Document:

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                                                              EXHIBIT 10.22

                         FOUNDATION HEALTH SYSTEMS, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

                                 I. INTRODUCTION

     Foundation Health Systems, Inc. (the "Company") hereby establishes the
Foundation Health Systems, Inc. Employee Stock Purchase Plan (the "Plan") to
encourage and facilitate the purchase of shares of common stock of the Company
by eligible employees of the Company and its subsidiaries.

                                 II. DEFINITIONS

     For purposes of the Plan, the following capitalized terms shall have the
meanings set forth in this Article.

2.1  "Benefits Representative" means the Human Resources Department of the
Company or such other person or persons designated by the Committee to assist
the Committee with the administration of the Plan.

2.2  "Board" means the Board of Directors of the Company as from time to time
constituted.

2.3  "Committee" means the Compensation and Stock Option Committee of the Board.

2.4  "Common Stock" means the Class A Common Stock, par value $.001 per share,
of the Company.

2.5  "Company" means Foundation Health Systems, Inc., a Delaware corporation,
and any successor thereto.

2.6  "Compensation" means the base compensation paid to a Participant by an
Employer, including shift differentials but excluding bonuses, commissions,
overtime or any other pay outside the regular work schedule, as determined by
the Committee.

2.7  "Effective Date" means September 1, 1997.

2.8  "Employee Stock Purchase Account" means the account established pursuant to
Section 5(c) of the Plan to which a Participant's payroll deductions are
credited.

2.9  "Employer" means the Company and each Subsidiary, other than a Subsidiary,
if any, which the Committee excludes from participation in the Plan.

2.10 "Entry Date" means a date which is September 1, 1997, or the first day of
each subsequent month.

2.11 "Excluded Employee" means an employee of an Employer who (i) is one of up
to thirty-five senior officers of the Company and its Subsidiaries whose
compensation is subject to Committee approval under the by-laws of the Company
or (ii) is scheduled to work less than 20 hours a week.

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2.12 "Fair Market Value" means the closing price of a share of Common Stock as
reported in THE WALL STREET JOURNAL on the New York Stock Exchange Composite
Transactions list for the date as of which such value is being determined or, if
there shall be no reported transaction on such date or if such date is not a
trading day, on the next immediately preceding date for which a transaction was
reported or which was a trading day, PROVIDED that if Fair Market Value for any
date cannot be so determined, Fair Market Value shall be determined by the
Committee by whatever means or method as the Committee, in the good faith
exercise of its discretion, shall at such time deem appropriate.

2.13 "Participant" means any employee of an Employer who meets the eligibility
requirements of Article III and has elected to participate in the Plan as
described in such Article. An individual shall cease to be a Participant as of
the date he or she terminates employment with all Employers, for whatever
reason, or abandons his or her election pursuant to Article VII hereof.

2.14 "Plan" means the Foundation Health Systems, Inc. Employee Stock Purchase
Plan herein set forth and any amendment hereto.

2.15 "Purchase Date" means a date which is September 30, 1997, or the last day
of each subsequent month.

2.16 "Purchase Period" means a monthly period ending on a Purchase Date.

2.17 "Purchase Price" means, with respect to a share of Common Stock purchased
on a Purchase Date, the lesser of (i) 85 percent of the Fair Market Value of a
share of Common Stock on the first day of the Purchase Period ending on such
Purchase Date or (ii) 85 percent of the Fair Market Value of a share of Common
Stock on such Purchase Date, PROVIDED that if such price includes a fraction of
a cent, the Purchase Price shall be rounded up to the next whole cent.

2.18 "Subsidiary" means a corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing 50
percent or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain. Any corporation that satisfies the
conditions set forth in the immediately preceding sentence after the date the
Plan is adopted by the Board shall be a "Subsidiary" beginning on the date such
corporation satisfies such conditions.

2.19 "Termination Date" means the earlier of (i) the date as of which the Board
terminates the Plan or (ii) the Purchase Date on which all shares available for
issuance under the Plan shall have been purchased by Participants under the
Plan.

                       III. ELIGIBILITY AND ADMINISTRATION

3.1  ELIGIBILITY AND PARTICIPATION.

     (a)  Any employee of an Employer who is not an Excluded Employee shall be
eligible to participate in the Plan as of the first Entry Date following such
employee's satisfaction of the "eligibility service requirement" (as defined
below in this Section 4(a)), or, if later, the first Entry Date following the
date on which the employee's Employer adopted the Plan. An employee shall have
satisfied the eligibility service requirement on the Entry Date following his or
her

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completion of at least 30 days of continuous service with an Employer. For the
sole purpose of calculating days of continuous service under the Plan, employees
shall be credited with service for an Employer or a Subsidiary (even though such
service may have been performed prior to (i) the Effective Date or (ii) the
Company's acquisition of such Subsidiary. No eligibility provision hereof shall
permit participation in the Plan in a manner contrary to the applicable
requirements of the Code and the regulations promulgated thereunder.

     (b)  At least 15 days (or such other period as may be prescribed by the
Committee) prior to any Entry Date, an employee who is eligible to participate
in the Plan pursuant to subsection (a) of this Section may execute and deliver
to the Benefits Representative an application on the prescribed form specifying
his or her chosen rate of payroll deductions, as described in Article IV. Such
application shall authorize the employee's Employer to reduce the employee's
Compensation by the amount of any such payroll deductions. The application shall
also evidence the employee's acceptance of and agreement to all provisions of
the Plan.

     (c)  If a Participant is transferred from one Employer to another Employer,
such transfer shall not terminate the Participant's participation in the Plan.
Such Participant shall continue to make payroll deductions under the Plan,
PROVIDED that such Participant completes any forms as the Committee may require,
in the time and manner prescribed by the Committee.

     (d)  If an individual terminates employment with all Employers so as to
discontinue participation in the Plan, and such individual is subsequently
reemployed by an Employer, such individual shall be required to satisfy the
eligibility service requirement described in subsection (a) of this Section as
if he or she were a new employee.

     (e)  Notwithstanding anything herein to the contrary, no employee shall be
entitled to participate in the Plan for a Purchase Period if such employee, on
the first day of such Purchase Period would own shares (including shares which
may be purchased under the Plan during such Purchase Period) possessing five
percent or more of the total combined voting power or value of all classes of
stock of the Company or any of its Subsidiaries. For purposes of the foregoing
sentence, the rules of stock attribution set forth in Section 424(d) of the Code
shall apply in determining share ownership.

3.2  ADMINISTRATION. The Plan shall be administered by the Committee. Subject to
the express provisions hereof, the Committee shall have complete authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it and to make all other determinations necessary or advisable for
its administration. Such determinations made by the Committee shall be
conclusive. No member of the Committee shall be personally liable for any
decision or determination made in good faith under the Plan.

