Exhibit 10.4
(Multicurrency -- Cross Border)
ISDA
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of October 7, 1999
Xxxxxx Brothers Financial Products, Inc. and IKON Receivables, LLC
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have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions
of the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. Obligations.
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than
by payment), such delivery will be made for receipt on the due date in
the manner customary for the relevant obligations unless otherwise
specified in the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event
of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date
in respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified
in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii) above
will not, or will cease to, apply to such Transactions from such date). This
election may be made separately for different groups of Transactions and will
apply separately to each pairing of Offices through which the parties make and
receive payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without
any deduction or withholding for or on account of any Tax unless such deduction
or withholding is required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, then in effect. If a part is so
required to deduct or withhold, then that party ("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be deducted or
withheld from any additional amount paid by X to Y under this Section 2(d))
promptly upon the earlier of determining that such deduction or withholding is
required or receiving notice that such amount has been assessed against Y:
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount actually
received by Y (free and clear of Indemnifiable Taxes, whether assessed against X
or Y) will equal the full amount Y would have received had no such deduction or
withholding been required. However, X will not be required to pay any
additional amount to Y to the extent that it would not be required to be paid
but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4 (a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would not have occured
but for (1) any action taken by a taxing authority, or brought in a court of
competent jurisdiction, on or after the date on which a Transaction is entered
into regardless of whether such action is taken or brought with respect to a
party to this Agreement) or (II) a Change in Tax Law.
(ii) Liability. If:--
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make
any deduction or withholding in respect of which X would not be
required to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax. Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence of effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws
of the jurisdiction of its organisation or incorporation and, if
relevant under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken
all necessary action to authorise such execution, delivery and
performance;
(iii) No Violation or Conflict. Such execution, delivery and
performance do not violate or conflict with any law applicable to it,
any provision of its constitutional documents, any order or judgment of
any court or other agency of government applicable to it or any of its
assets or any of its assets or any contractual restriction binding on or
affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required
to have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and
any Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors, rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
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(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body,agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representations. Each representation
specified in the Schedule as being made by it for the purpose of this Section
3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cased under subparagraph (iii) below, to such government or taxing
authority as the other party reasonable directs:--
(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation:
(ii) any other documents specified in the Schedule or any Confirmation:
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonable requested in writing in order to allow
such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of such
demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be executed and
to be delivered with any reasonably required certification.
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,
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organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the third
Local Business Day after notice of such failure is given to the party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment under
this Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice of a
Termination Event or any agreement or obligation under Section 4(a)(i),
4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance
with this Agreement if such failure is not remedied on or before the thirtieth
day after notice of such failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be complied with
or performed by it in accordance with any Credit Support Document if such
failure is continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case other than in
accordance with its terms) prior to the satisfaction of all obligations of such
party under each Transaction to which such Credit Support Document relates
without the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or challenges the
validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have been
made or repeated;
(v) Default under Specific Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party (1)
defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation of, an
acceleration of obligations under, or an early termination of, that Specified
Transaction, (2) defaults, after giving effect to any applicable notice
requirement or grace period, in making any payment or delivery due on the last
payment, delivery or exchange date of, or any payment on early termination of, a
Specified Transaction (or such default continues for at least three Local
Business Days if there is no applicable notice requirement or grace period) or
(3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity appointed
or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event of
default or other similar condition or event (however
described) in respect of such party, any Credit Support Provider of such party
or any applicable Specified Entity of such party under one or more agreements
or instruments relating to Specified Indebtedness of any of them (individually
or collectively) in an aggregate amount of no less than the applicable Threshold
