Exhibit 10.2
WAIVER AND THIRD AMENDMENT
TO
AMENDED AND RESTATED CREDIT
AGREEMENT
THIS WAIVER AND THIRD AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT (this “Waiver and
Amendment” ) is entered into as of November 29,
2006, among UNIVERSAL AMERICAN FINANCIAL CORP. , a New York
corporation (the “Borrower” ), the Banks
party to the Credit Agreement (hereinafter defined) and BANK OF
AMERICA, N.A. , as the Administrative Agent for the
Banks.
The Borrower, the Banks and the
Administrative Agent are party to the Amended and Restated Credit
Agreement dated as of May 28, 2004, as amended by the First
Amendment to Amended and Restated Credit Agreement dated as of
June 2, 2005 and the Waiver and Second Amendment to Amended
and Restated Credit Agreement dated as of December 30, 2005
(the “ Credit Agreement ” ). The
Borrower has requested that the Credit Agreement be amended and
waived to permit the following:
A.
The Asset Sale of 100% of the capital stock of UAFC (Canada) Inc.
pursuant to and upon the terms and conditions of that certain Share
Purchase Agreement dated August 31, 2006, among the Borrower,
Pennsylvania Life Insurance Company, La Capitale Assureur de
L’Administration Publique Inc. and GMF Assurances S.A. (the
“PennCorp Canada Sale”), and notwithstanding the
provisions of Section 3.03(i)(c) of the Credit Agreement, the
retention by the Borrower of all of the Net Available Proceeds of
such Asset Sale;
B.
The Asset Sale of 100% of the capital stock of Peninsular Life
Insurance Company pursuant to and upon the terms and conditions of
that certain Stock Purchase Agreement dated September 8, 2006,
among Universal Managed Care, Inc., Peninsular Life Insurance
Company, American Pioneer Life Insurance Company and American
Exchange Life Insurance Company (the “Peninsular
Sale”), and notwithstanding the provisions of
Section 3.03(i)(c) of the Credit Agreement, the retention by
the Borrower of all of the Net Available Proceeds of such Asset
Sale;
C.
The acquisition of 100% of the capital stock of Harmony Health,
Inc. pursuant to and upon the terms and conditions of that certain
Stock Purchase Agreement dated November 13, 2006, among
Heritage Health Systems, Inc., Harmony Health, Inc., GlobalHealth,
Inc., The Oklahoma City Clinic, a Professional Corporation, and
certain other selling shareholders (the “Harmony Health
Acquisition”);
D.
The dissolution and termination of the existence of HHS-HPN
Network, Inc. and HPN Network Venture, LP and the distribution of
the assets of such Persons to their respective shareholders,
members or partners (the “Dissolution”);
E.
An increase in the amount of the Capital Expenditures permitted by
Section 7.05 of the Credit Agreement; and
F.
An increase in the amount of Revolving Loans that may be incurred
under the Credit Agreement or of other indebtedness that may be
incurred pursuant to Section 7.04 of the Credit
Agreement.
Accordingly, for valuable and
acknowledged consideration, the Borrower, the Banks and the
Administrative Agent agree and acknowledge as follows:
1.
Defined Terms . Unless otherwise stated in this
Waiver and Amendment, terms defined in the Credit Agreement have
the same meanings when used in this Waiver and
Amendment.
2.
Waivers . The Banks hereby consent to the
following and agree that the following shall not constitute a
Default or Event of Default under the Credit Agreement:
(a)
The PennCorp Canada Sale and the retention by the Borrower of 100%
of the Net Available Proceeds of the PennCorp Canada Sale, and the
Banks agree that such Net Available Proceeds shall not count
against the amount described in the first proviso to
Section 3.03(i)(c) of the Credit Agreement. The Banks
further agree that, effective immediately prior to the
closing of the PennCorp Canada Sale, the shares of capital stock of
UAFC (Canada) Inc. held in pledge by the Administrative Agent for
the benefit of the Banks pursuant to the Credit Agreement and the
other Credit Documents, including the Pledge Agreement and the
Security Agreement, shall be released and discharged, any and all
obligations of UAFC (Canada) Inc. or any of its Subsidiaries under
the Credit Agreement and the other Credit Documents, including the
Pledge Agreement and the Security Agreement, shall be released and
discharged, and the appropriate Form UCC-3 financing statement
changes shall be filed in each necessary jurisdiction;
(b)
The Peninsular Sale and the retention by the Borrower of 100% of
the Net Available Proceeds of the Peninsular Sale, and the Banks
agree that such Net Available Proceeds shall not count against the
amount described in the first proviso to Section 3.03(i)(c) of
the Credit Agreement;
(c)
The Harmony Health Acquisition, and the Banks agree that the
consideration paid for the Harmony Health Acquisition shall not
count against the amounts described in Sections 7.02(i)(iv)
and 7.02(i)(v) of the Credit Agreement; provided that the Borrower
complies with Section 7.16 of the Credit Agreement within 60
days after the date of this Waiver and Amendment; and
(d)
The Dissolution, and the Banks agree that, effective immediately
prior to the completion of the Dissolution, the shares of capital
stock of HHS-HPN Network, Inc. and the partnership interests of HPN
Network Venture, LP held in pledge by the Administrative Agent for
the benefit of the Banks pursuant to the Credit Agreement and the
other Credit Documents, including the Pledge Agreement and the
Security Agreement, shall be released and discharged, any and all
obligations of HHS-HPN Network, Inc. and HPN Network Venture, LP
under the Credit Agreement and the other Credit Documents,
including the Pledge Agreement and the Security Agreement, shall be
released and discharged, and the appropriate Form UCC-3 financing
statement changes shall be filed in each necessary
jurisdiction.
3.
Amendments . The Credit Agreement is amended as
follows:
(a)
A new Section 2.03, reading in its entirety as follows, is
added to the Credit Agreement:
“2.03
Increase in Total Revolving Loan Commitment.
(a)
Request for Increase. Provided there exists no Default, upon
notice to the Administrative Agent (which shall promptly notify
such of the Banks as the Borrower may direct), the Borrower
may from time to time request an increase in the Total Revolving
Loan Commitment by an amount (for all such requests) not exceeding
$50,000,000; provided that (i) any such request for an increase
shall be in a minimum amount of $20,000,000, and (ii) the Borrower
may make a maximum of three such requests. At the time of
sending such notice, the Borrower (in consultation with the
Administrative Agent) shall specify the time period within which
each Bank directed to be notified by the Borrower is requested to
respond (which, unless waived by such Banks, shall in no event be
less than five Business Days from the date of delivery of such
notice to such Banks).
2
(b)
Bank Elections to Increase. Each Bank so notified shall
notify the Administrative Agent within such time period whether or
not it agrees to increase its Revolving Loan Commitment and, if so,
by what amount. Any Bank not responding within su
