<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
September 23, 1996
PHYSICIAN CORPORATION OF AMERICA
(Exact Name of Registrant as
Specified in its Charter)
0-21440
(Commission File Number)
Delaware 48-1006287
(State of Other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification Number)
5835 Blue Lagoon Drive
Miami, Florida 33126
(Address of Principal Executive Offices)
(305) 267-6633
(Registrant's Telephone Number
Including Area Code)
<PAGE>
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 3, 1996, Physician Corporation of America, a Delaware
corporation ("PCA") entered into a Stock Purchase Agreement ("Stock
Purchase Agreement") with Health Partners of Alabama, Inc., an
Alabama corporation ("Health Partners"), whereby Health Partners
agreed to purchase 100% of the outstanding shares of three of the
PCA's wholly owned subsidiary companies: PCA Health Plans of
Alabama, Inc. ("PCA Alabama"), Health Strategies, Inc.
("Health Strategies"), and PCA Health Plans of Georgia, Inc. ("PCA
Georgia"), (collectively the "PCA Subsidiaries"). PCA Alabama
operates a state licensed Health Maintenance Organization in
Alabama, Health Strategies provides third-party health and benefit
plan administration services to employer groups operating in Alabama
and PCA Georgia operates a state licensed Health Maintenance
Organization in Georgia.
The Stock Purchase Agreement was amended on August 15,
1996 and August 30, 1996 ("Amended Stock Purchase Agreement").
After receiving approval to complete the transaction from the
requisite governmental authorities, the transaction closed on
September 23, 1996 ("Closing Date"). Accordingly, pursuant to the
Amended Stock Purchase Agreement, Health Partners paid to PCA
$20,500,000 as determined through arms-length negotiations to acquire
100% of the shares of the PCA Subsidiaries and deposited $2,500,000
into an escrow account to be held pursuant to an escrow agreement
entered into by Health Partners and PCA.
Additionally, Health Partners and PCA entered into a Covenant not
to Compete agreement ("Non Compete Covenant"). The terms of the
Non Compete Covenant require PCA to refrain from engaging in
certain business activities in the states of Alabama and Georgia
for a period of three (3) years from the Closing Date. As
consideration for PCA's covenant, Health Partners will pay to PCA
$500,000 on the first anniversary of the Closing Date and
$1,000,000 on the second anniversary of the Closing Date.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Not applicable
b) PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated
financial statements are filed with this report:
Pro Forma Condensed Consolidated Balance Sheet
as of June 30, 1996. . . . . . . . . . . . . . . Page F-1
Pro Forma Condensed Consolidated Statements of Operations:
Year ended December 31, 1995. . . . . . . . . . . Page F-3
Six Months ended June 30, 1996. . . . . . . . . . Page F-4
The Pro Forma Condensed Consolidated Balance Sheet of PCA as of
June 30, 1996 reflects the financial position of PCA after giving
effect of the disposition of shares in the PCA subsidiaries as
discussed in Item 2 and assumes the disposition took place on June
30, 1996. The Pro Forma Condensed Consolidated Statements of
Operations for the fiscal year ended December 31, 1995 and the six
months ended June 30, 1996 assume the disposition occurred on
January 1, 1995 and January 1, 1996, respectively, and are based on
the operations of PCA for the year ended December 31, 1995 and the
six months ended June 30, 1996.
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The unaudited pro forma condensed consolidated financial statements
have been prepared by PCA based upon assumptions which it has
deemed appropriate. The unaudited pro forma condensed consolidated
financial statements as presented herein are shown for illustrative
purposes and are not necessarily indicative of the future financial
position or future results of operations of PCA, or of the
financial position or results of operations of PCA that would have
actually occurred had the transaction been in effect as of the date
or for the periods presented.
