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 XXXXXX XXXXXX (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, XXXXXX ACQUISITION,
CO., a Wisconsin corporation, XXXXXX BROTHERS, INC., a Wisconsin corporation,
the Holder and XXXXX XXXXXX 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.
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 Xxxxxx Xxxxxx.
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, Xxxxxx
Acquisition, Co., Xxxxxx Brothers, Inc., the Holder and Xxxxx Xxxxxx.
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.
0000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxx,
Chief Executive Officer
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WITH A COPY TO:
R. Xxxxx Xxxxxx, Xx.
Xxxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
IF TO THE HOLDER, TO EACH:
Xxxxxx Xxxxxx
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
WITH A COPY TO:
Xxxxx & Lardner
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
c/o Xxxxxx X. Xxxxxx, 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
14
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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONSOLIDATED GRAPHICS, INC.
By: /s/ XXX X. XXXXX
Xxx X. Xxxxx, Chief Executive
Officer
/s/ XXXXXX XXXXXX
Xxxxxx Xxxxxx
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