EXHIBIT 10.6
------------
REGISTRATION RIGHTS AGREEMENT
Between
The Aristotle Corporation
and
Geneve Corporation
Dated as of October 22, 1997
THE ARISTOTLE CORPORATION
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), made and entered
into as of the 22nd day of October, 1997, by and among The Aristotle
Corporation, a Delaware corporation (the "Company"), and Geneve Corporation, a
Delaware corporation (the "Shareholder").
RECITALS
--------
WHEREAS, the Company is issuing up to 489,131 shares of Series E
Convertible Preferred Stock, $.01 par value, at a purchase price of $4.60 per
share to the Shareholder pursuant to the Preferred Stock Purchase Agreement of
even date herewith among the Company and the Shareholder (the "Purchase
Agreement"); and
WHEREAS, one of the conditions to the consummation of the transactions
contemplated by the Purchase Agreement is the execution and delivery of this
Agreement to provide for registration rights for the shares of Series E
Convertible Preferred Stock purchased by the Shareholder as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Plan, the parties hereto
mutually agree as follows:
1. Registration Rights.
-------------------
1.1 Definitions.
-----------
(a) "Common Stock" means the common stock, $.01 par value per share, of
------------
the Company;
(b) "Holder" means any person owning or having the right to acquire
------
Registrable Securities; and
(c) "Form S-3," "Form S-4" and "Form S-8" mean such respective forms under
-------- -------- --------
the 1933 Act as in effect on the date hereof or any successor registration forms
to Form S-3, Form S-4 and Form S-8, respectively, under the 1933 Act
subsequently adopted by the Securities and Exchange Commission ("SEC"),
regardless of its designation.
(d) "Preferred Shares" means the shares of the Series E Convertible
----------------
Preferred Stock, $.01 par value per share, of the Company, issued pursuant to
the Purchase Agreement.
(e) "Register," "registered" and "registration" refer to a resale
-------- ---------- ------------
registration effected by preparing and filing a registration statement in
compliance with the 1933 Act and applicable rules and regulations thereunder,
and the declaration or ordering of the effectiveness of such registration
statement, or, as the context may require, under the Exchange Act or applicable
state securities laws.
(f) "Registrable Securities" means the shares of the Common Stock issued
or issuable upon conversion of the Preferred Shares. As to any particular
Registrable Securities, such securities will cease to be Registrable Securities
when: (1) they have been effectively registered under the 1933 Act and disposed
of in accordance with the registration statement covering them; (2) they are
transferred pursuant to Rule 144 (or any similar provision that is in force)
under the 1933 Act; or (3) they have been otherwise transferred and new
certificates for them not bearing a restrictive legend have been delivered by
the Company;
The number of shares of Registrable Securities then outstanding shall
be determined by adding the number of shares of Common Stock outstanding as a
result of the conversion of Preferred Shares and the number of shares of Common
Stock which are issuable upon conversion of Preferred Shares;
(g) "1933 Act" means the Securities Act of 1933, as amended, and the
--------
rules and regulations of the SEC thereunder, all as the same shall be in effect
from time to time.
(h) "1934 Act" means the Securities Exchange Act of 1934, as amended,
--------
and the rules and regulations of the SEC thereunder, all as the same shall be in
effect from time to time.
1.2 Request for Registration.
------------------------
(a) Demand Rights. (a) At any time after the second anniversary of
-------------
the date hereof, the Holders of Registrable Securities constituting a majority
of the total shares of Registrable Securities then outstanding may request the
Company to register under the Securities Act all or any portion of the shares of
Registrable Securities held by such requesting Holder or Holders for sale in the
manner specified in such notice; provided that the aggregate number of shares to
be registered pursuant to such request shall be not less than 50,000.
Notwithstanding anything to the contrary contained herein, the Company shall not
be required to cause a registration pursuant to this Subsection 1.2(a) to become
effective during the period starting with the filing of, and ending on the date
which is one hundred and eighty (180) days after the effective date of, a
registration statement filed by the Company covering a firm commitment
underwritten public offering of Common Stock under the Securities Act.
