AND EXCHANGE COMMISSION
to Section 13 or 15(d) of
Securities Exchange Act of 1934
Report (Date of earliest event reported)
name of registrant as specified in its charter)
(State or other jurisdiction of
(Commission File Number)
1100 Park Place, 4th Floor
San Mateo, California 94403
of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
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communications pursuant to Rule 425 under the Securities Act (17 CFR
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communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
Item 1.01 Entry into a Material Definitive Agreement.
On December 31, 2012, WageWorks, Inc., a Delaware corporation (the
“Company”), entered into a Credit Agreement (the “Credit Agreement”) by
and among the Company, the guarantors from time to time party thereto,
the lenders from time to time party thereto, and Union Bank, N.A., as
administrative agent (“Agent”). The Credit Agreement amends and
restates the Company’s existing Commercial Credit Agreement, dated as of
August 31, 2010, among the Company, MHM Resources, LLC and Union Bank,
The Credit Agreement provides for a $75.0 million revolving credit
facility, with a $15 million letter of credit subfacility. The Credit
Agreement contains an increase option permitting the Company, subject to
certain requirements, to arrange with existing lenders and/or new
lenders to provide up to an aggregate of $75.0 million in additional
commitments. Loan proceeds may be used for general corporate purposes,
including acquisitions permitted under the Credit Agreement. The
Company may prepay loans under the Credit Agreement in whole or in part
at any time without premium or penalty. At December 31, 2012, the
Company had outstanding revolving loans in an aggregate principal amount
of $44.6 million under the Credit Agreement and undrawn letters of
credit in an aggregate principal amount of $3.3 million.
The loans bear interest, at the Company’s option, at (i) a base rate
determined in accordance with the Credit Agreement, plus 0.25%, or (ii)
a LIBOR rate determined in accordance with the Credit Agreement, plus
2.50%. Interest is due and payable in arrears quarterly for base rate
loans and at the end of an interest period for LIBOR rate
loans. Principal, together with all accrued and unpaid interest, is due
and payable on December 31, 2015. The Company is also obligated to pay
other customary closing fees, commitment fees and letter of credit fees
for a facility of this size and type.
The Company’s obligations under the Credit Agreement are secured by
substantially all of the Company’s assets. All of the Company’s
existing and future material subsidiaries are required to guaranty its
obligations under the Credit Agreement. The guarantees by existing and
future material subsidiaries are and will be secured by substantially
all of the assets of such material subsidiaries.
The Credit Agreement provides that the Company must maintain compliance
with a liquidity ratio, a ratio of indebtedness to EBITDA, a debt
service coverage ratio and a minimum consolidated net worth covenant.
The Credit Agreement contains customary affirmative and negative
covenants, including, among others, covenants limiting the ability of
the Company and its subsidiaries to grant liens, make investments, make
acquisitions, incur indebtedness, make certain restricted payments,
merge or consolidate, dispose of assets, and enter into transactions
with affiliates, in each case subject to customary exceptions.
Upon an event of default, the lenders may declare the outstanding
obligations payable by the Company to be immediately due and payable and
exercise other rights and remedies provided for under the credit
facility. The events of default under the Credit Agreement include,
among others, payment defaults, covenant defaults, inaccuracy of
representations and warranties, cross-defaults to other material
indebtedness, judgment defaults, a change of control default and
bankruptcy and insolvency defaults. Under certain circumstances, a
default interest rate will apply on all obligations during the existence
of an event of default under the Credit Agreement at a per annum rate of
interest equal to 2.00% above the applicable interest rate.
The foregoing description of the Credit Agreement is qualified in its
entirety by reference to the full text of the Credit Agreement, which
the Company will file with its annual report on Form 10-K for the fiscal
year ending December 31, 2012.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01, “Entry into a Material
Definitive Agreement,” is incorporated herein by reference.
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 hereunto duly authorized.
/s/ Joseph L. Jackson
Joseph L. Jackson
Chief Executive Officer and Director
Date: January 7, 2013