EXHIBIT 10.4
Schedule
to the
Master Agreement
dated as of April 23, 2003
between
XXXXXX BROTHERS SPECIAL FINANCING INC. and IKON RECEIVABLES FUNDING, LLC
("PARTY A") ("PARTY B")
PART 1
TERMINATION PROVISIONS
In this Agreement:
(a) Specified Entity. "Specified Entity" is not applicable to Party A or
Party B.
(b) Specified Transactions. "Specified Transaction" has the meaning
specified in Section 14.
(c) Breach of Agreement. The "Breach of Agreement" provision of Section
5(a)(ii) will not apply to either Party A or Party B.
(d) Credit Support Default. The "Credit Support Default" provision of
Section 5(a)(iii) is hereby amended by adding, at the end thereof, the
following: "provided that, not withstanding anything to the contrary
contained in this Agreement or this Section 5, an Event of Default
relative to the Party B Credit Support Provider (as herein defined) will
not constitute an Event of Default with respect to Party B."
(e) Misrepresentation. The "Misrepresentation" provision of Section 5(a)(iv)
will not apply to either Party A or Party B.
(f) Default under Specified Transaction. The "Default under Specified
Transaction" provision of Section 5(a)(v) will not apply to either Party
A or Party B.
(g) Cross Default. The "Cross Default" provisions of Section 5(a)(vi) will
not apply to either Party A or Party B.
(h) Tax Event. The "Tax Event" provisions of Section 5(b)(ii) will not apply
to either Party A or Party B.
(i) Tax Event Upon Merger. The "Tax Event Upon Merger" provision of Section
5(b)(iii) will not apply to either Party A or Party B.
(j) Credit Event upon Merger. The "Credit Event Upon Merger" provision
(Section 5(b)(iv)) will not apply to Party A or Party B.
(k) Automatic Early Termination. The "Automatic Early Termination" provision
of Section 6(a) will not apply to Party A or Party B.
(l) Payments on Early Termination. For purposes of Section 6(e) but subject
to Part 5 of this Schedule:
(i) Market Quotation will apply, other than for an Additional
Termination Event.
(ii) The Second Method will apply, other than for an Additional
Termination Event.
(m) Termination Currency. "Termination Currency" shall be United States
Dollars.
(n) Additional Termination Event. Additional Termination Event with respect
to Party A will apply as follows: The occurrence of any of the following
events (each such occurrence, a "Downgrade") shall be an Additional
Termination Event, with Party A as the sole Affected Party, and
notwithstanding anything to the contrary in this Agreement, the
provisions of Part 1(o) of this Schedule will apply if any Additional
Termination Event occurs:
(i) The Party A Guarantor (including any successor to the Party A
Guarantor under this Agreement as a result of any merger,
consolidation or transfer of assets involving the Party A
Guarantor) at any time is rated below the applicable Specified
Rating (as so defined) by any of the Rating Agencies (as so
defined); or
(ii) either of the Rating Agencies withdraws its rating of the Party
A Guarantor, provided that Party B shall not exercise its rights
to terminate the Agreement pursuant to Section 6(b)(iv) without
the direction of the Party B Credit Support Provider for so long
as the Party B Credit Support Provider is not in default with
respect to its obligations under the policy with respect to the
Notes (as defined below).
For purposes of this Agreement, "Rating Agency" means each of Standard & Poor's
Rating Services ("S&P"), and Xxxxx'x Investors Service, Inc. ("Moody's"), and
the "Specified Rating" of the Party A Guarantor and related "Specified Ratings"
are as follows:
Specified Rating Specified Rating and Rating Agency
---------------- ----------------------------------
short-term debt credit rating "A-1" -- S&P
"P-1" -- Moody's
(o) Termination Rights and Consequences of an Additional Termination Event.
Section 6(b) is hereby amended, at the end thereof, by the insertion of
the following: "notwithstanding anything to the contrary in this
Agreement or this Section 6(b), neither party may designate an Early
Termination Date in connection with an Event of Default relating to the
Party B Credit Support Provider."
Notwithstanding Section 6(b)(iv) of this Agreement, upon the occurrence of any
of the Additional Termination Events listed in Part 1(n)(1) of this Schedule:
(A) Party A shall promptly, but in any event, not later than two (2)
Local Business Days following a Downgrade, give Party B notice of the
circumstances constituting the relevant Downgrade.
