AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 15, 1998
Registration No. 333-......
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CONSOLIDATED GRAPHICS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 5858 WESTHEIMER, SUITE 200 76-0190827
(State or other jurisdiction of HOUSTON, TEXAS 77057 (I.R.S. Employer
incorporation or organization) (713) 787-0977 Identification Number)
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JOE R. DAVIS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CONSOLIDATED GRAPHICS, INC.
5858 WESTHEIMER, SUITE 200
HOUSTON, TEXAS 77057
(713) 787-0977
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPY TO:
R. CLYDE PARKER, JR.
WINSTEAD SECHREST & MINICK P.C.
910 TRAVIS STREET, SUITE 2400
HOUSTON, TEXAS 77002
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
_________________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| _________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGITERED BE REGISTERED PER SHARE (1) OFFERING PRICE (REGISTRATION FEE
Common Stock, par value
<S> <C> <C> <C> <C>
$0.01 per share........... 364,543 $44.844 $16,347,566 $4,822.53
========================== =============== =============== =============== ===============
</TABLE>
(1) Calculated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and based upon the average of the high and low
sales prices of the Common Stock as reported by the New York Stock
Exchange on September 11, 1998.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
PROSPECTUS
364,543 SHARES
CONSOLIDATED GRAPHICS, INC.
COMMON STOCK
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This Prospectus has been prepared for use in connection with the sale by
the holders thereof (the "Selling Shareholders") of an aggregate of 364,543
shares (the "Shares") of common stock, par value of $.01 per share (the "Common
Stock"), of Consolidated Graphics, Inc., a Texas corporation (the "Company").
The Shares may be sold from time to time by or for the account of the Selling
Shareholders or by pledgees, donees, transferees or other successors in interest
on one or more exchanges or in the over-the-counter market or otherwise at
prices and at terms then prevailing or at prices related to the then current
market price, at negotiated prices or at fixed prices, directly or through
agents designated from time to time, or through dealers or underwriters to be
designated or in negotiated transactions. The Shares may be sold by any one or
more of the following methods: (a) a block trade (which may involve crosses) in
which the broker or dealer so engaged will attempt to sell the securities as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus; (c)
exchange distributions and/or secondary distributions in accordance with the
rules of such exchange; (d) ordinary brokerage transactions and transactions in
which the broker solicits purchasers; (e) through the writing of options on
Shares (whether such options are listed on an options exchange or otherwise); or
(f) privately negotiated transactions. In addition, any securities covered by
this Prospectus which qualify for sale pursuant to Rule 144 may be sold
thereunder rather than pursuant to this Prospectus. From time to time the
Selling Stockholders may engage in short sales, short sales versus the box, puts
and calls and other transactions in securities of the Company or derivatives
thereof, and may sell and deliver shares in connection therewith. To the extent
required by applicable law, the specific Shares to be sold and the names of the
Selling Shareholders will be set forth in an accompanying supplement to this
Prospectus. See "Plan of Distribution."
The Common Stock is traded on the New York Stock Exchange ("NYSE") under
the symbol "CGX". On September 11, 1998, the last reported sale price for the
Common Stock on the New York Stock Exchange was $44.625 per share.
The Company will receive no portion of the proceeds of the sale of the
Shares offered hereby and will bear certain of the expenses incident to their
registration. See "Plan of Distribution" and "Selling Shareholders."
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PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH
UNDER THE CAPTION "RISK FACTORS," BEGINNING ON PAGE 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS SEPTEMBER 15, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"), which can be inspected
and copied at the Public Reference Room maintained by the Commission at 450
Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549 and at
the regional offices of the Commission at Citicorp Center, 13th Floor, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and at Seven World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Room of the Commission at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549 at prescribed rates. Such
information may also be obtained from the Public Reference Room by calling the
Commission at 1-800-SEC-0330. The Commission also maintains a web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
The address of such web site is (http://www.sec.gov).
The Company's Common Stock is listed on the New York Stock Exchange under
the symbol "CGX" and the periodic reports, proxy statements and other
information filed by the Company with the Commission may also be inspected at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The Company has filed with the Commission a registration statement (the
"Registration Statement") on Form S-3 under the Securities Act with respect to
the shares of Common Stock offered hereby. This Prospectus, which constitutes a
part of the Registration Statement, does not contain all of the information set
forth in the Registration Statement and the exhibits and schedules thereto,
certain parts of which are omitted as permitted by the rules and regulations of
the Commission. For further information with respect to the Company and such
Common Stock, reference is made to such Registration Statement and to the
exhibits and schedules thereto. Statements contained in this Prospectus, if any,
as to the contents of any document referred to are not necessarily complete, and
in each instance reference is made to the copy of such document filed as an
exhibit or schedule to the Registration Statement, each such statement being
qualified in all respects by such reference. A copy of the Registration
Statement, including the exhibits and schedules thereto, may be obtained at the
public reference facilities maintained by the Commission as provided in the
preceding paragraph.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated in this Prospectus by reference and shall
be deemed to be a part hereof:
1. Annual Report on Form 10-K for the fiscal year ended March 31, 1998;
2. Quarterly Report on Form 10-Q for the quarter ended June 30, 1998;
3. Description of the Capital Stock of the Company set forth in its
Form 8-A filed with the Commission on January 8, 1997; and
4. Current Reports on Forms 8-K filed July 2, July 9, July 21, July 29,
August 5, August 17, August 26 and September 2, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering made hereby shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of the
filing of such documents. Any statement contained in this Prospectus, in a
supplement to this Prospectus or in a document either wholly or partially
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed supplement to this
Prospectus or in any document that also either wholly or partially is or is
deemed to be incorporated by reference
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herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner of Common Stock, to whom a copy of this Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all of the documents referred to above which have been or may be incorporated in
this Prospectus by reference but not delivered with the Prospectus, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference in such documents). Written or telephone requests for such copies
should be directed to the Company at its principal executive offices located at
5858 Westheimer, Suite 200, Houston, Texas 77057, Attention:
Secretary (telephone number: (713) 787-0977).
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RISK FACTORS
In addition to other information in this Prospectus, prospective investors
should consider carefully the following information before investing in the
Common Stock offered hereby.
NATURE OF PRINTING BUSINESS
The Company competes in the general commercial and financial printing
sectors, which are characterized by individual orders from customers for
specific printing projects rather than long-term contracts, with continued
engagement for successive jobs dependent upon the customers' satisfaction with
the services provided. As such, the Company is unable to predict, for more than
a few weeks in advance, the number, size and profitability of printing jobs in a
given period. Consequently, the timing of projects in any quarter could have a
significant impact on financial results in that quarter. Quarterly operating
results may also fluctuate as a result of overall trends in the economy,
acquisitions of new businesses and customer buying patterns and, accordingly,
the Company's quarterly operating results may vary significantly from quarter to
quarter.
IMPLEMENTATION OF ACQUISITION STRATEGY
A significant element of the Company's growth strategy is to expand by
acquiring printing companies located throughout the United States. While there
are numerous such companies, there can be no assurance that the Company will be
able to identify and acquire suitable companies on terms acceptable to the
Company, nor that it will be able to finance significant acquisitions in the
future. Increased competition for acquisition candidates may develop, in which
event there may be fewer acquisition opportunities available to the Company as
well as higher acquisition prices. There can be no assurance that the Company
will be able to continue to identify, acquire or profitably manage additional
businesses or successfully integrate acquired businesses, if any, into the
Company without substantial cost, delays or other operational or financial
problems. Further, acquisitions involve a number of special risks, including
possible adverse effects on the Company's operating results, diversion of
management's attention, failure to retain key acquired personnel, risks
associated with unanticipated events or liabilities and amortization of acquired
intangible assets, some or all of which could have a material adverse effect on
the Company's business, financial condition and results of operations. Any
acquisition may also initially have an adverse effect upon the Company's
operating results while the acquired businesses are adopting the Company's
management practices. Although the Company has so far generally been successful
in integrating its acquisitions, there can be no assurance that the Company will
be able to establish, maintain or increase profitability of an entity once it
has been acquired.
COMPETITION
The printing industry is extremely competitive and fragmented. The Company
competes with numerous large and small printing companies, some of which have
greater financial resources than the Company. The Company competes on the basis
of ongoing customer service, quality of finished products and price.
DEPENDENCE UPON KEY PERSONNEL
The Company believes that its continued success will depend to a
significant extent upon its senior management, particularly Joe R. Davis, the
Company's founder, President and Chief Executive Officer. The loss of the
services of Mr. Davis or other key personnel could have a material adverse
effect on the Company's business and prospects. The Company's continued success
also depends upon its ability to attract and retain qualified employees.
CONTROL
Based upon the latest information available to the Company, Joe R. Davis,
the Vinik Group ("Vinik") and Pilgrim Baxter & Associates ("Pilgrim")
beneficially own approximately 10.6%, 9.2% and 8.8%, respectively, of the
outstanding Common Stock. As a result, although Mr. Davis, Pilgrim and Vinik
have not acted in concert in the past,
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they could, if they acted in concert, have the ability to substantially
influence the election of the Company's Board of Directors and other matters
requiring shareholder approval.
GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS
The Company is subject to the environmental laws and regulations of the
United States and the states in which its subsidiaries have operations
concerning emissions into the air, discharges into waterways and the generation,
handling and disposal of waste materials. While the Company believes it is
currently in substantial compliance with these laws and regulations, there can
be no assurance that future changes in such laws and regulations will not have a
material effect on the Company's operations.
DIVIDEND POLICY
The Company currently intends to retain all future earnings to finance the
continuing development of its business and does not anticipate paying cash
dividends on the Common Stock in the foreseeable future.
SHARES ELIGIBLE FOR FUTURE SALE
The Company has from time to time issued and may in the future issue a
significant number of shares of Common Stock without registration in acquisition
transactions or otherwise. Such shares, upon issuance, will be "restricted
securities" as such term is defined in Rule 144 promulgated under the Securities
Act or will be held by "affiliates" of the Company and consequently are subject
to the resale limitations of Rule 144. Furthermore, the Company filed a
registration statement on Form S-4 with the Commission on August 26, 1998,
registering 2,000,000 shares for sale in connection with the Company's potential
future acquisitions. In addition, a significant number of shares of Common Stock
are issuable upon exercise of certain stock purchase options that have been or
may be granted under the Company's existing incentive stock plan.
The Board of Directors, without further action by the shareholders, is
authorized to issue up to five million shares of the Company's Preferred Stock,
par value $1.00 per share (the "Preferred Stock"), in one or more series and to
fix and determine as to any series all the relative rights and preferences of
shares in such series, including, without limitation, preferences, limitations
or relative rights with respect to redemption rights, conversion rights, if any,
voting rights, if any, dividend rights and preferences on liquidation. The
dividend, liquidation and voting rights of any such Preferred Stock issued could
be superior to the rights of the holders of Common Stock.
The issuance of shares of Preferred Stock, or the issuance of rights to
purchase such shares, could be used to discourage an unsolicited acquisition
proposal that some, or a majority, of the shareholders might believe to be in
the best interests of the Company or in which shareholders might receive a
premium for their stock over the then market price of such stock. In addition,
under certain circumstances, the issuance of Preferred Stock could adversely
affect the voting power of the holders of the Common Stock.
