Exhibit 4.4
EXECUTION COPY
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WAIVER OF RIGHTS AND AMENDMENT
UNDER STOCKHOLDERS AGREEMENT
This Waiver of Rights and Amendment under Stockholders Agreement
("Waiver of Rights") is made and entered into as of December 11, 1996, by and
among Physicians Quality Care, Inc., a Delaware corporation (the "Company"), and
each of the undersigned parties (the "Majority Stockholders"). Capitalized
terms not defined herein shall have the meanings set forth in the Stockholders
Agreement (as hereinafter defined).
WHEREAS, the Company and the Majority Stockholders, along with certain
other holders of the Company's securities, are parties to a Stockholders
Agreement dated as of August 30, 1996, as amended and in effect from time to
time (the "Stockholders Agreement");
WHEREAS, the Majority Stockholders collectively hold a majority of all
Shares currently outstanding and subject to the Stockholders Agreement and
collectively hold a majority of the Non-Xxxx Investor Shares currently
outstanding and subject to the Stockholders Agreement;
WHEREAS, each of the physicians listed on Exhibit A (the "Non-Retiree
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Flagship Physicians") are becoming parties to the Stockholders Agreement for all
purposes by executing an Instrument of Joinder to Stockholders Agreement dated
as of even date herewith; and
WHEREAS, pursuant to the provisions of Section 12.2 of the
Stockholders Agreement, the Company and the Majority Stockholders desire to
waive certain of the Company's rights under the Stockholders Agreement as set
forth below.
NOW, THEREFORE, the parties to this Waiver of Rights agree as follows:
1. As applied to each of the Non-Retiree Flagship Physicians, Section
5.1.1. of the Stockholders Agreement is hereby amended to read in its
entirety as follows:
5.1.1. Termination by the Company Without Cause. If such
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termination is the result of termination of such holder's
employment by the Company, its Subsidiaries or any Affiliate
thereof without Cause or as a result of the death or Disability
(as defined in such holder's written employment agreement with the
Company, its Subsidiary or its Affiliate, as applicable (the
"Employment Agreement")) of such holder, the Company (or its
designee), upon written notice delivered within 90 days of
termination, may purchase all or any portion of the Shares,
Warrants and Options then held by the applicable
Call Stockholder Group at a price equal to the Fair Market Value
of such securities; provided, however, that upon termination of
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the employment by the Company, its Subsidiary or any Affiliate
thereof of a holder of Physician Shares as a result of a
Disability of such Physician Stockholder, the Company shall have
no right to purchase all or any portion of the Shares, Warrants
and Options then held by the applicable Call Stockholder Group for
such period of time, if any, as such Physician Stockholder is in
all respects a Qualified Holder with a Total Disability, as
hereafter defined.
5.1.1.1. It shall be the responsibility of such Physician
Stockholder or his/her legal guardian, if any, to notify the
Company in writing within 30 days of termination of employment as
a result of Total Disability that such Physician Stockholder
should be considered a Qualified Holder with a Total Disability
and the failure of the Physician Stockholder or his/her legal
guardian to do so in a timely manner shall be determinative of the
matter. Following said notice, the Physician Stockholder (in the
case of seeking such qualification pursuant to Section
5.1.1.3(d)(i), upon the Company's request, or in the case of
seeking such qualification pursuant to Section 5.1.1.3(d)(ii),
upon the request of the NMA Board (as defined below in Section
5.1.1.3(d)(ii)) shall submit to the examination and testing of up
to three physicians selected by the Company or the NMA Board,
respectively. In order for the Physician Stockholder to be
medically certified as having a Total Disability hereunder
pursuant to Section 5.1.1.3(d)(i), each of the physicians so
selected must conclude that the Physician Stockholder has a Total
Disability in accordance with Section 5.1.1.3(d)(i) hereof. In the
case of Physician Stockholders who qualify as Totally Disabled
hereunder pursuant to Section 5.1.1.3(d)(i), the Company may
require the Physician Stockholder to be recertified quarterly
thereafter by up to three physicians and the Physician Stockholder
shall be recertified only by unanimous determination of the
physicians selected by the Company. In the case of Physician
Stockholders who qualify as Totally Disabled hereunder pursuant to
Section 5.1.1.3(d)(ii), the NMA Board may require the Physician
Stockholder to be examined by a physician from time to time as the
NMA Board determines appropriate but in no event more frequently
than annually. If the Physician Stockholder shall fail to submit
to any medical examination or testing requested by the Company or
the NMA Board hereunder, the Physician Stockholder shall cease to
be a Qualified Holder with a Total Disability.
