DESCRIPTION OF NOTES
Background
On November 10, 2015, we sold $700 million aggregate principal amount of the original notes in a private placement to certain initial purchasers. In connection with the sale of the original notes in the private placement, we and the initial purchasers entered into that certain Registration Rights Agreement. Under the Registration Rights Agreement, we agreed to use our commercially reasonable efforts to file a registration statement regarding the exchange of the original notes for the exchange notes which are registered under the Securities Act with terms substantially identical in all material respects to the original notes (except that the exchange notes will not be subject to restrictions on transfer or to any increase in annual interest rate for failure to comply with the registration rights obligations). We also agreed to use our commercially reasonable efforts to cause the registration statement to become effective with the SEC and to conduct this exchange offer. To comply with our obligations under the Registration Rights Agreement, we will issue 5.375% Senior Notes due 2022 that will be registered under the Securities Act. These exchange notes will be issued pursuant to the indenture (as amended or supplemented from time to time, the "indenture"), dated as of November 10, 2015, among Molina, the Guarantors party thereto and U.S. Bank National Association, as trustee (the "trustee"). The terms of the notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
The following description is a summary of the material provisions of the indenture. It does not restate that agreement in its entirety. We urge you to read the indenture because it, and not this description, defines your rights as holders of the notes. Copies of the indenture are available upon request to Molina at the address indicated under "Where You Can Find Additional Information".
You can find the definitions of certain terms used in this "Description of Notes" under the subheading "Certain Definitions". In this section, references to "Molina", "us" and "our" refer only to Molina Healthcare, Inc. and not to any of its Subsidiaries, references to "notes" refer only to the exchange notes and references to "Note Guarantees" refer only to the exchange guarantees associated with the exchange notes.
Brief Description of Notes and the Note Guarantees
The Notes
The notes will be:
|
|
|
|
•
|
general senior unsecured obligations of Molina;
|
|
|
|
|
•
|
equal in right of payment to all existing and future senior unsecured obligations of Molina (including Molina’s obligations under the Credit Agreement);
|
|
|
|
|
•
|
effectively subordinate in right of payment to any existing or future secured obligations of Molina to the extent of the value of the assets securing such obligations;
|
|
|
|
|
•
|
senior in right of payment to any future subordinated obligations of Molina;
|
|
|
|
|
•
|
unconditionally guaranteed on a senior basis by the Guarantors; and
|
|
|
|
|
•
|
structurally subordinated to all Indebtedness and other liabilities and preferred stock of Subsidiaries of Molina that are not Guarantors.
|
The registered holder of a note will be treated as the owner of it for all purposes. Only registered holders have rights under the indenture.
The Note Guarantees
The notes will be fully and unconditionally and jointly and severally guaranteed by the Guarantors.
Each Note Guarantee will be:
|
|
|
|
•
|
a general senior unsecured obligation of the Guarantor;
|
|
|
|
|
•
|
equal in right of payment to all existing and future senior unsecured obligations of that Guarantor;
|
|
|
|
|
•
|
effectively subordinate in right of payment to any existing or future secured obligations of that Guarantor to the extent of the value of the assets securing such obligations; and
|
|
|
|
|
•
|
senior in right of payment to any future subordinated obligations of that Guarantor.
|
Certain of our operating Subsidiaries are licensed insurance companies or health management organizations in the jurisdictions in which we do business. Applicable laws and related regulations require approval by the state regulators for certain of our Subsidiaries to Guarantee the notes. We have not sought, nor do we intend to seek, such approval. As a result, the only Subsidiaries of Molina that will Guarantee the notes are such Domestic Subsidiaries that provide a Guarantee or act as a borrower under a Credit Facility. As such, the notes will be structurally subordinated to all liabilities (including Indebtedness as well as medical claims and benefits payable, accounts payable and accrued expenses, deferred revenue and other long-term liabilities) of all of Molina’s other non-Guarantor Subsidiaries. Any right of Molina to receive assets of any of its non-Guarantor Subsidiaries upon such a Subsidiary’s liquidation or reorganization (and the consequent right of the holders of the notes to participate in those assets) will be effectively subordinated to the claims of that non-Guarantor Subsidiary’s creditors, except to the extent that Molina is itself recognized as a creditor of the Subsidiary, in which case the claims of Molina would still be subordinate in right of payment to any obligations that are secured by the assets of the Subsidiary to the extent of the value of the assets securing such obligations and any obligations of the Subsidiary senior to that held by Molina.
Substantially all of Molina’s operations are conducted through its Subsidiaries. Therefore, Molina’s ability to service its Indebtedness, including the notes, is dependent upon the earnings of its Subsidiaries and their ability to distribute those earnings as dividends, loans or other payments to Molina. All of Molina’s health plan Subsidiaries are restricted by statute, regulatory capital requirements and certain contractual obligations in their ability to make distributions to Molina. As a result, we may not be able to cause such Subsidiaries to distribute sufficient funds to enable us to meet our obligations under the notes. See "Risk Factors—Risks Related to the Notes and Our Indebtedness—We will depend on the business of and distributions from our HMO and licensed insurance subsidiaries to satisfy our obligations under the notes and we cannot assure you that the operating results of such subsidiaries will be sufficient to, or our subsidiaries will be permitted to, make distributions or other payments to us".
As of
June 30, 2016
, Molina had approximately $1,627 million of Indebtedness, including lease financing obligations. As of
June 30, 2016
, Molina’s non-Guarantor Subsidiaries had approximately $3,470 million of liabilities outstanding, including medical claims and benefits payable, deferred revenue, accounts payable, other accrued expenses and liabilities and amounts due government agencies (excluding intercompany liabilities). As of
June 30, 2016
, our non-Guarantor Subsidiaries held unrestricted cash and Cash Equivalents of $2,682 million. As of
June 30, 2016
, Molina and the Guarantors held unrestricted cash and Cash Equivalents in the aggregate amount of $370 million, of which $341 million was held by Molina.
As of the Issue Date, all of our Subsidiaries will be "Restricted Subsidiaries". However, under the circumstances described below under the subheading "Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries", we will be permitted to designate certain of our Subsidiaries as "Unrestricted Subsidiaries". Our Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the indenture and will not guarantee the notes.
Principal, Maturity and Interest
Molina will issue up to $700 million aggregate principal amount of notes in the exchange offer. Subject to compliance with the covenant described under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock" below, Molina may issue additional notes under the indenture from time to time. The initial notes and any additional notes subsequently issued under the indenture will be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions, and offers to purchase;
provided, however,
that a separate CUSIP number or ISIN will be issued for the additional notes, unless the notes and such additional notes are treated as fungible for U.S. federal income tax purposes. Molina will issue notes in minimum denominations of $2,000 and in integral multiples of $1,000 in excess of $2,000.
The notes will mature on November 15, 2022.
Interest on the notes will accrue at the rate of 5.375% per annum and will be payable semi-annually in arrears on May 15 and November 15, commencing on November 15, 2016. Molina will make each interest payment to the holders of record on the immediately preceding May 1 and November 1, respectively.
Interest on the notes will accrue from May 15, 2016, the most recent interest payment date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.
Methods of Receiving Payments on the Notes
All payments on the notes will be made at the office or agency of the paying agent and registrar within the United States unless Molina elects to make interest payments by check mailed to the holders at their address set forth in the register of holders;
provided
that all payments of principal, premium, if any, and interest with respect to notes represented by one or more global notes registered in the name of or held by DTC or its nominee will be made by wire transfer of immediately available funds to the accounts specified by the Holder or Holders thereof.
Paying Agent and Registrar for the Notes
The trustee will initially act as paying agent and registrar. Molina may change the paying agent or registrar without prior notice to the holders of the notes, and Molina or any of its Restricted Subsidiaries may act as paying agent or registrar.
Transfer and Exchange
Under existing interpretations of the SEC contained in several no-action letters to third parties, the notes will be freely transferable by holders thereof (other than affiliates of Molina) after the exchange offer without further registration under the Securities Act, subject to certain restrictions and limitations described above under "The Exchange Offer—Resale of the Exchange Notes". Holders will be required to pay all taxes due on transfer. Molina is not required to transfer or exchange any note selected for redemption. Also, Molina is not required to transfer or exchange any note for a period of 15 days before a selection of notes to be redeemed.
Note Guarantees
Upon issuance, the notes will be fully and unconditionally guaranteed by eighteen of Molina’s wholly-owned subsidiaries. These Note Guarantees will be joint and several obligations of the Guarantors. Each Note Guarantee will be
pari passu
in right of payment with the senior Indebtedness of that Guarantor and effectively subordinated to any secured Indebtedness of that Guarantor to the extent of the value of its assets securing such Indebtedness. The obligations of each Guarantor under its Note Guarantee will be limited as necessary to prevent that Note Guarantee from constituting a fraudulent conveyance under applicable law. See "Risk Factors—Risks Related to the Notes and Our Indebtedness—Federal and state fraudulent transfer laws may permit a court to void the notes and the guarantees, subordinate claims in respect of the notes and the guarantees, and require note holders to return payments received and, if that occurs, you may not receive any payments on the notes".
The Note Guarantee of a Guarantor will be automatically and unconditionally released:
(1) in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) Molina or a Restricted Subsidiary of Molina, if the sale or other disposition does not violate the "Asset Sale" provisions of the indenture;
(2) in connection with any sale or other disposition of all of the Capital Stock of that Guarantor to a Person that is not (either before or after giving effect to such transaction) Molina or a Restricted Subsidiary of Molina, if the sale or other disposition does not violate the "Asset Sale" provisions of the indenture;
(3) if Molina designates any of its Restricted Subsidiaries that is a Guarantor to be an Unrestricted Subsidiary in accordance with the applicable provisions of the indenture;
(4) if such Guarantor is dissolved or liquidated;
(5) upon legal defeasance, covenant defeasance or satisfaction and discharge of the notes as provided below under the captions "Legal Defeasance and Covenant Defeasance" and "Satisfaction and Discharge"; or
(6) if such Guarantor is released or discharged from the underlying Guarantee of Indebtedness giving rise to the execution of a Note Guarantee, except as a result of the repayment in full of such Guarantee in connection with the enforcement of remedies under such Guarantee (it being understood that a release subject to a contingent reinstatement will constitute a release, and that if any such Guarantee is so reinstated, the Note Guarantee shall also be reinstated, subject to the covenant described below under the caption "Certain Covenants—Limitation on Issuances of Guarantees of Indebtedness").
Optional Redemption
Prior to August 15, 2022 (three months prior to the maturity of the notes), Molina may on any one or more occasions redeem all or a part of the notes, upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to 100% of
the principal amount of the notes redeemed, plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but not including, the applicable date of redemption.
Except pursuant to the preceding paragraph, the notes will not be redeemable at Molina’s option prior to August 15, 2022 (three months prior to the maturity of the notes)
.
On or after August 15, 2022 (three months prior to the maturity of the notes), Molina may on any one or more occasions redeem all or a part of the notes, upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the applicable date of redemption (subject to the rights of holders of notes on the relevant record date to receive interest due on the relevant interest payment date).
Selection and Notice
If less than all of the notes are to be redeemed at any time, the trustee will select notes for redemption as follows:
(1) if the notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the notes are listed; or
(2) if the notes are not listed on any national securities exchange, based on a method that most nearly approximates a pro rata basis unless otherwise required by law or depository requirements.
No notes of $2,000 or less can be redeemed in part. Notices of redemption will be delivered by electronic transmission (for notes held in book entry form) or first class mail at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address, except that redemption notices may be delivered more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the notes or a satisfaction and discharge of the indenture. Notice of any redemption may, at Molina’s discretion, be subject to one or more conditions precedent.
If any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion of the principal amount of that note that is to be redeemed. A new note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the holder of the note upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption. Unless Molina defaults in the payment of the redemption price, interest will cease to accrue on the notes or portions thereof called for redemption on the applicable redemption date.
Mandatory Redemption
Molina is not required to make mandatory redemption or sinking fund payments with respect to the notes. However, under certain circumstances, Molina may be required to offer to purchase notes as described under the captions "Repurchase at the Option of Holders—Change of Control" and "Repurchase at the Option of Holders—Asset Sales". Molina and its Subsidiaries may at any time and from time to time purchase notes in open market transactions, tender offers or otherwise.
Repurchase at the Option of Holders
Change of Control
Upon the occurrence of a Change of Control, each holder of notes will have the right to require Molina to repurchase all or any part (provided that no notes of $2,000 or less will be repurchased in part) of that holder’s notes pursuant to the offer described below (the "Change of Control Offer") on the terms set forth in the indenture. In the Change of Control Offer, Molina will offer a payment in cash (the "Change of Control Payment") equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest, if any, on the notes repurchased, to, but not including, the date of purchase (subject to the right of holders of notes on the relevant record date to receive interest due on the relevant interest payment date).
Within 30 days following any Change of Control, Molina will deliver a notice to each holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase notes on the Change of Control Payment date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date of such Change of Control, pursuant to the procedures required by the indenture and described in such notice. Molina will comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase and/or payment at maturity of the notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the change of control provisions of the indenture, Molina will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the change of control provisions of the indenture by virtue of such compliance.
On the Change of Control Payment date, Molina will, to the extent lawful:
(1) accept for payment all notes or portions of notes properly tendered and not withdrawn pursuant to the Change of Control Offer;
(2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered and not withdrawn; and
(3) deliver or cause to be delivered to the trustee the notes properly accepted together with an officer’s certificate stating the aggregate principal amount of notes or portions of notes being purchased by Molina.
The paying agent will promptly deliver or wire transfer to each holder of notes properly tendered the Change of Control Payment for such notes (or, if all the notes are then in global form, make such payment through the facilities of DTC), and the trustee will promptly authenticate and deliver (or cause to be transferred by book entry) to each holder a new note equal in principal amount to the unpurchased portion of the notes surrendered, if any;
provided
that each new note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess of $2,000.
Molina will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment date.
If holders of not less than 90% in aggregate principal amount of the outstanding notes validly tender and do not withdraw such notes in a Change of Control Offer and Molina, or any other Person making a Change of Control Offer in lieu of Molina as described below, purchases all of the notes validly tendered and not withdrawn by such holders, Molina or such Person will have the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer described above, to redeem all notes that remain outstanding following such purchase at a redemption price in cash equal to the applicable Change of Control Payment plus, to the extent not included in the Change of Control Payment, accrued and unpaid interest, if any, to, but excluding, the date of redemption.
The Credit Agreement provides, and any future credit agreements or other agreements to which Molina or its Subsidiaries becomes a party may provide, that certain change of control events with respect to Molina constitute a default thereunder or otherwise provide the lenders thereunder with the right to require Molina to repay obligations outstanding thereunder. Molina’s ability to repurchase notes following a Change of Control also may be limited by Molina’s then-existing resources. The provisions described above that require Molina to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of the indenture are applicable to the Change of Control. Except as described above with respect to a Change of Control, the indenture does not contain provisions that permit the holders of the notes to require Molina to repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.
Molina will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by Molina and purchases all notes properly tendered and not withdrawn under the Change of Control Offer or (2) notice of redemption has been given pursuant to the indenture as described under the caption "Optional Redemption", unless and until there is a default in payment of the applicable redemption price. A Change of Control Offer may be made in advance of a Change of Control and may be subject to the occurrence of a Change of Control, if a definitive agreement is in place for the Change of Control at the time the Change of Control Offer is made.
The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the properties or assets of Molina and its Restricted Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require Molina to repurchase its notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of Molina and its Subsidiaries taken as a whole to another Person or group may be uncertain.
Asset Sales
Molina will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
(1) Molina (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets sold, issued, leased, transferred, conveyed or otherwise disposed of; and
(2) at least 75% of the consideration received in the Asset Sale by Molina or such Restricted Subsidiary is in the form of cash or Cash Equivalents. For purposes of this clause (2), each of the following will be deemed to be cash:
(a) any liabilities, as shown on Molina’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto, of Molina or any of its Restricted Subsidiaries (other than contingent liabilities and liabilities that are by their terms subordinated to the notes or any Note Guarantee) (A) that are assumed by the transferee of any such assets and from which Molina or such Restricted Subsidiary have been validly released by all creditors in writing, or (B) in respect of which neither Molina nor any Restricted Subsidiary following such Asset Sale has any obligation;
(b) any securities, notes or other obligations received by Molina or any such Restricted Subsidiary from such transferee that are converted by Molina or such Restricted Subsidiary into cash or Cash Equivalents within 180 days, to the extent of the cash or Cash Equivalents received in that conversion; and
(c) any Designated Non-cash Consideration received by Molina or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding not to exceed the greater of (x) $200.0 million and (y) 3.50% of the Consolidated Total Assets at the time of the receipt of such Designated Non-cash Consideration (determined based on the most recently ended fiscal quarter for which internal financial statements are available and with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value) shall be deemed to be cash for purposes of this paragraph and for no other purpose.
To the extent that the Fair Market Value of any Asset Sale exceeds 10.0% of Consolidated Total Assets at the time of receipt of the Net Proceeds of any such Asset Sale (determined based on the most recently ended fiscal quarter for which internal financial statements are then available and with the Fair Market Value of each Asset Sale being measured at the time of such Asset Sale), then, within 365 days after the receipt of any Net Proceeds from any such Asset Sale, Molina or such Restricted Subsidiary may apply those Net Proceeds (but shall only be required to apply that portion of the Net Proceeds from such Asset Sale that exceeds 10.0% of Consolidated Total Assets) at its option (or any portion thereof):
(1) to permanently repay Indebtedness of Molina or any Restricted Subsidiary that is secured by a Lien, other than Indebtedness owed to Molina or any Affiliate of Molina and, if such Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto;
(2) to make an Investment in any one or more businesses (
provided
that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary), assets, or property or capital expenditures, in each case (a) used or useful in a Permitted Business or (b) that replace the properties and assets that are the subject of such Asset Sale; or
(3) to repay other Senior Debt;
provided
that to the extent Molina (or the applicable Restricted Subsidiary, as the case may be) reduces Obligations under Senior Debt other than the notes, Molina shall equally and ratably reduce Obligations under the notes as provided under "—Optional Redemption", through open-market purchases (to the extent such purchases are at or above 100% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer (as defined below)) to all holders to purchase their notes at 100% of the principal amount thereof,
plus
the amount of accrued and unpaid interest, if any, on the amount of notes to be prepaid;
provided
that a binding commitment to apply Net Proceeds as set forth in clauses (1), (2) and (3) above shall be treated as a permitted application of the Net Proceeds from the date of such commitment so long as Molina or such Restricted Subsidiary enters into such commitment with the good faith expectation that such Net Proceeds will be applied to satisfy such commitment within 545 days after receipt of such Net Proceeds (an "Acceptable Commitment") and, in the event any Acceptable Commitment is later cancelled or terminated for any reason before the Net Proceeds are applied in connection therewith, then Molina or such Restricted Subsidiary shall be permitted to apply the Net Proceeds in any manner set forth in clauses (1), (2) and (3) above before the expiration of such 545-day period and, in the event Molina or such Restricted Subsidiary fails to do so, then such Net Proceeds shall constitute Excess Proceeds (as defined below). Pending the final application of any Net Proceeds, Molina may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by the indenture.
Any Net Proceeds from Asset Sales that were required to be applied in accordance with the first sentence of the immediately preceding paragraph and that are not so applied or invested as provided in the immediately preceding paragraph will constitute "Excess Proceeds". When the aggregate amount of Excess Proceeds exceeds $35.0 million, within 30 days thereof, Molina will make an offer (an "Asset Sale Offer") to all holders of notes to purchase the maximum principal amount of notes and, if Molina is required to do so under the terms of any other Indebtedness that is
pari passu
in right of payment with the notes, such other Indebtedness on a pro rata basis with the notes, that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of principal amount plus accrued and unpaid interest, if any, to, but
not including, the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of the purchase of all properly tendered and not withdrawn notes pursuant to an Asset Sale Offer, Molina may use such remaining Excess Proceeds for any purpose not otherwise prohibited by the indenture. If the aggregate principal amount of notes and other
pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the notes and such other
pari passu
Indebtedness will be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
Molina will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of the indenture, Molina will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the indenture by virtue of such compliance.
