EXECUTION COPY
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PHYSICIANS QUALITY CARE, INC.
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STOCKHOLDERS AGREEMENT
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Dated as of August 30, 1996
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STOCKHOLDERS AGREEMENT
This Stockholders Agreement (the "Agreement") is made as of August 30, 1996
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by and among (i) Physicians Quality Care, Inc., a Delaware corporation (the
"Company"), (ii) each of Xxxx Capital Fund V, L.P., a Delaware limited
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partnership, Xxxx Capital Fund V-B, L.P., a Delaware limited partnership, BCIP
Associates, a Delaware partnership, BCIP Trust Associates, L.P., a Delaware
limited partnership (collectively, the "Bain Initial Investors," and each a
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"Bain Initial Investor") and each of the other Additional Bain Investors from
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time to time party hereto, (iii) each Management Stockholder from time to time
party hereto, (iv) each Physician Stockholder from time to time party hereto and
(v) other stockholders from time to time party hereto. The Bain Investors, the
Management Stockholders and the Physician Stockholders and such other
stockholders are sometimes referred to herein collectively as the
"Stockholders".
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Recitals
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1. Pursuant to a Purchase Agreement dated as of August 30, 1996 by and
among the Company and the Initial Bain Investors (the "Purchase Agreement"), the
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Initial Bain Investors will acquire up to an aggregate of 12,000,000 shares of
Class B Common Stock, $.01 par value per share ("Class B Common") of the Company
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and Warrants to purchase an aggregate of 13,000,000 shares of Class B Common,
subject to adjustment.
2. It is anticipated that one or more individuals serving or who will
serve as officers of the Company will acquire or have acquired shares of Class A
Common Stock, $.01 par value per share ("Class A Common") of the Company.
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3. It is anticipated that one or more individual or professional
corporations have or will enter into agreements with the Company pursuant to
which an affiliate of the Company will acquire the group practices of certain
physicians (the "Physicians") and will enter into various agreements in
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connection therewith and pursuant to which the Physicians will acquire capital
stock of the Company (the "Physician Stockholders").
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4. It is a condition to the Closing under the Purchase Agreement that the
Company and certain Stockholders of the Company enter into this Agreement in
substitution for certain existing agreements with the Company.
5. The parties believe that it is in the best interests of the Company and
the Stockholders to: (i) provide that certain shares of common stock shall be
transferable only upon compliance with the terms hereof; (ii) provide the Bain
Investors with certain rights with respect to the purchase of shares of common
stock under certain circumstances; and (iii) set forth their agreements on
certain other matters.
Agreement
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Now therefore, in consideration of the foregoing and the mutual agreements
set forth below, the parties hereto, each intending to be legally bound, hereby
agree as follows:
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1. DEFINITIONS. For purposes of this Agreement:
1.1. Certain Definitions. The following terms shall have the following
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meanings:
1.1.1. "Affiliate" shall mean, with respect to any specified Person,
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any Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with,
the Person specified including effective control by virtue of a contractual
relationship such as a management agreement or a stockholder transfer or
designation or similar agreement other than a management or similar
agreement which does not, alone or together with related agreements, result
in control of such Person.
1.1.2. "Affiliated Fund" shall mean any limited partnership or other
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Person formed for the purpose of investing in other companies or businesses
and for which (a) Xxxx Capital Investors V, Inc., a Delaware corporation,
or any of its Affiliates, acts as a general partner or otherwise has the
right to direct the voting of shares of corporations in which such limited
partnership or other Person invests or (b) Xxxx Capital, Inc. or Xxxx
Capital Partners V, L.P. or any of their respective Affiliates provides
management services.
1.1.3. "Bain Investor" shall mean (i) any Bain Initial Investor and
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(ii) any Affiliated Fund which, from time to time, acquires Shares or
Warrants and becomes party to this Agreement by executing and delivering to
the Company an instrument in form satisfactory to the Company pursuant to
which such stockholder agrees to be bound by the terms of this Agreement to
the same extent as a Bain Initial Investor.
1.1.4. "Bain Investor Initial Shares" shall mean all Shares
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originally issued to the Bain Investors at the Effective Time.
1.1.5. "Bain Investor Majority Holders" shall mean, as of any date,
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the holders of a majority of the Bain Investor Shares outstanding on such
date.
1.1.6. "Bain Investor Shares" shall mean all Shares originally
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issued to (or issued upon conversion of or otherwise with respect to
Shares, Warrants or Options issued to) or held by the Bain Investors
whenever issued.
1.1.7. "Board" shall mean the Board of Directors of the Company.
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1.1.8. "Cause" shall mean, (a) in the context of termination of the
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employment of any Management Stockholders, any of the following events or
conditions: (i) such person's significant failure to perform (other than by
reason of disability) his or her duties and responsibilities to the Company
and its Affiliates which failure causes material injury to the Company and
is not cured within fourteen (14) days after written notice by the Company
to such person, (ii) any act of fraud, embezzlement or other material
dishonesty, (iii) conviction of, or plea of nolo contendere to, any felony
or any other crime involving fraud, dishonesty or moral turpitude, or (iv)
conduct which causes criminal or material civil liabilities to the Company,
its Subsidiaries or Affiliates thereof; and (b) shall
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mean, in the context of a Physician, any of the following events or
conditions: (i) fraud or dishonesty with respect to the Company, its
Affiliates or their employees, patients or visitors; (ii) suspension or
termination from Medicare, Medicaid or any third-party reimbursement
program, for cause other than by reason of the fact of employment by the
Company or its Affiliates; (iii) ceases to be licensed to practice medicine
without restriction under the laws of any state in which the Physician is
licensed; (iv) ceases to maintain a current and valid Federal Drug
Enforcement Agency license; or (v) conviction of, or plea of nolo contendre
to, any felony or any other crime involving fraud, dishonesty or moral
turpitude, (vi) conduct causes criminal or material civil liabilities to
the Company, its Subsidiaries or Affiliates thereof or (vii) breach of
noncompetition agreement with the Company or any of its Subsidiaries or
Affiliates thereof.
1.1.9. "Class A Director" shall have the meaning set forth in the
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Company's Restated Certificate of Incorporation.
1.1.10. "Common Stock" shall mean the Class A Common and the Class B
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Common of the Company.
1.1.11. "Common Stock Director" shall have the meaning set forth in
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the Company's Restated Certificate of Incorporation.
1.1.12. "Cost" shall mean, in the context of the Cost of securities
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subject to the provisions of Section 4, (i) in the case of Shares, the
amount (in the form of subscription price or exercise price or otherwise)
paid to the Company upon issuance of such Shares and (ii) in the case of
Warrants or Options, an amount equal to the value of the consideration paid
therefor as determined by the Board; in each case adjusted appropriately to
take account of any stock splits, stock dividends, conversions or
consolidations of stock or substantially similar reorganizations of the
Company's capital stock.
1.1.13. "Effective Time" shall mean the time of the Initial Closing
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A (as defined in the Purchase Agreement).
1.1.14. "Exchange Act" shall mean the Securities Exchange Act of
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1934, as amended.
1.1.15. "Executive" shall mean Xxxxxxx Xxxxx or Xxx Xxxxxxxxx.
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1.1.16. "Fair Market Value" shall mean, as of any date, the fair
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value of any Share as of the applicable date, as determined pursuant to
Section 5.5.
1.1.17. "Majority Stockholders" shall mean, as of any date, the
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holders of a majority of the Shares outstanding on such date.
1.1.18. "Management Majority Holders" shall mean, as of any date,
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the holders of a majority of the Management Shares outstanding on such
date.
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1.1.19. "Management Shares" shall mean all Shares originally issued
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to (or issued upon conversion of or otherwise with respect to Shares
originally issued to) or held by the Management Stockholders, whenever
issued, including without limitation all Shares issued pursuant to the
exercise of any Warrants or Options, whenever issued; provided, however,
that for purposes of this Agreement Management Shares shall not include
Shares issued upon exercise of Options (i) outstanding on the Effective
Time (ii) which are exercisable as of the Effective Time or on or prior to
December 31, 1997 anniversary of the Effective Time, (iii) which Shares
shall not exceed 303,057 in the aggregate and (iv) are held by such
Management Stockholders listed on Schedule A hereto in the amounts
specified therein.
1.1.20. "Management Stockholder" shall mean any officer or employee
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of the Company or any of its subsidiaries who, from time to time, acquires
Shares or Options and becomes party to this Agreement by executing and
delivering to the Company an instrument in form satisfactory to the Company
and the Bain Investors pursuant to which such stockholder agrees to be
bound by the terms of this Agreement applicable to Management Stockholders.
1.1.21. "Members of the Immediate Family" shall mean, with respect
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to any individual, each spouse, parent, brother, sister or child of such
individual, each spouse of any such Person, each child of any of the
aforementioned Persons, each trust created solely for the benefit of one or
more of the aforementioned Persons and each custodian or guardian of any
property of one or more of the aforementioned Persons in his capacity as
such custodian or guardian.
1.1.22. "Non-Bain Investor Options" shall mean all Options held by
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any Stockholder other than Options held by Bain Investors.
1.1.23. "Non-Bain Investor Shares" shall mean all Shares other than
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Bain Investor Shares, whenever issued.
