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EXHIBIT 2.2
FIRST AMENDMENT TO
STOCK PURCHASE AGREEMENT
This FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT, dated as of September
30, 1998 (this "First Amendment"), is made and entered into by and between
PACIFICARE HEALTH PLAN ADMINISTRATORS, INC., an Indiana corporation, as seller
("Seller"), and ELAN HEALTH PARTNERS LLC, a Utah limited liability company, as
buyer ("Buyer"), with reference to the following facts:
PREAMBLE
A. On or about July 6, 1998, Buyer and Seller entered into that certain
Stock Purchase Agreement pursuant to which Buyer agreed to purchase all of the
issued and outstanding shares of capital stock of PacifiCare of Utah, Inc. (the
"Company") and Seller agreed to sell such capital stock to Buyer (the "Stock
Purchase Agreement").
B. Buyer and Seller mutually desire to amend the Stock Purchase
Agreement in accordance with the terms of this First Amendment.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree as
follows:
1. Amendments to the Stock Purchase Agreement. The Stock Purchase
Agreement is hereby amended as follows:
1.1 Section 2.2(a) of the Stock Purchase Agreement is amended
by deleting the third sentence thereof and substituting the following sentence
therefor:
"In the event that the Deposit becomes refundable, Seller
shall return the Deposit to the Company, together with interest which
has accrued thereon at the Interest Rate from the date of the Deposit's
receipt through the date of the Deposit's return."
1.2 Article 2 of the Stock Purchase Agreement is amended by
adding the following new section 2.7:
"2.7 Additional Assurances at Closing.
(a) The PacifiCare Subordinated Loan. Notwithstanding the
provisions of Section 2.3 above or any other provision of this Agreement, before
or as of the Closing, Seller shall extend to the Company a subordinated loan in
the original principal amount of Seven Hundred Thousand Dollars ($700,000) upon
the following principal terms and conditions (the "PacifiCare Subordinated
Loan"): (i) the PacifiCare Subordinated Loan shall be evidenced
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by a promissory note which contains terms and conditions consistent with
applicable Utah regulatory laws; (ii) the PacifiCare Subordinated Loan shall
accrue interest at the lesser of 10% per annum or the highest rate permissible
by Utah law; (iii) the PacifiCare Subordinated Loan shall be subordinated to
payments owed by the Company to the Company's normal trade creditors and
subscribers; (iv) the PacifiCare Subordinated Loan shall have a superior
position to the holders of all other debt incurred by the Company, including,
without limitation, amounts borrowed from banks, lenders, and other third
parties, dividends or other amounts owed to the Company's shareholders, and the
Elan Subordinated Loan (as defined in Paragraph (b) below); (v) until the
PacifiCare Subordinated Loan has been repaid: (A) the Company shall not issue
additional shares of its capital stock or other securities and Buyer shall not
sell, encumber, or otherwise dispose of any of the Shares, and (B) in
furtherance of the foregoing covenants, Elan shall cause a legend reflecting
such restrictions on transfer to be borne on all certificates representing any
authorized, issued, or treasury shares or securities of the Company; and (vi)
after January 1, 1999, the PacifiCare Subordinated Loan shall be repayable only
from funds which the Company maintains in excess of the sum of the Minimum
Capital, as required by Utah Code Xxx. Section 31A-8-209(1), plus the Compulsory
Surplus, as required by Utah Code Xxx. Section 31A-8-210(b).
(b) The Elan Subordinated Loan. Notwithstanding the provisions
of Section 2.3 above or any other provision of this Agreement, before or as of
the Closing, Buyer shall extend to the Company a subordinated loan in the
original principal amount of Five Hundred Thousand Dollars ($500,000) upon the
following principal terms and conditions (the "Elan Subordinated Loan"): (i) the
Elan Subordinated Loan shall be evidenced by a promissory note which contains
terms and conditions consistent with applicable Utah regulatory laws; (ii) the
Elan Subordinated Loan shall accrue interest at the lesser of 10% per annum or
the highest rate permissible by Utah law; (iii) the Elan Subordinated Loan shall
be subordinated to payments owed by the Company to the Company's normal trade
creditors and subscribers; (iv) the Elan Subordinated Loan shall have a superior
position to the holders of all other debt incurred by the Company, including,
without limitation, amounts borrowed from banks, lenders, and other third
parties, dividends or other amounts owed to the Company's shareholders, except
for the PacifiCare Subordinated Loan which is superior to the Elan Subordinated
Loan; and (v) after January 1, 1999 and after the PacifiCare Subordinated Loan
has been repaid, the Elan Subordinated Loan shall be repayable only from funds
which the Company maintains in excess of the sum of the Minimum Capital, as
required by Utah Code Xxx. Section 31A-8-209(1), plus the Compulsory Surplus, as
required by Utah Code Xxx. Section 31A-8-210(b)."
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2. Capitalized Terms. Any capitalized terms used in this First
Amendment which are not defined herein shall have the meanings ascribed to those
terms in the Stock Purchase Agreement.
3. Effect of this First Amendment. Except as amended by this First
Amendment, the Stock Purchase Agreement shall not be further amended, modified,
or revised and the Stock Purchase Agreement, as hereby amended, shall continue
in full force and effect and shall be enforced in accordance with its terms and
conditions. The Stock Purchase Agreement may only be further amended, modified,
revised, or supplemented by a dated written instrument executed by Buyer and
Seller.
4. Integrated Agreement. This First Amendment constitutes the final
written integrated expression of all of the agreements between Buyer and Seller
with respect to those matters addressed herein and is a complete and exclusive
statement of those terms. This First Amendment supersedes all prior or
contemporaneous, written or oral, memoranda, arrangements, contracts, and
understandings between Buyer and Seller relating to the subject matter hereof.
Any representations, promises, warranties, or statements made by any party which
differ in any way from the terms of this First Amendment shall be given no force
or effect.
5. Severability. In the event that any provision in this First
Amendment shall be found by a court or Governmental Authority of competent
jurisdiction to be invalid, illegal, or unenforceable, such provision shall be
construed and enforced as if it had been narrowly drawn so as not to be invalid,
illegal, or unenforceable, and the validity, legality, and enforceability of the
remaining provisions of this First Amendment shall not in any way be affected or
impaired thereby.
6. Governing Law. This First Amendment shall be governed by and
construed in accordance with the internal laws of the State of Utah and Federal
law where state law is pre-empted or applicable, without regard to principles of
conflicts of law.
7. Successors and Assigns. This First Amendment shall be binding upon
the parities hereto and their respective successors, successors-in-interest,
transferees, and assigns. However, Buyer may not assign its rights or delegate
its duties or obligations under this Agreement, whether voluntarily,
involuntarily, or by operation of law, without the prior written consent of
Seller.
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8. Counterparts. This First Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be considered one and the same agreement
IN WITNESS WHEREOF, Buyer and Seller have executed this First Amendment
as of the date first written above.
BUYER: ELAN HEALTH PARTNERS LLC,
a Utah limited liability company
By: /s/ XXX X. XXXXXXXXXXX
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Title: Manager
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SELLER: PACIFICARE HEALTH PLAN ADMINISTRATORS,
INC., Indiana corporation
By: /s/ XXXX XXXXXX
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Title: President
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