Exhibit 10.2
EXECUTION COPY
 
 
SPHERIS HOLDING III, INC.
AMENDED AND RESTATED

STOCKHOLDERS’ AGREEMENT
Dated as of October 3, 2008
 
 

 

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TABLE OF CONTENTS

                                      Page   1.   Additional Offerings     1  
 
    1.1.     Additional Offerings; Generally     1  
 
    1.2.     Exercise of Purchase Rights     2  
 
    1.3.     Sale of Unpurchased Securities     2  
 
    1.4.     Future Additional Offerings     2  
 
                    2.   Restrictions on Transfers and Sales to Third Parties  
  2  
 
    2.1.     General     2  
 
    2.2.     Tag-Along Rights     3  
 
    2.3.     Company Sale     3  
 
                    3.   Election of Directors; Committees     5  
 
    3.1.     Board Make-up     5  
 
    3.2.     Replacement Directors     6  
 
    3.3.     Committees     6  
 
    3.4.     Directors of Subsidiaries     6  
 
    3.5.     Board Observers     7  
 
                    4.   Legends     8  
 
                    5.   Covenants, Representations and Warranties     8  
 
    5.1.     Actions by the Board Requiring the Approval of the Majority Warburg
Investors; Actions by the Board Requiring the Approval of the Majority
TowerBrook Investors     8  
 
    5.2.     Transactions With Investors     10  
 
    5.3.     Information Rights     10  
 
    5.4.     Warburg Information Rights     10  
 
                    6.   Amendment, Modification, Supplement and Waiver     11  
 
                    7.   Termination of Rights and Obligations Under Certain
Sections     11  
 
                    8.   Parties     11  
 
    8.1.     Assignment Generally     11  
 
    8.2.     Termination     12  
 
    8.3.     Agreements to Be Bound     12  
 
                    9.   Recapitalizations, Exchanges, etc. Affecting the Shares
    12  
 
                    10.   Further Assurances     12  

 

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                                      Page
 
                    11.   Governing Law     12  
 
                    12.   Invalidity of Provision     12  
 
                    13.   Notices     12  
 
                    14.   Headings; Execution in Counterparts     15  
 
                    15.   Entire Agreement     15  
 
                    16.   Injunctive Relief     15  
 
                    17.   Defined Terms     15  
 
    17.1.     Affiliate     15  
 
    17.2.     CHS     15  
 
    17.3.     Common Stock     15  
 
    17.4.     Company Sale     16  
 
    17.5.     Convertible Securities     16  
 
    17.6.     Equity Securities     16  
 
    17.7.     Exchange Act     16  
 
    17.8.     Investors     16  
 
    17.9.     Mandatory Conversion     16  
 
    17.10.     Majority TowerBrook Investors     16  
 
    17.11.     Majority Warburg Investors     16  
 
    17.12.     Owns, Own or Owned     16  
 
    17.13.     Permitted Assignee     16  
 
    17.14.     Person     17  
 
    17.15.     Qualified Public Offering     17  
 
    17.16.     Registration Rights Agreement     17  
 
    17.17.     Restricted Stock Plan     17  
 
    17.18.     Securities Act     17  
 
    17.19.     Shares     17  
 
    17.20.     Spheris Investment     17  
 
    17.21.     Spheris Investment LLC Agreement     17  
 
    17.22.     TowerBrook Investors     17  
 
    17.23.     Transfer     17  
 
    17.24.     Warburg Investors     17  
 
    17.25.     Warburg Pincus     17  

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AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT
     This AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT (this “Agreement”) is
dated as of October 3, 2008 and is entered into by and among Spheris Holding
III, Inc., a Delaware corporation (the “Company”) and the Warburg Investors, the
TowerBrook Investors, Spheris Investment and CHS. Capitalized terms used herein
without definition elsewhere in this Agreement are defined in Section 17 hereof.
RECITALS
     WHEREAS, the Company, the Warburg Investors, the TowerBrook Investors and
Spheris Investment have previously entered into a Stockholders’ Agreement, dated
November 5, 2004 as amended by that certain First Amendment to Stockholders’
Agreement, dated August 17, 2006, that certain Second Amendment to Stockholders’
Agreement, dated May 2, 2007, and that certain Third Amendment to Stockholders’
Agreement, dated July 15, 2008 (the “Stockholders’ Agreement”); and
     WHEREAS, on the date hereof, CHS has entered into a Securities Purchase
Agreement with the Company (the “Securities Purchase Agreement”), pursuant to
which the Company has, on the date hereof, issued and sold to CHS and CHS has
purchased from the Company shares of Series A Convertible Preferred Stock of the
Company (the “Preferred Stock”); and
     WHEREAS, the Investors and the Company desire to promote their mutual
interests by amending and restating the Stockholders Agreement according to the
terms set forth herein.
     NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth in this Agreement, and to implement the foregoing, the parties hereto
agree as follows:
1. Additional Offerings.
     1.1. Additional Offerings; Generally. If at any time after the date hereof,
the Company or any direct or indirect subsidiary of the Company (each a
“Subsidiary”) proposes to issue any Equity Securities (other than the issuance
of any Equity Securities (i) to the public in a firm commitment underwriting
pursuant to a registration statement filed under the Securities Act,
(ii) pursuant to the acquisition of another Person by the Company or any
Subsidiary (as consideration for the acquisition and not for the purpose of
financing an acquisition), whether by purchase of stock, merger, consolidation,
purchase of all or substantially all of the assets of such Person or otherwise,
(iii) pursuant to an employee stock option plan, stock bonus plan, stock
purchase plan or other management equity program, including without limitation
the Restricted Stock Plan, approved by a majority of the members of the Board
(iv) by a Subsidiary to the Company or any other Subsidiary of the Company or
(v) in the form of warrants to purchase Common Stock issued to lessors of
property and/or equipment or to financial institutions or related entities in
connection with commercial credit or debt financing or other similar
arrangements which are approved by a majority of the members of the Board),
then, as to each Investor who Owns at least 5% of the Common Stock (each such
Person is hereinafter referred to, for purposes of this Section 1, as a
“Participating Investor” and collectively, such Persons are referred to in this
Section 1 as the “Participating Investors”), the Company shall:

