EXHIBIT (10)
Amended and Restated
1996 SUPPORT AGREEMENT
By and Between
Alco Standard Corporation
and
IKON Capital, Inc.
SUPPORT AGREEMENT, dated as of this 22nd day of October, 1996 by and
between ALCO STANDARD CORPORATION, an Ohio Corporation ("Alco") and IKON
CAPITAL, INC., a Delaware corporation ("IKON Capital"). Alco, in consideration
of $10 and other good and valuable consideration, receipt and adequacy of which
is hereby acknowledged, and to induce IKON Capital to provide leasing services
with respect to products sold and serviced by Alco, hereby agrees with IKON
Capital as set forth below.
1. Pretax Interest Coverage. From and after the execution of this
Support Agreement, Alco will, within 45 days after the last day of each quarter
end period of IKON Capital, make, or cause to be made, a determination of the
ratio of Income Before Interest Expense and Taxes to Interest Expense for the
most recent four quarter end periods on a rolling basis. If said ratio of
Income Before Interest Expense and Taxes to Interest Expense shall be less than
1.25 to 1, Alco will, within 10 days after the date of such determination, pay
to IKON Capital a fee (the "Support Fee") in an amount at least sufficient to
increase said ratio of Income Before Interest Expense and Taxes to 1.25 to 1.
2. Debt to Equity. From and after the execution of this Support
Agreement, Alco will, within 45 days after the last day of each quarter end
period, make, or cause to be made such payment to IKON Capital as shall be
necessary to enable IKON Capital to have a debt to equity ratio not to exceed 6
to I determined in accordance with generally accepted accounting principles.
3. Maintenance of Net Worth. From and after the execution of this
Support Agreement, Alco will, at all times, make, or cause to be made such
payment to IKON Capital as shall be necessary to enable IKON Capital to have a
Tangible Net Worth of at least one dollar ($1.00).
4. Ownership. From and after the execution of this Support
Agreement, Alco will maintain 100 percent direct or indirect ownership of IKON
Capital, except in the event that this Agreement is assigned by Alco pursuant to
Section 7.
5. Definitions. As used in this Agreement, the following terms have
the meanings indicated:
"Interest Expense" of IKON Capital and its subsidiaries shall mean the
most recent four quarter end periods on a rolling basis interest charges on the
aggregate principal amount of consolidated indebtedness of IKON Capital and its
subsidiaries, including intercompany debt owed to Alco determined in accordance
with generally accepted accounting principles.
"Income Before Interest Expense and Taxes" shall mean the
consolidated net income of IKON Capital and its subsidiaries for the
most recent four quarter end periods on a rolling basis determined in
accordance with generally accepted accounting principles, except that
such determination shall be made before any deduction for Interest
Expense or provisions for taxes in respect of income.
"Tangible Net Worth" shall be determined in accordance with
generally accepted accounting principles and shall mean an amount
equal to the capital stock and surplus accounts (including retained
earnings) of IKON Capital and its subsidiaries after deducting
therefrom the book amount of all assets of IKON Capital and its
subsidiaries which would be treated as intangible assets, all
determined on a consolidated basis.
6. Termination Amendment and Waiver. This agreement, or any term,
covenant, agreement or condition hereof may be amended or terminated by either
party hereto upon not less than ninety (90) days written notice and provided
that either: (i) all the outstanding debt of IKON Capital is repaid, or (ii)
approval of 2/3 of the debtholders (not including Alco, IKON Capital or
affiliates of Alco or IKON) for all amounts outstanding covered by this Support
Agreement is obtained.
7. Assignment. This Agreement (or any rights herein) may not be
assigned by Alco unless: (i) all the outstanding debt of IKON Capital is repaid,
or (ii) approval of 2/3 of the debtholders (not including Alco, IKON Capital or
affiliates of Alco or IKON Capital) for all amounts outstanding covered by this
Support Agreement is obtained.
8. Successors and Assigns. This Agreement shall inure to the
benefit of the parties hereto, their respective successors and permitted
assigns, and to the benefit of and is enforceable by IKON Capital debtholders.
All IKON Capital debtholders shall be third party beneficiaries of this Support
Agreement provided that third party rights of such debt holders shall be limited
to: (i) right to demand that IKON Capital enforce its rights under this
Agreement, (ii) the right to proceed against Alco Standard on behalf of IKON
Capital to enforce IKON Capital's rights under this agreement if IKON Capital
fails or refuses to take timely action to enforce IKON Capital's rights
hereunder following demand for such enforcement by such debtholders
9. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
Executed this 22nd day of October, 1996.
ALCO STANDARD
CORPORATION
By /s/O. Xxxxxx Xxxxxx, Xx.
------------------------------
O. Xxxxxx Xxxxxx, Xx.
Vice President-Finance
Accepted and agreed to by
IKON CAPITAL, INC.
By /s/Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx
President
