[EXECUTION COPY]
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement dated as of May 13, 2002 among IKON
Office Solutions, Inc., an Ohio corporation ("IKON"), and Deutsche Bank
Securities Inc., Banc of America Securities LLC and X.X. Xxxxxx Securities Inc.
(collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated as of
May 7, 2002 (the "Purchase Agreement") among IOS Capital, LLC, a Delaware
limited liability company ("IOSC"), IKON and the Initial Purchasers, which
provides for the sale by IOSC to the Initial Purchasers of $300,000,000
aggregate principal amount of 5% Convertible Subordinated Notes Due 2007 (the
"Firm Securities"), which are convertible into Common Stock of IKON, no par
value (the "IKON Common Stock"), and also provides for the sale to Deutsche Bank
Securities Inc. of up to an additional $50,000,000 principal amount of the 5%
Convertible Subordinated Notes Due 2007 which Deutsche Bank Securities Inc. may
elect to purchase pursuant to the terms of the Purchase Agreement (the "Option
Securities" and together with the Firm Securities, the "Securities"). The
Securities are being issued pursuant to an Indenture dated as of May 13, 2002
(the "Indenture") among IOSC, IKON and Deutsche Bank Trust Company Americas, as
trustee (the "Trustee").
In order to induce the Initial Purchasers to enter into the Purchase
Agreement, IKON has agreed to provide the registration rights set forth in this
Agreement for the benefit of the Initial Purchasers and any subsequent holders
of the Securities and holders of the IKON Common Stock issuable upon conversion
of the Securities. The execution of this Agreement is a condition to the
obligation of the Initial Purchasers to purchase the Firm Securities under the
Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York City are
authorized or obligated by law or executive order to close.
"Closing Date" means May 13, 2002, the date the Firm Securities were
sold pursuant to the Purchase Agreement.
"Conversion Price" has the meaning set forth in the Indenture.
"Damages Payment Date" has the meaning set forth in Section 3(b)
hereof.
"Effectiveness Deadline" means 180 days after the Closing Date as set
forth in Section 2(c) hereof.
"Effectiveness Period" has the meaning set forth in Section 2(c)
hereof.
"Electing Holder" means a holder that has delivered a signed Notice and
Questionnaire to IKON.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Filing Deadline" means 90 days after Closing Date as set forth in
Section 2(a) hereof.
"Holder" means any beneficial owner of Registrable Securities.
"Liquidated Damages" has the meaning set forth in Section 3(a) hereof.
"Managing Underwriters" means the investment bank or investment banks
that shall administer an underwritten offering, if any, as set forth in Section
9 hereof.
"Notice and Questionnaire" means a Selling Securityholder Notice and
Questionnaire substantially in the form of Appendix I to the Confidential
Offering Memorandum of IOSC and IKON issued May 7, 2002 relating to the
Securities, or a written notice in another form, that has been approved by IKON,
containing substantially the same information or such other information
reasonably required by IKON regarding a Holder and its plans for distributing
the Registrable Securities.
"Person" means an individual, partnership, limited liability company,
corporation, association, trust, joint venture or any other unincorporated
organization or entity.
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"Prospectus" means the prospectus included in the Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.
"Record Date" means each April 15 and October 15.
"Record Holder" means with request to any Damages Payment Date relating
to any Security or Registrable Security as to which any Liquidated Damages have
accrued, the registered holder of such Security or Registrable Security, as the
case may be, on the Record Date next preceding the Damages Payment Date;
provided that if Liquidated Damages have accrued on a Registrable Security that
was issued after the Record Date next preceding the Damages Payment Date, Record
Holder means the registered holder of such Registrable Security at close of
business on the first date on which the Registrable Security was outstanding
during the period beginning on the Record Date and ending on the Damages Payment
Date.
"Registrable Securities" means the shares of IKON Common Stock issuable
upon conversion of the Securities that are Restricted Securities.
"Registration Default" has the meaning set forth in Section 3(a)
hereof.
"Restricted Securities" means any and all shares of IKON Common Stock
issuable upon conversion of the Securities, except any share of IKON Common
Stock that (i) has been registered under the Securities Act and transferred in
accordance with the Shelf Registration Statement; (ii) has been transferred
pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A)
under the Securities Act; or (iii) may be transferred pursuant to Rule 144(k)
under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"Shelf Registration Statement" means the registration statement filed
by IKON with the SEC that covers the resale of the Registrable Securities
pursuant to Section 2 and the other provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration statement, including
post-
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effective amendments, all exhibits, and all material incorporated by reference
or deemed to be incorporated by reference in such registration statement.
"Special Counsel" means Xxxxx Xxxx & Xxxxxxxx, as special counsel to
the Initial Purchasers, or such other special counsel as may be designated by
the holders of a majority of the Voting Securities.
