FIRST TIER TRANSFER AGREEMENT
Dated as of March 31, 1997
between
IKON CAPITAL, INC.
and
IKON FUNDING, INC.
TABLE OF CONTENTS
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PAGE
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ARTICLE I
DEFINITIONS AND RELATED MATTERS
1.1. Defined Terms........................................................ 1
1.2. Other Interpretive Matters........................................... 1
ARTICLE II
CONTRIBUTION OF POOL RECEIVABLES; AGREEMENT TO
TRANSFER; TRANSFER PRICE
2.1. Contribution of Pool Receivables..................................... 2
2.2. Agreement to Transfer................................................ 2
2.3. Timing of Purchases and Contributions................................ 2
2.4. Transfer Price for Pool Receivables Transferred by Originator........ 3
2.5. Transfer Termination Date............................................ 4
2.6. No Recourse or Assumption of Obligations............................. 4
2.7. Intention of the Parties............................................. 4
2.8. Advances by the Company to Originator................................ 5
ARTICLE III
ADMINISTRATION AND COLLECTION
3.1. Originator to Act as Servicer........................................ 5
3.2. Deemed Collections................................................... 5
3.3. Actions Evidencing Purchases......................................... 6
3.4. Application of Collections........................................... 7
3.5. Rights of the Company................................................ 7
3.6. Responsibilities of Originator....................................... 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ORIGINATOR
4.1. Organization and Good Standing....................................... 8
4.2. Due Qualification.................................................... 8
4.3. Power and Authority; Due Authorization............................... 8
4.4. Valid Transfer or Contribution; Binding Obligations.................. 8
4.5. No Violation......................................................... 8
4.6. No Proceedings....................................................... 9
4.7. Bulk Sales Act....................................................... 9
4.8. Government Approvals................................................. 9
4.9. Financial Condition.................................................. 9
4.10. Litigation........................................................... 10
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TABLE OF CONTENTS
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(continued)
PAGE
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4.11. Margin Regulations................................................... 10
4.13. Accuracy of Information.............................................. 10
4.14. Offices.............................................................. 11
4.15. Trade Names.......................................................... 11
4.16. Compliance with Applicable Laws...................................... 11
4.17. Solvency............................................................. 11
4.18. Eligibility of Pool Receivables...................................... 11
ARTICLE V
COVENANTS OF ORIGINATOR
5.1. Affirmative Covenants................................................ 12
5.2. Reporting Requirements............................................... 13
5.3. Negative Covenants................................................... 13
ARTICLE VI
TRANSFER TERMINATION EVENTS
6.1. Transfer Termination Events.......................................... 15
6.2. Remedies............................................................. 15
ARTICLE VII
INDEMNIFICATION
7.1. Indemnities by Originator............................................ 16
ARTICLE VIII
MISCELLANEOUS
8.1. Amendments, Waivers, etc............................................. 18
8.2. Notices, etc......................................................... 18
8.3. Binding Effect; Assignability........................................ 18
8.4. Survival............................................................. 19
8.5. Governing Law........................................................ 19
8.6. Costs, Expenses and Taxes............................................ 19
8.7. No Proceedings....................................................... 19
8.8. Waiver of Jury Trial................................................. 19
8.9. Execution in Counterparts............................................ 19
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SCHEDULES
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SCHEDULE 4.14 Office Locations
SCHEDULE 4.15 Trade Names
EXHIBITS
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EXHIBIT A Form of Transfer Report
EXHIBIT B Form of Company Note
EXHIBIT C Closing Date Report
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FIRST TIER TRANSFER AGREEMENT
THIS FIRST TIER TRANSFER AGREEMENT (as amended, supplemented or modified
from time to time, this "Agreement"), dated as of March 31, 1997, is between
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IKON CAPITAL, INC., a Delaware corporation ("Originator"), as transferor and
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contributor, and IKON FUNDING, INC., a Delaware corporation (the "Company"), as
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transferee and contributee.
Background
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1. On the Closing Date, Originator is transferring certain Pool
Receivables and Related Property to the Company as a capital contribution to the
Company. From time to time Originator may transfer additional Pool Receivables
and Related Property to the Company as a capital contribution to the Company.
2. In order to finance its business, Originator wishes to transfer
certain Pool Receivables and Related Property from time to time to the Company,
and the Company is willing, on the terms and subject to the conditions set forth
herein, to accept such Pool Receivables and Related Property from Originator.
3. The Company intends to obtain a Commitment from the Transferee
pursuant to the Receivables Transfer Agreement in order to finance the transfers
of Pool Receivables and Related Property hereunder.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND RELATED MATTERS
I.1. Defined Terms. Unless otherwise indicated, certain terms that are
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capitalized and used throughout this Agreement are defined in Appendix A to the
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Amended and Restated Receivables Transfer Agreement of even date herewith (as
amended, supplemented or otherwise modified from time to time, the "Receivables
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Transfer Agreement"), among the Company, as Seller, the Originator, as Servicer,
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Twin Towers Inc., as Transferee, and Deutsche Bank AG, acting through its New
York Branch, as agent for the Transferee (the "Agent").
