-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SR8bdBY1G88KM3vKTOgALKfY3iAWTtLsYYVw89bDNXdN3dSXJ3i6TCR5IM/zxcuH Bn9HxBw/InF2QfXPXaCnTg== 0000909518-06-000959.txt : 20061025 0000909518-06-000959.hdr.sgml : 20061025 20061025082146 ACCESSION NUMBER: 0000909518-06-000959 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20061025 DATE AS OF CHANGE: 20061025 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSAL AMERICAN FINANCIAL CORP CENTRAL INDEX KEY: 0000709878 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 112580136 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-34486 FILM NUMBER: 061161543 BUSINESS ADDRESS: STREET 1: SIX INTERNATIONAL DRIVE STREET 2: SUITE 190 CITY: RYE BROOK STATE: NY ZIP: 10573-1068 BUSINESS PHONE: 9149345200X253 MAIL ADDRESS: STREET 1: SIX INTERNATIONAL DRIVE STREET 2: SUITE 190 CITY: RYE BROOK STATE: NY ZIP: 10573-1068 FORMER COMPANY: FORMER CONFORMED NAME: UNIVERSAL HOLDING CORP DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BARASCH RICHARD A CENTRAL INDEX KEY: 0001076341 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: UNIVERSAL AMERICAN FINANCIAL CORP STREET 2: SIX INTERNATIONAL DRIVE SUITE 190 CITY: RYE BROOK STATE: NY ZIP: 10573 BUSINESS PHONE: 9149348700 MAIL ADDRESS: STREET 1: C/O UNIVERSAL AMERICAN FINANCIAL CORP STREET 2: SIX INTERNATIONAL DRIVE SUITE 190 CITY: RYE BROOK STATE: NY ZIP: 10573 SC 13D/A 1 mm10-2406_rab13da.txt AMENDMENT NO.1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 This Amendment No. 1 to SCHEDULE 13D Under the Securities Exchange Act of 1934 UNIVERSAL AMERICAN FINANCIAL CORP. (Name of Issuer) COMMON STOCK (PAR VALUE $.01 PER SHARE) 913377107 (Title of class of securities) (CUSIP number) RICHARD A. BARASCH SIX INTERNATIONAL DRIVE, SUITE 190, RYE BROOK, NEW YORK 10573 TEL NO. (914) 934-5200 (Name, address and telephone number of person authorized to receive notices and communications) OCTOBER 24, 2006 (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of ss. ss. 240-13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [_]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss. 240.13d-7 for other parties to whom copies are to be sent. The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
- ------------------------------------------------------------------------------------------------ 1 NAME OF REPORTING PERSON: Richard A. Barasch S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: - ------------------------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A (a) [ ] MEMBER OF A GROUP: (b) [X] - ------------------------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------------------------ 4 SOURCE OF FUNDS: BK,PF,OO - ------------------------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT [ ] TO ITEM 2(d) OR 2(e): - ------------------------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF United States of America ORGANIZATION: - ------------------------------------------------------------------------------------------------ NUMBER OF 7 SOLE VOTING POWER: 2,760,043 SHARES --------------------------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER: OWNED BY --------------------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER: 2,760,043 REPORTING --------------------------------------------------------------------------- PERSON WITH 10 SHARED DISPOSITIVE POWER: - ------------------------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY 2,760,043 REPORTING PERSON: - ------------------------------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [ ] SHARES: - ------------------------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 4.6% - ------------------------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON: IN - ------------------------------------------------------------------------------------------------
2 AMENDMENT TO SCHEDULE 13D This Amendment to Schedule 13D is filed by the undersigned to amend the Statement on Schedule 13D, dated January 7, 1999 (the "Schedule 13D"), relating to common stock of Universal American Financial Corp. ITEM 1. SECURITY AND ISSUER The title and class of equity security to which this Statement relates is the common stock, par value $.01 per share (the "Common Stock"), of Universal American Financial Corp., a New York corporation (the "Company"). The address of the Company's principal executive offices is Six International Drive, Suite 190, Rye Brook, New York 10573. ITEM 2. IDENTITY AND BACKGROUND This Statement is filed by Richard A. Barasch ("Barasch"), a United States citizen, whose principal occupation is Chairman and