Future sales of significant numbers of shares of Common Stock in the
public market could adversely affect the prevailing market price of the Common
Stock and also could impair the Company's ability to raise capital through
subsequent offerings of securities.
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THE COMPANY
The Company's principal executive offices are located at 5858 Westheimer,
Suite 200, Houston, Texas 77057, and its telephone number is (713) 787-0977.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Common Stock offered by the Selling Shareholders.
SELLING SHAREHOLDERS
This Prospectus covers offers and sales from time to time by the Selling
Shareholders of the Shares owned by the Selling Shareholders. Set forth below
are (i) the names of the Selling Shareholders and (ii) the number of shares of
Common Stock held as of the date of this Prospectus by the Selling Shareholders,
which number is also the number of Shares which may be offered by each Selling
Shareholder pursuant to this Prospectus. Each person named below has sole voting
and investment power with respect to the Shares indicated. Any or all of the
Shares listed below may be offered for sale by the Selling Shareholders from
time to time.
NUMBER OF SHARES OF
COMMON STOCK HELD
AND OFFERED PURSUANT
TO THIS PROSPECTUS
Continental Graphics Corporation 335,105
Ralph R. Hilker 14,677
The Randy Roberts 1998 Revocable Trust 7,381
The Carol Ann Roberts 1998 Revocable Trust 7,380
Because the Company does not know how many Shares will be sold by the
Selling Shareholders pursuant to this Prospectus, no estimate can be given as to
the number of the Shares that will be held by the Selling Shareholders upon
termination of this offering.
The Shares issued to Continental Graphics Corporation were issued in
connection with the acquisition by the Company of Rush Press, Inc., a California
corporation, and Arts & Crafts Press, Inc., a California corporation (the
"California Companies"). Pursuant to such acquisition, the California Companies
became wholly owned subsidiaries of the Company. Ralph R. Hilker and John R.
Roberts acquired their Shares in connection with the merger of Lincoln Printing
Corp. with a subsidiary of the Company. John R. Roberts has since transferred
all of his Shares to The Randy Roberts 1998 Revocable Trust and The Carol Ann
Roberts 1998 Revocable Trust. Since the merger, Ralph R. Hilker and John R.
Roberts have been officers of a subsidiary of the Company.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by or for the account of the
Selling Shareholders. As used herein, "Selling Shareholders" includes pledgees,
donees, transferees or other successors in interest selling Shares received from
a named Selling Shareholder after the date of this Prospectus. Such sales may be
effected by the Selling Shareholders from time to time in one or more
transactions on one or more exchanges (including the NYSE) or in the
over-the-counter market or otherwise at prices and at terms then prevailing or
at prices related to the then current market price, at negotiated prices or at
fixed prices, directly or through agents designated from time to time or through
dealers or underwriters to be designated or in negotiated transactions. The
Shares may be sold by one or more of the following:
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(a) a block trade (which may involve crosses) in which the broker or dealer so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) an exchange distribution in accordance
with the rules of such exchange; (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; (e) through the writing of
options on Shares (whether such options are listed on an options exchange or
otherwise); or (f) privately negotiated transactions.
Each Selling Shareholder may effect the above transactions by selling
Shares directly to other purchasers, through agents or through broker-dealers,
which may act as agents or principals. In effecting sales, brokers or dealers
engaged by the Selling Shareholders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions, concessions or
discounts from Selling Shareholders in amounts to be negotiated immediately
prior to the sale. The Selling Shareholders have advised the Company that they
have not entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their Shares, nor is there
an underwriter or coordinating broker acting in connection with the proposed
sale of Shares by Selling Shareholders.
Because Selling Shareholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, the Selling Shareholders will be
subject to the prospectus delivery requirements of the Securities Act. Upon the
Company being notified by a Selling Shareholder that a material arrangement has
been entered into with a broker-dealer for the sale of Shares through a block
trade, special offering, exchange distribution or secondary distribution or a
purchase by a broker or dealer, a supplement to this Prospectus will be filed
with the Commission, if required, pursuant to Rule 424(b) under the Securities
Act disclosing (i) the name of each such Selling Shareholder and of the
participating broker-dealer(s), (ii) the number of Shares involved, (iii) the
price at which such Shares were sold, (iv) the commissions paid or discounts or
concessions allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this Prospectus and (vi) other facts
material to the transaction. With respect to sales by donees and pledgees, a
supplement to this Prospectus is not required to be filed by the Company unless
the Company is notified by the Selling Shareholder that such donee or pledgee
intends to sell more than five hundred (500) Shares.
From time to time the Selling Shareholders may engage in short sales,
short sales versus the box, puts and calls and other transactions in securities
of the Company or derivatives thereof, and may sell and deliver the Shares in
connection therewith. The Selling Shareholders may enter into hedging
transactions with broker-dealers or other financial institutions. In connection
with such transactions, broker-dealers or other financial institutions may
engage in short sales of the Company's Common Stock in the course of hedging the
positions they assume with Selling Shareholders. The Selling Shareholders may
also enter into options or other transactions with broker-dealers or other
financial institutions which require the delivery to such broker-dealer or other
financial institution of Shares offered hereby, which Shares such broker-dealer
or other financial institution may resell pursuant to this Prospectus (as
supplemented or amended to reflect such transaction).
The Company will bear all costs and expenses incurred by it in connection
with the offering and sale of Shares pursuant to this Prospectus, but will not
be responsible for any commissions, underwriting discounts or similar amounts
payable in respect of any such sale. Notwithstanding the foregoing, the Company,
on the one hand, has agreed to indemnify the Selling Shareholders and the
Selling Shareholders, on the other hand, have severally agreed to indemnify the
Company from certain liabilities relating to the offering made hereby, including
liabilities under the Securities Act. The Selling Shareholders may also agree to
indemnify any agent, dealer or broker-dealer that participates in transactions
regarding sales of the Shares against certain liabilities, including liabilities
arising under the Securities Act.
In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this Prospectus, provided they meet the criteria and conform to the requirements
of such Rule.
One of the Selling Shareholders has agreed with the Company, in connection
with the acquisition of the California Companies, that such Shareholder will
sell no more than 7,447 Shares of Common Stock per day during the 45 trading
day period beginning on the third trading day following the effectiveness of the
Registration Statement, provided, however, that any Shares
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unsold with respect to a given trading day may be sold on a subsequent trading
day so long as the number of shares sold on any such subsequent trading day
during such 45 trading day period does not exceed 37,235 Shares.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 100,000,000 shares of
Common Stock of which 13,667,699 shares were issued and outstanding as of
September 15, 1998, and 5,000,000 shares of Preferred Stock, par value $1.00 per
share, issuable in series, no shares of which were issued and outstanding as of
the date of this Prospectus.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share in the election
of directors and on all other matters on which shareholders are entitled or
permitted to vote. Such holders are not entitled to vote cumulatively for the
election of directors. Holders of Common Stock have no redemption, conversion,
preemptive or other subscription rights. In the event of the liquidation,
dissolution or winding up of the Company, holders of Common Stock are entitled
to share ratably in all of the assets of the Company remaining, if any, after
satisfaction of the debts and liabilities of the Company and the preferential
rights of the holders of the Preferred Stock, if any, then outstanding. The
outstanding shares of Common Stock are validly issued, fully paid and
nonassessable.
Holders of Common Stock are entitled to receive dividends when and as
declared by the Board of Directors of the Company out of funds legally available
therefor only after payment of, or provision for, full dividends (on a
cumulative basis, if applicable) on all outstanding shares of any series of
Preferred Stock and after the Company has made provision for any sinking or
purchase funds for any series of Preferred Stock. The Company has not paid any
cash dividends on the Common Stock since its incorporation and does not
anticipate paying cash dividends in the foreseeable future.
PREFERRED STOCK
The Preferred Stock is issuable by the Board of Directors in one or more
series. The number of shares of each series and the rights, preferences and
limitations of each series may be determined by the Board of Directors,
including without limitation: the annual rate of dividends; the redemption
price, if any; the terms of a sinking or purchase fund, if any; the amount
payable in the event of any voluntary liquidation, dissolution or winding up of
the affairs of the Company; conversion rights, if any; and voting powers, if
any. All series of Preferred Stock rank equally and are identical in all
respects except as may otherwise be provided in the Statement or Statements of
Resolution establishing such series. The Board of Directors of the Company,
without obtaining stockholder approval, may issue shares of the Preferred Stock
with voting rights or conversion rights which could affect the voting power of
the holders of Common Stock. The issuance of any shares of Preferred Stock could
be utilized, under certain circumstances, in an attempt to prevent the
acquisition of the Company. There are no shares of Preferred Stock outstanding
as of the date of this Prospectus, and the Company has no present intention to
issue any shares of Preferred Stock.
CERTAIN ANTI-TAKEOVER PROVISIONS
Certain provisions of the Certificate of Incorporation and Bylaws
summarized in the following paragraph may have the effect of discouraging,
delaying or preventing an acquisition proposal that a shareholder might consider
favorable, including a proposal that might result in the payment of a premium
over the market price for the shares held by shareholders.
The Company's authorized capital stock consists of 100,000,000 shares of
Common Stock and 5,000,000 shares of Preferred Stock, all of which shares of
Preferred Stock are undesignated as of the date of this Prospectus. The
authorized but unissued (and in the case of Preferred Stock, undesignated) stock
may be given voting rights and privileges and issued by the Board of Directors
in one or more transactions. Such rights and privileges, when exercised, may
make it more difficult for a shareholder or any group of shareholders to obtain
control of the Company.
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LEGAL OPINION
The validity of the issuance of the shares of the Common Stock offered
hereby will be passed upon for the Company by Winstead Sechrest & Minick P.C.,
Houston, Texas.
EXPERTS
The financial statements incorporated by reference in this Prospectus to
the extent and for the periods indicated in their reports have been audited by
Arthur Andersen LLP, independent public accountants, and are incorporated herein
by reference in reliance upon the authority of said firm as experts in
accounting and auditing.
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NO DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY SELLING SHAREHOLDER OR
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME AND ANY SALE MADE
HEREUNDER DOES NOT IMPLY THAT THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
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TABLE OF CONTENTS
PAGE
Available Information........................................................2
Incorporation of Certain Documents by Reference..............................2
Risk Factors.................................................................4
The Company..................................................................6
Use of Proceeds..............................................................6
Selling Shareholders.........................................................6
Plan of Distribution.........................................................6
Description of Capital Stock.................................................8
Legal Opinion................................................................9
Experts......................................................................9
364,543 SHARES
Consolidated
Graphics, Inc.