(b) Following receipt of any notice under this Section 1.2, the Company
shall immediately notify all Holders of Registrable Securities from whom notice
has not been received and such Holders shall then be entitled within twenty (20)
days after receipt of such notice from the Company to request the Company to
include in the requested registration all or any portion of their shares of
Registrable Securities. The Company shall use its best efforts to register
under the 1933 Act, for public sale in accordance with the method of disposition
specified in the notice from
2
requesting Holders described in paragraph (a) above, the number of shares of
Registrable Securities specified in such notice (and in all notices received by
the Company from other Holders within twenty (20) days after the receipt of such
notice by such Holders). The Company shall be obligated to register the
Registrable Securities pursuant to this Section 1.2 on three (3) occasions only;
provided, however, that such obligation shall be deemed satisfied only when a
registration statement covering all shares of Registrable Securities specified
in notices received as aforesaid (other than shares voluntarily withdrawn by the
Holder thereof), for sale in accordance with the method of disposition specified
by the requesting Holders, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, all such shares
shall have been sold pursuant thereto.
(c) If the Holders requesting such registration intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 1.2 and the Company shall include such information in the written
notice referred to in paragraph (b) above. The right of any Holder to
registration pursuant to this Section 1.2 shall be conditioned upon such
Holder's agreeing to participate in such underwriting and to permit inclusion of
such Holder's Registrable Securities in the underwriting. If such method of
disposition is an underwritten public offering, the Holders of at least a
majority in interest of the shares of Registrable Securities to be sold in such
offering may designate the managing underwriter of such offering, subject to the
approval of the Company, which approval shall not be unreasonably withheld or
delayed. A Holder may elect to include in such underwriting all or a part of
the Registrable Securities it holds.
(d) A registration statement filed pursuant to this Section 1.2 may,
subject to the following provisions, include (i) shares of Common Stock for sale
by the Company for its own account, (ii) shares of Common Stock held by officers
or directors of the Company and (iii) shares of Common Stock held by persons who
by virtue of agreements with the Company are entitled to include such shares in
such registration (the "Other Shareholders"), in each case for sale in
accordance with the method of disposition specified by the requesting Holders.
If such registration shall be underwritten, the Company, such officers and
directors and Other Shareholders proposing to distribute their shares through
such underwriting shall enter into an underwriting agreement in customary form
with the representative of the underwriter or underwriters selected for such
underwriting
1.3 Company Registration. If at any time the Company proposes to register
--------------------
(including for this purpose a registration effected by the Company for
shareholders other than the Holders) any of its capital stock or other
securities under the 1933 Act in connection with the public offering of such
securities (other than a registration on Form S-8 relating solely to the sale of
securities to participants in a Company stock plan, or a registration on Form S-
4 or any successor form), the Company , at such time, promptly give each Holder
written notice of such registration. Upon the written request of any Holder
given within twenty (20) days after delivery of such notice by the Company, the
Company shall, subject to the provisions of Section 1.8, use its best efforts to
cause a registration statement covering all of the Registrable Securities that
each such Holder has requested to be registered to become effective under the
1933 Act. The Company shall be under no obligation to complete any offering of
its securities it proposes to make and shall incur no liability to any Holder
for its failure to do so.
3
1.4 Obligations of the Company. Whenever required under this Section 1 to
--------------------------
use its best efforts to effect the registration of any Registrable Securities,
the Company shall, as expeditiously as possible:
(a) Prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its best efforts to cause such registration
statement to become effective, and, if applicable, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder use
its best efforts consistent with then applicable restrictions of SEC
registration forms to keep such registration statement effective for up to: (i)
the seventh (7th) anniversary of the date hereof if the registration is effected
on Form S-3 or (ii) nine (9) months or until the Holders have informed the
Company in writing that the distribution of their securities has been completed
if the registration is effected on a form other than Form S-3.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement, and use its best efforts to cause each such amendment to
become effective, as may be necessary to comply with the provisions of the 1933
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such reasonable number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by them.