(B) In the event of a Downgrade, (x) Party A shall, at its own cost, on
or before the 30th day after the date of such Downgrade, use its
commercially reasonable best efforts to cause a substitute swap
counterparty ("X") that (i) is reasonably acceptable to Party B and the
Party B Credit Support Provider, (ii) has a short-term debt rating (or a
counterparty or financial program rating, or the equivalent) sufficient
to maintain the then-current ratings of the Notes as required by each of
the Rating Agencies to assume the obligations of Party A under the
Transaction or replace the
2
Transaction with a transaction on identical terms, with X to be "Party
A"; or (y) in the event that Party A, after application of its
commercially reasonable best efforts, fails to find such a replacement,
on or before the third business day after the date Party A determines it
will not be able to find such a replacement (the notice of such
determination shall be promptly delivered to Party B and the Party B
Credit Support Provider), deliver credit support to the extent set forth
in the Credit Support Annex (the "Credit Support Annex") between Party A
and Party B, attached as an exhibit hereto, in either case in such
manner (i) that is satisfactory to Party B and the Party B Credit
Support Provider and (ii) as is necessary for the Rating Agencies to
confirm not later than that day that the arrangements and/or credit
support delivered are sufficient to maintain or, if applicable, restore
their respective ratings of the Notes to the ratings in effect
immediately before the Downgrade. For this purpose, "Notes" means the
IKON Receivables Funding, LLC Lease-Backed Notes, Series 2003-1.
(C) If Party A shall fail to comply with the requirements of
subparagraph (B) above and Party B designates an Early Termination Date
as a result of the failure, Party B will calculate and certify to Party
A the sum of the Loss, costs and expenses actually incurred by Party B
as a result of the early termination.
PART 2
TAX REPRESENTATIONS
(a) Payer Tax Representations. For the purpose of Section 3(e), Party A
makes the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) or amounts treated as interest under applicable tax
laws) to be made by it to the other party under this Agreement. In
making this representation, it may rely on:
(i) the accuracy of any representation made by the other party
pursuant to Section 3(f);
(ii) the satisfaction of the agreement of the other party contained
in Section 4(a)(i) or 4(a)(iii) and the accuracy and
effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii); and
(iii) the satisfaction of the agreement of the other party contained
in Section 4(d);
provided that it shall not be a breach of this representation where
reliance is placed on clause (ii), and the other party does not deliver
a form or document under Section 4(a)(iii) by reason of material
prejudice to its legal or commercial position.
(b) Payee Tax Representations. For the purpose of Section 3(f), Party A
makes no Payee Tax Representation. For the purpose of Section 3(f),
Party B makes the following representation:
Party B is a limited liability company formed under the laws of the
State of Delaware and is a "United States person" as such term is
defined in Section 7701(a)(30) of the Code.
PART 3
AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable (and each party's
representation in Section 3(d) will apply to each document required from it as
provided below, other than any opinion of counsel):
(a) Documents to be delivered by Party B: (1) the Indenture dated as of
April 1, 2003 among Party B, IOS Capital, LLC. ("IOS") and BNY Midwest
Trust Company (the "Indenture") and (2) the
3
Assignment and Servicing Agreement dated as of April 1, 2003 among Party
B, IOS Capital, LLC and IKON Receivables-2, LLC (the "Assignment and
Servicing Agreement").
(b) Other documents to be delivered by Party A and Party B: evidence
reasonably satisfactory to the other party as to the authority,
incumbency and specimen signature of each person executing any document
on its behalf in connection with this Agreement, Confirmation of the
Transaction and any Credit Support Document as well as each of the
documents certificates and reports referenced in Part 5(n) of this
Schedule, as requested by Party A from time to time.
PART 4
MISCELLANEOUS
(a) Addresses for Notices. For the purpose of Section 12(a):
(i) Addresses for notices or communications to Party A and the Party
A Guarantor:
Xxxxxx Brothers Special Financing Inc.