"Trustee" means Deutsche Bank Trust Company Americas until a successor
trustee shall have become such pursuant to the applicable provisions of the
Indenture, and thereafter Trustee shall mean such successor trustee.
"Voting Securities" means as of any time the Securities and the
Registrable Securities then issued and outstanding. For purposes of determining
a majority of the Voting Securities, holders of the Securities shall be deemed
to hold the number of shares of Registrable Securities into which such
Securities would be convertible as of the time such determination is made.
SECTION 2. Shelf Registration.
(a) As promptly as practicable and, subject to Section 4(a), in no
event later than 90 days after the Closing Date (the "Filing Deadline"), IKON
shall prepare and file with the SEC a registration statement under the
Securities Act for an offering to be made on a delayed or continuous basis
pursuant to Rule 415 (or any similar rule that may be adopted by the SEC) under
the Securities Act covering all of the Registrable Securities (the "Shelf
Registration Statement").
(b) The Shelf Registration Statement shall be on Form S-3 or another
appropriate form permitting registration of the Registrable Securities for
resale by Holders in the manner or manners designated by them (including,
without limitation, underwritten offerings). IKON shall not permit any
securities other than the Registrable Securities to be included in the Shelf
Registration Statement.
(c) IKON shall use all reasonable efforts to cause the Shelf
Registration Statement to become effective under the Securities Act as soon as
practicable and in no event later than 180 days after the Closing Date (the
"Effectiveness Deadline") and, subject to Section 2(d) and 2(f), shall keep the
Shelf Registration Statement continuously effective and the Prospectus
continuously available for use by Holders to transfer Registrable Securities,
until the earlier of (i) the transfer pursuant to the Shelf Registration
Statement of all the securities registered thereunder, (ii) the expiration of
the holding period under Section 144(k) of the Securities Act applicable to the
last Registrable Securities issued upon conversion of Securities and (iii) the
date there are no longer any Registrable Securities outstanding or issuable;
such period the "Effectiveness Period." If a shelf registration statement filed
by IKON under this Section 2 ceases to be effective
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during the Effective Period and the effectiveness of the shelf registration
statement cannot be reinstated, IKON shall promptly file a substitute shelf
registration statement and shall use all reasonable efforts to cause the
replacement shelf registration statement to become effective as soon as
practicable and continuously effective for the balance of the Effectiveness
Period.
(d) IKON may suspend use of the Prospectus due to pending material
corporate developments or any material event that has not yet been publicly
disclosed, whether in whole or in part. Promptly after any such suspension, IKON
will deliver a certificate in writing, signed by an authorized officer of IKON,
to the Holders of Registrable Securities, the holders of the Securities, the
Trustee and the Special Counsel stating that such an event (without notice of
the nature or details of such event) has taken or is taking place and the length
of time of suspension of the use of the Prospectus. IKON will use reasonable
efforts to ensure that use of the Prospectus may be resumed as promptly as is
practicable. The period of time that the Prospectus is not available for sales
as a result of events under this Section 2(d) shall not exceed in the aggregate
30 days in any 90 day period, for a total of not more than 60 days in any
calendar year.
(e) IKON shall supplement or make amendments to any Shelf Registration
Statement if required by the Securities Act.
(f) Each Holder may elect to have any of its Registrable Securities
included for transfer pursuant to the Shelf Registration Statement and related
Prospectus by completing and delivering a signed Notice and Questionnaire to
IKON at least five Business Days prior to any intended transfer under the Shelf
Registration Statement. For purposes of this Agreement, an "Electing Holder" is
a Holder that has delivered to IKON a completed and signed Notice and
Questionnaire in accordance with this Section 2(f). IKON shall not be required
to name any Holder that has not become an Electing Holder as a selling
securityholder in the Shelf Registration Statement or related Prospectus. At the
time the Shelf Registration Statement becomes effective under the Securities
Act, IKON shall name each Holder that became an Electing Holder at least ten
Business Days prior to effectiveness as a selling securityholder in the Shelf
Registration Statement and the related Prospectus in such a manner as to permit
such Holder to deliver the Prospectus to purchasers of Registrable Securities.
After the Shelf Registration Statement has been declared effective, IKON will,
within five Business Days of the receipt from a Holder of a signed Notice and
Questionnaire, name such Holder as a selling securityholder in the Shelf
Registration Statement and the related Prospectus in such manner as to permit
such Holder to deliver the Prospectus upon transfers of Registrable Securities.
If IKON receives a Notice and Questionnaire from a Holder when the use of the
Prospectus has been suspended in accordance with Section 2(d), IKON will name
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such Holder as a selling securityholder in the Shelf Registration Statement and
the related Prospectus within five Business Days after the date on which the
permitted suspension is no longer in effect.