1.1.24. "Non-Bain Investor Warrants" shall mean all Warrants held by
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Stockholders other than Warrants held by Bain Investors.
1.1.25. "Options" shall mean any options to subscribe for, purchase
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or otherwise acquire Shares, including, without limitation, any and all
options issued pursuant to the Company's Equity Incentive Plan or any
similar plan.
1.1.26. "Permitted Transferee" shall mean as to each Management
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Share and Physician Share, a transferee of such Management Share or
Physician Share in compliance with Section 3.1 or 3.2.
1.1.27. "Person" shall mean any individual, partnership,
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corporation, company, association, trust, joint venture, unincorporated
organization or other entity, or any government, governmental department or
agency or political subdivision thereof.
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1.1.28. "Physician Shares" shall mean Shares, Warrants or Options
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issued pursuant to the acquisition by an Affiliate of the Company of group
practices of certain physicians which are held by Persons who become
parties to this Agreement by executing and delivering to the Company an
instrument in form satisfactory to the Company and the Bain Investors
pursuant to which such stockholder agrees to be bound by the terms of this
Agreement applicable to Physician Stockholders.
1.1.29. "Prime Rate" shall mean the rate of interest as announced
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from time to time by Fleet Bank, at its principal office in Boston,
Massachusetts as its prime lending rate, the Prime Rate to change when and
if such prime lending rate changes.
1.1.30. "Public Event" shall mean any transaction or other event
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(including, without limitation, a merger with a public company) after or in
connection with which shares of common stock of the Company or any
successor are registered under the Securities Act or listed on a "national
securities exchange" as defined in the Exchange Act or the subject of price
quotation through the National Association of Securities Dealers' Automated
Quotation System.
1.1.31. "Public Offering" shall mean the closing of an offering of
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Shares registered under the Securities Act of Shares of the Company.
1.1.32. "Qualified Public Offering" shall mean the closing of a
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Public Offering with (i) the net proceeds of the sale of such Shares by the
Company and any stockholder of the Company to equal or exceed $50,000,000
provided that the Bain Investors shall have sold fifty percent (50%) of the
Shares then held by the Bain Investors and the net proceeds of the sale
thereof to the Bain Investors shall equal or exceed $10,000,000 and (ii)
subject to a firm commitment underwriting conducted by a nationally
recognized underwriter acceptable to the Bain Investors.
1.1.33. "Second Closing" shall have the meaning set forth in the
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Purchase Agreement.
1.1.34. "Securities Act" shall mean the Securities Act of 1933, as
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amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder, all as from time to time in effect.
1.1.35. "Shares" shall mean shares of Common Stock of the Company.
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1.1.36. "Third Closing" shall have the meaning set forth in the
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Purchase Agreement.
1.1.37. "Transfer" shall mean to sell, assign, pledge, grant a
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participation interest in, encumber, or otherwise dispose of any Shares to
any other Person whether directly, indirectly, voluntarily, involuntarily,
by operation of law, pursuant to judicial process (including, without
limitation, divorce decree) or otherwise.
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1.1.38. "Underlying Shares" shall mean the (i) Shares issuable upon
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exercise of any Option or Warrant, (ii) without duplication, any Shares
issued upon the conversion of such Shares referred to in clause (i) above
and (iii) any Shares issued or issuable with respect to the securities
referred to in clauses (i) or (ii) above by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization. For purposes of this
Agreement, any Person who holds Options or Warrants shall be deemed to be
the holder of the Underlying Shares obtainable upon exercise of the Options
or Warrants in connection with the transfer thereof or otherwise regardless
of any restriction or limitation on the exercise of the Options or
Warrants; provided, however, that such Underlying Shares shall not be
deemed to be outstanding for purposes of Section 3 hereof. As to any
particular Underlying Shares, such shares shall cease to be Underlying
Shares when they have been (a) registered under the Securities Act and
disposed of in accordance with the registration statement covering them or
(b) distributed to the public through a broker, dealer or market maker
pursuant to Rule 144 under the Securities Act or any similar provision then
in force as the requirements of which may be modified by Rule 701 ("Rule
144"), in each case in compliance with any applicable provisions of this
Agreement.
1.1.39. "Warrants" shall mean any warrants to subscribe for,
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purchase or otherwise acquire Shares, including, without limitation, any
and all warrants issued pursuant to the Purchase Agreement.
1.2. Certain Matters of Construction. In addition to the definitions
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referred to as set forth in Section 1.1:
(a) The words "hereof," "herein," "hereunder" and words of
similar import shall refer to this Agreement as a whole and not to any
particular Section or provision of this Agreement, and reference to a
particular Section of this Agreement shall include all subsections thereof;
(b) Definitions shall be equally applicable to both the
singular and plural forms of the terms defined; and
(c) The masculine, feminine and neuter genders shall each
include the other.
1.3. Cross Reference Table. The following terms defined elsewhere in this
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Agreement in the Sections set forth below shall have the respective meanings
therein defined:
Term Definition
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"Agreement" Preamble
"Bain Initial Investor" Preamble
"Call Option" Section 5.1
"Call Stockholder Group" Section 5.1
"Class A Common" Recitals
"Class B Common" Recitals
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"Come Along Notice" Section 6.1
"Company" Preamble
"Designated Physician Directors" Section 3.1
"Initiating Holders" Section 9.2
"Majority Requesting Holders" Section 9.2
"Management Designated Directors" Section 2.1
"Material Loan Agreement" Section 4.2
"Non-Complying Stockholder" Section 9.2
"Participating Seller" Section 6.1; 7.1
"Physicians" Recitals
"Physician Stockholders" Recitals
"Purchase Agreement" Recitals
"Proposed Seller" Section 6; 6.1
"Proposed Buyer" Section 6; 7.1
"Proposed Initial Management Subscription" Recitals
"Public Offering" Section 9.1
"Purchase Agreement" Recitals
"Registrable Securities" Section 9.2
"Registrable Bain Investor Securities" Section 7.2
"Rule 144" Section 1.1.35
"Sale" Section 7; 7.1
"Sale Percentage" Section 7; 7.1
"Stockholders" Preamble
"Tag Along Notice" Section 7.1
"Tag Along Offerees" Section 7.1
2. TERMINATION OF PRIOR STOCKHOLDERS AGREEMENT AND REGISTRATION RIGHTS
AGREEMENT. By the execution and delivery hereof by certain parties hereto, the
Stockholders Voting Agreement dated June 30, 1995 among the Company, Xxxxxxx
Xxxxx, Xxxxx Xxxxxx and the Investor (as defined therein), the Registration
Rights Agreement dated as of June 30, 1995 among the Company and the Purchasers
named therein and any agreement pursuant to which any Stockholder hereto is a
party which provides for the right to register any securities of the Company
under the Securities Act and related rights are terminated and superseded by
this Agreement.
3. VOTING AGREEMENT; OBSERVER RIGHTS; RIGHT TO ACCESS.
3.1. Election of Directors. Each holder of Shares hereby agrees to cast
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all votes to which such holder is entitled in respect of the Shares now or
hereinafter owned by such holder, whether at any annual or special meeting of
stockholders, by written consent or otherwise to: (i) elect as a Class A
Director of the Company any two individuals who are employees of the Company
(the "Management Designated Directors") designated to serve on the Board by the
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Chief Executive Officer of the Company for election at any election of
directors; (ii) elect as Common Stock Directors any seven individuals who shall
be physicians (the "Designated Physician Directors") designated by the Chief
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Executive Officer of the Company and approved by the Bain Investors.
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3.2. Removal. No Management Designated Director or Designated Physician
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Director may be removed without the consent of the Majority Stockholders except
for cause as determined in good faith by a majority of all directors other than
the director to be so removed.
3.3. Vacancy. Any vacancy in the Board of Directors shall be filled by
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the nominee of the Persons who would be entitled to designate a director
pursuant to Section 3.1. Each holder of Shares shall, upon receipt of notice
identifying such nominee, promptly take all action necessary to cause the
appointment of such nominee to the Board of Directors pursuant to the Company's
Restated Certificate of Incorporation and By-laws.
3.4. Observer Rights. The Company agrees to permit the holders of Bain
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Investor Shares to have two representatives to attend meetings of the Board of
Directors of the Company. The Company agrees to permit Xxxxxx Xxxxxxxx as
representative of Offshore Health Industries, Inc. to attend meetings of the
Board of Directors of the Company until the first anniversary of the Effective
Time. The Company may, upon the approval of the Board of Directors of the
Company, permit up to two additional representatives of Physician Stockholders
who agree to be bound by this Agreement to attend meetings of the Board of
Directors of the Company. The Company agrees to provide such representatives
with such notice of and other information with respect to such meetings or
action by written consent as are delivered to the directors of the Company.
