REGISTRATION RIGHTS AGREEMENT between DWG CORPORATION and DWG ACQUISITION GROUP, L.P.
EXHIBIT
10.36
________________________________________________________
between
DWG
CORPORATION
and
DWG
ACQUISITION GROUP, L.P.
________________________________________________________
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REGISTRATION
RIGHTS AGREEMENT, dated as of April 23, 1993, by and between DWG Corporation, an
Ohio corporation (the "Company"), and DWG Acquisition Group, L.P., a Delaware
limited partnership ("DAG").
1. Background. DAG
has entered into that certain Stock Purchase Agreement among ▇▇▇▇▇▇ ▇▇▇▇▇▇
("Posner"), Security Management Corp., a Maryland corporation ("SMC") and ▇▇▇▇▇▇
▇▇▇▇▇▇ Trust Number 20, a trust organized under the laws of the State of Florida
(the "Trust") dated as of October 1, 1992 and as subsequently amended (the
"Agreement"), providing for, among other things, the purchase by DAG from
Posner, SMC and the Trust of 5,982,866 shares of common stock, par value $.10
per share, of the Company (the "Shares").
2. Registration under
Securities Act.
2.1. Registration on
Request. (a) Request. At
any time after the date hereof, the holders of Registrable Securities (as
hereinafter defined) (hereinafter each such Person is a "Holder"), holding an
aggregate of 25% of the Registrable Securities shall have the right to request,
in a writing to the Company, that the Company effect a registration with the
Commission (as hereinafter defined) under the Securities Act (as hereinafter
defined) of no less than fifty (50%) percent of such requesting Holders'
Registrable Securities; provided, however, that the
Company shall not be obligated to effect more than two registrations pursuant to
this Section 2.1. The Company will promptly give written notice of
any such requested registration to all Holders and thereupon, the Company will
use its best efforts to effect the registration under the Securities Act
of:
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the
Registrable Securities which the Company has been so requested to register by
the Holders requesting registration pursuant to the first sentence of
Section 2.l(a) (the "Requesting Holders"); and
(i) Subject
to Section 2.l(b), all other Registrable Securities which the Company has been
requested to register by the Holders by written request given to the Company
within 30 days after the giving of such written notice by the Company, all to
the extent requisite to permit the disposition of the Registrable Securities so
to be registered. If the Requesting Holders so elect, the offering of
the Registrable Securities pursuant to this Section 2.1(a) shall be in the form
of an underwritten offering.
(b) If the
managing underwriter of any underwritten offering shall advise the Company and
the Requesting Holders in writing that, in its opinion, the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering within a price range acceptable to 66-2/3% of the
Requesting Holders (by number of shares sought to be registered), the Company
shall include in such registration the number of Registrable Securities which in
the opinion of such managing underwriter can be sold within such price range,
and such securities shall be allocated, first pro rata among the
Requesting Holders, then, to the extent any Registrable Securities remaining,
pro rata among
the Holders requesting to have Registrable Securities included pursuant to
Section 2.l(a)(ii) on the basis of the relative number of Registrable Securities
requested by each such Holder to be included in such registration.
(c) Registration Statement
Form. Registrations
under this Section 2.1 shall be on such appropriate registration form of the
Commission (i) as shall be selected by the Company and as shall be reasonably
acceptable to a majority of the Requesting Holders (by number of
shares
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sought to
be registered) and (ii) as shall permit the disposition of such Registrable
Securities in accordance with the intended method or methods of
disposition.
(d) Expenses. The
Company will pay promptly all Registration Expenses (as hereinafter defined) in
connection with the registration requests made pursuant to this Section
2.1.
(e) Effective Registration
Statement. A
registration requested pursuant to this Section 2.1 shall not be deemed to
have been effected (i) unless a registration statement with respect thereto has
become effective, (ii) if after it has become effective, such registration is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason not the
fault of the Registering Holders and 85% or more of the Registrable Securities
covered thereby have not been sold, or (iii) if the conditions to closing
specified in the selling agreement or underwriting agreement entered into in
connection with such registration are not satisfied or waived, other than by
reason of a failure on the part of any Registering Holder who is a party to the
underwriting agreement or selling agreement to satisfy a covenant or condition
contained therein (such registration to be deemed to have been effected in favor
only of such defaulting Registering Holder and no other Registering
Holder).