(d) Use its best efforts to register or qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdiction.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement, including furnishing any opinion of counsel or entering into
a lock-up agreement reasonably requested by the managing underwriter.
(f) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto covered
by such registration statement is required to be delivered under the 1933 Act,
of the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing and promptly file such amendments and supplements
which may be required pursuant to subparagraph (b) of this Section 1.4 on
account of such event and use its best efforts to cause each such amendment and
supplement to become effective.
4
(g) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 1, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 1, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters on the date that the registration statement with respect to such
securities becomes effective, a letter dated such date, from the independent
certified public accountant of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.
(h) Apply for listing and use its best efforts to list the Registrable
Securities being registered on any national securities exchange on which the
Common Stock is then listed or, if the Common Stock is not then listed on a
national securities exchange, but is quoted on the automated quotation system of
the National Association of Securities Dealers, Inc., promptly file an
additional listing application with respect to the Registrable Securities.
1.5 Furnish Information. It shall be a condition precedent to the
-------------------
obligations of the Company to take any action pursuant to this Section 1 that
the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
1.6 Expenses of Registrations. All expenses other than underwriting
-------------------------
discounts, fees and commissions relating to Registrable Securities incurred in
connection with the registration, filing or qualification of the Registrable
Securities pursuant to Section 1.2 and 1.3 and other than counsel fees and
expenses of the Holders and underwriter counsel fees and expenses, including,
without limitation, all registration, filing and qualification fees, printing
and accounting fees and fees and disbursements of counsel for the Company shall
be borne by the Company; provided, however, that the Company shall not be
-------- -------
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2, if the registration request is subsequently withdrawn at any
time at the request of the Holders of a majority of the Registrable Securities
to be registered (in which case all participating Holders shall bear such
expenses).
1.7 Underwriting Requirements. In connection with any offering involving an
-------------------------
underwriting of securities being issued by the Company, the Company shall not be
required under Section 1.3 to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it, and then, subject to
the provisions of this Section 1.7, only in such quantity, if any, as, in the
opinion of the underwriters, marketing factors permit. If the managing
underwriter for the offering shall advise the Company in writing that the total
amount of securities, including Registrable Securities requested to be included
in such offering, exceeds the amount of securities proposed to be included in
such offering that can be successfully offered, then the Company shall include
in the offering only that number of such securities, including Registrable
Securities, which the managing underwriter believes marketing factors permit the
securities so included to be apportioned as follows: first all shares of Common
Stock held by officers or directors (other than Registrable
5
Securities) of the Company or by Other Shareholders (other than Registrable
Securities or shares of Common Stock submitted for registration pursuant to
Section 1.3 of that certain Registration Rights Agreement dated April 11, 1994)
be excluded from such registration to the extent so required by such managing
underwriter, and unless the Holders of such shares and the Company have
otherwise agreed in writing, such exclusion shall be applied first to the shares
held by the directors and officers, and if a limitation of the number of shares
is still required by such managing underwriter, then to the shares of Common
Stock of the Other Shareholders (other than Registrable Securities or share of
Common Stock submitted for registration pursuant to Section 1.3 of that certain
Registration Rights Agreement dated April 11, 1994) to the extent required by
the managing underwriter, and if further limitation on the number of shares to
be included in the underwriting is required, then the number of shares held by
Holders that may be included in the underwriting shall be apportioned pro rata
among the selling Holders according to the total amount of securities requested
to be registered therein owned by each selling Holder or in such other
proportions as shall be mutually agreed to by such selling Holders; provided
however; that notwithstanding the exclusion of Registrable Securities owned by
the Holders, no shares of Common Stock submitted for registration pursuant to
Section 1.3 of that certain Registration Rights Agreement dated April 11, 1994
shall be excluded unless and until all shares held by Holders shall have been
excluded. In any event all securities to be sold other than Registrable
Securities and shares of Common Stock submitted for registration pursuant to
Section 1.3 of that certain Registration Rights Agreement dated April 11, 1994
will be excluded prior to any exclusion of Registrable Securities. No
Registrable Securities or any other security excluded from the underwriting by
reason of the underwriter's marketing limitation shall be included in such
registration. If any Holder of Registrable Securities, officer, director or
Other Shareholder who has requested inclusion in such registration as provided
above, disapproves of the terms of the underwriting, such Holder of securities
may elect to withdraw therefrom by written notice to the Company and the
managing underwriter.
