**Exhibit 10.12**

 

**FIRST AMENDMENT TO AMENDED AND RESTATED CREDITAGREEMENT**

 

THISFIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this ***“Amendment”***) isentered into as of June 2, 2005, among **UNIVERSALAMERICAN FINANCIAL CORP.**, a New York corporation (the ***“Borrower”***), the Banks party to theCredit Agreement (hereinafter defined) and **BANK OF AMERICA, N.A.**,as the Administrative Agent for the Banks.

 

TheBorrower, the Banks and the Administrative Agent are party to the CreditAgreement dated as of May 28, 2004 (the **“*Credit Agreement*”**), and have agreed, uponthe following terms and conditions, to amend the Credit Agreement in certainrespects.  Accordingly, for valuable andacknowledged consideration, the Borrower, the Banks and the Administrative Agentagree as follows:

 

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

 

2.             **Amendment**.  Clause (iv) of ***Section 3.03(i)(e) ***isamended to read in its entirety as follows:

 

“(iv)        thefirst $60,000,000 of net cash proceeds from the issuance of up to 3,500,000shares of common stock by the Borrower, provided that such net cash proceeds areused in a manner and for purposes consistent with those set forth in thatcertain letter dated May 26, 2005, from the Borrower to the Banks), shall be applied as a mandatory prepaymentof the Outstanding Amount of the Term Loans.”

 

3.             **ConditionsPrecedent to Effectiveness of Amendment**.  This Amendment shall not be effective untilthe Administrative Agent receives: (a) counterparts of this Amendmentexecuted by the Borrower, the Subsidiary Guarantors, the requisite Banks andthe Administrative Agent; (b) an amendment fee for the account of eachBank that has executed and delivered (which may be by facsimile transmission)this Amendment at or before 5:00 p.m., New York time, on June 2,2005, in the amount of .03% times the sum of (i) such Bank’s Revolving LoanCommitment plus (ii) the Outstanding Amount of the Term Loans owing tosuch Bank; (c) paymentof all expenses, including legal fees and expenses of counsel to theAdministrative Agent, incurred by the Administrative Agent in connection withthis Amendment, to the extent invoiced to the Borrower on or prior to the datehereof; and (d) such other agreements, documents, instruments and items asthe Administrative 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 thisAmendment, the incumbency of the officer of the Borrower and each of theSubsidiary Guarantors executing this Amendment, and any other matters relevantthereto.

 

4.             **Representations**.  The Borrower represents and warrants to the Administrative Agentand the Banks as follows:  (a) theexecution, delivery and performance by the Borrower of this Amendment and theCredit Agreement, as amended hereby, have been duly authorized by all necessarycorporate action; (b) all representations and warranties made or deemedmade by the Borrower in the Credit Documents are true and correct as of thedate hereof, except to the extent that such representations and warrantiesexpressly relate solely to an earlier date (in which case such representationsand warranties were true and accurate on and as of such earlier date) andexcept for changes in factual circumstances not prohibited by the CreditAgreement; and (c) no Default or Event of Default has occurred and iscontinuing as of the date hereof.

 

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5.             **Effect ofAmendment**.  This Amendmentis a Credit Document.  Except asexpressly modified and amended by this Amendment, all of the terms, provisionsand conditions of the Credit Documents shall remain unchanged and in full forceand effect.  If any part of thisAmendment is for any reason found to be unenforceable, all other portions of itshall nevertheless remain enforceable. The Credit Documents and any and all other documents heretofore, now orhereafter executed and delivered pursuant to the terms of the Credit Agreementare hereby amended so that any reference to the Credit Agreement shall mean areference to the Credit Agreement as amended hereby.

 

6.             **Expenses****.**  The Borrower shall pay all reasonable feesand expenses paid or incurred by the Administrative Agent incident to thisAmendment, including, without limitation, the reasonable fees and expenses ofthe Administrative Agent’s counsel in connection with the negotiation,preparation, delivery and execution of this Amendment and any relateddocuments.

 

7.             **Governing Law.**  ThisAmendment 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.

 

8.             **Counterparts.**  This Amendment may be executed in any numberof counterparts and by the parties hereto in separate counterparts, each ofwhich when so executed and delivered shall be deemed to be an original and allof which taken together shall constitute one and the same instrument.

 

9.             **ENTIRETY. THIS AMENDMENT, THE CREDIT AGREEMENT, AND THE OTHER CREDIT DOCUMENTSEMBODY THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND SUPERCEDE ALL PRIORAGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING TO THE SUBJECT MATTERHEREOF.  THESE CREDIT DOCUMENTS REPRESENTTHE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BYEVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THEPARTIES.**

 

10.           **Parties.**  This Amendment binds and inures to thebenefit of the Borrower, the Subsidiary Guarantors, the Administrative Agent,the Banks and their respective permitted successors and assigns.

