EXHIBIT 10.12(c)
SECOND EXTENSION OF NONWAIVER AND STANDSTILL AGREEMENT
Dated as of April 13, 2000
HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Executive Vice President
& Chief Financial Officer
Ladies and Gentlemen:
Reference is made to: (i) that certain Amended and Restated
Credit Agreement dated as of May 1, 1998 (as heretofore amended, modified,
restated or supplemented from time to time, the "Credit Agreement"), among
HealthPlan Services Corporation, a Delaware corporation (the "Borrower"), the
lenders referred to therein (the "Lenders") and First Union National Bank, as
administrative agent (the "Administrative Agent"); and (ii) that certain
Nonwaiver and Standstill Agreement dated as of February 11, 2000 among the
Borrower, the Lenders and the Administrative Agent, as modified by that certain
Extension of Nonwaiver and Standstill Agreement dated as of March 17, 2000 (the
"Standstill Agreement"). The capitalized terms used herein without definition
shall have the meanings set forth in the Credit Agreement or the Standstill
Agreement, as applicable.
The Lenders and the Administrative Agent hereby agree (i) that
the dates referred to in clauses (i) and (ii) of Section 2 of the Standstill
Agreement are in each case hereby extended to May 31, 2000 and (ii) subject to
the execution of definitive documentation satisfactory in form and substance to
the Administrative Agent and Lenders on or before May 31, 2000, and the
satisfaction of all conditions to effectiveness as may be set forth therein, to
amend the Credit Agreement and the other Loan Documents in accordance with the
Summary of Definitive Terms annexed hereto as Exhibit A.
Except as expressly provided in this Second Extension of
Nonwaiver and Standstill Agreement (this "Extension"), the Standstill Agreement,
the Credit Agreement and each other Loan Document shall continue to be, and
shall remain, in full force and effect. This Extension shall not be deemed or
otherwise construed (a) to be a waiver of, or consent to or a modification or
amendment of, any other term or condition of the Standstill Agreement or of the
Credit Agreement or any other Loan Document; (b) to prejudice any other right or
rights that the Administrative Agent or the Lenders, or any of them, may now
have or may have in the future under or in connection with the Standstill
Agreement, the Credit Agreement or the other Loan Documents; (c) except as
specifically provided in clause (ii) of the preceding paragraph, to be a
commitment or any other undertaking or expression of any willingness to engage
in any further discussion with the Borrower or any other person, firm or
corporation with respect to any waiver,
amendment, modification or any other change to the Standstill Agreement, the
Credit Agreement or the Loan Documents or any rights or remedies arising in
favor of the Lenders or the Administrative Agent, or any of them, under or with
respect to any such documents or (d) to be a waiver of, or consent to or a
modification or amendment of, any other term or condition of any other agreement
by and among the Borrower, on the one hand, and the Administrative Agent or any
other Lender, on the other hand.
By its execution hereof, the Borrower hereby certifies on
behalf of itself and the other Credit Parties that (i) each of the
representations and warranties set forth in the Standstill Agreement, the Credit
Agreement and the other Loan Documents is true and correct as of the date hereof
as if fully set forth herein and that, as of the date hereof, no Default or
Event of Default (other than Events of Default occurring by reason of failure to
comply with the Breached Covenants calculated as of the Waiver Calculation
Period) has occurred and is continuing and (ii) all financial projections
concerning Borrower and its subsidiaries that have been or are hereafter made
available to the Administrative Agent or the other Lenders by Borrower or any of
its representatives in connection with the transactions contemplated hereby (the
"Projections") have been (or will be, in the case of Projections made available
after the date hereof) prepared in good faith based upon reasonable assumptions.
By its execution hereof, the Borrower hereby agrees on behalf
of itself and the other Credit Parties, subject to the execution of definitive
documentation in form and substance satisfactory to the Borrower, to amend the
Credit Agreement and the other Loan Documents in accordance with the Summary of
Definitive Terms annexed hereto as Exhibit A.