Amount (as specified in the Schedule) which has resulted in such Specified
Indebtedness becoming, or becoming capable at such time of being declared, due
and payable under such agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such Credit Support
Provider or such Specified Entity (individually or collectively) in making one
or more payments on the due date thereof in an aggregate amount of not less than
the applicable Threshold Amount under such agreements or instruments ( after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or any
applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation, amalgamation or
merger); (2) becomes insolvent or is unable to pay its debts or fails or
admits in writing its inability generally to pay its debts as they become
due; (3) makes a general assignment, arrangement or composition with or
for the benefit of its creditors; (4) institutes or has instituted against
it a proceeding seeking a judgement of insolvency or bankruptcy or any
other relief under any bankruptcy or insolvency law or similar law
affecting creditors' rights, or a petition instituted or presented against
it, such proceeding or petition (A) results in a judgement of insolvency
or bankruptcy or the entry of an order for relief or the making of an
order for its winding-up or liquidation or (B) is not dismissed,
discharged, stayed or restrained in each case within 30 days of the
institution or presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes subject to
the appointment of an administrator, provisional liquidator, conservator,
receiver, trustee, custodian or other similar official for it or for all
or substantially all its assets; (7) has a secured party take
possession of all or substantially all its assets or has a distress,
execution, attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its assets and
such secured party maintains possession, or any such process is dismissed,
discharged, stayed or restrained, in each case within 30 days thereafter;
(8) causes or is subject to any event with respect to it which, under the
applicable laws of jurisdiction, has an analogous effect to any of the
events specified in clauses (1) to (7) (inclusive); or (9) takes any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider of
such party consolidates or amalgamates with or merges with or into, or transfers
all or substantially all its assets to, another entity and, at the time of such
consolidation, amalgamation, merger or transfer:--
(1) the resulting, surviving or transferee entity fails to assume all the
obligations of such party or such Credit Support Providers under this
Agreement or any Credit Support Document to which it or its predecessor
was a party by operation of law pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to extend (without
the consent of the other party) to the performance by such resulting,
surviving or transferee entity of its obligations under this Agreement.
(h) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable law
after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court, tribunal or
regulatory authority with competent jurisdiction of any applicable law after
such date, it becomes unlawful (other than as a result of a breach by the party
of Section 4(b)) for such party (which will be the Affected Party):--
(1) to perform any absolute or contingent obligation to make a payment or
delivery or to receive a payment or delivery in respect of such Transaction or
to comply with any other material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of such party to perform, any
contingent or other obligation which the party (or such Credit Support Provider)
has under any Credit Support Document relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or brought in
a court of competent jurisdiction, on or after the date on which a Transaction
is entered into (regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (y) a Change in Tax Law, the party
(which will be the Affected Party) will, or there is a substantial likelihood
that it will, on the next succeeding Scheduled Payment Date (1) be required to
pay to the other party an additional amount in respect of an Indemnifiable Tax
under Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required tp
be deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e))and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other than
by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4)
(except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2)
receive a payment from which an amount has been deducted or withheld for or on
account of any Indemnifiable Tax in respect of which the other party is not
required to pay an additional amount (other than by reason of Section
2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or
amalgamating with, or merging with or into, or transferring all or substantially
all its assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified in the
Schedule as applying to the party, such party ("X"), any Credit Support Provider
of X or any applicable Specified Entity of X consolidates or amalgamates with,
or merges with or into, or transfers all or substantially all its assets to,
another entity and such action does not constitute an event described in Section
5(a)(viii) but the creditworthiness of the resulting, surviving or transferee
entity is materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action (and, in
such event, X or its successor or transferee, as appropriate, will be the
Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence of
such event (and, in such event, the Affected Party or Affected Parties shall be
as specified for such Additional Termination Event in the Schedule or such
Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
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6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event
of Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice, If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as the
other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an illegality under
Section 59(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, of if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party will, as a condition to its right to designate an Early
Termination Date under Section 6(b)(iv), use all reasonable efforts
(which will not require such party to incur a loss, excluding immaterial,
incidental expenses) to transfer within 20 days after it gives notice
Section 6(b)(i) all its rights and obligations under this Agreement in
respect of the Affected Transactions to another of its Offices or
Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will
use all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) Right to Terminate. If:--
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party.
