, five.
"Applicable Percentage" means, a percentage equal to the greater of (i)
14% or (ii) the product of (a) Applicable Multiplier, (b) the weighted average
life of all Receivables expressed in years and fractions thereof and as reported
in the most recent Servicer Report and (c) the average
26
of the Default Ratios for the twelve months preceding the related date of
such Incremental Borrowing.
"Approved Currency" shall mean United States dollars and Sterling.
"Approved Currency Equivalent" shall mean the value expressed in
Approved Currencies as determined by the Applicable Forward Rate(s) or the
applicable FX Hedging Agreements.
"Applicable Forward Rate" has the meaning ascribed to it in the IKON
Loan Agreement.
"Asset Purchase Agreement" shall mean each asset purchase agreement,
liquidity asset purchase agreement, or other similar agreement pursuant to which
any bank or group of banks or financial institutions agrees to purchase or make
loans secured by (or otherwise advance funds against) all or any portion of
PARCO's interest in the funded Receivables, Related Security and Collections in
order to support PARCO's repayment of the Commercial Paper issued to fund or
maintain such interest.
"Bankruptcy Code" shall mean the United States Federal Bankruptcy Code,
11 U.S.C. ss.ss. 101-1330, as amended.
"Base Rate" shall mean with respect to PARCO prior to the Termination
Date or the occurrence and continuation of a Trigger Event or Potential Trigger
Event, a rate per annum equal to the sum of (x) the greater of (i) the prime
rate of interest announced by the Funding Agent from time to time, changing when
and as said prime rate changes (such rate not necessarily being the lowest or
best rate charged by the Funding Agent) and (ii) the sum of (A) 1.50% and (B)
the rate equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by the
Funding Agent from three Federal funds brokers of recognized standing selected
by it and (y) the Applicable Margin.
"Base Rate Tranche" means, with respect to any Lender, a Tranche funded
or maintained by such Lender as to which Interest is calculated at the Base
Rate.
"Base Rate Tranche Period" shall mean, with respect to a Base Rate
Tranche, either (i) prior to the Termination Date, a period of up to thirty (30)
days requested by the Borrower and agreed to by the Lender commencing on a
Business Day requested by the Borrower and agreed to by the Lender, or (ii)
after the Termination Date, a period of one (1) day. If such Base Rate Tranche
Period would end on a day which is not a Business Day, such Base Rate Tranche
Period shall end on the next succeeding Business Day.
"Blended PARCO Cap Strike Price" shall mean as of the related
Settlement Date, a per annum rate equal to the weighted average of all PARCO Cap
Strike Prices then in effect.
"Bundled Invoice" means an invoice delivered to an Obligor in respect
of both the Contract and in respect of equipment maintenance services and/or
supplies provided to the Obligor by a Person other than the Originator.
"Business Day" means any day on which (i) banks are not authorized or
required to close in New York City [and London] and (ii) if this definition of
"Business Day" is utilized in connection with the Eurodollar Rate, dealings are
carried out on the London interbank market.
27
"Closing Date" means 30 March, 2001.
"Collection Fee" has the meaning specified in Section 2.4(c) of the
Agreement.
"Collections" means, with respect to any Receivable, (i) all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all cash proceeds of Related Security with respect to such
Receivable (including, without limitation, payments under the related Contract
due upon or in connection with (a) Obligor's default under the Contract or (b)
loss, theft or damage to the related Equipment) (ii) any Collection of such
Receivable deemed to have been received pursuant to the Agreement; and (iii) all
amounts received under the PARCO Cap; provided, that Collections shall not
include collections which represent the payment of (x) maintenance charges or
(y) insurance premiums or (z) any amount attributable to value added tax;
"Commercial Paper" means the short-term promissory notes of PARCO
issued by PARCO in the United States commercial paper market.
"Commitment" means, respectively, the Commitment of each APA Bank as
set forth below such APA Bank's name on the signature pages to the Asset
Purchase Agreement or as set forth in the assignment agreement or the assumption
agreement pursuant to which such APA Bank became a party thereto.
"Commitment Expiry Date" shall mean the earliest to occur of (i) the
date on which all amounts due and owing to the Lenders under the Agreement and
the other Transaction Documents have been paid in full, (ii) the date on which
the Commitments have been reduced to zero pursuant to the terms of the Asset
Purchase Agreement and (iii) the Scheduled Termination Date.
"Conduit Assignee" shall mean, with respect to the Conduit Lender, any
commercial paper conduit that issues commercial paper rated at least A-1 by S&P
and P1 by Moody's administered by the Funding Agent with respect to such Conduit
Lender and designated by the Funding Agent to accept an assignment from the
Conduit Lender of the Conduit Lender's rights and obligations pursuant to
Section 6.4.
"Contract" means a closed-end lease agreement between the Originator
and an Obligor having an original lease/loan term not exceeding 72 months, in
substantially the form of one of the forms of written contract set forth in
Annex A hereto or otherwise provided to and approved by the Funding Agent
pursuant to or under which such Obligor shall be obligated to pay for the lease
of Equipment.
"Consolidated Net Worth" shall be determined in accordance with GAAP
and shall mean the sum (as reflected in the consolidated balance sheet of Parent
and its Consolidated Subsidiaries) of (i) the stated dollar amount of
outstanding capital stock plus, (ii) the stated dollar amount of additional paid
in capital, if any, plus (iii) the amount of surplus and retained earnings
minus, (iv) the cost of treasury shares and the excess of redemption value over
the stated value of preferred stock of Parent and its Consolidated Subsidiaries.
"Consolidated Subsidiary" means any corporation of which Parent
directly or indirectly owns or controls at least a majority of the outstanding
stock having general voting power, including without limitation the right, under
ordinary circumstances, to vote for the election of a majority of the Board of
Directors of such corporation.
"CP Rate" shall mean, with respect to any CP Tranche funded or
maintained by PARCO, the rate equivalent to the weighted average of (i) the
weighted average of the discount rates on all
28
of PARCO's Commercial Paper issued at a discount and outstanding during the
related Settlement Period, converted to an annual yield-equivalent rate on the
basis of a 360-day year, which rates shall include dealer fees and commissions
and (ii) the weighted average of the annual interest rates payable on all
interest-bearing PARCO Commercial Paper outstanding during the related
Settlement Period, on the basis of a 360-day year, which rates shall include
dealer fees and commissions; provided, that to the extent that the CP Tranche is
funded by a specific issuance of PARCO's Commercial Paper, the "CP Rate" shall
equal the rate or weighted average of the rates applicable to such issuance.
"CP Tranche" means a Tranche funded or maintained by PARCO as to which
Interest is calculated at the CP Rate.
"CP Tranche Period" shall mean, with respect to a CP Tranche, a period
of days not to exceed 30 days commencing on a Business Day requested by the
Borrower and agreed to by the Lenders pursuant to Section 2.13 of the Agreement.
"Credit and Collection Policy" means those receivables collection
policies and practices of the Originator in effect on the date of the Agreement
and described in Schedule I hereto, as modified in compliance with the Agreement
from time to time.
"Debenture" means the debenture dated 30 March, 2001 between the
Originator and the Lender.
"Debt" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services (other
than in the ordinary course of business), (iv) obligations as Obligor under
leases which shall have been or should be, in accordance with generally accepted
accounting principles, recorded as capital leases and (v) obligations under
direct or indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (i) through (iv) above.
"Default Ratio" means the ratio (expressed as a percentage) computed as
of the last day of each calendar month by dividing (i) the aggregate Outstanding
Balance of all Receivables that became Defaulted Receivables during such month
by (ii) the aggregate Outstanding Balance of all Receivables on the last day of
such month and multiplying by twelve.
"Defaulted Receivable" means a Receivable:
(i) as to which any payment, or part thereof, remains unpaid for more
than 120 days from the original due date for such payment;
(ii) as to which the Obligor thereof or any other Person obligated
thereon or owning any Related Security in respect thereof has taken
any action, or suffered any event to occur, of the type described in
paragraph (g) of Exhibit V; or
(iii) which, consistent with the Credit and Collection Policy, would be
written off the Originator's books as uncollectible.
"Delinquency Ratio" means the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the aggregate
amount of all Related Contracts having
29
one or more Receivables that were Delinquent Receivables on such day by (ii) the
aggregate amount of all Related Contracts on such day.
"Delinquent Receivable" means a Receivable:
(i) as to which any payment, or part thereof, remains
unpaid for 60 or more days from the original due date
for such payment; or
(ii) which, consistent with the Credit and Collection
Policy, would be classified as delinquent by the
Originator.
"Designated Account" means an account in the name of and owned by the
Funding Agent, designated by the Funding Agent in a writing delivered to the
Borrower, for the purpose of receiving Collections of Receivables.
"Discount" means, with respect to any group of Receivables, the product
of (a) the aggregate Outstanding Balance of the Related Contracts relating to
such Receivables and (b) the Applicable Percentage in respect of such
Receivables.
"Dollars" and "$" means the lawful currency for the time being of the
United States of America.
