SECOND AMENDMENT AGREEMENT
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Second Amendment Agreement, dated as of April 1, 1997 (this "Waiver"),
among Foundation Health Corporation, a Delaware corporation (the "Borrower"),
the lenders (the "Lenders") listed on the signature pages hereof and
Citibank, N.A., as administrative agent (the "Agent") for the Lenders.
1. The Borrower, the Lenders and the Agent have entered into a
Revolving Credit Agreement, dated as of December 17, 1996, as amended by a
First Amendment and Waiver dated as of January 28, 1997 (such credit
agreement, as it may be amended and in effect from time to time, being
referred to herein as the "Credit Agreement"; terms defined therein and not
otherwise defined herein being used herein as therein defined).
2. The Borrower anticipates that it will not be in compliance with the
Fixed Charge Coverage Ratio set forth in Section 5.03(b) of the Credit
Agreement for the fiscal quarters ending December 31, 1996 and March 31, 1997
and that it will no longer prepare audited annual financial statements and
will therefore also not be in compliance with Section 5.04(b) of the Credit
Agreement and has requested the Lenders and the Agent to amend such
covenants. The Lenders and the Agent have agreed to such request on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises set forth above and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. (a) Subject to the
satisfaction of the condition precedent set forth in Section 2 hereof,
Section 5.03(b) of the Credit Agreement is hereby amended in full to read as
follows:
"(b) FIXED CHARGE COVERAGE RATIO. Permit, as at the end of any
Fiscal Quarter of the Borrower listed below, the Consolidated Fixed
Charge Coverage Ratio of the Borrower and its Subsidiaries for the
four-Fiscal Quarter period ending on the last day of such Fiscal
Quarter to be less than the minimum ratio set forth opposite such
Fiscal Quarter:
FISCAL QUARTER MINIMUM RATIO
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December 31, 1996 1.5 to 1.0
March 31, 1997 1.5 to 1.0
Each Fiscal Quarter thereafter (if any) 3.75 to 1.0
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(b) Subject to the satisfaction of the condition precedent set forth
in Section 2 hereof, Section 5.04(b) of the Credit Agreement is hereby
amended in full to read as follows:
"(b) As soon as available and in any event within 120 days after
the end of each Fiscal Year, a Consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such Fiscal Year
and Consolidated statements of operations, stockholders' equity
and cash flows of the Borrower and its Subsidiaries for such
Fiscal Year, certified by the chief financial officer of the
Borrower, together with (i) a certificate of said officer stating
that, to his or her knowledge, no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a
statement as to the nature thereof and the action the Borrower
has taken or proposes to take with respect thereto and (ii) a
schedule in form satisfactory to the Agent of the computations
used by the Borrower in determining compliance with the covenants
contained in Section 5.03 and in sufficient detail for determining
the Applicable Eurodollar Margin and Applicable Percentage in
accordance with the definition of such terms set forth in
Section 1.01."
SECTION 2. CONDITION OF EFFECTIVENESS. This Amendment shall
become effective if, on or prior to April 11, 1997, the Agent shall have
received counterparts of this Amendment duly executed by the Borrower, the
Majority Lenders and the Agent.
SECTION 3. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
(a) Except as specifically amended above, the Credit Agreement is and shall
continue to be in full force and effect and is hereby ratified and confirmed
in all respects.
(b) The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of any Lender
or the Agent under the Credit Agreement, nor constitute a waiver of any
provision of the Credit Agreement, except as specifically herein
provided.
(c) Upon the effectiveness of this Amendment, on and after the
date hereof, each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof" or words of like import referring to the Credit
Agreement shall mean and be a reference to the Credit Agreement as amended
hereby.
SECTION 4. FEES, COSTS AND EXPENSES. The Borrower agrees to pay on
demand all reasonable costs and expenses of the Agent incurred in connection
with the preparation, execution and delivery of this Amendment, including,
without limitation, the reasonable fees and out-of-pocket expenses of the
Agent's legal counsel.
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SECTION 5. EXECUTION IN COUNTERPARTS. This Amendment 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 to be an original and all of which taken together shall constitute but
one and the same agreement.
SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their respective officers thereunto duly authorized, as of
the date first above written.
THE BORROWER:
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FOUNDATION HEALTH CORPORATION
By:
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Name:
Title:
THE AGENT:
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CITIBANK, N.A.
By:
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Name:
Title:
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THE LENDERS:
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CITIBANK, N.A.
By:
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Name:
Title:
NATIONSBANK OF TEXAS, N.A.
By:
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Name:
Title:
BANK OF AMERICA, N.T. & S.A.
By:
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Name:
Title:
THE CHASE MANHATTAN BANK,
By:
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Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
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Name:
Title:
0
XXX XXXX XX XXXX XXXXXX
By:
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Name:
Title:
THE DAI-ICHI KANGYO BANK, LIMITED
SAN FRANCISCO AGENCY
By:
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Name:
Title:
THE SUMITOMO BANK, LIMITED
SAN XXXXXXXXX XXXXXX
By:
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Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
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Name:
Title:
THE SANWA BANK, LIMITED
By:
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Name:
Title:
