GoHealth(GOCO) - 2025 Q2 - Quarterly Results

Amendment No. 14 to the Credit Agreement Overview This section outlines Amendment No. 14, covering its introduction, key provisions, conditions, and interest treatment Introduction and Background This section introduces Amendment No. 14, dated August 6, 2025, involving key parties and referencing the original Credit Agreement - Amendment No. 14 to the Credit Agreement is dated August 6, 2025[1] - Parties involved include Blizzard Midco, LLC (Holdings), Norvax, LLC (Borrower), Lenders, and Blue Torch Finance, LLC (Administrative Agent)[1] - The amendment refers to the original Credit Agreement dated September 13, 2019, which has undergone 13 prior amendments[2] Key Amendment Provisions and Roll-Up Class A Revolving Lenders agreed to a 'cashless roll' of $35,000,000 in outstanding Class A Revolving Loans, converting them into Rolled Term Loans under the Superpriority Credit Agreement - Class A Revolving Lenders agreed to a 'cashless roll' of $35,000,000 in outstanding Class A Revolving Loans[3] - The rolled Class A Revolving Loans will convert into an equal principal amount of Rolled Term Loans under the Superpriority Credit Agreement[3] - The Roll-Up amount will not be increased by the capitalization of Effective Date PIK Interest[3] Agreement and Representations The parties agree to the amendment, reaffirming existing Loan Documents and security interests, with the Borrower representing all warranties are true and no default exists - The Credit Agreement is amended to delete stricken text and add double-underlined text as set forth in Annex A, effective on the Amendment No. 14 Effective Date[8] - The Borrower reaffirms that all Loan Documents and security interests remain in full force and effect[7] - The Borrower represents that all representations and warranties are true and correct, and no Default or Event of Default exists as of the Amendment No. 14 Effective Date[8][9] Governing Law and Counterparts The Amendment is governed by New York law, allowing for execution in counterparts and recognizing electronic signatures as legally effective - The Amendment is governed by the law of the State of New York[10] - The Amendment may be executed in counterparts, and electronic signatures are legally effective[10] Conditions Precedent to Effectiveness The Amendment's effectiveness is contingent on various conditions, including executed documents, true representations, fee payments, solvency, and board appointments - The Amendment No. 14 Effective Date is contingent on: receipt of executed counterparts, true representations, Superpriority Credit Agreement and Intercreditor Agreement effectiveness, payment of fees, Loan Party solvency, and absence of 'going concern' disclosures[11][12] - New directors (Alan J. Carr, Timothy R. Pohl, William L. Transier) must be appointed to the Parent's Board, and a Transformation Committee established[12] - A non-refundable consent fee of 0.25% of Term Loans and Revolving Commitments (up to $450,918.75) is payable on the Amendment No. 14 Effective Date[12] - Receipt of a fully-executed Stock Subscription Agreement is also a condition[13] Treatment of Accrued Interest and Roll-Up Effectiveness Accrued interest on loans will be paid in kind (PIK) by adding it to the principal, with the Roll-Up of Class A Revolving Loans effective thereafter - Accrued and unpaid interest on Loans will be paid in kind (PIK) by adding it to the principal amount ('Effective Date PIK Interest')[14] - Effective Date PIK Interest will bear interest as per the Amended Credit Agreement and is payable on the Term Maturity Date or Revolving Maturity Date[14] - The Roll-Up of Class A Revolving Loans into Rolled Term Loans becomes effective immediately after PIK interest capitalization[17] Credit Agreement (Amended and Restated) This section details the amended Credit Agreement, covering definitions, credit facilities, representations, conditions, covenants, defaults, and general provisions ARTICLE I DEFINITIONS This article provides comprehensive definitions for terms, including loan types, financial metrics, and the Amendment No. 14 Effective Date, ensuring consistent interpretation - The 'Amendment No. 14 Effective Date' is defined as August 6, 2025[88] - The 'Applicable Rate' for Initial Term Loans and Class A Revolving Loans on and after the Amendment No. 14 Effective Date allows for a portion of interest to be paid in kind (PIK)[94] Applicable Rate Changes (Post-Amendment No. 14 Effective Date) | Loan Type | ABR Loan Rate | SOFR Loan Rate | PIK Option (SOFR + X%) | | :---------- | :------------ | :------------- | :----------------------- | | Initial Term Loan | 6.50% p.a. | 7.50% p.a. | 8.00% p.a. (4.50% cash, remainder PIK) | | Class A Revolving Loan | 6.50% p.a. | 7.50% p.a. | 8.00% p.a. (4.50% cash, remainder PIK) | - The 'Class A Revolving Commitments' are reduced to zero as of the Amendment No. 14 Effective Date, and 'Class A-1 Revolving Commitments' are also zero[138][144] - The 'Initial Term Loan Commitments' are reduced to zero as of the Amendment No. 14 Effective Date[290] - The 'Suspension Period' is defined as the period from the Effective Date through the Termination Date, during which certain financial covenants and baskets are restricted[107][451] ARTICLE II THE CREDITS This article details credit facilities, including commitments, loan types, borrowing procedures, interest, fees, and prepayment terms, with key changes to commitments and PIK interest options - As of the Amendment No. 14 Effective Date, Initial Term Loan Commitments and Class A Revolving Commitments have been reduced to zero[516] - Amounts repaid or prepaid for Revolving Loans and Initial Term Loans may not be reborrowed[516] - The Borrower may elect to pay a portion of interest on Initial Term Loans and Class A Revolving Loans in kind (PIK) on or after the Amendment No. 14 Effective Date, with a minimum cash component[609] Outstanding Loan Amounts (Amendment No. 14 Effective Date) | Loan Type | Aggregate Principal Amount Outstanding | | :---------- | :----------------------------------- | | Class A Revolving Loans | $55,754,312.04 | | Class A-1 Revolving Loans | $0 | | Initial Term Loans | $496,618,425.55 | - Mandatory amortization payments for Initial Term Loans are suspended from June 30, 2025, through December 31, 2026[575] - The Borrower is required to prepay outstanding Class A Revolving Loans if the Consolidated Cash Balance exceeds $75,000,000 (or $37,500,000 after a Securitization Transaction) from September 13, 2024, until the Class A Revolving Facility Termination Date[591][593] ARTICLE III REPRESENTATIONS AND WARRANTIES This article outlines representations and warranties by Holdings and the Borrower, covering organizational status, financial condition, legal compliance, and security interests in collateral - Holdings, the Borrower, and each Restricted Subsidiary are duly organized, validly existing, and in good standing, with the necessary power and authority to conduct business and perform Loan Document obligations[686] - No Material Adverse Effect has occurred since July 15, 2025[691] - The Loan Parties, on a consolidated basis, are Solvent after giving effect to the Transactions[717] - Proceeds of the Loans will not be used for funding activities with Sanctioned Persons or in Sanctioned Countries, or in violation of Anti-Corruption Laws or the USA Patriot Act[720][721] ARTICLE IV CONDITIONS This article specifies conditions for each credit event, including true representations, absence of default, and adherence to Consolidated Cash Balance thresholds - Each credit event requires that representations and warranties are true and correct in all material respects[726