successors, assigns, agents, and legal representatives forever release

 

                         PHYSICIAN HEALTH CORPORATION
                            990 Hammond, Suite 300
                            Atlanta, Georgia 30328

                               December 31, 1997

J. Michael Ribaudo, M.D.
Metropolitan Plastic and
  Reconstructive Surgery, Ltd.
450 North New Ballas
St. Louis, Missouri 63141

     Re:  Physician Health Corporation ("PHC").
          -------------------------------------

Dear Dr. Ribaudo:

     Reference is made to that certain Asset Purchase Agreement ("Purchase
Agreement"), dated as of October 24, 1996, by and among PHC, PHC-St. Louis
Acquisition Subsidiary I, Inc. ("PHC-Sub") and Metropolitan Plastic and
Reconstructive Surgery, Ltd. ("MPRS"), that certain Practice Management
Agreement (the "Management Agreement"), dated as of November 26, 1997, by and
among PHC, PHC-Sub and MPRS and that certain General Undertakings Agreement (the
"Undertakings Agreement"), dated as of October 25, 1996, by and among PHC, PHC-
Sub, MPRS and J. Michael Ribaudo, M.D. ("Ribaudo"), as amended by the Amendment
to the Undertakings Agreement (the "Amendment"), dated November 11, 1997, by and
among PHC, PHC-Sub, MPRS and Ribaudo (collectively, the Purchase Agreement,
Management Agreement, Undertaking Agreement and Amendment are the "MPRS
Agreements").  Capitalized terms not otherwise defined in this agreement (this
"Letter Agreement") shall have the meanings assigned to such terms in the MPRS
Agreements.

     In consideration of good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the parties, PHC, PHC-Sub, MPRS and
Ribaudo agree that as of the close of business on December 31, 1997:

      1)  The Management Agreement is terminated effective on the earlier to
          occur of (i) June 30, 1998 and (ii) the date that Ribaudo ceases to
          practice medicine through MPRS.  The parties acknowledge that
          notwithstanding anything to the contrary contained herein or in the
          Employment Agreement (hereafter defined) Ribaudo may practice medicine
          through MPRS up to one full day a week through June 30, 1998 in order
          that Ribaudo may successfully transition his surgical practice.  From
          and after the date of this Letter Agreement, Ribaudo shall not
          directly or indirectly sell his interest in MPRS to any person or
          entity not controlled or managed by PHC or PHC-Sub.  Notwithstanding
          anything to the contrary in this Letter Agreement, (i) from and after
          the date of this Letter Agreement, neither Ribaudo nor MPRS shall 

          be responsible for payment of a management fee under the Management
          Agreement, (ii) Ribaudo and MPRS shall be responsible for the direct
          costs of the practice of medicine by Ribaudo from and after the date
          of this Letter Agreement, (iii) Ribaudo and MPRS shall be entitled to
          fees derived from the practice of medicine by Ribaudo from and after
          the date of this Letter Agreement and (iv) neither PHC nor PHC-Sub
          shall be responsible for any negative difference between fees derived
          from and direct costs associated with the practice of medicine by
          Ribaudo from and after the date of this Letter Agreement.

      2)  Each of PHC, PHC-Sub and MPRS, their respective predecessors,
          successors, assigns, agents, and legal representatives forever release
          and discharge each other, their employees, affiliates, successors,
          assigns, heirs, agents, and legal representatives of and from any and
          all claims, demands, controversies, debts, actions, or causes of
          action, of whatever nature or character, whether now known or unknown,
          related to or in any way arising out of the Management Agreement or
          the relationships or transactions giving rise to such.  Nothing in
          this paragraph releases PHC, PHC-Sub and MPRS from their obligations
          under this Letter Agreement;

      3)  MPRS hereby forgives the PHC $500,000, 5% Convertible Subordinated
          Promissory Note Due 1999, dated November 26, 1996, executed by PHC for
          the benefit of MPRS (the "Note") and will have no further rights in
          connection with the Note, including the right to convert the Note into
          shares of PHC Common Stock;

      4)  PHC hereby forgives any and all loans (including interest accrued
          thereon) made to Ribaudo pursuant to Section 9 of the Undertakings
          Agreement; [CONFIRM]

      5)  PHC will grant to Ribaudo non-qualified stock options (the "Options")
          to purchase up to 125,000 shares of PHC Common Stock at an exercise
          price of $4.00 per share, with 1/3 of such Options vesting each year
          after the date of the grant and with such other terms as be shall set
          forth in a non-qualified stock option agreement.  In the event that
          Ribaudo's employment is terminated without cause prior to the complete
          vesting of such options, such options will fully vest on the date of
          termination of employment;

      6)  The right granted to Ribaudo, as set forth in the PHC Written Consent
          of Directors, dated as of June 16, 1997 (the "Director Consent") and
          relating to PHC's grant of options to Ribaudo to purchase up to
          300,000 shares of Common Stock pursuant to the Undertakings Agreement,
          to elect to receive a cash payment in event the Company is sold
          (through a merger, sale of assets or otherwise) at an effective price
          of less than $4.00 per share of Common Stock, equal to the product of:
          (i) $0.80 multiplied by (ii) the number of options remaining
          unexercised at the time of such change of control multiplied by (iii)
          the effective price per share of Common Stock received by the holders
          of Common Stock in the sale, provided that Ribaudo remains an employee
          of the Company and surrenders that portion of such options that remain
          unexercised, is hereby terminated;

