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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): June 20, 1996
WICKES LUMBER COMPANY
(Exact name of registrant as specified in its charter)
Delaware 0-22468 36-3554758
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification
incorporation) Number)
706 North Deerpath Drive, Vernon Hills, Illinois 60061
(Address of principal executive offices) (Zip Code)
847-367-3400
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On June 20, 1996, pursuant to the previously reported Stock Purchase
Agreement (the "Stock Purchase Agreement") dated January 11, 1996 between
Riverside Group, Inc. ("Riverside") and the registrant, Riverside purchased
from the registrant 2,000,000 newly-issued shares of the registrant's
common stock, par value $.01 per share ("Wickes Common Stock"), for
$10,000,000 in cash. As a result of this transaction, Riverside
beneficially owns 4,217,288 shares of Wickes Common Stock, constituting
approximately 55% of the registrant's outstanding voting common stock and
approximately 52% of all outstanding shares of the registrant's common
stock.
The terms of the Stock Purchase Agreement were reviewed and
recommended to the boards of directors of Riverside and the registrant by
committees comprised of the independent directors of each company. The
registrant's board committee received the opinion of its financial advisor
that the consideration received by the registrant pursuant to the Stock
Purchase Agreement was fair, from a financial point of view, to the
registrant as of the date of the opinion.
In connection with the Stock Purchase Agreement, Riverside and the
registrant entered into a Registration Rights Agreement granting certain
demand and piggyback securities law registration rights with respect to the
shares acquired by Riverside pursuant to the Stock Purchase Agreement.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
Number Description of Exhibit
99.1* Stock Purchase Agreement dated January 11, 1996, between
Riverside Group, Inc. and Wickes Lumber Company ((incorporated
by reference to Exhibit 99.1 to the registrant's Current Report
on Form 8-K dated January 11, 1996)
99.2 Registration Rights Agreement between Riverside Group,
Inc. and Wickes Lumber Company pursuant to January 11, 1996
Stock Purchase Agreement.
__________
*Incorporated by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
WICKES LUMBER COMPANY
Date: June 27, 1996 By: /s/ George A. Bajalia________
George A. Bajalia
Senior Vice President and
Chief Financial Officer
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Exhibit 99.2
Registration Rights Agreement
1. Introduction. Wickes Lumber Company, a Delaware corporation (the
"Company"), and Riverside Group, Inc., a Florida corporation ("Riverside"),
are parties to the Stock Purchase Agreement dated January 11, 1996 (the
"Stock Purchase Agreement"), pursuant to which the Company and Riverside
have entered into this Agreement.
Certain capitalized terms used in this Agreement are defined in
Section 3 hereof; references to sections shall be to sections of this
Agreement.
2. Registration under Securities Act, etc.
2.1 Registration on Request.
(a) Request. At any time or from time to time after the date
hereof, upon the written request of one or more Initiating Holders, re
questing that the Company effect the registration under the Securities Act
of all or part of such Initiating Holders' Registrable Securities and
specifying the intended method of disposition thereof, the Company will
promptly give written notice of such requested registration to all
registered holders of Registrable Securities, and thereupon the Company
will use its best efforts to effect the registration under the Securities
Act of:
(i) the Registrable Securities which the Company has
been so requested to register by such Initiating Holders for
disposition in accordance with the intended method of disposition
stated in such request;
(ii) all other Registrable Securities the holders of
which shall have made a written request to the Company for
registration thereof within 30 days after the giving of such
written notice by the Company (which request shall specify the
intended method of disposition of such Registrable Securities);
and
(iii) all shares of Common Stock which the Company may
elect to register in connection with the offering of Registrable
Securities pursuant to this section 2.1,
all to the extent requisite to permit the disposition (in accordance with
the intended methods thereof as aforesaid) of the Registrable Securities
and the additional shares of Common Stock, if any, so to be registered,
provided that the Company shall not be required to effect a registration
pursuant to this Section 2.1 (other than Rule 415 Registrations) if three
earlier registrations shall have been effected pursuant to this Section
2.1, and further provided that the Company shall not be required to effect
any registration of Registrable Securities pursuant to this Section 2.1
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(other than pursuant to a Rule 415 Registration) unless the aggregate
number of shares of Registrable Securities requested to be registered by
all holders of Registrable Securities is equal to or greater than 10% of
the number of shares of Common Stock outstanding at the date hereof
(excluding those shares issued pursuant to the Stock Purchase Agreement).