(g) If at any time the Securities are convertible into securities
other than IKON Common Stock, IKON shall, or shall cause any successor under the
Indenture to, grant the beneficial owners of such securities registration rights
as nearly equivalent as possible to the rights of Holders of Registrable
Securities under this Agreement no later than the date on which the Securities
may then be convertible into such securities.
SECTION 3. Liquidated Damages.
(a) IKON and the Initial Purchasers agree that the holders of
Registrable Securities and any outstanding Securities will suffer damages if
IKON fails to fulfill its obligations under Section 2 hereof and that it would
not be feasible to ascertain the extent of such damages with precision.
Accordingly, IKON agrees to pay liquidated damages ("Liquidated Damages"), to
the fullest extent permitted by applicable law, to the holders of outstanding
Registrable Securities and any outstanding Securities under the circumstances
and to the extent set forth below (each of which shall be given independent
effect; each a "Registration Default"):
(i) if IKON fails to file the Shelf Registration Statement on
or prior to the Filing Deadline, then commencing on the day after the
Filing Deadline, Liquidated Damages shall accrue on each outstanding
share of Registrable Securities and any outstanding Securities until
such failure is cured;
(ii) if IKON fails to have the Shelf Registration Statement
declared effective by the SEC on or prior to the Effectiveness
Deadline, then commencing one day after the Effectiveness Deadline,
Liquidated Damages shall accrue on each outstanding share of
Registrable Securities and any outstanding Securities until such
failure is cured; or
(iii) if the Shelf Registration Statement fails to be effective
or for any other reason the Shelf Registration Statement or the
Prospectus ceases to be usable in connection with transfers of
Registrable Securities, in either case at any time during the
Effectiveness Period (other than as permitted under Section 2(d)), then
Liquidated Damages shall accrue on each outstanding share of
Registrable Securities and any outstanding Securities commencing on the
day such Shelf Registration Statement fails to be effective or the
Shelf Registration Statement or the Prospectus ceases to be usable
until such failure is cured.
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Liquidated Damages under this Section 3(a) shall accrue at a rate of 0.50% per
annum on (1) the Conversion Price on each outstanding share of Registrable
Securities and (2) the principal amount of any outstanding Securities,
regardless of the number of concurrent Registration Defaults. In calculating
Liquidated Damages on the Registrable Securities on any date on which no
Securities are outstanding, the Conversion Price shall be calculated as if the
Securities were continuously outstanding to the date of calculation, giving
effect to any Conversion Price adjustments set forth in the Indenture as if the
Indenture continued to be in effect.
(b) So long as any Securities remain outstanding, IKON shall notify
the Trustee within two Business Days after each date on which an event occurs in
respect of which Liquidated Damages are required to be paid. Any amounts of
Liquidated Damages due pursuant to this Section 3 will be payable in cash
semi-annually on each May 1 and November 1 (each a "Damages Payment Date"),
commencing with the first such date occurring after any such Liquidated Damages
accrue, to the Record Holders of the outstanding Securities and outstanding
Registrable Securities entitled thereto; provided that any Liquidated Damages
accrued with respect to any Security or portion thereof redeemed by IOSC, or
converted into Registrable Securities, after the record date for a Damages
Payment Date, but before the Damages Payment Date, shall instead be paid to the
holder of the Security who submitted the Security for redemption or conversion.
Liquidated Damages shall be determined on the basis of a 360-day year comprising
twelve 30-day months and the actual number of days on which a Registration
Default exists.
SECTION 4. Registration Procedures. In connection with the registration
obligations pursuant to Section 2 hereof, IKON shall:
(a) Prepare and file with the SEC on or prior to the Filing Deadline,
a Shelf Registration Statement as prescribed by Section 2 hereof, and use its
reasonable best efforts to cause the Shelf Registration Statement to become
effective and remain effective as provided herein; provided that before filing
the Shelf Registration Statement or Prospectus or any amendments or supplements
thereto, IKON shall furnish to and afford the Initial Purchasers and the
Managing Underwriters, if any, a reasonable opportunity to review copies of all
such documents proposed to be filed (in each case at least five Business Days
prior to such filing, or such later date as is reasonable under the
circumstances). IKON shall not file the Shelf Registration Statement or any
Prospectus or any amendments to supplements thereto to which the Initial
Purchasers or the Managing Underwriters, if any, shall reasonably object.
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(b) Prepare and file with the SEC such amendments and post-effective
amendments to the Shelf Registration Statement as may be necessary to keep the
Shelf Registration Statement continuously effective during the Effectiveness
Period; cause the related Prospectus to be supplemented by any prospectus
supplement required by applicable law, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) promulgated under
the Securities Act; and comply with the provisions of the Securities Act and the
Exchange Act applicable to it with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such Prospectus as so
supplemented.