(f) Underwriters. The
managing underwriter or underwriters of any underwritten offering effected
pursuant to this Section 2.1 shall be selected by the Company and within ten
(10) days of such selection, the Company shall notify the Requesting Holders of
the selection. The selection of the underwriters shall be subject to
the approval of at least a majority of the Requesting Holders (by number of
Registrable Securities sought to be registered), which approval shall not be
unreasonably withheld and shall be given within 10 days after the
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Company
notifies the Requesting Holders of the selection, and the price, terms and
provisions of the offering, shall be subject to the approval of at least 66 2/3%
of the Requesting Holders (by number of Registrable Securities sought to be
registered).
2.2. Incidental
Registration
.
(a) Right to Include Registrable
Securities. If
the Company at any time proposes to register any of its securities under the
Securities Act (other than by a registration on Form ▇-▇, ▇▇▇▇ ▇-▇ or any
successor or similar form and other than pursuant to a registration statement
requested pursuant to Section 2.1 hereof), whether or not for sale for its own
account or as a result of a demand from a security holder, and if the
registration form proposed to be used may be used for the registration of the
Registrable Securities, it will each such time give prompt written notice to all
Holders of its intention to do so and of such holders' rights under this Section
2.2. Upon the written request of any Holder made within 30 days after
the receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such Holder), the Company will use its
best efforts to effect the registration with the Commission under the Securities
Act of all Registrable Securities which the Company has been so requested to
register, to the extent required to permit the disposition of the Registrable
Securities so to be registered, provided, however, that if, at
any time after giving written notice of its intention to register any securities
and prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company shall
give written notice of such determination to each Holder, thereupon, (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such
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registration
(but not from its obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of any Holder entitled to
do so, to request that such registration be effected as a registration under
Section 2.1, and (ii) in the case of a determination to delay registering, shall
be permitted to delay registering any Registrable Securities, for the same
period as the delay in registering such other securities. No
registration effected under this Section 2.2 shall relieve the Company of its
obligation to effect any registration upon request under Section
2.1. The Company will pay all Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
Section 2.2.
(b) Apportionment in Incidental
Registrations. If
(i) a registration pursuant to this Section 2.2 involves an underwritten
offering of the securities being registered, whether or not for sale for the
account of the Company, to be distributed (on a firm commitment basis) by or
through one or more underwriters, and (ii) the managing underwriter of such
underwritten offering shall inform the Company in writing of its good faith
belief that the number of securities requested to be included in such
registration exceeds the number which can be sold in (or during the time of)
such offering or that the inclusion of such number of securities would adversely
affect the marketing of the securities to be sold by the Company or the security
holder or security holders upon whose exercise of demand registration rights the
Company is registering securities, then the Company shall include, to the extent
of the number and type which the Company is so advised can be sold in (or during
the time of) such offering, first, either (A) in
the case of a registration proposed by the Company for its own account, all
securities proposed by the Company to be sold for its own account, or (B) in the
case of a registration of any securities to be
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registered
by the Company for the accounts of other Persons pursuant to the exercise of
demand registration rights granted pursuant to an applicable registration rights
agreement between the Company and such other Person, the securities requested to
be registered by such Person but only in such amount and to the extent required
by such agreement and subject to the provisions of Section 7 hereof; second, such
Registrable Securities requested to be included in such registration pursuant to
Section 2.2 of this Agreement and such other securities requested to be included
pursuant to the registration rights agreement between the Company and SMC dated
the date hereof (the "SMC Agreement") notwithstanding any subsequent amendment
or modification thereof, pro rata between the
security holders under this Agreement and the SMC Agreement and third, such
securities proposed to be registered by the Company for the accounts of other
persons which must be included, pro rata.