(b) 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
the holders of more than 50% (by number of shares) of the Registrable
Securities so to be registered and (ii) as shall permit the disposition of
such Registrable Securities in accordance with the intended method or
methods of disposition specified in their request for such registration.
The Company agrees to include in any such registration statement all
information which holders of Registrable Securities being registered shall
reasonably request (after giving due regard to the confidentiality of such
information) provided, however, that all such requests shall be in the best
interests of the Company as shall be determined in good faith by its Board
of Directors. If, in connection with any registration under section 2.1
which is proposed by the Company to be on Form S-3 or any similar short
form registration statement which is a successor to Form S-3, the managing
underwriters, if any, shall advise the Company in writing that in their
opinion the use of another permitted form is of material importance to the
success of the offering, then such registration shall be on such other
permitted form.
(c) Expenses. The Company will pay all Registration Expenses in
connection with any registration requested pursuant to this section 2.1 by
any Initiating Holders.
(d) 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,
provided that a registration which does not become effective after the
Company has filed a registration statement with respect thereto solely by
reason of the refusal to proceed of the Initiating Holders (other than a
refusal to proceed based upon the advice of counsel relating to a matter
with respect to the Company) shall be deemed to have been effected by the
Company at the request of such Initiating Holders unless the Initiating
Holders shall have elected to pay all Registration Expenses in connection
with such registration, (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, or (iii) the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection
with such registration are not satisfied, other than by reason of some act
or omission by such Initiating Holders.
(e) Selection of Underwriters. If a requested registration
pursuant to this section 2.1 involves an underwritten offering, the
underwriter or underwriters thereof shall be selected by the holders of
more than 50% of the Registrable Securities so to be registered.
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(f) Priority in Requested Registrations. If a requested
registration pursuant to this section 2.1 involves an underwritten
offering, and the managing underwriter shall advise the Company in writing
(with a copy to each holder of Registrable Securities requesting
registration) that, in its opinion, the number of securities requested to
be included in such registration (including securities of the Company which
are not Registrable Securities) exceeds the number which can be sold in
such offering within a price range acceptable to the holders of a majority
of the Registrable Securities requested to be included in such
registration, the Company will include in such registration, to the extent
of the number which the Company is so advised can be sold in such offering,
(i) first, Registrable Securities requested to be included in such
registration by the holder or holders of Registrable Securities, pro rata
among such holders on the basis of the number of such securities requested
to be included by such holders; and (ii) second, securities the Company
proposes to sell and other securities of the Company included in such
registration by the holders thereof.
(g) Limitation on Demands. No Initiating Holder may make a
written request for registration pursuant to this section 2.1 during the
pendency of any other written request made pursuant to this section 2.1 and
for a period of six months after the date any Initiating Holder has
delivered a request to the Company pursuant to section 2.1 (a), other than
in each case as contemplated by clause (ii) of section 2.1(a).
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, S-8, S-14 or S-15 or any suc
cessor or similar forms and other than pursuant to section 2.1), whether or
not for sale for its own account, it will each such time give prompt
written notice to all holders of Registrable Securities of its intention to
do so and of such holders' rights under this section 2.2. Upon the written
request of any such 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 and the intended method of
disposition thereof), the Company will use its best efforts to effect the
registration under the Securities Act of all Registrable Securities which
the Company has been so requested to register by the holders thereof, to
the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to
be registered, by inclusion of such Registrable Securities in the
registration statement which covers the securities which the Company
proposes to register, provided 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 either not to
register or to delay registration of such securities, the Company may, at
its election, give written notice of such determination to each holder of
Registrable Securities and, 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),
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without prejudice, however, to the rights of any holder or holders of
Registrable Securities 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) Priority in Incidental Registrations. If (i) a registration
pursuant to this section 2.2 involves an underwritten offering of the
securities so 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 of recognized standing under underwriting terms
appropriate for such a transaction, (ii) the Registrable Securities so
requested to be registered for sale for the account of holders of
Registrable Securities are not also to be included in such underwritten
offering (either because the Company has not been requested so to include
such Registrable Securities pursuant to section 2.4(b) or, if requested to
do so, is not obligated to do so under section 2.4(b)), and (iii) the
managing underwriter of such underwritten offering shall inform the Company
and holders of the Registrable Securities requesting such registration by
letter of its belief that the distribution of all or a specified number of
such Registrable Securities concurrently with the securities being dis
tributed by such underwriters would interfere with the successful marketing
of the securities being distributed by such underwriters (such writing to
state the basis of such belief and the approximate number of such Registra
ble Securities which may be distributed without such effect), then the
Company may, upon written notice to all holders of such Registrable
Securities, reduce pro rata (if and to the extent stated by such managing
underwriter to be necessary to eliminate such effect) the number of such
Registrable Securities the registration of which shall have been requested
by each holder of Registrable Securities so that the resultant aggregate
number of such Registrable Securities so included in such registration
shall be equal to the number of shares stated in such managing
underwriter's letter.
