Document:

exv10w8

Exhibit 10.8

Stockholders Agreement

STOCKHOLDERS AGREEMENT

Dated as of [                    ]

among

CBaySystems Holdings Limited,

S.A.C. PEI CB Investment, L.P.,

S.A.C. PEI CB Investment II, LLC,

International Equities (S.A.C. Asia) Limited

and the other Stockholders party hereto

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	Section 1.1 Definitions
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II CERTAIN RESTRICTIONS ON TRANSFERS
	 	 	4	 
	 
	 	 	 	 
	Section 2.1 Agreement to be Bound
	 	 	4	 
	Section 2.2 Share Certificates
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III GOVERNANCE
	 	 	5	 
	 
	 	 	 	 
	Section 3.1 Board Size
	 	 	5	 
	Section 3.2 Officer Appointment
	 	 	7	 
	Section 3.3 Proxy
	 	 	7	 
	 
	 	 	 	 
	ARTICLE IV REGISTRATION
	 	 	7	 
	 
	 	 	 	 
	Section 4.1 Piggyback Registrations
	 	 	7	 
	Section 4.2 Lockup Agreements
	 	 	8	 
	Section 4.3 Registration Procedures
	 	 	8	 
	Section 4.4 Registration Expenses
	 	 	10	 
	Section 4.5 Additional Procedures
	 	 	10	 
	Section 4.6 Termination of Registration Rights
	 	 	11	 
	 
	 	 	 	 
	ARTICLE V INDEMNIFICATION AND CONTRIBUTION
	 	 	11	 
	 
	 	 	 	 
	Section 5.1 Indemnification by the Company
	 	 	11	 
	Section 5.2 Indemnification by Stockholders of Registrable Securities
	 	 	11	 
	Section 5.3 Conduct of Indemnification Proceedings
	 	 	11	 
	Section 5.4 Contribution
	 	 	12	 
	 
	 	 	 	 
	ARTICLE VI MISCELLANEOUS
	 	 	13	 
	 
	 	 	 	 
	Section 6.1 Recapitalization, Exchanges, etc.
	 	 	13	 
	Section 6.2 Entire Agreement; Successors and Assigns
	 	 	13	 
	Section 6.3 No Waivers, Amendments
	 	 	14	 
	Section 6.4 Notices
	 	 	14	 
	Section 6.5 Termination
	 	 	15	 
	Section 6.6 Governing Law
	 	 	15	 
	Section 6.7 Consent to Jurisdiction
	 	 	15	 
	Section 6.8 Waiver of Jury Trial
	 	 	16	 
	Section 6.9 Descriptive Headings
	 	 	16	 
	Section 6.10 Severability
	 	 	16	 
	Section 6.11 Counterparts
	 	 	16	 

i

 

 

	 	 	 	 	 
	 	 	Page	 
	Section 6.12 Confidentiality
	 	 	17	 
	Section 6.13 Authority; Effect
	 	 	17	 
	Section 6.14 Enforcement; Further Assurances
	 	 	18	 

ii

 

1

STOCKHOLDERS AGREEMENT

          STOCKHOLDERS AGREEMENT dated as of [     ] (this “Agreement”)
by and among:

          (i) CBaySystems Holdings Limited, a Delaware corporation (the “Company”);

          (ii) S.A.C. PEI CB Investment, L.P., a Cayman Islands limited partnership (“SAC
CBI”);

          (iii) S.A.C. PEI CB Investment II, LLC, a Delaware limited liability company (“SAC CBI
II”);

          (iv) International Equities (S.A.C. Asia) Limited, a company incorporated under the
Companies Act 2001 of Mauritius (“SAC Asia” and, together with SAC CBI and SAC CBI II,
collectively, the “SAC Group”);

          (iv) the Investors (as defined below); and

          (v) such other Persons who from time to time become party hereto by executing a counterpart
signature page hereof in the form of Exhibit A hereto or such other form as may be designated by
the Board (together with the SAC Group and the Investors, the “Stockholders”).

WITNESSETH:

          WHEREAS, the Company and the Investors have entered into an Exchange Agreement, dated as of
September 30, 2010, pursuant to which the Investors agreed to exchange (the “Exchange”) their
shares of common stock, no par value, of MedQuist, Inc., a subsidiary of the Company, for shares of
Common Stock (as defined hereinafter); and

          WHEREAS, the parties hereto desire to enter into certain arrangements relating to the Company,
the CBAY Shares and the Stockholders.

          NOW, THEREFORE, in consideration of the mutual terms, conditions and other covenants and
agreements set forth herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

          Section 1.1 Definitions. As used in this Agreement, the following terms have
the following meanings:

          “Affiliate”, as applied to any Person, means any other Person directly or indirectly
through one or more intermediaries, controlling, controlled by, or under common control with, that
Person. For the purposes of this definition “control” (including, with correlative
meanings, the terms “controlling”, “controlled by” and “under common control
with”), as applied to any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction

 

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of the management and policies of that Person, whether through the ownership of voting
securities, by contract or otherwise.

          “Agreement” shall have the meaning set forth in the preamble of this
Agreement.

          “Board” shall have the meaning set forth in Section 3.1.

          “Business Day” means any day other than a Saturday, a Sunday or a day on which banks
are required to be closed in New York, New York.

          “By-Laws” means the by-laws of the Company and any amendments thereto and restatements
thereof.

          “Certificate of Incorporation” means the Certificate of Incorporation of the Company
and any amendments thereto and restatements thereof filed on behalf of the Company with the
Delaware Secretary of State.

          “Change in Control” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events: (i) the sale or disposition of
all or substantially all of the assets of the Company to any Person or “group” (as such term is
used for the purposes of Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended), other than the Stockholders as of the date of this Agreement and their Affiliates and
Permitted Transferees; or (ii) any Person, other than the Stockholders as of the date of this
Agreement, their Affiliates and Permitted Transferees, is or becomes the beneficial owner, directly
or indirectly, of more than fifty percent (50%) of the total voting power of the outstanding voting
stock of the Company, including by way of merger, consolidation or otherwise.

          “Commission” shall have meaning set forth in Section 4.3(a).

          “Common Stock” means the common stock of the Company, par value $0.01 per share.

          “Company” shall have the meaning set forth in the preamble of this
Agreement.

          “Indemnified Party” shall have the meaning set forth in Section
5.3.

          “Indemnifying Party” shall have the meaning set forth in Section 5.3.

          “Investors” means each of the Stockholders as of the date hereof other than the SAC
Group, and the Permitted Transferees of such Stockholders other than the SAC Group.

          “NASDAQ” means the NASDAQ Global Market.

          “Permitted Transferee” means, with respect to each Stockholder, (a) any
Affiliates thereof (or their Permitted Transferees), (b) any general or limited partner, member,
director, officer or employee of such Stockholder (or their Permitted Transferees) and (c) any
Person to whom a Stockholder (or any direct or indirect Permitted Transferee thereof) Transfers
equity

 

3

interests of the Company in accordance with the terms of this Agreement (including, for the
avoidance of doubt, any consent or waiver pursuant to and in accordance with the terms of this
Agreement) by which such Transferor is bound and, in the case of Transfers other than Transfers of
Common Stock pursuant to a Public Offering or pursuant to Rule 144 under the Securities Act after a
Public Offering, if such Transferee becomes a party to, and is bound to the same extent as its
Transferor by the terms of, this Agreement; provided, that any such Permitted Transferee
referred to in the foregoing clauses agrees in writing to be bound by the terms of this Agreement
in accordance with Section 2.1.

          “Person” means an individual, partnership, corporation, business trust, joint stock
company, limited liability company, unincorporated association, joint venture or other entity of
whatever nature.

          “Piggyback Registration” shall have the meaning set forth in Section 4.1.

          “Public Offering” means any public offering pursuant to an effective registration
statement under the Securities Act.

          “Registrable Securities” means any outstanding shares of Common Stock held by a
Stockholder from time to time until the earlier of (i) a registration statement covering such
Common Stock has been declared effective by the Commission and such stock has been disposed of
pursuant to such effective registration statement, (ii) such Common Stock is eligible to be sold to
the public pursuant to Rule 144 (or any similar provisions then in force) by such Stockholder
without restriction as to volume or manner of sale under the Securities Act, under circumstances in
which any legend borne by the Common Stock relating to restrictions on transferability thereof
under the Securities Act is or can be removed or (iii) such Common Stock is no longer subject to
restrictions under Rule 144 of the Securities Act.

          “Registration Expenses” shall have the meaning set forth in Section 4.4.

          “SAC CBI” shall have the meaning set forth in the preamble of this
Agreement.

          “SAC CBI II” shall have the meaning set forth in the preamble of this Agreement.

          “SAC Directors” shall have the meaning set forth in Section 3.1.

          “SAC Group” shall have the meaning set forth in the preamble of this Agreement.

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

          “Selling Stockholder” shall have the meaning set forth in Section 4.3(c).

          “Shares” means shares of Common Stock.

          “Stockholder” shall have the meaning set forth in the preamble of this Agreement.

          “Subsidiary” means, with respect to any Person, any corporation or other entity of
which a majority of the capital stock or other ownership interests having ordinary voting power

 

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to elect a majority of the board of directors or other persons performing a similar function
at the time directly or indirectly owned by such Person.

          “Transfer” means any direct or indirect transfer, sale, assignment, pledge, mortgage,
hypothecation, encumbrance or other disposition of all or a portion of any Shares or any economic
interest therein (including without limitation by means of any participation or swap transaction),
but for the avoidance of doubt shall not include an ordinary course transfer of an ownership
interest in any investment fund or similar entity having an investment in Shares.

          “Transferee’’ means any Person to whom Shares subject to this Agreement are
Transferred.

          “Transferor” means any Person who Transfers Shares subject to this
Agreement.

          “Underwriter” means a securities dealer that purchases any Registrable Securities as
principal in an underwritten offering and not as part of such dealer’s market making activities.