 

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     (a) give written notice (the “Subscription Right Notice”) setting forth in
reasonable detail (i) the designation and all of the terms and provisions of the
Equity Securities proposed to be issued (the “Proposed Securities”), including,
where applicable, the voting powers, preferences and relative participating,
optional or other special rights, and the qualification, limitations or
restrictions thereof and interest rate and maturity; (ii) the price and other
terms of the proposed sale of such Proposed Securities; and (iii) the amount of
such Proposed Securities proposed to be issued; and
     (b) offer to issue to each Participating Investor that number of Proposed
Securities equal to the number of Proposed Securities multiplied by such
Participating Investor’s Percentage Interest. For purposes hereof, “Percentage
Interest” shall mean, in respect of any Participating Investor, the percentage
determined by dividing (x) the number of shares of Common Stock Owned by such
Participating Investor, by (y) the total number of shares of Common Stock Owned
by the Investors.
     1.2. Exercise of Purchase Rights. Each Participating Investor may exercise
its purchase rights hereunder within twenty (20) business days after receipt of
the Subscription Right Notice. If all of the Proposed Securities offered to the
Participating Investors are not fully subscribed by such Participating
Investors, the remaining Proposed Securities will be reoffered to the
Participating Investors upon the terms set forth in this Section 1, until all
such Proposed Securities are fully subscribed for or until all such
Participating Investors have subscribed for all such Proposed Securities which
they desire to purchase, except that such Participating Investors must exercise
their purchase rights within ten (10) business days after receipt of all such
reoffers. To the extent that the Company or its Subsidiary, as the case may be,
offers two or more securities in units, the Participating Investors must
purchase such units as a whole and will not be given the opportunity to purchase
only one of the securities making up such unit.
     1.3. Sale of Unpurchased Securities. Upon the expiration of the offering
periods described above, the Company or its Subsidiary, as the case may be, will
be free to sell such Proposed Securities that the Participating Investors have
not elected to purchase during the ninety (90) calendar day period immediately
following such expiration on terms and conditions no more favorable to the
purchasers thereof than those offered to the Participating Investors. Any
Proposed Securities offered or sold by the Company or its Subsidiary, as the
case may be, after such ninety (90) calendar day period must be reoffered to the
Participating Investors pursuant to this Section 1.
     1.4. Future Additional Offerings. The election by a Participating Investor
not to exercise its subscription rights under this Section 1 in any one instance
shall not affect its right (other than in respect of a reduction in its
percentage holdings) as to any subsequent proposed issuance.
2. Restrictions on Transfers and Sales to Third Parties.
     2.1. General. No Shares owned by any Investor nor any interest therein nor
any rights related thereto may be Transferred by such Investor unless such
Investor complies with the provisions of this Section 2 and Section 8.3 hereof.

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     2.2. Tag-Along Rights.
          (a) Subject to the other terms of this Section 2.2, and except as
required by Section 5.4, no Investor shall be permitted to Transfer any Shares
to one or more third parties unless each other Investor is offered a right to
participate in such Transfer for a purchase price per Share equal to the
purchase price to be received by such Investor then proposing to sell the Shares
(the “Selling Investor”) and on other terms and conditions not less favorable to
such other Investor than those applicable to the Selling Investor. Any Investor
who, in accordance with the terms of Section 2.2(b) below, notifies the Selling
Investor that it desires to participate in any sale of Shares shall have the
right to include in such sale an amount of Shares equal to the amount of Shares
the third party actually proposes to purchase multiplied by the percentage
obtained by dividing the number of Shares owned by such participating Investor
by the aggregate number of Shares owned by the Selling Investor and each other
Investor exercising its right to participate in such sale pursuant hereto. For
the purposes of this Section 2.2(a), a sale to a “third party” shall not include
a sale to any Permitted Assignee or a sale pursuant to a Qualified Public
Offering. Notwithstanding the foregoing, in the event the Selling Investor is
selling only shares of Preferred Stock, holders of Common Stock shall not have
the right to sell shares of Common Stock pursuant to this Section 2.2(a).
          (b) In the event a Selling Investor is proposing to sell any Shares
and, pursuant to this Section 2.2, the Investors are entitled to participate in
such sale, such Selling Investor shall notify each Investor entitled to
participate therein in writing of such proposed sale and its terms and
conditions (and shall provide any other information regarding the proposed
transfer that such other Investor may reasonably request). Within fifteen
(15) business days of the date of such notice, each Investor entitled to
participate therein shall notify such Selling Investor if it elects to
participate in such sale. Any Investor that fails to notify the Selling Investor
within such fifteen (15) business day period shall be deemed to have waived its
rights hereunder with respect to such sale. Notwithstanding anything contained
in this Section 2.2 to the contrary, in the event that all or a portion of the
purchase price for the Shares being purchased consists of securities and the
sale of such securities to any Investor entitled to participate therein would,
by virtue of the fact that such Investor is not an “accredited investor” (within
the meaning of Rule 501(a) under the Securities Act), require either a
registration under the Securities Act or the preparation of a disclosure
document pursuant to Regulation D under the Securities Act (or any successor
regulation) or a similar provision of any state securities law, then, at the
option of the Selling Investor, any one or more of such Investors may receive,
in lieu of such securities, the fair market value of such securities in cash, as
determined in good faith by the Board.
     2.3. Company Sale.
          (a) In the event that the Warburg Investors are proposing to
consummate a Company Sale to any Person or Persons that are not Affiliates of
any of the Warburg Investors, the Warburg Investors shall have the right (the
“Drag-along Right”), but not the obligation, to require each other Investor to
sell all Shares owned by such Investor in accordance with the terms of such
Company Sale, or in the case of a merger, consolidation or sale of assets, to
vote all shares of capital stock owned by such Investor in favor of, and waive
any dissenter or appraisal right it may have in respect of, such Company Sale;
provided, however, that, in the