Transaction Management
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Documentation Manager
Telephone No.: (000) 000-0000
Fax Number: (000) 000-0000
(ii) Address for notices or communications to Party B:
IKON Receivables Funding, LLC
0000 Xxxx Xxxx
X.X. Xxx 0000
Xxxxx, Xxxxxxx 00000
With a copy to:
Chief Counsel of Leasing
IOS Capital, LLC
00 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
With a copy to the Party B Credit Support Provider:
Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: None.
Party B appoints as its Process Agent: None.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c):
4
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A unless Party A is a
Defaulting Party, in which case Party B or its designee will be the
Calculation Agent.
(f) Credit Support Document.
With respect to Party A:
(i) the Credit Support Annex; and
(ii) that certain Guarantee of Xxxxxx Brothers Holdings Inc., dated
as of April 23, 2003 (the "Guarantee Agreement") by Xxxxxx
Brothers Holdings Inc, a Delaware corporation (the "Party A
Guarantor"), in favor of Party B, as the same may be amended
from time to time.
With respect to Party B: that certain Financial Guaranty Insurance
Policy issued by Ambac Assurance Corporation (the "Party B Credit
Support Provider") in favor of Party A dated as of April 23, 2003 (the
"Policy"), as the same may be amended from time to time.
(g) Credit Support Providers.
Credit Support Provider in relation to Party A: Xxxxxx Brothers Holdings
Inc., a Delaware corporation (the "Party A Guarantor"), pursuant to the
Guarantee Agreement.
Credit Support Provider in relation to Party B: Ambac Assurance
Corporation, a Wisconsin stock insurance corporation (the "Party B
Credit Support Provider"), pursuant to the Policy.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the law of the State of New York, without reference to
choice of laws doctrine.
(i) Netting of Payments. Sub-paragraph (ii) of Section 2(c) of this
Agreement will apply.
(j) Affiliate. Affiliate will have (i) with respect to Party A, the meaning
specified in Section 14 of this Agreement, and (ii) with respect to
Party B, is not applicable.
PART 5
OTHER PROVISIONS
(a) Set-off. The definition of "Set-off" is hereby amended to mean the
set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an
amount under Section 6 is entitled or subject, arising under this
Agreement that is exercised by, or imposed on, such payer. Neither Party
A nor Party B may Set-off amounts which may arise under another contract
or agreement between such parties against obligations under this
Agreement.
(b) Covenant Not to Institute Proceedings. Prior to the date that is one
year and one day after the date on which all of the Notes (as defined in
the Indenture) have been paid in full, Party A shall not acquiesce,
petition or otherwise invoke or cause Party B to invoke the process of
any bankruptcy court of other governmental authority for the purpose of
commencing or sustaining a case against Party B under any federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of Party B or any substantial part of their respective
properties or the winding up or liquidation of affairs of Party B. Party
A acknowledges that Party B is a legal entity separate from any other
entity and that the holders of the Notes have relied on such
separateness, and Party A agrees, which agreement shall be enforceable
by such holders at law or through an action for specific
5
performance, not to seek or support the substantive consolidation of
Party B with any other entity as long as the Notes remain outstanding.
The provisions of this clause (b) shall survive any termination of this
Agreement.
(c) Successors. Notwithstanding any limitation imposed by Section 7 of this
Agreement or any other provision of this Agreement to the contrary, the
term "Party B" shall include all successors in interest to Party B
pursuant to its limited liability company agreement, and no consent of
Party A shall be required for any transfer or assignment to such
successor in interest.
(d) Limited Recourse; No Petition for Bankruptcy. Notwithstanding the
provisions of this Agreement which impose on Party B an obligation
(including any indemnity given hereunder) at any time to make any
payment to Party A, the rights of recourse of Party A for the
obligations of Party B hereunder shall be limited to amounts available
under the terms of the Indenture and Assignment and Servicing Agreement.
Accordingly, Party A shall have no claim for recourse against Party B or
any of its directors, officers, or affiliates, in respect of any amount
which is or remains unsatisfied after the application of those funds and
any obligations hereunder of Party B not so satisfied will automatically
be extinguished. Party A, by entering into this Agreement, hereby
covenants and agrees that, in connection with any obligations of Party B
under this Agreement, Party A will not institute against Party B, or
join in any institution against Party B of, any proceeding under any
bankruptcy, insolvency or similar law until the Notes have been paid in
full and the longest applicable preference period has lapsed. The
provisions of this clause (e) shall survive any termination of this
Agreement.
