exv10w5






Exhibit 10.5




THIRD AMENDED AND RESTATED

STOCKHOLDERS’ AGREEMENT




     THIRD AMENDED AND RESTATED
STOCKHOLDERS’ AGREEMENT, dated as of the 22nd day of February, 2009
(this “Agreement”), by and among HEALTHCARE SERVICES, INC., a Delaware corporation (the
“Company”), ACCRETIVE INVESTORS SBIC, L.P., a Delaware limited partnership
(“Accretive”), FW OAK HILL ACCRETIVE HEALTHCARE INVESTORS, L.P., a Delaware limited
partnership (“Oak Hill”) (Accretive and Oak Hill are hereinafter sometimes referred to
collectively as the “Investors” and each individually as an “Investor”), Mary
Tolan, an individual resident of the State of Illinois (“Tolan”), Accretive Investors V,
LLC, a Delaware limited liability company (“Accretive Investors”) and each of the other
Persons listed on Schedule A hereto (such Persons, together with Tolan and Accretive
Investors, are hereinafter sometimes referred to collectively as the “Additional
Stockholders” and individually as an “Additional Stockholder”) (together with the Investors,
hereinafter referred to collectively as the “Investors and Additional Stockholders”).



     This Third Amended and Restated Stockholders’ Agreement amends and restates in its entirety
the Second Amended and Restated Stockholders’ Agreement, dated as of December 1, 2005, by and among
the Company, the Investors, Tolan and Accretive Investors (the “Second Amended and Restated
Stockholders’ Agreement”). Capitalized terms used in this Agreement and not otherwise defined
shall have the meanings set forth on Annex A hereto.



WITNESSETH:




     WHEREAS, the Investors and Additional Stockholders each own shares of the Company’s Capital
Stock; and



     WHEREAS, certain non-voting shares of the Company’s Capital Stock currently held by the
Additional Stockholders are being exchanged for voting shares of the Company’s Capital Stock
pursuant to that certain Share Exchange Agreement, dated as of the date hereof, by and between the
Company and the other Persons party thereto (the “Share Exchange Agreement”); and



     WHEREAS, as of the date hereof, in connection with and as a precondition to the consummation
of the transactions contemplated by the Share Exchange Agreement, the Company, the Investors, Tolan
and Accretive Investors desire to and do hereby amend and restate the Second Amended and Restated
Stockholders’ Agreement as more particularly set forth herein, and the other Persons party hereto
desire to become parties hereto.



     NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:



     Section 1. Stock Ownership.



 









 





     Each Additional Stockholder severally represents and warrants that he, she or it is the record
and beneficial owner of the shares of Capital Stock which is the subject of the Share Exchange
Agreement.



     Section 2. Management of the Company; Board of Directors.



          2.1 The Investors and Additional Stockholders agree that the entire Board of Directors of the
Company shall consist of between five (5) and nine (9) directors and they further agree to promptly
take all necessary action to establish or amend, as the case may be, the Company’s by-laws or other
organizational documents in order to effectuate the same. Subject to Section 2.2 below and
applicable Delaware law, (A) Accretive shall have the right, for so long as it continues to own, in
the aggregate, not less than five percent (5%) of the aggregate outstanding shares of the Capital
Stock on a fully-diluted basis, to designate, remove or redesignate, at any time or from time to
time, two (2) directors to the Company’s Board of Directors, (B) Oak Hill shall have the right, for
so long as it continues to own not less than five percent (5%) of the aggregate outstanding shares
of the Capital Stock on a fully-diluted basis, to designate, remove or redesignate, at any time or
from time to time, one (1) director to the Company’s Board of Directors, (C) each of the Investors
and the Additional Stockholders shall through November 15, 2009 vote his, her or its shares of
Capital Stock for the election of each of Denis Nayden and Art Spiegel as a member of the Company’s
Board of Directors, each such person to act as a Co-Chairman thereof, for a term at least through
November 15, 2009; provided that if Mr. Nayden at any time ceases being a member of the
Company’s Board of Directors by reason of incapacity or death (but not for any other reason,
including but not limited to resignation or removal), or if, after November 15, 2009, the Investors
and the Additional Stockholders do not vote their shares of Capital Stock for the election of Mr.
Nayden, then Oak Hill shall have the right, for so long as it continues to own not less than five
percent (5%) of the aggregate outstanding shares of the Capital Stock on a fully-diluted basis, to
designate, remove or redesignate, at any time or from time to time, one (1) additional director to
the Company’s Board of Directors in lieu of Mr. Nayden, and (D) each of the Investors shall, for so
long as Tolan remains the Chief Executive Officer of the Company, vote its shares of Capital Stock
for the election of Tolan to the Company’s Board of Directors. Four (4) additional directors, each
of whom is an independent outside director, have been selected by the mutual agreement of the
Investors. As of the date hereof, the Board of Directors of the Company is currently comprised of
the following eight (8) persons:




	 	 	 
	Dennis Nayden

	 	Co-Chairman
	Art Spiegel

	 	Co-Chairman
	Michael Cline

	 	Designee of Accretive
	Edgar Bronfman, Jr.

	 	Designee of Accretive
	Mark Wolfson

	 	Designee of Oak Hill
	Mary Tolan

	 	Chief Executive Officer
	Steven Kaplan

	 	Independent Director
	George Shultz

	 	Independent Director






          2.2 The members of the Board of Directors shall be elected at annual (or special) meetings of
stockholders of the Company and each Investor and Additional Stockholder







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agrees to vote all shares
of Capital Stock owned or held of record by such Investor or Additional Stockholder, at each such
annual (or special) meeting of stockholders at which directors of the Company are to be elected, in
favor of, or take all actions by written consent in lieu of any such meeting as are necessary to
cause, the election as members of the Board of Directors of the nominees of and as designated by
the Investors in the manner provided in this Section 2.




          2.3 Each Investor and Additional Stockholder hereby agrees to vote all of his, her or its
shares of Capital Stock from time to time and at all times in whatever manner necessary to
effectuate the intent of the provisions of this Section 2.




          2.4 Whenever any vacancy in the Board of Directors (whether occurring by reason of incapacity,
death, resignation, removal or otherwise, except as provided in Section 2.1) involving a designee
of one of the Investors is to be filled, the Investor who designated, under the provisions of this
Section 2, the director who no longer will be acting as a director (whether by reason of
incapacity, death, resignation, removal or otherwise) shall designate a successor director to fill
such vacancy. Whenever any vacancy in the Board of Directors (whether occurring by reason of
incapacity, death, resignation, removal or otherwise) involving a director other than a designee of
one of the Investors is to be filled, the Majority Stockholders shall designate a successor
director to fill such vacancy.




          2.5 All decisions of the Board of Directors of the Company shall be made by the vote of a
majority of the directors present and constituting a quorum at any meeting of the Board of
Directors. Notwithstanding the foregoing, the Board of Directors of the Company shall not make any
decision or take any action without the affirmative vote of at least one of the directors
designated by either Accretive or Oak Hill.




          2.6 The Board of Directors of the Company may establish an Audit Committee, a Compensation
Committee and such other committees as it deems advisable. Each of Accretive and Oak Hill, to the
extent they have a right to designate one or more directors to the Company’s Board of Directors
pursuant to Section 2.1, can choose to have one representative on each such committee, if any.




          2.7 Upon the presentation of appropriate documentation, the Company shall reimburse each
director who is not an employee of the Company for all reasonable out-of-pocket costs and expenses
incurred by such director in attending Board of Directors meetings.




          2.8 The Company shall, as soon as practicable, taking into account the Company’s financial
condition, business and prospects, maintain Officer’s and Director’s Liability Insurance in a
reasonable and customary amount for a business comparable to that of the Company with respect to
the Company’s officers, consultants and members of the Company’s Board of Directors. Further, the
Company shall take no action, absent the written consent of the Majority Stockholders, amending or
repealing Article V of the Amended Certificate, pursuant to which Article the Company agrees to
indemnify, to the maximum extent permitted by Delaware Law, each person who serves as a director or
officer of the Company in connection with any action, suit or proceeding brought against such person by reason of the
fact that he or she is or was a director or officer of the Company.







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          2.9 During the term of this Agreement, each Investor and Additional Stockholder shall at all
times vote, or cause to be voted, all shares then owned or controlled by him, her or it to
effectuate the provisions of this Agreement.




     Section 3. [Intentionally Ommitted].



     Section 4. Restrictions on Disposition of Stock.



          4.1 Restrictions on Disposition. Except as expressly provided in Section 4.2 hereof,
the Investors and Additional Stockholders of the Company may not, directly or indirectly,
voluntarily or involuntarily, sell, transfer, gift, negotiate, pledge, hypothecate, assign or any
other way dispose of (collectively, “Dispose” or a “Disposition”) any shares of the
Company’s Capital Stock (or any other securities of the Company) now owned or hereafter acquired by
him, her or it or any part thereof either during such Investor’s or Additional Stockholder’s
corporate or other existence or lifetime, as the case may be, or upon its dissolution or
liquidation or his or her death, as the case may be.




          4.2 Exceptions to Restrictions on Disposition. The restrictions set forth in Section
4.1 hereof shall not apply to any of the following Dispositions: (i) any repurchase or redemption
by the Company from an Investor or Additional Stockholder of any shares of Capital Stock (or other
securities of the Company), provided that such repurchase or redemption is effectuated in
accordance with and is not in contravention of the terms of this Agreement, Delaware law, or as set
forth in the Amended Certificate; (ii) in the case of an Investor or Additional Stockholder who is
a natural person, to such Stockholder’s spouse, children, sisters or brothers (collectively,
“Family Members” and, individually a “Family Member”) or any trust, limited
partnership or limited liability company primarily for the benefit of a Family Member or Family
Members; (iii) in the case of an Investor or Additional Stockholder that is not a natural person,
to any successor, partner, parent, subsidiary or affiliate of such Investor or Additional
Stockholder; or (iv) to any Person in accordance with the terms of Section 4.4 or Section 5 hereof;
provided, however, with respect to any of the foregoing, that as a condition of
such Disposition being effective, any such transferee shall agree in writing to be bound by, and
the shares so transferred shall remain subject to, the terms and conditions of this Agreement.




          4.3 Disclosure of Offers to Purchase. If an Investor or Additional Stockholder
receives a bona fide offer in writing from a third person (an “Offer”) to purchase all or a
portion of such Investor’s or Additional Stockholder’s shares of Capital Stock (or any other
securities of the Company), the Investor or Additional Stockholder receiving such Offer shall
immediately give the Company and all of the members of the Board of Directors of the Company
written notice (the “Offer Notice”) of the Offer, which notice shall set forth the terms of
the Offer and the identity and business address of the offeror (the “Offeror”) and, if the
Offer was made in writing, be accompanied by a copy of the Offer.




