EXHIBIT 10.3
SPHERIS HOLDING III, INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of November 5, 2004, among the
investors listed on Schedule I hereto (the "Investors") and Spheris Holding III,
Inc., a Delaware corporation (the "Company").
RECITALS
WHEREAS, the Investors have, pursuant to the terms of the Securities
Purchase Agreement, dated as of November 5, 2004, by and among the Company and
the Investors (the "Purchase Agreement"), agreed to purchase shares of Series A
Convertible Preferred Stock, par value $0.01 per share, of the Company (the
"Preferred Stock"); and
WHEREAS, the shares of Preferred Stock are convertible into shares of
common stock, par value $0.01 per share, of the Company (the "Common Stock");
and
WHEREAS, Warburg Pincus Private Equity VIII, L.P. holds 10 shares of
Common Stock; and
WHEREAS, the Company has agreed, as a condition precedent to the
Investors' obligations under the Purchase Agreement, to grant the Investors
certain Registration rights; and
WHEREAS, the Company and the Investors desire to define the
Registration rights of the Investors on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following terms have the respective
meanings set forth below:
Agreement: shall mean this Registration Rights Agreement among the
Investors and the Company;
Commission: shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act;
Exchange Act: shall mean the Securities Exchange Act of 1934, as
amended;
Holder: shall mean any holder of Registrable Securities;
Initial Public Offering: shall mean the initial public offering of
shares of Common Stock pursuant to a Registration under the Securities Act;
Initiating Holder: shall mean, with respect to any Registration, the
Holder or Holders who deliver a request to the Company pursuant to Section
2(a)(i) that the Company effect such Registration;
Majority Xxxxx Investors: shall mean the Xxxxx Investors holding a
majority of the then outstanding Registrable Securities then held by the Xxxxx
Investors.
Majority Warburg Investors: shall mean the Warburg Investors holding a
majority of the then outstanding Registrable Securities then held by the Warburg
Investors.
Person: shall mean an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;
Register, Registered and Registration: shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean (A) shares of Common Stock issuable
upon conversion of the shares of Preferred Stock, (B) any other shares of Common
Stock held or hereafter acquired by the Investors and (C) any stock of the
Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, the shares of Preferred Stock or Common Stock
referred to in clause (A) or (B);
Registration Expenses: shall mean all expenses incurred by the Company
in compliance with Section 2(a), (b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
Xxxxx Investors in an amount not to exceed $25,000, fees and expenses of one
counsel for the Warburg Investors in an amount not to exceed $25,000, blue sky
fees and expenses and the expense of any special audits incident to or required
by any such Registration (but excluding the compensation of regular employees of
the Company, which shall be paid in any event by the Company);
Security, Securities: shall have the meaning set forth in Section 2(1)
of the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as amended;
Selling Expenses: shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than (i) fees and
expenses of one counsel for the Xxxxx Investors in an amount not to exceed
$25,000 and (ii) fees and expenses of one counsel for the Warburg Investors in
an amount not to exceed $25,000;
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Xxxxx Initiating Holders: shall mean the Xxxxx Investors who in the
aggregate are the Holders of more than 50% of all then outstanding Registrable
Securities held by Xxxxx Investors;
Xxxxx Investors: shall mean the Investors designated as Xxxxx
Investors in subsection B of Schedule I hereto and their respective transferees
and assigns;
Warburg Initiating Holders: shall mean Warburg Investors who in the
aggregate are the Holders of more than 50% of all then outstanding Registrable
Securities held by Warburg Investors; and
Warburg Investors: shall mean the Investors designated as Warburg
Investors in subsection A of Schedule I hereto and their respective transferees
and assigns.
SECTION 2. REGISTRATION RIGHTS
(a) Requested Registration.
