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EXHIBIT 10.32
REGISTRATION AGREEMENT
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THIS REGISTRATION AGREEMENT (this "Agreement") is made and entered
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into as of September 1, 2000, by and among Argosy Education Group, Inc. (the
"Company") and Leeds Equity Associates, L.P. ("Leeds"). Certain capitalized
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terms used herein are used as defined in paragraph 7 hereof.
The parties to this Agreement are parties to a Consulting Agreement of
even date herewith (the "Consulting Agreement"). In order to induce Leeds to
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enter into the Consulting Agreement, the Company agreed to (i) issue a stock
purchase warrant (the "Warrant") to Leeds or its assigns to purchase 200,000
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shares of the Company's Class A Common Stock, par value $0.01 per share (the
"Class A Common"), and (ii) provide the registration rights set forth in this
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Agreement.
The parties hereto agree as follows:
1. Required Registration.
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(a) Filing of Registration Statement. Subject to the provisions set
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forth in paragraph 3 below, within 45 days of the date on which Leeds or
its assignees instructs the Company in writing to effect the Required
Registration (as defined below) (the "Notification Date"), the Company
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shall file with the Securities and Exchange Commission a registration
statement under the Securities Act on Form S-3 pursuant to Rule 415 under
the Securities Act or a registration statement under the Securities Act on
Form S-8 (which registration statement on Form S-8 shall include a reoffer
prospectus prepared in accordance with the requirements of Part I of Form
S-3 under the Securities Act) (the "Required Registration"). The Company
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shall use its best efforts to cause the Required Registration to be
declared effective under the Securities Act as soon as practical after
filing, and once effective, the Company shall cause such Required
Registration to remain continuously effective for a period ending on the
earlier of (i) the date on which all Registrable Securities have been sold
pursuant to the Required Registration, and (ii) the date as of which there
are no longer any Registrable Securities in existence (the "Effective
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Period").
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(b) Limitations on Additional Securities. In no event shall the
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Company include any securities under the Required Registration which are
not Registrable Securities without the prior written consent of the holders
of a majority of Registrable Securities, and any such securities permitted
to be sold under the Required Registration shall only be sold in connection
with a Sale. If in connection with any Sale the Managing Underwriter (as
defined below) advises the Company that, in its opinion, the number of
Registrable Securities and other securities (if any) requested to be
included in such Sale exceeds the number of Registrable Securities and
other securities which can be sold in such offering without adversely
affecting the marketability of the offering, the Company shall include in
such Sale (i) first, the Registrable Securities requested to be included in
such Sale, pro rata among the
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holders of such Registrable Securities on the basis of the number of
Registrable Securities owned by each such holder, and (ii) second, other
securities requested to be included in such Sale to the extent permitted
hereunder.
(c) Selection of Underwriter. The holders of a majority of
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Registrable Securities shall have the right to retain and select an
investment banker and manager (the "Managing Underwriter") to administer
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the Required Registration and Sales thereunder.
(d) Required Registration Expenses. As further provided in paragraph
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4 below, all Registration Expenses incurred in connection with the Required
Registration and any Sales thereunder (whether incurred by the Company or
the holders of Registrable Securities) shall be borne by the Company.
(e) Eligibility. The Company represents, warrants and covenants that
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it currently is, and will be at all times between the date hereof and the
date the Required Registration is declared effective, eligible to use Form
S-3 under the Securities Act to the extent required for the sale of the
Registrable Securities by the holders thereof pursuant to the Required
Registration.
(f) Opinion of Counsel. Upon the request of the holders of a
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majority of the Registrable Securities, the Company shall furnish such
holders with an opinion of counsel reasonably satisfactory to such holders
stating that the registration statement filed in connection with the
Required Registration is effective.
2. Piggyback Registrations.
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(a) Right to Piggyback. Whenever the Company proposes to register
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any of its securities (including any proposed registration of the Company's
securities by any third party) under the Securities Act (other than (i)
pursuant to paragraph 1 hereof, or (ii) pursuant to a registration on Form
S-4 or S-8 or any successor or similar forms) and the registration form to
be used may be used for the registration of Registrable Securities (a
"Piggyback Registration"), whether or not for sale for its own account, the
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Company shall give prompt written notice to all holders of Registrable
Securities of its intention to effect such a registration and, subject to
the terms of paragraphs 2(c) and 2(d) hereof, shall include in such
registration all Registrable Securities with respect to which the Company
has received written requests for inclusion therein within 10 days after
the receipt of the Company's notice.
(b) Piggyback Expenses. The Registration Expenses of the holders of
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Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
(c) Priority on Primary Registrations. If a Piggyback Registration
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is an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion
the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering without adversely
affecting the marketability of the offering, the Company shall include in
such
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registration (i) first, the securities the Company proposes to sell, and
(ii) second, the Registrable Securities requested to be included in such
registration and the other securities requested to be included in such
registration, pro rata among the holders of such Registrable Securities and
other securities on the basis of the number of shares owned by each such
holder.
