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EXHIBIT 3.1
EXECUTION COPY
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REGISTRATION RIGHTS AGREEMENT
DATED
JANUARY 8, 1996
BETWEEN
MEDIRISK, INC.,
AND
HEALTHPLAN SERVICES CORPORATION
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is dated as of
January 8, 1996 by and between MEDIRISK, INC., a Florida corporation (the
"Company"), and HEALTHPLAN SERVICES CORPORATION, a Delaware corporation (the
"Shareholder").
W I T N E S S E T H
WHEREAS, the Company and the Shareholder are parties to a Securities
Purchase Agreement dated January 8, 1996 (the "Securities Purchase Agreement"),
providing for, upon the terms and subject to the conditions of the Securities
Purchase Agreement, the acquisition by the Shareholder of Series B Convertible
Preferred Stock of the Company (the "Preferred Stock") and Warrants to purchase
Series A Common Stock of the Company (the "Warrants"), and upon the conversion
of the Preferred Stock or the exercise of the Warrants the Shareholder will
receive shares of Series A Common Stock of the Company (the "Restricted
Shares"); and
WHEREAS, it is in the best interests of the Company and the Shareholder
that certain registration rights be granted to the Shareholder with respect to
the Restricted Shares;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1. DEFINITIONS.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of Tampa, Florida are authorized by law to
close.
"Closing Date" shall have the meaning set forth in the Stock Purchase
Agreement.
"Commission" means the Securities and Exchange Commission and any
successor commission or agency having similar powers.
"Common Stock" means the Series A Common Stock of the Company and any
stock into which such Series A Common Stock is converted in any
recapitalization, merger, consolidation, statutory share exchange or similar
event.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Initial Public Offering" means the means the Company's first offering of
Common Stock of the Company that is registered under the Securities Act, which
offering is underwritten on a firm commitment basis and produces gross proceeds
in excess of $10,000,000.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture, or other
entity of whatever nature.
"Registrable Securities" means the Restricted Shares acquired by the
Shareholder upon conversion of the Preferred Stock or acquired upon the
exercise of the Warrants granted from time to time under the Warrant Agreement
(as defined in the Securities Purchase Agreement) and held by the Shareholder
at a given time; provided that any of such Restricted Shares shall cease to be
Registrable Securities if and when (i) a registration statement with respect to
the disposition of such Restricted Shares shall have become effective under the
Securities Act and such Restricted Shares shall have been disposed of pursuant
to such effective registration statement, (ii) such Restricted Shares have been
or could be sold to the public under circumstances in which all of the
applicable conditions of Rule 144 (or any similar rule then in force) under the
Securities Act were met or would be met, as the case may be, without limitation
on the number of Restricted Shares that could be sold by the Shareholder
thereunder, (iii) such Restricted Shares shall have been otherwise transferred,
if new certificates or other evidences for such Restricted Shares not bearing a
legend restricting further transfer and not subject to any stop transfer order
or other restrictions on transfer shall have been delivered by the Company and
subsequent disposition of such Restricted Shares shall not require registration
or qualification of such Restricted Shares under the Securities Act, or (iv)
such Restricted Shares shall have ceased to be outstanding.
"Registration Expenses" means (i) all registration and filing fees, (ii)
fees and expenses of compliance with federal or state securities or blue sky
laws (including fees and disbursements of counsel in connection with blue sky
qualification of the Registrable Securities), (iii) printing expenses, (iv)
internal expenses (including, without limitation, all salaries and expenses of
officers and employees of the Company performing legal or accounting duties),
(v) fees and disbursements of counsel for the Company and fees and expenses for
independent certified public accountants retained by the Company (including the
expenses of any comfort letters or costs associated with the delivery by
independent certified public accountants of a comfort letter or comfort letters
requested pursuant to Section 2.4(h) hereof), (vi) fees and expenses of any
special experts retained by the Company in connection with such registration,
(vii) fees and expenses of listing the Registrable Securities on a securities
exchange or interdealer quotation system, (viii) any documentary stamp or
similar taxes payable in connection with the issuance or sale of the
Registrable Securities, (ix) fees of the National Association of Securities
Dealers, Inc., and (x) fees of transfer agents and registrars; but shall not
include any underwriting fees, discounts or commissions attributable to the
sale of Registrable Securities, any out-of-pocket expenses of the Shareholder
(or the agents who manage the Shareholder's
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accounts) or any fees and expenses of counsel for the Shareholder or any
expenses of underwriters except as specifically indicated above.
