Document:

EX-4.2

 

Exhibit 4.2

          This Security is a Global Security within the meaning of the Indenture (as defined on the
Reverse of this Security) hereinafter referred to and is registered in the name of The Depository
Trust Company (the “Depository”) or a nominee of the Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Indenture and may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository. Unless this Security is presented by an authorized
representative of the Depository (55 Water Street, New York) to The Chubb Corporation or its agent
for registration of transfer, exchange or payment, and any Security issued is registered in the
name of Cede & Co. or such other name as requested by an authorized representative of the
Depository and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.

			
	 	 	 
	No. 1
	 	Principal Amount: $500,000,000
	Issue Date: May 6, 2008
	 	CUSIP: 171232AS0
	 
	 	ISIN: US171232AS07

THE CHUBB CORPORATION

6.50% Senior Notes due 2038

          THE CHUBB CORPORATION, a corporation organized and existing under the laws of New Jersey
(hereinafter called the “Company”, which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered
assigns, the principal sum of five hundred million dollars ($500,000,000) as may be revised from
time to time on Schedule I hereto, and all accrued and unpaid interest thereof on May 15, 2038, or
if such day is not a Business Day, the following Business Day, and to pay interest thereon from and
including May 6, 2008, or from and including the most recent Interest Payment Date on which
interest has been paid or duly provided for, semi-annually in arrears on November 15 and May 15 of
each year, commencing on November 15, 2008, at the rate of 6.50% per annum to and including May 15,
2038 or earlier redemption date of this Security (each such date, an “Interest Payment Date”).

          The amount of interest payable for any full semi-annual period will be computed on the basis
of a 360-day year consisting of twelve 30-day months. The amount of interest payable for any period
shorter than a full semi-annual period for which interest is computed will be computed on the basis
of a 30-day month and, for any period less than a month, on the basis of the actual number of days
elapsed per 30-day month. In the event that any Interest Payment Date or the maturity date is not
a Business Day, then payment of the interest or principal payable on such date will be made on the
next succeeding day that is a Business Day with the same force

 

 

and effect as if made on the date the payment was originally payable and without any interest
or other payment in respect of the delay.

          The interest installment so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security
is registered on the first Business Day of the month in which the Interest Payment Date falls or on
any other day more than one and less than sixty Business Days prior to such Interest Payment Date
that the Company chooses (such day, an “Alternate Record Date”); provided that the Company shall
provide written notice of such Alternate Record Date to the Trustee not less than ten Business Days
prior to the Alternate Record Date.

          A “Business Day” shall mean any day other than (i) a Saturday or Sunday, (ii) a day on which
banking institutions in The City of New York are authorized or required by law or executive order
to remain closed or (iii) a day on which the Corporate Trust Office of the Trustee is closed for
business.

          Payment of the principal of (and premium, if any) and interest on this Security will be made
at the office or agency of the Company maintained for that purpose in the United States, in such
coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of the Company payment
of interest may be made (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the securities register or (ii) by wire transfer in immediately available
funds at such place and to such bank account as may be designated by the Person entitled thereto as
specified in the securities register in writing not less than ten days before the relevant Interest
Payment Date.

          The Company and, by acceptance of this Security or a beneficial interest in this Security,
each Holder hereof and any person acquiring a beneficial interest herein, agree to treat this
Security as indebtedness for United States federal income tax purposes.

          Reference is hereby made to the further provisions of this Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.

          Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.

2

 

     In WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

	 	 	 	 	 
	 	THE CHUBB CORPORATION

 	 
	 	By:  	/s/ Michael O’Reilly	 
	 	 	Name:  	Michael O’Reilly	 
	 	 	Title:    Vice Chairman and CFO	 
	 
	 	 	 
	 	By:  	/s/ Douglas A. Nordstrom	 
	 	 	Name:  	Douglas A. Nordstrom	 
	 	 	Title:    Treasurer and Vice
President	 
	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

	 	 	 	 	 
	 	This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK TRUST COMPANY, N.A.