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then
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continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence
of written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in
the Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid, at the
Applicable Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results form an
event of Default.--
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the Non-
defaulting Party the excess, if a positive number, of (A) the sum of
the Settlement Amount (determined by the Non-defaulting Party) in
respect of the Terminated Transactions and the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-defaulting Party
over (B) the Termination Currency Equivalent of the Unpaid Amounts
owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the
9
Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid Amounts owing to
the Non-defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
that amount is a positive number, the Defaulting Party will pay it
to the Non-defaulting Party, if it is a negative number, the Non-
defaulting Party will pay the absolute value of that amount to the
Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event:--
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotations applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated. Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:--
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions, and
an amount will be payable equal to (I) the sum of (a) one-half
of the difference between the Settlement Amount of the party
with the higher Settlement Amount ("X") and the Settlement
Amount of the party with the lower Settlement Amount ("Y") and
(b) the Termination Currency Equivalent of the Unpaid Amounts
owing to X less (II) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all Terminated
Transactions) and an amount will be payable equal to one-half of
the difference between the Loss of the party with the higher
Loss ("X") and the Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
10
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in
any amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this
Agreement will be made in the relevant currency specified in this Agreement for
that payment (the "Contractual Currency"). To the extent permitted by
applicable law, any obligation to make payments under this Agreement in the
Contractual Currency will not be discharged or satisfied by any tender in any
currency other than the Contractual Currency, except to the extent such tender
results in the actual receipt by the party to which payment is owed, acting in a
reasonable manner and in good faith in converting the currency so tendered into
the Contractual Currency, of the full amount in the Contractual Currency of all
amounts payable in respect of this Agreement. If for any reason the amount in
the Contractual Currency so received falls short of the amount in the
Contractual Currency payable in respect of this Agreement, the party required to
make the payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be necessary to
compensate for the shortfall. If for any reason the amount in the Contractual
Currency so received exceeds the amount in the Contractual Currency payable in
respect of this Agreement, the party receiving the payment will refund promptly
the amount of such excess.
(b) Judgments. To the extent permitted by applicable law, if any
judgment or order expressed in a currency other than the Contractual Currency
is rendered (i) for the payment of any amount owing in respect of this
Agreement, (ii) for the payment of any amount relating to any early termination
in respect of this Agreement or (iii) in respect of a judgment or order of
another court for the payment of any amount described in (i) or (ii) above, the
party seeking recovery, after recovery in full of the aggregate amount to which
such party is entitled pursuant to the judgment or order, will be entitled to
receive immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency and will refund promptly to the other party any excess of
the Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and
costs of exchange payable in connection with the purchase of or conversion into
the Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law,
these indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.
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9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable and may
be executed and delivered in counterparts (including by facsimile transmission)
or be created by an exchange of telexes or by an exchange of electronic messages
on an electronic messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The parties will
specify therein or through another effective means that any such counterpart,
telex or electronic message constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power
or privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organisation of such party, the
obligations of such party are the same as if it had entered into the Transaction
through its head or home office. This representation will be deemed to be
repeated by such party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
12
to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date the mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Address. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:-
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section (3) of the Civil
Jurisdiction and Judgments Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdiction preclude the bringing of Proceedings
in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
13
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgement) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement, but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to such
recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organised, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).
"Law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"Lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (for gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and out-
of-pocket expenses referred to under Section 11. A party will determine its Loss
as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have
15
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but without limitation, any payment or delivery that would, but for the
relevant Early Termination Date, have been required (assuming satisfaction of
each applicable condition precedent) after that Early Termination Date is to be
included. The Replacement Transaction would be subject to such documentation as
such party and the Reference Market-maker may, in good faith, agree. The party
making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it)
if it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotations in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable from among such
dealers having an office in the same city.
"Relevent Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through wich such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means 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 (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: .
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for wich a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
16
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only on
party is obliged to make a determination under Section 6(e), be selected in good
faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by such delivery to such party on or prior to such Early Termination
Date and which has not been so settled as at such Early Termination Date, an
amount equal to the fair market
17
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b)
above shall be reasonably determined by the party obliged to make the
determination under Section 6(e) or, if each party is so obliged, it shall be
the average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
Xxxxxx Brothers Financial Products, Inc. IKON Receivables, LLC
----------------------------------------- ----------------------------------------------
(Name of Party) (Name of Party)
By: /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxxxx Xxxxxxx
----------------------------------------- ----------------------------------------------
Name: Xxxxxxxx X. Xxxxx Name: Xxxxxx Xxxxxxx
Title: Vice President Title: Treasurer
Date: Date:
18
Schedule
to the
Master Agreement
dated as of October 7, 1999
between
Xxxxxx Brothers Financial Products Inc. and IKON Receivables, 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 Credit
Support Provider 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 the purpose 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 will apply as
follows. The occurrence of any of the following events (each 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) Party A (including any successor to Party A under this Agreement as a
result of any merger, consolidation or transfer of assets involving
Party A) at any time is rated below the applicable Specified Rating
(as so defined) by any of the Rating Agencies (as so defined); or
(ii) any of the Rating Agencies withdraws its rating for the Specified
Rating of Party A.