"Securities Act" means the Securities Act of 1933, as amended.
ARTICLE 2
REGISTRATION RIGHTS
2.1 DEMAND REGISTRATION. The Company shall, upon the written demand of
the Shareholder at any time after the closing of the Initial Public Offering by
the Company, use its reasonable best efforts to effect the registration (the
"Demand Registration") under the Securities Act of such number of Registrable
Securities held by the Shareholder as shall be indicated in a written demand
sent to the Company by the Shareholder; provided, however, that (i) the Company
shall only be obligated to effect one Demand Registration per calendar year and
a total of two Demand Registrations; (ii) the Company shall not be required to
register in any Demand Registration an amount of Registrable Securities
representing less than 2% of the number of shares of Series A Common Stock
then-outstanding or $5,000,000 in market value, whichever is less (except that
the Shareholder shall in any event be entitled to Demand Registration of all,
but not less than all, the Registrable Securities then held by it); (iii) a
Demand Registration shall not count as such until it has become effective and
the Shareholder has been able to register and sell at least 90% of the
Registrable Securities requested to be included in such registration, provided
that if, after it has become effective, the offering of Registrable Securities
pursuant to such registration is interfered with by any stop order, injunction
or other order or requirement of the Commission or other governmental entity or
court, such registration shall be deemed not have been effected unless such
stop order, injunction or other order or requirement shall subsequently have
been vacated or otherwise removed; (iv) a Demand Registration shall not count
as such if the Company (or any other shareholder of the Company) offers any of
its securities pursuant to a registration initiated in response to a demand by
the Shareholder (such registration being, instead, treated as a Piggyback
Registration as provided below); and (v) the Company shall not be required to
effect a Demand Registration if counsel for the Company reasonably acceptable
to the Shareholder shall deliver to the Shareholder an opinion reasonably
acceptable to counsel for the Shareholder that, pursuant to Rule 144 under the
Securities Act or otherwise, the Shareholder can sell Registrable Securities
proposed to be included in the Demand Registration without registration under
the Securities Act, without limitation as to the number of Registrable
Securities that are proposed to be sold by the Shareholder. The Company shall
pay all expenses in connection with a registration initiated as a Demand
Registration that, by reason of the application of the immediately preceding
sentence, does not count as a Demand Registration. If a Demand Registration is
initiated by the Shareholder, and the Company (or any other shareholder of the
Company with similar registration rights) then wishes to offer any of its
securities in connection with the registration, then the registration shall be
considered a Piggyback Registration (as defined in Section 2.2) and the
provisions of Section 2.2 and not this Section 2.1 shall apply. If a Demand
Registration is an underwritten offering and the managing underwriters advise
the Company in writing that in their opinion the number of Registrable
Securities and, if
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permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any,
which can be sold in an orderly manner in such offering with a price range
acceptable to the Shareholder, the Company will include in such registration
prior to the inclusion of any securities that are not Registrable Securities
the number of Registrable Securities requested to be included which in the
opinion of such underwriters can be sold in an orderly manner within the price
range of such offering. Upon receipt of the Purchaser's written demand, the
Company shall expeditiously (but in any event within 90 days) file a
registration statement under the Securities Act for the Registrable Securities
and use its best efforts to have such registration statement declared effective
as soon as practicable after the filing thereof; provided that (A) the Company
shall not be required to cause any special audit to be undertaken in connection
with any such registration and (B) the Company shall not be required to file
any registration statement during any period of time (not exceeding 90 days)
when (I) the Company is contemplating a public offering of its securities and,
in the judgment of the managing underwriter thereof (or the Company, if such
offering is not underwritten) such filing would have a material adverse effect
on the contemplated offering, (II) the Company is in possession of material
information that it deems advisable not to disclose in a registration statement
or (III) the Company is engaged in any program for the repurchase of voting
securities of the Company. The Shareholder shall have the right to select the
underwriters for a Demand Registration, subject to the approval of the Company,
which approval will not be unreasonably withheld.
