REGISTRATION RIGHTS AGREEMENT
AGREEMENT made as of the 24th day of October, 1995, by and among CRA
MANAGED CARE, INC., a Massachusetts corporation (the "Company"), and LAURENCE G.
ERNST and MICHAEL J. SPILDE, individuals (collectively, the "ALTA
Shareholders").
WHEREAS, the Company, CRA Acquisition Corp., a wholly-owned subsidiary of
the Company ("Merger Sub"), ALTA Pacific Corporation, a Washington corporation
("ALTA"), and the ALTA Shareholders have entered into an Agreement and Plan of
Merger (the "Merger Agreement") pursuant to which Merger Sub is merging with and
into ALTA, with ALTA being the surviving corporation in consideration of the
issuance by the Company to the ALTA Shareholders of 136,150 shares of Common
Stock, par value $.01 per share, of the Company (the "Common Stock") with an
aggregate value of $2,900,000, as determined in accordance with the Merger
Agreement (the "Merger"); and
WHEREAS, Comprehensive Rehabilitation Associates, Inc. (predecessor to
CRA), J.H. Whitney & Co., Whitney 1990 Equity Fund, L.P., Whitney Subordinated
Debt Fund, L.P., First Union Corporation, Lois E. Silverman, and Donald J.
Larson are parties to a certain Registration Rights Agreement, dated March 8,
1994 (the "CRA Registration Rights Agreement"); and
WHEREAS, pursuant to the terms of the Merger Agreement, the Company has
agreed to grant the ALTA Shareholders certain rights to require the Company to
register their shares of Common Stock in accordance with the terms of this
Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
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shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or any
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other federal agency at the time administering the Securities Act (as
defined below).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the
time.
"Permitted Transferee" shall mean the ALTA Shareholders who received
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shares of Common Stock pursuant to the Merger.
"Person" means a corporation, an association, a partnership, an
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organization, a business, an individual, a governmental or political
subdivision thereof, or a governmental agency.
"Registrable Securities" shall mean the _______ shares of Common Stock
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received by the ALTA Shareholders pursuant to the Merger and held by
them on the date hereof (together with any other shares of Common Stock
which may be issued by the Company in respect of such shares by means
of stock splits, stock dividends or similar events), excluding shares
of Common Stock which have been sold, assigned or otherwise transferred
to a person who is not a Permitted Transferee.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
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any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
2. Securities Subject to this Agreement.
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(a) Registrable Securities. For the purposes of this Agreement,
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Registrable Securities will cease to be Registrable Securities when (i) a
registration statement covering such Registrable Securities has been declared
effective under the Act by the SEC and such Registrable Securities have been
disposed of pursuant to such effective registration statement or (ii) the entire
amount of Registrable Securities proposed to be sold in a single sale are or, in
the opinion of counsel satisfactory to the Company and the Holder, each in their
reasonable judgment, may be distributed to the public pursuant to Rule 144 (or
any successor provision then in effect) under the Act.
(b) Holders of Registrable Securities. A Person is deemed to be a
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holder of Registrable Securities (a "Holder") whenever such Person (i) is a
party to this Agreement (or a Permitted Transferee thereof) and (ii) owns of
record Registrable Securities. If the Company receives conflicting
instructions, notices, or elections from two or more persons with respect to the
same Registrable Securities, the Company may act upon the basis of the
instructions, notice, or election received from the registered owner of such
Registrable Securities.
3. Required Registration. If the Company shall receive a written consent
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therefor from any record holder or holders of an aggregate of at least fifty
percent (50%) of the Registrable Securities then held by the Alta Shareholders
(but in no event less than 50,000 Registrable Securities), the Company shall
prepare and file a registration statement on Form S-3 under the Securities Act
covering the Registrable Securities which are the subject of such request and
shall use its best efforts to cause such registration statement to become
effective - provided that the Registrable Securities to be sold pursuant to such
registration statement should not be sold pursuant to an underwriter offering.
In addition, unless such request is made on behalf of all ALTA Shareholders,
upon the receipt of such request, the Company shall promptly give written notice
to all other ALTA Shareholders. CRA shall include in such registration
statement such Registrable Securities for which it has received written requests
to register by such other ALTA Shareholders within 30 days after the delivery of
the Company's written notice to such other ALTA Shareholders. The Company shall
be obligated to prepare, file and cause to become effective only one
registration statement (on Form S-3 or any successor
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form promulgated by the SEC ("Form S-3")) pursuant to this Section 3, and to pay
the expenses associated with such registration statement. Holders may not
exercise any right pursuant to this Section 3 until such time as financial
results (including combined sales and net income) covering at least 30 days of
post-merger operations have been published by the Company.