          4.4 Rights of First Refusal.




               (a) Except as otherwise provided in Section 4.2, and prior to the exercise of any rights
provided in Section 5.1, in the event that an Investor or Additional Stockholder (the “Offering
Stockholder”), desires to sell all or a portion of his, her or its shares



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of Capital Stock (or any other securities of the Company) pursuant to an Offer, the Offering Stockholder shall give the
Company the Offer Notice required under Section 4.3, and thereafter the Company shall have the
option to purchase all of the shares that are subject to the Offer (the “Offered Shares”)
at the same purchase price and on the same terms and conditions as set forth in the Offer and
otherwise in accordance herewith (the “Company Option”). The Company shall exercise the
Company Option by delivering written notice to the Offering Stockholder within fifteen (15) days
(the “Company Option Period”) following receipt by the Company of the Offer Notice.




               (b) Except as otherwise provided in Sections 4.2 and 5.1, if the Company does not elect to
exercise the Company Option within the Company Option Period, the Offering Stockholder, before he,
she or it may sell the Offered Shares to the Offeror pursuant to the Offer, shall provide the
Investors and Additional Stockholders with written notice thereof within ten (10) days immediately
following the expiration of the Company Option Period, and the Investors and Additional
Stockholders shall thereafter have the option (the “Investor Option”) to purchase all of
the Offered Shares at the same purchase price and on the same terms and conditions as set forth in
the Offer. To the extent the offering is oversubscribed it shall be divided pro rata according to
the relative number of shares of Capital Stock (including Common Stock issuable upon exercise of
any warrants or options) held by such Investor or Additional Stockholder. The Investor Option
shall be exercisable by written notice from the Investor or Additional Stockholder to the Offering
Stockholder within fifteen (15) days immediately following receipt by the Investor or Additional
Stockholder of the notice that the Company did not exercise the Company Option.



               (c) If options to purchase all of the Offered Shares are not exercised pursuant to Sections
4.4(a) or 4.4(b) hereof, then any such purchase or option to purchase shall be null and void, and
the Offering Stockholder shall be entitled to sell all, but not less than all, of the Offered
Shares to the Offeror, but only on the exact terms contained in the Offer not more than sixty (60)
days after the expiration of the last option period contemplated by Sections 4.4(a) or 4.4(b)
hereof. If the Offering Stockholder does not sell the Offered Shares in strict compliance with
this subsection (c), any other Disposition of shares by such Offering Stockholder must be made
pursuant to a new bona fide offer and subject to the provisions of this Section 4.4.



               (d) The closing of any purchase and sale contemplated by Section 4.4(a) or 4.4(b) hereof shall
take place at the principal offices of the Company on the tenth (10th) day after the
Company or the Investor or Additional Stockholder who has exercised an Investor Option, as the case
may be, has agreed to purchase all, but not less than all, of the Offered Shares pursuant to the
provisions of this Section 4.4, or such other time and at such other place as agreed upon by the
parties. If any of the aforesaid closing dates fall on a Saturday, Sunday or legal holiday, then
such closing shall be held on the next succeeding business day. At the closing, the Offering
Stockholder shall deliver in exchange for the purchase price due hereunder (i) certificates for the
shares of Capital Stock (or other securities of the Company) being sold duly endorsed for transfer and with all applicable documentary and/or transfer stamps affixed,
(ii) at the request of the Board of Directors of the Company, the Offering Stockholder’s (or its or
his or her designee(s), as the case may be) written resignation as a director and/or officer of the
Company and any of its affiliates, all effective as of such closing, and (iii) representations
customary for transactions of this type, including but not limited to the following: that the



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Offering Stockholder owns the securities being sold free and clear of all liens, claims and
encumbrances; that the Offering Stockholder has the right, power and authority to sell such
securities in accordance with the sale terms; that no consent of any third party is required to
consummate such sale; that the sale does not violate any agreement or restrictions applicable to
the Offering Stockholder or the securities offered.




               (e) No Disposition pursuant to this Agreement shall have any force or effect until the
transferee of such Capital Stock (or other securities of the Company) executes and delivers such
documents, certificates, instruments and other agreements as may reasonably be requested by any
Investor or Additional Stockholder or by counsel to the Company to assure compliance with
applicable federal and state securities laws. Until such time, the Company shall not enter on its
records the identity of any such transferee or otherwise recognize such transferee as a stockholder
of the Company.



               (f) In the event of a Disposition of shares of Capital Stock (or other securities of the
Company) that violates the provisions of Section 4 hereof, such Disposition shall be null and void
and the Company, first, and the other Investors and Additional Stockholders, second, shall have
successive options to purchase, pro rata according to the relative number of shares of Capital
Stock held by each Investor or Additional Stockholder (including Common Stock issuable upon
exercise of any warrants or options), all of such shares at a purchase price equal to the aggregate
consideration initially paid by such violating Investor or Additional Stockholder for all shares of
Capital Stock (or other securities of the Company) disposed of in contravention of Section 4
hereof, minus any cash distributions paid to such Investor or Additional Stockholder by the Company
with respect to such shares, which purchase price the parties hereto agree is reasonable in light
of the damage that could be caused as a result of a breach of Section 4 hereof.



               (g) All Dispositions of Capital Stock (or other securities of the Company) under Section 4
hereof are subject to the transferees thereof agreeing to be bound in writing by all of the terms
and conditions of this Agreement.



               (h) If an Offering Stockholder is a Director or an affiliate of a Director, then such Offering
Stockholder shall recuse himself or cause its designee to recuse itself from participating in the
Board of Directors’ decision as to whether the Company will exercise the Company Option with
respect to such Offering Stockholder.



     Section 5. Tag-Along Rights and Drag-Along Obligations.



          5.1 Tag-Along Rights.




               (a) Except as otherwise provided in Sections 4.2 and 5.2, and provided none of the options
under Section 4.4 have been exercised, with respect to any proposed Disposition of any shares of Capital Stock by any Investor or Additional Stockholder or a
group of the Investors and Additional Stockholders (each individually a “Transferring
Shareholder” and collectively, “Transferring Shareholders”) to a person (such other
person being hereafter referred to as the “Proposed Purchaser”), such Transferring
Shareholder(s) shall be required to provide that each of the other Investors and Additional
Stockholders (referred to herein



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collectively as the “Tag-Along Stockholders”) shall have the right to require the Proposed Purchaser to purchase from each of them up to the number of whole
shares of Capital Stock (including Common Stock issuable upon exercise of any warrants or options)
owned by each such Tag-Along Stockholder equal to the number derived by multiplying the total
number of shares of Capital Stock (including Common Stock issuable upon exercise of any warrants or
options) that the Transferring Shareholder(s) propose to sell by a fraction, the numerator of which
shall be the total number of shares of Capital Stock (including Common Stock issuable upon exercise
of any warrants or options) owned by such Tag-Along Stockholder, and the denominator of which shall
be the total number of shares of Capital Stock (including Common Stock issuable upon exercise of
any warrants or options) owned by the Transferring Shareholder(s) and all such Tag-Along
Stockholders. Any shares purchased from Tag-Along Stockholders pursuant to this Section 5.1 shall
be at the same price per share and otherwise at the same time and upon the same terms and
conditions as the proposed transfer by the Transferring Shareholder(s). For purposes of this
Agreement, all consideration received or receivable by a Transferring Shareholder from the Proposed
Purchaser (and/or its affiliates) or the Company, howsoever denominated, shall be deemed payment
for the shares transferred by the Transferring Shareholder.




               (b) The Transferring Shareholder shall notify, or cause to be notified, each other Investor
and Additional Stockholder and the Company’s Board of Directors in writing of each such proposed
transfer subject to the provisions of this Section 5.1. Such notice shall set forth: (A) the
number of shares of Capital Stock proposed to be purchased, (B) the name and address of the
Proposed Purchaser, (C) the proposed consideration and terms and conditions of payment offered by
the Proposed Purchaser, and (D) that the Proposed Purchaser has been informed of the “tag-along
right” provided for in this Section 5.1 and that the Proposed Purchaser has agreed to purchase such
shares in accordance with the terms hereof.



               (c) The tag-along right may be exercised by any Tag-Along Stockholder by delivery of a written
notice to the Transferring Shareholder(s) (the “Tag-Along Notice”) and to the Company’s
Board of Directors within thirty (30) days following the receipt of the notice specified in Section
5.1(b) hereof. The Tag-Along Notice shall state the number of shares that such Tag-Along
Stockholder proposes to include in such transfer to the Proposed Purchaser, determined in
accordance with Section 5.1(a) hereof, and the number of additional shares such Tag-Along
Stockholder desires to include in such transfer. The maximum number of additional shares that each
such Tag-Along Stockholder shall be entitled to sell shall be determined by multiplying the total
number of shares of Capital Stock (including Common Stock issuable upon exercise of any warrants or
options) that, under the formula in Section 5.1(a) hereof, all Tag-Along Stockholders could have
elected to sell to the Proposed Purchaser but did not so elect, by a fraction, the numerator of
which shall be the total number of shares of Capital Stock (including Common Stock issuable upon
exercise of any warrants or options) owned by such Tag-Along Stockholder electing to sell
additional shares and the denominator of which shall be the total number of shares of Capital Stock
(including Common Stock issuable upon exercise of any warrants or options) owned by all Tag-Along Stockholders who delivered
Tag-Along Notices indicating a willingness to sell additional shares. In the event that the
Proposed Purchaser refuses to purchase such shares from the Tag-Along Stockholders on the same
terms and conditions as it purchases shares from the Transferring Shareholder(s) in the proposed
transfer, then the Transferring Shareholder(s) shall not be permitted to sell any shares to the



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Proposed Purchaser in the proposed transfer. If no Tag-Along Notice is received during the 30-day
period referred to in this Section 5.1(c), the Transferring Shareholder(s) shall have the right to
transfer their shares on terms and conditions no more favorable than those stated in the notice
under Section 5.1(b) hereof and in accordance with the provisions of this Section 5.




               (d) Any provision herein to the contrary notwithstanding, the exercise of the tag-along right
shall be conditioned upon the agreement by each Tag-Along Stockholder to become a party to any
proposed agreement for the sale of shares by the Transferring Shareholder(s), and to execute any
agreement, certificate or other document required to be executed in connection with such sale;
provided, however, that no Tag-Along Stockholder shall be required to give
representations or warranties more extensive than those given by the Transferring Shareholder(s) or
to provide indemnities disproportionately (based upon the percentage of sales proceeds to be
received) to those provided by the Transferring Shareholder(s). Failure of any Tag-Along
Stockholder to comply with the provisions of this Section 5.1(d) shall constitute a breach of this
Agreement and waiver of his tag-along right.