      7)  PHC acknowledges that as of the date of this Letter Agreement, PHC
          will have responsibility for the lease obligations (the "Lease
          Obligations") related to 450 North New Ballas Road, Suite 250, St.
          Louis, Missouri 63141. MPRS and Ribaudo will use their best efforts to
          help PHC and PHC-Sub obtain tenants who will assume Lease Obligations;

      8)  Concurrently with the execution of this agreement, Ribaudo and PHC
          shall execute an Employment Agreement in the form attached hereto as
          Exhibit A;

      9)  PHC's obligation to pay Ribaudo's quarterly draw as set forth in
          paragraph 5 of the Undertaking Agreement is terminated;

     10)  PHC hereby forgives Ribaudo for all quarterly draw payments which have
          not been repaid and remain outstanding and forever releases and
          discharges Ribaudo and MPRS, its employees, affiliates, successors,
          assigns, heirs, agents, and legal representatives of and from any and
          all claims, demands, controversies, debts, actions, or causes of
          action, of whatever nature or character, whether known or unknown,
          related to or in any way arising out of any quarterly draw payment
          which has not been repaid to PHC as required by paragraph 5 of the
          Undertaking Agreement;

     11)  Section 7 of the Undertakings Agreement is hereby terminated;

     12)  From and after January 1, 1997, PHC-Sub shall reimburse Ribaudo and
          MPRS for malpractice insurance premium costs, including tail
          insurance, at levels consistent with those previously maintained by
          Ribaudo and MPRS;

     13)  From and after January 1, 1997, PHC shall for so long as Ribaudo
          remains employed by PHC reimburse Ribaudo for up to $5,000 in
          documented continuing medical education expense;

     14)  PHC confirms its agreement to reimburse Ribaudo for 12 months rental
          expense for an apartment in Atlanta (start date           , 1997) and
                                                          ----------
          to reimburse Ribaudo for reasonable and documented moving expenses
          related to the relocation of his personal residence to Atlanta,
          Georgia from St. Louis, Missouri; and

     15)  PHC will reimburse Ribaudo for up to $5,000 in documented legal
          expenses incurred by him in connection with the negotiation and
          documentation of this Letter Agreement and the other agreements
          contemplated hereby.

     This Letter Agreement shall be governed and construed under the laws of the
State of Georgia except to the extent the MPRS Agreements and the Note provide
otherwise.  If any term, provision, covenant, or condition of this Letter
Agreement is held to be invalid or unenforceable by a court of competent
jurisdiction, it is to that extent deemed omitted and the remainder of this
Letter Agreement shall continue in full force and effect.  Furthermore, in lieu
of each illegal, invalid or unenforceable provision of this Letter Agreement,
there shall be added automatically as part of this 

Letter Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

     This Letter Agreement may be executed in any number of counterparts, and
each such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one Letter Agreement.

     Please execute this Letter Agreement in the space provided below to
evidence that the above is in accordance with our understanding.

                              Very truly yours,

                              Physician Health Corporation

                              By: /s/ Sarah C. Garvin
                                 --------------------
                                      Sarah C. Garvin
                                      President

AGREED AND ACCEPTED:

 /s/ J. Michael Ribaudo
- -----------------------
J. Michael Ribaudo, M.D.

Metropolitan Plastic and Reconstructive Surgery, Ltd.
 
By:   /s/ J. Michael Ribaudo
      ----------------------
Printed Name:    J. Michael Ribaudo
                 ------------------
Title:           President
                 ------------------

 
PHC-St. Louis Acquisitions Subsidiary I
 
By:   /s/ J. Michael Ribaudo
      ----------------------  
Printed Name:    J. Michael Ribaudo
                 ------------------
Title:           President
                 ------------------ 

Basic Info X:

Name: successors, assigns, agents, and legal representatives forever release
Type: Release
Date: Jan. 28, 1998
Company: PHYSICIAN HEALTH CORP
State: Delaware

Other info:

Date:

  • October 24 , 1996
  • November 26 , 1997
  • October 25 , 1996
  • November 11 , 1997
  • December 31 , 1997
  • full day a week through June 30 , 1998
  • November 26 , 1996
  • June 16 , 1997
  • January 1 , 1997

Organization:

  • PHC-St. Louis Acquisition
  • Each of PHC
  • PHC Common Stock
  • PHC Written Consent of Directors
  • the State of Georgia
  • Physician Health Corporation
  • Reconstructive Surgery , Ltd.

Location:

  • North New Ballas St. Louis
  • Atlanta
  • Georgia
  • Missouri

Money:

  • $ 500,000
  • $ 4.00
  • $ 0.80
  • $ 5,000

Person:

  • Hammond
  • Sarah C. Garvin
  • J. Michael Ribaudo

Percent:

  • 5 %