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event that the TowerBrook Investors Own at least 5% of the Common Stock at the
time of such proposal, the Warburg Investors shall not be permitted to exercise
the Drag-along Right unless the Warburg Investors first comply with
Section 2.3(b) below.
          (b) The Warburg Investors shall, as a condition precedent to
exercising any Drag-along Right, deliver to the TowerBrook Investors an offer
notice (the “Notice of Offer”) that shall include (A) an offer (the “TowerBrook
Offer”) to effect such Company Sale with the TowerBrook Investors and (B) the
terms of such proposed Company Sale, including the purchase price in respect
thereof, terms of payment and any other material terms and conditions for such
sale. Within ten (10) business days after receipt of the TowerBrook Offer (the
“TowerBrook Offer Period”), the TowerBrook Investors may, at their option,
accept the TowerBrook Offer. The TowerBrook Investors shall give written notice
to the Warburg Investors of their acceptance, or their rejection, of the
TowerBrook Offer within the TowerBrook Offer Period. Failure by the TowerBrook
Investors to give notice of their acceptance of the TowerBrook Offer hereunder
within the TowerBrook Offer Period shall be deemed rejection of the TowerBrook
Offer. If the TowerBrook Investors accept the TowerBrook Offer, such notice
shall specify the date for the closing of the Company Sale which shall not be
more than forty-five (45) days after such notice and each Investor shall take
such action as may be necessary to consummate the Company Sale as required by
this Section 2.3. The closing of any such Company Sale to the TowerBrook
Investors shall take place at such location as shall be mutually agreeable
between the Warburg Investors and the TowerBrook Investors and the purchase
price, to the extent comprised of cash, shall be paid at the closing, and cash
equivalents and documents evidencing any deferred payments of cash permitted
shall be delivered at the closing.
          (c) If the TowerBrook Investors reject (or are deemed to reject) the
TowerBrook Offer, the Warburg Investors may exercise the Drag-along Right on
terms no less favorable to the Warburg Investor than the terms set forth in the
applicable TowerBrook Offer; provided, however, that if the Warburg Investors
fail to consummate such Company Sale within one-hundred and eighty (180) days
after the expiration or termination of the TowerBrook Offer Period, the
Drag-along Right shall again be subject to the restrictions of this Section 2.3.
To exercise the Drag-along Right, the Warburg Investors shall give each other
Investor a written notice containing (i) the name and address of the proposed
transferee(s) and (ii) the proposed purchase price, terms of payment and any
other material terms and conditions of the Company Sale.
          (d) Upon exercise of the Drag-along Right or acceptance of the
TowerBrook Offer (if such TowerBrook Offer is required hereby), each Investor
shall be obligated to sell all Shares owned by it to the proposed transferee,
or, in the case of a merger or sale of assets or other transaction that requires
the vote of the Company’s stockholders, to vote all Shares owned by such
Investor in favor of, and waive any dissenter or appraisal right it may have in
respect of, such Company Sale and shall otherwise take all steps necessary
(including delivery of certificates or other instruments evidencing the shares
to be conveyed, duly endorsed and in negotiable form with all the requisite
documentary stamps affixed thereto) to enable him, her or it to facilitate such
Company Sale and to comply with the provisions of this Section 2.3.
          (e) Each Investor required to sell all its Shares pursuant to a
Company Sale shall be entitled to receive in exchange therefor an amount per
share equal to the purchase price

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received per share of Common Stock Owned by the Warburg Investors in connection
with such Company Sale (it being understood that, solely for purposes of this
Section 2.3, “Owned” shall mean beneficial ownership, assuming Mandatory
Conversion of all outstanding Preferred Stock (whether or not then convertible)
pursuant to Section 5(a)(i) of the Restated Certificate (giving full effect to,
Section 5 of the Restated Certificate)). Such Investors shall otherwise
participate in such Company Sale on other terms and conditions not less
favorable to such Investors than those applicable to the Warburg Investors and,
subject to Section 2.3(f) below, shall receive the same type of consideration
received by the Warburg Investors in such Company Sale.
          (f) Notwithstanding anything contained in this Section 2.3 to the
contrary, in the event that all or a portion of the purchase price for the
shares being purchased consists of securities and the sale of such securities to
an Investor entitled to participate therein would, by virtue of the fact that
such Investor is not an “accredited investor” (within the meaning of Rule 501(a)
under the Securities Act), require either a registration under the Securities
Act or the preparation of a disclosure document pursuant to Regulation D under
the Securities Act (or any successor regulation) or a similar provision of any
state securities law, then, at the option of the Warburg Investors, any one or
more of such Investors may receive, in lieu of such securities, the fair market
value of such securities in cash, as determined in good faith by the Board.
3. Election of Directors; Committees.
     3.1. Board Make-up. As of the date hereof, the Board of Directors of the
Company (the “Board”) shall consist of Jonathan Bilzin, Neal Moszkowski, James
W. Doucette, Martin G. Schweinhart, Steven Simpson, Michael King, Robert Z.
Hensley and John A. Kane. From and after the date hereof, the Investors and the
Company shall take all action within their respective power, including but not
limited to, the voting of all Shares Owned by them, required to cause the Board
to consist of no more than ten (10) members, and at all times throughout the
term of this Agreement, to include:
     (a) at the option of the Warburg Investors, for as long as the Warburg
Investors Own at least five percent (5%) of the Common Stock Owned by Investors,
two (2) members designated by Warburg Pincus (such members referred to herein as
“Warburg Directors” and each a “Warburg Director”);
     (b) for as long as the TowerBrook Investors Own at least five percent (5%)
of the Common Stock Owned by Investors, two (2) members designated by the
TowerBrook Investors (such members referred to herein as “TowerBrook Directors”
and each a “TowerBrook Director”);
     (c) at the option of CHS, for as long as CHS Owns at least five percent
(5%) of the Common Stock Owned by Investors, two (2) members designated by CHS
(such members referred to herein as the “CHS Directors” and each a “CHS
Director”);
     (d) one (1) member of management who shall be the Chief Executive Officer
of the Company then in office (the “Management Director”);