As an inducement to the Lenders to execute and deliver this
Extension, the Borrower hereby agrees to pay to the Administrative Agent for the
ratable benefit of the Lenders, upon the effectiveness of this Extension, a
nonrefundable fee in the amount of 0.25% of the maximum amount of the Amended
Bank Facilities (as defined in Exhibit A hereto), payable in immediately
available funds.
This Extension may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. This Extension shall
become effective as of the date hereof upon the execution of counterparts hereof
by the Borrower and the Required Lenders and receipt by the Administrative Agent
of written or telephonic notification of such execution and authorization of
delivery thereof.
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THIS EXTENSION AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this
Extension to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
FIRST UNION NATIONAL BANK,
individually and as Administrative Agent
By: /s/ XXXXXXX XXXX
----------------------------------
Name: XXXXXXX XXXX
Title: DIRECTOR
CREDIT LYONNAIS, NEW YORK BRANCH,
as a Lender
By: /s/ XXXX-XXXXXXX VAN ESSCHE
----------------------------------
Name: XXXX-XXXXXXX VAN ESSCHE
Title: VICE PRESIDENT
SUNTRUST BANK, TAMPA BAY, as a Lender
By: /s/ XXXXXX XXXXXXXXXXX
----------------------------------
Name: XXXXXX XXXXXXXXXXX
Title: DIRECTOR
FLEET NATIONAL BANK, as a Lender
By: /s/ XXXXXX XXXXXX
----------------------------------
Name: XXXXXX XXXXXX
Title: SR. VICE PRESIDENT
SOUTHTRUST BANK, NATIONAL
ASSOCIATION, as a Lender
By: /s/ XXXX XXXXX
----------------------------------
Name: XXXX XXXXX
Title: VICE PRESIDENT
S-1
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEEBANK BA "RABOBANK
NEDERLAND", NEW YORK BRANCH, as a
Lender
By: /s/ XXX XXXXX
----------------------------------
Name: XXX XXXXX
Title: SENIOR CREDIT OFFICER
BANK OF AMERICA, N.A., as a Lender
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Name: XXXXXX X. XXXXXXX
Title: SENIOR VICE PRESIDENT
AMSOUTH BANK, as a Lender
By: /s/ XXXX XXX XXXXXX
----------------------------------
Name: XXXX XXX XXXXXX
Title: ASSISTANT VICE PRESIDENT
HIBERNIA NATIONAL BANK, as a Lender
By: /s/ XXXXXXXXXXX XXXXX
----------------------------------
Name: XXXXXXXXXXX XXXXX
Title: VICE PRESIDENT
THE FIFTH THIRD BANK OF COLUMBUS,
as a Lender
By: /s/ XXXX XXXXXX
----------------------------------
Name: XXXX XXXXXX
Title: VICE PRESIDENT
S-2
HEALTHPLAN SERVICES CORPORATION, as Borrower
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------
Name: XXXXXXX X. XXXXXX
Title: EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
S-3
EXHIBIT A
TO SECOND EXTENSION OF NONWAIVER AND STANDSTILL AGREEMENT
HEALTHPLAN SERVICES CORPORATION
SUMMARY OF DEFINITIVE TERMS
AMENDED BANK FACILITIES
The following summarizes certain significant terms of an
amendment (the "Amended Bank Facilities") to the existing senior bank credit
facilities (the "Existing Bank Facilities") outstanding under that certain
Amended and Restated Credit Agreement dated as of May 1, 1998 by and among
HealthPlan Services Corporation, the lenders referred to therein and First Union
National Bank, as Administrative Agent, as amended. This Summary of Definitive
Terms is intended merely as an outline of certain of the material terms of the
proposed Amended Bank Facilities. It does not include descriptions of all of the
other terms, conditions and other provisions ordinarily contained in the
definitive documentation for facilities of this type (and which will be required
for the Amended Bank Facilities) and it is not intended to limit the scope of
discussion and negotiation of such terms, conditions or provisions.
