AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 26, 1998
Registration No. 333-......
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
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)
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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)
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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
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
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Common Stock, par value
$0.01 per share....... 442,806 $54.25 $24,022,225 $7,086.56
======================================================================================================
</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 June 19, 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
442,806 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 442,806
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, including without limitation Bear, Stearns International Limited, 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 Prospectus Supplement.
See "Plan of Distribution."
The Common Stock is traded on the New York Stock Exchange under the
symbol "CGX". On June 25, 1998, the last reported sale price for the Common
Stock on the New York Stock Exchange was $58.00 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."
-------------------
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH
UNDER THE CAPTION "RISK FACTORS," BEGINNING ON PAGE 3.
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.
-------------------
THE DATE OF THIS PROSPECTUS IS JUNE 26, 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 facilities 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 Section of the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 at prescribed
rates. 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 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 in accordance with 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 as to the contents of any contract or any other document
referred to are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. A copy of the Registration Statement 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 Company's Annual Report on Form 10-K for the fiscal year ended March
31, 1998, which has been filed by the Company with the Commission pursuant to
the Exchange Act (File No. 0-24068), and the Company's Current Report on Form
8-K, filed June 24, 1998 in connection with the press release regarding the
completion of the acquistion of Graphic Communications, Inc. of San Diego,
California are incorporated in this Prospectus by reference and shall be deemed
to be a part hereof.
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 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 is or is deemed to be incorporated by reference 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 hereby undertakes to provide without charge to each person,
including any beneficial owner, 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, 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).
---------------------
2
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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. Further, any acquisition may initially have an adverse effect upon the
Company's operating results while the acquired businesses are adopting the
Company's management practices. In addition, 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.
The Company maintains insurance policies of $8.0 million on Mr. Davis.
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 11.0%, 9.5% and 9.1%, respectively, of the
outstanding Common Stock. As a result, although Mr. Davis, Pilgrim and Vinik
have not acted in concert in the past, 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
3
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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.
Pursuant hereto or to the Company's registration statements filed with
the Commission on Form S-3 on June 17, 1996, December 24, 1996 and December 23,
1997 approximately 1,800,000 shares have been registered for sale. 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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4
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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
--------------------
John T. Bragg. Jr. 61,040
Ronald Robertson 32,370
Robin Robertson 32,370
Ralph Williams 27,122
Ken Fitzwater 12,895
National HealthCare Corp. 12,895
William B. Keathley 2,570
John Rush 1,633
Mark Cunningham 189
Berneice Benjamin 65
Mark Woodman 80,942
Bear, Stearns International Limited 113,000
Dennis Rampe 13,334
Arthur Wetzel 52,381
Because the Company does not know how many Shares may 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 John T. Bragg, Jr., Ronald Robertson, Robin
Robertson, Ralph Williams, Ken Fitzwater, National HealthCare Corp., and William
B. Keathley were issued in connection with the acquisition by the Company of
Courier Printing Company ("CPC"). Pursuant to the acquisition, CPC became a
wholly owned subsidiary of the Company. John Rush, Mark Cunningham and Berneice
Benjamin acquired their Shares in the merger of Graphic
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Communications, Inc. and a subsidiary of the Company. Mark Woodman received the
Shares offered by him pursuant to mergers of Printing, Inc., Web Graphics, Inc.
and Mercury Web Printing, Inc. and subsidiaries of the Company and the Company's
indirect acquisition of Gilprin, LLC and Serco Forms, LLC. Following the
transactions between the Company and Mr. Woodman, Mr. Woodman transferred
certain shares to Bear, Stearns & Co., Inc., who subsequently transferred such
shares to Bear, Stearns International Limited. Dennis Rampe acquired his shares
pursuant to an earn-out arrangement with a subsidiary of the Company. Arthur
Wetzel received the Shares to be offered hereunder by him in the merger of
Wetzel Bros., Inc. with 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, or by pledgees, donees, transferees or other successors in
interest, including without limitation Bear, Stearns International Limited. Such
sales may be made 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 one or
more of the following: (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. 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
Prospectus Supplement. Each Selling Shareholder may effect such transactions by
selling Shares directly to other purchasers, through agents or through
broker-dealers. 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. 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 issuer or derivatives thereof, and may sell
and deliver the shares in connection therewith.
In effecting sales, brokers or dealer engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from Selling Shareholders in
amounts to be negotiated immediately prior to the sale. The Selling Shareholders
and agents who execute orders on their behalf may be deemed to be underwriters
as that term is defined in Section 2(11) of the Act and a portion of any
proceeds of sales and discounts, commissions or other compensation may be deemed
to be underwriting compensation for purposes of the Act.
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 certain Selling Shareholders
and certain Selling Shareholders, on the other hand, have agreed to indemnify
the Company from certain liabilities relating to the offering made hereby,
including liabilities under the Securities Act.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 20,000,000 shares of
Common Stock of which 12,982,882 shares were issued and outstanding as of May
31, 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
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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 By-laws
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 20,000,000 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.
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.
----------
TABLE OF CONTENTS
PAGE
Available Information...................................................2
Incorporation of Certain
Documents by Reference..................................................2
Risk Factors............................................................3
The Company.............................................................5
Use of Proceeds.........................................................5
Selling Shareholders....................................................5
Plan of Distribution....................................................6
Description of Capital Stock............................................6
Legal Opinion...........................................................7
Experts ................................................................7
================================================================================
442,806 SHARES
Consolidated
Graphics, Inc.
COMMON STOCK
----------
PROSPECTUS
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JUNE 26, 1998
================================================================================
8
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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.......................................... $ 7,087.00
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............................................... 913.00
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Total....................................................... $ 28,000.00
===========
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 2.01-1.
The Company's Second Amended and Restated By-Laws, as amended (the
"By-Laws"), 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 By-Laws.
