AGREEMENT AND AMENDMENT RELATING TO:
(a) Amended and Restated Registration Rights Agreement dated December
31, 1996, as amended as of February 6, 1997 and as of August 25,
1997, among U.S. PHYSICIANS, Inc. (the "Company") and certain of
its shareholders (the "Series A and B Registration Rights
Agreement"); and
(b) Amended and Restated Shareholders Agreement dated as of December
31, 1996, as amended as of February 6, 1997 and as of August 25,
1997, among the Company and its shareholders (the "Shareholders
Agreement").
THIS AGREEMENT AND AMENDMENT is made as of January 16, 1998 by and among
the Company and the signatories hereto.
WHEREAS, the Company and the other signatories hereto, other than the
Series C Purchasers (as defined below), have previously executed and delivered
one or both of the Series A and B Registration Rights Agreement and the
Shareholders Agreement (collectively, the "Operative Agreements");
WHEREAS, the Company wishes to enter into (i) a Series C Convertible
Preferred Stock Purchase Agreement (the "Purchase Agreement") with certain
purchasers (the "Series C Purchasers") pursuant to which the Company will issue
to the Series C Purchasers up to (a) 1,445,784 shares (the "Series C Shares") of
the Company's Series C Convertible Preferred Stock, $.01 par value (the "Series
C Preferred Stock"), (b) warrants (the "Series C Initial Warrants") to purchase
400,000 shares (the "Series C Initial Warrant Shares") of the Company's Common
Stock, $.01 par value ("Common Stock"), at an exercise price of $4.15 per share
(subject to anti-dilution and other adjustments), and (c) in the event that the
Company does not close the initial public offering of its Common Stock by
specified dates, warrants (the "Series C Contingent Warrants") to purchase up to
450,000 shares of Common Stock (the "Series C Contingent Warrants Shares"), and
(ii) a Registration Rights Agreement with the Series C Purchasers (the "Series C
Registration Rights Agreement") pursuant to which the Company will provide
demand and piggyback registration rights for the shares of Common Stock issuable
upon conversion of the Series C Shares (the "Series C Conversion Shares"), the
Series C Initial Warrant Shares and the Series C Contingent Warrant Shares;
WHEREAS, the Company wishes to issue to Dominion Fund IV ("Dominion")
warrants (the "Dominion Warrants") to purchase either: up to 38,555 shares of
Common Stock at an exercise price of $4.15 per share or, if the Company does not
pay on or prior to January 19, 1998 principal and interest due and owing on a
loan in the principal amount of $800,000 from Dominion (or if such prinicipal
amount is converted into Series C Shares), up to 77,110 shares at an exercise
price of $.01 per share (the "Dominion Warrant Shares"), and to grant to
Dominion registration rights with respect to the Dominion Warrant Shares
substantially comparable to those granted to the Series C Purchasers under the
Series C Registration Rights Agreement;
WHEREAS, the parties hereto wish to waive certain rights under the
Operative Agreements and to reflect the other matters provided for herein.
NOW, THEREFORE, in consideration of the agreements set forth below and the
parties' desires to further the interests of the Company and its present and
future shareholders, and intending to be legally bound, the parties agree as
follows:
1. The parties hereto confirm that none of the following transactions
shall result in any adjustment to (a) the Conversion Price (as defined in
Exhibit A to the Company's Second Amended and Restated Articles of
Incorporation, as amended through the date hereof (the "Articles")) of the
Series A Preferred Stock (as defined in the Series A and B Registration Rights
Agreement) or the Series B Preferred Stock (as defined in the Series A and B
Registration Rights Agreement), or (b) (i) the number of shares of Common Stock
issuable pursuant to the Warrants (as defined in the Registration Rights
Agreement) or (ii) the exercise price of such Warrants. The undersigned consent
for all purposes to, and waive any rights (including, without limitation, rights
of first refusal under Section 4 of the Shareholders Agreement and rights
arising under subparagraph 6D of the Articles) arising out of, the following
transactions:
(I) the issuance of the Series C Shares, the issuance of the Series
C Conversion Shares, the issuance of the Series C Initial Warrants, the issuance
of the Series C Contingent Warrants and the issuance of the Series C Initial
Warrant Shares and the Series C Contingent Warrant Shares upon the exercise of
the Series C Initial Warrants and the Series C Contingent Warrants,
respectively; and
(II) the issuance of the Dominion Warrants and the issuance of the
Dominion Warrant Shares upon the exercise of the Dominion Warrants.