ARTICLE II

CERTAIN RESTRICTIONS ON TRANSFERS

          Section 2.1 Agreement to be Bound. Until the earlier of (a) such time as the
Shares held by an Investor may be sold pursuant to Rule 144 under the Securities Act under
circumstances in which any legend borne by the Shares relating to restrictions on transferability
thereof under the Securities Act may be removed or (b) the first anniversary of the closing of the
Exchange (the “Closing”), no Transfer of Shares by an Investor (other than Transfers in a Public
Offering or pursuant to Rule 144 of the Securities Act (or any successor provision)) shall be
effective unless (i) the Transferee, if not already a party hereto, shall have executed and
delivered to the Company, as a condition precedent to such Transfer, an instrument reasonably
satisfactory to the Company confirming that the Transferee agrees to be bound by the terms of this
Agreement with respect to the Shares so Transferred to the same extent applicable to the Transferor
thereof and acknowledging that such Transferee shall be deemed to be an Investor hereunder and (ii)
the Transferee has delivered to the Company an opinion of counsel reasonably satisfactory to the
Company indicating that the proposed Transfer is exempt from registration pursuant to applicable
securities laws.

          Section 2.2 Share Certificates.

	 	(a)	 	Each certificate representing Shares held by an Investor will bear a legend on
the face thereof substantially to the following effect (with such additions thereto or
changes therein as the Company may be advised by counsel are required by law or
necessary or appropriate):

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
STOCKHOLDERS AGREEMENT AMONG CBAYSYSTEMS HOLDINGS LIMITED AND THE
OTHER STOCKHOLDERS PARTY THERETO, DATED AS OF [                    ], AS AMENDED AND
SUPPLEMENTED FROM TIME TO TIME IN

 

5

ACCORDANCE WITH THE TERMS THEREOF, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF CBAYSYSTEMS HOLDINGS LIMITED. THE STOCKHOLDERS AGREEMENT CONTAINS,
AMONG OTHER THINGS, CERTAIN PROVISIONS RELATING TO THE VOTING AND TRANSFER OF THE
SHARES SUBJECT TO THE AGREEMENT. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE, DIRECTLY OR INDIRECTLY, MAY BE MADE EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT. THE HOLDER OF THIS CERTIFICATE, BY
ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH
STOCKHOLDERS AGREEMENT.”

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES ACTS AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER SUCH ACTS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.”

ARTICLE III

GOVERNANCE

          Section 3.1 Board Size.

	 	(a)	 	The Board of Directors of the Company (the “Board”) shall initially consist of
[eleven (11)] directors. Thereafter, the size of the Board shall be determined in the
manner set forth from time to time in the Company’s Certificate of Incorporation and
By-Laws. SAC CBI shall have the right to nominate three (3) directors to the Board
(the “SAC Directors”). As of the date hereof, the SAC Directors shall be Messrs.
Frank Baker, Peter Berger and Jeffrey Hendren.
	 
	 	(b)	 	For so long as SAC CBI has the right to nominate the SAC Directors, the Company at
all times shall take such actions as may be required under applicable Law, NASDAQ
rules, the Certificate of Incorporation and the By-Laws to cause the Board to consist
of the number of directors in accordance with Section 3.1(a), and to include on the
Board or in the slate of nominees recommended by the Board such persons nominated
by SAC CBI pursuant to this Section 3.1.
	 
	 	(c)	 	For as long as SAC CBI has the right to nominate the SAC Directors, each Investor
hereby agrees that it will vote all of the voting Shares owned or held of record by
such Investor, or (as applicable) provide its written consent in respect thereof, in
order to elect or appoint (as applicable) the SAC Directors to the Board.

 

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	 	(d)	 	For so long as SAC CBI has the right to nominate the SAC Directors, without the
prior written consent of SAC CBI, each Investor agrees not to take any action that
would cause the number of directors constituting the entire Board to be greater than
[eleven (11)].
	 
	 	(e)	 	For so long as SAC CBI has the right to nominate the SAC Directors, in the event a
vacancy is created at any time, including by the death, disability, retirement,
resignation or removal (with or without cause) of any SAC Director, SAC CBI may
nominate another individual to be elected to fill each such vacancy created thereby
and the parties hereto agree to take, at any time, and from time to
time, all actions
necessary or appropriate in order to effect the election or appointment (as applicable)
of each such individual to the Board.
	 
	 	(f)	 	Any proposed SAC Director, at the time when such person is nominated to serve as a
director, shall be reasonably acceptable to the Company’s Nominating and Corporate
Governance Committee as determined in good faith. SAC CBI shall notify the
Company of any proposed SAC Director, in writing, a reasonable time in advance of
the mailing of any proxy statement, information statement or registration statement in
which such proposed SAC Director would be named, together with all information
concerning such nominee reasonably requested by the Company so that the Company
can comply with applicable disclosure rules; provided that in the absence of such
notice, SAC CBI shall be deemed to have designated or nominated the same SAC
Directors currently in office or, if applicable, set forth in the most recent notice
delivered to the Company pursuant to this Section 3.1(f).
	 
	 	(g)	 	For as long as SAC CBI has the right to nominate the SAC Directors, each Investor
agrees that, (i) if at any time SAC CBI shall notify such Investor of its desire to
remove, with or without cause, any SAC Director, such Investor will vote, or cause to
be voted, all of the voting Shares owned or held of record by such Investor, and shall
take all such other actions promptly as shall be necessary or appropriate to cause the
removal of such director and (ii) it will not take any action to remove any SAC
Director unless so notified by SAC CBI.
	 
	 	(h)	 	The parties acknowledge that the Company may enter into agreements with each of the SAC
Directors providing for the payment of a total aggregate compensation amount for each SAC
Director equal to $4 million to be paid in equal installments of $1 million due and payable on
each of the first four (4) anniversaries of the date hereof, and such payments will be
structured to minimize their effect on the on-going valuation of the Company (including,
without limitation, through lump sum payments at the time of any Initial Public Offering).
Each of the other parties hereto agrees to take, at any time, and from time to time, all
actions necessary or appropriate to effect such payments and further agrees not, at any time,
directly or indirectly, any action in opposition to such payments.
	 
	 	(i)	 	After the first anniversary of the Closing, the obligations provided by Sections 3.1(c) and
3.1(g) will terminate with respect to each Investor when such Investor owns less than 3.0%
of the Company’s outstanding shares of Common Stock. The provisions

 

7

	 	 	 	of this Section 3.1 shall terminate and be of no further force or effect upon the
earlier of consummation of a Change in Control or, with respect to any Investor, at such
time as all Common Stock held by such Investor are sold, in accordance with this
Agreement, to a third party not bound by this Agreement or required to become a party
hereto, and otherwise upon the tenth anniversary hereof.

          Section 3.2 Officer Appointment. The Company and each Investor acknowledge and
agree that as of the date hereof and until the fourth anniversary of the date hereof, at the
discretion of SAC CBI, Mr. Jeffrey Hendren shall have the opportunity to serve as Vice-Chairman,
Finance of the Company. In the event that a vacancy in such position is created at any time prior
to the fourth anniversary of the date hereof, including as a result of the death, disability,
retirement, resignation or removal (with or without cause) of Mr. Hendren or any successor, SAC CBI
may nominate another individual to be appointed by the Company to fill the vacancy created thereby
and the parties hereto agree to take, at any time, and from time to time, all actions necessary or
appropriate to effect such appointment, to the extent requested by SAC CBI.

          Section 3.3 Proxy. In the event that any Investor entitled or required to vote on
or provide its written consent with respect to a matter specified in Sections 3.1 and 3.2 shall
fail at any time to vote or act by written consent (as applicable) with respect to any Shares held
of record or beneficially owned by such Investor (or as to which such Investor otherwise has direct
or indirect voting control), as set forth in this Agreement, such Investor hereby irrevocably
appoints SAC CBI as such Investor’s proxy and attorney-in-fact (with full power of substitution),
for and in the name, place and stead of such Investor, to vote or act by written consent with
respect to such Shares and to grant a consent, proxy or approval in respect of such Shares, in each
case in such manner and to the extent as is necessary or appropriate to vote such Shares in
accordance with this Agreement. Each Investor hereby affirms that the irrevocable proxy and
irrevocable power of attorney set forth in this Section 3.3 will be valid for the term of this
Agreement and are given to secure the performance of the obligations of such Investor under this
Agreement. Each Investor hereby further affirms that each proxy and power of attorney hereby
granted shall, for the term of this Agreement, be irrevocable and shall be deemed coupled with an
interest.

ARTICLE IV

REGISTRATION

          Section 4.1 Piggyback Registrations.

	 	(a)	 	Right to Piggyback. Until the earlier of (a) such time as the Shares held by an Investor may be sold
pursuant to Rule 144 under the Securities Act under circumstances in which any legend
borne by the Shares relating to restrictions on transferability thereof under the
Securities Act may be removed or (b) the first anniversary of the Closing, if the
Company proposes to register and sell any of its Common Stock under the Securities Act
and the registration form to be used may be used for the registration of the Investors’
Registrable Securities (a “Piggyback Registration”), the Company shall give
prompt written notice to the Investors of its

 

 

8

	 	 	 	intention to effect such a registration at least ten (10) days before the
anticipated offering date or as promptly thereafter as reasonably practicable, and will
include in such registration the Shares of the Investors with respect to which the
Company has received written requests for inclusion therein within five (5) days after
delivery of the Company’s notice.
	 
	 	(b)	 	Piggyback Expenses. The Registration Expenses shall be paid by the
Company in all Piggyback Registrations; provided, however, that for the avoidance of
doubt, each of the Investors shall bear its pro rata portion of any discounts and
commissions with respect to Shares sold by it in connection therewith.
	 
	 	(c)	 	Priority on Registrations. If a Piggyback Registration is an
underwritten registration on behalf of the Company, and the managing Underwriters
advise the Company in writing that in their opinion the number of Shares requested to
be included in such registration exceeds the number which can be sold in such offering
without adversely affecting the marketability of the offering, then the number of
Shares available for registration shall be allocated (i) first, 100% to the Shares to
be sold by the Company and (ii) second, pro rata based on the relative number of
Registrable Securities then held by each Investor and Shares held by each other holder
of Shares eligible to be sold in such offering; provided, that any such amount thereby
allocated to any such holder that exceeds such holder’s request shall be reallocated
among the remaining requesting holders in like manner.

