EXHIBIT 10(BF)
INDENTURE SUPPLEMENT NO. 20
THIS INDENTURE SUPPLEMENT NO. 20, dated as of January 26, 1998 (this
"Supplemental Indenture"), by and between Magellan Health Services, Inc., a
Delaware corporation ("Magellan"), the guarantors set forth on the signature
pages hereto (the "Guarantors") and Marine Midland Bank, as trustee (the
"Trustee"), under that certain Indenture described below.
W I T N E S S E T H:
WHEREAS, Magellan and the Guarantors have heretofore executed and
delivered to the Trustee that certain Indenture, dated as of May 2, 1994 (the
"Indenture"), setting forth the terms and provisions of $375,000,000
aggregate principal amount of Magellan's 11-1/4% Series A Senior Subordinated
Notes due 2004 (the "Notes"); and
WHEREAS, in connection with Magellan's proposed acquisition of Merit
Behavioral Care Corporation ("Merit") through a merger of Merit with a
wholly-owned subsidiary of Magellan, Magellan is making a cash tender offer
(the "Offer") to purchase the Notes and is soliciting consents (the
"Solicitation") to certain amendments to the Indenture (the "Amendments")
(all as described in the Offer to Purchase and Consent Solicitation Statement
dated January 12, 1998 (the "Offer to Purchase and Consent Solicitation"));
and
WHEREAS, Section 10.02 of the Indenture provides that Magellan, the
Guarantors and the Trustee may amend or supplement the Indenture with the
written consent of holders of at least 66-2/3% in aggregate principal amount
of the Notes at the time outstanding; and
WHEREAS, written consents to the Amendments have been delivered to the
Trustee by holders of at least 66-2/3% in aggregate principal amount of the
Notes outstanding;
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, THAT THIS SUPPLEMENTAL
INDENTURE WITNESSETH:
That Magellan, the Guarantors and the Trustee in consideration of the
premises and of the sum of TEN DOLLARS ($10.00), lawful money of the United
States of America, to the Trustee paid by Magellan and the Guarantors, at or
before the execution and delivery of this Supplemental Indenture, and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, DO HEREBY
AGREE AS FOLLOWS:
Section One. Definitions. For purposes of this Supplemental Indenture,
all capitalized terms not otherwise defined herein shall be defined as set
forth in the Indenture, unless the context otherwise clearly requires.
Section Two. Amendment to Table of Contents. The Table of Contents to
the Indenture is hereby amended by deleting the following and inserting in
lieu thereof the notation "[deleted]":
(1) the words "Compliance Certificates" appearing therein under the
heading Article 5, Section 5.03;
(2) the words "Further Instruments and Acts" appearing therein under
the heading Article 5, Section 5.04;
(3) the words "Limitation on Restricted Payments" appearing therein
under the heading Article 5, Section 5.06;
(4) the words "Limitation on Additional Indebtedness" appearing therein
under the heading Article 5, Section 5.08;
(5) the words "Limitation on Sale of Subsidiary Shares" appearing
therein under the heading Article 5, Section 5.10;
(6) the words "Limitation on Liens" appearing therein under the heading
Article 5, Section 5.11;
(7) the words "Limitation on Payment Restrictions Affecting Restricted
Subsidiaries" appearing therein under the heading Article 5, Section 5.12;
(8) the words "Limitation on Transactions with Affiliates" appearing
therein under the heading Article 5, Section 5.13;
(9) the words "Payment of Taxes and Other Claims" appearing therein
under the heading Article 5, Section 5.16;
(10) the words "Maintenance of Properties and Insurance" appearing
therein under the heading Article 5, Section 5.18; and
(11) the words "Covenant to Comply with Securities Laws Upon Purchase of
Securities" appearing therein under the heading Article 5, Section 5.21.
