EXHIBIT 1.1
IKON RECEIVABLES FUNDING, LLC
$ 253,200,000 - 1.30813% Class A-1 Lease-Backed Notes, Series 2003-1
$ 26,700,000 - 1.68% Class A-2 Lease-Backed Notes, Series 2003-1
$ 206,400,000 - Variable Rate Class A-3a Lease-Backed Notes, Series 2003-1
$ 206,400,000 - 2.33% Class A-3b Lease-Backed Notes, Series 2003-1
$ 159,385,000 - 3.27% Class A-4 Lease-Backed Notes, Series 2003-1
UNDERWRITING AGREEMENT
April 16, 2003
Lehman Brothers, Inc.,
as Representative for the Underwriters
745 7th Avenue
New York, New York 10019
Ladies and Gentlemen:
IKON Receivables Funding, LLC, a limited liability company
organized and existing under the laws of Delaware (the "Issuer"), IKON
Receivables-2, LLC, a limited liability company organized and existing under the
laws of Delaware (the "Seller"), and IOS Capital, LLC, a limited liability
company organized and existing under the laws of Delaware ("IOS Capital"),
hereby agree with you as follows:
Section 1. Issuance and Sale of Notes. The Issuer has
authorized the issuance of $253,200,000 of 1.30813% Class A-1 Lease-Backed
Notes, Series 2003-1 (the "Class A-1 Notes"); $26,700,000 of 1.68% Class A-2
Lease-Backed Notes, Series 2003-1 (the "Class A-2 Notes"); $206,400,000 of
variable rate Class A-3a Lease-Backed Notes, Series 2003-1 (the "Class A-3a
Notes"); $206,400,000 of 2.33% Class A-3b Lease-Backed Notes, Series 2003-1 (the
"Class A-3b Notes" and, together with the Class A-3a Notes, the "Class A-3
Notes") and $159,385,000 of 3.27% Class A-4 Lease-Backed Notes, Series 2003-1
(the "Class A-4 Notes"; together with the Class A-1 Notes, Class A-2 Notes and
the Class A-3 Notes, the "Notes"). The Notes will be issued pursuant to an
Indenture, dated as of April 1, 2003 (the "Indenture"), among the Issuer, IOS
Capital, as Servicer, and BNY Midwest Trust Company (the "Trustee"). The Notes
are more fully described in the Final Prospectus (as defined below), a copy of
which the Issuer is furnishing to you. The Notes will evidence secured debt
obligations of the Issuer. The assets of the Issuer will include a pool of
primarily office equipment lease contracts, including certain payments due
thereunder (the "Leases"), and the Issuer's interest in the
underlying equipment (the "Equipment"). The Notes will be entitled to the
benefits of a financial guaranty insurance policy (the "Policy") issued by Ambac
Assurance Corporation ("Ambac") in accordance with the terms of an Insurance and
Indemnity Agreement among Ambac, the Issuer, the Seller, IOS Capital and the
Trustee (the "Insurance Agreement"). Capitalized terms used and not defined
herein shall have the meanings specified in the Indenture.
The Notes will be sold by the Issuer to the Underwriters in
the amounts set forth on Schedule A hereto.
The terms which follow, when used in this Underwriting
Agreement (this "Agreement"), shall have the meanings indicated:
"Base Prospectus" means the prospectus included in
the Registration Statement.
"Effective Date" means each date that the
Registration Statement and any post-effective amendment or amendments
thereto became or become effective under the Securities Act.
"Execution Time" means the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" means the Base Prospectus together
with any prospectus supplement delivered to purchasers of the Notes at
or before the time of confirmation of their purchases.
"Preliminary Prospectus" means any preliminary
prospectus supplement specifically relating to the Notes, together with
the Base Prospectus.
"Registration Statement" means the registration
statement on Form S-3 (File No. 333-71362) in respect of the Notes
filed with the Securities and Exchange Commission, including
amendments, incorporated documents, exhibits and financial statements,
in the form in which it has or shall become effective and, in the event
that any post-effective amendment thereto becomes effective prior to
the Issuance Date, shall also mean such registration statement as so
amended.
"Rule 424" refers to such rule under the Securities
Act.
"Underwriters" means Lehman Brothers Inc., J.P.
Morgan Securities Inc., Banc of America Securities LLC, Deutsche
Bank Securities Inc. and PNC Capital Markets, Inc.
"Underwriting Information" has the meaning given to
such term in Section 8(b) hereof.
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Section 2. Purchase and Sale of Notes.
(a) Subject to the terms and conditions and in reliance upon
the covenants, representations and warranties set forth herein, the Underwriters
agree to purchase from the Issuer the Notes pursuant to the terms of this
Agreement on the Issuance Date at the purchase price or prices (the "Purchase
Price") set forth on Schedule A attached hereto.
(b) The obligations of each of the Underwriters hereunder to
purchase the respective Notes shall be several and not joint. Each Underwriter's
obligation shall be to purchase the aggregate principal amount of Notes as is
indicated with respect to each Underwriter on Schedule A attached hereto. The
rights of the parties in the event of the failure on the part of the
Underwriters to purchase any Notes as contemplated herein shall be as set forth
in Section 13 hereof.
(c) It is understood that the Underwriters propose to offer
the Notes for sale to the public in the manner set forth in the Final
Prospectus.
Section 3. Delivery and Payment.
Delivery of and payment for the Notes to be purchased by the
Underwriters shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue
of the Americas, New York, New York, at 10:00 A.M., New York time, on April 23,
2003 (the "Issuance Date"). The Notes shall be delivered against payment by the
Underwriters of the Purchase Price therefor, to or upon the order of the Issuer
by one or more wire transfers in immediately available funds. Following the
Effective Date, at the request of the Underwriters, delivery of one or more
global notes (the "Global Notes") representing the Notes shall be made to the
respective accounts of the Underwriters. The Global Notes to be so delivered
shall be registered in the name of Cede & Co., as nominee for The Depository
Trust Company ("DTC"). The interests of beneficial owners of the Notes will be
represented by book entries on the records of DTC and participating members
thereof. Definitive Notes representing the Notes will be available under the
circumstances described in the Indenture.