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 Party A and related "Specified Ratings" are as
follows:
Specified Rating Specified Rating and Rating Agency
---------------- ----------------------------------
long-term credit rating "A-" -- S&P
"A3" -- 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 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) 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, Party A shall, at its own cost or
benefit, either (x) on or before the 30th day after the date of such
Downgrade, cause a substitute swap counterparty ("X") that (i) is
reasonably acceptable to Party B and the Credit Support Provider, (ii) has
a long-term unsecured 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 Transaction
with a transaction on identical terms, with X to be "Party A"; or (y) on or
before the 7th business day after the date of such Downgrade, deliver
credit support to the extent set forth in the Credit Support Annex (the
"Credit Support Annex") between Party A and Party B, which will reflect the
terms of that certain letter agreement dated as of the date hereof between
the Credit Support Provider and Party A and which will be completed by
November 1, 1999 and will be attached hereto, in either case in such manner
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
2
their respective ratings of the Notes to the ratings in effect immediately
before the Downgrade. For this purpose, "Notes" means the IKON Receivables,
LLC Lease-Backed Notes, Series 1999-2.
(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 no Payee Tax Representation.
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
October 1, 1999 among Party B, IOS Capital, Inc. ("IOS") and Xxxxxx Trust
and Savings Bank (the "Indenture") and (2) the Assignment and Servicing
Agreement dated as of October 1, 1999 among Party B, IOS Capital, Inc. and
IKON Receivables-1, 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.
3
Part 4
Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a):
(i) Addresses for notices or communications to Party A:
Xxxxxx Brothers Financial Products Inc.
3 World Financial Center, 8th Floor
New York, New York 10285
(ii) Address for notices or communications to Party B:
IKON Receivables, LLC
0000 Xxxx Xxxx
X.X. Xxx 0000
Xxxxx, Xxxxxxx 00000
With a copy to:
General Counsel
IKON Office Solutions, Inc.
00 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
With a copy to the 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):
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: the Credit Support Annex.
With respect to Party B: that certain Financial Guaranty Insurance Policy
issued by Ambac Assurance Corporation in favor of Party A dated as of
October 7, 1999 (the "Policy"), as the same may be amended from time to
time.
4
(g) Credit Support Provider.
Credit Support Provider in relation to Party A: Not applicable.
Credit Support Provider in relation to Party B: Ambac Assurance
Corporation, a Wisconsin stock insurance corporation, 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, 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 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.
5
(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 swap participant" as defined in Section 35.1(b)(2)
of the CFTC Regulations.
(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.
(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
6
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
Credit Support Provider" 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 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.
(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.
(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 Credit Support Provider.
(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.
7
(r) Credit Support Provider.
(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
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 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 Credit Support Provider shall be
obligated to pay interest on such amounts at the Default Rate minus
1.00%.
(iii) Party A and Party B hereby acknowledge and agree that (a) the 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 (b) the Credit Support Provider's
obligations with respect to this Agreement and the Confirmation shall
be limited to the terms of the Policy.
(iv) Party A and Party B hereby acknowledge that to the extent of payment
made by the Credit Support Provider to Party A under the Policy, the
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 Credit Support Provider its right to receive
payment from Party B under the Transaction to the extent of any
payment thereunder by the Credit Support Provider to Party A. Party B
hereby acknowledges and consents to the assignment by Party A to the
Credit Support Provider of any rights and remedies that Party A has
under the Transaction or any other document executed in connection
herewith.
(v) The representations of Section 3 made by each party to the other
party shall also be deemed made to the Credit Support Provider 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 Credit Support Provider."
(vii) Party A and Party B hereby confirm that in the event Party B fails to
make a payment required by this Agreement or the Confirmation and the
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.
8
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, LLC, as Issuer
By: IKON RECEIVABLES FUNDING, INC., its
Manager
By /s/ Xxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
XXXXXX BROTHERS FINANCIAL PRODUCTS
INC.