2.3 Registration Procedures. If and whenever (a) 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 or (b) there is a Requesting Holder in connection with any other
proposed registration by the Company under the Securities Act, the Company
shall, as expeditiously as possible:
(i) prepare and (within 60 days after the end of the
period within which requests for registration may be given to the
Company, or in any event as soon thereafter as possible, and in
the case of a registration pursuant to Section 2.1, such filing
to be made within 60 days after the initial request of one or
more Initiating Holders of Registrable Securities or in any event
as soon thereafter as possible) file with the Commission the
requisite registration statement to effect such registration (in
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cluding such audited financial statements as may be required by
the Securities Act or the rules and regulations promulgated
thereunder) and thereafter use its best efforts to cause such
registration statement to become and remain effective, 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, and further
provided that before filing such registration statement or any
amendments thereto, the Company will furnish to the counsel
selected by the holders of Registrable Securities which are to be
included in such registration copies of all such documents
proposed to be filed, which documents will be subject to the
review of such counsel;
(ii) 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 and to comply with the
provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement until
the earlier of such time as all of such securities have been
disposed of in accordance with the intended methods of dispo
sition by the seller or sellers thereof set forth in such
registration statement or (A) in the case of a registration
pursuant to section 2.1, the expiration of 180 days after such
registration statement becomes effective, or (B) in the case of a
registration pursuant to section 2.2, the expiration of 90 days
after such registration statement becomes effective;
(iii) furnish to each seller of Registrable Securities
covered by such registration statement and each Requesting Holder
and each underwriter, if any, of the securities being sold by
such seller 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 the
prospectus contained in such registration statement (including
each preliminary prospectus and any summary prospectus) and any
other prospectus filed under Rule 424 under the Securities Act,
in conformity with the requirements of the Securities Act, and
such other documents, as such seller, Requesting Holder and
underwriter, if any, may reasonably request in order to facili
tate the public sale or other disposition of the Registrable
Securities owned by such Seller;
(iv) use its best efforts (A) to register or qualify
all Registrable Securities and other securities covered by such
registration statement under such other securities laws or blue
sky laws of such jurisdictions as shall reasonably be requested
by any underwriter of the securities being sold by a seller
thereof or, if there is no such underwriter, such seller, and any
Requesting Holder, (B) to keep such registrations or
qualifications in effect for so long as such registration
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statement remains in effect, and (C) take any other action which
may be reasonably necessary or advisable to enable such under
writer, and Requesting Holder (or seller, if there is no
underwriter) to consummate the disposition in such jurisdictions
of the securities owned by such seller, 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 (iv), 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;
(v) use its best efforts to cause all Registrable Secu
rities 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 seller or sellers
thereof to consummate the disposition of such Registrable Secu
rities;
(vi) furnish to each seller of Registrable Securities
and each Requesting Holder a signed counterpart, addressed to
such seller, such Requesting Holder (and the underwriters, if
any) of the following:
(a) an opinion of counsel for the Company, dated the
effective date of such registration statement (and, if
such registration includes an underwritten public offer
ing, an opinion dated the date of the closing under the
underwriting agreement), reasonably satisfactory in
form and substance to such seller; and
(b) a "comfort" letter, dated the effective date of
such registration statement (and, if such registration
includes an underwritten public offering, a letter
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 substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and, in the case of the
accountants' letter, such other financial matters, and, in the case of the
legal opinion, such other legal matters, as such seller or such Requesting
Holder (or the underwriters, if any) may reasonably request;
(vii) notify each seller of Registrable Securities
covered by such registration statement and each Requesting Hold
er, at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, upon the discovery that,
or upon the happening of any event as a result of which, the
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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 neces
sary 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 seller or Requesting Holder promptly prepare
and furnish to such seller or Requesting Holder (and each under
writer, if any) a reasonable number of copies of a supplement to
or an 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;
(viii) 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 day of the full calendar month after the effective
date of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities
Act, and will furnish to each such seller and each Requesting
Holder at least five business days (or such shorter reasonable
time period as given circumstances shall dictate) prior to the
filing thereof a copy of any amendment or supplement to such
registration statement or prospectus and shall not file any
thereof to which any such seller or any Requesting Holder shall
have reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations
thereunder; and
(ix) enter into such agreements and take such other
actions as sellers of such Registrable Securities holding 51% of
the shares so to be sold shall reasonably request in order to
expedite or facilitate the disposition of such Registrable
Securities.