 	 
	 	By:  	/s/ Benita A. Vaughn	 
	 	 	Name:  	Benita A. Vaughn	 
	 	 	Title:    Authorized Signatory	 
	 	 	Dated:  	May 6, 2008	 

3

 

	 	 	 	 	 

REVERSE OF SENIOR NOTES

          This Security is one of a duly authorized issue of securities of the Company, issued and to be
issued in one or more series under the indenture, dated as of October 25, 1989 between the Company
and The Bank of New York Trust Company, N.A. (as successor to JPMorgan Trust Company, N.A., as
successor to Bank One Trust Company, N.A. (formerly the First National Bank of Chicago)), as
trustee (the “Trustee”), as amended and supplemented through the date hereof (the “Indenture”), to
which Indenture and all other indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities thereunder of the
Trustee, the Company and the Holders of the Securities, and of the terms upon which the Securities
are, and are to be, authenticated and delivered. By the terms of the Indenture, the Securities are
issuable in series that may vary as to amount, date of maturity, rate of interest, rank and in any
other respect provided in the Indenture.

          All terms used in this Security that are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

          The Securities will be redeemable in whole at any time or in part from time to time, at the
Company’s option, at a redemption price equal to the greater of:

	 	•	 	100% of the principal amount of the Security to be redeemed; and
	 
	 	•	 	the sum of the present values of the remaining scheduled payments of
principal and interest on the Security to be redeemed (exclusive of
accrued and unpaid interest to the redemption date) discounted to the
redemption date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at a discount rate equal to the
Treasury Rate plus 0.30%,
	 
	 	 	 	in each case plus accrued and unpaid interest to the redemption date.
	 
	 	 	 	For the purposes of the preceding paragraph:
	 
	 	•	 	“Treasury Rate” means the semi-annual equivalent yield to
maturity of the Treasury Security that corresponds to the
Treasury Price (calculated in accordance with standard market
practice and computed as of the second trading day preceding the
redemption date);
	 
	 	•	 	“Treasury Security” means the United States Treasury security
that the Treasury Dealer determines would be appropriate to use,
at the time of determination and in accordance with standard
market practice, in pricing the Security being redeemed in a
tender offer based on a spread to United States Treasury yields;
	 
	 	•	 	“Treasury Price” means the bid-side price for the Treasury
Security as of the third trading day preceding the redemption
date, as set forth in the daily statistical release (or any
successor release) published by the Wall Street Journal in the
table entitled “Treasury Bonds, Notes and Bills,” as determined
by the Treasury Dealer except that: (i) if that release (or any
successor release) is not published or does not contain that

4

 

	 	 	 	price information on that trading day; or (ii) if the Treasury
Dealer determines that the price information is not reasonably
reflective of the actual bid-side price of the Treasury Security
prevailing at 3:30 p.m., New York City time, on that trading day,
then Treasury Price will instead mean the bid-side price for the
Treasury Security at or around 3:30 p.m., New York City time, on
that trading day (expressed on a next trading day settlement
basis) as determined by the Treasury Dealer through such
alternative means as are commercially reasonable under the
circumstances; and
	 
	 	•	 	“Treasury Dealer” means Citigroup Global Markets Inc. (or its
successor) or, if Citigroup Global Markets Inc. (or its
successor) refuses to act as Treasury Dealer for this purpose or
ceases to be a primary U.S. Government securities dealer, another
nationally recognized investment banking firm that is a primary
U.S. Government securities dealer specified by the Company for
these purposes.

          Notice of any redemption will be mailed at least 30 days but not more than 60 days before the
redemption date to each Holder of the Securities to be redeemed at its registered address. Unless
the Company defaults in payment of the redemption price, on and after the redemption date, interest
will cease to accrue on the Securities or portions thereof called for redemption.

          The Company will not be required (i) to issue, register the transfer of or exchange any
Securities during a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of the Securities selected for redemption and ending at the close
of business on the day of such mailing, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed portion of such
Securities being redeemed in part.

          No sinking fund is provided for the Securities. The Indenture contains provisions for
satisfaction, discharge and defeasance of the entire indebtedness of this Security upon compliance
by the Company with certain conditions set forth in the Indenture, which conditions apply to this
Security.

          In case an Event of Default, as defined in the Indenture, with respect to the Securities,
shall have occurred and be continuing, the principal hereof may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.