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     (e) three (3) independent members selected by the Majority Warburg
Investors and the Majority TowerBrook Investors (such members referred to herein
as “Independent Directors” and each an “Independent Director”).
     The parties hereto acknowledge that the four representatives to be
designated by the Warburg Investors and the TowerBrook Investors are the
directors that the holders of Preferred Stock are entitled to elect under the
Restated Certificate. The parties hereto further acknowledge that as of the date
hereof there are no Warburg Directors, the TowerBrook Directors are Jonathan
Bilzin and Neal Moszkowski, the CHS Directors are James W. Doucette and Martin
G. Schweinhart, the Management Director is Steven Simpson and the Independent
Directors are Robert Z. Hensley, John A. Kane and Michael King. In addition,
subject to the ownership requirements set forth in paragraphs (a) and (b) of
this Section 3.1, the Warburg Investors, on the one hand, and the TowerBrook
Investors, on the other hand, shall be entitled to designate an equal number of
directors.
     3.2. Replacement Directors. In the event that any member of the Board
designated in the manner set forth in Section 3.1 hereof is unable to serve, or
once having commenced to serve, is removed or withdraws from the Board (each, a
“Withdrawing Director”), such Withdrawing Director’s replacement (the
“Substitute Director”) will be designated by the Investors of the Company that
have the right to designate such director, as applicable, in accordance with
Section 3.1 above. The Investors and the Company agree to take all action within
their respective power, including, but not limited to, the voting of all Shares
Owned by them (i) to cause the election of such Substitute Director promptly
following his or her nomination pursuant to this Section 3.2 and (ii) upon the
written request of the Investors that have the right to designate such director
to the Board in accordance with Section 3.1 above, to remove, with or without
cause, any of the Warburg Directors, the TowerBrook Directors or the CHS
Directors, as the case may be.
     3.3. Committees. Subject to applicable law and any rules or regulations of
any stock exchange or automated dealer quotation system on which the Common
Stock is listed, in the event the Board shall at any time create a committee of
the Board, any such committee shall have, at the option of the Majority Warburg
Investors, at least one Warburg Director so long as the Warburg Investors are
entitled to elect at least one member of the Board and, at the option of the
Majority TowerBrook Investors, at least one TowerBrook Director so long as the
TowerBrook Investors are entitled to elect at least one member of the Board;
provided, however, that in respect of any such Investor, the foregoing shall not
apply to any committee formed to consider a transaction between the Company and
such Investor or its Affiliates.
     3.4. Directors of Subsidiaries.
     (a) For so long as the TowerBrook Investors are entitled to elect at least
one member of the Board, the TowerBrook Investors shall be entitled to designate
one director to the board of directors of each Subsidiary. In the event that the
TowerBrook Investors exercise their right pursuant to this Section 3.4, the
Company shall take all action within its power to cause such designee to be
appointed to such boards.
     (b) For so long as Warburg Pincus is entitled to elect at least one member
of the Board, Warburg Pincus shall be entitled to designate one director to the
board of

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directors of each Subsidiary. In the event that Warburg Pincus exercises its
right pursuant to this Section 3.4, the Company shall take all action within its
power to cause such designee to be appointed to such boards.
     (c) For so long as CHS is entitled to elect at least one member of the
Board and Warburg Pincus and the TowerBrook Investors are each entitled to elect
at least one member of the Board, CHS shall be entitled to designate one
director to the board of directors of each Subsidiary to which Warburg Pincus
and the TowerBrook Investors have designated a director. During any period in
which CHS is entitled to elect at least one member of the Board and neither
Warburg Pincus nor the TowerBrook Investors are entitled to elect at least one
member of the Board, CHS shall be entitled to designate one director to the
board of directors of each Subsidiary. In the event that CHS exercises its right
pursuant to this Section 3.4, the Company shall take all action within its power
to cause such designee to be appointed to such boards.
     3.5. Board Observers.
     (a) For so long as there are no Warburg Directors serving on the Board and
the Warburg Investors Own at least five percent (5%) of the Common Stock Owned
by Investors, the Warburg Investors shall be entitled to designate two
non-voting observers (the “Warburg Observers”), who shall be entitled to observe
meetings of the Board. For so long as there are no TowerBrook Directors serving
on the Board and the TowerBrook Investors Own at least five percent (5%) of the
Common Stock Owned by Investors, the TowerBrook Investors shall be entitled to
designate two non-voting observers (the “TowerBrook Observers” and, together
with the Warburg Observers, the “Board Observers”), who shall be entitled to
observe meetings of the Board.
     (b) The Board Observers shall be entitled to receive notice of all meetings
of the Board at the same time and in the same manner as the Board, and have full
rights to attend all meetings thereof and all meetings (whether such meetings
are formal or informal, are convened in person, telephonically, or by any other
telecommunication means) of any committee or subcommittee of the Board,
including, without limitation, any executive committee. The Company shall
provide the Board Observers all materials distributed to the Board and all other
information related to the Company which is made available to, or which would
otherwise be available upon reasonable request by, the Board or committee
members thereof. The Company shall also pay the reasonable out-of-pocket
expenses incurred by the Board Observers in connection with attending the
meetings of the Board and all committees thereof (including travel and related
expenses).
     (c) No Board Observer shall (i) be permitted to act in any way as a
director of the Board, (ii) be included for purposes of determining a quorum at
a meeting of the Board for the transaction of business or otherwise, (iii) vote
on any matter presented to or voted upon by the Board or (iv) without the prior
consent of the Board, disclose non-public, competitively sensitive Company
information to anyone outside of the Company.