                       IV. PARTICIPANT PAYROLL DEDUCTIONS

4.1  ELECTIONS. Each Participant may elect, in the manner described in
Section 4, to make payroll deductions under the Plan in an amount equal to a
whole dollar amount or a whole percentage, of such Participant's Compensation
for each payroll period, beginning with the first pay date which occurs on or
after the Entry Date as of which such Participant commences participation in the
Plan. Payroll deductions for each payroll period under the Plan shall be at
least two percent of a Participant's Compensation for such payroll period and
may be limited by such maximum percentage or whole dollar amount, if any, as the
Committee may designate from time to time. Once a Participant's participation in
the Plan commences, such Participant

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shall continue to participate in the Plan for each succeeding Purchase Period
until he or she withdraws from the Plan pursuant to Article VII or ceases to be
an eligible employee.

4.2  ELECTION CHANGES. At least 15 days (or such other period as may be
prescribed by the Committee) prior to the first day of any Purchase Period, a
Participant shall have the right to elect to increase or decrease his or her
designated rate of payroll deductions under the Plan by executing and delivering
to the Benefits Representative an application on the prescribed form specifying
his or her chosen rate of payroll deductions.

4.3  ACCOUNTS. The Committee shall cause to be established a separate Employee
Stock Purchase Account on behalf of each Participant. Such Employee Stock
Purchase Accounts shall be solely for accounting purposes, and there shall be no
segregation of assets among the separate accounts. Such accounts shall not be
credited with interest or other investment earnings.

                          V. PURCHASE OF COMMON SHARES

5.1  NUMBER OF SHARES PURCHASED. Subject to a Participant's right of abandonment
described in Article VII, the balance of each Participant's Employee Stock
Purchase Account shall be applied on each Purchase Date to purchase the number
of whole and fractional shares of Common Stock determined by dividing the
balance of such Participant's Employee Stock Purchase Account as of such date by
the Purchase Price. The Participant's Employee Stock Purchase Account shall be
debited accordingly.

5.2  MAXIMUM SHARES PURCHASED.

     (a)  Notwithstanding any provision of the Plan to the contrary, the maximum
number of shares which shall be available for purchase under the Plan shall be
1,000,000 shares of Common Stock, subject to adjustment as provided in Section
9.2. The shares of Common Stock available under the Plan may be treasury shares,
shares originally issued for such purpose or shares purchased by the Company, as
the Company may decide. In the event that the aggregate number of shares of
Common Stock which all Participants elect to purchase during a Participation
Period exceeds the number of shares remaining available for issuance under the
Plan, then the number of shares to which each Participant is entitled shall be
determined by multiplying the number of shares available for issuance by a
fraction, the numerator of which is the number of shares which such Participant
has elected to purchase and the denominator of which is the number of shares
which all Participants have elected to purchase.

     (b)  Notwithstanding any provision contained herein to the contrary, no
Participant shall be permitted to purchase shares of Common Stock in any
calendar year under the Plan and other employee stock purchase plans (within the
meaning of Section 423 of the Code) of the Company and its Subsidiaries with an
aggregate fair market value (determined at the time the options to purchase such
shares are granted) in excess of $25,000, all determined in the manner provided
by Section 423 (b) (8) of the Code. Any portion of the balance of a
Participant's Employee Stock Purchase Account that is not applied to purchase
shares of Common Stock due to the application of this subsection shall be
refunded to such Participant as soon as administratively practicable.

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5.3  TERMINATION OF EMPLOYMENT. If a Participant dies, terminates employment
with all the Employers for any reason or otherwise becomes an Excluded Employee,
then the Participant's payroll deductions shall be suspended and the balance of
the Participant's Employee Stock Purchase Account shall be applied to purchase
shares of Common Stock on the Purchase Date next occurring after the effective
date of such transfer, except to the extent the Participant abandons his or her
election to purchase shares of Common Stock as described in Article VII.

                          VI. ISSUANCE OF CERTIFICATES

     As soon as administratively practicable after each Purchase Date, the
Company, in its sole discretion, shall purchase or issue shares of Common Stock
and at the election of the Company, a certificate representing the shares of
Common Stock purchased by such Participant under the Plan on such date shall be
issued and delivered to such Participant or a notation of noncertificated shares
shall be made on the stock records of the Company. Shares of Common Stock
purchased by a Participant under the Plan shall be registered in the name of the
Participant. Shares of Common Stock purchased hereunder may not be sold,
assigned, transferred, pledged, exchanged, encumbered or otherwise disposed of
in any way (other than by will or the laws of descent and distribution) for a
period commencing on the Purchase Date and ending one year thereafter (the
"Holding Period"); PROVIDED, HOWEVER, that the Committee, in its discretion, may
shorten the Holding Period or otherwise provide for the lapse of any
restrictions outstanding on any shares. All certificates issues to Participants
following each Purchase Date shall bear a legend in substantially the following
form:

          The  shares represented by this certificate may not be sold, assigned,
     transferred, pledged, exchanged, encumbered or otherwise disposed of in any
     way (other than by will or the laws of descent and distribution) for a
     period commencing on [insert applicable Purchase Date] and ending one year
     thereafter (the "Holding Period"); provided, however, that the committee
     administering the Foundation Health Systems, Inc. Employee Stock Purchase
     Plan, in its discretion, may shorten the Holding Period or otherwise
     provide for the lapse of any restrictions outstanding on any such shares.

             VII. PARTICIPANT'S RIGHT TO ABANDON PURCHASE OF SHARES

     At any time during a Purchase Period, but in no event later than 15 days
(or such shorter period prescribed by the Committee) prior to a Purchase Date, a
Participant may elect to abandon his or her election to purchase shares of
Common Stock under the Plan. Such abandonment election shall be made on forms
prescribed by the Committee and delivered to the Benefits Representative. Upon
such an election by a Participant, the amount credited to the Participant's
Employee Stock Purchase Account for the current Purchase Period shall be
refunded to the Participant as soon as is administratively practicable, and such
Participant's participation in the Plan shall terminate.

               VIII. SUSPENSION ON ACCOUNT OF HARDSHIP WITHDRAWAL

     If a Participant makes a hardship withdrawal from any plan with a cash or
deferred arrangement qualified under Section 401(k) of the Code, which plan is
sponsored, or participated in, by the Participant's Employer, such Participant
shall be suspended from making payroll deductions under the Plan for a period of
twelve months from the date of such

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withdrawal. The balance of such Participant's Employee Stock Purchase Account
shall be applied to purchase shares of Common Stock on the Purchase Date next
occurring after the effective date of such withdrawal, except to the extent the
Participant abandons his or her election to purchase shares of Common Stock as
described in Article VII. After the expiration of such twelve-month period, the
Participant may resume his or her payroll deductions in accordance with Article
IV.