The unaudited pro forma condensed consolidated financial statements
should be read in conjunction with the historical financial
statements and related notes of PCA. Additionally, it should be
noted that PCA's financial statements will reflect the disposition
from September 23, 1996, the Closing Date.
c) EXHIBITS
NO. DESCRIPTION
- --- -----------
2.1 Stock Purchase Agreement between Health Partners of Alabama,
Inc. and Physician Corporation of America dated May 3, 1996 (to be
filed by Amendment).
2.2 Amendment dated August 15, 1996 to that certain Stock Purchase
Agreement by and between Physician Corporation of America and
Health Partners of Alabama, Inc.
2.3 Second Amendment dated August 30, 1996 to that certain Stock
Purchase Agreement by and between Physician Corporation of America
and Health Partners of Alabama, Inc.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
PHYSICIAN CORPORATION OF AMERICA
(Registrant)
Date: October 8, 1996 By: /s/ Jay M. Grobowsky
---------------------------- ----------------------------
Jay M. Grobowsky
Vice President of Finance
3
<PAGE>
<TABLE>
<CAPTION>
PHYSICIAN CORPORATION OF AMERICA
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996
(UNAUDITED)
PRO FORMA ADJUSTMENTS
-----------------------------------------
PCA HEALTH PCA
HISTORICAL ALABAMA a) STRATEGIES a) GEORGIA a) OTHER PRO FORMA
---------- ------- ---------- ------- ----- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents 56,564 359 352 90 2,908 b) 58,671
Short-term investments 141,771 2,229 - 139,542
Accounts receivable, net of allowance 127,975 1,788 948 1,630 1,247 g) 124,856
Prepaid expenses, inventories and
other current assets 26,742 276 56 42 467 c) 28,335
1,500 d)
Income tax receivable 6,486 2,379 (62) 4,257 88 h) -
Deferred income tax benefit 16,641 866 528 42 15,205
-------- ------- ------- ------ ------ -------
Total current assets 376,179 7,897 1,822 6,061 6,210 366,609
Property and equipment, net 52,727 683 538 524 50,982
Long-term investments 220,073 571 293 219,209
Deferred income tax benefit 5,746 1,176 i) 6,922
Statutory deposits and other assets 106,879 1,200 124 1,000 d) 107,428
873 c)
Intangibles assets - Goodwill 161,559 8,484 153,075
- Other intangible assets 23,204 3,702 10 19,492
-------- ------- ------- ------ ------ -------
Total intangible assets 184,763 12,186 - 10 - 172,567
-------- ------- ------- ------ ------ -------
Total Assets 946,367 22,537 2,360 7,012 9,259 923,717
-------- ------- ------- ------ ------ -------
-------- ------- ------- ------ ------ -------
Current liabilities:
Accounts payable, accrued
expense and other current liabilities 51,864 2,332 1,853 241 447 e) 48,628
655 g)
88 b)
Health Claims payable 165,624 4,337 2,881 158,406
Current portion of other claims payable,
primarily workers' compensation 41,480 41,480
Unearned premiums and service fees 40,481 58 40,423
Current portion of long term debt and
obligations under capital leases 70,421 82 41 70,298
-------- ------- ------- ------ ------ -------
Total current liabilities 369,870 6,809 1,853 3,163 1,190 359,235
Long-term debt and obligations under capital
leases, less current portion 97,645 271 93 (17,000)f) 80,281
Long-term portion of other claims payable,
primarily workers' compensation 252,591 252,591
Deferred income taxes - 1,124 52 1,176 i)
Deferred income and other long term liabilities 18,530 893 c) 19,423
-------- ------- ------- ------ ------ -------
Total liabilities 738,636 8,204 1,853 3,308 (13,741) 711,530
-------- ------- ------- ------ ------ -------
Stockholders' Equity
Preferred stock - -
Common stock 388 100 1 1,500 1,601 388
Additional paid-in-capital 136,945 45,784 1,875 13,555 61,214 136,945
Common stock held in treasury - at cost (10,048) - (10,048)
Retained earnings 84,460 (31,558) (1,369) (11,298) (39,769) 88,916
Unrealized (loss) gain on investments (4,014) 7 (53) (46) (4,014)
-------- ------- ------- ------- ------ -------
Total stockholders' equity 207,731 14,333 507 3,704 23,000 212,187
-------- ------- ------- ------- ------ -------
Total liabilities and stockholders' equity 946,367 22,537 2,360 7,012 9,259 923,717
-------- ------- ------- ------- ------ -------
-------- ------- ------- ------- ------ -------
</TABLE>
F-1
<PAGE>
PHYSICIAN CORPORATION OF AMERICA
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996
(UNAUDITED)
a) To eliminate the assets, liabilities and equity of PCA Alabama, Health
Strategies and PCA Georgia for the entire period.