(e) Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDINGS ARISING UNDER OR IN
CONNECTION WITH THIS AGREEMENT, ANY CREDIT SUPPORT DOCUMENT OR THE
TRANSACTION.
(f) Swap Exemption. Each party hereto represents to the other party on and
as of the date hereof and on each date on which a Transaction is entered
into between them hereunder, in connection with the negotiation of, the
entering into, and the execution of this Agreement, any Credit Support
Document to which it is a party, each Transaction and any other
documentation relating to this Agreement to which it is a party, that:
(i) This Agreement and each Transaction constitute a "swap
agreement" within the meaning of the United States Commodity
Futures Trading Commission Regulations ("CFTC Regulations")
Section 35.1(b)(1), Section 101(53)(B) of the U.S. Bankruptcy
Code and the CFTC Policy Statement concerning Swap Transactions,
54 Fed. Reg. 30694 (July 21, 1989) (the "CFTC Swap Policy
Statement").
(ii) It is an "eligible contract participant" as defined in the
Commodity Futures Modernization Act of 2000.
(iii) Neither this Agreement nor any Transaction is one of a fungible
class of agreements that are standardized as to their material
economic terms, with the meaning of Section 35.2(b) of the CFTC
Regulations.
(iv) The economic terms of this Agreement, any Credit Support
Document to which it is a party and the Transaction have been
individually tailored and negotiated by it, and the
creditworthiness of the other party was a material consideration
in its entering into or determining the terms of this Agreement,
any such Credit Support Document and the Transaction (including,
without limitation, pricing, cost and credit enhancement terms),
within the meaning of Section 35.2(c) of the CFTC Regulations.
(v) It has entered into this Agreement and the Transaction in
conjunction with a line of its business (including financial
intermediation services) or the financing of its business,
within the meaning of the CFTC Swap Policy Statement.
6
(g) Relationship between Parties. In connection with the negotiation of, the
entering into, and the confirming of this Agreement, and any other
documentation relating to this Agreement, including any Credit Support
Document, to which it is a party or that it is required by this
Agreement to deliver, each party hereby represents and warrants, and, in
connection with the negotiation of, the entering into and the confirming
of the execution of the Transaction, each party will be deemed to
represent, to the other party as of the date hereof (or in connection
with the Transaction, as of the date which it entered into the
Transaction) that (absent a written agreement between the parties that
expressly imposes affirmative obligations to the contrary for the
Transaction):
(i) Non Reliance. It is acting for its own account, and it has made
its own independent decisions to enter into the Transaction and
as to whether the Transaction is appropriate or proper for it
based upon its own judgment and upon advice from such advisers
as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment
advice or as a recommendation to enter into the Transaction; it
being understood that information and explanations related to
the terms and conditions of the Transaction shall not be
considered investment advice or a recommendation to enter into
the Transaction. No communications (written or oral) received
from the other party shall be deemed to be an assurance or
guarantee as to the expected results of the Transaction.
(ii) Assessment and Understanding. It is capable of assessing the
merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts,
the terms, conditions and risks of the Transaction. It is also
capable of assuming, and assumes, the risks of the Transaction.
It has determined to its satisfaction whether or not the rates,
prices or amounts and other economic terms of the Transaction
and the indicative quotations (if any) provided by the other
party reflect those in the relevant market for similar
transactions, and all trading decisions have been the result of
arm's length negotiations between the parties.
(iii) Status of Parties. The other party is not acting as a fiduciary
for or an adviser to it in respect of the Transaction.
(h) Applicable Only to One Rate Swap Transaction. This Agreement shall be
effective only for a single rate swap transaction between the parties
hereto with a specified Effective Date identical to the issue date for
the Notes (as defined in Part 1(o) of this Schedule) (the
"Transaction").
(i) Amendments/waivers. Section 9(b) of this Agreement is hereby amended by
(i) adding the words "or any Credit Support Documents" after the word
"Agreement" in the first line thereof and (ii) by adding the words "and
the Party B Credit Support Provider and the Party A Guarantor" after the
word "parties" on the third line thereof.