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 By-Laws 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, 10.2, 10.3 and 10.4 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
- ---------- ----------------------
<TABLE>
<CAPTION>
<S> <C>
*4 - Specimen Common Stock Certificate (Consolidated Graphics, Inc., Form 10K (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 February 23, 1996 by and between Consolidated Graphics,
Inc. and Dennis Rampe.
10.2 - Registration Rights Agreement dated as of March 18, 1998 by and between Consolidated Graphics,
Inc. and John T. Bragg, Jr., Robin Robertson, Ronald Robertson, Ralph Williams, Ken Fitzwater,
William Keathley and National HealthCare Corporation.
10.3 - Registration Rights Agreement dated as of June 9, 1998 by and between Consolidated Graphics, Inc.
and Mark Woodman.
10.4 - Registration Rights Agreement dated as of June 17, 1998 by and between Consolidated Graphics, Inc.
and Arthur Wetzel.
23.1 - Consent of Winstead Sechrest & Minick P.C. (set forth in Exhibit 5).
23.2 - Consent of Arthur Andersen LLP.
24 - Powers of Attorney (Set forth on signature page).
</TABLE>
*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
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<PAGE>
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.
(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) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14ac-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(d) 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 June 26, 1998.
CONSOLIDATED GRAPHICS, INC.
By: /s/ JOE R. DAVIS
Joe R. Davis
President, Chief Executive Officer and
Chairman of the Board of Directors
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<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Joe R. Davis and G. Christopher Colville, 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> <C>
/S/ JOE R. DAVIS President, Chief Executive Officer June 26, 1998
(Joe R. Davis) and Director (Principal Executive
Officer)
/S/ G. CHRISTOPHER COLVILLE Executive Vice President June 26, 1998
(G. Christopher Colville) Mergers and Acquisitions; Chief
Financial and Accounting Officer
/S/ LARRY J. ALEXANDER Director June 26, 1998
(Larry J. Alexander)
/S/ BRADY F. CARRUTH Director June 26, 1998
(Brady F. Carruth)
/S/ CLARENCE C. COMER Director June 26, 1998
(Clarence C. Comer)
/S/ GARY L. FORBES Director June 26, 1998
(Gary L. Forbes)
/S/ W.D. HAWKINS Director June 26, 1998
(W. D. Hawkins)
/S/ JAMES H. LIMMER Director June 26, 1998
(James H. Limmer)
/S/ THOMAS E. SMITH Director June 26, 1998
(Thomas E. Smith)
/S/ HUGH N. WEST Director June 26, 1998
(Hugh N. West)
</TABLE>
II-5
[WINSTEAD SECHREST & MINICK LETTERHEAD]
June 26, 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 442,806 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.
June 26, 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,
WINSTEAD SECHREST & MINICK P.C.
EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of February
23, 1996, by and between Consolidated Graphics, Inc., a Texas corporation (the
"Company"), and Dennis Rampe, an individual resident in California (the
"Holder");
WITNESSETH:
WHEREAS, it is a condition to the consummation of the transactions
contemplated by that certain Stock Purchase Agreement dated as of February 23,
1996 (the "Stock Purchase Agreement") by and between the Company 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:
"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
$.10 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 Dennis Rampe.
"INSPECTORS" shall mean any Holder of Registrable Securities, any
underwriter participating in any disposition of Registrable Securities pursuant
to a Piggyback Registration and any attorney, accountant or other agent retained
by such Holder or underwriter.
"LIABILITIES" shall mean all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation).
<PAGE>
"NEW COMMON STOCK" shall mean the shares of Common Stock to be
acquired by the Holder pursuant to the Stock Purchase Agreement, together with
any Related Securities.
"PERSON" shall mean any individual, corporation, partnership,
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 and any
Related Securities, until such time as the New Common Stock and the Related
Securities have been (i) distributed to the public pursuant to a registration
statement covering such securities that has been declared effective under the
Securities Act, (ii) distributed to the public in accordance with the provisions
of Rule 144 (or any similar provision then in force) under the Securities Act or
(iii) repurchased by the Company.
"REGISTRATION EXPENSES" shall mean all expenses incident to the
Company's performance of or compliance with the Piggyback 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), rating agency fees, printing
expenses, messenger and delivery expenses, internal expenses (not 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)
and 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).
"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.
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<PAGE>
"STOCK PURCHASE AGREEMENT" shall mean the Stock Purchase Agreement
dated as of February 23, 1996 between the Company and the Holder.
Section 2. PIGGYBACK REGISTRATION. (a) If at any time after the
date hereof until February 22, 1998, 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 Form 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 stockholders), then the
Company shall in each case give written notice of such proposed filing to the
Holder at least twenty (20) days before the anticipated filing date, and such
notice shall offer such Holder the opportunity to register such number of
Registrable Securities as the Holder may request. The Company shall use
reasonable diligence to cause the managing underwriter or underwriters of a
proposed underwritten offering to permit the Holder 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 Holder that the total amount of securities which the Holder, 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 (including
the price at which such securities can be sold), then the amount of Registrable
Securities to be offered for the accounts of the Holder 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; PROVIDED, that the reduction imposed
upon Holder shall not be greater, on a fractional basis, than the reduction
imposed upon other Persons whose piggyback registration rights are PARI PASSU
with those granted hereby with respect to the amount of securities requested for
inclusion in such registration. The Company is authorized to proceed on the
basis of any notice of election received from the Holder within ten days after
giving notice to the Holder of the proposed offering. If no response is received
from the Holder within such ten-day period, the Company may deem that the Holder
does not elect to participate in the proposed offering.
(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 (1) a registration
of a stock option or other employee incentive compensation plan or of securities
issued or issuable pursuant to any such plan; (2) a registration of securities
issued or issuable pursuant to a stockholder reinvestment plan or other similar
plan; (3) 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 (4) a registration of securities pursuant to a "rights"
or other similar plan designed to protect the Company's stockholders from a
coercive or other attempt to take control of the Company.
(a) The Company may withdraw any registration statement and
abandon any proposed offering initiated by the Company without the consent of
the Holder, notwithstanding
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<PAGE>
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 stockholders (for
this purpose, the interest of the Holder shall not be considered).