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I.2. Other Interpretive Matters. In this Agreement, unless otherwise
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specified: (a) references to any Section or Annex refer to such Section of, or
Annex to, this Agreement, and references in any Section or definition to any
subsection or clause refer to
such subsection or clause of such Section or definition; (b) "herein", "hereof",
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"hereto", "hereunder" and similar terms refer to this Agreement as a whole and
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not to any particular provision of this Agreement; (c) "including" means
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"including without limitation", and other forms of the verb "to include" have
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correlative meanings; (d) the word "or" is not exclusive; and (e) captions are
--
solely for convenience of reference and shall not affect the meaning of this
Agreement;
ARTICLE II
CONTRIBUTION OF POOL RECEIVABLES; AGREEMENT TO
TRANSFER; TRANSFER PRICE
II.1. Contribution of Pool Receivables. On the Closing Date, Originator
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hereby assigns and transfers to the Company, as a contribution of capital, Pool
Receivables and Related Property with respect thereto consisting of each Pool
Receivable of Originator that existed and was owing to Originator on the Closing
Date, beginning with the oldest of such Pool Receivables and continuing
chronologically thereafter, and all or an undivided interest in the most recent
of such Pool Receivables such that the aggregate Fair Market Value (as defined
below) of all such Pool Receivables shall be equal to the amount set forth on
Exhibit C. In addition, from time to time Originator may assign and transfer to
the Company, as a contribution of capital, Pool Receivables and Related Property
with respect thereto as designated by Originator.
II.2. Agreement to Transfer. On the terms and subject to the conditions
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set forth in this Agreement, Originator hereby transfers and assigns to the
Company, and the Company hereby accepts from Originator, all of Originator's
right, title and interest in and to the Pool Receivables, the Related Property
and all proceeds of the foregoing, other than those Pool Receivables and Related
Property contributed to the Company pursuant to Section 2.1.
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II.3. Timing of Purchases and Contributions. Originator's entire right,
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title and interest in each Pool Receivable that existed and was owing to
Originator as of the close of Originator's business on March 28, 1997 (the
"Closing Date") shall be deemed to have been transferred and/or contributed to
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the Company on such date. After the Closing Date, each Pool Receivable created
or purchased by Originator shall be transferred to and owned by the Company
(without any further action) upon the creation of such Pool Receivable or the
purchase thereof by the Originator. The Related Property with respect to each
Pool Receivable (and proceeds of such Pool Receivable and Related Property)
shall be transferred and/or contributed at the same time
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as such Pool Receivable, whether such Related Property (or proceeds) exist at
such time or arise or are acquired thereafter.
II.4. Transfer Price for Pool Receivables Transferred by Originator.
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(a) Calculation of Transfer Price. The transfer price for each Pool Receivable
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and the Related Property with respect thereto transferred to the Company shall
equal the Fair Market Value of such Pool Receivable at the time of transfer. The
"Fair Market Value" of a Pool Receivable shall equal (i) the aggregate unpaid
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scheduled debt service or lease payments that the Obligor is obligated to make
thereunder, but excluding unearned finance charges, minus (ii) that portion of
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Originator's loss contingency reserve on the date of transfer which is allocable
to such Pool Receivable.
(b) Initial Transfer Price Payment. On the terms and subject to the
------------------------------
conditions set forth in this Agreement, the Company agrees to pay to Originator
the transfer price for the Pool Receivables to be transferred to the Company on
the Closing Date (i) by taking such Pool Receivables subject to the Lien of the
Original Receivables Agreement and assuming Originator's obligations thereunder,
(ii) in cash, to the extent of funds obtained by the Company on such date under
the Receivables Transfer Agreement, and (iii) by issuing to Originator a
subordinated promissory note in the form of Exhibit B (as such promissory note
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may be amended, supplemented, endorsed or otherwise modified from time to time,
together with all promissory notes issued from time to time in substitution
therefor or renewal thereof, the "Company Note") in an initial principal amount
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equal to the transfer price for such Pool Receivables minus the amount paid
under clauses (i) and (ii) above. The initial purchase price for the Pool
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Receivables and Related Property with respect thereto transferred to the Company
on the Closing Date shall be set forth on Exhibit C.
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(c) Subsequent Transfer Price Payments. On each Business Day falling
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after the Closing Date and on or prior to the Transfer Termination Date, on the
terms and subject to the conditions set forth in this Agreement, the Company
shall pay to Originator the transfer price for the Pool Receivables transferred
by Originator to the Company on such Business Day, in cash, to the extent of any
funds made available to the Company for such purpose under Section 3.01 of the
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Receivables Transfer Agreement after satisfying the Company's obligations under
the Receivables Transfer Agreement and after netting any amounts owed to the
Company by the Originator hereunder (including amounts owed under Section 3.2 to
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the extent permitted thereby), and to the extent any of such transfer price
remains unpaid, such remaining portion of such transfer price shall be paid by
increasing the outstanding principal amount of
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the Company Note.
(d) Transfer Reports. On or prior to the 15th day (or if such day is not
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a Business Day, the next Business Day) of each month (the "Reporting Date"),
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Originator agrees to prepare and deliver to the Company a signed report, in
substantially in the form of Exhibit A or in such other form as the parties may
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agree on from time to time with the written approval of the Agent (each, a
"Transfer Report"). Each Transfer Report shall set forth a summary of
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information as to the Pool Receivables transferred hereunder, collections on
Pool Receivables and other charges or credits as may be required by this
Agreement during the month ending on the preceding Month End Date.
(e) Company Note. Servicer shall make all appropriate record keeping
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entries with respect to the Company Note or otherwise to reflect the foregoing
payments and adjustments pursuant to Section 3.2, and Servicer's books and
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records shall constitute rebuttable presumptive evidence of the principal amount
of and accrued interest on the Company Note at any time. Furthermore, Servicer
shall hold the Company Note for the benefit of Originator, and all payments
under the Company Note shall be made to the Servicer for the account of the
applicable payee thereof. Originator hereby irrevocably authorizes Servicer to
xxxx the Company Note "CANCELLED" and to return the Company Note to the Company
upon the final payment thereof after the occurrence of the Transfer Termination
Date.