          5.2 Drag-Along Obligations. If any Investor or Additional Stockholder or group of
Investors and Additional Stockholders (“Sellers”) agree to Dispose of, by merger, sale or
otherwise, all of their shares of Capital Stock (or other securities of the Company) constituting
not less than fifty and one-tenth percent (50.1%) of the shares of Capital Stock (including Common
Stock issuable upon exercise of any warrant or option) then outstanding, and such sale is
contingent on all of the outstanding shares of Capital Stock (and other securities of the Company)
being sold simultaneously, then, provided such proposed sale is pursuant to a bona fide,
arms-length agreement with a third party not affiliated with the Sellers, the other Investors and
Additional Stockholders shall (i) be required to and shall sell all of their shares of Capital
Stock (or other securities of the Company) pursuant to such proposed sale, (ii) vote for any such
transaction proposed by Sellers, and (iii) agree to become a party to any proposed agreement for
the sale of such shares by and to execute any agreement, certificate or other documents required to
be executed in connection with such sale, including making such representations and warranties as,
but not more extensive than, those made by Sellers, provided that no other Investor or
Additional Stockholder shall be required to indemnify the acquiror of the securities of the Company
sold in an amount in excess of the proceeds received by such other Investor or Additional
Stockholder from such sale net of all costs, expenses and taxes attributable to such sale. The sale
by the other Investors and Additional Stockholders pursuant to this Section 5.2 shall be on the
same terms and conditions as the sale by the Sellers (including the payment of the same
consideration per share for each share of the same class of securities sold). If such other
Investors and Additional Stockholders fail to comply with the provisions of this Section 5.2,
Sellers shall be entitled to treat such failure as breach of this Agreement for which Sellers shall
be entitled to specific performance and/or damages.




          5.3 The tag-along rights and drag-along obligations arising under this Section 5 shall
terminate at such time as there is a Public Market.




     Section 6. Registration Rights.



          6.1 Demand Registrations.




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               (a) At any time after an initial public offering of shares of Capital Stock of the Company,
which public offering raises net proceeds to the Company of not less than $25 million (the
“Initial Public Offering”) pursuant to a registration statement under the Securities Act,
holders of at least fifty percent (50%) of the outstanding shares of Capital Stock covered by this
Agreement (the “Requesting Holders”) may request in writing that the Company effect the
registration under the Securities Act of all or part of the Registrable Securities (as hereinafter
defined) held by such Requesting Holders, specifying in the request the number and type of
Registrable Securities to be registered by each such holder and the intended method of disposition
thereof (such notice is hereinafter referred to as a “Holder Request”). Upon receipt of
such Holder Request, the Company will promptly give written notice of such requested registration
to all other holders of Registrable Securities, which other holders shall have the right to include
the Registrable Securities held by them in such registration and thereupon the Company will, as
expeditiously as possible, use its best efforts to effect the registration under the Securities Act
of:



                    (i) the Registrable Securities which the Company has been so requested to register by such
Requesting Holder; and



                    (ii) all other Registrable Securities which the Company has been requested to register by any
other holder thereof by written request given to the Company within thirty (30) days after the
giving of such written notice by the Company (which request shall specify the intended method of
disposition of such Registrable Securities), all to the extent necessary to permit the disposition
(in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to
be registered; provided, however, that notwithstanding the provisions of Section
6.1(a), the Company shall not be obligated to file a registration statement pursuant to this
Section 6.1:



                         (1) unless the Company shall have received requests for such registration with respect to at
least twenty five percent (25%) of the outstanding Common Stock on a fully diluted basis; or



                         (2) within the six month period immediately following the effective date of any registration
previously effected by the Company pursuant to this Section 6.1.



               (b) Notwithstanding the provisions of Section 6.1(a) hereof, the Company shall not be
obligated to file more than an aggregate of two registration statements pursuant to this Section
6.1.



               (c) If the Company proposes to effect a registration requested pursuant to this Section 6.1 by
the filing of a registration statement on Form S-3 (or any similar short-form registration
statement) and the intended method of distribution is through a firm commitment underwriting (an
“Underwritten Offering”), the Company will comply with any request by the managing
underwriter to effect such registration on another permitted form if such managing underwriter advises the Company that, in its opinion, the use of another form of registration
statement is of material importance to the success of such proposed offering.



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               (d) A registration requested pursuant to Section 6.1(a) hereof will not be deemed to have been
effected unless it has become effective under the Securities Act; provided,
however, that if after it has become so 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 agency or court, such registration will be
deemed not to have been effected.



               (e) The Company will pay all Registration Expenses in connection with each of the
registrations of Registrable Securities effected by it pursuant to this Section 6.1.



               (f) Whenever a requested registration pursuant to this Section 6.1 involves an Underwritten
Offering, the only shares that may be included in such Offering are (i) Registrable Securities, and
(ii) securities of the Company being offered and sold for the Company’s behalf in such Offering
(“Issuer Securities”).



               (g) If a registration pursuant to this Section 6 involves an Underwritten Offering and the
managing underwriter shall advise the Company that, in its judgment, the number of shares proposed
to be included in such Underwritten Offering should be limited due to market conditions, then the
Company will promptly so advise each holder of Registrable Securities that has requested
registration, and, subject to the consent of the managing underwriter, the Issuer Securities, if
any, shall first be excluded from such Underwritten Offering to the extent necessary to meet such
limitation. If further exclusions are necessary to meet such limitation, the number of Registrable
Securities of each such holder shall be excluded pro rata (until such limitation has been met),
based on the respective number of shares of Registrable Securities as to which registration has
been requested by such holder.



               (h) By making a Holder Request, a Requesting Holder shall be deemed to have (i) a present
intention to sell the Registrable Securities covered thereby, (ii) agreed to execute all consents,
powers of attorney and other documents required in order to cause the registration statement to
become effective, (iii) agreed, if the offering is at the market, to give the Company written
notice of the first bona fide offering of the Registrable Securities covered thereby and to use the
prospectus forming a part of the registration statement for only the period permitted by the
Securities Act and the rules and regulations promulgated by the Commission thereunder, (iv) agreed,
subject to adverse events regarding the selling price of the Registrable Securities covered
thereby, to utilize the method of distribution of such Registrable Securities proposed in the
Holder Request, and (v) agreed, in connection with the disposition of the Registrable Securities
covered thereby, to comply with Registration M and any other applicable rules and regulations
promulgated by the Commission under the Exchange Act.



          6.2 Piggyback Registrations.




               (a) If, at any time (including in an Initial Public Offering), the Company proposes to
register any of its equity securities under the Securities Act (other than a registration on Form
S-4 or S-8 or any successor or similar forms thereto and other than pursuant to a registration under Section 6.1), whether or not for sale for its own account, on a form
and in a manner that would permit registration of Registrable Securities for sale to the public
under the Securities Act, it will give written notice to all the holders of Registrable Securities
promptly of



10









 




its intention to do so, describing such securities and specifying the form and manner
and the other relevant facts involved in such proposed registration (including, without limitation
(i) whether or not such registration will be in connection with an underwritten offering of
Registrable Securities and, if so, the identity of the managing underwriter and whether such
offering will be pursuant to a “best efforts” or “firm commitment” underwriting, and (ii) the
price, net of any underwriting commissions, discounts and the like, at which the Registrable
Securities are reasonably expected to be sold) if such disclosure is acceptable to the managing
underwriter. Upon the written request of any such holder delivered to the Company within thirty
(30) days after the receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such holder and the intended method of disposition
thereof), the Company will use best efforts to effect the registration under the Securities Act of
all of the Registrable Securities that the Company has been so requested to register;
provided, however, that:




                    (i) If, at any time after giving such written notice of its intention to register any
securities 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 may, at its election, give written notice of such determination to each holder of
Registrable Securities who made a request as hereinabove provided and thereupon the Company shall
be relieved of its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of the holders of the Registrable Securities
to request that a registration subsequently be effected under Section 6.1 hereof.



                    (ii) If such registration involves an Underwritten Offering, all holders of Registrable
Securities requesting to be included in the Company’s registration must sell their Registrable
Securities to the underwriters selected by the Company on the same terms and conditions as apply to
the Company or the other selling stockholders participating therein. No registration effected under
this Section 6.2 shall relieve the Company of its obligation to effect registration upon request
under Section 6.1.



               (b) The Company shall not be obligated to effect any registration of Registrable Securities
under this Section 6.2 incidental to the registration of any of its securities in connection with
mergers, acquisitions, exchange offers, dividend reinvestment plans or stock option or other
employee benefit plans.



               (c) The Registration Expenses incurred in connection with each registration of Registrable
Securities requested pursuant to this Section 6.2 shall be paid by the Company.



               (d) If a registration pursuant to this Section 6.2 involves an Underwritten Offering and the
managing underwriter advises the Company that, in its opinion, the number of securities proposed to
be included in such registration should be limited due to market conditions, then the Company will
promptly so notify each holder of Registrable Securities that has requested registration and the Registrable Securities of each such holder
shall be excluded pro rata (until such limitation has been met) based on the respective number of
shares of Registrable Securities as to which registration has been requested by all such holders.



11









 





               (e) In connection with any Underwritten Offering with respect to which holders of Registrable
Securities shall have requested registration pursuant to this Section 6.2, the Company shall have
the right to select the managing underwriter with respect to the offering.



          6.3 Registration Procedures.




               (a) If and whenever the Company is required to use its best efforts to effect or cause the
registration of any Registrable Securities under the Securities Act as provided in Section 6.1 or
6.2 hereof, the Company will, as expeditiously as possible:



                    (i) Prepare and, in any event within sixty (60) calendar days after the end of the period
within which requests for registration may be given to the Company (or within ninety (90) days
after the end of such period if such period ends during the first month or the last month of the
Company’s fiscal year), file with the Commission a registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration statement to become and
remain effective; provided that, in the case of a registration provided for in Section 6.1
or 6.2 hereof, before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish to the counsel selected by the Requesting Holders
copies of all such documents proposed to be filed, which documents will be subject to the timely
and reasonable review of such counsel; and provided, further, that the Company may
discontinue any registration of its securities that is being effected pursuant to Section 6.2 at
any time prior to the effective date of the registration statement relating thereto.



                    (ii) Prepare and file with the Commission such amendments (including post-effective
amendments) and supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for a period as may be
requested by the Requesting Holders not exceeding nine (9) months and to comply with the provisions
of the Securities Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended methods of disposition by
the seller or sellers thereof set forth in such registration statement.



                    (iii) Furnish to each holder of Registrable Securities covered by the registration statement
and to each underwriter, if any, of such Registrable Securities such number of copies of a
prospectus and preliminary prospectus for delivery in conformity with the requirements of the
Securities Act, and such other documents as such Person may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities.