COMMON STOCK
----------
PROSPECTUS
----------
SEPTEMBER 15, 1998
10
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Company in connection with this
offering are as follows:
Securities and Exchange Commission
registration fee............................................$ 4,822.53
Printing and distribution expenses............................ 3,000.00
Accounting fees and expenses.................................. 2,000.00
Legal fees and expenses, including Blue Sky................... 15,000.00
Miscellaneous................................................. 1,177.47
Total.........................................................$26,000.00
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act provides that a
corporation may indemnify any director or officer who was, is or is threatened
to be made a named defendant or respondent in a proceeding because he is or was
a director or officer, provided that the director or officer (i) conducted
himself in good faith, (ii) reasonably believed (a) in the case of conduct in
his official capacity, that his conduct was in the corporation's best interests,
and (b) in all other cases, that his conduct was at least not opposed to the
corporation's best interests and (iii) in the case of any criminal proceeding,
had no reasonable cause to believe his conduct was unlawful. Subject to certain
exceptions, a director or officer may not be indemnified if the person is found
liable to the corporation or if the person is found liable on the basis that he
improperly received a personal benefit. Under Texas law, reasonable expenses
incurred by a director or officer may be paid or reimbursed by the corporation
in advance of a final disposition of the proceeding after the corporation
receives a written affirmation by the director or officer of his good faith
belief that he has met the standard of conduct necessary for indemnification and
a written undertaking by or on behalf of the director or officer to repay to the
corporation such expenses if it is ultimately determined that the director or
officer is not entitled to indemnification by the corporation. Texas law
requires a corporation to indemnify an officer or director against reasonable
expenses incurred in connection with a proceeding in which he is named defendant
or respondent because he is or was a director or officer if he is wholly
successful in defense of the proceeding.
Texas law also permits a corporation to purchase and maintain insurance or
another arrangement on behalf of any person who is or was a director or officer
against any liability asserted against him and incurred by him in such a
capacity or arising out of his status as such a person, whether or not the
corporation would have the power to indemnify him against that liability under
Article 2.02-1.
The Company's Second Amended and Restated Bylaws, as amended (the
"Bylaws"), provide for the indemnification of its officers and directors, and
the advancement to them of expenses in connection with proceedings and claims,
to the fullest extent permitted under the Texas Business Corporation Act. Such
indemnification may be made even though directors and officers would not
otherwise be entitled to indemnification under other provisions of the Bylaws.
The Company has entered into indemnification agreements with its directors and
certain of its officers that contractually provide for indemnification and
expense advancement. Both the Bylaws and the agreements include related
provisions meant to facilitate the indemnitees' receipt of such benefits. These
provisions cover, among other things: (i) specification of the method of
determining entitlement to indemnification and the selection of independent
counsel that will in some cases make such determination, (ii) specification of
certain time periods by which certain payments or determinations must be made
and actions must be taken and (iii) the establishment of certain presumptions in
favor of an indemnitee. The benefits of certain of these provisions are
available to an indemnitee only if there has been a change in control (as
defined). In addition, the Company may, in the future, purchase directors and
officers liability insurance policies for its directors and officers.
II-1
<PAGE>
The above discussion of Article 2.02-1 of the Texas Business Corporation
Act and of the Company's Bylaws is not intended to be exhaustive and is
respectively qualified in its entirety by such statute and the Bylaws.
Reference is made to the form of the Registration Rights Agreements, filed
as Exhibits 10.1 and 10.2 hereto, which contain provisions for indemnification
of the Company, its directors, officers, and any controlling persons by the
Selling Shareholders against certain liabilities for certain information
furnished by the Selling Shareholders.
ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated herein by
reference:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
*4 - Specimen Common Stock Certificate (Consolidated Graphics, Inc., Form
10-K (March 31, 1998) SEC. File No. 0-24068, Exhibit 4).
5 - Opinion of Winstead Sechrest & Minick P.C. regarding the legality of
the securities being offered.
10.1 - Registration Rights Agreement dated as of August 13, 1998 by and
between Consolidated Graphics, Inc. and John R. Roberts and Ralph R.
Hilker, with Addendum dated September 14, 1998.
10.2 - Registration Rights Agreement dated as of September 14, 1998 by and
between Consolidated Graphics, Inc. and Continental Graphics
Corporation.
23.1 - Consent of Winstead Sechrest & Minick P.C. (set forth in Exhibit 5).
23.2 - Consent of Arthur Andersen LLP.
24 - Power of Attorney (set forth on signature page).
*Incorporated by reference.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement; provided, however, that paragraph (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-2
<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described in Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against policy
as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, the State of Texas, on September 15, 1998.
CONSOLIDATED GRAPHICS, INC.
By: /s/ JOE R. DAVIS
Joe R. Davis
President, Chief Executive Officer and
Chairman of the Board of Directors
II-4
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Joe R. Davis and Randall D. Keys, and each one of
them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitutes or substitute, may lawfully
do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REPORT
HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C>
/s/ JOE R. DAVIS President, Chief Executive September 15, 1998
(Joe R. Davis) Officer and Director (Principal
Executive Officer)
/s/ RANDALL D. KEYS Vice President - Finance and September 15, 1998
(Randall D. Keys) Chief Financial and Accounting
Officer
/s/ LARRY J. ALEXANDER Director September 15, 1998
(Larry J. Alexander)
/s/ BRADY F. CARRUTH Director September 15, 1998
(Brady F. Carruth)
/s/ CLARENCE C. COMER Director September 15, 1998
(Clarence C. Comer)
/s/ GARY L. FORBES Director September 15, 1998
(Gary L. Forbes)
/s/ W. D. HAWKINS Director September 15, 1998
(W. D. Hawkins)
/s/ JAMES H. LIMMER Director September 15, 1998
(James H. Limmer)
/s/ THOMAS E. SMITH Director September 15, 1998
(Thomas E. Smith)
/s/ HUGH N. WEST Director September 15, 1998
(Hugh N. West)
</TABLE>
II-5
WINSTEAD
SECHREST
& MINICK
Suite 2400
910 Travis Street A Professional Corporation (713) 650-8400
Houston, Texas 77002-5895 Attorneys & Counselors Telecopier (713) 650-2400
DALLAS, HOUSTON, AUSTIN Direct Dial: 713/650-2753
MEXICO CITY [email protected]
September 15, 1998
Consolidated Graphics, Inc.
5858 Westheimer, Suite 200
Houston, Texas 77057
Gentlemen:
This opinion is given in connection with the filing by Consolidated
Graphics, Inc. ("CGX") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, of a Registration Statement on Form S-3 with
respect to an aggregate of 364,543 shares of the common stock, $.01 par value,
of CGX (the "Common Stock"). All of such shares (the "Shares") are being sold by
selling stockholders.
We have acted as counsel for CGX in connection with the filing of the
Registration Statement. In so acting, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such corporate
records, agreements, documents and other instruments, and such certificates or
comparable documents of public officials and of officers and representatives of
CGX, and have made such inquiries of such officers and representatives as we
have deemed relevant and necessary as a basis for the opinions hereinafter set
forth.
In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. As to all
questions of fact material to this opinion that have not been independently
established, we have relied upon certificates, comparable documents or the
representations of officers and representatives of CGX and of the selling
stockholders.
Based on the foregoing, and subject to the qualifications stated herein,
we are of the opinion that the Shares being registered pursuant to the
Registration Statement are validly issued, fully paid and nonassessable.
<PAGE>
Consolidated Graphics, Inc.
September 15, 1998
Page 2
We consent to the use of this opinion as an exhibit to the Registration
Statement. We further consent to the reference to our firm under the caption
"Legal Matters" in the prospectus which is a part of the Registration Statement.
This opinion is rendered solely for your benefit in connection with the
transactions described above. Except as set forth above, this opinion may not be
used or relied upon by any other person and may not be disclosed, quoted, filed
with a governmental agency or otherwise referred to without our prior written
consent.
Very truly yours,
/s/ WINSTEAD SECHREST & MINICK P.C.
WINSTEAD SECHREST & MINICK P.C.
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of August
13, 1998, by and among CONSOLIDATED GRAPHICS, INC., a Texas corporation (the
"Company") and JOHN R. ROBERTS and RALPH R. HILKER (each individually a "Holder"
and collectively the "Holders");
W I T N E S S E T H :
WHEREAS, it is a condition to the consummation of the transactions
contemplated by that certain Agreement and Plan of Reorganization dated as of
August 13, 1998 (the "Merger Agreement"), among the Company, LINCOLN
ACQUISITION, CO., an Indiana corporation, LINCOLN PRINTING CORPORATION, an
Indiana corporation, and the Holders that this Agreement be executed and
delivered by the Company and the Holders;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and each Holder agree as follows:
Section 1. DEFINITIONS. As used in this Agreement, the following terms
have the meanings indicated below:
AGENT shall mean any Person acting for or on behalf of a Holder of
Registrable Securities with respect to the holding or sale of such Registrable
Securities.
AGREEMENT shall mean this Registration Rights Agreement.
BUSINESS DAY shall mean any day other than a Saturday, Sunday, or legal
holiday for banks in the State of Texas.
COMMISSION shall mean the Securities and Exchange Commission.
COMMON STOCK shall mean the Company's common stock, par value $0.01 per
share, or any successor class of the Company's common stock.
COMPANY shall mean Consolidated Graphics, Inc.
DEMAND REGISTRATION shall mean the registration pursuant to Section 3
hereof, upon demand by any one or more Holders, with the Commission of the offer
and sale of Registrable Securities under and in accordance with the provisions
of the Securities Act.
EXCESS DEMAND REGISTRATION shall mean the registration upon demand of the
Excess Requested Shares with the Commission of the offer and sale of the Excess
Requested Shares under and in accordance with the provisions of the Securities
Act.
1
<PAGE>
EXCESS REQUESTED SHARES shall mean Registrable Securities that were
requested to be included in the Demand Registration, but were not so included
pursuant to the terms of this Agreement.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as amended.
HOLDER or HOLDERS shall mean John R. Roberts and Ralph R. Hilker.
INSPECTORS shall mean the Holders of Registrable Securities, any
underwriter participating in any disposition of Registrable Securities pursuant
to a Demand Registration or Excess Demand Registration, and any attorney,
accountant or other agent retained by the Holders or underwriter.
LIABILITIES shall mean all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation).
MERGER AGREEMENT shall mean that certain Agreement and Plan of
Reorganization dated as of August 13, 1998 among the Company, Lincoln
Acquisition, Co., Lincoln Printing Corporation, and the Holders.
NEW COMMON STOCK shall mean the shares of Common Stock to be acquired by
the Holders pursuant to Section 1.3 of the Merger Agreement, together with any
Related Securities.
PERSON shall mean any individual, corporation, limited liability company,
partnership (general or limited), joint venture, association, joint-stock
company, trust, unincorporated organization or government or a political
subdivision, agency or instrumentality thereof or other entity or organization
of any kind.
PIGGYBACK REGISTRATION shall mean the registration of Registrable
Securities pursuant to a registration statement filed by the Company under the
Securities Act as set forth in Section 2 of this Agreement.
RECORDS shall mean all financial and other records, pertinent corporate
documents and properties of the Company.
REGISTRABLE SECURITIES shall mean the New Common Stock, until such time as
the New Common Stock has been (a) distributed to the public pursuant to a
registration statement covering such securities that has been declared effective
under the Securities Act, (b) distributed to the public in accordance with the
provisions of Rule 144 (or any similar provision then in force) under the
Securities Act, or (c) repurchased by the Company.