Certain Covenants
Covenant Termination
Following the first day (such date, the "Covenant Termination Date"):
(a) the notes have an Investment Grade Rating; and
(b) no Default has occurred and is continuing under the indenture;
Molina and its Restricted Subsidiaries shall cease to be subject to the provisions of the indenture described above under the caption "Repurchase at the Option of Holders—Asset Sales" and described below under the following subheadings:
•
"Restricted Payments",
•
"Incurrence of Indebtedness and Issuance of Preferred Stock",
•
"Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries",
•
"Transactions with Affiliates", and
•
"Limitation on Issuances of Guarantees of Indebtedness",
(collectively, the "Terminated Covenants"). No Default, Event of Default or breach of any kind shall be deemed to exist under the indenture or the notes with respect to the Terminated Covenants based on, and none of Molina or any of its Subsidiaries shall bear any liability for, any actions taken or events occurring after the notes attain an Investment Grade Rating, regardless of whether such actions or event would have been permitted if the applicable Terminated Covenants remained in effect. The Terminated Covenants will not be reinstated even if Molina subsequently does not satisfy the requirements set forth in clauses (a) and/or (b) above. After the Terminated Covenants have been terminated, Molina and its Restricted Subsidiaries shall remain subject to the provisions of the indenture described above under the caption "Repurchase at the Option of Holders—Change of Control" and described below under the following subheadings:
|
|
|
|
•
|
"Merger, Consolidation or Sale of Assets" (other than the financial test set forth in clause (4) of that covenant), and
|
In addition, after the Terminated Covenants have been terminated, Molina will no longer be permitted to designate any of its Restricted Subsidiaries as Unrestricted Subsidiaries.
Restricted Payments
Molina will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution (A) on account of Molina’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving Molina or any of its Restricted Subsidiaries) or (B) to the direct or indirect holders of Molina’s or any
Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends, payments or distributions (i) payable in Equity Interests (other than Disqualified Stock) of Molina or (ii) to Molina or a wholly owned Restricted Subsidiary or to all holders of Capital Stock of a Restricted Subsidiary on a pro rata basis);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving Molina) any Equity Interests of Molina or any of its Restricted Subsidiaries (other than (a) Equity Interests of any wholly owned Restricted Subsidiary of Molina or (b) purchases, redemptions, defeasances or other acquisitions made by a Restricted Subsidiary on a pro rata basis from all shareholders of such Restricted Subsidiary);
(3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Obligations (excluding any intercompany Indebtedness between or among Molina or any of its Restricted Subsidiaries), except a payment of interest or principal at the Stated Maturity thereof or the payment, purchase, redemption, defeasance or other acquisition or retirement for value of any such Subordinated Obligations, in each case where the Stated Maturity is within one year of such payment, purchase, redemption, defeasance or other acquisition or retirement for value; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (3) above and this clause (4) being collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default has occurred and is continuing or would occur as a consequence thereof; and
(b) Molina would, at the time of such Restricted Payment and after giving
pro forma
effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock"; and
(c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Molina and the Restricted Subsidiaries after the date of the indenture (including Restricted Payments permitted by clauses (1) and (11) of the next succeeding paragraph), is less than the sum, without duplication, of:
(I) 50% of the Consolidated Net Income of Molina for the period (taken as one accounting period) from January 1, 2016 to the end of Molina’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit),
plus
(II) 100% of the aggregate net cash proceeds (or the Fair Market Value of property other than cash) received by Molina since the Issue Date as a contribution to its common equity capital or from the issuance or sale of Equity Interests of Molina (other than the issuance of Disqualified Stock) or from the issuance or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of Molina, in either case, that have been converted into or exchanged for such Equity Interests of Molina (other than Equity Interests or Disqualified Stock or debt securities sold to a Subsidiary of Molina),
plus
(III) to the extent that any Restricted Investment that was made after the date of the indenture is (A) sold for cash or otherwise cancelled, liquidated or repaid for cash, the cash proceeds received with respect to such Restricted Investment (less the cost of disposition, if any) or (B) made in an entity that subsequently becomes a Restricted Subsidiary, an amount equal to the Fair Market Value of the Restricted Investments owned by Molina and the Restricted Subsidiaries in such entity at the time such entity becomes a Restricted Subsidiary,
plus
(IV) 100% of the aggregate net cash proceeds (or the Fair Market Value of property other than cash) received by Molina since the Issue Date by means of (A) the sale (other than to Molina or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary and (B) a distribution or dividend from an Unrestricted Subsidiary (other than in each case to the extent such Investment constituted a Permitted Investment), in each case to the extent that such amounts were not otherwise included in the Consolidated Net Income for such period,
plus
(V) in case, after the date of the indenture, any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary under the terms of the indenture or has been merged,
consolidated or amalgamated with or into, or transfers or conveys assets to, or is liquidated into Molina or a Restricted Subsidiary, an amount equal to the Fair Market Value of the Restricted Investments owned by Molina and the Restricted Subsidiaries in such Unrestricted Subsidiary at the time of the redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable).
Notwithstanding the foregoing, and in the cases of clauses (6), (10) and (11) below, so long as no Default or Event of Default has occurred and is continuing or would be caused thereby, the preceding provisions will not prohibit any of the following:
(1) the payment of any dividend within 60 days after the date of declaration of the dividend, if at the date of declaration the dividend payment would have complied with the provisions of the indenture;
(2) any Restricted Payments made out of the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of Molina) of, Equity Interests of Molina (other than Disqualified Stock);
provided, however
, that the amount of any such net cash proceeds from such sale will be excluded from clause (c)(II) of the preceding paragraph;
(3) the redemption, repurchase, repayment, retirement, defeasance or other acquisition of any Subordinated Obligations with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(4) the redemption, repurchase or other acquisition or retirement for value of any Equity Interests of Molina or any Restricted Subsidiary of Molina (a) held by any current or former director, officer, employee or consultant of Molina or any of its Subsidiaries and their Affiliates, heirs and executors pursuant to any management equity subscription plan or agreement, stock option or stock purchase plan or agreement or employee benefit plan as may be adopted by Molina or any of its Subsidiaries from time to time or pursuant to any agreement with any director, officer, employee or consultant of Molina or any of its Subsidiaries in existence on the date of the indenture or (b) from an employee of Molina or any of its Subsidiaries upon the termination of such employee’s employment with Molina or any of its Subsidiaries;
provided, however
, that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests in reliance on this clause (4) (other than with respect to employees whose employment has terminated) may not exceed $15.0 million in any calendar year, with any unused amounts in any calendar year being carried forward to the next two succeeding calendar years, and
provided, further
, that such amount in any calendar year may be increased by an amount not to exceed (A) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of Molina, in each case to members of management, directors or consultants of Molina or any of its Subsidiaries that occurs after the Issue Date,
provided
that such cash proceeds utilized for redemptions, repurchases or other acquisitions or retirements will be excluded from clause (c)(II) of the preceding paragraph plus (B) the cash proceeds of "key man" life insurance policies received by Molina or its Restricted Subsidiaries after the Issue Date (
provided
that Molina may elect to apply all or any portion of the aggregate increase contemplated by clauses (A) and (B) above in any calendar year, it being understood that the forgiveness of any debt by such Person shall not be a Restricted Payment hereunder) less (C) the amount of any Restricted Payments previously made pursuant to clauses (A) and (B) of this clause (4));
(5) repurchases, acquisitions, forfeitures or retirements of Capital Stock of Molina deemed to occur upon the exercise or vesting of stock options, warrants or restricted stock or similar rights under employee benefit plans of Molina or its Subsidiaries if such Capital Stock represents all or a portion of the exercise price thereof and repurchases, acquisitions, forfeitures or retirements of Capital Stock or options to purchase Capital Stock in connection with the exercise or vesting of stock options, warrants or restricted stock to the extent necessary to pay applicable withholding taxes;
(6) any Restricted Payments, so long as the Total Net Debt Ratio is no more than 2.25 to 1.0, both as of the date thereof and on a
pro forma
basis after giving effect to such Restricted Payment;
(7) payments of cash, dividends, distributions, advances or other Restricted Payments by Molina or any of its Restricted Subsidiaries to allow the payment of cash in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of Molina;
provided, however
, that any such cash payment shall not be for the purpose of evading the limitation of the covenant described under this subheading (as determined in good faith by the Board of Directors of Molina);
(8) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Obligations or Disqualified Stock pursuant to provisions similar to those described under the captions "Repurchase at the Option of Holders—Change of Control" and "Repurchase at the Option of Holders—Asset Sales";
provided
that a Change of Control Offer or Asset Sale Offer, as applicable, has been made and all notes tendered by holders of the notes in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;
(9) the declaration and payment of regularly scheduled or accrued dividends or distributions to holders of any class or series of Disqualified Stock of Molina or any preferred stock of any Restricted Subsidiary of Molina issued on or after the date of the indenture in accordance with the covenant described below under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock" to the extent such dividends or distributions are included in the definition of Fixed Charges;
(10) other Restricted Payments in an aggregate amount since the Issue Date not to exceed the greater of (a) $200.0 million and (b) 3.50% of Consolidated Total Assets; or
(11) the declaration and payment of dividends on Molina’s common Equity Interests not to exceed $25.0 million per fiscal year.
The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the assets, property or securities proposed to be transferred or issued by Molina or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. Molina will deliver to the trustee an officer’s certificate setting forth any Fair Market Value determinations. If Molina or a Restricted Subsidiary makes a Restricted Payment which at the time of the making of such Restricted Payment would in the good faith determination of Molina be permitted under the provisions of the indenture, such Restricted Payment shall be deemed to have been made in compliance with the indenture notwithstanding any subsequent adjustments made in good faith to Molina financial statements affecting Consolidated Net Income of Molina for any period.
For purposes of determining compliance with this "Restricted Payments" covenant, in the event that a payment or other action meets the criteria of more than one of the exceptions described in clauses (1) through (11) above, or is entitled to be made pursuant to the first paragraph of this covenant (including any payment or other action that constitutes a "Permitted Investment"), Molina will be permitted to classify such payment or other action on the date of its occurrence in any manner that complies with this covenant (including any payment or other action that constitutes a "Permitted Investment"). Payments or other actions permitted by this covenant need not be permitted solely by reference to one provision permitting such payment or other action (including any payment or other action that constitutes a "Permitted Investment"), but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting payment or other action (including any payment or other action that constitutes a "Permitted Investment").
Incurrence of Indebtedness and Issuance of Preferred Stock
Molina will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and Molina will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock (including Disqualified Stock) other than to Molina;
provided, however
, that Molina may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any Restricted Subsidiary of Molina may incur Indebtedness (including Acquired Debt) or issue preferred stock (including Disqualified Stock), if the Fixed Charge Coverage Ratio for Molina's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been at least 2.0 to 1.0, determined on a
pro forma
basis (including a
pro forma
application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period;
provided further
,
however
, that the aggregate principal amount incurred under this paragraph by Restricted Subsidiaries that are not Guarantors at any one time outstanding shall not exceed the greater of $150.0 million and 3.0% of Consolidated Total Assets as of the date of any such incurrence.
The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by Molina or any of its Restricted Subsidiaries of Indebtedness and letters of credit under one or more Credit Facilities;
provided
that the aggregate principal amount of all Indebtedness and letters of credit of Molina and any Restricted Subsidiary incurred pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the face amount thereof) does not exceed the greater of (a) $350.0 million and (b) 7.50% of Consolidated Total Assets;
(2) the incurrence by Molina or any of its Restricted Subsidiaries of Indebtedness existing on the Issue Date (other than Indebtedness outstanding under clause (1) above or clause (3) below and Indebtedness being repaid with the proceeds of this offering, if any);
(3) the incurrence by Molina and the Guarantors of Indebtedness represented by the notes and the related Note Guarantees to be issued on the date of the indenture and the exchange notes and the related Note Guarantees to be issued
pursuant to the Registration Rights Agreement (and any exchange notes issued in exchange for additional notes properly incurred under the indenture, where the terms of such exchange notes are substantially identical to such additional notes);
(4) the incurrence by Molina or any of its Restricted Subsidiaries of Indebtedness (including Capital Lease Obligations, mortgage financings or purchase money obligations), Disqualified Stock and preferred stock, in each case incurred for the purpose of financing all or any part of the purchase price, lease or cost of design, installation, construction or improvement of property, plant or equipment used in the business of Molina or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness, Disqualified Stock and preferred stock incurred to refund, refinance or replace any Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), not to exceed the greater of (a) $150.0 million and (b) 3.0% of Consolidated Total Assets;
(5) the incurrence by Molina or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which serves to extend, defease, renew, refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was incurred under the first paragraph of this covenant or clauses (2), (3), this clause (5) or (13) of this paragraph;
(6) the incurrence by Molina or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Molina and any of its Restricted Subsidiaries;
provided, however
, that (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Molina or a Restricted Subsidiary and (ii) any subsequent sale or other transfer of any such Indebtedness to a Person that is not either Molina or a Restricted Subsidiary shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Molina or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence of Indebtedness of Molina or any of its Restricted Subsidiaries consisting of Guarantees, indemnities, holdbacks, earn-out, non-compete, consulting, deferred compensation, purchase price adjustments and similar obligations in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock of Restricted Subsidiaries or contingent payment obligations incurred in connection with the acquisition of assets which are contingent on the performance of the assets acquired, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such assets or shares of Capital Stock of such Restricted Subsidiary for the purpose of financing such acquisition;
(8) the incurrence of Indebtedness of Molina or any of its Restricted Subsidiaries in respect of bid, appeal, surety and performance bonds, completion guarantees or other similar arrangements, provider claims, workers’ compensation claims, statutory, appeal or similar obligations, bankers’ acceptances, payment obligations in connection with sales tax and insurance or other similar requirements in the ordinary course of business or in respect of awards or judgments not resulting in an Event of Default;
(9) the incurrence by Molina or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, netting services and otherwise in connection with deposit accounts, so long as such Indebtedness is covered within 10 business days or arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(10) Indebtedness representing deferred compensation or other similar arrangements to employees and directors of Molina or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(11) the incurrence by Molina or any of its Restricted Subsidiaries of Hedging Obligations;
provided
that such Hedging Obligations are entered into for bona fide hedging purposes (and not for speculative purposes) of Molina or its Restricted Subsidiaries;
(12) (a) the Guarantee by Molina or any of the Restricted Subsidiaries of Indebtedness of Molina or a Restricted Subsidiary that was permitted to be incurred by another provision of this covenant;
provided
that if the Indebtedness being Guaranteed is incurred by Molina and is subordinated to the notes, then the Guarantee of such Indebtedness by any of its Restricted Subsidiaries shall be subordinated to the same extent as the Indebtedness Guaranteed and (b) the Guarantee by Molina or any of the Restricted Subsidiaries of Indebtedness of Molina or a Restricted Subsidiary required pursuant to applicable law or any applicable rule, regulation or order of, or arrangement with, any regulatory body or agency;
(13) Indebtedness of a Restricted Subsidiary outstanding on the date on which such Restricted Subsidiary was acquired by Molina or otherwise became a Restricted Subsidiary (other than Indebtedness incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of transactions pursuant to which such Restricted Subsidiary became a Subsidiary of Molina or was otherwise acquired by Molina),
provided
that after giving effect thereto, (a) Molina would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test in the first paragraph above, or (b) the Fixed Charge Coverage Ratio would be no worse than immediately prior thereto;
(14) the incurrence by Molina or any Restricted Subsidiary of Indebtedness to the extent the proceeds thereof are used to purchase notes pursuant to a Change of Control Offer or to defease or discharge notes in accordance with the terms of the indenture;
(15) the incurrence by Molina or any Restricted Subsidiary of Indebtedness consisting of (a)(i) the financing of insurance premiums or (ii) insurance premiums incurred in the ordinary course of business and owed to any Person providing property, casualty or liability insurance to Molina or its Subsidiaries, so long as such Indebtedness shall not be in excess of the amount of the unpaid cost of and shall be incurred only to defer the cost of, such insurance for the year in which such Indebtedness is incurred and such Indebtedness shall only be outstanding during such year, or (b) take or pay obligations in supply agreements, in each case in the ordinary course of business;
(16) Indebtedness in respect of secured or unsecured letters of credit incurred by Molina or any Restricted Subsidiary in an aggregate principal amount not to exceed $200.0 million;
(17) Guarantees in the ordinary course of business of the obligations of suppliers, customers, franchisees and licensees of Molina and its Restricted Subsidiaries;
(18) the incurrence by Molina or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (18), not to exceed the greater of (a) $275.0 million and (b) 5.0% of Consolidated Total Assets; or
(19) Guarantees by Molina or a Restricted Subsidiary of Contractual Obligations of an HMO Subsidiary or an Insurance Subsidiary incurred in the ordinary course of business.
For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (19) above or is entitled to be incurred pursuant to the first paragraph of this covenant, Molina shall, in its sole discretion, classify (or later re-classify in whole or in part), or divide (or later re-divide in whole or in part) such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and such Indebtedness will be treated as having been incurred pursuant to such clauses or the first paragraph hereof, as the case may be, designated by Molina. Indebtedness under Credit Facilities outstanding on the date on which notes are first issued and authenticated under the indenture will be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt and may not later be reclassified. Accrual of interest or dividends, the accretion of accreted value or liquidation preference and the payment of interest or dividends in the form of additional Indebtedness or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant.
Molina will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is subordinated to any other Indebtedness of Molina or such Restricted Subsidiary, as the case may be, unless made expressly subordinate to the notes to the same extent and in the same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of Molina or such Restricted Subsidiary, as the case may be.
The indenture will not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured, (2) Indebtedness as subordinated or junior to any other Indebtedness merely because it has a junior priority with respect to the same collateral or (3) Indebtedness that is not Guaranteed as subordinated or junior to Indebtedness that is Guaranteed merely because of such Guarantee.
Liens
Molina will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur or assume any consensual Liens (the "Initial Lien") of any kind against or upon any of their respective properties or assets, or any proceeds, income or profit therefrom or assign or convey any right to receive income therefrom, except Permitted Liens, to secure any Indebtedness of Molina or a Guarantor unless prior to, or contemporaneously therewith, the notes and the Note Guarantees are equally and ratably secured by a Lien on such property, assets, proceeds, income or profit;
provided, however
, that if such Indebtedness is expressly subordinated to the notes and the Note Guarantees, the Lien securing such Indebtedness will be subordinated and junior to the Lien securing the notes and the Note Guarantees with the same relative priority as such Indebtedness has with respect to the notes and the Note Guarantees. Any Lien created for the benefit of the holders of the notes
pursuant to the preceding sentence shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Initial Lien.
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
Molina will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any of its Restricted Subsidiaries to:
(a) pay dividends or make any other distributions on its Capital Stock to Molina or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to Molina or any of its Restricted Subsidiaries;
(b) make loans or advances to Molina or any of its Restricted Subsidiaries; or
(c) transfer any of its properties or assets to Molina or any of its Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:
(1) agreements governing the Credit Agreement and agreements governing Existing Indebtedness, in each case, as in effect on the date of the indenture;
(2) the indenture and the notes;
(3) applicable law or any applicable rule, regulation or order of, or arrangement with, any regulatory body or agency;
(4) any agreement or other instrument of (i) a Person acquired by Molina or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such encumbrance or restriction was created in connection with or in contemplation of such acquisition) or (ii) any Unrestricted Subsidiary at the time it is designated or is deemed to become a Restricted Subsidiary, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or Unrestricted Subsidiary, or the property or assets of the Person or Unrestricted Subsidiary, so acquired or designated, as the case may be;
(5) restrictions on cash, Cash Equivalents or other deposits or net worth imposed by customers or governmental regulatory bodies or required by insurance, surety or bonding companies, in each case pursuant to contracts entered into in the ordinary course of business;
(6) customary non-assignment provisions in leases, licenses, sublicenses and other contracts entered into in the ordinary course of business;
(7) customary restrictions and conditions contained in agreements relating to purchase money indebtedness for property acquired and Capital Lease Obligations permitted to be incurred under the provisions of the covenant described above under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock" that impose restrictions of the nature described in clause (c) of the first paragraph of this covenant on the property so acquired or subject to such obligations;
(8) any agreement for the sale or other disposition of a Restricted Subsidiary or the assets of a Restricted Subsidiary pending the closing of such sale or other disposition or the sale or other disposition of its assets;
(9) Permitted Refinancing Indebtedness;
provided, however
, that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced (as determined in good faith by an officer of Molina);
(10) Liens securing Indebtedness otherwise permitted to be incurred under the provisions of the covenant described above under the caption "—Liens" that limit the right of the debtor to dispose of the assets subject to such Liens;
(11) provisions with respect to the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements (including agreements entered into in connection with a Restricted Investment);
provided
that such provisions with respect to the disposition or distribution of assets or property relate only to the assets or properties subject to such agreements;
(12) other Indebtedness, Disqualified Stock or preferred stock permitted to be incurred subsequent to the Issue Date under the provisions of the covenant described above under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock"; provided that such incurrence will not materially impair Molina’s ability to make payments under the notes when due (as determined in good faith by an officer of Molina);
(13) Contractual Obligations binding upon a HMO Subsidiary or Insurance Subsidiary,
provided
that such restrictions apply only to such Subsidiary;
(14) any amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing of an agreement referred to in clauses (1) through (13) above,
provided, however
that such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing is not materially more restrictive, taken as a whole, than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing (as determined in good faith by an officer of Molina);
(15) Hedging Obligations; and
(16) customary provisions in any joint venture agreement or similar agreement to the extent prohibiting the pledge of the Equity Interests of such joint venture.