On one occasion, the Board of Directors may, by delivery of written notice
to the Holders of Registrable Securities requesting registration, cause the
requested registration to be delayed for not more than sixty (60) days if the
Board of Directors determines in good faith that, in connection with such
registration, the Company would be required to disclose information regarding a
proposed transaction involving the Company which, if disclosed, could have an
adverse effect on the Company, the other party or parties to such transaction,
or the probability that such transaction would be consummated on terms no less
favorable to the Company as would be available without such disclosure.
If, prior to the time of any request by holders of Registrable Securities
pursuant to this Section 3, the Company has publicly announced its intention to
register any of its securities for a public offering under the Securities Act,
no registration of Registrable Securities shall be initiated pursuant to this
Section 3 until 180 days after the effective date of the registration so
announced unless the Company is no longer proceeding diligently to effect such
registration, whether such registration is for the sale of securities for the
Company's own account or for the account of others.
Without the written consent of the holders of a majority of the Registrable
Securities for which registration has been requested pursuant to this Section 3,
neither CRA nor any other holder of securities of CRA may include securities in
such registration.
4. Piggy Back Rights. In the case of any offering of securities by the
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Company under the Securities Act for its own account, or the account of any
selling shareholder of the Company, of any class of security (other than a
registration statement on Form S-4 or S-8 or any successor form thereto) under
the Act, then the Company shall give written notice of such proposed filing to
each of the Holders at least thirty (30) days before the anticipated filing
date, and such notice shall describe in detail the proposed registration and
distributions (including those jurisdictions where registration under the
securities or blue sky laws is intended) and offer such Holders the opportunity
to register the number of Registrable Securities as each such Holder may
request. The Company shall use its best efforts to cause the managing
underwriter or underwriters of an underwritten offering proposed by the Company
(the "Company Underwriter") to permit the Holders who have requested and are
eligible to participate in the registration for such offering (within ten (10)
days of notice provided for in the preceding sentence) to include such
Registrable Securities in such offering on the same terms and conditions as the
securities of the Company included therein. All Holders of Registrable
Securities shall be entitled to include Registrable Securities in such proposed
offering; provided that if the offering is an underwritten offering and the
managing underwriter shall inform the Company (or, in the case of a secondary
offering, the selling stockholders initiating such offering) of its belief that
the number or type of
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Registrable Securities and other securities (if any) requested to be included in
such registration would materially adversely affect such offering, then the
Company will include in such registration, to the extent of the number and type
which the Company is (or the selling stockholders initiating such offer are) so
advised can be sold in (or during the time of) such offering, first, all
securities proposed by the Company (or, in the case of a secondary offering, the
selling stockholders initiating such offering) to be sold for its (or their) own
account, second, such Registrable Securities requested to be included in such
registration and all other shares of Common Stock requested to be included in
such registration by any Person entitled to piggy back registration rights
ranking pari passu with the rights of Holders pursuant to the CRA Registration
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Rights Agreement or a similar agreement with the Company, pro rata among all
such Holders on the basis of the estimated gross proceeds of the securities of
such Holders requested to be so included, and, if all such Registrable
Securities and other shares of Common Stock can be so included, third, any other
securities of the Company requested to be included in such registration.
5. Holdback Agreements. In the case of any underwritten public offering
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by the Company of shares of Common Stock, whether for its own account or for the
account of any stockholder of the Company, each Holder agrees not to effect any
public disposition (including any sale pursuant to Rule 144 under the Securities
Act) (a "Disposition") of any Registrable Securities, and not to effect any such
Disposition of any other equity security of the Company or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (in each case, other than as part of such underwritten public offering)
during the 90-day period beginning on the effective date of such registration
statement (except as part of such registration), provided that each Holder of
Registrable Securities has received notice of such registration at least seven
(7) days prior to such effective date.
6. Registration Procedure. If and whenever CRA is required by the
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provisions of Section 3 hereof to effect the registration of Registrable
Securities under the Securities Act, the Company will:
(a) prepare and file with the SEC a registration statement with respect
to such securities, and use its best efforts to cause such registration
statement to become and remain effective for such period as may be reasonably
necessary to effect the sale of such securities, not to exceed thirty (30) days
from the date such registration statement is declared effective by the SEC;
(b) prepare and file with the SEC such amendments to such registration
statement and supplements to the prospectus contained therein as may be
necessary to keep such registration statement effective for such period as may
be reasonably necessary to effect the sale of such securities, not to exceed
thirty (30) days from the date such registration statement is declared effective
by the SEC;
(c) furnish to the security holders participating in such registration
such reasonable number of copies of the registration statement, preliminary
prospectus, final
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prospectus and such other documents as such security holders or underwriters may
reasonably request in order to facilitate the public offering of such
securities;
(d) use its best efforts to register or qualify the securities covered by
such registration statement under such state securities or blue sky laws of such
jurisdictions as such participating holders may reasonably request in writing,
except that the Company shall not for any purpose be required to execute a
general consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified;
(e) notify the security holders participating in such registration,
promptly after it shall receive notice thereof of the time when such
registration statement has become effective or a supplement to any prospectus
forming a part of such registration statement has been filed;
(f) notify such holders promptly of any such request by the SEC for the
amending or supplementing of such registration statement or prospectus or for
additional information;
(g) prepare and file with the SEC, promptly upon the request of any such
holders, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for such holders (and concurred in
by counsel for the Company), is required under the Securities Act or the rules
and regulations thereunder in connection with the distribution of the
Registrable Shares by such holder;
(h) promptly notify such holders of the filing of such amendment or
supplement to such registration statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a prospectus relating
to such securities is required to be delivered under the Securities Act, any
event shall have occurred as the result of which any such prospectus or any
other prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading; and
(i) advise such holders, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the SEC suspending the
effectiveness of such registration statement or the initiation or threatening of
any proceeding for that purpose and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order should
be issued.