Section 4. Representations and Warranties.
(a) The Issuer hereby represents and warrants to, and agrees
with, the Underwriters as follows:
(i) The Issuer meets the requirements for use of
Form S-3 under the Securities Act of 1933, as amended (the "Securities
Act"), and has filed with the Securities and Exchange Commission (the
"Commission") the Registration Statement, including the Base Prospectus
and form of Prospectus Supplement, on such Form S-3 for the
registration under the Securities Act of the Notes. Such Registration
Statement has been declared effective. The Issuer may have filed one or
more amendments thereto, each of which has previously been furnished to
you. The Issuer will file with the Commission either, (A) prior to the
effectiveness of such Registration Statement, a further amendment
thereto (including the form of Final Prospectus) or, (B) after
effectiveness of such
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Registration Statement, a Final Prospectus in accordance with Rule
424(b). In the case of clause (B), the Issuer will include in such
Registration Statement, as amended at the Effective Date, all
information required by the Securities Act and the rules thereunder to
be included with respect to the Notes and the offering thereof. As
filed, such amendment and form of Final Prospectus, or such Final
Prospectus, shall include all information required by the Securities
Act and, except to the extent you shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus which has previously been furnished to
you) as the Issuer has advised you, prior to the Execution Time, will
be included or made therein.
(ii) On the Effective Date, the Registration
Statement did or will comply in all material respects with the
applicable requirements of the Securities Act and the rules thereunder;
on the Effective Date and when the Final Prospectus is first filed (if
required) in accordance with Rule 424(b) and on the Issuance Date, the
Final Prospectus will comply in all material respects with the
applicable requirements of the Securities Act and the rules thereunder;
on the Effective Date, the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading; and the Final Prospectus, as of its
date and on the Issuance Date, did not or will not include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Issuer makes no representation or warranty as to the
Underwriting Information.
(iii) This Agreement has been duly authorized,
executed and delivered by the Issuer and constitutes a legal, valid and
binding agreement of the Issuer enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors rights generally and to general
principles of equity, and except that the provisions hereof relating to
indemnification of the Underwriters may be subject to limitations of
public policy.
(iv) Each of the Indenture and the Assignment and
Servicing Agreement dated as of April 1, 2003 by and among the
Originator, the Seller and the Issuer (the "Assignment and Servicing
Agreement") has been duly authorized by the Issuer and, when executed
and delivered, will constitute the legal, valid and binding obligation
of the Issuer, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors rights generally and to general principles of equity, and
each of the Indenture and the
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Assignment and Servicing Agreement conforms to the description thereof
contained in the Final Prospectus.
(v) The issuance of the Notes has been duly
authorized by the Issuer and, when duly and validly executed,
authenticated and delivered in accordance with the Indenture and this
Agreement, will be the legal, valid and binding obligations of the
Issuer, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors rights generally and to general principles of equity, and
entitled to the benefits of the Indenture.
(vi) The performance of this Agreement, the
Indenture and the Assignment and Servicing Agreement by the Issuer will
not (A) conflict with or result in a breach of, and will not constitute
a default under any of the provisions of, its certificate of formation
or any law, governmental rule or regulation, or any judgment, decree or
order binding on the Issuer or its properties, or any of the provisions
of any indenture, mortgage, deed of trust, contract or other agreement
or instrument to which the Issuer is a party or by which it is bound,
or (B) result in the creation or imposition of any Adverse Claim and no
consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required
for the issue and sale of the Notes or the consummation by the Issuer
of the transactions contemplated by this Agreement, except such
consents, approvals, authorizations, registrations or qualifications as
have been already obtained and such as may be required under the
Securities Act and under state securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by the
Underwriters. As used herein, "Adverse Claim" means a lien, pledge,
security interest or other charge or encumbrance.
(vii) The Issuer is not, and will not, as of the
Issuance Date, be, or be controlled by, an "investment company" under
the Investment Company Act of 1940, as amended (the "1940 Act").
(viii) The Indenture, when executed and delivered,
will have been duly qualified under the Trust Indenture Act of 1939.
(ix) There is no pending or threatened action,
suit or proceeding against or affecting the Issuer in any court or
tribunal or before any arbitrator of any kind or before or by any
governmental authority (i) asserting the invalidity of this Agreement,
the Assignment and Servicing Agreement, the Indenture or the Notes,
(ii) seeking to prevent the issuance of the Notes or the consummation
of any of the transactions contemplated by this Agreement, the
Assignment and Servicing Agreement or the Indenture or (iii) seeking
any determination or ruling that might materially and adversely affect
(A) its performance of its obligations under this Agreement, the
Assignment and Servicing Agreement or the Indenture (as applicable) or
(B) the validity or enforceability of this Agreement, the Assignment
and Servicing Agreement, the Indenture or the Notes.
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(b) IOS Capital hereby represents and warrants to and agrees
with the Underwriters as follows:
(i) This Agreement has been duly authorized,
executed and delivered by IOS Capital and constitutes a legal, valid
and binding agreement of IOS Capital enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general
principals of equity, and except that the provisions hereof relating to
indemnification of the Underwriters may be subject to limitations of
public policy.
(ii) Each of the Indenture and the Assignment and
Servicing Agreement have been duly authorized, and when executed and
delivered, will constitute the legal, valid and binding obligation of
IOS Capital, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors rights generally and to general principles of equity, and
each of the Indenture and the Assignment and Servicing Agreement
conforms in all material respects to the description thereof contained
in the Final Prospectus.
