EXHIBIT 10.40
PHYSICIAN HEALTH CORPORATION
AMENDMENT NO. 2 TO
ESCROW AGREEMENT
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THIS AGREEMENT, dated as of October , 1997, is among Physician Health
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Corporation, a Delaware corporation (the "Company"), Weston Presidio Capital II,
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L.P. ("WPC") (in its capacity only as escrow agent hereunder, and not as an
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Investor, the "Escrow Agent"), each of the investors set forth on the signatures
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pages below (Weston Presidio Capital II, L.P. and each of the other investors
being hereinafter referred to as the "Investors"), and Paribas Principal
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Incorporated (the "Additional Investor").
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1. ESCROW AGREEMENT; DEFINITIONS. This Agreement amends the Escrow
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Agreement dated as of June 16, 1997 (the "Escrow Agreement"), as amended to
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date, among the Company, WPC, and the Investors. Capitalized terms not otherwise
defined in this Agreement are used as defined in the Escrow Agreement.
2. AMENDMENT OF ESCROW AGREEMENT. The Escrow Agreement is amended as
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follows, effective as of the date hereof:
2.1 Amendment of Recitals. The Recitals to the Escrow Agreement are
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deleted and replaced in their entirety with the following:
"Recitals: The Company and the Investors have entered into the Purchase
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Agreement pursuant to which, among other things, the Investors have agreed
to purchase Investor Securities, on the terms and subject to conditions set
forth in the Purchase Agreement (a) at the Third Closing on the condition
that certificates for such Investor Securities be held in the Securities
Escrow created hereby and (b) at the Second Closing, the proceeds of which
shall be held in the Purchase Price Escrow created hereby."
2.2 Amendment of Section 2. Section 2 of the Escrow Agreement is deleted
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and replaced in its entirety with the following:
"2. Second Closing Escrow. Pursuant to Section 2.4 of the Purchase
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Agreement, on the date of the Second Closing under the Purchase Agreement,
(a) the Company shall deliver to the Investors certificates evidencing the
respective Investor Securities set forth in Exhibit 1 of the Purchase
Agreement for the Second Closing, and (b) the Investors shall deposit the
purchase price therefor into an interest-bearing account with the Company's
principal depository bank as specified
by the Company (the "Purchase Price Escrow"), from which withdrawal of
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funds shall be made to the Company upon its request for specific
acquisitions permitted by the Purchase Agreement. Investor Securities
contained in the Securities Escrow and cash and other investments contained
in the Purchase Price Escrow are referred to collectively as the "Escrow
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Assets"."
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2.3 Amendment of Section 3.1. Section 3.1 of the Escrow Agreement is
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deleted and replaced in its entirety with the following:
"3.1 Disposition of Escrow Assets in respect of the Second Closing.
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Pursuant to Section 2.4 of the Purchase Agreement, immediately upon the
request by the Company to the Escrow Agent for the release to the Company
of all or a portion of the funds held in the Purchase Price Escrow for
acquisitions permitted by the Purchase Agreement, funds from the Purchase
Price Escrow shall be so released to the Company in accordance with such
request."
2.4 Amendment of Section 3.4. Section 3.4 of the Escrow Agreement is
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deleted and replaced in its entirety with the following:
"3.4 Closing out of Securities Escrow and Purchase Price Escrow.
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Except to the extent the Escrow Agent has received written notice of a
claim for dispositions from the Securities Escrow or Purchase Price Escrow,
(a) on April 14, 1998, the Escrow Agent shall deliver to the Company any
remaining Investor Securities in the Securities Escrow in respect of the
Third Closing, in accordance with Section 2.5 of the Purchase Agreement;
and (b) upon the earlier of the closing of an underwritten public offering
of Common Stock registered under the federal Securities Act of 1933 and
having aggregate net cash proceeds (or market value of freely tradable
marketable securities with a market float reasonably satisfactory to the
Required Holders) of at least $20,000,000 and June 16, 2000, the Escrow
Agent shall release any funds remaining in the Purchase Price Escrow in
respect of the Second Closing, in accordance with Section 2.4 of the
Purchase Agreement."
3. JOINDER OF ADDITIONAL INVESTOR. The Additional Investor joins in and
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becomes a party to the Escrow Agreement as an Investor.
4. GENERAL. Except to the extent expressly amended hereby, the provisions
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of the Purchase Agreement shall remain unmodified and are confirmed as being in
full force and effect. The headings in this Agreement are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof. This
Agreement, the Purchase Agreement and the other items referred to herein or
therein constitute the entire understanding of the parties hereto with respect
to the subject matter hereof and thereof and supersede all present and prior
agreements, whether written or oral. This Agreement is intended to take effect
as a sealed
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instrument and may be executed in any number of counterparts, which together
shall constitute one instrument and shall be governed by and construed in
accordance with the laws (other than the conflict of laws rules) of The
Commonwealth of Massachusetts, and shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
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The undersigned have executed this Agreement under seal as of the date
first above written.
Company: PHYSICIAN HEALTH CORPORATION
By
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Title:
Escrow Agent: WESTON PRESIDIO CAPITAL II, L.P.
By: WESTON PRESIDIO CAPITAL
MANAGEMENT II, L.P.
By
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General Partner
Investors: WESTON PRESIDIO CAPITAL II, L.P.
By: WESTON PRESIDIO CAPITAL
MANAGEMENT II, L.P.
By
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General Partner
BANCBOSTON INVESTMENTS INC.
By
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Title:
MERCURY ASSET MANAGEMENT plc, on
behalf of ROWAN NOMINEES LIMITED
By:
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Title:
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NATWEST VENTURES INVESTMENTS LIMITED
By:
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Title:
ST. XXXX VENTURE CAPITAL IV, LLC
By:
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Title:
PARTECH U.S. PARTNERS III C.V.
By:
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Title:
U.S. GROWTH FUND PARTNERS C.V.
By:
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Title:
AXA U.S. GROWTH FUND LLC
By:
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Title:
DOUBLE BLACK DIAMOND II LLC
By:
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Title:
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XXXXXXXX LIMITED
By:
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Title:
MULTINVEST LIMITED
By:
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Title:
NATIONAL CITY VENTURE CORPORATION
By:
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Title:
Additional Investor: PARIBAS PRINCIPAL INCORPORATED
By:
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Title:
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