2.2 INCIDENTAL REGISTRATION.
(a) If the Company proposes to register any of its equity securities (the
"Priority Securities") under the Securities Act (other than a registration (i)
on Form S-8 or S-4 or any successor or similar forms, (ii) relating to equity
securities issuable upon exercise of employee stock options or in connection
with any employee benefit or similar plan of the Company, or (iii) in
connection with a direct or indirect acquisition by the Company of another
company), whether or not for sale for its own account, in a manner that would
permit registration of Registrable Securities for sale to the public under the
Securities Act, it will on each such occasion give prompt written notice to the
Shareholder of its intention to do so and of the Shareholder's rights under
this Section 2.2, at least 30 days prior to the anticipated filing date of the
registration statement relating to such registration. Any such notice shall
offer the Shareholder the opportunity to request to include in such
registration statement such number of Registrable Securities as the Shareholder
may request (the "Piggyback Registration"). Upon the written request of the
Shareholder made within 20 days after the receipt of notice from the Company
(which request shall specify the number of Registrable Securities intended to
be disposed of by the Shareholder and the intended method of disposition
thereof), the Company will use its best efforts to effect the registration
under the Securities Act of all Registrable Securities which the Company has
been so requested to register by the Shareholder, to the extent requisite to
permit the disposition (in accordance with such intended methods thereof) of
the Registrable Securities so to be registered; provided that (i) if such
registration involves an underwritten public offering, the Shareholder must
sell its Registrable Securities to the underwriters selected by the Company on
the same terms and conditions as apply to the
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Company; and (ii) if, at any time after giving written notice of its intention
to register any securities pursuant to this Section 2.2(a) and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register such
securities, the Company shall give written notice to the Shareholder and,
thereupon, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration. If a registration pursuant to
this Section 2.2(a) involves an underwritten public offering and the
Shareholder requests shares be included in such registration, the Shareholder
may elect, by notice to the Company not less than 10 business days prior to the
anticipated effective date of the registration statement filed in connection
with such registration, not to register such shares in connection with such
registration.
(b) Priority In Incidental Registrations. If a registration pursuant to
this Section 2.2 involves an underwritten public offering and the managing
underwriter advises the Company that, in its view, the number of equity
securities (including all Registrable Securities) which the Company, the
Shareholder and any other persons intend to include in such registration
exceeds the largest number of securities that can, in the opinion of the
managing underwriter, be sold in such offering (the "Maximum Offering Size"),
the Company will include in such registration, in the following priority, up to
the Maximum Offering Size:
(i) first, all the Priority Securities (including any to be sold for
the Company's own account or for other holders of Priority Securities
exercising demand registration rights), with such priorities among them as
the Company may determine; and
(ii) second, the equity securities requested to be sold for the account
of the Shareholder and the holders of Registrable Securities and Executive
Registrable Securities (as defined in the Consent and Modification
Agreement dated January 8, 1996, by and among the Company, Xxxxxxxx
Investment Partners II, L.P., Sears Pension Trust and Xxxxxxxx X. Xxxxxx)
pro rata on the basis of the relative number of equity securities that all
such persons have requested to be included in such registration; and
(iii) third, the equity securities requested to be sold for the account
of all other persons pro rata on the basis of the relative number of equity
securities that all such persons have requested to be included in such
registration;
provided, however, that if securities owned by any executive officer of the
Company are included in the Priority Securities, then any Registrable
Securities that the Shareholder proposes to include in such registration shall
also be deemed Priority Securities, and to the extent securities owned by any
such executive officer are included in the registration, the Shareholder's
Registrable Securities shall be included in such registration pro rata with
those owned by the Shareholder and all executive officers on the basis of the
relative number of equity securities that the Shareholder and all such
executive officers have requested to be included in such registration.
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2.3 HOLDBACK AGREEMENTS.
(a) If any registration of Registrable Securities shall be in connection
with an underwritten public offering and the Shareholder elects to have shares
included in such offering, the Shareholder agrees not to effect any public sale
or distribution under the Securities Act of any Registrable Securities (other
than the sale of Registrable Securities included in and as part of such
offering), and not to effect any such public sale or distribution 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 public offering) during the 5 business days
prior to, and during the 90-day period (or such longer period as requested by
the underwriters and agreed to by the Shareholder) which begins on, the
effective date of such registration statement, provided that the Shareholder
has received written notice of such registration at least two business days
prior to the anticipated beginning of the 5 business day period referred to
above.