By /s/ Xxxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
9
October 7, 1999
Rate Swap Transaction
IKON RECEIVABLES, LLC, a Delaware
Limited Liability Company (the "Issuer"),
formed pursuant to that certain Limited
Liability Company Agreement dated as of
April 23, 1999 between IKON Receivables
Funding, Inc., as Manager and IKON
Receivables-1, LLC.
Ladies and Gentlemen:
The purpose of this letter agreement (this "Confirmation") is to confirm
the terms and conditions of the transaction entered into between us on the Trade
Date specified below (the "Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the Master Agreement specified below.
The definitions and provisions contained in the 1998 Supplement to the 1991
ISDA Definitions and the 1991 ISDA Definitions (each, as published by the
International Swaps and Derivatives Association, Inc.) are incorporated into
this Confirmation (referred to herein as the "1998 ISDA Definitions" and the
"1991 ISDA Definitions" respectively, or collectively referred to as the "ISDA
Definitions"). For these purposes, all references in those Definitions to a
"Swap Transaction" shall be deemed to apply to the Transaction referred to
herein. In the event of any inconsistency between the 1998 ISDA Definitions and
the 1991 ISDA Definitions, the 1998 ISDA Definitions shall prevail. In the
event of any inconsistency between the ISDA Definitions and this Confirmation,
this Confirmation will govern. Each party represents and warrants to the other
that (i) it is duly authorized to enter into the Transaction and to perform its
obligations hereunder and (ii) the person executing and delivering this
Confirmation on behalf of the party is duly authorized to execute and deliver
it.
1. This Confirmation supplements, forms part of, and is subject to, the
Master Agreement dated as of October 7, 1999, as amended and supplemented from
time to time (the "Agreement"), between the Issuer and Xxxxxx Brothers Financial
Products Inc. ("LBFP"). All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Notional Amount: For each Calculation Period, the aggregate outstanding
principal balance of the IKON Receivables, LLC Lease-Backed
Notes, Series 1999-2 Class A-3b Notes (the "Issuer
Securities") used as the basis for calculating the regularly
scheduled Class A-3b Interest Payments 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
(subject to part 5b hereof) to LBFP 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 U.S.$240,891,000.
Trade Date: September 30, 1999.
Effective Date: October 7, 1999.
Termination Date: The earlier of the date on which the Notional Amount is
reduced to zero, and August 15, 2003, subject to adjustment
in accordance with the Following Business Day Convention.
Fixed Amounts:
-------------
Fixed Rate Payer: The Issuer.
Fixed Rate: 6.27% per annum.
Day Count Fraction: 30/360
Fixed Rate Payer
Period End Dates: The 15th calendar day of each month in each year prior
to and including the Termination Date, commencing on
November 15, 1999, with No Adjustment.
Fixed Rate Payer
Payment Dates: Each Fixed Rate Payer Period End Date, subject to
adjustment in accordance with the Following Business Day
Convention.
Fixed Rate Payer
Initial Calculation Period: Accrues from and including October 7, 1999 to but
excluding November 15, 1999, with No Adjustment of
Period End Dates.
2
Floating Amounts:
----------------
Floating Rate Payer: LBFP.
Floating Rate Payer
Period End Dates
and Payment Dates: Same as Fixed Rate Payer Period End Dates and Payment
Dates. Accrues from and including October 7, 1999, to
but excluding, November 15, 1999, with No Adjustment of
Period End Dates.
Floating Rate
Payer Initial Calculation Period: Accrues from and including October 7, 1999,
to but excluding, November 15, 1999, with No
Adjustment of Period End Dates.
Floating Rate Option USD-LIBOR-BBA
Designated Maturity One Month
Spread: None
Floating Rate
Day Count Fraction: Actual /360
Reset Dates: The first day of each Calculation Period.
Business Days: New York.
Calculation Agent: LBFP, except as otherwise provided in the Agreement.
3. Account Details
Account for Payments to the Issuer:
Xxxxxx Trust and Savings Bank
ABA# 000-000-000
DDA# 000-000-0
Reference: Collection Account; IKON Receivables, LLC Lease-Backed
Notes, Series 1999-2
Account for Payments to LBFP:
The Chase Manhattan Bank
3
ABA # 000-000-000
Account # 000-000-000
Reference: IKON Receivables, LLC Lease-Backed Notes, Series 1999-2
4. Offices
The Office of LBFP for the Transaction is its New York Branch, at the
address specified for notices to it in the Schedule to the Agreement. The Office
of the Issuer for the Transaction is its office at the address specified for
notices to it in the Schedule to the Agreement.
