ex10-1.htm


    Exhibit
      10.1

     

    
      AMENDMENT
        NO. 1 TO CONFIDENTIALITY AGREEMENT

       

      AMENDMENT
        NO. 1 dated as of November 20, 2007 (this “Amendment”), to the CONFIDENTIALITY
        AGREEMENT (the “Confidentiality Agreement”) dated as of October 12, 2007,
        between  IKON Office Solutions, Inc., an Ohio corporation, and Steel
        Partners II, L.P.  Capitalized terms not otherwise defined herein have
        the meanings ascribed thereto in the Confidentiality Agreement.

       

      WHEREAS,
        the Parties to the Confidentiality Agreement wish to amend certain provisions
        of
        the Confidentiality Agreement as set forth in this Amendment.

       

      NOW
        THEREFORE, in consideration of the foregoing and for other good and valuable
        consideration, the receipt and adequacy of which are hereby acknowledged,
        the
        parties hereto agree as follows:

       

      1.  The
        Parties agree that the sixth paragraph of the Confidentiality Agreement starting
        with “The Interested Party further agrees...” and ending with “not earlier than
        December 1, 2007” is hereby amended and replaced with the following six
        paragraphs:

       

      “The
        Interested Party further agrees that it shall not, and shall cause its
        affiliates not to, prior to May 19, 2009, directly or indirectly, alone or
        in
        concert with others or in any other manner: (1) acquire, agree to acquire,
        or
        make any proposal to acquire any securities or assets of the Disclosing Party
        (other than assets transferred in the ordinary course of its business), acquire
        “beneficial ownership” (within the meaning of Section 13(d) of the Securities
        Exchange Act of 1934, as amended (the “Exchange Act”)) of any equity securities
        of the Disclosing Party, or acquire any economic long position in voting
        securities of the Disclosing Party through the purchase of any equity derivative
        contract, (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 Exchange Act) or otherwise
        acquire voting power with respect to any equity securities of the Disclosing
        Party, (4) form, join or in any way participate in a “group” (within the meaning
        of Section 13(d)(3) of the Exchange Act) with respect to any voting securities
        of the Disclosing Party or any of its subsidiaries, (5) propose any person
        for
        nomination or election as a director of the Disclosing Party or otherwise
        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, the board of directors or policies of
        the
        Disclosing Party, including by communicating with the board of directors
        of the
        Disclosing Party, 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 strategy
        or
        corporate governance, (7) request a waiver or amendment of this paragraph,
        (8) take any action that would reasonably be expected to require the
        Disclosing Party to make any announcement regarding any of the foregoing,
        (9)
        disclose any intention, plan or arrangement inconsistent with the foregoing,
        or
        (10) assist, advise or encourage any other person in doing any of the foregoing;
        provided, however, that (i) the restrictions contained in
        this paragraph shall not apply to (A) any proposal by the Interested Party
        to acquire any securities or assets of the Disclosing Party made to
        the board of directors of the Disclosing Party only after the board
        has publicly announced a determination to solicit offers or proposals
        for the purchase of all or a material portion of the securities or
        assets of the Disclosing Party; (B) any bona fide proposal by the
        Interested Party to acquire more than 25% of the Disclosing Party’s common
        stock (the “Common Stock”) made to the board of directors of the Disclosing
        Party in response to a public unsolicited offer or proposal by a third
        party unaffiliated with the Interested Party (and not acting in concert
        with the Interested Party) to acquire more than 25% of the Common Stock
        or more than 25% of the Disclosing Party’s consolidated total
        non-current assets, unless such unsolicited offer or proposal is publicly
        opposed by the Disclosing Party within 20 days of its public disclosure; or
        (C) any announcement or activities of the Interested Party in support of or
        in opposition to any proposal for consideration by the shareholders of
        the Disclosing Party at any meeting of shareholders or by written consent
        of shareholders of the Disclosing Party that has been proposed by the
        board of directors or management of the Disclosing Party; and (ii) in
        response to an public unsolicited offer or proposal by a third party
        unaffiliated with the Interested Party (and not acting in concert with the
        Interested Party), other than a current shareholder of the Disclosing
        Party, to acquire more than 25% of the Common Stock or more than 25% of
        the Disclosing Party’s consolidated total non-current assets or any
        proposal for consideration by the shareholders of the Disclosing Party at
        any meeting of shareholders or by written consent of shareholders of
        the Disclosing Party that has been proposed by any third party
        unaffiliated with the Interested Party (and not acting in concert with the
        Interested Party), other than a current shareholder of the Disclosing
        Party, the Interested Party may make public statements as to whether it is
        or is not in favor of such offer or proposal or as to how it intends to vote
        with respect to such proposal, as applicable.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Notwithstanding
        anything herein to the contrary, the restrictions contained in the immediately
        preceding paragraph shall terminate on the earliest of
        (1) November 26, 2007, if on that date the Disclosing Party has not
“commenced” (within the meaning of Rule 14d-2(a) of the Exchange Act) a
        Recapitalization Transaction that consists of an equity self-tender offer
        in
        which the Disclosing Party offered to repurchase at least $295,000,000 of
        the
        Common Stock using a so-called “modified Dutch auction” structure with a pricing
        range of $13.00 to $15.00 per share (a “Qualified Recapitalization
        Transaction”), (2) December 31, 2007, if on that date the Disclosing
        Party has not completed a Qualified Recapitalization Transaction, unless
        (A) on December 31, 2007, the only conditions to such offer that
        remain unsatisfied are any conditions relating to receipt of necessary consents
        from existing debtholders and funding of the Disclosing Party’s financing, and
        (B) the Disclosing Party reasonably believes, and can reasonably
        demonstrate to the Interested Party the likelihood that, such offer will
        be
        consummated by January 15, 2008, (3) January 15, 2008, if on that
        date the Disclosing Party has not completed a Qualified Recapitalization
        Transaction, (4) September 30, 2008, if between November 19, 2007 and that
        date
        the Disclosing Party has not repurchased Common Stock with an aggregate purchase
        price (including brokers’ fees and commissions) of at least $500,000,000, unless
        the primary reason for the aggregate repurchases being less than $500,000,000
        is
        that the beneficial ownership of Common Stock by a particular shareholder
        (other
        than State Street Bank and Trust Company) has been during such period
        sufficiently high as to impair the ability of the Disclosing Party to repurchase
        Common Stock without causing such shareholder to exceed 14.9% of the outstanding
        Common Stock, and (5) March 31, 2008, unless by that date the Disclosing
        Party
        has notified the Interested Party that the Disclosing Party has financing,
        on
        terms reasonably satisfactory to the Disclosing Party, that together with
        cash
        on hand will be sufficient to finance the repurchase by the Disclosing Party
        of
        an additional $205,000,000 of Common Stock and (if necessary) to refinance
        the
        Disclosing Party’s existing 7.75% Notes due 2015.  The Interested
        Party shall have no obligation to tender into a Qualified Recapitalization
        Transaction.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      Until
        the
        termination of the restrictions in the second preceding paragraph, the
        Disclosing Party shall not amend its Articles of Incorporation or Code of
        Regulations to restrict the ability of its shareholders to nominate candidates
        for elections as directors of the Disclosing Party.