(c) Notify each Electing Holder and the Managing Underwriters, if any,
promptly (but in any event within two Business Days):
(i) when a Prospectus or any prospectus supplement or
post-effective amendment has been filed and, when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective under the Securities Act (including in such notice a
written statement that any Electing Holder may, upon request, obtain,
at the sole expense of IKON, one conformed copy of the Shelf
Registration Statement or post-effective amendment, including financial
statements and schedules, documents incorporated or deemed to be
incorporated by reference therein and exhibits);
(ii) of the issuance by the SEC of any stop order suspending
the effectiveness of the Shelf Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the
initiation of any proceedings for that purpose;
(iii) of the receipt by IKON of any notification with respect to
the suspension of the qualification or exemption from qualification of
any of the Registrable Securities for sale or exchange in any
jurisdiction of the United States of America or the initiation of any
proceeding for such purpose;
(iv) of the happening of any event, the existence of any
condition or any information becoming known (without providing notice
of the nature or details of such event, condition or information) that
makes any statement made in the Shelf Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires
the making of any changes in or amendments or supplements to the Shelf
Registration Statement or Prospectus so that such documents will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated
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therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and
(v) of IKON's determination that a post-effective amendment to
the Shelf Registration Statement would be appropriate.
(d) Use its reasonable best efforts to prevent the issuance of any
order suspending the effectiveness of the Shelf Registration Statement or of any
order preventing or suspending the use of the Prospectus or any order suspending
the qualification (or exemption from qualification) of any Registrable
Securities for sale or exchange in any jurisdiction in the United States of
America and, if any such order is issued, to use its reasonable best efforts to
obtain the withdrawal of any such order at the earliest possible moment.
(e) If requested by any Electing Holder or Managing Underwriter, if
any:
(i) promptly incorporate in a prospectus supplement or
post-effective amendment to the Shelf Registration Statement such
information such Electing Holder or Managing Underwriter reasonably
determines is necessary to be included therein;
(ii) make all required filings of such prospectus supplement or
such post-effective amendment as soon as IKON has received notification
of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and
(iii) supplement or make amendments to the Shelf Registration
Statement as required by applicable law.
(f) Furnish to each Electing Holder upon request, and to the Special
Counsel, at the sole expense of IKON, one conformed copy of the Shelf
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules and, if requested, all documents incorporated
or deemed to be incorporated therein by reference and all exhibits.
(g) Deliver to each Electing Holder, the Special Counsel and the
underwriters, if any, selling any Registrable Securities, at the sole expense of
IKON, as many copies of the Prospectus (including each preliminary prospectus)
and each amendment or supplement thereto and any documents incorporated by
reference therein as such Persons may reasonably request; and, subject to
Section 2(d) hereof, IKON hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each Electing Holder in connection with the
offering and sale of the Registrable Securities covered by such Prospectus or
any amendment or supplement thereto.
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(h) Prior to any public offering of Registrable Securities, to use its
reasonable best efforts to register or qualify and to cooperate with the
Electing Holders and the Managing Underwriters, if any, in connection with the
registration for qualification (or exemption from such registration or
qualification) of such Registrable Securities or offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Electing Holder may reasonably request; keep each such registration or
qualification (or exemption therefrom) effective during the period the Shelf
Registration Statement is required to be kept effective and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities; provided that IKON shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction where it is not otherwise so qualified or
required to file such a consent.
(i) Cooperate with the Electing Holders to facilitate the timely
preparation and delivery of certificates representing the Registrable Securities
transferred under the Registration Statement, which certificates shall not bear
any restrictive legends; and enable such shares of Registrable Securities to be
in such denominations and registered in such amounts as Electing Holders may
request.
(j) Use its reasonable best efforts to cause the Registrable
Securities covered by a Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof to consummate the disposition of such Registrable
Securities.
(k) Upon the occurrence of any event contemplated by paragraph
4(c)(ii), 4(c)(iii) or 4(c)(iv), as promptly as practicable prepare and (subject
to Section 2(d) hereof) file with the SEC, at the sole expense of IKON, a
supplement or post-effective amendment to the Shelf Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, the Prospectus, as supplemented or amended, will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(l) Take all customary actions in order to expedite or facilitate the
disposition of such Registrable Securities.