(iii) The performance of this Agreement by IOS
Capital, and the consummation by IOS Capital of the transactions herein
contemplated, will not (A) conflict with or result in a breach of, and
will not constitute a default under any of the provisions of its
certificate of incorporation or by-laws or any law, governmental rule
or regulation, or any judgment, decree or order binding on IOS Capital
or its properties, or any of the provisions of any indenture, mortgage,
deed of trust, contract or other agreement or instrument to which IOS
Capital is a party or by which it is bound, which conflict, breach or
default would be material to the issue and sale of the Notes or would
have a material adverse effect on the operations, management, prospects
or financial condition of IOS Capital or on the shareholders equity of
IOS Capital, or (B) result in the creation or imposition of any Adverse
Claim and no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the consummation by IOS Capital of the transactions
contemplated by this Agreement, except such consents, approvals,
authorizations, registrations or qualifications as have been already
obtained and such as may be required under the Securities Act and under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Notes by the Underwriters.
(iv) IOS Capital represents and warrants it has
delivered to the Underwriters complete and correct copies of its
balance sheet and statements of income and retained earnings reported
by IOS Capital and IKON Office Solutions, Inc. (the "IKON Entities")
for the fiscal year ended September 30, 2002. Except as set forth in or
contemplated in the Registration Statement, the Final Prospectus, or
any filing by any IKON Entity with the Commission pursuant to Form 10-K
or Form 10-Q under the Securities Act, there has been no material
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adverse change in the condition (financial or otherwise) of the IKON
Entities since December 31, 2002.
(v) Any taxes, fees and other governmental
charges arising from the execution and delivery of this Agreement, the
Assignment and Servicing Agreement and the Indenture and in connection
with the execution, delivery and issuance of the Notes and with the
transfer of the Leases and the Equipment, have been paid or will be
paid by the Issuer prior to the Issuance Date.
(vi) As of December 31, 2002, and during the
period covered by the financial statements on which
PriceWaterhouseCoopers LLP reported, PriceWaterhouseCoopers LLP were
independent auditors with respect to IKON Office Solutions, Inc., IOS
Capital and IKON Receivables Funding, LLC within the meaning of the
Securities Act and the applicable rules and regulations thereunder
adopted by the Commission.
(vii) There is no pending or threatened action,
suit or proceeding against or affecting IOS Capital in any court or
tribunal or before any arbitrator of any kind or before or by any
governmental authority (i) asserting the invalidity of this Agreement,
the Assignment and Servicing Agreement, the Indenture or the Notes,
(ii) seeking to prevent the issuance of the Notes or the consummation
of any of the transactions contemplated by this Agreement, the
Assignment and Servicing Agreement or the Indenture or (iii) seeking
any determination or ruling that might materially and adversely affect
(A) its performance of its obligations under this Agreement, the
Assignment and Servicing Agreement or the Indenture (as applicable) or
(B) the validity or enforceability of this Agreement, the Assignment
and Servicing Agreement, the Indenture or the Notes.
In addition, IOS Capital hereby makes and repeats the
representations and warranties set forth in Section 2 of the Assignment and
Servicing Agreement. Such representations and warranties are incorporated by
reference in this Section 4(b), and the Underwriters may rely thereon as if such
representations and warranties were fully set forth herein.
(c) The Seller hereby represents and warrants to and agrees
with the Underwriters as follows:
(i) This Agreement has been duly authorized,
executed and delivered by the Issuer and constitutes a legal, valid and
binding agreement of the Seller enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors rights generally and to general
principles of equity, and except that the provisions hereof relating to
indemnification of the Underwriters may be subject to limitations of
public policy.
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(ii) The Assignment and Servicing Agreement has
been duly authorized by the Seller and, when executed and delivered,
will constitute the legal, valid and binding obligation of the Seller,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors rights
generally and to general principles of equity.
(iii) The performance of this Agreement and the
Assignment and Servicing Agreement by the Seller will not (A) conflict
with or result in a breach of, and will not constitute a default under
any of the provisions of, its certificate of formation or any law,
governmental rule or regulation, or any judgment, decree or order
binding on the Seller or its properties, or any of the provisions of
any indenture, mortgage, deed of trust, contract or other agreement or
instrument to which the Seller is a party or by which it is bound, or
(B) result in the creation or imposition of any adverse claim and no
consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required
for the issue and sale of the Notes or the consummation by the Seller
of the transactions contemplated by this Agreement, except such
consents, approvals, authorizations, registrations or qualifications as
may be required under the Securities Act and under state securities or
Blue Sky laws in connection with the purchase and distribution of the
Notes by the Underwriters.
(iv) There is no pending or threatened action,
suit or proceeding against or affecting the Seller in any court or
tribunal or before any arbitrator of any kind or before or by any
governmental authority (i) asserting the invalidity of this Agreement,
the Assignment and Servicing Agreement, the Indenture or the Notes,
(ii) seeking to prevent the issuance of the Notes or the consummation
of any of the transactions contemplated by this Agreement, the
Assignment and Servicing Agreement or the Indenture or (iii) seeking
any determination or ruling that might materially and adversely affect
(A) its performance of its obligations under this Agreement or the
Assignment and Servicing Agreement or (B) the validity or
enforceability of this Agreement, the Assignment and Servicing
Agreement, the Indenture or the Notes.
In addition, the Seller hereby makes and repeats the
representations and warranties set forth in Section 3 of the Assignment and
Servicing Agreement. Such representations and warranties are incorporated by
reference in this Section 4(c), and the Underwriters may rely thereon as if such
representations and warranties were fully set forth herein.
(d) The Underwriters severally and not jointly hereby make and
repeat each of the representations set forth in the third paragraph under
"Underwriting" in the Prospectus Supplement (dealing with offers and sales of
Notes to persons in the United Kingdom). Such representations are incorporated
by reference in this Section 4(d), and the Issuer, the Seller and IOS Capital
may rely thereon as if such representations were fully set forth herein.