2. The parties hereto consent for all purposes to, and waive any rights
(including, without limitation, any rights arising under Section 5 or Section
13(i) of the Registration Rights Agreement or any other provision of the
Operative Agreements) arising out of, (i) the grant by the Company of
registration rights to the Series C Purchasers under the Series C Registration
Rights Agreement or any grant of substantially comparable registration rights to
Dominion with respect to the Dominion Warrant Shares or (ii) the exercise of any
such registration rights by the Series C Purchasers under the Series C
Registration Rights Agreement or by Dominion of such substantially comparable
rights with respect to the Dominion Warrant Shares.
3. By executing this Agreement and Amendment, the Series C Purchasers
shall become a party to the Shareholders Agreement. The address of the Series C
Purchasers for notice purposes shall be as specified in the Purchase Agreement.
4. Paragraph 12 of the Shareholders Agreement is hereby amended by
adding the following phrase at the end of the first sentence thereof: "and
provided, further, that the holders of Series C Preferred Stock owning at least
two-thirds of the Shares owned by all holders of Series C Preferred Stock may
effect any such waiver, modification, amendment or termination on behalf of all
the holders of Series C Preferred Stock."
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5. The Series A and B Registration Rights Agreement and the
Shareholders Agreement shall remain in full force and effect, except as set
forth herein.
6. This Agreement and Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument. In accordance with Section 12 of the
Shareholders Agreement and Section 13d of the Series A and B Registration Rights
Agreement, this Amendment and Agreement shall become effective when the Company,
the Series C Purchasers and Series A Purchasers owning at least two-thirds of
the Shares owned by all Series A Purchasers, Series B Purchasers owned at least
two-thirds of the Shares owned by all Series B Purchasers and Stockholders
owning at least two-thirds of the Shares owned by all Stockholders (as such
terms are defined in the Shareholders Agreement) have executed and delivered to
the Company counterparts or originals of this Amendment and Agreement.
-3-
IN WITNESS WHEREOF, the Company and the undersigned have executed this
Agreement and Amendment as of the day and year first above written.
U.S. PHYSICIANS, Inc.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Title: Sr. Vice President
-------------------------------------------
SHAREHOLDERS:
/s/ Xxxxxx X. Xxxxx
--------------------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxx Xxxxxxxx
--------------------------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxx, attorney in fact
--------------------------------------------------
Xxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxx, attorney in fact
--------------------------------------------------
Xxxxxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxx, attorney in fact
--------------------------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxx X. XxXxxxxxx
--------------------------------------------------
Xxxxx X. XxXxxxxxx
/s/ Xxxxxx X. Xxxxx
--------------------------------------------------
Xxxxxx X. Xxxxx
--------------------------------------------------
Xxxxx Xxxxxxxxx, with respect to all shares
beneficially owned by her
/s/ Xxxxxx X. XxXxxxxxx
--------------------------------------------------
Xxxxxx X. XxXxxxxxx
-4-
/s/ Xxxxx X. Xxxxxx, M.D.
--------------------------------------------------
Xxxxx X. Xxxxxx, M.D., with respect to all shares
beneficially owned by him
SERIES A PURCHASERS:
EDISON VENTURE FUND III, L.P.
By: Edison Partners III, L.P., its general partner
By: /s/ Xxxxxx X. Xxxxx, III
----------------------------------------------
Title: General Partner
NEPA VENTURE FUND II, L.P.