          Section 4.2 Lockup Agreements. With respect to any underwritten Public Offering,
each Investor agrees not to effect any sale or distribution (except as part of such underwritten
registration) of Registrable Securities, including a sale pursuant to Rule 144 under the Securities
Act, (i) during the fifteen (15) days prior to such offering, (ii) during the 180-day period
beginning on the effective date of the Initial Public Offering, unless the investment banks or
Underwriters managing the Public Offering otherwise agree, and (iii) during the 90-day period
beginning on the effective date of any other Public Offering, unless the investment banks or
Underwriters managing the Public Offering otherwise agree.

          Section 4.3 Registration Procedures. Whenever Investors with the right to do so
pursuant to Section 4.1 request that any of their Registrable Securities be registered pursuant
to Section 4.1, the Company will use its reasonable best efforts to effect the registration of
such Registrable Securities in accordance with the intended method of disposition thereof as
quickly as reasonably practicable, and in connection with any such request:

	 	(a)	 	The Company will as expeditiously as reasonably practicable prepare and file
with the Securities and Exchange Commission (the “Commission”) a registration
statement on any form for which the Company then qualifies and which counsel for the
Company shall deem appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with the intended
method of distribution thereof (it being understood that the Company shall use Form S-3
(or any replacement form) if such form is then available), and use its reasonable best
efforts to cause such filed registration statement to become effective and keep such
registration statement effective for a period of up to one hundred twenty (120)

 

9

	 	 	 	days or, if earlier, until the distribution contemplated in the registration statement
has been completed; provided, however, that in the case of any registration of Registrable
Securities on Form S-3 (or any replacement form) that are intended to be offered on a continuous
or delayed basis, subject to compliance with applicable Commission rules, such period shall be
extended to the extent reasonably requested in order to allow sufficient time for all such
Registrable Securities to be sold.
	 
	 	(b)	 	The Company will prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
	 
	 	(c)	 	The Company will, prior to filing a registration statement or prospectus or any amendment or
supplement thereto, furnish to each Investor selling Registrable Securities pursuant to a
registration statement under this Section 4 (each, a “Selling Stockholder”), copies of
such registration statement as proposed to be filed, together with exhibits thereto, which
documents will be subject to review by the foregoing persons within five (5) Business Days
after delivery, and thereafter furnish to such Selling Stockholder such number of copies of
such registration statement, each amendment and supplement thereto (in each case including all
exhibits thereto and documents incorporated by reference therein), the prospectus included in
such registration statement (including each preliminary prospectus) and such other documents
as such Selling Stockholder may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such Selling Stockholder and registered thereunder.
	 
	 	(d)	 	After the filing of the registration statement, the Company will promptly notify each Selling
Stockholder covered by such registration statement of any stop order issued or threatened by
the Commission and take reasonable actions to prevent the entry of such stop order or to
remove it if entered.
	 
	 	(e)	 	The Company will use its reasonable best efforts to register or qualify the Registrable
Securities under such other securities or blue sky laws of such jurisdictions in the United
States and such other jurisdictions as any Selling Stockholder reasonably (in light of such
Selling Stockholder’s intended plan of distribution) requests; provided that the Company will
not be required to (A) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (e), (B) subject itself to taxation in
any such jurisdiction or (C) consent to general service of process in any such jurisdiction.
	 
	 	(f)	 	The (i) Company will promptly notify each Selling Stockholder covered by such registration
statement and (ii) each Investor will promptly notify the Company, at any time when a
prospectus relating to such registration statement is required to be delivered under the
Securities Act, of the occurrence of an event of which it is aware that requires the
preparation of a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any

 

10

	 	 	 	material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will promptly make available to each
Selling Stockholder any such supplement or amendment.
	 
	 	(g)	 	The Company will use its reasonable best efforts to comply with all applicable
rules and regulations of the Commission.
	 
	 	(h)	 	The Company will use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be listed on each national
securities exchange on which similar securities issued by the Company are then listed
(if any), if the listing of such Registrable Securities is then permitted under the
rules of such exchange.
	 
	 	(i)	 	The Company may require each Selling Stockholder of Registrable Securities to
promptly furnish in writing to the Company such information regarding the Selling
Stockholder and the distribution of the Registrable Securities as the Company may from
time to time reasonably request, and such other information as may be necessary or
appropriate in connection with such registration.
	 
	 	(j)	 	Each Selling Stockholder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 4.3(f), such
Selling Stockholder will immediately discontinue disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities until such
Selling Stockholder’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 4.3(f), and, if so directed by the Company, such Selling
Stockholder will deliver to the Company all copies, other than permanent file copies
then in such Selling Stockholder’s possession, of the most recent prospectus covering
such Registrable Securities at the time of receipt of such notice.

          Section 4.4 Registration Expenses. All expenses incident to the Company’s
performance of or compliance with this Agreement, including all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws, printing expenses, messenger and
delivery expenses, and fees and disbursements of counsel for the Company and all independent
certified public accountants, Underwriters (excluding underwriting discounts and commissions) and
other Persons retained by the Company (all such expenses being herein called “Registration
Expenses”) shall be borne as provided in this Agreement, except that the Company shall, in any
event, pay its internal expenses (including all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the securities to be
registered on each securities exchange on which similar securities issued by the Company are then
listed or on the NASD automated quotation system.

          Section 4.5 Additional Procedures. All Selling Stockholders will take all such
actions and execute all such documents and instruments that are reasonably requested by the Company
to effect the registration and sale of their securities pursuant to this Section 4, including,
without limitation, being parties to the underwriting agreement entered into by the Company and any
other Selling Stockholders in connection therewith; provided, however, that

 

11

the aggregate amount of any liability of any Selling Stockholder pursuant to such
underwriting or other agreement will not exceed such Selling Stockholder’s net proceeds from such
offering.

          Section 4.6 Termination of Registration Rights. The registration rights and the
obligations provided by this Section 4 will terminate with respect to each Investor when such
Investor owns less than 3.0% of the Company’s outstanding shares of Common Stock.

ARTICLE V

INDEMNIFICATION AND CONTRIBUTION

          Section 5.1 Indemnification by the Company. To the fullest extent permitted by
law, the Company agrees to indemnify and hold harmless each Selling Stockholder of Registrable
Securities included in the applicable registration statement, its officers, directors, employees
and agents, and each person, if any, who controls such Selling Stockholder within the meaning of
the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof to which such Selling Stockholder, officer, director, employee or agent
or controlling Person may become subject under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in any registration statement, prospectus
or any preliminary prospectus or any amendment or supplement thereto relating to the Registrable
Securities or (ii) any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in each case except
insofar as the same are contained in any information furnished to the Company by a Selling
Stockholder or on a Selling Stockholder’s behalf for use therein.

          Section 5.2 Indemnification by Stockholders of Registrable Securities. To the
fullest extent permitted by law, each Selling Stockholder agrees, severally but not jointly, to
indemnify and hold harmless the Company, each Underwriter and each other Selling Stockholder, their
respective officers, directors and agents and each Person, if any, who controls the Company, any
such Underwriter or any such other Selling Stockholder within the meaning of the Securities Act, to
the same extent as the indemnity from the Company to such Selling Stockholder pursuant to Section
5.1, but only with respect to information furnished to the Company by such Selling Stockholder or
on such Selling Stockholder’s behalf for use in any registration statement or prospectus relating
to the Registrable Securities, or any amendment or supplement thereto, or any preliminary
prospectus.

          Section 5.3 Conduct of Indemnification Proceedings. Promptly after receipt by any
Person in respect of which indemnity may be sought pursuant to Section 5.1 or 5.2 (an
“Indemnified Party”) of notice of any claim or the commencement of any action, the
Indemnified Party shall, if a claim in respect thereof is to be made against the Person against
whom such indemnity may be sought (an “Indemnifying Party”), notify the Indemnifying Party
in writing of the claim or the commencement of such action provided that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to an Indemnified
Party, except to the extent of any actual prejudice resulting therefrom. If any such claim or
action shall be brought against an Indemnified Party, the Indemnifying Party shall be entitled to

 

12

participate therein, and, to the extent that it wishes, jointly with any other Indemnifying
Party, assume the defense thereof with counsel reasonably satisfactory to the Indemnified Party.
After notice from the Indemnifying Party to the Indemnified Party of its election to assume the
defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified
Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof unless (i) the Indemnifying Party shall have agreed in writing to be
liable for such expenses or (ii) the Indemnifying Party engages the same counsel to represent
itself and the Indemnified Party in such action and such counsel advises that representation of
both parties by the same counsel would be inappropriate due to an actual or reasonably likely
potential conflict of interests between them. No Indemnifying Party will, without the prior written
consent of the Indemnified Party (not to be unreasonably withheld), effect any settlement of any
claim or pending or threatened proceeding in respect of which the Indemnified Party is a party and
indemnity has been sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out of such claim or
proceeding. No Indemnified Party will, without the prior written consent of the Indemnifying Party
(not to be unreasonably withheld), effect any settlement of any claim or pending or threatened
proceeding in respect of which indemnity has or may be sought hereunder by such Indemnified Party.