3.5. Access, etc. From time to time upon request of any partner,
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designee or officer of any Bain Investor so long as it holds any equity
securities of the Company representing at least 30% of the Bain Investor Initial
Shares, the Company will furnish to such partner, designee or officer, and their
representatives (including without limitation their accountants and legal
counsel), such information regarding the business of the Company and its
Subsidiaries (including materials furnished to the directors of the Company and
its subsidiaries at or in connection with board meetings) as such partner,
designee or officer may reasonably request. Each such partner, designee or
officer, and their representatives (including without limitation their
accountants and legal counsel), shall have the right during normal business
hours and upon reasonable notice to make an independent examination of the books
and records of the Company and any of its subsidiaries, to make copies, notes
and abstracts therefrom, and to discuss their business, affairs and financial
condition with the officers, employees and accountants of the Company. Each
such partner, designee or officer shall have the right during normal business
hours to consult with the directors and executive officers of the Company and
its subsidiaries and to advise such directors and officers on corporate issues;
provided, however, that no such partner, designee or officer shall thereby have
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any right to direct the management or policies of the Company or any of its
subsidiaries.
3.6. Period. (a) The provisions of Sections 3 shall expire upon the date
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of Qualified Public Offering.
4. CERTAIN TRANSFER RIGHTS AND RESTRICTIONS. No holder of Management Shares
or Physician Shares shall Transfer any of such Shares to any other Person,
except as permitted by Sections 4.1, 4.2, 7 and 9.1, as permitted or required by
Section 5 or as required by Section 6. Any attempted Transfer of Management
Shares or Physician Shares not so permitted or required by such Sections shall
be null and void, and the Company shall not in any way give effect to any
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such impermissible Transfer. All permitted transfers shall be further subject
to the requirements of Section 8. Notwithstanding any contrary provision of this
Agreement, any Management Stockholder or Physician Stockholder may Transfer any
or all Options, Warrants or Shares held by such Stockholder: (i) to the Company
or any subsidiary of the Company in one or more transactions approved by the
Board, (ii) to any Bain Investor, or (iii) on the terms and subject to the
conditions of Section 5, 6, 7 or 9.
4.1. Transfers of Management Shares and Physician Shares to Immediate
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Family. Any holder of Management Shares or Physician Shares may Transfer any or
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all of such Shares to a Member of the Immediate Family of such holder; provided,
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however, that no such Transfer shall be effective until such Member of the
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Immediate Family has delivered to the Company a written acknowledgment and
agreement in form and substance reasonably satisfactory to the Company that such
Shares to be received by such Member of the Immediate Family are subject to all
the provisions of this Agreement applicable thereto prior to such Transfer and
that such Member of the Immediate Family is bound hereby and a party hereto to
the same extent as a Management Stockholder or Physician Stockholder, as the
case may be.
4.2. Transfer of Management Shares or Physician Shares Upon Death. Upon
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the death of any holder of Management Shares or Physician Shares such Shares
held by such holder may be distributed by will or other instrument taking effect
at death or by applicable laws of descent and distribution to such holder's
estate, executors, administrators and personal representatives, and then to such
holder's heirs, legatees or distributees, whether or not such recipients are
Members of the Immediate Family of such holder; provided, however, that no such
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Transfer shall be effective until the recipient has delivered to the Company a
written acknowledgment and agreement in form and substance reasonably
satisfactory to the Company that such Shares to be received by such recipient
are subject to all the provisions of this Agreement applicable thereto prior to
such Transfer and that such recipient is bound hereby and a party hereto to the
same extent as a Management Stockholder or Physician Stockholder, as the case
may be.
4.3. Period. The foregoing provisions of Section 4 shall terminate and
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be of no further force or effect on the date of a Qualified Public Offering.
5. OPTIONS TO PURCHASE MANAGEMENT SHARES AND PHYSICIAN SHARES.
5.1. Call Options. Upon any termination of the employment by the
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Company, its Subsidiaries or any Affiliate thereof of a holder of Management
Shares (other than Management Shares held by an Executive) or Physician Shares,
the Company (or its designee) shall have the right to purchase Shares held by
such holder or originally issued to such holder but held by one or more
Permitted Transferees of such holder (collectively, the "Call Stockholder
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Group") and Warrants and Options held by the Call Stockholder Group and
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exercisable at the time of such termination on the following terms (the "Call
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Option"); it being understood that all Options not exercisable at the time of
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such termination of employment will be terminated pursuant to the option plan
pursuant to which such Option was issued.
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 of such holder,
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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.
5.1.2. Termination by Company for Cause. If such termination is the
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result of termination of such holder's employment by the Company, its
Subsidiaries or any Affiliate thereof for Cause, the Company (or its
designee) may, upon written notice delivered within 90 days of termination,
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 lower of
the Cost (without any rate of return) or the then Fair Market Value of such
securities.
5.1.3. Termination by Holder through Resignation. If such
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termination is the result of holder's resignation, the Company (or its
designee) may, upon written notice delivered within 90 days of termination,
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 then Fair
Market Value of such securities.
5.2. Termination of Executives. Upon the termination of either of the
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Executives as contemplated in Section 5.1, the rights of the Company and the
Executives in respect of Shares, Warrants and Options held by Executives shall
each be governed by the applicable agreement among such parties dated as of the
Effective Time.
5.3. Put Right. Upon the death of any Management Stockholder or
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Physician Stockholder, the estate of such holder (or the heirs, legatees or
distributees of such holder to whom such Shares have been transferred upon
death) shall have the right to sell to the Company, and upon exercise of such
right the Company (or its designee) shall have the obligation to purchase, all
or any portion of the Management Shares or Physician Shares or Warrants issued
to such Management Stockholder or Physician Stockholder held by such estate (or
other specified Person) on the following terms (the "Put Option").
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5.3.1. Notice. Notice of an intention to sell securities pursuant
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to this Section 5.2 must be delivered to the Company within six (6) months
of the death of the holder of such Shares.
5.3.2. Price. Shares will be purchased pursuant to this Section 5.3
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at a price per Share equal to the then Fair Market Value of such
securities.
5.3.3. Senior Lenders. The Company shall have no obligation to
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purchase any Shares pursuant to this Section 5.3 if such purchase is
prohibited by or would give rise to any default or event of default under
any Material Loan Agreement; provided, however, that in such circumstances
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the obligation to purchase Shares pursuant to this Section 4.2 shall be
extended until such time as such circumstances no longer exist.
5.4. Closing; Assignability of Company Purchase Rights; Related Matters.
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The closing of any purchase pursuant to the exercise of any Call Options or Put
Options pursuant to this
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Section 5 shall take place as soon as reasonably practicable at the principal
office of the Company, or at such other time and location as the parties to such
purchase may mutually determine. In the event the price of any securities to be
purchased pursuant to this Section 5 is specified to be Fair Market Value, such
Fair Market Value shall be determined as of the date of the applicable
Termination Event. At the closing of any purchase and sale pursuant to this
Section 5, the holder of securities to be sold shall deliver to the Company a
certificate or certificates representing the Shares, Warrants and Options to be
purchased by the Company duly endorsed, or with stock powers or other
appropriate instruments duly endorsed, for transfer with signature guaranteed,
free and clear of any lien or encumbrance, with any necessary stock transfer tax
stamps affixed, and the Company shall pay to such holder by Company check or
wire transfer of immediately available or next day funds or a note the purchase
price of the securities being purchased by the Company. The payment of the
purchase price under this Section 5 may be paid in the form of a three year note
issued by the Company, bearing interest at the Prime Rate, all such interest and
principal to be payable at maturity and subordinated on such terms as may be
required by any agreement (a "Material Loan Agreement") to which the Company or
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any of subsidiaries may be or hereafter become a party relating to indebtedness
for borrowed money in a principal amount outstanding (including, without
limitation, unused availability under a line of credit) in excess of $5,000,000,
which note shall be prepayable without premium or penalty. The delivery of a
certificate or certificates for Shares, Warrants or Options by any Person
selling securities pursuant to this Section 5 shall be deemed a representation
and warranty by such Person that: (i) such Person has full right, title and
interest in and to such securities; (ii) such Person has all necessary power and
authority and has taken all necessary action to sell such securities as
contemplated; and (iii) such securities are free and clear of any and all liens
or encumbrances. The Company shall have the right, but no obligation, to assign
to any holder of Bain Investor Shares all or any portion of its right to
purchase any securities pursuant to this Section 5.
5.5. Determination of Fair Market Value. (a) For purposes of this
----------------------------------
Section 5, the term "Fair Market Value" shall mean, as of any date, the fair
value of any Share as of the applicable date on the basis of a sale of such
Share in an arms length private sale between a willing buyer and a willing
seller, neither acting under compulsion (or, in the case of a Warrant or Option,
the fair value of the Shares that may then be purchased by the holder of such
Warrant or Option upon exercise thereof, determined as described in this Section
5.5, minus the exercise price applicable thereto), as determined by the Board;
(b) at any time when more than 15% of the Shares then outstanding has been
offered and sold pursuant to one or more Public Offerings, the Fair Market Value
of any Share shall be equal to the average of the sum of the closing prices of
the Shares for the 30 trading days immediately prior to the date on which Share
becomes subject to repurchase under this Section 5. In determining Fair Market
Value, the Board shall (a) consider, in addition to other factors that it
determines in good faith to be relevant, the purchase price of the Shares in
recent (i) arms-length sales of Shares by the Company, (ii) transfers of Shares
by a Stockholder in an arms-length transaction and (b) not give effect to any
discount which may otherwise be attributable to the fact that such Shares which
are the subject of such valuation constitute less than a majority of the Shares
outstanding.
5.6. Period. The foregoing provisions of this Section 5 shall expire on
------
the date of a Qualified Public Offering.