II.5. Transfer Termination Date. The "Transfer Termination Date" means the
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earliest of (a) the date of termination of this Agreement pursuant to
Section 6.2(i) or (ii), (b) the Final Pay Out Date and (c) the date of any Event
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of Bankruptcy with respect to the Company.
II.6. No Recourse or Assumption of Obligations. Except as specifically
----------------------------------------
provided in this Agreement, the transfer of Pool Receivables and Related
Property under this Agreement shall be without recourse to Originator.
Originator and the Company intend the transactions hereunder to constitute true
absolute transfers and true contributions of Pool Receivables and the Related
Property by Originator to the Company, providing the Company with the full risks
and benefits of ownership of the Pool Receivables and Related Property (such
that the Pool Receivables and the Related Property would not be property of
Originator's estate in the event of Originator's bankruptcy).
The Company shall not have any obligation or liability with respect to any
Pool Receivables or Related Property, nor shall the Company have any obligation
or liability to any Obligor or other
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customer or client of Originator (including any obligation to perform any of the
obligations of Originator under any Pool Receivables or Related Property).
II.7. Intention of the Parties. It is the express intent of the parties
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hereto that the transfers of the Pool Receivables and Related Property by
Originator to the Company as contemplated by this Agreement be, and be treated
as, absolute transfers and capital contributions, respectively, and not as
secured loans secured by the Pool Receivables and Related Property. If, however,
notwithstanding the intent of the parties, such transactions are deemed to be
loans, Originator hereby grants to the Company a security interest in all of the
Originator's right, title and interest in and to the Pool Receivables and the
Related Property now existing and hereafter created, and all proceeds thereof,
to secure all of Originator's obligations hereunder.
II.8. Advances by the Company to Originator. The Company may make
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advances to Originator from time to time if so agreed between such parties and
to the extent the Company has funds available for that purpose after satisfying
its obligations under this Agreement and the Receivables Transfer Agreement. Any
such advances shall be payable upon demand and the Company may net any payments
to be made to Originator hereunder against any such outstanding advances.
ARTICLE III
ADMINISTRATION AND COLLECTION
III.1. Originator to Act as Servicer. Notwithstanding the transfer of
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Pool Receivables pursuant to this Agreement, Originator shall continue to be
responsible for the servicing, administration and collection of the Pool
Receivables, all on the terms set out in (and subject to any rights to terminate
Originator as servicer pursuant to) the Receivables Transfer Agreement.
III.2. Deemed Collections. (a) If on any day the Unpaid Balance of any
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Pool Receivable is (i) reduced as a result of any defective, rejected or
returned merchandise or services, any cash discount, any allowances or billing
errors, any trade-in or trade-up, any adjustment by Originator or any Affiliate
of Originator or any early termination, refinancing, prepayment, consolidation
or replacement of the Contract related to such Pool Receivable, (ii) reduced or
cancelled as a result of a setoff in respect of any claim or dispute by the
Obligor thereof against Originator or any
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Affiliate of Originator or any other Person (whether such claim arises out of
the same or a related or an unrelated transaction), or (iii) reduced on account
of the obligation of Originator or an Affiliate of Originator to pay to the
related Obligor any rebate or refund, then, on such day, Originator shall be
deemed to have received a Collection of such Pool Receivable in an amount equal
to such reduction or cancellation.
(b) If on any day it is determined that any of the representations or
warranties of Originator set forth in Section 4.4, 4.12 or 4.19 are not true as
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to any Pool Receivable, Originator shall be deemed to have received a Collection
of such Pool Receivable in the amount of the Unpaid Balance of such Pool
Receivable. To the extent that the Company subsequently receives Collections
with respect to any such Pool Receivable, the Company shall pay Originator an
amount equal to the amount so collected.
(c) Not later than the first Business Day after Originator is deemed,
pursuant to this Section 3.2, to have received any Collections, the amount of
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any such Collections shall be applied as a credit for the account of the Company
against the transfer price of Pool Receivables subsequently transferred to the
Company from the Originator hereunder; provided, however, if the transfer price
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for such subsequent transfers of Pool Receivables is less than the amount of
such credit, the amount of such credit (i) shall be paid in cash to the Company
by Originator, or (ii) shall be deducted from the principal amount outstanding
under the Company Note; provided further, however, that at any time (y) on or
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after a Termination Event under the Receivables Transfer Agreement or (z) on or
after the Transfer Termination Date, the amount of any such credit shall be paid
by Originator to the Company by deposit in immediately available funds into such
account as is designated by the Company or the Agent for application by Servicer
to the same extent as if Collections of the applicable Pool Receivable in such
amount had actually been received on such date.
(d) Each Transfer Report shall include a calculation of the aggregate
reductions described in Section 3.2(a) or (b) relating to the Pool Receivables
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since the last Transfer Report delivered hereunder.