(d) Priority on Secondary Registrations. If a Piggyback Registration
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is an underwritten secondary registration on behalf of holders of the
Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company shall include in such registration (i) first, the securities
requested to be included therein by the holders requesting such
registration, and (ii) second, the Registrable Securities requested to be
included in such registration and the other securities requested to be
included in such registration, pro rata among the holders of such
Registrable Securities and other securities on the basis of the number of
shares owned by each such holder.
(e) Other Registrations. If the Company has previously filed a
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registration statement pursuant to paragraph 1 or pursuant to this
paragraph 2, and if such previous registration has not been withdrawn or
abandoned, the Company shall not file or cause to be effected any other
registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the
Securities Act (except on Form S-4 or Form S-8 or any successor forms),
whether on its own behalf or at the request of any holder or holders of
such securities, without the prior written consent of the holders of a
majority of the Registrable Securities, until a period of at least180 days
has elapsed from the effective date of such previous registration.
3. Registration Procedures. In connection with the Required Registration
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and whenever the holders of Registrable Securities have otherwise requested that
any Registrable Securities be registered pursuant to this Agreement, the Company
shall use its best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof as promptly as practicable, and in connection with the Required
Registration and any other such request, the Company will as expeditiously as
possible (provided that nothing contained herein prohibits the Company from
abandoning a registration in which holders of Registrable Securities have
requested to participate pursuant to paragraph 2 hereof):
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use
its best efforts to cause such registration statement to become effective
(provided that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall furnish to the counsel
selected by the holders of a majority of the Registrable Securities covered
by such registration statement copies of all such documents proposed to be
filed, which documents shall be subject to the review and comment of such
counsel);
(b) notify each holder of Registrable Securities of the effectiveness
of each registration statement filed hereunder and prepare and file with
the Securities and Exchange
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Commission such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep
such registration statement continuously effective for the period specified
herein in the case of the Required Registration, or, in any other case, for
a period of not less than 180 days and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such registration statement during such period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
registration statement;
(c) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other
acts and things which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller (provided that the Company
shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this subparagraph, (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any such
jurisdiction);
(e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of any such seller,
the Company shall prepare a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not contain an untrue statement of a
material fact or omit to state any fact necessary to make the statements
therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are
then listed and, if not so listed, to be included for quotation on the
Nasdaq Stock Market;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities (including effecting a stock
split or a combination of shares);
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(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to
such registration statement and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning
with the first day of the Company's first full calendar quarter after the
effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder; and
(k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any Common Stock included in such registration statement
for sale in any jurisdiction, the Company shall use its best efforts
promptly to obtain the withdrawal of such order.
4. Registration Expenses.
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(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, fees and disbursements of
custodians, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts
and commissions) and other Persons retained by the Company (all such
expenses being herein called "Registration Expenses"), shall be borne as
provided in this Agreement, except that (i) the Company shall, in any
event, pay its internal expenses (including all salaries and expenses of
its officers and employees performing legal or accounting duties), the
expense of any annual audit or quarterly review, the expense of any
liability insurance and the expenses and fees for listing the securities to
be registered on each securities exchange on which similar securities
issued by the Company are then listed or on the Nasdaq Stock Market, and
(ii) the holders of Registrable Securities shall, in any event, pay their
internal expenses.
(b) In connection with the Required Registration and each Sale
thereunder and each Piggyback Registration, the Company shall reimburse the
holders of Registrable Securities included in such registration (in an
amount not to exceed $10,000) for the reasonable fees and expenses of one
counsel chosen by the holders of a majority of the Registrable Securities
covered by such registration or transaction.
5. Indemnification.
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(a) The Company agrees to indemnify, to the extent permitted by law,
each holder of Registrable Securities, its officers and directors and each
Person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are caused by
or contained in any information furnished in writing to the Company by such
holder expressly for use therein or by such holder's failure to deliver a
copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished such holder with a
sufficient number of copies of the same. In connection with an underwritten
offering, the Company shall indemnify such underwriters, 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.
(b) In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder shall furnish
to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration
statement or prospectus and, to the extent permitted by law, shall
indemnify the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses resulting from any untrue
or alleged untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or
omission is contained in any information or affidavit so furnished in
writing by such holder; provided that the obligation to indemnify shall be
individual, not joint and several, for each holder and shall be limited to
the net amount of proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give prompt
notice shall not impair any Person's right to indemnification hereunder to
the extent such failure has not prejudiced the indemnifying party), and
(ii) unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist with
respect to such claim, permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed, the indemnifying party shall not be
subject to any liability for any settlement made by the indemnified party
without its consent (but such consent shall not be unreasonably withheld).
An indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim shall not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such indemnifying
party with respect to such claim, unless in the reasonable judgment of any
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indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and shall survive the transfer of
securities. The Company also agrees to make such provisions, as are
reasonably requested by any indemnified party, for contribution to such
party in the event the Company's indemnification is unavailable for any
reason.
6. Participation in Underwritten Registrations. No Person may
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participate in any registration hereunder which is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements, and (ii) completes and executes all
questionnaires, powers of attorney, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that no
holder of Registrable Securities included in any underwritten registration shall
be required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding such holder
and such holder's intended method of distribution) or to undertake any
indemnification obligations to the Company or the underwriters with respect
thereto, except as otherwise provided in paragraph 5 hereof.