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     (d) The Chairman of the Board shall be entitled to, in its reasonable
discretion, excuse any Board Observer from any meeting or proceeding of the
Board, to the extent that the Chairman of the Board in good faith believes that
such action is required in order to comply with applicable law.
4. Legends. A copy of this Agreement shall be filed with the Secretary of the
Company and kept with the records of the Company. Each certificate or other
instrument representing Shares owned by any Investor shall bear upon its face
the following legends, as appropriate:
     (i) THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW AND MAY NOT BE OFFERED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL
REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS UNLESS, IN THE
OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL MUST BE, AND
THE FORM AND SUBSTANCE OF WHICH OPINION ARE, REASONABLY SATISFACTORY TO SPHERIS
HOLDING III, INC. (THE “COMPANY”), SUCH OFFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION, TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION OR IS
OTHERWISE IN COMPLIANCE WITH THE ACT, SUCH LAWS AND THE AMENDED AND RESTATED
STOCKHOLDERS’ AGREEMENT DATED AS OF OCTOBER 3, 2008, BY AND AMONG THE COMPANY,
WARBURG PINCUS PRIVATE EQUITY VIII, L.P., TOWERBROOK INVESTORS L.P., SPHERIS
INVESTMENT LLC AND CHS/COMMUNITY HEALTH SYSTEMS, INC. (THE “STOCKHOLDERS’
AGREEMENT”).
     (ii) THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER AND OTHER CONDITIONS, AS SPECIFIED IN THE STOCKHOLDERS’
AGREEMENT, COPIES OF WHICH ARE ON FILE AT THE OFFICE OF THE COMPANY AND WILL BE
FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH SECURITIES UPON WRITTEN REQUEST.
In addition, certificates representing Shares shall bear any legends required by
the applicable laws of any states.
5. Covenants, Representations and Warranties.
     5.1. Actions by the Board Requiring the Approval of the Majority Warburg
Investors; Actions by the Board Requiring the Approval of the Majority
TowerBrook Investors.
     (a) Without the approval of (x) the Board and (y) for so long as the
Warburg Investors own at least five percent (5%) of the Common Stock Owned by
Investors, the

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affirmative vote of the Majority Warburg Investors, the Company will not, and
will not permit any Subsidiary to:
     (i) sell, lease, or dispose of assets in excess of $5,000,000 outside of
the ordinary course of business;
     (ii) incur indebtedness for borrowed money in excess of $2,000,000 in any
fiscal year;
     (iii) make capital expenditures in any fiscal year in excess of an amount
equal to 110% of the capital expenditures described in the operating plan of the
Company approved by the Board (the “Operating Plan”) for such fiscal year;
     (iv) engage in any material business or activity other than that described
in the Operating Plan;
     (v) materially change its accounting methods or policies or change its
auditors;
     (vi) increase the compensation of its senior executives other than as
described in the Operating Plan;
     (vii) approve the Operating Plan; or
     (viii) take, agree to take or resolve to take any actions in furtherance of
any of the foregoing.
     (b) Without the written approval of the Majority TowerBrook Investors, the
Company will not:
     (i) amend, alter or repeal the preferences, special rights or other powers
of the Preferred Stock in a manner that (a) would adversely affect the rights of
one holder of Preferred Stock, in its capacity as a holder of Preferred Stock,
without similarly affecting the rights of all other holders of Preferred Stock
or (b) changes the economic terms of the Preferred Stock other than the issuance
of Equity Securities of which the TowerBrook Investors have or had been granted
purchase rights pursuant to Section 1 hereof;
     (ii) authorize or effect any merger or consolidation or other
reorganization of the Company with or into another corporation or other entity
other than in connection with a Company Sale to any Person or Persons that are
not Affiliates of any of the Warburg Investors; or
     (iii) amend, alter or repeal the Restated Certificate or bylaws of the
Company in a manner that (a) would adversely affect the rights of one holder of
Preferred Stock, in its capacity as a holder of Preferred Stock, without
similarly affecting the rights of all other holders of Preferred Stock or
(b) changes the economic terms of the Preferred Stock other than the issuance of
Equity Securities of which the TowerBrook Investors have or had been granted
purchase rights pursuant to Section 1 hereof.

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     5.2. Transactions With Investors. So long as TowerBrook Investors Owns at
least 5% of the Common Stock Owned by Investors, the Company will not enter, and
will cause its subsidiaries not to enter, into any Warburg Affiliated
Transaction without the approval of the Investors that Own a majority of the
Common Stock Owned by Investors other than the Warburg Investors and, for so
long as Spheris Investment is an Affiliate of Warburg Pincus, Spheris
Investment. For the purposes hereof, “Warburg Affiliated Transaction” shall
mean, at any time that Warburg Pincus and Affiliates of Warburg Pincus Own
twenty percent (20%) or more of the aggregate Common Stock Owned by Investors,
any transaction outside the ordinary course of business of the Company and its
Subsidiaries (other than the issuance of Equity Securities of which the
TowerBrook Investors have or had been granted purchase rights pursuant to
Section 1 hereof) with Warburg Pincus or any Affiliate of Warburg Pincus.
     5.3. Information Rights. At any time that the Company is not required to
file periodic reports pursuant to the Exchange Act, or, if required and the
Company fails to file such required periodic reports with the Securities and
Exchange Commission (the “SEC”) for any reason whatsoever, the Company shall
provide to each Investor, by electronic means or otherwise, essentially the same
financial statements that would be contained in Annual Reports on Form 10-K and
in Quarterly Reports on Form 10-Q, if the Company were required to file, or did
not fail to file, such periodic reports, it being understood and agreed that
such information shall (a) be provided to the Investors no later than the date
on which the Company would have been required to file such report with the SEC
and (b) include, without limitation, annual audited financial statements and
unaudited quarterly financial statements, each prepared in accordance with
generally accepted accounting principles. Without limiting the foregoing, from
and after the date hereof, on reasonable prior written notice, the Company and
its subsidiaries shall make their respective representatives reasonably
available to each Investor that Owns at least 10% of the Common Stock Owned by
all Investors to discuss the business, results of operations and other matters
pertaining to the Company and its subsidiaries. Any and all information provided
to any Investor pursuant to the terms of this Agreement (other than any
information that is generally available to the public through no breach of the
terms of this Agreement) shall be treated as confidential information by such
Investor and such Investor shall use its reasonable best efforts to ensure that
such information is not disclosed or otherwise divulged to any third party
(other than such Investor’s counsel, accountants and other professional advisors
in connection with services being performed by any such professional for such
Investor and to the members, partners and limited partners of the Warburg
Investors and the TowerBrook Investors).
     5.4. Warburg Information Rights.
     (a) In addition to the rights provided for in Paragraph 5.3, the Warburg
Investors will be entitled to the following contractual rights:
     (i) The Warburg Investors shall be permitted to consult with management of
the Company and its Subsidiaries (“Management”) on significant business issues,
including Management’s proposed annual operating plans, and Management will make
itself available to meet with the Warburg Investors regularly at mutually
agreeable times for such consultation and to review progress in achieving said
plans;