REGISTRATION EXPENSES shall mean all expenses (including attorneys' fees)
incident to the Company's performance of or compliance with the Demand
Registration, Piggyback Registration or Excess Demand Registration pursuant to
this Agreement, including without limitation all Commission and securities
exchange or National Association of Securities Dealers, Inc. registration and
filing fees, fees and expenses of compliance with securities or blue sky laws
(including fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities),
2
<PAGE>
rating agency fees, printing expenses, messenger and delivery expenses, internal
expenses (including salaries and expenses of its officers and employees
performing legal or accounting duties), the fees and expenses incurred in
connection with the listing of the Registrable Securities to be registered on
each securities exchange on which similar securities issued by the Company are
then listed and fees and disbursements of counsel for the Company and its
independent certified public accountants (including the expenses of any special
audit or interim review or "cold comfort" letters required by or incident to
such performance), the fees and expenses of any special experts retained by the
Company in connection with such registration (including any underwriting fees,
discounts or commissions attributable to the sale of Registrable Securities) and
any out-of-pocket expenses of the Holders of Registrable Securities.
RELATED SECURITIES shall mean any securities issued in exchange for, as a
dividend on or in replacement of, or otherwise issued in respect of (including
securities issued in a stock dividend, split or recombination or pursuant to the
exercise of preemptive rights), the New Common Stock.
SECURITIES ACT shall mean the Securities Act of 1933, as amended.
Section 2. PIGGY-BACK REGISTRATION. a. If at any time within one (1) year
of the date hereof the Company proposes to file a registration statement under
the Securities Act with respect to an offering by the Company for its own
account or for the account of any other Person of any class of equity security,
including any security convertible into or exchangeable for any equity security
(other than a registration statement on Forms S-4 or S-8 (or their successor
forms) or filed in connection with an exchange offer or an offering of
securities solely to the Company's existing shareholders), then the Company
shall in each case give written notice of such proposed filing to the Holders of
Registrable Securities at least twenty (20) days before the anticipated filing
date, and such notice shall offer the Holders the opportunity to register such
number of Registrable Securities as each such Holder may request. The Company
shall use reasonable diligence to cause the managing underwriter or underwriters
of a proposed underwritten offering to permit the Holders of Registrable
Securities requested to be included in the registration for such offering to
include such securities in such offering on the same terms and conditions as any
similar securities of the Company included therein. Notwithstanding the
foregoing, if the managing underwriter or underwriters of such offering delivers
a written opinion to the Holders of Registrable Securities that the total amount
of securities which they or the Company and any other Persons intend to include
in such offering is sufficiently large to materially and adversely affect the
success of such offering, then the amount of Registrable Securities to be
offered for the accounts of the Holders of Registrable Securities shall be
reduced to the extent necessary, in the opinion of such managing underwriter, to
reduce the total amount of securities to be included in such offering to the
amount recommended by such managing underwriter. The Holders acknowledge and
agree that if the managing underwriter determines that it is necessary to reduce
the number of securities to be registered on behalf of the Holders of
Registrable Securities and any other Persons, such reduction will not take place
pro rata, but instead will be done with a preference being given to those other
Persons who are holders of securities of the Company which were issued prior to
the execution of this Agreement or which are issuable pursuant to contracts
entered into prior to the execution of this Agreement. From and after the date
of this Agreement, the Company agrees that it shall not, without the prior
written consent of the Holders, enter into any agreement with any holder or
prospective holders of any securities of the
3
<PAGE>
Company which would grant to such holder or prospective holders any piggy-back
registration rights having a preference or priority over the piggy-back
registration rights granted to the Holders pursuant to this Section 2; provided,
however, that the foregoing covenant and agreement shall not, in any manner,
alter or otherwise affect the preference or priorities previously granted to
other Persons prior to the execution of this Agreement.
b. Notwithstanding anything to the contrary contained in this Agreement,
the Company shall not be required to include Registrable Securities in any
registration statement if the proposed registration is (a) a registration of a
stock option or other employee incentive compensation plan or of securities
issued or issuable pursuant to any such plan, (b) a registration of securities
issued or issuable pursuant to a shareholder reinvestment plan or other similar
plan, (c) a registration of securities issued in exchange for any securities or
any assets of, or in connection with a merger or consolidation with, an
unaffiliated company, or (d) a registration of securities pursuant to a "rights"
or other similar plan designed to protect the Company's shareholders from a
coercive or other attempt to take control of the Company.
c. The Company may withdraw any registration statement and abandon any
proposed offering initiated by the Company without the consent of the Holder of
Registrable Securities, notwithstanding the request of the Holder to participate
therein in accordance with this provision, if the Company determines, in good
faith in its sole discretion, that such action is in the best interests of the
Company and its shareholders (for this purpose, the interest of the Holder shall
not be considered).
Section 3. DEMAND REGISTRATION RIGHTS. a. Subject to the conditions stated
herein, at any time after the 30th day following the closing of the transaction
contemplated in the Merger Agreement (the "Closing Date"), and on or before the
300th day following the Closing Date, either Holder may make a written request
to the Company for registration with the Commission of the offer and sale of the
Registrable Securities held by the Holders under and in accordance with the
provisions of the Securities Act. Following receipt of such request, the Company
shall, no later than ten (10) Business Days after receipt of such request,
notify the Holders that it will file a registration statement covering the
Registrable Securities for sale by the Holders; PROVIDED, HOWEVER, THAT the
Company may, if necessary, delay the filing of any registration statement
relating to the Demand Registration for such reasonable period of time, not to
exceed 90 days, as is necessary to prepare the financial statements of the
Company for the fiscal period most recently ended prior to such written request.
If the Holders of Registrable Securities shall, within ten (10) days after
receipt of such notice, withdraw the Holders' Registrable Securities from the
Demand Registration, the Holders shall not have any further rights under this
Section 3.
b. All requests made pursuant to this Section 3 will specify the amount of
Registrable Securities to be registered and will also specify the intended
methods of disposition thereof.
c. The Holders of Registrable Securities shall be entitled to one Demand
Registration. Such Demand Registration must become effective under the
Securities Act to count as having occurred with respect to such Registrable
Securities. The Registration Expenses of the Demand Registration, whether or not
it becomes effective, shall be paid as set forth in Section 11 below.
4
<PAGE>
d. If the Demand Registration is an underwritten offering, the Holders of
the Registrable Securities to be included in such demand registration will
select a managing underwriter or underwriters to administer the offering. Such
managing underwriter or underwriters shall be acceptable to the Company, and
such acceptance will not be unreasonably withheld or delayed.
Section 4. COMPANY REGISTRATION. Notwithstanding the provisions of Section
3, the Company shall not be obligated to effect a registration requested
pursuant to Section 3 if within 30 days after receiving the notice provided by
any Holder under Section 3, the Company notifies all Holders of the Registrable
Securities of its intention to file a registration statement for an underwritten
public offering of Common Stock at least a portion of which shares are to be
issued and/or sold for the account of the Company and within 90 days after
providing such notice, the Company files a registration statement for such
offering. In such case, the Holders shall have all the rights provided herein as
if no such demand registration had been requested with the latest date by which
a request for registration must be made with respect to any Registrable Security
not included in the underwritten public offering delayed to a date 180 days
after the effective date of such registration statement filed for an offering
for the account of the Company that resulted in the application of this Section
4. If at any time the Company fails to pursue diligently any such registration
statement or offering, the provisions of the preceding sentence shall not apply,
and the Company shall be obligated to satisfy its obligations under Section 3
promptly following notice to do so from the Holders. With respect to such
Company registration, the Company shall have the sole authority to select or
terminate the employment of underwriters and to make all decisions in connection
with the filing, effectiveness and consummation of the proposed offering,
subject to the express provisions hereof.
Section 5. LIMITATIONS ON OBLIGATIONS OF COMPANY. The obligations of the
Company under Section 3 are subject to each of the following limitations,
conditions and qualifications:
a. The Company shall be entitled to postpone for a reasonable period of
time (not exceeding 60 days) the filing (but not the preparation) of any
registration statement otherwise required to be prepared and filed by it
pursuant hereto if, at the time the Company receives a request for such
registration, the Company is in possession of material non-public information
that would be required to be disclosed in a registration statement, but that has
not been and will otherwise not be disclosed to the public, and the Company
deems disclosure not to be in the best interests of the Company and its
shareholders (for this purpose, the interest of the Holders shall not be
considered). The Company shall be entitled to postpone the filing of such a
registration statement for additional 60 day periods (not to exceed in any event
an aggregate of 120 days) if it delivers to the Holders of the Registrable
Securities an opinion of counsel to the effect that there is a reasonable
likelihood that the filing of a registration statement would result in the
disclosure of material non-public information that would be required to be
disclosed in a registration statement, the disclosure of which at the time of
delivery of such opinion appears not to be in the best interests of the Company
and its shareholders (for this purpose, the interest of the Holders shall not be
considered).
b. The Company shall be entitled to postpone for a reasonable period of
time (not exceeding 90 days) the distribution of preliminary or final
prospectuses under any registration statement required to be prepared and filed
by it pursuant hereto, if at the time such distribution
5
<PAGE>
would otherwise be made, the Company is engaged in an issuer tender offer within
the meaning of Section 13(e) of the Exchange Act for securities of the same
class (within the meaning of the Exchange Act) as the Registrable Securities
that are proposed to be registered, unless the Holders of the Registrable
Securities proposed to be registered can obtain a no-action letter from the
staff of the Commission to the effect that the staff would not recommend
enforcement action to the Commission if offers or sales were made pursuant to a
prospectus under such circumstances.
c. The Company shall be entitled to postpone for a reasonable period of
time (not exceeding 90 days) the effectiveness (but not the filing or
preparation) of any registration statement otherwise required to be prepared and
filed by it pursuant hereto if, within ten (10) Business Days after it receives
a request for a registration pursuant hereto, the Company's investment banking
firm determines (and the Company so notifies the Holders of the Registrable
Securities) that in its judgment, such registration and offering would
materially interfere with any financing, acquisition, corporate reorganization
or other material transaction involving the Company that before such request was
made the Board of Directors of the Company had agreed by resolution to pursue.
d. During any period in which claims made pursuant to the Purchase
Agreement remain disputed by the parties thereto, any registration rights
granted hereunder shall be suspended pending resolution of such claim or claims.
Section 6. RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTRABLE
SECURITIES. To the extent not inconsistent with applicable law, including
insurance codes, each Holder of Registrable Securities that is included in a
registration statement which registers Registrable Securities pursuant to this
Agreement agrees not to effect any public sale or distribution of the issue
being registered (or any securities of the Company convertible into or
exchangeable or exercisable for securities of the same type as the issue being
registered) during the 14 days before, and during the 90-day period beginning
on, the effective date of a registration statement filed by the Company (except
as part of such registration), but only if and to the extent requested in
writing (with reasonable prior notice) by the managing underwriter or
underwriters in the case of an underwritten public offering by the Company of
securities of the same type as the Registrable Securities; PROVIDED, HOWEVER,
THAT the period of time for which the Company is required to keep such
registration statement which includes Registrable Securities continuously
effective shall be increased by a period equal to such requested holdback
period.
Section 7. RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company agrees
not to effect any public sale or distribution of any securities similar to those
being registered, or any securities convertible into or exchangeable or
exercisable for such securities, during the 14 days before, and during the
90-day period beginning on, the effective date of any registration statement in
which the Holder of Registrable Securities is participating (except pursuant to
such registration statement).