2.3. Registration
Procedures. If
and whenever the Company is required to use its best efforts to effect the
registration of any Registrable Securities under the Securities Act as provided
in Sections 2.1 and 2.2, the Company will, as promptly as possible:
(i) select,
in accordance with terms of this Agreement, underwriters, counsel and
independent accountants for the Company in connection with such
registration;
(ii) prepare
and (as promptly thereafter as practicable and in any event within 45 days after
the end of the 30-day period within which requests for registration may be given
to the Company) file with the Commission the requisite registration statement to
effect such registration and thereafter use its best efforts to cause such
registration statement to become effective and to remain effective for the
period specified in Section 2.3(iii), provided, however, that the
Company may discontinue any registration of its securities
which are not Registrable Securities (and, under the circumstances specified in
Section 2.2(a), its securities which are Registrable Securities) at any time
prior to the effective date of the registration statement relating
thereto;
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(iii) prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period of not more
than six months (or such shorter period which will terminate when all
Registrable Securities covered by such registration statement have been sold
(but not before the expiration of the period referred to in Section 4(3) of the
Securities Act and Rule 174 thereunder, if applicable)) after the date of the
original filing and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement until such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the Registering Holders
thereof set forth in such registration statement; provided, however, that at a
reasonable time before filing any registration statement or prospectus or
supplement or amendment thereto, the Company shall furnish drafts of such
documents to counsel for the Registering Holders, which documents shall be
subject to reasonable review by such counsel and further, provided that there
shall not be counted as part of the six months any period during which the
prospectus may not be used pursuant to the last paragraph of this Section
2.3;
(iv) furnish
to each Registering Holder and to any underwriter such number of conformed
copies of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
theprospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 or Rule 430A under the Securities Act, in conformity with
the requirements of the Securities Act, documents incorporated by reference in
such registration statement, amendment, supplement or prospectus and such other
documents (in each case including all exhibits), as a Registering Holder or
underwriter may reasonably request;
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(v) use its
best efforts to register or qualify all Registrable Securities and other
securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as a majority of the Registering Holders (by
number of shares sought to be registered) or the underwriter shall reasonably
request, to keep such registration or qualification in effect for so long as
such registration statement remains in effect, and take any other action which
may be reasonably necessary or advisable to enable the Registering Holders to
consummate the disposition in such jurisdictions of the securities owned by such
Registering Holders, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this subdivision
2.3(v) be obligated to be so qualified, to subject itself to taxation in any
such jurisdiction or to consent to general service of process in any such
jurisdiction;
(vi) use its
best efforts to cause all Registrable Securities covered by such registration
statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the Registering Holders to
consummate the disposition of such Registrable Securities;
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(vii) furnish
to each Registering Holder and the underwriters a signed counterpart of: (x) an
opinion of counsel for the Company, dated the effective date of such
registration statement (or, if such registration includes an underwritten public
offering, dated the date of the closing under the underwriting agreement)
covering such matters as are customarily covered by opinions of issuer's counsel
delivered to underwriters in underwritten public offerings of securities; and
(y) a "comfort" letter, dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering, dated the
date of the closing under the underwriting agreement), signed by the independent
public accountants who have certified the Company's financial statements
included in such registration statement, covering matters which are customarily
covered in accountants' letters delivered to the underwriters in underwritten
public offerings of securities, and such other financial matters as the
underwriters may reasonably request;
(viii) notify
each Registering Holder at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or upon
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 any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of any such
Registering Holder promptly prepare and furnish to such Registering Holder a
reasonable number of copies of any supplement to or amendment of such prospectus
as may be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a material
fact or omit 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
under which they were made;
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(ix) otherwise
use its best efforts to comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve
months, but not more than eighteen months, beginning with the first full
calendar month after the effective date of such registration statement (as the
term "effective date" is defined in Rule 158 under the Securities Act), which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder, and will furnish to each Registering
Holder, underwriter and Registering Holders' or underwriter's counsel, at least
two business days prior to the filing thereof, a draft copy of any amendment or
supplement to such registration statement or prospectus and shall not file any
such amendment or supplement which does not comply in all material respects with
the requirements of the Securities Act or of the rules or regulations
thereunder;
(x) provide
and cause to be maintained a transfer agent for all Registrable Securities
covered by such registration statement from and after a date not later than the
effective date of such registration statement;
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(xi) use its
best efforts (A) to list all Registrable Securities covered by such registration
statement on any securities exchange on which any of the same class of the
Registrable Securities is then listed or (B) in the event such securities are
not so listed, to have such Registrable Securities qualified for inclusion on
the NASDAQ National Market System, if the Registrable Securities are then so
qualified or (C) in the event such securities are not so listed or qualified, to
have such Registrable Securities qualified for inclusion on the NASDAQ System;
and
(xii) furnish
unlegended certificates representing ownership of the Registrable Securities
then being sold in such denominations as shall be requested by Registering
Holders or underwriters.
The
Company may require each Registering Holder to promptly furnish the Company, as
a condition precedent to including such Registering Holder's Registrable
Securities in any registration, such information regarding such Registering
Holder and the distribution of such securities as the Company may from time to
time reasonably request in writing.
Each
Holder agrees, by acquisition of such Registrable Securities, that upon receipt
of any notice from the Company of the happening of any event of the kind
described in subdivision (viii) of this Section 2.3, such Holder will forthwith
discontinue such Holder's disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until such
Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by subdivision (viii) of this Section 2.3 and, if so directed by
the Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in
such Holder's possession, of the prospectus and any amendments or supplements
thereto relating to such Registrable Securities current at the time of receipt
of such notice.
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2.4. Underwritten
Offerings.