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Section 5. Covenants of the Issuer and IOS Capital. The Issuer
hereby covenants and agrees with you, and IOS Capital hereby covenants and
agrees with you to cause the Issuer:
(a) to use its best efforts to cause the Registration
Statement, and any amendment thereto, if not effective as of the date hereof, to
become effective; if the Registration Statement has become or becomes effective,
or filing of the Final Prospectus is otherwise required under Rule 424(b), to
file the Final Prospectus, properly completed, pursuant to Rule 424(b) within
the time period prescribed and to provide evidence satisfactory to the
Underwriters of such timely filing; to promptly advise the Underwriters (i) when
the Registration Statement shall have become effective, (ii) when any amendment
thereof shall have become effective, (iii) of any request by the Commission for
any amendment or supplement of the Registration Statement, the Final Prospectus,
or for any additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose, and (v) of the
receipt by the Issuer of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; to not file any amendment of the
Registration Statement or supplement to the Final Prospectus to which the
Underwriters reasonably object; and to use best efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof;
(b) if, at any time when a Final Prospectus relating to the
Notes is required to be delivered under the Securities Act, any event occurs as
a result of which the Final Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading or, if it shall be necessary to supplement such
Final Prospectus to comply with the Securities Act or the rules thereunder, to
promptly prepare and file with the Commission, subject to paragraph (a) of this
Section 5, a supplement which will correct such statement or omission or an
amendment which will effect such compliance;
(c) as soon as practicable, to make generally available to the
holders of Notes (the "Noteholders") and to the Underwriters an earnings
statement or statements of the Issuer which will satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 under the Securities Act;
(d) to furnish to the Underwriters and counsel for the
Underwriters, without charge, a signed copy of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus by any of
the Underwriters or any dealer may be required by the Securities Act, to furnish
as many copies of each Final Prospectus and Preliminary Prospectus relating to
the Notes and any supplement thereto as the Underwriters may reasonably request;
(e) to take all reasonable actions requested by the
Underwriters to arrange for the qualification of the Notes for sale under the
laws of such jurisdictions within the
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United States and as the Underwriters may designate and as necessary to qualify
the Notes for book-entry registration under the rules of DTC and to maintain
such qualifications in effect so long as required for the completion of the
distribution of the Notes; provided, in connection therewith that neither the
Issuer nor IOS Capital shall be required to qualify to do business as a foreign
corporation in any jurisdiction where it is not so qualified or to take any
action that would subject it to service of process in any jurisdiction where it
is not so subject, other than in suits arising out of the offering of the Notes
or the transactions contemplated by the Notes, the Indenture or the Assignment
and Servicing Agreement;
(f) for so long as the Notes are outstanding, to deliver to
the lead underwriter on behalf of the Underwriters, electronically or by
first-class mail and as soon as practicable, a copy of all reports and notices
delivered to the Rating Agencies, Trustee, Ambac or the Noteholders under the
Indenture;
(g) for so long as the Notes are outstanding, to furnish to
the Underwriters as soon as practicable after filing any other information
concerning the Issuer or IOS Capital filed with any government or regulatory
authority which is otherwise publicly available;
(h) all Collateral Term Sheets, Structural Term Sheets and
Computational Materials (as such terms are defined in Section 8 hereof) prepared
in connection with the Notes and presented to the Issuer shall be filed with the
Securities and Exchange Commission pursuant to a Form 8-K of the Issuer in
compliance with applicable No-Action Letters (as defined in Section 8 hereof);
and
(i) to the extent, if any, that any rating provided with
respect to the Notes set forth in Section 6(g) hereof is conditional upon the
furnishing of documents reasonably available to the Issuer, the Seller or IOS
Capital, to furnish such documents within any required time period.
Section 6. Conditions of Underwriters' Obligation. The
obligations of the Underwriters to purchase and pay for the Notes on the
Issuance Date shall be subject to the accuracy in all material respects of the
respective representations and warranties of the Issuer, the Seller and IOS
Capital herein, in the Assignment and Servicing Agreement and in the Indenture,
to the performance by the Issuer, the Seller and IOS Capital in all material
respects of their respective obligations hereunder, under the Assignment and
Servicing Agreement and under the Indenture and to the following additional
conditions:
(a) The Issuer, the Seller and IOS Capital shall each have
delivered a certificate (an "Officer's Certificate"), dated the Issuance Date,
signed by its Vice President and its Chief Financial Officer, to the effect
that:
(i) the representations and warranties made by
the Issuer, the Seller or IOS Capital (as the case may be) in this
Agreement, the Indenture and the Assignment and Servicing Agreement are
true and correct in all material
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respects at and as of the date of such Officer's Certificate as if made
on and as of such date (except to the extent they expressly relate to
an earlier date);
(ii) the Issuer, the Seller or IOS Capital (as the
case may be) has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied under this
Agreement, the Indenture and the Assignment and Servicing Agreement at
or prior to the date of such Officer's Certificate;
(iii) nothing has come to such officer's attention
that would lead him to believe that the Final Prospectus contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(iv) such officer is not aware of (A) any request
of the Commission for further amendment of the Registration Statement
or the Final Prospectus for any additional information, (B) the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation or
threatening of any proceeding for that purpose or (C) any notification
with respect to the suspension of the qualification of the Notes for
sale in any jurisdiction or the threatening of any proceeding for that
purpose.
