**Exhibit 10.13**

 

**WAIVER AND SECOND AMENDMENT TO**

**AMENDED AND RESTATED CREDIT AGREEMENT**

 

THIS WAIVER AND SECOND AMENDMENT TO AMENDED AND RESTATED CREDITAGREEMENT (this ***“Waiverand Amendment”***) is entered into as of December 30, 2005,among **UNIVERSAL AMERICAN FINANCIAL CORP.**,a New York corporation (the ***“Borrower”***),the Banks party to the Credit Agreement (hereinafter defined) and **BANK OF AMERICA, N.A.**, as the Administrative Agent for theBanks.

 

The Borrower, the Banks and the Administrative Agent are party to theAmended and Restated Credit Agreement dated as of May 28, 2004, as amendedby the First Amendment to Amended and Restated Credit Agreement dated as ofJune 2, 2005 (the **“*Credit Agreement*”**). TheBorrower has advised the Banks and the Administrative Agent that the Borrowerhas purchased shares of its capital stock during its fiscal year endingDecember 31, 2005 in an amount equal to $10.9 million (such purchase insuch amount being herein called the “***Subject Purchase***”), which amount is in excessof that permitted by ***Clause(B)***of ***Section7.08(a)(ii)*** of the Credit Agreement and has requested that theBanks waive the Event of Default that has occurred as a result thereof and thatthe Administrative Agent acknowledge such waiver. The Borrower has also requestedthat the Banks agree to amend ***Clause (B)*** of ***Section 7.08(a)(ii)*** of the Credit Agreementand that the Administrative Agent acknowledge such amendment. Accordingly, forvaluable and acknowledged consideration, the Borrower, the Banks and theAdministrative Agent agree and acknowledge as follows:

 

1.             **Terms and References**. Unlessotherwise stated in this Waiver and Amendment, (a) terms defined in the CreditAgreement have the same meanings when used in this Waiver and Amendment and (b)references to “***Sections***” are to the CreditAgreement’s sections.

 

2.             **Waiver.**The Banks hereby waive theEvent of Default that has occurred as the result of the Subject Purchase andagree that such Event of Default is no longer continuing.

 

3.             **Amendment**. ***Clause (B)*** of ***Section 7.08(a)(ii)***is amended and restated to read in its entirety as follows:

 

“(B) other than with the cash proceeds ofcapital stock issued by the Borrower or any of its Subsidiaries after theInitial Borrowing Date, in an amount not exceeding (1) $1,000,000 in theaggregate during the fiscal year ending December 31, 2004, (2) $11,000,000in the aggregate during the fiscal year ending December 31, 2005, or (3)$30,000,000 in the aggregate after January 1, 2006.”

 

4.             **Conditions Precedent to Effectiveness of Waiverand Amendment**. This Waiver and Amendment shall not be effectiveuntil the Administrative Agent receives: (a) counterparts of this Waiver andAmendment executed by the Borrower, the Subsidiary Guarantors, the RequiredBanks and the Administrative Agent; (b) payment of all reasonable expenses,including reasonable legal fees and expenses of counsel to the AdministrativeAgent, incurred by the Administrative Agent in connection with this Waiver andAmendment, to the extent invoiced to the Borrower on or prior to the datehereof; and (c) such other agreements, documents, instruments and items as theAdministrative Agent may reasonably request, including, without limitation,documents evidencing the due authorization of the execution, delivery andperformance by the Borrower and each of the Subsidiary Guarantors of thisWaiver and Amendment, the incumbency of the officer of the Borrower and each ofthe Subsidiary Guarantors executing this Waiver and Amendment, and any othermatters relevant thereto.

 

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5.             **Representations**. The Borrowerrepresents and warrants to the Administrative Agent and the Banks asfollows:  (a) the execution, delivery andperformance by the Borrower of this Waiver and Amendment and the Credit Agreement,as amended hereby, have been duly authorized by all necessary corporate action;(b) all representations and warranties made or deemed made by the Borrower inthe Credit Documents are true and correct as of the date hereof, except to theextent that such representations and warranties expressly relate solely to anearlier date (in which case such representations and warranties were true andaccurate on and as of such earlier date) and except for changes in factualcircumstances not prohibited by the Credit Agreement; and (c) except as waivedhereby, no Default or Event of Default has occurred and is continuing as of thedate hereof.