          The Indenture contains provisions permitting the Company and the Trustee, with the consent of
the Holders of not less than a majority in aggregate principal amount of the Securities at the time
Outstanding (as defined in the Indenture) of all series to be affected (voting as one class),
evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the Holders of the Securities of
each such series; provided, however, that no such supplemental indenture shall (i) extend the final
maturity of any Security, or reduce the principal amount thereof or any premium thereon, or reduce
the rate or extend the time of payment of any interest thereon, or reduce any amount payable on
redemption thereof, or reduce the amount of the principal of an Original Issue

5

 

Discount Security that would be due and payable upon an acceleration of the maturity thereof
or provable in bankruptcy, or change the currency of payments of principal, premium, if any, or
interest, or extend the time or reduce the amount of any payment to any sinking fund or analogous
obligation relating to any Security, or impair or affect the rights of any Holder to institute suit
for the payment thereof, without the consent of the Holder of each Security so affected, or (ii)
reduce the aforesaid percentage of Securities, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holder of each Security affected or (iii)
reduce the percentage of Securities of this series outstanding necessary to consent to waive any
past default under the Indenture to less than a majority, without the consent of the Holder of each
Security so affected, or (iv) modify the provisions of the sections of the Indenture dealing with
supplementary indentures or waivers of covenants, except to increase any such percentage or to
provide that certain other provisions of the Indenture cannot be modified or waived without the
consent of the Holder of each Security affected thereby, provided, however, that this clause shall
not be deemed to require the consent of any Holder with respect to changes in the references to
“the Trustee” and concomitant changes in such sections of the Indenture or the deletion of this
proviso, in accordance with the requirements of the Indenture. It is also provided in the
Indenture that, with respect to certain defaults or Events of Default regarding the Securities of
any series, prior to any declaration accelerating the maturity of such Securities, the Holders of a
majority in aggregate principal amount Outstanding of the Securities of such series (or, in the
case of certain defaults or Events of Default, all or certain series of the Securities) may on
behalf of the Holders of all the Securities of such series (or all or certain series of the
Securities, as the case may be) waive any such past default or Event of Default and its
consequences. The preceding sentence shall not, however, apply to a default in the payment of the
principal of or premium, if any, or interest on any of the Securities. Any such consent or waiver
by the Holder of this Security (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners of this Security and any
Security which may be issued in exchange or substitution herefor, irrespective of whether or not
any notation thereof is made upon this Security or such other Securities.

          No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of (and premium, if any) and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.

          Upon due presentment for registration of transfer of this Security at the office or agency of
the Company in the Borough of Manhattan, The City of New York, a new Security or Securities of
authorized denominations for an equal aggregate principal amount will be issued to the transferee
in exchange therefor, subject to the limitations provided in the Indenture, without charge except
for any tax or other governmental charge imposed in connection therewith.

          The Company, the Trustee and any authorized agent of the Company or the Trustee may deem and
treat the registered Holder hereof as the absolute owner of this Security (whether or not this
Security shall be overdue and notwithstanding any notation of ownership or other writing hereon),
for the purpose of receiving payment of, or on account of, the principal hereof and premium, if
any, and subject to the provisions on the face hereof, interest hereon, and for all other purposes,
and neither the Company nor the Trustee nor any authorized agent of the Company or the Trustee
shall be affected by any notice to the contrary.

6

 

          No recourse under or upon any obligation, covenant or agreement of the Company in the
Indenture or any indenture supplemental thereto or in any Security, or because of the creation of
any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer
or director, as such, of the Company or of any successor corporation, either directly or through
the Company or any successor corporation, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the acceptance hereof and as
part of the consideration for the issue hereof.

          The Securities are issuable only in registered form without coupons in minimum denominations
of $1,000 and any integral multiples of $1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate
principal amount of Securities of a different authorized denomination, as requested by the Holder
surrendering the same.

          THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

          This is one of the Securities referred to in the within mentioned Indenture.

7

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Security to:

      

      

      

(Insert assignee’s social security or tax identification number)

 

 

(Insert address and zip code of assignee)

agent to transfer this Security on the books of the Securities Registrar. The agent may substitute
another to act for him or her.

	 	 	 
	Dated:

	 	Signature:
	 
	 	 
	 

	 	Signature Guarantee:

(Sign exactly as your name appears on the other side of this Security)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Securities Registrar, which requirements include membership or participation in the Security
Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Securities Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.

 

 

SCHEDULE I

SCHEDULE OF PRINCIPAL AMOUNT REDUCTIONS

Principal amount of Securities outstanding represented by this certificate as of May 6, 2008:
$500,000,000

Thereafter, the following decreases have been made:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Notation Made by or	 
	 	 	 	 	Principal Amount	 	 	Principal Amount	 	 	on Behalf of the	 
	Date of Redemption	 	 	Redeemed	 	 	Remaining	 	 	Trustee	 

9

 

          This Security is a Global Security within the meaning of the Indenture (as defined on the
Reverse of this Security) hereinafter referred to and is registered in the name of The Depository
Trust Company (the “Depository”) or a nominee of the Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Indenture and may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository. Unless this Security is presented by an authorized
representative of the Depository (55 Water Street, New York) to The Chubb Corporation or its agent
for registration of transfer, exchange or payment, and any Security issued is registered in the
name of Cede & Co. or such other name as requested by an authorized representative of the
Depository and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.