(b) You shall have received a favorable opinion from Don Liu,
Esq. (subject to customary and usual qualifications), dated the Issuance Date
and reasonably satisfactory in form and substance to the Underwriters and their
counsel with respect to or to the effect that: (i) the existence and good
standing of IOS Capital, (ii) that the Issuer, the Seller and IOS Capital, as
applicable, have the corporate authority to perform this Agreement, the
Assignment and Servicing Agreement, the Indenture and the Insurance Agreement
(collectively, the "Transaction Documents") and the transactions contemplated
herein and therein; (iii) the due authorization, execution, delivery and
enforceability of this Agreement and the other Transaction Documents, as
applicable, by the Issuer, the Seller and IOS Capital; (iv) each of this
Agreement and the other Transaction Documents are the legal, valid and binding
obligation of the Issuer, the Seller and IOS Capital, as applicable, enforceable
against each of them in accordance with its terms (subject to customary
exceptions relating to bankruptcy and laws affecting creditors' rights); (v) the
Notes have been duly authorized, executed and delivered by the Issuer and
constitute the legal, valid and binding obligations of the Issuer enforceable in
accordance with their terms (subject to customary exceptions as to bankruptcy
and laws affecting creditors' rights) and are entitled to the benefits of the
Indenture; (vi) the issuance and sale of the Notes by the Issuer, the
performance of this Agreement by the Issuer, the Seller and IOS Capital and
compliance by the Issuer, the Seller and IOS Capital with the terms of the
Transaction Documents, as applicable, and the consummation of the transactions
contemplated herein and therein will not conflict with the organizational
documents of the Issuer, the Seller or IOS Capital, or to the best of such
counsel's knowledge, any other contract to which the Issuer, the Seller or IOS
Capital is a party or by which any of them is bound; (vii) to the best of such
counsel's knowledge, there is no legal or governmental proceeding threatened or
pending against
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the Issuer, the Seller or IOS Capital which would have a material adverse effect
on the issuance of the Notes, the performance by the Issuer, the Seller or IOS
Capital of this Agreement or compliance by the Issuer, the Seller or IOS Capital
with the terms of the Transaction Documents to which they are parties,
respectively; and (viii) on the Issuance Date the Registration Statement is
effective, and, that to the best of such counsel's knowledge no stop order
suspending the effectiveness of the Registration Statement has been issued or is
threatened, and that with respect to the statements contained in the sections
entitled "The Issuer", "The Servicer and the Originator" and "The Asset Pool" in
the Prospectus Supplement and "The Issuer", "The Asset Pools", "Management's
Discussion and Analysis of Financial Condition", "Directors and Executive
Officers of the Manager of the Issuer", "The Leases" and "The Originator's
Leasing Business" in the Base Prospectus, nothing came to such counsel's
attention that leads such counsel to believe that any of such sections (as of
the Effective Date or the date of the Final Prospectus) contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made not misleading (in each case other than
the financial and statistical information and notes and schedules thereto, as to
which such counsel need express no opinion). In rendering such opinion, counsel
may rely, to the extent deemed proper and as stated therein, as to matters of
fact on certificates of responsible officers of the Issuer, the Seller or IOS
Capital and public officials and as to matters of state law of jurisdictions
other than the jurisdictions in which such counsel is admitted to practice, on
opinions of local counsel satisfactory to the Underwriters.
(c) You shall have received a favorable opinion from Parker,
Hudson, Rainer & Dobbs, counsel to the Issuer, the Seller and IOS Capital
(subject to customary and usual qualifications), dated the Issuance Date and
reasonably satisfactory in form and substance to the Underwriters and their
counsel with respect to the enforceability of the renewal provisions of the
Leases.
(d) You shall have received a favorable opinion from Richards,
Layton & Finger, special counsel to the Issuer, the Seller and IKON Receivables
Funding Inc. (the "Manager") (subject to customary and usual qualifications)
with respect to or to the effect that: (i) the due formation, existence and good
standing of the Issuer, the Seller and the Manager, (ii) the legal, valid and
binding effect and enforceability of the limited liability company agreement of
the Seller and the Issuer, (iii) a Delaware court applying Delaware law would
conclude that the consent of the Manager and of IOS Capital, as sole member of
the Seller, would be required to file a voluntary bankruptcy petition on behalf
of the Seller and the provisions requiring such consent would be enforceable,
(iv) a Delaware court applying Delaware law would conclude that the consent of
the Manager and of the Seller, as sole member of the Issuer, would be required
to file a voluntary bankruptcy petition on behalf of the Issuer and the
provisions requiring such consent would be enforceable, (v) an insolvency or
bankruptcy event affecting the sole member of the Seller or the Issuer would not
result in the dissolution of such entity, (vi) a bankruptcy court would hold
that Delaware law, and not federal law, governs the determination of what
persons or entities have authority to file a voluntary bankruptcy petition on
behalf of the Issuer or the Seller, as applicable, (vii) creditors of IOS
Capital or the Seller may only claim against the respective ownership interests
in the Seller (in the case of IOS Capital )
12
and the Issuer (in the case of the Seller) and have no direct claim to the
assets of the Seller or the Issuer, as applicable, and (viii) that the Seller
and the Issuer are separate legal entities under Delaware law.
(e) The Underwriters shall have received from Dewey Ballantine
LLP, counsel for the Underwriters, such opinion or opinions, dated the Issuance
Date, with respect to the validity of the Notes, the Registration Statement, the
Final Prospectus, true sale, nonconsolidation, enforceability of the Transaction
Documents and the Notes, certain securities law issues, perfection, federal
taxes, and other related matters as the Underwriters may require.
(f) At the Execution Time and at the Issuance Date,
PricewaterhouseCoopers, LLP shall have furnished to the Underwriters a letter or
letters, dated the date of this Agreement and the Issuance Date, respectively,
in form and substance satisfactory to the Underwriters.
(g) The Class A-1 Notes shall have been rated at least "A-1+"
and "P-1", that the Class A-2, A-3a, A-3b and A-4 Notes be rated at least "AAA"
and "Aaa" by Standard & Poor's Ratings Group ("S&P") and Moody's Investors
Service, Inc. ("Moody's"), respectively, which ratings shall not have been
reduced or withdrawn as evidenced by the Officer's Certificate referred to in
Section 6(b).
(h) Counsel to the Trustee shall have delivered a favorable
opinion (subject to customary and usual exceptions), dated the Issuance Date, as
the case may be, and satisfactory in form and substance to the Underwriters and
counsel for the Underwriters and to the Issuer, the Seller and IOS Capital and
their counsel with respect to, or to the effect that: (i) the due incorporation
and valid existence of the Trustee, (ii) the due authorization, execution and
delivery by the Trustee of the Indenture, (iii) the Indenture is the legal,
valid and binding obligation of the Trustee, enforceable against the Trustee in
accordance with its terms (subject to the customary and usual exceptions), (iv)
the execution, delivery and performance of the Indenture will not conflict with
the Trustee's organizational documents and (v) the Notes have been duly
authenticated by the Trustee.
(i) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall be
reasonably satisfactory in form and substance to you, and you and your counsel
shall have received such other information, certificates and documents as you or
they may reasonably request.