(i) Request for Registration. If the Company shall receive a
written request that the Company effect any Registration with respect to
all or a part of the Registrable Securities from (w) the Warburg Initiating
Holders, at any time prior to an Initial Public Offering, (x) the Warburg
Initiating Holders, at any time after 180 days after a Initial Public
Offering, (y) the Xxxxx Initiating Holders, at any time after 180 days
after a Initial Public Offering, or (z) the Holders who are Holders of more
than 50% of the then outstanding Registrable Securities, the Company will:
(1) promptly give written notice of the proposed
Registration, qualification or compliance to all other Holders; and
(2) as soon as practicable, use its diligent best efforts to
effect such Registration (including, without limitation, the execution
of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws
and appropriate compliance with applicable regulations issued under
the Securities Act) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request
received by the Company within ten (10) business days after written
notice from the Company is given under Section 2(a)(i)(1) above;
provided that the Company shall not be obligated to effect, or take
any action to effect:
(A) any such Registration pursuant to this Section 2(a)
in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in
effecting such Registration, qualification or compliance, unless
the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act or applicable
rules or regulations thereunder;
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(B) any such Registration pursuant to clause (x) of
this Section 2(a)(i), if the Company has effected three (3) such
Registrations pursuant to requests under clauses (w) and (x) of
this Section 2(a)(i) and such Registrations have been declared or
ordered effective and the sales of all such Registrable
Securities requested to be so Registered shall have closed;
(C) any such Registration pursuant to clause (y) of
this Section 2(a)(i), if the Company has effected two (2) such
Registrations pursuant to requests under clause (y) of this
Section 2(a)(i) and such Registrations have been declared or
ordered effective and the sales of all such Registrable
Securities requested to be so Registered shall have closed;
(D) any such Registration pursuant to clause (z) of
this Section 2(a)(i), if the Company has effected two (2) such
Registrations pursuant to requests under clause (z) of this
Section 2(a)(i) and such Registrations have been declared or
ordered effective and the sales of all such Registrable
Securities requested to be so Registered shall have closed;
(E) any such Registration pursuant to this Section
2(a), if the Registrable Securities requested by the Initiating
Holders to be Registered pursuant to such request do not have an
anticipated aggregate public offering price (before any
underwriting discounts and commissions) of at least $20,000,000;
(F) any such Registration pursuant to this Section 2(a)
during the period starting with the date sixty (60) days prior to
the Company's good faith estimate of the date of filing of, and
ending on the date six (6) months immediately following the
effective date of, any registration statement pertaining to
securities of the Company (other than a Registration of
securities in a Rule 145 transaction under the Securities Act,
with respect to an employee benefit plan or with respect to the
Company's first Registered public offering of its stock),
provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become
effective; provided, however, that the Company may only delay an
offering pursuant to this Section 2(a)(i)(2)(F) for a period of
not more than sixty (60) days, if a filing of any other
registration statement is not made within that period and the
Company may only exercise this right once in any twelve
(12)-month period; or
(G) any such Registration pursuant to this Section
2(a), if the Company shall furnish to the Initiating Holders a
certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors of the
Company it would be seriously detrimental
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to the Company or its stockholders for a registration statement
to be filed in the near future, in which case the Company's
obligation to use its best efforts to comply with this Section
2(a) shall be deferred for a period not to exceed sixty (60) days
from the date of receipt of written request from the Initiating
Holders; provided, however, that the Company shall not exercise
such right more than once in any twelve (12)-month period.
The registration statement filed pursuant to the request of the
Initiating Holders may, subject to the provisions of Section 2(a)(ii) below,
include other securities of the Company which are held by Persons who, by virtue
of agreements with the Company, are entitled to include their securities in any
such Registration ("Other Stockholders"). In the event any Holder requests a
Registration pursuant to this Section 2(a) in connection with a distribution of
Registrable Securities to its partners, the Registration shall provide for the
resale by such partners, if requested by such Holder.
The Registration rights set forth in this Section 2 may be assigned,
in whole or in part, to any transferee of Registrable Securities (who shall be
bound by all obligations of this Agreement).
(ii) Underwriting. If the Initiating Holders 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 Section 2(a)(i).