       

      As
        soon
        as practicable following the completion of a Qualified Recapitalization
        Transaction, the Disclosing Party shall implement a plan for the repurchase
        of
        shares of Common Stock with an aggregate purchase price equal to $500,000,000
        less the amount purchased in the Qualified Recapitalization Transaction (the
        “Repurchase Balance”).  Such repurchases may be pursuant to one or
        more additional equity self-tender offers, accelerated stock repurchase programs
        or open market share repurchase programs under Rule 10b-18 of the Exchange
        Act (“Rule 10b-18 Programs”) or a combination thereof.   To
        the extent the Disclosing Party elects to repurchase Common Stock pursuant
        to
        Rule 10b-18 Programs, after April 1, 2008, the Disclosing Party shall use
        commercially reasonable best efforts to repurchase the maximum number of
        shares
        of Common Stock allowable on a daily basis (and shall purchase at least 75%
        of
        such maximum on a weekly basis), at the then prevailing market prices for
        the
        shares, under the manner, timing, price and volume guidelines of
        Rule 10b-18(b) of the Exchange Act.  The Disclosing Party shall
        not be required to repurchase Common Stock pursuant to any Rule 10b-18
        Program (1) at a price greater than $17.50 per share (or such other limit
        as the Disclosing Party and the Interested Party may agree from time to time),
        (2) on any trading day on which there is a substantial market disruption,
        (3) if such repurchase would, in the view of counsel to the Disclosing
        Party, raise a substantial risk of violation of law or non-compliance with
        the
        terms of the Disclosing Party’s existing indebtedness or (4) if such
        repurchase would result in the Interested Party or any other person (other
        than
        State Street Bank and Trust Company) beneficially owning more than 14.9%
        of the
        outstanding Common Stock.  To the extent the Disclosing Party suspends
        its repurchase of Common Stock under any Rule 10b-18 Program, the Disclosing
        Party will promptly notify the Interested Party of such suspension and specify
        which subsection in the immediately preceding sentence the Disclosing Party
        is
        relying on in suspending such repurchase.  The Disclosing Party shall
        notify the Interested Party promptly after the close of trading on the last
        trading day of each month during the pendency of any Rule 10b-18 Program
        the
        total number of shares of Common Stock outstanding at the end of that month
        and
        the dollar value of the Repurchase Balance less the aggregate purchase price
        of
        the Common Stock repurchased by the Disclosing Party pursuant to this paragraph
        at the end of that month.  For purposes of this paragraph, the
        allowable purchases of Common Stock shall be determined without regard to
        the
“however” clause in Rule 10b-18(b)(4).