(j) Payments on Early Termination. Notwithstanding the printed provisions of
this Agreement, Party B shall be under no obligation to make a payment
to Party A pursuant to Section 6(e) of this Agreement as modified by
this Schedule unless such termination is at the direction of the Party B
Credit Support Provider pursuant to Part 5(r)(i) of this Schedule.
(k) Confidential Information. Each party may share any information
concerning the other party with any of its Affiliates.
(l) Consent to Telephonic Recording. Each party consents to the monitoring
or recording, at any time and from time to time and to the extent
lawful, by the other party of the telephone conversations of trading and
marketing personnel of the parties and their authorized representatives
in connection with this Agreement or the Transaction; and the parties
waive any further notice of such monitoring or recording and agree and
to the extent lawful to give proper notice and obtain any necessary
consent of such personnel for any such monitoring or recording, provided
that, each party shall have the right to receive a copy of any such
recording upon which the other party would seek to rely in the event of
a dispute.
7
(m) Change of Account. Section 2(b) of this Agreement is hereby amended by
the addition of the following after the word "delivery" in the first
line thereof:
"to another account in the same legal and tax jurisdiction as the
original account."
(n) Information Relating to Assets. Party A may request Party B to obtain
the Servicer Report (as defined in the Assignment and Servicing
Agreement) and any other reasonably available reports, notices,
financial statements or other information in respect of the assets of
Party B that are to be amounts available under the Indenture for
payments due to Party A under this Agreement. Party B shall promptly
comply with all such requests.
(o) Transfers/Assignments. Prior notice of any transfer of rights,
obligations or interests under or in this Agreement must be given to the
Rating Agencies and the Party B Credit Support Provider and the Party A
Guarantor.
(p) Notwithstanding anything to the contrary in this Agreement, Party B will
in no circumstances be required to make any payment of additional
amounts of the kinds contemplated in Section 2(d) of this Agreement.
(q) Amendments. Notwithstanding anything to the contrary contained in the
Agreement, Party A and Party B may not amend the terms of the
Transaction in a material way without first obtaining written
confirmation from each Rating Agency that such amendment will not result
in a reduction, downgrade or withdrawal of the then current rating of
the Notes by such Rating Agency.
(r) Party B Credit Support Provider and Party A Guarantor.
(i) If any event which would have been an Event of Default under
Section 5(a) occurs with respect to Party B as the Defaulting
Party, then the Party B Credit Support Provider shall have the
right (but not the obligation) upon notice to Party A, to
designate an Early Termination Date with respect to Party B,
with the same effect as if such designation were made by Party
A.
(ii) Notwithstanding Section 2(e), the Party B Credit Support
Provider shall not have any obligation to pay any additional
amount calculated by application of the Default Rate on any
amount which accrued under this Agreement; provided that the
Party B Credit Support Provider shall be obligated to pay
interest following a payment default of the Party B Credit
Support Provider under the Policy at the Default Rate minus
1.00%.
(iii) Party A and Party B hereby acknowledge and agree that (a) (i)
the Party B Credit Support Provider shall be a third party
beneficiary under this Agreement and under the Confirmation,
entitled to enforce its rights hereunder and thereunder and (ii)
the Party B Credit Support Provider's obligations with respect
to this Agreement and the Confirmation shall be limited to the
terms of the Policy and (b) (i) the Party A Guarantor shall be a
third party beneficiary under this Agreement and under the
Confirmation, entitled to enforce its rights hereunder and
thereunder and (ii) the Party A Guarantor's obligations with
respect to this Agreement and the Confirmation shall be limited
to the terms of the Guarantee Agreement.
(iv) (a) Party A and Party B hereby acknowledge that, to the extent
of payment made by the Party B Credit Support Provider to Party
A under the Policy, the Party B Credit Support Provider shall be
fully subrogated to the rights of Party A against Party B under
the Transaction to which such payments relate, including, but
not limited to, the right to receive payment from Party B and
the enforcement of any remedies. Party A hereby agrees to assign
to the Party B Credit Support Provider its right to receive
payment from Party B under the Transaction to the extent of any
payment thereunder by the Party B Credit Support Provider to
Party A. Party B hereby acknowledges and consents to the
assignment by Party A to the Party B Credit Support Provider of
any rights and remedies
8
that Party A has under the Transaction or any other document
executed in connection herewith.