If Other Stockholders request inclusion of their securities in the
underwriting, the Holders shall offer to include the securities of such Other
Stockholders in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Section 2. The Holders
whose shares are to be included in such Registration and the Company shall
(together with all Other Stockholders proposing to distribute their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected for
such underwriting by the Initiating Holders and reasonably acceptable to the
Company; provided, however, that such underwriting agreement shall not provide
for indemnification or contribution obligations on the part of the Holders
materially greater than the obligations of the Holders under Section 2(f)(ii).
Notwithstanding any other provision of this Section 2(a), if the representative
advises the Holders in writing that marketing factors require a limitation on
the number of shares to be underwritten, the securities of the Company held by
Other Stockholders shall be excluded from such Registration to the extent so
required by such limitation. If, after the exclusion of the shares, further
reductions are still required, the number of Registrable Securities included in
the Registration by each Holder shall be reduced on a pro rata basis (based on
the number of shares held by such Holder), by such minimum number of shares as
is necessary to comply with such request. No Registrable Securities or any other
securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such Registration. If any Other
Stockholder who has requested inclusion in such Registration as provided above
disapproves of the terms of the underwriting, such Person may elect to withdraw
therefrom by written notice to the Company, the underwriter and the Initiating
Holders. The securities so withdrawn shall also be withdrawn from Registration.
If the underwriter has not limited the number of Registrable Securities or other
securities to be underwritten, the Company and officers and directors of the
Company may
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include its or their securities for its or their own account in such
Registration if the representative so agrees and if the number of Registrable
Securities and other securities which would otherwise have been included in such
Registration and underwriting will not thereby be limited.
(b) Company Registration.
(i) If the Company shall determine to Register any of its equity
securities either for its own account or for the account of any Other
Stockholder, other than a Registration relating solely to employee benefit
plans, or a Registration relating solely to a Rule 145 transaction under
the Securities Act, or a Registration on any registration form which does
not permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
(1) promptly give to each of the Holders a written notice
thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
(2) include in such Registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made by the Holders within
fifteen (15) days after receipt of the written notice from the Company
described in clause (1) above, except as set forth in Section 2(b)(ii)
below. Such written request may specify all or a part of the Holders'
Registrable Securities. In the event any Holder requests inclusion in
a Registration pursuant to this Section 2(b) in connection with a
distribution of Registrable Securities to its partners, the
Registration shall provide for the resale by such partners, if
requested by such Holder.
(ii) Underwriting. If the Registration of which the Company gives
notice is for a Registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(b)(i)(1) above. In such event, the right of
each of the Holders to Registration pursuant to this Section 2(b) shall be
conditioned upon such Holders' participation in such underwriting and the
inclusion of such Holders' Registrable Securities in the underwriting to
the extent provided herein. The Holders whose shares are to be included in
such Registration shall (together with the Company and the Other
Stockholders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the representative of
the underwriter or underwriters selected for underwriting by the Company;
provided, however, that such underwriting agreement shall not provide for
indemnification or contribution obligations on the part of the Holders
materially greater than the obligations of the Holders under Section
2(f)(ii). Notwithstanding any other provision of this Section 2(b), if the
representative determines that marketing factors require a limitation on
the number of shares to be underwritten, and (x) if such Registration is
the Initial Public Offering, the representative may (subject to the
allocation priority set forth below) exclude from such Registration and
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underwriting some or all of the Registrable Securities which would
otherwise be underwritten pursuant hereto, and (y) if such Registration is
other than the Initial Public Offering, the representative may (subject to
the allocation priority set forth below) limit the number of Registrable
Securities to be included in the Registration and underwriting to not less
than twenty-five percent (25%) of the shares included therein (based on the
number of shares). The Company shall so advise all Holders of securities
requesting Registration, and the number of shares of securities that are
entitled to be included in the Registration and underwriting shall be
allocated in the following manner: the securities of the Company held by
officers and directors of the Company (except shares held by them as
Holders) and Other Stockholders shall be excluded from such Registration
and underwriting to the extent required by such limitation, and, if a
limitation on the number of shares is still required, the number of shares
that may be included in the Registration and underwriting by each of the
Holders shall be reduced, on a pro rata basis (based on the number of
shares held by such Holder), by such minimum number of shares as is
necessary to comply with such limitation. If any of the Holders or any
officer, director or Other Stockholder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
Registration.