Section Three. Amendment to Article 5. Article 5 is hereby amended as
follows:
(1) Section 5.02 is amended by deleting the section following the
caption "SECTION 5.02", except for the last sentence of Section 5.02(1), and
inserting in lieu thereof the notation "[intentionally omitted]";
(2) Section 5.03 is amended by deleting the section following the
caption "SECTION 5.03" in its entirety and inserting in lieu thereof the
notation "[intentionally omitted]";
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(3) Section 5.04 is amended by deleting the section following the
caption "SECTION 5.04" in its entirety and inserting in lieu thereof the
notation "[intentionally omitted]";
(4) Section 5.06 is amended by deleting the section following the
caption "SECTION 5.06" in its entirety and inserting in lieu thereof the
notation "[intentionally omitted]";
(5) Section 5.08 is amended by deleting the section following the
caption "SECTION 5.08" in its entirety and inserting in lieu thereof the
notation "[intentionally omitted]";
(6) Section 5.10 is amended by deleting the section following the
caption "SECTION 5.10" in its entirety and inserting in lieu thereof the
notation "[intentionally omitted]";
(7) Section 5.11 is amended by deleting the paragraph following the
caption "SECTION 5.11" in its entirety and inserting in lieu thereof the
notation "[intentionally omitted]";
(8) Section 5.12 is amended by deleting the paragraph following the
caption "SECTION 5.12" in its entirety and inserting in lieu thereof the
notation "[intentionally omitted]";
(9) Section 5.13 is amended by deleting the paragraph following the
caption "SECTION 5.13" in its entirety and inserting in lieu thereof the
notation "[intentionally omitted]";
(10) Section 5.16 is amended by deleting the paragraph following the
caption "SECTION 5.16" in its entirety and inserting in lieu thereof the
notation "[intentionally omitted]";
(11) Section 5.18 is amended by deleting the section following the
caption "SECTION 5.18" in its entirety and inserting in lieu thereof the
notation "[intentionally omitted]"; and
(12) Section 5.21 is amended by deleting the section following the
caption "SECTION 5.21" in its entirety and inserting in lieu thereof the
notation "[intentionally omitted]".
Section Four. Amendment to Article 6. Article 6 is hereby amended by
deleting subsections 6.01(iii) and 6.01(iv) and Section 6.02 in their
entirety and inserting in lieu thereof the notation "[intentionally omitted]";
Section Five. Amendment to Section 7.01. Section 7.01 is hereby
amended by deleting subsections 7.01(iii) and 7.01(vi) in their entirety and
inserting in lieu thereof the notation "[intentionally omitted]";
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Section Six. Definitions.
(a) Section 1.01 is hereby amended by deleting any defined terms that
are no longer used in the Indenture pursuant to this Supplemental Indenture.
(b) Section 1.01 is hereby further amended by deleting the definition
of "New Credit Agreement" in its entirety and in its place inserting the
following new defined term and accompanying definition:
"New Credit Agreement" means collectively (a) the Credit
Agreement dated on or about the date of acceptance for purchase of the
Securities pursuant to the Offer to Purchase and Consent Solicitation
Statement of Magellan Health Services, Inc. dated January 12, 1998,
among the Company, certain Subsidiaries of the Company, The Chase
Manhattan Bank, as Administrative Agent, and the "Lenders" that are
parties thereto, and (b) each note, guaranty, pledge agreement,
mortgage, security agreement and other instrument and document from
time to time entered into pursuant to or in respect of such Credit
Agreement or any guaranty, as each such Credit Agreement and other
document may be amended, restated, supplemented, extended, renewed and
otherwise modified from time to time.