			
	 	 	 
	No. 2
	 	Principal Amount: $100,000,000
	Issue Date: May 6, 2008
	 	CUSIP: 171232AS0
	 
	 	ISIN: US171232AS07

THE CHUBB CORPORATION

6.50% Senior Notes due 2038

          THE CHUBB CORPORATION, a corporation organized and existing under the laws of New Jersey
(hereinafter called the “Company”, which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered
assigns, the principal sum of one hundred million dollars ($100,000,000) as may be revised from
time to time on Schedule I hereto, and all accrued and unpaid interest thereof on May 15, 2038, or
if such day is not a Business Day, the following Business Day, and to pay interest thereon from and
including May 6, 2008, or from and including the most recent Interest Payment Date on which
interest has been paid or duly provided for, semi-annually in arrears on November 15 and May 15 of
each year, commencing on November 15, 2008, at the rate of 6.50% per annum to and including May 15,
2038 or earlier redemption date of this Security (each such date, an “Interest Payment Date”).

          The amount of interest payable for any full semi-annual period will be computed on the basis
of a 360-day year consisting of twelve 30-day months. The amount of interest payable for any period
shorter than a full semi-annual period for which interest is computed will be computed on the basis
of a 30-day month and, for any period less than a month, on the basis of the actual number of days
elapsed per 30-day month. In the event that any Interest Payment Date or the maturity date is not
a Business Day, then payment of the interest or principal payable on such date will be made on the
next succeeding day that is a Business Day with the same force

 

 

and effect as if made on the date the payment was originally payable and without any interest
or other payment in respect of the delay.

          The interest installment so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security
is registered on the first Business Day of the month in which the Interest Payment Date falls or on
any other day more than one and less than sixty Business Days prior to such Interest Payment Date
that the Company chooses (such day, an “Alternate Record Date”); provided that the Company shall
provide written notice of such Alternate Record Date to the Trustee not less than ten Business Days
prior to the Alternate Record Date.

          A “Business Day” shall mean any day other than (i) a Saturday or Sunday, (ii) a day on which
banking institutions in The City of New York are authorized or required by law or executive order
to remain closed or (iii) a day on which the Corporate Trust Office of the Trustee is closed for
business.

          Payment of the principal of (and premium, if any) and interest on this Security will be made
at the office or agency of the Company maintained for that purpose in the United States, in such
coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of the Company payment
of interest may be made (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the securities register or (ii) by wire transfer in immediately available
funds at such place and to such bank account as may be designated by the Person entitled thereto as
specified in the securities register in writing not less than ten days before the relevant Interest
Payment Date.

          The Company and, by acceptance of this Security or a beneficial interest in this Security,
each Holder hereof and any person acquiring a beneficial interest herein, agree to treat this
Security as indebtedness for United States federal income tax purposes.

          Reference is hereby made to the further provisions of this Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.

          Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.

2

 

In WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

	 	 	 	 	 
	 	THE CHUBB CORPORATION

 	 
	 	By:  	/s/ Michael O’Reilly	 
	 	 	Name:  	Michael O’Reilly	 
	 	 	Title:    Vice Chairman and CFO	 
	 
	 	 	 
	 	By:  	/s/ Douglas A. Nordstrom	 
	 	 	Name:  	Douglas A. Nordstrom	 
	 	 	Title:    Treasurer and Vice President	 
	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

	 	 	 	 	 
	 	This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK TRUST COMPANY, N.A.

 	 
	 	By:  	/s/ Benita A. Vaughn	 
	 	 	Name:  	Benita A. Vaughn	 
	 	 	Title:    Authorized Signatory	 
	 	 	Dated:  	May 6, 2008	 

3

 

	 	 	 	 	 

REVERSE OF SENIOR NOTES

          This Security is one of a duly authorized issue of securities of the Company, issued and to be
issued in one or more series under the indenture, dated as of October 25, 1989 between the Company
and The Bank of New York Trust Company, N.A. (as successor to JPMorgan Trust Company, N.A., as
successor to Bank One Trust Company, N.A. (formerly the First National Bank of Chicago)), as
trustee (the “Trustee”), as amended and supplemented through the date hereof (the “Indenture”), to
which Indenture and all other indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities thereunder of the
Trustee, the Company and the Holders of the Securities, and of the terms upon which the Securities
are, and are to be, authenticated and delivered. By the terms of the Indenture, the Securities are
issuable in series that may vary as to amount, date of maturity, rate of interest, rank and in any
other respect provided in the Indenture.