b) To record cash proceeds from dispositions of $20.5 million net of debt
repayments of $17.0 million and intercompany settlements and transactions
expenses.
c) To record current and long-term portion of covenant-not-to-compete
receivable.
d) To record the current and long-term portion of receivable from escrow.
e) To record current and long-term portion of covenant-not-to-compete
deferred revenue.
f) To record use of proceeds to reduce long-term debt.
g) To eliminate intercompany balances.
h) To reclassify income tax payable.
i) To reclassify negative deferred income tax liability balances to deferred
tax asset.
F-2
<PAGE>
<TABLE>
<CAPTION>
PHYSICIAN CORPORATION OF AMERICA
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED)
(DOLLARS AND SHARES IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
PRO FORMA ADJUSTMENTS
---------------------------------------
PCA HEALTH PCA
HISTORICAL ALABAMA a) STRATEGIES a) GEORGIA a) OTHER PRO FORMA
---------- --------- ---------- --------- --------- ---------
Revenues: <C> <C> <C> <C> <C> <C>
Health Premiums 1,038,638 29,391 14,111 995,136
Workers' Compensation and other
revenue 159,309 3,401 2,944 11 447 b) 153,400
Investment income 18,602 381 8 162 94 c) 18,145
--------- --------- --------- --------- --------- ---------
Total revenues 1,216,549 33,173 2,952 14,284 541 1,166,681
Operating Expenses:
Medical Costs 878,918 27,645 12,842 838,431
Administrative, marketing and other
expenses 305,510 8,337 2,781 8,738 285,654
Impairment of long lived assets 25,863 25,863 -
Depreciation and amortization 23,264 3,112 149 178 19,825
--------- --------- --------- --------- --------- ---------
Total operating expenses 1,233,555 64,957 2,930 21,758 1,143,910
Operating (loss) income (17,006) (31,784) 22 (7,474) 541 22,771
Interest expense (9,113) (45) (4) (17) 1,190 d) (7,857)
Other income (expense) 263 3 260
--------- --------- --------- --------- --------- ---------
(Loss) earnings before income taxes (25,856) (31,829) 18 (7,488) 1,731 15,174
Income tax benefit (expense) 1,260 2,272 (8) 2,599 (606)e) (4,209)
--------- --------- --------- --------- --------- ---------
Net earnings (24,596) (29,557) 10 (4,889) 1,125 10,965
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Net earnings (loss) per common and common
equivalent share assuming full dilution $ (0.62) $ 0.27
--------- ---------
--------- ---------
Number of Common Shares used in
Computation of fully diluted earnings per share 39,970 39,970
--------- ---------
--------- ---------
</TABLE>
NOTES:
a) TO ELIMINATE THE REVENUE AND EXPENSES OF PCA ALABAMA, HEALTH STRATEGIES
AND PCA GEORGIA FOR THE ENTIRE PERIOD.
b) TO RECOGNIZE REVENUE EARNED PURSUANT TO THE COVENANT-NOT-TO-COMPETE
AGREEMENT.
c) TO RECOGNIZE INTEREST INCOME EARNED RELATING TO THE
COVENANT-NOT-TO-COMPETE AGREEMENT.
d) TO RECORD REDUCTION IN INTEREST EXPENSE RESULTING FROM USING $17.0
MILLION OF SALES PROCEEDS TO REPAY LONG-TERM DEBT.
e) TO RECORD THE RELATED INCOME TAX EXPENSE ARISING FROM THE PRO FORMA
ADJUSTMENTS NOTED ABOVE.