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III.3. Actions Evidencing Purchases. (a) On or prior to the Closing
----------------------------
Date, Originator shall xxxx its master data processing records evidencing Pool
Receivables and Contracts with a legend, acceptable to the Company, evidencing
that the Pool Receivables have been transferred and contributed in accordance
with this Agreement. In addition, Originator agrees that from time to time, at
its expense, it shall promptly execute and deliver all further instruments and
documents, and take all further action, that the Company or its assigns may
reasonably request in order to perfect, protect or more fully evidence the
transfers and contributions hereunder, or to enable the Company or its assigns
to exercise or enforce any of their respective rights with respect to the Pool
Receivables and the Related Property. Without limiting the generality of the
foregoing, Originator shall upon the request of the Company or the Agent: (i)
execute and file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices, as may be
necessary or appropriate; and (ii) xxxx conspicuously each Contract evidencing
each Pool Receivable with a legend, acceptable to the Company, evidencing that
the related Pool Receivables have been transferred in accordance with this
Agreement.
(b) Originator hereby authorizes the Company or the Agent (i) to file
one or more financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Pool Receivables and the
Related Property now existing or hereafter arising in the name of Originator and
(ii) to the extent permitted by the Receivables Transfer Agreement, to notify
Obligors of the assignment of the Pool Receivables and the Related Property.
(c) Without limiting the generality of Section 3.3(a), Originator
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shall, not earlier than six months and not later than three months prior to the
fifth anniversary of the date of filing of the financing statements filed in
connection with the Closing Date or any other financing statement filed pursuant
to this Agreement: (i) execute and deliver and file or cause to be filed
appropriate continuation statements; and (ii) deliver or cause to be delivered
to Agent an opinion of counsel reasonably satisfactory to the Company and the
Agent, in form and substance reasonably satisfactory to the Company and the
Agent, confirming and updating the opinion delivered in connection with the
Closing Date relating to the validity, perfection and priority of the Company's
interests in the Pool Receivables.
III.4. Application of Collections. Any payment by an Obligor in respect
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of any indebtedness owed by it to Originator shall, except as otherwise
specified by such Obligor or otherwise required by the related Contract or law,
be applied first, as a
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Collection of any Pool Receivables of such Obligor, in the order of the age of
such Pool Receivables, starting with the oldest of such Pool Receivables
(provided that if payment is designated by such Obligor for application to
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specific Receivables, it shall be applied to such specified Receivables), and
second, to any other indebtedness of such Obligor to Originator.
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III.5. Rights of the Company. Originator hereby authorizes the Company
---------------------
and the Servicer (if other than Originator) or their respective designees to
take any and all steps in Originator's name necessary or desirable, in their
respective determination, to collect all amounts due under any and all Pool
Receivables and Related Property, including endorsing Originator's name on
checks and other instruments representing Collections and enforcing such Pool
Receivables and the provisions of the related Contracts that concern payment
and/or enforcement of rights to payment.
III.6. Responsibilities of Originator. Anything herein to the contrary
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notwithstanding, Originator shall repurchase from the Company all merchandise
repossessed by the Company (or the Servicer on its behalf) with respect to Pool
Receivables in default, at a price equal to the price at which such merchandise
is resold to a dealer.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ORIGINATOR
Originator, in its capacity as transferor and/or contributor under this
Agreement, hereby makes the representations and warranties set forth in this
Article IV.
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IV.1. Organization and Good Standing. Originator has been duly
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organized and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with power and authority to own its properties
and to conduct its business as such properties are presently owned and such
business is presently conducted.
IV.2. Due Qualification. Originator is duly qualified to do business
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as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or lease of
its property or the conduct of its business requires such qualification,
licenses or approvals and where the failure to have such qualification, license
or approval would have a Material Adverse Effect.
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IV.3. Power and Authority; Due Authorization. Originator (a) has all
--------------------------------------
necessary power, authority and legal right (i) to execute and deliver, and
perform its obligations under, each Transaction Document to which it is a party,
and (ii) to generate, own, transfer, contribute and assign Pool Receivables and
Related Property on the terms and subject to the conditions herein provided; and
(b) has duly authorized such execution, delivery and, performance of such
obligations by all necessary corporate action.
IV.4. Valid Transfer or Contribution; Binding Obligations. Each
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transfer or contribution, as the case may be, of Pool Receivables and Related
Property made by Originator pursuant to this Agreement shall constitute a valid
transfer and assignment or contribution, as the case may be, thereof to the
Company, enforceable against creditors of, and purchasers from, Originator; and
this Agreement constitutes, and each other Transaction Document to be signed by
Originator, when duly executed and delivered, will constitute, a legal, valid,
and binding obligation of Originator, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
IV.5. No Violation. The execution, delivery and performance by
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Originator of the Transaction Documents to which it is a party and the
consummation of the transactions contemplated thereby will not (a) conflict
with, result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under (i)
Originator's articles of incorporation or by-laws, or (ii) any indenture, loan
agreement, receivables purchase agreement, mortgage, deed of trust, or other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, (b) result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture, loan
agreement, receivables purchase agreement, mortgage, deed of trust, or other
agreement or instrument, other than the Transaction Documents, or (c) violate
any law or any order, rule, or regulation applicable to it of any court or of
any federal, state or foreign regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over it or any of its
properties.
IV.6. No Proceedings. There are no proceedings or investigations
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pending, or threatened, before, and there has been no injunction, decree or
other decision issued or made by, any
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court, regulatory body, administrative agency, or other tribunal or governmental
agency or instrumentality (i) asserting the invalidity of this Agreement or any
other Transaction Document, (ii) seeking to prevent the transfer or contribution
of the Pool Receivables and Related Property to the Company or any portion
thereof or the consummation of any of the other transactions contemplated by
this Agreement or any other Transaction Document or (iii) seeking any
determination or ruling that might have a Material Adverse Effect.
IV.7. Bulk Sales Act. No transaction contemplated hereby or by any
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other Transaction Documents requires compliance with any bulk sales act or
similar law.
