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