          All terms used in this Security that are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

          The Securities will be redeemable in whole at any time or in part from time to time, at the
Company’s option, at a redemption price equal to the greater of:

	 	•	 	100% of the principal amount of the Security to be redeemed; and
	 
	 	•	 	the sum of the present values of the remaining scheduled payments of
principal and interest on the Security to be redeemed (exclusive of
accrued and unpaid interest to the redemption date) discounted to the
redemption date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at a discount rate equal to the
Treasury Rate plus 0.30%,
in each case plus accrued and unpaid interest to the redemption date.
	 
	 	 	 	For the purposes of the preceding paragraph:
	 
	 	•	 	“Treasury Rate” means the semi-annual equivalent yield to
maturity of the Treasury Security that corresponds to the
Treasury Price (calculated in accordance with standard market
practice and computed as of the second trading day preceding the
redemption date);
	 
	 	•	 	“Treasury Security” means the United States Treasury security
that the Treasury Dealer determines would be appropriate to use,
at the time of determination and in accordance with standard
market practice, in pricing the Security being redeemed in a
tender offer based on a spread to United States Treasury yields;
	 
	 	•	 	“Treasury Price” means the bid-side price for the Treasury
Security as of the third trading day preceding the redemption
date, as set forth in the daily statistical release (or any
successor release) published by the Wall Street Journal in the
table entitled “Treasury Bonds, Notes and Bills,” as determined
by the Treasury Dealer except that: (i) if that release (or any
successor release) is not published or does not contain that

4

 

	 	 	 	price information on that trading day; or (ii) if the Treasury
Dealer determines that the price information is not reasonably
reflective of the actual bid-side price of the Treasury Security
prevailing at 3:30 p.m., New York City time, on that trading day,
then Treasury Price will instead mean the bid-side price for the
Treasury Security at or around 3:30 p.m., New York City time, on
that trading day (expressed on a next trading day settlement
basis) as determined by the Treasury Dealer through such
alternative means as are commercially reasonable under the
circumstances; and
	 
	 	•	 	“Treasury Dealer” means Citigroup Global Markets Inc. (or its
successor) or, if Citigroup Global Markets Inc. (or its
successor) refuses to act as Treasury Dealer for this purpose or
ceases to be a primary U.S. Government securities dealer, another
nationally recognized investment banking firm that is a primary
U.S. Government securities dealer specified by the Company for
these purposes.

          Notice of any redemption will be mailed at least 30 days but not more than 60 days before the
redemption date to each Holder of the Securities to be redeemed at its registered address. Unless
the Company defaults in payment of the redemption price, on and after the redemption date, interest
will cease to accrue on the Securities or portions thereof called for redemption.

          The Company will not be required (i) to issue, register the transfer of or exchange any
Securities during a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of the Securities selected for redemption and ending at the close
of business on the day of such mailing, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed portion of such
Securities being redeemed in part.

          No sinking fund is provided for the Securities. The Indenture contains provisions for
satisfaction, discharge and defeasance of the entire indebtedness of this Security upon compliance
by the Company with certain conditions set forth in the Indenture, which conditions apply to this
Security.

          In case an Event of Default, as defined in the Indenture, with respect to the Securities,
shall have occurred and be continuing, the principal hereof may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.

          The Indenture contains provisions permitting the Company and the Trustee, with the consent of
the Holders of not less than a majority in aggregate principal amount of the Securities at the time
Outstanding (as defined in the Indenture) of all series to be affected (voting as one class),
evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the Holders of the Securities of
each such series; provided, however, that no such supplemental indenture shall (i) extend the final
maturity of any Security, or reduce the principal amount thereof or any premium thereon, or reduce
the rate or extend the time of payment of any interest thereon, or reduce any amount payable on
redemption thereof, or reduce the amount of the principal of an Original Issue

5

 