"Dollar Equivalent" means, in relation to a sterling denominated
amount, such amount converted to dollars at the Applicable Forward Rate.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which (a) is a United Kingdom resident and
(b) is not an Affiliate of the Borrower;
(ii) the Obligor of which has not been disapproved (notice of
which shall have been given to the Borrower) by the Funding Agent on or
prior to the date of the relevant Incremental Borrowing and which, at
the time of the relevant Incremental Borrowing, is not the Obligor of
any Defaulted Receivables;
(iii) which is not a Defaulted Receivable or (on the date of
the relevant Incremental Borrowing) a Delinquent Receivable; which
arises under a Contract duly authorized by the parties thereto (which
parties had the legal capacity to enter into such Contract) which is in
full force and effect and which is legal valid and binding obligation
of the related Obligor, enforceable against such Obligor in accordance
with its terms;
(iv) (a) which arises under a Contract with a remaining term
of not more than 60 months; provided, that Contracts having an
aggregate Outstanding Balance of not greater than 5% of the aggregate
Outstanding Balance of all Eligible Receivables may have a remaining
term of up to 72 months;
and
(b) which, according to such Contract, consists of
substantially equal quarterly or more frequent Periodic Payments which
are required to be paid within 30 days of the billing date therefor;
provided, that Contracts having an aggregate Outstanding Balance of not
greater than 2% of the aggregate Outstanding Balance of all Eligible
Receivables may have payments which are not substantially equal monthly
payments or which are required to be paid within up to 90 days of the
billing date;
30
(v) which is originated by the Originator in its ordinary
course of business and is denominated and payable in Sterling in the
United Kingdom;
(vi) which arises under a Contract (a) which has not been
amended, modified, or altered in any material respect (except in
writing and copies of any such writing is attached to the Contract) and
(b) which has been duly authorized and which, together with such
Receivable, is in full force and effect and constitutes the legal,
valid and binding obligation of the Obligor of such Receivable
enforceable against such Obligor in accordance with its terms and is
not subject to any dispute, offset, counterclaim or defense whatsoever
(except as limited by applicable bankruptcy law), (c) in respect of
which, prior to the date it is funded hereunder, the Equipment has been
delivered and accepted, (d) which pursuant to its terms may not be
cancelled, terminated or prepaid by the Obligor before the end of its
stated term (other than Contracts which contain early termination or
prepayment clauses which require the Obligor to pay the remainder of
all scheduled payments under such Contract upon cancellation or
prepayment, and, in the case of Contracts related to Governmental
Obligors, by reason of nonrenewal of appropriations), and (e) which, if
related to a Governmental Obligor, has not been cancelled before the
end of its stated term by reason of nonrenewal of appropriations;
(vii) which, together with the Contract related thereto, does
not contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to usury, consumer protection, truth in lending,
consumer leasing, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and
with respect to which none of the Borrower, the Originator or the
related Obligor is in violation of any such law, rule or regulation in
any material respect;
(viii) with regard to which there exists only one executed
original Contract, which is in the possession of the Originator;
(ix) which was selected for funding by a procedure not
designed to adversely affect the credit quality of the Receivables;
(x) which represents payments due to the Originator and does
not represent (otherwise than in the case of a Receivable in respect of
which a Bundled Invoice is delivered only to the extent that the
Outstanding Balance of Contracts in respect of which Bundled Invoices
are delivered does not exceed 10% of the Outstanding Balance of all
Related Contracts) any payments payable for the account of any Person
other than the Originator under the Contract relating to such
Receivable or any sales or use tax payable under such Contract;
(xi) which was originated by the Originator in accordance
with, and otherwise satisfies all applicable requirements of, the
Credit and Collection Policy;
(xii) which, after giving effect to the financing thereof,
would not result in the aggregate Outstanding Balance of Related
Contracts of any single Obligor (excluding for these purposes any
Governmental Obligor) exceeding 1.5% of the aggregate Outstanding
Balance of all Related Contracts;
(xiii) as to which, at or prior to the time of the Incremental
Borrowing, the Funding Agent has not notified the Borrower that such
Receivable (or class of Receivables) is not acceptable for financing
hereunder;
31
(xiv) the transfer or assignment of which does not require the
Obligor's consent, and which does not contravene any applicable law,
rule or regulation;
(xv) with respect to which (a) the related Obligor has not
been released, (b) the Related Contract has not been satisfied,
cancelled, subordinated or rescinded, and (c) no Equipment subject to
the Related Contract has been released from the Related Contract;
(xvi) which Equipment subject to the related Contract has not
been released and such Contract requires the related Obligor to
maintain insurance on such Equipment in an amount sufficient to fully
insure such Equipment;
(xvii) which has a Yield of at least 5% per annum;
(xviii) the Receivable was entered into on the terms of the
Contract and was used for the jurisdiction of residence of the Obligor
and the form and terms of the Contact comply with the Consumer Credit
Act 1974, where applicable (save for any non-compliance which would not
reduce the value of the Receivable);
(xix) the Receivable is governed by English law and is a
legal, valid and binding obligation of the relevant Obligor and,
subject to any laws from time to time in effect relating to bankruptcy,
sequestration or liquidation or any other laws or other legal
procedures affecting generally the enforcement of creditors' rights, is
enforceable in accordance with its terms;
(xx) the Receivable was entered into without any conduct
constituting fraud or misrepresentation or breach of the Consumer
Credit Act 1974 on the part of any person which conduct would entitle
the relevant Obligor or any person to claim against the Originator in
respect of such conduct or entitle the relevant Obligor to repudiate
any of its obligations under such Receivable;
(xxi) no Receivable is an extortionate credit bargain within
the meaning of ss 137 to 139 Consumer Credit Act 1974;
(xxii) each Receivable has been concluded at arm's length and
the relevant Obligor has entered into the relevant Receivable at his
own will and not under any undue influence;
(xxiii) to the extent that any Receivable was entered into
between the Originator and a "consumer" resident in the United Kingdom
and such Receivable was not "individually negotiated" with such
consumer (as such terms are defined in the Unfair Terms in Consumer
Contracts Regulations 1999 (the "Regulations")), (a) none of the terms
contained in such Receivables are unfair terms within the meaning of
the Regulations and no injunction has been granted by the court
pursuant to regulation 12 of the Regulations which might prevent or
restrict the use in a Receivable of any particular term or the
enforcement of any such term and (b) in carrying out the procedures for
enabling Obligors to enter into such Receivables, the Originator
complied with the Regulations and, in particular, ensured that each
Obligor had a real opportunity of becoming acquainted with the terms of
the relevant Receivable before the conclusion of the Receivable;
(xxiv) the Originator is the absolute beneficial owner of the
Receivable free from any charge, encumbrance or lien save for those
created by the Originator in favour of the Lender by or pursuant to the
Security Agreements;
32
(xxv) if the Receivable is not settled in full on its due
date, the Originator will have full recourse to the relevant Obligor,
pursuant to the terms of the related Contract, to the extent of any
shortfall;
(xxvi) the Receivable can be clearly segregated, identified
and monitored in the books and records of the Originator and payments
made by an Obligor relating thereto will be on their receipt, clearly
identifiable in the records and/or bank accounts of the Originator;
(xxvii) the Receivable is not subject to withholding taxes;
(xxviii) all required consents approvals and authorisations in
the relevant jurisdiction have been obtained in relation to the
Receivable; and
(xxix) with respect to each Receivable and the relevant
Equipment the Contract requires the related Obligor to maintain
insurance on such Equipment in an amount sufficient to fully insure
such Equipment.
"Equipment" with respect to any Receivable means office, business or
other equipment leased or sold to an Obligor by the Originator pursuant to a
Contract (including any modifications or substitutions of equipment pursuant to
the original Contract giving rise to such Receivable).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Tranche
funded or maintained by any Lender (or any liquidity or credit support provider
of PARCO) prior to the Termination Date or the occurrence and continuation of a
Trigger Event or Potential Trigger Event, the Applicable Margin plus a rate per
annum equal to the sum (rounded upwards, if necessary, to the next higher 1/100
of 1%) of (i) the rate obtained by dividing (A) the applicable LIBOR Rate by (B)
a percentage equal to 100% minus the reserve percentage used for determining the
maximum reserve requirement as specified in Regulation D (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
that is applicable to the Funding Agent during the related Settlement Period in
respect of eurocurrency or eurodollar funding, lending or liabilities (or, if
more than one percentage shall be so applicable, the daily average of such
percentage for those days in such Settlement Period during which any such
percentage shall be applicable) plus (ii) the then daily net annual assessment
rate (rounded upwards, if necessary, to the nearest 1/100 of 1%) as estimated by
the Funding Agent for determining the current annual assessment payable by the
Funding Agent to the Federal Deposit Insurance Corporation in respect of
eurocurrency or Eurodollar funding, lending or liabilities.
"Eurodollar Tranche" means a Tranche funded or maintained by the Lender
as to which Interest is calculated at the Eurodollar Rate.
"Eurodollar Tranche Period" shall mean, with respect to a Eurodollar
Tranche, prior to the Termination Date, a period of up to 30 days requested by
the Borrower and agreed to by the Lender and the Funding Agent commencing on a
Business Day requested by the Borrower and agreed to by the Lender and the
Funding Agent; provided, however, that if such Eurodollar Tranche Period would
expire on a day which is not a Business Day, such Eurodollar Tranche Period
shall expire on the next succeeding Business Day; provided, further, that if
such
33
Eurodollar Tranche Period would expire on (a) a day which is not a Business Day
but is a day of the month after which no further Business Day occurs in such
month, such Eurodollar Tranche Period shall expire on the next preceding
Business Day or (b) a Business Day for which there is no numerically
corresponding day in the applicable subsequent calendar month, such Eurodollar
Tranche Period shall expire on the last Business Day of such month.
"Excess Spread" shall mean as of the related Settlement Date, the
weighted average Yield of all Funded Receivables, less:
(A) the Blended PARCO Cap Strike Price;
(B) the Collection Fee; and
(C) the Applicable Margin.
"Fee Letter" has the meaning set forth in Section 2.4 of the Agreement.