Section 3. RESTRICTIONS ON PUBLIC SALE BY HOLDER. To the extent
not inconsistent with applicable law, including insurance codes, the Holder of
Registrable Securities that are included in a registration statement registering
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.
Section 4. 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 is participating (except pursuant to such registration
statement).
Section 5. COOPERATION BY HOLDERS. 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 shares of the Holder, if the Holder
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.
Section 6. REGISTRATION PROCEEDINGS. Whenever any Registrable
Securities are to be registered pursuant to this Agreement, 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, 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 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
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<PAGE>
to the reasonable review of the Holder and such 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 the Holder or the underwriters with
respect to such Registrable Securities, if any, shall reasonably object,
and will notify the Holder 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 (or such shorter period which will terminate when all
Registrable Securities covered by such registration statement have been
sold or withdrawn, but not prior to the expiration of the 9O-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 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 Holder being
prevented from selling the Registrable Securities during that period
unless such action is required under applicable law;
(c) furnish to the Holder 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 Holder or such 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 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, that before filing a registration
statement or prospectus or any amendments or supplements thereto, the
Company will furnish to one counsel selected by the Holder copies of all
documents proposed to be filed which documents will be subject to the
review of such counsel;
(d) notify the Holder, 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
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<PAGE>
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 the 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 the 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,
NASDAQ) 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 45 days after the end of the 12-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 such 12-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, 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;
(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 Holder, 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
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<PAGE>
offer and sale under the securities or blue sky laws of each state and
other jurisdiction of the United States as the Holder or such 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 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 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 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;
(m) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other
reasonable actions as the Holder or the underwriters reasonably request
in order to expedite or facilitate the disposition of such Registrable
Securities;
(n) make available for inspection by the Inspectors the 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, 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 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 6, will forthwith
discontinue disposition of the
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<PAGE>
Registrable Securities Until receipt by the Holder of the copies of the
supplemented or amended prospectus contemplated by subsection (d) of this
Section 6 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 6 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 the Holder has received the copies of the supplemented
or amended prospectus contemplated by subsection (d) of this Section 6 hereof or
the notice that they may resume use of the prospectus.
Section 7. REFERENCE TO HOLDER IN REGISTRATION STATEMENT. If such
registration statement refers to the Holder by name or otherwise as the holder
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 8. REGISTRATION EXPENSES. All Registration Expenses incident to
the Company's performance of or compliance with the 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 of the Holders of Registrable Securities, will be borne by the Company.
Section 9. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Holder 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 the Holder
or to such other extent as the Company and such underwriters may agree.
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<PAGE>
Section 10. INDEMNIFICATION BY HOLDER. In connection with any registration
statement in which the Holder 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 Liabilities 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 the Holder so furnished in writing by the Holder
specifically for inclusion in any prospectus or registration statement.
Section 11. 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 12. CONTRIBUTION. If the indemnification provided for in Sections
9 and 10 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of Liabilities 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
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<PAGE>
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 the Liabilities
referred to above shall be deemed to include, subject to the limitations set
forth in Section 11, 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 12 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above. 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 9, 10, 11 and 12 shall be
further subject to such additional express agreements of the Company as may be
required to facilitate an underwritten offering, provided that no such agreement
shall in any way limit the rights of the Holder 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 13. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. The Holder may
not participate in any underwritten registration hereunder unless the Holder (a)
agrees to sell the Registrable 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 14. 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,
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 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 (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 Holder, the Company will deliver to the
Holder a written statement as to whether it has complied with such requirements.
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
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<PAGE>
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 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. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly received if so given) by personal delivery,
facsimile, cable, telegram or telex, or such notice shall be deemed given to
such person on the third (3rd) day after mailing if mailed to the person to whom
notice is to be given by registered or certified mail, postage prepaid, return
receipt requested, or by reputable air courier service to the respective parties
as follows:
IF TO THE COMPANY. TO:
Consolidated Graphics, Inc.
2210 West Dallas Street
Houston, Texas 77019
Attention: Joe R. Davis, Chairman and
Chief Executive Officer
WITH A COPY TO:
Keck, Mahin & Cate
First City Tower
1001 Fannin Street
Houston, Texas 77002
Attention: R. Clyde Parker, Jr., Esq.
IF TO THE HOLDER. TO.
Dennis Rampe
1844 Robin Hood Road
Vista, California 92084
WITH A COPY TO:
Alan S. Rich, A Professional Law Corporation
2141 Palomar Airport Road
Suite 350
Carlsbad, California 92009
Attention: Alan S. Rich, Esq.
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<PAGE>
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 18. APPLICABLE LAW. This contract is entered into under, and
shall be governed for all purposes by, the internal laws of the State of
Texas.
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 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
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<PAGE>
respective heirs, legal representatives, successors, and permitted assigns, and
is not intended to confer upon any other Person any right or remedies hereunder.
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 request, such
information about the Holder and the holdings of Registrable Securities by the
Holder as the Company may reasonably request as is necessary to permit the
Company to prepare and file its annual report on Form 10-K and its proxy
statements under the Exchange Act.
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<PAGE>
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, Chairman and Chief
Executive Officer
/s/ DENNIS RAMPE
Dennis Rampe
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of March
18, 1998, by and among Consolidated Graphics, Inc., a Texas corporation (the
"Company"), John T. Bragg, Jr., Robin Robertson, Ronald Robertson, Ralph
Williams, Ken Fitzwater, William Keathley and National HealthCare Corporation
(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
March 18, 1998 (the "Purchase Agreement"), among the Company, Courier Printing
Company, a Tennessee corporation, Courier Acquisition Company, a Tennessee
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 the Holders 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 of the Holders, with the Commission of the offer and sale of
Registrable Securities under and in accordance with the provisions of the
Securities Act.