 

***[REMAINDER OF PAGE INTENTIONALLYBLANK.***

***SIGNATURE PAGES FOLLOW.]***

 

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Signature Page to thatcertain First Amendment to Amended and Restated Credit Agreement dated as ofthe date first set forth above, among Universal American Financial Corp., asthe Borrower, Bank of America, N.A., as the Administrative Agent, and certainBanks party thereto.

 
| **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/  Mark Short*                      |   | * * | * * |
|                                        | Mark Short, Vice  President            |   |   |
|                                        |                                   |   |   |
|                                        |                                   | **SUNTRUST  BANK**, as a Bank |
|                                        |                                   |   |   |
| **THE  CIT GROUP/EQUIPMENT**                | ** **                             | ** ** |
| **FINANCING,  INC.**, as a Bank             | By:                                    | */s/  Stephen L. Leister* |   |
|                                        |                                   |   | Stephen L.  Leister, First Vice President |
|                                        |                                   |   |   |
| By:                                         | */s/  Steven J. Kobriger*              |   | * * | * * |
|                                        | Steven J.  Kobriger, Assistant Vice    |   |   |
|                                        | President                              | **U.S.  BANK NATIONAL ASSOCIATION**, as a |
|                                        |                                   | Bank |   |
|                                        |                                   |   |   |
|                                        |                                   |   |   |
| **LASALLE  BANK, N.A.**, as a Bank          | By:                                    | */s/  Ziad W. Amra* |   |
|                                        |                                   |   | Ziad W. Amra,  Corporate Banking Officer |
|                                        |                                   |   |   |
| By:                                         | /s/ Andrew C.  Haak                    |   |   |   |
|                                        | Andrew C. Haak,  Senior Vice President |   |   |
|                                        |                                   | **RAYMOND  JAMES BANK, FSB**, as a Bank |
|                                        |                                   |   |   |
|                                        |                                   |   |
| **THE  BANK OF NEW YORK**, as a Bank        | By                                     | */s/  Andrew Hahn* |   |
|                                        |                                   |   | Andrew Hahn,Vice  President |
|                                        |                                   |   |   |
| By:                                         | */s/  Thomas McGinley*                 |   | * * | * * |
|                                        | Thomas McGinley,  Vice President       |   |   |
|                                             |                                        |  |  |  |  |  |

 

**Signature Page to First Amendment to Amended and RestatedCredit Agreement**

 

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** **

Signature Page to thatcertain First Amendment to Amended and Restated Credit Agreement dated as ofthe date first set forth above, among Universal American Financial Corp., asthe Borrower, Bank of America, N.A., as the Administrative Agent, and certainBanks party thereto.

** **
| **DENALI  CAPITAL, LLC,**managing member of | **MAGNETITE  IV CLO LIMITED**, as a Bank |
|---------------------------------------------|------------------------------------------|
| DC Funding  Partners, portfolio manager for |                                     |   |
| **DENALI  CAPITAL CLO III, LTD**, or an     |                                     |   |
| affiliate                                   | By:                                      | */s/  Tom Coldwell* |   |
|                                        |                                     |   | Tom Coldwell,  Authorized Signatory |
|                                        |                                     |   |   |
| By:                                         | */s/  John F. Thacker*                   |   |   |   |
|                                        | John F. Thacker,  Chief Credit Officer   |   |   |
|                                        |                                     | **MAGNETITE  V CLO LIMITED**, as a Bank |
|                                        |                                     | ** ** |
|                                        |                                     | ** ** | ** ** |
| **DENALI  CAPITAL, LLC,**managing member of | By:                                      | */s/  Tom Coldwell* |   |
| DC Funding  Partners, portfolio manager for |                                     | Tom Coldwell,  Authorized Signatory |
| **DENALI  CAPITAL CLO IV, LTD**, or an      |                                     |   |
| affiliate                                   |                                     |   |
|                                        |                                     |   |
|                                        |                                     | **SENIOR  LOAN PORTFOLIO**, as a Bank |
| By:                                         | */s/  John F. Thacker*                   |   |   |   |
|                                        | John F. Thacker,  Chief Credit Officer   |   |   |
|                                        |                                     | By: | */s/  Tom Coldwell* |   |
|                                        |                                     |   | Tom Coldwell,  Authorized Signatory |
|                                        |                                     |   |   |
| **GULF  STREAM - COMPASS CLO 2002-1**       | ** **                               | ** ** |
| **LTD**,  as a Bank **GULF STREAM-COMPASS** | ** **                               | ** ** |
| **CLO  2002-1 LTD**By: Gulf Stream Asset    | **VAN  KAMPEN SENIOR INCOME TRUST**, as  |
| Management LLC,  As Collateral Manager      | a Bank                                   |   |
|                                        |                                     |   |   |
|                                        |                                     |   |   |
| * *                                    | By:                                      | */s/  Brad Langs* | * * |
| By:                                         | */s/  Barry K. Love*                     |   |   | Brad Langs,  Executive Director |
|                                        | Barry K. Love,  Chief Credit Officer     |   |   |
|                                        |                                     |   |   |
|                                        |                                     |   |   |
|                                        |                                     | **BLACKROCK  LIMITED DURATION** |
| **GULF  STREAM - COMPASS CLO 2004-1**       | **INCOME  TRUST**, as a Bank             |
| **LTD**,  as a Bank **GULF STREAM-COMPASS** | ** **                               | ** ** |
| **CLO  2004-1 LTD**By: Gulf Stream Asset    |                                     |   |
| Management LLC,  As Collateral Manager      | By:                                      | */s/  Tom Coldwell* |   |
|                                        |                                     |   | Tom Coldwell,  Authorized Signatory |
|                                        |                                     |   |   |
| By:                                         | */s/  Barry K. Love*                     | * * | * * | * * |
|                                        | Barry K. Love,  Chief Credit Officer     |   |   |
|                                             |                                          |  |  |  |  |  |