          Section 5.4 Contribution. If the indemnification provided for in this Article V
is unavailable to any Indemnified Parties in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such
losses, claims, damages, liabilities or expenses (i) as between the Company and the Selling
Stockholders on the one hand and the Underwriters on the other, in such proportion as is
appropriate to reflect the relative benefits received by the Company and the Selling Stockholders
on the one hand and the Underwriters on the other from the offering of the Registrable Securities,
or if such allocation is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits but also the relative fault of the Company and the Selling
Stockholders on the one hand and of the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations and (ii) as between the Company and/or one or more other Selling
Stockholders on the one hand and any Selling Stockholder on the other, in such proportion as is
appropriate to reflect the relative fault of the Company and of each Selling Stockholder in
connection with such statements or omissions, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other shall be deemed to be in the same proportion as the
total proceeds from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each case as set forth in
the table on the cover page of the prospectus. The relative fault of the Company and the Selling
Stockholders on the one hand and of the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the
Company and the Selling Stockholders or by the Underwriters. The relative fault of the Company
and/or one or more other Selling Stockholders on the one hand and of any Selling Stockholder on the
other shall be determined by

 

13

reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information
supplied by such Person, and the Persons’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

     The Company and the Selling Stockholders agree that it would not be just and equitable if
contribution pursuant to this Section 5.4 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending any such action or
claim. Notwithstanding the foregoing provisions of this Section 5.4, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total price at which the
Registrable Securities underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged omission, and no Selling
Stockholder shall be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of such Selling Stockholder were offered to the public
(less underwriting discounts and commissions) exceeds the amount of any damages which such Selling
Stockholder has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. Notwithstanding the foregoing provisions of this Section 5.4, no
Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

ARTICLE VI

MISCELLANEOUS

          Section 6.1 Recapitalization, Exchanges, etc. In the event that any capital stock
or other securities are issued in respect of, in exchange for, or in substitution of, any
Registrable Securities by reason of any reorganization, recapitalization, reclassification, merger,
consolidation, spin-off, partial or complete liquidation, stock dividend, split-up, sale of assets,
distribution to Stockholders or combination of the Shares or any other change in capital structure
of the Company, appropriate adjustments shall be made with respect to the relevant provisions of
this Agreement so as to fairly and equitably preserve, as far as reasonably practicable, the
original rights and obligations of the parties hereto under this Agreement and the term
“Registrable Securities,” as used herein, shall be deemed to include shares of such capital stock
or other securities, as appropriate.

          Section 6.2 Entire Agreement; Successors and Assigns. Except for restrictions on
Transfer of Shares set forth in other agreements, plans or other documents, this Agreement
constitutes the entire agreement of the parties with respect to its subject matter, supersedes all
prior or contemporaneous oral or written agreements or discussions with respect to such subject
matter, and shall be binding upon and inure to the benefit of the parties hereto and their

 

14

respective heirs, representatives, successors and assigns. Except as otherwise expressly
provided herein, no Stockholder party hereto may assign any of its respective rights or delegate
any of its respective obligations under this Agreement without the prior written consent of the
other parties hereto, and any attempted assignment or delegation in violation of the foregoing
shall be null and void.

          Section 6.3
No Waivers, Amendments.

	 	(a)	 	No delay of or omission in the exercise of any right, power or remedy accruing
to any party as a result of any breach or default by any other party under this
Agreement shall impair any such right, power or remedy, nor shall it be construed as a
waiver of or acquiescence in any such breach or default, or of any similar breach or
default occurring later; nor shall any such delay, omission nor waiver of any single
breach or default be deemed a waiver of any other breach or default occurring before or
after that waiver.
	 
	 	(b)	 	This Agreement may be amended or modified, or any provision hereof may be
waived, provided that such amendment, modification or waiver is set forth in a writing
executed by (i) the Company, (ii) the SAC Group and (iii) each Investor that would be
adversely affected thereby. Notwithstanding the foregoing, each of the Stockholders
acknowledges and agrees that in respect of a Transfer pursuant to Section 2.1 of this
Agreement, the Transferee may be added as an additional party to this Agreement by a
written joinder, provided that such addition is done in accordance with and pursuant to
the provisions of this Agreement. No course of dealing between or among any Persons
having any interest in this Agreement will be deemed effective to modify, amend or
discharge any part of this Agreement or any rights or obligations of any Person under
or by reason of this Agreement.

          Section 6.4 Notices. Any notices and other communications required or permitted
in this Agreement shall be effective if in writing and (a) delivered personally or (b) sent (i) by
nationally-known, reputable overnight carrier or (ii) by facsimile, in each case, addressed as
follows:

if to the Company:

CBaySystems Holdings Limited

2661 Riva Road, Building 800

Annapolis, MD 21401

Fax: 416-266-9409

Attention: Chief Financial Officer

if to the SAC Group:

c/o S.A.C. Capital Advisors, L.P.

72 Cummings Point Road

Stamford, Connecticut 06902

Fax: (203)823-4209

Attention: General Counsel

 

15

in each case, with a copy to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Fax: 212-455-2502

Attention: D. Rhett Brandon

          If to any Investor, to such Investor at the address set forth in the stock record book of the
Company or as otherwise provided in writing by such Investor to the Company.

          Unless otherwise specified herein, such notices or other communications shall be deemed
effective (a) on the date received, if personally delivered, (b) two (2) Business Days (or one (1)
Business Day if sent for next Business Day delivery) after being sent by nationally-known,
reputable overnight carrier or (c) upon transmission and confirmation of receipt by a facsimile
operator, in the case of facsimile. Each of the parties hereto shall be entitled to specify a
different address by giving notice as aforesaid to each of the other parties hereto.

          Section 6.5 Termination. Unless earlier terminated, the provisions of this
Agreement shall terminate and be of no further force or effect upon the earlier of consummation of
a Change in Control or, with respect to any Investor, at such time as all Common Stock held by such
Investor are sold, in accordance with this Agreement, to a third party not bound by this Agreement
or required to become a party hereto, and otherwise upon the tenth anniversary hereof.

          Section 6.6 Governing Law. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS
OR SIMILAR RULES OR PRINCIPLES THAT MIGHT REQUIRE THE APPLICATION TO THIS AGREEMENT OF THE LAWS OF
ANOTHER JURISDICTION.

          Section 6.7 Consent to Jurisdiction. Each party to this Agreement, by its
execution hereof, (a) hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in New York, New York for the purpose of any action, claim, cause of action
or suit (in contract, tort or otherwise), inquiry, proceeding or investigation arising out of or
based upon this Agreement or relating to the subject matter hereof, (b) hereby waives to the extent
not prohibited by applicable law, and agrees not to assert, and agrees not to allow any of its
subsidiaries to assert, by way of motion, as a defense or otherwise, in any such action, any claim
that it is not subject personally to the jurisdiction of the above-named courts, that its property
is exempt or immune from attachment or execution, that any such proceeding brought in one of the
above-named courts is improper, or that this Agreement or the subject matter hereof may not be
enforced in or by such court and (c) hereby agrees not to commence or maintain any action, claim,
cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation
arising out of or based upon this Agreement or relating to the subject matter hereof other than
before one of the above-named courts nor to make any motion or take any other action

 

16

seeking or intending to cause the transfer or removal of any such action, claim, cause of
action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation to any court
other than one of the above-named courts whether on the grounds of inconvenient forum or otherwise.
Notwithstanding the foregoing, to the extent that any party hereto is or becomes a party in any
litigation in connection with which it may assert indemnification rights set forth in this
Agreement, the court in which such litigation is being heard shall be deemed to be included in
clause (a) above with respect to the assertion of such rights in such matter. Each party hereto
hereby consents to service of process in any such proceeding in any manner permitted by New York
law, and agrees that service of process by registered or certified mail, return receipt requested,
at its address specified pursuant to Section 6.4 hereof is reasonably calculated to give actual
notice. Notwithstanding the foregoing in this Section 6.7, a party may commence any action in a
court other than the above-named courts solely for the purpose of enforcing an order or judgment
issued by one of the above-named courts.

          Section 6.8 Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT
OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY,
PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED
HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY HERETO ACKNOWLEDGES THAT
IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 6.8 CONSTITUTES A MATERIAL
INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. ANY PARTY
HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 6.8 WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

          Section 6.9 Descriptive Headings. The descriptive headings of this Agreement are
for convenience of reference only, are not to be considered a part hereof and shall not be
construed to define or limit any of the terms or provisions hereof.

          Section 6.10 Severability. In the event that any provision hereof would, under
applicable law, be invalid or unenforceable in any respect, such provision shall be construed by
modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with,
and possible under, applicable law and the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as possible in an
acceptable manner to the fullest extent possible. The provisions hereof are severable, and in the
event any provision hereof should be held invalid or unenforceable in any respect, it shall not
invalidate, render unenforceable or otherwise affect any other provision hereof.

          Section 6.11 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken together shall
constitute one instrument. A manual signature of a counterpart hereto delivered via facsimile

 

17

signature or by other electronic means shall be considered due execution and shall be
binding upon the signatory thereto with the same force and effect as if the signature were an
original.

          Section 6.12 Confidentiality. Each Investor agrees that it will keep confidential
and will not disclose, divulge or use for any purpose, other than to monitor its investment in the
Company and its subsidiaries, any confidential information obtained from the Company, unless such
confidential information (a) is known or becomes known to the public in general (other than as a
result of a breach of this Section 6.12 by such Investor or its Affiliates), (b) is or has been
independently developed or conceived by such Investor without use of the Company’s confidential
information or (c) is or has been made known or disclosed to such Investor by a third party (other
than another Stockholder or an Affiliate of such Investor or of another Stockholder) without a
breach of any obligation of confidentiality such third party may have to the Company that is known
to such Investor; provided, however, that an Investor may disclose confidential
information on a confidential basis (v) to its attorneys, accountants, consultants and other
professionals to the extent necessary to obtain their services in connection with monitoring its
investment in the Company, (w) to any prospective purchaser of any Shares from such Investor as
long as such prospective purchaser agrees to be bound by the provisions of this Section 6.12 as if
an Investor, (x) to any Affiliate, partner, member or related investment fund of such Investor and
their respective directors, employees and consultants, in each case in the ordinary course of
business, (y) as may be reasonably determined by such Investor to be necessary in connection with
such Investor’s enforcement of its rights in connection with this Agreement or its investment in
the Company and its subsidiaries or (z) as may otherwise be required by law or legal, judicial or
regulatory process, provided that such Investor takes reasonable steps to minimize the extent of
any required disclosure described in this clause (z); and provided, further,
however, that the acts and omissions of any Person to whom such Investor may disclose
confidential information pursuant to clauses (v) through (x) of the preceding proviso shall be
attributable to such Investor for purposes of determining such Investor’s compliance with this
Section 6.12. Each of the parties hereto acknowledge that the SAC Group, the Investors or any of
their respective Affiliates and related investment funds may review the business plans and related
proprietary information of many enterprises, including enterprises which may have products or
services which compete directly or indirectly with those of the Company, and may trade in the
securities of such enterprises. Nothing in this Section 6.12 shall preclude or in any way restrict
the SAC Group, the Investors or their respective Affiliates or related investment funds from
investing or participating in any particular enterprise, or trading in any particular securities,
whether or not such enterprise has products or services that compete with those of the Company.