By: NEPA II Management Partners, L.P.,
its general partner
By: NEPA II Management Corporation,
its general partner
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------------
Title: Secretary and Treasurer
-------------------------------------------
XXXXXXX LIQUIDATING TRUST
By: /s/ Xxxx X. Xxxxxxx, Xx.
----------------------------------------------
Xxxx X. Xxxxxxx, Xx.
Title: Trustee
SERIES B PURCHASERS:
KEYSTONE VENTURE IV, L.P.
By: Keystone Venture IV Management Co., L.P.,
the general partner of
Keystone Venture IV, L.P.
By: Keystone Venture IV Management Co., Group
the general partner of
Keystone Venture IV Management Co., L.P.
By: /s/ Xxxxx X. Xxxx
----------------------------------------------
Xxxxx X. Xxxx
Title: Vice President
-5-
EDISON VENTURE FUND III, L.P.
By: Edison Partners, III, L.P.,
its general partner
By: /s/ Xxxxxx X. Xxxxx, III
----------------------------------------------
Title: General Partner
NEPA VENTURE FUND II, L.P.
By: NEPA II Management Partners, L.P.,
its general partner
By: NEPA II Management Corporation,
its general partner
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------------
Title: Secretary and Treasurer
-------------------------------------------
SUBSEQUENT PURCHASERS:
/s/ Xxxxxx X. Xxxxx
--------------------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx
--------------------------------------------------
Xxxxxx X. Xxxxx
E.J.K. Real Estate Services Limited
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------------
Xxxxxxx X. Xxxxxxxx
Title: President
Glenville Capital Partners, L.P.
By: Glenville Capital Corporation,
its general partner
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------------
Title: President
-------------------------------------------
-6-
DOMINION FUND IV, A DELAWARE
LIMITED PARTNERSHIP
By: Dominion Management IV,
its general partner
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------------------------
Xxxxxxxx X. Xxxxxx,
Title: Member
/s/ Xxxxxx X. Xxxx, Xx.
--------------------------------------------------
Xxxxxx X. Xxxx, Xx.
/s/ Xxxxxxxx X. Xxxxx, Xx.
--------------------------------------------------
Xxxxxxxx X. Xxxxx, Xx.
/s/ Xxxxxxx X. Xxxxx, M.D.
--------------------------------------------------
Xxxxxxx X. Xxxxx, M.D., with respect to all shares
beneficially owned by him
-7-
SERIES C PURCHASERS:
CAPITAL VENTURES INTERNATIONAL
By: Heights Capital Management, Inc.,
Authorized Agent
By: /s/ Xxxxxxx Xxxxxx
----------------------------------------------
Title: Secretary and General Counsel
-------------------------------------------
LANCASTER INVESTMENT PARTNERS, L.P.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------------
Title: Managing General Partner
-------------------------------------------
KEYSTONE VENTURE IV, L.P.
By: Keystone Venture IV Management Co., L.P.,
the general partner of
Keystone Venture IV, L.P.
By: Keystone Venture IV Management Co., Group
the general partner of
Keystone Venture IV Management Co., L.P.
By: /s/ Xxxxx X. Xxxx
----------------------------------------------
Xxxxx X. Xxxx
Title: Vice President
EDISON VENTURE FUND III, L.P.
By: Edison Partners, III, L.P.,
its general partner
By: /s/ Xxxxxx X. Xxxxx, III
----------------------------------------------
Title: General Partner
NEPA VENTURE FUND II, L.P.
By: NEPA II Management Partners, L.P.,
its general partner
By: NEPA II Management Corporation,
its general partner
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------------
Title: Secretary and Treasurer
-------------------------------------------
-8-
DOMINION FUND IV, A DELAWARE
LIMITED PARTNERSHIP
By: Dominion Management IV,
its general partner
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------------------------
Xxxxxxxx X. Xxxxxx,
Title: Member
/s/ Xxxxxx X. Xxxxx
--------------------------------------------------
Xxxxxx X. Xxxxx
-9-