For purposes of determining compliance with this covenant, (1) the priority of any preferred stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (2) the subordination of loans or advances made to Molina or a Restricted Subsidiary to other Indebtedness incurred by Molina or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.
Merger, Consolidation or Sale of Assets
Molina may not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not Molina is the surviving Person) or (2) sell, assign, transfer, convey, lease or otherwise dispose of all or substantially all of the properties or assets of Molina in one or more related transactions, to another Person; unless:
(1) either:
(a) Molina is the surviving Person; or
(b) the Person formed by or surviving any such consolidation or merger (if other than Molina) or to which such sale, assignment, transfer, conveyance or other disposition has been made is an entity organized or existing under the laws of the United States, any state of the United States or the District of Columbia;
provided
that, if such entity is not a corporation, a co-obligor of the notes is a corporation;
(2) the Person formed by or surviving any such consolidation or merger (if other than Molina) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes by supplemental indenture and all the obligations of Molina under the notes, and the indenture (to the extent Molina’s obligations thereunder have been not been completed) pursuant to agreements in form satisfactory to the trustee;
(3) immediately after such transaction no Default or Event of Default exists; and
(4) Molina or the Person formed by or surviving any such consolidation or merger (if other than Molina), or to which such sale, assignment, transfer, conveyance or other disposition has been made will, on the date of such transaction after giving
pro forma
effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, (a) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock" above or (b) have a Fixed Charge Coverage Ratio that is no worse than the Fixed Charge Coverage Ratio of Molina for such applicable four-quarter period without giving
pro forma
effect to such transactions and any related financing transactions.
A Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, other than Molina or another Guarantor, unless:
(1) immediately after giving effect to that transaction, no Default or Event of Default exists; and
(2) either:
(a) (i) such Guarantor shall be the Person surviving any such consolidation or merger or (ii) the Person acquiring the assets in any such sale or other disposition or the Person formed by or surviving any such consolidation or merger assumes all the obligations of that Guarantor under the indenture and its Note Guarantee pursuant to agreements in form satisfactory to the trustee; or
(b) such sale or other disposition does not violate the "Asset Sale" provisions of the indenture. See "—Repurchase at the Option of Holders—Asset Sales".
For purposes of this covenant, the sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of one or more Subsidiaries of Molina, which properties or assets, if held by Molina instead of such Subsidiaries, would constitute all or substantially all of the properties or assets of Molina on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties or assets of Molina.
Upon any transaction or series of transactions that are of the type described in, and are effected in accordance with, conditions described in the immediately preceding paragraphs, the surviving entity shall succeed to, and be substituted for, and may exercise every right and power of, Molina or the Guarantor, as applicable, under the indenture and the notes with the same effect as if such surviving entity had been named as the issuer or the Guarantor, as applicable, of the notes; and when a surviving entity duly assumes all of the obligations and covenants of the issuer or the Guarantor, as applicable, pursuant to the indenture, the notes, and the Note Guarantee, Molina or the Guarantor, as applicable, or any other predecessor Person shall be relieved of such obligations.
This covenant will not apply to any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among Molina or any of its Restricted Subsidiaries. Clauses (3) and (4) of this covenant will not apply to (1) any merger or consolidation of Molina or a Guarantor with or into a Restricted Subsidiary of Molina for any purpose or (2) the merger of Molina or a Guarantor with or into an Affiliate solely for the purpose of reincorporating Molina or such Guarantor, as the case may be, in another jurisdiction under the laws of the United States, any state of the United States or the District of Columbia so long as the amount of Indebtedness of Molina and its Restricted Subsidiaries is not increased thereby.
Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve "all or substantially all" of the property or assets of a Person.
Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors of Molina may designate any of its Restricted Subsidiaries to be an Unrestricted Subsidiary if that designation would not cause a Default and if that designation otherwise is consistent with the definition of an Unrestricted Subsidiary. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by Molina and its Restricted Subsidiaries in the Subsidiary properly designated will be deemed to be an Investment made as of the time of the designation and will either reduce the amount available for Restricted Payments under the covenant described above under the caption "—Restricted Payments" or be a Permitted Investment, as determined by Molina; provided that no designation of an Unrestricted Subsidiary may be made in reliance upon clause (6) of the second paragraph under the caption "—Restricted Payments". Such designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
Any designation of a Subsidiary of Molina as an Unrestricted Subsidiary will be evidenced to the trustee by filing with the trustee a certified copy of a resolution of the Board of Directors giving effect to such designation and an officer’s certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption "—Restricted Payments". If, at any time, any Unrestricted Subsidiary would fail to meet the requirements of an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of the indenture, and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of Molina as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock", Molina will be in default of such covenant unless such Unrestricted Subsidiary is made to meet such requirements.
The Board of Directors of Molina may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of Molina;
provided
that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of Molina of any outstanding Indebtedness and Liens of such Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness and Liens are permitted under the covenants described under the captions "—Incurrence of Indebtedness and Issuance of Preferred Stock" and "—Liens", calculated on a
pro forma
basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence following such designation.
Transactions with Affiliates
Molina will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend
any transaction, contract, agreement, understanding, loan, advance or Guarantee with, or for the benefit of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, the Affiliate Transaction is on terms that are not less favorable in any material respect to Molina or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by Molina or such Restricted Subsidiary with an unrelated Person; and
(2) Molina delivers to the trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $30.0 million, a resolution of the Board of Directors set forth in an officer’s certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors of Molina.
The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:
(1) transactions solely between or among Molina and/or any of its Restricted Subsidiaries or solely among its Restricted Subsidiaries;
(2) any issuances of Equity Interests (other than Disqualified Stock) to Affiliates of Molina;
(3) reasonable and customary fees, indemnification and similar arrangements, consulting fees, employee salaries, bonuses or employment or severance agreements, compensation or employee benefit arrangements or plans and incentive arrangements or plans (including any amendments to the foregoing) with any officer, director, employee or consultant of Molina or a Restricted Subsidiary entered into in the ordinary course of business or approved in good faith by the Board of Directors of Molina or any Restricted Subsidiary, as applicable;
(4) any transactions made in compliance with the covenant described above under the caption "—Restricted Payments";
(5) loans (and cancellation of loans) and advances to directors, officers, employees or consultants of Molina or any of its Restricted Subsidiaries entered into in the ordinary course of business of Molina or any of its Restricted Subsidiaries or approved in good faith by the Board of Directors of Molina or such Restricted Subsidiary, as applicable;
(6) any agreement as in effect as of the date of the indenture or any amendment to such agreement so long as any such amendment is not more disadvantageous to the holders in any material respect than the original agreement as in effect on the date of the indenture;
(7) transactions entered into by a Person prior to the time such Person becomes a Restricted Subsidiary or is merged or consolidated into Molina or a Restricted Subsidiary (provided such transaction is not entered into in contemplation of such event);
(8) transactions permitted by, and complying with, the provisions of the covenant described above under the caption "—Merger, Consolidation or Sale of Assets";
(9) transactions with a Person (other than an Unrestricted Subsidiary of Molina) that is an Affiliate of Molina solely because Molina owns, directly or through a Restricted Subsidiary, an Equity Interest in such Person;
(10) payment of management fees or similar fees under any management agreement entered into or assumed in connection with an acquisition or business expansion; and
(11) any transaction in which Molina or any Restricted Subsidiary, as the case may be, receives an opinion from a nationally recognized investment banking, appraisal or accounting firm that such Affiliate Transaction is either fair, from a financial standpoint, to Molina or such Restricted Subsidiary or meets the requirements of clause (1) of the preceding paragraph.
Limitation on Issuances of Guarantees of Indebtedness
Molina will not permit any of its Domestic Subsidiaries, directly or indirectly, to Guarantee or pledge any assets to secure the payment of any other Indebtedness of Molina or another Guarantor under any Credit Facility or incur Indebtedness under any Credit Facility, unless such Domestic Subsidiary simultaneously executes and delivers a supplemental indenture providing for the Guarantee of the payment of the notes by such Domestic Subsidiary. The Note Guarantee will be (1) senior to such
Domestic Subsidiary’s Guarantee of, pledge to secure or obligation to pay such other Indebtedness if such other Indebtedness is subordinated in right of payment to the notes; or (2)
pari passu
in right of payment with such Domestic Subsidiary’s Guarantee of, pledge to secure or obligation to pay such other Indebtedness if such other Indebtedness is not subordinated in right of payment to the notes.
SEC Reports
Whether or not required by the rules and regulations of the SEC, so long as any notes are outstanding, Molina will electronically file, within the time periods specified in the SEC’s rules and regulations (after giving effect to any grace period provided by Rule 12b-25 under the Exchange Act):
(1) all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if Molina were required to file such reports; and
(2) all current reports that would be required to be filed with the SEC on Form 8-K if Molina were required to file such reports.
All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will include a report on Molina’s consolidated financial statements by Molina’s certified independent accountants.
If Molina has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of Molina and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of Molina.
If the SEC will not accept Molina’s filings for any reason, Molina will post the reports referred to in the preceding paragraph on its website within the time periods that would apply if Molina were required to file those reports with the SEC (after giving effect to any grace period provided by Rule 12b-25 under the Exchange Act). Molina will not take any action for the purpose of causing the SEC not to accept any such filing.
In addition, Molina and the Guarantors agree that, for so long as any notes remain outstanding, they will furnish to the holders of notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Events of Default and Remedies
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of interest on the notes;
(2) default in payment when due (at maturity, upon redemption or otherwise) of the principal of or premium, if any, on the notes;
(3) failure by Molina or any of its Restricted Subsidiaries to comply with the provisions described under the caption "Certain Covenants—Merger, Consolidation or Sale of Assets";
(4) failure by Molina or any of its Restricted Subsidiaries for 30 days after notice to Molina by the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding to comply with the provisions described under the captions "Repurchase at the Option of Holders—Asset Sales" or "Repurchase at the Option of Holders—Change of Control";
(5) failure by Molina for 120 days after notice to Molina by the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding to comply with the provisions described under the caption "Certain Covenants—SEC Reports";
(6) failure by Molina or any of its Restricted Subsidiaries for 60 days after notice to Molina by the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding to comply with any of the other agreements in the indenture or the notes;
(7) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Molina or any of its Restricted Subsidiaries (or the payment of
which is Guaranteed by Molina or any of its Restricted Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created after the date of the indenture, if that default:
(a) is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness on or prior to the expiration of any grace period provided in such Indebtedness on the date of such default (a "Payment Default"); or
(b) results in the acceleration of such Indebtedness prior to its Stated Maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregating in excess of $30.0 million;
(8) failure by Molina or any of its Restricted Subsidiaries to pay final non-appealable judgments entered by a court or courts of competent jurisdiction aggregating in excess of $30.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;
(9) except as permitted by the indenture, any Note Guarantee by a Guarantor that is a Significant Subsidiary of Molina is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor that is a Significant Subsidiary of Molina, or any Person acting on behalf of any such Guarantor, denies or disaffirms its obligations under its Note Guarantee; and
(10) certain events of bankruptcy or insolvency described in the indenture with respect to Molina or any Significant Subsidiary or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary.
In the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to Molina, any Subsidiary that would constitute a Significant Subsidiary or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary, all outstanding notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding notes may declare all the notes to be due and payable immediately.
Subject to certain limitations, holders of a majority in principal amount of the then outstanding notes may direct the trustee in its exercise of any trust or power.
If an Event of Default occurs and is continuing, the trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any holders of notes unless such holders have offered to the trustee indemnity or security reasonably satisfactory to it against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium, if any, or interest, if any, when due, no holder of a note may pursue any remedy with respect to the indenture or the notes unless:
(1) such holder has previously given the trustee written notice that an Event of Default is continuing;
(2) holders of at least 25% in aggregate principal amount of the then outstanding notes make a written request to the trustee to pursue the remedy;
(3) such holder or holders offer to the trustee security or indemnity reasonably satisfactory to the trustee against any loss, liability or expense;
(4) the trustee does not comply with such request within 60 days after receipt of the request and the offer of security or indemnity; and
(5) during such 60-day period, holders of a majority in aggregate principal amount of the then outstanding notes do not give the trustee a direction inconsistent with such request.
The holders of at least a majority in aggregate principal amount of the notes then outstanding by notice to the trustee may on behalf of the holders of all of the notes waive any existing Default or Event of Default and its consequences under the indenture, except a continuing Default or Event of Default in the payment of interest on, or the principal of, the notes. In the event of any Event of Default specified in clause (7) above, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of the acceleration of the notes) shall be annulled, waived and rescinded, automatically and without any action by the trustee or holders of the notes, if within 20 days after such Event of Default arose:
(a) the Indebtedness or Guarantee that is the basis for such Event of Default has been discharged;
(b) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or
(c) if the default that is the basis for such Event of Default has been cured.
Molina is required to deliver to the trustee annually a statement regarding compliance with the indenture. Within 30 days of becoming aware of any Default or Event of Default, Molina is required to deliver to the trustee a statement specifying such Default or Event of Default.
No Personal Liability of Directors, Officers, Incorporators, Employees or Stockholders
No director, officer, employee, incorporator, stockholder, member, manager or partner of Molina or any Restricted Subsidiary, as such, will have any liability for any obligations of Molina or any Restricted Subsidiary under the notes, the Note Guarantees, the indenture, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the federal securities laws.
Legal Defeasance and Covenant Defeasance
Molina may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding notes and all obligations of the Guarantors discharged with respect to their Note Guarantees ("Legal Defeasance") except for:
(1) the rights of holders of outstanding notes to receive payments in respect of the principal of, or interest or premium, if any, on such notes when such payments are due from the trust referred to below;
(2) Molina’s obligations with respect to the notes concerning issuing temporary notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the trustee, and Molina’s and the Guarantors’ obligations in connection therewith; and
(4) the Legal Defeasance provisions of the indenture.
In addition, Molina may, at its option and at any time, elect to have the obligations of Molina and the Guarantors released with respect to certain covenants that are described in the indenture ("Covenant Defeasance") and thereafter any omission to comply with those covenants will not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under the caption "Events of Default and Remedies" will no longer constitute an Event of Default with respect to the notes.
To exercise either Legal Defeasance or Covenant Defeasance:
(1) Molina must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the notes, cash in U.S. dollars, Government Securities, or a combination of cash in U.S. dollars and Government Securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, or interest and premium, if any, on the outstanding notes on the stated maturity or on the next redemption date, as the case may be, and Molina must specify whether the notes are being defeased to maturity or to such particular redemption date;
(2) in the case of Legal Defeasance, Molina has delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that, subject to customary assumptions and exclusions, (a) Molina has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the issuance of the notes, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel will confirm that, subject to customary assumptions and exclusions, the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, Molina has delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that subject to customary assumptions and exclusions the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to make such deposit and the grant of any Lien securing such borrowing);
(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the indenture) to which Molina or any of its Subsidiaries is a party or by which Molina or any of its Subsidiaries is bound (other than resulting from the borrowing of funds to be applied to make such deposit and the grant of any Lien securing such borrowing);
(6) Molina must deliver to the trustee an officer’s certificate stating that the deposit was not made by Molina with the intent of preferring the holders of notes over the other creditors of Molina with the intent of defeating, hindering, delaying or defrauding creditors of Molina or others; and
(7) Molina must deliver to the trustee an officer’s certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.
Amendment, Supplement and Waiver
Except as provided in the next two succeeding paragraphs, the indenture, the notes or any Note Guarantee may be amended or supplemented with the consent of the holders of at least a majority in principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes), and any existing default or compliance with any provision of the indenture, the notes or any Note Guarantee may be waived with the consent of the holders of a majority in principal amount of the then outstanding notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes).
Without the consent of each holder affected, an amendment or waiver may not (with respect to any notes held by a non-consenting holder):
(1) reduce the principal amount of notes whose holders must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any note or alter the provisions with respect to the redemption or repurchase of the notes (except those provisions relating to the covenants described above under the caption "Repurchase at the Option of Holders");
(3) reduce the rate of, or change the time for, payment of interest on any note;
(4) waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, on the notes (except a rescission of acceleration of the notes by the holders of at least a majority in aggregate principal amount of the notes and a waiver of the payment default that resulted from such acceleration);
(5) make any note payable in money other than that stated in the notes;
(6) make any change in the provisions (including applicable definitions) of the indenture relating to waivers of past Defaults or the rights of holders of notes to receive payments of principal of, or interest or premium, if any, on the notes;
(7) waive a redemption or repurchase payment with respect to any note (other than a payment required by the provisions described under the caption "Repurchase at the Option of Holders" above);
(8) release any Guarantor from any of its obligations under its Note Guarantee or the indenture, except in accordance with the terms of the indenture, including as provided in clauses (3), (11) and (12) of the following paragraph;
(9) make any change in the ranking of the notes in a manner adverse to the holders of the notes; or
(10) make any change in the preceding amendment and waiver provisions.
Notwithstanding the preceding, without the consent of any holder of notes, Molina, the Guarantors (except no existing Guarantor need execute a supplemental indenture with respect to clause (7) below) and the trustee may amend or supplement the indenture or the notes:
(1) to cure any ambiguity, mistake, defect or inconsistency;
(2) to provide for uncertificated notes in addition to or in place of certificated notes;
(3) to provide for the assumption of Molina’s or a Guarantor’s obligations to holders of notes and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of Molina's or such Guarantor's assets, as applicable;
(4) to make any change that would provide any additional rights or benefits to the holders of notes or that does not adversely affect the legal rights under the indenture of any such holder;
(5) to provide for or confirm the issuance of additional notes otherwise permitted to be incurred by the indenture;
(6) to comply with requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act;
(7) to allow any Guarantor to execute a supplemental indenture and/or a Guarantee with respect to the notes;
(8) to evidence and provide the acceptance of the appointment of a successor trustee under the indenture;
(9) to mortgage, pledge, hypothecate or grant a security interest in favor of the trustee for the benefit of the holders of notes as additional security for the payment and performance of Molina’s or a Guarantor’s obligations;
(10) to comply with the rules of any applicable securities depositary;
(11) to release a Guarantor from its Note Guarantee pursuant to the terms of the indenture when permitted or required pursuant to the terms of the indenture; or
(12) to conform the text of the indenture, the notes or the Note Guarantees to any provision of this description to the extent that such provision in this description was intended to be a substantially verbatim recitation of a provision of the indenture, the notes or the Note Guarantees.
The consent of the holders is not necessary under the indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.
After an amendment under the indenture becomes effective, Molina is required to deliver to holders of the notes a notice briefly describing such amendment. However, the failure to give such notice to all holders of the notes, or any defect therein, will not impair or affect the validity of the amendment.
Satisfaction and Discharge
The indenture (including the Note Guarantees) will be discharged and will cease to be of further effect as to all notes issued thereunder (except for the trustee’s rights to compensation and indemnity under the indenture, which shall survive), when:
(1) either:
(a) all notes that have been authenticated, except lost, stolen or destroyed notes that have been replaced or paid and notes for whose payment money has been deposited in trust and thereafter repaid to Molina, have been delivered to the trustee for cancellation; or
(b) all notes that have not been delivered to the trustee for cancellation have become due and payable by reason of the delivery of a notice of redemption or otherwise or will become due and payable within one year, and Molina or any Subsidiary of Molina has irrevocably deposited or caused to be deposited with the trustee as trust funds in trust solely for the benefit of the holders, cash in U.S. dollars, Government Securities, or a combination of cash in U.S. dollars and Government Securities, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the notes not delivered to the trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption;
(2) no Default or Event of Default (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing) has occurred and is continuing on the date of the deposit or will occur as a result of the deposit and the deposit will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than resulting from the borrowing of funds to be applied to make such deposit and the grant of any Liens securing such borrowing) to which Molina or any Subsidiary of Molina is a party or by which Molina or any Subsidiary of Molina is bound;
(3) Molina or any Subsidiary of Molina has paid or caused to be paid all sums payable by Molina under the indenture; and
(4) Molina has delivered irrevocable instructions to the trustee under the indenture to apply the deposited money toward the payment of the notes at maturity or the redemption date, as the case may be.