                    (iv) Use its best efforts to register or qualify such Registrable Securities covered by such
registration statement under such other securities or blue sky laws of such jurisdictions as each
seller shall reasonably request, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the disposition of the Registrable
Securities owned by such seller in such jurisdictions, except that the Company shall not for any such purpose be required (A) to qualify to do business as a
foreign corporation in any jurisdiction where, but for the requirements of this Section 6.3(a)(iv),
it is not then so qualified, or (B) to subject itself to taxation in any such jurisdiction, or (C)
to take any



12









 




action which would subject it to general or unlimited service of process in any such
jurisdiction where it is not then so subject.




                    (v) Use its best efforts to cause such Registrable Securities covered by such registration
statement to be registered or qualified with or approved by such other governmental agencies or
authorities (including, without limitation, state securities commissions) as may be necessary to
enable the seller or sellers thereof to consummate the disposition of such Registrable Securities,
subject, however, to the limitations set forth in clauses (A), (B) and (C) of
Section 6.3(a)(iv) hereof.



                    (vi) Immediately notify each seller of Registrable Securities covered by such registration
statement, at any time when a prospectus relating thereto is required to be delivered under the
Securities Act within the appropriate period mentioned in
Section 6.3(a)(ii), if the Company becomes aware that the prospectus included 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 light of the circumstances then existing; use its best efforts to prepare
and file an appropriate amendment or supplement to such prospectus and to cause such amendment or
supplement to become effective; and, at the request of any such seller, deliver a reasonable number
of copies of an amended or supplemental prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the circumstances then
existing.



                    (vii) Otherwise use its best efforts to comply with all applicable rules and regulations of
the Commission and make generally available to its security holders, in each case as soon as
practicable, but not later than ninety (90) calendar days after the close of the period covered
thereby (one hundred eighty (180) calendar days in case the period covered corresponds to a fiscal
year of the Company), an earnings statement of the Company which will satisfy the provisions of
Section 11(a) of the Securities Act.



                    (viii) Use its best efforts in cooperation with the underwriters, if any, to list such
Registrable Securities on each securities exchange as they may reasonably designate, which
securities exchanges shall be acceptable to the Company.



                    (ix) In the event the offering is an Underwritten Offering, use its best efforts to obtain a
“cold comfort” letter from the independent public accountants for the Company in customary form and
covering such matters of the type customarily covered by such letters as the Requesting Holders
reasonably request in order to effect an Underwritten Offering of such Registrable Securities.



                    (x) Execute and deliver all instruments and documents (including in an Underwritten Offering
an underwriting agreement in customary form) and take such other actions and obtain such certificates and opinions as the Requesting Holders
reasonably request in order to effect an underwritten public offering of such Registrable
Securities.



13









 





               (b) Each holder of Registrable Securities will, upon receipt of any notice from the Company of
the happening of any event of the kind described in
Section 6.3(a)(vi), forthwith discontinue disposition of the Registrable Securities pursuant
to the registration statement covering such Registrable Securities until such holder’s receipt of
the copies of the supplemented or amended prospectus contemplated by Section 6.3(a)(vi).



               (c) If a registration pursuant to Section 6.1 or 6.2 hereof involves an Underwritten Offering,
each holder of Registrable Securities agrees, whether or not such holder’s Registrable Securities
are included in such registration, not to effect any public sale or distribution, including any
sale pursuant to Rule 144 under the Securities Act, of any Registrable Securities or of any
security convertible into or exchangeable or exercisable for any Registrable Securities (other than
as part of such Underwritten Offering), without the consent of the managing underwriter, during a
period commencing seven (7) days before and ending one hundred eighty (180) days (or such lesser
number as the managing underwriter shall designate) after the effective date of such registration.



               (d) If a registration pursuant to Section 6.1 or 6.2 involves an Underwritten Offering, the
Company agrees, if so required by the managing underwriter, not to effect any public sale or
distribution of any of its equity or debt securities, as the case may be, or securities convertible
into or exchangeable or exercisable for any of such equity or debt securities, as the case may be,
during a period commencing seven (7) days before and ending one hundred eighty (180) (or such
lesser number as the managing underwriter shall designate) days after the effective date of such
registration, except for such Underwritten Offering or except in connection with a stock option
plan, stock purchase plan, savings or similar plan, or an acquisition, merger or exchange offer.



               (e) If a registration pursuant to Section 6.1 or 6.2 involves an Underwritten Offering, any
holder of Registrable Securities requesting to be included in such registration may elect, in
writing, prior to the effective date of the registration statement filed in connection with such
registration, not to register such securities in connection with such registration, unless such
holder has agreed with the Company or the managing underwriter to limit its right under this
Section 6.3.



               (f) In any registration pursuant to Section 6.1 or 6.2, each holder of Registrable Securities
requesting to be included in such registration shall furnish to the Company all such information as
the Company may reasonably request from such holder concerning such holder and its intended method
of distribution of Registrable Securities to enable the Company to include such information in the
registration statement.



               (g) It is understood that in any Underwritten Offering in addition to any shares of stock (the
“initial shares”) the underwriters have committed to purchase, the underwriting agreement may grant
the underwriters an option to purchase up to a number of additional shares of stock (the “option
shares”) equal to fifteen percent (15%) of the initial shares (or such other maximum amount as the National Association of Securities Dealers, Inc. may then
permit), solely to cover over-allotments. Shares of stock proposed to be sold by the Company and
the other sellers shall be allocated between initial shares and option shares as agreed or, in the
absence of agreement, on a pro rata basis among all such holders on the basis of the relative



14









 




number of shares of Registrable Securities each such holder has requested to be included in such
registration.




               (h) Notwithstanding anything to the contrary herein, the Company shall not be required to
include any Registrable Securities of any holder in the event that the Company shall obtain an
opinion of its counsel that all such requested Registrable Securities may then be sold without
registration under Rule 144 or other provision of the Securities Act.



          6.4 Indemnification.




               (a) In the event of any registration of any securities under the Securities Act pursuant to
Section 6.1 or 6.2, the Company will, and it hereby agrees to, indemnify and hold harmless, to the
extent permitted by law, each seller of any Registrable Securities covered by such registration
statement, such seller’s directors, officers, managers, members and employees or general and
limited partners (and directors, officers, managers, members and employees thereof and, if such
seller is a portfolio or investment fund, its investment advisors or agents), each other person who
participants as an underwriter in the offering or sale of such securities and each other person, if
any, who controls such seller or any such underwriter within the meaning of the Securities Act, as
follows:



                    (i) against any and all loss, liability, claim, damage or expense whatsoever arising out of or
based upon an untrue statement or alleged untrue statement of a material fact contained in any
registration statement (or any amendment or supplement thereto), including all documents
incorporated therein by reference, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not misleading, or
arising out of an untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to make the statements therein not
misleading;



                    (ii) against any and all loss, liability, claim or damage and expense whatsoever to the extent
of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; and



                    (iii) against any and all expenses reasonably incurred by them in connection with
investigating, preparing or defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above;


provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in conformity with written
information furnished






15









 







to the Company by or on behalf of any underwriter or any seller expressly for
use in the preparation of any registration statement (or any amendment thereto) or any preliminary
prospectus or prospectus (or any amendment or supplement thereto); and



provided, further, that the Company will not be liable to any person who
participates as an underwriter in the offering or sale of Registrable Securities or any other
person, if any, who controls such underwriter within the meaning of the Securities Act, under the
indemnity agreement in this Section 6.4(a) with respect to any preliminary prospectus or final
prospectus or final prospectus as amended or supplemented, as the case may be, to the extent that
any such loss, claim, damage or liability of such underwriter or controlling Person resulted from
the fact that such underwriter sold Registrable Securities to a Person to whom there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the final prospectus or
of the final prospectus as then amended or supplemented, which is most recent, if the Company has
previously furnished copies thereof to such underwriter. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such seller or any such
director, officer, general or limited partner, manager, member, investment advisor or agent,
underwriter or controlling Person and shall survive the transfer of such securities by such seller.




               (b) The Company may require, as a condition to including any Registrable Securities in any
registration statement filed in accordance with Section 6.1 and 6.2, that the Company shall have
received an undertaking reasonably satisfactory to it from the prospective seller of such
Registrable Securities or any underwriter to indemnify and hold harmless (in the same manner and to
the same extent as set forth in Section 6.4(a)) the Company with respect to any statement or
alleged statement in or omission or alleged omission from such registration statement, any
preliminary, final or summary prospectus contained therein, or any amendment or supplement, if such
statement or alleged statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of such seller or
underwriter specifically stating that it is for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling Person and shall survive the transfer of such
securities by such seller. In that event, the obligations of the underwriter and such sellers
pursuant to this Section 6.4 are to be several and not joint; provided, however,
that each such seller’s liability under this Section 6.4 shall be limited to an amount equal to the
net proceeds (after deducting the underwriting discount and expenses) received by such seller from
the sale of Registrable Securities sold by such seller pursuant to this Agreement.



               (c) Promptly after receipt by an indemnified party hereunder of written notice of the
commencement of any action or proceeding involving a claim referred to in this Section 6.4, such
indemnified party will, if a claim in respect thereof is to be made against any indemnifying party,
give written notice to such indemnifying party of the commencement of such action;
provided, however, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations under this Section 6.4,
except to the extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party, unless in such
indemnified party’s reasonable judgement a conflict of interest between such indemnified and



16









 




indemnifying parties may exist in respect of such claim (in which case the indemnifying party shall
not be liable for the fees and expenses of more than one counsel for a majority of the sellers of
Registrable Securities, or more than one counsel for the underwriters in connection with any one
action or separate but similar or related actions), the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that it may wish with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof.




               (d) The Company and each seller of Registrable Securities shall provide for the foregoing
indemnity (with appropriate modifications) in any underwriting agreement with respect to any
required registration or other qualification of securities under any federal or state law or
regulation of any governmental authority.



          6.5 Contribution. In order to provide for just and equitable contribution in
circumstances under which the indemnity contemplated by Section 6.4 is for any reason not
available, the parties required to indemnify by the terms thereof shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity
agreement incurred by the Company, any seller of Registrable Securities and one or more of the
underwriters, except to the extent that contribution is not permitted under Section 11(f) of the
Securities Act. In determining the amounts which the respective parties shall contribute, there
shall be considered the relative benefits received by each party from the offering of the
Registrable Securities (taking into account the portion of the proceeds of the offering realized by
each), the parties’ relative knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent any statement or omission
and any other equitable considerations appropriate under the circumstances. The Company and each
person selling securities agree with each other that no seller of Registrable Securities shall be
required to contribute any amount in excess of the amount such seller would have been required to
pay to an indemnified party if the indemnity under Section 6.4 were available. The Company and
each such seller will agree with each other and the underwriters of the Registrable Securities, if
requested by such underwriters, that it would not be equitable if the amount of such contribution
were determined by pro rata or per capita allocation (even if the underwriters were treated as one
entity for such purpose) or for the underwriters’ portion of such contribution to exceed the
percentage that the underwriting discount bears to the initial public offering price of the
Registrable Securities. For purposes of this Section 6.5, each Person, if any, who controls an
underwriter within the meaning of Section 15 of the Securities Act, shall have the same rights to
contribution as such underwriter, and each director and each officer of the Company who signed the
registration statement, and each Person, if any, who controls the Company or a seller of
Registrable Securities within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Company or a seller of Registrable Securities, as the case may be.