5.1.1.2. A Physician Stockholder shall notify the Company in
writing immediately if the Physician Stockholder ceases, in any
respect, to be a Qualified Holder with a Total Disability in
accordance with Section 5.1.1.3(c) hereof. Any Physician
Stockholder who is determined to be a Qualified Holder with a
Total Disability hereunder shall no longer qualify as such in the
event that the Physician Stockholder ceases to meet in full all of
the criteria set forth
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in Section 5.1.1.3(c) hereof. The date on which the Company
determines, and provides notice of such determination to the
Physician Stockholder, that such Physician Stockholder ceases to
be a Qualified Holder with a Total Disability shall be the
"Disqualification Date". In the event a Physician Stockholder
ceases to be certified or recertified as having a Total Disability
or otherwise ceases to be a Qualified Holder with a Total
Disability, the Physician Stockholder shall be treated for
purposes of this Agreement as being terminated for Cause as of the
Disqualification Date.
5.1.1.3. Definitions. For purposes of this Agreement, the
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following definitions shall apply:
(a) "Basic Activities of Daily Living" shall mean
bathing, dressing, toileting, continence, eating and the ability
to move from a sitting to a lying position and vice versa.
(b) "Cognitive Impairment" shall mean confusion or
disorientation resulting from a deterioration or loss of
intellectual capacity as a result of Alzheimer's disease, senility
or other irreversible dementia, which deterioration or loss is
capable of being diagnosed, and is diagnosed, by standardized
testing or instruments.
(c) A "Qualified Holder with a Total Disability"
shall mean a Physician Stockholder who (i) is Totally Disabled in
accordance with Section 5.1.1.3 (d) hereof; (ii) is in compliance
with and intends to remain in compliance with all of his/her
obligations under the Employment Agreement (including without
limitation the restrictive covenants), excluding only the
Physician Stockholder's obligation to provide services thereunder;
and (iii) is not working in any capacity, with or without
compensation, whether as an employee, partner, independent
contractor or otherwise.
(d) A Physician Stockholder shall be certified as
having a "Total Disability" by a physician selected by the Company
hereunder only if (i) the Physician Stockholder (A) is unable to
perform three or more of the Basic Activities of Daily Living
without substantial human physical assistance and/or constant
supervision or is suffering from a Cognitive Impairment and (B) is
unable to work in any capacity, or (ii) in the event that (after
having been examined in accordance with the requirements of and
followed the procedures set forth in Section 5.1.1.1 above) the
Physician Stockholder fails to be certified as having a Total
Disability pursuant to Section 5.1.1.3(d)(i), (A) the Physician
Stockholder appeals to the National Medical Advisory Board of the
Company (the "NMA Board"), and the NMA Board (by vote of the
majority of all its members) certifies in its sole discretion that
the Physician Stockholder is permanently disabled and is not able
to contribute meaningfully
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as a member of the medical profession, and that such determination
will not unfairly and adversely affect the other physician
employees of the Company or its Subsidiaries or Affiliates and (B)
the NMA Board (by vote of the majority of all its members) has not
subsequently revoked such certification.
2. MISCELLANEOUS.
2.1. Authority; Effect. Each party hereto represents and warrants to
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and agrees with each other party that the execution and delivery
of this Waiver of Rights 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. Except
to the extent specifically amended hereby, the provisions of the
Stockholders Agreement shall remain unmodified and the provisions
of the Stockholders Agreement are hereby confirmed as being in
full force and effect. This Waiver of Rights does not, and shall
not be construed to, give rise to the creation of a partnership
among any of the parties hereto, or to constitute any of such
parties members of a joint venture or other association.
2.2. Notices. Notices and other communications provided for in this
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Waiver of Rights shall be given as directed in Section 14.2 of the
Stockholders Agreement.
2.3. Binding Effect, etc. This Waiver of Rights constitutes the
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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 respective heirs, representatives, successors and
assigns.
2.4. Descriptive Headings. The descriptive headings of this Waiver
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of Rights 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.
2.5. Counterparts. This Waiver of Rights may be executed in multiple
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counterparts, each of which shall be deemed an original, but all
of which taken together shall constitute one instrument.
2.6. Severability. If in any judicial proceedings a court shall
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refuse to enforce any provision of this Waiver of Rights, then
such unenforceable provision shall be deemed eliminated from this
Waiver of Rights for the purpose of such proceedings to the extent
necessary to permit the remaining provisions to be enforced. To
the full extent, however, that the provisions of any applicable
law may be waived, they are hereby waived to the end that this
Waiver of Rights
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be deemed to be valid and binding agreement enforceable in
accordance with its terms, and in the event that any provision
hereof shall be found to be invalid or unenforceable, such
provision shall be construed by limiting it so as to be valid and
enforceable to the maximum extent consistent with and possible
under applicable law.