(j) The Policy shall have been executed and delivered by Ambac
on the Issuance Date.
(k) The Underwriters shall have received from counsel to Ambac
an opinion or opinions dated the Issuance Date, in form acceptable to the
Underwriters and their counsel.
Section 7. Reimbursement of Expenses. In the event that (x) no
closing of the sale of the Notes occurs by the Issuance Date through no fault of
the Issuer or IOS
13
Capital or because any of the conditions set forth in Sections 6(e), 6(g), 6(h),
6(i), 6(j) and 6(k) have not been met, or (y) the Underwriters terminate the
engagement pursuant to Section 10 or because any conditions precedent in Section
6 (other than Section 6(a), 6(b), 6(c), 6(d) and 6 (f)) have not been fulfilled,
then the liability of the Issuer and IOS Capital to the Underwriters shall be
limited to the reimbursement of the Underwriters' expenses incurred through the
date of termination for its reasonable out-of-pocket and incidental expenses. In
addition, whether or not the Notes are issued or sold:
(a) The Issuer or IOS Capital shall pay the reasonable fees
and expenses associated with the transactions contemplated hereby not paid by
the Underwriters in accordance with the provisions of Section 7(b), including,
without limitation, the following fees and expenses:
(i) Rating Agency fees payable with respect to
their ratings of the Notes;
(ii) fees charged by the firm of independent
public accountants referred to in Section 6(f);
(iii) filing fees in connection with the
transactions contemplated hereby including, but not limited to, the
Commission;
(iv) fees and expenses of Dewey Ballantine LLP;
(v) Trustee's fees and fees of counsel to the
Trustee;
(vi) Ambac's fee and fees of counsel to Ambac;
(vii) the costs and expenses of printing the
Registration Statement, the Final Prospectus and each Preliminary
Prospectus;
(viii) the costs of printing or reproducing this
Agreement, the Blue Sky Survey and any other documents in connection
with the offer, sale and delivery of the Notes;
(ix) all expenses in connection with the
qualification of the Notes under state securities laws as provided in
section 5(e), including the fees and disbursements of counsel in
connection with the Blue Sky Survey;
(x) the cost of preparing the Notes;
(xi) the cost or expenses of any transfer agent or
registrar; and
(xii) all other costs and expenses incident to the
performance of their obligations hereunder which are not otherwise
specifically provided for in this Section 7; provided, however, that
the Issuer and IOS Capital do not hereby waive any right to
reimbursement from the Underwriters in the event of any of the
Underwriters' failure to perform in accordance with this Agreement.
14
(b) It is understood and agreed that, except as provided in
Sections 8 and 9, the Underwriter will pay securities transfer taxes on resale
of any of the Notes by them, and any advertising expenses connected with any
offers they may make.
Section 8. Indemnification and Contribution.
(a) The Issuer and IOS Capital, jointly and severally, will
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Securities and Exchange Act of 1934 as amended (the "Exchange Act") (each an
"Indemnified Party") from and against any and all losses, claims, damages or
liabilities, joint or several, to which such Underwriter or any such controlling
persons may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the Final
Prospectus or any amendment or supplement thereto, or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances in
which they were made not misleading, and will promptly reimburse each such
Indemnified Party for any legal or other expenses reasonably incurred by each
such Indemnified Party in connection with investigating, preparing to defend or
defending, or appearing as a third-party witness in connection with, any such
loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Issuer and IOS Capital shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or action
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement or the Final
Prospectus, or any such amendment or supplement, in reliance upon and in
conformity with the Underwriting Information. The foregoing indemnity agreement
is in addition to any liability which each of the Issuer and IOS Capital may
otherwise have to you or any person who controls you.
(b) Each Underwriter agrees severally, and not jointly, to
indemnify and hold harmless the Issuer and IOS Capital against any losses,
claims, damages or liabilities to which the Issuer or IOS Capital may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Final Prospectus, or any
amendment or supplement thereto, or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances under which they were made
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in the Registration Statement or the Final Prospectus or any such amendment
or supplement, in reliance upon and in conformity with written information
furnished to the Issuer or IOS Capital by or on behalf of such Underwriter
expressly for use therein and will reimburse the Issuer or IOS Capital for any
legal or other expenses reasonably incurred by the Issuer or IOS Capital in
connection with the investigating, preparing to defend or defending, or
appearing as a third-party
15
witness in connection with, any such loss, claim, damage, liability or action.
The Issuer and IOS Capital acknowledge that the statements set forth in the
second, third, fifth and sixth paragraphs under the heading "Underwriting" in
the Prospectus Supplement constitute the only information furnished in writing
by or on behalf of the Underwriters for inclusion in the Registration Statement
and the Final Prospectus (the "Underwriting Information"), and each of you with
respect to yourself confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the claim or commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action 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; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party, and the indemnified party shall have been advised by
counsel that representation of such indemnified party and the indemnifying party
may be inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them, the indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. It is understood that the
indemnifying party shall, in connection with any such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys together with appropriate
local counsel at any time from all indemnified parties not having actual or
potential differing interests with any other indemnified party. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to appoint counsel to defend such action and approval by the indemnified party
of such counsel, the indemnifying party will not be liable for any settlement
entered into without its consent and will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence, (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). Notwithstanding the immediately preceding sentence and the first
sentence of this paragraph, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without
16
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement.
(d) Each Underwriter agrees severally and not jointly to
deliver to the Issuer or IOS Capital no later than the date on which the Final
Prospectus is required to be filed pursuant to Rule 424 with a copy of its
Derived Information (defined below) for filing with the Commission.
(e) Each Underwriter agrees severally and not jointly,
assuming all Company-Provided Information (defined below) is accurate and
complete in all material respects, to indemnify and hold harmless the Issuer and
IOS Capital against any and all losses, claims, damages or liabilities, joint or
several, to which they may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement of a material fact
contained in the Derived Information provided by you, or arise out of or are
based upon, when read in conjunction with the Final Prospectus, the omission or
alleged omission to state therein 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, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by him,
her or it in connection with investigating or defending or preparing to defend
any such loss, claim, damage, liability or action as such expenses are incurred.