(c) The definition of "Senior Indebtedness," set forth as the second
paragraph of Section 11.01, is hereby deleted in its entirety and in its
place is inserted the following:
For purposes of this Indenture, including without limitation this
Section 11.01, "Senior Indebtedness" means the principal of and premium, if
any, and interest on (such interest on Senior Indebtedness, wherever referred
to in this Indenture, being deemed to include interest accruing after the
filing of a petition initiating any proceeding pursuant to any bankruptcy law
in accordance with and at the rate (including any rate applicable upon any
default or event of default, to the extent lawful) specified in any document
evidencing the Senior Indebtedness, whether or not the claim for such
interest is allowed as a claim after such filing in any proceeding under such
bankruptcy law) and other amounts (including, but not limited to, fees,
expenses, reimbursement obligations in respect of letters of credit and
indemnities) due or payable from time to time on or in connection with any
Indebtedness of the Company or any of its Restricted Subsidiaries which is
incurred (i) under the New Credit Agreement or any replacement or substitute
facility or facilities thereof (provided that Indebtedness under the New
Credit Agreement or any replacement or substitute facility or facilities,
including unused commitments, shall not at any time exceed $900,000,000 in
aggregate outstanding principal amount (including the available undrawn
amount of any letters of credit issued under the New Credit Agreement or any
replacement or substitute facility or facilities thereof)); (ii) Indebtedness
of the Company and its Restricted Subsidiaries which Indebtedness was in
existence on the Closing Date; (iii) Indebtedness created, incurred, issued,
assumed or guaranteed in exchange for or the proceeds of which are used to
extend, refinance, renew, replace, substitute or refund Indebtedness
permitted
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by clause (ii) above (the "Refinancing Indebtedness"); provided, however,
that (A) the principal amount of such Refinancing Indebtedness shall not
exceed the principal amount of Indebtedness (including unused commitments) so
extended, refinanced, renewed, replaced, substituted or refunded (plus costs
of issuance), (B) such Refinancing Indebtedness ranks, relative to the
Securities, no more senior than the Indebtedness being refinanced thereby,
(C) such Refinancing Indebtedness bears interest at a market rate, and (D)
such Refinancing Indebtedness (1) shall have an Average Life equal to or
greater than the Average Life of the Indebtedness being extended, refinanced,
renewed, replaced, substituted or refunded or (2) shall not have a scheduled
maturity, principal repayment, sinking fund payment or mandatory redemption
on or prior to the maturity of the Securities; (iv) Indebtedness arising from
guarantees, letters of credit, and bid or performance bonds securing any
obligations of the Company or any Restricted Subsidiary incurred in the
ordinary course of business; (v) Indebtedness for borrowed money denominated
in foreign currencies not to exceed an aggregate principal amount at any time
equal to the equivalent in such foreign currencies of $5,000,000 in U.S.
dollars; (vi) Capital Lease Obligations in an aggregate amount outstanding at
any time not to exceed 5% of the Company's Consolidated Net Assets; (vii)
Guarantees of any Senior Indebtedness; (viii) Indebtedness other than, and in
addition to, that permitted pursuant to the foregoing clauses (i) through
(vii) provided that the aggregate outstanding amount of such other additional
Indebtedness pursuant to this clause (viii) does not at any time exceed
$50,000,000, all or any portion of which Indebtedness, notwithstanding clause
(i) above, may be incurred pursuant to the New Credit Agreement or any
replacement or substitute facility or facilities thereof; and (ix) directly
or indirectly, any Indebtedness other than, and in addition to, that
permitted pursuant to the foregoing clauses (i) through (viii) where, after
giving pro forma effect to the incurrence of such other additional
Indebtedness pursuant to this clause (ix) and the application of any of the
proceeds therefrom to repay Indebtedness, the Consolidated Interest Coverage
Ratio of the Company for the four fiscal quarters ending immediately prior to
the date such additional Indebtedness is created, incurred, issued, assumed
or guaranteed will be at least 2.25, provided that such calculation shall
give pro forma effect to the acquisition of any Person, business, property or
assets made since the first day of such four fiscal quarter period as if such
acquisition had occurred at the beginning of such four quarter period; in
each case that are outstanding on the Closing Date or thereafter created,
incurred or assumed, unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior in
right of payment to the Securities. Notwithstanding anything to the contrary
in the foregoing, Senior Indebtedness shall not include (a) any Indebtedness
of the Company to any of its Subsidiaries or other Affiliates, (b) any
Indebtedness incurred after the Closing Date that is contractually
subordinated in right of payment to any Senior Indebtedness, and (c) amounts
owed (except to banks and other financial institutions) for goods, materials
or services purchased in the ordinary course of business or for compensation
to employees.