-12-
5.7. Construction. The foregoing provisions of this Section 5 are not
------------
intended, and shall not be construed, to eliminate, waive or otherwise affect
the restrictions on transfer, vesting requirements or termination provisions
which may apply to any Share or Option by its terms or under provisions of the
Company's 1995 Restricted Stock Plan, Equity Incentive Plan or other equity or
option plan pursuant to which such Share or Option was granted or other
governing documentation.
6. "TAKE ALONG" RIGHTS. Each holder of Shares, Warrants or Options hereby
agrees, if requested by the Bain Investor Majority Holders (which request shall
be made to all holders of shares), to Transfer for value (for purposes of this
Section 6, a "Sale") a specified percentage (for purposes of this Section 6, the
----
"Sale Percentage") of the securities then owned by such holder to a third party
---------------
which is not a Bain Investor or an Affiliate of any Bain Investor Majority
Holder (for purposes of this Section 6, the "Proposed Buyer") in the manner and
--------------
on the terms set forth in this Section 6 in connection with the Sale by such
Bain Investor (collectively, the "Proposed Bain Investor Seller") of the Sale
-----------------------------
Percentage of the total number of Bain Investor Shares held by all holders of
Bain Investor Shares on a fully diluted basis to the Proposed Buyer.
6.1. Procedure. If the Bain Investor Majority Holders elect to exercise
---------
their rights under this Section 6, a notice (the "Come Along Notice") shall be
-----------------
furnished by the Proposed Bain Investor Seller to each holder of Shares,
Warrants and Options. The Come Along Notice shall set forth the principal terms
of the proposed Sale insofar as it relates to the Shares, including the Sale
Percentage and the purchase price. No fee or additional consideration shall be
paid to a Bain Investor in connection with such Sale which is not contemplated
or permitted by the Management Agreement (as defined in Section 13) and relates
to services rendered by such Bain Investor or its Affiliates in connection
therewith. If the Bain Investor Majority Holders consummate the Sale referred
to in the Come Along Notice, each other holder of Shares, Warrants or Options
(each a "Participating Seller") shall be bound and obligated to Sell the Sale
--------------------
Percentage of the Shares, Warrants and Options in the Sale on the same terms and
conditions with respect to each Share sold, as the Bain Investor shall Sell each
Bain Investor Share in the Sale, and, in the case of Warrants or Options, have
the opportunity to either (i) exercise such Warrants or Options (if then
exercisable) and participate in such sale as holders of Shares issuable upon
such exercise or (ii) upon the consummation of the Sale, receive in exchange for
such Warrants or Options (to the extent exercisable at the time of such Sale)
consideration equal to the amount determined by multiplying (1) the same amount
of consideration per Share received by the holders of the Shares of the same
class of common stock for which the Warrants or Option is exercisable in
connection with the Sale less the exercise price per share of such Warrants or
Option by (2) the number of Shares of such class represented by such rights. If
at the end of the one hundred eightieth (180th) day following the date of the
effectiveness of the Come Along Notice the Proposed Bain Investor Seller has not
completed the Sale, each Participating Seller shall be released from his
obligation under the Come Along Notice, the Come Along Notice shall be null and
void, and it shall be necessary for a separate Come Along Notice to have been
furnished and the terms and provisions of this Section 6 separately complied
with, in order to consummate such Sale pursuant to this Section 6, unless the
failure to complete such Sale resulted from any failure by any Participating
Seller to comply in any material respect with the terms of this Section 6.
-13-
6.2. Certain Legal Requirements. In the event the consideration to be
--------------------------
paid in exchange for Shares in the proposed Sale pursuant to Section 6.1
includes any securities and the receipt thereof by any Stockholder as a
Participating Seller would require under applicable law (i) the registration or
qualification of such securities or of any person as a broker or dealer or agent
with respect to such securities or (ii) the provision to any participant in the
Sale of any information other than such information as would be required under
Regulation D of the Securities and Exchange Commission or similar rule then in
effect in an offering made pursuant to said Regulation D solely to "accredited
investors" as defined in said Regulation D, the Proposed Bain Investor Seller
may, but shall not be obligated to, cause to be paid to such Participating
Seller in lieu of such Securities, against surrender of the Shares, Warrants and
Options (in accordance with Section 6.4 hereof) which would have otherwise been
Sold by such Participating Seller to the Proposed Buyer in the Sale, an amount
in cash equal to the fair market value of the securities which such
Participating Seller would otherwise receive, as determined in good faith by the
Board. Any attempt by the Proposed Bain Investor Seller to permit a
Participating Seller to receive such securities may be conditioned on such
Participating Seller executing such documents and instruments, and taking such
other actions (including without limitation, if required by the Proposed Bain
Investor Seller, agreeing to be represented during the course of such
transaction by a "purchaser representative" (as defined in Regulation D) in
connection with evaluating the merits and risks of the prospective investment
and acknowledging that he was so represented), as the Proposed Bain Investor
Seller shall reasonably request in order to permit such legal requirements to
have been complied with.
6.3. Further Assurances. Each Participating Seller and each Stockholder
------------------
to whom the Shares held by such Participating Seller (or Warrants or Options to
purchase such Shares) were originally issued, shall, whether in his capacity as
a Participating Seller, stockholder, officer or director of the Company, or
otherwise, take or cause to be taken all such actions as may be reasonably
requested in order expeditiously to consummate each Sale pursuant to Section
6.1. Each such Participating Seller or Stockholder agrees (i) to vote all Shares
with respect to which he holds power to vote in favor of any proposal to
stockholders in connection with the Sale which is approved by the holders of a
majority of the outstanding Shares entitled to vote with respect to such matter
and (ii) to execute and deliver such agreements as may be necessary for the
Participating Seller to be subject to the same terms and conditions with respect
to the Sale as apply to the Proposed Bain Investor Seller, including without
limitation, an agreement by such Participating Seller to be subject to such
purchase price escrow or adjustment provisions as may apply to Stockholders
generally and to be liable in respect of any individual representations,
warranties, agreements and indemnities to be given by selling Stockholders in
the Sale.
6.4. Closing. The closing of a Sale pursuant to Section 6.1 shall take
-------
place at such time and place as the Bain Investor Majority Holders shall specify
by notice to each Participating Seller. At the closing of any Sale under this
Section 6, each Participating Seller shall deliver the certificates evidencing
the Shares, Warrants or Options to be sold by such Participating Seller, duly
endorsed, or with stock powers or other appropriate instruments duly endorsed,
for transfer with signature guaranteed, free and clear of any liens or
encumbrances, with any stock transfer tax stamps affixed, against delivery of
the applicable consideration.
6.5. Period. The foregoing provisions of this Section 6 shall expire on
------
the date of a Qualified Public Offering.
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7. CO-SALE RIGHTS.
7.1. Tag Along. No holder or holders of Shares (for purposes of this
---------
Section 7, collectively, the "Proposed Seller") shall Transfer (for purposes of
---------------
this Section 7, a "Sale") any Shares to any other Person (the "Proposed Buyer")
---- --------------
except in the manner and on the terms set forth in this Section 7 and attempted
Transfers in violation of this Section 7 shall be null and void.
7.1.1. Offer. A written notice (the "Tag Along Notice") shall be
----- ----------------
furnished by the Proposed Seller to each holder of Shares or Warrants or
Options (collectively, the "Tag Along Offerees") at least 30 days prior
------------------
to a Transfer. The Tag Along Notice shall include:
(a) The principal terms of the proposed Sale insofar as
it relates to the Shares, including the percentage of the total
number of Shares held by all Proposed Seller holders of Shares which
are proposed to be sold (for purposes of this Section 7, the "Sale
----
Percentage") and the purchase price; and
----------
(b) An offer by the Proposed Seller to include, at the
option of each Tag Along Offeree, in the Sale to the Proposed Buyer
such number of Shares and Underlying Shares (not in any event to
exceed the Sale Percentage of the total number of Shares and
Underlying Shares held by such Tag Along Offeree) owned by each Tag
Along Offeree determined in accordance with Section 7.1.2 hereof, on
the same terms and conditions, with respect to each Share Sold, as
the Proposed Seller shall Sell each of his, her or its Shares. No
fee or additional consideration shall be paid to a Bain Investor in
connection with such Sale which is not contemplated or permitted by
the Management Agreement and relates to services rendered by such
Bain Investor or its Affiliates in connection therewith.
7.1.2. Exercise. Each Tag Along Offeree desiring to accept the
--------
offer contained in the Tag Along Notice shall send a written commitment
to the Proposed Seller specifying the number of Shares and Underlying
Shares (not in any event to exceed the Sale Percentage of the total
number of Shares and Underlying Shares held by such Tag Along Offeree)
which such Tag Along Offeree desires to have included in the Sale within
30 days after the effectiveness of the Tag Along Notice (each a
"Participating Seller"). Each Tag Along Offeree who has not so accepted
--------------------
such offer shall be deemed to have waived all of his or her rights with
respect to the Sale, and the Proposed Seller and the Participating
Sellers shall thereafter be free to Sell to the Proposed Buyer, at a
price no greater than 105% of the price set forth in the Tag Along Notice
and otherwise on terms not more favorable in any material respect to them
than those set forth in the Tag Along Notice, without any further
obligation to such non-accepting Tag Along Offerees. If, prior to
consummation, the terms of such proposed Sale shall change with the
result that the price shall be greater than 105% of the price set forth
in the Tag Along Notice or the other terms shall be more favorable in any
material respect than as set forth in the Tag Along Notice, it shall be
necessary for a separate Tag Along Notice to have been furnished, and the
terms and provisions of this Section 7 separately complied with, in order
to consummate such proposed Sale pursuant to this Section 7.