EARNOUT STOCK shall mean the shares of Common Stock to be acquired by
the Holders pursuant to Section 1.4 of the Purchase Agreement, together with any
Related Securities issued in connection with any Earnout Stock.
<PAGE>
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.
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 shall mean John T. Bragg, Jr., Robin Robertson, Ronald Robertson,
Ralph Williams, Ken Fitzwater, William Keathley or National HealthCare
Corporation.
HOLDERS shall mean John T. Bragg, Jr., Robin Robertson, Ronald
Robertson, Ralph Williams, Ken Fitzwater, William Keathley and National
HealthCare, Corp. collectively.
INSPECTORS shall mean any Holder of Registrable Securities, any
underwriter participating in any disposition of Registrable Securities pursuant
to a Demand Registration, and any attorney, accountant or other agent retained
by such Holder or underwriter.
LIABILITIES shall mean all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation).
NEW COMMON STOCK shall mean the shares of Common Stock to be acquired by
the Holders pursuant to Section 1.3 of the Purchase Agreement, together with any
Related Securities issued in connection with any New Common Stock.
PERSON shall mean any individual, corporation, partnership, 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.
PURCHASE AGREEMENT shall mean that certain Agreement and Plan of
Reorganization dated as of March 18, 1998 among the Company, Courier Printing
Company, Courier Acquisition Company and the Holders.
RECORDS shall mean all financial and other records, pertinent corporate
documents and properties of the Company.
REGISTRABLE SECURITIES shall mean the New Common Stock, Earnout Stock
and the Related Securities, until such time as the New Common Stock, the Earnout
Securities and the Related Securities 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
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<PAGE>
accordance with the provisions of Rule 144 (or any similar provision then in
force) under the Securities Act, (c) repurchased by the Company, or (d)
qualified for sale under Rule 144(k) (or any similar provision then in force).
REGISTRATION EXPENSES shall mean all expenses incident to the Company's
performance of or compliance with the 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), rating agency fees, printing
expenses, messenger and delivery expenses, internal expenses (not 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 or Earnout Stock,
respectively.
SECURITIES ACT shall mean the Securities Act of 1933, as amended.
Section 2. PIGGY-BACK REGISTRATION. a. If 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 each of the Holders of Registrable Securities at least twenty
days before the anticipated filing date, and such notice shall offer such
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
and 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 Holders of Registrable Securities and other Persons who have the
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<PAGE>
contractual right to have securities included in the offering shall, to the
extent not inconsistent with the contractual obligations of the Company existing
on the date hereof, be reduced pro rata based on the amount of securities each
has requested to be included in the offering pursuant to such contractual rights
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.
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 any Holder of
Registrable Securities, notwithstanding the request of any such 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 Holders 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 Purchase Agreement (the "Closing Date"), and on
or before the 300th day following the Closing Date, Holders owning a majority of
the Registrable Securities acting together 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 a Holder of Registrable Securities shall, within ten (10) days after receipt
of such notice, withdraw such Holder's Registrable Securities from the Demand
Registration, such Holder withdrawing such Registrable Securities from such
Demand Registration shall not have any further rights under this Section 3,
unless no registration statement is filed pursuant to this Demand Registration
right becomes effective under the Securities Act. Notwithstanding anything to
the contrary contained in this Agreement, the Company shall not be required to
include any Earnout Stock or Related Securities issued in connection with any
Earnout Stock in any Demand Registration.
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<PAGE>
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 (as a group) of Registrable Securities shall as a group
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.
d. If the Demand Registration is an underwritten offering, the Holders
of a majority 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, including those in Section 2,
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
a Holder. 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 an additional period of up to 60 days (not to exceed
in any event an aggregate of 120 days or, if earlier, the date counsel to the
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<PAGE>
Company has determined that the Company is otherwise required by law, rule or
regulations to disclose such material non-public information) 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 and would not
otherwise be required to be disclosed by law, rule or regulations during the
duration of such postponement, 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 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.
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
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during the 90-day period beginning on, the effective date of any registration
statement in which the Holders of Registrable Securities are participating
(except pursuant to such registration statement).
Section 8. COOPERATION BY HOLDERS. 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 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 such 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 such 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 a majority 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 six months past the date hereof
or, if later, 60 days after effectiveness 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
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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 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
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 any 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 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 such Holder or
underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities being sold by such 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 each 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 one counsel
selected by the Holders of a majority of the Registrable Securities covered by
such registration statement copies of all documents proposed to be filed which
documents will be subject to the review of such counsel;
d. notify each Holder 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
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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 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 any 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 such Holder requests
to be included therein, including without limitation, with respect to the number
of Registrable Securities being sold by such 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 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 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
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names as the managing underwriter or underwriters, if any, or such Holders 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;
m. enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other reasonable actions as the
Holders of a majority of the Registrable Securities being sold or the
underwriters retained by Holders participating in an underwritten public
offering, if any, 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.
Each 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 9, will forthwith
discontinue disposition of the Registrable Securities until such Holder's
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, such 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 such 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 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 HOLDER IN REGISTRATION STATEMENT. If such
registration statement refers to any Holder by name or otherwise as the holder
of any securities of the Company, then such Holder shall have the right to
require (a) the insertion therein of language, in form and substance
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satisfactory to such Holder, to the effect that the holding by such Holder of
such securities is not to be construed as a recommendation of such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (b) if such reference to such Holder
by name or otherwise is not required by the Securities Act or any similar
federal statute then in force, the deletion of the reference to such Holder.
Section 11. DEMAND AND PIGGYBACK REGISTRATION EXPENSES. All Registration
Expenses incident to the Company's performance of or compliance with the Demand
Registration, Excess 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 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, its officers,
directors, 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 the Holders 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.
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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 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 the immediately preceding 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 such Holders not set forth herein, except as
otherwise expressly agreed in writing by any such Holders.