"Finance Leasing Subsidiary" means the Originator, IKON Capital Inc., a
Canadian corporation, IKON Capital, PLC, a British company, IKON Office
Solutions Dublin Limited, an Irish company, IKON Leasing GmbH, a German company,
and their respective subsidiaries, any successors to such corporations, and such
additional subsidiaries whose primary business is the leasing or other financing
of products distributed by Parent and its subsidiaries.
"Fitch" means Fitch IBCA Limited.
"Fixed Charges Coverage Ratio" means the ratio of (x) consolidated
operating income to (y) interest costs, excluding interests costs of Finance
Leasing Subsidiaries.
"Funded Assets" means each Funded Receivable and all Related Security
and Collections with respect thereto.
"Funded Receivables" means all of the Receivables funded by PARCO under
this Agreement.
"Funding Agent" shall mean JPMorgan Chase Bank, its successors and
permitted assigns.
"Funding Agent's Account" means account numbers 24214601 (in respect of
Stirling) and 23454907 (in respect of Dollars) of the Funding Agent held with
JPMorgan Chase Bank London.
"Funding Limit" means $125,000,000 or such amount as may be amended by
the parties in writing from time to time.
"FX Counterparty" shall mean (i) on the Closing Date, JPMorgan Chase
Bank and (ii) thereafter any FX counterparty or counterparties in any FX Hedging
Agreement, which has a short-term unsecured rating of at least "A-1" by S&P and
"P-1" by Moody's.
"FX Hedging Agreements" shall mean each hedging agreement entered into
by the FX Counterparty and the Borrower for the purpose of managing currency
risk by way of a series of spot and forward foreign exchange agreements.
"GAAP" shall mean generally accepted accounting principles in the
United States, set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial
34
Accounting Standards Board or in such other statements by such accounting
profession, which are in effect as of the date of this Agreement.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Governmental Obligor" means an Obligor that is the federal government,
the government of any state or governmental subdivision or any agency of the
federal government or the government of any state.
"IKON Group" means, collectively, the Originator, the Parent and IKON
Office Solutions Dublin Limited.
"IKON Loan Agreement" shall mean the loan agreement, dated as of 30
March, 2001 between, inter alia, the Originator, IKON Office Solutions Dublin
Limited, Rochford, Inc., and JPMorgan Chase Bank as Funding Agent.
"Indemnified Amounts" has the meaning specified in Section 4.1 of the
Agreement.
"Indemnified Party" has the meaning specified in Section 4.1 of the
Agreement.
"Interest" shall mean, with respect to any Tranche Period:
(TR x TOL x AD)
YD
Where:
TR = the Tranche Rate applicable to such Tranche Period;
TOL = the portion of the Outstanding Loans allocated to such
Tranche Period;
AD = the actual number of days during such Tranche Period; and
YD = either (i) if the Tranche Rate is the CP Rate or the
Eurodollar Rate, 360 or (ii) if the Tranche Rate is the Base
Rate, 365 or 366, as applicable.
provided, however, that (i) Interest shall include any commissions or
fees payable to PARCO's commercial paper placement agents in connection
with the sale of commercial paper related to this Agreement and (ii) no
provision of this Agreement shall require the payment or permit the
collection of Interest in excess of the maximum amount permitted by
applicable law; and provided, further, that Interest shall not be
considered paid by any distribution if, at any time, such distribution
is rescinded or must be returned for any reason.
"Investment Grade" means, with respect to any entity's long-term public
senior debt securities, a rating of at least "BBB-" by S& P and of at least
"Baa3" by Moody's.
"IOL Debenture" means the debenture dated 30 March, 2001 between, inter
alia, IKON Office Solutions Dublin Limited and the Lender.
"Lender" means the Conduit Lender and the APA Banks to the extent of
its interest in the Loans.
35
"LIBOR Rate" shall mean, with respect to any Eurodollar Tranche funded
or maintained by the Lender (or any liquidity or credit support provider of
PARCO), the rate at which deposits in Dollars are offered to the Funding Agent,
in the London interbank market at approximately 11:00 a.m. (London time) two
Business Days before the first day of the related Settlement Period in an amount
approximately equal to the portion of Outstanding Loans to which the Eurodollar
Rate is to apply and for a period of time approximately equal to the applicable
Settlement Period.
"Loan" has the meaning set forth in Section 2.1(a) of the Agreement.
"Loan Amount" shall mean, with respect to any Incremental Borrowing,
the amount paid to the Borrower by a Lender as described in the applicable Loan
Certificate. The Loan Amount for any Loan shall be comprised of a cash component
equal to the Outstanding Loans.
"Loan Date" shall mean, with respect to each Loan, the Business Day on
which such Loan is made.
"Material Adverse Change" means any set of circumstances or events
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of the Agreement or any
other Transaction Document, (b) is or could reasonably be expected to be
material and adverse to the business, properties, assets, financial condition,
results of operations or prospects, taken as a whole, of the Borrower, the
Servicer, the Originator or the Originator or any of their successors or assigns
(the "Parties"), (c) impairs materially or could reasonably be expected to
impair materially the ability of the Parties to duly and punctually pay or
perform their respective obligations under the Agreement or any other
Transaction Document, or (d) impairs materially or could reasonably be expected
to impair materially the ability of the Funding Agent or the Lender, to the
extent permitted, to enforce their legal remedies pursuant to the Agreement or
any other Transaction Document.
"Maximum PARCO Cap Strike Price" means (i) the weighted average Yield
as of the Loan Date of the Funded Receivables minus (ii) the Collections Fee
minus (iii) the Applicable Margin minus (iv) 3.68%.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto.
"Notice of Borrowing" has the meaning set forth in Section 2.2(a)(ii).
"Obligor" means a Person obligated to make payments pursuant to a
Contract; provided that in the event that any payments in respect of a Contract
are made by any other Person, such other Person shall be deemed to be an
Obligor.
"Official Body" shall mean any nation or government, any state or other
political subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of any such government or political
subdivision, or any court, tribunal, grand jury or arbitrator, in each case
whether foreign or domestic.
"Originator" shall means IKON Capital Plc and its successors and
assigns in such capacity.
"Other Corporations" means the Parent, the Originator and all of the
Parent's Subsidiaries.
"Outstanding Balance" of any Contract or Receivables with respect
thereto at any date means the net present value of the total Periodic Payments
due to the Originator over the
36
remaining term of the Contract or that have become due and payable on or prior
to such date but remain unpaid on such date (net of any security deposits or
advance rental payments received by the Originator) and not yet paid by the
Servicer pursuant to the provisions of Section 2.3(b), discounted monthly at the
Yield in relation to such Contract or Receivable as determined by subtracting
all amounts representing unearned interest from the aggregate amount of such
Periodic Payments.
"Outstanding Loans" shall mean the sum of the cash amounts paid to the
Borrower by the Lender in connection with each Incremental Borrowing minus (a)
the aggregate amount of proceeds of Collections received by and applied by the
Funding Agent to reduce such Outstanding Loans pursuant to Section 2.3 of the
Agreement; (b) the Dollar Equivalent of any amounts on deposit in the Funding
Agent's Account pursuant to Section 2.6(d); and (c) any additional amounts paid
to the Lender by the Borrower pursuant to the Agreement; provided that the
Outstanding Loans shall be restored and reinstated in the amount of any
Collections so received and applied if, at any time, the distribution of such
Collections is rescinded or must otherwise be returned for any reason.
"PARCO" shall mean Park Avenue Receivables Corporation, a Delaware
corporation.
"PARCO Cap" means the interest rate cap or other hedging arrangement
entered into by the Borrower (or the rights under which have been assigned to
the Borrower) for the purpose of hedging the interest rate risk associated with
Receivables bearing interest at a fixed rate, which cap (A) shall have a "strike
price" ("Parco Cap Strike Price") less than or equal to the Maximum PARCO Cap
Strike Price, (B) shall be entered into with a cap provider having a short term
rating of at least A-1 by S&P and P-1 by Moody's, (C) shall have a maturity date
no earlier than the final scheduled payment with respect to the last maturing
Funded Receivables, (D) shall be based upon the one-month LIBOR Rate, (E) on the
date it is entered into, and at all times thereafter, it shall have a notional
amount equal to or greater than the Outstanding Loans, (F) shall provide that
payments thereunder by the counterparty to the PARCO Cap shall be made directly
to the Funding Agent Account, and (H) shall provide that it may not be amended,
terminated, waived, assigned or otherwise modified without the prior written
consent of the Funding Agent.
"PARCO Termination Event" means (i) the providers of PARCO's program
liquidity and/or letter of credit facilities shall have given notice that an
event of default has occurred and is continuing under their respective
agreements with PARCO or (ii) the expiration of the commitments of all liquidity
providers under the Asset Purchase Agreement, notice of which, in each
circumstance shall be given to the Borrower and the Originator.
"Parent" means IKON Office Solutions, Inc., an Ohio corporation.
"Periodic Payments" means the aggregate base rental amounts coming due
on a periodic basis pursuant to the Contracts giving rise to Receivables,
excluding any maintenance charges or any amount attributable to value added tax
or, with respect to Contracts covering photocopiers, any per copy charges.
"Permitted Termination" means a termination of an existing Related
Contract (the "Terminated Contract") where the Obligor has entered into a new
Contract which has been either approved by the Funding Agent or: (i) in relation
to which the Receivables are Eligible Receivables; (ii) which has an Outstanding
Balance equal to or greater than the existing Related Contract; (iii) which has
been specified in a List of Contracts delivered to the Funding Agent pursuant to
paragraph (e) of Exhibit IV hereof; (iv) in relation to any termination after
the Scheduled Termination Date, has a Yield equal to or greater than that of the
Terminated Contract; and (v) in relation to any termination after the Scheduled
Termination Date, does not have a term which is longer than the Terminated
Contract.
