Execution Version
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") dated December ___,
1997 by and between THE RECOVERY NETWORK, INC., a Colorado corporation ("RNET"),
and ___________________________, an individual residing in ___________________
("Shareholder"),
WITNESSETH:
WHEREAS, Shareholder is the holder of ____ shares of the Common
Stock, par value $0.01 per share, of RNET ("Common Stock"); and
WHEREAS, the shares of Common Stock held by Shareholder ("Shares")
constitute "restricted securities" as defined in Rule 144; and
WHEREAS, Shareholder and any Transferees will be obligated to hold
the Shares indefinitely, absent registration or the applicability of an
exemption from registration under the Securities Act; and
WHEREAS, the parties desire to provide certain registration rights
with respect to the Shares in order to enhance the transferability thereof;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(b) "Exchange Act" shall mean the Securities Exchange
Act of 1934 or any similar federal statute and the rules and regulations
thereunder, in effect at the time.
(c) "Prospectus" shall mean the prospectus relating to
the Shares included in any Registration Statement at the time it becomes
effective and, in the event of any amendment or supplement to such prospectus
after the effective date of such Registration Statement, shall also mean (from
and after the effectiveness of such amendment or the filing with the Commission
of such supplement) such prospectus as so amended or supplemented.
(d) "Register," "registered," and "registration" shall
refer to a registration effected by preparing and filing a Registration
Statement in compliance with the Securities Act, and the declaration or ordering
of the effectiveness of such Registration Statement by the Commission.
(e) "Registrable Securities" shall mean all Common
shares of RNET which were
delivered pursuant to Section 4(a) of the Agreement and Plan of Merger dated
December __, 1997, and attached hereto as Exhibit A.
(f) "Registration Statement" shall mean the registration
statement filed by RNET in accordance herewith, including exhibits and financial
statements thereto, in the form in which it shall become effective and, in the
event of any amendment thereto after the effective date of such registration
statement, shall also mean (from and after the effectiveness of such amendment)
such registration statement as so amended.
(g) "Rule 144" shall mean Rule 144 as promulgated by the
Commission under the Securities Act, as such rule may be amended from time to
time, or any successor to such rule that may be promulgated by the Commission.
(h) "Securities Act" shall mean the Securities Act of
1933 or any similar federal
statute and the rules and regulations thereunder, in effect at the time.
(i) "Transferee" shall mean any valid transferee of the
Shares who acquires registration rights pursuant to Section 5.
2. RIGHT TO REGISTRATION. (a) On or after the date hereof,
Shareholder shall have the right, exercisable upon written notice to RNET, to
have the Shares included in any Registration Statement, containing therein a
Prospectus, filed from time to time by RNET (other than a registration statement
with respect to the resale of Financing Shares (as such term is defined in the
Company's Prospectus dated September 29, 1997)), on such form as may then be
required or available for use by RNET under the Securities Act to permit the
public offering of shares of the Common Stock. Such request shall specify the
number of Shares proposed to be subject to such Registration Statement. RNET
shall use its best efforts, including the filing of any amendments or
supplements thereto, to have any such Registration Statement declared effective
under the Securities Act as soon as practicable after the filing date thereof.
RNET shall also use its best efforts to keep any such Registration Statement and
the accompanying Prospectus effective and current under the Securities Act at
its expense for period of 90 days after its effective date. Notwithstanding the
foregoing, the obligation of RNET under this Section 2(a) is subject to (i) the
right of RNET or the managing underwriter, if any, to limit the number of Shares
to be included in any registration hereunder if RNET or such underwriter
determines in good faith that the offering of the requested number of Shares
will adversely affect the market for the Common Stock and (ii) the provisions of
Section 3. During the term of this Agreement, RNET shall not grant registration
rights to any person that would allow such person to have "piggy-back"
registration rights unless such rights specifically provide for Shareholder's
shares of Common Stock to be included, at Shareholder's election, in the same
registration statement as such person's shares and for any limitations to be
imposed against such person's shares prior to limitations being imposed on
Shareholders' shares.
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(b) In connection with any Registration Statement or
similar document filed pursuant to this Section 2, RNET shall take all
reasonable steps to cause the shares of Common Stock covered by such
Registration Statement to be eligible for public offering and sale by the
effective date of such Registration Statement under the securities or blue sky
laws of such states as may be appropriate; provided that in no event shall RNET
be obligated to qualify to do business in any state where it is not so qualified
at the time of filing such documents or to take any action which would subject
it to unlimited service of process or to general taxation in any state where it
is not so subject at such time. RNET shall use its best efforts to keep such
blue sky and state filings current for the length of time it must keep the
Registration Statement, the Prospectus, or any amendment thereto effective
pursuant to this Section 2.