 

6.             **Effect of Waiver and Amendment**.This Waiver and Amendment is a Credit Document. The waiver set forth in thisWaiver and Amendment is limited to the Event of Default existing as a result ofthe Subject Purchase and does not constitute the waiver of any other matter nowor hereafter requiring the consent or waiver of the Banks or the AdministrativeAgent under the Credit Documents. Except as expressly modified and amended bythis Waiver and Amendment, all of the terms, provisions and conditions of theCredit Documents, and the Liens created thereby, shall remain unchanged and infull force and effect and are hereby ratified and confirmed. If any part ofthis Waiver and Amendment is for any reason found to be unenforceable, allother portions of it shall nevertheless remain enforceable. The CreditDocuments and any and all other documents heretofore, now or hereafter executedand delivered pursuant to the terms of the Credit Agreement are hereby amendedso that any reference to the Credit Agreement shall mean a reference to theCredit Agreement as waived and amended hereby.

 

7.             **Expenses.**The Borrower shall pay allreasonable fees and expenses paid or incurred by the Administrative Agentincident to this Waiver and Amendment, including, without limitation, thereasonable fees and expenses of the Administrative Agent’s counsel inconnection with the negotiation, preparation, delivery and execution of thisWaiver and Amendment and any related documents.

 

8.             **Governing Law.**This Waiver andAmendment shall be governed by and construed in accordance with and be governedby the laws of the State of New York, without regard to conflict of lawsprinciples.

 

9.             **Counterparts.**This Waiver and Amendmentmay be executed in any number of counterparts and by the parties hereto inseparate counterparts, each of which when so executed and delivered shall bedeemed to be an original and all of which taken together shall constitute oneand the same instrument.

 

10.           **ENTIRETY. THIS WAIVER AND AMENDMENT, THECREDIT AGREEMENT, AND THE OTHER CREDIT DOCUMENTS EMBODY THE ENTIRE AGREEMENTBETWEEN THE PARTIES AND SUPERCEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS, IFANY, RELATING TO THE SUBJECT MATTER HEREOF. THESE CREDIT DOCUMENTS REPRESENTTHE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCEOF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.**

 

11.           **Parties.**This Waiver and Amendmentbinds and inures to the benefit of the Borrower, the Subsidiary Guarantors, theAdministrative Agent, the Banks and their respective permitted successors andassigns.

 

***[REMAINDER OF PAGEINTENTIONALLY BLANK.***

***SIGNATURE PAGES FOLLOW.]***

 

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| **UNIVERSAL AMERICAN FINANCIAL**            |                                   | **HAMILTON FLOATING RATE FUND, LLC,**   |
|---------------------------------------------|----------------------------------------|-----------------------------------------|
| **CORP.**, as the Borrower                  |                                   | as a Bank                               |
|                                        |                                   |                                    |
|                                        |                                   |                                    |
| By:                                         | */s/ Robert Waegelein*                 |                                    | By: | */s/ Dean Stephan* |
|                                        | Robert  Waegelein, Executive Vice      |                                    |   | Dean Stephan, Managing Director |
|                                        | President  and Chief Financial Officer |                                    |   |   |
|                                        |                                   |                                    |
|                                        |                                   |                                    |
|                                        |                                   | **ING CAPITAL LLC**,  as a Bank         |
| **BANK OF AMERICA, N.A.**, as a Bank and as |                                   |                                    |
| the  Administrative Agent                   |                                   |                                    |
|                                        |                                   | By:                                     | */s/ Mark R. Newsome* |
|                                        |                                   |                                    | Mark R. Newsome, Director |
| By:                                         | */s/ Jeffrey M. Shaver*                |                                    |   |
|                                        | Jeffrey M. Shaver, Vice President      |                                    |   |
|                                        |                                   |                                    |
|                                        |                                   |                                    |
|                                        |                                   | **SUNTRUST BANK**, as  a Bank           |
| **THE BANK OF NEW YORK**,  as a Bank        |                                   |                                    |
|                                        |                                   |                                    |
|                                        |                                   | By:                                     | */s/ Christine E. Moss* |
| By:                                         | */s/ Thomas McGinley*                  |                                    |   | Christine E. Moss, First Vice President |
|                                        | Thomas McGinley, Vice President        |                                    |   |
|                                        |                                   |                                    |
|                                        |                                   | **RAYMOND JAMES BANK, FSB**,  as a Bank |
| **DENALI CAPITAL, LLC,**managing  member of |                                   |                                    |
| DC Funding Partners, portfolio manager for  |                                   |                                    |
| **DENALI CAPITAL CLO III, LTD**,  or an     |                                   | By:                                     | */s/ Thomas F. Macina* |
| affiliate                                   |                                   |                                    | Thomas F. Macina, SeniorVice President |
|                                        |                                   |                                    |
|                                        |                                   |                                    |
| By:                                         | */s/ Nicole D. Kouba*                  |                                    |   |
|                                        | Nicole D. Kouba, Vice President        |                                    | **OWS CLO 1 LTD.**, as  a Bank |
|                                        |                                   |                                    |
|                                        |                                   |                                    |
| **DENALI CAPITAL, LLC,**managing  member of |                                   | By:                                     | */s/ Dean Sterian* |
| DC Funding Partners, portfolio manager for  |                                   |                                    | Dean Sterian, Managing Director |
| **DENALI CAPITAL CLO IV, LTD**,  or an      |                                   |                                    |
| affiliate                                   |                                   |                                    |
|                                        |                                   |                                    |
|                                        |                                   |                                    |
| By:                                         | */s/ Nicole D. Kouba*                  |                                    |   |
|                                        | Nicole D. Kouba, Vice President        |                                    |   |
|                                             |                                        |                                         |  |  |  |  |  |  |  |  |