(b) If any registration of Registrable Securities shall be in connection
with an underwritten public offering, the Company agrees not to effect any
public sale or distribution of any of its equity securities or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than any such sale or distribution of such securities in
connection with any merger or consolidation by the Company or any subsidiary of
the Company or the acquisition by the Company or a subsidiary of the Company of
the capital stock or substantially all the assets of any other person or in
connection with an employee stock ownership or other benefit plan) during the 5
business days prior to, and during the 90-day period (or such longer period as
requested by the underwriters and agreed to by the Company) which begins on,
the effective date of such registration statement.
2.4 REGISTRATION PROCEDURES. Whenever the Shareholder requests that any
Registrable Securities be registered pursuant to Section 2.1 or Section 2.2,
the Company will use its best efforts to effect the registration and the sale
of such Registrable Securities in accordance with the intended method of
disposition thereof as quickly as practicable, and the Company, in connection
with any such request, will:
(a) Prepare and file with the Commission, as expeditiously as possible,
a registration statement on any form for which the Company then qualifies
or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of the Registrable Securities to be
registered thereunder and which shall state, if applicable, that the
subject Registrable Securities are to be offered on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act, and use its best
efforts to cause such registration statement to become and remain effective
for the period of distribution contemplated thereby (determined as
hereinafter provided).
(b) Prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as
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may be necessary to keep such registration statement effective for the
period specified in this Section 2.4 and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such registration statement in accordance with the sellers' intended method
of disposition set forth in such registration statement for such period.
(c) Will, a reasonable time prior to filing a registration statement
or prospectus or any amendment or supplement thereto, furnish to the
Shareholder and each underwriter, if any, of the Registrable Securities
covered by such registration statement copies of such registration
statement as proposed to be filed, and thereafter the Company will furnish
to the Shareholder and underwriter, if any, such number of copies of such
registration statement, each amendment and supplement thereto (in each
case including all exhibits thereto and documents incorporated by
reference therein), the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as the
Shareholder or underwriter may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by the Shareholder.
(d) Promptly notify the Shareholder of any stop order issued or
threatened by the Commission and take all reasonable actions required to
prevent the entry of such stop order or to remove it if entered.
(e) Use its best efforts to (i) register or qualify the Registrable
Securities under such other securities or blue sky laws of such
jurisdictions in the United States as the managing underwriter or
Shareholder shall reasonably request and (ii) cause such Registrable
Securities to be registered with or approved by such other governmental
agencies or authorities as may be necessary by virtue of the business and
operations of the Company and to do any and all other acts and things that
may be reasonably necessary or advisable to enable the Shareholder to
consummate the disposition of the Registrable Securities owned by the
Shareholder; provided that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise
be required to qualify but for this paragraph (e), (B) subject itself to
taxation in any such jurisdiction or (C) consent to general service of
process in any such jurisdiction.
(f) Immediately notify the Shareholder and each underwriter, at any
time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the occurrence of any event as a result of which
the prospectus contained in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state
any 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 the Company will prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the
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statements therein not misleading and promptly make available to the
Shareholder any such supplement or amendment.
(g) Make available for inspection by the Shareholder, any underwriter
participating in any disposition pursuant to such registration statement
and any attorney, accountant or other professional retained by the
Shareholder or underwriter (collectively, the "Inspectors"), all financial
and other records, pertinent corporate documents and properties of the
Company and cause the Company's officers, directors and employees to
supply all information, in every instance where reasonably requested by
any Inspectors in connection with such registration statement.
(h) Will furnish to the Shareholder of Registrable Securities covered
by such registration statement and to each underwriter, if any, a signed
counterpart, addressed to the Shareholder or underwriter, of (i) an
opinion or opinions of counsel to the Company and (ii) a comfort letter or
comfort letters from the Company's independent public accountants, each in
customary form and covering such matters of the type customarily covered
by opinions or comfort letters in such transactions.
(i) Will otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission.
(j) Use its best efforts to cause all such Registrable Securities to
be listed on each securities exchange or interdealer quotation system on
which the same or similar securities issued by the Company are then
listed.
For purposes of paragraphs (a) and (b) of this Section 2.4, (i) the period
of distribution of securities in an underwritten public offering shall be
deemed to extend until the later of the date each underwriter has completed the
distribution of all securities purchased by it and the termination of the
period in which prospectuses must be delivered under Rule 174 of the Securities
Act, and (ii) the period of distribution of securities in any other
registration shall be deemed to extend until the earlier of the sale of all
securities covered thereby and 60 days after the effective date thereof.