          6.6 Rule 144. If the Company shall have filed a registration statement pursuant to
the requirements of Section 12 of the Exchange Act or a registration statement pursuant to the
requirements of the Securities Act, the Company covenants that it will file the



17









 




reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted
by the Commission thereunder (or, if the Company is not required to file such reports, it will,
upon the request of any holder of Registrable Securities, make publicly available other information
contemplated by Rule 144 under the Securities Act). From and after such time as the Company is
required to file reports and other documents with the Commission pursuant to the Exchange Act, so
long as any holder owns Registrable Securities that have not been registered under the Securities
Act, the Company shall furnish to such holder upon request a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other
reports and documents so filed as such holder may reasonably request in availing himself of any
rule or regulation of the Commission allowing him to sell any such Registrable Securities without
registration.




     Section 7. Right of First Offer for New Securities.



          7.1 The Company hereby agrees to offer to each Investor and Additional Stockholder the right
to purchase shares of any New Securities that the Company may propose to sell and issue. Such
right shall allow each Investor and Additional Stockholder to purchase up to such portion of the
New Securities proposed to be issued as may be necessary to prevent any dilution of the Investor’s
or Additional Stockholder’s ownership interest in the Company acquired pursuant to this Agreement
from the level that existed prior to the proposed issuance of such New Securities. The right of
first offer granted hereunder with respect to any specific proposed issuance of New Securities
shall terminate if unexercised, in whole or in part, by the payment of the purchase price in full,
within twenty one (21) days after receipt of the associated Issuance Notice described in Section
7.2 below.




          7.2 In the event the Company undertakes an issuance of New Securities while the right of first
offer granted hereunder remains in effect, it shall give each Investor and Additional Stockholder
written notice of its intention, describing the number of shares of Capital Stock, rights, options
or warrants it intends to issue as New Securities, the purchase price therefor (which shall be
payable solely in cash) and the terms upon which the Company proposes to issue the same (such
notice, the “Issuance Notice”). An Investor or Additional Stockholder may exercise its
right to purchase all or any portion of its share of such New Securities (as determined in
accordance with Section 7.1) for the purchase price and upon the terms specified in the Issuance
Notice by (i) giving written notice to the Company and each other Investor and Additional
Stockholder and stating therein the quantity of New Securities to be purchased (the “Purchase
Notice”) within fourteen (14) days after the receipt of the Issuance Notice and (ii) delivering
to the Company a cash payment for the full purchase price of the New Securities to be purchased
within twenty one (21) days after the receipt of the Issuance Notice. Notwithstanding the
foregoing, any Investor or Additional Stockholder that did not provide a Purchase Notice within
such fourteen (14) day period but receives a Purchase Notice from one or more other Investors or
Additional Stockholders shall be permitted to exercise its purchase right in accordance with the
immediately preceding sentence except that such Investor or Additional Stockholder shall be
permitted to provide its Purchase Notice up to seventeen (17) days after the receipt of the Issuance Notice. The right of first offer for New Securities provided for
under this Section 7 shall terminate upon, and shall not be applicable to, an Initial Public
Offering.





18









 








          7.3 Any New Securities issued and sold by the Company must be on the exact terms contained in
the Issuance Notice provided by the Company in connection therewith not more than ninety (90) days
after the date of such Issuance Notice.




     Section 8. Legend on Certificates. The following statement shall be inscribed on all
certificates representing shares of Capital Stock of the Company now owned or hereafter acquired by
the Investors and Additional Stockholders during the term of this Agreement:




“The sale, transfer, hypothecation, negotiation, pledge, assignment,
encumbrance or other disposition of this share certificate and the
shares of Capital Stock represented hereby are restricted by and are
subject to all of the terms, conditions and provisions of a certain
Stockholders’ Agreement dated as of November 15, 2003 among the
Stockholders of the Company as that agreement may be amended and
restated from time to time, which agreement is on file at the
principal office of the Company.”




“The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or pursuant
to any state securities laws. The securities have been acquired for
investment and may not be sold or transferred except in compliance
with the registration requirements of the Securities Act of 1933, as
amended, and applicable state securities laws.”



     Section 9. Financial Information. The Company will deliver the following reports to each
Investor or Additional Stockholder and each successor in interest, if any:



          9.1 Annual Audited Statements. As soon as practicable after the end of each fiscal
year, and in any event within one hundred eighty (180) days thereafter, consolidated balance sheets
of the Company and its subsidiaries, if any, as of the end of such fiscal year, and consolidated
statements of income and consolidated statements of changes in cash flow of the Company and its
subsidiaries, if any, for such fiscal year, prepared in accordance with United States generally
accepted accounting principles consistently applied and setting forth in each case in comparative
form the figures for the previous fiscal year and the budgeted figures for the current fiscal year,
all in reasonable detail and audited by independent public accountants approved by the Board of
Directors and acceptable to the Investors.




          9.2 Additional Information. The Company will deliver or provide to each Investor and
Additional Stockholder (i) as soon as practicable after the end of each quarter and in any event
within thirty (30) days thereafter, an unaudited consolidated balance sheet of the Company and its
subsidiaries, if any, as of the end of each such quarterly period, and consolidated statements of
income and consolidated statements of change in cash flow of the Company for such period and for
the current fiscal year to date, prepared in accordance with United States generally accepted
accounting principles, subject to changes resulting from normal year-end audit adjustments, and setting forth in each case in comparative form the figures for
the same periods of the previous fiscal year and the budgeted figures for the current periods, all
in reasonable detail and signed by the principal financial or accounting officer of the Company,






19









 







together with a letter from the management of the Company discussing in reasonable detail (A) the
operations of the Company for the previous quarter, (B) any deviations in the actual performance
for the previous quarter of the Company from the projected performance of the Company and its
subsidiaries, and (C) a general commentary on the business prospects of the Company and any other
material issues relating to the Company, and (ii) with reasonable promptness, (A) such information
and data, including access to books and records of the Company as any such Investor and Additional
Stockholder may from time to time reasonably request and (B) such other information as requested by
Accretive from time to time as is necessary or desirable for Accretive in fulfilling its reporting
requirements to the United States Small Business Administration as a Small Business Investment
Company; provided that the Company shall promptly provide to Oak Hill a copy of all such
information provided to Accretive under this clause (B).




     Section 10. Termination. This Agreement shall terminate



               (a) with respect to each Investor or Additional Stockholder, at such time as such Investor or
Additional Stockholder transfers all shares of Capital Stock (or any option or warrant therefor)
owned by such Investor or Additional Stockholder (or permitted transferees in accordance with
Section 4 hereof) in accordance with the terms of this Agreement;



               (b) upon the dissolution of the Company;



               (c) upon the mutual written agreement of the parties hereto; and



               (d) except for Section 6 hereof, upon the completion of an Initial Public Offering.



     Section 11. Miscellaneous.



          11.1 Entire Agreement; Amendment and Modification. This Agreement constitutes the
entire agreement of the parties with respect to the subject matter hereof and may not be modified,
amended or terminated except by a written instrument duly executed by the Majority Stockholders.
Notwithstanding the foregoing, this Agreement shall not be amended without the consent of each
holder of shares adversely affected if such amendment would adversely alter the interests of such
holders in any material respect disproportionately from all other holders of shares of the same
class or series.




          11.2 Waiver of Compliance. Except as otherwise provided in this Agreement, any
failure of any of the parties to comply with any obligation, covenant, agreement or condition
herein may be waived by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure, breach or default.




          11.3 Severability. If any provision of this Agreement shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to such provision and shall
not in any manner affect or render invalid or unenforceable any other severable provision of this





20









 







Agreement, and this Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein.




          11.4 Successors and Assigns. Except as otherwise expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of the Company, its successors and
assigns, and the Investors and Additional Stockholders and their respective heirs, personal
representatives, successors and assigns; provided, however, that nothing contained
herein shall be construed as granting any Investor or Additional Stockholder the right to transfer
his or its shares of Capital Stock (or any option or warrant therefor), except as expressly
provided in this Agreement, and no party shall be deemed an Investor or Additional Stockholder
hereunder after he or it ceases to own any Capital Stock (or any option or warrant therefor).




          11.5 Headings. The section headings contained herein are for the purposes of
convenience only and are not intended to define or limit the content of said sections.




          11.6 Injunctive Relief. The Capital Stock cannot be readily purchased or sold in the
open market and, for that reason, among others, the parties will be irreparably damaged if this
Agreement is not specifically enforced. Should any dispute arise concerning the sale or
Disposition of any Capital Stock hereunder or the non-compliance by an Investor or Additional
Stockholder with the terms of Section 2 hereof, an injunction may be issued restraining any sale or
Disposition of Capital Stock or alleged non-compliance with the terms of Section 2 hereof pending
the determination of such controversy. Any right or obligation to purchase, sell or vote any of the
Capital Stock or to assure compliance with the terms of Section 2 hereof shall be enforceable in a
court of equity by a decree of specific performance. Such remedy shall be cumulative and in
addition to any other remedy that the parties may have.




          11.7 Further Assurances. Each party hereto shall cooperate and shall take such
further action and shall execute and deliver such further documents as may be reasonably requested
by any other party in order to carry out the provisions and purposes of this Agreement.




          11.8 Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, without giving effect to the conflicts of law
principles thereof.




          11.9 Notices. Any notice, request or other communication hereunder, unless this
Agreement specifically provides otherwise, shall be in writing and shall be deemed to be duly given
when delivered personally, by registered or certified mail, postage prepaid, or by a nationally
recognized overnight courier service to such address as any Investor or Additional Stockholder may
provide to the Company, and with respect to notices sent to the Company, at 401 North Michigan
Avenue, Suite 2700, Chicago, Illinois 60611, Attn: Greg Kazarian, General Counsel, or to such
other address as the Company may by written notice advise the other parties hereto from time to
time.