IV.8. Government Approvals. No authorization or approval or other
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action by, and no notice to or filing with, any governmental authority or
regulatory body is required for Originator's due execution, delivery and
performance of any Transaction Document to which it is a party, except for the
filing of certain UCC financing statements, all of which shall have been duly
made and shall be in full force and effect.
IV.9. Financial Condition. (x) The audited consolidated balance sheets
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of Originator and its consolidated subsidiaries as at September 30, 1996, and
the related statements of income, cash flows and shareholders' equity of
Originator and its consolidated subsidiaries for the fiscal year then ended,
certified by Ernst & Young, independent certified public accountants, and the
consolidated balance sheets of Originator and its consolidated subsidiaries as
at December 31, 1996, and the related statements of income, cash flows and
shareholders' equity of Originator and its consolidated subsidiaries for the
period then ended, copies of each of which have been furnished to the Agent,
fairly present the consolidated financial condition, business, business
prospects and operations of Originator and its consolidated subsidiaries as at
such dates and the consolidated results of the operations of Originator and its
consolidated subsidiaries for the period ended on such dates, all in accordance
with generally accepted accounting principles consistently applied, and (y)
since September 30, 1996 there has been no material adverse change in any such
condition, business, business prospects or operations except as described in
Schedule 6.02(i) to the Receivables Transfer Agreement.
IV.10. Litigation. No injunction, decree or other decision has been
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issued or made by any court, governmental agency or instrumentality thereof that
prevents, and no threat by any person has been made to attempt to obtain any
such decision that would prevent, Originator from conducting a significant part
of
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its business operations.
IV.11. Margin Regulations. No use of any funds obtained by Originator
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under this Agreement will conflict with or contravene any of Regulations G, T, U
and X promulgated by the Board of Governors of the Federal Reserve System from
time to time.
IV.12. Quality of Title.
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(a) Each Pool Receivable (together with the Related Property) which is
to be transferred or contributed to the Company hereunder is or shall be owned
by Originator, free and clear of any Lien. Whenever the Company or accepts a
transfer or a contribution hereunder, it shall have acquired a valid and
perfected ownership interest (free and clear of any Lien) in all Pool
Receivables generated by Originator and all Collections related thereto, and in
Originator's entire right, title and interest in and to the other Related
Property with respect thereto.
(b) No effective financing statement or other instrument similar in
effect covering any Pool Receivable, any interest therein or any of the Related
Property is on file in any recording office except such as may be filed in favor
of the Company or Originator, as the case may be, in accordance with this
Agreement or in favor of the Transferee (or any assignee thereof) or the Agent
in accordance with the Receivables Transfer Agreement.
IV.13. Accuracy of Information. No information furnished or to be
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furnished in writing by Originator to the Company, the Agent or the Transferee
for purposes of or in connection with any Transaction Document will be
inaccurate in any material respect as of the date it was furnished or will be
furnished or (except as otherwise disclosed to the Company, the Agent or the
Transferee at or prior to such time) as of the date as of which such information
is dated, or contained or will contain any material misstatement of fact or
omitted or will omit to state any material fact necessary to make such
information contained therein was made, not materially misleading.
IV.14. Offices. Originator's principal place of business and chief
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executive office is located at the address set forth on Schedule 4.14, and the
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offices where Originator keeps all its books, records and documents evidencing
or included in the Pool Receivables are located at the addresses specified on
Schedule 4.14 (or at such other locations, notified to Servicer (if other than
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Originator) and the Agent in accordance with Section 5.3(d), in jurisdictions
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where all action required by Section 5.3(d) has
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been taken and completed).
IV.15. Trade Names. Except as disclosed on Schedule 4.15, Originator
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does not use any trade name other than its actual corporate name. From and after
the date that fell five (5) years before the date hereof, Originator has not
been known by any legal name other than its corporate name as of the date
hereof, nor has Originator been the subject of any merger or other corporate
reorganization except as disclosed on Schedule 4.15.
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IV.16. Compliance with Applicable Laws. Originator is in compliance, in
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all material respects, with the requirements of all applicable laws, rules,
regulations, and orders of all governmental authorities (including Regulation Z,
laws, rules and regulations relating to usury, truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt collection
practices and privacy and all other consumer laws applicable to the Pool
Receivables and related Contracts).
IV.17. Solvency. Originator is not insolvent, does not have
--------
unreasonably small capital with which to carry on its business and is able to
pay its debts generally as they become due and payable, and its liabilities do
not exceed its assets.
IV.18. Eligibility of Pool Receivables. Unless otherwise identified to
-------------------------------
the Company on the date of the contribution and/or transfer hereunder, each Pool
Receivable contributed and/or transferred hereunder is on the date of
contribution and/or transfer an Eligible Receivable and, so long as Originator
is the Servicer, each Pool Receivable included as an Eligible Receivable in the
calculation of Net Pool Balance is an Eligible Receivable as of the date of such
calculation.
ARTICLE V
COVENANTS OF ORIGINATOR
V.1. Affirmative Covenants. From the date hereof until the Final Pay
----------------------
Out Date, Originator will, unless the Company and the Agent shall otherwise
consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with
--------------------------
all applicable laws, rules, regulations and orders, including those with respect
to the Pool Receivables and the related Contracts.
(b) Preservation of Corporate Existence. Preserve and maintain its
-----------------------------------
corporate existence, rights, franchises and privileges
-12-
in the jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification could reasonably be expected to have a Material Adverse Effect.
