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December 7, 2000
To the Parties Listed On Schedule I
Attached Hereto:
Re: IKON Receivables, LLC Lease-Backed Notes, Series 2000-2
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Ladies and Gentlemen:
We have acted as special tax counsel in connection with the issuance of
$193,532,000 aggregate principal amount of 6.66125% Class A-1 Lease-Backed
Notes, Series 2000-2, $70,193,000 aggregate principal amount of 6.60% Class A-2
Lease-Backed Notes, Series 2000-2, $290,800,000 aggregate principal amount of
Class A-3 Lease-Backed Notes, Series 2000-2, and $79,906,000 aggregate principal
amount of Class A-4 Lease-Backed Notes, Series 2000-2 (collectively, the
"Notes") by IKON Receivables, LLC (the "Issuer") pursuant to an Indenture, dated
as of December 1, 2000 (the "Indenture") among the Issuer, IOS Capital, Inc., as
servicer, and The Chase Manhattan Bank, as trustee (the "Trustee"). Capitalized
terms used herein and not otherwise defined shall have the meanings set forth in
the Indenture.
We have examined the question of whether the Notes will be treated as
indebtedness for federal income tax purposes. Our analysis is based on the
provisions of the Internal Revenue Code of 1986, as amended, and the Treasury
regulations promulgated thereunder as in effect on the date hereof and on
existing judicial and administrative interpretations thereof. These authorities
are subject to change and to differing interpretations, which could apply
retroactively. The opinion of special tax counsel is not binding on the courts
or the Internal Revenue Service (the "IRS").
In general, whether a transaction constitutes the issuance of indebtedness
for federal income tax purposes is a question of fact, the resolution of which
is based primarily upon the economic substance of the instruments and the
transaction pursuant to which they are issued rather than the form of the
transaction or the manner in which the instruments are labeled. No transaction
closely comparable to the transactions contemplated by the Indenture has been
the subject of any Treasury regulation, revenue ruling, or judicial decision.
The IRS and the courts have set forth various factors to be taken into account
in determining whether or not a transaction constitutes the issuance of
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To the Parties Listed On Schedule I
Attached Hereto:
December 7, 2000
Page 2
indebtedness for federal income tax purposes, which we have reviewed as they
apply to this transaction.
Based on the foregoing, and such legal and factual investigations as we
have deemed appropriate, including certain representations and presentations of
factual data provided to us by the underwriter, we are of the opinion that for
federal income tax purposes:
1. The Notes will be treated as indebtedness for federal income tax
purposes because (i) the characteristics of the transaction strongly indicate
that in economic substance, the transaction is the issuance of indebtedness;
(ii) the form of the transaction is an issuance of indebtedness; and (iii) the
parties have stated unambiguously their intention to treat the transaction as an
issuance of indebtedness for all applicable tax purposes.
2. Assuming compliance with the terms of the Transaction Documents, the
Issuer will not be treated as an association (or a publicly traded partnership)
taxable as a corporation for federal income tax purposes.
3. The statements in the Prospectus under the heading "Material Federal
Income Tax Considerations" accurately describe the material federal income tax
consequences to the holders of the Notes.
Our opinion contained herein is rendered only as of the date hereof, and
we undertake no obligation to update this letter or the opinions contained
herein after the date hereof.
This opinion is furnished by us as special tax counsel in connection with
the issuance of the Notes occurring on the date hereof and is solely for the
benefit of the addressees hereto, and is not to be used, circulated, quoted or
otherwise referred to for any other purpose without our express written
permission.
Very truly yours,
/s/ DEWEY BALLANTINE LLP
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SCHEDULE I
IKON Receivables, LLC
1738 Bass Road
Macon, Georgia 31208
Chase Securities Inc.
as Representative of the Underwriters
270 Park Avenue
New York, New York 10017
The Chase Manhattan Bank, as Trustee
450 West 33rd Street
New York, New York 10001-26970/