7. Definitions.
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"Person" means an individual, a partnership, a joint venture, a
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corporation, a limited liability company, a trust, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
"Registrable Securities" means (i) any Class A Common issued or
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issuable upon exercise of the Warrant, and (ii) any Class A Common issued or
issuable with respect to the securities referred to in clause (i) above by way
of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization. As to
any particular Registrable Securities, such securities shall cease to be
Registrable Securities when they have been distributed to the public pursuant to
a offering registered under the Securities Act or sold to the public through a
broker, dealer or market maker in compliance with Rule 144 under the Securities
Act (or any similar rule then in force) or repurchased by the Company or any
subsidiary thereof. For purposes of this Agreement, a Person shall be deemed to
be a holder of Registrable Securities, and the Registrable Securities shall be
deemed to be in existence, whenever such Person has the right to acquire
directly or indirectly such Registrable Securities (upon conversion or exercise
in connection with a transfer of securities or otherwise, but disregarding any
restrictions or limitations upon the exercise of such right), whether or not
such acquisition has actually been effected, and such Person shall be entitled
to exercise the rights of a holder of Registrable Securities hereunder.
"Securities Act" means the Securities Act of 1933, as amended, or any
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similar federal law then in force.
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"Securities and Exchange Commission" includes any governmental body or
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agency succeeding to the functions thereof.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
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as amended, or any similar federal law then in force.
8. Miscellaneous.
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(a) No Inconsistent Agreements. The Company shall not hereafter enter
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into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to the holders of Registrable
Securities in this Agreement.
(b) Adjustments Affecting Registrable Securities. The Company shall
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not take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in
a registration undertaken pursuant to this Agreement or which would
materially and adversely affect the marketability of such Registrable
Securities in any such registration (including, without limitation,
effecting a stock split or a combination of shares).
(c) Remedies. Any Person having rights under any provision of this
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Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement
and to exercise all other rights granted by law. The parties hereto agree
and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that, in addition to any
other rights and remedies existing in its favor, any party shall be
entitled to specific performance and/or other injunctive relief from any
court of law or equity of competent jurisdiction (without posting any bond
or other security) in order to enforce or prevent violation of the
provisions of this Agreement.
(d) Amendments and Waivers. Except as otherwise provided herein, the
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provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and the holders of at least a majority of
the Registrable Securities.
(e) Successors and Assigns. All covenants and agreements in this
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Agreement by or on behalf of any of the parties hereto shall bind and inure
to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not. In addition, whether or not any
express assignment has been made, the provisions of this Agreement which
are for the benefit of purchasers or holders of Registrable Securities are
also for the benefit of, and enforceable by, any subsequent holder of
Registrable Securities.
(f) Severability. Whenever possible, each provision of this
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Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
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(g) Counterparts. This Agreement may be executed simultaneously in
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two or more counterparts, any one of which need not contain the signatures
of more than one party, but all such counterparts taken together shall
constitute one and the same Agreement.
(h) Descriptive Headings. The descriptive headings of this Agreement
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are inserted for convenience only and do not constitute a part of this
Agreement.
(i) Governing Law. All issues and questions concerning the
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construction, validity, interpretation and enforcement of this Agreement
and the exhibits and schedules hereto shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving
effect to any choice of law or conflict of law rules or provisions (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New
York.
(j) Notices. All notices, demands or other communications to be
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given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid) or mailed to the recipient by certified
or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications shall be sent to the addresses
indicated below:
If to the Company:
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Argosy Education Group, Inc.
Two First National Plaza
20 South Clark Street, 3/rd/ Floor
Chicago, IL 60603
Attention: Chief Executive Officer
with a copy to (which shall not constitute notice hereunder):
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Keith S. Crow
If to Leeds:
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Leeds Equity Associates, L.P.
660 Madison Avenue, 15th Floor
New York, New York 10021
Attention: Jeffrey T. Leeds
Joshua A. Sorensen
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with a copy to (which shall not constitute notice hereunder):
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Stephen L. Ritchie
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
(k) No Strict Construction. Notwithstanding that this Agreement has
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been drafted or prepared by one of the parties hereto, each of the parties
hereto confirm that each party and their respective counsel have reviewed,
negotiated and adopted this Agreement as the joint agreement of the
parties. The language used in this Agreement shall be deemed to be the
language chosen by the parties, and no rule of strict construction shall be
applied against any party. The use of the word "including" in this
Agreement shall be by way of example rather than limitation.
* * * * * *
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
ARGOSY EDUCATION GROUP, INC.
By: /s/ Michael C. Marrkovitz
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Michael C. Marrkovitz
Its: Chairman Of The Board
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LEEDS EQUITY ASSOCIATES, L.P.
By: Leeds Equity Management, L.L.C.
Its: General Partner
By: /s/ Jeffrey T. Leeds
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Name: Jeffrey T. Leeds
Title: Member
SIGNATURE PAGE OF REGISTRATION AGREEMENT