          11.10 Recapitalizations, Exchanges, Etc. Affecting the Securities. This Agreement
shall apply, to the full extent set forth herein with respect to all shares of Capital Stock and
all other equity and debt 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 at any time in








21









 







respect of, in exchange for, or in substitution of, such equity or debt securities (and shall be
appropriately adjusted for any stock dividends, splits, reverse splits, combinations,
reclassifications, recapitalizations, reorganizations and the like occurring after the date
hereof), owned by the Investors and Additional Stockholders (or their permitted transferees as
provided in this Agreement). Each person, natural or legal, to whom any certificate for shares of
Capital Stock is to be issued or transferred in accordance with and subject to the provisions of
this Agreement shall be required to execute a copy of this Agreement and acknowledge in writing
that he, she or it is bound by the terms of this Agreement prior to delivery to such transferee of
any such certificate and prior to such transferee being deemed a stockholder of the Company.




          11.11 Employee Shares. The Investors and Additional Stockholders acknowledge that
certain employees, directors and outside consultants of the Company, pursuant to the terms of the
Company’s Restricted Stock Plan (as the same may be amended from time to time), the Company’s
Restricted Stock Option Plan (as the same may be amended from time to time), any award agreements
entered into thereunder, and any applicable employment agreements, may have rights and obligations
similar to the rights and obligations described in Sections 5 and 6 hereof, and agree to take such
actions to permit the exercise and enforcement of such rights and obligations as the Company deems
necessary in the reasonable good-faith judgment of the Board.




          11.12 Tolan Restricted Shares. Notwithstanding anything set forth herein to the
contrary, any shares of Common Stock which have been or which may be acquired by Tolan pursuant to
any Restricted Stock Award Agreement or any other agreement, plan or arrangement under the
Company’s Restricted Stock Plan shall not be subject to the terms hereof, but shall instead be
governed by the terms of such Restricted Stock Plan and Restricted Stock Award Agreement or other
applicable agreement, plan or arrangement.




          11.13 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which together shall constitute one and the same instrument.




[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURES FOLLOW ON NEXT PAGE.]





22









 








          IN WITNESS WHEREOF, the undersigned individuals have executed this Agreement and the
undersigned entities have caused this Agreement to be executed by their duly authorized officers as
of the date first set forth above.




	 	 	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 	 	 
	 	 	HEALTHCARE SERVICES, INC.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Greg Kazarian	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Greg Kazarian	 	 
	 

	 	Title:
	 	SVP and General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	INVESTORS AND ADDITIONAL STOCKHOLDERS:
	 
	 	 	 	 	 	 
	 	 	ACCRETIVE INVESTORS SBIC, L.P.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Accretive Associates SBIC, LLC,

    General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ J. Michael Cline	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	J. Michael Cline	 	 
	 

	 	Title:
	 	Managing Member	 	 
	 
	 	 	 	 	 	 
	 	 	FW OAK HILL ACCRETIVE HEALTHCARE INVESTORS, L.P.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Group VI 31, L.L.C., General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	[illegible]	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	MARY TOLAN
	 
	 	 	 	 	 	 
	 	 	/s/ Mary Tolan
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ACCRETIVE INVESTORS V, LLC
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Accretive Associates I, LLC,

    Managing Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ J. Michael Cline	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:

	 	J. Michael Cline
	 	 
	 

	 	Title:
	 	Managing Member	 	 






[Signature Page to Third Amended and Restated Stockholders’ Agreement]




 









 





	 	 	 	 	 
	 	 	 
	 	     /s/ Etienne Deffarges
 	 
	 	Etienne Deffarges 	 
	 	 	 
	 



[Signature Page to Third Amended and Restated Stockholders’ Agreement]





 









 





	 	 	 	 	 
	 	 	 
	 	/s/ Steve Kaplan
 	 
	 	Steve Kaplan        	 
	 	 	 
	 



[Signature Page to Third Amended and Restated Stockholders’ Agreement]





 









 





	 	 	 	 	 
	 	JOHN T. STATON DECLARATION OF TRUST

 	 
	 	By:  	/s/ John Staton
 	 
	 	Name:  	John Staton 	 
	 	Its:	Trustee 	 
	 



[Signature Page to Third Amended and Restated Stockholders’ Agreement]





 









 





	 	 	 	 	 
	 	SPIEGEL FAMILY LLC

 	 
	 	By:  	/s/ Arthur H. Spiegel, III
 	 
	 	Name:  	Arthur H. Spiegel, III 	 
	 	Its:	 	 
	 



[Signature Page to Third Amended and Restated Stockholders’ Agreement]





 









 





	 	 	 	 	 
	 	 	 
	 	/s/ Gregory Kazarian
 	 
	 	Gregory Kazarian 	 
	 	 	 
	 



[Signature Page to Third Amended and Restated Stockholders’ Agreement]





 









 





	 	 	 	 	 
	 	THE SHULTZ 1989 FAMILY TRUST

 	 
	 	By:  	/s/ George Argyris
 	 
	 	Name:  	George Argyris 	 
	 	Its:	  Trustee 	 
	 



[Signature Page to Third Amended and Restated Stockholders’ Agreement]





 









 





	 	 	 	 	 
	 	 	 
	 	     /s/ Rich Gillette
 	 
	 	Rich Gillette 	 
	 	 	 
	 



[Signature Page to Third Amended and Restated Stockholders’ Agreement]





 









 





	 	 	 	 	 
	 	 	 
	 	/s/ Paul Daversa
 	 
	 	Paul Daversa 	 
	 	 	 
	 



[Signature Page to Third Amended and Restated Stockholders’ Agreement]





 









 





	 	 	 	 	 
	 	THE STEPHEN BROOKS SMITH FAMILY TRUST

 	 
	 	By:  	/s/ Stephen B. Smith
 	 
	 	Name:  	Stephen B. Smith 	 
	 	Its: 	  Trustee 	 
	 



[Signature Page to Third Amended and Restated Stockholders’ Agreement]





 









 





	 	 	 	 	 
	 	 	 
	 	     /s/ John Ducharme
 	 
	 	John Ducharme 	 
	 	 	 
	 




 









 





Schedule A – Additional Stockholders



Etienne Deffarges



Steve Kaplan



JOHN T. STATON DECLARATION OF TRUST



SPIEGEL FAMILY LLC



Greg Kazarian



THE SHULTZ 1989 FAMILY TRUST



Rich Gillette



Paul Daversa



The Stephen Brooks Smith Family Trust



John Ducharme




 









 





ANNEX A



Definitions




     As used in this Agreement, the following terms shall have the respective meanings set forth as
follows:


“Accretive” has the meaning stated in the preamble to this Agreement.



“Accretive Investors” has the meaning stated in the preamble to this Agreement.



“Additional Stockholder” has the meaning stated in the preamble to this Agreement.



“Affiliate” or “affiliate” means, with respect to any Person, any other Person that
controls, is controlled by or is under common control with such Person.



“Amended Certificate” means the Company’s Fourth Amended and Restated Certificate of
Incorporation.



“Capital Stock” means the Company’s Series B Common Stock, par value $0.01 per share (the
“Series B Common Stock”), the Company’s Series C Common Stock, par value $0.01 per share
(the “Series C Common Stock” and, together with the Series B Common Stock, the “Common
Stock”), the Company’s Series A Convertible Preferred Stock, par value $0.01 per share (the
“Series A Preferred Stock”) and the Company’s Series D Convertible Preferred Stock (the
“Series D Preferred Stock”).



“Commission” means the United States Securities and Exchange Commission.



“Common Stock” has the meaning stated in the recitals to this Agreement.



“Company” has the meaning stated in the preamble to this Agreement.



“Company Option” has the meaning stated in Section 4.4(a).



“Company Option Period” has the meaning stated in Section 4.4(a).



“Designation” means the Certificate of Designation with respect to the Preferred Stock.



“Dispose” or “Disposition” has the meaning stated in Section 4.1.



“Exchange Act” means the Securities Exchange Act of 1934, as amended.



“Family Member” or “Family Members” has the meaning stated in Section 4.2.



“Holder Request” has the meaning stated in Section 6.1(a).



“Initial Public Offering” has the meaning stated in Section 6.1(a).



“Investor” and “Investors” has the meaning stated in the preamble to this
Agreement.




 









 




“Investor Option” has the meaning stated in Section 4.4(b).



“Issuance Notice” has the meaning stated in Section 7.2.



“Issuer Securities” has the meaning stated in Section 6.1(f).



“Majority Stockholders” means the holders of at least fifty and one-tenth percent (50.1%)
of the outstanding shares of Capital Stock subject to this Third Amended and Restated Stockholders’
Agreement.



“New Securities” means any Capital Stock and all rights, options or warrants to purchase
Capital Stock, and securities of any type whatsoever that are, or may become, convertible into
Capital Stock; provided, however, that the term “New Securities” does not include
(i) any shares of Preferred Stock issued to any Investor in connection with the 2005 Financing,
(ii) any shares of Common Stock, or options to purchase the Company’s Capital Stock (or other
securities of the Company) issued to employees, consultants, directors, vendors or clients of the
Company pursuant to the Company’s Restricted Stock Plan, incentive stock option plans, stock
purchase agreements or other incentive plans, trust or other arrangements that are approved by the
Board of Directors (provided that each recipient thereof shall have recused himself or caused its
designees to recuse themselves from participating in the Board of Directors’ decision) and the
associated underlying shares of Common Stock issued upon the exercise thereof, (iii) shares of
Common Stock representing in the aggregate no more than seven percent (7.0%) of the Company’s
outstanding equity on a fully-diluted basis issued to Art Spiegel and John Ducharme, (iv) shares of
Common Stock issued to the Chief Executive Officer of the Company pursuant to such person’s
employment agreement or other arrangement approved by the Board of Directors (provided that if such
person is a director, such person shall have recused himself from participating in the Board of
Directors’ decision), (v) any shares of Common Stock issued pursuant to the exercise of any warrant
or option or otherwise issued by the Company pursuant to the provisions of this Agreement, or (vi)
any shares of Capital Stock issued to any institutional lender that provides a loan facility to the
Company approved by the Board of Directors.



“Oak Hill” has the meaning stated in the preamble to this Agreement.



“Offer” has the meaning stated in Section 4.3.



“Offer Notice” has the meaning stated in Section 4.3.



“Offered Shares” has the meaning stated in Section 4.4(a).



“Offering Stockholder” has the meaning stated in Section 4.4(a).



“Offeror” has the meaning stated in Section 4.3.



“Person” means any individual, corporation, joint stock company, joint venture,
partnership, unincorporated association, governmental regulatory entity, country, state or
political subdivision thereof, trust or other entity.



“Proposed Purchaser” has the meaning stated in Section 5.1(a).




 









 




“Public Market” means a market for the Common Stock of the Company that shall be deemed to
exist at such time as thirty-five percent (35%) or more of the Common Stock, on a fully-diluted
basis, has been sold to the public pursuant to one or more registration statements filed with, and
declared effective by, the Commission in accordance with the Securities Act.



“Purchase Notice” has the meaning stated in Section 7.2.