Chief Executive Officer of the Company, and whose business address is at the Company's offices, Six International Drive, Suite 190, Rye Brook, New York 10573. Barasch is sometimes referred to herein as the "Reporting Person". During the last five years, the Reporting Person has not (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION With respect to the proposed transaction described in Item 4 of this Statement, the Reporting Person and the Sponsors referred to in Item 4 plan to finance the cash requirements of such transaction through (i) debt financing that is expected to be incurred in connection with the transaction; (ii) equity financing that is expected to be provided by investment funds managed by, or affiliated with, the Sponsors and (iii) equity in the form of a significant portion of the Common Stock held by the Reporting Person, a significant portion of the Common Stock held by Capital Z Financial Services Fund II, L.P., Capital Z Financial Services Private Fund II, L.P. and Capital Z Management, LLC (collectively, the "Cap Z Holders") and all of the Common Stock held by Perry Capital, LLC and/or its affiliates, that is expected to be reinvested in the transaction; in each case, as further described in Item 4, and in the Proposal Letter and the Debt Financing Letters (each as defined in Item 4). The information set forth in this Item is qualified by reference to the Proposal Letter and the Debt Financing Letters, which are incorporated herein by reference. ITEM 4. PURPOSE OF TRANSACTION Capital Z Partners, Ltd. (which is an affiliate of each of the Cap Z Holders), Lee Equity Partners, LLC, Welsh, Carson, Anderson & Stowe X, L.P. and 3 Perry Capital, LLC (collectively, the "Sponsors") and Barasch have submitted to the Company's board of directors a letter, dated October 24, 2006 (the "Proposal Letter"), setting forth a proposal for an acquisition of the Company for $18.15 per share in cash. A copy of the Proposal Letter is Exhibit 7.01 to this Statement. It is contemplated that the proposed transaction would be effected through a merger of the Company with a wholly-owned subsidiary of a new acquisition company that would be formed by Barasch and investment funds managed by, or affiliated with, the Sponsors (the "Acquisition Company"), as a result of which the Company would become wholly owned by the Acquisition Company. The Reporting Person anticipates that, in the proposed transaction, (i) the Reporting Person would contribute and roll-over into equity of the Acquisition Company a significant portion of the shares of Common Stock that is beneficially owned by him, and the Cap Z Holders would contribute and roll-over into equity of the Acquisition Company a significant portion of the Common Stock held by them, and Perry Capital, LLC and/or its affiliates would contribute and roll over into equity of the Acquisition Company all of the shares of Common Stock held by them, and (ii) all of the other shares of Common Stock outstanding at the effective time of the merger (including shares of Common Stock held by the Reporting Person and the Cap Z Holders that are not rolled-over into equity of the Acquisition Company) would be converted into the right to receive $18.15 per share in cash. The Sponsors and Barasch have received a "highly confident" letter from each of Goldman Sachs Credit Partners L.P. and Banc of America Securities LLC with respect to proposed debt financing for the proposed transaction (collectively, the "Debt Financing Letters"). Copies of the Debt Financing Letters are attached as Exhibit 7.02 and Exhibit 7.03, respectively, to this Statement. It is anticipated that the balance of the cash required to finance the proposed transaction would be provided as equity capital by investment funds managed by the Sponsors. The information set forth in this Item is qualified by reference to the Proposal Letter and the Debt Financing Letters, which are incorporated herein by reference. The foregoing should not be construed as an offer to stockholders to purchase shares of Common Stock. If definitive agreements providing for the proposed transaction are entered into with the Company, a proxy or other appropriate statement would be distributed to stockholders of the Company, and stockholders should read that statement and other relevant documents that may be filed with the SEC (if and when they become available) because they will contain important information relevant to the decision to approve the proposed transaction. Stockholders will be able to obtain these documents (if and when they become