Section 8. COOPERATION BY HOLDER. The offering of Registrable Securities
by any Holder shall comply in all respects with the applicable terms, provisions
and requirements set forth in this Agreement, and such Holder shall timely
provide the Company with all information and materials required to be included
in a registration statement that (a) relate to the offering, (b) are in
possession of such Holder and (c) relate to such Holder, and to take all such
action as may be reasonably
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required in order not to delay the registration and offering of the securities
by the Company. The Company shall have no obligation to include in such
registration statement shares of a Holder who has failed to furnish such
information which, in the written opinion of counsel to the Company, is required
in order for the registration statement to be in compliance with the Securities
Act. If a Holder of Registrable Securities which are the subject of the Demand
Registration or an Excess Demand Registration shall fail to furnish such
information and such Demand Registration or Excess Demand Registration shall not
become effective under the Securities Act, such Holder shall not have a right to
request inclusion of the Holder's Registrable Securities in a future demand
registration with respect to Registrable Securities.
Section 9. REGISTRATION PROCEEDINGS. Whenever any Registrable Securities
are to be registered pursuant to Sections 2 or 3 of this Agreement, the Company
will use reasonable diligence to effect the registration of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable. In connection with any Piggyback Registration, Demand
Registration or Excess Demand Registration, the Company will act as
expeditiously as possible to:
a. prepare and file with the Commission a registration statement which
includes the Registrable Securities and use reasonable diligence to cause such
registration statement to become effective; PROVIDED, HOWEVER, THAT before
filing a registration statement or prospectus or any amendments or supplements
thereto, including documents incorporated by reference after the initial filing
of the registration statement, the Company will furnish to the Holders of the
Registrable Securities covered by such registration statement and the
underwriters, if any, draft copies of all such documents proposed to be filed at
least five (5) Business Days prior thereto, which documents will be subject to
the reasonable review of the Holders and underwriters, and the Company will not
file any registration statement or amendment thereto or any prospectus or any
supplement thereto (including such documents incorporated by reference) to which
Holders of the Registrable Securities covered by such registration statement or
the underwriters with respect to such Registrable Securities, if any, shall
reasonably object, and will notify each Holder of the Registrable Securities of
any stop order issued or threatened by the Commission in connection therewith
and take all reasonable actions required to prevent the entry of such stop order
or to remove it if entered;
b. prepare and file with the Commission such amendments and post-effective
amendments to the registration statement as may be necessary to keep the
registration statement effective for a period of 180 days if the registration is
pursuant to Section 2 or until the first anniversary of the date hereof if the
registration is pursuant to Section 3 (or such later date that results by adding
the number of days by which the effectiveness of the registration statement is
delayed as a result of any postponement permitted under subsections a through c
of Section 5) or such shorter period which will terminate when all Registrable
Securities covered by such registration statement have been sold or withdrawn,
but not before the expiration of the 90-day period referred to in Section 3(3)
of the Securities Act and Rule 174 thereunder, if applicable; cause the
prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act; and
comply with the provisions of the Securities Act applicable to it with respect
to the disposition of all securities covered by such registration statement
during the applicable period in accordance with the intended methods of
disposition by the sellers
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<PAGE>
thereof set forth in such registration statement or supplement to the
prospectus; the Company shall not be deemed to have complied with its
obligations hereunder to keep a registration statement effective during the
applicable period if it voluntarily takes any action that would result in the
selling Holders of the Registrable Securities being prevented from selling such
Registrable Securities during that period unless such action is required under
applicable law;
c. furnish to the Holders of Registrable Securities included in such
registration statement and the underwriter or underwriters, if any, without
charge, such number of conformed copies of the registration statement and any
post-effective amendment thereto and such number of copies of the prospectus
(including each preliminary prospectus) and any amendments or supplements
thereto, and any documents incorporated by reference therein, as the Holders or
underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities being sold by the Holders (it being understood that the
Company consents to the use of the prospectus and any amendment or supplement
thereto, provided by the Company to the Holders of Registrable Securities
covered by the registration statement and the underwriter or underwriters, if
any, in connection with the offering and sale of the Registrable Securities
covered by the prospectus or any amendment or supplement thereto); PROVIDED,
HOWEVER, THAT before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company will furnish to one counsel
selected by the Holders copies of all documents proposed to be filed which
documents will be subject to the review of such counsel;
d. notify the Holders of Registrable Securities included in such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, when the Company becomes
aware of the happening of any event as a result of which the prospectus included
in such registration statement (as then in effect) contains any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements therein (in the case of the prospectus or any preliminary prospectus,
in light of the circumstances under which they were made) not misleading and, as
promptly as practicable thereafter, prepare and file with the Commission and
furnish a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
e. use reasonable diligence to cause all Registrable Securities included
in such registration statement to be listed, by the date of the first sale of
Registrable Securities pursuant to such registration statement, on each
securities exchange (including, for this purpose, The New York Stock Exchange)
on which the Common Stock of the Company is then listed or proposed to be
listed, if any;
f. make generally available to its security holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act no later than
forty-five (45) days after the end of the twelve-month period beginning with the
first day of the Company's first fiscal quarter commencing after the effective
date of the registration statement, which earnings statement shall cover said
twelve-month period, which requirement will be deemed to be satisfied if the
Company
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<PAGE>
timely files complete and accurate information on Forms 10-Q, 10-K, and 8-K
under the Exchange Act and otherwise complies with Rule 158 under the Securities
Act as soon as feasible;
g. make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the registration statement at the earliest
possible moment;
h. if reasonably requested by the managing underwriter or underwriters or
the Holders of Registrable Securities covered by the registration statement,
promptly incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or underwriters or the Holders requests
to be included therein, including without limitation, with respect to the number
of Registrable Securities being sold by the Holders to such underwriter or
underwriters, the purchase price being paid therefor by such underwriter or
underwriters and any other terms of the underwritten offering of such
Registrable Securities, and promptly make all required filings of such
prospectus supplement or post-effective amendment;
i. as promptly as practicable after filing with the Commission of any
document which is incorporated by reference into a registration statement,
deliver a copy of such document to each Holder of Registrable Securities covered
by such registration statement;
j. on or before the date on which the registration statement is declared
effective, use reasonable diligence to register or qualify, and cooperate with
the Holders of Registrable Securities included in such registration statement,
the underwriter or underwriters, if any, and their counsel, in connection with
the registration or qualification of the Registrable Securities covered by the
registration statement for offer and sale under the securities or blue sky laws
of each state and other jurisdiction of the United States as any such Holder or
underwriter reasonably requests in writing, to use reasonable diligence to keep
each such registration or qualification effective, including through new
filings, or amendments or renewals, during the period such registration
statement is required to be kept effective and to do any and all other acts or
things necessary or advisable to enable the disposition in all such
jurisdictions of the Registrable Securities covered by the applicable
registration statement; PROVIDED, HOWEVER, THAT the Company will not be required
to qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
k. cooperate with the Holders of Registrable Securities covered by the
registration statement and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold under the registration
statement, and enable such securities to be in such denominations and registered
in such names as the managing underwriter or underwriters, if any, or such
Holder may request, subject to the underwriters' obligation to return any
certificates representing securities not sold;
l. use reasonable diligence to cause the Registrable Securities covered by
the registration statement to be registered with or approved by such other
governmental agencies or authorities within the United States as may be
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such securities;
9
<PAGE>
m. enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other reasonable actions as the
Holders or the underwriters retained by the Holders, reasonably request in order
to expedite or facilitate the disposition of such Registrable Securities;
n. make available for inspection by the Inspectors such Records as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors, and employees to
supply all Records reasonably requested by any such Inspector in connection with
such registration statement; PROVIDED, HOWEVER, THAT with respect to any Records
that are confidential, the Inspectors shall execute such confidentiality
agreements as the Company may reasonably request in order to maintain the
confidentiality of confidential Records; and
o. use reasonable diligence in connection with any underwritten offering
to obtain a "cold comfort" letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by cold comfort letters as the managing underwriter or underwriters may
reasonably request.
The Holders, upon receipt of any notice from the Company of the happening of any
event of the kind described in subsection d of this Section 9, will forthwith
discontinue disposition of the Registrable Securities until the Holders' receipt
of the copies of the supplemented or amended prospectus contemplated by
subsection d of this Section 9 or until it is advised in writing by the Company
that the use of the prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by reference in the
prospectus, and, if so directed by the Company, the Holders will, or will
request the managing underwriter or underwriters, if any, to, deliver to the
Company (at the Company's expense) all copies in their possession or control,
other than permanent file copies then in the Holders' possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice. If the Company shall give any such notice, the time periods
mentioned in subsection b of this Section 9 shall be extended by the number of
days during the period from and including the date of the giving of such notice
to and including the date when each seller of Registrable Securities covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by subsection d of this Section 9 hereof or
the notice that they may resume use of the prospectus.
Section 10. REFERENCE TO HOLDERS IN REGISTRATION STATEMENT. If such
registration statement refers to the Holders by name or otherwise as the holders
of any securities of the Company, then the Holders shall have the right to
require (a) the insertion therein of language, in form and substance
satisfactory to the Holders, to the effect that the holding by the Holders of
such securities is not to be construed as a recommendation of the Holders of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that the Holders will assist in meeting any future
financial requirements of the Company, or (b) if such reference to the Holders
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 the Holders.
Section 11. DEMAND AND PIGGYBACK REGISTRATION EXPENSES. All Registration
Expenses incident to the Company's performance of or compliance with the Demand
Registration, Excess
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Demand Registration or Piggyback Registration pursuant to this Agreement, except
underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities and any out-of-pocket expenses (including attorneys'
fees) of the Holders of the Registrable Securities, will be borne by the
Company.
Section 12. INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each Holder of Registrable Securities, and each
Person who controls such Holder (within the meaning of the Securities Act), and
any Agent (as hereinafter defined), or investment advisor thereof against all
Liabilities arising out of or based upon any untrue or alleged untrue statement
of material fact contained in any registration statement, any amendment or
supplement thereto, any prospectus or preliminary prospectus, 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, except insofar as
any such Liabilities arise out of or are based upon any untrue statement or
omission based upon information with respect to such indemnified Person
furnished in writing to the Company by such indemnified Person expressly for use
therein. In connection with an underwritten offering, the Company will indemnify
the underwriters thereof, their officers and directors and each Person who
controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of such Holder
of Registrable Securities or to such other extent as the Company and such
underwriters may agree.
Section 13. INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES. In
connection with any registration statement in which a Holder of Registrable
Securities is participating, each such Holder will furnish to the Company in
writing such information with respect to the name and address of such Holder and
the amount of Registrable Securities held by such Holder and such other
information as the Company shall reasonably request for use in connection with
any such registration statement or prospectus, and agrees to indemnify, to the
extent permitted by law, the Company, its directors and officers, and each
Person who controls the Company (within the meaning of the Securities Act)
against any losses, damages and expenses resulting from any untrue statement of
a material fact or any omission of a material fact required to be stated in the
registration statement or prospectus or any amendment thereof or supplement
thereto or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or omission is based
upon any information with respect to such Holder so furnished in writing by such
Holder specifically for inclusion in any prospectus or registration statement.