In addition, Molina must deliver an officer’s certificate and an opinion of counsel to the trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
Concerning the Trustee
If the trustee becomes a creditor of Molina or any Guarantor, the indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest, as defined in the indenture, it must (i) eliminate such conflict within 90 days, (ii) apply to the SEC for permission to continue or (iii) resign.
The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. The indenture provides that in case an Event of Default occurs and is continuing, the trustee will be required, in the exercise of its power, to use the degree of care that a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any holder of notes, unless such holder has offered to the trustee security and indemnity satisfactory to it against any loss, cost, liability or expense.
Governing Law
The laws of the State of New York will govern the indenture and will govern the notes without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby.
Certain Definitions
Set forth below are certain defined terms used in the indenture. Reference is made to the indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.
"
Acquired Debt
" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
"
Additional Interest
"
means all additional interest then owing pursuant to the Registration Rights Agreement.
"
Affiliate
"
of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" have correlative meanings.
"
Applicable Premium
"
means, with respect to any note on any redemption date, the greater of:
(1) 1.0% of the then outstanding principal amount of the note; or
(2) the excess of:
(a) the present value at such redemption date of (i) the principal amount at maturity of the note being redeemed plus (ii) all required interest payments due on the note through August 15, 2022 (three months prior to the maturity of the notes) (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(b) the then outstanding principal amount of the note.
Molina will calculate or cause the Applicable Premium to be calculated. The Trustee shall have no duty to calculate or verify the calculations of the Applicable Premium.
"
Asset Sale
"
means the sale, lease, transfer, conveyance or other disposition of any assets or rights (including the issuance or sale of Equity Interests of any Restricted Subsidiary of Molina), other than sales, leases, transfers, conveyances or other dispositions of products, services, accounts receivable or inventory in the ordinary course of business;
provided
that the sale, conveyance or other disposition of all or substantially all of the assets of Molina and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the indenture described above under the caption "Repurchase at the Option of Holders—Change of Control" and/or the provisions described above under the caption "Certain Covenants—Merger, Consolidation or Sale of Assets" and not by the provisions described under the caption "Repurchase at the Option of Holders—Asset Sales".
Notwithstanding the preceding, the following items will not be deemed to be Asset Sales:
(1) any single transaction or series of related transactions that involves assets having a Fair Market Value of less than the greater of (a) $50.0 million and (b) 1.0% of Consolidated Total Assets;
(2) a sale, lease, transfer, conveyance or other disposition of assets between or among Molina and its Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to Molina or to another Restricted Subsidiary;
(4) a sale, lease, transfer, conveyance or other disposition effected in compliance with the provisions described under the caption "Certain Covenants—Merger, Consolidation or Sale of Assets";
(5) a Restricted Payment or Permitted Investment that does not violate the covenant described above under the caption "Certain Covenants—Restricted Payments";
(6) the disposition of Equity Interests in Permitted Joint Ventures;
(7) a transfer of property or assets that are obsolete, damaged or worn out equipment and that are no longer useful in the conduct of Molina or its Subsidiaries’ business and that is disposed of in the ordinary course of business (including the abandonment or other disposition of intellectual property that is, in the reasonable judgment of Molina, no longer economically practicable to maintain or useful in the conduct of the business of Molina and its Restricted Subsidiaries taken as a whole);
(8) a Sale/Leaseback Transaction entered into within 180 days after the acquisition of the property to which such Sale/Leaseback Transaction relates,
provided
that at least 75% of the consideration paid to Molina or the Restricted Subsidiary for such Sale/Leaseback Transaction consists of cash received at closing;
(9) any Asset Swap;
(10) the unwinding of any Hedging Obligations;
(11) the termination, surrender or sublease of leases (as lessee), licenses (as licensee), subleases (as sublessee) and sublicenses (as sublicensee) in the ordinary course of business;
(12) the sale or other disposition of cash or Cash Equivalents;
(13) transfers, conveyances or other dispositions of any real property resulting from any condemnation or eminent domain;
(14) the settlement or write-off of accounts receivable in the ordinary course of business;
(15) any surrender or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;
(16) the granting of Liens not prohibited by the covenant described above under the caption "Certain Covenants—Liens"; and
(17) the lease, sublease or license or sublicense in the ordinary course of business of real or personal property, including patents, trademarks and other intellectual property rights that do not materially interfere with the business of Molina or any of its Restricted Subsidiaries (as determined in good faith by an officer of Molina).
"
Asset Swap
"
means any substantially contemporaneous (and in any event occurring within 180 days of each other) purchase and sale or exchange of any properties or assets or interests used or useful in a Permitted Business between Molina or any of its Restricted Subsidiaries and another Person; provided, that any cash received from such purchase and sale or exchange must be applied in accordance with "Repurchase at the Option of Holders—Asset Sales".
"
Beneficial Owner
" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as that term is used in Section 13(d)(3) of the Exchange Act), such "person" will be deemed to have beneficial ownership of all securities that such "person" has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms "Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"
Board of Directors
"
means:
(1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
(2) with respect to a partnership, the Board of Directors of the general partner of the partnership;
(3) with respect to a limited liability company, the managing member or members or any controlling committee or managing members thereof; and
(4) with respect to any other Person, the board or committee of such Person serving a similar function.
"
Capital Lease Obligation
" means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP as in effect on the date of the indenture. In the event of a change under GAAP (or the application thereof) requiring all leases to be capitalized, only those leases that would result or would have resulted in Capital Lease Obligations on the date of the indenture (assuming for purposes hereof that they were in existence on the date of the indenture) shall be considered Capital Lease Obligations and all calculations and deliverables under the indenture shall be made in accordance therewith.
"
Capital Stock
" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
"
Cash Equivalents
" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (
provided
that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than 24 months from the date of acquisition;
(3) certificates of deposit and Eurodollar time deposits with maturities of 12 months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding 12 months and overnight bank deposits, in each case, with any lender party to the Credit Agreement or with any domestic commercial bank having capital and surplus in excess of $250.0 million;
(4) repurchase obligations with a term of not more than thirty days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;
(5) commercial paper rated at least A-1 by S&P or at least P-1 by Moody’s (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within 12 months after the date of acquisition;
(6) readily marketable direct obligations issued by any state of the United States or any political subdivision with a rating of AA- or higher from S&P or Aa3 or higher from Moody’s (or reasonably equivalent ratings of another internationally recognized ratings agency) with maturities of 24 months or less from the date of acquisition;
(7) Indebtedness issued by Persons with a rating of A or higher from S&P or A-2 or higher from Moody’s (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding 24 months from the date of acquisition; and
(8) money market funds substantially all of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (7) of this definition.
"
Change of Control
" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of Molina and its Restricted Subsidiaries, taken as a whole, to any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act);
(2) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" or "group" (as defined above) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of Molina, measured by voting power rather than number of shares; or
(3) the approval by the holders of Capital Stock of Molina of any plan or proposal for the liquidation or dissolution of Molina (whether or not otherwise in compliance with the provisions of the indenture).
Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control under clause (2) above if (i) Molina becomes a direct or indirect wholly-owned Subsidiary of a holding company and (ii) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of Molina’s Voting Stock immediately prior to that transaction.
"
Consolidated Adjusted EBITDA
" means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:
(1) provision for taxes or assessments based on income (and excluding, for the avoidance of doubt, any amounts under the line item "premium tax expenses" but including, for the avoidance of doubt, income taxes based on reimbursement amounts attributable to the Health Insurer Fee), plus franchise or similar taxes, of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income;
plus
(2) Consolidated Interest Expense, plus amounts excluded from Consolidated Interest Expense pursuant to clause (1) of the definition thereof, to the extent such expense was deducted in computing Consolidated Net Income;
plus
(3) any fees, expenses or charges related to any Equity Offering, Permitted Investment, Hedging Obligation, acquisition, disposition, recapitalization or the incurrence of Indebtedness permitted to be incurred by the indenture (including a refinancing thereof) (whether or not successful), including such fees, expenses and charges relating to the offering of the notes (and the use of proceeds thereof), in each case, to the extent that such fees, expenses or charges were deducted in computing Consolidated Net Income;
plus
(4) depreciation, depletion, amortization and write-downs of goodwill and other non-cash charges or expenses (excluding any cash payment made during the period with respect to any non-cash charge in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, depletion, amortization, write-downs of goodwill and other non-cash charges or expenses were deducted in computing such Consolidated Net Income;
plus
(5) non-cash charges associated with stock-based compensation expenses pursuant to the financial reporting guidance of the Financial Accounting Standards Board concerning stock-based compensation as in effect from time to time, to the extent such charges or expenses were deducted in computing Consolidated Net Income;
plus
(6) any extraordinary, non-recurring or unusual items (excluding any cash payment made during the period with respect to any extraordinary, non-recurring or unusual item in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such extraordinary, non-recurring or unusual items were deducted in computing such Consolidated Net Income;
minus
(7) non-cash gains and all non-cash items of income increasing such Consolidated Net Income for such period (provided that, to the extent previously subtracted from Consolidated Adjusted EBITDA for the purposes of the indenture, any cash payment received during such period in respect of any non-cash gains or non-cash items of income in a prior period shall be added in computing Consolidated Adjusted EBITDA during the period in which such cash payment is received), in each case, on a consolidated basis and determined in accordance with GAAP.
"
Consolidated Interest Expense
" means, with respect to any Person for any period, the sum, without duplication, of:
(1) consolidated interest expense of such Person and its Restricted Subsidiaries for such period (including amortization of original issue discount and bond premium, the interest component of Capital Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations (
provided
,
however
, that if interest rate Hedging Obligations result in net benefits rather than costs, such benefits shall be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in Consolidated Net Income) and excluding amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and expensing of any financing fees);
plus
(2) consolidated capitalized interest of such Person and the Restricted Subsidiaries for such period, whether paid or accrued;
minus
(3) interest income for such period;
minus
(4) any amortization of deferred charges resulting from the application of Accounting Principles Board Opinion No. APB 14-1-Accounting for Convertible Debt Instruments that may be settled in cash upon conversion (including partial cash settlement).
For purposes of this definition, interest on a Capital Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by Molina to be the rate of interest implicit in such Capital Lease Obligation in accordance with GAAP.
"
Consolidated Net Income
" means, with respect to any Person for any period, the consolidated Net Income of such Person and its Restricted Subsidiaries determined in accordance with GAAP;
provided, however
, that there will not be included in such Consolidated Net Income:
(1) any Net Income (loss) of any Person if such Person is not a Restricted Subsidiary except that subject to the limitations contained in clauses (2), (3) and (4) below, Molina’s equity in the Net Income of any such Person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to Molina or a Restricted Subsidiary as a dividend or other distribution;
(2) solely for the purposes of determining the amount available for Restricted Payments under clause 4(c) of the first paragraph of "—Certain Covenants—Restricted Payments", the net income of any Restricted Subsidiary (other than a Guarantor) will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders;
(3) Net Income or loss of any Person for any period prior to the acquisition of such Person by Molina or a Restricted Subsidiary, or the Net Income or loss of any Person who succeeds to the obligations of Molina under the indenture for any period prior to such succession;
(4) the cumulative effect of a change in accounting principles;
(5) any net after-tax income (loss) from disposed or discontinued operations and any net after-tax gains or losses on disposal of disposed or discontinued operations;
(6) the net after-tax effect of any extraordinary, non-recurring or unusual items;
(7) any after tax gains (losses) attributable to sales of assets out of the ordinary course of business or the write-up of assets;
(8) any fees, expenses or charges related to any Equity Offering, Permitted Investment, Hedging Obligation, acquisition, disposition, recapitalization or the incurrence of Indebtedness permitted to be incurred by the indenture (including a refinancing thereof) (whether or not successful), including such fees, expenses and charges relating to the offering of the notes (and the use of proceeds thereof); and
(9) any non-cash compensation charge or expense realized for the grant of stock appreciation or similar rights, stock options or other rights to officers, directors and employees.
"
Consolidated Total Assets
" means, as of the date of any determination thereof, total assets of Molina and its Restricted Subsidiaries calculated in accordance with GAAP on a consolidated basis as of such date.
"
Contractual Obligation
" means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
"
Credit Agreement
" means that certain Credit Agreement, dated as of June 12, 2015, by and among Molina, the other loan parties party thereto, the lenders party thereto and SunTrust Bank, as administrative agent, including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.
"
Credit Facilities
" means one or more debt facilities or agreements (including, without limitation, the Credit Agreement), note purchase agreements, indentures or commercial paper facilities, in each case with banks or other institutional lenders or investors providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables), debt securities or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced (including any agreement to extend the maturity thereof and adding additional borrowers or guarantors and by means of sales of debt securities to institutional investors) in whole or in part from time to time under the same or any other agent, lender or group of lenders, underwriter or group of underwriters and including increasing the amount of available borrowings thereunder;
provided
that such increase is permitted by the "—Incurrence of Indebtedness and Issuance of Preferred Stock" covenant above.
"
Default
" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
"
Designated HMO Subsidiary
" means a Subsidiary of Molina designated or intended to be an HMO subject to obtaining the required licenses and certificates of authority necessary to operate as an HMO;
provided
that such Subsidiary is pursuing obtaining such required licenses and certificates of authority in a commercially reasonable manner in good faith.
"
Designated Insurance Subsidiary
" means a Subsidiary of Molina designated or intended to be doing business (or required to qualify or to be licensed) under the Insurance Regulations subject to obtaining the required licenses and certificates of authority necessary to operate as a Person doing business (or required to qualify or to be licensed) under the Insurance Regulations; provided that such Subsidiary is pursuing obtaining such required licenses and certificates of authority in a commercially reasonable manner in good faith.
"
Designated Non-cash Consideration
" means any non-cash consideration received by Molina or one of its Restricted Subsidiaries in connection with an Asset Sale that is designated as Designated Non-cash Consideration pursuant to an officer’s certificate executed by the principal financial or accounting officer of Molina or such Restricted Subsidiary at the time of such Asset Sale. Any particular item of Designated Non-cash Consideration will cease to be considered to be outstanding once it has been sold for cash or Cash Equivalents.
"
Disqualified Stock
" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature;
provided
,
however
, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable at the option of the holder thereof or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock;
provided
,
further
,
however
, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of Molina or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by Molina in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability;
provided
,
further
, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require Molina to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that Molina may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption "Certain Covenants—Restricted Payments".
"
dollars
" and the sign "$" mean the lawful money of the United States of America.
"
Domestic Subsidiary
" means any Restricted Subsidiary of Molina that was formed under the laws of the United States or any state of the United States or the District of Columbia.
"
Equity Interests
" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
"
Equity Offering
" means any private or public sale of Capital Stock (other than Disqualified Stock of Molina.
"
Existing Indebtedness
" means Indebtedness existing on the date of the indenture (other than Indebtedness under the indenture governing the notes and the Credit Agreement).
"
Fair Market Value
" means, with respect to any Asset Sale or Restricted Payment or other item, the price that would be negotiated in an arm’s-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction, as such price is determined in good faith by an officer of Molina.
"
Fixed Charge Coverage Ratio
" means with respect to any specified Person for any period, the ratio of the Consolidated Adjusted EBITDA of such Person and its Restricted Subsidiaries for such period to the Fixed Charges of such Person and its Restricted Subsidiaries for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems Disqualified Stock or preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated giving
pro forma
effect to such incurrence, assumption, Guarantee, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or preferred stock, and the use of the proceeds therefrom as if the same had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) Investments, dispositions and acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given
pro forma
effect as if they had occurred on the first day of the four-quarter reference period; and
(2) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date.
For purposes of this definition, whenever
pro forma
effect is to be given to an Investment, acquisition, disposition, merger or consolidation and the amount of income or earnings relating thereto, the
pro forma
calculations shall be determined in good faith by a responsible financial or accounting officer of Molina and such
pro forma
calculations may include operating expense reductions, cost- savings and synergies for such period resulting from the transaction which is being given
pro forma
effect that (A) have been realized or (B) for which the steps necessary for realization have been taken (or are taken concurrently with such transaction) or (C) for which the steps necessary for realization are reasonably expected to be taken within the twelve-month period following such transaction and, in each case, including, but not limited to, (a) reduction in personnel expenses, (b) reduction of costs related to administrative functions, (c) reduction of costs related to leased or owned properties and (d) reductions from the consolidation of operations and streamlining of corporate overhead;
provided
that, in each case, such adjustments are set forth in an officer’s certificate signed by Molina’s principal financial or accounting officer which states (i) the amount of such adjustment or adjustments, (ii) in the case of items (B) or (C) above, that such adjustment or adjustments are based on the reasonable good faith belief of the officer executing such officer’s certificate at the time of such execution, (iii) that any related incurrence of Indebtedness is permitted pursuant to the indenture and (iv) any such adjustments made for operating expense reductions, cost-savings and synergies shall not increase Consolidated Adjusted EBITDA by more than 10% of Consolidated Adjusted EBITDA for any period as calculated before giving effect to any such adjustments. If any Indebtedness bears a floating rate of interest and is being given
pro forma
effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the calculation date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if the related hedge has a remaining term in excess of twelve months).
Interest on a Capital Lease Obligation shall be deemed to accrue at the interest rate reasonably determined by a responsible financial or accounting officer of Molina to be the rate of interest implicit in such Capital Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a
pro forma
basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as Molina may designate.
"
Fixed Charges
" means, with respect to any specified Person for any period, the sum, without duplication, of:
(1) Consolidated Interest Expense of such Person for such period; plus
(2) all cash dividend payments (excluding items eliminated in consolidation) on any series of preferred stock or Disqualified Stock of such Person and its Restricted Subsidiaries for such period.
"
GAAP
" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect as in effect from time to time.
"
Government Securities
" means securities that are:
(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or
(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America or a member of the European Union, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such Government Securities or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt;
provided, however
, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.
"
Guarantee
" means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner, including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.
"
Guarantor
" means any Subsidiary that executes a Note Guarantee in accordance with the provisions of the indenture and its successors and assigns.
"
Hedging Obligations
" means, with respect to Molina or any of its Restricted Subsidiaries, the obligations of such Person under (a) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements, (b) other agreements or arrangements designed to manage interest rates or interest rate risk and (c) other arrangements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.
"
HMO
" means any health maintenance organization or managed care organization, any Person doing business as a health maintenance organization or managed care organization, or any Person required to qualify or be licensed as a health maintenance organization or managed care organization under applicable law (including HMO Regulations).
"
HMO Business
" means the business of operating an HMO or other similar regulated entity or business.
"
HMO Regulations
" means all laws, rules, regulations, directives and administrative orders applicable under Federal or state law to any HMO Subsidiary, including Part 422 of Chapter IV of Title 42 of the Code of Federal Regulations and Subchapter XI of Title 42 of the United States Code Annotated (and any regulations, orders and directives promulgated or issued pursuant thereto, including Part 417 of Chapter IV of Title 42 of the Code of Federal Regulations).
"
HMO Subsidiary
" means Molina Healthcare of California, Molina Healthcare of Florida, Inc., Molina Healthcare of Illinois, Inc., Molina Healthcare of Michigan, Inc., Molina Healthcare of New Mexico, Inc., Molina Healthcare of Ohio, Inc., Molina Healthcare of Puerto Rico, Inc., Molina Healthcare of South Carolina, LLC, Molina Healthcare of Texas, Inc., Molina Healthcare of Utah, Inc., Molina Healthcare of Virginia, Inc., Molina Healthcare of Washington, Inc., Molina Healthcare of Wisconsin, Inc. and any other existing or future U.S. Subsidiary that shall become capitalized or licensed as an HMO, shall conduct HMO Business or shall provide managed care services.
"
Indebtedness
" means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or, without duplication, reimbursement agreements in respect thereof), but excluding letters of credit, surety bonds and performance bonds entered into in the ordinary course of business to the extent such letters of credit, surety bonds and performance bonds are not drawn upon or are cash collateralized;
(3) the principal component in respect of banker’s acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price of any property, except (a) any such balance that constitutes an accrued expense or Trade Payable or (b) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP; or
(6) representing the net termination value of any Hedging Obligations, if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person),
provided, however
, that the amount of such Indebtedness will be the lesser of (a) the Fair Market Value of such asset at such date of determination and (b) the amount of such Indebtedness of such other Person and, to the extent not otherwise included, the Guarantee by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; and
(b) the principal amount of the Indebtedness, together with any interest on the Indebtedness that is more than 30 days past due, in the case of any other Indebtedness.
Notwithstanding the foregoing, Indebtedness shall be deemed to exclude (a) contingent obligations incurred in the ordinary course of business (not in respect of borrowed money); (b) deferred or prepaid revenues or marketing fees; (c) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; and (d) obligations to make payments in respect of funds held under escrow arrangements in the ordinary course of business.
Notwithstanding
anything in the indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Accounting Standards Codification 815 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under the indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under the indenture but for the application of this sentence shall not be deemed an incurrence of Indebtedness under the indenture.
"
Insurance Regulations
" means all laws, rules, regulations, directives and administrative orders applicable under Federal or state law to any Insurance Subsidiary.
"
Insurance Subsidiary
" means any Subsidiary that is engaged in the insurance business and that is regulated by the relevant governmental authority.
"
Investment Grade Rating
" means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s or BBB- (or the equivalent) by S&P, in each case, with a stable or better outlook.
"
Investments
" means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding accounts receivable, trade credit, security deposits and advances to customers or suppliers, and commission, travel and similar advances, fees and compensation paid to officers, directors, independent contractors and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If Molina or any Subsidiary of Molina sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of Molina such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of Molina, Molina will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Equity Interests of such Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under the caption "Certain Covenants—Restricted Payments". The acquisition by
Molina or any Subsidiary of Molina of a Person that holds an Investment in a third Person will be deemed to be an Investment by Molina or such Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investment held by the acquired Person in such third Person in an amount determined as provided in the final paragraph of the covenant described above under the caption "Certain Covenants—Restricted Payments". Except as otherwise provided in the indenture, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.
"
Issue Date
" means November 10, 2015.
"
Lien
" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction;
provided
that in no event shall an operating lease or an option or an agreement to sell be deemed to constitute a Lien.
"
Moody's
" means Moody’s Investors Service, Inc. or any successor to the ratings agency business thereof.
"
Net Income
" means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with: (a) any asset sales other than in the ordinary course of business; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness or Hedging Obligations or other derivative instruments of such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related provision for taxes on such extraordinary gain or loss.
"
Net Proceeds
" means the aggregate cash or Cash Equivalents received by Molina or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, and amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale, and any reserve established in accordance with GAAP against liabilities associated with such Asset Sale or any amount placed in escrow for adjustment in respect of the purchase price of such Asset Sale, until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall be increased by the amount of the reserve so reversed or the amount returned to Molina or its Restricted Subsidiaries from such escrow agreement, as the case may be.
"
Non-Recourse Debt
" means Indebtedness:
(1) as to which neither Molina nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender; and
(2) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of Molina or any of its Restricted Subsidiaries, in each case other than with respect the pledge of Equity Interests of any obligor securing such Indebtedness.
"
Note Guarantee
" means a Guarantee by each Guarantor of Molina’s obligations under the indenture and on the notes, executed pursuant to the provisions of the indenture.
"
Obligations
" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
"
Permitted Business
" means the lines of business conducted by Molina and its Restricted Subsidiaries on the date hereof and any other health care business related, ancillary or complementary (including any reasonable extension, development or expansion) to any such business.
"
Permitted Investments
" means:
(1) any Investment in Molina or a Restricted Subsidiary of Molina;
(2) any Investment in Cash Equivalents;
(3) any Investment by Molina or any of its Restricted Subsidiaries in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of Molina; or
(b) such Person is, in one transaction or a series of related transactions, merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, Molina or a Subsidiary of Molina;
(4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption "Repurchase at the Option of Holders—Asset Sales" or any other disposition of assets not constituting an Asset Sale;
(5) any acquisition of assets or Capital Stock solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of Molina; provided that such Equity Interests will not increase the amount available for Restricted Payments under clause (c)(II) of the first paragraph of the covenant described under the caption "Certain Covenants—Restricted Payments";
(6) any Investments received in compromise or resolution of (A) obligations of trade creditors, health care providers or customers that were incurred in the ordinary course of business, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor, health care provider or customer or (B) litigation, arbitration or other disputes;
(7) Hedging Obligations;
(8) Investments the payment for which is Capital Stock (other than Disqualified Stock) of Molina; provided that such Equity Interests will not increase the amount available for Restricted Payments under clause (c)(II) of the first paragraph of the covenant described under the caption "Certain Covenants—Restricted Payments";
(9) Investments in prepaid expenses, negotiable instruments held for collection, utility and workers' compensation, performance and similar deposits made in the ordinary course of business;
(10) loans and advances to directors, officers and employees of Molina or any of its Restricted Subsidiaries in an aggregate amount for all such loans and advances not to exceed $10.0 million at any time outstanding;
(11) any Investments existing on, or made pursuant to binding commitments existing on, the date of the indenture and any Investments consisting of an extension, modification or renewal of any Investments existing on, or made pursuant to a binding commitment existing on, the date of the indenture;
(12) Investments acquired after the date of the indenture as a result of the acquisition by Molina or any Restricted Subsidiary of another Person, by way of a merger, amalgamation or consolidation with or into Molina or any of its Restricted Subsidiaries in a transaction that is not prohibited by the covenant described above under the caption "Certain Covenants—Merger, Consolidation or Sale of Assets" after the date of the indenture to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(13) loans and advances to directors, officers and employees of Molina or any of its Restricted Subsidiaries for business-related travel expenses, moving expenses and other similar expenses, in each case incurred in the ordinary course of business;
(14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with another Person or Persons;
(15) Guarantees issued in accordance with the covenants described under the caption "Certain Covenants-Incurrence of Indebtedness and Issuance of Preferred Stock" and "Certain Covenants—Limitation on Issuances of Guarantees of Indebtedness";
(16) Investments consisting of purchases and acquisitions of inventory, supplies, materials, services and equipment or purchases of contract rights or licenses or leases of intellectual property, in each case in the ordinary course of business;
(17) Guarantees by Molina or any of its Restricted Subsidiaries of operating leases (other than Capital Lease Obligations), trademarks, licenses, purchase agreements or of other obligations that do not constitute Indebtedness, in each case entered into by Molina or any Restricted Subsidiary in the ordinary course of business;
(18) Investments in Permitted Joint Ventures in an amount not to exceed at any one time outstanding 5.0% of Consolidated Total Assets;
(19) deposits in the ordinary course of business to secure the performance of leases;
(20) other Investments in any Person having an aggregate Fair Market Value (measured on the date each such investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (20) that are at the time outstanding, not to exceed the greater of (a) $200.0 million and (b) 3.50% of Consolidated Total Assets;
(21) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit, in each case in the ordinary course of business;
(22) receivables owing to Molina or any of its Restricted Subsidiaries in connection with deferred premium obligations or endorsements for collection or deposit, in each case created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms;
(23) Investments consisting of, or made pursuant to, capital support or other similar keep-well agreements, or Guarantees thereof, Guaranteed by Molina or any Restricted Subsidiary of Molina that constitute insurance contracts, or Guarantees of insurance products written by, or the performance of, any Restricted Subsidiary, in each case in the ordinary course of business consistent with business practices in effect on the date of the indenture;
(24) Investments in any HMO Subsidiary or any Insurance Subsidiary (other than any Designated HMO Subsidiary or any Designated Insurance Subsidiary) in an aggregate amount reasonably necessary to ensure that such HMO Subsidiary or Insurance Subsidiary maintains the minimum Statutory Net Worth threshold required pursuant to applicable law or any applicable rule, regulation or order of, or arrangement with, any regulatory body or agency; and
(25) Investments in any Designated HMO Subsidiary or any Designated Insurance Subsidiary in an aggregate amount necessary to ensure that such HMO Subsidiary or Insurance Subsidiary maintains the minimum amount of capital as required pursuant to applicable law or any applicable rule, regulation or order of, or arrangement with, any regulatory body or agency;
provided
that such investments may not be made at any time after the occurrence and during the continuance of an Event of Default.
"
Permitted Joint Venture
" means any joint venture that Molina or any of its Restricted Subsidiaries is a party to that is engaged in a Permitted Business.
"
Permitted Liens
" means:
(1) Liens in favor of Molina or the Restricted Subsidiaries;
(2) Liens on assets of Molina or any of its Restricted Subsidiaries securing Indebtedness and other Obligations that were permitted by the terms of the indenture to be incurred pursuant to clause (1) of the second paragraph under "Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock" and/or securing Hedging Obligations related thereto;
(3) Liens on any property or assets existing at the time of acquisition thereof by Molina or any Restricted Subsidiary of Molina or on the property or assets of a Person existing at the time such Person becomes a Restricted Subsidiary of Molina or is merged with or into or consolidated with Molina or any Restricted Subsidiary of Molina;
provided
that such Liens were in existence prior to the contemplation of such acquisition, merger or consolidation and do not extend to any other property or assets of Molina or any Restricted Subsidiary of Molina;
(4) Liens for taxes, assessments or other governmental charges or claims not at the time delinquent or thereafter payable without penalty or being contested in good faith by appropriate proceedings;
provided
that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefore;
(5) Liens to secure the performance of statutory obligations, surety or appeal bonds, tenders, bids, trade contracts, leases, government contracts, performance bonds, landlords, carriers, warehousemen, mechanics and materialmen Liens and other similar Liens imposed by law, Liens in the form of deposits or pledges incurred in connection with workers’ compensation, unemployment compensation and other types of social security and/or other obligations of a like nature incurred in the ordinary course of business;
(6) Liens existing on the date of the indenture;
(7) survey exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the ordinary course of business of such Person;
(8) Liens created for the benefit of (or to secure) the notes (or any Note Guarantees);
(9) Liens arising from Uniform Commercial Code financing statement filings regarding leases entered into by Molina or any of its Restricted Subsidiaries in the ordinary course of business;
(10) Liens securing Permitted Refinancing Indebtedness incurred to refinance Indebtedness that was previously so secured as permitted by the indenture;
provided
that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced or is in respect of property that is the security for a Permitted Lien;
(11) Liens securing Hedging Obligations of Molina or any of its Restricted Subsidiaries, which transactions or obligations are incurred for bona fide hedging purposes (and not for speculative purposes) of Molina or its Restricted Subsidiaries;
(12) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) under the second paragraph under the caption "Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock";
provided
that any such Lien (a) covers only the assets acquired, leased, designed, installed, constructed or improved with such Indebtedness and (b) is created within 270 days of such acquisition, lease, design, installation, construction or improvement;
(13) Liens securing Indebtedness permitted by clause (16) of the second paragraph under the caption "Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock";
(14) Liens required by any regulation, or order of or arrangement or agreement with any regulatory body or agency, so long as such Liens do not secure Indebtedness;
(15) other Liens incurred in the ordinary course of business of Molina or any of its Restricted Subsidiaries with respect to Indebtedness other than in respect of borrowed money in an aggregate principal amount, together with all Indebtedness incurred to refund, refinance or replace such Indebtedness (or refinancings, refundings or replacements thereof), that does not exceed the greater of (a) $275.0 million and (b) 5.0% of Consolidated Total Assets at any one time outstanding;
(16) Liens securing judgments, decrees or attachments (or appeal or other surety bonds relating to such judgments), provided that no such judgment constitutes an Event of Default under paragraph (8) under the caption "Event of Default" or Liens securing appeal or surety bonds related thereto;
(17) licenses, leases or subleases and other intellectual property rights granted to others not interfering in any material respect with the business of Molina or any Restricted Subsidiary of Molina;
(18) Liens in the nature of normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions;
(19) Liens of a collection bank arising in the ordinary course of business under Section 4-210 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;
(20) Liens of sellers of goods to Molina or any Restricted Subsidiary of Molina arising under Article 2 of the UCC in effect in the relevant jurisdiction or similar provisions of applicable law in the ordinary course of business, covering only the goods sold and securing only the unpaid purchase price for such goods and related expenses;
(21) Liens in the nature of municipal ordinances, zoning, entitlement, land use and environmental regulation;
(22) Liens solely on any cash earnest money deposits made by Molina or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder;
(23) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; and
(24) Liens on assets of Molina or any of its Restricted Subsidiaries securing Indebtedness;
provided
that at the time of incurrence of such Indebtedness and Liens and after giving
pro forma
effect thereto, the Secured Debt Ratio would be no greater than 2.00 to 1.0.
"
Permitted Refinancing Indebtedness
" means any Indebtedness of Molina or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease, discharge or refund other Indebtedness of Molina or any of its Restricted Subsidiaries (other than intercompany Indebtedness);
provided, however
, that:
(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums (including tender premiums) and defeasance costs, incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date the same as or later than the final maturity date of, and has a Weighted Average Life to Maturity that is (a) equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, renewed, refunded, refinanced, replaced, defeased or discharged or (b) more than 90 days after the final maturity date of the notes;
(3) if Subordinated Obligations are being extended, refinanced, renewed, replaced, defeased, discharged or refunded, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the notes on terms at least as favorable to the holders of notes as those contained in the documentation governing the Subordinated Obligations being extended, refinanced, renewed, replaced, defeased, discharged or refunded; and
(4) such Indebtedness is incurred either by Molina or by the Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased, discharged or refunded.
"
Person
" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
"
Qualified Cash
" means cash and Cash Equivalents of Molina and the Guarantors (a) in excess of $50.0 million and (b) that does not appear or would not be required to appear as "restricted" on a consolidated balance sheet of Molina.
"
Registration Rights Agreement
" means that certain registration rights agreement related to the Notes dated the Issue Date by and among Molina, the Guarantors party thereto and SunTrust Robinson Humphrey, Inc., as representative of the initial purchasers.
"
Restricted Investment
" means an Investment other than a Permitted Investment.
"
Restricted Subsidiary
" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.
"
S&P
" means Standard & Poor's Ratings Service, a division of The McGraw Hill Companies, Inc., or any successor to the ratings agency business thereof.
"
Sale/Leaseback Transaction
" means an arrangement relating to property now owned or hereafter acquired whereby Molina or a Restricted Subsidiary thereof transfers such property to a Person and Molina or a Restricted Subsidiary leases it from such Person.
"
SAP
" means, with respect to each HMO Subsidiary (other than a Designated HMO Subsidiary), the statutory accounting principles and procedures prescribed or permitted by applicable HMO Regulations for such HMO Subsidiary, applied on a consistent basis, as interpreted by the state in which the applicable HMO Subsidiary operates and (ii) with respect to each Insurance Subsidiary (other than a Designated Insurance Subsidiary), the statutory accounting principles and procedures prescribed or permitted by applicable Insurance Regulations for such Insurance Subsidiary, applied on a consistent basis, as interpreted by the state in which the applicable Insurance Subsidiary operates.
"
SEC
" means the Securities and Exchange Commission.
"
Secured Debt
" means all Indebtedness secured by Liens of Molina and its Restricted Subsidiaries, determined on a consolidated basis.
"
Secured Debt Ratio
" as of the date of any event for which a calculation is required (the "date of determination") means the ratio of (a) the aggregate amount of Secured Debt as of the date of determination to (b) the Consolidated Adjusted EBITDA of Molina for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of determination, in each case with such
pro forma
adjustments as are appropriate and consistent with the
pro forma
adjustment provisions set forth in the definition of "Fixed Charge Coverage Ratio."
"
Senior Debt
" means:
(1) all Indebtedness of Molina or any Guarantor outstanding under Credit Facilities, and all Hedging Obligations and all banking service, treasury management and other similar Obligations with respect thereto;
(2) any other Indebtedness of Molina or any Guarantor permitted to be incurred under the terms of the indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is subordinated in right of payment to the notes or any Note Guarantee; and
(3) all Obligations with respect to the items listed in the preceding clauses (1) and (2) (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law).
Notwithstanding anything to the contrary in the preceding, Senior Debt will not include:
(1) any liability for federal, state, local or other taxes owed or owing by Molina;
(2) any Indebtedness of Molina or any of its Subsidiaries to Molina or any of its Subsidiaries or other Affiliates;
(3) any Trade Payables; or
(4) the portion of any Indebtedness that is incurred in violation of the indenture.
"
Significant Subsidiary
" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the date of the indenture.
"
Stated Maturity
" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
"
Statutory Net Worth
"
means, with respect to any HMO Subsidiary or any Insurance Subsidiary (other than a Designated HMO Subsidiary or a Designated Insurance Subsidiary), as of the end of any fiscal year, the difference between (a) total admitted assets and (b) total liabilities, in each case as calculated according to the applicable state’s interpretation of SAP in the applicable jurisdiction as most recently reported to the applicable jurisdiction for such fiscal year.
"
Subordinated Obligations
" means any Indebtedness of Molina (whether outstanding on the date of the indenture or thereafter incurred) that is subordinate or junior in right of payment to the notes pursuant to a written agreement to that effect.
"
Subsidiary
" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).
"
Total Net Debt
" means all Indebtedness (net of up to $250.0 million of Qualified Cash) of Molina and its Restricted Subsidiaries, determined on a consolidated basis, after eliminating all intercompany items, excluding Indebtedness under letters of credit to the extent such letters of credit are cash collateralized.
"
Total Net Debt Ratio
" as of the date of any event for which a calculation is required (the "date of determination") means the ratio of (a) the aggregate amount of Total Net Debt as of the date of determination to (b) the Consolidated Adjusted EBITDA of Molina for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of determination, in each case with such
pro forma
adjustments as are appropriate and consistent with the
pro forma
adjustment provisions set forth in the definition of "Fixed Charge Coverage Ratio".
"
Trade Payables
" means, with respect to any Person, any accounts payable or any other indebtedness or monetary obligation to trade creditors, physicians, hospitals, health maintenance organizations or other health care providers created, assumed or Guaranteed by such Person or any of its Subsidiaries arising in the ordinary course of business in connection with the acquisition of goods and services.
"
Treasury Rate
" means, at the time of computation, the yield to maturity of United States Treasury Securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15(519) which has become publicly available at least two business days prior to the redemption date or, if such Statistical Release is no longer published, any publicly available source of similar market data) most nearly equal to the period from the redemption date to August 15, 2022 (three months prior to the maturity of the notes);
provided, however
, that if the period from the redemption date to August 15, 2022 (three months prior to the maturity of the notes) is not equal to the constant maturity of a United States Treasury Security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury Securities for which such yields are given, except that if the period from the redemption date to August 15, 2022 (three months prior to the maturity of the notes) is less than one year, the weekly average yield on actually traded United States Treasury Securities adjusted to a constant maturity of one year shall be used.
"
Unrestricted Subsidiary
" means as of the Issue Date, any Subsidiary of Molina (or any successor to any of them) that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution and any Subsidiary of an Unrestricted Subsidiary, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) except as permitted by the covenant described above under the caption "Certain Covenants—Transactions with Affiliates", is not party to any agreement, contract, arrangement or understanding with Molina or any Restricted Subsidiary of Molina unless the terms of any such agreement, contract, arrangement or understanding are not less favorable in any material respect to Molina or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of Molina;
(3) is a Person with respect to which neither Molina nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Molina or any of its Restricted Subsidiaries.
Any Subsidiary of a Subsidiary of Molina designated by the Board of Directors of Molina as an Unrestricted Subsidiary shall also be an Unrestricted Subsidiary.
"
Voting Stock
" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
"
Weighted Average Life to Maturity
" means, when applied to any Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
EXCHANGE OFFER AND REGISTRATION RIGHTS AGREEMENT
We entered into a registration rights agreement with certain initial purchasers on November 10, 2015, wherein we agreed for the benefit of the holders of the original notes to use our commercially reasonable efforts to file with the Commission, and cause to become effective, a registration statement relating to an offer to exchange the original notes for notes registered with the Commission with terms substantially identical in all material respects to the original notes. We filed the registration statement of which this prospectus is a part to meet our obligations under the registration rights agreement. For details regarding the exchange offer, see "The Exchange Offer".
If (1) because of any change in law or in currently prevailing interpretations of the Staff of the Commission, we are not permitted to effect this exchange offer, (2) this exchange offer is not consummated within 300 days from November 10, 2015, the issue date of the original notes (the "Original Issue Date"), (3) in certain circumstances, certain holders of unregistered exchange notes so request, or (4) in the case of any holder that participates in this exchange offer, such holder does not receive exchange notes on the date of the exchange that may be sold without restriction under state and federal securities laws (other than due solely to the status of such holder as an affiliate of Molina within the meaning of the Securities Act), then, in each case, we will (x) promptly deliver to the holders and the trustee written notice thereof and (y) at our sole expense, as promptly as practicable, file a shelf registration statement covering resales of the notes (the "Shelf Registration Statement"), and use our commercially reasonable efforts to keep effective the Shelf Registration Statement until the earlier of two years after the Original Issue Date or such time as all of the applicable notes have been sold thereunder. We will, in the event that a Shelf Registration Statement is filed, provide to each holder copies of the prospectus that is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement for the notes has become effective and take certain other actions as are required to permit unrestricted resales of the notes. A holder that sells notes pursuant to the Shelf Registration Statement will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the registration rights agreement that are applicable to such a holder (including certain indemnification rights and obligations).