The Company may require the Shareholder promptly to furnish in writing to
the Company such information regarding the distribution of the Registrable
Securities as the Company may from time to time reasonably request and such
other information as may be legally required in connection with such
registration.
In connection with each registration pursuant to Section 2.1 or Section
2.2 covering an underwritten public offering, the Company and the Shareholder
agree to enter into a written agreement with the managing underwriter in such
form and containing such provisions as are customary in the securities business
for such an arrangement between major underwriters and companies of the
Company's size and investment stature, provided that such agreement shall not
contain any provision applicable to the Company that is inconsistent with the
provisions hereof.
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The Shareholder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 2.4(f) hereof,
the Shareholder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until the Shareholder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2.4(f) hereof. In the event that
the Company shall give such notice, the Company shall extend the period during
which such registration statement shall be maintained effective hereof by the
number of days during the period from and including the date of the giving of
notice pursuant to Section 2.4(f) hereof to the date when the Company shall
make available to the Shareholder a prospectus supplemented or amended to
conform with the requirements of Section 2.4(f) hereof.
2.5 EXPENSES. The Company will pay all Registration Expenses in
connection with any registration statement filed pursuant to Article II hereof.
All other expenses of registration, including underwriting discounts and
selling commissions and any out-of-pocket expenses incurred by the Shareholder
relating to the sale or disposition of the Shareholder's Registrable
Securities, shall be paid by the Shareholder.
2.6 INDEMNIFICATION BY THE COMPANY. If the Shareholder includes
Registrable Securities in a registration statement pursuant to Section 2.1 or
Section 2.2, the Company agrees to indemnify and hold harmless the Shareholder,
and each person, if any, who controls the Shareholder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, pending or threatened claims, damages, liabilities,
joint or several (or actions in respect thereof), including, as incurred and
without limitation, reasonable legal, accounting, expert witnesses, or other
costs of investigating, preparing or defending any such claim or action
("expenses"), arising under the Securities Act or otherwise, caused by any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement or prospectus relating to the Registrable Securities
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) or any preliminary prospectus, or caused by 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,
except insofar as such losses, claims, damages, liabilities or expenses are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon and in conformity with information relating to the
Shareholder or its plan of distribution of the Registrable Securities furnished
in writing to the Company by the Shareholder or on the Shareholder's behalf
expressly for use therein; provided, however, that with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, or in any prospectus, as the case may be, the indemnity
agreement contained in this paragraph shall not apply to the extent that any
such loss, claim, damage, liability or expenses results from the fact that a
current copy of the prospectus (or, in the case of a prospectus, the prospectus
as amended or supplemented) was not sent or given to the person asserting
any such loss, claim, damage, liability or expenses at or prior to the written
confirmation of the sale of the Registrable Securities concerned to such person
if it is determined that the Company has provided such prospectus and it was
the responsibility
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of the Shareholder to provide such person with a current copy of the prospectus
(or such amended or supplemented prospectus, as the case may be) and such
current copy of the prospectus (or such amended or supplemented prospectus, as
the case may be) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. The Company also agrees to indemnify any
underwriters of the Registrable Securities, their officers and directors and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of the Shareholders provided in this Section 2.6.
2.7 INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES AND
UNDERWRITERS. The Shareholder, if any of its Registrable Securities are
included in any registration statement, agrees to indemnify and hold harmless
the Company, its officers, directors and agents and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to the Shareholder, but only with respect to
information relating to the Shareholder or its plan of distribution of the
Registrable Securities furnished in writing by the Shareholder or on the
Shareholder's behalf expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus. The Shareholder also agrees
to indemnify and hold harmless underwriters of the Registrable Securities,
their officers and directors and each person who controls such underwriters on
substantially the same basis as that of the indemnification of the Company
provided in this Section 2.7. In no event and under no circumstances shall
Shareholder be liable for indemnification in an amount in excess of the
proceeds received by Shareholder from the sale of Registrable Securities
pursuant to the registration statement. As a condition to including
Registrable Securities in any registration statement filed in accordance with
Article II hereof, the Company may require that it shall have received an
undertaking reasonably satisfactory to it from any underwriter to indemnify and
hold it harmless to the extent customarily provided by underwriters with
respect to similar securities.