(m) In connection with any underwritten offering of Registrable
Securities pursuant to the Shelf Registration Statement, enter into an
underwriting
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agreement as is customary in underwritten offerings of securities similar to the
Registrable Securities and take all such other actions as are reasonably
requested by the Managing Underwriters in order to expedite or facilitate the
registration or the disposition of such Registrable Securities and, in such
connection:
(i) make such representations and warranties to, and covenants
with, the underwriters with respect to the business of IKON and its
subsidiaries (including any acquired business, properties or entity, if
applicable) and the Shelf Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings of securities similar to the
Registrable Securities and confirm the same in writing if and when
requested;
(ii) obtain the written opinion of counsel to IKON and written
updates thereof in form, scope and substance reasonably satisfactory to
the Managing Underwriters, addressed to the underwriters covering the
matters customarily covered in opinions requested in underwritten
offerings of securities similar to the Registrable Securities and such
other matters as may be reasonably requested by the managing
underwriter or underwriters; and
(iii) obtain "cold comfort" letters and updates thereof in form,
scope and substance reasonably satisfactory to the Managing
Underwriters from the independent certified public accountants of IKON
(and, if necessary, any other independent certified public accountants
of any subsidiary of IKON or of any business acquired by IKON for which
financial statements and financial data are, or are required to be,
included or incorporated by reference in the Shelf Registration
Statement), addressed to each of the underwriters, such letters to be
in customary form and covering matters of the type customarily covered
in "cold comfort" letters in connection with underwritten offerings of
securities similar to the Registrable Securities and such other matters
as reasonably requested by the managing underwriter or underwriters as
permitted by the Statement on Auditing Standards No. 72. The above
shall be done as and to the extent required by such underwriting
agreement.
(n) Make available for inspection by any Electing Holder, any
underwriter participating in any such disposition of Registrable Securities, if
any, and any attorney, accountant or other agent retained by any such Electing
Holder, or underwriter (collectively, the "Inspectors"), at the offices where
normally kept, during reasonable business hours at such time or times as shall
be mutually convenient for IKON and the Inspectors as a group, all financial and
other records, pertinent corporate documents and instruments of IKON and its
subsidiaries
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(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise any applicable due diligence responsibilities, and cause the officers,
directors and employees of IKON and its subsidiaries to supply all information
reasonably requested by any such Inspector in connection with the Shelf
Registration Statement. Records that IKON determines, in good faith, to be
confidential and any Records that it notifies the Inspectors are confidential
shall not be disclosed by any Inspector unless:
(i) the disclosure of such Records is necessary to avoid or
correct a material misstatement or material omission in the Shelf
Registration Statement or Prospectus;
(ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction;
(iii) disclosure of such information is, in the opinion of
counsel for any Inspector, necessary or advisable in connection with
any action, claim, suit or proceeding, directly involving or
potentially involving such Inspector and arising out of, based upon,
relating to, or involving this Agreement or any transactions
contemplated hereby or arising hereunder; or
(iv) the information in such Records has been made generally
available to the public other than through the acts of such Inspector;
provided that prior notice shall be provided as soon as practicable to
IKON of the potential disclosure of any information by such Inspector
pursuant to clauses (ii) or (iii) of this sentence to permit IKON to
obtain a protective order (or waive the provisions of this paragraph
(n)). Each Inspector shall take such actions as are reasonably
necessary to protect the confidentiality of such information (if
practicable) to the extent such actions are otherwise not inconsistent
with, an impairment of or in derogation of the rights and interests of
the Holder or any Inspector, unless and until such information in such
Records has been made generally available to the public other than as a
result of a breach of this Agreement.
(o) In connection with any underwritten offering, provide (i) the
Electing Holders and the Special Counsel, (ii) the underwriters (which term, for
purposes of this Agreement, shall include a Person deemed to be an underwriter
within the meaning of Section 2(11) of the Securities Act), if any, to be used
by the Electing Holders, (iii) the sales or placement agent, if any, to be used
by the Electing Holders and (iv) one counsel for such underwriters or agents,
reasonable opportunity to participate in the preparation of any prospectus
supplement in connection with any such offering.
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(p) Cooperate with each Electing Holder and each underwriter, if any,
participating in the disposition of any Registrable Securities and their
respective counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. (the "NASD"), including, if the
Conduct Rules of the NASD or any successor thereto as amended from time to time
so require, engaging a "qualified independent underwriter" ("QIU") as
contemplated therein and making Records available to such QIU as though it were
a participating underwriter for the purposes of Section 4(n) and otherwise
applying the provisions of this Agreement to such QIU (including
indemnification) as though it were a participating underwriter.
(q) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) commencing on the first day of the first
fiscal quarter of IKON after the effective date of a Registration Statement,
which statements shall cover said 12-month periods.
(r) Use its reasonable best efforts to take all other steps necessary
or advisable to effect the registration of the Registrable Securities on the
Shelf Registration Statement contemplated hereby.