available) free of charge at the SEC's web site, www.sec.gov. No assurance can be given that a definitive agreement providing for any transaction will be entered into or that any transaction will be consummated. No binding obligation on the part of the Reporting Person will arise with respect to the proposal or any transaction unless and until definitive transaction agreements satisfactory to the parties, and recommended by a special committee of the Company's board of directors and approved by the Company's board of 4 directors, are executed and delivered, and then only to the extent set forth in such definitive transaction agreements. The proposal could result in one or more of the actions enumerated in paragraphs (a) through (j) of Item 4 of the form of Schedule 13D promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including (if the proposed transaction is consummated), a merger of the Company, the termination of the listing of the Common Stock on any stock exchange, the termination of the registration of the Common Stock under the Exchange Act, and changes in the composition of the Company's board of directors. Other than as set forth herein or in the Proposal Letter and the Debt Financing Letters, the Reporting Person currently has no plans or proposals which relate to or would result in any of the actions enumerated in paragraphs (a) through (j) of Item 4 of the form of Schedule 13D promulgated under the Exchange Act. However, the Reporting Person reserves the right to change its plans at any time, as it deems appropriate. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) The responses set forth on rows 11 through 13 of the cover pages of this Statement are incorporated herein by reference. The percentage set forth in row 13 is based on the number of shares of Common Stock outstanding as of August 3, 2006 as reported by the Company in its Quarterly Report on Form 10-Q filed with the SEC on August 9, 2006 (the "Form 10-Q"). The response set forth on row 11 includes (i) 1,068,629 issued and outstanding shares of Common Stock owned by Barasch, (ii) 918,734 shares of Common Stock that may be acquired by Barasch through the exercise of stock options, (iii) 24,376 shares of Common Stock which are held directly by Tara Acquisition LLC (a limited liability company in which Barasch is the managing member), (iv) 67,744 shares of Common Stock which are held by the Norman Barasch Trust #1 (a trust in which Barasch is the trustee and a beneficiary (along with other members of his family)), (v) 180,149 shares of Common Stock which are held by the Barasch Family Trust #1 (a trust in which Barasch is not the trustee, but is a beneficiary (along with other members of his family)) and (vi) 500,411 shares of Common Stock which are held directly by, or in trust for, members of Barasch's immediate family. Pursuant to Rule 13d-3 under the Exchange Act, Barasch (as a result of the shares of Common Stock held by, or in trust for, members of his immediate family as described in subclause (vi) of the preceding sentence) may be deemed to be a beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of all shares of Common Stock that are owned by his immediate family, and the cover page to this Statement reflects such beneficial ownership on that basis for purposes of this Statement. Barasch disclaims any beneficial ownership of such shares, and neither the filing of this Statement nor its contents shall be deemed to constitute an admission to the contrary. (b) The responses set forth (i) on rows 7 through 10 of the cover pages of this Statement and (ii) in Item 5(a) above are incorporated herein by reference. By virtue of the relationships and as a result of the matters described in the other Items of this Statement, the Reporting Person may be deemed to constitute a "group" (within the meaning of Rule 13d-5(b) under the Exchange 5 Act) with the Sponsors, the Cap Z Holders and certain of their respective affiliates. As a result, and on that basis, the Reporting Person may be deemed to beneficially own shares of Common Stock that may be beneficially owned by such persons, including (i) 20,301,569 shares of Common Stock as being beneficially owned by the Cap Z Holders, as reported by the Cap Z Holders to the Reporting Person, and (ii) 5,820,500 shares of Common Stock as being beneficially owned by Perry Capital, LLC and/or its affiliates, as reported by Perry Capital, LLC to the Reporting Person. On the basis of including such shares, and based on the information reported in the Company's proxy statement for its 2006 annual