________________________________________________________
REGISTRATION RIGHTS
AGREEMENT
between
DWG CORPORATION
and
DWG ACQUISITION GROUP,
L.P.
________________________________________________________
REGISTRATION RIGHTS
AGREEMENT
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 Victor Posner ("Posner"), Security Management
Corp., a Maryland corporation ("SMC") and Victor Posner 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:
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
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
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 S-4, Form S-8
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
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
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;
(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;
(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;
(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;
(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;
(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.
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