5. Other Terms
The Assignment and Servicing Agreement dated as of October 7, 1999 (the
"Assignment and Servicing Agreement") by and among IKON Receivables, LLC, IOS
Capital, Inc., as originator and servicer, and IKON Receivables-1 LLC, as
seller, sets forth the agreement of IOS Capital, Inc., as Servicer, with respect
to its duties to communicate to the Issuer and LBFP 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.
THE AGREEMENT AND THIS CONFIRMATION REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR OR CONTEMPORANEOUS
WRITTEN OR ORAL AGREEMENTS BETWEEN THE PARTIES OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us or by sending to us a letter or telex substantially
similar to this letter, which letter or telex sets forth the material terms of
the Transaction to which this Confirmation relates and indicates agreement to
those terms.
4
Yours sincerely,
XXXXXX BROTHERS FINANCIAL PRODUCTS INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
Confirmed as of the date first
above written:
IKON RECEIVABLES, LLC, as Issuer
By: IKON RECEIVABLES FUNDING, INC., its Manager
By: /s/ Xxxxxx Xxxxxxx
------------------
Name: Xxxxxx Xxxxxxx
Title: Treasurer
5
October 7, 1999
Rate Swap Transaction
Ladies and Gentlemen:
The purpose of this letter agreement (this "Confirmation") is to confirm
the terms and conditions of the transaction entered into between us on the Trade
Date specified below (the "Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the Master Agreement specified below.
The definitions and provisions contained in the 1998 Supplement to the
1991 ISDA Definitions and the 1991 ISDA Definitions (each, as published by the
International Swaps and Derivatives Association, Inc.) are incorporated into
this Confirmation (referred to herein as the "1998 ISDA Definitions" and the
"1991 ISDA Definitions" respectively, or collectively referred to as the "ISDA
Definitions"). For these purposes, all references in those Definitions to a
"Swap Transaction" shall be deemed to apply to the Transaction referred to
herein. In the event of any inconsistency between the 1998 ISDA Definitions and
the 1991 ISDA Definitions, the 1998 ISDA Definitions shall prevail. In the event
of any inconsistency between the ISDA Definitions and this Confirmation, this
Confirmation will govern. Each party represents and warrants to the other that
(i) it is duly authorized to enter into the Transaction and to perform its
obligations hereunder and (ii) the person executing and delivering this
Confirmation on behalf of the party is duly authorized to execute and deliver
it.
1. This Confirmation supplements, forms part of, and is subject to, the
Master Agreement dated as of November 1, 1997, as amended and supplemented from
time to time (the "Agreement"), between Xxxxxx Brothers Special Financing Inc.
("Party A") and IOS Capital Inc. ("Party B"). All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Trade Date: September 30, 1999
Effective Date: October 7, 1999.
Termination Date: August 15, 2003, subject to adjustment in accordance
with the Following Business Day Convention.
Notional Amount: For each Calculation Period, the difference between (a)
the aggregate outstanding principal balance of the IKON
Receivables, LLC Lease-Backed Notes, Series 1999-2
Class A-3(b) Notes (the "Issuer Securities") used as
the basis for calculating the regularly scheduled Class
A-3(b) Interest Payments 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
(subject to part 5b hereof) by the entity acting at the
relevant time as the servicer under the Assignment and
Servicing Agreement (the "Servicer"); and (b) the
Scheduled Notional in the attached schedule ("Annex
I"). The Notional Amount for the Initial Calculation
Period is U.S.$0.00.
Fixed Amounts -
---------------
Fixed Rate Payer: On the first day of each Calculation Period, if the
Notional Amount for a Calculation Period is a positive
number, Party A shall pay such amount to Party B on the
Fixed Rate Payer Payment Date. If the Notional Amount
for a Calculation Period is a negative number, Party B
shall pay the absolute value of such amount to Party A
on the Fixed Rate Payer Payment Date.