(a) Requested Underwritten
Offerings If
requested by the underwriters for any offering by Holders pursuant to a
registration requested under Section 2.1, the Company will enter into an
underwriting agreement with such underwriters for such offering, such agreement
to be satisfactory in substance and form to the Company, the Requesting Holders
and the underwriters and to contain such representations and warranties by the
Company and such other terms as are then generally prevailing in agreements of
such type, including, without limitation, indemnities to the effect and to the
extent provided in Section 2.8 hereof. The Requesting Holders and the
Company will cooperate in the negotiation of the underwriting agreement,
provided that nothing herein contained shall diminish the foregoing obligations
of the Company. The Registering Holders shall be parties to such
underwriting agreement. No Registering Holder shall be required to
make any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements to or for the
benefit of the Company and such underwriters regarding such Registering Holder,
such Registering Holder's Registrable Securities, any other information supplied
in writing by such Registering Holder to the Company specifically for use in the
Registration Statement and any other representation required by
law.
(b) Incidental Underwritten
Offerings. If
the Company at any time proposes to register any of its securities under the
Securities Act as contemplated by Section 2.2 and its securities are to be
distributed by or through one or more underwriters, the Company will, if
requested by any Holder as provided in Section 2.2 and subject to the provisions
of Section 2.2(b), use its best efforts to arrange for such underwriters to
include all the Registrable Securities to be offered and
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sold by
such Holder among the securities to be distributed by such
underwriters. The Registering Holders shall be parties to the
underwriting agreement between the Company and such underwriters. No
Registering Holder shall be required to make any representations or warranties
to or agreements with the Company or the underwriters other than
representations, warranties, or agreements to or for the benefit of the Company
and such underwriter regarding such Registering Holder, such Registering
Holder's Registrable Securities and any other information supplied in writing by
such Registering Holder to the Company specifically for use in the registration
statement and any other representation required by law.
(c) Participation in
Underwritten Registrations. No
Person may participate in any underwritten registration hereunder unless such
person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
(d) Holdback
Agreements. (i) Each
Holder agrees not to effect any sale or distribution, of any Registrable
Securities or any securities convertible into or exchangeable or exercisable for
such Registrable Securities, including a sale pursuant to Rule 144, during the
14 days prior to and the 180-day period beginning on the effective date of a
registration statement, if and to the extent requested by the Company, in the
case of a non-underwritten public offering or if and to the extent requested by
the managing underwriter in the case of an underwritten public
offering.
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(ii) The Company
agrees, if so required by the managing underwriter, (x) not to effect any sale
or distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the 14 days prior to and
during the 180-day period beginning on the effective date of any underwritten
registration pursuant to Section 2 hereof (except as part of such underwritten
registration or pursuant to registrations on Form S-8 or S-4 or any successor
form), and (y) to use its best efforts to cause each holder of at least 5% (on a
fully-diluted basis) of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities (other than securities
purchased in a registered offering) to agree not to effect any sale or
distribution of any such securities during such period (except as part of such
underwritten registration).
2.5. Preparation; Reasonable
Investigation. In
connection with the preparation and filing of each registration statement under
the Securities Act pursuant to this Agreement, the Company will give the
Registering Holders, the underwriters and their respective counsel and
accountants, the timely opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of each of such Registering Holders' and such underwriters'
respective counsel, to conduct appropriate due diligence within the meaning of
the Securities Act.
2.6. Rights of
Holders. If
any such registration statement refers to any Holder by name or otherwise as the
holder of any securities of the Company, then such holder shall have the right
to require (a) the insertion therein of language, in form and substance
reasonably
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satisfactory
to the Company, to the effect that the naming of such holder does not
necessarily make such holder a controlling Person within the meaning of the
Securities Act (each such Person hereinafter a "Controlling Person" and
collectively "Controlling Persons") of the Company and is not to be construed as
a recommendation by such holder of the investment quality of the Company's debt
or equity securities covered thereby and that such naming does not imply that
such holder will assist in meeting any future financial requirements of the
Company, or (b) in the event that such reference to such holder by name or
otherwise is not required by the Securities Act or any rules and regulations
promulgated thereunder, the deletion of the reference to such
holder.