2.8 CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 2.6 or
2.7, such person (an "Indemnified Party") shall promptly notify the person
against whom such indemnity may be sought (the "Indemnifying Party") in writing
and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all fees and expenses; provided that the failure of
any Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent that the
Indemnifying Party is materially prejudiced by such failure to notify. In any
such proceeding, any Indemnified Party shall have the right to retain its own
counsel, and the fees and expenses of the counsel of such Indemnified Party
shall be at the expense of such Indemnifying Party if (i) the Indemnifying
Party and the Indemnified Party shall have mutually agreed to the retention of
such counsel or (ii) in the reasonable judgment
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of such Indemnified Party representation of both parties by the same counsel
would be inappropriate because there may be defenses available to the
Indemnified Party which are different from or additional to those available to
the Indemnifying Party or if the interests of the Indemnified Party reasonably
may be deemed to conflict with the interests of the Indemnifying Party. It is
understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings, in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one counsel for the Shareholder's
Indemnified Parties and one counsel for the underwriters' Indemnified Parties
(in each case in addition to any local counsel) at any time for all such
Indemnified Parties, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firms for the Indemnified
Parties, such firm shall be designated in writing by the Indemnified Parties.
The Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent which consent shall not be unreasonably
withheld, but if settled with such consent, or if there shall be a final
judgment for the plaintiff, the Indemnifying Party shall indemnify and hold
harmless such Indemnified Parties from and against any loss or liability (to
the extent stated above) by reason of such settlement or judgment. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such proceeding.
2.9 CONTRIBUTION. If the indemnification provided for in this Article II
is unavailable to the Indemnified Parties in respect of any losses, claims,
damages, liabilities or expenses referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities and expenses in such proportion as
is appropriate to reflect the relative fault of the Indemnifying Party and the
Indemnified Parties in connection with the actions or inactions which resulted
in such losses, claims, damages, liabilities and expenses. The relative fault
of the Company on the one hand and of the Shareholder on the other 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 such party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Shareholder agree that it would not be just and
equitable if contribution pursuant to this Section 2.9 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 2.9, the Shareholder
shall not be required to contribute any amount in excess of the amount by which
the net proceeds received by the Shareholder exceeds the amount of any damages
which the Shareholder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
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2.10 PARTICIPATION IN PUBLIC OFFERING. No person may participate in any
registration hereunder unless such person (a) agrees to sell such person's
Restricted Shares on the basis provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and this Agreement.
2.11 OTHER INDEMNIFICATION. Indemnification similar to that specified
herein (with appropriate modifications) shall be given by the Company and the
Shareholder with respect to any required registration or other qualification of
securities under any state law or regulation or governmental authority other
than the Securities Act.
ARTICLE 3
MISCELLANEOUS
3.1 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
any provisions hereof.
3.2 NO INCONSISTENT AGREEMENTS. From and after the date of this
Agreement, the Company shall not enter into any agreement with any holder of
any securities of the Company providing for the granting to such holder of
registration rights unless such agreement:
(a) Includes as a term the equivalent of Section 2.3 of this
Agreement;
(b) Includes a provision that, in the case of a Demand
Registration, protects the Shareholder if marketing factors require a
limitation on the number of securities to be included in an underwriting in the
manner contemplated by Sections 2.1 and 2.2 of this Agreement; and
(c) Is otherwise not inconsistent with the rights granted to
the Shareholder in this Agreement.
3.3 REMEDIES. The Company acknowledges and agrees that in the event of
any breach of this Agreement by it, the Shareholder would be irreparably harmed
and could not be made whole by monetary damages. The Company accordingly
agrees (i) not to argue in any action for specific performance that a remedy at
law would be adequate, and (ii) that the Shareholder, in addition to any other
remedy to which she may be entitled at law or in equity, shall be entitled to
seek specific performance of this Agreement.
3.4 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein, and there are no restrictions, promises,
representations, warranties, covenants, or undertakings with respect to the
subject matter hereof, other than those expressly set forth
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14
or referred to herein or therein. This Agreement supersedes all prior
agreements and understandings between the parties hereto with respect to the
subject matter hereof.