Section 14. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such Person of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which such Person may claim indemnification or contribution
pursuant to this Agreement and, unless in the written opinion of counsel for
such indemnified party a conflict of interest may exist between such indemnified
party and the indemnifying party with respect to such claim, permit the
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to such indemnified party. Whether or not such defense is assumed
by the indemnifying party, the indemnifying party will not be subject to any
liability for any settlement made without its consent. No indemnifying party
will consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof
11
<PAGE>
the giving by the claimant or plaintiff to such indemnified party of a release
from all liability in respect of such claim or litigation. 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 for any indemnified
party a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
Section 15. CONTRIBUTION. If the indemnification provided for in Sections
12 and 13 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities, or expenses
referred to therein, then the 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 losses, claims, damages, liabilities, or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities, or expenses, as
well as any other relative equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information, and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of any losses, claims, damages, liabilities, and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 14, any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding. The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 15 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this paragraph. 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. The obligations of the Company pursuant to Sections 12, 13,
14 and 15 shall be further subject to such additional express agreements of the
Company as may be required to facilitate an underwritten offering, PROVIDED,
HOWEVER, THAT no such agreement shall in any way limit the rights of the Holders
of Registrable Securities under this Agreement, or create additional obligations
of the Holders not set forth herein, except as otherwise expressly agreed in
writing by the Holders.
Section 16. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. The Holders of
Registrable Securities may not participate in any underwritten registration
hereunder unless each such Holder (a) agrees to sell the Holder's securities on
the terms of and on the basis provided in any underwriting arrangements approved
by the Persons entitled hereunder to approve such arrangements (which shall be
the Company in the case of an offering of securities by the Company), and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
Section 17. RULE 144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by
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the Commission thereunder (or, if the Company is not required to file such
reports, it will, upon the request of the Holders of Registrable Securities,
make publicly available other nonconfidential information so long as necessary
to permit sales under Rule 144 under the Securities Act), and it will take such
other action as the Holders of Registrable Securities may reasonably request,
all to the extent required from time to time to enable the Holders 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 the Holders
of Registrable Securities, the Company will deliver to the Holders a written
statement as to whether it has complied with such requirements.
Section 18. RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this
Agreement shall apply, to the full extent set forth herein, with respect to the
Registrable Securities, to any and all shares of equity capital of the Company
or any successor or assign of the Company (whether by merger, consolidation,
sale of assets, or otherwise) which may be issued in respect of, in exchange
for, or in substitution of the Registrable Securities, in each case as the
amounts of such securities outstanding are appropriately adjusted for any equity
dividends, splits, reverse splits, combinations, recapitalizations, and the like
occurring after the date of this Agreement.
Section 19. OPINIONS. When any legal opinion is required to be delivered
hereunder, such opinion may contain such qualifications as may be customary or
otherwise appropriate for legal opinions in similar circumstances.
Section 20. NOTICES. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
IF TO COMPANY, TO:
Consolidated Graphics, Inc.
5858 Westheimer, Suite 200
Houston, Texas 77057
Attention: Joe R. Davis,
Chief Executive Officer
WITH A COPY TO:
R. Clyde Parker, Jr.
Winstead Sechrest & Minick, P.C.
910 Travis Street, Suite 2400
Houston, Texas 77002
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IF TO THE HOLDERS, TO EACH:
John R. Roberts
==========================
--------------------------
Ralph R. Hilker
==========================
--------------------------
WITH A COPY TO:
==========================
==========================
IF TO ANY PERSON OTHER THAN THE HOLDERS:
to the address of such Person on the records of the transfer agent of the
Company as of the date prior to the date of any notice by the Company
or to such other address as any party may furnish to the others in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt, and that failure to copy legal counsel shall not
invalidate notices otherwise properly given.
Section 21. APPLICABLE LAW. This Agreement and all rights and obligations
hereunder, including matters of construction, validity and performance, shall be
governed by the laws of the State of Texas, without giving effect to the
principles of conflicts of laws thereof.
Section 22. AMENDMENT AND WAIVER. This Agreement may be amended, and the
provisions hereof may be waived, only by a written instrument signed by (a) the
Holders and (b) the Company. No failure by either party hereto at any time to
give notice of any breach by the other party of, or to require compliance with,
any condition or provision of this Agreement shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior or subsequent
time.
Section 23. REMEDY FOR BREACH OF CONTRACT. The parties agree that if there
is any breach or asserted breach of the terms, covenants, or conditions of this
Agreement, the remedy of the parties hereto shall be at law and in equity and
injunctive relief shall lie for the enforcement of or relief from any provisions
of this Agreement. If any remedy or relief is sought and obtained by any party
against one of the other parties pursuant to this Section 23, the other party
shall, in addition to the remedy of relief so obtained, be liable to the party
seeking such remedy or relief for the reasonable
14
<PAGE>
expenses incurred by such party in successfully obtaining such remedy or relief,
including the reasonable fees and expenses of such party's counsel.
Section 24. SEVERABILITY. It is a desire and intent of the parties that
the terms, provisions, covenants, and remedies contained in this Agreement shall
be enforceable to the fullest extent permitted by law. If any such term,
provision, covenant, or remedy of this Agreement or the application thereof to
any Person or circumstances shall, to any extent, be construed to be invalid or
unenforceable, in whole or in part, then such term, provision, covenant, or
remedy shall be construed in a manner so as to permit its enforceability under
the applicable law to the fullest extent permitted by law. In any case, the
remaining provisions of this Agreement, or the application thereof to any Person
or circumstances other than those to which they have been held invalid or
unenforceable, shall remain in full force and effect.
Section 25. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
Section 26. HEADINGS. The section and paragraph headings have been
inserted for purposes of convenience of reference only and shall not be used for
interpretive purposes.
Section 27. BINDING EFFECT. Unless otherwise provided herein, the
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, legal representatives,
successors, and permitted assigns, and is not intended to confer upon any other
Person any right or remedies hereunder; PROVIDED, HOWEVER, THAT a transferee of
a Holder, other than as contemplated in (a), (b) or (c) of the definitions of
Registrable Securities in Section 1, shall be deemed to be the Holder for
purposes of obtaining the benefits or enforcing the rights of the Holder.
Section 28. ENTIRE AGREEMENT. This Agreement, together with the other
agreements referenced herein, constitutes the entire agreement and supersedes
all prior agreements, understandings, both written and oral, among the parties
with respect to the subject matter hereof.
Section 29. INFORMATION. So long as the Holders own Registrable
Securities, the Holders agree to deliver to the Company, upon request, such
information about the Holders and the Holders' holdings of Registrable
Securities as the Company may reasonably request as is necessary to permit the
Company to prepare and file its annual report on Form 10-K, its proxy statements
under the Exchange Act and any filings under the Securities Act. Without
limiting the generality of the foregoing, the Holders agrees to provide the
Company, upon request, with information concerning the number of shares then
held by the Holders that are the subject of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONSOLIDATED GRAPHICS, INC.
By: /s/ JOE R. DAVIS
Joe R. Davis, Chief Executive Officer
/s/ JOHN R. ROBERTS
JOHN R. ROBERTS
/s/ RALPH R. HILKER
RALPH R. HILKER
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<PAGE>
ADDENDUM TO REGISTRATION RIGHTS AGREEMENT
This Addendum to Registration Rights Agreement is entered into effective
September 14, 1998 by and among Consolidated Graphics, Inc., a Texas corporation
("Company"), and The Randy Roberts 1998 Revocable Trust and The Carol Ann
Roberts 1998 Revocable Trust (individually, each a "Trust" and collectively, the
"Trusts"). All capitalized terms not defined herein shall have the meaning
assigned to them in the Registration Rights Agreement dated August 13, 1998 (the
"Registration Rights Agreement") by and among the Company and John R. Roberts
and Ralph R. Hilker (the "Holders").
WITNESETH:
WHEREAS, in connection with that certain Agreement and Plan of
Reorganization dated as of August 13, 1998, the Company and the Holders entered
into the foregoing Registration Rights Agreement; and
WHEREAS, John R. Roberts, a Holder under the Registration Rights
Agreement, transferred all of the Registerable Securities held by him to The
Randy Roberts 1998 Revocable Trust and The Carol Ann Roberts 1998 Revocable
Trust (individually each a "Trust" and collectively the "Trusts").
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and each of the Trusts agree as
follows:
The undersigned parties acknowledge and agree that (i) John R.
Roberts, a Holder under the Registration Rights Agreement, has transferred all
of the Registerable Securities held by him to the Trusts; and (ii) as of the
effective date of this Addendum, each such Trust shall be considered to be for
any and all purposes a Holder under the Registration Rights Agreement and shall
enjoy and have all of the rights, privileges and obligations of a Holder
thereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of
the date first written above.
CONSOLIDATED GRAPHICS, INC.,
a Texas corporation
By: /s/ RANDALL D. KEYS
Name: RANDALL D. KEYS
Title: VICE PRESIDENT - FINANCE AND CHIEF FINANCIAL
OFFICER
THE RANDY ROBERTS 1998 REVOCABLE TRUST
By: /s/ JOHN R. ROBERTS
John R. Roberts, Trustee
THE CAROL ANN ROBERTS 1998 REVOCABLE TRUST
By: /s/ JOHN R. ROBERTS
John R. Roberts, Trustee
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
September 14, 1998, by and among CONSOLIDATED GRAPHICS, INC., a Texas
corporation and CONTINENTAL GRAPHICS CORPORATION, a California corporation;
W I T N E S S E T H :
WHEREAS, it is a condition to the consummation of the transactions
contemplated by that certain Stock Purchase Agreement dated as of September 14,
1998 (the "Purchase Agreement"), among the Company, RUSH PRESS, INC., a
California corporation, ARTS & CRAFTS PRESS, INC., a California corporation, and
the Holder that this Agreement be executed and delivered by the Company and the
Holder;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Holder agree as follows:
Section 1. DEFINITIONS. As used in this Agreement, the following terms
have the meanings indicated below:
AGENT shall mean any Person acting for or on behalf of the Holder of
Registrable Securities with respect to the holding or sale of such Registrable
Securities, including, without limitation, its officers, directors,
representatives and other agents.
AGREEMENT shall mean this Registration Rights Agreement.
BUSINESS DAY shall mean any day other than a Saturday, Sunday, or legal
holiday for banks in the State of Texas.
COMMISSION shall mean the Securities and Exchange Commission.
COMMON STOCK shall mean the Company's common stock, par value $0.01 per
share, or any successor class of the Company's common stock.
COMPANY shall mean Consolidated Graphics, Inc.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as amended.
HOLDER shall mean Continental Graphics Corporation, its successors and
assigns.
INSPECTORS shall mean the Holder of Registrable Securities, any
underwriter participating in any disposition of Registrable Securities pursuant
to the Required Registration, and any attorney, accountant or other agent
retained by the Holder or underwriter.
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LIABILITIES shall mean all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation) and defense and
attorneys' fees.
NEW COMMON STOCK shall mean the shares of Common Stock acquired by the
Holder pursuant to the Purchase Agreement, together with any Related Securities.
PERSON shall mean any individual, corporation, limited liability company,
partnership (general or limited), joint venture, association, joint-stock
company, trust, unincorporated organization or government or a political
subdivision, agency or instrumentality thereof or other entity or organization
of any kind.
RECORDS shall mean all financial and other records, pertinent corporate
documents and properties of the Company.