(c) Form S-3. Following the Initial Public Offering, the Company shall
use its best efforts to qualify for Registration on Form S-3 for secondary
sales. After the Company has qualified for the use of Form S-3, each Holder
shall have the right to request an unlimited number of Registrations on Form S-3
(such requests shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended method of disposition
of shares by such Holders), provided that the Company shall not be obligated to
effect, or take any action to effect, any such Registration pursuant to this
Section 2(c):
(i) unless the Holder or Holders requesting Registration propose
to dispose of shares of Registrable Securities having an aggregate price to
the public (before deduction of Selling Expenses) of more than $5,000,000;
(ii) within one hundred eighty (180) days of the effective date
of the most recent Registration pursuant to this Section 2(c) in which
securities held by the requesting Holder could have been included for sale
or distribution;
(iii) in any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in effecting
such Registration, qualification or compliance, unless the Company is
already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations
thereunder;
(iv) during the period starting with the date sixty (60) days
prior to the Company's good faith estimate of the date of filing of, and
ending on the date six (6) months immediately following the effective date
of, any registration statement pertaining to securities of the Company
(other than a Registration of securities in a Rule 145 transaction under
the Securities Act or with respect to an employee benefit plan),
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provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become
effective; provided, however, that the Company may only delay an offering
pursuant to this Section 2(c)(iv) for a period of not more than sixty (60)
days, if a filing of any other registration statement is not made within
that period and the Company may only exercise this right once in any twelve
(12)-month period; or
(v) if the Company shall furnish to the requesting Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company it would be
seriously detrimental to the Company or its stockholders for a registration
statement to be filed in the near future, in which case the Company's
obligation to use its best efforts to comply with this Section 2(c) shall
be deferred for a period not to exceed sixty (60) days from the date of
receipt of written request from the Holders; provided, however, that the
Company shall not exercise such right more than once in any twelve
(12)-month period.
The Company shall give written notice to all Holders of the receipt of
a request for Registration pursuant to this Section 2(c) and shall provide a
reasonable opportunity for other Holders to participate in the Registration,
provided that if the Registration is for an underwritten offering, the terms of
Section 2(a)(ii) above shall apply to all participants in such offering. Subject
to the foregoing, the Company will use its best efforts to effect promptly the
Registration of all shares of Registrable Securities on Form S-3 to the extent
requested by the Holder or Holders thereof for purposes of disposition. In the
event any Holder requests a Registration pursuant to this Section 2(c) in
connection with a distribution of Registrable Securities to its partners, the
Registration shall provide for the resale by such partners, if requested by such
Holder.
(d) Expenses of Registration. All Registration Expenses incurred in
connection with any Registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company, and all Selling Expenses shall be borne
by the Holders of the securities so Registered pro rata on the basis of the
number of their shares so Registered other than fees and expenses of counsel,
which, to the extent not included in Registration Expenses, shall be borne by
the Holder incurring such fees and expenses of counsel (or, if incurred by a
Holder or Holders on behalf of one or more other Holders, pro rata on the basis
of the number of their shares so Registered).
