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EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of June 1, 1998 by and among Daisytek International
Corporation, a Delaware corporation ("DAISYTEK"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇ (the "STOCKHOLDERS").
R E C I T A L S
A. Concurrently herewith Daisytek, Daisytek, Incorporated, a
wholly owned subsidiary of Daisytek (the "PURCHASER"), TC Illinois Acquisition
Corp., TC Michigan Acquisition Corp., TC Georgia Acquisition Corp., TC Ohio
Acquisition Corp., TC Pennsylvania Acquisition Corp., TC Texas Acquisition
Corp. and TC Minnesota Acquisition Corp., each a wholly owned subsidiary of the
Purchaser (collectively, the "ACQUISITION SUBS"), The Tape Company, Inc., an
Illinois corporation, The Tape Company, Inc., a Michigan corporation, The Tape
Company, Inc., a Georgia corporation, The Tape Company, Inc., an Ohio
corporation, Tape Distributors, Inc., a Pennsylvania corporation, Tape
Distributors of Texas, Inc., a Texas corporation, and Tape Distributors of
Minnesota, Inc., a Minnesota corporation (collectively, the "SELLERS") and the
Stockholders are entering into that certain Agreement and Plan of Merger (the
"MERGER AGREEMENT") pursuant to which the Acquisition Subs are merging (the
"MERGER") with and into the Sellers, with the Sellers remaining as the
surviving corporations thereof.
B. Pursuant to the terms of the Merger Agreement and as a
consequence of the Merger, all of the shares of Daisytek Common Stock of the
Sellers issued and outstanding and held of record by the Stockholders are
concurrently herewith being converted into shares of Daisytek Common Stock,
$.01 par value (the "DAISYTEK COMMON STOCK"), of Daisytek.
C. In connection with the transactions contemplated by the Merger
Agreement, Daisytek has agreed to grant to the Stockholders certain piggy-back
registration rights as more fully set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
1. DEFINITIONS.
1.1 DEFINITIONS. For purposes of this Agreement:
(a) HOLDER. The term "HOLDER" means any person
owning of record Registrable Securities that have not been sold to the public
or pursuant to Rule 144 promulgated under the Securities Act or any assignee of
record of such Registrable Securities to whom rights under this Agreement have
been duly assigned in accordance with this Agreement.
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(b) REGISTRABLE SECURITIES. The term
"REGISTRABLE SECURITIES" means: (1) all the shares of Daisytek Common Stock
issued to the Stockholders pursuant to the terms of the Merger Agreement and
(2) any shares of Daisytek Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, all such shares of Daisytek Common Stock described in clause
(1) of this subsection (b); excluding in all cases, however, any Registrable
Securities sold by a person in a transaction in which rights under this Section
2 are not assigned in accordance with this Agreement or any Registrable
Securities sold to the public or sold pursuant to Rule 144 promulgated under
the Securities Act. In addition, all shares of Daisytek Common Stock which are
held in escrow under the terms of the Merger Agreement shall not be deemed
Registrable Securities hereunder for so long as such shares are held in escrow.
(c) REGISTRATION. The terms "REGISTER,"
"REGISTERED," and "REGISTRATION" refer to a registration effected by preparing
and filing a registration statement in compliance with the Securities Act, and
the declaration or ordering of effectiveness of such registration statement.
(d) SEC. The term "SEC" or "COMMISSION" means the
U.S. Securities and Exchange Commission.
(e) SECURITIES ACT. The term "SECURITIES ACT"
means the Securities Act of 1933, as amended.
2. REGISTRATION RIGHTS.
2.1 PIGGYBACK REGISTRATIONS. Daisytek shall notify all
Holders of Registrable Securities in writing at least thirty (30) days prior to
filing any registration statement under the Securities Act for purposes of
effecting a public offering of Daisytek Common Stock (including, but not
limited to, registration statements relating to secondary offerings of Daisytek
Common Stock, but excluding registration statements on Form S-8 or S-4 or
otherwise relating to relating to any employee benefit plan or a corporate
reorganization) and will afford each such Holder an opportunity to include in
such registration statement all or any part of the Registrable Securities then
held by such Holder. Each Holder desiring to include in any such registration
statement all or any part of the Registrable Securities held by such Holder
shall, within twenty (20) days after receipt of the above-described notice from
Daisytek, so notify Daisytek in writing, and in such notice shall inform
Daisytek of the number of Registrable Securities such Holder wishes to include
in such registration statement. If a Holder decides not to include all of its
Registrable Securities in any registration statement thereafter filed by
Daisytek, such Holder shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by Daisytek with respect to offerings
of Daisytek Common Stock (except as aforesaid), all upon the terms and
conditions set forth herein.
