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Subsequent Event
6 Months Ended
Jun. 30, 2015
Subsequent Events [Abstract]  
Subsequent Event
SUBSEQUENT EVENTS
Amendment to Cognizant Master Services Agreement
On July 1, 2015, Health Net entered into an amendment (the “Cognizant Amendment”) to the Master Services Agreement, with Cognizant. The Cognizant Amendment suspends efforts towards, and defers the occurrence of, the BPaaS Services Commencement Date (as defined in the Master Services Agreement) by, among other things, extending the Pre-BPaaS Services Commencement Date Termination (as defined in the Master Services Agreement) period, or the period of time during which the Company may terminate the Cognizant Agreement for a break-up fee of $10 million, until after the closing of the Company’s previously-announced merger with Centene pursuant to the terms of the Merger Agreement. Concurrent with executing the Master Services Agreement, we entered into the Asset Purchase Agreement with Cognizant, through which Cognizant was to purchase certain software assets and related intellectual property from us. The closing of the Asset Sale was scheduled for the BPaaS Services Commencement Date. As a result, the parties’ aforementioned decision to suspend efforts towards the BPaaS Services Commencement Date has similarly deferred the Asset Sale.
Cognizant will continue to provide certain application and business processing services pursuant to existing agreements it has with the Company. The Company and Cognizant have agreed to exercise good faith efforts to explore and, if both parties agree to proceed, to negotiate and enter into a new definitive agreement relating to certain services described in the Master Services Agreement, which new definitive agreement shall survive the closing of the Merger. See Note 1 for information regarding our Merger Agreement with Centene.
Consent Solicitation for Senior Notes
On August 3, 2015, the Company commenced a solicitation with respect to the Senior Notes (as described in Note 7, "Financing Arrangements") to amend the defined term "Change of Control" in the Senior Notes to provide that the Merger will not constitute a Change of Control. If the requisite consents are received, the Company intends to execute a supplement to the indenture governing the Senior Notes effecting the amendment, and accordingly, no Change of Control Offer (as defined in the Senior Notes) to repurchase the Senior Notes would be required in connection with the completion of the Merger. The Company is offering a cash payment of $2.50 per $1,000 in aggregate principal amount of Senior Notes for which a consent is validly delivered. The consent solicitation is scheduled to expire on August 12, 2015.
The Company is conducting the consent solicitation at the request of Centene pursuant to a covenant contained in the Merger Agreement (see Note 1). Centene has agreed that it will be responsible for all liabilities incurred by the Company in connection with the consent solicitation, including but not limited to all consent fees payable to holders of the Senior Notes.