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"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, limited liability partnership, joint
stock company, trust, unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency thereof.
"Potential Trigger Event" means an event that but for notice or lapse
of time or both, in each case, as specified in Exhibit V would constitute a
Trigger Event.
"Pro Rata" means, with respect to any Lender, pro rata based on such
Lender's Outstanding Loans, so long as PARCO is the sole Lender, its Pro Rata
Share of any amount shall be equal to 100% of such amount.
"Program Fee" is defined in the Fee Letter.
"Rating Agencies" means S&P and Moody's and, for the purposes of
Section 6.7 of this Agreement and Section 9.06 of the IKON Loan Agreement only,
Fitch.
"Receivable" means the obligations of any Obligor under a Related
Contract and includes monies received subsequent to the related Incremental
Borrowing with respect to (i) all Periodic Payments and (ii) all obligations of
such Obligor to pay interest or finance charges and other obligations of such
Obligor (other than obligations in respect of taxes or insurance or similar
escrow arrangements of any kind) with respect thereto, and all other payments
(other than in respect of taxes or insurance or similar escrow arrangements of
any kind) received by the Originator pursuant to such Contract, excluding any
maintenance charges or, with respect to Contracts covering photocopiers, any per
copy charges. A Receivable arising under a Related Contract for which the
Outstanding Balance has been collected shall no longer constitute a "Receivable"
outstanding hereunder.
"Related Contract" means a Contract included in the List of Contracts
delivered to the Funding Agent pursuant to paragraph (e) of Exhibit IV hereof;
provided, that after the Outstanding Balance of such Contract has been
collected, it shall no longer constitute a "Related Contract" hereunder.
"Related Security" means with respect to any Receivable:
(i) all security interests or liens and property (including
without limitation Equipment) securing or purporting to secure payment
of such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise;
(ii) all guaranties (other than the Support Agreement),
insurance and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such Receivable (or
insuring for loss or liability with respect to the related Equipment),
whether pursuant to the Contract related to such Receivable or
otherwise and all of the Originator's and the Borrower's rights (if
any) to recourse, repurchase or indemnity against any Person with
respect to such Receivable; and
(iii) the related Contract and all other books, records and
other information (including, without limitation, computer programs,
tapes, discs, punch cards, data processing software and related
property and rights) relating to such Receivable and the related
Obligor.
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"Required APA Banks" shall mean the APA Banks having Commitments which,
in the aggregate, equals at least 662/3% of the Aggregate Commitment, or, if the
Commitments have been terminated, having Outstanding Loans, which in the
aggregate, equals at least 662/3% of the aggregate Outstanding Loans; provided
that the Commitment or Outstanding Loans of any APA Bank that has not paid all
amounts due and owing by it in respect of such Loans (or portion thereof) that
it was obligated to make, shall not be included in any calculations made
pursuant to this definition.
"Required Balance" means, with respect to any Settlement Date, an
amount equal to (a) the aggregate Outstanding Loans on such Settlement Date
divided by (b) (i) one minus (ii) the Applicable Percentage.
"Revolving Credit Note" shall mean each promissory note of the Borrower
payable to the order of the Lenders in respect of obligations under the
Agreement, substantially in the form of Annex C-1 and any promissory note of the
Borrower issued in substitution thereof.
"S&P" means Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies, Inc. and any successor thereto.
"Scheduled Termination Date" shall mean the Scheduled Commitment
Termination Date as defined in the Asset Purchase Agreement.
"Security Agreements" means the Debenture, the IOL Debenture and the
declaration of trust to be made on or about the date hereof by IKON Capital plc
in favour of Rochford, Inc. in respect of the accounts to which Collections are
to be credited.
"Servicer" means at any time the Person then authorized pursuant to
Section 5.1 of the Agreement to administer and collect Receivables.
"Servicer Report" means a report, in substantially the form of Annex B
hereto, furnished by the Servicer to the Funding Agent pursuant to Section 5.2
of the Agreement.
"Settlement Date" means the fifteenth day of each calendar month, or,
if such day is not a Business Day, the next succeeding Business Day.
"Settlement Period" means: (i) initially, the period commencing on (and
including) the date of the initial funding of the applicable Receivables and
ending on (and including) the last day of the calendar month in which such
Settlement Period began, and (ii) thereafter, each calendar month, provided,
that:
(i) any Settlement Period (other than of one day) which would
otherwise end on a day which is not a Business Day shall be extended to
the next succeeding Business Day; and
(ii) in the case of any Settlement Period which commences
before the Termination Date and would otherwise end on a date occurring
after the Termination Date, such Settlement Period shall end on the
Termination Date and the duration of each Settlement Period which
commences on or after the Termination Date shall be of such duration as
shall be selected by the Funding Agent.
"SFAS" means the Statement on Financial Accounting Standards issued by
the American Institute of Certified Public Accountants from time to time.
39
"Special Indemnified Amounts" has the meaning specified in Section 5.7
of the Agreement.
"Special Indemnified Party" has the meaning specified in Section 5.7 of
the Agreement.
"Sterling" means the lawful currency for the time being of the United
Kingdom.
"Sterling Equivalent" means, in relation to a dollar denominated
amount, such amount converted to sterling at the rate of exchange specified in
the relevant FX Hedging Agreement.
"Subsidiary" means any corporation or other entity of which securities
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by the Originator or the Parent, as the case may be, or one or
more Subsidiaries, or by the Originator or the Parent, as the case may be, and
one or more Subsidiaries.
"Termination Date" shall mean the earliest of (i) the Business Day
designated by the Borrower (with the prior written consent of the Originator) to
the Funding Agent as the Termination Date at any time following forty-five (45)
days' written notice to the Funding Agent, (ii) the day upon which a Termination
Date is declared or automatically occurs relating to a Trigger Event pursuant to
Section 3.3 and (iii) the Commitment Expiry Date.
"Tranche" shall mean a portion of the Outstanding Loans allocated to a
Tranche Period pursuant to Section 2.13 of the Agreement.
"Tranche Period" shall mean a CP Tranche Period, a Base Rate Tranche
Period or a Eurodollar Tranche Period.
"Tranche Rate" means, with respect to any Tranche, the rate (which
shall be either the CP Rate, Base Rate, or the Eurodollar Rate as selected at
the sole discretion of the Funding Agent) at which such Tranche is funded or
maintained by the applicable Lender; it being understood that at all times on
and after the occurrence and continuation of a Trigger Event, the Tranche Rate
with respect to any Tranche, for any Lender shall be equal to the Base Rate
applicable to such Lender plus 2.00% per annum.
"Transaction Document" means any of the Agreement, the Security
Agreements, the IKON Loan Agreement, the Asset Purchase Agreement and all other
agreements and documents delivered and/or related hereto or thereto.
"Trigger Event" has the meaning specified in Exhibit V.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"Yield" shall mean the implied per annum interest rate used by the
Originator in originating such Receivable.
All terms used in Article 9 of the UCC in the State of New York and not
specifically defined herein, are used herein as defined in such Article 9.
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EXHIBIT II
CONDITIONS PRECEDENT
1. Conditions Precedent to initial Incremental Borrowing. The initial
Incremental Borrowing is subject to the conditions precedent that the
Funding Agent shall have received on or before the date of such initial
Incremental Borrowing the following, each (unless otherwise indicated)
dated such date, in form and substance satisfactory to the Funding
Agent:
(a) Certified copies of the resolutions of the Board of Directors of the
Borrower approving the Transaction Documents and all related actions,
and certified copies of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to
the Transaction Documents and such actions.
(b) Certified copies of the resolutions of the Board of Directors of the
Originator approving the Transaction Documents and all related actions,
and certified copies of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to
the Transaction Documents and such actions.
(c) A certificate of the Secretary or Assistant Secretary of the Borrower
certifying the names and true signatures of the officers of the
Borrower, authorized to sign the Transaction Documents and the other
documents to be delivered by it thereunder.
(d) A certificate of the Secretary or Assistant Secretary of the Originator
certifying the names and true signatures of the officers of the
Originator authorized to sign the Transaction Documents and the other
documents to be delivered by it thereunder.
(e) Acknowledgement copies or time stamped receipt copies of proper
statements, duly filed on or before the initial Incremental Borrowing
(or such later date as determined by the Funding Agent) under the UCC
of all jurisdictions that the Funding Agent may deem necessary or
desirable in order to perfect the interests contemplated by the
Agreement.
(f) Acknowledgement copies or time stamped receipt copies of proper
financing statements, if any, necessary to release all security
interests and other rights of any Person in the (i) Receivables,
Related Contracts or Related Security previously granted by the
Borrower and the Originator and (ii) the collateral security referred
to in Section 2.14.
(g) Completed requests for information, listing all effective financing
statements, filed in the jurisdictions referred to in subsection (e)
above that name the Borrower as debtor, together with copies of such
other financing statements (none of which shall cover any Receivables,
Related Contracts, Related Security or the collateral security referred
to in Section 2.14.
(h) A certified copy of the organizational documents of the Borrower, and a
certificate as to the good standing of the Borrower from such Secretary
of State or other official, dated as of a recent date.
(i) An opinion from each of Weil, Gotshal & Manges, New York and Weil,
Gotshal & Manges, London as to the legal, valid and binding nature of
the New York and English law documents, respectively, each addressed to
the Funding Agent and the Lenders, in form and substance reasonably
acceptable to the Funding Agent.
41
(j) An opinion of Andersen Legal, addressed to the Funding Agent and the
Lenders, in form and substance reasonably acceptable to the Funding
Agent, regarding certain corporate matters in relation to each of the
Borrowers.
(k) The Fee Letter duly executed by all parties thereto, and payment of all
fees required to be paid on the Closing Date, and reimbursement of the
Funding Agent and the Lenders for all costs and expenses of the closing
of the transaction (including reasonable legal fees and costs).
(l) Each Transaction Document, the amendment agreement, in the agreed form,
to be entered into in respect of the lease agreement dated 4 March 1999
between the Originator and IKON Office Solutions Dublin Limited, and
the facilitation agreement to be entered into between J.H. Management
Corporation, the Borrower and IKON Office Solutions, Inc., in respect
of certain management services to be provided to the Borrower by
Rochford Inc., in each case duly executed by all parties thereto.
(m) Satisfactory results of a review and audit by the Funding Agent of the
Originator's collection, operating and reporting systems, Credit and
Collection Policy, historical receivables data and accounts.
(n) The audited financial statements of the Servicer and its Subsidiaries
prepared in accordance with GAAP on a consolidated and consolidating
basis (consolidating statements need not be audited by such
accountants) for the Servicer's financial year ending on 30 September
2000.
(o) A letter from each Rating Agency rating PARCO's Commercial Paper
confirming its rating of PARCO's Commercial Paper or that such rating
will not be withdrawn or downgraded after giving effect to the
Agreement and the transactions contemplated hereby.
(p) An officer's certificate of (i) the Originator certifying that the
representations and warranties of the Originator set forth in this
Agreement and the IKON Loan Agreement and (ii) the Borrower certifying
that the representations and warranties of the Borrower set forth
herein, are true and correct in all material respects as of the Closing
Date.
(q) A Servicer Report duly completed for the most recently completed
Settlement Period.
(r) The Borrower shall have entered into the PARCO Cap.
(s) Evidence that FX Hedging Agreements satisfactory to the Funding Agent
are in place and effective.
2. Additional Conditions Precedent. Each Incremental Borrowing after the
initial Incremental Borrowing shall be subject to the further
conditions precedent that:
(a) on or prior to the date of such Incremental Borrowing, the Servicer
shall have delivered to the Funding Agent, in form and substance
satisfactory to the Funding Agent, a completed Servicer Report dated
within 30 days prior to the date of such Incremental Borrowing together
with a listing by Obligor of all Receivables arising from a Related
Contract and such additional information as may reasonably be requested
by the Funding Agent;
42
(b) on the date of such Incremental Borrowing the following statements
shall be true (and acceptance of the proceeds of such Incremental
Borrowing shall be deemed a representation and warranty by the Borrower
that such statements are then true):
(i) The representations and warranties of the Borrower contained in
Exhibit III are correct on and as of the date of such Incremental
Borrowing as though made on and as of such date for which purposes
paragraph (e) of Exhibit III shall be deemed to refer to the latest
accounts delivered to the Funding Agent pursuant to paragraph (k) of
Exhibit IV;
(ii) The representations and warranties of the Originator contained in
the Transaction Documents are correct on and as of the date of such
Incremental Borrowing as though made on and as of such date;
(iii) No event has occurred and is continuing, or would result from such
Incremental Borrowing, that constitutes a Trigger Event or Potential
Trigger Event;
(iv) The Termination Date shall not have occurred or, in the case of
Incremental Borrowings funded by PARCO, no PARCO Termination Event
shall have occurred;
(v) The aggregate Outstanding Loans do not exceed the Funding Limit; and
(vi) The Dollar Equivalent of the Outstanding Balance of all Eligible
Receivables is not less than the Required Balance.
(c) the Funding Agent shall have received such other approvals, opinions or
documents as it may reasonably request;
(d) the Funding Agent shall have received the list of the Related Contracts
to which such Incremental Borrowing relates that is required to be
delivered pursuant to paragraph (j) of Exhibit IV hereof;
(e) the PARCO Cap, or such other interest rate cap(s) acceptable to the
Funding Agent, shall be in full force and effect;
(f) such Incremental Borrowing would not result in the Excess Spread in
relation to the Funded Receivables falling below 3%;
(g) evidence that FX Hedging Agreements satisfactory to the Funding Agent
are in place and effective; and
(h) such Incremental Borrowing would not result in the weighted average
Yield in relation to the Funded Receivables falling below 5.75%.
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EXHIBIT III
REPRESENTATIONS AND WARRANTIES
Part A - Borrower
The Borrower represents and warrants as follows:
(a) The Borrower is a Delaware corporation duly formed and validly
existing and in good standing under the laws of Delaware, and is duly qualified
to do business, and is in good standing, in every jurisdiction where the nature
of its business requires it to be so qualified.
(b) The execution, delivery and performance by the Borrower of the
Transaction Documents (i) are within the Borrower's corporate powers, (ii) have
been duly authorized by all necessary corporate action, (iii) do not contravene
(1) the Borrower's organizational documents, (2) any law, rule or regulation
applicable to the Borrower, (3) any contractual restriction binding on or
affecting the Borrower or the Borrower's property or (4) any order, writ,
judgment, award, injunction or decree binding on or affecting the Borrower or
the Borrower's property, and (iv) do not result in or require the creation of
any lien, security interest or other charge or encumbrance upon or with respect
to any of the Borrower's properties (other than those created pursuant to the
Transaction Documents); and no transaction contemplated by the Agreement
requires compliance with any bulk sales act or similar law. Each of the
Transaction Documents has been duly executed and delivered by the Borrower.
(c) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of the Transaction
Documents, except for the filing of the UCC financing statements which are
referred to therein.
(d) Each of the Transaction Documents constitutes the legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms (subject to applicable bankruptcy, insolvency,
liquidation and similar laws of general application and general equitable
principles).
(e) Since the date of its formation, there has not been a material adverse
change in the business, operations, property or financial or other condition of
the Borrower.
(f) No proceeds of any Loan will be used to acquire any equity security of
a class, which is registered pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended.
(g) Each Receivable funded by the Conduit Lender to the Borrower hereunder
is an Eligible Receivable on the date of the relevant Incremental Borrowing and
in fact satisfies at such time the definition of "Eligible Receivable". The
Borrower has the right to grant the security interest pursuant to Section 2.14
of the Agreement, free and clear of any Adverse Claim, other than the effect of
the Agreement and the transactions contemplated hereby.
(h) The principal place of business and chief executive office of it and
the office where it keeps its records concerning the Receivables are located at
the respective addresses identified on Exhibit VI.
(i) The Borrower is not known by and does not use any tradename or
doing-business-as name.
44
(j) The Borrower was formed on 16 March, 2001 and has no Subsidiaries.
(k) (i) The fair value of the property of the Borrower is greater than its
total amount of liabilities, including contingent liabilities, (ii) the present
fair saleable value of the assets of the Borrower is not less than the amount
that will be required to pay all probable liabilities of the Borrower on its
debts as they become absolute and matured, (iii) the Borrower does not intend
to, and does not believe that it will, incur debts or liabilities beyond its
abilities to pay such debts and liabilities as they mature and (iv) the Borrower
is not engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which its property would constitute unreasonably
small capital.
(l) So far as the Borrower is aware, no relevant Obligor has threatened
any action against the Originator for any failure on the part of the Originator
to perform any such obligations or provisions.
Part B - Originator
The Originator represents and warrants as follows:
(a) The balance sheets of the Originator and its Subsidiaries as at 30
September 2000 and the related statements of income and retained earnings of the
Originator and its Subsidiaries for the fiscal year then ended, copies of which
have been furnished to the Funding Agent, fairly present the financial condition
of the Originator and its Subsidiaries as at such date and the results of the
operations of Originator and its Subsidiaries for the period ended on such date,
all in accordance with generally accepted accounting principles consistently
applied, and since 30 September 2000 there has been no material adverse change
in the business, operations, property or financial or other condition of the
Originator (taken as a whole).
(b) There is no pending or threatened action or proceeding affecting the
Originator or any of its Subsidiaries before any court, governmental agency or
arbitrator which would materially adversely affect the financial condition or
operations, taken as a whole, of the Originator or any of its Subsidiaries or
the ability of the Originator to perform its obligations under the Transaction
Documents, or which purports to affect the legality, validity or enforceability
of the Transaction Documents; neither the Originator nor any Subsidiary is in
default with respect to any order of any court, arbitration or governmental
body.
(c) Each Servicer Report (if prepared by the Originator or one of its
Affiliates, information, exhibit, financial statement, document, book, record or
report furnished or to be furnished at any time by or on behalf of the
Originator to the Funding Agent or any Lender in connection with the Agreement
is or will be accurate in all material respects as of its date or (except as
otherwise disclosed to the Funding Agent or the Lenders, as the case may be, at
such time) as of the date so furnished, and no such document contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained therein, in
the light of the circumstances under which they were made, not misleading.
(d) The Outstanding Balance with respect to each Receivable, as of the
date of the relevant Loan for such Receivable, is correctly set forth on
Schedule II (as supplemented pursuant to Section 2.2)).
(e) Schedule II (as supplemented pursuant to Section 2.2(a)) sets forth
accurately and completely in all material respects, as of the date of the
relevant Loan for such Receivable, the information with respect to each such
Receivable transferred on such date.
45
(f) Each Contract giving rise to a Receivable provides for Periodic
Payments that will fully amortize such Receivable over the term of the Contract
related thereto and the Borrower has not extended the maturity or adjusted the
Outstanding Balance of any Receivable, or amended, modified or waived the terms
of any Receivable or any Contract relating to any Receivable such that the
interests of the Funding Agent or the Lenders would be materially and adversely
affected thereby.
(g) With respect to each Receivable funded hereunder, such Receivable is
representative of all of the Receivables owned by the Originator.