          Section 6.13 Authority; Effect. Each party hereto represents and warrants (as to
itself only) to and agrees with each other party that (a) the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been duly authorized on
behalf of such party and do not violate any agreement or other instrument applicable to such party
or by which its assets are bound and (b) this Agreement constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its terms, except to
the extent that the enforcement of the rights and remedies created hereby is subject to (i)
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
the rights and remedies of creditors generally and (ii) general principles of equity. This
Agreement does not, and shall not be construed to, give rise to the creation of a

 

18

partnership among any of the parties hereto, or to constitute any of such parties members of
a joint venture or other association.

          Section 6.14 Enforcement; Further Assurances.

	 	(a)	 	The parties hereto agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with their
specific terms. It is accordingly agreed that the parties shall be entitled to
specific performance of the terms hereof, this being in addition to any other remedy to
which they are entitled at law or in equity.
	 
	 	(b)	 	The parties hereto agree to execute, acknowledge, deliver, file and record such
further certificates, amendments, instruments, agreements and documents, and to do all
such other acts and things, as may be required by law or as may be necessary or
appropriate to carry out the intent and purposes of this Agreement.

 

 

          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date set forth above.

	 	 	 	 	 
	 	CBAYSYSTEMS HOLDINGS LIMITED

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set
forth above.

	 	 	 	 	 
	 	S.A.C. PEI CB INVESTMENT, L.P.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set
forth above.

	 	 	 	 	 
	 	S.A.C. PEI CB INVESTMENT II, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set
forth above.

	 	 	 	 	 
	 	INTERNATIONAL EQUITIES (S.A.C. ASIA) LIMITED

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set
forth above.

	 	 	 	 	 
	 	COSTA BRAVA PARTNERSHIP III, L.P.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set
forth above.

	 	 	 	 	 
	 	NEWCASTLE PARTNERS, L.P.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
set forth above.

	 	 	 	 	 
	 	BLACK HORSE CAPITAL MANAGEMENT LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set
forth above.

	 	 	 	 	 
	 	AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:exv10w10

Exhibit 10.10

MANAGEMENT STOCKHOLDER’S AGREEMENT

          This Management Stockholder’s Agreement (this “Agreement”) is entered into as of
______ (the “Effective Date”) among CBaySystems Holdings Limited, a company incorporated in
the British Virgin Islands (including any successors thereto, the “Company”), S.A.C. PEI CB
Investment, L.P., an exempted limited partnership organized under the laws of the Cayman Islands
(“SAC CBI”), and the undersigned person (the “Management Stockholder”) (the Company
and the Management Stockholder being hereinafter collectively referred to as the
“Parties”). All capitalized terms not immediately defined are hereinafter defined in
Section 6(a) of this Agreement.

          WHEREAS, pursuant to the Subscription Agreement, dated as of May 21, 2008 (the
“Subscription Agreement”), by and among the Company, SAC CBI, and only for purposes of
Section 4.13, Section 6.2(e), Section 6.2(g) and Article 8 thereof, S.A.C. Private Capital Group,
LLC, SAC CBI agreed to subscribe for new ordinary shares of common stock (the “Common
Stock”), par value $0.10 per share, of the Company (the “Subscription”);

          WHEREAS, in connection with the Subscription, the Management Stockholder has been selected by
the Company to receive options to purchase shares of Common Stock (together with any options to
purchase shares of Common Stock granted in the future, the “Options”) pursuant to the terms
set forth below and the terms of the Company’s 2007 Equity Incentive Plan (the “Option
Plan”) and the Stock Option Agreement entered into by and between the Company and the
Management Stockholder in respect thereof (the “Option Agreement”).

          NOW THEREFORE, to implement the foregoing and in consideration of the grant of Options and of
the mutual agreements contained herein, the Parties agree as follows:

          1. Management Stockholder’s Representations, Warranties and Agreements.

          (a) The certificate (or certificates) representing the Option Stock shall bear the following
legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS
OF THE MANAGEMENT STOCKHOLDER’S AGREEMENT DATED AS OF APRIL 17, 2009 BETWEEN
CBAYSYSTEMS HOLDINGS LIMITED (THE “COMPANY”) AND THE MANAGEMENT STOCKHOLDER NAMED ON
THE FACE HEREOF (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY).”

          (b) The Management Stockholder acknowledges that he has been advised that (i) a restrictive
legend in the form heretofore set forth shall be placed on the certificates representing the Option
Stock and (ii) a notation shall be made in the Register of Members of the Company indicating that
the Option Stock is subject to restrictions on transfer and appropriate stop transfer restrictions
will be issued to the Company’s transfer agent with

 

 

respect to the Option Stock. If the Management
Stockholder is an Affiliate, the Management Stockholder also acknowledges that (1) the Option Stock
must be held indefinitely and the Management Stockholder must continue to bear the economic risk of
the investment in the Option Stock unless it is subsequently registered under the Act or an
exemption from such registration is available, (2) when and if shares of the Option Stock may be
disposed of without registration in reliance on Rule 144 of the rules and regulations promulgated
under the Act, such disposition can be made only in limited amounts in accordance with the terms
and conditions of such Rule and (3) if the Rule 144 exemption is not available, public sale without
registration will require compliance with some other exemption under the Act.

          (c) If any shares of Common Stock are to be disposed of in accordance with Rule 144 under the
Act or otherwise, the Management Stockholder shall promptly notify the Company of such intended
disposition and shall deliver to the Company at or prior to the time of such disposition such
documentation as the Company may reasonably request in connection with such sale and, in the case
of a disposition pursuant to Rule 144, shall deliver to the Company an executed copy of any notice
on Form 144 required to be filed with the SEC.

          (d) The Management Stockholder agrees that, if requested by the managing underwriter for an
underwritten offering of any shares of Common Stock to the public pursuant to an effective
registration statement under the Act (other than registration of securities issued on Form S-8, S-4
or any successor or similar form), the Management Stockholder will not effect any public sale or
distribution of any shares of Common Stock not covered by such registration statement from the time
of the receipt of a notice from the Company that the Company has filed or imminently intends to
file such registration statement to, or within 180 days (or such shorter period as may be consented
to by the managing underwriter or underwriters) in the case of the initial Public Offering and
ninety (90) days (or in an underwritten offering such shorter period as may be consented to by the
managing underwriter or underwriters, if any) in the case of any other Public Offering after, the
effective date of such registration statement, unless otherwise agreed to in writing by the
Company; provided, that the transfer restrictions (lock-up) described in this
Section shall only apply to the extent the Principal Stockholders are subject to such restrictions.

          (e) The Management Stockholder represents and warrants that (i) with respect to the Option
Stock, the Management Stockholder has received and reviewed the Option Agreement, the Option Plan
and (ii) the Management Stockholder has been given the opportunity to obtain any additional
information or documents and to ask questions and receive answers about such information, the
Company and the business and prospects of the Company which the Management Stockholder deems
necessary to evaluate the merits and risks related to the Management Stockholder’s investment in
the Option Stock and to verify the information contained in the information received as indicated
in this Section 1(e), and the Management Stockholder has relied solely on such information.

          (f) The Management Stockholder further represents and warrants that (i) the Management
Stockholder’s financial condition is such that the Management Stockholder can afford to bear the
economic risk of holding the Option Stock for an indefinite period of time and has adequate means
for providing for the Management Stockholder’s current needs and personal contingencies, (ii) the
Management Stockholder can afford to suffer a complete loss of his investment in the Option Stock,
(iii) the Management Stockholder understands and has taken cognizance of all risk factors related
to the acquisition of the Option Stock and (iv) the Management Stockholder’s knowledge and
experience in financial and business matters are

2

 

such that the Management Stockholder is capable of
evaluating the merits and risks of the Management Stockholder’s acquisition of the Option Stock as
contemplated by this Agreement.

          2. Sales to Third Parties.

          (a) The Management Stockholder hereby agrees that he shall not directly or indirectly, assign,
gift, offer, convey, pledge, transfer, sell, assign, pledge, hypothecate, encumber or otherwise
dispose of (collectively, “Transfer”) at any time during the period commencing on the date
hereof and ending on the earlier of (i) the third anniversary of the Closing Date and (ii) the
occurrence of a Change in Control:

     (i) any shares of Option Stock, without the prior written consent of SAC CBI, which
consent may be (i) withheld in the sole discretion of SAC CBI, or (ii) given subject to
reasonable terms and conditions determined by SAC CBI in its sole discretion; or

     (ii) any shares of Common Stock (other than Option Stock), without the prior written
consent of the Company, which consent shall have been authorized by a majority of the
members of the Board and which consent may be (i) withheld in the sole discretion of the
Board, or (ii) given subject to reasonable terms and conditions determined by the Board in
its sole discretion.

The Management Stockholder further agrees that in connection with any Transfer consented to
pursuant to this Section 2(a), the Management Stockholder shall, if requested by the Company,
deliver to the Company an opinion of counsel in form and substance reasonably satisfactory to the
Company and counsel for the Company, to the effect that the Transfer is not in violation of this
Agreement or the Act. In addition, the Company shall be satisfied that the Transfer is not in
violation of the securities laws of any state applicable to such Transfer. Any purported Transfer
in violation of the provisions of this Section 2 shall be null and void ab initio and shall have no
force or effect.