2.2 UNDERWRITING. If a registration statement under
which Daisytek gives notice under this Section is for an underwritten offering,
then Daisytek shall so advise the Holders of Registrable Securities. In such
event, the right of any such Holder's Registrable
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Securities to be included in a registration pursuant to this Section shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. The selection of such underwriter(s), and the terms
and provisions of any underwriting agreement to be entered into with such
underwriter(s), shall be in the sole and absolute discretion of Daisytek,
regardless of whether Daisytek is offering any shares of Daisytek Common Stock
thereunder. All Holders proposing to distribute their Registrable Securities
through such underwriting shall enter into an underwriting agreement in
customary form with the managing underwriter(s) selected for such underwriting.
2.3 PRIORITY. Notwithstanding any other provision of
this Agreement, if the managing underwriter determines in good faith that
marketing factors require a limitation of the number of shares to be
underwritten, then the managing underwriter may exclude shares (including
Registrable Securities) from the registration and the underwriting, and the
number of shares that may be included in the registration and the underwriting
shall be allocated, first, to Daisytek (to the extent Daisytek is offering any
shares of Daisytek Common Stock thereunder), and second, to the Holders and
other persons requesting inclusion of their Registrable Securities and Daisytek
Common Stock in such registration statement on a pro rata basis based on the
following formula (as applicable to each such Holder or other person): the
number of shares of Registrable Securities or Daisytek Common Stock requested
to be included in such registration statement by such Holder or person (the
"REQUESTED SHARES"), multiplied by a fraction, the numerator of which is such
Holder's or person's Requested Shares, and the denominator of which is the
total number of Requested Shares of all Holders and other persons. If, as the
result of such allocation, any Holder wishes to withdraw from such registration
and underwriting, such Holder may elect to do so by written notice to Daisytek
and the underwriter, delivered as promptly as possible following the
determination of such allocation, but in no event later than five business days
prior to the effective date of the registration statement.
2.4 EXPENSES. All expenses incurred in connection with a
registration pursuant to this Section (excluding underwriters' and brokers'
discounts and commissions), including, without limitation all federal and "blue
sky" registration and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for Daisytek (but not counsel for any Holder)
shall be borne by Daisytek.
2.5 OBLIGATIONS OF DAISYTEK. Whenever required to effect
the registration of any Registrable Securities under this Agreement, Daisytek
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective, and, upon the request
of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to ninety (90)
days.
(b) Prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
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(c) Furnish to the Holders such number of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration.
(d) Use its best efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that Daisytek shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter(s) of
such offering. Each Holder participating in such underwriting shall also enter
into and perform its obligations under such an agreement.
(f) Notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening
of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
2.6 FURNISH INFORMATION. It shall be a condition
precedent to the obligations of Daisytek to take any action pursuant to Section
2.2 that the selling Holders shall complete any and all documents and furnish
to Daisytek such information regarding themselves, the Registrable Securities
held by them, and the intended method of disposition of such securities as
shall be required to timely effect the registration of their Registrable
Securities.
2.7 DELAY OF REGISTRATION. No Holder shall have any
right to obtain or seek an injunction restraining or otherwise delaying any
registration in which Daisytek is registering shares of Daisytek Common Stock
to be sold by it as the result of any controversy that might arise with respect
to the interpretation or implementation of this Agreement.
2.8 INDEMNIFICATION. In the event any Registrable
Securities are included in a registration statement under this Agreement:
(a) BY DAISYTEK. To the extent permitted by law,
Daisytek will indemnify and hold harmless each Holder, the partners, officers
and directors of each Holder, any underwriter (as defined in the Securities
Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Securities Act or the Securities Exchange
Act of 1934, as amended, (the "1934 ACT"), against any losses, claims, damages,
or liabilities (joint or several) to which they may become subject under the
Securities Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "VIOLATION"):
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(i) any untrue statement or alleged
untrue statement of a material fact contained in such
registration statement, including any preliminary
prospectus or final prospectus contained therein or
any amendments or supplements thereto;
(ii) the omission or alleged omission to
state therein a material fact required to be stated
therein, or necessary to make the statements therein
not misleading, or
(iii) any violation or alleged violation
by Daisytek of the Securities Act, the 1934 Act, any
federal or state securities law or any rule or
regulation promulgated under the Securities Act, the
1934 Act or any federal or state securities law in
connection with the offering covered by such
registration statement;
and Daisytek will reimburse each such Holder, partner, officer or
director, underwriter or controlling person for any legal or other expenses
reasonably incurred by them, as incurred, in connection with investigating or
defending any such loss, claim, damage, liability or action; provided however,
that the indemnity agreement contained in this subsection shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of Daisytek (which consent
shall not be unreasonably withheld), nor shall Daisytek be liable in any such
case for any such loss, claim, damage, liability or action to the extent that
it arises out of or is based upon a Violation which occurs in reliance upon and
in conformity with written information furnished expressly for use in
connection with such registration by such Holder, partner, officer, director,
underwriter or controlling person of such Holder.