(c) Audits. (i) At any time and from time to time during regular
------
business hours, upon reasonable notice, permit the Agent, or its agents or
representatives, (A) to examine and make copies of and abstracts from all books,
records and documents (including computer tapes and disks) in the possession or
under the control of such party relating to Pool Receivables, including the
related Contracts and purchase orders and other agreements, and (B) to visit the
offices and properties of Originator for the purpose of examining such
materials, and to discuss matters relating to Pool Receivables or Originator's
performance hereunder with any of the officers or employees of such party having
knowledge of such matters; and (ii) without limiting the provisions of clause
------
(i) next above, from time to time on request of the Agent (given not more than
---
once in each calendar year so long as no Termination Event or Unmatured
Termination Event shall have occurred and be continuing under the Receivables
Transfer Agreement), permit certified public accountants or other auditors
acceptable to the Agent to conduct, at Originator's expense, a review of the
Originator's books and records with respect to the Pool Receivables.
(d) Keeping of Records and Books of Account. Maintain and implement
---------------------------------------
administrative and operating procedures (including an ability to recreate
records evidencing Pool Receivables in the event of the destruction of the
originals thereof), and keep and maintain, all documents, books, records and
other information reasonably necessary or advisable for the collection of all
Pool Receivables (including records adequate to permit the daily identification
of each new Pool Receivable and all Collections of and adjustments to each
existing Pool Receivable).
(e) Performance and Compliance with Pool Receivables and Contracts. 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 Contracts
related to the Pool Receivables and all purchase orders and all other agreements
related to such Pool Receivables.
(f) Location of Records. Keep its chief place of business and chief
-------------------
executive office, and the offices where it keeps its records concerning or
related to Pool Receivables and all purchase orders and other agreements related
to the Pool Receivables, all related Contracts and all required documents
relating thereto), at
-13-
the address(es) referred to in Schedule 4.14 or, upon 30 days' prior written
-------------
notice to the Company and the Agent, at such other locations in jurisdictions
where all action required by the Servicer or the Agent to continue the
perfection of the Company's and the Transferee's interests in the Pool
Receivables and the Related Property have been taken.
(g) Credit and Collection Policies. Comply in all material respects
------------------------------
with its Credit and Collection Policy in regard to each Pool Receivable and the
related Contract.
(h) Collections. Instruct all Obligors to cause all Collections of
-----------
Pool Receivables to be sent directly to a Post Office Box, and deposit all
Collections received into a Designated Account within one Business Day after
receipt.
(i) Transaction Documents. Perform and comply in all material respects
---------------------
with all of its covenants and agreements set forth in the Transaction Documents
to which it is a party.
V.2. Reporting Requirements. From the date hereof until the first day
----------------------
following the Final Pay Out Date, Originator shall, unless the Agent and the
Company shall otherwise consent in writing, furnish to the Company and the Agent
the information set forth in Section 7.02 of the Receivables Transfer Agreement
------------
(to the extent such information relates to Originator).
V.3. Negative Covenants. From the date hereof until the Final Pay Out
------------------
Date, unless the Agent and the Company shall otherwise consent in writing, it
shall not:
(a) Sales, Liens, Etc. Except as otherwise provided herein, sell,
-----------------
assign (by operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist any Lien upon or with respect to, any Pool Receivable or Related
Property, or any interest therein, or any post office box or account to which
any Collections of any Pool Receivables are sent, or any right to receive income
from or in respect thereof, or the Company Note or any shares of capital stock
of the Company.
(b) Extension or Amendment of Pool Receivables. Extend, amend,
------------------------------------------
terminate or otherwise modify the terms of any Pool Receivable, or amend,
modify, terminate or waive any term or condition of any Contract related
thereto, unless permitted pursuant to Section 8.02 of the Receivables Transfer
Agreement.
(c) Change in Business or Credit and Collection Policy. Make any change
--------------------------------------------------
in the character of its business or in its Credit and Collection Policy, which
change would, in either case, impair
-14-
the collectibility of any Pool Receivable (other than an immaterial portion
thereof) or otherwise adversely affect the interests, rights or remedies of the
Company or the Transferee under any Transaction Document.
(d) Change in Name. Change its corporate name or the name under or by
--------------
which it does business, unless Originator shall have given the Company and the
Agent at least 30 days' prior written notice thereof and unless, prior to any
such change in name, Originator shall have filed (or shall have caused to be
filed) such financing statements or amendments as the Servicer or the Agent
determines may be necessary to continue the perfection of the Company's and the
Transferee's interest in the Pool Receivables and Related Property.
(e) Negative Pledges. Enter into or assume any agreement (other than
----------------
this Agreement and the other Transaction Documents) prohibiting the creation or
assumption of any Lien upon any Pool Receivables or Related Property, whether
now owned or hereafter acquired by Originator, as contemplated by the
Transaction Documents, or otherwise prohibiting or restricting any transaction
contemplated hereby or by the other Transaction Documents.
(f) Mergers, Acquisitions, Sales, etc. Be a party to any merger or
---------------------------------
consolidation, or purchase or otherwise acquire all or substantially all of the
assets or any stock of any class of, or any partnership or joint venture
interest in, any other Person, or, except in the ordinary course of its
business, sell, transfer, convey or lease all or any substantial part of its
assets, or permit any Subsidiary to do any of the foregoing except for any such
merger or consolidation, sale, transfer, conveyance, lease or assignment of or
by any wholly-owned Subsidiary (other than the Company) into Originator or into,
with or to any other wholly-owned Subsidiary, any such purchase or other
acquisition by Originator or any wholly-owned Subsidiary (other than the
Company) of the assets or stock of any wholly-owned Subsidiary and pursuant to
which Originator is the survivor, provided that no Termination Event or
Unmatured Termination Event has occurred and is continuing or would result
therefrom.