2.7. Governing Law. Except to the extent that any provision of this
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Waiver of Rights is contrary to any mandatory provision of the
General Corporation Law of the State of Delaware (in which case
such mandatory statutory provision shall apply), this Waiver of
Rights shall be governed by and construed in accordance with the
domestic substantive laws of The Commonwealth of Massachusetts
without giving effect to any choice or conflict of laws provision
or rule that would cause the application of the domestic
substantive laws of any other jurisdiction.
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IN WITNESS WHEREOF, each of the undersigned has duly executed this
Waiver of Rights (or caused this Waiver of Rights to be executed on its behalf
by its officer or representative thereunto duly authorized) under seal as of the
date first above written.
THE COMPANY: Physicians Quality Care, Inc.
By:
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Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer and President
MAJORITY STOCKHOLDERS: Xxxx Capital Fund V, L.P.
By Xxxx Capital Partners V, L.P., a
Delaware limited partnership,
its general partner
By Xxxx Capital Investors V, Inc., its
general partner
By
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Title: Managing Director
Xxxx Capital Fund V-B, L.P.
By Xxxx Capital Partners V, L.P., a
Delaware limited partnership,
its general partner
By Xxxx Capital Investors V, Inc., its
general partner
By
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Title: Managing Director
BCIP Associates
By
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Title: a general partner
BCIP Trust Associates, L.P.
By
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Title: a general partner
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Xxxxxxx X. Xxxxx, as an individual
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Xxx Xxxxxxxxx, as an individual
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Xxxxx Xxxxxx, Xx., M.D., as an individual
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Xxxxxx X. Xxxxx, M.D., as an individual
Exhibit A -- Non-Retiree Flagship Physicians
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Xxxxxxx X. Xxxxxx, M.D.
Xxxx Xxxxxx, M.D.
Xxxxx X. Xxxxxx, M.D.
Xxxxx X. Xxxxxxx, M.D.
Xxxxxxx X. Xxxx, M.D.
Xxxxxxxx X. Xxxxxx, M.D.
Xxxxxxx Xxxx, M.D.
Xxxxx X. Xxxxxxxx, M.D.
Xxxxxx X. Xxxxx, M.D.
Xxxxx Xxxx, M.D.
Xxxxxxxx Xxxxxxxxx, M.D.
Xxxxxxx X. Xxxxxxxx, M.D.
Xxxxx X. Xxxx, III, M.D.
Xxxx X. Xxxxxx, M.D.
Xxxxxxx X. Xxxxx, M.D.
Xxxxxxx X. Xxxxx, M.D.
Xxx Fine, M.D.
Xxxxxx X. Xxxxxxx, M.D.
Xxxx X. Xxxxx, M.D.
Xxxxx X. Xxxxxxxx, M.D.
Xxxx Xxxxxxxx, M.D.
Xxxxx X. Graze, M.D.
Xxxxx Xxxxxxx, M.D.
Xxxxx Xxxxxxx, M.D.
Xxxxxx X. Headings, M.D.
Xxxxxxxxx X. Xxxx, M.D.
S. Xxxxx Xxxxxxx, M.D.
Xxxxxxx X. Xxxxx, M.D.
Xxxx X. Lake, M.D.
Xxxxxxxx X. Xxxxxx, M.D.
Xxxxxx X. Xxxxxx, M.D.
Xxx X. Xxxxxx, M.D.
Xxxxx X. Xxxxxxxx, M.D.
Xxxxx Xxxxxxx, M.D.
Xxxx X. Xxxxxx, M.D.
Xxxx Xxxxx, M.D.
Xxxx X. Xxxxxx, M.D.
Xxxxxxx Xxxxxxxx, M.D.
Xxxxx Xxxxxxxx, M.D.
Xxxxxxx Xxxxxxxxxx, M.D.
Xxxxxxx X. Xxxxxxxxx, M.D.
Xxxx X. Xxxxxxx, M.D.
Xxxxxx Xxxxxxxx, M.D.
Xxxxxxx X. Xxxxxxx, M.D.
Xxxxxxx X. Xxxxxx, M.D.
Xxxxx Xxx, M.D.
Xxxxx Xxxxxx, M.D.
Xxxxxx X. Xxxx, M.D.