“Registrable Securities” means (A) all shares of Common Stock outstanding on the date
hereof and now or hereafter owned of record or beneficially by any of the Investors and Additional
Stockholders, (B) any shares of Common Stock issued or issuable by the Company in respect of any
shares of Common Stock referred to in the foregoing clause (A) by way of a stock dividend or stock
split or in connection with a combination or subdivision of shares, reclassification,
recapitalization, merger, consolidation or other reorganization of the Company and (C) any shares
of Common Stock issued or issuable upon the conversion of any shares of Preferred Stock or the
exercise of any warrant or option. As to any particular Registrable Securities that have been
issued, such securities shall cease to be Registrable Securities when (i) a registration statement
with respect to the sale of such securities shall have become effective under the Securities Act
and such securities shall have been disposed of under such registration statement, (ii) they shall
have been distributed to the public pursuant to Rule 144 under the Securities Act, (iii) they shall
have been otherwise Disposed of, and new certificates therefor not bearing a legend restricting
further Disposition shall have been delivered by the Company, and subsequent Disposition of them
shall not require their registration or qualification under the Securities Act or any similar state
law then in force, or (iv) they shall have ceased to be outstanding.



“Registration Expenses” means any and all out-of-pocket expenses incident to the Company’s
performance or compliance with Section 6 hereof, including, without limitation, all Commission,
stock exchange or registration and filing fees, all fees and expenses of complying with securities
and blue sky laws (including reasonable fees and disbursements of underwriters’ counsel in
connection with blue sky qualification and stock exchange filings), all fees and expenses of the
transfer agent and registrar, if any, for the Registrable Securities, all printing expenses, the
fees and disbursements of counsel for the Company and of its independent auditors, public
accountants, including the expenses of any special audits and/or “cold comfort” letters required by
or incident to such performance and compliance, and the reasonable fees and disbursements of one
counsel retained by the Requesting Holders, but excluding underwriting discounts and commissions
and applicable transfer and documentary stamp taxes, if any, which shall be borne by the seller of
the securities in all cases.



“Requesting Holders” has the meaning stated in Section 6.1(a).



“Second Amended and Restated Stockholders’ Agreement” has the meaning stated in the
preamble to this Agreement.



“Securities Act” means the Securities Act of 1933, as amended.



“Sellers” has the meaning stated in Section 5.2.



“Tag-Along Notice” has the meaning set forth in Section 5.1(c).




 









 




“Tag-Along Stockholder” has the meaning set forth in Section 5.1(a).



“Tolan” has the meaning stated in the preamble to this Agreement.



“Underwritten Offering” has the meaning stated in Section 6.1(c).





 












 





First Amendment to

Third Amended and Restated Stockholders’ Agreement




     This FIRST AMENDMENT to THIRD AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT (this
“Amendment”), is dated as of September 25, 2009, by and among Accretive Health, Inc., a
Delaware corporation formerly known as Healthcare Services, Inc. (the “Company”), Accretive
Investors SBIC, L.P., a Delaware limited partnership (“Accretive”), FW Oak Hill Accretive
Healthcare Investors, L.P., a Delaware limited partnership (“Oak Hill” and together with
Accretive, the Investors, and each individually, an “Investor”), Mary Tolan, an individual
resident of the State of Illinois (“Tolan”) and the other parties executing signature pages
hereto. Capitalized terms used but not defined herein shall have the meanings ascribed to them in
the Agreement (as defined below).



     WHEREAS, the Company, the Investors and Tolan are parties to the Third Amended and Restated
Stockholders’ Agreement dated as of February ___, 2009 among the Company and the other parties
thereto (the “Agreement”);



     WHEREAS, an amendment to the Agreement requires a written instrument duly executed by the
Majority Stockholders;



     WHEREAS, the undersigned, comprising the Majority Stockholders, desire to amend the Agreement
to (a) provide each holder of Registrable Securities that holds more than 12% of the Company’s
Common Stock (on an as-converted basis) as of the date of this Amendment with one “demand”
registration, subject to specified limitations, and (b) clarify that Tolan shall have registration
rights with respect to all shares of capital stock of the Company held by Tolan, and that all
shares of capital stock held by Tolan shall be deemed to be “Registrable Securities;”



     NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this
Amendment, the parties hereto agree as follows:



     1. Section 6.1(a) of the Agreement is hereby replaced with the following:



     “(a) At any time after an initial public offering of shares of Capital Stock of the
Company, which public offering raises net proceeds to the Company of not less than $25
million (the “Initial Public Offering”) pursuant to a registration statement under
the Securities Act, (i) each holder of Registrable Securities that holds more than 12% of
the Company’s Common Stock (on an as-converted basis) as of the date of this Amendment
(each, a “New Demand Holder”), or (ii) holders of at least fifty percent (50%) of
the outstanding shares of Capital Stock covered by this Agreement (the “Original Demand
Holders”; a New Demand Holder or the Original Demand Holders, as the case may be, are
referred to herein as the “Requesting Holders”) may request in writing that the
Company effect the registration under the Securities Act of all or part of the Registrable
Securities (as hereinafter defined) held by such Requesting Holders, specifying in the
request the number and type of Registrable Securities to be registered by each such holder
and the intended method of disposition thereof (such notice is hereinafter referred to as a
“Holder Request”). Upon receipt of such Holder Request, the Company will promptly
give written notice of such requested registration to all other holders of Registrable
Securities, which other holders shall have the right to include the Registrable Securities
held by them in such registration and thereupon the Company will, as expeditiously as
possible, use its best efforts to effect the registration under the Securities Act of:”



 









 





     2. Section 6.1(a)(ii)(1) of the Agreement is hereby replaced with the following:




     “(1) (A) in the case of a New Demand Holder, unless the New Demand Holder shall have
made a request for registration with respect to at least 5% of the Company’s then
outstanding Common Stock or having an aggregate market value of at least $50 million, and
(B) in the case of the Original Demand Holders, unless the Company shall have received
requests for such registration with respect to at least 25% of the Company’s then
outstanding Common Stock on a fully diluted basis; or”



     3. Section 6.1(b) of the Agreement is hereby replaced with the following:




     “(b) Notwithstanding the provisions of Section 6.1(a) hereof, the Company shall not be
obligated to file more than (i) in the case of any New Demand Holder, one registration
statement on behalf of such New Demand Holder pursuant to this Section 6.1, and (ii) in the
case of the Original Demand Holders, an aggregate of two registration statements pursuant to
this Section 6.1.”



     4. Section 11.12 of the Agreement is hereby replaced with the following:




     “11.12 Tolan Restricted Shares. For the avoidance of doubt, all shares of
Common Stock which have been or which may be acquired by Tolan from the Company pursuant to
any agreement, plan or arrangement shall be subject to the terms hereof, including, without
limitation, for purposes of Section 6 of this Agreement.”



     5. Continuing Effect of Agreement. Except as specifically provided herein, the
Agreement shall remain in full force and effect in accordance with its terms.



     6. Titles and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this Agreement.



     7. Counterparts; Facsimile Signatures. This Amendment may be executed in any number
of counterpart signature pages, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same document. This Amendment may be executed by exchange of
signatures by facsimile.



     8. Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to the conflicts of laws principles
thereof.



[signature pages follow]





2









 








     IN WITNESS WHEREOF, the parties hereto have executed this Amendment or caused this Amendment
to be executed by their duly authorized representatives, as of the date first written above.



	 	 	 	 	 
	 	ACCRETIVE HEALTH, INC.

 	 
	 	By:  	/s/ Greg Kazarian
 	 
	 	 	Name:  	Greg Kazarian 	 
	 	 	Title:  	Senior Vice President and General Counsel 	 
	 	 	 	 	 
	 	ACCRETIVE INVESTORS SBIC, L.P.

 	 
	 	By:  	Accretive Associates SBIC, LLC
General Partner
 	 
	 	 	 
	 	By:  	/s/ J. Michael Cline
 	 
	 	 	Name:  	J. Michael Cline 	 
	 	 	Title:  	Managing Member 	 
	 
	 	FW OAK HILL ACCRETIVE HEALTHCARE INVESTORS, L.P.

 	 
	 	By:  	Group VI 31, L.L.C., General Partner
 	 
	 	 	 
	 	By:  	/s/ John Fant
 	 
	 	 	Name:  	John Fant 	 
	 	 	Title:  	 	 
	 
	 	MARY TOLAN

 	 
	 	/s/ Mary Tolan
 	 
	 	 	 
	 	ACCRETIVE INVESTORS V, LLC

 	 
	 	By:  	Accretive Associates I, LLC,
Managing Member
 	 
	 	 	 	 
	 	By:  	/s/ J. Michael Cline
 	 
	 	 	Name:  	J. Michael Cline 	 
	 	 	Title:  	Managing Member 	 
	 




3











 





Second Amendment to

Third Amended and Restated Stockholders’ Agreement




     This SECOND AMENDMENT to THIRD AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT (this
“Amendment”), is dated as of April 26, 2010, by and among Accretive Health, Inc., a
Delaware corporation formerly known as Healthcare Services, Inc. (the “Company”), Accretive
Investors SBIC, L.P., a Delaware limited partnership (“Accretive Investors SBIC”),
Accretive Investors V, LLC, a Delaware limited liability company (“Accretive Investors V”
and together with Accretive Investors SBIC, “Accretive”), FW Oak Hill Accretive Healthcare
Investors, L.P., a Delaware limited partnership (“Oak Hill” and together with Accretive,
the “Investors”, and each individually, an “Investor”), and Mary Tolan, an
individual resident of the State of Illinois (“Tolan”). Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Agreement (as defined below).



     WHEREAS, the Company, the Investors and Tolan are parties to the Third Amended and Restated
Stockholders’ Agreement dated as of February 22, 2009 among the Company and the other parties
thereto, as amended pursuant to a First Amendment to Third Amended and Restated Stockholders’
Agreement dated as of September 25, 2009 (as amended, the “Agreement”);



     WHEREAS, an amendment to the Agreement requires a written instrument duly executed by the
Majority Stockholders;



     WHEREAS, the undersigned, comprising the Majority Stockholders, desire to amend the Agreement
as provided below;



     NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this
Amendment, the parties hereto agree as follows:



     1. That the phrase “within thirty (30) days after the receipt of any such notice” in the
second sentence of Section 6.2(a) of the Agreement is hereby replaced with the following:



          “within such period of time as is specified in the Company’s written notice”



     2. A new Section 6.2(f) is added to the Agreement to read in its entirety as follows:




     “(f) The Company shall be entitled to permit stockholders who are not parties to this
Agreement to include shares of Common Stock in the registration statement for the Initial
Public Offering to the extent authorized by the Company’s Board of Directors or a committee
thereof, provided that each holder of shares so included (“Other Shares”) shall be
permitted to include no more than the same percentage of the number of shares of Capital
Stock it beneficially owns as each holder of Registrable Securities is permitted to include.
In the event that, pursuant to Section 6.2(d), the number of shares to be included in the
Initial Public Offering by selling stockholders needs to be limited, Registrable Securities
and Other Shares shall be excluded pro rata based on the respective number of shares of
Registrable Securities and Other Shares as to which registration has been requested by all
such holders.”