7. Expenses. With respect to such registration, the Company shall bear
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the following fees, costs and expenses: all registration, qualification, filing
and NASD fees, printing expenses, fees and disbursements of counsel and
accountants for the Company, including expenses of any regular or special audits
incident to or required by such registration, all internal expenses of the
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Company, and all legal fees and disbursements and other expenses of complying
with state securities or blue sky laws of any jurisdictions in which the
securities to be offered are to be registered or qualified. Fees and
disbursements of counsel and accountants for the selling security holders,
underwriting discounts and commissions, broker's fees and commissions and
transfer taxes, and any other expenses incurred by the security holders not
expressly included above shall be borne by the selling security holders.
8. Indemnification. With respect to such registration:
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(a) The Company will indemnify and hold harmless each Holder of
Registrable Securities which are included in a registration statement pursuant
to the provisions of this Agreement from and against, and will reimburse such
Holder with respect to, any and all loss, damage, liability, cost and expense to
which such Holder may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused by
any untrue statement or alleged untrue statement of any material fact contained
therein or any amendment or supplement thereto, or arise out of or are based
upon the 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; provided, however,
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that the Company will not be liable in any such case to the extent that any such
loss, damage, liability, cost or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in reliance upon and in strict conformity with information furnished by
such Holder in writing specifically for use in the preparation thereof.
(b) Each Holder of Registrable Securities which are included in a
registration pursuant to the provisions of this Agreement will indemnify and
hold harmless the Company, its directors and officers, and any controlling
person from and against, and will reimburse the Company, its directors and
officers, and any controlling person with respect to, any and all loss, damage,
liability, cost or expense to which the Company, its directors or officers,
and/or any controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue or alleged untrue statement of any material fact contained
in such registration statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon the omission
or the 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, 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 so made in reliance upon and in
strict conformity with written information furnished by such Holder specifically
for use in the preparation thereof.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (a) or (b) of this Section 6 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim
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thereof is to be made against the indemnifying party pursuant to the provisions
of said paragraph (a) or (b), promptly notify the indemnifying party of the
commencement thereof; but the failure to so notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
unless the indemnifying party is unduly prejudiced by the failure to receive
prompt notice. In case such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party,
provided, however, if the defendants in any action include both the indemnified
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party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are are different from or additional to those
available to the indemnifying party, or if there is a conflict of interest which
would prevent counsel for the indemnifying party from also representing the
indemnified party, the indemnified party or parties shall have the right to
select separate counsel to participate in the defense of such action on behalf
of such indemnified party or parties. After notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless (i) the indemnified
party shall have employed counsel in accordance with the provision of the
preceding sentence, (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after the notice of the commencement of the action or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party.
9. Miscellaneous.
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(a) All covenants and agreements contained in this 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 (including without
limitation Permitted Transferees of any Registrable Securities), whether so
expressed or not.
(b) All notices, requests, consents and other communications hereunder
shall be in writing and shall be mailed by certified or registered mail, return
receipt requested, postage prepaid, or telecopied or sent by other facsimile
method to the addresses set forth in the Merger Agreement.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
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(d) This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and the Holders
of at least a majority of the outstanding Registrable Securities.
(e) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
(g) In the event that any party hereto initiates an action or claim to
enforce any provision of this Agreement, the costs and expenses (including
attorneys' fees) of the prevailing party shall be paid by the other party, such
party to be deemed to have prevailed if such action or claim is concluded
pursuant to a court order or final judgment which is not subject to appeal, a
settlement agreement or dismissal of the principle claims.
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IN WITNESS WHEREOF, this Agreement has been executed by a duly authorized
officer of the Company and by the ALTA Shareholders as of the date and year
first above written.
CRA MANAGED CARE, INC.
By: /s/ Donald J. Larson
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Donald J. Larson, President
ALTA SHAREHOLDERS:
/s/ Laurence G. Ernst
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Laurence G. Ernst
/s/ Michael J. Spilde
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Michael J. Spilde
1768-2
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