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      If
        a
        tender offer that constitutes a Qualified Recapitalization Transaction expires
        on or before January 15, 2008, the Disclosing Party will promptly notify
        the
        Interested Party of the number of shares of the Common Stock to be repurchased,
        the number of shares of Common Stock outstanding after such repurchase and
        the
        pro-ration factor, if applicable, and the Interested Party shall sell a number
        of shares of Common Stock sufficient to reduce the aggregate beneficial
        ownership of shares of Common Stock by the Interested Party and its affiliates
        to below 14.9% of the outstanding shares of Common Stock (taking into account
        the consummation of the Qualified Recapitalization Transaction).  Any
        sales required to be executed by the Interested Party pursuant to the
        immediately preceding sentence shall be executed through the facilities of
        the
        New York Stock Exchange no later than the close of trading on the second
        complete trading day immediately following such notification (and, for purposes
        of determining two complete trading days, if the notification is given prior
        to
        9:30 a.m. (New York time) on a trading day, such trading day shall
        constitute the first of the two complete trading days).

       

      The
        Disclosing Party agrees that the next meeting of shareholders of the Disclosing
        Party held for the purpose of electing directors shall not be held prior
        to
        February 21, 2008 and that the deadline for the shareholders of the Disclosing
        Party to submit to the Secretary of the Disclosing Party nominations for
        the
        election of directors at such meeting shall be not earlier than December
        1,
        2007.”

       

      2.  In
        connection with the execution of this Amendment, the Disclosing Party shall
        issue a press release (the “Press Release”), substantially in the form attached
        hereto as Exhibit A.  The Disclosing Party shall promptly file
        with the Securities and Exchange Commission a Form 8-K disclosing the material
        contents of this Amendment and including as an exhibit thereto an executed
        copy
        of this Amendment, together with the Press Release.

       

      3.  The
        Interested Party will be permitted, without prior notice or consultation
        with
        the Disclosing Party and its legal counsel, to file with the Securities and
        Exchange Commission an amendment to its Schedule 13D with respect to the
        securities of the Disclosing Party disclosing the material contents of this
        Amendment and including as an exhibit thereto an executed copy of this
        Amendment.  The Interested Party may also issue its own press release
        with respect to this Amendment.

       

      4.  This
        Amendment shall be governed by, and construed and enforced in accordance
        with,
        the laws of the State of New York without regard to the conflicts of laws
        principles thereof.  Each Party hereby consents to the exclusive
        jurisdiction of any Federal court or state court located in the Borough of
        Manhattan in the City of New York. Each Party hereby waives any right to
        a trial
        by jury of any dispute arising under or relating to this Amendment.

      
         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

      

      5.  Except
        as
        expressly set forth herein, the Confidentiality Agreement remains in full
        force
        and effect.

       

      IN
        WITNESS WHEREOF, the parties hereto have duly executed this Amendment No.
        1  to Confidentiality Agreement as of the date first written
        above.

       

       

      
        	 	
                IKON
                  OFFICE SOLUTIONS, INC.

              
	 	 	 
	
                 

              	
                By:
                  

              	/s/ 
                Matthew J. Espe
	 	 	Name:
 Matthew
                J.
                Espe
	 	 	Title: 
Chairman
                and Chief
                Executive Officer
	 	 	 


      

       

       

      
        
          	 	
                  
                    STEEL
                      PARTNERS II, L.P.

                  

                
	 	 	 
	 	By: 	Steel
                  Partners, L.L.C., General Partner
	 	 	 
	
                   

                	
                  By:
                    

                	/s/ 
                  Warren Lichtenstein
	 	 	Name:  Warren
                  Lichtenstein
	 	 	Title: 
Managing
                  Member
	 	 	 


        

         

         

      

       

       

       

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