(h) The particulars of each Receivable are true and correct in all
material respects and all such Receivables have been correctly categorised in
the Originator's records in accordance with the provisions of the Consumer
Credit Act 1974 as a regulated or an unregulated agreement thereunder, as the
case may be.
(i) Except as provided by the Consumer Credit Act 1974 where applicable,
(i) the obligations of the relevant Obligor under or in connection with any
Receivable are not subject to any lien, right of rescission, counterclaim,
set-off, defence or right of retention against the Originator, (ii) the
performance of any of the terms of any such Receivable or the exercise of any
rights thereunder will not render such Receivable unenforceable in whole or in
part or subject to such lien, right of rescission, counterclaim, set-off,
defence or right of retention and (iii) so far as the Originator is aware, no
such lien, right of rescission, counterclaim, set-off, defence or right of
retention has been asserted against the Originator in respect thereof.
(j) No Receivable and in relation thereto any Contract has been terminated
or, so far as the Originator is aware, rescinded.
(k) No Receivable and in relation thereto any Contract has been varied or
amended other than in accordance with the Credit and Collection Policy and no
obligation of an Obligor in relation to the relevant Receivable has been
rescheduled or an accommodation or arrangement has been arrived at as a result
of a deterioration in the creditworthiness of an Obligor.
(l) The Originator has performed all its obligations in all material
respects under or in connection with each Receivable and has complied with all
relevant provisions of the Consumer Credit Act 1974 in connection therewith
(where applicable and save for any non-compliance the effect of which would not
reduce the value of the relevant Receivable).
(m) The Originator holds and, since prior to such time as the Originator
first entered into any Receivable has held, a valid and current licence under
the Consumer Credit Act 1974 (and no such licence has ever been revoked or
suspended) which is in full force and effect and the Originator is not aware of
any circumstance which indicates that such licence or registration are likely to
be revoked.
(n) The Originator is entered in the register maintained by the Data
Protection Commissioner pursuant to the Data Protection Act 1998 and, since
prior to such time as the Originator first entered into any Receivable, has
either been so entered on such register or that maintained under the Data
Protection Act 1984.
(o) The Originator has maintained records relating to each Receivable
which are accurate and complete in all material respects and which are
sufficient to enable such Funded Receivable to be enforced against the relevant
Obligor, and such records, which include an original of each Contract, are held
by or to the order of the Borrower.
46
(p) The Originator has not received notice or become aware of any act,
omission or event such that any of the insurance policies relating to a
Receivable might be rendered void or voidable or otherwise any way materially
adversely affected.
(q) The Originator is not aware of any default, breach or violation under
any Receivable or, as the case may be, the Contract relating thereto (other than
any default relating to the lateness in payment) or of any event which would
constitute such a default, breach or violation.
(r) No Obligor under a Receivable is bankrupt or dead.
(s) The Originator has selected the Receivables from the Eligible
Receivables which it owns in good faith and without any intention that the
performance of the Receivables should in any way vary from that of its remaining
receivables.
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EXHIBIT IV
COVENANTS
At all times from the date hereof to the later to occur of (i) the
Termination Date or (ii) the date on which the Outstanding Loans have been
reduced to zero, all accrued Interest and fees and all other amounts due and
owing shall have been paid in full, in cash, unless the Funding Agent shall
otherwise consent in writing:
Part A - Borrower
(a) Compliance with Laws, Etc. The Borrower will comply in all material
respects with all applicable laws, rules, regulations and orders and
preserve and maintain its corporate existence, rights, franchises,
qualifications and privileges except to the extent that the failure so
to comply with such laws, rules and regulations or the failure so to
preserve and maintain such existence, rights, franchises,
qualifications and privileges would not materially adversely affect the
collectibility of the Receivables or the ability of the Borrower to
perform its obligations under the Transaction Documents.
(b) Offices, Records and Books of Account. The Borrower will keep its
principal place of business and chief executive office and the office
where it keeps its records concerning the Receivables (and all original
documents relating thereto) at the respective addresses set forth on
Exhibit VI of the Agreement or, upon 30 days' prior written notice to
the Funding Agent, at any other locations in jurisdictions where all
actions reasonably requested by the Funding Agent to protect and
perfect the interest in the Receivables have been taken and completed.
The Borrower also will maintain and implement administrative and
operating procedures (including, without limitation, an ability to
recreate records evidencing the Receivables and Related Contracts in
the event of the destruction of the originals thereof), and keep and
maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all Receivables
(including, without limitation, records adequate to permit the daily
identification of each Receivable and all Collections of and
adjustments to each Receivable).
(c) Further Action. The Borrower will from time to time, execute and
deliver all further instruments and documents and take all further
action that the Funding Agent may reasonably request in order to
perfect, protect or more fully evidence the interest in the
Receivables, the Related Contracts, and the Related Security and
Collections with respect thereto or to enable the Funding Agent or any
Lender to exercise or enforce any of its rights under the Transaction
Documents. Without limiting the generality of the foregoing, the
Borrower will, or will cause the Servicer to, upon the occurrence of a
Trigger Event or Potential Trigger Event, (x) mark conspicuously each
Related Contract with a legend, acceptable to the Funding Agent,
evidencing that an interest in the Receivable has been transferred to
the Funding Agent (for the benefit of the Lenders) under the Agreement;
and (y) code the Servicer's master data processing records evidencing
Receivables and Related Contracts to the foregoing effect. The Borrower
hereby authorizes the Funding Agent to file one or more financing or
continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Receivables and the Related
Security without the signature of the Borrower where permitted by law.
A photocopy or other reproduction of the Agreement shall be sufficient
as a financing statement where permitted by law. If the Borrower fails
after notice to perform any of its agreements or obligations under the
Transaction Documents, the Funding Agent may (but shall not be required
to) itself perform, or cause performance of, such agreement or
obligation, and the expenses of the Funding Agent incurred in
connection therewith shall be payable as provided in the Agreement.
48
(d) Assembly of Documents. The Borrower will, or will cause the Servicer
to, at the Funding Agent's request following the occurrence of a
Trigger Event or Potential Trigger Event, (A) assemble all documents,
instruments and other records (including, without limitation, computer
tapes and disks) which evidence or relate to the Receivables, and the
Related Contracts and Related Security, or which are otherwise
necessary or desirable to collect the Receivables, and make the same
available to the Funding Agent at a place selected by the Funding Agent
or its designee, and (B) segregate all cash, checks and other
instruments received by it or the Servicer from time to time
constituting Collections of Receivables in a manner acceptable to the
Funding Agent and shall, promptly upon receipt, remit all such cash,
checks and instruments, duly endorsed or with duly executed instruments
of transfer, to the Funding Agent or its designee.
(e) Delivery of List of Related Contracts. The Borrower will on or prior to
the date of each Incremental Borrowing, deliver to the Funding Agent a
complete and accurate list of each Related Contract, together with the
contract number, the name of the Obligor and the Outstanding Balance
thereof.
(f) Reporting Requirements. The Borrower will provide to the Funding Agent
(in multiple copies, if requested by the Funding Agent) the following:
(i) as soon as available and in any event within 60 days after the end
of the first three quarters of each fiscal year of the Originator,
balance sheets of the Originator and its Subsidiaries as of the end
of such quarter and statements of income and retained earnings of
the Originator and its Subsidiaries for the period commencing at the
end of the previous fiscal year and ending with the end of such
quarter, certified by the chief financial officer of the Originator;
(ii) as soon as available and in any event within 120 days after the end
of each fiscal year of the Originator, a copy of the annual report
for such year for the Parent and the Annual Report for the
Originator and its Subsidiaries, containing financial statements for
such year audited by PricewaterhouseCoopers LLP, or other
independent public accountants acceptable to the Funding Agent;
(iii) as soon as possible and in any event within five Business Days after
the occurrence of each Trigger Event or Potential Trigger Event, a
statement of the chief financial officer of the Borrower setting
forth details of such Trigger Event or Potential Trigger Event and
the action that the Borrower has taken and proposes to take with
respect thereto;
(iv) promptly after the sending or filing thereof, copies of all reports
that the Originator sends to any of its securityholders, and copies
of all reports and registration statements that the Originator or
any Subsidiary files with the Securities and Exchange Commission or
any national securities exchange;
(v) promptly after the filing or receiving thereof, copies of all
reports and notices that the Originator or any Affiliate of either
thereof files under ERISA with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation of the U.S. Department of Labor
or that the Originator or any Affiliate of either thereof receives
from any of the foregoing or from any multiemployer plan (within the
meaning of Section 4001(a)(3) of ERISA) to which the Originator or
any Affiliate of either thereof is or was, within the preceding five
years, a contributing employer, in each case in respect of the
assessment of withdrawal liability or an event or condition which
could, in the aggregate, result in the imposition of liability on
the Originator and/or any such Affiliate in excess of $5,000,000;
49
(vi) at least ten Business Days prior to any change in the Borrower's
name, a notice setting forth the new name and the effective date
thereof;
(vii) promptly, from time to time, such other information, documents,
records or reports respecting the Receivables or the condition or
operations, financial or otherwise, of the Borrower, the Originator
or any of its subsidiaries as the Funding Agent may from time to
time reasonably request;
(viii)promptly after the Borrower obtains knowledge thereof, notice of
any (a) litigation, investigation or proceeding which may exist at
any time between the Borrower or the Originator and any governmental
authority which, in either case, if not cured or if adversely
determined, as the case may be, would have a material adverse effect
on the business, operations, property or financial or other
condition of the Borrower or the Originator; (b) litigation or
proceeding adversely affecting the Borrower's ability to perform its
obligations under the Transaction Documents or the Originator's
ability to perform their obligations under the Transaction Documents
or (c) litigation or proceeding adversely affecting the Borrower or
the Originator in which in the case of the Originator, the amount
involved is $10,000,000 or more and not covered by insurance or in
which injunctive or similar relief is sought;
(ix) promptly after the occurrence thereof, notice of a material adverse
change in the business, operations, property or financial or other
condition of the Borrower or the Originator (taken as a whole);
(x) promptly after the Borrower obtains knowledge thereof, notice of any
"Event of Termination", "Incipient Event of Termination" or
"Facility Termination Date" under the IKON Loan Agreement;
(xi) so long as any Outstanding Loans shall be outstanding, as soon as
possible and in any event no later than the day of occurrence
thereof, notice that the Originator has stopped financing, pursuant
to the IKON Loan Agreement, newly arising Receivables;
(xii) at the time of the delivery of the financial statements provided for
in clauses (i) and (ii) of this paragraph, a certificate of the
chief financial officer or the treasurer of each Borrower to the
effect that, to the best of such officer's knowledge, no Trigger
Event or Potential Trigger Event has occurred and is continuing or,
if any such Trigger Event or Potential Trigger Event has occurred
and is continuing, specifying the nature and extent thereof; and
(xiii)promptly after receipt thereof, copies of all notices received by
the Borrower from the Originator under the IKON Loan Agreement.
