Exhibit 10.17
AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
AND REORGANIZATION
THIS AMENDMENT TO AGREEMENT AND PLAN OF MERGER
AND REORGANIZATION (this “ Amendment ”), dated
as of December 31, 2008, is entered into by and among
UNIVERSAL AMERICAN CORP., a New York corporation, formerly known as
Universal American Financial Corp. (“ Parent ”),
MEMBERHEALTH, LLC, a Delaware limited liability company and wholly
owned subsidiary of Parent, formerly known as MH Acquisition II LLC
(the “ Company ”), which is the successor by
merger to MEMBERHEALTH, INC., an Ohio corporation (the “
Original Entity ”) and to MH ACQUISITION I CORP., a
Delaware corporation and wholly owned subsidiary of Parent (“
Merger Sub ”), MHRx LLC, a Delaware limited liability
company (“ MHRx ”), and Welsh, Carson,
Anderson & Stowe IX, L.P., a Delaware limited partnership
(“ WCAS IX ”), as the Shareholder Representative
hereunder.
RECITALS
WHEREAS, Parent, MHRx, its former
wholly-owned subsidiary the Original Entity, the Company, Merger
Sub, and WCAS IX are parties to that certain Agreement and Plan of
Merger and Reorganization, dated as of May 7, 2007 (the
“ Original Agreement ”), pursuant to which there
was effected a merger of Merger Sub with and into the Original
Entity, with the Original Entity continuing as the surviving
corporation thereof, and, immediately following the effectiveness
thereof, and as part of the same plan of merger and reorganization,
the merger of the Original Entity with and into the Company, with
the Company continuing as the surviving entity thereof;
WHEREAS, the Original Agreement was
amended by that certain Settlement Agreement and Amendment to
Merger Agreement dated as of March 5, 2008 (the Original
Agreement, as amended thereby, the “Merger
Agreement”);
WHEREAS, the Merger Agreement
provides that MHRx shall be entitled to receive payments of certain
Annual Earnout Amounts as additional merger consideration upon the
terms and conditions set forth therein; and
WHEREAS, the Merger Agreement
provides that forty-five percent (45%) of each such payment of an
Annual Earnout Amount shall be made in the form of Parent Common
Stock and the remaining fifty-five percent (55%) of each such
payment shall be made by wire transfer of immediately available
funds to an account or accounts designated by the Shareholder
Representative, subject to the terms and conditions set forth
therein;
WHEREAS, the Management Committee of
MHRx has unanimously determined that it is in the best interest of
MHRx and its members to relinquish its rights under the Merger
Agreement to the portion of the Annual Earnout Amount that is
payable in Parent Common Stock, without thereby increasing the
aggregate Annual Earnout Amount that is payable in cash;
WHEREAS, Parent has agreed to accept
such relinquishment and to enter into this Amendment to reflect the
revised agreement of the parties as to the payment of the Annual
Earnout Amount; and
WHEREAS, capitalized terms used
herein and not defined shall have the respective meanings ascribed
thereto in the Merger Agreement.
NOW, THEREFORE, in consideration of
the mutual covenants contained herein and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:
1.
Amendments
.
A.
Section 1.1 of the Merger
Agreement is hereby revised by the deletion of the definitions set
forth therein of “ Annual Earnout Amount ”,
“ Parent Shares ” and “ Stock Merger
Consideration ” in their entirety and the substitution
therefore of the following:
“ Annual Earnout Amount
” shall mean (A) with respect to the Annual Earnout
Periods ending December 31, 2008 and December 31, 2009,
an amount equal to fifty-five percent (55%) of the lesser of
(i) the amount by which Annual EBITDA for such period exceeds
the EBITDA Threshold for such period and (ii) the Annual Cap
and (B) with respect to the Annual Earnout Period ending
December 31, 2010, an amount equal to fifty-five percent (55%)
of the lesser of (i) the amount by which the sum of the Annual
EBITDA for such period and the TRICARE Amount exceeds the EBITDA
Threshold for such period and (ii) the Annual Cap. For
the avoidance of doubt, to the extent that any portion of the CMS
Reconciliation Payment Amount is paid to or by the Company, with
respect to the 2006 plan year, during the Annual Earnout Periods,
any such portion of the CMS Reconciliation Payment Amount or other
CMS settlement amounts shall be excluded from the calculation of
Annual EBITDA for such Annual Earnout Period.”
““ Parent Shares
” means the Initial Parent Shares, and any Parent Shares from
time to time issued pursuant to Section 2.12 and/or
Section 8.2 (it being understood that if any shares of
Parent Common Stock are transferred to Parent pursuant to
Section 2.12 and/or Section 8.2 , the
transfer of such shares to Parent shall be deemed to reduce the
number of Parent Shares actually and ultimately issued by Parent as
Merger Consideration hereunder).”
““ Stock Merger
Consideration ” means the Initial Stock Merger
Consideration, as from time to time adjusted pursuant to
Section 2.12 and/or Section