(g) Corporate Separateness. Take any action that is inconsistent with
----------------------
the terms of Section 7.04 of the Receivables Transfer Agreement.
-15-
ARTICLE VI
TRANSFER TERMINATION EVENTS
VI.1. Transfer Termination Events. Each of the following events or
---------------------------
occurrences described in this Section 6.1 shall constitute a "Transfer
Termination Event":
(a) A Termination Event shall have occurred under the Receivables
Transfer Agreement and the Agent shall have declared the Commitment Termination
Date to have occurred; or
(b) Originator shall fail to make any payment or deposit to be made by
it hereunder when due and such failure shall remain unremedied for one Business
Day; or
(c) Any representation or warranty made or deemed to be made by
Originator (or any of its officers) under or in connection with this Agreement,
any other Transaction Document or any other information or report delivered
pursuant hereto or thereto shall prove to have been false or incorrect in any
material respect when made or deemed made and, if such breach of representation
or warranty is capable of cure, it shall have continued for thirty days after
written notice thereof shall have been given by the Servicer, the Agent or the
Company to Originator; or
(d) Originator shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be performed or
observed and any such failure shall remain unremedied for thirty days after
written notice thereof shall have been given by Servicer, the Agent or the
Company to Originator; or
(e) An Event of Bankruptcy shall have occurred and remained continuing
with respect to Originator.
VI.2. Remedies.
--------
(i) Automatic Termination. The agreement of the Originator to transfer
---------------------
Pool Receivables hereunder, and the agreement of the Company to accept Pool
Receivables from the Originator hereunder, shall terminate automatically (and
the Transfer Termination Date shall be deemed to have occurred) on the
occurrence of a Transfer Termination Event of the type described in Section
6.1(e).
(ii) Optional Termination. Upon the occurrence of a Transfer
--------------------
Termination Event, the Company, with the consent of the
-16-
Agent, shall have the option by notice to Originator (with a copy to the Agent)
to declare the Transfer Termination Date to have occurred.
(iii) Remedies Cumulative. Upon any termination pursuant to this
-------------------
Section 6.2, the Company shall have, in addition to all other rights and
-----------
remedies under this Agreement or otherwise, all other rights and remedies
provided under the UCC of each applicable jurisdiction and other applicable
laws, which rights shall be cumulative.
ARTICLE VII
INDEMNIFICATION
VII.1. Indemnities by Originator. Without limiting any other rights
-------------------------
that any such Person may have hereunder or under applicable law, Originator
hereby agrees to indemnify the Company and each of its successors, transferees
and assigns and all officers, directors, shareholders, controlling persons,
employees and agents of any of the foregoing (each of the foregoing Persons
being individually called a "First Tier Indemnified Party"), forthwith on
----------------------------
demand, from and against any and all damages, losses, claims, judgments,
liabilities and related costs and expenses, including reasonable attorneys' fees
and disbursements (collectively, the "First Tier Indemnified Amounts") awarded
------------------------------
against or incurred by any of them arising out of or as a result of the
following:
(a) the transfer by Originator of an interest in any Pool Receivable or
Related Property to any Person other than the Company;
(b) the breach of any representation or warranty made by Originator
pursuant to this Agreement, or any information or report delivered by Originator
pursuant hereto or thereto which shall have been false or incorrect in any
respect when made or deemed made;
(c) the failure by Originator to comply with any applicable law, rule
or regulation with respect to any Pool Receivable or the related Contract, or
the nonconformity of any Pool Receivable or the related Contract with any such
applicable law, rule or regulation;
(d) the failure to vest and maintain vested in the Company an ownership
interest in the Pool Receivables generated by Originator and Related Property
free and clear of any Lien, other
-17-
than a Lien arising solely as a result of an act of the Company, whether
existing at the time of the transfer or contribution of such Pool Receivables or
at any time thereafter;
(e) any claim resulting from the sale of the merchandise or services
related to any Pool Receivable or the furnishing or failure to furnish such
merchandise or services; or any products liability claim arising out of or in
connection with merchandise or services that are the subject of any Pool
Receivable;
(f) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of transfers hereunder or the ownership of, or
in respect of, any Pool Receivables, Related Property or Contract;
(g) any tax or governmental fee or charge (other than any tax band upon
or measured by net income), all interest and penalties thereon or with respect
thereto, and all out-of-pocket costs and expenses, including the reasonable fees
and expenses of counsel in defending against the same, which may arise by reason
of the transfer, contribution or ownership of the Pool Receivables or any
Related Property connected with any such Pool Receivables;
(h) any failure of Originator to perform its duties or obligations in
accordance with the provisions of this Agreement; and
(i) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Pool Receivable (including,
without limitation, a defense based on such Pool Receivable or the related
Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms);
excluding, however, (i) First Tier Indemnified Amounts to the extent resulting
--------- -------
from gross negligence or willful misconduct on the part of a First Tier
Indemnified Party and (ii) any indemnification which has the effect of recourse
to Originator for non-payment of the Pool Receivables due to credit reasons
(except as otherwise specifically provided in this Agreement).