(c) In connection with any filing pursuant to this
Section 2, RNET shall bear all of the expenses and professional fees (other than
fees of separate counsel of Shareholder and Transferees, underwriting discounts,
commissions, and transfer taxes) which arise in connection with such filings,
including without limitation fees under the blue sky laws, the Securities Act,
and the Exchange Act, and all expenses incurred in making such filings and
keeping the filings effective and current, as required by this Agreement or by
applicable law, and shall also provide to Shareholder and Transferees (if they
are engaged in the distribution) a reasonable number of printed copies of the
Prospectus in preliminary and final form. RNET consents to the use of the
Prospectus in connection with the sale of the Shares pursuant to the Securities
Act and the rules and regulations promulgated thereunder.
(d) Shareholder and each Transferee participating in a
registration hereunder shall furnish to RNET in writing promptly upon the
request of RNET all additional information regarding Shareholder or such
Transferee, as the case may be, the Shares proposed to be included in the
registration, and such other information as shall be required in the opinion of
RNET in connection with the proposed registration by the applicable federal
securities laws and the securities laws of states in which the Shares are
contemplated to be distributed. All information furnished by Shareholder or any
Transferee shall be signed by Shareholder or such Transferee, as the case may
be, and shall be stated to be specifically for use in connection with the
registration.
(e) Notwithstanding anything to the contrary, RNET may,
at any time upon notice to Shareholder and each Transferee participating in a
registration, terminate the effectiveness of any Registration Statement or, upon
notice to Shareholder or any such Transferee, withdraw from the Registration
Statement the Shares of Shareholder or such Transferee if, in the opinion of
counsel for RNET, there shall have arisen any legal impediment to the offer of
the Shares made by the Prospectus or if any legal action or administrative
proceeding shall have been instituted or threatened or any other claim shall
have been made relating to the offer made by the Prospectus or against any of
the parties involved in such offer; provided that RNET shall use its best
efforts to resolve such matter as promptly as practicable, and, promptly after
such matters shall be resolved to the satisfaction of counsel for RNET, shall
cause the registration pursuant to this Agreement of Shares formerly covered by
the Registration Statement that were removed from registration by such action of
RNET.
(f) Neither Shareholder nor any Transferee shall have
any right to take any action to restrain, enjoin, or otherwise delay any
registration as a result of any controversy that may arise with respect to the
interpretation or implementation of this Agreement.
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3. LIMITATIONS ON RESALE. (a) Subject to Section 3(c), if RNET in
good faith determines that resales of the Shares (i) may adversely affect the
market price of any security with respect to which RNET is contemplating a
public or private offering; (ii) may adversely affect the negotiation of any
contemplated acquisition, merger, consolidation, reorganization, or other
business combination or the making of arrangements preparatory to an exchange or
tender offer, stock split, redemption, or other significant corporate
transaction; or (iii) may require RNET to disclose material developments
affecting RNET and its business that may adversely affect the market price of
any security of RNET or the terms upon which RNET may consummate any transaction
specified in clause (ii) above and that RNET would otherwise not be required by
law to disclose at such time; RNET may, by notice to Shareholder and
Transferees, limit resales of the Shares from time to time pursuant to any
Registration Statement filed pursuant to this Agreement for one or more periods
of up to 20 consecutive trading days specified in such notice by requiring
Shareholder and Transferees to abstain from selling any Shares pursuant to the
Registration Statement. The notice by RNET pursuant to this Section 3(a) shall
be effective immediately upon receipt with respect only to resales not then
completed or contractually committed to by Shareholder or any Transferee, and
Shareholder or any Transferee receiving such notice shall immediately limit
resales of the Shares as specified in the notice.
(b) If, after giving notice pursuant to Section 3(a),
RNET determines that the contemplated offering of securities, acquisition,
merger, consolidation, reorganization, share exchange, or other business
combination will not occur or will be delayed or determines that resales of the
Shares will not adversely affect such an offering or transaction or require
affirmative disclosure adverse to RNET's interests, RNET shall promptly notify
Shareholder and Transferees that the prior notice and the limitations contained
in such notice are rescinded.
(c) RNET shall be entitled to restrict resales of the
Shares for an aggregate maximum of 60 trading days pursuant to Section 3(a). The
time period for effectiveness of any Registration Statement filed under Section
2 shall be extended automatically by one day for each day of any interruption or
limitation pursuant to this Section 3.