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Section 16. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder of
Registrable Securities may participate in any underwritten registration
hereunder unless such Holder (a) agrees to sell such 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 the Commission thereunder (or, if the
Company is not required to file such reports, it will, upon the request of any
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 any Holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (a) Rule
144 under the Securities Act, as such Rule may be amended from time to time, or
(b) any similar rule or regulation hereafter adopted by the Commission. Upon the
request of any Holder of Registrable Securities, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
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
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WITH A COPY TO:
R. Clyde Parker, Jr.
Winstead Sechrest & Minick, P.C.
910 Travis Street, Suite 2400
Houston, Texas 77002
IF TO THE HOLDERS, TO EACH:
c/o John T Bragg, Jr.
c/o Courier Printing, Inc.
P.O. Box 899, 1 Courier Place
Smyrna, TN 37167
WITH A COPY TO:
Robert F. Thompson, Esq.
Bass, Berry & Sims, PLC
2700 First American Center
Nashville, Tennessee 37238-2700
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 of a majority of the Registrable Securities 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
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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 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 a Holder for purposes
of obtaining the benefits or enforcing the rights of a 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 each Holder owns Registrable
Securities, such Holder agrees to deliver to the Company, upon request, such
information about such Holder and such 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, each Holder agrees to provide the
Company, upon request, with information concerning the number of shares then
held by such Holder that are the subject of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONSOLIDATED GRAPHICS, INC.
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By: /s/ JOE R. DAVIS
Joe R. Davis, Chief Executive
Officer
/s/ JOHN T. BRAGG
John T. Bragg, Jr.
/s/ ROBIN ROBERTSON
Robin Robertson
/s/ RONALD ROBERTSON
Ronald Robertson
/s/ RALPH WILLIAMS
Ralph Williams
/s/ KEN FITZWATER
Ken Fitzwater
/s/ WILLIAM KEATHLEY
William Keathley
NATIONAL HEALTHCARE CORPORATION
By: /s/ RICHARD F. LAROCHE, JR.
Name: Richard F. LaRoche, Jr.
Title: Senior Vice President
16
EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of June 9,
1998, by and among Consolidated Graphics, Inc., a Texas corporation (the
"Company"), and Mark Woodman (the "Holder");
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 by and among
the Company, Printing Acquisition, Inc., Web Acquisition, Inc., Mercury
Acquisition, Inc., Gilprin Acquisition, Inc., Printing, Inc., Web Graphics,
Inc., Mercury Web Printing, Inc. and the Holder dated as of June 9, 1998 (the
"Merger Agreement") 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 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 $.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, 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 and
as set forth in Section 3 of this Agreement.
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.
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EXCESS REQUESTED SHARES shall mean Registrable Securities that were
requested to be included in the (i) Demand Registration, but were not so
included pursuant to the terms of this Agreement, or (ii) a Piggyback
Registration pursuant to Section 3.e. hereof, 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 any Person holding Registrable Securities.
INSPECTORS shall mean a Requisite Group of 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 such 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 by and among the Company, Printing Acquisition, Inc., Web
Acquisition, Inc., Mercury Acquisition, Inc., Gilprin Acquisition, Inc.,
Printing, Inc., Web Graphics, Inc., Mercury Web Printing, Inc. and the Holder
dated as of June 9, 1998.
NEW COMMON STOCK shall mean the shares of Common Stock of the Company to
be acquired by the Holder pursuant to 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 and the Related
Securities, until such time as the New Common Stock and the Related Securities
have been (i) distributed to the public pursuant to a registration statement
covering such securities that has been declared effective under the Securities
Act, (ii) distributed to the public in accordance with the provisions of Rule
144 (or any similar provision then in force) under the Securities Act or (iii)
repurchased by the Company.
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REGISTRATION EXPENSES shall mean all expenses incident to the Company's
performance of or compliance with any Piggyback Registration, Demand
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 (including
fees and disbursements of the Company's counsel in connection therewith), fees
and expenses of compliance with securities or blue sky laws (including fees and
disbursements of the Company's 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 Company's expenses of any legal work, advice or
opinions and 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.
REQUISITE GROUP shall mean Mark Woodman, for so long as he is a Holder, or
any one or more Holders of more than 10% of the Registrable Securities.
SECURITIES ACT shall mean the Securities Act of 1933, as amended.
Section 2. PIGGYBACK REGISTRATION. a. If at any time within one 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, then the
Company shall in each case give written notice of such proposed filing to the
Holders of Registrable Securities at least 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
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be included in such offering to the amount recommended by such managing
underwriter. The Holder acknowledges and agrees 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 a
Requisite Group, enter into any agreement with any Person who becomes a holder
of securities pursuant to contracts entered into subsequent to the execution of
this Agreement which would grant to such Person any piggyback registration
rights having a preference or priority over the piggyback registration rights
granted to the Holders pursuant to this Section 2.
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 (i) a registration of a
stock option or other employee incentive compensation plan or of securities
issued or issuable pursuant to any such plan, (ii) a registration of securities
issued or issuable pursuant to a stockholder reinvestment plan or other similar
plan, (iii) 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 (iv) a registration of securities pursuant to a
"rights" or other similar plan designed to protect the Company's stockholders
from a coercive or other attempt to take control of the Company.
c. The Company may withdraw any registration statement to which this
Section 2 relates 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 July 9, 1998, and on or before April 5, 1999, a
Requisite Group 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
members of such Requisite Group 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 all
Holders of Registrable Securities that it will file a registration statement
covering the Registrable Securities for sale by certain 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 as is necessary to prepare the financial statements of the
Company for the fiscal period most recently ended prior to such written request,
such delay not to exceed ten (10) Business Days following the applicable filing
period relating to the Company's filing of such financial statements. If any
Holder of Registrable Securities shall, within ten (10) days after receipt of
such notice, withdraw such Holder's Registrable Securities from the Demand
Registration to the effect that a Requisite Group is no longer proposing to
participate
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in the Demand Registration, the Holders shall not have any further rights under
this Section 3, without regard to whether the Demand Registration becomes
effective under the Securities Act; provided, however, that if the Holders
requesting such Demand Registration pay or otherwise reimburse the Company for
all Registration Expenses incurred by the Company in connection with such
requested Demand Registration, the Holders shall continue to have the right to
request a Demand Registration pursuant to the terms of 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. Any registration of Registrable Securities
pursuant to this Agreement shall include, but shall not be limited to, the
methods of distribution described in the proposed Plan of Distribution set forth
on Annex A to this Agreement.
c. The Holders of Registrable Securities shall be entitled, in the
aggregate, 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. Except as otherwise provided in the last sentence
of Section 3.a above, the Registration Expenses of the Demand Registration,
whether or not it becomes effective, shall be paid as set forth in Section 11
below.
d. If the Demand Registration is an underwritten offering, the Holders of
a majority 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.