I. THE BANK FACILITIES
Borrower: HealthPlan Services Corporation, a Delaware
corporation ("Borrower").
Lenders: First Union National Bank ("First Union") and
the lenders party to the Existing Credit
Facilities the "Lenders").
Administrative Agent for the First Union (in such capacity, the
Lenders: "Administrative Agent").
Closing Date: The date on or before May 31, 2000 on which the
conditions to the effectiveness of the Amended
Bank Facilities are satisfied.
Type and Amount: The Amended Bank Facilities shall consist of a
Term Loan Facility and a Revolving Credit
Facility.
Term Loan Facility. $90 million delayed-draw
term loan facility with a final maturity date
of August 31, 2001 (subject to reduction based
on the aggregate face amount of letters of
credit outstanding on the Closing Date as set
forth below). Up to $73.7 million of loans
outstanding under the Existing Bank Facility as
of the Closing Date, shall be deemed to be term
loans outstanding on the Closing Date. The face
amount of all letters of credit outstanding
under the Existing Bank Facilities as of the
Closing Date and any replacements,
renewals or extensions thereof will be reserved
in full against availability under the Term
Loan Facility. Except for such replacements,
renewals or extensions, no new letters of
credit will be issued under the Term Loan
Facilities. The Term Loan Facility shall be
permanently reduced by the amount of any
reduction in the face amount of any letter of
credit and by the face amount of any letter of
credit not renewed upon the expiration thereof.
Drawings under the letters of credit shall be
reimbursed to the issuing lender through a draw
of a term loan under the Term Loan Facility. In
the event the aggregate face amount of all
letters of credit outstanding on the Closing
Date is less than [$16.3] million as a result
of a permanent reduction in the face amount
thereof or the expiration thereof, the $90
million Term Loan Facility shall be decreased
dollar for dollar.
Monthly amortization of the Term Loan Facility
will be required in an amount equal to $250,000
on May 31, 2000, June 30, 2000 and July 31,
2000, respectively, and $500,000 on the last
day of each calendar month thereafter. Two
additional amortization payments (the
"Additional Amortization Payments") will be
required on January 31, 2001 and July 31, 2001
in an amount equal to $15 million on each such
date.
Revolving Credit Facility. Up to $25 million
(the "Revolving Commitment") revolving credit
facility with a final maturity date of August
31, 2001 under which revolving loans may be
made.
Borrowing availability under the Revolving
Credit Facility will be limited to 90% of
Borrower's eligible accounts receivable less
reserves (the "Borrowing Base"), but not to
exceed the Revolving Commitment. The definitive
documentation evidencing the Amended Bank
Facilities (the "Definitive Financing
Documents") will contain customary and
appropriate Borrowing Base provisions.
Use of Proceeds: The Revolving Credit Facility will be available
to pay any costs associated with the Amended
Bank Facilities on the Closing Date and to
provide for the ongoing working capital
requirements and general corporate purposes of
Borrower and its subsidiaries.
Guarantors: All active subsidiaries of Borrower.
Security: All extensions of credit to Borrower and all
guaranties of subsidiaries of Borrower will be
secured by a first priority lien on all
existing and after-acquired personal property
of Borrower and the subsidiary guarantors,
including a pledge of 100% of the stock of all
subsidiaries of Borrower.
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The Amended Bank Facilities shall also be
secured by first priority liens on all existing
and after-acquired real property fee and
leasehold interests of Borrower and the
subsidiary guarantors, subject to exceptions to
be agreed upon.
To effect such liens securing the Amended Bank
Facilities, Borrower and the subsidiary
guarantors shall execute and deliver to the
Administrative Agent all security agreements,
financing statements, deeds of trust, mortgages
and other documents and instruments as are
necessary to grant a first priority perfected
security interest in and lien upon all such
property of Borrower and the subsidiary
guarantors, subject to customary permitted
liens to be agreed upon.
Negative pledge on all assets of Borrower and
its subsidiaries, subject to exceptions to be
agreed upon.