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     (ii) In the event of any material development to or affecting the Company’s
business, the Company shall notify the Warburg Investors and provide the Warburg
Investors with the opportunity, on reasonable prior written notice, to consult
with Management with respect thereto; and
     (iii) On reasonable prior written notice, the Warburg Investors may discuss
the business operations, properties and financial and other conditions of the
Company with Management and with the Company’s independent accountants and
investment bankers;
provided, however, that the Board shall be entitled to, in its reasonable
discretion, limit the foregoing rights to the extent that the Board in good
faith believes that such action is required in order to comply with applicable
law.
     (b) The aforementioned rights are intended to satisfy the requirement of
management rights for purposes of qualifying the Warburg Investors’ investments
in the Company as “venture capital investments” for purposes of the Department
of Labor “plan assets” regulation, 29 C.F.R. §2510.3-101. In the event the
aforementioned rights are not satisfactory for such purpose, the Company and the
Warburg Investors shall reasonably cooperate in good faith to agree upon
mutually satisfactory management rights that satisfy such regulations.
6. Amendment, Modification, Supplement and Waiver. This Agreement may be
amended, modified or supplemented, and the enforcement of any provision hereof
may be waived, with, and only with, the prior written consent of the Company and
each Investor Owning at least five percent (5%) of the Common Stock Owned by
Investors.
7. Termination of Rights and Obligations Under Certain Sections. All rights and
obligations pursuant to Sections 1, 2, 5, 8, 9, and 10 of this Agreement shall
terminate upon the closing of a Qualified Public Offering. Without limiting the
foregoing, this Agreement or any portion hereof shall terminate upon the written
consent of each Investor Owning at least five percent (5%) of the Common Stock
Owned by Investors.
8. Parties.
     8.1. Assignment Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors and assigns; provided, that no Investor
shall be permitted to assign any of his, her or its obligations pursuant to this
Agreement without the prior written consent of the Company, the Majority Warburg
Investors and the Majority TowerBrook Investors, unless such assignment is in
connection with a Transfer explicitly permitted by this Agreement and, prior to
such assignment, such assignee complies with the requirements of Section 8.3;
provided, further, that the parties hereto acknowledge and agree that, subject
to compliance with Section 8.3 hereof, Spheris Investment shall be permitted to
assign its rights and obligations under this Agreement from time to time in
accordance with the terms of Section 13 of the Spheris Investment LLC Agreement.
Notwithstanding the foregoing, the rights and obligations set forth in
Section 2.3 and Section 3, and Sections 5.2 and 5.4 may not be assigned.

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     8.2. Termination. Any party to, or Person who is subject to, this Agreement
that ceases to Own any Shares shall cease to be a party to, or Person who is
subject to, this Agreement and thereafter shall have no rights or obligations
hereunder; provided, however, that a Transfer of Shares not explicitly permitted
under this Agreement shall not relieve any Investor of any of his, her or its
obligations hereunder.
     8.3. Agreements to Be Bound. Notwithstanding anything to the contrary
contained in this Agreement, as a condition precedent to the effectiveness of
any Transfer of Shares the transferee thereof shall be required to agree in
writing to be bound by the terms and conditions of this Agreement pursuant to an
instrument of assumption reasonably satisfactory in substance and form to the
Company (a “Joinder”).
9. Recapitalizations, Exchanges, etc. Affecting the Shares. Except as otherwise
provided herein, the provisions of this Agreement shall apply to the fullest
extent set forth herein with respect to (a) the Shares and (b) any and all
Equity Securities of the Company or any successor or assign of the Company
(whether by merger, consolidation, sale of assets or otherwise) which may be
issued in respect of, in exchange for, or in substitution for the Shares, by
reason of any stock dividend, split, reverse split, combination,
recapitalization, reclassification, merger, consolidation or otherwise. Except
as otherwise expressly provided herein, this Agreement is not intended to
confer, and does not confer, upon any Person, except for the parties hereto, any
rights or remedies hereunder.
10. Further Assurances. Each party hereto or Person subject hereto shall do and
perform or cause to be done and performed all such further acts and things and
shall execute and deliver all such other agreements, certificates, instruments
and documents as any other party hereto or Person subject hereto may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
11. Governing Law. This Agreement and the rights and obligations of the parties
hereunder and the Persons subject hereto shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Delaware, without
giving effect to the choice of law principles thereof.
12. Invalidity of Provision. The invalidity or unenforceability of any provision
of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
13. Notices. All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if (a) delivered personally, (b) mailed,
certified or registered mail with postage prepaid, (c) sent by next-day or
overnight mail or delivery or (d) sent by telecopy (including facsimile) or
telegram, as follows:

  (i)   If to the Company, to it at:

Spheris Holding III, Inc.
9009 Carothers Parkway

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Suite C-3
Franklin, Tennessee 37067
Facsimile No.: (615) 261-1792
Attention: Steven Simpson

with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
Facsimile No.: (212) 728-8111
Attention: Steven J. Gartner, Esq.
                   Mark A. Cognetti, Esq.