(g) Separateness (1) The Borrower shall at all times be managed by an
entity which has at least one independent director, who (x) is not
currently and has not been during the five years preceding the date of
the Agreement an officer, director or employee of an Affiliate of the
Originator or any Other Corporation, (y) is not a current or former
officer or employee of the Originator and (z) is not a stockholder of
any Other Corporation or any of their respective Affiliates.
(i) The Borrower shall not direct or participate in the management of
any other entity's operations.
50
(ii) The Borrower shall conduct its business from an office separate from
that of the Other Corporations).
(iii) The Borrower shall at all times be adequately capitalized in light
of its contemplated business.
(iv) The Borrower shall maintain its assets and transactions separately
from those of any other entity and reflect such assets and
transactions in financial statements separate and distinct from
those of any other entity and evidence such assets and transactions
by appropriate entries in books and records separate and distinct
from those of any other entity. The Borrower shall hold itself out
to the public under its own name as a legal entity separate and
distinct from all other entities. The Borrower shall not hold itself
out as having agreed to pay, or as being liable, primarily or
secondarily, for, any obligations of any other entity.
(v) The Borrower shall not become liable as a guarantor or otherwise
with respect to any Debt or contractual obligation of any other
entity.
(vi) The Borrower shall not make any payment or distribution of assets
with respect to any obligation of any other entity or grant an
Adverse Claim on any of its assets to secure any obligation of any
other entity.
(vii) The Borrower shall not make loans, advances or otherwise extend
credit to any other entity.
(viii)The Borrower shall hold regular duly noticed meetings of its Board
of Directors and make and retain minutes of such meetings.
(ix) The Borrower shall not engage in any transaction with any of the
Other Corporations, except as permitted by its organizational
documents.
(h) Mergers, Etc. The Borrower will not merge with or into or consolidate
with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions), all or
substantially all of its assets (whether now owned or hereafter
acquired) to, or acquire all or substantially all of the assets or
capital stock or other ownership interest of, or enter into any joint
venture or partnership agreement with, any Person, other than as
contemplated by the Agreement and the IKON Loan Agreement.
(i) IKON Loan Agreement. The Borrower will not amend, waive or modify any
provision of the IKON Loan Agreement or waive the occurrence of any
"Event of Termination" under the IKON Loan Agreement, without in each
case the prior written consent of the Funding Agent. The Borrower will
perform all of its obligations under the IKON Loan Agreement in all
material respects and will enforce the IKON Loan Agreement in
accordance with its terms in all material respects.
(j) Nature of Business. The Borrower will not engage in any business other
than the funding of Receivables, Related Security and Collections from
the Originator and the transactions contemplated by the Agreement. The
Borrower will not create or form any Subsidiary.
(k) Distributions, Etc. The Borrower will not declare or make any dividend
payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any membership interest in it,
or return any capital to its members as such, or purchase, retire,
defease, redeem or otherwise acquire for value or make any payment in
respect of any
51
membership interest in it or any warrants, rights or
options to acquire any such shares, now or hereafter outstanding;
provided, however, that it may declare and pay cash distributions on
its membership interests to its members so long as (i) no Trigger Event
or Potential Trigger Event shall then exist or would occur as a result
thereof, (ii) such distributions are in compliance with all applicable
law including the law of the state of Delaware, and (iii) such
distributions have been approved by all necessary and appropriate
action of it.
(l) Debt. The Borrower will not incur any Debt, other than any Debt
incurred pursuant to the Agreement and the IKON Loan Agreement.
(m) Access to the Borrower. Until the latest of the Termination Date, the
date on which no Outstanding Loans of or Interest on any Receivable
shall be outstanding or the date all other amounts owed by the Borrower
hereunder to the Lenders or the Funding Agent are paid in full, the
Borrower will, at its expense, from time to time during regular
business hours as requested by the Funding Agent, permit the Funding
Agent or its agents or representatives (including independent public
accountants, which may be the Borrower's independent public
accountants), (i) to conduct periodic audits of the Receivables, the
Related Security and the related books and records and collections
systems of the Borrower, (ii) to examine and make copies of and
abstracts from all books, records and documents (including, without
limitation, computer tapes and disks) in the possession or under the
control of the Borrower relating to Receivables and the Related
Security, including, without limitation, the Contracts, and (iii) to
visit the offices and properties of the Borrower for the purpose of
examining such materials described in clause (ii) above, and to discuss
matters relating to the Receivables and the Related Security or the
Borrower's performance under the Transaction Documents or under the
Contracts with any of the officers or employees of the Borrower having
knowledge of such matters, in each case subject to the confidentiality
provisions contained herein. In addition, upon the Funding Agent's
request at least once per year, the Borrower will, at its expense,
appoint independent public accountants (which may, with the consent of
the Funding Agent, be the Borrower's regular independent public
accountants), or utilize the Funding Agent's representatives or
auditors, to prepare and deliver to the Funding Agent a written report
with respect to the Receivables and the Credit and Collection Policy
(including, in each case, the systems, procedures and records relating
thereto) on a scope and in a form reasonably requested by the Funding
Agent.
(n) PARCO Cap: The Borrower shall at all times maintain in full force
and effect the PARCO Cap and/or such other interest rate cap(s) acceptable to
the Funding Agent.
(o) IKON Loan Agreement. The Borrower shall not exercise any discretion
it may have under the provisions of the IKON Loan Agreement without the prior
consent of the Funding Agent.
Part B - Originator
(a) Access to the Originator. Until the latest of the Termination Date, the date
on which no Outstanding Loans of or Interest on any Receivable shall be
outstanding or the date all other amounts owed by the Borrower hereunder to the
Lenders or the Funding Agent are paid in full, the Originator will, at its
expense, from time to time during regular business hours as requested by the
Funding Agent, permit the Funding Agent or its agents or representatives
(including independent public accountants, which may be the Originator's
independent public accountants), (i) to conduct periodic audits of the
Receivables, the Related Security and the related books and records and
collections systems of the Originator, (ii) to examine and make copies of and
abstracts from all books, records and documents (including, without limitation,
computer tapes and disks) in the possession or under the control of the
Originator relating to Receivables and the Related Security, including, without
limitation, the Contracts, and (iii) to
52
visit the offices and properties of the Originator for the purpose of examining
such materials described in clause (ii) above, and to discuss matters relating
to the Receivables and the Related Security or the Originator's performance
under the Transaction Documents or under the Contracts with any of the officers
or employees of the Originator having knowledge of such matters, in each case
subject to confidentiality provisions contained herein.
(b) Performance and Compliance with Related Contracts and Credit and Collection
Policy. The Originator will, at its expense, timely and fully perform and comply
with all material provisions, covenants and other promises required to be
observed by it under the Related Contracts, and timely and fully comply in all
material respects with the Credit and Collection Policy in regard to each
Receivable and the Related Contract.
(c) Sales, Liens, Etc. The Originator will not sell, assign (by operation of law
or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim upon or with respect to, its interest in any Receivable the subject of the
Agreement or any Related Security, Related Contract or Collections, or assign
any right to receive income in respect thereof in each case, other than in
favour of the Lenders.
(d) Extension or Amendment of the Receivables. The Originator will not extend
the maturity or adjust the Outstanding Balance of any Receivable or otherwise
modify the terms of any Receivable other than in relation to a Permitted
Termination, or amend, modify or waive any term or condition of any Related
Contract such that the interests of the Funding Agent or the Lenders would be
materially and adversely affected thereby.
(e) Change in Business or Credit and Collection Policy. (i) The Originator will
not make any change in the character of its business, and (ii) the Originator
will not make any change in the Credit and Collection Policy in each case that
would materially adversely affect the collectibility of the Receivables or the
ability of the Originator to perform its obligations under the Transaction
Documents.
(f) Change in Payment Instructions to Obligors. The Originator will not make any
change in its instructions to Obligors of Related Contracts regarding payments
to be made to the Borrower unless the Funding Agent shall have received notice
of and agreed to such addition, termination or change.
(g) Collections. At all times following the designation by the Funding Agent of
any Designated Account, the Originator will deposit, or cause to be deposited,
all Collections to such Designated Account.
(h) Deposits to Designated Accounts. The Originator will not deposit or
otherwise credit, or cause or permit to be so deposited or credited, to any
Designated Account cash or cash proceeds other than Collections of Receivables
53
..