Interest Rates: All amounts outstanding under the Amended Bank
Facilities shall bear interest, at Borrower's
option, at the Base Rate plus the Applicable
Margin.
The Applicable Margin shall be determined based
on Borrower's consolidated leverage ratio for
the trailing four quarters most recently ended
in accordance with the grid attached hereto as
Schedule I.
As used herein, the terms "Base Rate" shall
have the meaning customary and appropriate for
financings of this type. After the occurrence
and during the continuation of an event of
default, interest shall accrue at a rate equal
to the rate on loans bearing interest at the
rate determined by reference to the Base Rate
plus an additional two percentage points
(2.00%) per annum and shall be payable on
demand.
Interest Payments: Monthly and upon prepayment, in each case
payable in arrears and computed on the basis of
a 360-day year.
Letter of Credit Fee: The letter of credit fee shall be 2.50%, which
shall be shared by all Lenders, and an
additional 0.25% per annum, which shall be
retained by the Lender issuing the letter of
credit, in each case based upon the applicable
percentage multiplied by the amount available
from time to time for drawing under such letter
of credit.
Facility Fee: Facility fee equal to 0.75% of the maximum
amount of the Amended Bank Facilities payable
on the Closing Date to Administrative Agent for
the ratable benefit of the Lenders.
Commitment Fees: Commitment fees equal to 0.25% per annum times
the daily
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average unused portion of the Revolving Credit
Facility shall accrue from the Closing Date and
shall be computed on the basis of a 360-day
year and payable quarterly in arrears and upon
the maturity or termination of the Revolving
Credit Facility.
Administrative Agent Fees: Agency fees equal to $100,000 payable to the
Administrative Agent, for its own account, on
the Closing Date and a monthly monitoring fee
equal to $8,000 payable, for its own account,
in advance on the first business day of each
calendar month.
Voluntary Prepayments and The Amended Bank Facilities may be prepaid in
Commitment Reductions: wholeor in part without premium or penalty and
the Lenders' commitments relative thereto
reduced or terminated upon such notice and in
such amounts as may be agreed upon. Voluntary
prepayments of the Term Loan Facility shall be
applied to the scheduled installments thereof
in a manner to be agreed upon.
Mandatory Prepayments and Borrower shall prepay the term and revolving
Commitment Reductions: loans and/or the commitments under the
Revolving Credit Facility shall be reduced
(subject to certain basket amounts to be agreed
upon) in amounts equal to:
Asset Sale Proceeds: 75% of the net after-tax
cash proceeds of the permitted sale or other
disposition of any property or assets of
Borrower or any of its subsidiaries, other than
certain exceptions to be negotiated, in each
case payable no later than the first business
day following the date of receipt;
Insurance/Condemnation Proceeds: the net cash
proceeds received under any casualty insurance
maintained by Borrower or any of its
subsidiaries or as a result of the taking of
any assets of Borrower or any of its
subsidiaries pursuant to the power of eminent
domain or condemnation, in each case payable no
later than the first business day following the
date of receipt, and subject to certain rights
of repair, restoration and replacement in
similar property to be determined;
Proceeds of Equity Offerings: 75% of the net
cash proceeds received from the issuance of
equity securities of Borrower or any of its
subsidiaries, in each case payable no later
than the first business day following the date
of receipt;
[Proceeds of Pension Plan Reversions: all
proceeds received from any pension plan
reversion, in each case payable upon receipt;
and]
Excess Cash Flow: 75% of excess cash flow (to
be defined and, in any event to include,
without limitation, cash flow from
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operations and proceeds of assets sales
retained by the Borrower and not reinvested
within the time periods and pursuant to
reinvestment provisions to be agreed in the
Definitive Financing Documents) for the fiscal
year ending December 31, 2000 and for each
successive two fiscal quarter period thereafter
payable within 90 days after the end of the
applicable fiscal year or two fiscal quarter
period, as applicable.