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the
Company may from time to time be permitted to request under applicable law.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of
the occurrence of any event of the kind described in subdivision (vii) 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 (vii) of this section 2.3 and, if so directed
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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 relating to such Registrable Securities current at the
time of receipt of such notice.
If any such registration or comparable statement refers to any holder
of Registrable Securities by name or otherwise as the holder of any
securities of the Company then such holder shall have the right to require
(i) the insertion therein of language, in form and substance satisfactory
to such holder, to the effect that the holding by such holder of such
securities is not to be construed as a recommendation by such holder of the
investment quality of the Company's securities covered thereby and that
such holding does not imply that such holder will assist in meeting any
future financial requirements of the Company or (ii) in the event that such
reference to such holder by name or otherwise is not required by the
Securities Act or any similar federal statute then in force, the deletion
of the reference to such holder.
2.4 Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering by holders of Registrable
Securities 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, each such holder and the underwriters, and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of this type, including, without
limitation, indemnities and other payments to the effect and to the extent
provided in section 2.7. The holders of the Registrable Securities will
cooperate with the Company in the negotiation of the underwriting agreement
and will give consideration to the reasonable suggestions of the Company
regarding the form thereof, provided that nothing herein contained shall
diminish the foregoing obligations of the Company. The holders of
Registrable Securities to be distributed by such underwriters shall be
parties to such underwriting agreement and may, at their option, require
that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to
the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such holders of Registrable
Securities. Any such holder of Registrable Securities shall not be re
quired to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or
agreements regarding such holder, such holder's Registrable Securities and
such holder's intended method of distribution 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 such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any
holder of Registrable Securities as provided in section 2.2 and subject to
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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
sold by such holder among the securities to be distributed by such
underwriters, provided that if the managing underwriter of such
underwritten offering shall inform the holders of the Registrable
Securities requesting such registration and the holders of any other secu
rities which shall have exercised, in respect of such underwritten
offering, registration rights comparable to the rights under section 2.2 by
letter of its belief that inclusion in such underwritten distribution of
all or a specified number of such Registrable Securities or of such other
securities so requested to be included would interfere with the successful
marketing of the securities (other than such Registrable Securities and
other securities so requested to be included) by the underwriters (such
writing to state the basis of such belief and the approximate number of
such Registrable Securities and other securities so requested to be
included which may be included in such underwritten offering without such
effect), then the Company may, upon written notice to all holders of such
Registrable Securities and of such other securities so requested to be
included, exclude pro rata from such underwritten offering (if and to the
extent stated by such managing underwriter to be necessary to eliminate
such effect) the number of such Registrable Securities and shares of such
other securities so requested to be included the registration of which
shall have been requested by each holder of Registrable Securities and by
the holders of such other securities so that the resultant aggregate number
of such Registrable Securities and of such other securities so requested to
be included which are included in such underwritten offering shall be equal
to the approximate number of shares stated in such managing underwriter's
letter, provided that such other securities shall first be so excluded, and
thereafter, Registrable Securities shall be so excluded pro rata based on
the number of shares so requested to be included.
The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the
Company and such underwriters and may, at their option, require that any or
all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters shall
also be made to and for the benefit of such holders of Registrable Secu
rities and that any or all of the conditions precedent to the obligations
of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such holders of Registrable Securities.
Any such holder of Registrable Securities shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding
such holder, such holder's Registrable Securities and such holder's
interest in the Company and intended method of distribution and any other
representation required by law.
(c) Holdback Agreements.
(i) Each holder of Registrable Securities agrees by
acquisition of such Registrable Securities, if so required by the
managing underwriter, not to effect any public sale or
distribution of any securities of the Company, during the seven
days prior to and the 90 days after any underwritten registration
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pursuant to section 2.1 or 2.2 has become effective, except as
part of such underwritten registration, whether or not such
holder participates in such registration, and except for any inci
dental registration pursuant to section 2.2 with respect to any
distribution or public sale in which the managing underwriter has
agreed to include such securities in the registration or public
distribution.