(b) Party A and Party B hereby acknowledge that, to the extent
of payment made by the Party A Guarantor to Party B under the
Guarantee Agreement, the Party A Guarantor shall be fully
subrogated to the rights of Party B against Party A under the
Transaction to which such payments relate, including, but not
limited to, the right to receive payment from Party A and the
enforcement of any remedies. Party B hereby agrees to assign to
the Party A Guarantor its right to receive payment from Party A
under the Transaction to the extent of any payment thereunder by
the Party A Guarantor to Party B. Party A hereby acknowledges
and consents to the assignment by Party B to the Party A
Guarantor of any rights and remedies that Party B has under the
Transaction or any other document executed in connection
herewith. All rights of the Party A Guarantor arising under this
clause (iv)(b) will be payable only in accordance with the
priority of payments set forth in Article III of the Indenture.
(v) The representations of Section 3 made by each party to the other
party shall also be deemed made to the Party B Credit Support
Provider and the Party A Guarantor as provided in Section 3.
(vi) Section 10 is hereby amended to add the following subsection:
"(c) Any notice that is required to be given to any party shall
also be given to the Party B Credit Support Provider and the
Party A Guarantor."
(vii) Party A and Party B hereby confirm that (i) in the event Party B
fails to make a payment required by this Agreement or the
Confirmation and the Party B Credit Support Provider makes such
payment on behalf of Party B pursuant to the Policy, such
non-payment by Party B shall not constitute an Event of Default
with respect to Party B under this Agreement or the Confirmation
and (ii) in the event Party A fails to make a payment required
by this Agreement or the Confirmation and the Party A Guarantor
makes such payment on behalf of Party A pursuant to the
Guarantee Agreement, such non-payment by Party A shall not
constitute an Event of Default with respect to Party A under
this Agreement or the Confirmation.
9
IN WITNESS WHEREOF, the parties hereto have caused this Schedule to be
duly executed by their officer, hereunto duly authorized, with effect from the
date specified on the first page of this Schedule.
IKON RECEIVABLES FUNDING, LLC, as Issuer
By: IKON RECEIVABLES FUNDING, INC., its
Manager
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Treasurer
XXXXXX BROTHERS SPECIAL FINANCING INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title:
10
XXXXXX BROTHERS
TRANSACTION
Date: 23 April, 2003
To: IKON Receivables, Funding LLC
Attention: Documentation Unit
From: Xxxxxx Brothers Special Financing Inc.
Xxxxx Xxxxx - Transaction Management Group
Facsimile: 000-000-0000 (United States of America)
Telephone: 000-000-0000
Effort ID: N308546 REVISED
--------------------------------------------------------------------------------
Dear Sir or Madam:
The purpose of this communication (this "Confirmation") is to confirm the terms
and conditions of the transaction (the "Transaction") entered into between
Xxxxxx Brothers Special Financing Inc. ("Party A") and IKON Receivables Funding,
LLC ("Party B") on the Trade Date specified below. This Confirmation constitutes
a "Confirmation" as referred to in the Agreement specified below. This
communication supersedes and replaces all prior communication between the
parties hereto with respect to this Swap Transaction.
This Confirmation supplements, forms part of, and is subject to, the ISDA Master
Agreement dated as of 23 April, 2003 as amended and supplemented from time to
time, between Party A and Party B (the "Agreement"). All provisions contained in
the Agreement shall govern this Confirmation except as expressly modified below.
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and the terms of this Confirmation, this
Confirmation will govern. For the purpose of the Definitions, references herein
to a "Transaction" shall be deemed to be references to a "Swap Transaction".
Party A and Party B each represents that entering into the Transaction is within
its capacity, is duly authorized and does not violate any laws of its
jurisdiction of organization or residence or the terms of any agreement to which
it is a party. Party A and Party B each represents that (a) it is not relying on
the other party in connection with its decision to enter into this Transaction,
and neither party is acting as an advisor to or fiduciary of the other party in
connection with this Transaction regardless of whether the other party provides
it with market information or its views; (b) it understands the risks of the
Transaction and any legal, regulatory, tax, accounting and economic consequences
resulting therefrom; and (c) it has determined based upon its own judgment and
upon any advice received from its own professional advisors as it has deemed
necessary to consult that entering into the Transaction is appropriate for such
party in light of its financial capabilities and objectives. Party A and Party B
each represents that upon due execution and delivery of this Confirmation, it
will constitute a legally valid and binding obligation, enforceable against it
in accordance with its terms, subject to applicable principles of bankruptcy and
creditors' rights generally and to equitable principles of general application.