If we fail to meet the targets listed above, then additional interest ("Additional Interest") will become payable in respect of the original notes as follows:
|
|
|
|
(1)
|
if (A) the registration statement of which this prospectus is a part is not declared effective by the Commission on or prior to 270 days after the Original Issue Date or a Shelf Registration Statement is not declared effective by the Commission on or prior to 270 days after the Original Issue Date or (B) notwithstanding that we have consummated or will consummate this exchange offer, we are required to file a Shelf Registration Statement and such Shelf Registration Statement is not declared effective by the Commission on or prior to later of (x) 270 days after the Original Issue Date and (y) the 90th day following the date such Shelf Registration Statement was filed, then, commencing on the day after either such required effective date, Additional Interest shall accrue on the principal amount of the original notes at a rate of 0.25% per annum for the first 90 days immediately following such date, such Additional Interest rate increasing by an additional 0.25% per annum at the beginning of each subsequent 90 day period; or
|
|
|
|
|
(2)
|
if (A) we have not exchanged exchange notes for all original notes validly tendered in accordance with the terms of this exchange offer on or prior to the 300th day after the Original Issue Date or (B) if applicable, the Shelf Registration Statement has been declared effective and such Shelf Registration Statement ceases to be effective at any time prior to the second anniversary of the Original Issue Date (other than after such time as all original notes have been disposed of thereunder), then Additional Interest shall accrue on the principal amount of the original notes at a rate of 0.25% per annum for the first 90 days commencing on (x) the day after such required exchange, in the case of (A) above, or (y) the day such Shelf Registration Statement ceases to be effective, in the case of (B) above, such Additional Interest rate increasing by an additional 0.25% per annum at the beginning of each subsequent 90 day period;
|
provided, however
, that the Additional Interest rate on the original notes may not accrue under more than one of the foregoing clauses (a)-(b) at any one time and at no time shall the aggregate amount of Additional Interest accruing exceed in the aggregate 1.0% per annum;
provided, further, however
, that (1) upon the effectiveness of the registration statement of which this prospectus is a part or a Shelf Registration Statement (in the case of clause (a) above), or (2) upon the exchange of exchange notes for all original notes tendered (in the case of clause (b)(A) above), or upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective (in the case of clause (b)(B) above), Additional Interest on the original notes as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue.
Any amounts of Additional Interest due pursuant to clause (a) or (b) above will be payable in cash on the same original interest payment dates as the original notes.
This summary of the provisions of the registration rights agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, all of the provisions of the registration rights agreement, incorporated herein by reference, a copy of which has been filed as an exhibit to the registration statement of which this prospectus is a part.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20.
Indemnification of Directors and Officers.
Directors and officers of the Registrant and the Additional Registrants are insured against certain liabilities for actions taken in such capacities, including liabilities under the Securities Act of 1933, as amended.
The Delaware Corporations
The Registrant and Additional Registrant AmericanWork, Inc. are corporations incorporated in the State of Delaware.
Subsection (a) of Section 145 of the General Corporation Law of the State of Delaware (the "DGCL") empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Section 145 of the DGCL further provides that to the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in subsections (a) and (b) of Section 145, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith; that indemnification and advancement of expenses provided for by Section 145 will not be deemed exclusive of any other rights to which the indemnified party may be entitled; and the indemnification and advancement of expenses provided by, or granted pursuant to, Section 145 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. Section 145 also empowers the corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under Section 145.
Section 102(b)(7) of the DGCL provides that a corporation’s certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit.
Molina Healthcare, Inc.
The Certificate of Incorporation of Molina Healthcare, Inc. contains the indemnification language mandated by Sections 145(a) and 145(b) of the DGCL.
The Certificate of Incorporation of Molina Healthcare, Inc. further provides that a director of the corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of a director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit.
The Third Amended and Restated Bylaws of Molina Healthcare, Inc. provide for the indemnification of directors, officers, employees and agents to the extent permitted by Delaware law.
AmericanWork, Inc.
The Certificate of Incorporation of AmericanWork, Inc. provides that each person who serves or who has served as a director shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that this provision shall not eliminate or limit the liability of a director: (i) for any breach of loyalty to the corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) for unlawful payment of dividend or unlawful stock purchase or redemption as such liability is imposed under Section 174 of the DGCL; or (iv) for any transaction from which the director derived an improper personal benefit.
The Bylaws of AmericanWork, Inc. provide that the company shall indemnify its officers, directors, employees and agents to the extent permitted or required by the DGCL.
The Delaware Limited Liability Companies
Additional Registrants Molina Pathways, LLC, Pathways Community Services LLC, Pathways Health and Community Support LLC, Pathways of Idaho LLC and Pathways of Massachusetts LLC are limited liability companies organized under the laws of the State of Delaware.
The Delaware Limited Liability Company Act (the "Delaware Act"), Section 18-108, provides that, subject to such standards and restrictions, if any, as are set forth in its limited liability company agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever.
Molina Pathways, LLC
The Limited Liability Company Operating Agreement of Molina Pathways, LLC provides that the company shall, to the fullest extent permitted under the Delaware Act, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (including, without limitation, arbitration), by reason of the fact that the person is or was a manager, or a member, partner, manager, affiliate, officer, director, employee or agent of a manager, or an officer, employee or agent of the company or any person who is or was serving at the request of the manager or the company as a manager, member, partner, director, officer, employee or agent of another company or person ("Indemnifiable Person"), against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually incurred by it in connection with the action, suit or proceeding except by reason of the fraud or willful misconduct of such Indemnifiable Person, provided that such Indemnifiable Person acted in good faith and in a manner which it reasonably believed to be in or not opposed to the best interests of the company and, with respect to any criminal action or proceeding, did not reasonably believe its conduct was unlawful.
Notwithstanding the foregoing, indemnification may not be made for any claim, issue or matter as to which an Indemnifiable Person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom (or by an arbitrator in a final, binding judgment), to be liable to the company, or for amounts paid in settlement to the company, unless
and only to the extent that the court in which the action or suit was brought (or such arbitrator) or other court of competent jurisdiction (or arbitrator) determines upon application that in view of all the circumstances of the case, the Indemnifiable Person is fairly and reasonably entitled to indemnity for such expenses as the court or arbitrator deems proper.
The limited liability company operating agreement also provides that reasonable expenses of the Indemnifiable Person incurred in defending a civil or criminal action, suit or proceeding may be paid by the company as they are incurred and in advance of the final disposition of the action, suit or proceeding upon receipt of an undertaking by or on behalf of the Indemnifiable Person to repay the amount if it is ultimately determined by a court of competent jurisdiction (or by an arbitrator in a final, binding judgment) that such person is not entitled to be indemnified by the company.
The limited liability company operating agreement further provides that the indemnification and advancement of expenses described above (i) does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled (whether under contract or otherwise); (ii) continues for a person who has ceased to be an Indemnifiable Person; provided that the act or omission that is the subject of the claim took place prior to the cessation of such person's status as an Indemnifiable Person; (iii) inures to the benefit of the Indemnifiable Person's respective heirs, assignees, successors, executors and administrators and (iv) survives the dissolution of the company to the extent of any assets distributed by the company on that dissolution.
In addition to indemnification, the limited liability company operating agreement authorizes the company to purchase and maintain insurance or make other financial arrangements on behalf of any Indemnifiable Person for any liability asserted against that person and liability and expenses incurred by him or her in the capacity as an Indemnifiable Person, or arising out of his or her status as such.
Pathways Community Services LLC
Neither the Certificate of Formation of Aspen MSO, LLC (now known as Pathways Community Services LLC) nor the Amended and Restated Operating Agreement of Providence Community Services, LLC (now known as Pathways Community Services LLC) contain any provisions authorizing the company to indemnify or insure directors or officers against liability arising out of their capacities as directors or officers.
Pathways Health and Community Support LLC
The Amended and Restated Limited Liability Company Agreement of Pathways Health and Community Support LLC provides that, to the fullest extent permitted by law, no member, manager or officer shall be liable to the company or any other member for any act or omission in connection with the management of the business or affairs of the company unless such act or omission was taken or made in bad faith or constitutes gross negligence or willful misconduct. The limited liability company agreement also provides that the company shall, to the fullest extent permitted by law, indemnify and hold harmless each member, manager and officer against any losses, judgments, liabilities or expenses incurred in settling any claim or incurred in any finally adjudicated legal proceeding, including reasonable attorneys' fees and costs of removing any liens affecting property of the indemnitee, and/or amounts paid in settlement of any claims sustained by it arising from or relating to the company, provided that the same were not the result of (a) actions or omissions of such member, manager or officer taken or made in bad faith or which constitute gross negligence or willful misconduct or (b) actions or claims instituted by such member, manager or officer (other than claims or actions seeking to enforce the indemnification obligations under the limited liability company agreement) provided, however, that any indemnity under this
section (b) by the company shall be provided out of and to the extent of company assets only, and the member shall not have personal liability on account thereof.
The limited liability company agreement provides that expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the company in advance of the final disposition upon receipt of an undertaking by the member, manager or officer, as the case may be, to repay such amount unless it is ultimately determined that such member, manager or officer is entitled to be indemnified by the company.
The limited liability company agreement provides that the indemnification provided for in the limited liability company agreement shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any statute, agreement, vote of members or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office.
Pathways of Idaho LLC
The Limited Liability Company Agreement of Providence of Idaho, LLC (now known as Pathways of Idaho LLC) provides that, to the fullest extent permitted by law, no member, manager or officer shall be liable to the company or any other member for any act or omission in connection with the management of the business or affairs of the company unless such act or omission was taken or made in bad faith or constitutes gross negligence or willful misconduct. The limited liability company agreement also provides that the company shall, to the fullest extent permitted by law, indemnify and hold harmless each member, manager and officer against any losses, judgments, liabilities or expenses incurred in settling any claim or incurred in any finally adjudicated legal proceeding, including reasonable attorneys' fees and costs of removing any liens affecting property of the indemnitee, and/or amounts paid in settlement of any claims sustained by it arising from or relating to the company, provided that the same were not the result of (a) actions or omissions of such member, manager or officer taken or made in bad faith or which constitute gross negligence or willful misconduct or (b) actions or claims instituted by such member, manager or officer (other than claims or actions seeking to enforce the indemnification obligations under the limited liability company agreement) provided, however, that any indemnity under this
section (b) by the company shall be provided out of and to the extent of company assets only, and the member shall not have personal liability on account thereof.
The limited liability company agreement provides that expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the company in advance of the final disposition upon receipt of an undertaking by the member, manager or officer, as the case may be, to repay such amount unless it is ultimately determined that such member, manager or officer is entitled to be indemnified by the company.
The limited liability company agreement provides that the indemnification provided for in the limited liability company agreement shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any statute, agreement, vote of Members or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office.
Pathways of Massachusetts LLC
The Limited Liability Company Agreement of Providence Human Services of Massachusetts, LLC (now known as Pathways of Massachusetts LLC) provides that, to the fullest extent permitted by law, no member, manager or officer shall be liable to the company or any other member for any act or omission in connection with the management of the business or affairs of the company unless such act or omission was taken or made in bad faith or constitutes gross negligence or willful misconduct. The agreement also provides that the company shall, to the fullest extent permitted by law, indemnify and hold harmless each member, manager and officer against any losses, judgments, liabilities or expenses incurred in settling any claim or incurred in any finally adjudicated legal proceeding, including reasonable attorneys' fees and costs of removing any liens affecting property of the indemnitee, and/or amounts paid in settlement of any claims sustained by it arising from or relating to the company, provided that the same were not the result of (a) actions or omissions of such member, manager or officer taken or made in bad faith or which constitute gross negligence or willful misconduct or (b) actions or claims instituted by such member, manager or officer (other than claims or actions seeking to enforce the indemnification obligations under the limited liability company agreement) provided, however, that any indemnity under this
section (b) by the company shall be provided out of and to the extent of company assets only, and the member shall not have personal liability on account thereof.
The limited liability company agreement provides that expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the company in advance of the final disposition upon receipt of an undertaking by the member, manager or officer, as the case may be, to repay such amount unless it is ultimately determined that such member, manager or officer is entitled to be indemnified by the company.
The limited liability company agreement provides that the indemnification provided for in the limited liability company agreement shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any statute, agreement, vote of members or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office.
The Arizona Corporation
Additional Registrant Pathways of Arizona, Inc. is a corporation incorporated under the laws of the State of Arizona.
Arizona Revised Statutes ("ARS") Section 10-851 provides that a corporation may indemnify an individual made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative
and whether formal or informal (a "proceeding") because either (1) the individual is or was a director against liability incurred in the proceeding and (a) the individual’s conduct was in good faith, (b) the individual (i) in the case of conduct in an official capacity with the corporation, reasonably believed that the conduct was in the corporation’s best interests, (ii) in all other cases, reasonably believed that the conduct was at least not opposed to the corporation’s best interests, and (c) in the case of any criminal proceedings, had no reasonable cause to believe the conduct was unlawful; or (2) the director engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the corporation’s articles of incorporation. Indemnification in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding. A corporation may not indemnify a director in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or in connection with any other proceeding charging improper financial benefit to the director, whether or not involving action in the director’s official capacity, in which the director was adjudged liable on the basis that financial benefit was improperly received by the director.
Unless limited by the articles of incorporation, a corporation must indemnify a director who was the prevailing party, on the merits or otherwise, in the defense of any proceeding to which the director was a party because the director is or was a director of the corporation against reasonable expenses incurred by the director in connection with the proceeding. Unless otherwise limited, a corporation must indemnify a director who while serving as a director was not an officer, employee or holder of more than five percent of the outstanding shares of any class of stock of the corporation or of any affiliate of the corporation ("Outside Director"). Unless limited by the articles of incorporation or ARS Section 10-851(C), a corporation must pay an Outside Director’s expenses in advance of a final disposition of a proceeding if the director furnishes the corporation with a written affirmation of the director’s good faith belief that the director has met the standard of conduct described in the foregoing paragraph and the director furnishes the corporation with a written undertaking executed personally, or on the director’s behalf, to repay the advance if it is ultimately determined that the director did not meet the relevant standard of conduct. Notwithstanding the foregoing, under the provisions that apply exclusively to Outside Directors, a corporation may not provide the indemnification or the advancement of expenses provided for in this paragraph if a court of competent jurisdiction has determined before payment that the outside director failed to meet the standards described in the foregoing paragraph and a court of competent jurisdiction does not otherwise authorize payment under ARS Section 10-854.
ARS Section 10-202 provides that the articles of incorporation may set forth a provision eliminating or limiting the liability of a director to the corporation or its shareholders for money damages, and permitting or making obligatory indemnification of a director, for liability for any action taken or any failure to take any action as a director, except liability for any of the following: (1) the amount of a financial benefit received by a director to which the director is not entitled, (2) an intentional infliction of harm on the corporation or the shareholders, (3) unlawful distributions and (4) an intentional violation of criminal law.
ARS Section 10-852 provides for mandatory indemnification in certain situations such that, unless limited by its articles of incorporation, a corporation shall indemnify a director who was the prevailing party, on the merits or otherwise, in the defense of any proceeding to which the director was a party because the director is or was a director of the corporation against reasonable expenses incurred by the director in connection with the proceeding.
Section 10-856 of the ARS provides that a corporation may indemnify and advance expenses to an officer who is a party to a proceeding because the individual is or was an officer of the corporation (1) to the same extent as a director; and (2) if the individual is an officer but not a director (or if both an officer and director, if the basis on which the officer is made a party to the proceeding is an act or omission solely as an officer), to the further extent as may be provided by the articles of incorporation, the bylaws, a resolution of the board of directors, or contract, except for (a) liability in connection with a proceeding by or in the right of the corporation other than for reasonable expenses incurred in connection with the proceeding; and (b) liability arising out of conduct that constitutes receipt by the officer of a financial benefit to which the officer is not entitled, an intentional infliction of harm on the corporation or the shareholders, or an intentional violation of criminal law.
Additionally, a corporation may, before final disposition of the proceeding, pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding; provided that the director furnishes the corporation with (i) a written affirmation of the director’s good faith belief that the director has met the relevant standard of conduct or that the proceeding involves conduct for which liability has been properly eliminated under a provision of the articles of incorporation; and (ii) a written undertaking, executed personally or on the director’s behalf, to repay the advance if the director is not entitled to mandatory indemnification and it is ultimately determined that the director did not meet the relevant standard of conduct.
A corporation may purchase and maintain insurance, including retrospectively rated and self-insured programs, on behalf of an individual who is or was a director or officer of the corporation or who, while a director or officer of the
corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other entity, against liability asserted against or incurred by the individual in that capacity or arising from the individual’s status as a director or officer, whether or not the corporation would have power to indemnify or advance expenses to the individual against the same liability.
A corporation’s power to indemnify, advance expenses or maintain insurance on behalf of an employee or agent is not limited by the foregoing laws.
Pathways of Arizona, Inc.
The Articles of Incorporation of Parents and Children Together, Inc. (now known as Pathways of Arizona, Inc.) eliminate, to the fullest extent permitted by law, a director’s liability to the company or its shareholders for monetary damages for breach of fiduciary duty as a director. The articles also require the company to indemnify any person who incurs expenses by reason of the fact that he or she is or was an officer, director, employee, or agent of the corporation. This indemnification is mandatory in all circumstances in which indemnification is permitted by law.
The Bylaws of Providence of Arizona, Inc. (now known as Pathways of Arizona, Inc.) provide that indemnification of an authorized representative of the company (which, for purposes of the bylaws, means a director, officer, fiduciary (as defined by the Employee Retirement Income Security Act of 1974) or agent of the company, or a director, officer, employee or agent of another corporation partnership, joint venture, trust or other enterprise serving as such at the request of the company) shall be made when ordered by a court and shall be made in a specific case upon a determination that indemnification of the authorized representative is required or proper in the circumstances because the applicable standard of conduct set forth in the General Corporation Law of Arizona as amended from time to time has been met.
The bylaws also provide that expenses (including attorneys’ fees) incurred in defending a civil or criminal action, suit or proceeding shall be paid by the company in advance of the final disposition, subject to receipt of an undertaking by or on behalf of a director, officer or fiduciary to repay such amount unless it is ultimately determined that such person is entitled to be indemnified by the company as required in the articles of incorporation or the bylaws. To the extent authorized by law, such expenses may be paid by the company in advance on behalf of any other authorized representative when authorized by the board of directors upon receipt of a similar undertaking.
The indemnification provided for in the articles of incorporation and the bylaws is not deemed to be exclusive of any other rights to which those seeking indemnification may be entitled under any agreement, vote of shareholders or disinterested directors, statute or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office or position, and continues as to a person who has ceased to be an authorized representative of the company and inures to the benefit of the heirs and personal representatives of such a person.
The California Corporations
Additional Registrants College Community Services and Molina Medical Management, Inc. are corporations incorporated under the laws of the State of California. College Community Services is a nonprofit mutual benefit corporation organized under the California Nonprofit Mutual Benefit Corporation Law (the "California Nonprofit Law").
Subsection (b) of Section 317 of the California Corporations Code (the "California Code") empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of the corporation to procure a judgment in its favor) by reason of the fact that the person is or was an agent of the corporation, as defined in that section, against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of the person was unlawful.
Subsection (c) of Section 317 of the California Code further empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was an agent of the corporation, against expenses actually and reasonably incurred by that person in connection with the defense or settlement of the action if the person acted in good faith, in a manner the person believed to be in the best interests of the corporation and its shareholders.
Section 317 of the California Code further provides that the indemnification provided for under Section 317 shall not be deemed exclusive of any additional rights to indemnification for breach of duty to the corporation and its shareholders while acting in the capacity of a director or officer of the corporation to the extent such additional rights are properly authorized. The indemnification provided for under Section 317 for acts, omissions or transactions while acting in the capacity of, or while serving as, a director or officer of the corporation but not involving breach of duty to the corporation and its shareholders will not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, to the extent the additional rights to indemnification are authorized in the articles of the corporation. The rights to such indemnification will continue as to a person who has ceased to be a director, officer, employee or agent and will inure to the benefit of such person’s heirs, executors and administrators. Section 317 also empowers the corporation to purchase and maintain insurance on behalf of any agent of the corporation against any liability asserted against or incurred by the agent in that capacity or arising out of the agent’s status as such whether or not the corporation would have the power to indemnify the agent against that liability under Section 317.
