EXHIBIT 10.65
SECOND AMENDMENT TO
CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT is made and dated as of July
31, 1998 (the "Second Amendment") among FOUNDATION HEALTH SYSTEMS, INC. (the
"Company"), the Banks party to the Credit Agreement referred to below, and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, as Administrative Agent (the "Agent"), and amends that certain
Credit Agreement dated as of July 8, 1997, as amended by that certain First
Amendment and Waiver to Credit Agreement (the "FIRST AMENDMENT") dated as of
April 6, 1998 (as further amended or modified from time to time, the "CREDIT
AGREEMENT").
RECITALS
WHEREAS, the Company has requested the Agent and the Banks to amend
certain provisions of the Credit Agreement, and the Agent and the Banks are
willing to do so, on the terms and conditions specified herein:
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. TERMS. All terms used herein shall have the same meanings as in the
Credit Agreement unless otherwise defined herein.
2. AMENDMENT. The Credit Agreement is hereby amended as follows:
2.1 AMENDMENT TO SCHEDULE 1.01.
(a) Schedule 1.01 of the Credit Agreement is hereby amended and
restated to read in its entirety as set forth on Schedule 1.01 hereto.
2.2 AMENDMENTS TO SECTION 7.12.
(a) Clause (a) of Section 7.12 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"(a) the Total Leverage Ratio, as of any date set forth below, to
exceed the ratio set forth below opposite such date:
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DATE MAXIMUM TOTAL LEVERAGE RATIO
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June 30, 1998 3.75 to 1.00
September 30, 1998 3.75 to 1.00
December 31, 1998 3.25 to 1.00
Thereafter 3.00 to 1.00;"
3. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to the Agent and the Banks that, on and as of the date hereof, and after giving
effect to this Second Amendment:
3.1 AUTHORIZATION. The execution, delivery and performance by the
Company of this Second Amendment has been duly authorized by all necessary
corporate action, and this Second Amendment has been duly executed and delivered
by the Company.
3.2 BINDING OBLIGATION. This Second Amendment constitutes the legal,
valid and binding obligation of the Company, enforceable against it in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
3.3 NO LEGAL OBSTACLE TO AMENDMENT. The execution, delivery and
performance of this Second Amendment will not (a) contravene the Organization
Documents of the Company; (b) constitute a breach or default under any
contractual restriction or violate or contravene any law or governmental
regulation or court decree or order binding on or affecting the Company which
individually or in the aggregate does or could reasonably be expected to have a
Material Adverse Effect; or (c) result in, or require the creation or imposition
of, any Lien on any of the Company's properties. No approval or authorization
of any governmental authority is required to permit the execution, delivery or
performance by the Company of this Second Amendment, or the transactions
contemplated hereby.
3.4 INCORPORATION OF CERTAIN REPRESENTATIONS. After giving effect to
the terms of this Second Amendment, the representations and warranties of the
Company set forth in Article V of the Credit Agreement are true and correct in
all respects on and as of the date hereof as though made on and as of the date
hereof, except as to such representations made as of an earlier specified date.
3.5 DEFAULT. No Default or Event of Default under the Credit
Agreement has occurred and is continuing.
4. CONDITIONS, EFFECTIVENESS. The effectiveness of this Second Amendment
shall be subject to the compliance by the Company with its agreements herein
contained, and to the delivery of the following to Agent in form and substance
satisfactory to Agent;
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4.1 AUTHORIZED SIGNATORIES. A certificate, signed by the Secretary
or an Assistant Secretary of the Company and dated the date of this Second
Amendment, as to the incumbency of the person or persons authorized to execute
and deliver this Second Amendment and any instrument or agreement required
hereunder on behalf of the Company.
4.2 AUTHORIZING RESOLUTIONS. A certificate, signed by the Secretary
or an Assistant Secretary of the Company and dated the date of this Second
Amendment, as to the resolutions of the Company's board of directors authorizing
the transactions contemplated by the First Amendment.
4.3 OTHER EVIDENCE. Such other evidence with respect to the Company
or any other person as the Agent or any Bank may reasonably request to establish
the consummation of the transactions contemplated hereby, the taking of all
corporate action in connection with this Second Amendment and the Credit
Agreement and the compliance with the conditions set forth herein.
5. MISCELLANEOUS.
5.1 EFFECTIVENESS OF THE CREDIT AGREEMENT AND THE NOTES. Except as
hereby expressly amended, the Credit Agreement and the Notes shall each remain
in full force and effect, and are hereby ratified and confirmed in all respects
on and as of the date hereof.
5.2 WAIVERS. This Second Amendment is limited solely to the matters
expressly set forth herein and is specific in time and in intent and does not
constitute, nor should it be construed as, a waiver or amendment of any other
term or condition, right, power or privilege under the Credit Agreement or under
any agreement, contract, indenture, document or instrument mentioned therein;
nor does it preclude or prejudice any rights of the Agent or the Banks
thereunder, or any exercise thereof or the exercise of any other right, power or
privilege, nor shall it require the Majority Banks to agree to an amendment,
waiver or consent for a similar transaction or on a future occasion, nor shall
any future waiver of any right, power, privilege or default hereunder, or under
any agreement, contract, indenture, document or instrument mentioned in the
Credit Agreement, constitute a waiver of any other right, power, privilege or
default of the same or of any other term or provision.
5.3 COUNTERPARTS. This Second Amendment may be executed in any
number of counterparts, and all of such counterparts taken together shall be
deemed to constitute one and the same instrument. This Second Amendment
shall not become effective until the Company, the Agent and the Majority
Banks shall have signed a copy hereof and the same shall have been delivered
to the Agent.
5.4 GOVERNING LAW. This Second Amendment shall be governed by and
construed in accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be duly executed and delivered as of the date first written above.
FOUNDATION HEALTH SYSTEMS, INC.
By: /s/ SIGNATURE
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By: /s/ SIGNATURE
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
By: /s/ SIGNATURE
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[NOTE: OTHER SIGNATURE LINES
HAVE BEEN OMITTED.]
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