meeting of stockholders filed with the SEC on May 2, 2006 and the Form 10-Q, the Reporting Person may be deemed to be a beneficial owner of, in the aggregate, 49% of the outstanding shares of Common Stock. Except as referred to in this Statement, the Reporting Person currently does not have actual knowledge of beneficial ownership of Common Stock by any of the signatories to the Proposal Letter. The Reporting Person disclaims beneficial ownership of shares of Common Stock that may be beneficially owned by the Sponsors, the Cap Z Holders and their respective affiliates, and neither the filing of this Statement nor its contents shall be deemed to constitute an admission to the contrary. (c)-(e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE ISSUER The responses to Items 2, 3, 4 and 5, and the Proposal Letter and the Debt Financing Letters, are incorporated herein by reference. In addition, the Shareholders' Agreement and the Registration Rights Agreement, dated as of July 30, 1999, previously filed with and described in the Schedule 13D filed by the Cap Z Holders, dated August 10, 1999, as amended, are incorporated herein by reference. The Reporting Person notes that no agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting, or disposing of any of the stock of the Company directly or indirectly beneficially owned by the Reporting Person, the Cap Z Holders or any of the other Sponsors or their affiliates or associates shall exist unless and until such agreement, arrangement or understanding, or the proposed transaction described herein, is expressly approved by the board of directors of the Company. 6 ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit No. Description - ----------- ----------- 7.1 Letter to the Board of Directors of Universal American Financial Corp., dated October 24, 2006 7.2 Debt Financing "Highly Confident" Letter, dated October 23, 2006, from Goldman Sachs Credit Partners L.P. 7.3 Debt Financing "Highly Confident" Letter, dated October 23, 2006, from Banc of America Securities LLC 7 Signatures After reasonable inquiry and to the best of the knowledge and belief of the undersigned, the undersigned hereby certifies that the information set forth in this statement is true, complete and correct. Dated: October 25, 2006 RICHARD A. BARASCH /s/ Richard A. Barasch -------------------------------------- Name: Richard A. Barasch 8 EX-99 2 mm10-2406_barasch13da71.txt BARASCH 7.1 EXHIBIT 7.1 ----------- October 24, 2006 Board of Directors of Universal American Financial Corp. Six International Drive, Suite 190 Rye Brook, NY 10573-1068 Ladies and Gentlemen: Richard A. Barasch and investment funds managed by, or affiliated with, Capital Z Partners, Ltd., Lee Equity Partners, LLC, Welsh, Carson, Anderson & Stowe X, L.P. and Perry Capital, LLC (the "Sponsors"), on behalf of an entity to be formed, are pleased to propose to acquire by merger, for a purchase price of $18.15 in cash per share, all of the outstanding shares of common stock of Universal American Financial Corp., other than certain shares and options held by Richard A. Barasch and funds managed by, or affiliated with, Capital Z Partners, Ltd. and Perry Capital, LLC that are expected to be rolled over into equity in the acquiring entity in connection with the proposed transaction. It is also expected that other members of the Company's management will be offered the opportunity to roll over a portion of their shares and options in the proposed transaction. The proposed purchase price represents a 12.2% premium over the closing price of the Company's shares on October 24, 2006. We plan to finance the cash requirements of the transaction through a combination of equity financing from investment funds managed by, or affiliated with, the Sponsors and debt financing that we anticipate will be arranged by Goldman Sachs Credit Partners L.P. and Banc of America Securities LLC. Enclosed are copies of "highly-confident" letters that we have received from Goldman Sachs Credit Partners L.P. and Banc of America Securities LLC with respect to the proposed debt financing. We would welcome the opportunity to discuss our proposal with the Special Committee of the Board of Directors and its advisors as soon as possible. We are ready to move quickly to negotiate and finalize definitive transaction documents, especially given our familiarity with the Company. We and our advisors look forward to working expeditiously with the Special Committee and its advisors to complete a mutually acceptable transaction. Of course, no binding obligation on the part of