Health Net 2010 Annual Report Download - page 81

Standard & Poor’s Ratings Services, within a specified period, we will be required to make an offer to purchase
the Senior Notes at a price equal to 101% of the principal amount of the Senior Notes plus accrued and unpaid
interest to the date of repurchase. As of December 31, 2010, we were in compliance with all of the covenants
under the indenture governing the Senior Notes.
The Senior Notes may be redeemed in whole at any time or in part from time to time, prior to maturity at
our option, at a redemption price equal to the greater of:
• 100% of the principal amount of the Senior Notes then outstanding to be redeemed; or
• the sum of the present values of the remaining scheduled payments of principal and interest on the
Senior Notes to be redeemed (not including any portion of such payments of interest accrued to the
date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the applicable treasury rate plus 30 basis points
plus, in each case, accrued and unpaid interest on the principal amount being redeemed to the redemption date.
Each of the following will be an Event of Default under the indenture governing the Senior Notes:
• failure to pay interest for 30 days after the date payment is due and payable; provided that an extension
of an interest payment period by us in accordance with the terms of the Senior Notes shall not
constitute a failure to pay interest;
• failure to pay principal or premium, if any, on any note when due, either at maturity, upon any
redemption, by declaration or otherwise;
• failure to perform any other covenant or agreement in the notes or indenture for a period of 60 days
after notice that performance was required;
• (A) our failure or the failure of any of our subsidiaries to pay indebtedness for money we borrowed or
any of our subsidiaries borrowed in an aggregate principal amount of at least $50,000,000, at the later
of final maturity and the expiration of any related applicable grace period and such defaulted payment
shall not have been made, waived or extended within 30 days after notice or (B) acceleration of the
maturity of indebtedness for money we borrowed or any of our subsidiaries borrowed in an aggregate
principal amount of at least $50,000,000, if that acceleration results from a default under the instrument
giving rise to or securing such indebtedness for money borrowed and such indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled within 30 days after notice;
or
• events in bankruptcy, insolvency or reorganization of our Company.
Revolving Credit Facility
We have a $900 million five-year revolving credit facility with Bank of America, N.A. as Administrative
Agent, Swingline Lender, and L/C Issuer, and the other lenders party thereto. Our revolving credit facility
provides for aggregate borrowings in the amount of $900 million, which includes a $400 million sub-limit for the
issuance of standby letters of credit and a $50 million sub-limit for swing line loans. In addition, we have the
ability from time to time to increase the facility by up to an additional $250 million in the aggregate, subject to
the receipt of additional commitments. The revolving credit facility matures on June 25, 2012.
Amounts outstanding under the new revolving credit facility will bear interest, at our option, at (a) the base
rate, which is a rate per annum equal to the greater of (i) the federal funds rate plus one-half of one percent and
(ii) Bank of America’s prime rate (as such term is defined in the facility), (b) a competitive bid rate solicited
from the syndicate of banks, or (c) the British Bankers Association LIBOR rate (as such term is defined in the
facility), plus an applicable margin, which is initially 70 basis points per annum and is subject to adjustment
according to our credit ratings, as specified in the facility.
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