SECTION 5. Holder Obligations. (a) Each Holder agrees, by acquisition
of the Registrable Securities, and each beneficial holder of the Securities
agrees, by acquisition of the Securities, that no Holder shall be entitled to
transfer any Registrable Securities pursuant to a Registration Statement or to
receive a Prospectus relating thereto, unless such Holder has furnished IKON
with a Notice and Questionnaire as required pursuant to Section 2(f) hereof and
the information set forth in the next sentence. Each Electing Holder shall
promptly furnish to IKON all information required to be disclosed in order to
make the information previously furnished to IKON by such Electing Holder not
misleading and any other information regarding such Electing Holder and the
distribution of such Registrable Securities as IKON may from time to time
reasonably request. Any sale of any Registrable Securities by any Holder shall
constitute a representation and warranty by such Holder that the information
relating to such Holder and its plan of distribution is as set forth in the
Prospectus delivered by such Holder in connection with such disposition, that
such Prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to or provided by such Holder or its plan
of distribution and that such Prospectus does not as of the time of such sale
omit to state any material fact relating to or provided by such
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Holder or its plan of distribution necessary to make the statements in such
Prospectus, in the light of the circumstances under which they were made, not
misleading.
(b) Each Holder agrees by acquisition of the Registrable Securities
that upon actual receipt of any notice from IKON of the happening of any event
of the kind described in Sections 4(c)(ii), 4(c)(iii) or 4(c)(iv) hereof, such
holder will forthwith discontinue disposition of such Registrable Securities
covered by the Shelf Registration Statement or Prospectus and will not resume
disposition of such Registrable Securities until such holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 4(k)
hereof, or until it is advised in writing by IKON that the use of the applicable
Prospectus may be resumed.
(c) During the Effectiveness Period, each Electing Holder will
promptly (and in any case within two Business Days after completion of such sale
or other transfer) notify IKON following any sale or other transfer of
Registrable Securities under the Shelf Registration Statement or pursuant to
Rule 144 (or any similar provision then in force, but not Rule 144A under the
Securities Act).
SECTION 6. Registration Expenses. (a) All fees and expenses incident to
the performance of or compliance with this Agreement by IKON shall be borne by
IKON, including, without limitation, (i) all registration and filing fees
(including, without limitation, (A) fees with respect to filings required to be
made with the NASD in connection with an underwritten offering and (B) fees and
expenses of compliance with state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of counsel in connection
with Blue Sky qualifications of the Registrable Securities and determination of
the eligibility of the Registrable Securities for investment under the laws of
such jurisdictions as provided in Section 4(h) hereof), (ii) printing expenses,
including, without limitation, expenses of printing certificates for Registrable
Securities in a form eligible for deposit with The Depository Trust Company and
of printing prospectuses if the printing of prospectuses is requested by the
Managing Underwriters, if any, or by the Holders of a majority of the
Registrable Securities included in the Shelf Registration Statement, (iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for IKON, (v) fees and disbursements of all independent certified public
accountants referred to in Section 4(m) hereof (including, without limitation,
the expenses of any special audit and "cold comfort" letters required by or
incident to such performance), (vi) Securities Act liability insurance, if IKON
desires such insurance, (vii) fees and expenses of all other Persons retained by
IKON, (viii) internal expenses of IKON (including, without limitation, all
salaries and expenses of officers and employees of IKON performing legal or
accounting duties), (ix) the expense of any annual audit, (x) the fees and
expenses incurred in connection with the listing of the
14
securities to be registered on any securities exchange, if applicable, and (xi)
the expenses relating to printing, word processing and distributing the Shelf
Registration Statement, underwriting agreements, securities sales agreements and
any other documents necessary in order to comply with this Agreement.
Notwithstanding anything in this Agreement to the contrary, each Electing Holder
shall pay all underwriting discounts and brokerage commissions with respect to
any Registrable Securities sold by it.
(b) In connection with an underwritten offering, IKON shall reimburse
the holders of the Voting Securities for the reasonable fees and disbursements
of the Special Counsel.