          (b) Notwithstanding the foregoing, nothing in this Section 2 shall prevent the Transfer of any
shares of Common Stock by the Management Stockholder pursuant to Sections 3 and 4 of this Agreement
and to (i) the Company; or (ii) (A) any member of the Management Stockholder’s immediate family
(the “Permitted Family Members”), (B) trusts for the benefit of the Permitted Family
Members, and (C) upon the Management Stockholder’s death, the Management Stockholder’s executors,
administrators, testamentary trustees, legatees and beneficiaries; provided that,
in the case of subclause (A) and (B), the transferee agrees in writing that the Management
Stockholder retains the sole and exclusive right to vote or dispose of any shares of Common Stock
transferred to the Permitted Family Member (each such person and entity described in clause (ii) a
“Permitted Transferee” and collectively, the “Permitted Transferees”);
provided, further that the Permitted Transferee agrees in writing to be bound by
the terms and conditions of this Agreement pursuant to an instrument of assumption reasonably
satisfactory in form and substance to the Board.

          3. Drag-Along Rights.

          (a) If a Principal Stockholder at any time, or from time to time, in one transaction or a
series of related transactions, proposes to Transfer shares of Common Stock (or rights to acquire
Common Stock) to one or more Persons (a “Third Party Purchaser”),

3

 

then such Principal
Stockholder shall have the right (a “Drag-Along Right”), but not the obligation, to require
the Management Stockholder to tender for purchase to the Third Party Purchaser, on the same terms
and conditions as apply to the Principal Stockholder, a number of shares of Common Stock and vested
Options (including any options that vest as a result of the consummation of the Transfer to the
Third Party Purchaser) that, in the aggregate, equal the lesser of (A) the number derived by
multiplying (1) the total number of shares of Common Stock owned by the Management Stockholder
(including shares of Common Stock issuable in respect of all vested Options held by the Management
Stockholder whether or not exercised and including any options that vest as a result of the
consummation of the Transfer to the Third Party Purchaser to the extent the per share consideration
offered by the Third Party Purchaser(s) is greater than the exercise price of such rights to
acquire Common Stock); by (2) a fraction, the numerator of which is the total number of shares of
Common Stock to be sold by the Principal Stockholder in connection with the transaction or series
of related transactions and the denominator of which is the total number of the then outstanding
shares of Common Stock (including shares issuable upon the exercise of rights to acquire Common
Stock to the extent the per share consideration offered by the Third Party Purchaser(s) is greater
than the exercise price of such rights to acquire Common Stock) held by the Principal Stockholder;
or (B) the number of shares as the Principal Stockholder shall designate in the Drag-Along Notice
(as defined below).

          (b) If a Principal Stockholder elects to exercise its Drag-Along Right under this Section 3
with respect to the shares of Common Stock held by the Management Stockholder, such Principal
Stockholder shall notify the Management Stockholder in writing (the “Drag-Along Notice”).
Each Drag-Along Notice shall set forth: (i) the proposed amount and form of consideration and terms
and conditions of payment offered by the Third Party Purchaser(s) and a summary of any other
material terms pertaining to the Transfer (the “Third Party Terms”); and (ii) the number of
shares of Common Stock and vested Options that the Principal Stockholder elects the Management
Stockholder to sell in the Transfer. The Drag-Along Notices shall be given at least five (5) days
before the closing of the proposed Transfer.

          (c) Upon the giving of a Drag-Along Notice, the Management Stockholder shall be obligated to
sell the number of shares of Common Stock and vested Options set forth in the Management
Stockholder’s Drag-Along Notice on the Third Party Terms.

          (d) At the closing of the Transfer to any Third Party Purchaser(s) pursuant to this Section 3,
the Third Party Purchaser(s) shall remit to the Management Stockholder the consideration for the
total sales prices of the Common Stock and unexercised vested Options held by the Management
Stockholder sold pursuant hereto minus any consideration to be escrowed or otherwise held
back in accordance with the Third Party Terms, and minus the aggregate exercise price of
any unexercised vested Options being Transferred by the Management Stockholder to the Third Party
Purchaser(s), against delivery by the Management Stockholder of certificates for Common Stock, duly
endorsed for Transfer or with duly executed stock powers and, as applicable, an instrument
evidencing the transfer or the cancellation of the unexercised vested Options subject to the
Drag-Along Right reasonably acceptable to the Company, and the compliance by the Management
Stockholder with any other conditions to closing generally applicable to the Principal Stockholder
and all other holders of Common Stock selling shares in the transaction.

4

 

          4. Tag-Along Rights.

          (a) If a Principal Stockholder at any time proposes to Transfer shares of Common Stock (or
rights to acquire Common Stock) to a Third Party Purchaser (other than a Principal Stockholder), in
a single Transfer or a series of related Transfers constituting a Change in Control, then the
Management Stockholder shall have the right (the “Tag-Along Right”) to require that the
Principal Stockholder may not consummate such Transfer unless the proposed Third Party Purchaser
purchases from the Management Stockholder, on the same terms and conditions as apply to the
Principal Stockholder, up to the number of shares of Common Stock (including any shares of Common
Stock issuable upon the exercise of vested Options to the extent the per share consideration
offered by the Third Party Purchaser(s) is greater than the exercise price of such rights to
acquire Common Stock) (including such options that vest as a result of the consummation of the
Transfer to the Third Party Purchaser)) equal to the number derived by multiplying (x) the total
number of shares of Common Stock that the proposed Third Party Purchaser has agreed or committed to
purchase, by (y) a fraction, the numerator of which is the total number of shares of Common Stock
(including any shares of Common Stock issuable upon the exercise of vested Options) (including
options that vest as a result of the consummation of the Transfer to the Third Party Purchaser))
owned by the Management Stockholder, and the denominator of which is the aggregate number of shares
of Common Stock owned by the Principal Stockholder (including shares issuable upon the exercise of
rights to acquire Common Stock), the Management Stockholder and all other holders of Common Stock
who have exercised a Tag-Along Right similar to the rights granted to the Management Stockholder in
this Section 4 or are otherwise participating in such transaction (including any shares of Common
Stock issuable upon the exercise of vested Options to the extent the per share consideration
offered by the Third Party Purchaser(s) is greater than the exercise price of such rights to
acquire Common Stock) (including such options that vest as a result of the consummation of the
Transfer to the Third Party Purchaser)).

          (b) A Principal Stockholder shall notify the Management Stockholder in writing in the event
such Principal Stockholder proposes to make a Transfer or series of Transfers giving rise to a
Tag-Along Right at least five (5) days prior to the date on which the Principal Stockholder expects
to consummate such Transfer (the “Sale Notice”) which notice shall specify the number of
shares of Common Stock which the Third Party Purchaser intends to purchase in such Transfer. The
Tag-Along Right may be exercised by the Management Stockholder by delivery of a written notice to
the Principal Stockholder proposing to sell the shares of Common Stock (the “Tag-Along
Notice”) within three (3) days following receipt of the Sale Notice from the Principal
Stockholder. The Tag-Along Notice shall state the number of shares of Common Stock (including any
shares of Common Stock issuable upon the exercise of vested Options to the extent the per share
consideration offered by the Third Party Purchaser(s) is greater than the exercise price of such
rights to acquire Common Stock) (including such options that vest as a result of the consummation
of the Transfer to the Third Party Purchaser)) that the Management Stockholder proposes to include
in such Transfer to the proposed Third Party Purchaser (not to exceed the number as determined
above); provided that, in the case of any shares of Common Stock issuable upon the
exercise of vested Options, the Principal Stockholder may require the Management Stockholder to
exercise such vested Options, in whole or in part, prior to or simultaneously with the Transfer(s)
described in Section 4(a). In the event that the proposed Third Party Purchaser does not purchase
the specified number of shares of Common Stock (including any shares of Common Stock issuable upon
the exercise of vested Options to the extent the per share

5

 

consideration offered by the Third Party
Purchaser(s) is greater than the exercise price of such rights to acquire Common Stock and
including such options that vest as a result of the consummation of the Transfer to the Third Party
Purchaser) from the Management Stockholder on the same terms and conditions as specified in the
Sale Notice, then the Principal Stockholder shall not be permitted to sell any shares of Common
Stock to the proposed Third Party Purchaser unless the Principal Stockholder purchases from the
Management Stockholder such specified number of shares of Common Stock (including any shares of
Common Stock issuable upon the exercise of vested Options to the extent the per share consideration
offered by the Third Party Purchaser(s) is greater than the exercise price of such rights to
acquire Common Stock and including such options that vest as a result of the consummation of the
Transfer to the Third Party Purchaser) on the same terms and conditions as specified in such Sale
Notice.

          (c) At the closing of the Transfer to any Third Party Purchaser pursuant to this Section 4,
the Third Party Purchaser shall remit to the Management Stockholder who exercised his Tag-Along
Right the consideration for the total sales price of the Common Stock and unexercised vested
Options held by the Management Stockholder sold pursuant hereto minus any such
consideration to be escrowed or otherwise held back in accordance with the Third Party Terms, and
minus the aggregate exercise price of any unexercised vested Options being Transferred by
the Management Stockholder to the Third Party Purchaser, against delivery by the Management
Stockholder of certificates for Common Stock, duly endorsed for Transfer or with duly executed
stock powers and an instrument evidencing the transfer or the cancellation of the vested Options
subject to the Tag-Along Right reasonably acceptable to the Company, and the compliance by the
Management Stockholder with any other conditions to closing generally applicable to the Principal
Stockholder and all other holders of Common Stock selling shares in the transaction.

          5. Cooperation.

          (a) In the event of (i) the exercise of a Drag-Along Right pursuant to Section 3 or (ii) a
Change in Control triggering a Tag-Along Right pursuant to Section 4, the Management Stockholder
shall, to the extent permitted by applicable law, consent to and raise no objections against the
transaction, and if the transaction is structured as a sale of stock, the Management Stockholder
shall take all actions that the Board reasonably deems necessary or desirable in connection with
the consummation of the transaction. Without limiting the generality of the foregoing, the
Management Stockholder agrees to (A) consent to and raise no objection against the transaction; (B)
execute any Common Stock purchase agreement, merger agreement or other agreement entered into with
the Third Party Purchaser with respect to the transaction setting forth the Third Party Terms and
any ancillary agreement with respect thereto; (C) vote the Common Stock held by the Management
Stockholder in favor of the transaction; and (D) refrain from the exercise of dissenters’ appraisal
rights with respect to the transaction.