                                   IX. GENERAL

9.1  RIGHTS NOT TRANSFERABLE. The right to purchase shares of Common Stock under
the Plan shall not be transferable by any Participant other than by will or the
laws of descent and distribution, and must be exercisable, during his or her
lifetime, only by the Participant.

9.2  CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.

     (a)  The existence of the Plan shall not affect in any way the right or
power of the Company or its shareholders to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock that affects the
shares of Common Stock or the rights thereof, or the dissolution or liquidation
of the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.

     (b)  If, during the term of the Plan, the Company shall effect (i) a
distribution or payment of a dividend on its Common Stock in shares of the
Company, (ii) a subdivision of its outstanding Common Stock by a stock split or
otherwise, (iii) a combination of the outstanding shares of Common Stock into a
smaller number of shares by a reverse stock split or otherwise, or (iv) an
issuance by reclassification or other reorganization of its Common Stock (other
than by merger or consolidation) of any shares of the Company, then each
Participant shall be entitled to receive upon the purchase of shares of Common
Stock pursuant to the Plan such shares of the Company which the Participant
would have owned or would have been entitled to receive after the happening of
such event had the Participant purchased shares of Common Stock pursuant to the
Plan immediately prior to the happening of such event. If any other event shall
occur that, in the judgment of the Board, necessitates adjusting the Purchase
Price, the number of shares of Common Stock offered or other terms of the Plan,
the Board shall take any action that in its judgment shall be necessary to
preserve each Participant's rights substantially proportionate to the rights
existing prior to such event. To the extent that any event or action pursuant to
this paragraph shall entitle Participants to purchase additional shares of
Common Stock or other shares of the Company, the shares available under the Plan
shall be deemed to include such additional shares of Common Stock or such other
shares.

     (c)  In the event of a merger of one or more corporations into the Company,
or a consolidation of the Company and one or more corporations in which the
Company shall be the surviving corporation, each Participant in the Plan shall,
at no additional cost, be entitled, upon his or her payment for all or part of
the shares of Common Stock purchasable by him or her under the Plan, to receive
(subject to any required action by shareholders) in lieu of the number of shares
of Common Stock which he or she was entitled to purchase, the number and class
of shares of stock or other securities to which such holder would have been
entitled pursuant to the terms of the agreement of merger or consolidation if,
immediately prior to such merger or

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consolidation, such holder had been the holder of record of the number of shares
of Common Stock equal to the number of shares paid for by the Participant.

     (d)  If the Company is merged into or consolidated with another corporation
under circumstances where the Company is not the surviving corporation, or if
the Company sells or otherwise disposes of substantially all its assets to
another corporation during the term of the Plan, each holder of a right to
purchase shall be entitled to receive, upon his or her payment for all or part
of the shares of Common Stock purchasable by him or her under the Plan and in
lieu of such shares of Common Stock, shares of such stock or other securities as
the holders of shares of Common Stock received pursuant to the terms of the
merger, consolidation or sale.

     (e)  Except as heretofore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock then
available for purchase under the Plan.

9.3  SHAREHOLDER APPROVAL. The Plan shall be submitted to the stockholders of
the Company for approval and, if approved by the affirmative vote of a majority
of the shares of Common Stock present in person or represented by proxy at
the1997 annual meeting of stockholders, shall become effective as of September
1,1997.

9.4  RIGHTS OF A SHAREHOLDER. No Participant shall have rights or privileges of
a shareholder of the Company with respect to shares purchasable under the Plan
unless and until the Participant shall become the holder of record of one or
more shares of Common Stock.

9.5  NO REPURCHASE OF COMMON STOCK BY COMPANY. The Company is not obligated to
repurchase any shares of Common Stock acquired under the Plan.

9.6  AMENDMENT OF THE PLAN. The Board may amend the Plan as it shall deem
advisable, subject to any requirement of stockholder approval required by
applicable law, rule or regulation, including Section 423 of the Code; provided,
however, that no amendment shall be made without stockholder approval if such
amendment would increase the maximum number of shares of Common Stock available
under the Plan (subject to Section 9.2). No amendment may impair the rights of a
holder of an outstanding award without the consent of such holder.

9.7  TERMINATION OF THE PLAN. While it is intended that the Plan remain in
effect as long as shares of Common Stock are available for purchase under the
Plan, the Board may terminate the Plan at any time in its discretion by
resolutions duly adopted. Upon termination of the Plan, the Committee shall
terminate payroll deductions and shall apply the balance of each Participant's
Employee Stock Purchase Account to purchase shares of Common Stock as described
in Section 6 as if such termination date were a Purchase Date under the Plan.
Notwithstanding the foregoing, in the event of the termination of the Plan, a
Participant may

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elect, in the time and manner prescribed by the Committee, to abandon his or her
right to purchase all or a portion of the shares of Common Stock purchasable by
him. As soon as administratively practicable after the termination of the Plan,
the Committee shall refund to each Participant who elects to abandon his or her
right to purchase shares of Common Stock, the entire balance of in his or her
Employee Stock Purchase Plan Account, or the applicable portion thereof.

     Notwithstanding any provision in the Plan to the contrary, the Plan shall
automatically terminate as of the Purchase Date on which all shares available
for issuance under the Plan shall have been purchased by Participants under the
Plan.

9.8  COMPLIANCE WITH STATUTES AND REGULATIONS. The sale and delivery of Common
Stock under the Plan shall be in compliance with relevant statutes and
regulations of governmental authorities, including state securities laws and
regulations, and with the regulations of applicable stock exchanges.

9.9  GOVERNING LAW. The Plan and all determinations made hereunder and actions
taken pursuant hereto, to the extent not otherwise governed by the Code or the
laws of the United States, shall be governed by the laws of the State of
Delaware and construed in accordance therewith without giving effect to
principles of conflicts of laws.

9.10 COMPANY AS AGENT FOR THE EMPLOYERS. Each Employer, by adopting the Plan,
appoints the Company, the Board and the Committee as its agents to exercise on
its behalf all of the powers and authorities hereby conferred upon the Company,
the Board and the Committee by the terms of the Plan, including, but not by way
of limitation, the power to amend and terminate the Plan. The authority of the
Company, the Board and the Committee to act as such agents shall continue for as
long as necessary to carry out the purposes of the Plan.

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                                                                   EXHIBIT 10.45

                               FIFTH AMENDMENT TO
                                CREDIT AGREEMENT

     THIS FIFTH AMENDMENT TO CREDIT AGREEMENT is made and dated as of September
20, 2000 (the "FIFTH AMENDMENT") among FOUNDATION HEALTH SYSTEMS, INC. (the
"COMPANY"), the Banks party to the Credit Agreement referred to below, and BANK
OF AMERICA, N.A., 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, that certain Second Amendment to
Credit Agreement (the "SECOND AMENDMENT") dated as of July 31, 1998, that
certain Third Amendment (the "THIRD AMENDMENT") dated as of November 6, 1998 and
that certain Fourth Amendment (the "FOURTH AMENDMENT") dated as of March 26,
1999 (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     AMENDMENTS TO SECTION 1.01.