(ii) The Company agrees (x), if so required by the
managing underwriter, not to effect any public sale or distri
bution of its equity securities or securities convertible into or
exchangeable or exercisable for any of such securities during the
seven days prior to and the 90 days after any underwritten regis
tration pursuant to section 2.1 or 2.2 has become effective,
except as part of such underwritten registration and except
pursuant to registrations on Form S-4, S-8, S-14 or S-15 or any
successor or similar forms thereto, and (y) to cause each holder
of its securities or any securities convertible into or
exchangeable or exercisable for any of such securities, in each
case purchased directly from the Company at any time after the
date of this Agreement (other than in a public offering) to agree
not to effect any such public sale or distribution of such
securities during such period.
2.5 Preparation; Reasonable Investigation 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 holders of Registrable Securities registered under such
registration statement, their underwriters, if any, each Requesting Holder
and their respective counsel and accountants, the 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 such holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
2.6 Rights of Requesting Holders. The Company will not file any
registration statement under the Securities Act (other than by a
registration on Form S-8), unless it shall first have given to each holder
of Registrable Securities at the time outstanding (other than any such
person who acquired all such securities held by such person in a public
offering registered under the Securities Act or as the direct or indirect
transferee of shares initially issued in such an offering), at least 30
days prior written notice thereof. Any such person who shall so request
within 30 days after such notice (a "Requesting Holder") shall have the
rights of a Requesting Holder provided in sections 2.3, 2.5 and 2.7. In
addition, if any such registration statement refers to any Requesting
Holder by name or otherwise as the holder of any securities of the Company,
then such Requesting Holder shall have the right to require (a) the
insertion therein of language, in form and substance reasonably
satisfactory to such holder and the Company, to the effect that the holding
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by such holder of such securities does not necessarily make such holder a
"controlling person" of the Company within the meaning of the Securities
Act and is not to be construed as recommendation by such holder of the
investment quality of the Company's debt or equity securities covered
thereby and that such holding 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 Indemnification.
(a) Indemnification by the Company. In the event of any
registration of any securities of the Company under the Securities Act, the
Company will, and hereby does, indemnify and hold harmless (i) in the case
of any registration statement filed pursuant to section 2.1 or 2.2, the
holder of any Registrable Securities covered by such registration
statement, its directors and officers, each other Person who participates
as an underwriter in the offering or sale of such securities and each other
Person, if any, who controls such holder or any such underwriter within the
meaning of the Securities Act, and (ii) in the case of any registration
statement of the Company, any Requesting Holder, its directors and officers
and each other Person, if any who controls such Requesting Holder within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such holder or Requesting Holder or
any such director or officer or underwriter or controlling Person may
become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based
upon, any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or 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 such
holder, such Requesting Holder and each such director, officer, underwriter
and controlling Person for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending any such
loss, claim, liability, action or proceeding; provided that the Company
shall not be liable in any such case to the extent that any such 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 through an instrument duly
executed by such holder or Requesting Holder, as the case may be, specifi
cally stating that it is for use in the preparation thereof and, provided
further that the Company shall not be liable to any Person who participates
as an underwriter, in the offering or sale of Registrable Securities or to
any other Person, if any, who controls such underwriter within the meaning
of the Securities Act, in any such case to the extent that any such loss,
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claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of such Person's failure to send or give a copy of the
final prospectus, as the same may be then supplemented or amended, 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. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf
of such holder or such Requesting Holder or any such director, officer,
underwriter or controlling person and shall survive the transfer of such
securities by such holder.
(b) Indemnification by the Sellers. The Company may require, as a
condition to including any Registrable Securities in any registration
statement filed pursuant to section 2.3, that the Company shall have
received an undertaking satisfactory to it from the prospective seller of
such Registrable Securities, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in subdivision (a) of this
section 2.7) the Company, each director of the Company, each officer of the
Company and each other Person, if any, who controls the Company within the
meaning of the Securities Act, 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 through an instrument duly executed by such seller
specifically stating that it is for use in the preparation of such registra
tion statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Such indemnity shall be limited to
the extent allowable by applicable law and shall remain in full force and
effect, regardless of any investigation made by or on behalf of the Company
or any such director, officer or controlling person and shall survive the
transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this section
2.7, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party, give written notice to the latter of
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 2.7, 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 such indemnified
party's reasonable judgment a conflict of interest between such indemnified
and indemnifying parties 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 the indemnifying party 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
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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. No indemnifying party shall, without
the consent of the indemnified party, consent to entry of any judgment or
enter into any settlement of any such action 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, or a covenant not to
sue, in respect to such claim or litigation. No indemnified party shall
consent to entry of any judgment or enter into any settlement of any such
action the defense of which has been assumed by an indemnifying party
without the consent of such indemnifying party.