          (b) If the Company or the holders of the Company’s securities enter into any negotiation or
transaction for which Rule 506 (or any similar rule then in effect) promulgated under the Act, may
be available with respect to the negotiation or transaction (including a merger, consolidation, or
other reorganization), the Management Stockholder, if he is not an accredited investor, shall, if
requested by the Company, appoint a purchaser representative (as defined in Rule 501 of the Act)
reasonably acceptable to the Company. If the purchaser representative is designated by the
Company, the Company shall pay the fees of the purchaser representative, but if the Management
Stockholder appoints another purchaser

6

 

representative, the Management Stockholder shall be
responsible for the fees of the purchaser representative so appointed.

          (c) The Management Stockholder shall bear its pro-rata share of the costs of any transaction
in which it sells shares of Common Stock and/or vested Options (based upon the net proceeds
received by the Management Stockholder in such transaction) to the extent such costs are incurred
for the benefit of all holders of Common Stock and vested Options and are not otherwise paid by the
Company or the acquiring party.

          6. Definitions.

          (a) Definitions. All capitalized terms used in this Agreement and not defined herein shall
have such meaning as such terms are defined in the Option Plan. Terms used herein and as listed
below shall be defined as follows:

     “Act” shall mean the Securities Act of 1933, as amended.

     “Affiliate” shall mean, with respect to any individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature (each, a
“Person”), any other Person directly or indirectly controlling, controlled by, or under
common control with, such Person where “control” shall have the meaning given such term under Rule
405 of the Act; provided, that, in no event shall the Company, any of its
subsidiaries or the Management Stockholder be considered an “Affiliate” of the Principal
Stockholders.

     “Agreement” shall have the meaning set forth in the introductory paragraph.

     “Board” shall mean the board of directors of the Company.

     “Cause” shall mean the Company or an Affiliate having “Cause” to terminate the
Management Stockholder’s employment, as defined in any employment agreement between the Management
Stockholder and the Company or an Affiliate; provided, that in the absence of an
employment agreement containing such a definition, the Company or an Affiliate shall have “Cause”
to terminate the Management Stockholder’s employment upon: (i) a determination by the Board that
the Management Stockholder failed to substantially perform the Management Stockholder’s duties
(other than any such failure resulting from the Management Stockholder’s Disability) which is not
remedied within 30 days after receipt of written notice from the Company’s specifying such failure;
(ii) the Management Stockholder’s conviction, or plea of nolo contendere for any felony or crime
involving moral turpitude; (iii) the Management Stockholder’s unlawful use (including being under
the influence) or possession of illegal drugs on the Company’s premises or while performing the
Management Stockholder’s duties and responsibilities; or (iv) the Management Stockholder’s
commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of
fiduciary duty against the Company.

     “Change in Control” shall mean and shall be deemed to have occurred if SAC Private
Capital Group, LLC and its Affiliates cease to have the right or the ability by voting power,
contract or otherwise to directly or indirectly elect or designate for election at least three (3)
directors to the Board of Directors of the Company.

7

 

     “Closing Date” shall mean the date of closing of the Subscription pursuant to the
Subscription Agreement.

     “Common Stock” shall have the meaning set forth in the Recitals.

     “Company” shall have the meaning set forth in the introductory paragraph.

     “Disability” shall mean “Disability” as defined in any employment agreement between
the Management Stockholder and the Company or an Affiliate; provided, that in the
absence of an employment agreement containing such a definition, “Disability” shall mean the
Management Stockholder’s inability to perform, with or without reasonable accommodation, the
essential functions of the Management Stockholder’s position for a total of three months during any
six month period as a result of incapacity due to mental or physical illness as determined by a
physician selected by the Company or its insurers and acceptable to the Management Stockholder or
the Management Stockholder’s legal representative, such agreement as to acceptability not to be
unreasonably withheld or delayed.

     “Fair Market Value” of shares of the Common Stock, as of any date of determination,
shall be determined by the Board as follows:

     (i) If the Common Stock is listed on one or more National Securities Exchanges (within
the meaning of the Exchange Act) or an equivalent foreign exchange, each share of Common
Stock to be repurchased shall be valued at the average of the closing prices of a share of
Common Stock on the principal exchange on which the shares are then trading for the period
of ten consecutive trading days ending on the most recent trading day preceding such date of
determination;

     (ii) If the Common Stock is not traded on a National Securities Exchange or an
equivalent foreign exchange but is quoted on Nasdaq or a successor quotation system and the
Common Stock is listed as a National Market Issue under the NASD National Market System,
each share of Common Stock to be repurchased shall be valued at the average of the mean
between the closing representative bid and asked prices for a share of Common Stock for the
period of ten consecutive trading days ending on the most recent trading day preceding such
date of determination as reported by Nasdaq or such successor quotation system; or

     (iii) If the Common Stock is not publicly traded on a National Securities Exchange and
is not quoted on Nasdaq or a successor quotation system, the Fair Market Value of the Common
Stock to be repurchased shall be determined in good faith by the Board in its sole
discretion, with reference to the most recent valuation of the Common Stock requested by the
Board and performed by an independent valuation consultant or appraiser of nationally
recognized standing (which may be the Company’s independent accounting firm) selected by the
Board (with the Management Stockholder not participating in such selection) and with such
adjustment to the appraisal by said independent valuation consultant or appraiser to the
date of the exercise of the Involuntary Transfer Repurchase Right, as the Board, acting in
good faith, in its sole discretion deems appropriate.

     “Management Stockholder” shall have the meaning set forth in the introductory
paragraph.

8

 

     “Option Stock” shall mean any Common Stock issuable or issued upon exercise of
Options.

     “Options” shall have the meaning set forth in the second “whereas” paragraph.

     “Option Plan” shall have the meaning set forth in the second “whereas” paragraph.

     “Parties” shall have the meaning set forth in the introductory paragraph.

     “Principal Stockholders” shall mean SAC CBI and its successors.

     “Public Offering” shall mean the sale of shares of Common Stock to the public
subsequent to the date hereof pursuant to a registration statement under the Act which has been
declared effective by the SEC (other than a registration statement on Form S-4, S-8 or any other
similar form).

     “SEC” shall mean the U.S. Securities and Exchange Commission.

          7. Rights to Negotiate Repurchase Price. Nothing in this Agreement shall be deemed to
restrict or prohibit the Company from purchasing, redeeming or otherwise acquiring for value shares
of Common Stock or Options from the Management Stockholder, at any time, upon such terms and
conditions, and for such price, as may be mutually agreed upon in writing between the Parties,
whether or not at the time of such purchase, redemption or acquisition circumstances exist which
specifically grant the Company the right to purchase shares of Common Stock or any Options under
the terms of this Agreement; provided that no such purchase, redemption or
acquisition shall be consummated, and no agreement with respect to any such purchase, redemption or
acquisition shall be entered into, without the prior approval of the Board.

          8. Covenant Regarding 83(b) Election. Except as the Company may otherwise agree in
writing, the Management Stockholder hereby covenants and agrees that the Management Stockholder
will make an election provided pursuant to Treasury Regulation 1.83-2 with respect to the Option
Stock when first acquired by the Management Stockholder; and the Management Stockholder further
covenants and agrees that he will furnish the Company with copies of the forms of election the
Management Stockholder files within thirty (30) days after the date hereof, and within thirty (30)
days after each exercise of the Management Stockholder’s Options and with evidence that each such
election has been filed in a timely manner.

          9. Recapitalizations, etc. The provisions of this Agreement shall apply, to the full
extent set forth herein with respect to the Common Stock or the Options, to any and all shares of
capital stock of the Company or any capital stock, partnership units or any other security
evidencing ownership interests in any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or
substitution of the Common Stock or the Options by reason of any stock dividend, split, reverse
split, combination, division, recapitalization, liquidation, reclassification, merger,
consolidation or otherwise.

          10. Management Stockholder’s Employment by the Company. Nothing contained in this
Agreement or in any other agreement entered into by the Company and the Management Stockholder
contemporaneously with the execution of this Agreement (subject

9

 

to, and except as set forth in, the
applicable provisions of any offer letter, letter of employment provided to the Management
Stockholder by the Company or any employment agreement entered into by and between the Management
Stockholder and the Company or any of its subsidiaries) (i) obligates the Company or any subsidiary
of the Company to employ the Management Stockholder in any capacity whatsoever or (ii) prohibits or
restricts the Company (or any such subsidiary) from terminating the employment of the Management
Stockholder at any time or for any reason whatsoever, with or without Cause, and the Management
Stockholder hereby acknowledges and agrees that neither the Company nor any other person has made
any representations or promises whatsoever to the Management Stockholder concerning the Management
Stockholder’s employment or continued employment by the Company or any subsidiary of the Company.

          11. Binding Effect; Assumption. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. In the case of a transferee permitted under Section 2(a)
hereof, such transferee shall be deemed a Management Stockholder hereunder; provided,
however, that no transferee (including without limitation, transferees referred to in
Section 1(a) or Section 2(a) hereof) shall derive any rights under this Agreement unless and until
such transferee has delivered to the Company a valid undertaking and becomes bound by the terms of
this Agreement. This Agreement shall be assumed mutatis mutandis by any successor to the Company
in any transaction that does not constitute a Change in Control.

          12. Amendment. This Agreement may be amended by resolution of the Board; provided
that the amendment has been approved by the Principal Stockholders; and, provided, further, that
any such amendment that would materially adversely affect the rights of the Management Stockholder
shall not to that extent be effective without the written consent of the Management Stockholder.

          13. Closing. Except as otherwise provided herein, the closing of each purchase and
sale of shares of Common Stock pursuant to this Agreement shall take place at the principal office
of the Company on the tenth business day following delivery of the notice by either Party to the
other of its exercise of the right to purchase or sell such Common Stock hereunder.

          14. Applicable Law; Jurisdiction; Arbitration; Legal Fees.

          (a) The laws of the State of New York applicable to contracts executed and to be performed
entirely in such state shall govern the interpretation, validity and performance of the terms of
this Agreement.