Section 317 of the California Code provides that indemnification is precluded under certain circumstances, including, (i) in respect of any claim, issue or matter as to which the person has been adjudged to be liable to the corporation in the performance of that person’s duty to the corporation and its shareholders, unless and only to the extent that the court in which the proceeding is or was pending determines upon application that, in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for expenses and then only to the extent that the court determines, (ii) of amounts paid in settling or otherwise disposing of a pending action without court approval, and (iii) of expenses incurred in defending a pending action which is settled or otherwise disposed of without court approval. To the extent that an agent of a corporation has been successful on the merits in defense of any proceeding referred to in Subsections (b) or (c) of Section 317 or in defense of any claim, issue or matter therein, such agent will be indemnified against expenses actually and reasonably incurred in connection therewith. Otherwise, Section 317 requires that indemnification must be authorized in each specific instance by either a majority vote of a quorum consisting of directors who are not parties to such proceeding, by independent legal counsel in a written opinion if such a quorum of directors is not obtainable, by approval of the shareholders, with shares owned by the person to be indemnified not being entitled to vote, or by the court in which the proceeding is or was pending upon application by the corporation or an agent or attorney or other person rendering services in connection with the defense. Expenses incurred in defending any proceeding may be advanced by the corporation prior to the final disposition of the proceeding upon receipt of an undertaking by or on behalf of the agent to repay that amount if it is ultimately determined that such person is not entitled to be indemnified under Section 317.
Section 7237(b) of the California Nonprofit Law empowers a corporation to indemnify a person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of the corporation to procure a judgment in its favor, an action brought under Section 5233 of Part 2 made applicable pursuant to Section 7238 or an action brought by the Attorney General or a person granted relator status by the Attorney General for any breach of duty relating to assets held in charitable trust) by reason of the fact that the person is or was an agent of the corporation, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding if the person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of the person was unlawful.
Section 7237(c) of the California Nonprofit Law further empowers a corporation to indemnify a person who was or is a party or is threatened to be made a party to any threatened, pending or completed action by or in the right of the corporation, or brought under Section 5233 of Part 2 made applicable pursuant to Section 7238, or brought by the Attorney General or a person granted relator status by the Attorney General for any breach of duty relating to assets held in charitable trust, to procure a judgment in its favor by reason of the fact that the person is or was an agent of the corporation, against expenses actually and reasonably incurred by the person in connection with the defense or settlement of the action if the person acted in good faith, in a manner the person believed to be in the best interests of the corporation and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.
Section 7237(c) of the California Nonprofit Law provides that indemnification is precluded under certain circumstances including, (i) with respect to any claim, issue, or matter as to which the person shall have been adjudged to be liable to the corporation in the performance of the person’s duty to the corporation, unless and only to the extent that the court in which the proceeding is or was pending shall determine upon application that, in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for the expenses which the court shall determine; (ii) of amounts paid in settling or otherwise disposing of a threatened or pending action, with or without court approval; or (iii) of expenses incurred in defending a threatened or pending action that is settled or otherwise disposed of without court approval unless the action concerns assets held in charitable trust and is settled with the approval of the Attorney General. Section 7237(h) of the California Nonprofit Law further precludes indemnification, except as provided for in Section 7237(d) or (e)(3), in any
circumstance where it appears that it would be inconsistent with a provision of the articles, bylaws, a resolution of the members, an agreement in effect at the time of the accrual of the alleged cause of action which prohibits or limits indemnification or any condition expressly imposed by a court in approving a settlement.
Section 7237(d) of the California Nonprofit Law provides that, to the extent that an agent of a corporation has been successful on the merits in defense of any proceeding described in Section 7237(b) or (c) or in defense of any claim, issue or matter therein, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith. Otherwise, Section 7237 requires that indemnification must be authorized in each specific instance by either a majority vote of a quorum consisting of directors who are not parties to such proceeding, by approval of the members, with the persons to be indemnified not being entitled to vote thereon, or by the court in which the proceeding is or was pending upon application by the corporation or an agent or attorney or other person rendering services in connection with the defense. Expenses incurred in defending any proceeding may be advanced by the corporation before the final disposition of the proceeding upon receipt of an undertaking by or on behalf of the agent to repay the amount unless it is ultimately determined that the agent is entitled to be indemnified as authorized by Section 7237.
Under Section 7237(g) of the California Nonprofit Law, a provision made by a corporation to indemnify its or its subsidiary’s directors or officers for the defense of any proceeding, whether contained in the articles, bylaws, a resolution of members or directors, an agreement or otherwise, shall not be valid unless consistent with Section 7237.
Section 7237(i) of the California Nonprofit Law provides that a corporation shall have the power to purchase and maintain insurance on behalf of an agent of the corporation against any liability asserted against or incurred by the agent in that capacity or arising out of the agent’s status as such whether or not the corporation would have the power to indemnify the agent against that liability under Section 7237 of the California Nonprofit Law.
College Community Services
The Amended and Restated Bylaws of College Community Services provide that the company shall, to the maximum extent permitted by the California Nonprofit Law, indemnify each of its agents (as defined in the bylaws) against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact any such person is or was an agent of the company.
Molina Medical Management, Inc.
The Amended and Restated Articles of Incorporation of American Family Care, Inc. (now known as Molina Medical Management, Inc.) and the Amended and Restated Bylaws of Molina Medical Management, Inc. provide that liability of directors for monetary damages shall be eliminated to the fullest extent permissible under California law. In addition, the articles authorize the company to provide indemnification of agents (as defined in Section 317 of the California Code) through bylaw provisions, agreements with agents, vote of shareholders or disinterested directors or otherwise, in excess of the indemnification otherwise permitted by Section 317 of the California Code with respect to actions for breach of duty to the corporation and its shareholders. The bylaws authorize the corporation to provide and maintain insurance on behalf of any person serving as a director or other officer against any liability asserted against such person.
The California Limited Liability Company
Additional Registrant Molina Information Systems, LLC is a limited liability company organized under the laws of the State of California.
The Operating Agreement of Molina Information Systems, LLC specifies that the Company is governed by the Beverly-Killea Limited Liability Company Act found at California Code, Title 25 Sections 17000 through 17656, as amended from time to time (the "Old CA LLC Act"). Under Section 17155 of the California Code, except for a breach of fiduciary duty by a manager, the articles of organization or written operating agreement of a limited liability company may provide for indemnification of any person, including, without limitation, any manager, member, officer, employee or agent of the limited liability company, against judgments, settlements, penalties, fines or expenses of any kind incurred as a result of acting in that capacity. Section 17155 also authorizes a limited liability company to purchase and maintain insurance on behalf of any manager, member, officer, employee or agent of the limited liability company against any liability asserted against or incurred by the person in that capacity or arising out of the person’s status as a manager, member, officer, employee or agent of the limited liability company.
Although the Old CA LLC Act was repealed and replaced with the California Revised Uniform Limited Liability Company Act (the "New CA LLC Act"), effective January 1, 2014, Section 17713.04(b) of the New CA LLC Act provides that prior law (i.e., the Old CA LLC Act) governs operating agreements entered into by a limited liability company prior to January 1, 2014.
Molina Information Systems, LLC
The Operating Agreement for Molina Information Systems, LLC authorizes the company to indemnify and hold harmless any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative, including an action by or in the right of the company, by reason of the fact that such person is or was a member, a manager of the company or an officer of the company or is or was serving at the request of the company as a manager, director or officer of another person, against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding.
To the extent that such person has been successful on the merits or otherwise in defending any such action, suit or proceeding referred to above or any claim, issue or matter therein, he or she is entitled to indemnification for expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
Pursuant to the operating agreement, the company may advance funds to pay expenses reasonably expected to be incurred in defending a civil or criminal action, suit or proceeding in advance of the final disposition upon receipt of an undertaking by or on behalf of the covered person to repay such amount unless it is ultimately determined that the covered person is entitled to be indemnified by the company.
The operating agreement authorizes the company to purchase and maintain on behalf of any member, manager or officer of the company insurance against liabilities incurred in such capacities, whether or not the corporation would have the power to indemnify such person against the same liability under the provisions of the operating agreement.
The Florida Corporation
Additional Registrant Family Preservation Services of Florida, Inc. is a corporation incorporated in the State of Florida.
Section 607.0850 of the Florida Business Corporation Act ("FBCA") permits, in general, a Florida corporation to indemnify any person who was or is a party to any proceeding (other than an action by, or in the right of, the corporation) by reason of the fact that he or she is or was a director or officer of the corporation, or served another entity in any capacity at the request of the corporation, against liability incurred in connection with such proceeding, including any appeal thereof, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interest of the corporation and, in criminal actions or proceedings, additionally had no reasonable cause to believe that his or her conduct was unlawful. In actions brought by or in the right of the corporation, a corporation may indemnify such person against expenses and amounts paid in settlement not exceeding, in the judgment of the board of directors, the estimated expense of litigating the proceeding to conclusion, actually and reasonably incurred by such person in connection with the defense or settlement of such proceeding, including any appeal thereof, if such person acted in good faith and in a manner that person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect of any claim, issue or matter as to which that person shall have been adjudged to be liable to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnification for such expenses which the court shall deem proper. Section 607.0850(6) of the FBCA permits the corporation to pay such costs or expenses in advance of a final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if he or she is ultimately found not to be entitled to indemnification under the FBCA. Section 607.0850 of the FBCA provides that the indemnification and advancement of expense provisions contained in the FBCA shall not be deemed exclusive of any rights to which a director or officer seeking indemnification or advancement of expenses may be entitled.
Family Preservation Services of Florida, Inc.
The Bylaws of Family Preservation Services of Florida, Inc. provide that indemnification of an authorized representative of the company (which, for purposes of this section, means a director, officer, fiduciary (as defined by the Employee Retirement Income Security Act of 1974) or agent of the company, or a director, officer, employee or agent of
another corporation partnership, joint venture, trust or other enterprise serving as such at the request of the company) shall be made when ordered by a court and shall be made in a specific case upon a determination that indemnification of the authorized representative is required or proper in the circumstances because the applicable standard of conduct set forth in the FBCA as amended from time to time has been met.
The bylaws also provide that expenses incurred in defending a civil or criminal action, suit or proceeding shall be paid by the company in advance of the final disposition, subject to the receipt of an undertaking by or on behalf of a director, officer or fiduciary to repay such amount unless it is ultimately determined that such person is entitled to be indemnified by the company. The bylaws further provide that, to the extent authorized by law, such expenses may be paid by the company in advance on behalf of any other authorized representative when authorized by the board of directors upon receipt of a similar undertaking.
The indemnification provided for in the bylaws is not deemed to be exclusive of any other rights to which those seeking indemnification may be entitled under any agreement, vote of shareholders or disinterested directors, statute or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office or position, and continues as to a person who has ceased to be an authorized representative of the company and inures to the benefit of the heirs and personal representatives of such a person.
The Illinois Corporation
Additional Registrant Camelot Care Centers, Inc. is a corporation incorporated in the State of Illinois.
Under Section 8.75 of the Illinois Business Corporation Act of 1983 ("ILBCA"), a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding (i) if such person acted in good faith and in a manner that person reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with respect to any criminal action or proceeding, if he or she had no reasonable cause to believe such conduct was unlawful. In actions brought by or in the right of the corporation, a corporation may indemnify such person against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner that person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect of any claim, issue or matter as to which that person shall have been adjudged to be liable to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnification for such expenses which the court shall deem proper.
To the extent that such person has been successful on the merits or otherwise in defending any such action, suit or proceeding referred to above or any claim, issue or matter therein, he or she is entitled to indemnification for expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, if such person acted in good faith and in a manner that person reasonably believed to be in or not opposed to the best interests of the corporation.
Section 8.75(f) of the ILBCA further provides that the indemnification and advancement of expenses provided by or granted under Section 8.75 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office. In addition, a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of this Section.
Camelot Care Centers, Inc.
The Articles of Incorporation of Camelot Care Centers, Inc. and the Amended and Restated Bylaws of Camelot Care Centers, Inc. provide that each person who was or is made a party or is threatened to be made a party to or is otherwise involved
in any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation), by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the corporation to the fullest extent authorized by the ILBCA, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than such la permitted the corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred or suffered by such indemnitee in connection therewith if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. Except with respect to proceedings to enforce rights to indemnification, the corporation shall indemnify any such indemnitee in connection with a proceeding initiated by such indemnitee only if such proceeding was authorized by the Board of Directors of the corporation.
The articles and bylaws further provide that each person who was or is made a party or is threatened to be made a party to any proceeding by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the corporation to the fullest extent authorized by the ILBCA, as the same exists or may hereafter by amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than such la permitted the corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred or suffered by such indemnitee in connection therewith if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, provided that no indemnification shall be made with respect to any claim, issue or matter as to which such person has been adjudged to have been liable to the corporation, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper.
To the extent that a director, officer, employee or agent of the corporation has been successful on the merits or otherwise, in the defense of any action, suit or proceeding referred to in the bylaws, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
The articles and bylaws further provide that expenses incurred in defending any action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it is ultimately determined that he or she is not entitled to be indemnified by the corporation. In addition, the company is required to purchase and maintain insurance on behalf of directors, officers, employees and agents against liability arising out of their capacity as directors, officers, employees and agents, whether or not the company would have the power to indemnify them under the articles.
The indemnification and advancement of expenses provided for by the articles and bylaws is not deemed to be exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any by-law, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office.
The Maine Corporation
Additional Registrant Pathways of Maine, Inc. is a corporation incorporated under the laws of the State of Maine.
Subchapter 5 of Chapter 8 of the Maine Business Corporation Act ("MBCA") provides that a corporation may indemnify any person who was, is or is threatened to be made a defendant or respondent to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative, and whether formal or informal, because that person is or was a director or officer, or while a director or officer of the corporation is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other entity, against any obligation to pay a judgment, settlement, penalty, fine,
including any excise tax assessed with respect to an employee benefit plan, or reasonable expenses incurred in the proceeding if: (A) (i) he conducted himself in good faith, (ii) he reasonably believed, in the case of conduct in his official capacity with the corporation, that his conduct was in its best interests and, in all other cases, that his conduct was at least not opposed to its best interests, and (iii) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful; or (B) he engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the corporation's articles of incorporation.
In addition, unless ordered by a court, a corporation may not indemnify one of the corporation's officers or directors in connection with an action, suit or proceeding (i) by or in the right of the corporation, except for reasonable expenses incurred in connection with the action, suit or proceeding if it is determined that the officer or director acted in accordance with the standard above, or (ii) with respect to conduct for which the director or officer was adjudged liable on the basis that the director or officer received a financial benefit to which the director was not entitled, whether or not involving action in the director's official capacity.
Under the MBCA, a corporation may indemnify an officer of the corporation to the same extent as a director and, if the officer is an officer but not a director, to such further extent as may be provided in the corporation's articles of incorporation, bylaws, a resolution of the corporation's board of directors or a contract except for (i) liability in connection with an action, suit or proceeding by or in the right of the corporation other than reasonable expenses incurred in connection with the action, suit or proceeding, or (ii) liability arising out of conduct that constitutes receipt by the officer of a financial benefit to which the officer is not entitled, an intentional infliction of harm on the corporation or its shareholders or an intentional violation of criminal law.
Pathways of Maine, Inc.
The Bylaws of Pathways of Maine, Inc. provide that indemnification of an authorized representative of the company (which, for purposes of this section, means a director, officer, fiduciary (as defined by the Employee Retirement Income Security Act of 1974) or agent of the company, or a director, officer, employee or agent of another corporation partnership, joint venture, trust or other enterprise serving as such at the request of the company) shall be made when ordered by a court (in which case the expense, including attorneys' fees, of the authorized representative in enforcing such right of indemnification shall be added to and be included in the final judgment against the company) and shall be made in a specific case upon a determination that indemnification of the authorized representative is required or proper in the circumstances because the applicable standard of conduct set forth in the MBCA has been met.
The bylaws also provide that expenses incurred in defending a civil or criminal action, suit or proceeding shall be paid by the company in advance of the final disposition, subject to the receipt of an undertaking by or on behalf of a director, officer or fiduciary to repay such amount unless it ultimately shall be determined that such person is entitled to be indemnified by the company as required in the articles of incorporation or the bylaws. The bylaws further provide that, to the extent authorized by law, such expenses may be paid by the company in advance on behalf of any other authorized representative when authorized by the board of directors upon receipt of a similar undertaking.
The indemnification provided for in the bylaws is not deemed to be exclusive of any other rights to which those seeking indemnification may be entitled under any agreement, vote of shareholders or disinterested directors, statute or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office or position, and continues as to a person who has ceased to be an authorized representative of the company and inures to the benefit of the heirs and personal representatives of such a person.
The North Carolina Corporation
Additional Registrant Family Preservation Services of North Carolina, Inc. is a corporation incorporated under the laws of the State of North Carolina.
Section 55-8-51 of the North Carolina Business Corporation Act ("NCBCA") provides that a corporation may indemnify an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if: (1) he conducted himself in good faith; and (2) he reasonably believed (i) in the case of conduct in his official capacity with the corporation, that his conduct was in its best interests; and (ii) in all other cases, that his conduct was at least not opposed to its best interests; and (3) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. A corporation may not indemnify a director (i) in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or (ii) in connection with any proceeding charging improper personal
benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him.
Section 55-8-57 of the NCBCA permits a corporation, in its articles of incorporation or bylaws or by contract or resolution, to indemnify, or agree to indemnify, its directors, officers, employees or agents against liability and expenses (including attorneys' fees) in any proceeding (including proceedings brought by or on behalf of the corporation) arising out of their status as such or their activities in such capacities, except for any liabilities or expenses incurred on account of activities that were, at the time taken, known or believed by the person to be clearly in conflict with the best interests of the corporation. Sections 55-8-52 and 55-8-56 of the NCBCA require a corporation, unless its articles of incorporation provide otherwise, to indemnify a director or officer who has been wholly successful, on the merits or otherwise, in the defense of any proceeding to which such director or officer was made a party because he was or is a director or officer of the corporation against reasonable expenses actually incurred by the director or officer in connection with the proceeding. Section 55-8-57 of the NCBCA authorizes a corporation to purchase and maintain insurance on behalf of an individual who was or is a director, officer, employee or agent of the corporation against certain liabilities incurred by such a person, whether or not the corporation is otherwise authorized by the NCBCA to indemnify that person.
Family Preservation Services of North Carolina, Inc.
The Bylaws of Family Preservation Services of North Carolina, Inc. provide that indemnification of an authorized representative of the company (which, for purposes of this section, means a director, officer, fiduciary (as defined by the Employee Retirement Income Security Act of 1974) or agent of the company, or a director, officer, employee or agent of another corporation partnership, joint venture, trust or other enterprise serving as such at the request of the company) shall be made when ordered by a court and shall be made in a specific case upon a determination that indemnification of the authorized representative is required or proper in the circumstances because the applicable standard of conduct set forth in the NCBCA as amended from time to time has been met.
The bylaws also provide that expenses incurred in defending a civil or criminal action, suit or proceeding shall be paid by the company in advance of the final disposition, subject to receipt of an undertaking by or on behalf of a director, officer or fiduciary to repay such amount unless it is ultimately determined that such person is entitled to be indemnified by the company. The bylaws further provide that, to the extent authorized by law, such expenses may be paid by the company in advance on behalf of any other authorized representative when authorized by the board of directors upon receipt of a similar undertaking.
The indemnification provided for in the bylaws is not deemed to be exclusive of any other rights to which those seeking indemnification may be entitled under any agreement, vote of shareholders or disinterested directors, statute or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office or position, and continues as to a person who has ceased to be an authorized representative of the company and inures to the benefit of the heirs and personal representatives of such a person.
The Pennsylvania Corporations
Additional Registrants Children’s Behavioral Health, Inc. and the Redco Group, Inc. are corporations incorporated under the laws of the State of Pennsylvania.
Sections 1741 through 1750 of Subchapter D, Chapter 17, of the Pennsylvania Business Corporation Law ("PBCL") contain provisions for mandatory and discretionary indemnification of a corporation’s directors, officers and other personnel, and related matters.
