EXHIBIT 2.3
Physician Corporation of America
0000 Xxxx Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxx, Xxxxxxx 00000
August 30, 1996
Health Partners of Alabama, Inc.
Health Partners Southeast, Inc.
000 Xxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
RE: Second Amendment to that certain Stock Purchase Agreement, dated
May 3, 1996 and amended on August 15, 1996, by and between Physician
Corporation of America ("PCA") and Health Partners of Alabama, Inc.
("HPA"), as assigned by HPA to and assumed by Health Partners
Southeast, Inc. ("HPS") of even date herewith (collectively, the
"Stock Purchase Agreement")
Dear HPA and HPS:
The parties desire to amend the Stock Purchase Agreement as follows:
1. Employee Incentives: PCA hereby acknowledges that it has
transferred $67,587.50 to PCA Health Plans of Georgia, Inc. ("PCA-GA") and
$338,831.99 to PCA Health Plans of Alabama, Inc. ("PCA-AL") in order to allow
PCA-GA and PCA-AL to satisfy the employee incentive payments to such persons
(the "Payees") and in such amounts as set forth in Exhibit A attached hereto
and incorporated herein (the "Employee Incentive Payments"). HPS agrees to
cause PCA-GA and PCA-AL: (a) to pay the appropriate amount of the Employee
Incentive Payments to the appropriate Payee as soon as practical after the
date hereof but no later than ten days after the date on which PCA transfers
ownership to HPS of PCA-GA and PCA-AL, as may be applicable; and (b) to use
its best efforts to obtain an executed Acknowledgment and Release from each
Payee in the form attached hereto as Exhibit B. If PCA-GA or PCA-AL are
unable to obtain an executed Acknowledgment and Release from the appropriate
Payee, then HPS shall cause PCA-GA or PCA-AL, as may be applicable, to contact
Xxxx Xxxxxxxx, Esq. or such other designee of PCA for further instructions with
respect to such payment. As consideration for such services, PCA hereby
indemnifies, defends and holds harmless HPS, HPA, PCA-GA and PCA-AL, and
their officers, directors, shareholders, employees, agents and assigns, from
any liability owed by such parties to any Payee with respect to that certain
Incentive Compensation Agreement with such Payee as referenced in the
applicable Acknowledgment and Release.
2. Temporary Name Use: PCA agrees to allow PCA-GA and PCA-AL to
temporarily use the initials "PCA" on its membership cards and existing
marketing materials for a period not to exceed sixty days from the date after
the date on which PCA transfers ownership to HPS of PCA-GA and PCA-AL, as may
be applicable. PCA-GA, PCA-AL and HPS are prohibited from using the initials
"PCA", the name "Physician Corporation of America" or any derivative thereof
in any manner other than as set forth in the foregoing sentence without the
prior written consent of PCA.
3. Access to Telephone System: The telephone system currently used by
PCA-GA is being leased in conjunction with PCA Solutions, Inc. and expect as
otherwise provided herein, will be used exclusively by PCA Solutions, Inc.
following PCA's transfer of ownership of PCA-GA to HPS.
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However, PCA hereby agrees to allow PCA-GA to continue its current use of
such telephone system for a period of one hundred twenty days following such
transfer. PCA-GA shall pay its applicable share of the lease cost with
respect to this telephone system during this period of use.
4. Adjustment to Base Purchase Price and Covenant Not-to-Compete: In
consideration for each party agreeing not to terminate the Stock Purchase
Agreement under Section 8.1(c) thereof prior to September 17, 1996 and
extending the Stock Purchase Agreement to September 17, 1996, the parties
agree: (a) to increase the Base Purchase Price under Section 1.2 of the
Stock Purchase Agreement from $22,500,000 to $23,000,000 with this additional
$500,000 deposited with the Escrow Agent in a separate escrow account to be
released to PCA on August 17, 1998 to be utilized in connection with the
obligations of Seller to indemnify HPS under the Stock Purchase Agreement,
and such additional $500,000 amount shall be paid in connection with the sale
of the capital stock of PCA-HSA from PCA to HPS; and (b) decrease the amount
payable $500,000 on the first anniversary date of the Closing Date and
$1,000,000 on the second anniversary date of the Closing Date.
Notwithstanding this reduction of the amount payable under Section 5.12 of
the Stock Purchase Agreement, if the last sentence of Section 5.12 of the
Stock Purchase Agreement becomes operational, PCA shall immediately refund to
HPS all payments then made by HPS under Section 5.12 of the Stock Purchase
Agreement together with an additional $500,000, at which point the Covenant
Not-to-Compete and the Period of Non-Compete will terminate.
5. Limited Software Use Agreement: The Limited Software Use Agreement
shall include Section 11(b) and (c) set forth in the draft of such agreement
provided to HPS's counsel by PCA's counsel on July 25, 1996.
6. Escrow Agreement: The Escrow Agreement contemplated in the Stock
Purchase agreement shall provide that the governing law for such agreement
shall be Georgia and choice of venue for any arbitrations or legal actions
shall be held in Atlanta, Georgia. In addition, the Escrow Agreement will
not include language which was previously set forth in the Stock Purchase
Agreement but will incorporate by reference the terms of the Stock Purchase
Agreement.
7. Marketing of PCA-AL, PCA-HSA and PCA-GA: In the event that no
hearing date is established with the Georgia Department of Insurance on or
before September 4, 1996 with respect to the transfer of PCA-GA from PCA to
HPS, PCA may privately market the sale of the capital stock or assets of
PCA-AL, PCA-HSA and/or PCA-GA to five or fewer potential purchasers.
Notwithstanding the foregoing, PCA may not enter into any agreement to
privately sell such stock or assets of PCA-AL, PCA-HSA or PCA-GA on or prior
to September 17, 1996.
The parties to the Stock Purchase Agreement hereby amend the Stock
Purchase Agreement only with respect to the matters contained herein, and all
other terms and provisions of the Stock Purchase Agreement shall remain
unchanged as of the date hereof.
Sincerely,
Physician Corporation of America
By: /s/ Xxxxxxxx X. Xxxxxxxx
_____________________________________
Xxxxxxxx X. Xxxxxxxx,
Senior Vice President and
Chief Financial Officer
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AGREED AND ACCEPTED:
The undersigned consent to the terms of the foregoing letter and hereby
amend the Stock Purchase Agreement as set forth above.
August 30, 1996 Health Partners of Alabama, Inc.
By: /s/ Xxxx Xxxxxxx
_____________________________________
Xxxx Xxxxxxx,
Senior Vice President and
Chief Financial Officer
Health Partners Southeast, Inc.
By: /s/ Xxxx Xxxxxxx
_____________________________________
Xxxx Xxxxxxx,
Senior Vice President and
Chief Financial Officer
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