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 such Holders and, if applicable, the Company and other Persons
intend to include in such offering is sufficiently large to materially and
adversely affect the success of such offering, then the Company shall include in
such registration (i) first, the securities requested to be included therein by
the Holders of Registrable Securities exercising their right to request a Demand
Registration pursuant to this Agreement, and (ii) second, any other securities
requested to be included in such registration by the Company or such other
Person in such amount which in the opinion of such underwriters can be sold
without adversely affecting the marketability of the offering, such additional
securities to be included by the Company and such other Persons as they may
mutually agree. If the number of Registrable Securities being registered
pursuant to a Demand Registration under this Section 3 is reduced pursuant to
this subsection d., the Holders of the Excess Requested Shares shall be treated
as if there had been no Demand Registration and shall be entitled to the benefit
of Section 3 with respect to the Excess Requested Shares as if the Demand
Registration had not been requested; provided, however, that (i) if any such
Holder shall have been the managing underwriter of such offering, such Holder
shall not be entitled to request an Excess Demand Registration with respect to
any Excess Requested Shares held by such Holder, and (ii) the Company shall not
be required to file such Excess Demand Registration within 180 days of the
effective date of the Demand Registration or any Piggyback Registration
hereunder. With respect to such an Excess Demand Registration relating to the
Excess Requested Shares, only Excess Requested Shares shall be deemed
Registrable Securities with respect thereto, and no Holder shall have any
independent demand registration rights with respect to shares
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for which such Holder failed to request inclusion pursuant to Section 3 in the
Demand Registration that became effective.
e. Subject to the conditions herein, the Company covenants and agrees that
within 30 days of the date hereof, the Company shall, at the Company's option,
either (i) provide the Holders of the Registrable Securities notice of a
proposed filing of a registration statement under the Securities Act, such
filing to occur within 30 days of the date hereof, with respect to which such
Holders may exercise their rights to a Piggyback Registration pursuant to
Section 2, or (ii) file a registration statement covering the Registrable
Securities for sale by the Holders in accordance with the other provisions of
this Section 3 and such registration shall, for purposes of this Agreement,
constitute a Demand Registration. If within 30 days of the date hereof the
Company provides to the Holders an opportunity to participate in a Piggyback
Registration pursuant to which the Holders of the Registrable Securities may
register any such number of Registrable Securities as they may request, the
Company shall have fulfilled its obligations under this Section 3.e. and the
Holders shall have no further rights under this Section 3 to request a Demand
Registration unless the Piggyback Registration is an underwritten offering and
the number of shares of Registrable Securities to be offered for the accounts of
the Holders of the Registrable Securities shall be reduced pursuant to Section
2, in which event the Holders of the Excess Requested Shares shall be treated as
if there had been no Demand Registration and shall be entitled to the benefit of
Section 3 with respect to the Excess Requested Shares provided, however, that
(i) if any such Holder participating in such Piggyback Registration shall have
been the managing underwriter of such offering, such Holder shall not be
entitled to request an Excess Demand Registration with respect to any Excess
Requested Shares held by such Holder, (ii) the Company shall not be required to
file such Excess Demand Registration within 60 days of the effective date of the
Piggyback Registration, and (iii) with respect to such Excess Demand
Registration relating to the Excess Requested Shares, only Excess Requested
Shares shall be deemed Registrable Securities with respect thereto and no holder
shall have any independent demand registration rights with respect to shares for
which such Holder failed to request inclusion in such Piggyback Registration. If
the Company does not provide an opportunity to participate in a Piggyback
Registration filed within 30 days of the date hereof pursuant to this Section
3.e. but the Company files a registration statement covering the Registrable
Securities pursuant to clause (ii) of the first grammatical sentence of this
Section 3.e., such registration shall, for all purposes of this Agreement,
constitute a Demand Registration under this Section 3 and no holder of
Registrable Securities shall be entitled to request any additional Demand
Registration except as otherwise provided in Section 3.d. with respect to Excess
Requested Shares.
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 15 days after receiving the notice provided by
any Holder under Section 3, the Company notifies all Holders of Registrable
Securities of its intention to file a registration statement for an underwritten
public offering of Common Stock for the sole account of the Company and within
60 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 delayed to a date 90 days
after the effective date of such registration statement filed for an offering
for the account of the
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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 a Requisite Group. 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. The Company currently has no intention to file a
registration statement (other than a registration statement on Forms S-4 or S-8
(or their successor forms)) relating to a public offering of Common Stock for
the sole account of the Company.
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 such time
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 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.
Except as otherwise provided below, if as a result of the Company's postponement
of the distribution of the preliminary or final prospectus the Holders of the
Registrable Securities requesting such registration are unable to continue with
the requested underwritten offering, such Holders shall be treated as if there
had been no Demand Registration and shall be entitled to make a subsequent
request for a Demand Registration pursuant to Section 3. Notwithstanding the
foregoing, if the Board of Directors of the Company had authorized, by
resolution, any such tender offer before the Company's
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receipt of a request for registration hereunder, and the Holders requesting such
registration elect to continue with such registration, the Holders shall not be
entitled to any additional Demand Registration even if any postponement of the
distribution of the preliminary or final prospectus results in such Holders
being unable to continue with the requested underwritten offering.
