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accordance with the CPR Rules, except as otherwise provided in this Section 4.6.
Within 20 days following receipt of the written notice of arbitration, Daisytek
and PFSweb shall each appoint one arbitrator. The two arbitrators so appointed
shall appoint the third arbitrator. If either Daisytek or PFSweb shall fail to
appoint an arbitrator within such 20-day period, the arbitration shall be by the
sole arbitrator appointed by the other party. Whether selected by Daisytek and
PFSweb or otherwise, each arbitrator selected to resolve such dispute shall be a
tax attorney or tax accountant who is generally recognized in the tax community
as a qualified and competent tax practitioner with experience in the tax area
involved in the issue or issues to be resolved. Such arbitrators shall be
empowered to determine whether one party is required to indemnify the other
pursuant to Section 4.4 and to determine the amount of the related
indemnification payment. Each of Daisytek and PFSweb shall bear 50% of the
aggregate expenses of the arbitrators, unless the arbitrators otherwise
determine that a different allocation of responsibility for expenses is
appropriate under the circumstances. The arbitration shall be governed by the
United States Arbitration Act, 9 U.S.C. Sections 1-14. The place of arbitration
shall be Dallas, Texas. The final decision of the arbitrators shall be rendered
no later than one year from the date of the written notice of arbitration.
4.7. Exclusive Remedies. Except for the right to pursue
equitable remedies or as otherwise set forth in an Ancillary Agreement, the
remedies provided in this Section 4 shall be deemed the sole and exclusive
remedies of the parties with respect to the subject matters of the
indemnification provisions of Section 4.4.
5. CERTAIN OTHER COVENANTS.
5.1. Financial And Other Information.
(a) PFSweb agrees that, for so long as Daisytek
International is required to consolidate PFSweb's results of operations and
financial position or to account for its investment in PFSweb under the equity
method of accounting (determined in accordance with generally accepted
accounting principles consistently applied):
(i) PFSweb shall, and shall cause each of its
Subsidiaries to, maintain a system of internal accounting controls that will
provide reasonable assurance that: (A) PFSweb's and such Subsidiaries' books,
records and accounts fairly reflect all transactions and dispositions of assets
and (B) the specific objectives of accounting control are achieved.
(ii) PFSweb shall, and shall cause each of its
Subsidiaries to, maintain a fiscal year which commences on April 1 and ends on
March 31 of each calendar year.
(iii) PFSweb shall deliver to Daisytek
International a trial balance submission, which shall include amounts relating
to each of its Subsidiaries, in such format and detail as Daisytek International
may request, as promptly as practicable following the last day of each month.
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