REGISTRABLE SECURITIES shall mean the New Common Stock, until such time as
the New Common Stock have been (a) distributed to the public pursuant to a
registration statement covering such securities that has been declared effective
under the Securities Act, (b) distributed to the public in accordance with the
provisions of Rule 144 (or any similar provision then in force) under the
Securities Act, or (c) repurchased by the Company.
REGISTRATION EXPENSES shall mean all expenses (including attorneys' fees)
incident to the Company's performance of or compliance with the Required
Registration pursuant to this Agreement, including, without limitation, all
Commission and securities exchange or National Association of Securities
Dealers, Inc. and other registration and filing fees, fees and expenses of
compliance with securities or blue sky laws (including fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), rating agency fees, printing expenses, messenger and delivery
expenses, internal expenses (including salaries and expenses of its officers and
employees performing legal or accounting duties), the fees and expenses incurred
in connection with the listing of the Registrable Securities to be registered on
each securities exchange on which similar securities issued by the Company are
then listed and fees and disbursements of counsel for the Company and its
independent certified public accountants (including the expenses of any special
audit or interim review or "cold comfort" letters required by or incident to
such performance), the fees and expenses of any special experts retained by the
Company in connection with such registration (including any underwriting fees,
discounts or commissions attributable to the sale of Registrable Securities) and
any out-of-pocket expenses of the Holder of Registrable Securities.
RELATED SECURITIES shall mean any securities issued in exchange for, as a
dividend on or in replacement of, or otherwise issued in respect of (including
securities issued in a stock dividend, split or recombination or pursuant to the
exercise of preemptive rights), the New Common Stock.
REQUIRED REGISTRATION shall mean the registration pursuant to Section 2
hereof with the Commission of the offer and sale of Registrable Securities under
and in accordance with the provisions of the Securities Act.
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SECURITIES ACT shall mean the Securities Act of 1933, as amended.
Section 2. REQUIRED REGISTRATION. Subject to the conditions stated herein,
within fifteen (15) days following the closing of the issuance of the New Common
Stock contemplated in the Purchase Agreement (the "Closing Date"), the Company
shall file with the Commission a registration statement on Form S-3 covering the
offer and sale of the Registrable Securities held by the Holder under and in
accordance with the provisions of the Securities Act.
Section 3. LIMITATIONS ON OBLIGATIONS OF COMPANY. The obligations of the
Company under Section 2 are subject to the following: the Company shall be
entitled to postpone for a reasonable period of time (not exceeding 10 days) the
filing (but not the preparation) of any registration statement otherwise
required to be prepared and filed by it pursuant hereto if, within the fifteen
(15) day period following the Closing Date, the Company is in possession of
material non-public information that would be required to be disclosed in a
registration statement, but that has not been and will otherwise not be
disclosed to the public, and the Company reasonably deems disclosure not to be
in the best interests of the Company and its shareholders (for this purpose, the
interest of the Holder shall not be considered). The Company shall be entitled
to postpone the filing of such a registration statement for additional 10 day
periods (not to exceed in any event an aggregate of 20 days) if it delivers to
the Holder of the Registrable Securities an opinion of outside counsel to the
effect that there is a reasonable likelihood that the filing of a registration
statement would result in the disclosure of material non-public information that
would be required to be disclosed in a registration statement, the disclosure of
which at the time of delivery of such opinion appears not to be in the best
interests of the Company and its shareholders (for this purpose, the interest of
the Holder shall not be considered). As of the date hereof, the Company
represents and warrants that it is not in possession of any material non-public
information that would be required to be disclosed in a registration statement
that could delay the Company's timely performance of its obligations under
Section 2.
Section 4. COOPERATION BY HOLDER. The offering of Registrable Securities
by the Holder shall comply in all respects with the applicable terms, provisions
and requirements set forth in this Agreement, and the Holder shall timely
provide the Company with all information and materials required to be included
in a registration statement that (a) relate to the offering, (b) are in
possession of the Holder and (c) relate to the Holder, and to take all such
action as may be reasonably required in order not to delay the registration and
offering of the securities by the Company. The Company shall have no obligation
to include in such registration statement Registrable Securities of the Holder,
if the Holder has failed to furnish such information which, in the written
opinion of outside counsel to the Company, is required in order for the
registration statement to be in compliance with the Securities Act. If the
Holder of Registrable Securities which are the subject of the Required
Registration shall fail to furnish such information and such Required
Registration shall not become effective under the Securities Act as a result
thereof, the Holder shall not have a right to request inclusion of the Holder's
Registrable Securities in a future registration with respect to Registrable
Securities.
Section 5. REGISTRATION PROCEEDINGS. In connection with the Required
Registration, the Company will act as expeditiously as possible to:
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a. prepare and file with the Commission a registration statement on Form
S-3 which includes the Registrable Securities and use commercially reasonable
efforts to cause such registration statement to become effective as promptly as
is reasonably practical; PROVIDED, HOWEVER, THAT before filing a registration
statement or prospectus or any amendments or supplements thereto, including
documents incorporated by reference after the initial filing of the registration
statement, the Company will furnish to the Holder of the Registrable Securities
covered by such registration statement and the underwriters, if any, draft
copies of all such documents proposed to be filed at least three (3) days prior
thereto, which documents will be subject to the reasonable review of the Holder
and underwriters, if any, and the Company will not file any registration
statement or amendment thereto or any prospectus or any supplement thereto
(including such documents incorporated by reference) to which the Holder of the
Registrable Securities covered by such registration statement or the
underwriters, if any, with respect to such Registrable Securities, if any, shall
reasonably object, and will notify the Holder of the Registrable Securities of
any stop order issued or threatened by the Commission in connection therewith
and take all reasonable actions required to prevent the entry of such stop order
or to remove it if entered;
b. prepare and file with the Commission such amendments and post-effective
amendments to such registration statement as may be necessary to keep such
registration statement effective until the first anniversary of the effective
date of such registration statement or such shorter period which will terminate
when all Registrable Securities covered by such registration statement have been
sold or withdrawn, but not before the expiration of the 90-day period referred
to in Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable;
cause the prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Securities
Act; and comply with the provisions of the Securities Act applicable to it with
respect to the disposition of all securities covered by such registration
statement during the applicable period in accordance with the intended methods
of disposition by the sellers thereof set forth in such registration statement
or supplement to the prospectus;
c. furnish to the Holder of Registrable Securities included in such
registration statement and the underwriter or underwriters, if any, without
charge, such number of conformed copies of the registration statement and any
post-effective amendment thereto, together with exhibits thereto, and such
number of copies of the prospectus (including each preliminary prospectus) and
any amendments or supplements thereto, and any documents incorporated by
reference therein, as the Holder or underwriter may reasonably request in order
to facilitate the disposition of the Registrable Securities being sold by the
Holder (it being understood that the Company consents to the use of the
prospectus and any amendment or supplement thereto, provided by the Company to
the Holder of Registrable Securities covered by the registration statement and
the underwriter or underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by the prospectus or any amendment or
supplement thereto); PROVIDED, HOWEVER, THAT before filing a registration
statement or prospectus or any amendments or supplements thereto, the Company
will furnish to the Holder and counsel selected by the Holder copies of all
documents proposed to be filed which documents will be subject to the review of
Holder and such counsel;
d. promptly notify the Holder of Registrable Securities included in such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the
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Securities Act, when the Company becomes aware of the happening of any event as
a result of which the prospectus included in such registration statement (as
then in effect) contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein (in the case of
the prospectus or any preliminary prospectus, in light of the circumstances
under which they were made) not misleading and, as promptly as practicable
thereafter, prepare and file with the Commission and furnish a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading;
e. use commercially reasonable efforts to cause all Registrable Securities
included in such registration statement to be listed, by the date of the first
sale of Registrable Securities pursuant to such registration statement, on each
securities exchange (including, for this purpose, The New York Stock Exchange)
on which the Common Stock of the Company is then listed or proposed to be
listed, if any;
f. make generally available to its security holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act no later than
forty-five (45) days after the end of the twelve-month period beginning with the
first day of the Company's first fiscal quarter commencing after the effective
date of the registration statement, which earnings statement shall cover said
twelve-month period, which requirement will be deemed to be satisfied if the
Company timely files complete and accurate information on Forms 10-Q, 10-K, and
8-K under the Exchange Act and otherwise complies with Rule 158 under the
Securities Act as soon as feasible;
g. make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the registration statement at the earliest
possible moment;
h. if reasonably requested by the managing underwriter or underwriters or
the Holder of Registrable Securities covered by the registration statement,
promptly incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or underwriters or the Holder requests
to be included therein, including without limitation, with respect to the number
of Registrable Securities being sold by the Holder to such underwriter or
underwriters, the purchase price being paid therefor by such underwriter or
underwriters and any other terms of the underwritten offering of such
Registrable Securities, and promptly make all required filings of such
prospectus supplement or post-effective amendment;
i. as promptly as practicable after filing with the Commission of any
document which is incorporated by reference into a registration statement,
deliver a copy of such document to the Holder of Registrable Securities covered
by such registration statement;
j. on or before the date on which the registration statement is declared
effective, use commercially reasonable efforts to register or qualify, and
cooperate with the Holder of Registrable Securities included in such
registration statement, the underwriter or underwriters, if any, and their
counsel, in connection with the registration or qualification of the Registrable
Securities covered by the registration statement for offer and sale under the
securities or blue sky laws of each state and
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other jurisdiction of the United States as the Holder or underwriter reasonably
requests in writing, to use commercially reasonable efforts to keep each such
registration or qualification effective, including through new filings, or
amendments or renewals, during the period such registration statement is
required hereunder to be kept effective and to do any and all other acts or
things necessary or advisable to enable the disposition in all such
jurisdictions of the Registrable Securities covered by the applicable
registration statement; PROVIDED, HOWEVER, THAT the Company will not be required
to qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
k. cooperate with the Holder of Registrable Securities covered by the
registration statement and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold under the registration
statement, and enable such securities to be in such denominations and registered
in such names as the managing underwriter or underwriters, if any, or the Holder
may request, subject to the underwriters' obligation to return any certificates
representing securities not sold;
l. use commercially reasonable efforts to cause the Registrable Securities
covered by the registration statement to be registered with or approved by such
other governmental agencies or authorities within the United States as may be
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such securities;
m. deliver to the Holder and its counsel and the managing underwriter or
underwriters, if any, copies of all correspondence related to the offering
between the Commission, the Company and its counsel;
n. make available for inspection by the Inspectors such Records as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors, and employees to
supply all Records reasonably requested by any such Inspector in connection with
such registration statement; PROVIDED, HOWEVER, THAT with respect to any Records
that are confidential, the Inspectors shall execute such confidentiality
agreements as the Company may reasonably request in order to maintain the
confidentiality of confidential Records.
The Holder, upon receipt of any notice from the Company of the happening of any
event of the kind described in subsection d of this Section 5, will forthwith
discontinue disposition of the Registrable Securities until the Holder's receipt
of the copies of the supplemented or amended prospectus contemplated by
subsection d of this Section 5 or until it is advised in writing by the Company
that the use of the prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by reference in the
prospectus, and, if so directed by the Company, the Holder will, or will request
the managing underwriter or underwriters, if any, to, deliver to the Company (at
the Company's expense) all copies in their possession or control, other than
permanent file copies then in the Holder's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. If the Company shall give any such notice, the time periods mentioned in
subsection b of this Section 5 shall be extended by the number of days during
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the period from and including the date of the giving of such notice to and
including the date when each seller of Registrable Securities covered by such
registration statement shall have received the copies of the supplemented or
amended prospectus contemplated by subsection d of this Section 5 hereof or the
notice that they may resume use of the prospectus.