  (ii)   If to Warburg Pincus, to it at:

Warburg Pincus Private Equity VIII, L.P.
c/o Warburg Pincus LLC
466 Lexington Avenue
New York, New York 10017
Facsimile No.: (212) 878-9100
Attention: Joel Ackerman
                   Tenno Tsai

with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
Facsimile No.: (212) 728-8111
Attention: Steven J. Gartner, Esq.
                   Mark A. Cognetti, Esq.

  (iii)   If to TowerBrook, to it at:

TowerBrook Investors L.P.
430 Park Avenue
New York, NY 10022
Facsimile No.: (917) 591-9856
Attention: General Counsel and Jonathan Bilzin
with a copy to:
Kirkland & Ellis LLP
153 East 53rd Street
New York, NY 10022-4675
Facsimile No.: (212) 446-4900
Attention: W. Brian Raftery, Esq.

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  (iv)   If to Spheris Investment LLC, to it at

c/o Warburg Pincus LLC
466 Lexington Avenue
New York, New York 10017
Facsimile No.: (212) 878-9100
Attention: Joel Ackerman
                     Tenno Tsai
with a copy to:
Spheris Inc.
9009 Carothers Parkway
Suite C-3
Franklin, Tennessee 37067
Facsimile No.: (615) 261-1792
Attn: Steven Simpson

  (v)   If to CHS/Community Health Systems, Inc., to it at

        Community Health Systems Professional
     Services Corporation
4000 Meridian Boulevard
Franklin, Tennessee 37067
Facsimile No.: (615) 465-3012
Attn: Senior Vice President, Acquisitions &
          Development

with a copy to:
Community Health Systems Professional
     Services Corporation
4000 Meridian Boulevard
Franklin, Tennessee 37067
Facsimile No: (615) 373-9704
Attention: General Counsel
     (vi) If to any other Investor, to such Investor at the address or facsimile
number listed on the signature page hereto or the Joinder Agreement executed by
such Investor or as such Investor shall designate to the Company in writing in
accordance with the terms hereof, with a copy to the Company and Investors at
their respective addresses indicated herein;
     or, in each case, to such other Person or address as any party shall
specify by notice in writing to the Company and Investors. Any notice so
addressed shall be deemed to be given: if

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delivered personally or by telecopy (including facsimile) or telegram, on the
date of such delivery, if a business day, otherwise on the first business day
thereafter; if mailed by certified or registered mail with postage prepaid, on
the third business day after the date of such mailing; and if sent by next-day
or overnight mail or delivery, on the first business day following the date of
such mailing or delivery.
14. Headings; Execution in Counterparts. The headings and captions contained
herein are for convenience only and shall not control or affect the meaning or
construction of any provision hereof. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
which together shall constitute one and the same instrument.
15. Entire Agreement. This Agreement, together with Registration Rights
Agreement and the other agreements and documents referenced herein, including in
the recitals hereto (collectively, the “Other Agreements”), embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings relating to the Shares, other than those
expressly set forth or referred to herein and other than those set forth in the
Other Agreements. This Agreement and the Other Agreements supersede all prior
agreements and understandings among each of the parties with respect to such
subject matter, and it is the understanding of all parties hereto that any such
prior agreement is hereby terminated, null and void as of the date hereof.
16. Injunctive Relief. The Shares cannot readily be purchased or sold in the
open market, and for that reason, among others, the Company and the Investors
will be irreparably damaged in the event this Agreement is not specifically
enforced. Each of the parties therefore agrees that in the event of a breach of
any provision of this Agreement, the aggrieved party may elect to institute and
prosecute proceedings in any court of competent jurisdiction to enforce specific
performance or to enjoin the continuing breach of this Agreement. Such remedies
shall, however, be cumulative and not exclusive, and shall be in addition to any
other remedy which the Company or the Investors may have. Each party hereto
hereby irrevocably submits to the non-exclusive jurisdiction of the state and
federal courts in New York, New York for the purposes of any suit, action or
other proceeding arising out of or based upon this Agreement or the subject
matter hereof. Each party hereto hereby consents to service of process by mail
made in accordance with Section 13 hereof.
17. Defined Terms. As used in this Agreement, the following terms shall have the
meanings ascribed to them below:
     17.1. Affiliate. “Affiliate” shall mean, with respect to any Person, a
Person directly or indirectly, through one or more intermediaries, controlling,
controlled by, or under common control with, such Person.
     17.2. CHS. “CHS” shall mean CHS/Community Health Systems, Inc., a Delaware
corporation.
     17.3. Common Stock. “Common Stock” shall mean common stock, par value $0.01
per share, of the Company.