(e) Registration Procedures. In the case of each Registration effected
by the Company pursuant to this Section 2, the Company will keep the Holders, as
applicable, advised in writing as to the initiation of each Registration and as
to the completion thereof. At its expense, the Company will:
(i) keep such Registration effective for a period of one hundred
twenty (120) days or until the Holders (or in the case of a distribution to
the partners of such Holder, such partners), as applicable, have completed
the distribution described in the registration statement relating thereto,
whichever first occurs; provided, however, that (1) such one hundred twenty
(120)-day period shall be extended for a period of time equal to the period
during which the Holders or partners, as applicable, refrain from
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selling any securities included in such Registration in accordance with the
provisions in Section 2(i) hereof; and (2) in the case of any Registration
of Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such one hundred and twenty (120)-day period
shall be extended until all such Registrable Securities are sold, provided
that Rule 415, or any successor rule under the Securities Act, permits an
offering on a continuous or delayed basis, and provided further that
applicable rules under the Securities Act governing the obligation to file
a post-effective amendment permit, in lieu of filing a post-effective
amendment which (x) includes any prospectus required by Section 10(a) of
the Securities Act or (y) reflects facts or events representing a material
or fundamental change in the information set forth in the registration
statement, the incorporation by reference of information required to be
included in (x) and (y) above to be contained in periodic reports filed
pursuant to Section 12 or 15(d) of the Exchange Act in the registration
statement;
(ii) furnish such number of prospectuses and other documents
incident thereto as each of the Holders, as applicable, from time to time
may reasonably request;
(iii) notify each Holder of Registrable Securities covered by
such Registration 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, 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
(iv) furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, 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, (1) an opinion, dated as of such date,
of the counsel representing the Company for the purposes of such
Registration, in form and substance as is customarily given to underwriters
in an underwritten public offering and reasonably satisfactory to a
majority in interest of the Holders participating in such Registration,
addressed to the underwriters, if any, and to the Holders participating in
such Registration and (2) a letter, dated as of such date, from the
independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders
participating in such Registration, addressed to the underwriters, if any,
and if permitted by applicable accounting standards, to the Holders
participating in such Registration.
(f) Indemnification.
(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors and partners, and each Person
controlling each of the Holders, with respect to each Registration which
has been effected pursuant to this Section 2, and each underwriter, if any,
and each person who controls any underwriter,
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against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such Registration, qualification
or compliance, 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 not misleading, or any violation by the Company of
the Securities Act or the Exchange Act or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of
the Company in connection with any such Registration, qualification or
compliance, and will reimburse each of the Holders, each of its officers,
directors and partners, and each Person controlling each of the Holders,
each such underwriter and each Person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such 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 based upon written
information furnished to the Company by the Holders or underwriter and
stated to be specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities held by
it are included in the securities as to which such Registration,
qualification or compliance is being effected, indemnify the Company, each
of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration statement, each person
who controls the Company or such underwriter, each Other Stockholder and
each of their officers, directors, and partners, and each person
controlling such Other Stockholder against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in any such registration statement, prospectus, offering circular or other
document made by such Holder about such Holder, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements by such Holder about such Holder therein
not misleading, and will reimburse the Company and such Other Stockholders,
directors, officers, partners, persons, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection with
investigating and 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) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein; provided, however, that the obligations of
each of the Holders hereunder shall be limited to an amount equal to the
net proceeds to such Holder of securities sold as contemplated herein.
(iii) Each party entitled to indemnification under this Section
2(f) (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "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;
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provided that counsel for the Indemnifying Party, who shall conduct the
defense of such claim or any litigation resulting therefrom, 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
party's expense (unless the Indemnified Party shall have reasonably
concluded that there may be a conflict of interest between the Indemnifying
Party and the Indemnified Party in such action, in which case the fees and
expenses of counsel shall be at the expense of the Indemnifying Party), 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 Section 2(f) unless the Indemnifying Party is
materially prejudiced thereby. 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. Each Indemnified Party
shall furnish such information regarding itself or the claim in question as
an Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(f) 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 herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, 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 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 (or alleged 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.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten
public offering contemplated by this Agreement are in conflict with the
foregoing provisions, the provisions in such underwriting agreement shall
be controlling.
(vi) The foregoing indemnity agreement of the Company and Holders
is subject to the condition that, insofar as they relate to any loss,
claim, liability or damage arising out of a statement made in or omitted
from a preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the Commission at the time the registration
statement in question becomes effective or the amended prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act (the
"Final
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Prospectus"), such indemnity or contribution agreement shall not inure to
the benefit of any underwriter or Holder if a copy of the Final Prospectus
was furnished to the underwriter and was not furnished to the Person
asserting the loss, liability, claim or damage at or prior to the time such
action is required by the Securities Act.