-15-
The acceptance of each Participating Seller shall be irrevocable
except as hereinafter provided, and each such Participating Seller shall
be bound and obligated to Sell in the Sale, on the same terms and
conditions specified in the Tag Along Notice with respect to each of the
Shares to be sold (including Underlying Shares), and on the same terms
and conditions as apply to each of the Shares sold by the Proposed
Seller, such number of Shares (including any Underlying Shares) as such
Participating Seller shall have specified in such Participating Seller's
written commitment. In the event the Proposed Seller shall be unable
(otherwise than by reason of the circumstances described in Section 7.2)
to obtain the inclusion in the Sale of all Shares (including Underlying
Shares) which the Proposed Seller and each Participating Seller desires
to have included in the Sale (as evidenced in the case of the Proposed
Seller by the Tag Along Notice and in the case of each Participating
Seller by such Participating Seller's written commitment), the number of
Shares (including Underlying Shares) to be sold in the Sale by the
Proposed Seller and each Participating Seller shall be reduced on a pro
rata basis according to the proportion which the number of Shares
(including Underlying Shares) which each such Seller desires to have
included in the Sale bears to the total number of Shares desired
(including Underlying Shares) by all such Sellers to have included in the
Sale.
If at the end of the ninetieth (90th) day following the date of the
effectiveness of the Tag Along Notice the Proposed Seller has not
completed the Sale as provided in the foregoing provisions of this
Section 7.1, each Participating Seller shall be released from his
obligations under his written commitment, the Tag Along Notice shall be
null and void, and it shall be necessary for a separate Tag Along Notice
to have been furnished, and the terms and provisions of this Section 7
separately complied with, in order to consummate such Sale pursuant to
this Section 7, unless the failure to complete such Sale resulted from
any failure by any Tag Along Offeree to comply in any material respect
with the terms of this Section 7.
7.2. Excluded Transactions. Notwithstanding the preceding provisions of
---------------------
this Section 7 and subject to the provisions of Section 7 and Section 8 below,
the preceding provisions of this Section 7 shall not restrict any Transfer
pursuant to the provisions of Section 6 or 7 of this Agreement, and no holder of
Shares shall have pursuant to the provisions of this Section 7 any right of
participation or otherwise with respect to any Transfer of Shares:
(a) to a Bain Investor;
(b) to an Affiliated Fund which exists as of the date of
this Agreement or with respect to which the investment in such Bain
Investor Shares does not represent more than 10% of assets under
management provided;
(c) by a Bain Investor or an Affiliated Fund: (i) to any
director, officer or employee of the Company or its principal
subsidiary; or (ii) to any trust established for the benefit of its
partners or pro rata to its partners;
(d) in a Public Offering or other Public Event or to the
public under Rule 144;
-16-
(e) to a Transfer permitted by Section 4; or
(f) to a Transfer by a holder of Shares in an amount less
than 1% of the aggregate capital stock outstanding at such time;
provided (except with respect to Section 7.2(d)) that such transferee shall have
--------
executed and delivered to the Company an agreement to be bound by this Agreement
to the same extent as the transferor and provided that no such transfer shall
result in the Company being required to register the transfer of such Shares or
other securities under the Securities Act or Exchange Act or any similar state
law.
7.3. Termination. The foregoing provisions of this Section 7 shall
-----------
terminate immediately following the closing of a Qualified Public Offering.
8. CERTAIN ISSUANCES AND TRANSFERS, ETC. Each holder of Shares agrees that
it will not transfer any Shares to any Person unless the transferee has
delivered to the Company a written acknowledgment and agreement that the Shares
to be received by such transferee are subject to all of the provisions of this
Agreement (as Bain Investor Shares in the case of a transfer from a holder of
Bain Investor Shares, as Management Shares in the case of a transfer from a
holder of Management Shares, and as Physician Shares in the case of a transfer
from a holder of Physician Shares) and that such transferee is bound by and a
party to this Agreement to the same extent as if it were an original signatory
hereto as a Stockholder hereunder; provided, however, notwithstanding any other
-----------------
provision of this Agreement, (i) Shares transferred pursuant to and in
accordance with Section 6 or 7 to any Proposed Buyer (as defined in such
Sections) hereof or in a Public Offering or to the public under Rule 144 shall
be conclusively deemed thereafter not to be Shares under this Agreement and not
to be subject to any of the provisions hereof or entitled to the benefit of any
of the provisions hereof, and (ii) any Shares acquired by a holder of Bain
Investor Shares shall upon such acquisition be deemed for all purposes hereof to
be Bain Investor Shares, of like kind with the other Shares held by such holder.
Without limiting the generality of the foregoing, in the event that a Bain
Investor transfers Shares, in accordance with the provisions of this Section 8,
to any Affiliated Fund, such Affiliated Fund shall be deemed for all purposes
hereunder to be a Bain Investor with all of the rights and obligations of an
Initial Bain Investor hereunder.
9. REGISTRATION RIGHTS. The Company will perform and comply, and cause each
of its subsidiaries to perform and comply, with such of following provisions as
are applicable to it. Each holder of Shares will perform and comply with such of
the following provisions as are applicable to such holder.
9.1. Piggyback Registration Rights.
-----------------------------
9.1.1. Election. Whenever the Company proposes to register any
--------
shares of its Common Stock for its own or others' account under the
Securities Act for a public offering (each a "Public Offering"), the
---------------
Company shall furnish each holder of Shares prompt written notice of its
intent to do so. Upon the request of any such holder given by notice to
the Company within twenty (20) days after the effectiveness of such
notice from the Company, the Company will use its best efforts to cause
to be included in such
-17-
registration all of the Shares which such holder requests. Notwithstanding the
foregoing provisions of this Section 9.1.1, if the Company is advised in writing
in good faith by any managing underwriter of the securities being offered
pursuant to any Public Offering under this Section 9.1 (including, without
limitation, Sections 9.2.1 and 9.2.2) that the number of shares to be sold by
Persons other than the Company in such Public Offering is greater than the
number of such shares which can be included in such Public Offering without
adversely affecting such Public Offering, the Company may reduce pro rata (based
upon the number of Shares requested to be included by such Persons other than
the Company) the number of Shares offered for the accounts of such Persons other
than the Company to a number of Shares deemed satisfactory by such managing
underwriter; provided, however, that (i) the number of Shares offered for the
-----------------
account of the Bain Investors pursuant to Section 9.1.1 shall not be reduced to
an amount less than the percentage of the number of Shares offered equal to the
percentage of Shares outstanding owned by the Bain Investors and (ii) the number
of Shares offered for the account of the Bain Investors pursuant to Section
9.2.1 shall not be reduced unless and until all other Shares held by such
Persons other than the Bain Investors have been reduced.
9.1.2. Further Assurances. Holders of Shares participating in any
------------------
Public Offering shall take all such actions and execute all such documents and
instruments that are reasonably requested by the Company to effect the sale of
their Shares in such Public Offering, including without limitation being parties
to the underwriting agreement entered into by the Company and any other selling
stockholders in connection therewith (and being liable in respect of the
representations and warranties made by such holder in respect of its legal
capacity or due organization, authority to sell Shares being registered by such
holder and ownership (free and clear of liens) of such Shares), and any
indemnification agreements or "lock-up" agreements for the benefit of the
underwriters in such underwriting agreement; provided, however, that the
-----------------
aggregate amount of such liability shall not exceed the net proceeds to such
holder from the disposition of such Shares.
9.1.3. Expenses. The Company shall pay all expenses of the holders of
--------
Shares participating in any Public Offering pursuant to this Section 9.1, other
than underwriting discounts and commissions, if any, applicable transfer taxes,
if any, and fees and charges of any attorneys or other advisors (other than
attorneys and advisors retained by the Company to advise it in connection with
such Public Offering) retained by any such holders.
9.1.4. Excluded Transactions. Notwithstanding the preceding
---------------------
provisions of this Section 9.1, no holder of Shares shall have any right of
participation or otherwise with respect to the following Public Offerings:
(a) Any Public Offering relating to employee benefit plans on
Form S-8 or any similar form then in effect.
(b) Any Public Offering relating to the acquisition after the
date hereof by the Company or any of its subsidiaries of any acquired
businesses.
-18-
9.2. Demand Registration Rights.
--------------------------
9.2.1. Registration on Request of Holders of Bain Investor
---------------------------------------------------
Shares. One or more holders of Bain Investor Shares that wish to register
------
securities representing at least twenty-five percent (25%) of the sum of
the total number of Bain Investor Shares then outstanding requested to be
registered pursuant to this Section 9.2.1 ("Initiating Holders") may, by
------------------
notice to the Company specifying the intended method or methods of
disposition, request that the Company effect the registration under the
Securities Act of all or a specified part of the Registrable Securities
held by such Initiating Holders. For purposes of this Agreement, the term
"Registrable Securities" shall mean, at any time, Shares that have not
----------------------
previously been sold in a Public Offering or in a "brokers transaction"
within the meaning of Rule 144 and "Registrable Bain Investor Securities"
------------------------------------
shall mean Registrable Securities constituting Bain Investor Shares. The
Company will then use its best efforts to effect the registration under
the Securities Act of the Registrable Securities which the Company has
been requested to register by such Initiating Holders.