 









 





     3. Continuing Effect of Agreement. Except as specifically provided herein, the
Agreement shall remain in full force and effect in accordance with its terms.



     4. Titles and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this Agreement.



     5. Counterparts; Facsimile Signatures. This Amendment may be executed in any number
of counterpart signature pages, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same document. This Amendment may be executed by exchange of
signatures by facsimile.



     6. Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to the conflicts of laws principles
thereof.



[signature pages follow]









2









 








     IN WITNESS WHEREOF, the parties hereto have executed this Amendment or caused this Amendment
to be executed by their duly authorized representatives, as of the date first written above.



	 	 	 	 	 	 	 

	 	 	ACCRETIVE HEALTH, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ D. Zaccardo
 

	 	 
	 

	 	Name:
	 	D. Zaccardo	 	 
	 

	 	Title:
	 	VP / General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	ACCRETIVE INVESTORS SBIC, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Accretive Associates SBIC, LLC	 	 
	 

	 	 	 	General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ J. Michael Cline	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	J. Michael Cline	 	 
	 

	 	Title:
	 	Managing Member	 	 
	 
	 	 	 	 	 	 
	 	 	FW OAK HILL ACCRETIVE HEALTHCARE INVESTORS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Group VI 31, L.L.C., General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John H. Fant	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	John H. Fant	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	MARY TOLAN	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Mary Tolan	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ACCRETIVE INVESTORS V, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Accretive Associates I, LLC,	 	 
	 

	 	 	 	Managing Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ J. Michael Cline	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	J. Michael Cline	 	 
	 

	 	Title:
	 	Managing Member	 	 






[Signature Page to First Amendment to Third Amended and Restated Stockholders’ Agreement]





 











 





Third Amendment to

Third Amended and Restated Stockholders’ Agreement




     This THIRD AMENDMENT to THIRD AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT (this
“Amendment”), is dated as of May 3, 2010, by and among Accretive Health, Inc., a Delaware
corporation formerly known as Healthcare Services, Inc. (the “Company”), Accretive
Investors SBIC, L.P., a Delaware limited partnership (“Accretive Investors SBIC”),
Accretive Investors V, LLC, a Delaware limited liability company (“Accretive Investors V”
and together with Accretive Investors SBIC, “Accretive”), FW Oak Hill Accretive Healthcare
Investors, L.P., a Delaware limited partnership (“Oak Hill” and together with Accretive,
the “Investors”, and each individually, an “Investor”), and Mary Tolan, an
individual resident of the State of Illinois (“Tolan”). Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Agreement (as defined below).



     WHEREAS, the Company, the Investors and Tolan are parties to the Third Amended and Restated
Stockholders’ Agreement dated as of February 22, 2009 among the Company and the other parties
thereto, as amended pursuant to a First Amendment to Third Amended and Restated Stockholders’
Agreement dated as of September 25, 2009 and as further amended pursuant to a Second Amendment to
Third Amended and Restated Stockholders’ Agreement dated as of April 26, 2010 (as so mended, the
“Agreement”);



     WHEREAS, an amendment to the Agreement requires a written instrument duly executed by the
Majority Stockholders;



     WHEREAS, the undersigned, comprising the Majority Stockholders, desire to amend the Agreement
as provided below;



     NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this
Amendment, the parties hereto agree as follows:



     1. Clause (iv) of Section 4.2 of the Agreement is hereby renumbered as clause (v).



     2. A new clause (iv) of Section 4.2 is hereby added to the Agreement to read in its entirety
as follows:




     “(iv) a transfer by gift to a charitable organization, or to any trust, limited
partnership or limited liability company primarily for the benefit of a charitable
organization;”



     3. Continuing Effect of Agreement. Except as specifically provided herein, the
Agreement shall remain in full force and effect in accordance with its terms.



     4. Titles and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this Agreement.



     5. Counterparts; Facsimile Signatures. This Amendment may be executed in any number
of counterpart signature pages, each of which shall be deemed to be an original, and all



 









 




of which together shall constitute one and the same document. This Amendment may be executed
by exchange of signatures by facsimile.




     6. Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to the conflicts of laws principles
thereof.



[signature pages follow]









2









 








     IN WITNESS WHEREOF, the parties hereto have executed this Amendment or caused this Amendment
to be executed by their duly authorized representatives, as of the date first written above.



	 	 	 	 	 	 	 

	 	 	ACCRETIVE HEALTH, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ D. Zaccardo	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	D. Zaccardo	 	 
	 

	 	Title:
	 	VP / General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	ACCRETIVE INVESTORS SBIC, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Accretive Associates SBIC, LLC	 	 
	 

	 	 	 	General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ J. Michael Cline	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	J. Michael Cline	 	 
	 

	 	Title:
	 	Managing Member	 	 
	 
	 	 	 	 	 	 
	 	 	FW OAK HILL ACCRETIVE HEALTHCARE INVESTORS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Group VI 31, L.L.C., General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John Fant	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	John Fant	 	 
	 

	 	Title:
	 	V.P.	 	 
	 
	 	 	 	 	 	 
	 	 	MARY TOLAN	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Mary Tolan	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ACCRETIVE INVESTORS V, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Accretive Associates I, LLC,	 	 
	 

	 	 	 	Managing Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ J. Michael Cline
 

	 	 
	 

	 	Name:
	 	J. Michael Cline	 	 
	 

	 	Title:
	 	Managing Member	 	 






[Signature Page to Third Amendment to Third Amended and Restated Stockholders’ Agreement]





 











 





Fourth Amendment to

Third Amended and Restated Stockholders’ Agreement




     This FOURTH AMENDMENT to THIRD AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT (this
“Amendment”), is dated as of March 9, 2011, by and among Accretive Health, Inc., a Delaware
corporation formerly known as Healthcare Services, Inc. (the “Company”), Accretive
Investors SBIC, L.P., a Delaware limited partnership (“Accretive Investors SBIC”),
Accretive Investors V, LLC, a Delaware limited liability company (“Accretive Investors V”
and together with Accretive Investors SBIC, “Accretive”), FW Oak Hill Accretive Healthcare
Investors, L.P., a Delaware limited partnership (“Oak Hill” and together with Accretive,
the “Investors”, and each individually, an “Investor”), Mary Tolan, an individual
resident of the State of Illinois (“Tolan”) and the
other parties to the Agreement (the “Additional Parties”).
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the
Agreement (as defined below).



     WHEREAS, the Company, the Investors, Tolan and the Additional Parties are parties to the Third
Amended and Restated Stockholders’ Agreement dated as of February 22, 2009 among the Company and
the other parties thereto, as amended pursuant to a First Amendment to Third Amended and Restated
Stockholders’ Agreement dated as of September 25, 2009, as further amended pursuant to a Second
Amendment to Third Amended and Restated Stockholders’ Agreement dated as of April 26, 2010, and as
further amended pursuant to a Third Amendment to Third Amended and Restated Stockholders’ Agreement
dated as of May 3, 2010 (as so amended, the “Agreement”);



     WHEREAS, an amendment to the Agreement requires a written instrument duly executed by the
Majority Stockholders;



     WHEREAS, the undersigned, comprising the Majority Stockholders, desire to amend the Agreement
as provided below;



     NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this
Amendment, the parties hereto agree as follows:



     1. A new Section 6.2(g) is added to the Agreement to read in its entirety as follows:




     “(g) The Company shall be entitled to permit stockholders who are not parties to this
Agreement to include shares of Common Stock in the registration statement for the
Underwritten Offering contemplated by the Registration Statement on Form S-1 to be filed on
or about March 9, 2011 to the extent authorized by the Company’s Board of Directors or a
committee thereof (such shares, “Other Piggyback Shares”). In the event that, pursuant to
Section 6.2(d), the number of shares to be included in such Underwritten Offering by selling
stockholders needs to be limited, Registrable Securities and Other Piggyback Shares shall be
excluded pro rata based on the respective number of shares of Registrable Securities and
Other Piggyback Shares as to which registration has been requested by all such holders.”



 









 





     2. Section 10(d) of the Agreement is hereby replaced with the following:




     “(d) except for Sections 6, 10 and 11 hereof, upon the completion of an Initial Public
Offering.”



     3. Continuing Effect of Agreement. Except as specifically provided herein, the
Agreement shall remain in full force and effect in accordance with its terms.



     4. Titles and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this Agreement.



     5. Counterparts; Facsimile Signatures. This Amendment may be executed in any number
of counterpart signature pages, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same document. This Amendment may be executed by exchange of
signatures by facsimile.



     6. Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to the conflicts of laws principles
thereof.



[signature pages follow]






2









 








     IN WITNESS WHEREOF, the parties hereto have executed this Amendment or caused this Amendment
to be executed by their duly authorized representatives, as of the date first written above.



	 	 	 	 	 

	 

	 	ACCRETIVE HEALTH, INC.	 	 
	 
	 	 	 	 
	 

	 	By: /s/ Daniel A. Zaccardo
 

Name: Daniel A. Zaccardo
	 	 
	 

	 	Title: Vice President and General Counsel	 	 
	 
	 	 	 	 
	 

	 	ACCRETIVE INVESTORS SBIC, L.P.	 	 
	 
	 	 	 	 
	 

	 	By: Accretive Associates SBIC, LLC

       General Partner	 	 
	 
	 	 	 	 
	 

	 	By: /s/ J. Michael Cline
 

Name: J. Michael Cline
	 	 
	 

	 	Title: Managing Member	 	 
	 
	 	 	 	 
	 

	 	FW OAK HILL ACCRETIVE HEALTHCARE INVESTORS, L.P.	 	 
	 
	 	 	 	 
	 

	 	By: Group VI 31, L.L.C., General Partner	 	 
	 
	 	 	 	 
	 

	 	By: /s/ John Fant
 

Name: John Fant
	 	 
	 

	 	Title: V.P.	 	 
	 
	 	 	 	 
	 

	 	MARY TOLAN	 	 
	 
	 	 	 	 
	 

	 	/s/ Mary Tolan

 



ACCRETIVE INVESTORS V, LLC
	 	 
	 
	 	 	 	 
	 

	 	By: Accretive Associates I, LLC,

       Managing Member	 	 
	 
	 	 	 	 
	 

	 	By: /s/ J. Michael Cline
 

Name: J. Michael Cline
	 	 
	 

	 	Title: Managing Member	 	 






[Signature Page to Fourth Amendment to Third Amended and Restated Stockholders’ Agreement]