All such prepayment amounts shall be applied
first to the prepayment of the Term Loan
Facility and thereafter to the prepayment of
the Revolving Credit Facility and the permanent
reduction of the commitments thereunder. All
such mandatory prepayments of the Term Loan
Facility shall be applied first to the
outstanding term loans and then to
cash-collateralize the outstanding letters of
credit. All mandatory prepayments applied to
outstanding term loans shall be applied as
follows: first, to the extent not previously
paid, up to $500,000 to the scheduled
installments of the Term Loan Facility due May
31, 2000, June 30, 2000 and July 31, 2000 and
$1.25 million to the scheduled installments of
the Term Loan Facility due August 31, 2000,
September 30, 2000 and October 31, 2000, in
each case in forward order or maturity, second,
to the Additional Amortization Installments in
forward order of maturity, and third pro rata
to all remaining scheduled installments of the
Term Loan Facility (other than the final such
installment).
Representations and Warranties: Customary and appropriate, including without
limitation due organization and authorization,
enforceability, financial condition, no
material adverse changes, title to properties,
liens, litigation, payment of taxes, no
material adverse agreements, compliance with
laws, employee benefit liabilities,
environmental liabilities, perfection and
priority of liens securing the Amended Bank
Facilities, and full disclosure.
Covenants: Customary and appropriate affirmative and
negative covenants, including but not limited
to limitations on other indebtedness, liens,
investments, guarantees, restricted junior
payments (dividends, redemptions and payments
on subordinated debt), mergers and
acquisitions, sales of assets, leases,
transactions with affiliates, conduct of
business and other provisions customary and
appropriate for financings of this type,
including exceptions and baskets to be mutually
agreed upon. Financial performance covenants
will include but not be limited to, a minimum
fixed charge coverage test, a minimum EBITDA
test, a minimum revenue test and a maximum
capital expenditure limit.
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Minimum EBITDA and minimum revenue covenant
levels for the Year 2000 will be set at amounts
equal to 90% of the amounts set forth in the
Borrower's forecast delivered to the Lenders
and dated April 7, 2000, as adjusted for
permitted asset sales and agreed upon
restructuring charges and reserve adjustments.
Minimum EBITDA and minimum revenue will be
tested as of the end of each month for the
three month period then ending and shall be
reported no later than 30 days after the end of
each such month. Minimum EBITDA and minimum
revenue levels for the Year 2001 shall not be
less than the levels required for the three
month period ending December 31, 2000.
Customary and appropriate financial reporting
requirements to be agreed upon in the
Definitive Financing Documents including
without limitation, delivery of Borrowing Base
certificates on a weekly basis and at such
other times as the Administrative Agent may
reasonably request, monthly reports of rolling
13-week cash flow of Borrower and its
Subsidiaries, monthly certificate confirming
compliance with covenants and other information
reasonably requested by the Administrative
Agent. All annual financial statements shall be
prepared on a consolidated and consolidating
basis and in accordance with U.S. GAAP.
Cash Management Cash management systems for Borrower and its
Subsidiaries acceptable to Administrative
Agent. Administrative Agent will have full cash
dominion [by means of lock boxes and blocked
account agreements] with daily cash sweeps of
all amounts in excess of $[4] million applied
to prepay the Revolving Credit Facility.
Events of Default: Customary and appropriate (subject to customary
and appropriate grace periods), including
without limitation failure to make payments
when due, defaults under other agreements or
instruments of indebtedness, noncompliance with
covenants, breaches of representations and
warranties, bankruptcy, judgments in excess of
specified amounts, invalidity of guaranties,
impairment of security interests in collateral,
"changes of control" (to be defined in a
mutually agreed upon manner) and revocation,
cancellation or termination of any license
(subject to materiality standard to be agreed).
I. CONDITIONS TO LOANS
Certain Conditions Customary and appropriate including without
Precedent to limitation, the
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Effectiveness of the following:
Amended Bank
Facilities:
1. Satisfactory Documentation. The Definitive Financing Documents
shall be prepared by counsel to First Union and shall be in
form and substance satisfactory to the Administrative Agent
and the Lenders.