2.7. Postponement of
Registration. If
at the time of any request to register Registrable Securities pursuant to
Section 2.1 hereof, the Company is engaged in or in good faith has plans to
engage in any financing, acquisition, corporate reorganization or other material
transactions involving the Company which the Company's Board of Directors
determines in its good faith reasonable judgment would be adversely affected by
the filing of any registration statement otherwise required to be prepared and
filed pursuant to Section 2.1, the Company shall be entitled to postpone for a
reasonable period of time (but not exceeding 120 days from the date of the
request), the filing of such registration statement and shall promptly give the
Requesting Holders written notice of such determination, containing a general
statement of the reasons for such postponement and an approximation of the
anticipated delay (which shall be kept confidential by such Requesting
Holders). If the Company shall so postpone the filing of the
registration statement, the Requesting Holders holding not less than 50% of the
Registrable Securities of the Requesting Holders shall have the right to
withdraw the request for registration
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by giving
written notice to the Company within 30 days after receipt of the notice of
postponement and, in the event of such withdrawal, such withdrawn request shall
not be counted for purposes of the requests for registration to which Holders
are entitled pursuant to Section 2.1 hereof. Such right to delay a
request for registration pursuant to this Section 2.7 may not be exercised more
than once in any two-year period.
2.8. Indemnification. (a) Indemnification by the
Company. In the event of any registration of any Registrable
Securities under the Securities Act, the Company will, and hereby does,
indemnify and hold harmless, each Registering Holder, its directors, officers,
employees, attorneys, agents and affiliates, and each Controlling Person, if
any, of such Registering Holder, against any settlement, losses, claims, damages
or liabilities, joint or several, to which such Registering Holder or any such
director, officer, employee, attorney, agent, affiliate, or Controlling Person
may become subject under the Securities Act or otherwise, insofar as such
settlement, losses, claims, damages or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Registrable Securities
were registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein or used in association
therewith, or any amendment or supplement thereto or any document incorporated
by reference therein, or (ii) any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will reimburse each such
Registering Holder, and each such director, officer, employee, agent, attorney,
affiliate, and Controlling Person for any legal or any other expenses reasonably
incurred by them in
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connection
with investigating or defending any such settlement, loss, claim, liability,
action or proceeding; provided that the
Company shall not be liable in any such case to any particular Registering
Holder or its director, officers, employees, agents, attorneys, affiliates or
Controlling Persons to the extent that any such settlement, loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Registering Holder or such director, officer, agent, affiliate
or Controlling Person specifically stating that it is for use in the preparation
thereof. Such indemnity and reimbursement obligation shall remain in
full force and effect regardless of any investigation made by or on behalf of
such Registering Holder or any such director, officer, agent, affiliate or
Controlling Person of such Registering Holder and shall survive the transfer of
such Registrable Securities by such Registering Holder. If the
offering pursuant to any registration statement provided for under this
Agreement is made through an underwriter, the Company agrees to indemnify the
underwriter, its officers and directors and each Controlling Person of such
underwriter to the same extent as hereinbefore provided; provided, that the
Company shall not be required to indemnify any such underwriter, or any officer
or director of such underwriter, or any Controlling Person of such underwriter,
to the extent the settlement, loss, claim, damage or liability results from such
underwriter's failure to send or to give a copy of the final prospectus to the
Person asserting an untrue statement or alleged untrue statement or omission or
alleged omission
at or prior to the written confirmation of the sale of Registrable Securities to
such Person if such statement or omission was corrected in such final
prospectus.
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(b) Indemnification by the
Registering Holders. The
Company may require, as a condition to including any Registrable Securities in
any registration statement filed pursuant to Section 2.1 or 2.2, that the
Company shall have received an undertaking satisfactory to it from the
Registering Holders to indemnify and hold harmless (in the same manner and to
the same extent as set forth in subdivision (a) of this Section 2.8) the
Company, its directors, officers, employees, agents, attorney and affiliates,
each Person, if any, who participates as an underwriter in the offering or sale
of such securities and each other Controlling Person of the Company or such
underwriter, if any, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Registering Holder or its
directors, officers, employees, agents, attorneys, affiliates or Controlling
Persons specifically stating that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Such indemnity shall remain in
full force and effect, regardless of any investigation made by or on behalf of
the Company or any such director, officer, employee, agent, attorney, affiliate
or Controlling Person and shall survive the transfer of such Registrable
Securities by such Registering Holder. Notwithstanding the provisions
of this paragraph (b), no Registering Holder shall be required to indemnify any
Person pursuant to this Section 2.8 for any amount in excess of the amount by
which the aggregate
net proceeds received by such Registering Holder in such offering exceeds the
amount of any damages that such Registering Holder has otherwise been required
or agreed to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
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(c) Notices of Claims,
etc. Promptly
after receipt by an indemnified party of notice of a claim, demand or the
commencement of any action or proceeding involving a claim referred to in the
preceding subdivisions of this Section 2.8, such indemnified party will, if a
claim in respect thereof is to be made by an indemnified party against an
indemnifying party, give prompt written notice to the latter of such claim,
demand or the commencement of such action, provided that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding
subdivisions of this Section 2.8, except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case
any such action is brought against an indemnified party, unless in the opinion
of counsel to such indemnified party a conflict of interest between such
indemnified party and indemnifying party may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. If the
indemnifying party is not entitled to, or elects not to, assume the defense of a
claim, it will not be obligated to pay the fees and expenses of more than one
counsel with respect to such claim, unless in the opinion of counsel to an
indemnified party a conflict of interest between such indemnified party and
other indemnified parties may exist in respect of such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of an
additional counsel for each such indemnified party as to which such conflict
exists. No indemnifying party shall, without the consent of
the
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indemnified
party, consent to entry of any judgment or enter into any settlement with
respect to any claim, demand, action or proceeding against the indemnified party
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation. If the indemnifying party has
agreed to indemnify the indemnified party for any action or proceeding, then
whether or not such defense is assumed by the indemnifying party, the
indemnifying party shall not be liable for any settlement made without its
consent, which consent shall not be unreasonably withheld.