any of the undersigned shall arise with respect to this proposal or any transaction unless and until (and then only to the extent that) definitive transaction agreements satisfactory to us, and recommended by the Special Committee and approved by the Board of Directors, are executed and delivered. We look forward to hearing from you in the near future regarding our proposal. Very truly yours, /s/ Richard A Barasch -------------------------------------------- Richard A. Barasch Capital Z Partners, Ltd. By: /s/ Robert A. Spass ---------------------------------------- Name: Robert A. Spass Title: Chairman Lee Equity Partners, LLC By: /s/ Mark Gormley ---------------------------------------- Name: Mark Gormley Title: Partner Welsh, Carson, Anderson & Stowe X, L.P. By: WCAS X Associates LLC, its General Partner By: /s/ Sean M. Traynor ---------------------------------------- Name: Sean M. Traynor Title: General Partner Perry Capital, LLC By: /s/ Richard Perry ---------------------------------------- Name: Richard Perry Title: President EX-99 3 mm10-2406_barasch13da72.txt BARASCH 7.2 EXHIBIT 7.2 ----------- GOLDMAN SACHS CREDIT PARTNERS L.P. 85 BROAD STREET NEW YORK, NEW YORK 10004 PERSONAL AND CONFIDENTIAL - ------------------------- October 23, 2006 Mr. Richard A. Barasch Mr. Mark K. Gormley Chief Executive Officer Managing Director Universal American Financial Corp. Lee Equity Partners, LLC 6 International Drive 767 Fifth Avenue Suite 190 New York, NY 10153 Rye Brook, NY 10573 Mr. Robert A. Spass Mr. George Brokaw Partner Managing Director Capital Z Partners Perry Capital LLC 230 Park Ave. South, 11th Floor, 767 Fifth Avenue New York, NY 10003 New York, NY 10153 Mr. Sean M. Traynor General Partner Welsh, Carson, Anderson & Stowe 320 Park Avenue, Suite 2500 New York, NY 10022 Gentlemen: You have advised Goldman Sachs Credit Partners L.P. ("GSCP") that a consortium of investors including Richard A. Barasch, Capital Z Partners, Welsh, Carson, Anderson & Stowe, Lee Equity Partners, LLC and Perry Capital LLC (together, the "COMPANIES") is submitting a proposal to acquire (the "ACQUISITION") all or substantially all of the outstanding capital stock of Universal American Financial Corp. (the "ACQUIRED BUSINESS"). You have advised us that the Acquisition will be financed from a combination of (i) equity contributed by investment funds managed by the Companies in cash (the "EQUITY CONTRIBUTION"), (ii) indebtedness of approximately $325.0 million to be incurred under a senior secured credit facility (the "CREDIT FACILITY") by a newly created corporation ("NEWCO") to be formed by the Companies for the purpose of making the Acquisition and (iii) equity in the form of common stock held by certain members of management of the Acquired Business and certain funds managed by Capital Z Partners and Perry Capital LLC that is expected to be reinvested pursuant to the Acquisition. You have consulted with GSCP concerning the structuring and syndication of the Credit Facility. Based on the information that you have provided us to date, our analysis of the current market for loans and securities issued by entities engaged in the health care industry and subject to the immediately succeeding paragraph and such other matters as we consider relevant, we are pleased to inform you that, as of the date hereof, we are highly confident that the structuring and syndication of the Credit Facility can be accomplished by GSCP as part of the financing for the Messrs. Barasch, Gormley, Spass, Brokaw and Traynor October 23, 2006 Page 2 Acquisition as described above. The structure, covenants and terms of the Credit Facility will be determined by GSCP in consultation with the Companies based on market conditions at the time of the syndication of the Credit Facility and on the structure and documentation of the Acquisition. Our ability to consummate the structuring and syndication of the Credit Facility is subject to (i) GSCP's satisfaction (in form and substance) with the terms and conditions of the Credit Facility (including the structuring and syndication thereof), the Equity Contribution (including the aggregate amount thereof), the Acquisition (including the purchase price) and the capital structure and ownership structure of Newco and the Acquired Business, and all documentation relating to each of the foregoing (and the execution and delivery thereof); (ii) satisfactory market conditions for new issuances of bank loans in the loan syndication market; (iii) the absence of any material adverse change in the business, financial condition, results