Exhibit 10.8

 

 

SECOND AMENDMENT TO CREDIT AGREEMENT

 

THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of
August 8, 2005, is entered into among HEALTH NET, INC., a Delaware corporation
(the “Borrower”), the Lenders and BANK OF AMERICA, N.A., as Administrative
Agent. Terms used but not otherwise defined herein shall have the meanings
provided in the Credit Agreement described below.

 

W I T N E S S E T H

 

WHEREAS, the Borrower, the Lenders party thereto, and the Administrative Agent
entered into that certain Credit Agreement dated as of June 30, 2004, as amended
by that certain First Amendment to Credit Agreement dated as of March 2, 2005
(the “Existing Credit Agreement”);

 

WHEREAS, the Borrower has requested that the Required Lenders agree to amend
certain provisions of the Credit Agreement; and

 

WHEREAS, the Required Lenders have agreed to such modifications on the terms and
conditions set forth herein.

 

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

 

PART 1

 

DEFINITIONS

 

SUBPART 1.1 Certain Definitions. Unless otherwise defined herein or the context
otherwise requires, the following terms used in this Amendment, including its
preamble and recitals, have the following meanings:

 

“Amended Credit Agreement” means the Existing Credit Agreement as amended
hereby.

 

“Amendment No. 2 Effective Date” is defined in Subpart 3.1.

 

SUBPART 1.2 Other Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Amendment, including its preamble and
recitals, have the meanings provided in the Existing Credit Agreement.

 

PART 2

 

AMENDMENTS TO EXISTING CREDIT AGREEMENT

 

Effective on (and subject to the occurrence of) the Amendment No. 2 Effective
Date, the Existing Credit Agreement is hereby amended in accordance with this
Part 2.

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SUBPART 2.1 Amendments to Section 1.01. Section 1.01 of the Existing Credit
Agreement is hereby amended in the following respects:

 

(a) Clause (a)(v) of the definition of “Minimum Borrower Cash Flow Fixed Charge
Coverage Ratio” set forth in Section 1.01 of the Existing Credit Agreement is
hereby amended and restated to read as follows:

 

(v) the aggregate amount (such aggregate amount to be delineated on a
Subsidiary-by-Subsidiary basis) of all other capital contributions by the
Borrower into regulated Subsidiaries of the Borrower during such period (other
than a Designated Capital Contribution)

 

(b) The following new definition is hereby added to the Existing Credit
Agreement in the appropriate alphabetical order to read as follows:

 

“Designated Capital Contribution” means any capital contribution from the
Borrower to a regulated Subsidiary the proceeds of which are derived from the
sale, transfer, lease or other disposition of the Borrower’s assets.

 

PART 3

 

CONDITIONS TO EFFECTIVENESS

 

SUBPART 3.1 Amendment No. 2 Effective Date. This Amendment shall be and become
effective as of the date hereof (the “Amendment No. 2 Effective Date”) when all
of the conditions set forth in this Part 3 shall have been satisfied, and
thereafter this Amendment shall be known, and may be referred to, as the
“Amendment”.

 

SUBPART 3.2 Execution of Counterparts of Amendment. The Administrative Agent
shall have received counterparts of this Amendment, which collectively shall
have been duly executed on behalf of each of the Borrower, the Required Lenders
and the Administrative Agent.

 

SUBPART 3.3 Fees and Expenses. The Administrative Agent shall have received, on
the date hereof, all out-of-pocket costs and expenses of the Administrative
Agent in connection with the preparation, execution and delivery of this
Amendment, including without limitation the fees and expenses of Moore & Van
Allen PLLC, special counsel to the Administrative Agent.

 

PART 4

 

MISCELLANEOUS

 

SUBPART 4.1 Representations and Warranties. The Borrower hereby represents and
warrants to the Administrative Agent and the Lenders that, after giving effect
to this Amendment, (a) no Default or Event of Default exists under the Credit
Agreement and (b) the representations and warranties set forth in Article V of
the Existing Credit Agreement are, subject to the limitations set forth therein,
true and correct as of the date hereof (except for those which expressly relate
to an earlier date).

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SUBPART 4.2 Cross-References. References in this Amendment to any Part or
Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment.

 

SUBPART 4.3 Instrument Pursuant to Existing Credit Agreement. This Amendment is
executed pursuant to the Existing Credit Agreement and shall (unless otherwise
expressly indicated therein) be construed, administered and applied in
accordance with the terms and provisions of the Existing Credit Agreement.

 

SUBPART 4.4 References in Other Loan Documents. At such time as this Amendment
shall become effective pursuant to the terms of Subpart 3.1, all references to
the “Credit Agreement” shall be deemed to refer to the Credit Agreement as
amended by this Amendment.

 

SUBPART 4.5 Counterparts/Telecopy. This Amendment may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
Delivery of executed counterparts of the Amendment by telecopy shall be
effective as an original and shall constitute a representation that an original
shall be delivered.

 

SUBPART 4.6 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT
EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES).

 

SUBPART 4.7 Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

SUBPART 4.8 General. Except as amended hereby, the Existing Credit Agreement and
all other credit documents shall continue in full force and effect.

 

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the
Credit Agreement as of the date first above written.

 

BORROWER:      

HEALTH NET, INC.,

a Delaware corporation

        By: /s/ Wisdom Lu                                             Name:
Wisdom Lu        

Title: Vice President, Treasurer and

Chief Investment Officer

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ADMINISTRATIVE AGENT:       BANK OF AMERICA, N.A.         By:      

/s/    KEVIN L. AHART

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        Name:       Kevin L. Ahart         Title:       Assistant Vice President

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LENDERS:      

BANK OF AMERICA, N.A., as L/C Issuer,

Swing Line Lender as a Lender

       

By:/s/ Joseph L. Coran

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        Name: Joseph L. Coran         Title: Senior Vice President

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CITICORP USA, INC.

By: /s/ Peter C. Bickford

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Name: Peter C. Bickford

Title: Vice President

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JPMORGAN CHASE BANK, N.A. By:  

/s/ DAWN LEE LUM

Name:

 

Dawn Lee Lum

Title:

 

Vice President

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THE BANK OF NEW YORK By:  

/s/ JONATHAN ROLLINS

Name:

 

Jonathan Rollins, CFA

Title:

 

Vice President

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UNION BANK OF CALIFORNIA, N.A. By:  

/s/ PHILIP M. ROESNOR

Name:

 

Philip M. Roesnor

Title:

 

Vice President

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THE BANK OF NOVA SCOTIA By:  

/s/ M.D. Smith

Name: M.D. Smith Title: Agent Operations