9.2.2. Form. Each registration requested pursuant to this
----
Section 9.2 shall be effected by the filing of a registration statement
on Form S-1 (or any other form which includes substantially the same
information as would be required to be included in a registration
statement on such form as currently constituted), unless the use of a
different form has been agreed to in writing by holders of at least a
majority of the Registrable Securities initially requesting such
registration (the "Majority Requesting Holders").
---------------------------
9.2.3. Registrations Pursuant to Section 9.2. In the case of a
-------------------------------------
registration pursuant to Section 9.2 hereof, whenever the Majority
Requesting Holders shall request that such registration shall be effected
pursuant to an underwritten offering, such registration shall be so
effected, and all Registrable Bain Investor Securities to be included in
such registration shall be included in such underwritten offering. If
requested by such underwriters, the Company will enter into an
underwriting agreement with such underwriters for such offering
containing such representations and warranties by the Company and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, customary indemnity and contribution provisions.
9.2.4. Number. The Company is obligated to effect only three
------
such registrations pursuant to this Section 9.2.
9.3. Obligations of the Company. Whenever required under this Section 9
--------------------------
to use its best efforts to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible: Prepare
and file with the SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective, and, upon the request of the holders of a majority of the
Registrable Securities registered thereunder, keep such registration statement
effective until the Holders have informed the Company in writing that the
distribution of their securities has been completed provided that the Company
shall not be required to keep any registration statement which is not
-19-
a shelf registration or similar registration (including any successor thereto
such as a Company registration) effective for a period of more than 30 days; and
shall:
(a) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with
such registration statement, and use its best efforts to cause each such
amendment to become effective, as may be necessary to comply with the
provisions of the 1933 Act with respect to the disposition of all
securities covered by such registration statement.
(b) Furnish to the Holders such reasonable number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may
reasonably request in order to facilitate the public offering of
Registrable Securities owned by them.
(c) Use its best efforts to register or qualify the securities
covered by such registration statement under such securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the
Holders provided that the Company shall not be required to register in
any jurisdictions which require it, in connection therewith or as a
condition thereto, to qualify to do business or to file a general consent
to service of process or to subject itself to taxation in any such states
or jurisdiction.
(d) In the event of any underwritten public offering, enter into and
perform its obligations under an Underwriting Agreement, in which the
Company addresses its representations and warranties to the underwriters
and the Holders participating in such offering, with the managing
underwriter of such offering. Each Holder participating in such
underwriting shall also enter into and perform its obligations under such
Underwriting Agreement, including furnishing any opinion of counsel or
entering into a lock-up and indemnification agreement reasonably
requested by the managing underwriter.
(e) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto
covered by such registration statement is required to be delivered under
the 1933 Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing and promptly file such amendments and supplements which may be
required pursuant to subparagraph (b) of this Section 9.3 on account of
such event and use its best efforts to cause each such amendment and
supplement to become effective.
(f) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 9, on the date that such
Registrable
-20-
Securities are delivered to the underwriters for sale in connection with
a registration pursuant to this Section 9, if such securities are being
sold through underwriters, or, if such securities are not being sold
through underwriters on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion or opinions,
dated such date, of the counsel representing the Company for the purposes
of such registration, in form and substance as is customarily given by
company counsel to the underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date,
from the independent certified public accountant of the Company, in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders requesting registration
of Registrable Securities.
(g) Apply for listing and use its best efforts to list the
Registrable Securities being registered on any national securities
exchange on which a class of the Company's equity securities is listed
or, if the Company does not have a class of equity securities listed on a
national securities exchange, apply for qualification and use its best
efforts to qualify the Registrable Securities being registered for
inclusion on the NASDAQ National Market System.
(h) Without in any way limiting the types of registrations to which
this Section 9 shall apply, in the event that the Company shall effect a
"shelf registration" under Rule 415 promulgated under the 1933 Act, the
Company shall take all necessary action, including, without limitation,
the filing of post-effective amendments, to permit the Holders, who have
exercised their rights under Section 9. 1, to maintain the inclusion of
their Registrable Securities in such registration in accordance with the
terms of this Section 9.
9.4. Indemnification and Contribution.
--------------------------------
9.4.1. Indemnities of the Company. In the event of any registration
--------------------------
of any Registrable Securities under the Securities Act pursuant to this Section
9, and in connection with any registration statement or any other disclosure
document produced by or on behalf of the Company pursuant to which securities of
the Company are sold (whether or not for the account of the Company), the
Company will, and hereby does, indemnify and hold harmless each seller of
Registrable Securities, any other holder of securities who is or might be deemed
to be a controlling Person of the Company within the meaning of Section 15 of
the Securities Act, their respective direct and indirect partners, advisory
board members, directors, officers and stockholders, and each other Person, if
any, who controls any such seller or any such holder within the meaning of
Section 15 of the Securities Act (each such person being referred to herein as a
"Covered Person"), against any losses, claims, damages or liabilities, joint or
--------------
several, and reasonable expenses (including, without limitation, reasonable
legal and other fees and expenses incurred by any Covered Person in defending or
investigating any action or claim in respect thereof) to which such Covered
Person may be or become subject under the Securities Act, any other securities
or other law of any jurisdiction, common law or
-21-
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained or
incorporated by reference in any registration statement under the Securities
Act, any preliminary prospectus or final prospectus included therein, or any
related summary prospectus, or any amendment or supplement thereto, or any
document incorporated by reference therein, or any other such disclosure
document, 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, and will reimburse such Covered Person for any legal or any
other expenses incurred by it in connection with investigating or defending any
such loss, claim, damage, liability, action or proceeding; provided, however,
-----------------
that the Company shall not be liable to any Covered Person in any such case to
the extent that any such loss, claim, damage, liability, action or proceeding
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement, incorporated document or other such disclosure document in reliance
upon and in conformity with written information furnished to the Company through
an instrument duly executed by such Covered Person specifically stating that it
is for use in the preparation thereof. The indemnities of the Company and of its
subsidiaries contained in this Section 9.4.1 shall remain in full force and
effect regardless of any investigation made by or on behalf of such Covered
Person and shall survive any transfer of securities.
9.4.2. Indemnities to the Company. The Company may require, as a
--------------------------
condition to including any securities in any registration statement filed
pursuant to this Section 9, that the Company shall have received an undertaking
satisfactory to it from each prospective seller of such securities, to indemnify
and hold harmless the Company, each director of the Company, each officer of the
Company who shall sign such registration statement and each other Person (other
than such seller), if any, who controls the Company within the meaning of
Section 15 of the Securities Act, with respect to any statement in or omission
from such registration statement, any preliminary prospectus or final prospectus
included therein, or any amendment or supplement thereto, or any document
incorporated therein, if such statement or omission was made in reliance upon
and in conformity with written information furnished to the Company through an
instrument executed by such seller specifically stating that it is for use in
the preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement, or incorporated
document. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any such director, officer
or controlling Person and shall survive any transfer of securities.
9.4.3. Third Party Claims. Each party entitled to indemnification
------------------
under this Agreement (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom; provided, that counsel for
--------
the Indemnifying Party, who shall conduct
-22-
the defense of such claim or litigation, shall be approved by the Indemnified
Party (whose approval shall not be unreasonably withheld); and, provided,
--------
further, that the failure of any Indemnified Party to give notice as provided
-------
herein shall not relieve the Indemnifying Party of its obligations under this
Section 9. The Indemnified Party may participate in such defense at such party's
expense; provided, however, that the Indemnifying Party shall pay such expense
-----------------
if representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between the Indemnified Party and any other party represented by such
counsel in such proceeding. In Indemnifying Party, in the defense of any such
claim or litigation shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect of such
claim or litigation, and no Indemnified Party shall consent to entry of any
judgment or settle such claim or litigation without the prior written consent of
the Indemnifying Party.
9.4.4. Contribution. If the indemnity provided for in Sections 9.4.1
------------
or 9.4.2 is available, each Indemnified Party will be indemnified thereunder to
the full extent provided in such section without regard to the relative fault of
the Indemnifying Party or the Indemnified Party or the other equitable
considerations referenced in this Section 9.4.4. If the indemnification provided
for in Sections 9.4.1 or 9.4.2 hereof is unavailable to a party that would have
been an Indemnified Party under any such Section in respect of any losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each party that would have been an Indemnifying Party
thereunder shall, in lieu of indemnifying such Indemnified Party, contribute to
the amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the relative fault of such
Indemnifying Party on the one hand and such Indemnified Party on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof).
The relative fault 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 such Indemnifying Party or such Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties agree that it would not be just
or equitable if contribution pursuant to this Section 9.4.4 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the preceding sentence.
The amount paid or payable by a contributing party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 9.4.4 shall include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. 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.