(d) Other
Indemnification. Indemnification
similar to that specified in the preceding subdivisions of this Section 2.8
(with appropriate modifications) shall be given by the Company and each
Registering Holder covered by a registration statement with respect to any
required registration or other qualification of securities under any Federal or
state law or regulation of any governmental authority other than the Securities
Act.
(e) Indemnification and
Reimbursement Payments. The
indemnification and reimbursement payments required by this Section 2.8 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
(f) Contribution. If
the indemnification provided for in this Agreement shall for any reason be
unavailable or insufficient to an indemnified party under Section 2.8(a), 2.8(b)
or 2.8(d) hereof in respect to any settlement, loss, claim, damage or liability,
or any action in respect thereof, or referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such settlement,
loss, claim, damage or liability, or action in respect thereof, in such
proportion
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as shall
be appropriate to reflect (i) the relative benefits received by the Company on
the one hand and each of the Registering Holders on the other hand, from the
offering of the Registrable Securities, and (ii) the relative fault of the
Company on the one hand and each of the Registering Holders on the other, with
respect to the statements or omissions which resulted in such settlement, loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and each of the Registering Holders on the other
shall be deemed to be in the same proportion as the sum of the total
consideration paid to the Company in respect of the Registrable Securities plus
the total net proceeds from the offering of the Registrable Securities (before
deducting expenses) received by the Company bears to the amount by which the
total net proceeds from the offering of the Registrable Securities (before
deducting expenses) received by the Registering Holders exceeds the
consideration paid to the Company in respect of such Registrable Securities, and
in each case the net proceeds received from such offering shall be determined as
set forth on the table of the cover page of the prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Registering Holders, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Registering Holders agree that it would not be just and equitable if
contribution pursuant to this Section 2.8 were to be determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the settlement, loss, claim,
damage or liability, or action in respect thereof, referred to in this Section
2.8 shall be deemed to include, for purposes of this Section 2.8, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any
person. Notwithstanding the provisions of this paragraph (f), no
Registering Holder shall be required to contribute an amount in excess of the
amount by which the aggregate net proceeds received by such Registering Holder
exceeds the amount of any damages that such Registering Holder has otherwise
been required or agreed to pay by reason of any such untrue or alleged untrue
statement or omission or alleged omission.
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2.9. Listing of Common
Stock. The
Company covenants and agrees for the benefit of the Holders, that it will, at
its expense, as soon as is reasonably practicable, cause the Registrable
Securities registered from time to time upon exercise of the rights granted
hereby to be approved for listing upon the effectiveness of a registration under
this Agreement, subject to Section 2.l(e), and use its best efforts to maintain
such listing, on the American Stock Exchange or such other national securities
exchange on which the Company's traded securities are listed or authorized
for trading,
or NASDAQ if at such time the Company's traded securities are authorized for
trading on NASDAQ, subject to notice of issuance, if any, and the requirements
of such exchange or NASDAQ and will provide prompt notice to such exchange or
NASDAQ of the issuance thereof from time to time.
3. Definitions. As
used herein, unless the context otherwise requires, the following terms have the
following respective meanings:
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"Commission" shall
mean the United States Securities and Exchange Commission or any federal agency
at the time administering the Securities Act.
"Company" shall have
the meaning set forth in the preamble.
"Exchange Act" shall
mean the United States Securities Exchange Act of 1934, as amended, and any
successor statute thereto.
"NASDAQ” shall mean
the National Association of Securities Dealers Automated Quotation
System.
"Person" shall mean a
corporation, an association, a partnership, a business, an individual, a
governmental or political subdivision thereof or a governmental
agency.