(g) Information by the Holders.
(i) Each of the Holders holding securities included in any
Registration shall furnish to the Company such information regarding such
Holder and the distribution proposed by such Holder as the Company may
reasonably request in writing and as shall be reasonably required in
connection with any Registration, qualification or compliance referred to
in this Section 2.
(ii) In the event that, either immediately prior to or subsequent
to the effectiveness of any registration statement, any Holder shall
distribute Registrable Securities to its partners, such Holder shall so
advise the Company and provide such information as shall be necessary to
permit an amendment to such registration statement to provide information
with respect to such partners, as selling security holders. Promptly
following receipt of such information, the Company shall file an
appropriate amendment to such registration statement reflecting the
information so provided. Any incremental expense to the Company resulting
from such amendment shall be borne by such Holder.
(h) Rule 144 Reporting.
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without Registration, the Company agrees to:
(i) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act ("Rule 144"),
at all times from and after ninety (90) days following the effective date
of the first Registration under the Securities Act filed by the Company for
an offering of its securities to the general public;
(ii) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act at any time after it has become subject
to such reporting requirements; and
(iii) so long as a Holder owns any Registrable Securities,
furnish to such Holder upon request, a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 (at any time
from and after ninety (90) days following the effective date of the first
registration statement filed by the Company for an offering of its
securities to the general public), and of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed as such Holder may
reasonably request in availing itself of any
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rule or regulation of the Commission allowing such Holder to sell any such
securities without Registration.
(i) "Market Stand-off" Agreement. Each of the Holders agrees, if
requested by the Company and an underwriter of equity securities of the Company,
not to sell or otherwise transfer or dispose of any Registrable Securities held
by such Holder during the 180-day period following the effective date of a
registration statement of the Company filed under the Securities Act, provided
that:
(i) such agreement only applies to the Initial Public Offering;
and
(ii) all officers and directors of the Company enter into similar
agreements.
If requested by the underwriters, the Holders shall execute a separate
agreement to the foregoing effect. The Company may impose stop-transfer
instructions with respect to the shares (or securities) subject to the foregoing
restriction until the end of said 180-day period. The provisions of this Section
2(i) shall be binding upon any transferee who acquires Registrable Securities.
(j) Additional Registration Rights. The Company shall not, without
first obtaining the written consent of the Holders who are Holders of more than
50% of the then outstanding Registrable Securities, grant future Registration
rights on terms more favorable than the Registration rights granted pursuant to
this Agreement.
(k) Termination. The Registration rights set forth in this Section 2
shall not be available to any Holder if, (i) in the opinion of counsel to the
Company, all of the Registrable Securities then owned by such Holder could be
sold in any ninety (90)-day period pursuant to Rule 144 (without giving effect
to the provisions of Rule 144(k)) or (ii) all of the Registrable Securities held
by such Holder have been sold in a Registration pursuant to the Securities Act
or pursuant to Rule 144.
SECTION 3. MISCELLANEOUS
(a) Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely within such State.
(c) Section Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(d) Notices.
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(i) All communications under this Agreement shall be in writing
and shall be delivered by hand or facsimile or mailed by overnight courier
or by registered or certified mail, postage prepaid:
(1) if to the Company, to Spheris Holding III, Inc., Suite
200, 000 Xxxx Xxxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxx 00000, Attention:
Chief Administrative Officer Xxxxxxx X. Xxxxxxx, Esq. (facsimile:
(000) 000-0000), or at such other address as it may have furnished in
writing to the Company and Holders.
(2) if to the Warburg Investors, at the address or facsimile
number listed beneath such Investors name on Schedule I hereto, or at
such other address or facsimile number as it may have been furnished
in writing the Company and Holders, with a copy to Xxxxxxx Xxxx &
Xxxxxxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (facsimile:
(000) 000-0000), Attention: Xxxxxx X. Xxxxxxx, Esq.