Your obligations under this Section 8(e) shall be in addition to any liability
which you may otherwise have.
(f) Each of the Issuer and IOS Capital agrees to indemnify and
hold harmless the Underwriters, the directors, officers, employees and agents of
each Underwriter and each person who controls any Underwriter within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement of a material fact contained in the
Company-Provided Information provided by the Issuer, the Seller or IOS Capital,
or arise out of or are based upon, when read in conjunction with the Final
Prospectus, the omission or alleged omission to state therein 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, and
agrees to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by him, her or it in connection with investigating or
defending or preparing to defend any such loss, claim, damage, liability or
action as such expenses are incurred. Your obligation under this Section 8(f)
shall be in addition to any liability which you may otherwise have.
(g) The procedures set forth in Section 8(c) shall be equally
applicable to Sections 8(e) and 8(f).
17
(h) For purposes of this Section 8, the term "Derived
Information" means such portion, if any, of the information delivered to the
Issuer or IOS Capital by the Underwriters pursuant to Section 8(d) for filing
with the Commission as:
(i) is not contained in the Final Prospectus
without taking into account information incorporated therein by
reference;
(ii) does not constitute Company-Provided
Information; and
(iii) is of the type of information defined as
Collateral Term Sheets, Structural Term Sheets or Computational
Materials (as such terms are interpreted in the No-Action Letters).
"Company-Provided Information" means any computer tape
furnished to the Underwriters by the Issuer, the Seller or IOS Capital
concerning the Leases or any other information furnished by the Issuer, the
Seller or IOS Capital to the Underwriters that is relied on or is reasonably
anticipated by the parties hereto to be relied on by the Underwriters in the
course of the Underwriters' preparation of its Derived Information or the
Underwriting Information.
The terms "Collateral Term Sheet" and "Structural Term Sheet"
shall have the respective meanings assigned to them in the February 13, 1995
letter (the "PSA Letter") of Cleary, Gottlieb, Steen & Hamilton on behalf of the
Public Securities Association (which letter, and the SEC staff's response
thereto, were publicly available February 17, 1995). The term "Collateral Term
Sheet" as used herein includes any subsequent Collateral Term Sheet that
reflects a substantive change in the information presented. The term
"Computational Materials" has the meaning assigned to it in the May 17, 1994
letter (the "Kidder letter" and together with the PSA Letter, the "No-Action
Letters") of Brown & Wood on behalf of Kidder, Peabody & Co., Inc. (which
letter, and the SEC staff's response thereto, were publicly available May 20,
1994).
(i) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) in such proportion as is equitable and as shall reflect the
relative benefits received by the Issuer, the Seller and IOS Capital on the one
hand and the Underwriters on the other from the offering of the Notes. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Issuer, the Seller or IOS Capital on the one hand and
the Underwriters 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
18
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Issuer, the Seller or IOS Capital on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion that
the total net proceeds from the offering (before deducting expenses) received by
the Issuer, the Seller and IOS Capital bear to the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus Supplement. 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 the Issuer or IOS Capital on
the one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Issuer, IOS Capital and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this subsection
(i) were determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred to above
in this subsection (i). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to above in this subsection (i) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, preparing to defend or defending, or
appearing as a third-party witness in connection with, any such action or claim.
Notwithstanding the provisions of this subsection (i), none of the Underwriters
shall be required to contribute any amount in excess of the total underwriting
discount and commissions as set forth on the cover page of the Prospectus
Supplement paid to the respective Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(j) The obligations of the Issuer and IOS Capital under this
Section 8 shall be in addition to any liability which the Issuer or IOS Capital
may otherwise have and shall extend, upon the same terms and conditions, to each
director, officer, employee and agent of each Underwriter and each person, if
any, who controls any of the Underwriters within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Issuer, the Seller and IOS
Capital and to each person, if any, who controls the Issuer or IOS Capital
within the meaning of the Securities Act.
(k) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
Section 9. Survival. The respective representations,
warranties and agreements of the Issuer, the Seller, IOS Capital and the
Underwriters set forth in or
19
made pursuant to this Agreement will remain in full force and effect,
notwithstanding any investigation heretofore or hereafter made by or on behalf
of the Issuer, the Seller, IOS Capital or the Underwriters, and such
representations, warranties and agreements made by the Issuer, the Seller and
IOS Capital shall survive the delivery and payment for the Notes. The provisions
of Sections 7 and 8 shall survive the termination or cancellation of this
Agreement.
Section 10. Termination.
(a) This Agreement may be terminated by you in your absolute
discretion at any time upon the giving of notice at any time prior to the
Issuance Date: (i) if there has been, since December 31, 2002, any material
adverse change in the condition, financial or otherwise, of IOS Capital, the
Seller, the Issuer or of Ambac, or in the earnings, business affairs or business
prospects of IOS Capital, the Seller, the Issuer or of Ambac, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
outbreak or escalation of hostilities or other calamity or crisis (including,
but not limited to, an act of terrorism) the effect of which on the financial
markets of the United States is such as to make it, in your reasonable judgment,
impracticable to market the Notes or enforce contracts for the sale of the
Notes, or (iii) if trading generally on either the American Stock Exchange or
the New York Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said exchanges or by order of the Commission or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either federal or New York authorities. In the event of any such termination, no
party will have any liability to any other party hereto, except as otherwise
provided in Section 7 or 8 hereof.
(b) This Agreement may not be terminated by the Issuer, the
Seller or IOS Capital, without the written consent of the Underwriters, except
in accordance with law.
(c) Notwithstanding anything herein to the contrary, in the
event the Issuer, the Seller or IOS Capital does not perform any obligation
under this Agreement or any representation and warranty hereunder is incomplete
or inaccurate in any material respect, this Agreement and all of the
Underwriters' obligations hereunder may be immediately cancelled by the
Underwriters by notice thereof to the Issuer or IOS Capital. Any such
cancellation shall be without liability of any party to any other party except
that the provisions of Sections 7 and 8 hereof shall survive any such
cancellation.