-23-
9.4.5. Limitation on Liability of Holders of Registrable Securities.
------------------------------------------------------------
The liability of each holder of Registrable Securities in respect of any
indemnification or contribution obligation of such holder arising under
this Section 9.4 shall not in any event exceed an amount equal to the net
proceeds to such holder (after deduction of all underwriters' discounts
and commissions and all other expenses paid by such holder in connection
with the registration in question) from the disposition of the
Registrable Securities disposed of by such holder pursuant to such
registration.
9.5. Selection of Underwriter. Any and all underwriters to be engaged in
------------------------
connection with any public offering of Shares pursuant to a registration
effected pursuant to Section 9.2 shall be selected by the Bain Investors and
shall be reasonably acceptable to the Company.
9.6. Lock-up. Each holder of Shares (including Underlying Shares) agrees
-------
that upon the request of the underwriters managing any underwritten Public
Offering, it shall not Transfer any Shares (including Underlying Shares) for a
period beginning not more than seven days immediately preceding and ending not
more than 180 days following any Public Offering without the prior written
consent of the underwriters, if any, managing the offering.
9.7. Limitations on Other Registration Rights. From and after the date of
----------------------------------------
this Agreement, the Company shall not, without the prior written consent of the
holders of a majority of the Bain Investor Shares then outstanding, enter into
any agreement with any holder or prospective holder of any securities of the
Company relating to registration rights unless such agreement includes to the
extent the agreement would allow such holder or prospective holder to include
such securities in any registration filed under Section 9.1 or 9.2 hereof, a
provision that such holder or prospective holder may include such securities in
any such registration only to the extent that the inclusion of its securities
will not reduce the amount of the Registrable Securities, and the amount of the
Registrable Bain Investor Securities of the Holders and the Bain Investors which
would otherwise be included and does otherwise not diminish the rights provided
in this Section 9 above.
In the event of any conflict between this Section 9 and any
agreement to which the Company or its subsidiaries is a party or by which
any of them are bound, the provisions of this Section 9 shall govern.
9.8. Availability of Information. If the Company shall have filed a
---------------------------
registration statement pursuant to the requirements of Section 12 of the
Exchange Act or a registration statement pursuant to the requirements of the
Securities Act, the Company shall comply with the reporting requirements of
Sections 13 and 15(d) of the Exchange Act and shall comply with all other public
information reporting requirements of the Commission (including Rule 144
promulgated by the Commission under the Securities Act) from time to time in
effect and relating to the availability of an exemption from the Securities Act
for the sale of any Shares. The Company shall also cooperate with each holder of
any Shares in supplying such information as may be necessary for such holder to
complete and file any information reporting forms presently or hereafter
required by the Commission as a condition to the availability of an exemption
from the Securities Act for the sale of any Shares.
-24-
10. REMEDIES.
10.1. Generally. The Company, the holders of Bain Investor Shares, the
---------
holders of the Management Shares, the holders of Physician Shares and all other
Stockholders shall have all remedies available at law, in equity or otherwise in
the event of any breach or violation of this Agreement or any default hereunder
by the Company or any holder of Shares, Warrants or Options. The parties
acknowledge and agree that in the event of any breach of this Agreement, in
addition to any other remedies which may be available, each of the parties
hereto shall be entitled to specific performance of the obligations of the other
parties hereto and, in addition, to such other equitable remedies (including,
without limitation, preliminary or temporary relief) as may be appropriate in
the circumstances.
10.2. Deposit. Without limiting the generality of Section 10.1, if any
-------
Stockholder (a "Non-Complying Stockholder") fails to deliver any certificate or
-------------------------
certificates evidencing Shares, Warrants or Options that may be required to be
sold pursuant to any provision of this Agreement in accordance with the terms
hereof, the Company or other Person entitled to purchase such securities may, at
its option, in addition to all other remedies it may have, deposit the purchase
price for such Shares with any national bank or trust company having combined
capital, surplus and undivided profits in excess of one hundred million dollars
($100,000,000) and which has agreed to act as escrow agent in the manner
contemplated by this Section 10.2 and shall furnish or make available to all
interested Persons satisfactory evidence of such deposit and thereupon the
Company shall cancel on its books the certificate or certificates representing
such securities and, in the case of any such purchase of securities by a Person
other than the Company issue, in lieu thereof and in the name of such Person, a
new certificate or certificates representing such securities, and thereupon all
of the Non-Complying Stockholder's rights in and to such securities shall
terminate. Thereafter, upon delivery to the Company by such Non-Complying
Stockholder of the certificate or certificates evidencing such securities (duly
endorsed, or with stock powers or other appropriate instruments of transfer duly
endorsed, for transfer, with signature guaranteed, free and clear of any liens
or encumbrances, and with any stock transfer tax stamps affixed), the Company
shall instruct the escrow agent referred to above to deliver the purchase price
(without any interest from the date of the closing to the date of such delivery,
any such interest to accrue to the Person who deposited the purchase price for
such securities) to such Non-Complying Stockholder.
11. LEGENDS. Each certificate representing Shares shall have the following
legend endorsed conspicuously thereupon:
"The securities represented by this certificate were issued in a
private placement, without registration under the Securities Act of 1933,
as amended (the "Act"), and may not be sold, assigned, pledged or
otherwise transferred in the absence of an effective registration under
the Act covering the transfer or an opinion of counsel, satisfactory to
the issuer, that registration under the Act is not required.
The shares of stock represented by this certificate are subject to
restrictions on transfer and requirements of sale set forth in the
Stockholders Agreement dated as of _________ 1996, as amended and in
effect from time to time. The Company will furnish a copy of such
agreement to the holder of this certificate without charge upon written
request."
-25-
Each certificate representing Management Shares shall have the following
legend endorsed conspicuously thereupon:
"The shares of stock represented by this certificate were originally
issued to, or issued with respect to shares originally issued to, the
following Management Stockholders: _________________________."
Each certificate representing Physician Shares shall have the following
legend endorsed conspicuously thereupon:
"The shares of stock represented by this certificate were originally
issued to, or issued with respect to shares originally issued to the
following Physician Stockholder: _______."
Any person who acquires Shares which are not subject to all or part of
the terms of this Agreement shall have the right to have such legends (or the
applicable portion thereof) removed from certificates representing such Shares.
The Company shall have the right to waive any requirement of delivery of a legal
opinion with respect to exemption from registration requirements under the Act.
12. AMENDMENT, TERMINATION, ETC.
12.1. No Oral Modifications. This Agreement may not be orally amended,
---------------------
modified, extended or terminated, nor shall any oral waiver of any of its terms
be effective.
12.2. Written Modifications. This Agreement may be amended, modified,
---------------------
extended or terminated, and the provisions hereof may be waived, by an agreement
in writing signed by holders of a majority of all Shares then outstanding and
subject to this Agreement; and each such amendment, modification, extension,
termination and waiver shall be binding upon each party hereto and each holder
of Shares subject hereto; provided, however, that no such amendment,
-----------------
modification, extension, termination or waiver which amends, modifies, extends,
terminates or waives any of the provisions of Sections 5, 6, 7, 9 or 12 hereof
will be effective with respect to the Non-Bain Investor Stockholders unless and
until the consent of the Non-Bain Investor Majority Holders has been obtained.
In addition, each party hereto and each holder of Shares subject hereto may
waive any of its rights hereunder by an instrument in writing signed by such
party or holder.
12.3. Automatic Partial Termination. The provisions of Sections 3, 4, 5,
-----------------------------
6 and 7 of this Agreement shall terminate and be of no further force or effect
at the termination times specified in such sections; provided, however, that no
such termination shall relieve any Person of liability for any breach of such
sections prior to such termination.
13. CERTAIN FEES AND EXPENSES.
13.1. Certain Fees and Expenses. Pursuant to a Management Agreement
-------------------------
dated on or about the date hereof (the "Management Agreement") between the
Company and Xxxx Capital Partners V, L.P. ("BCP-V"), the Company shall pay to
BCP-V fees and expenses on the terms and subject to the conditions of such
Management Agreement.
-26-
14. MISCELLANEOUS.
14.1. Authority; Effect. Each party hereto represents and warrants to
-----------------
and agrees with each other party that 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. This
Agreement does not, and shall not be construed to, give rise to the reaction of
a partnership among any of the parties hereto, or to constitute any of such
parties members of a joint venture or other association.
14.2. Notices. Notices and other communications provided for in this
-------
Agreement shall be in writing and shall be effective (i) when one full day shall
have elapsed (exclusive of Saturdays, Sundays and banking holidays in the City
of Boston) from their deposit for overnight delivery with Federal Express or
other bonded courier (charges prepaid), addressed to the party or parties sought
to be charged with notice of the same at the respective addresses set forth or
referred to below, subject to written notice of change of address given by any
party to each other party, or (ii) if earlier, upon receipt.
If to the Company, to it at:
Physicians Quality Care, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: President
with a copy to:
Xxxx Capital, Inc.
Two Xxxxxx Place, 7th Floor
Boston, Massachusetts 02116
Attention: Xx. Xxxxxxx X. Xxxxxxxx
If to the Bain Investors, to them at:
c/o Bain Capital, Inc.