(3) if to the Xxxxx Investors, at the address or facsimile
number listed beneath such Investors name on Schedule I hereto, or at
such other address or facsimile number as may have been furnished in
writing to the Company and Holders, with a copy to Xxxxxxxx & Xxxxx
LLP, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000-0000 (facsimile: (212)
446-4900), Attention: W. Xxxxx Xxxxxxx, Esq.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand or facsimile, on the date of such delivery; if mailed by
overnight courier, on the first business day following the date of such
mailing; and if mailed by registered or certified mail, on the third
business day after the date of such mailing.
(e) Reproduction of Documents. This Agreement and all documents
relating hereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the Holders
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and the Holders may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Holders in the regular course
of business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties.
(g) Entire Agreement; Amendment and Waiver. This Agreement constitutes
the entire understanding of the parties hereto relating to the subject matter
hereof and supersedes all prior understandings among such parties. This
Agreement may be amended, and the observance of any term of this Agreement may
be waived, with (and only with) the written consent of the Company, the Majority
Warburg Investors and the Majority Xxxxx Investors.
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(h) Severability. In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not affect the
remaining provisions of this Agreement which shall remain in full force and
effect.
(i) Counterparts. This Agreement may be executed in two or more
counterparts (including by facsimile), each of which shall be deemed an original
and all of which together shall be considered one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned has executed this Registration
Rights Agreement as of the date first above written.
SPHERIS HOLDING III, INC.
By: /s/ Tenno Tsai
------------------------------------
Name: Tenno Tsai
----------------------------------
Title: President
---------------------------------
[Registration Rights Agreement]
IN WITNESS WHEREOF, the undersigned have executed this Registration
Rights Agreement as of the date first above written.
WARBURG PINCUS PRIVATE EQUITY VIII, L.P.
By: WARBURG PINCUS & CO.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
----------------------------------
Title: General Partner
---------------------------------
WARBURG PINCUS NETHERLANDS PRIVATE
EQUITY VIII C.V. I
By: WARBURG PINCUS & CO.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
----------------------------------
Title: General Partner
---------------------------------
WARBURG PINCUS NETHERLANDS PRIVATE
EQUITY VIII C.V. II
By: WARBURG PINCUS & CO.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
----------------------------------
Title: General Partner
---------------------------------
WARBURG PINCUS GERMANY PRIVATE
EQUITY VIII KG
By: WARBURG PINCUS & CO.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
----------------------------------
Title: General Partner
---------------------------------
[Registration Rights Agreement]
IN WITNESS WHEREOF, the undersigned has executed this Registration
Rights Agreement as of the date first set forth above.
SPHERIS INVESTMENT LLC
By: Warburg Pincus Private Equity VIII,
L.P., Warburg Pincus Netherlands
Private Equity VIII C.V. I, Warburg
Pincus Netherlands Private Equity
VIII C.V. II and Warburg Pincus
Germany Private Equity VIII KG,
together, its Managing Members
By: Warburg Pincus & Co., their General
Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
----------------------------------
Title: General Partner
---------------------------------
[Registration Rights Agreement]
IN WITNESS WHEREOF, the undersigned has executed this Registration
Rights Agreement as of the date first set forth above.
XXXXX PRIVATE EQUITY INVESTORS LP
By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxxx
----------------------------------
Title: CFO
---------------------------------
[Registration Rights Agreement]
Schedule I
Subsection A
"Warburg Investors"
INVESTOR NAME AND ADDRESS
Warburg Pincus Private Equity VIII, L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx and Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxx Netherlands Private Equity VIII C.V. I
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx and Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxx Netherlands Private Equity VIII C.V. I
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx and Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxx Germany Private Equity VIII KG
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx and Xxxxx Xxxxxxxx
Spheris Investment LLC
c/o Warburg Pincus Private Equity VIII, L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx and Xxxxx Xxxxxxxx
Subsection B
"Xxxxx Investors"
INVESTOR NAME AND ADDRESS
Xxxxx Private Equity Investors LP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000 and (000) 000-0000
Attention: General Counsel and Xxxxxxxx Xxxxxx