                (a)     There shall be added to Section 1.01 of the Credit
Agreement, in appropriate alphabetical sequence, the following new definitions:

                "EXISTING LETTERS OF CREDIT" means those letters of credit
identified on SCHEDULE 1.02.

                "EXTENSION OF CREDIT" means (a) a Borrowing of Loans or (b) a
Letter of Credit Action wherein a new Letter of Credit is issued or which has
the effect of increasing the amount of, extending the maturity of, or making a
material modification to an outstanding Letter of Credit or the reimbursement of
drawings thereunder (collectively, the "EXTENSIONS OF CREDIT").

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                "ISSUING BANK" means Bank of America, N.A.

                "LETTER OF CREDIT" means any standby letter of credit issued or
outstanding hereunder.

                "LETTER OF CREDIT ACTION" means the issuance, supplement,
amendment, renewal, extension or modification relating to a Letter of Credit
hereunder.

                "LETTER OF CREDIT APPLICATION" means an application by the
Company prepared in the form then used by the Issuing Bank.

                "LETTER OF CREDIT CASH COLLATERAL ACCOUNT" means a blocked
deposit account at Administrative Agent with respect to which the Company hereby
grants a security interest in such account to Administrative Agent as security
for Letter of Credit Usage and with respect to which the Company agrees to
execute and deliver from time to time such documentation as the Administrative
Agent may reasonably request to further assure and confirm such security
interest.

                "LETTER OF CREDIT EXPIRATION DATE" means June 8, 2002.

                "LETTER OF CREDIT SUBLIMIT" means an amount equal to
$100,000,000. The Letter of Credit Sublimit is part of, and not in addition to,
the Commitments.

                "LETTER OF CREDIT USAGE" means, as at any date of determination,
the aggregate undrawn face amount of outstanding Letters of Credit PLUS the
aggregate amount of all drawings under the Letters of Credit not reimbursed by
the Company or converted into Committed Loans.

                "MINIMUM AMOUNT" means, with respect to any Letter of Credit
Action, $100,000 or such lesser amount as the Issuing Bank and the Company may
agree.

                "OUTSTANDING OBLIGATIONS" means, as of any date, and giving
effect to making any Extensions of Credit requested on such date and all
payments, repayments and prepayments made on such date, (a) when reference is
made to all Banks, the sum of (i) the aggregate outstanding principal amount of
all Loans and (ii) all Letter of Credit Usage, and (b) when reference is made to
one Bank the sum of (i) the aggregate outstanding principal amount of all Loans
made by such Bank and (ii) such Bank's ratable risk participation in all Letter
of Credit Usage.

                "PHS FINANCING" means the loan by Health Net to PHS Real Estate
II, Inc. ("PHS") of approximately $35,400,000 to finance the purchase of PHS's
headquarters building, which loan will be secured by the Lien on such building
in favor of Health Net.

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                "REQUISITE TIME" means, with respect to the Letter of Credit
Action, 10:00 a.m. (San Francisco time) on the date two (2) Business Days prior
to such action (or such lesser time which is acceptable to Issuing Bank).

                (b)     The definition of the term "Loan Documents" in Section
1.01 of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:

                "LOAN DOCUMENTS" means this Agreement, any Notes, any Letter of
Credit Application, the Fee Letters and all other documents delivered to the
Administrative Agent or any Bank in connection herewith.

                (c)     The definition of the term "Loan" in Section 1.01 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

                "LOAN" means an extension of credit by a Bank to the Company
under Article II and Article XI, and may be a Committed Loan or a Bid Loan.

                2.2     AMENDMENTS TO SECTION 2.01.

                (3)     Section 2.01 of the Credit Agreement is hereby amended
and restated to read in its entirety as follows:

                "2.01   AMOUNTS AND TERMS OF COMMITMENTS. Each Bank severally
agrees, on the terms and conditions set forth herein, to make loans to the
Company from time to time on any Business Day during the period from the Closing
Date to the Revolving Termination Date; PROVIDED, HOWEVER, that the Outstanding
Obligations of each Bank (excluding Bid Loans) shall not exceed the amount set
forth on SCHEDULE 2.01 (such amount, as the same may be reduced under Section
2.07 or as a result of one or more assignments under Section 2.07 or as a result
of one or more assignments under Section 10.08, the Bank's "COMMITMENT");
PROVIDED, FURTHER, that, after giving effect to any Committed Borrowing, the
Outstanding Obligations of all Lenders shall not at any time exceed the combined
Commitments MINUS the outstanding principal amount of Commercial Paper Debt.
Within the limits of each Bank's Commitment, and subject to the other terms and
conditions hereof, the Company may borrow under this Section 2.01, prepay under
Section 2.08 and reborrow under this Section 2.01."

                2.3     AMENDMENTS TO SECTION 2.05.

                (1)     The second proviso of Section 2.05 of the Credit
Agreement is hereby amended and restated to read in its entirety as follows:

                "and PROVIDED, FURTHER, that at no time shall (a) the
Outstanding Obligations of all Banks (including all outstanding Bid Loans)
exceed the combined Commitments MINUS the

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outstanding principal amount of Commercial Paper Debt; or (b) the number of
Interest Periods for Bid Loans then outstanding plus the number of Interest
Periods for Committed Loans then outstanding exceed ten."

                2.4     AMENDMENTS TO SECTION 4.02.

                (a)     Section 4.02 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:

                "4.02   CONDITIONS TO ALL EXTENSIONS OF CREDIT. The obligation
of each Bank to make any Extension of Credit to be made by it, and the
obligation of any Bank to make any Bid Loan as to which the Company has accepted
the relevant Competitive Bid, is subject to the satisfaction of the following
conditions precedent on the date of such Extension of Credit:

                (4)     NOTICE. As to any Committed Loan, the Administrative
Agent shall have received a Notice of Borrowing and as to any Letter of Credit
Action, the Administrative Agent shall have received a Letter of Credit
Application duly completed and signed by the Company;

                (5)     CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties in Article V shall be true and correct on and as
of the date of such Extension of Credit with the same effect as if made on and
as of the date of such Extension of Credit (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct as of such earlier date);

                (6)     NO EXISTING DEFAULT. No Default or Event of Default
shall exist or shall result from such Extension of Credit; and

                (7)     OTHER DOCUMENTS. Such other approvals, opinions,
documents or materials as the Administrative Agent may reasonably request.

Each Notice of Borrowing, Competitive Bid Request and Letter of Credit
Application submitted by the Company hereunder shall constitute a representation
and warranty by the Company hereunder, as of the date of each such notice or
request and as of the date of such Extension of Credit, that the conditions in
Section 4.02 are satisfied."

                2.5     AMENDMENTS TO SECTION 7.01.

                (a)     Section 7.01 is hereby amended by adding the following
immediately prior to the end of clause (a) thereof:

                "and any Lien on the headquarters building of PHS Real Estate
II, Inc. in favor of Health Net pursuant to the PHS Financing"

                                       4
<PAGE>

                2.6     AMENDMENTS TO SECTION 8.02.

                (a)     Section 8.02 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:

                "8.02   REMEDIES. If any Event of Default occurs, the
Administrative Agent shall, at the request of, or may, with the consent of, the
Majority Banks,

                (1)     declare the commitment of each Bank to make Committed
Loans to be terminated, whereupon such commitments shall be terminated;

                (2)     declare (i) the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Company and
(ii) the amount equal to the aggregate amount of all outstanding Letters of
Credit Usage to be immediately due and payable to Issuing Bank without notice to
or demand upon the Company, which are hereby expressly waived by the Company, to
be held in a Letter of Credit Cash Collateral Account; and

                (3)     exercise on behalf of itself and the Banks all rights
and remedies available to it and the Banks under the Loan Documents or
applicable law;

PROVIDED, HOWEVER, that upon the occurrence of any event specified in subsection
(f) or (g) of SECTION 8.01 (or in the case of clause (i) of subsection (g) upon
the expiration of the 60-day period mentioned therein), (x) the obligation of
each Bank to make Loans shall automatically terminate and the unpaid principal
amount of all outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable without further act of the
Administrative Agent or any Bank, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Company and
(y) Issuing Bank may, with the approval of Administrative Agent on behalf of
Majority Banks, demand immediate payment by the Company of an amount equal to
the aggregate amount of all outstanding Letters of Credit Usage to be held in a
Letter of Credit Cash Collateral Account."

                2.7     AMENDMENT TO SECTION 9.01.

                (a)     Section 9.01 is hereby amended by adding the following
new paragraph to the end of Section 9.01:

                "Issuing Bank shall act on behalf of Banks with respect to any
Letters of Credit issued by it and the documents associated therewith; PROVIDED,
HOWEVER, that Issuing Bank shall

                                       5
<PAGE>

have all of the benefits and immunities (i) provided to Administrative Agent in
this SECTION 9.01 with respect to any acts taken or omissions suffered by
Issuing Bank in connection with Letters of Credit issued by it or proposed to be
issued by it and the application and agreements for letters of credit pertaining
to the Letters of Credit as fully as if the term "Administrative Agent" as used
in this SECTION 9.01 included Issuing Bank with respect to such acts or
omissions, and (ii) as additionally provided in this Agreement with respect to
Issuing Bank."

                2.8     ADDITION OF ARTICLE XIX.

                (a)     There shall be added to the Credit Agreement a new
Article XI reading in its entirety as follows:

                                   "ARTICLE XI

                                LETTERS OF CREDIT

                11.01   THE LETTER OF CREDIT SUBLIMIT. Subject to the terms and
conditions set forth in this Agreement, until the Letter of Credit Expiration
Date, the Issuing Bank shall take such Letter of Credit Actions as the Company
may from time to time request; PROVIDED, HOWEVER, that (i) the Outstanding
Obligations of each Bank (excluding its Bid Loans) shall not exceed such Bank's
Commitment, and the Outstanding Obligations of all Banks shall not exceed the
combined Commitments at any time, and (ii) Letter of Credit Usage shall not
exceed the Letter of Credit Sublimit at any time. Subject to SECTION 11.06 below
and unless consented to by the Issuing Bank and the Majority Banks, no Letter of
Credit may expire more than 12 months after the date of its issuance or last
renewal; PROVIDED, HOWEVER, that no Letter of Credit shall expire after the
Letter of Credit Expiration Date. If any Letter of Credit Usage remains
outstanding after such date, the Company shall, not later than such date,
deposit cash in an amount equal to such Letter of Credit Usage in a Letter of
Credit Cash Collateral Account. From and after the effective date of the Fifth
Amendment to Credit Agreement dated as of September 20, 2000 among the Company,
the Agent and the Banks, the Existing Letters of Credit shall be deemed to have
been issued hereunder and shall be Letters of Credit for all purposes hereof.

                11.02   REQUESTING LETTER OF CREDIT ACTIONS. The Company may
irrevocably request a Letter of Credit Action in a Minimum Amount therefor by
delivering a Letter of Credit Application therefor to the Issuing Bank, with a
copy to the Administrative Agent (who shall notify the Banks), not later than
the Requisite Time. In the case of a request for an initial issuance of a Letter
of Credit, such Letter of Credit Application shall specify in form and detail
reasonably satisfactory to the Issuing Bank: (A) the proposed issuance date of
the requested Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as

                                       6
<PAGE>

the Issuing Bank may reasonably require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit Application
shall specify in form and detail reasonably satisfactory to the Issuing Bank (A)
the Letter of Credit to be amended; (B) the proposed date of amendment thereof
(which shall be a Business Day); (C) the nature of the proposed amendment; and
(D) such other matters as the Issuing Bank may reasonably require. Unless the
Administrative Agent notifies the Issuing Bank that such Letter of Credit Action
is not permitted hereunder, or the Issuing Bank notifies the Administrative
Agent that: (a) it has determined that such Letter of Credit Action is contrary
to any Requirement of Law; or (b) in the reasonable judgment of the Issuing
Bank, such Letter of Credit materially violates the policies of the Issuing Bank
in existence on the date of such Letter of Credit Action uniformly applied, the
Issuing Bank shall, upon satisfaction of the applicable conditions set forth in
SECTION 4.02 with respect to any Letter of Credit Action constituting an
Extension of Credit, effect such Letter of Credit Action. This Agreement shall
control in the event of any conflict with any Letter of Credit Application. Upon
the issuance of a Letter of Credit, each Bank shall be deemed to have purchased
from the Issuing Bank a risk participation therein in an amount equal to that
Bank's Pro Rata Share TIMES the amount of such Letter of Credit Usage.

                11.03   REIMBURSEMENT OF PAYMENTS UNDER LETTERS OF CREDIT. The
Company shall reimburse the Issuing Bank through the Administrative Agent for
any payment that the Issuing Bank makes under a Letter of Credit on or before
the date of such payment; PROVIDED, HOWEVER, that if the conditions precedent
set forth in SECTION 4.02 can be satisfied, the Company may request a Borrowing
of Committed Loans to reimburse the Issuing Bank for such payment pursuant to
SECTION 2.03, or, failing to make such request, the Company shall be deemed to
have requested a Borrowing of Committed Loans which are Base Rate Committed
Loans on such payment date pursuant to SECTION 11.05 below. Without limitation
of any of the Company's other Obligations under this Credit Agreement, once the
Company has reimbursed the Administrative Agent as provided herein, it shall
have no further reimbursement obligation to the Administrative Agent or the
Issuing Bank under this SECTION 11.03 in respect thereof.

                11.04   FUNDING BY BANKS WHEN ISSUING BANK NOT REIMBURSED. Upon
any drawing under a Letter of Credit, the Issuing Bank shall notify the
Administrative Agent and the Company. If the Company fails to timely make the
payment required pursuant to SECTION 11.03 above, the Issuing Bank shall notify
the Administrative Agent of such fact and the amount of such unreimbursed
payment. The Administrative Agent shall promptly notify each Bank of its Pro
Rata Share of such amount. Each Bank shall make funds in an amount equal to its
Pro Rata Share of such amount available to the Administrative Agent at the
Administrative Agent's Payment Office not later than 12:00 noon (San Francisco
time) on the Business Day specified by the Administrative Agent and the
Administrative Agent shall remit the funds so received to the Issuing Bank. The
obligation of each Bank to so reimburse the Issuing Bank shall be absolute and
unconditional and shall not be affected by the occurrence of a Default or Event
of Default or any other occurrence or event. Any such reimbursement shall not
relieve or otherwise impair the

                                       7
<PAGE>

obligation of the Company to reimburse the Issuing Bank for the amount of any
payment made by the Issuing Bank under any Letter of Credit, together with
interest as provided herein.

                11.05   NATURE OF BANKS' FUNDING. If the conditions precedent
set forth in SECTION 4.02 can be satisfied (except for the execution and
delivery of a Letter of Credit Application) on any date the Company is obligated
to, but fails to, reimburse the Issuing Bank for a drawing under a Letter of
Credit, the funding by the Banks pursuant to SECTION 11.04 shall be deemed to be
a Borrowing of Base Rate Committed Loans (without regard to the Minimum Amount
therefor) deemed requested by the Company. If the conditions precedent set forth
in SECTION 4.02 cannot be satisfied on the date the Company is obligated to, but
fails to, reimburse the Administrative Agent for the account of the Issuing Bank
for a drawing under a Letter of Credit, the funding by the Banks pursuant to
SECTION 11.04 shall be deemed to be a funding by each Bank of its risk
participation in such Letter of Credit, and each Bank making such funding shall
thereupon acquire a pro rata participation, to the extent of its reimbursement,
in the claim of the Issuing Bank against the Company in respect of such payment
and shall share, in accordance with that pro rata participation, in any payment
made by the Company with respect to such claim. Any amounts made available by a
Bank under its risk participation shall be payable by the Company upon demand of
Administrative Agent, and shall bear interest at a rate per annum equal to the
Base Rate plus the Applicable Margin.

                11.06   SPECIAL PROVISIONS RELATING TO EVERGREEN LETTERS OF
CREDIT. The Company may request Letters of Credit that have automatic extension
or renewal provisions ("evergreen" Letters of Credit) so long as the Issuing
Bank consents in its sole and absolute discretion thereto and has the right to
not permit any such extension or renewal at least annually within a notice
period in advance of expiry to be agreed upon at the time each such Letter of
Credit Application is accepted. Once an evergreen Letter of Credit is issued,
unless the Administrative Agent has notified the Issuing Bank that the Majority
Banks have elected not to permit such extension or renewal, the Company, the
Administrative Agent and the Banks shall be deemed to have authorized (but may
not require) the Issuing Bank to, in its sole and absolute discretion, permit
the renewal of such evergreen Letter of Credit at any time to a date not later
than the Letter of Credit Expiration Date, and, unless directed by the Issuing
Bank, the Company shall not be required to request such extension or renewal.
The Issuing Bank may, in its sole and absolute discretion elect not to permit an
evergreen Letter of Credit to be extended or renewed at any time. If the Issuing
Bank shall elect not to renew any evergreen Letter of Credit, notice of such
nonrenewal shall be given to the Company substantially contemporaneously with
the delivery of notice of nonrenewal to the beneficiary of such evergreen Letter
of Credit.

                11.07   OBLIGATIONS ABSOLUTE. Without limiting the Company's
rights under SECTION 11.08 below, the obligation of the Company to pay to the
Issuing Bank the amount of any payment made by the Issuing Bank under any Letter
of Credit shall be absolute, unconditional, and irrevocable. Without limiting
the foregoing, the Company's obligation shall not be affected by any of the
following circumstances:

                                       8
<PAGE>

                (a)     any lack of validity or enforceability of the Letter of
Credit, this Agreement, or any other agreement or instrument relating thereto;

                (b)     any amendment or waiver of or any consent to departure
from the Letter of Credit, this Agreement, or any other agreement or instrument
relating hereto or thereto;

                (c)     the existence of any claim, setoff, defense, or other
rights which the Company may have at any time against the Issuing Bank, the
Administrative Agent or any Bank, any beneficiary of the Letter of Credit (or
any persons or entities for whom any such beneficiary may be acting) or any
other Person, whether in connection with the Letter of Credit, this Agreement,
or any other agreement or instrument relating thereto, or any unrelated
transactions;

                (d)     any demand, statement, or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid, or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect whatsoever so long as any such document appeared to comply with
the terms of the Letter of Credit;

                (e)     payment by the Issuing Bank in good faith under the
Letter of Credit against presentation of a draft or any accompanying document
which does not strictly comply with the terms of the Letter of Credit; or any
payment made by the Issuing Bank under any Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of any Letter of Credit,
including any arising in connection with any proceeding under any bankruptcy,
insolvency, reorganization or receivorship laws;

                (f)     the solvency or financial responsibility of any party
issuing any documents in connection with a Letter of Credit;

                (g)     any failure or delay in notice of shipments or arrival
of any property;

                (h)     any error in the transmission of any message relating to
a Letter of Credit not caused by the Issuing Bank, or any delay or interruption
in any such message;

                (i)     any error, neglect or default of any correspondent of
Issuing Bank in connection with a Letter of Credit;

                (j)     any consequence arising from acts of God, wars,
insurrections, civil unrest, disturbances, labor disputes, emergency conditions
or other causes beyond the control of the Issuing Bank;

                                       9
<PAGE>

                (k)     so long as the Issuing Bank with diligence and in good
faith determines that the contract or document appears to comply with the terms
of the Letter of Credit, the form, accuracy, genuineness or legal effect of any
contract or document referred to in any document submitted to the Issuing Bank
in connection with a Letter of Credit; and

                (l)     where the Issuing Bank has acted with diligence and in
good faith under any other circumstances whatsoever.

                In addition, the Company will promptly examine a copy of each
Letter of Credit and amendments thereto delivered to it and, in the event of any
claim of noncompliance with the Company's instructions or other irregularity,
the Company will immediately notify the Issuing Bank in writing. The Company
shall be conclusively deemed to have waived any such claim against the Issuing
Bank and its correspondents unless such notice is given as aforesaid or unless
the Company proves such noncompliance or irregularity was caused directly by the
Issuing Lender's gross negligence or willful misconduct.

                11.08   ROLE OF ISSUING BANK. Each Bank and the Company agree
that, in paying any drawing under a Letter of Credit, the Issuing Bank shall not
have any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. No
Agent-Related Persons nor any of the respective correspondents, participants or
assignees of the Issuing Bank shall be liable to any Bank for any action taken
or omitted in connection herewith at the request or with the approval of the
Banks or the Majority Banks, as applicable; any action taken or omitted in the
absence of gross negligence or willful misconduct; or the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit. The Company hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any Letter
of Credit; PROVIDED, HOWEVER, that this assumption is not intended to, and shall
not, preclude the Company's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. No
Agent-Related Persons, nor any of the respective correspondents, participants or
assignees of the Issuing Bank, shall be liable or responsible for any of the
matters described in SECTION 11.07 above; PROVIDED, FURTHER, that anything in
such clauses to the contrary notwithstanding, the Company may have a claim
against the Issuing Lender, and the Issuing Lender may be liable to the Company,
to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Company which the Company
proves were caused directly by the Issuing Lender's gross negligence or willful
misconduct or the Issuing Lender's willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the Issuing Bank shall not be responsible for
the validity or

                                      10
<PAGE>

sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason. After a Letter of Credit has been paid by the
Issuing Bank, the Issuing Bank shall (a) deliver to the Company the original of
all documents presented in connection with the request for payment thereunder
(other than the original Letter of Credit, which shall be retained by the
Issuing Bank with a copy thereof for the Company) and (b) use commercially
reasonable efforts to reply in a timely manner to any requests by the Company
for assistance in connection with such Letter of Credit.

                11.09   APPLICABILITY OF ISP98 AND UCP. Unless otherwise
expressly agreed by the Issuing Bank and the Company when a Letter of Credit is
issued and subject to applicable laws, performance under Letters of Credit by
the Issuing Bank, its correspondents, and beneficiaries will be governed by the
rules of the "International Standby Practices 1998" (ISP98) or such later
revision as may be published by the International Chamber of Commerce (the
"ICC").

                11.10   LETTER OF CREDIT FEE. On each Interest Payment Date for
Base Rate Committed Loans, the Company shall pay to Administrative Agent in
arrears, for the account of each Bank in accordance with its Pro Rata Share, a
Letter of Credit fee in an amount equal to the indicated Applicable Offshore
Rate Margin TIMES the actual daily maximum amount available to be drawn under
each Letter of Credit since the later of the Closing Date and the previous
Interest Payment Date. If there is any change in the Applicable Offshore Rate
Margin during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Offshore Rate Margin separately for each period
during such quarter that such Applicable Offshore Rate Margin was in effect.

                11.11   FRONTING FEE AND DOCUMENTARY AND PROCESSING CHARGES
PAYABLE TO THE ISSUING BANK. On each Interest Payment Date for Base Rate
Committed Loans, the Company shall pay to Administrative Agent for the sole
account of the Issuing Bank a fronting fee in an amount equal to 1/8 of 1% per
annum on the daily average face amount thereof, payable quarterly in arrears on
each Interest Payment Date for Base Rate Committed Loans. In addition, the
Company shall pay directly to the Issuing Bank, upon demand, for its sole
account its customary documentary and processing charges in accordance with its
standard schedule, as from time to time in effect, for any Letter of Credit
Action or other occurrence relating to a Letter of Credit for which such charges
are customarily made. Such fees and charges are nonrefundable."

                        2.9     AMENDMENT TO SCHEDULES. There shall be added to
the Credit Agreement a new Schedule 1.02 in the form of Schedule 1.02 hereto.

                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 Fifth Amendment:

                                       11
<PAGE>

                3.1     AUTHORIZATION. The execution, delivery and performance
by the Company of this Fifth Amendment has been duly authorized by all necessary
corporate action, and this Fifth Amendment has been duly executed and delivered
by the Company.

                3.2     BINDING OBLIGATION. This Fifth 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 Fifth 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 Fifth Amendment, or the transactions
contemplated hereby.

                3.4     INCORPORATION OF CERTAIN REPRESENTATIONS. After giving
effect to the terms of this Fifth 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 or warranties 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 Fifth
Amendment shall be subject to the execution hereof by the Company and the
Majority Banks, the compliance by the Company with its agreements herein
contained, and the delivery of the following to Agent in form and substance
satisfactory to Agent of the following on or before September 30, 2000:

        (1)     AUTHORIZED SIGNATORIES. A certificate, signed by the
                Secretary or an Assistant Secretary of the Company and dated the
                date of this Fifth Amendment, as to the incumbency of the person
                or persons authorized to execute and deliver this Fifth
                Amendment and any instrument or agreement required hereunder on
                behalf of the Company.

        (2)     RESOLUTIONS. A certificate, signed by the Secretary or an
                Assistant Secretary of the Company as to the resolutions of the
                Company's board of

                                       12
<PAGE>

                directors authorizing or ratifying the transactions contemplated
                by the Fifth Amendment, which certificate shall be in form and
                substance reasonably satisfactory to the Agent.

        (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 taking of all corporate action in
                connection with this Fifth 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 Fifth 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 Company, 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 Fifth 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.

                5.4     GOVERNING LAW. This Fifth Amendment shall be governed by
and construed in accordance with the laws of the State of California.

                               [SIGNATURES FOLLOW]

                                       13
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment
to be duly executed and delivered as of the date first written above.

                                  FOUNDATION HEALTH SYSTEMS, INC.

                                  By: /s/ MICHAEL P. WHITE
                                      ---------------------------------------
                                  Name: Michael P. White
                                        -------------------------------------
                                  Title: Senior Vice President and Treasurer
                                         ------------------------------------

                                  BANK OF AMERICA, N.A., as Administrative Agent

                                  By: /s/ JOSEPH L. CORAH
                                      ---------------------------------------
                                  Name: Joseph L. Corah
                                        -------------------------------------
                                  Title: Principal
                                         ------------------------------------

                                  BANK OF AMERICA, N.A., as a Bank

                                  By: /s/ JOSEPH L. CORAH
                                      ---------------------------------------
                                  Name: Joseph L. Corah
                                        -------------------------------------
                                  Title: Principal
                                         ------------------------------------

                                  CITICORP USA, INC.

                                  By:  /s/ CLAIRE WITIVE
                                      ---------------------------------------
                                  Name: Claire Witive
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                  THE CHASE MANHATTAN BANK

                                  By: /s/ DAWN LEE LUM
                                      ---------------------------------------
                                  Name:  Dawn Lee Lum
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                       14
<PAGE>

                                  THE DAI-ICHI KANGYO BANK, LIMITED
                                  SAN FRANCISCO AGENCY

                                  By:  /s/ CHRISTOPHER FAHEY
                                      ---------------------------------------
                                  Name: Christopher Fahey
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                  THE INDUSTRIAL BANK OF JAPAN, LIMITED,
                                  LOS ANGELES AGENCY

                                  By:  /S/ VICENTE TIMIRAOS
                                      ---------------------------------------
                                  Name:  Vicente Timiraos
                                        -------------------------------------
                                  Title:  Joint General Manager
                                         ------------------------------------

                                  CREDIT LYONNAIS NEW YORK BRANCH

                                  By:  /s/ JOHN C. OBERLE
                                      ---------------------------------------
                                  Name:  John C. Oberle
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                  THE SUMITOMO BANK, LIMITED

                                  By:  /s/ AL GALLUZZO
                                      ---------------------------------------
                                  Name:  Al Galluzzo
                                        -------------------------------------
                                  Title:  Senior Vice President
                                         ------------------------------------

                                  UNION BANK OF CALIFORNIA, N.A.

                                  By:  /s/ ALBERT W. KELLEY
                                      ---------------------------------------
                                  Name: Albert W. Kelley
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                       15
<PAGE>

                                  THE BANK OF NEW YORK

                                  By:  /s/ REBECCA K. LEVINE
                                      ---------------------------------------
                                  Name:  Rebecca K. Levine
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                  BANCA COMMERCIALE ITALIANA
                                  LOS ANGELES FOREIGN BRANCH

                                  By:  /s/ CHARLES DOUGHERTY
                                      ---------------------------------------
                                  Name:  Charles Dougherty
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                  By:  /s/ FRANK MAFFEI
                                      ---------------------------------------
                                  Name: Frank Maffei
                                        -------------------------------------
                                  Title:  Authorized Signature
                                         ------------------------------------

                                  BANCA DI ROMA - SAN FRANCISCO BRANCH

                                  By:  /s/ THOMAS C. WOODRUFF
                                      ---------------------------------------
                                  Name:  Thomas C. Woodruff
                                        -------------------------------------
                                  Title:  Vice President 97969
                                         ------------------------------------

                                  By:  /s/ RICHARD G. DIETZ
                                      ---------------------------------------
                                  Name:  Richard G. Dietz
                                        -------------------------------------
                                  Title:  97271
                                         ------------------------------------

                                  BANK OF MONTREAL

                                  By:  /s/ HEATHER L. TURF
                                      ---------------------------------------
                                  Name:  Heather L. Turf
                                        -------------------------------------
                                  Title:  Director
                                         ------------------------------------

                                       16
<PAGE>

                                  THE BANK OF NOVA SCOTIA

                                  By:  /s/ R.P. REYNOLDS
                                      ---------------------------------------
                                  Name:  R.P. Reynolds
                                        -------------------------------------
                                  Title:  Director
                                         ------------------------------------

                                  CREDIT SUISSE FIRST BOSTON

                                  By:  /s/ WILLIAM S. LUTKINS
                                      ---------------------------------------
                                  Name: Williams S. Lutkins
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                  By:  /s/ BILL O'DALY
                                      ---------------------------------------
                                  Name:  Bill O'Daly
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                  THE FUJI BANK, LIMITED

                                  By:
                                      ---------------------------------------
                                  Name:
                                        -------------------------------------
                                  Title:
                                         ------------------------------------

                                  GENERAL ELECTRIC CAPITAL CORPORATION

                                  By:  /s/ THOMAS E. JOHNSTONE
                                      ---------------------------------------
                                  Name:  Thomas E. Johnstone
                                        -------------------------------------
                                  Title:  Duly Authorized Signatory
                                         ------------------------------------

                                       17
<PAGE>

                                  THE MITSUBISHI TRUST AND BANKING CORPORATION,
                                  LOS ANGELES AGENCY

                                  By:
                                      ---------------------------------------
                                  Name:
                                        -------------------------------------
                                  Title:
                                         ------------------------------------

                                  NATEXIS BANQUE

                                  By:
                                      ---------------------------------------
                                  Name:
                                        -------------------------------------
                                  Title:
                                         ------------------------------------

                                  THE NORTHERN TRUST COMPANY

                                  By:  /s/ DAVID J. MITCHELL
                                      ---------------------------------------
                                  Name: David J. Mitchell
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                  THE SAKURA BANK, LTD.

                                  By:  /s/ Yoshikazu Nagura
                                      ---------------------------------------
                                  Name:  Yoshikazu Nagura
                                        -------------------------------------
                                  Title:  Senior Vice President
                                         ------------------------------------

                                  THE SANWA BANK, LIMITED

                                  By:  /s/ PATRICK MANSOURIELLE
                                      ---------------------------------------
                                  Name:  Patrick Mansourielle
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                       18
<PAGE>

                                  SUNTRUST BANK

                                  By:
                                      ---------------------------------------
                                  Name:
                                        -------------------------------------
                                  Title:
                                         ------------------------------------

                                       19
<PAGE>

                                  THE TOKAI BANK, LIMITED

                                  By:  /s/ SHINICHI NAKATANI
                                      ---------------------------------------
                                  Name:  Shinichi Nakatani
                                        -------------------------------------
                                  Title:  Assistant General Manager
                                         ------------------------------------

                                  WELLS FARGO BANK, N.A.

                                  By:  /s/ CATHERINE M. WALLACE
                                      ---------------------------------------
                                  Name:  Catherine M. Wallace
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                  By:  /s/ J. GREGORY SEIBLY
                                      ---------------------------------------
                                  Name:  J. Gregory Seibly
                                        -------------------------------------
                                  Title:  Senior Vice President
                                         ------------------------------------

                                  ABN AMRO BANK N.V.

                                  By:
                                      ---------------------------------------
                                  Name:
                                        -------------------------------------
                                  Title:
                                         ------------------------------------

                                  By:
                                      ---------------------------------------
                                  Name:
                                        -------------------------------------
                                  Title:
                                         ------------------------------------

                                  U.S. BANK NATIONAL ASSOCIATION

                                  By:
                                      ---------------------------------------
                                  Name:
                                        -------------------------------------
                                  Title:
                                         ------------------------------------

                                       20
<PAGE>

                                  MORGAN GUARANTY TRUST COMPANY

                                  By:  /s/ ROBERT BOTTAMEDI
                                      ---------------------------------------
                                  Name:  Robert Bottamedi
                                        -------------------------------------
                                  Title:  Vice President
                                         ------------------------------------

                                       21

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