(d) Other Indemnification. Indemnification similar to that
specified in the preceding subdivisions of this section 2.7 (with
appropriate modifications) shall be given by the Company and each seller of
Registrable Securities 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 Payments. The indemnification required by this
section 2.7 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 the
preceding subdivisions of this section 2.7 is unavailable to an indemnified
party in respect of any expense, loss, damage or liability referred to
therein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such expense, loss, damage or liability
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the holder or underwriter, as
the case may be, on the other from the distribution of the Registrable
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and of the holder or
underwriter, as the case may be, on the other in connection with the
statements or omissions which resulted in such expense, loss, damage or
liability, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the holder or
underwriter, as the case may be, on the other in connection with the
distribution of the Registrable Securities shall be deemed to be in the
same proportion as the total net proceeds received by the Company from the
initial sale of the Registrable Securities by the Company to the purchasers
pursuant to the Stock Purchase Agreement, as the case may be, bear to the
gain realized by the selling holder or the underwriting discounts and
commissions received by the underwriter, as the case may be. The relative
fault of the Company on the one hand and of the holder or underwriter, as
the case may be, on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or omission to state a material fact relates to information supplied
by the Company, by the holder or by the underwriter and the parties'
relative intent, knowledge, access to information and opportunity to
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<PAGE> 14
correct or prevent such statement or omission; provided, that the foregoing
contribution agreement shall not inure to the benefit of any indemnified
Person if indemnification would be unavailable to such indemnified Person
by reason of the proviso contained in the first sentence of subdivision (a)
of this section 2.7, and in no event shall the obligation of any
indemnifying party to contribute under this subdivision (f) exceed the
amount that such indemnifying party would have been obligated to pay by way
of indemnification if the indemnification provided for under subdivisions
(a) or (b) of this section 2.7 had been available under the circumstances.
The Company and the holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this
subdivision (f) were determined by pro rata allocation (even if the holders
and any underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
in the preceding sentence and subdivisions (c) of this section 2.7, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subdivision (f), no holder of
Registrable Securities or underwriter shall be required to contribute any
amount in excess of the amount by which (i) in the case of any such holder,
the net proceeds received by such holder form the sale of Registrable
Securities or (ii) in the case of an underwriter, the total price at which
the Registrable Securities purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any
damages that such holder or underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. 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 who was not guilty of such fraudulent
misrepresentation.
3. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
Class B Common Stock: The shares of Class B Non-Voting Common
Stock, par value $.01 per share, of the Company, as existing
under the Company's Second Amended and Restated Certificate of
Incorporation.
Commission: The Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
Common Stock: The shares of Common Stock, par value $.01 per
share, of the Company as existing under the Company's Second
Amended and Restated Certificate of Incorporation.
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Company: As defined in the introductory paragraph of this
Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at
the time. Reference to a particular section of the Securities
Exchange Act of 1934, as amended, shall include a reference to
the comparable section, if any, of any successor statute.
Initiating Holders: Any holder or holders of Registrable
Securities holding greater than 50% of the Registrable Securities
(by number of shares at the time issued and outstanding) and
initiating a request pursuant to section 2.1 for the registration
of all or part of such holder's or holders' Registrable
Securities.
Person: A corporation, an association, a partnership, an
organization, business, an individual, a governmental or
political subdivision thereof or a governmental agency.
Registrable Securities: (a) any shares of Common Stock issued
pursuant to the Stock Purchase Agreement and (b) securities
issued or issuable with respect to any Common Stock referred to
in the foregoing subdivision by way of stock dividend or stock
split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization
or otherwise. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (i) 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, (ii) they shall have been
distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (iii) they shall have been
otherwise transferred, 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 (iv) they shall have
ceased to be outstanding.