Discount Security that would be due and payable upon an acceleration of the maturity thereof
or provable in bankruptcy, or change the currency of payments of principal, premium, if any, or
interest, or extend the time or reduce the amount of any payment to any sinking fund or analogous
obligation relating to any Security, or impair or affect the rights of any Holder to institute suit
for the payment thereof, without the consent of the Holder of each Security so affected, or (ii)
reduce the aforesaid percentage of Securities, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holder of each Security affected or (iii)
reduce the percentage of Securities of this series outstanding necessary to consent to waive any
past default under the Indenture to less than a majority, without the consent of the Holder of each
Security so affected, or (iv) modify the provisions of the sections of the Indenture dealing with
supplementary indentures or waivers of covenants, except to increase any such percentage or to
provide that certain other provisions of the Indenture cannot be modified or waived without the
consent of the Holder of each Security affected thereby, provided, however, that this clause shall
not be deemed to require the consent of any Holder with respect to changes in the references to
“the Trustee” and concomitant changes in such sections of the Indenture or the deletion of this
proviso, in accordance with the requirements of the Indenture. It is also provided in the
Indenture that, with respect to certain defaults or Events of Default regarding the Securities of
any series, prior to any declaration accelerating the maturity of such Securities, the Holders of a
majority in aggregate principal amount Outstanding of the Securities of such series (or, in the
case of certain defaults or Events of Default, all or certain series of the Securities) may on
behalf of the Holders of all the Securities of such series (or all or certain series of the
Securities, as the case may be) waive any such past default or Event of Default and its
consequences. The preceding sentence shall not, however, apply to a default in the payment of the
principal of or premium, if any, or interest on any of the Securities. Any such consent or waiver
by the Holder of this Security (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners of this Security and any
Security which may be issued in exchange or substitution herefor, irrespective of whether or not
any notation thereof is made upon this Security or such other Securities.

          No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of (and premium, if any) and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.

          Upon due presentment for registration of transfer of this Security at the office or agency of
the Company in the Borough of Manhattan, The City of New York, a new Security or Securities of
authorized denominations for an equal aggregate principal amount will be issued to the transferee
in exchange therefor, subject to the limitations provided in the Indenture, without charge except
for any tax or other governmental charge imposed in connection therewith.

          The Company, the Trustee and any authorized agent of the Company or the Trustee may deem and
treat the registered Holder hereof as the absolute owner of this Security (whether or not this
Security shall be overdue and notwithstanding any notation of ownership or other writing hereon),
for the purpose of receiving payment of, or on account of, the principal hereof and premium, if
any, and subject to the provisions on the face hereof, interest hereon, and for all other purposes,
and neither the Company nor the Trustee nor any authorized agent of the Company or the Trustee
shall be affected by any notice to the contrary.

6

 

          No recourse under or upon any obligation, covenant or agreement of the Company in the
Indenture or any indenture supplemental thereto or in any Security, or because of the creation of
any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer
or director, as such, of the Company or of any successor corporation, either directly or through
the Company or any successor corporation, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the acceptance hereof and as
part of the consideration for the issue hereof.

          The Securities are issuable only in registered form without coupons in minimum denominations
of $1,000 and any integral multiples of $1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate
principal amount of Securities of a different authorized denomination, as requested by the Holder
surrendering the same.

          THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

          This is one of the Securities referred to in the within mentioned Indenture.

7

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Security to:

 

 

 

(Insert assignee’s social security or tax identification number)

      

      

(Insert address and zip code of assignee)

agent to transfer this Security on the books of the Securities Registrar. The agent may substitute
another to act for him or her.

	 	 	 
	Dated:

	 	Signature:
	 
	 	 
	 

	 	Signature Guarantee:

(Sign exactly as your name appears on the other side of this Security)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Securities Registrar, which requirements include membership or participation in the Security
Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Securities Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.

 

SCHEDULE I

SCHEDULE OF PRINCIPAL AMOUNT REDUCTIONS

Principal amount of Securities outstanding represented by this certificate as of May 6, 2008:
$100,000,000

Thereafter, the following decreases have been made:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Notation Made by or
	 	 	 	 	Principal Amount	 	Principal Amount	 	on Behalf of the
	Date of Redemption	 	Redeemed	 	Remaining	 	Trustee

9EX-10.1

 

	 	 	 	 	 

Exhibit 10.1

          FIRST AMENDMENT AND WAIVER, effective as of March 31, 2008 (“First Amendment”), to the AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of September 26, 2007 (as amended, restated,
supplemented or otherwise modified, the “LSA”), among BioScrip Pharmacy Services, Inc. (“Pharmacy
Services”), BioScrip Infusion Services, Inc. (“Infusion Services Inc”), BioScrip Pharmacy (NY),
Inc. (“Pharmacy (NY)”), BioScrip PBM Services, LLC (“PBM Services”), BioScrip Pharmacy, Inc.
(“Pharmacy”), Natural Living, Inc. (“Natural Living”) and BioScrip Infusion Services, LLC
(“Infusion Services LLC” and together with Pharmacy Services, Infusion Services Inc, Pharmacy (NY),
PBM Services, Pharmacy and Natural Living, each a “Borrower” and collectively, jointly and
severally, the “Borrowers”), as borrowers, and HFG Healthco-4 LLC (together with its successors and
assigns, the “Lender”), as the lender. Unless otherwise defined herein, terms in the LSA are used
herein as therein defined.