1.8 Indemnification. In the event any Registrable Securities are included
---------------
in a registration statement under this Section 1:
(a) Company Indemnification. To the extent permitted by law, the Company
-----------------------
will indemnify and hold harmless each Holder, the officers, directors, partners,
agents and employees of each Holder, any underwriter (as defined in the 1933
Act) for such Holder, and each person, if any, who controls such Holder or
underwriter within the meaning of the 1933 Act or the 1934 Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the 1933 Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any state securities law
or any rule or regulation promulgated under the 1933 Act, the 1934 Act or any
state securities law. The Company will reimburse each such Holder, officer,
director, partner, agent, employee, underwriter or controlling person for any
legal or other expenses reasonably incurred by them in connection with
6
investigating, defending or settling any such loss, claim, damage, liability, or
action. The indemnity agreement contained in this Section 1.8(a) shall not apply
to amounts paid in settlement of any loss, claim, damage, liability, or action
if such settlement is effected without the consent of the Company which consent
shall not be unreasonably withheld, nor shall the Company be liable to a Holder
in any such case for any such loss, claim, damage, liability, or action (i) to
the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished (or omitted
to be furnished) expressly for use in connection with such registration by or on
behalf of such Holder, underwriter or controlling person or (ii) in the case of
a sale directly by a Holder of Registrable Securities (including a sale of such
Registrable Securities through any underwriter retained by such Holder to engage
in a distribution solely on behalf of such Holder), if such untrue statement or
alleged untrue statement or omission or alleged omission was contained in a
preliminary prospectus and corrected in a final or amended prospectus, and such
Holder failed to deliver a copy of the final or amended prospectus at or prior
to the confirmation of the sale of the Registrable Securities to the person
asserting any such loss, claim, damage or liability in any case where such
delivery is required by the Securities Act.
(b) Holder Indemnification. To the extent permitted by law, each selling
----------------------
Holder will indemnify and hold harmless the Company, each of its directors, each
of its officers who have signed the registration statement, each person, if any,
who controls the Company within the meaning of the 1933 Act, each agent and any
underwriter for the Company, and any other Holder selling securities in such
registration statement or any of its directors, officers, partners, agents or
employees or any person who controls such Holder or underwriter, against any
losses, claims, damages, or liabilities (joint or several) to which the Company
or any such director, officer, controlling person, agent or underwriter or
controlling person, or other such Holder or director, officer or controlling
person may become subject, under the 1933 Act, the 1934 Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent that such Violation occurs in reliance upon and in conformity with
information furnished (or omitted to be furnished) by or on behalf of such
Holder for use in connection with such registration; and each such Holder will
reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer, controlling person, officer, director, partner, agent,
employee, or controlling person in connection with investigating, defending or
settling any such loss, claim, damage, liability, or action. The indemnity
agreement contained in this Section 1.8(b) shall not apply to amounts paid in
settlement of any loss, claim, damage, liability or action if such settlement is
effected without the consent of the Holder, which consent shall not be
unreasonably withheld nor, in the case of a sale directly by the Company of its
securities (including a sale of such securities through any underwriter retained
by the Company to engage in a distribution solely on behalf of the Company), the
Holder be liable to the Company in any case which such untrue statement or
alleged untrue statement or omission or alleged omission was contained in a
preliminary prospectus and corrected in a final or amended prospectus, and the
Company failed to deliver a copy of the final or amended prospectus at or prior
to the confirmation of the sale of the securities to the person asserting any
such loss, claim, damage or liability in any case where such delivery is
required by the 1933 Act.