SECTION 7. Indemnification. (a) IKON agrees:
(i) to indemnify and hold harmless each Holder and each
Person, if any, who controls each such Holder within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange
Act against any losses, claims, damages or liabilities to which such
Holder or controlling Person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of
or are based upon (A) any untrue statement or alleged untrue statement
of any material fact contained in the Shelf Registration Statement, any
preliminary prospectus, the Prospectus or any amendment or supplement
thereto or (B) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, that IKON will not be
liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission made in the
Shelf Registration Statement, any preliminary prospectus, the
Prospectus or such amendment or supplement, in reliance upon and in
conformity with written information furnished to IKON by any Holder or
controlling Person specifically for use in the preparation thereof;
provided further, that the indemnification contained in this paragraph
shall not inure to the benefit of any Holder (or to the benefit of any
Person controlling such Holder) on account of any such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
arising out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary
prospectus provided in each case IKON previously furnished copies of
the Prospectus to such Holder and (A) (i) such Holder failed to send or
deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale by such Holder to the person asserting
the claim from which such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise and (ii) the
15
Prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, or (B) (x) such untrue
statement or alleged untrue statement or omission or alleged omission
is corrected in an amendment or supplement to the Prospectus and (y)
having previously been furnished by or on behalf of IKON with copies of
the Prospectus as so amended or supplemented, such Holder thereafter
fails to deliver such Prospectus as so amended or supplemented, with or
prior to the delivery or written confirmation of the sale of Securities
to the person asserting the claim from which such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
arise; and
(ii) to reimburse each Holder and controlling Person upon
demand for any legal or other out-of-pocket expenses reasonably
incurred by such Holder or controlling Person in connection with
investigating or defending any such loss, claim, damage or liability,
action or proceeding or in responding to a subpoena or governmental
inquiry related to the offering of the Registrable Securities, whether
or not such Holder or controlling Person is a party to any action or
proceeding. In the event that it is finally judicially determined that
the Holder or controlling Person was not entitled to receive payments
for legal and other expenses pursuant to this subparagraph, the Holder
or controlling Person will promptly return all sums that had been
advanced pursuant hereto.
(b) Each Holder severally and not jointly will indemnify and hold
harmless IKON, each of its directors, each of its officers who have signed the
Registration Statement and each Person, if any, who controls IKON, and each
other selling Holder against any losses, claims, damages or liabilities to which
IKON, any such director, officer, controlling Person or other selling Holder may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Shelf Registration Statement,
any preliminary prospectus, the Prospectus or any amendment or supplement
thereto or (ii) the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made; and
will reimburse any legal or other expenses reasonably incurred by IKON, any such
director, officer, controlling Person or other selling Holder in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, that each Holder will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the Shelf
Registration Statement, any preliminary prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to IKON by such Holder
16
specifically for use in the preparation thereof. The liability of each Holder
under the indemnity provided under this Section 7(b) shall be limited to the
proceeds received by such Holder from the sale of the Registrable Securities
using the Shelf Registration Statement. This indemnity agreement will be in
addition to any liability which such Holder may otherwise have.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 7, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
7(a) or (b) shall be available to any party who shall fail to give notice as
provided in this Section 7(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 7(a) or (b). In case any
such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party and
shall pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred (or within 30 days of presentation) the
fees and expenses of the counsel retained by the indemnified party in the event
(i) the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
separate firm shall be designated in writing by, in the case of parties
indemnified pursuant to Section 7(a), the Holders of a majority of the
Registrable Securities seeking such indemnification and in the case of parties
indemnified pursuant to Section 7(b), IKON. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written consent
but
17
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment. In
addition, the indemnifying party will not, without the prior written consent of
the indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(d) To the extent the indemnification provided for in this Section 7
is unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) above in respect of any losses, claims, damages, liabilities
or expenses (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities
or expenses (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative fault of IKON on the one hand, and the
Holders on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by IKON on the one hand, or such Holder on the other, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses (or actions or proceedings in respect thereof) referred
to above in this Section 7(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) no Holder shall be required to contribute
any amount in excess of the proceeds received by such Holder from the sale of
Registrable Securities using the Prospectus less the amount of any damages that
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to
18
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Holders in this Section 7(d) to
contribute are several in proportion to the number of shares of Registrable
Securities sold by such Holder using the Prospectus and not joint.
(e Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 shall remain
operative and in full force and effect, regardless of (i) any investigation made
by or on behalf of any Holder or any Person controlling a Holder or by or on
behalf of IKON, its directors or officers or any Person controlling IKON and
(ii) any termination of this Agreement. A successor to any Holder or any Person
controlling any Holder, or to IKON, its directors or officers or any Person
controlling IKON, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 7.
(f IKON acknowledges and agrees that the only information furnished or
to be furnished by any Holder to IKON for inclusion in the Prospectus or the
Shelf Registration Statement consists of the information provided by such Holder
in its signed Notice and Questionnaire delivered to IKON in accordance with
Section 2(f) hereof.
SECTION 8. Rules 144 and 144A. IKON covenants that it will file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time it is not required to file such reports
but in the past had been required to or did file such reports, it will, upon the
request of any holder of Registrable Securities, make available other
information as required by, and so long as necessary to permit sales of its
Registrable Securities pursuant to, Rules 144 and 144A under the Securities Act
or, in each case, any similar rule or regulation hereafter adopted by the SEC as
a replacement thereto having substantially the same effect as such rule. IKON
further covenants that, for so long as any Registrable Securities remain
outstanding, it will use its reasonable best efforts to take such further action
as any Holder of Registrable Securities may reasonably request, all to the
extent required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 and Rule 144A under the Securities
Act, as such rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC.