Section 6. REFERENCE TO HOLDER IN REGISTRATION STATEMENT. If such
registration statement refers to the Holder by name or otherwise as the holders
of any securities of the Company, then the Holder shall have the right to
require (a) the insertion therein of language, in form and substance
satisfactory to the Holder, to the effect that the holding by the Holder of such
securities is not to be construed as a recommendation of the Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that the Holder will assist in meeting any future
financial requirements of the Company, or (b) if such reference to the 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 the Holder.
Section 7. REQUIRED REGISTRATION EXPENSES. All Registration Expenses
incident to the Company's performance of or compliance with the Required
Registration pursuant to this Agreement, except underwriting fees, discounts or
commissions, in each case, attributable to the sale of Registrable Securities
and any out-of-pocket expenses (including attorneys' fees) of the Holder of the
Registrable Securities, will be borne by the Company.
Section 8. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Holder of Registrable Securities, and each Person who
controls the Holder (within the meaning of the Securities Act or the Exchange
Act), and any Agent (as hereinafter defined), or investment advisor thereof
against all Liabilities (joint and several) arising out of or based upon any
untrue or alleged untrue statement of material fact contained in any
registration statement, any amendment or supplement thereto, any prospectus or
preliminary prospectus, 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, except insofar as any such Liabilities arise out of or
are based upon any untrue statement or omission based upon information with
respect to such indemnified Person furnished in writing to the Company by such
indemnified Person expressly for use therein. In connection with an underwritten
offering, the Company will indemnify the underwriters thereof, their officers
and directors and each Person who controls such underwriters (within the meaning
of the Securities Act or the Exchange Act) to the same extent as provided above
with respect to the indemnification of the Holder of Registrable Securities or
to such other extent as the Company and such underwriters may agree.
Section 9. INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. In
connection with any registration statement in which the Holder of Registrable
Securities is participating, the Holder will furnish to the Company in writing
such information with respect to the name and address of the Holder and the
amount of Registrable Securities held by the Holder and such other information
as the Company shall reasonably request for use in connection with any such
registration statement or prospectus, and agrees to indemnify, to the extent
permitted by law, the Company, its directors and officers, and each Person who
controls the Company (within the meaning of the Securities Act) against any
losses, damages and expenses resulting from any untrue statement of a material
fact or
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any omission of a material fact required to be stated in the registration
statement or prospectus or any amendment thereof or supplement thereto or
necessary to make the statements therein not misleading, to the extent, but only
to the extent, that such untrue statement or omission is based upon any
information with respect to the Holder so furnished in writing by the Holder
specifically for inclusion in any prospectus or registration statement.
Section 10. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such Person of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which such Person may claim indemnification or contribution
pursuant to this Agreement and, unless in the written opinion of counsel for
such indemnified party a conflict of interest may exist between such indemnified
party and the indemnifying party with respect to such claim, permit the
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to such indemnified party. Whether or not such defense is assumed
by the indemnifying party, the indemnifying party will not be subject to any
liability for any settlement made without its consent. No indemnifying party
will consent to entry of any judgment or enter into any settlement 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
of such claim or litigation. 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 for any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event the indemnifying
party shall be obligated to pay the fees and expenses of such additional counsel
or counsels.
Section 11. CONTRIBUTION. If the indemnification provided for in Sections
8 and 9 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any Liabilities, then the 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 Liabilities in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such Liabilities, as well as any other relative equitable considerations. The
relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact, has been
made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of any Liabilities shall be deemed to include,
subject to the limitations set forth in Section 10, any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding. The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 11 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this paragraph. 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. The obligations of the Company
pursuant to Sections 8, 9, 10 and 11 shall be further subject to such additional
express agreements of the Company as may be required
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to facilitate an underwritten offering, PROVIDED, HOWEVER, THAT no such
agreement shall in any way limit the rights of the Holder of Registrable
Securities under this Agreement, or create additional obligations of the Holder
not set forth herein, except as otherwise expressly agreed in writing by the
Holder.
Section 12. RULE 144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the Commission thereunder (or, if the Company
is not required to file such reports, it will, upon the request of the Holder of
Registrable Securities, make publicly available other nonconfidential
information so long as necessary to permit sales under Rule 144 under the
Securities Act), and it will take such other action as the Holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable the Holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by Rule 144
under the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of the Holder of Registrable Securities, the Company will deliver to the Holder
a written statement as to whether it has complied with such requirements.
Section 13. NO OBLIGATION FOR UNDERWRITTEN REGISTRATIONS. The Company is
under no obligation to provide the Holder of Registrable Securities the
opportunity to participate in any underwritten registration.
Section 14. LIMITATION ON REGISTERED OFFERINGS. The Company shall not file
any other registration statement under the Securities Act with respect to an
offering of securities by the Company for its own account for cash (i) during
the period that begins on the sixteenth day following the issuance of the New
Common Stock and ends on the date that the Company files with the Commission a
registration statement on Form S-3 covering the offer and sale of all the
Registrable Securities held by Holder, if the Company has failed to file such a
registration statement by or on the fifteenth day following the issuance of the
New Common Stock and (ii) during the period that begins on the sixty-first day
following the filing with the Commission of a registration statement on Form S-3
covering the offer and sale of all the Registrable Securities held by Holder and
ends on the date such registration statement is declared effective by the
Commission, if such registration statement has not been declared effective by
the Commission within sixty days of it being filed by the Company.
Section 15. RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this
Agreement shall apply, to the full extent set forth herein, with respect to the
Registrable Securities, to any and all shares of equity capital of the Company
or any successor or assign of the Company (whether by merger, consolidation,
sale of assets, or otherwise) which may be issued in respect of, in exchange
for, or in substitution of the Registrable Securities, in each case as the
amounts of such securities outstanding are appropriately adjusted for any equity
dividends, splits, reverse splits, combinations, recapitalizations, and the like
occurring after the date of this Agreement.
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Section 16. OPINIONS. When any legal opinion is required to be delivered
hereunder, such opinion may contain such qualifications as may be customary or
otherwise appropriate for legal opinions in similar circumstances.
Section 17. NOTICES. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered personally, by facsimile or by mail, return
receipt requested, postage prepaid, addressed as follows:
IF TO COMPANY, TO:
Consolidated Graphics, Inc.
5858 Westheimer, Suite 200
Houston, Texas 77057
Attention: Joe R. Davis
WITH A COPY TO:
R. Clyde Parker, Jr., Esq.
Winstead Sechrest & Minick, P.C.
910 Travis Street, Suite 2400
Houston, Texas 77002
IF TO THE HOLDER:
Continental Graphics Corporation
4525 Wilshire Boulevard,
Suite 203
Los Angeles, California 90071
Attention: David L. Malmo, Esq.
WITH A COPY TO:
Munger, Tolles & Olson LLP
355 South Grand Avenue,
Suite 3500
Los Angeles, California 90071
Attention: Sandra Seville-Jones, Esq.
IF TO ANY PERSON OTHER THAN THE HOLDER:
to the address of such Person on the records of the transfer agent of the
Company as of the date prior to the date of any notice by the Company
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or to such other address as any party may furnish to the others in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt, and that failure to copy legal counsel shall not
invalidate notices otherwise properly given; provided, however, that in the case
of facsimile transmissions, the facsimile must be legible.
Section 18. APPLICABLE LAW. This Agreement and all rights and obligations
hereunder, including matters of construction, validity and performance, shall be
governed by the laws of the State of California, without giving effect to the
principles of conflicts of laws thereof.
Section 19. AMENDMENT AND WAIVER. This Agreement may be amended, and the
provisions hereof may be waived, only by a written instrument signed by (a) the
Holder and (b) the Company. No failure by either party hereto at any time to
give notice of any breach by the other party of, or to require compliance with,
any condition or provision of this Agreement shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior or subsequent
time.
Section 20. REMEDY FOR BREACH OF CONTRACT. The parties agree that if there
is any breach or asserted breach of the terms, covenants, or conditions of this
Agreement, the remedy of the parties hereto shall be at law and in equity and
injunctive relief shall lie for the enforcement of or relief from any provisions
of this Agreement. If any remedy or relief is sought and obtained by any party
against one of the other parties pursuant to this Section 20, the other party
shall, in addition to the remedy of relief so obtained, be liable to the party
seeking such remedy or relief for the reasonable expenses incurred by such party
in successfully obtaining such remedy or relief, including the reasonable fees
and expenses of such party's counsel.
Section 21. SEVERABILITY. It is a desire and intent of the parties that
the terms, provisions, covenants, and remedies contained in this Agreement shall
be enforceable to the fullest extent permitted by law. If any such term,
provision, covenant, or remedy of this Agreement or the application thereof to
any Person or circumstances shall, to any extent, be construed to be invalid or
unenforceable, in whole or in part, then such term, provision, covenant, or
remedy shall be construed in a manner so as to permit its enforceability under
the applicable law to the fullest extent permitted by law. In any case, the
remaining provisions of this Agreement, or the application thereof to any Person
or circumstances other than those to which they have been held invalid or
unenforceable, shall remain in full force and effect.
Section 22. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
Section 23. HEADINGS. The section and paragraph headings have been
inserted for purposes of convenience of reference only and shall not be used for
interpretive purposes.
Section 24. BINDING EFFECT. Unless otherwise provided herein, the
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, legal representatives,
successors, and permitted assigns, and is not intended to confer upon any
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other Person any right or remedies hereunder; PROVIDED, HOWEVER, THAT a
transferee of the Holder, other than as contemplated in (a), (b) or (c) of the
definitions of Registrable Securities in Section 1, shall be deemed to be the
Holder for purposes of obtaining the benefits or enforcing the rights of the
Holder.
Section 25. ENTIRE AGREEMENT. This Agreement, together with the other
agreements referenced herein, constitutes the entire agreement and supersedes
all prior agreements, understandings, both written and oral, among the parties
with respect to the subject matter hereof.
Section 26. INFORMATION. So long as the Holder owns Registrable
Securities, the Holder agrees to deliver to the Company, upon its reasonable
request, such information about the Holder and the Holder's holdings of
Registrable Securities as the Company may reasonably request as is necessary to
permit the Company to prepare and file its annual report on Form 10-K, its proxy
statements under the Exchange Act and any filings under the Securities Act.
Without limiting the generality of the foregoing, the Holder agrees to provide
the Company, upon request, with information concerning the number of shares then
held by the Holder that are the subject of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONSOLIDATED GRAPHICS, INC.
By: /s/ JOE R. DAVIS
Joe R. Davis
Chief Executive Officer
CONTINENTAL GRAPHICS CORPORATION
By: /s/ CURTIS F. BOURLAND
Name: Curtis F. Bourland
Title: President and Chief Executive Officer
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
13
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3, of our report dated May
8, 1998, included in the Consolidated Graphics, Inc. Annual Report on Form 10-K
for the year ended March 31, 1998, and to all references to our Firm included in
this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Houston, Texas
September 15, 1998