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.
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 are 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. If the registration
in which the Holders of Registrable Securities are participating is an
underwritten offering and the managing underwriter or underwriters of such
registration shall so require, the Company agrees not to effect, for the account
of the Company, any public sale or distribution of any securities similar to
those being registered in such registration, 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 Holders of Registrable Securities are
participating; provided, however, that the foregoing shall not prohibit or
adversely affect the Company's right to (i) participate in such registration
statement, (ii) undertake a registration for its own account or for the account
of any other Person of any class of equity security pursuant to a Registration
Statement on Forms S-4 or S-8 (or their successor forms).
Section 8. COOPERATION BY HOLDERS. 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 Holders shall timely
provide the Company with all information and materials required to be included
in a registration statement that (i) relate to the offering, (ii) are in
possession
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of such Holder and (iii) relate to such 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 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 as a result of
such Holder's failure to furnish such information, such 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 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, notify the Holders of such
Registrable Securities and any managing underwriter of such effectiveness, and
to keep such registration statement effective for the period specified in
Section 9.b. 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 the Holders of a majority 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 for a period of one year 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 4(3) of the
Securities Act and Rule 174 thereunder, if applicable; cause the prospectus to
be supplemented by any required
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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; 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 (except for a public offering or other transaction requiring the Company
to suspend the use of the prospectus included in such registration statement as
provided in subsection d. and the last paragraph of this Section 9) 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 any 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 (including exhibits) 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
such Holder or underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities being sold by such 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 each 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
counsel selected by the Holders of a majority of the Registrable Securities
covered by such registration statement copies of all documents proposed to be
filed which documents will be subject to the review of such counsel;
d. notify each Holder 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, NASDAQ) on which the Common
Stock of the Company is then listed or proposed to be listed, if any;
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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
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;
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
any 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 such Holder requests
to be included therein, including without limitation, with respect to the number
of Registrable Securities being sold by such 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 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
Holders may request, subject to the underwriters' obligation to return any
certificates representing securities not sold;
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<PAGE>
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;
m. enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other reasonable actions as the
Holders of a majority of the Registrable Securities being sold or the
underwriters retained by the Holders participating in an underwritten public
offering, if any, 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
respond to all reasonable inquiries from, and 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 (i) a "cold comfort" letter from the Company's independent public
accountants, and (ii) an opinion of counsel from the Company's counsel, each in
customary form and covering such matters of the type customarily covered by cold
comfort letters and opinions of counsel as the managing underwriter or
underwriters may reasonably request.
Notwithstanding the foregoing provisions of this Section 9, each Holder
acknowledges that there may occasionally be times when the Company must suspend
the use of the prospectus included in such registration statement until such
time as an amendment to the registration statement has been filed by the Company
and declared effective by the Commission, or until such time as the Company has
filed an appropriate report with the Commission pursuant to the Exchange Act.
Each 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 9, will forthwith
discontinue disposition of the Registrable Securities until the Holder's receipt
of the copies of the supplemented or amended prospectus contemplated by the
first sentence of this paragraph and 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, such 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 9 and
elsewhere herein 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
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<PAGE>
or amended prospectus contemplated by the first sentence of this paragraph and
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 any Holder by name or otherwise as the holder
of any securities of the Company, then such Holder shall have the right to
require (i) the insertion therein of language, in form and substance
satisfactory to such Holder, to the effect that the holding by such Holder of
such securities is not to be construed as a recommendation of such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) if such reference to such Holder
by name or otherwise is not required by the Securities Act or any similar
federal statute then in force, the deletion of the reference to such Holder.
Section 11. DEMAND AND PIGGYBACK REGISTRATION EXPENSES. All Registration
Expenses incident to the Company's performance of or compliance with the Demand
Registration, Excess 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 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 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 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
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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 (provided the failure to so notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party so long as the failure to so notify the indemnifying party
does not prejudice the indemnifying party's ability to defend any such action,
suit, investigation, proceeding or claim) 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 15. CONTRIBUTION. If the indemnification provided for in Sections
12 and 13 from the indemnifying party is unavailable to or insufficient to hold
harmless an indemnified party hereunder in respect of any Liabilities 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 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 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)
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<PAGE>
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 such Holders not set forth
herein, except as otherwise expressly agreed in writing by such Holders.
Notwithstanding anything in this Section to the contrary, Mark Woodman, to the
extent he is an indemnifying party, shall not be required pursuant hereto to
contribute any amount in excess of the amount by which the dollar amount of
proceeds received by him from the sale of the Registrable Securities (after
deducting any underwriting commissions, discounts and transfer taxes applicable
thereto) in the offering to which the losses, claims, damages, liabilities or
expenses of the indemnified parties relate exceeds the amount of any losses,
claims, damages, liabilities and expenses which he may have otherwise been
required to pay as indemnity or contribution hereunder by reason of such losses,
claims, damages, liabilities or expenses.
Section 16. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder of
Registrable Securities may participate in any underwritten registration
hereunder unless such Holder (i) agrees to sell such 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 controlled by the Company), and
(ii) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
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 the Commission thereunder (or, if the Company
is not required to file such reports, it will, upon the request of any 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 any Holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule
144 under the Securities Act, as such Rule may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the Commission. Upon
the request of any Holder of Registrable Securities, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
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.
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<PAGE>
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
IF TO HOLDER: Mark Woodman
344 N. St. Francis
Wichita, Kansas 67202
WITH A COPY TO: William E. Dakan
Sherwood & Harper
833 No. Waco
Wichita, Kansas 67203
IF TO ANY PERSON OTHER THAN 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
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.
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<PAGE>
Section 22. AMENDMENT AND WAIVER. This Agreement may be amended, and the
provisions hereof may be waived, only by a written instrument signed by (i) the
Holders of a majority of the Registrable Securities and (ii) 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 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
any Holder, other than as contemplated in (i), (ii) or (iii) of the definition
of Registrable Securities in Section 1, shall be deemed to be a Holder for
purposes of obtaining the benefits or enforcing the rights of a 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.