          (b) In the event of any controversy among the parties hereto arising out of, or relating to,
this Agreement which cannot be settled amicably by the parties, such controversy shall be finally,
exclusively and conclusively settled by mandatory arbitration conducted expeditiously in accordance
with the American Arbitration Association rules by a single independent arbitrator. Such
arbitration process shall take place within 100 miles of the New York City metropolitan area. The
decision of the arbitrator shall be final and binding upon all parties hereto and shall be rendered
pursuant to a written decision, which contains a detailed recital of the arbitrator’s reasoning.
Judgment upon the award rendered may be entered in any court having jurisdiction thereof.

10

 

          (c) Notwithstanding the foregoing, the Management Stockholder acknowledges and agrees that the
Company, its subsidiaries, the Principal Stockholders and any of their respective Affiliates shall
be entitled to injunctive or other relief in order to enforce the covenants set forth in Section 19
of this Agreement.

          (d) In the event of any arbitration or other disputes with regard to this Agreement, each
Party shall pay its own legal fees and expenses, unless otherwise determined by the arbitrator.

          15. Miscellaneous.

          (a) In this Agreement all references to “$” are to United States dollars and the masculine
pronoun shall include the feminine and neuter, and the singular the plural, where the context so
indicates.

          (b) If any provision of this Agreement shall be declared illegal, void or unenforceable by any
court of competent jurisdiction, the other provisions shall not be affected, but shall remain in
full force and effect.

          16. Withholding. The Company or its subsidiaries shall have the right to deduct from
any cash payment made under this Agreement to the Management Stockholder any minimum federal, state
or local income or other taxes required by law to be withheld with respect to such payment.

          17. Notices. All notices and other communications provided for herein shall be in
writing. Any notice or other communication hereunder shall be deemed duly given (i) upon
electronic confirmation of facsimile, (ii) one business day following the date sent when sent by
overnight delivery and (iii) five (5) business days following the date mailed when mailed by
registered or certified mail return receipt requested and postage prepaid, in each case as follows:

          (a) If to the Company, to it at the following address:

CBaySystems Holdings Limited

2661 Riva Road

Building 1000, Fifth Floor

Annapolis, Maryland 21401

Facsimile: 410.266.9409

Attention: Raman Kumar

with a copy to (which shall not constitute notice):

Jones Day

77 West Wacker Drive

Chicago, Illinois 60601

Facsimile: 312.782.8585

Attention: Philip S. Stamatakos, Esq.

and

CMS Cameron McKenna LLP

11

 

Mitre House

160 Aldersgate Street

London EC1A 4DD

United Kingdom

Facsimile: 44.20.7367.2000

Attention: Peter Smith, Esq.

          (b) If to SAC CBI, to it at the following address:

c/o S.A.C. Capital Advisors, LLC

72 Cummings Point Rd

Stamford, Connecticut 06902

Facsimile: 203.823.4209

Attention: General Counsel

with a copy to (which shall not constitute notice):

Simpson Thacher & Bartlett LLP

1999 Avenue of the Stars

29th Floor

Los Angeles, California 90067

Facsimile: 310.407.7502

Attention: Daniel Clivner, Esq.

          (c) If to the Management Stockholder, to the Management Stockholder at the address set forth
below under the Management Stockholder’s signature;

or at such other address as any party shall have specified by notice in writing to the others.

          18. Covenant Not to Disparage.

          (a) The Management Stockholder shall not, at any time, disparage the Company, the Principal
Stockholders, any of their respective Affiliates, or any of the products or practices, directors,
officers, agents, representatives, partners, members, stockholders of any of the foregoing, either
orally or in writing.

          (b) In the event that the Management Stockholder breaches any of the covenants sets forth in
this Section 18 (i) while the Management Stockholder is receiving severance payments under any
agreement or plan, the Company may cease making payments thereunder and the Management Stockholder
must repay all amounts previously received from the Company thereunder; (ii) the Management
Stockholder agrees to repay all amounts received, if any, from the Company or any of its affiliates
with respect to the purchase of Common Stock from the Management Stockholder in connection with the
termination of the Management Stockholder’s employment with the Company; and (iii) the Management
Stockholder agrees to pay the amount of damages the Company can reasonably demonstrate it incurred
as a result of such breach. The Management Stockholder shall be liable for the payment of
reasonable attorneys’ fees, costs and ancillary expenses incurred by the Company in enforcing its
rights hereunder in court or other legal proceedings if the Company prevails in such proceedings.

12

 

          (c) The existence of any claim or cause of action of the Management Stockholder against the
Company whether predicated on this Agreement or otherwise shall not constitute a defense to the
enforcement by the Company of the covenants contained in this Section 18. It is specifically agreed
that the period following the termination of the Management Stockholder’s employment with the
Company during which the agreements and covenants of the Management Stockholder made in this
Section 18 shall be effective, shall be computed by excluding from such computation any time during
which the Management Stockholder is in violation of any provision of this Section 18.

          19. Irrevocable Proxy.

          (a) In accordance with Section 82(5) of the BVI Business Companies Act, 2004 and Article 64 of
the Company’s articles of association, the Management Stockholder hereby irrevocably appoints SAC
CBI and any authorized representatives and designees thereof as its lawful proxy and
attorney-in-fact to exercise with full power in the Management Stockholder’s name and on its
behalf, the Management Stockholder’s right to vote all of the shares of outstanding Common Stock
then (or, as applicable, on the record date for such action) owned by the Management Stockholder at
any regular or special meeting of the stockholders of the Company, or written consent in lieu
thereof, in such proxy holder’s sole discretion, on any and all matters, including in favor of or
in opposition to directors. This proxy is irrevocable and is coupled with an interest and shall
not be terminable as long as this Agreement remains in effect and, if the Management Stockholder is
a natural person, shall not terminate on the Disability or incompetence of the Management
Stockholder. The Company is hereby requested and directed to honor this proxy upon its
presentation by SAC CBI and any authorized representatives and designees thereof, without any duty
of investigation whatsoever on the part of the Company. The Management Stockholder agrees that the
Company, including the Company’s officers, directors and employees, shall not be liable to the
Management Stockholder for honoring this proxy. If, for any reason, this proxy is unenforceable,
the Management Stockholder agrees to vote all shares of outstanding Common Stock then (or, as
applicable, on the record date for such action) owned by the Management Stockholder at any regular
or special meeting of the stockholders of the Company, or written consent in lieu thereof, as
directed by SAC CBI in SAC CBI’s sole discretion, on any and all matters, including in favor of or
in opposition to directors. The Management Stockholder agrees to renew the granting of this proxy
every twelve (12) months following the execution of this Agreement, if requested. If requested
from time to time by SAC CBI, the Management Stockholder will execute a separate form of proxy
consistent with this Section 19(a) that applies with respect to one or more particular matters to
be voted on by the stockholders.

          (b) Notwithstanding the foregoing, no provision of Section 19(a) shall be effective if such
provision of Section 19(a) shall be deemed to give rise under the Memorandum of Association and
Articles of Association of the Company (as amended from time to time, the “Memorandum and
Articles”) to an obligation of SAC CBI or any of its Affiliates or successors to purchase or
make an offer to purchase any or all shares of Common Stock (including pursuant to Article 163 of
the Memorandum and Articles).

          20. Exercisability of Options. If the Management Stockholder is a Leaver (as defined in
the Share Option Agreement between the Management Stockholder and the Company dated _______ (the
“Share Option Agreement”)) for any reason other than one specified in sub-clause (a) or (c)
of clause 3.4 of the Share Option Agreement, the Options shall continue to be exercisable over
those shares of Common Stock in relation to which the Options have vested as of the date that the
Management Stockholder becomes a Leaver

13

 

provided that the Management Stockholder must exercise such
Options (if at all) within the period of three years following the date that the Management
Stockholder becomes a Leaver (but in no event beyond the end of the “Option Period,” as
defined in the Share Option Agreement), failing which the Options shall lapse; provided,
that if on the date the Management Stockholder becomes a Leaver the Common Stock is not
publicly traded on a National Securities Exchange and is not quoted on Nasdaq or a successor
quotation system, then such exercise must take place (if at all) within the period of ninety days
following the date that the Management Stockholder becomes a Leaver (but in no event beyond the end
of the Option Period), failing which the Options shall lapse; provided, further,
that if on the date the Management Stockholder becomes a Leaver the Common Stock is
publicly traded on a National Securities Exchange or is quoted on Nasdaq or a successor quotation
system, and the Common Stock ceases to be publicly traded on a National Securities Exchange or
quoted on Nasdaq or a successor quotation system prior to the third anniversary of date the
Management Stockholder becomes a Leaver, then such exercise must take place (if at all) prior to
the earlier of (a) the 90th day following the date that the Common Stock ceases to be publicly
traded on a National Securities Exchange or quoted on Nasdaq or a successor quotation system and
(b) the third anniversary of date the Management Stockholder becomes a Leaver (but in no event
beyond the end of the Option Period), failing which the Options shall lapse.

          21. Compliance. The parties hereto agree that performance of this Agreement shall be
subject to the Memorandum and Articles and the laws of the British Virgin Islands and all other
applicable laws and regulations.

          22. Termination. This Agreement shall terminate on the earlier of (a) date that is
eight years from the date hereof and (b) the date on which SAC CBI no longer holds, directly or
indirectly, any shares of Common Stock or any equity interests of any successor to the Company.

[Signatures on next pages.]

14

 

          IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	CBAYSYSTEMS HOLDINGS LIMITED

 	 
	 	By: 	 	 
	 	 	Name:  	 	 	 
	 	 	Title:  	 	 	 

15

 

	 	 	 	 	 
	 	S.A.C. PEI CB INVESTMENT, L.P., acting by its
general partner,

S.A.C. PEI CB Investment GP, Limited

	 
	 	By: 	 	 
	 	 	Name:  	 	 	 
	 	 	Title:  	 	 	 

16

 

	 	 	 	 	 
	 	MANAGEMENT STOCKHOLDER:

 	 
	 	 	 
	 
	 	Name:  	 	 	 
	 
	 
	 	ADDRESS: 	 
	 	 	 
	 
	 	 	 
	 

17

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