Registration Expenses: All expenses incident to the Company's
performance of or compliance with section 2, including, without
limitation, all registration, filing and NASD 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 reasonable 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 fees and disbursements of any one
legal counsel and accountants retained by the holder or holders
of more than 50% of the Registrable Securities being registered
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to act on behalf of all such holders, premiums and other costs of
policies of insurance against liabilities arising out of the
public offering of the Registrable Securities being registered
and any fees and disbursements of underwriters customarily paid
by issuers or sellers of securities, but excluding underwriting
discounts and commissions and transfer taxes, if any, provided
that, in any case where Registration Expenses are not to be borne
by the Company, such expenses shall not include salaries of
Company personnel or general overhead expenses of the Company,
auditing fees, premiums or other expenses relating to liability
insurance required by underwriters of the Company or other expens
es for the preparation of financial statements or other data
normally prepared by the Company in the ordinary course of its
business or which the Company would have incurred in any event.
Requesting Holder: As defined in section 2.6.
Rule 415 Registration: A registration requested on Form S-3
pursuant to Rule 415, or their successors, in connection with the
bona fide pledge of at least 5,000 shares of Common Stock, as
constituted on the date hereof.
Securities Act: The Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the
Commission thereunder, all as of the same shall be in effect at
the time. References to a particular section of the Securities
Act of 1933, as amended, shall include a reference to the
comparable section, if any, of any successor statute.
4. Rule 144. If the Company shall have filed a registration
statement pursuant to the requirements of section 12 of the Exchange Act or
a registration statement pursuant to the requirements of the Securities Act
the Company shall timely file the reports required to be filed by it under
the Securities Act and the Exchange Act (including but not limited to the
reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144 adopted by the Securities and Exchange
Commission under the Securities Act) and the rules and regulations adopted
by the Commission thereunder (or, if the Company is not required to file
such reports, will, upon the request of any holder of Registrable
Securities, make publicly available other information) and will take such
further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such 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. Upon
the request of any holder of Registrable Securities, the Company will
deliver to such holder a written statement as to whether it has complied
with such requirements.
5. Amendments and Waivers. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have ob
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tained the written consent to such amendment, action or omission to act, of
the holder or holders of more than 50% of the shares of Registrable
Securities. Each holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any consent authorized by this
section 5, whether or not such Registrable Securities shall have been
marked to indicate such consent; provided, however, that no amendment shall
be made to section 2.7 hereof without the written consent of the Company
and the holder or holders of 100% of the shares of Registrable Securities.
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, be treated as
the holder of such Registrable Securities for purposes of any request or
other action by any holder or holders of Registrable Securities pursuant to
this Agreement or any determination of any number or percentage of shares
of Registrable Securities held by any holder or holders of Registrable
Securities 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.
7. Notices. Except as otherwise provided in this Agreement, all
communications provided for hereunder shall be in writing and sent by
prepaid commercial courier, telecopy or first-class registered or certified
mail, postage prepaid, and (a) if addressed to a party other than the
Company, addressed to such party in the manner set forth in the Stock
Purchase Agreement, or at such other address as such party shall have
furnished to the Company in writing, or (b) if addressed to any other
holder of Registrable Securities, at 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 of such Registrable Securities who has furnished an address to
the Company, or (c) if addressed to the Company, at 706 Deerpath Drive,
Vernon Hills, Illinois 60016 to the attention of its Chief Executive
Officer with a copy to Kirschner, Main, Petrie, Graham & Tanner, One
Independent Drive, Suite 2000, 20th Floor, Jacksonville, Florida 32202 to
the attention of T. Malcolm Graham, Esq., 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. Notices
sent by commercial courier services for next day delivery shall be deemed
given and received the day after they are sent, notices sent by telecopy
shall be deemed given and received the day they are sent, and notices sent
by mail shall be deemed given and received five (5) days after being mailed
as aforesaid.
8. 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 permitted 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
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actions, contained herein; provided, that no assignee hereunder or
subsequent holder of Registrable Securities shall have any rights hereunder
unless such assignee or holder shall have executed and delivered to the
Company an appropriate instrument in which such assignee or holder agrees
to be bound by this Agreement and to observe and comply with this Agreement
and all obligations and restrictions imposed upon holders of Registrable
Securities hereunder.
9. 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.
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10. 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 Delaware without reference to the principles of
conflicts of laws.
WICKES LUMBER COMPANY
By/s/ George A. Bajalia
RIVERSIDE GROUP, INC.
By/s/ Kenneth M. Kirschner
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