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<PAGE>
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 and its proxy
statements under the Exchange Act and any filings under the Securities Act. The
Holders further agree to report to the Company any sale or disposition of any
kind relating to the Holders' Registrable Securities.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONSOLIDATED GRAPHICS, INC.
By: /s/ G. CHRISTOPHER COLVILLE
G. Christopher Colville
Executive Vice President -
Mergers & Acquisitions
/s/ MARK WOODMAN
Mark Woodman
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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EXHIBIT 10.4
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of June
17, 1998, by and among CONSOLIDATED GRAPHICS, INC., a Texas corporation (the
"Company") and ARTHUR WETZEL (the "Holder");
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
June 17, 1998 (the "Merger Agreement"), among the Company, WETZEL ACQUISITION,
CO., a Wisconsin corporation, WETZEL BROTHERS, INC., a Wisconsin corporation,
the Holder and HEIDE WETZEL 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.
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 of the Holder, 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.
<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 shall mean Arthur Wetzel.
INSPECTORS shall mean the Holder 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 Holder 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 June 17, 1998 among the Company, Wetzel
Acquisition, Co., Wetzel Brothers, Inc., the Holder and Heide Wetzel.
NEW COMMON STOCK shall mean the shares of Common Stock to be acquired by
the Holder 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),
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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.
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 Holder of
Registrable Securities at least twenty (20) days before the anticipated filing
date, and such notice shall offer the Holder the opportunity to register such
number of Registrable Securities as the Holder may request. The Company shall
use reasonable diligence to cause the managing underwriter or underwriters of a
proposed underwritten offering to permit the Holder 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 Holder 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 account of the Holder 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 Holder acknowledges and agrees
that if the managing underwriter determines that it is necessary to reduce the
number of securities to be registered on behalf of the Holder 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 Holder, enter into any agreement with any holder or prospective
holders of any securities of the
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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 Holder 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, the 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 Holder 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 Holder that it will file a registration statement covering
the Registrable Securities for sale by the Holder; 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 Holder of Registrable Securities shall, within ten (10) days after
receipt of such notice, withdraw the Holder's Registrable Securities from a
Demand Registration, the Holder shall not have any further rights under this
Section 3. Notwithstanding the foregoing, the Holder may request a Demand
Registration before the date which is thirty days following the Closing Date if:
(i) the Holder pays $25,000 of the costs and expenses incurred by the Company in
connection therewith, and (ii) counsel for the Company does not advise the
Company that a delay in the filing of such registration statement is appropriate
or necessary for the Company to comply with applicable federal and state
securities laws.
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.
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c. Except as set forth in subparagraph e of Section 3 below, the Holder
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. Except as set forth
subparagraph e of Section 3 below, the Registration Expenses of the Demand
Registration, whether or not it becomes effective, shall be paid as set forth in
Section 11 below.
d. If a Demand Registration is an underwritten offering, the Holder 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.
e. If the Holder makes a Demand Registration pursuant to the terms of
subparagraph e of Section 3 prior to the 300th day following the Closing Date
(the "Anniversary Date") and such registration statement with respect to such
request ceases to be effective (subject to any temporary suspensions) prior to
the Anniversary Date, the Holder shall have the right to make one additional
written request to the Company for registration with the Commission of the offer
and sale of the Registrable Securities held by the Holder under, and in
accordance with the provisions of the Securities Act, at the Company's expense,
prior to the Anniversary Date. The Holder's right to request an additional
registration shall expire on the Anniversary Date.
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
the Holder under Section 3, the Company notifies the Holder 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 Holder 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 Holder. 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
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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 Holder 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 Holder 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 Holder 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 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 Holder 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 Holder 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.
Section 6. RESTRICTIONS ON PUBLIC SALE BY HOLDER OF REGISTRABLE
SECURITIES. To the extent not inconsistent with applicable law, including
insurance codes, the 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.
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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 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 shares of the 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 the 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, the 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 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 five (5) Business Days prior thereto, which documents will be subject to
the reasonable review of the Holder 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
Holder 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 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 the registration statement as may be necessary to
keep the registration statement
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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 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 Holder 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 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 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 one counsel selected by the
Holder copies of all documents proposed to be filed which documents will be
subject to the review of such counsel;
d. 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 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;
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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 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 reasonable diligence 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 other jurisdiction of the United States as the 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;
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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 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;
m. enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other reasonable actions as the
Holder or the underwriters retained by the Holder, reasonably requests 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 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 9, 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 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 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 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.
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Section 10. REFERENCE TO HOLDER IN REGISTRATION STATEMENT. If such
registration statement refers to the Holder by name or otherwise as the holder
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 11. DEMAND AND PIGGYBACK REGISTRATION EXPENSES. All Registration
Expenses incident to the Company's performance of or compliance with the Demand
Registration, Excess 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 Holder of the Registrable Securities, will be borne by
the Company.
Section 12. 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), 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 the Holder
of Registrable Securities or to such other extent as the Company and such
underwriters may agree.
Section 13. 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 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.
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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 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 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.
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Section 16. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. The Holder of
Registrable Securities may not participate in any underwritten registration
hereunder unless the 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 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 (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 Holder of Registrable Securities, the Company will deliver to the
Holder 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
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WITH A COPY TO:
R. Clyde Parker, Jr.
Winstead Sechrest & Minick, P.C.
910 Travis Street, Suite 2400
Houston, Texas 77002
IF TO THE HOLDER, TO EACH:
Arthur Wetzel
2921 E. Newport Avenue
Milwaukee, Wisconsin 53211
WITH A COPY TO:
Foley & Lardner
777 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202
c/o Ronald L. Walter, 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
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
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 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
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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
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 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 Holder owns Registrable
Securities, the Holder agrees to deliver to the Company, upon 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.
15
<PAGE>
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/ ARTHUR WETZEL
Arthur Wetzel
16
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
June 26, 1998