          The Borrowers have failed to comply with the requirements of paragraph (v) (Debt/EBITDA Ratio)
of Exhibit V to the LSA for the fiscal quarter ended March 31, 2008 and have therefore requested
that the Lender waive such requirements for such fiscal quarter and the Lender has agreed to waive
such failure on the terms and subject to the conditions set forth herein.

          The Borrowers and the Lender have agreed to amend the LSA on the terms and subject to the
conditions set forth herein.

          Accordingly, in consideration of the foregoing and for other good and valuable consideration,
the receipt and sufficiency of which hereby are acknowledged, and subject to the fulfillment of the
conditions set forth below, the parties hereto agree as follows:

          SECTION 1. WAIVER UNDER THE LSA

          1.1. Effective as of the Effective Date (as defined below), the Lender hereby waives the Event
of Default (and any Default related thereto) under paragraph (v) of Exhibit V to the LSA solely for
the fiscal quarter ended March 31, 2008.

          SECTION 2. AMENDMENTS TO LSA. Effective as of the Effective Date (as defined below), the LSA
is hereby amended as follows:

          2.1. The definition of “A/R Fee” contained in Exhibit I to the LSA is amended and restated in
its entirety to read as follows:

“‘A/R Fee’ means the account receivable tracking fee, due on the first Business Day
of each Month, in an amount equal to:

AORA x TD x 0.50%

360

          where:

          AORA      =      The average outstanding amount of the Revolving Loan for the prior Month,
calculated as the arithmetic average of all daily balances

          TD         =         The actual amount of days in such prior Month.”

 

 

          2.2. The table within the definition of “Applicable Margin” contained in Exhibit I to the LSA
is amended and restated in its entirety to read as follows:

	 	 	 	 	 
	Debt/EBITDA Ratio is:	 	Applicable Margin:	 
	£ 1.50:1.00
	 	 	1.60	%
	>
1.50:1.00 but £ 2.00:1.00
	 	 	1.90	%
	> 2.00:1.00
	 	 	2.20	%

          2.3. The definition of “LIBOR” contained in Exhibit I to the LSA is amended and restated in
its entirety to read as follows:

“‘LIBOR’ for any Interest Period, means a rate per annum equal to the greater of (a)
the rate per annum established by the Program Manager two Business Days prior to the
first day of each Interest Period based on an annualized 30-day interest rate
(calculated on the basis of actual days elapsed over a 360-day year) equal to the
offered rate for deposits in U.S. dollars in the London interbank market which is
published by the British Bankers’ Association and currently appears on the Reuters
Screen LIBO Page (or any successor page) as of 11:00 a.m. (London time) on such day,
provided that if more than one rate is specified on Reuters Screen LIBO Page, LIBOR
shall be a rate per annum equal to the arithmetic mean of all such rates or (b)
2.75%.”

          2.4. Exhibit IV to the LSA is amended by adding the following new clause (aa) at the end
thereof:

“(aa) Wire Fees. The Borrowers shall pay to the Lender, in consideration of
electronic funds transfer transactions initiated by the Lender at the request of any
Borrower (or by the Borrower Representative, on behalf of any Borrower), a wire
transfer fee in the amount of $30.00 for each such transaction. The Borrowers
irrevocably authorize the Lender to charge any and all such fees to the applicable
Revolving Advance and disburse the proceeds thereof to the Lender in payment
thereof.”

          SECTION 3. CONDITIONS PRECEDENT

          3.1. Effective Date of this First Amendment. This First Amendment shall become
effective as of the date listed above (the “Effective
Date”) at such time when the Lender shall
have received fully executed counterparts of this First Amendment.

          SECTION 4. POST-EFFECTIVE COVENANTS.