Fixed Rate: 6.22%
Fixed Rate
Day Count Fraction: 30/360
Fixed Rate Payer
Period End Dates: The fifteenth calendar day of each month in each year
prior to and including the Termination Date, commencing
on November 15, 1999, with No Adjustment of Period End
Dates
2
Fixed Rate Payer
Payment Dates: Each Fixed Rate Payer Period End Date, subject to
adjustment in accordance with the Following Business
Day Convention
Fixed Rate Payer initial
Calculation Period: Accrues from and including October 7, 1999, to but
excluding November 15, 1999, with No Adjustment of
Period End Dates
Floating Amounts -
Floating Rate Payer: On the first day of each Calculation Period, if the
Notional Amount for a Calculation Period is a positive
number, Party B shall pay such amount to Party A on the
Floating Rate Payer Payment Date. If the Notional
Amount for a Calculation Period is a negative number,
Party A shall pay the absolute value of such amount to
Party B on the Floating Rate Payer Payment Date.
Floating Rate Payer
Period End Dates
and Payment Dates: Same as Fixed Rate Payer Period End Dates and Payment
Dates.
Floating Rate Payer initial
Calculation Period: Accrues from and including October 7, 1999, to but
excluding November 15, 1999, with No Adjustment of
Period End Dates
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: None
Floating Rate
Day Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Business Days: New York.
Calculation Agent: Party A, except as otherwise provided in the Agreement.
Credit Support Document: With respect to Party A, the Guarantee of Xxxxxx
Brothers Holdings Inc. provided by Party A
3. Account Details
3
Account for Payment to IOS Capital:
Account for Payments to LBSF: Chase Manhattan Bank
ABA # 021 000 021
Xxxxxx Brothers Special Financing Inc.
Account # 066-143543
4. Offices
The Office of Party A for the Transaction is its New York Branch, at the
address specified for notices to it in the Schedule to the Agreement. The Office
of Party B for the Transaction is its office at the address specified for
notices to it in the Schedule to the Agreement.
THE AGREEMENT AND THIS CONFIRMATION REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR OR
CONTEMPORANEOUS WRITTEN OR ORAL AGREEMENTS BETWEEN THE PARTIES OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us or by sending to us a letter or telex substantially
similar to this letter, which letter or telex sets forth the material terms of
the Transaction to which this Confirmation relates and indicates agreement to
those terms.
4
Annex I Ref: 80361/80363
Initial Date of
Calculation
Period Notional Amount
-------------------------------------------
10/7/99 $240,891,000
11/15/99 $240,891,000
12/15/99 $240,891,000
1/15/00 $240,891,000
2/15/00 $240,891,000
3/15/00 $240,891,000
4/15/00 $240,891,000
5/15/00 $240,891,000
6/15/00 $240,891,000
7/15/00 $240,891,000
8/15/00 $240,891,000
9/15/00 $240,891,000
10/15/00 $240,891,000
11/15/00 $240,125,844
12/15/00 $228,027,385
1/15/01 $216,074,313
2/15/01 $204,301,936
3/15/01 $192,706,693
4/15/01 $181,334,925
5/15/01 $170,134,015
6/15/01 $159,134,268
7/15/01 $148,335,211
8/15/01 $137,769,162
9/15/01 $127,384,946
10/15/01 $117,249,714
11/15/01 $107,310,050
12/15/01 $ 97,577,824
1/15/02 $ 88,152,304
2/15/02 $ 79,029,068
3/15/02 $ 70,263,912
4/15/02 $ 62,011,402
5/15/02 $ 54,173,103
6/15/02 $ 46,753,790
7/15/02 $ 39,794,554
8/15/02 $ 33,159,187
9/15/02 $ 26,721,422
10/15/02 $ 20,555,063
11/15/02 $ 14,571,521
12/15/02 $ 8,761,151
1/15/03 $ 3,219,836
2/15/03 $0
3/15/03 $0
4/15/03 $0
5/15/03 $0
6/15/03 $0
Page 1 of 2
Annex I Ref: 80361/80363
7/15/03 $0
8/15/03 $0
Page 2 of 2
Yours sincerely,
XXXXXX BROTHERS SPECIAL FINANCING INC.
By: /s/ Xxxxxx Xxxxxxx
------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Confirmed as of the date first
above written:
IOS Capital Inc.
By: /s/ X. X. Xxxxx
---------------
Name: X. X. Xxxxx
Title: Treasurer
LB Ref: 80361/80363 - Global 36517/36521
5
