Steel
Partners II, L.P. (the “Interested Party”) has
made a proposal with respect to the recapitalization of IKON
Office Solutions, Inc. (the “Disclosing Party” and
together with the Interested Party, the
“Parties”). The Parties mutually wish to review
the feasibility and appropriateness of such a
recapitalization or any similar or comparable transaction (a
“Recapitalization Transaction”), in light of other
strategic alternatives available to the Disclosing Party. In
this connection, the Disclosing Party is prepared to make
available to the Interested Party certain information relating
to the Disclosing Party (including potential strategic
transactions and possible participants or counterparties
thereto) which is non-public, confidential or proprietary in
nature and which may be disclosed either in written form or
orally (the “Confidential
Information”).
By
execution of this letter agreement (this
“Agreement”), the Interested Party agrees to treat
all Confidential Information confidentially and to observe the
terms and conditions set forth herein. For purposes of this
Agreement, “Confidential Information” shall
include all information relating to the Disclosing Party
(including potential strategic transactions and possible
participants or counterparties thereto), regardless of the
form in which it is communicated or maintained, that is
furnished to the Interested Party or its Representatives (as
defined below) by or on behalf of the Disclosing Party in the
course of the Parties’ mutual review of a possible
Recapitalization Transaction. The term “Confidential
Information” shall also include all reports, analyses,
notes, compilations, forecasts, studies or other
documents or information prepared by the Interested Party or
its Representatives that are based on, contain or reflect any
Confidential Information received by it or its Representatives
(“Notes”). The term “Representatives”
shall include a Party’s directors, officers, employees,
partners, affiliates, subsidiaries, agents, advisors, lawyers,
accountants, consultants, financial advisors, potential
co-investors and financing sources of the
Interested Party in any Recapitalization Transaction or other
representatives.
The
term “Confidential Information” does not include
any information relating to the Disclosing Party that (i)
becomes generally available to the public other than as a
result of a breach of this Agreement directly or indirectly by
the Interested Party or its Representatives who received such
information under the terms of this Agreement, (ii) was or
becomes available on a non-confidential basis from a source
other than the Disclosing Party or its Representatives,
provided that the source of such information was not known by
the Interested Party to be bound by a confidentiality
agreement with, or other contractual, legal or fiduciary
obligation of confidentiality to, the Disclosing Party or
(iii) has been independently acquired or developed by the
Interested Party or its Representatives without violating any
of the provisions of this Agreement.
Confidential
Information received by the Interested Party will be used
solely for the purpose of considering the feasibility and
appropriateness of a Recapitalization Transaction. The
Interested Party may disclose the Confidential Information to
its Representatives to the extent necessary to permit such
Representatives to assist it in its consideration thereof,
provided, however, (1) that each such Representative shall be
bound by the terms of this Agreement to the same extent as if
it was a party hereto and the Interested Party shall be
responsible for any breach of this Agreement by any of its
Representatives, and (2) the Interested Party will not
disclose any Confidential Information to potential
co-investors or potential financing sources of the Interested
Party without the Disclosing Party’s prior written
consent, which such written consent shall not be unreasonably
withheld. Confidential Information may also be disclosed by
the Interested Party to any regulatory authority
having jurisdiction over it as such regulatory authority may
request.
Except
as otherwise set forth herein, each Party agrees that it will
not take any action or cause any action to be taken which
would reasonably be expected to create a legal obligation for
either Party to make a public announcement regarding the
possibility of a Recapitalization Transaction. The Interested
Party agrees that during the term of this Agreement, it will
not, as a result of knowledge or information obtained from the
Confidential Information in connection with a possible
Recapitalization Transaction or otherwise, (i) divert or
attempt to divert any business, customer or supplier of the
Disclosing Party or (ii) employ or attempt to employ or divert
any employee of the Disclosing Party; provided, however, that
the Interested Party shall not be prohibited from (a)
employing any such employee who contacts the Interested Party
on his or her own initiative and without any direct or
indirect solicitation by the Interested Party, (b) conducting
generalized solicitations for employees (which solicitations
are not specifically targeted at the Disclosing
Party’s employees) through the use of media
advertisements, professional search firms or otherwise, or (c)
if the Parties consummate a Recapitalization Transaction
pursuant to a definitive agreement that results in the
Interested Party substantially increasing its
ownership interest in Disclosing Party and the Disclosing
Party ceasing to be publicly traded, employing such persons
connected with the Disclosing Party in accordance with such
Recapitalization Transaction and in accordance with all
applicable laws.
The
Interested Party further agrees that, for a period of six
months from the date hereof, it will not, and will cause its
affiliates not to, in any manner, (1) acquire, agree to
acquire, or make any proposal (or request permission to make
any proposal) to acquire any securities or assets of the
Disclosing Party (other than assets transferred in the
ordinary course of its business), unless such acquisition,
agreement or making of a proposal shall have been expressly
first approved (or in the case of a proposal, expressly first
invited) by the Disclosing Party, (2) except at the specific
written request of the Disclosing Party, propose to enter
into, directly or indirectly, any merger, consolidation, share
exchange, recapitalization, business combination or similar
transaction involving the Disclosing Party or any of its
subsidiaries, (3) solicit proxies or consents from
shareholders of the Disclosing Party (whether or not such
solicitation is subject to Regulation 14A under the Securities
Exchange Act of 1934), (4) form, join or in any way
participate in a “group” (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934) with
respect to any voting securities of the Disclosing Party or
any of its subsidiaries, (5) seek to include any matter for
consideration at a meeting of shareholders of the Disclosing
Party, (6) otherwise act, alone or in concert with others, to
seek to control or influence the management, board of
directors or policies of the Disclosing Party, including by
communicating with the board of directors, management,
employees or shareholders of the Disclosing Party to the
effect that the board of directors of the Disclosing Party
should engage in a strategic transaction or recapitalization
transaction or otherwise with respect to potential material
transactions or changes in corporate s
