EXHIBIT 10.12(c)

             SECOND EXTENSION OF NONWAIVER AND STANDSTILL AGREEMENT

                           Dated as of April 13, 2000





HealthPlan Services Corporation
3501 Frontage Road
Tampa, Florida   33607
Attention:  Phillip S. Dingle, 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,

<PAGE>

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.

                                        2
<PAGE>

                  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]


                                       3
<PAGE>

                  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/ MATTHEW BERK
                                             ----------------------------------
                                             Name: MATTHEW BERK
                                             Title: DIRECTOR


                                        CREDIT LYONNAIS, NEW YORK BRANCH,
                                        as a Lender


                                        By:  /s/ JOHN-CHARLES VAN ESSCHE
                                             ----------------------------------
                                             Name: JOHN-CHARLES VAN ESSCHE
                                             Title: VICE PRESIDENT


                                        SUNTRUST BANK, TAMPA BAY, as a Lender


                                        By:  /s/ SAMUEL BALLESTEROS
                                             ----------------------------------
                                             Name: SAMUEL BALLESTEROS
                                             Title: DIRECTOR


                                        FLEET NATIONAL BANK, as a Lender


                                        By:  /s/ THOMAS ENGELS
                                             ----------------------------------
                                             Name: THOMAS ENGELS
                                             Title: SR. VICE PRESIDENT


                                        SOUTHTRUST BANK, NATIONAL
                                        ASSOCIATION, as a Lender


                                        By:  /s/ ANDY RAINE
                                             ----------------------------------
                                             Name: ANDY RAINE
                                             Title: VICE PRESIDENT


                                      S-1
<PAGE>

                                        COOPERATIEVE CENTRALE RAIFFEISEN-
                                        BOERENLEEBANK BA "RABOBANK
                                        NEDERLAND", NEW YORK BRANCH, as a
                                        Lender


                                        By:  /s/ IAN REECE
                                             ----------------------------------
                                             Name: IAN REECE
                                             Title: SENIOR CREDIT OFFICER


                                        BANK OF AMERICA, N.A., as a Lender


                                        By:  /s/ JOSEPH M. MARTENS
                                             ----------------------------------
                                             Name: JOSEPH M. MARTENS
                                             Title: SENIOR VICE PRESIDENT


                                        AMSOUTH BANK, as a Lender


                                        By:  /s/ LIZA LEE HOOVER
                                             ----------------------------------
                                             Name: LIZA LEE HOOVER
                                             Title: ASSISTANT VICE PRESIDENT


                                        HIBERNIA NATIONAL BANK, as a Lender


                                        By:  /s/ CHRISTOPHER PITRE
                                             ----------------------------------
                                             Name: CHRISTOPHER PITRE
                                             Title: VICE PRESIDENT


                                        THE FIFTH THIRD BANK OF COLUMBUS,
                                        as a Lender

                                        By:  /s/ MARK RANSON
                                             ----------------------------------
                                             Name: MARK RANSON
                                             Title: VICE PRESIDENT






                                       S-2

<PAGE>

                                    HEALTHPLAN SERVICES CORPORATION, as Borrower


                                    By:  /s/ PHILLIP S. DINGLE
                                         --------------------------------------
                                         Name: PHILLIP S. DINGLE
                                         Title: EXECUTIVE VICE PRESIDENT AND
                                                CHIEF FINANCIAL OFFICER




                                       S-3

<PAGE>
                                    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,


<PAGE>

                                 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.

                                       2
<PAGE>



                                 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

                                       3
<PAGE>
                                 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

                                       4
<PAGE>

                                 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.

                                       5
<PAGE>


                                 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

                                       6
<PAGE>
Effectiveness of the            following:
Amended Bank
Facilities:
<TABLE>
<CAPTION>

<S>                     <C>      <C>
                        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.

                                                          7
<PAGE>

                        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:

                                       8
<PAGE>

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 & Myers LLP.
</TABLE>

                                       9
<PAGE>
                                   SCHEDULE I
                               APPLICABLE MARGINS

---------------------------------------- -------------------------------------

         IF LEVERAGE RATIO IS:                    APPLICABLE MARGIN:
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------

                < 1.75                                 1.50%
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------

          < 2.25, but > 1.75                           2.00%
                      -
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------

          < 2.75, but > 2.25                           2.50%
                      -
---------------------------------------- -------------------------------------
---------------------------------------- -------------------------------------

                 >2.75                                 3.00%
                 -
---------------------------------------- -------------------------------------

                                       10