4. INDEMNIFICATION. (a) RNET shall indemnify and hold harmless
Shareholder and each Transferee participating in a registration pursuant to this
Agreement, each of its officers and directors, if applicable, and each person
controlling Shareholder or such Transferee, as the case may be, within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, against all expenses, claims, losses, damages, and liabilities (or action
in respect thereof), including any of the foregoing incurred in settlement of
any litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in the
Registration Statement, the Prospectus, or other document incident thereto, or
any amendment or supplement thereof, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or any violation by RNET of any rule or
regulation promulgated under the Securities Act applicable to RNET and relating
to action or inaction required of RNET in connection with the Registration
Statement or the Prospectus, and shall reimburse Shareholder and such Transferee
and each other person indemnified pursuant to this Section 4(a) for any legal
and any other expenses reasonably incurred in connection with investigating,
preparing, or defending any such claim, loss, damage, liability, or action;
provided, however, that RNET shall not be liable in any such
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case to the extent that any such claim, loss, damage, liability, or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to RNET by an instrument duly executed by or on behalf of
Shareholder or such Transferee and stated to be specifically for use in the
Registration Statement or the Prospectus.
(b) Shareholder and each Transferee, by participating in
a registration pursuant to this Agreement, thereby agree to indemnify and hold
harmless RNET, its officers and directors, each underwriter, if any, of RNET's
securities covered by a Registration Statement, each person who controls any of
them within the meaning of Section 15 of the Securities Act or Section 20(a) of
the Exchange Act, and their respective successors, against all claims, losses,
damages, and liabilities to third parties (or actions in respect thereof)
arising out of or based on any violation of the Securities Act or of applicable
state securities laws or arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any Registration
Statement or Prospectus or other document incident thereto, or filed with the
Commission or any securities exchange, 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, and shall reimburse RNET and each other
person indemnified pursuant to this Section 4(b) for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability, or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) was made in reliance upon and in conformity with
written information furnished to RNET by an instrument duly executed by or on
behalf of Shareholder or such Transferee and stated to be specifically for use
in the Registration Statement or in the Prospectus.
(c) Each party entitled to indemnification under this
Section 4 ("Indemnified Party") shall give notice to the party required to
provide indemnification ("Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
Indemnified Party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement, unless such failure
is prejudicial to the Indemnifying Party in defending such claim or litigation.
No Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, 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 to such claim or litigation.
(d) If the indemnification provided in this Section 4 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party thereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
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connection with the statements or omissions which resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in any underwriting
agreement entered into in connection with an underwritten public offering are in
conflict with the foregoing provisions, the provisions in such underwriting
agreement shall be controlling.
5. TRANSFER OF REGISTRATION RIGHTS. The registration rights set
forth herein shall be transferable, upon ten days' written notice to RNET, to
any person validly acquiring the Shares; provided that if notice of the transfer
of such registration rights to any such person is given to RNET after the
thirtieth day following notice to Shareholder and such Transferees pursuant to
Section 2(a), Shareholder transferring such rights shall pay all costs and
expenses reasonably incurred by RNET in including such Transferee in the
requested registration, including reasonable counsel fees of RNET; and provided
further that any such Transferee shall be subject to all of the terms and
conditions of this Agreement.
6. MISCELLANEOUS. (a) This Agreement shall be binding upon and inure
to the benefit of the respective heirs, personal representatives, successors,
and assigns of the parties hereto.
(b) No modification, amendment, or waiver of this Agreement or any
provision hereof shall be effective unless in writing and executed by
Shareholder and RNET. Any modification, amendment, or waiver of this Agreement
or any provision hereof adopted in accordance with this Section 6 shall bind all
Transferees.
(c) All amendments and waivers under this Agreement and all notices,
consents, demands, requests, approvals, and other communications that are
required or may be given hereunder shall, unless otherwise provided herein, be
in writing and shall be deemed to have been given when hand delivered or two
days after being mailed, by certified mail, return receipt requested, to the
intended recipient as follows, or to such other address as the party may provide
in accordance with this Section 6:
If to RNET:
THE RECOVERY NETWORK, INC.
000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attn: Xxxx Xxxxxx
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with a copy to:
Holme Xxxxxxx & Xxxx LLP
1700 Lincoln, Suite 4100
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
If to Shareholder:
At the address set forth on the signature page
(d) Shareholder hereby acknowledges that (i) RNET may not file any
registration statement prior to the first year anniversary of RNET's initial
public offering without the prior written consent of Whale Securities Co., L.P.
and (ii) RNET has informed Shareholder that it currently does not intent to seek
to file any registration statement on its behalf prior to such date.
(e) This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
(f) This Agreement shall be governed by and construed in accordance
with the laws of the State of Colorado.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
THE RECOVERY NETWORK, INC.
By: _______________________________
SHAREHOLDER
By: _______________________________
Address:___________________________
___________________________
___________________________
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