63
prompt notice to Daisytek and include in such registration all shares of our
stock which Daisytek requests to be included (each, a "Piggyback Registration").
Priority on Piggyback Registrations. If a Piggyback Registration is being
made on our behalf and the underwriters advise us that a reduction in the number
of shares to be sold is necessary, we must include in such registration: first,
the securities we propose to offer; second, the securities requested to be
included by Daisytek; and third, any other securities requested to be included
in such registration. If a Piggyback Registration is being made on behalf of
other holders of our securities and the underwriters advise us that a reduction
in the number of shares to be sold is necessary, we must include in such
registration: first, the securities requested to be included therein by the
holders requesting such registration and the securities requested to be included
therein by Daisytek, pro rata among such holders and Daisytek on the basis of
the number of securities owned by each such holder; and second, any other
securities requested to be included in such registration.
Registration Procedures and Expenses. The registration rights agreement
sets forth various registration procedures, including a covenant by us to make
available our senior management for road show presentations. All registration
expenses incurred in connection with the registration rights agreement,
including all filing fees, fees and expenses of compliance with securities
and/or blue sky laws, financial printing expenses, fees and disbursements of
custodians, transfer agents, exchange agents and/or information agents, and fees
and disbursements of counsel and all independent certified public accountants,
underwriters (excluding discounts and commissions) and other persons retained by
us will be paid by us. In addition, we must reimburse Daisytek for the fees and
disbursements of its outside counsel as well as out-of-pocket expenses incurred
in connection with any such registration.
Indemnification. The registration rights agreement contains indemnification
and contribution provisions by us for the benefit of Daisytek and any
underwriters and by Daisytek for the benefit of us and any underwriters with
respect to information provided by Daisytek.
Transfer. Daisytek may transfer shares covered by the registration rights
agreement and the holders of such transferred shares will be entitled to the
benefits of the registration rights agreement; provided that each such
transferee agrees to be bound by the terms of the registration rights agreement.
Duration. The registration rights under the registration rights agreement
will remain in effect with respect to any shares of our common stock until:
- such shares have been sold pursuant to an effective registration
statement under the Securities Act;
- such shares have been sold to the public pursuant to Rule 144 under the
Securities Act (or any successor provision);
- such shares have been otherwise transferred, new certificates for them
not bearing a legend restricting further transfer shall have been
delivered by the company and subsequent public distribution of them shall
not require registration of them under the Securities Act or any similar
state law;
- such shares have ceased to be outstanding; or
- in the case of shares held by a transferee of Daisytek, when such shares
become eligible for sale pursuant to Rule 144(k) under the Securities Act
(or any successor provision).
TAX MATTERS
We will enter into a tax indemnification and allocation agreement with
Daisytek to govern the allocation of tax liabilities and to set forth agreements
with respect to certain other tax matters.
59