EXHIBIT V
TRIGGER EVENTS
Each of the following, unless waived in writing by the Funding Agent
(other than as set forth in clause (g) which cannot be waived), shall be a
"Trigger Event":
(a) The Servicer (if the Originator or any of its Affiliates) (i) shall fail to
perform or observe any term, covenant or agreement under the Agreement (other
than as referred to in clause (ii) of this paragraph (a)) and such failure shall
remain unremedied for three Business Days after receipt of notice or actual
knowledge thereof or (ii) shall fail to make when due any payment or deposit to
be made by it under the Agreement; or
(b) the Borrower or the Originator shall fail to make any payment required under
Sections 2.3 or 4.2 of the Agreement; or
(c) Any representation or warranty made by the Borrower or the Originator (or
any of their respective officers) under the Transaction Documents, or any
information or report delivered by the Borrower or the Originator pursuant to
the Transaction Documents shall prove to have been incorrect or untrue in any
material respect when made or delivered; or
(d) The Borrower shall fail to perform or observe any other term, covenant or
agreement contained in the Transaction Documents on its part to be performed or
observed and any such failure shall remain unremedied for ten days after written
notice thereof shall have been given to the Borrower by the Funding Agent or
actual knowledge thereof; or
(e) The Originator shall fail to perform or observe any term, covenant or
agreement contained in the Transaction Documents on its part to be performed or
observed and any such failure shall remain unremedied for ten days after written
notice thereof shall have been given to the Originator by the Funding Agent or
actual knowledge thereof, (or, with respect to a failure to deliver the Servicer
Report pursuant to Section 5.2 of the Agreement such failure shall remain
unremedied for three days, without a requirement for notice); or
(f) Any member of the IKON Group or any Subsidiary thereof shall fail to pay any
principal of or premium or interest on any of its Debt which is outstanding in a
principal amount of at least $10,000,000 in the aggregate when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), redeemed, purchased or defeased, or an
offer to repay, redeem, purchase or defease such Debt shall be required to be
made, in each case prior to the stated maturity thereof; or
(g) Any member of the IKON Group or any Subsidiary thereof shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against any such
member or any of its Subsidiaries seeking to adjudicate it a
54
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian, administrator, examiner or other similar official
for it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 30 days, or any
of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian, administrator, examiner or other similar official for, it or for any
substantial part of its property) shall occur; or any member of the IKON Group
or any of its Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this paragraph (f); or
(h) Any Loan shall for any reason cease to create, or the interest of the
Funding Agent (for the benefit of the Lenders) in any Receivable shall for any
reason cease to be, a valid and perfected first priority interest in each
Receivable and the Security and Collections with respect thereto; or the
security interest created pursuant to Section 2.14 shall for any reason cease to
be a valid first priority security interest in the collateral security referred
to in such Section; or
(i) As of the last day of any calendar month:(i) the Default Ratio averaged over
the three-month period ending on such day exceeds 5% or (ii) the Delinquency
Ratio averaged over the three-month period ending on such day exceeds 8%; or
(j) There shall have occurred any material adverse change in the business,
operations, property or financial or other condition, taken as a whole, of the
Originator since 30 September 2000 or the Borrower since the date of its
formation; or there shall have occurred any event which may materially adversely
affect the collectibility of the Receivables, the ability of the Servicer or the
Borrower to collect the Receivables or the ability of the Originator or the
Borrower to perform its respective obligations under the Transaction Documents;
or
(k) (i) The total debt of Parent and its Consolidated Subsidiaries is equal to
or greater than 60% of the sum of (a) the total debt of Parent and its
Consolidated Subsidiaries plus (b) the consolidated minority interest
obligations shown on the consolidated balance sheet of Parent and its
Consolidated Subsidiaries plus, (c) the Consolidated Net Worth of Parent and its
Consolidated Subsidiaries. For the purposes of calculating such ratio (x)
Finance Leasing Subsidiaries shall be excluded from the definition of
"Consolidated Subsidiaries", (y) any adjustments resulting from the application
of SFAS 133 shall be excluded from shareholder's equity, and (z) in calculating
the Consolidated Net Worth of Parent and its Consolidated Net Worth of Parent
and its Consolidated Subsidiaries, non-recurring charges subsequent to June 30,
2001 shall be added back.
(ii) For any quarter, the Fixed Charges Coverage Ratio of Parent is less
than 1.35 to 1.00.
(l) An "Event of Termination" or "Facility Termination Date" shall occur under
the IKON Loan Agreement, or the IKON Loan Agreement shall cease to be in full
force and effect; or
(m) On the last day of any calendar month, (a) the Dollar Equivalent of the
aggregate Outstanding Balance of all Eligible Receivables is less than (b) the
Required Balance; or
(n) The Borrower shall fail to comply with the covenant contained in clause
(f)(x) of Exhibit IV; or
55
(o) The Borrower shall fail to maintain the PARCO Cap in accordance with
terms of this Agreement;
(p) The rating of the counterparty to the PARCO Cap falls below A-1 by
S&P or P-1 by Moody's, unless a new counterparty with such rating,
or such other interest rate hedging arrangement as may be acceptable
to the Funding Agreement, is in place within 10 Business Days; or
(q) The Excess Spread in relation to the Funded Receivables falls below
3%.
56
EXHIBIT VI
PLACE OF BUSINESS/RECORDS
The principal place of business and chief executive offices of the
Borrower are located at:
c/o J.H. Management Corporation
P.O. Box 4024
One International Place
Room 569
Boston, MA 02110
USA
The original records concerning the Receivables (and all original
documents related thereto) are located at the offices of the Servicer at:
IKON House
Ullswater Crescent
Coulsdon
Surrey CR5 2EQ
57
ANNEX A
FORM OF CONTRACT
58
ANNEX B
FORM OF SERVICER REPORT
59
ANNEX C-1
FORM OF REVOLVING CREDIT NOTE
$____________ [ ] , 2001
Reference is made to the Asset Backed Loan Agreement, dated as of 30
March, 2001 (as amended, supplemented or otherwise modified and in effect from
time to time, the "Agreement"), by and among ROCHFORD, INC. as borrower (in such
capacity, the "Borrower"), PARK AVENUE RECEIVABLES CORPORATION (in such capacity
the "Conduit Lender"), certain APA Banks (together with the Conduit Lender, the
"Lenders") IKON CAPITAL PLC as "Originator" and "Servicer" and JPMorgan Chase
Bank ("Chase"), as Funding Agent (in such capacity (the "Funding Agent"). Terms
defined in the Agreement, or incorporated therein by reference, are used herein
as therein defined.
The Borrower, for the value received, hereby promise to pay to the
order of the Lenders, at [ ] or such other office as the Lenders may designate,
the principal amount of $[ ], or if less, the unpaid principal amount of all
Loans outstanding and owing to the Lenders under the Agreement. Each Loan shall
be due and payable as provided in the Agreement. The Borrower also promises to
pay interest on the unpaid principal amount hereof from time to time
outstanding, at such interest rate and on such dates as are determined pursuant
to the Agreement. All such principal and interest shall be payable in lawful
money of the United States of America in same day funds in [ ].
Each Loan by the Borrower from the Lenders, and each reduction or
increase in the Outstanding Loans in respect of each Loan evidenced hereby,
shall be indicated by the Funding Agent on the grid attached hereto which is
part of this Note.
This Note is made without recourse except as otherwise provided in the
Agreement.
This Note shall be governed by, and construed in accordance with, the
laws of the State of New York.
IN WITNESS WHEREOF, each of the undersigned has caused this Note to be
duly executed and delivered by its duly authorized officer as of the date first
above written.
ROCHFORD, INC.
By: ____________________
Name:
Title:
60
ANNEX C-2
FORM OF LOAN CERTIFICATE
Principal Amount Payments or
of Loan Prepayments of Balance Outstanding Notation Made By
Date of Loan Principal
- ------------------------ -------------------- ---------------------- -------------------- -----------------
61
ANNEX D
FORM OF PAYDOWN NOTICE
___________, ____
JPMorgan Chase Bank
4 New York Plaza,
6th Floor
New York, NY 10004
Attention: Christopher Lew
Ladies and Gentlemen:
Reference is hereby made to the Asset Backed Loan Agreement dated as of
30 March 2001 (as amended, supplemented or otherwise modified, the "Asset Backed
Loan Agreement"), among Rochford, Inc. as Borrower, IKON Capital Plc as
Originator and Servicer, PARCO as Conduit Lender and JPMorgan Chase Bank as
Funding Agent. Capitalized terms used in this Paydown Notice and not otherwise
defined herein shall have the meanings assigned thereto in the Asset Backed Loan
Agreement.
This letter constitutes a Paydown Notice pursuant to Section 2.3 of the
Asset Backed Loan Agreement. The Borrower desires to reduce the Outstanding
Loans on _________, ______1 by the application of $________ in cash to pay the
Outstanding Loans and Interest accrued to and to accrue (until such cash can be
used to pay Commercial Paper notes) with respect to such Outstanding Loans,
together with all costs related to such reduction of Outstanding Loans.
We hereby confirm that the requirements of Section 2.3(f) hereof and
Section 8.2 of the Debenture have been complied with.
IN WITNESS WHEREOF, the undersigned has caused this Paydown Notice to
be executed by its duly authorized officer as of the date first above written.
ROCHFORD, INC.
By: _______________________
Name:
Title:
- --------
1 Notice must be given at least ten Business Days' prior to the requested
paydown date, in the case of reductions in excess of $25,000,000 or at
least two Business Days' prior to the requested paydown date, in the
case of reductions of $25,000,000 or less.
61