(b) BY SELLING HOLDERS. To the extent permitted
by law, each selling Holder will indemnify and hold harmless Daisytek, each of
its directors, each of its officers who have signed the registration statement,
each person, if any, who controls Daisytek within the meaning of the Securities
Act, any underwriter and any other Holder selling securities under such
registration statement or any of such other Holder's partners, directors or
officers or any person who controls such Holder within the meaning of the
Securities Act or the 1934 Act, against any losses, claims, damages or
liabilities (joint or several) to which Daisytek or any such director, officer,
controlling person, underwriter or other such Holder, partner or director,
officer or controlling person of such other Holder may become subject under the
Securities Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise
out of or are based upon any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by Daisytek or any such director, officer,
controlling person, underwriter or other Holder, partner, officer, director or
controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this subsection shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which
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consent shall not be unreasonably withheld; and provided further, that the
total amounts payable in indemnity by a Holder under this Section in respect of
any Violation shall not exceed the net proceeds received by such Holder in the
registered offering out of which such Violation arises.
(c) NOTICE. Promptly after receipt by an
indemnified party under this Section of notice of the commencement of any
action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under
this Section, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party shall have the right to retain its own counsel, with
the fees and expenses to be paid by the indemnifying party, if representation
of such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential conflict of interests between
such indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section.
(d) DEFECT ELIMINATED IN FINAL PROSPECTUS. The
foregoing indemnity agreements of Daisytek and Holders are subject to the
condition that, insofar as they relate to any Violation made in a preliminary
prospectus but eliminated or remedied in the amended prospectus on file with
the SEC at the time the registration statement in question becomes effective or
the amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (the
"FINAL PROSPECTUS"), such indemnity agreement shall not inure to the benefit of
any person if a copy of the Final Prospectus was furnished to the indemnified
party and was not furnished to the person asserting the loss, liability, claim
or damage at or prior to the time such action is required by the Securities
Act.
(e) CONTRIBUTION. In order to provide for just
and equitable contribution to joint liability under the Securities Act in any
case in which either (i) any Holder exercising rights under this Agreement, or
any controlling person of any such Holder, makes a claim for indemnification
pursuant to this Section but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of any such
selling Holder or any such controlling person in circumstances for which
indemnification is provided under this Section; then, and in each such case,
Daisytek and such Holder will contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after contribution from
others) in such proportion so that such Holder is responsible for the portion
represented by the percentage that the public offering price of its Registrable
Securities offered by and sold under the registration statement bears to the
public offering price of all securities offered by and sold under such
registration statement, and Daisytek and other selling Holders are responsible
for the
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remaining portion; provided, however, that, in any such case, (A) no such
Holder will be required to contribute any amount in excess of the public
offering price of all such Registrable Securities offered and sold by such
Holder pursuant to such registration statement; and (B) no person or entity
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) will be entitled to contribution from any person or entity
who was not guilty of such fraudulent misrepresentation.
(f) SURVIVAL. The obligations of Daisytek and
Holders under this Section shall survive the completion of any offering of
Registrable Securities in a registration statement, and otherwise.
2.9 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby
agrees that it shall not, to the extent requested by Daisytek or an underwriter
of securities of Daisytek, sell or otherwise transfer or dispose of any
Registrable Securities or other shares of stock of Daisytek then owned by such
Holder (other than to donees or partners of the Holder who agree to be
similarly bound) for up to 90 days following the effective date of a
registration statement of Daisytek filed under the Securities Act; provided,
however, that such agreement shall be applicable only to a registration
statement of Daisytek which covers securities to be sold on its behalf to the
public in an underwritten offering (and not to Registrable Securities sold
pursuant to such registration statement). In order to enforce the foregoing
covenant, Daisytek shall have the right to place restrictive legends on the
certificates representing the shares subject to this Section and to impose stop
transfer instructions with respect to the Registrable Securities and such other
shares of stock of each Holder (and the shares or securities of every other
person subject to the foregoing restriction) until the end of such period.