Section Seven. Trust Indenture Act. Notwithstanding the provisions of
this Supplemental Indenture, Magellan agrees to comply with the provisions of
the Trust Indenture
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Act of 1939 (the "TIA"), including Section 314(a) of the TIA which requires
Magellan, among other things, to provide to the Trustee (i) copies of the
annual reports and other information which Magellan is required to provide to
the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 and (ii) to provide to the Trustee annual compliance
certificates as to Magellan's compliance with all conditions and covenants
contained in the Indenture.
Section Eight. Effective Date. This Supplemental Indenture is dated as
of the 26th day of January, 1998 but the Amendments set forth herein shall be
operative only upon, and simultaneously with, and shall have no force and
effect prior to, the acceptance for purchase and payment of the Notes
tendered pursuant to the Offer.
Section Nine. Other Provisions.
(a) Trust Indenture Act Controls. If any provision of this
Supplemental Indenture limits, qualifies or conflicts with the duties imposed
by TIA Section 318(c), the imposed duties shall control.
(b) Acceptance by Trustee. The Trustee hereby accepts the trusts in
this Supplemental Indenture declared and provided upon the terms and
conditions set forth in the Indenture. The Trustee shall not be responsible
in any manner whatsoever for the validity or sufficiency of this Supplemental
Indenture or the due execution hereof by the Company or for or in respect of
the recitals and statements contained herein, all of which recitals and
statements are made solely by the Company.
(c) Notice to Securityholders. After the Amendments become effective,
the Company shall mail to the holders of the Notes a notice briefly
describing such Amendments.
(d) Governing Law. This Supplemental Indenture shall be governed by
and construed in accordance with the laws of the State of New York.
(e) Successors. All agreements of the Company in this Supplemental
Indenture shall bind its successors. All agreements of the Trustee in this
Supplemental Indenture shall bind its successors.
(f) Duplicate Originals. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all
of them together represent the same agreement.
(g) Separability. In case any provision in this Supplemental Indenture
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
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(h) Headings, Etc. The Article and Section headings of this
Supplemental Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall not in any way modify or
restrict any of the terms and provisions hereof. Except as expressly
provided herein and notwithstanding the elimination of certain Sections of
this Indenture as set forth herein, all references to Sections in the
Indenture shall remain unchanged.
(i) Benefits of Supplemental Indenture. Nothing in this Supplemental
Indenture, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Paying Agent and the
holders of the Notes, any benefit or any legal or equitable right, remedy or
claim under this Supplemental Indenture.
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IN WITNESS WHEREOF, Magellan has caused this Supplemental Indenture to
be executed in its corporate name and attested by its authorized officer,
each Guarantor has caused this Supplemental Indenture to be executed in its
corporate name and attested by its authorized officer and the Trustee has
caused this Supplemental Indenture to be executed in its corporate name and
attested by its authorized officer, as of this 26th day of January, 1998.
MAGELLAN HEALTH SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------
Xxxxx X. Xxxxxxxxxx
Vice President and Treasurer
Attest:
/s/ Xxxxxxxxx X. Xxxxxxx
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Xxxxxxxxx X. Xxxxxxx
Assistant Treasurer
THE GUARANTORS LISTED ON EXHIBIT A
ATTACHED HERETO
By: /s/ Xxxxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxxxx X. Xxxxxxx
Treasurer or as Director
for each of the Guarantors
Attest:
------------------------------
Name:
Title:
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THE GUARANTORS LISTED ON EXHIBIT B
ATTACHED HERETO
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxxxx
Treasurer
for each of the Guarantors
Attest:
------------------------------
Name:
Title:
Attest:
------------------------------
Name:
Title:
MARINE MIDLAND BANK, as Trustee
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Assistant Corporate Trust Officer
Attest:
------------------------------
Name:
Title:
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