SECTION 9. Underwritten Offerings. If any Registrable Securities are to
be sold pursuant to an underwritten offering, the Managing Underwriter or
underwriters thereof shall be designated by the Electing Holders that hold a
19
majority of the Registrable Securities to be included in the underwritten
offering and will be reasonably acceptable to IKON.
Each Electing Holder hereby agrees with each other Electing Holder that
no Electing Holder may participate in any underwritten offering hereunder unless
such Electing Holder (i) agrees to sell its Registrable Securities on the basis
provided in any underwriting arrangements approved by the Electing Holders that
hold a majority of the Registrable Securities to be included in the underwritten
offering and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements.
SECTION 10. Miscellaneous. (a No Inconsistent Agreements. IKON has not,
as of the date hereof, and shall not, on or after the date of this Agreement,
enter into any agreement with respect to any of its securities that is
inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof.
(b Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless IKON has obtained the written consent of holders of a majority of
the Voting Securities, provided that Section 7 and this Section 10(b) may not be
amended, modified or supplemented without the prior written consent of IKON and
each Holder (including, in the case of an amendment, modification or supplement
of Section 7, any Person who was a Holder of Registrable Securities disposed of
pursuant to any Registration Statement). Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority the Registrable
Securities being sold by such Holders.
(c Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered first
class mail, or telecopier:
(i if to a holder of Securities, at the most current address
or telecopier number of such holder set forth in the records of the
registrar under the Indenture, except with respect to the Initial
Purchasers prior to distribution of the Securities, then to the Initial
Purchasers at the address set forth on the first page of the Purchase
Agreement, Attention: Syndicate Manager, with a copy to Deutsche Bank
Securities Inc., 0 Xxxxx Xxxxxx,
00
00xx Xxxxx, Xxxxxxxxx, XX 00000, Attention General Counsel (fax: (410)
895-3619), and a copy to Xxxx Xxxx, Esq., Xxxxx Xxxx & Xxxxxxxx, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: (000) 000-0000);
(ii if to a Holder, at the most current address or telecopier
number of such Holder set forth in the records of the transfer agent
for the IKON Common Stock;
(iii if to the Trustee, c/o DB Services New Jersey Inc., 100
Plaza One - MSJCY03-0603, Xxxxxx Xxxx, Xxx Xxxxxx 00000, attention:
Xxxxx Xxxxxxx (fax: (000) 000-0000), and thereafter by such other
address, notice of which is given in accordance with the provisions of
this Section 10(c) by IOSC, the Trustee or the Conversion Agent;
(iv if to IOSC, IOS Capital, LLC, 0000 Xxxx Xxxx, Xxxxx,
Xxxxxxx 00000, attention: President (fax: (000) 000-0000), and
thereafter by such other address, notice of which is given in
accordance with the provisions of this Section 10(c);
(v if to the Special Counsel, Xxxxx Xxxx & Xxxxxxxx, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Xxxx Xxxx, Esq.
(fax: (000) 000-0000), and thereafter by such other address, notice of
which is given in accordance with the provisions of this Section 10(c);
and
(vi if to IKON, IKON Office Solutions, Inc., 00 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000, attention: Chief Financial
Officer (fax: (000) 000-0000), and thereafter by such other address,
notice of which is given in accordance with the provisions of this
Section 10(c).
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; the next Business Day
after being sent by next-day delivery by a solvent air courier; and when receipt
acknowledged, whether telecopied or otherwise (which acknowledgment may be via
electronic transmission, such as telecopier confirmation, e-mail receipt or
otherwise).
Copies of all such notices, demands or other communications shall be
concurrently delivered by the person giving the same to the Trustee under the
Indenture at the address specified in such Indenture.
(d Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including
21
without limitation and without the need for an express assignment, subsequent
Holders of Registrable Securities and subsequent holders of Securities.
(e Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(h Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
(i Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement, and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by IKON with respect to
the securities sold pursuant to the Purchase Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(j Securities Held by IKON or IOSC or their Affiliates; Calculation of
Percentage of Registrable Securities. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities or Voting Securities
is required hereunder, any Registrable Securities or Voting Securities held by
IKON, IOSC or any of their affiliates shall not be counted in determining
whether such consent or approval was given by the holders of such required
percentage or amount.
22
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
IKON OFFICE SOLUTIONS, INC.
By:
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Name:
Title:
DEUTSCHE BANK SECURITIES INC.
By:
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Name:
Title:
By:
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Name:
Title:
BANK OF AMERICA SECURITIES LLC
By:
-----------------------------------
Name:
Title:
X.X. XXXXXX SECURITIES INC.
By:
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Name:
Title:
