UNIVERSAL AMERICAN FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. LOAN AGREEMENTS:

As of December 31, 2000 and 1999, in connection with the 1999 Acquisition on July 30, 1999, (see Note 3) the Company had an $80 million credit facility consisting of a $70 million term loan and a $10 million revolving loan facility. The term loan calls for interest at the London Interbank Offering Rate for one, two, three or six months ("LIBOR") plus 350 basis points (currently 9.0425%) with principal repayment over a seven-year period and a final maturity date of July 31, 2006. The term loan is secured by a first priority interest in 100% of the outstanding common stock of American Exchange, American Progressive, PFI, Inc. (an immaterial subsidiary), Quincy (an immaterial subsidiary), WorldNet and 65% of the outstanding common stock of UAFC (Canada) Inc. (the 100% parent of PennCorp Life of Canada). In addition, the Company incurred loan origination fees of $3.5 million, which were capitalized and will be amortized on a straight-line basis over the life of the loan. For the year ended December 31, 2000, the Company paid $7.1 million in interest and fees in connection with the credit facility. The Company paid $1.5 million in principal on July 31, 2000 and $1.9 million in principal on October 31, 2000 and January 31, 2001.

The following table shows the schedule of remaining principal payments on the Company's outstanding term loan, with the final payment in July 2006: 

                                                             Principal
                                                             Repayment
                                                          (In thousands)
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $  8,175
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10,700
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11,525
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12,400
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13,275
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10,575   
Total  . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 66,650
In August 2000, to fund the CHCS acquisition (see Note 4), the Company drew down $3.0 million of the revolving loan facility, which amount currently incurs interest at 9.06% and is due to mature on July 31, 2004. The Company pays a commitment fee of 50 basis points on the unutilized facility, which is currently $7.0 million.

The following table sets forth certain summary information with respect to total borrowings of the Company for the three years ended December 31, 2000: 

                As of December 31,                    Year Ended December 31, 
                                                          Weighted
                                            Maximum      Average(a)  Average
                     Amount  Interest        Amount         Amount  Interest
                Outstanding      Rate   Outstanding    Outstanding   Rate (b) 
              (In thousands)          (In thousands) (In thousands)
2000 . . . .     $   69,650    10.22%    $   71,500     $   70,056    10.05%  
1999 . . . .     $   70,000     9.01%    $   70,000     $   31,833     8.98%  
1998 . . . .     $    4,750     7.97%    $    5,000     $    3,743     8.19%
   (a)   The average amounts of borrowings outstanding were computed by determining the arithmetic average of the months' average out-standing in borrowings.
   (b)   The weighted-average interest rates were determined by dividing interest expense related to total borrowings by the average amounts outstanding of such borrowings.