Two Xxxxxx Place, 7th Floor
Boston, Massachusetts 02116
Attention: Xx. Xxxxxxx X. Xxxxxxxx
with a copy to:
Ropes & Gray
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
-27-
If to a Stockholder other than a Bain Investor, to him or her at the
address set forth in the stock record book of the Company.
Notice to the holder of record of any shares of capital stock shall be
deemed to be notice to the holder of such shares for all purposes hereof.
14.3. Binding Effect, etc. 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 respective heirs, representatives, successors and
assigns.
14.4. 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.
14.5. 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.
14.6. Severability. If in any judicial proceedings a court shall refuse
------------
to enforce any provision of this Agreement, then such unenforceable provision
shall be deemed eliminated from this Agreement 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 Agreement 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.
14.7. Governing Law. Except to the extent that any provision of this
-------------
Agreement 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 Agreement 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.
-28-
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Agreement (or caused this Agreement 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 /s/ Xxxxxxx Xxxxx
--------------------------------------
Title
THE INITIAL BAIN INVESTORS: 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 /s/ Xxxxxxx Xxxxxxxx
-------------------------------
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 /s/ Xxxxxxx Xxxxxxxx
-------------------------------
Title: Managing Director
BCIP ASSOCIATES
By /s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Title: a general partner
BCIP TRUST ASSOCIATES, L.P.
By /s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Title: a general partner
-29-
SIGNATURE PAGES FOR STOCKHOLDERS' AGREEMENT
/s/ Xxxxxxx Xxxxx /s/ Chesapeake Osteoporosis Center, Inc.
------------------------------------------ ---------------------------------------------------
Xxxxxxx X. Xxxxx Xxxxxxxxxx Osteoporosis Center, Inc.
/s/ Xxx X. Xxxxxxxxx /s/ Xxxxxx X. Xxxxx
------------------------------------------ --------------------------------------------------
Xxx X. Xxxxxxxxx Xxxxxx X. Xxxxx, Ph.D
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxx
------------------------------------------ --------------------------------------------------
Xxxxxxx X. Xxxxx, Rollover XXX Xxxxxx X. Xxxxx, Rollover IRA
/s/ Xxxxx Xxxxxx, Xx. /s/ Xxxxxxx Xxxxx
------------------------------------------- --------------------------------------------------
Xxxxx Xxxxxx, Xx. Xxxxxxx Xxxxx, IRA
/s/ Xxxxxxxx Xxxxxx /s/ Xxxxxx Xxxxxx
------------------------------------------ --------------------------------------------------
Xxxxxxxx Xxxxxx Xxxxxx Xxxxxx
/s/ Xxxxx Xxxxxxxxxx /s/ Xxxxxxx Xxxxxxx
------------------------------------------ --------------------------------------------------
Xxxxx Xxxxxxxxxx Xxxxxxx Xxxxxxx
/s/ Xxxx Xxxxxx /s/ KCB Services & Co.
----------------------------------------- ---------------------------------------------------
Xxxx Xxxxxx KCB Services & Co.
FBO Xxxx Xxxxxx
/s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------------ ---------------------------------------------------
Xxxxxx X. Xxxxxxx Beaver Medical Clinic 401(k)
and Profit Sharing Plan for Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxx Xxxxxxxx
------------------------------------------ ---------------------------------------------------
Xxxxxx X. Xxxxx Xxxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxxxxxx /s/ Xxxxxx Xxxxxxx
----------------------------------------- ---------------------------------------------------
Xxxxx Xxxxxxxxxx Xxxxxx Xxxxxxx
/s/ Xxxx Xxxxx /s/ X. Xxxxxxx Xxxx
------------------------------------------ ---------------------------------------------------
Xxxx Xxxxx XXX X. Xxxxxxx Xxxx
-30-
/s/ Xxxxxxx Xxxx /s/ Xxxxx Xxxxxx
------------------------------------------ --------------------------------------------------
Xxxxxxx Xxxx Retirement Accounts, Inc.
FBO Xxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxxx, Partner /s/ Xxxxxx Xxxxx
------------------------------------------ --------------------------------------------------
SMA Enterprises Xxxxxx Xxxxx
/s/ Xxxxxx Xxxxx /s/ Xxxxxx Xxxxx
------------------------------------------- --------------------------------------------------
H.C. Associates Xxxxxx Electronics Assoc.
/s/ Xxxxxx Xxxxx, trustee /s/ Xxxxxx Xxxxx
------------------------------------------ --------------------------------------------------
T.Z. Assoc. Pension Trust Xxxxxx Xxxxx Xxxxxx Plan
/s/ Xxxxxx Xxxxx, trustee /s/ Xxxxxxxx Xxxxx
------------------------------------------ ---------------------------------------------------
T.Z. Assoc. Profit Sharing Trust Xxxxxxxx Xxxxx
/s/ Xxxx Xxxxx /s/
------------------------------------------ ---------------------------------------------------
Xxxx Xxxxx Arthritis Center of Northeast Ohio,
Inc. Pension and Profit Sharing Plan
/s/ Xxxxx X. Xxxxx /s/ Xxxx Xxxxx
------------------------------------------ ---------------------------------------------------
Xxxxx X. Xxxxx Xxxx Xxxxx
/s/ Xxxxxxx X. Xxxxxxx, Trustee /s/
------------------------------------------ ---------------------------------------------------
Xxxxxxx X. Xxxxxxx Living Trust ESEN Associates XLVII
/s/ H&D Investments II
/s/ Xxxxx X. Xxxxx By Xxxx X. Xxxxxxxx, Partner
------------------------------------------ ---------------------------------------------------
Xxxxx X. Xxxxx H&D Investments II
/s/ Xxxxx X. Xxxxxx, Xx. /s/
------------------------------------------ ---------------------------------------------------
Xxxxx X. Xxxxxx, Xx. Therapy Management Corp.
/s/
------------------------------------------
Offshore Health Industries, Inc.
-31-
By /s/ Xxxxx Xxxxxx
-----------------------------------------
Xxxxx Xxxxxx
By /s/ Xxxxxx Xxxxx, M.D.
-----------------------------------------
Xx. Xxxxxx Xxxxx
By
-----------------------------------------
Xxxxx Management Corporation
By /s/ Xxxxx Xxxxxx
-----------------------------------------
Xxxxx Xxxxxx
By /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Xxxxx Xxxxxxx
By /s/ Xxxxxxxx Xxxxxxxx
-----------------------------------------
Xxxxxxxx Xxxxxxxx
By /s/ Xxxxx Xxxxxxx
-----------------------------------------
Xxxxx Xxxxxxx
By /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxxxx
By /s/ Xxxxxx Xxxxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxxxx
By /s/ Xxx Xxxxxx
-----------------------------------------
Xxx Xxxxxx
By /s/ Xxxxxxxx Xxxxx xx Xxxxxxxxx
-----------------------------------------
Xxxxxxxx Xxxxx xx Xxxxxxxxx
By /s/ Xxxx Xxxxx
-----------------------------------------
Xxxx Xxxxx
By /s/ Xxxxxx Xxxxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxxxx
By /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Xxxxxxx Xxxxxx
By /s/ Xxxxxx Xxxxx
-----------------------------------------
Xxxxxx Xxxxx
-32-
By /s/ Xxxx Xxxxxxxx
----------------------------------------
Xxxx Xxxxxxxx
By /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxxx
By
----------------------------------------
Xxxxxx, Xxxxx & Co.
By /s/ Xxxxxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxxxx
-33-
Schedule A
----------
Physicians Quality Care, Inc.
--------------------------------------------------------------------
Vested
through
Total Options Type Exercise Price 12/31/97
--------------------------------------------------------------------
X. Xxxxxx 140,586 ISO $0.01 93,724
--------------------------------------------------------------------
X. Xxxxxxxx 120,000 ISO $0.01 80,000
--------------------------------------------------------------------
X. Xxxxx 50,000 ISO $0.01 25,000
--------------------------------------------------------------------
X. Xxxxx 50,000 ISO $0.01 33,333
--------------------------------------------------------------------
X. Xxxxxxxxx 50,000 ISO $0.25 25,000
--------------------------------------------------------------------
X. Xxxxx 50,000 ISO $0.85 12,500
--------------------------------------------------------------------
X. Xxxxxx 25,000 ISO $0.85 6,250
--------------------------------------------------------------------
X. Xxxxxxxxxx 20,000 ISO $0.25 10,000
--------------------------------------------------------------------
X. Xxxxx 15,000 ISO $0.25 7,500
--------------------------------------------------------------------
X. Xxxxxxxx 10,000 ISO $0.25 5,000
--------------------------------------------------------------------
X. Xxxxxxxxx 5,000 ISO $0.25 2,500
--------------------------------------------------------------------
X. Xxxxxx 1,000 ISO $0.25 500
--------------------------------------------------------------------
X. Xxxxxxx 1,000 ISO $0.25 500
--------------------------------------------------------------------
X. Xxxxxxxx 1,000 ISO $0.25 500
--------------------------------------------------------------------
M. Kefakis 1,000 ISO $0.85 500
--------------------------------------------------------------------
X. Xxxxxx 500 ISO $0.85 250
------- -------
--------------------------------------------------------------------
Total 540,086 303,057
======= =======
--------------------------------------------------------------------