XXXXXX BROTHERS SPECIAL FINANCING INC.
XXXXXX BROTHERS INC.
000 XXXXXXX XXXXXX, XXX XXXX XX 00000
The terms of the particular Transaction to which this Confirmation relates are
as follows:
GENERAL TERMS:
Notional Amount: For each Calculation Period, the
aggregate outstanding principal
balance of the IKON Receivables
Funding, LLC Lease-Backed Notes,
Series 2003-1 Class A-3a Notes,
Cusip # 45172H AG 4 (the "Issuer
Securities") used as the basis for
calculating the regularly scheduled
Class A-3a Interest Payments
("Interest Payment" as such term is
identified in the Assignment and
Servicing Agreement) thereunder for
the interest period thereunder
scheduled to begin and end on the
first and last days, respectively,
of that Calculation Period, as such
Interest Payment amount is
identified to Party A by the entity
acting at the relevant time as the
servicer under the Assignment and
Servicing Agreement (the
"Servicer"). The Notional Amount for
the initial Calculation Period is
USD206,400,000
Trade Date: 16 April, 2003
Effective Date: 23 April, 2003
Termination Date: 15 December, 2007, subject to
adjustment in accordance with the
Following Business Day Convention.
FIXED AMOUNTS:
Fixed Amount Payer: Party B
Fixed Amount Payer Payment Dates: The 15th calendar day of each month,
from and including 15 May, 2003 to
and including the Termination Date,
subject to adjustment in accordance
with the Following Business Day
Convention.
No Adjustment of Period End Dates: Applicable
Fixed Rate: 2.095% per annum
Fixed Rate Day Count Fraction: 30/360
FLOATING AMOUNTS:
Floating Amount Payer: Party A
Floating Amount Payer Payment Dates: The 15th calendar day of each month,
from and including 15 May, 2003 to
and including the Termination Date,
subject to adjustment in accordance
with the Following Business Day
Convention.
No Adjustment of Period End Dates: Applicable
Floating Rate Option: USD-LIBOR-BBA
Risk ID: 484475L / Effort ID: 308546 / Global Deal ID: 339850
Page 2 of 4
Designated Maturity: 1 month
Spread: Inapplicable
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Calculation
Period
BUSINESS DAYS: New York
MISCELLANEOUS:
Calculation Agent: Party A
OTHER PROVISION:
The Assignment and Servicing
Agreement dated as of 01 April, 2003
(the "Assignment and Servicing
Agreement") by and among IKON
Receivables Funding, LLC, as Issuer,
IOS Capital, LLC, as originator and
servicer, and IKON Receivables-2
LLC, as seller, sets forth the
agreement of IOS Capital, LLC, as
Servicer, with respect to its duties
to communicate to the Issuer and
Party A information relating to the
interest scheduled to be paid by the
Issuer from time to time under the
Issuer Securities. Neither party to
the Transaction will have any
responsibility to the other in
connection with any failure by the
servicer to perform any of those
duties or any delay by it in doing
so. Nothing in this provision shall
affect the rights of the parties
hereto against the servicer for the
failure by it to perform its
obligations under the Assignment and
Servicing Agreement as set forth
herein.
Risk ID: 484475L / Effort ID: 308546 / Global Deal ID: 339850
Page 3 of 4
Please confirm your agreement with the foregoing by executing this Confirmation
and returning such Confirmation, in its entirety, to us at facsimile number
000-000-0000 (United States of America), Attention: Documentation.
Yours sincerely, Accepted and agreed to:
Xxxxxx Brothers Special Financing Inc. IKON Receivables Funding LLC, as Issuer
By: IKON RECEIVABLES FUNDING, INC.,
its Manager
Risk ID: 484475L / Effort ID: 308546 / Global Deal ID: 339850
Page 4 of 4