(c) Notice, Defense and Counsel. Promptly after receipt by an indemnified
---------------------------
party under this Section 1.8 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying
7
party under this Section 1.8, deliver to the indemnifying party a written notice
of the commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume and control the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.8 to the extent of such prejudice, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 1.8.
(d) Survival of Rights and Obligations. The obligations of the Company and
----------------------------------
the Holders under this Section 1.8 shall survive the conversion, if any, of the
shares of Preferred Stock, and the completion of any offering of Registrable
Securities in a registration statement whether under this Section 1 or
otherwise.
1.9 Reports Under 1934 Act. With a view to making available to the Holders
----------------------
the benefits of Rule 144 promulgated under the 1933 Act and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration, and with a view to making it
possible for Holders to register the Registrable Securities pursuant to a
registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the 1933 Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the 1933 Act and
the 1934 Act (at any time after it has become subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.
1.10 Lockup Agreement. Each Holder, if requested by the Company and an
----------------
underwriter of the Company's securities, shall agree not to sell or otherwise
transfer or dispose of any Registrable Securities or other securities of the
Company held by such Holder for a specified period of time (not to exceed 180
days) following the effective date of a registration statement pursuant to which
the Company proposes to sell its securities to the public generally, provided
that all holders of at least 5% of the Common Stock (on an as-exchanged basis)
enter into similar agreements.
8
1.11 Additional Grants of Registration Rights. The Company shall not
----------------------------------------
hereafter enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holders in this Agreement. If the
Company shall hereafter grant any registration or similar rights with respect to
securities of the Company which are more favorable than the rights granted
pursuant to this Agreement, each Holder shall immediately be vested with such
more favorable rights.
2. Miscellaneous.
-------------
2.1 Notices. All notices or other communications hereunder shall be in
-------
writing and shall be deemed to have been given when delivered by certified mail,
return receipt requested, a recognized overnight delivery service or hand
delivery to such party at the address set forth below or such other address as
such party may specify by notice to the other parties hereto:
If to the Holders, to their respective addresses as set forth in Exhibit A
---------
to this Agreement.
If to the Company, to: The Aristotle Corporation
78 Olive Street
New Haven, Connecticut 06510
Attention: John J. Crawford
Its Chairman and President
2.2 Entire Agreement. This Agreement sets forth the entire agreement and
----------------
understanding of the parties with respect to the subject matter hereof,
supersedes and rescinds any prior written or oral agreements relating to the
subject matter hereof between the parties hereto and shall not be modified
except by the execution of a written instrument signed by the parties hereto.
2.3 Binding Effect; Assignment. This Agreement shall be binding upon and
--------------------------
inure to the benefit of the personal representatives, successors and assigns of
the respective parties hereto. The Company shall not have the right to assign
its rights or obligations hereunder or any interest herein without obtaining the
prior written consent of the Holders and the Holders may not assign or transfer
their rights under this Agreement, except to an Affiliate (as such terms is used
in Rule 12b-2 of the 1934 Act), without the prior written consent of the
Company.
2.4 Counterparts. This Agreement may be executed in counterparts, all of
------------
which together shall constitute one and the same instrument.
2.5 Governing Law. This Agreement shall be governed by, construed and
-------------
enforced in accordance with the laws and decisions of the State of Delaware.
9
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first above written.
THE ARISTOTLE CORPORATION
By: /s/ John J. Crawford
---------------------------------
Name: John J. Crawford
Title: President
GENEVE CORPORATION
By: /s/ Steven B. Lapin
----------------------------------
Name: Steven B. lapin
Title: President
10