2.10 TERMINATION OF DAISYTEK'S OBLIGATIONS. Daisytek
shall have no obligations pursuant to Section 2.2 with respect to: (i) any
request or requests for registration made by any Holder on a date more than
three years after the Closing Date under the Merger Agreement or (ii) any
Registrable Securities proposed to be sold by a Holder in a registration
pursuant to Section 2.2 if, in the opinion of counsel to Daisytek, all such
Registrable Securities proposed to be sold by a Holder may be sold in a
three-month period without registration under the Securities Act pursuant to
Rule 144 under the Securities Act.
3. ASSIGNMENT AND AMENDMENT.
3.1 ASSIGNMENT. Notwithstanding anything herein to the
contrary, the registration rights of a Holder under Section 2 hereof may be
assigned only to a party who acquires at least 250,000 shares of Registrable
Securities from a Holder; provided, however that no party may be assigned any
of the foregoing rights unless Daisytek is given written notice by the
assigning party at the time of such assignment stating the name and address of
the assignee and identifying the securities of Daisytek as to which the rights
in question are being assigned; and provided further that any such assignee
shall receive such assigned rights subject to all the terms and conditions of
this Agreement, including without limitation the provisions of this Section 3.
3.2 AMENDMENT OF RIGHTS. Any provision of this Agreement
may be amended and the observance thereof may be waived (either generally or in
a particular instance
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and either retroactively or prospectively), only with the written consent of
Daisytek and the party to be charged with such amendment or waiver. Each Holder
acknowledges and agrees that the grant of piggyback registration rights on a
pari passu basis with the piggyback registration rights of the Holders under
Section 2.2 shall not be deemed to be a material and adverse change to the
piggyback registration rights of the Holders under this Agreement and, to the
extent that such rights are granted to any person with respect to Daisytek
Common Stock acquired after the date hereof, each Holder (and/or any of his
permitted successors or assigns) shall be deemed to have consented to such
grant. Any amendment or waiver effected in accordance with this Section 3.2
shall be binding upon each Holder, each permitted successor or assignee of such
Holder and Daisytek.
4. GENERAL PROVISIONS.
4.1 NOTICES. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered or if deposited with an overnight
courier service or if deposited in the U.S. mail by registered or certified
mail, return receipt requested, postage prepaid, as follows:
(a) if to Daisytek, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇;
(b) if to a Stockholder, at such Stockholder's
address as set forth on the signature page hereof.
Any party hereto (and such party's permitted assigns) may by notice so given
change its address for future notices hereunder. Notice shall conclusively be
deemed to have been given when personally delivered or when deposited in the
mail in the manner set forth above.
4.2 ENTIRE AGREEMENT. This Agreement constitutes and
contains the entire agreement and understanding of the parties with respect to
the subject matter hereof and supersedes any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties respecting the subject matter hereof.
4.3 GOVERNING LAW. This Agreement shall be governed by
and construed exclusively in accordance with the laws of the State of Delaware,
excluding that body of law relating to conflict of laws and choice of law.
4.4 SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, then such
provision(s) shall be excluded from this Agreement and the balance of this
Agreement shall be interpreted as if such provision(s) were so excluded and
shall be enforceable in accordance with its terms.
4.5 THIRD PARTIES. Nothing in this Agreement, express or
implied, is intended to confer upon any person, other than the parties hereto
and their successors and assigns, any rights or remedies under or by reason of
this Agreement.
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4.6 SUCCESSORS AND ASSIGNS. Subject to the provisions of
Section 3.1, the provisions of this Agreement shall inure to the benefit of,
and shall be binding upon, the successors and permitted assigns of the parties
hereto.
4.7 CAPTIONS. The captions to sections of this Agreement
have been inserted for identification and reference purposes only and shall not
be used to construe or interpret this Agreement.
4.8 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.9 COSTS AND ATTORNEYS' FEES. In the event that any
action, suit or other proceeding is instituted concerning or arising out of
this Agreement or any transaction contemplated hereunder, the prevailing party
shall recover all of such party's costs and attorneys' fees incurred in each
such action, suit or other proceeding, including any and all appeals or
petitions therefrom.
4.10 ADJUSTMENTS FOR STOCK SPLITS, ETC. Wherever in this
Agreement there is a reference to a specific number of shares of Daisytek
Common Stock of any class or series, then, upon the occurrence of any
subdivision, combination or stock dividend of such class or series of stock,
the specific number of shares so referenced in this Agreement shall
automatically be proportionally adjusted to reflect the affect on the
outstanding shares of such class or series of stock by such subdivision,
combination or stock dividend.
4.11 AGGREGATION OF STOCK. All shares held or acquired by
affiliated entities or persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
DAISYTEK INTERNATIONAL CORPORATION
By:
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▇▇▇ ▇▇▇▇▇▇, Vice President
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