          4.1. The Borrowers hereby agree (i) that the Debt/EBITDA Ratio as at the end of the fiscal
quarter ended March 31, 2008 shall not exceed 4.70:1.00 and (ii) to deliver to the Lender,
concurrently with the delivery of the financial statements or Form 10-Q, as applicable,

 

 

for the fiscal quarter ended March 31, 2008 in accordance with Section (k)(ii) of Exhibit IV
to the LSA, evidence reasonably satisfactory to the Lender that the Debt/EBITDA Ratio does not
exceed 4.70:1.00 as at the end of such fiscal quarter.

          SECTION 5. MISCELLANEOUS

          5.1. The Borrowers each hereby certify, represent and warrant that, after giving effect to
this First Amendment, (i) except as otherwise disclosed in public filings made by the Parent with
the United States Securities and Exchange Commission, the representations and warranties in the LSA
are true and correct, with the same force and effect as if made on such date, except as they may
specifically refer to an earlier date, in which case they were true and correct as of such date,
(ii) no unwaived Default or Event of Default has occurred or is continuing (nor any event that but
for notice or lapse of time or both would constitute a Default or an Event of Default), (iii) each
of the Borrowers has the corporate power and authority to execute and deliver this First Amendment,
and (iv) no consent of any other person (including, without limitation, shareholders or creditors
of any Borrower), and no action of, or filing with any governmental or public body or authority is
required to authorize, or is otherwise required in connection with the execution and performance of
this First Amendment, other than, in each case, such that have been obtained.

          5.2. The terms “Agreement”, “hereof”, “herein” and similar terms as used in the LSA shall mean
and refer to, from and after the effectiveness of this First Amendment, the LSA as amended by this
First Amendment, and as it may in the future be amended, restated, modified or supplemented from
time to time in accordance with its terms. Except as specifically agreed herein, nothing herein
shall be deemed to be an amendment or waiver of any covenant or agreement contained in the LSA or
any other Document and each of the parties hereto agrees that all of the covenants and agreements
and other provisions contained in the LSA and the other Documents, as amended, waived or otherwise
modified hereof, are hereby ratified and confirmed in all respects and shall remain in full force
and effect in accordance with their terms from and after the date of this First Amendment.

          5.3. Parent and Chronimed, LLC (f/k/a Chronimed Inc.) each hereby ratifies its Guarantee of
the Guaranteed Obligations (as defined in that certain Amended and Restated Guaranty, effective as
of October 1, 2007, made by Parent and Chronimed, LLC (f/k/a Chronimed Inc.) (the “Guaranty”))
pursuant to the Guaranty and each of the Borrowers, Parent and Chronimed, LLC (f/k/a Chronimed
Inc.) hereby ratifies its grant of a security interest made under the Documents.

          5.4. This First Amendment shall constitute a Document under the LSA

          5.5. THIS FIRST AMENDMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK, BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
ANY CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY
OTHER JURISDICTION.

 

 

          5.6. The captions in this First Amendment are for convenience of reference only, are not part
of this First Amendment and shall not affect the construction of, or be taken into consideration in
interpreting, this First Amendment.

          5.7. Any provision of this First Amendment held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and enforceability of the
remaining provisions hereof, and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

          5.8. This First Amendment may be executed in counterparts, each of which when so executed
shall be deemed to be an original and all of which when taken together shall constitute one and the
same agreement.

          5.9. Delivery of an executed counterpart of a signature page by telecopier, .pdf or similar
electronic transmission shall be effective as delivery of a manually executed counterpart.

 

 

          IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed by
their respective officers thereunto duly authorized, as of the date first above written.

	 	 	 	 	 	 	 	 	 
	BIOSCRIP INFUSION SERVICES, INC.	 	 	 	BIOSCRIP PHARMACY SERVICES, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:
	 

	 	Title:
	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	BIOSCRIP PBM SERVICES, LLC	 	 	 	BIOSCRIP PHARMACY (NY), INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:
	 

	 	Title:
	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	NATURAL LIVING, INC.	 	 	 	BIOSCRIP PHARMACY, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:
	 

	 	Title:
	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	BIOSCRIP INFUSION SERVICES, LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 

Name:
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Solely with respect to Section 5.3 hereof:	 	 	 	 	 	 
	BIOSCRIP, INC.	 	 	 	CHRONIMED, LLC (f/k/a Chronimed Inc.)
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:
	 

	 	Title:
	 	 	 	 	 	Title:

 

 

	 	 	 	 	 	 	 	 	 
	HFG HEALTHCO-4 LLC,	 	 	 	 	 	 
	as Lender	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By: HFG Healthco-4, Inc., a member	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 

Name:
	 	 	 	 	 	 
	 

	 	Title:

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