of operations, assets, liabilities, management or prospects of the Acquired Business; (iv) the receipt of all necessary governmental, regulatory and third party approvals and consents in connection with the Acquisition; (v) our continuing financial, business, legal, environmental and other due diligence investigation with respect to the Companies and the Acquired Business not disclosing any facts that would alter our current view with respect to either the Companies or the Acquired Business; (vi) the availability of audited and unaudited historical financial statements of the Acquired Business (to the extent not publicly available as of the date hereof) and (vii) our having reasonable time to market the Credit Facility with the reasonable assistance of management of the Companies and the Acquired Business. In connection with this letter, we have relied without independent verification upon the accuracy and completeness of all of the financial, accounting, tax and other information reviewed by us for purposes of this letter. Obtaining financing for the Acquisition is inherently subject to uncertainties and contingencies beyond our control; accordingly, this letter is not a commitment to place, purchase or provide any loans under the Credit Facility, and there can be no assurance that the structuring and syndication of the Credit Facility will in fact be accomplished. This letter and any written or oral advice provided by us are exclusively for your information and assistance in evaluating the financing of the Acquisition and may not be used, circulated, quoted or otherwise referred to with any other person or for any other purpose, except in accordance with the prior written consent of GSCP (such consent not to be unreasonably withheld). Notwithstanding the foregoing, this letter may be disclosed (i) to the officers, directors, equity holders, employees, attorneys and other advisors, agents and representatives of each of the Companies and the Acquired Business on a confidential and need to know basis, (ii) to the extent required by applicable law in the good faith opinion of counsel (in which case, unless prohibited by applicable law, you agree to inform us thereof as soon as reasonably practicable) and (iii) to the extent the board of directors, or a special committee thereof, of the Acquired Business determines that it is advisable to be filed with, included in or referred to, in whole or in part, in any Form 8-K or other document filed with the Securities and Exchange Commission (in which case, to the extent you are aware of such filing by the Acquired Business, you agree to inform us thereof as soon as reasonably practicable). Messrs. Barasch, Gormley, Spass, Brokaw and Traynor October 23, 2006 Page 3 In addition, please note that none of GSCP or any of its affiliates (including Goldman, Sachs & Co.) provides accounting, tax or legal advice. Very truly yours, Goldman Sachs Credit Partners L.P. By: /s/ John Waldron ------------------------------- Authorized Signatory EX-99 4 mm10-2406_barasch13da73.txt BARASCH 7.3 EXHIBIT 7.3 ----------- [Banc of America Securities LOGO] October 23, 2006 Mr. Richard A. Barasch Mr. Mark K. Gormley Chief Executive Officer Managing Director Universal American Financial Corp. Lee Equity Partners, LLC 6 International Drive 767 Fifth Avenue Suite 190 New York, NY 10153 Rye Brook, NY 10573 Mr. Robert A. Spass Mr. George Brokaw Partner Managing Director Capital Z Partners Perry Capital LLC 230 Park Ave. South, 11th Floor, 767 Fifth Avenue New York, NY 10003 New York, NY 10153 Mr. Sean M. Traynor General Partner Welsh, Carson, Anderson & Stowe 320 Park Avenue, Suite 2500 New York, NY 10022 FINANCEABILITY LETTER Gentlemen: You have asked Banc of America Securities LLC ("BAS") to evaluate the feasibility of arranging financing in an amount necessary to meet all costs and expenses associated with a transaction (the "Transaction") to be proposed, pursuant to which a consortium of investors including Richard A. Barasch, Capital Z Partners, Welsh, Carson, Anderson & Stowe, Lee Equity Partners, LLC and Perry Capital (together, the "Equity Investors") would acquire all or substantially all of the outstanding capital stock of Universal American Financial Corp. (the "Company"). You have advised us that the Transaction would be financed from a combination of (i) equity contributed in cash by investment funds managed by the Equity Investors, (ii) indebtedness of approximately $325 million to be incurred under a senior secured credit facility by a newly created corporation to be formed by the Equity