3.5 NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party hereto to another party hereto shall be in writing
and shall be deemed given upon the earlier of delivery thereof, if by hand or
upon receipt if sent by certified or registered mail, postage prepaid, return
receipt requested, or on the second next business day after deposit if sent by
a recognized overnight delivery service or upon facsimile transmission (with
request of assurance of receipt in a manner customary for communications of
such type), to the following addresses:
If to the Shareholder:
HealthPlan Services Corporation
X.X. Xxx 00000
Xxxxx, Xxxxxxx 00000-0000
Facsimile #: (000) 000-0000
Attention: Xxxxx X. Xxxxxx III, Executive
Vice President and Chief
Financial Officer,and
Xxxx Xxxx, General Counsel
with a copy (which shall not constitute notice) to:
Fowler, White, Gillen, Boggs, Xxxxxxxxx and Banker,
P.A.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Facsimile #: (000) 000-0000
Attention: Xxxxx. X. Xxxxx
If to the Company:
Medirisk, Inc.
Two Piedmont Center, Suite 400
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile #: (000) 000-0000
Attention: Xxxx X. Xxxxxx
with a copy (which shall not constitute notice) to:
Xxxxxx & Bird
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile #: (000) 000-0000
Attention: Xxxxx X. Xxxxx
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15
(b) If delivered personally or by facsimile, the date on which a notice,
request, instruction or document is delivered shall be the date on which such
delivery is made and, if delivered by mail, the date on which such notice,
request, instruction or document is received shall be the date of delivery.
(c) Any party hereto may change its address specified for notices herein
by designating a new address by notice in accordance with this Section 3.5.
3.6 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.
3.7 SEVERABILITY. The invalidity or unenforceability of any provisions
of this Agreement in any jurisdiction shall not affect the validity, legality
or enforceability of the remainder of this Agreement in such jurisdiction or
the validity, legality or enforceability of this Agreement, including any such
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.
3.8 SUCCESSORS, ASSIGNS, TRANSFEREES. The provisions of this Agreement
shall be binding upon and accrue to the benefit of the parties hereto and their
respective heirs, successors, and assigns. Without limiting the generality of
the foregoing, the registration rights conferred herein on the Shareholder
shall inure to the benefit of any and all subsequent holders from time to time
of the Registrable Securities, unless otherwise agreed to by such subsequent
holders; provided that such subsequent holders promptly provide the Company
with their names and addresses and that such subsequent holder has acquired
such Registrable Securities in a transaction that did not violate Section 7.1
of the Securities Purchase Agreement.
3.9 COMPANY REPORTS. The Company covenants that, from and after the time
the Company engages in an Initial Public Offering, it will file the reports
required to be filed by the Company under the Securities Act and the Exchange
Act, and the rules and regulations adopted by the Commission thereunder; and it
will take such further action as the Shareholder may reasonably request, all to
the extent required from time to time to enable the Shareholder to sell the
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the reasonable request of
the Shareholder, the Company will deliver to the Shareholder a written
statement as to the status of the filings made by the Company with the
Commission with copies of such filings.
3.10 DEFAULTS. A default by any party to this Agreement in such party's
compliance with any of the conditions or covenants hereof or performance of any
of the obligations of such party hereunder shall not constitute a default by
any other party.
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3.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same Agreement.
3.12 RECAPITALIZATION, ETC. In the event that any capital stock or other
securities are issued in respect of, in exchange for, or in substitution of,
any Registrable Securities by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the Restricted Shares or any other change in
capital structure of the Company, appropriate adjustments shall be made in the
provisions of this Agreement so as to fairly and equitably preserve, as far as
practicable, the original rights of the Shareholder under this Agreement.
3.13 CONSENT TO EXCLUSIVE JURISDICTION, VENUE AND FORUM. THE COMPANY
HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION, VENUE AND FORUM OF ANY STATE OR
FEDERAL COURT IN TAMPA, FLORIDA WITH RESPECT TO ANY ACTION, WHETHER COMMENCED
BY THE SHAREHOLDER OR ANY OTHER PERSON, WHICH, IN WHOLE OR IN PART, IN ANY WAY
ARISES UNDER OR RELATES TO THE INVESTMENT DOCUMENTS, AND THE COMPANY AGREES
THAT ANY SUCH ACTION FILED BY IT WILL BE FILED IN SUCH A COURT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
MEDIRISK, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Chairman and Chief Executive Officer
HEALTHPLAN SERVICES CORPORATION
By: /s/ Xxxxx X. Xxxxxx III
-------------------------------------
Xxxxx X. Xxxxxx III
Executive Vice President and Chief
Financial Officer
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