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     17.4. Company Sale. “Company Sale” shall mean any sale (including by merger
or consolidation) of all of the Shares owned by the Warburg Investors or any
sale of all or substantially all of the assets of the Company and its
Subsidiaries, on a consolidated basis, in either case, to any Person.
     17.5. Convertible Securities. “Convertible Securities” shall mean any
warrants, options or other rights to acquire, and any equity and debt securities
convertible into, capital stock of the Company or any Subsidiary.
     17.6. Equity Securities. “Equity Securities” shall mean any equity
securities of any kind of the Company or any Subsidiary, including any
Convertible Securities.
     17.7. Exchange Act. “Exchange Act” shall mean the Securities Exchange Act
of 1934, as amended.
     17.8. Investors. “Investors” shall mean the Warburg Investors, the
TowerBrook Investors, Spheris Investment, CHS and their respective transferees
and assigns that become parties to this Agreement pursuant to Section 8.3
hereof.
     17.9. Mandatory Conversion. “Mandatory Conversion” shall have the meaning
ascribed to such term in the Restated Certificate.
     17.10. Majority TowerBrook Investors. “Majority TowerBrook Investors” shall
mean the TowerBrook Investors that Own the majority of the aggregate Common
Stock Owned by the TowerBrook Investors.
     17.11. Majority Warburg Investors. “Majority Warburg Investors” shall mean
the Warburg Investors that Own the majority of the aggregate Common Stock Owned
by the Warburg Investors.
     17.12. Owns, Own or Owned. “Owns,” “Own,” or “Owned” shall mean beneficial
ownership within the meaning of Rule 13d-3 under the Exchange Act, assuming the
conversion (whether or not then convertible) of all outstanding Preferred Stock
(which for purposes hereof shall mean assuming the conversion (whether or not
then convertible) of all outstanding Preferred Stock into the number of shares
of Common Stock into which such Preferred Stock is convertible at the then
applicable Conversion Rate in accordance with, and as adjusted from time to time
by, the Restated Certificate without giving effect to subclauses 5(a)(x) and
5(a)(z) of the Restated Certificate).
     17.13. Permitted Assignee. A “Permitted Assignee” shall mean, with respect
to each Investor, any Affiliate of such Investor and any member, general partner
or limited partner of such Investor (or any Person holding an equity interest in
any such member, general partner or limited partner); provided, that in each
instance, any such transferee agrees to be bound by the provisions of this
Agreement in accordance with the terms of Section 8.3 hereof.

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     17.14. Person. “Person” shall mean an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority or other
entity of whatever nature.
     17.15. Qualified Public Offering. “Qualified Public Offering” shall have
the meaning ascribed to such term in the Restated Certificate.
     17.16. Registration Rights Agreement. “Registration Rights Agreement” shall
mean that certain Amended and Restated Registration Rights Agreement, dated as
of the date hereof, by and among the Company and the investors ascribed thereto.
     17.17. Restricted Stock Plan. “Restricted Stock Plan” shall mean the
Spheris Holding III, Inc. Stock Incentive Plan.
     17.18. Securities Act. “Securities Act” shall mean the Securities Act of
1933, as amended.
     17.19. Shares. “Shares” shall mean shares of Common Stock and Convertible
Securities (including Preferred Stock) convertible into Common Stock.
     17.20. Spheris Investment. “Spheris Investment” shall mean Spheris
Investment LLC and its transferees and assigns.
     17.21. Spheris Investment LLC Agreement. “Spheris Investment LLC Agreement”
shall mean the Amended and Restated Limited Liability Company Agreement of
Spheris Investment LLC.
     17.22. TowerBrook Investors. “TowerBrook Investors” shall mean TowerBrook
Investors L.P.
     17.23. Transfer. “Transfer” (or any variation thereof used herein) shall
mean any direct or indirect sale, assignment, mortgage, transfer, pledge,
hypothecation or other disposal.
     17.24. Warburg Investors. “Warburg Investors” shall mean Warburg Pincus,
Warburg Pincus Netherlands Private Equity VIII C.V. I and WP-WP VIII Investors
L.P.
     17.25. Warburg Pincus. “Warburg Pincus” shall mean Warburg Pincus Private
Equity VIII, L.P.
[signature pages follow]

17

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     IN WITNESS WHEREOF, the undersigned has executed this Stockholders’
Agreement as of the date first above written.

            SPHERIS HOLDING III, INC.
      By:   /s/ Steven E. Simpson         Name:   Steven E. Simpson       
Title:   President & CEO     

[Stockholders’ Agreement Signature Page]

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     IN WITNESS WHEREOF, the parties hereto have executed this Stockholders’
Agreement as of the date first above written.

            WARBURG PINCUS PRIVATE EQUITY VIII, L.P.
      By:   Warburg Pincus Partners LLC, its General Partner               By:  
/s/ Joel Ackerman         Name:   Joel Ackerman        Title:   Authorized
Signatory        WARBURG PINCUS NETHERLANDS PRIVATE EQUITY VIII C.V. I
      By:   Warburg Pincus Partners LLC, its General Partner               By:  
/s/ Joel Ackerman         Name:   Joel Ackerman        Title:   Authorized
Signatory        WP-WP VIII INVESTORS L.P.
      By:   Warburg Pincus Partners LLC, its General Partner               By:  
/s/ Joel Ackerman         Name:   Joel Ackerman        Title:   Authorized
Signatory     

[Stockholders’ Agreement Signature Page]

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     IN WITNESS WHEREOF, the undersigned has executed this Stockholders’
Agreement as of the date first set forth above.

            TOWERBROOK INVESTORS L.P.
      By:   /s/ Glenn F. Miller         Name:   Glenn F. Miller        Title:  
Attorney-in-Fact     

[Stockholders’ Agreement Signature Page]

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     IN WITNESS WHEREOF, the undersigned has executed this Stockholders’
Agreement as of the date first set forth above.

            CHS/COMMUNITY HEALTH SYSTEMS, INC.
      By:   /s/ Kenneth D. Hawkins         Name:   Kenneth D. Hawkins       
Title:   Senior Vice President,
Acquisitions & Development     

[Stockholders’ Agreement Signature Page]

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     IN WITNESS WHEREOF, the undersigned has executed this Stockholders’
Agreement as of the date first above written.

            SPHERIS INVESTMENT LLC
      By:   Warburg Pincus Private Equity VIII, L.P., Warburg
Pincus Netherlands Private Equity VIII C.V. I and
WP-WP VIII Investors L.P., together, its Managing Members         By:   Warburg
Pincus Partners LLC, their General Partner               By:   /s/ Joel Ackerman
        Name:   Joel Ackerman        Title:   Authorized Signatory     

22