 

 

**Signature Page to Waiver and Second Amendmentto Amended and Restated Credit Agreement**

 

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To induce the Administrative Agent and the Banks to enter into thisWaiver and Amendment, the undersigned consent and agree (a) to its executionand delivery and terms and conditions thereof, (b) that this document in no wayreleases, diminishes, impairs, reduces, or otherwise adversely affects anyLiens, Subsidiary Guaranties, assurances, or other obligations or undertakingsof any of the undersigned under any Credit Documents, and (c) that thisAmendment binds each of the undersigned and its successors and permittedassigns and inures to the benefit of the Administrative Agent, the Banks, andtheir respective successors and permitted assigns.

 

 
| **WORLDNET SERVICES CORP.**,  as a  Guarantor                    | **HERITAGE HEALTH SYSTEMS OF TEXAS,  INC.**, as a Guarantor |
|------------------------------------------------------------------|-------------------------------------------------------------|
|                                                             |                                                        |
|                                                             |                                                        |
| By:                                                              | */s/ Robert Waegelein*                                      |   | By: | */s/ Theodore M. Carpenter, Jr* |   |
|                                                             | Robert  Waegelein, Chief Financial Officer                  |   | Theodore  M. Carpenter, Jr., President |
| ** **                                                       | ** **                                                  |
| ** **                                                       | ** **                                                  |
| **UNIVERSAL AMERICAN FINANCIAL  SERVICES, INC.**, as a Guarantor | **HHS TEXAS MANAGEMENT, INC.**,  as a  Guarantor            |
|                                                             |                                                        |
|                                                             |                                                        |
| By:                                                              | */s/ Robert Waegelein*                                      |   | By: | */s/ Steven C. Holman* |   |
|                                                             | Robert  Waegelein, President                                |   | Steven  C. Holman, Secretary |
| ** **                                                       | ** **                                                  |
| ** **                                                       | ** **                                                  |
| **QUINCY COVERAGE CORPORATION**,  as a  Guarantor                | **CHCS SERVICES INC.**,  as a Guarantor                     |
|                                                             |                                                        |
|                                                             |                                                        |   | By: | */s/ Robert Waegelein* |   |
| By:                                                              | */s/ Robert Waegelein*                                      |   |   | Robert  Waegelein, Executive Vice |   |
|                                                             | Robert  Waegelein, President                                |   | President |
| ** **                                                       | ** **                                                  |
| ** **                                                       | ** **                                                  |
| **HERITAGE HEALTH SYSTEMS, INC.**,  as a  Guarantor              | **CHCS INC.**, as a  Guarantor                              |
|                                                             |                                                        |
|                                                             | By:                                                         | */s/ Robert Waegelein* |   |
| By:                                                              | */s/ Steven C. Holman*                                      |   |   | Robert  Waegelein, Executive Vice |   |
|                                                             | Steven C. Holman, Assistant Secretary                       |   | President |

 

 

**Signature Page to Waiver and Second Amendmentto Amended and Restated Credit Agreement**

 

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| **PSO MANAGEMENT OF TEXAS, LLC**,  as a  Guarantor | **HHS-HPN NETWORK, INC.**,  as a Guarantor       |
|----------------------------------------------------|--------------------------------------------------|
|                                               |                                             |
|                                               | * *                                         |   | By: | */s/ Steven C. Holman* |   |
| By:                                                | */s/  Steven C. Holman*                          |   |   | Steven C. Holman, Secretary |   |
|                                               | Steven C. Holman, Vice President                 |   |   |
| ** **                                         | ** **                                       |
| ** **                                         | ** **                                       |
| ** **                                         | **HHS TEXAS MANAGEMENT, L.P.**,  as a  Guarantor |
|                                               |                                             |
|                                               |                                             |
|                                               | * *                                         |   | By: | **HHS Texas Management, Inc.**,  its  general partner |
|                                               |                                             |   |   |
|                                               |                                             |   |   |
|                                               |                                             | By: | */s/  Steven C. Holman* |   |
|                                               |                                             |   | Steven C. Holman, Secretary |

 

 

**Signature Page to Waiver and Second Amendmentto Amended and Restated Credit Agreement**

 

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