If for any reason the indemnification provided above in this Section
-------
7.1 is unavailable to a First Tier Indemnified Party or is insufficient to hold
---
such First Tier Indemnified Party harmless, then Originator shall contribute to
the amount paid or payable by such First Tier Indemnified Party as a result of
such loss, claim, damage or liability to the maximum extent permitted under
applicable law.
-18-
ARTICLE VIII
MISCELLANEOUS
VIII.1. Amendments, Waivers, etc. No amendment of this Agreement or
------------------------
waiver of any provision hereof or consent to any departure by either party
therefrom shall be effective without the written consent of the party that is
sought to be bound. Any such waiver or consent shall be effective only in the
specific instance given. No failure or delay on the part of either party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law. Originator acknowledges that institutions providing
financing (by way of accepting transfers of Pool Receivables or interests
therein) pursuant to the Receivables Transfer Agreement may rely upon the terms
of this Agreement, and the terms of this Agreement may not be amended, nor any
material waiver of those terms be granted, without the consent of the Agent.
VIII.2. Notices, etc. All notices and other communications provided for
------------
hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by express
mail or courier or by certified mail, postage-prepaid, or by facsimile, to the
intended party at the address or facsimile number of such party set forth under
its name on the signature pages hereof or at such other address or facsimile
number as shall be designated by such party in a written notice to the other
parties hereto. All such notices and communications shall be effective, (i) if
personally delivered or sent by express mail or courier or if sent by certified
mail, when received, (ii) if sent by certified mail, three Business Days after
having been deposited in the mail, postage prepaid and (iii) if transmitted by
facsimile, when sent, receipt confirmed by telephone or electronic means.
VIII.3. Binding Effect; Assignability. This Agreement shall be binding
-----------------------------
upon and inure to the benefit of the parties hereto and their respective
successors and assigns and shall also, to the extent provided herein, inure to
the benefit of the parties to the Receivables Transfer Agreement. Originator may
not assign its rights hereunder or any interest herein without the prior consent
of the Company and the Agent. Originator acknowledges that the Company's rights
under this Agreement may be assigned to
-19-
the Transferee under the Receivables Transfer Agreement and consents to such
assignment and to the exercise of those rights directly by the Transferee or the
Agent on its behalf.
VIII.4. Survival. The rights and remedies with respect to any breach of
--------
any representation and warranty made by Originator or the Company pursuant to
Article IV and the indemnification and payment provisions of Article VII and
---------- -----------
Section 8.6 shall be continuing and shall survive any termination of this
-----------
Agreement.
VIII.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF NEW YORK.
VIII.6. Costs, Expenses and Taxes. In addition to its obligations under
-------------------------
Article VII, Originator agrees to pay on demand (a) all costs and expenses
-----------
incurred by the Company and its assigns in connection with the enforcement of,
or any actual or claimed breach of, this Agreement, including the reasonable
fees and expenses of counsel to any of such Persons incurred in connection with
any of the foregoing or in advising such Persons as to their respective rights
and remedies under this Agreement in connection with any of the foregoing and
(b) all stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement.
VIII.7. No Proceedings. Originator agrees, for the benefit of the
--------------
parties to the Receivables Transfer Agreement, that it will not institute
against the Company or the Transferee, or join any other Person in instituting
against the Company or the Transferee, any Event of Bankruptcy until one year
and one day after the Final Pay Out Date (in relation to the Company) or for one
year and one day after the date when the latest maturing Commercial Paper Note
is paid (in relation to the Transferee). In addition, all amounts payable by the
Company to Originator pursuant to this Agreement shall be payable solely from
funds available for that purpose (after the Company has satisfied all
obligations then due and owing under the Receivables Transfer Agreement).
VIII.8. Waiver of Jury Trial. EACH PARTY HERETO EXPRESSLY WAIVES ANY
--------------------
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT.
VIII.9. Execution in Counterparts. This Agreement may be executed in
-------------------------
any number of counterparts and by different parties in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same agreement.
-20-
-21-
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.
IKON CAPITAL, INC.
By:
-------------------------------------------
Name:
Title:
0000 Xxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
IKON Office Solutions, Inc.
000 Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx Xxxxx
Facsimile: (000) 000-0000
IKON FUNDING, INC.
By:
-------------------------------------------
Name:
Title:
000 Xxxxxxxxxx Xxxx, Xxxxx 00
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx XxXxxx
Facsimile: (000) 000-0000
S-1
Acknowledged and consented by:
IKON CAPITAL, INC., as Servicer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
0000 Xxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
IKON Office Solutions, Inc.
000 Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx Xxxxx
Facsimile: (000) 000-0000
S-2
SCHEDULE 4.14
OFFICE LOCATIONS
IKON Capital, Inc.
0000 Xxxx Xxxx
Xxxxx, Xxxxxxx 00000
SCHEDULE 4.15
TRADE NAMES
None.
EXHIBIT A
FORM OF TRANSFER REPORT
(See attached)
EXHIBIT B
FORM OF COMPANY NOTE
(See attached)
EXHIBIT C
CLOSING DATE REPORT
I. Calculation of Fair Market Value of Pool Receivables transferred on
Closing Date:
(i) aggregate unpaid scheduled debt service or lease payments (excluding
financing charges): $_______________, minus
-----
(ii) allocated loss contingency reserve: $_____________
Total Fair Market Value: $_______________
II. Fair Market Value of contributed Pool Receivables: $______________
Fair Market Value of transferred Pool Receivables: ____________
(i) Outstanding Transferee's Investment under Original Receivables
Agreement: $______________
(ii) Cash transfer price: $______________
(iii) Initial principal amount of Company Note: $_____________