"Registrable
Securities" shall mean the Shares or any stock issued by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or
otherwise. Registrable Securities shall cease to be Registrable
Securities when (a) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (b) they shall have been distributed to the public pursuant to Rule
144, (c) they shall have been otherwise transferred and new certificates for
them not bearing a legend restricting further transfer shall have been delivered
by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force, or (d)
they shall have ceased to be outstanding.
"Registering Holders"
shall mean any Holder whose securities are included in a registration statement
contemplated by Section 2.1 or 2.2 hereof.
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"Registration
Expenses" shall mean all expenses incident to the Company's performance
of or compliance with Section 2, including, without limitation, all
registration, filing and National Association of Securities Dealers, Inc. fees,
all fees and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company and of its independent
public accountants, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and compliance, the
reasonable fees and disbursements of one counsel to represent all holders of
Registrable Securities but who shall be selected by 50% (by number of
Registrable Securities sought to be registered) of the Registering Holders at
any given time, premiums and other costs of policies of insurance obtained by
the Company against liabilities arising out of the public offering of the
Registrable Securities being registered (if the Company elects to obtain such
insurance) and any fees and disbursements of underwriters customarily paid by
issuers or holders of securities (including fees paid to a qualified independent
underwriter), but excluding applicable underwriting discounts and commissions
and transfer taxes, if any.
"Rule 144" shall have
the meaning set forth in Section 4 hereof.
"Securities Act”
shall mean the United States Securities Act of 1933, as amended, and any
successor statute thereto.
4. Rule 144. So
long as the common stock of the Company shall be registered pursuant to the
requirements of Section 12 of the Exchange Act, the Company will file the
reports required to be filed by it under the Exchange Act and will take such
further action as any Holder may reasonably request, all to the extent required
from time to time to enable such
- 25 -
Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to time or (b) any similar rule or
regulation hereafter adopted by the Commission ("Rule 144"). Upon the
request of any Holder the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
5. Amendments and
Waivers. Except
as otherwise provided herein, the provisions of this Agreement may not be
amended, modified or supplemented unless in a writing signed by the Company and
majority (except with respect to those provisions requiring 66 2/3% approval for
action) of the Holders (by number of shares). Except as otherwise
provided herein, no waivers or consents to departures from the provisions hereof
may be given unless the Company has obtained the written consent of at least
majority (except with respect to those provisions requiring 66 2/3 % approval
for action) of the Holders (by number of shares). Each Holder shall
be bound by any consent obtained in the manner authorized by this Section 5,
whether or not such Registrable Securities shall have been marked to indicate
such consent.
6. Nominees for Beneficial
Owners. In
the event that any Registrable Securities are held by a nominee for the
beneficial owner thereof, the beneficial owner thereof may, at its election by
written notice to the Company effective upon receipt by the Company, be treated
as a Holder for purposes of any request or other action by any Holder pursuant
to this Agreement or any determination of any number or percentage of shares of
Registrable Securities held by any Holder contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so
elects, the Company may require assurances reasonably satisfactory to it of such
owner's beneficial ownership of such Registrable Securities. Prior to
receipt by the Company of written
- 26 -
notice
contemplated hereby, any action taken by any nominee shall be binding upon any
such beneficial owner.
7. Registration
Rights. The
Company will not grant any right of registration under the Securities Act
relating to any of its shares of capital stock or other securities to any
Person, other than pursuant to this Agreement or the SMC Agreement, unless the
registration rights agreement between the Company and such other Person(s)
contains an express provision to the effect that in any registration to be
effected by the Company, other than registrations on Form ▇-▇, ▇▇▇▇ ▇-▇ or any
successor or similar form, Holders of Registrable Securities hereunder and under
the SMC Agreement shall be entitled to have included in any registration
effected pursuant to Section 2.2 herein and the equivalent incidental
registration provision in the SMC Agreement 100% of the securities requested by
them to be so included prior to the inclusion of any securities requested to be
registered by the other Persons entitled to registration pursuant to the
incidental registration rights contained in any such other registration rights
agreement. The Company will not amend or modify any provisions of the
SMC Agreement which may adversely affect the rights of DAG under this
Agreement.
8. Notices. All
communications provided for hereunder shall be sent by first-class mail or
overnight courier and (a) if addressed to DAG, addressed to DAG in the manner
set forth in the Agreement, or at such other address as DAG shall have furnished
to the Company in writing, or (b) if addressed to any other Holder, the address
that such Holder shall have furnished to the Company in writing, or, until any
such other Holder so furnishes to the Company an address, then to and at the
address of the last Holder who has furnished an address to the Company, or (c)
if addressed to the Company, to DWG Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇,
- ▇▇ -
▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Secretary or at such other address, or to the
attention of such other officer, as the Company shall have furnished to each
holder of Registrable Securities at the time outstanding.