Investors for the purpose of consummating the Transaction and (iii) equity in the form of common stock held by certain members of management of the Company and certain funds managed by Capital Z Partners and Perry Capital LLC that is expected to be reinvested pursuant to the Transaction. Pursuant to your request, we have reviewed and analyzed certain assumptions and information provided by you with respect to the Transaction. We have taken into account our assessment of current general economic, market and financial conditions, as well as our experience in similar transactions and in debt and equity capital raising activities in general. We have not attempted to independently verify any assumptions or information provided by you and take no responsibility for the accuracy of any such information. Having conducted the review cited above and taking into account the assumptions and qualifications cited herein, including, without limitation, the common equity investments and reinvestments in the Company outlined above, we are Messrs. Barasch, Gormley, Spass, Brokaw and Traynor October 23, 2006 Page 2 highly confident that the Transaction, including costs and expenses related thereto, is financeable under a financing plan similar to the financing plan outlined above. In determining our financing plan, we have assumed no material adverse change in general economic conditions and the absence of adverse capital market and syndication conditions from those existing on the date hereof, and have further assumed there not having occurred any change or development that either individually or in the aggregate could reasonably be expected to have a material adverse effect on the business, operations, assets, properties, liabilities (actual or contingent), results of operations, financial condition, or prospects of the Company and its subsidiaries, taken as a whole, since December 31, 2005. We have also assumed that no new or additional information shall have been received or discovered by BAS after the date hereof which is inconsistent, in any material respect, with any assumptions or information provided by you. Additionally, we have assumed our satisfaction with the equity investments and reinvestments outlined above and the capital structure of the Company and its parent subsequent to the consummation of the Transaction. Specifically, we have assumed that the indebtedness owing in connection with the Company's existing trust preferred securities will be contractually subordinated (and not otherwise structurally superior) in right of payment to the senior secured credit facility described above. Finally, we have assumed the engagement of BAS and/or its affiliates by the Company as sole book-running arranger of the senior secured financings described below. This letter is not intended to be and should not be construed as (or relied upon as) an offer or commitment by BAS or any of its affiliates with respect to the extension, underwriting, arrangement, sale or placement of any of the foregoing components of our financing plan and creates no obligations or liability on our part or your part, or on the part of any of our respective affiliates, in connection therewith. Obtaining financing for the Transaction is inherently subject to uncertainties and contingencies beyond our control; accordingly, there can be no assurance that any of the foregoing components of our financing plan will in fact be accomplished. Except as otherwise required by law or unless BAS has otherwise consented in writing, you are not authorized to show or circulate this letter to any other person or entity (other than your advisors and to the Company, its board of directors and its advisors with a need to know). Nothing herein, express or implied, is intended or shall confer upon any third party any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this letter. We advise you that BAS or its affiliates may be providing financing or other services to parties whose interests may conflict with those of the Equity Investors. We further advise you that, in connection with the Transaction, BAS and its affiliates are and will be acting solely as principals and not as the financial advisor, agent or fiduciary for the Equity Investors or the Company. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Messrs. Barasch, Gormley, Spass, Brokaw and Traynor October 23, 2006 Page 3 Very truly yours, BANC OF AMERICA SECURITIES LLC By: /s/ Peter C. Hall ---------------------------------- Name: Peter C. Hall Title: Managing Director -----END PRIVACY-ENHANCED MESSAGE-----