2. Corporate Structure, Management, etc. The corporate, capital and
ownership structure of Borrower and its subsidiaries shall be
satisfactory to the Administrative Agent and the Lenders in
all respects.
3. Discharge of Swingline Facility. The existing swingline facility
provided by First Union shall have been repaid in full, all
commitments relating thereto shall have been terminated, and
all liens or security interests related thereto shall have
been terminated or released, in each case on terms
satisfactory to the Administrative Agent and the Lenders, and
no other existing indebtedness of Borrower and its
subsidiaries shall remain outstanding.
4. Certain Approvals and Agreements. All governmental and third
party approvals necessary or advisable in connection with the
financings contemplated hereby shall have been obtained.
5. Security. The Administrative Agent, for the benefit of the
Lenders, shall have been granted on the Closing Date a
perfected security interest in all assets to the extent
described above under the heading "Security".
6. Environmental Matters. The Administrative Agent and the Lenders
shall have received reports and other information, in form,
scope and substance satisfactory to the Administrative Agent
and the Lenders, concerning any environmental liabilities of
Borrower and its subsidiaries.
7. Collateral Audit. Upon request of the Administrative Agent, the
Administrative Agent shall have received an audit of all
accounts receivable of Borrower and its subsidiaries, in
form, scope and substance satisfactory to the Administrative
Agent and the Lenders; provided that from and after the
Closing Date, so long as no event of default has occurred,
Borrower shall be required to pay for only one such audit in
any twelve month period.
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8. Financial Statements. The Lenders shall have received (i) audited
financial statements of Borrower and its subsidiaries for the
fiscal year ended December 31, 1999, (ii) unaudited financial
statements of Borrower and its subsidiaries for the
three-month period ended March 31, 2000 and (iii) such pro
forma and projected financial statements of Borrower and its
Subsidiaries as the Administrative Agent and Lenders may
request, all in form and substance reasonably satisfactory to
the Administrative Agent and the Lenders.
9. No Material Adverse Change. Since December 31, 1999, there shall
have occurred no material adverse change in the business,
operations, properties, assets, liabilities, condition
(financial or otherwise) or prospects of Borrower and its
subsidiaries, taken as a whole. The failure of Borrower to
complete the recently announced transaction with UICI shall
not be deemed to have a Material Adverse Effect.
10. Customary Closing Documents. All documents required to be
delivered under the Definitive Financing Documents, including
customary legal opinions, corporate records, documents from
public officials and officers' certificates, shall have been
delivered.
Conditions to All Borrowings: The conditions to all borrowings will include requirements relating to one
business days' prior written notice of borrowing, the accuracy of
representations and warranties, and the absence of any default or potential
event of default, and will otherwise be customary and appropriate for
financings of this type.
I. MISCELLANEOUS
Requisite Lenders: Requisite Lenders shall mean Lenders holding in the aggregate more than 66
2/3% of the commitments under the Amended Bank Facilities.
Assignments and Participations Substantially as set forth under the Existing Credit Facilities, with such
by Lender: amendments to the definition of the term Eligible Assignee as may be agreed
upon by the Administrative Agent and the Borrower.
Taxes, Reserve Requirements & Customary and appropriate for transactions of this type.
Indemnities:
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Governing Law and Jurisdiction: Borrower will submit to the non-exclusive jurisdiction and venue of the
federal and state courts of the State of North Carolina and will waive any
right to trial by jury. North Carolina law shall govern the Definitive
Loan Documents.
First Union's Counsel: O'Melveny & Xxxxx LLP.
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SCHEDULE I
APPLICABLE MARGINS
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IF LEVERAGE RATIO IS: APPLICABLE MARGIN:
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< 1.75 1.50%
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< 2.25, but > 1.75 2.00%
-
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< 2.75, but > 2.25 2.50%
-
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>2.75 3.00%
-
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