Section 11. Notices. All communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered to or mailed by certified or registered mail,
postage prepaid, or transmitted by telex or telegraph and confirmed by a similar
mailed writing, if to you, addressed to you, at the addresses first stated in
this Agreement, or to such other address as you may designate in writing to the
Issuer, the Seller and IOS Capital; if to IOS Capital, addressed to IOS Capital
at 1738 Bass Road, P.O. Box 9115, Macon, Georgia, 31210; if to the Issuer,
addressed to IKON Receivables Funding, LLC at 1738 Bass Road P.O. Box 9115,
Macon, Georgia 31210; and if to the Seller, addressed to IKON Receivables-2, LLC
at
20
1738 Bass Road, P.O. Box 9115, Macon, Georgia 31210, or such other address as
IOS Capital, the Issuer or the Seller may have designated in writing to you.
Section 12. Successors. This Agreement will inure to the
benefit of and be binding upon the Issuer, the Seller and IOS Capital and their
respective successors and assigns and the Underwriters and their respective
successors and assigns.
Section 13. Default by Any of the Underwriters. Subject to
Section 6 hereof, if any of the Underwriters shall fail on the Issuance Date to
purchase the Notes, which it is obligated to purchase hereunder (the "Defaulted
Notes"), the remaining Underwriter(s) (the "Non-Defaulting Underwriter(s)")
shall have the right, but not the obligation, within one (1) Business Day
thereafter, to make arrangements to purchase all, but not less than all, of the
Defaulted Notes upon the terms herein set forth; if, however, the Non-Defaulting
Underwriter(s) shall not have completed such arrangements within such one (1)
Business Day period, then this Agreement shall terminate without liability on
the part of the Non-Defaulting Underwriter(s).
No action taken pursuant to this Section 13 shall relieve the
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, any of the Non-Defaulting Underwriters or the
Company shall have the right to postpone the Issuance Date for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement, the Final Prospectus or in any other documents or arrangements.
Section 14. Entire Agreement. This Agreement and the documents
referred to herein and to be delivered pursuant hereto constitute the entire
agreement between the parties pertaining to the subject matter hereof and
supersede all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties.
Section 15. Governing Law.
(a) THIS AGREEMENT IS TO BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK.
(b) THE ISSUER, THE SELLER AND IOS CAPITAL HEREBY SUBMIT TO
THE NONEXCLUSIVE 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, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO
THE ADDRESS SET FORTH IN SECTION 11 HEREOF AND SERVICE SO MADE SHALL BE DEEMED
TO BE COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U. S.
MAILS, POSTAGE PREPAID. THE ISSUER, THE SELLER AND IOS CAPITAL
21
HEREBY WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO
VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH
LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS
SECTION SHALL AFFECT THE RIGHT OF THE ISSUER, THE SELLER OR IOS CAPITAL TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT EITHER'S RIGHT TO
BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.
(c) THE ISSUER, THE SELLER AND IOS CAPITAL HEREBY WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN
CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 16. Counterparts. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument.
Section 17. Miscellaneous. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
If you are in agreement with the foregoing, please sign a
counterpart hereof and return the same to the Issuer, the Seller or IOS Capital,
whereupon this Agreement shall become a binding agreement between the
Underwriters, on the one hand, and the Issuer, the Seller and IOS Capital on the
other.
22
Very truly yours,
IOS CAPITAL, LLC
By: /s/ Kathleen M. Burns
------------------------------
Name: Kathleen M. Burns
Title: Treasurer
IKON RECEIVABLES FUNDING, LLC
By: IKON Receivables Funding, Inc.,
its Manager
By: /s/ Kathleen M. Burns
------------------------------
Name: Kathleen M. Burns
Title: Treasurer
IKON RECEIVABLES-2, LLC
By: IKON Receivables Funding, Inc.,
its Manager
By: /s/ Kathleen M. Burns
------------------------------
Name: Kathleen M. Burns
Title: Treasurer
The foregoing Agreement is hereby
accepted and entered into as of the
date hereof.
LEHMAN BROTHERS, INC.,
as Representative of the Underwriters
By: /s/ Diane Rinnovatore
-----------------------------
Name: Diane Rinnovatore
Title: Managing Director
[Signature Page to the Underwriting Agreement]
SCHEDULE A
The Notes will be purchased by Lehman Brothers, Inc., J.P. Morgan Securities,
Inc., Banc of America Securities LLC, Deutsche Bank Securities, Inc. and PNC
Capital Markets, Inc. as follows:
Banc of Deutsche Bank
Lehman J.P. Morgan America Securities, PNC Capital
Brothers Inc. Securities Inc. Securities LLC Inc. Markets, Inc.
Principal Principal Principal Principal Principal Underwriting
Amount Amount Amount Amount Amount Discount
- ---------------------------------------------------------------------------------------------------------------
Class A-1
Notes $ 111,408,000 $ 111,408,000 $ 10,128,000 $ 10,128,000 $ 10,128,000 $ 253,200,000
- ---------------------------------------------------------------------------------------------------------------
Class A-2
Notes 11,748,000 11,748,000 1,068,000 1,068,000 1,068,000 26,700,000
- ---------------------------------------------------------------------------------------------------------------
Class A-3a 90,816,000 90,816,000 8,256,000 8,256,000 8,256,000 206,400,000
- ---------------------------------------------------------------------------------------------------------------
Class A-3b
Notes 90,816,000 90,816,000 8,256,000 8,256,000 8,256,000 206,400,000
- ---------------------------------------------------------------------------------------------------------------
Class A-4
Notes 70,129,400 70,129,400 6,375,400 6,375,400 6,375,400 159,385,000
- ---------------------------------------------------------------------------------------------------------------
Totals $ 374,917,400 $ 374,917,400 $ 34,083,400 $ 34,083,400 $ 34,083,400 $ 852,085,000