 

**Signature Page to First Amendment to Amended and RestatedCredit Agreement**

 

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Signature Page to thatcertain First Amendment to Amended and Restated Credit Agreement dated as ofthe date first set forth above, among Universal American Financial Corp., asthe Borrower, Bank of America, N.A., as the Administrative Agent, and certainBanks party thereto.

 
| **BLACKROCK  SENIOR INCOME SERIES**, as |
|-----------------------------------------|
| a Bank                                  |
|                                    |   |
|                                    |   |
| By:                                     | */s/  Tom Coldwell* |   |
|                                    | Tom Coldwell,  Authorized Signatory |

 

**Signature Page to First Amendment to Amended and RestatedCredit Agreement**

 

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To induce theAdministrative Agent and the Banks to enter into this Amendment, theundersigned consent and agree (a) to its execution and delivery and termsand conditions thereof, (b) that this document in no way releases,diminishes, impairs, reduces, or otherwise adversely affects any Liens,Subsidiary Guaranties, assurances, or other obligations or undertakings of anyof the undersigned under any Credit Documents, and (c) that this Amendmentbinds each of the undersigned and its successors and permitted assigns andinures to the benefit of the Administrative Agent, the Banks, and theirrespective successors and permitted assigns.

 

 
| **WORLDNET  SERVICES CORP.**, as         | **HERITAGE  HEALTH SYSTEMS OF TEXAS,**    |
|------------------------------------------|-------------------------------------------|
| a Guarantor                              | **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**        | **HHS  TEXAS MANAGEMENT, INC.**, as a     |
| **SERVICES,  INC.**, as a Guarantor      | Guarantor                                 |
|                                     |                                      |   |   |
|                                     |                                      |   |   |
| By:                                      | */s/ Robert Waegelein*                    |   | By: | */s/  Steven C. Holman* | * * |
|                                     | Robert Waegelein, President               |   | Steven C.  Holman, Secretary |
|                                     |                                      |   |   |
|                                     |                                      |   |   |
| **QUINCY  COVERAGE CORPORATION**, as a   | **CHCS  SERVICES INC.**, as a Guarantor   |
| Guarantor                                |                                      |   |
|                                     |                                      |   |   |
|                                     |                                      | By: | */s/ Robert Waegelein* |   |
| By:                                      | */s/ Robert Waegelein*                    |   | * * | Robert Waegelein, Executive Vice |
|                                     | Robert Waegelein, President               |   | President |
|                                     |                                      |   |   |
|                                     |                                      |   |   |
| **HERITAGE  HEALTH SYSTEMS, INC.**, as a | **CHCS  INC.**, as a Guarantor            |
| Guarantor                                |                                      |   |
|                                     |                                      |   |   |
|                                     |                                      | By: | */s/ Robert Waegelein* |   |
| By:                                      | */s/ Robert Waegelein*                    |   | * * | Robert Waegelein, Executive Vice |
|                                     | Robert Waegelein, Executive Vice          |   | President |
|                                     | President                                 |   |   |

 

**Signature Page to First Amendment to Amended and RestatedCredit Agreement**

 

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** **
| **PSO  MANAGEMENT OF TEXAS, LLC**, as a | **HHS-HPN  NETWORK, INC.**, as a Guarantor |
|-----------------------------------------|--------------------------------------------|
| 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 |
|                                         |                                            |  |  |  |  |

 

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