9. Assignment. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and assigns. In
addition, and whether or not any express assignment shall have been made, the
provisions of this Agreement which are for the benefit of the parties hereto
other than the Company shall also be for the benefit of and enforceable by any
subsequent holder of any Registrable Securities, subject to the provisions
respecting the minimum numbers or percentages of shares of Registrable
Securities required in order to be entitled to certain rights, or take certain
actions, contained herein.
10. Descriptive
Headings. The
descriptive headings of the several sections and paragraphs of this Agreement
are inserted for reference only and shall not limit or otherwise affect the
meaning hereof.
11. Governing
Law. This
Agreement shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the laws of the State of New
York.
12. Jurisdiction. (a) Each
of the parties hereto hereby irrevocably and unconditionally:
(i) Submits
itself in any legal action or proceeding relating to this Agreement, or for
recognition and enforcement of any judgment in respect hereof, to the exclusive
jurisdiction of the United States District Court for
- 28 -
the
Southern District of New York, and appellate courts therefrom, and consents and
agrees to such action or proceeding being brought in such court; provided,
however, that if for any reason such courts shall not have or decline to
exercise jurisdiction in any legal action or proceeding, such legal action or
proceeding may be brought in any other court or jurisdiction in accordance with
applicable laws; and
(ii) Waives
any objection that it may now or hereafter have to the venue of any such action
or proceeding in the United States District Court for the Southern District of
New York or that any such action or proceeding brought in the United States
District Court for the Southern District of New York was brought in an
inconvenient court and agrees not to plead or claim the same.
(b) The
Company hereby irrevocably and unconditionally:
(i) Designates
and directs Prentice Hall Corporation, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ as its agent to receive service of any
and all process and documents on its behalf, in any legal action or proceeding
referred to in clause (a) above in the State of New York and agrees that service
upon such agent shall constitute valid and effective service and that failure of
such agent to give any notice of such service to its principal shall not affect
or impair in any way the validity of such service or any judgment rendered in
any action or proceeding based thereon;
- 29 -
(ii) Agrees to
notify DAG promptly by registered or certified mail if such agent in the City of
New York shall cease to act as agent, and, in such event, promptly to designate
another agent in the City of New York to serve in place of such agent and
deliver to DAG written evidence of such substitute agent's acceptance of such
designation; and
(iii) Agrees
that nothing herein shall affect DAG's right to effect service of process in any
other manner permitted by law, and DAG shall have the right to bring any legal
proceedings (including a proceeding for enforcement of a judgment entered by the
aforementioned court) against the Company, in such court in accordance with
applicable laws.
(c) DAG
hereby irrevocably and unconditionally:
(i) Designates
and directs Paul, Weiss, Rifkind, Wharton, & ▇▇▇▇▇▇▇▇, 1285 Avenue of the
Americas, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ as its agent to receive service of any
and all process and documents on its behalf, in any legal action or proceeding
referred to in clause (a) above in the State of New York and agrees that service
upon such agent shall constitute valid and effective service and that failure of
such agent to give any notice of such service to its
principal shall not affect or impair in any way the validity of such service or
any judgment rendered in any action or proceeding based
thereon;
(ii) Agrees to
notify the Company promptly by registered or certified mail if such agent in the
City of New York shall cease to act
- 30 -
as agent,
and, in such event, promptly to designate another agent in the City of New York
to serve in place of such agent and deliver to the Company written evidence of
such substitute agent's acceptance of such designation; and
(iii) Agrees
that nothing herein shall affect the Company's rights to effect service of
process in any other manner permitted by law, and that the Company shall have
the right to bring any legal proceedings (including a proceeding for enforcement
of a judgment entered by the aforementioned court) against DAG in such court in
accordance with applicable laws.
13. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all such counterparts shall together constitute one and
the same agreement and shall become effective only when one or more of the
counterparts shall have been signed by each party and delivered to the other
party, it being understood that all the parties need not sign the same
counterpart.
- 31 -
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their respective officers thereunto duly authorized as of the date
first above written.
DWG
CORPORATION
By: /s/
Name:
Tide:
DWG
ACQUISITIONxGROUP, L.P.
By: /s/ ▇▇▇▇▇▇
▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇▇▇▇▇
Tide: General
Partner
By: /s/ ▇▇▇▇▇ ▇.
May
Name: ▇▇▇▇▇
▇. May
Tide: General
Partner
- 32 -