Under Section 1741 of the PBCL, subject to certain limitations, a corporation has the power to indemnify directors and officers under certain prescribed circumstances against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with an action or proceeding, whether civil, criminal, administrative or investigative (other than derivative or corporate actions), to which any such officer or director is a party or is threatened to be made a party by reason of such officer or director being a representative of the corporation or serving at the request of the corporation as a representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, so long as the director or officer acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation and with respect to any criminal proceeding, such officer or director had no reasonable cause to believe his conduct was unlawful.
Section 1742 of the PBCL permits indemnification in derivative and corporate actions if the director or officer acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, except
in respect of any claim, issue or matter as to which the officer or director has been adjudged to be liable to the corporation unless and only to the extent that the proper court determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the officer or director is fairly and reasonably entitled to indemnity for the expenses that the court deems proper.
Under Section 1743 of the PBCL, indemnification is mandatory to the extent that the officer or director has been successful on the merits or otherwise in defense of any action or proceeding referred to in Sections 1741 or 1742 of the PBCL.
Section 1744 of the PBCL provides that, unless ordered by a court, any indemnification under Sections 1741 or 1742 of the PBCL shall be made by the corporation only as authorized in the specific case upon a determination that the officer or director met the applicable standard of conduct, and such determination must be made by (i) the board of directors by a majority vote of a quorum of directors not parties to the action or proceeding, (ii) if a quorum is not obtainable, or if obtainable and a majority vote of a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the shareholders.
Section 1745 of the PBCL provides that expenses (including attorneys’ fees) incurred by a director or officer in defending any action or proceeding referred to in Subchapter D of Chapter 17 of the PBCL may be paid by the corporation in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation. Except as otherwise provided in the corporation’s bylaws, advancement of expenses must be authorized by the board of directors.
Section 1746 of the PBCL provides generally that the indemnification and advancement of expenses provided by Subchapter D of Chapter 17 of the PBCL shall not be deemed exclusive of any other rights to which an officer or director seeking indemnification or advancement of expenses may be entitled under any by-law, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding that office. In no event may indemnification be made in any case where the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness.
Section 1747 of the PBCL grants a corporation the power to purchase and maintain insurance on behalf of any director or officer against any liability incurred by him in his capacity as officer or director, whether or not the corporation would have the power to indemnify him against that liability under Subchapter D of Chapter 17 of the PBCL.
Sections 1748 and 1749 of the PBCL extend the indemnification and advancement of expenses provisions contained in Subchapter D of Chapter 17 of the PBCL to successor corporations in fundamental changes and to officers and directors serving as fiduciaries of employee benefit plans.
Section 1750 of the PBCL provides that the indemnification and advancement of expenses provided by, or granted pursuant to, Subchapter D of Chapter 17 of the PBCL shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer shall inure to the benefit of the heirs and personal representatives of such person.
Children’s Behavioral Health, Inc.
The Bylaws of Children’s Behavioral Health, Inc. provide that the company shall indemnify, to the extent permitted under the bylaws, any person who was or is a party (other than a party plaintiff suing on his or her own behalf), or is threatened to be made such a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the company) arising out of, or in connection with, any actual or alleged act or omission or by reason of the fact that he or she is or was a director or officer of the company, or is or was serving at the request of the company as a director or officer of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she (a) acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the company and (b) with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The bylaws further provide that the company shall indemnify any person who was or is a party (other than a party suing in the right of the company), or is threatened to be made a party, to any threatened, pending or completed action by or in the right of the company to procure a judgment in its favor by reason of the fact that the person is or was a director or officer of
the company, or is or was serving at the request of the company as a director or officer of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection with the defense or settlement of the action if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the company. Indemnification shall not be made in respect of any claim, issue or matter as to which the person has been adjudged to be liable to the company unless and only to the extent that a court determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for the expenses that the court deems proper.
The company may, to the extent permitted by the PBCL, indemnify any person who is or was an employee or agent of the company, other than an officer, or is or was serving at the request of the Corporation as an employee or agent of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him by reason of his service on behalf of the company, provided such person has met the applicable standard of conduct as would apply in any particular instance under the PBCL.
To the extent that a director, officer, employee or agent of the company has been successful on the merits or otherwise in defense of any action or proceeding referred to above, or in defense of any claim, issue or matter therein, the bylaws require the company to indemnify him or her against expenses (including attorneys' fees) actually and reasonably incurred in connection therewith.
Expenses (including attorneys' fees) incurred by an officer, director, employee or agent in defending any action or proceeding referred to above may be paid by the company in advance of the final disposition of the action or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it is ultimately determined that he or she is not entitled to be indemnified by the company.
The indemnification and advancement of expenses provided for in the bylaws is not deemed to be exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to actions in his or her official capacity and as to actions in another capacity while holding that office.
The bylaws authorize the company to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the company, or is or was serving at the request of the company as a director, officer, employee or agent of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the company would have the power to indemnify him or her against that liability.
The Redco Group, Inc.
The Amended and Restated Bylaws of The Redco Group, Inc. provide that the company shall, to the fullest extent permitted by applicable law, indemnify its directors and officers who were or are a party or are threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (whether or not such action, suit or proceeding arises or arose by or in the right of the company or other entity) by reason of the fact that such director or officer is or was a director or officer of the company or is or was serving at the request of the company as a director, officer, employee, general partner, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise (including service with respect to employee benefit plans), against expenses (including, but not limited to, attorneys' fees and costs), judgments, fines (including excise taxes assessed on a person with respect to any employee benefit plan) and amounts paid in settlement actually and reasonably incurred by such director or officer in connection with such action, suit or proceeding, except as otherwise provided in the bylaws. The bylaws also provide that the company may, to the fullest extent permitted by applicable law, indemnify, and advance or reimburse expenses for, persons in all situations other than that covered by the bylaws.
No indemnification or advancement or reimbursement of expenses may be provided (a) with respect to expenses or the payment of profits arising from the purchase or sale of securities of the company in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended; (b) if a final unappealable judgment or award establishes that such director or officer engaged in self-dealing, willful misconduct or recklessness; (c) for expenses or liabilities of any type whatsoever including, but not limited to, judgments, fines, and amounts paid in settlement, which have been paid directly to, or for the benefit of, such person by an insurance carrier under a policy of officers' and directors' liability insurance whose premiums are paid for by the
company or by an individual or entity other than such director or officer; and (d) for amounts paid in settlement of any threatened, pending or completed action, suit or proceeding without the written consent of the company, which written consent shall not be unreasonably withheld.
Expenses incurred in defending a threatened, pending or completed civil or criminal action, suit or proceeding shall be paid by the company in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it is ultimately determined that such person is not entitled to be indemnified by the company.
The indemnification and advancement or reimbursement of expenses described above is not deemed to be exclusive of any other rights to which those seeking indemnification or advancement or reimbursement of expenses may be entitled under the articles of incorporation, any bylaw, agreement, vote of shareholders or directors or otherwise, both as to action in such director's or officer's official capacity and as to action in another capacity while holding that office.
The Pennsylvania Limited Liability Company
Additional Registrant Pathways Community Services LLC is a limited liability company organized under the laws of the State of Pennsylvania.
Section 8945 of the Pennsylvania Limited Liability Company Law of 1994, as amended (the "Pennsylvania Act") provides that a limited liability company may and shall have the power to indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever, except that in no event may indemnification be made in any case where the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness. Section 8945 also provides that expenses incurred by a member, manager or other person in defending any action or proceeding against which indemnification may be made under Section 8945 may be paid by a limited liability company in advance of the final disposition of any action or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the limited liability company.
Pathways Community Services LLC
The Limited Liability Company Operating Agreement of Pathways Community Services LLC provides that the company shall, to the fullest extent permitted under the Pennsylvania Act, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (including, without limitation, arbitration), by reason of the fact that the person is or was a manager, or a member, partner, manager, affiliate, officer, director, employee or agent of a manager, or an officer, employee or agent of the company or any person who is or was serving at the request of the manager or the company as a manager, member, partner, director, officer, employee or agent of another company or person ("Indemnifiable Person"), against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually incurred by it in connection with the action, suit or proceeding except by reason of the fraud or willful misconduct of such Indemnifiable Person, provided that such Indemnifiable Person acted in good faith and in a manner which it reasonably believed to be in or not opposed to the best interests of the company and, with respect to any criminal action or proceeding, did not reasonably believe its conduct was unlawful.
Notwithstanding the foregoing, indemnification may not be made for any claim, issue or matter as to which an Indemnifiable Person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom (or by an arbitrator in a final, binding judgment), to be liable to the company, or for amounts paid in settlement to the company, unless and only to the extent that the court in which the action or suit was brought (or such arbitrator) or other court of competent jurisdiction (or arbitrator) determines upon application that in view of all the circumstances of the case, the Indemnifiable Person is fairly and reasonably entitled to indemnity for such expenses as the court or arbitrator deems proper.
The limited liability company operating agreement also provides that reasonable expenses of the Indemnifiable Person incurred in defending a civil or criminal action, suit or proceeding may be paid by the company as they are incurred and in advance of the final disposition of the action, suit or proceeding upon receipt of an undertaking by or on behalf of the Indemnifiable Person to repay the amount if it is ultimately determined by a court of competent jurisdiction (or by an arbitrator in a final, binding judgment) that such person is not entitled to be indemnified by the company.
The limited liability company operating agreement further provides that the indemnification and advancement of expenses described above (i) does not exclude any other rights to which a person seeking indemnification or advancement of
expenses may be entitled (whether under contract or otherwise); (ii) continues for a person who has ceased to be an Indemnifiable Person; provided that the act or omission that is the subject of the claim took place prior to the cessation of such person's status as an Indemnifiable Person; (iii) inures to the benefit of the Indemnifiable Person’s respective heirs, assignees, successors, executors and administrators and (iv) survives the dissolution of the company to the extent of any assets distributed by the company on that dissolution.
In addition to indemnification, the limited liability company operating agreement authorizes the company to purchase and maintain insurance or make other financial arrangements on behalf of any Indemnifiable Person for any liability asserted against that person and liability and expenses incurred by him or her in the capacity as an Indemnifiable Person, or arising out of his or her status as such.
The Virginia Corporation
Additional Registrant Family Preservation Services, Inc. is a corporation incorporated under the laws of the State of Virginia.
The Virginia Stock Corporation Act ("VSCA") empowers a corporation to indemnify an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if: (1) he conducted himself in good faith; and (2) he reasonably believed (i) in the case of conduct in his official capacity with the corporation, that his conduct was in its best interests; and (ii) in all other cases, that his conduct was at least not opposed to its best interests; and (3) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.
Unless limited by its articles of incorporation, a corporation must indemnify a director who entirely prevails in the defense of any proceeding to which he was a party because he is or was a director of the corporation against reasonable expenses incurred by him in connection with the proceeding. Under the VSCA, a corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of the final disposition of the proceeding if: (1) the director furnishes the corporation a written affirmation of his good faith belief that he has met the standard of conduct described in Section 13.1-697 of the VSCA; and (2) the director furnishes the corporation an undertaking, executed personally or on his behalf, to repay the advance if the director is not entitled to mandatory indemnification under Section 13.1-698 of the VSCA and it is ultimately determined that he did not meet the relevant standard of conduct.
Unless a corporation's articles of incorporation provide otherwise, the corporation may indemnify and advance expenses to an officer of the corporation to the same extent as to a director. A corporation may also purchase and maintain on behalf of a director or officer insurance against liabilities incurred in such capacities, whether or not the corporation would have the power to indemnify him against the same liability under the VSCA.
Family Preservation Services, Inc.
The By-laws of Family Preservation Services, Inc. provide that the company shall indemnify its directors, officers and employees against all expenses and liabilities, including counsel fees, reasonably incurred by or imposed upon him in connection with any proceeding to which he may be made a party, or in which he may become involved, by reason of his being or having been a director, officer, employee or agent of the company or is or was serving at the request of the company as a director, officer, employee or agent of the corporation, partnership, joint venture, trust or enterprise, or any settlement thereof, whether or not he is a director, officer, employee or agent at the time such expenses are incurred, except in such cases wherein the director, officer, employee or agent is adjudged guilty of willful misfeasance or malfeasance in the performance of his duties; provided that in the event of a settlement the indemnification herein shall apply only when the board of directors approves such settlement and reimbursement as being for the best interests of the company. In addition, the bylaws require the company to provide to any person who is or was a director, officer, employee, or agent of the company or is or was serving at the request of the company as a director, officer, employee or agent of the company, partnership, joint venture, trust or enterprise, the indemnity against expenses of suit, litigation or other proceedings which is specifically permissible under applicable law. Lastly, the bylaws authorize the Board of Directors to direct the purchase of liability insurance by way of implementing the foregoing indemnity provisions.
Item 21.
Exhibits and Financial Statement Schedules.
(a) Exhibits. The attached Index to Exhibits is incorporated herein by reference as part of this registration statement.
(b) Financial Statement Schedules. All schedules have been incorporated herein by reference or omitted because they are not applicable or not required.
Item 22.
Undertakings.
(a)
Each of the undersigned registrants hereby undertakes:
1.
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
To include any prospectus required by section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
2.
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
3.
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
4.
That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
5.
That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the Securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrants relating to the offering required to be filed pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrants or used or referred to by the undersigned registrants;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrants or the securities provided by or on behalf of the undersigned registrants; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrants to the purchaser.
6.
That, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act), that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
7.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
8.
To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
9.
To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his or her true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Joseph M. Molina
|
|
Chairman of the Board, Chief Executive Officer, and President
|
|
July 28, 2016
|
|
Joseph M. Molina, M.D.
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
/s/ John C. Molina
|
|
Director, Chief Financial Officer, and Treasurer
|
|
July 28, 2016
|
|
John C. Molina, J.D.
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Chief Accounting Officer
|
|
July 28, 2016
|
|
Joseph W. White
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/ Garrey E. Carruthers
|
|
Director
|
|
July 28, 2016
|
|
Garrey E. Carruthers, Ph.D.
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Daniel Cooperman
|
|
Director
|
|
July 28, 2016
|
|
Daniel Cooperman
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Charles Z. Fedak
|
|
Director
|
|
July 28, 2016
|
|
Charles Z. Fedak
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Frank E. Murray
|
|
Director
|
|
July 28, 2016
|
|
Frank E. Murray, M.D.
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Steven J. Orlando
|
|
Director
|
|
July 28, 2016
|
|
Steven J. Orlando
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Ronna E. Romney
|
|
Director
|
|
July 28, 2016
|
|
Ronna E. Romney
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Richard M. Schapiro
|
|
Director
|
|
July 28, 2016
|
|
Richard M. Schapiro
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Dale B. Wolf
|
|
Director
|
|
July 28, 2016
|
|
Dale B. Wolf
|
|
|
|
|
|
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
AMERICANWORK, INC.
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Director and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
CAMELOT CARE CENTERS, INC.
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Director and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Craig Bass
|
|
Director
|
|
July 28, 2016
|
|
Craig Bass
|
|
|
|
|
|
|
|
|
|
|
|
/s/ David Vinkler
|
|
Director
|
|
July 28, 2016
|
|
David Vinkler
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mike Fidgeon
|
|
Director
|
|
July 28, 2016
|
|
Mike Fidgeon
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert Gordon
|
|
Director
|
|
July 28, 2016
|
|
Robert Gordon
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
CHILDREN'S BEHAVIORAL HEALTH, INC.
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Director and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mike Fidgeon
|
|
Director
|
|
July 28, 2016
|
|
Mike Fidgeon
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert Gordon
|
|
Director
|
|
July 28, 2016
|
|
Robert Gordon
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
COLLEGE COMMUNITY SERVICES
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Susan Burns
|
|
Director
|
|
July 28, 2016
|
|
Susan Burns
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Ginny Romig
|
|
Director
|
|
July 28, 2016
|
|
Ginny Romig
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
FAMILY PRESERVATION SERVICES, INC.
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Director and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mike Fidgeon
|
|
Director
|
|
July 28, 2016
|
|
Mike Fidgeon
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert Gordon
|
|
Director
|
|
July 28, 2016
|
|
Robert Gordon
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
FAMILY PRESERVATION SERVICES OF FLORIDA, INC.
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Director and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mike Fidgeon
|
|
Director
|
|
July 28, 2016
|
|
Mike Fidgeon
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert Gordon
|
|
Director
|
|
July 28, 2016
|
|
Robert Gordon
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
FAMILY PRESERVATION SERVICES OF NORTH CAROLINA, INC.
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Director and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mike Fidgeon
|
|
Director
|
|
July 28, 2016
|
|
Mike Fidgeon
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert Gordon
|
|
Director
|
|
July 28, 2016
|
|
Robert Gordon
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
MOLINA INFORMATION SYSTEMS, LLC
|
|
|
|
By:
|
/s/ John C. Molina
|
|
|
John C. Molina
|
|
|
Chief Financial Officer
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Norm Nichols
|
|
President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Norm Nichols
|
|
|
|
|
|
|
|
|
|
|
|
/s/ John C. Molina
|
|
Sole Manager and Chief Financial Officer
|
|
July 28, 2016
|
|
John C. Molina
|
|
(Principal Financial and Accounting Officer)
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
MOLINA MEDICAL MANAGEMENT, INC.
|
|
|
|
By:
|
/s/ Gloria Calderon
|
|
|
Gloria Calderon
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his or her true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Gloria Calderon
|
|
Chairman of the Board and President
|
|
July 28, 2016
|
|
Gloria Calderon
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Vice President, Chief Financial Officer and Treasurer
|
|
July 28, 2016
|
|
Joseph W. White
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/ Joann Zarza-Garrido
|
|
Director
|
|
July 28, 2016
|
|
Joann Zarza-Garrido
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Zackary Sanabia
|
|
Director
|
|
July 28, 2016
|
|
Zackary Sanabia
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
MOLINA PATHWAYS, LLC
|
|
|
|
By:
|
/s/ Craig Bass
|
|
|
Craig Bass
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Craig Bass
|
|
President and Manager (Principal Executive Officer)
|
|
July 28, 2016
|
|
Craig Bass
|
|
|
|
|
|
|
|
|
|
|
|
/s/ John C. Molina
|
|
Chief Financial Officer
|
|
July 28, 2016
|
|
John C. Molina
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Manager
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert Gordon
|
|
Manager
|
|
July 28, 2016
|
|
Robert Gordon
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
PATHWAYS COMMUNITY SERVICES LLC,
|
|
a Delaware limited liability company
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Sole Manager and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
PATHWAYS COMMUNITY SERVICES LLC,
|
|
a Pennsylvania limited liability company
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Sole Manager and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
PATHWAYS HEALTH AND COMMUNITY SUPPORT LLC
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Sole Manager and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
PATHWAYS OF ARIZONA, INC.
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his or her true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Director and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Craig Bass
|
|
Director
|
|
July 28, 2016
|
|
Craig Bass
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mary Syiek
|
|
Director
|
|
July 28, 2016
|
|
Mary Syiek
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mike Fidgeon
|
|
Director
|
|
July 28, 2016
|
|
Mike Fidgeon
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert Gordon
|
|
Director
|
|
July 28, 2016
|
|
Robert Gordon
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
PATHWAYS OF IDAHO LLC
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Sole Manager and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
PATHWAYS OF MAINE, INC.
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Director and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mike Fidgeon
|
|
Director
|
|
July 28, 2016
|
|
Mike Fidgeon
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert Gordon
|
|
Director
|
|
July 28, 2016
|
|
Robert Gordon
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
PATHWAYS OF MASSACHUSETTS LLC
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Sole Manager and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act, the additional registrant named below has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Long Beach, State of California, on the
28th
day of July, 2016.
|
|
|
|
|
|
THE REDCO GROUP, INC.
|
|
|
|
By:
|
/s/ Terry P. Bayer
|
|
|
Terry P. Bayer
|
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints J. Mario Molina, M.D. and Jeff D. Barlow, and each of them, his true and lawful attorneys-in-fact and agents with full power or substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement, (2) registration statements, and any and all amendment thereto (including post-effective amendment), relating to the offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Terry P. Bayer
|
|
Director and President (Principal Executive Officer)
|
|
July 28, 2016
|
|
Terry P. Bayer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Treasurer (Principal Financial and Accounting Officer)
|
|
July 28, 2016
|
|
Joseph W. White
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mike Fidgeon
|
|
Director
|
|
July 28, 2016
|
|
Mike Fidgeon
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert Gordon
|
|
Director
|
|
July 28, 2016
|
|
Robert Gordon
|
|
|
|
|