F-3
<PAGE>
<TABLE>
<CAPTION>
PHYSICIAN CORPORATION OF AMERICA
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
(DOLLARS AND SHARES IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
PRO FORMA ADJUSTMENTS
---------------------------------------------
PCA HEALTH PCA
HISTORICAL ALABAMA a) STRATEGIES a) GEORGIA a) OTHER PRO FORMA
---------- ------- ---------- ------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Health Premiums 642,811 14,000 10,960 617,851
Workers' Compensation and other
revenue 72,692 1,591 1,300 6 223 b) 70,018
Investment income 11,609 168 6 73 47 c) 11,409
----------- --------- ---------- ---------- ------- ------------
Total revenues 727,112 15,759 1,306 11,039 270 699,278
Operating Expenses:
Medical Costs 560,869 13,171 12,633 535,065
Administrative, marketing and other
expenses 161,256 3,878 1,054 3,270 153,054
Depreciation and amortization 11,969 11,969
----------- --------- ---------- ---------- -------- -----------
Total operating expenses 734,094 17,049 1,054 15,903 - 700,088
Operating (loss) income (6,982) (1,290) 252 (4,864) 270 (810)
Gain on sale of subsidiaries 7,900 7,900
Interest expense (7,722) (20) (48) 595 d) (7,059)
Other income (expense) (137) 1 (138)
----------- --------- ---------- ---------- -------- -----------
(Loss) earnings before income taxes (6,941) (1,310) 252 (4,911) 865 (107)
Income tax benefit (expense) 7,343 765 (69) 1,772 (303) e) 4,572
----------- --------- ---------- ---------- -------- -----------
Net earnings 402 (545) 183 (3,139) 562 4,465
----------- --------- ---------- ---------- -------- -----------
----------- --------- ---------- ---------- -------- -----------
Net earnings (loss) per common and common
equivalent share assuming full dilution $ 0.01 $0.11
----------- -----------
----------- -----------
Number of Common Shares used in Computation
of fully diluted earnings per share 39,281 39,281
----------- -----------
----------- -----------
</TABLE>
NOTES:
a) TO ELIMINATE THE REVENUE AND EXPENSES OF PCA ALABAMA, HEALTH STRATEGIES
AND PCA GEORGIA FOR THE ENTIRE PERIOD.
b) TO RECOGNIZE REVENUE EARNED PURSUANT TO THE COVENANT-NOT-TO-COMPETE
AGREEMENT.
c) TO RECOGNIZE INTEREST INCOME EARNED RELATING TO THE
COVENANT-NOT-TO-COMPETE AGREEMENT.
d) TO RECORD REDUCTION IN INTEREST EXPENSE RESULTING FROM USING $17.0
MILLION OF SALES PROCEEDS TO REPAY LONG-TERM DEBT.
e) TO RECORD THE RELATED INCOME TAX EXPENSE ARISING FROM THE PRO FORMA
ADJUSTMENTS NOTED ABOVE.
F-4
<PAGE>
EXHIBIT 2.2
Physician Corporation of America
5835 Blue Lagoon Drive, 4th Floor
Miami, Florida 33126
August 15, 1996
Health Partners of Alabama, Inc.
680 Beacon Parkway West, Suite 500
Birmingham, Alabama 35209
RE: Amendment to that certain Stock Purchase Agreement by and between
Physician Corporation of America ("PCA") and Health Partners of
Alabama, Inc. ("Health Partners"), dated May 3, 1996 (the "Stock
Purchase Agreement")
Dear Sir:
In the event that the closing occurs on or before August 31, 1996, PCA
proposed to modify the Stock Purchase Agreement in the following manner:
1. COVENANT NOT-TO-COMPETE: Section 5.12 of the Stock Purchase
Agreement is hereby amended as follows:
(a) the second sentence is deleted in its entirety and inserted in
lieu thereof, the following:
However, notwithstanding the foregoing, nothing herein shall
prohibit Seller or its subsidiaries, assigns, agents, successors or
other affiliates from providing or soliciting workers compensation
insurance, workers compensation surety insurance, workers compensation
excess insurance, workers compensation inland marine insurance,
employer liability insurance, property and casualty insurance,
third party administration services to administer self funded
workers compensation programs or self insured workers compensation
programs or self insured worker compensation program funds or any
provider network services for any workers compensation programs in
Alabama and Georgia.
(b) to the end of Section 5.12 of the Stock Purchase Agreement,
the following:
Nothing herein to the contrary shall prohibit the Seller or its
subsidiaries (including without limitation PCA Solutions) from
providing services to the entities set forth on Exhibit A attached
hereto and incorporated herein in the manner and form as currently
provided to such entities. Neither the Seller nor its subsidiaries
may renew its contractual obligations to render such services to
the Permissible Entities.
2. RESTRUCTURING PURCHASE PRICE AND COVENANT NOT-TO-COMPETE. The
parties hereby amend the Stock Purchase Agreement to increase the Base
Purchase Price under Section 1.2 of the Stock Purchase Agreement from
$21,250,000 to $22,500,000 and to reduce the payment to PCA under Section 5.12
of the Stock Purchase Agreement from $3,750,000 to $2,000,000. The $2,000,000
payable under Section 5.12 of the Stock Purchase Agreement shall be paid by
Health Partners to PCA in the following
1
<PAGE>
manner: (a) $750,000 on the first annual anniversary of the Closing Date under
the Stock Purchase Agreement; and (b) $1,250,000 on the second annual
anniversary of the Closing Date under the Stock Purchase Agreement.
3. ASSIGNABILITY. Health Partners may transfer its right under the
Stock Purchase Agreement to a third party whose shareholders are substantially
the same as the shareholders of Health Partners, provided that such third party
assumes all of the obligations, terms and conditions and makes all such
representations and warranties as otherwise provided for Health Partners under
the Stock Purchase Agreement. This assignment shall not affect Health Partners'
obligations hereunder.
4. NO OTHER AMENDMENTS. The parties agree that the Stock Purchase
Agreement is only amended as provided herein, and all other provisions of the
Stock Purchase Agreement shall remain in full effect.
If you agree with the foregoing terms, please execute this letter below.
Sincerely,
Physician Corporation of America
By: /s/ Clifford W. Donnelly
_____________________________________
Clifford W. Donnelly,
Chief Financial Officer and
Senior Vice President
AGREEMENT AND CONSENT
Health Partners of Alabama, Inc. hereby agrees to amend the Stock
Purchase Agreement in accordance with the terms of the foregoing letter.
HEALTH PARTNERS OF ALABAMA, INC.
By: /s/ Gary Simmons
_____________________________________
Gary Simmons, Chief Financial Officer
2
<PAGE>
EXHIBIT 2.3
Physician Corporation of America
5835 Blue Lagoon Drive, 4th Floor
Miami, Florida 33126
August 30, 1996
Health Partners of Alabama, Inc.
Health Partners Southeast, Inc.
680 Beacon Parkway West, Suite 500
Birmingham, Alabama 35209
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
Jose Menendez, 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.
1
<PAGE>
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/ Clifford W. Donnelly
_____________________________________
Clifford W. Donnelly,
Senior Vice President and
Chief Financial Officer
2
<PAGE>
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/ Gary Simmons
_____________________________________
Gary Simmons,
Senior Vice President and
Chief Financial Officer
Health Partners Southeast, Inc.
By: /s/ Gary Simmons
_____________________________________
Gary Simmons,
Senior Vice President and
Chief Financial Officer
3
