EXHIBIT 1.2
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COMMUNITY HEALTH SYSTEMS, INC.
(a Delaware corporation)
_ Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated: _, 2000
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TABLE OF CONTENTS
PAGE
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SECTION 1. Representations and Warranties.............................3
(a) Representations and Warranties by the Company...................3
(b) Representations and Warranties by the Selling Shareholders.....15
(c) Officer's Certificates, Selling Shareholder Certificates.......19
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing...........19
(a) Initial Securities.............................................19
(b) Option Securities..............................................20
(c) Payment........................................................20
(d) Denominations; Registration....................................21
SECTION 3. Covenants of the Company..................................21
(a) Compliance with Securities Regulations and Commission Requests.21
(b) Filing of Amendments...........................................22
(c) Delivery of Registration Statements............................22
(d) Delivery of Prospectuses.......................................23
(e) Continued Compliance with Securities Laws......................23
(f) Blue Sky Qualifications........................................23
(g) Rule 158.......................................................24
(h) Use of Proceeds................................................24
(i) Listing........................................................24
(j) Restriction on Sale of Securities..............................24
(k) Reporting Requirements.........................................25
SECTION 4. Payment of Expenses.......................................25
(a) Expenses.......................................................25
(b) Expenses of the Selling Shareholders...........................25
(c) Termination of Agreement.......................................26
(d) Allocation of Expenses.........................................26
SECTION 5. Conditions of International Managers' Obligations.........26
(a) Effectiveness of Registration Statement........................26
(b) Opinion of Counsel for the Company.............................26
(c) Opinion of Counsel for the Selling Shareholders................27
(d) Opinion of Counsel for the International Managers..............27
(e) Officers'Certificate...........................................27
(f) Certificate of the Selling Shareholder.........................27
(g) Accountant's Comfort Letter....................................28
(h) Bring-down Comfort Letter......................................28
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(i) Approval of Listing............................................28
(j) No Objection...................................................28
(k) Lock-up Agreements.............................................28
(l) Purchase of Initial U.S. Securities............................28
(m) Form W-8 or W-9................................................28
(n) Conditions to Purchase of International Option Securities......29
(o) Additional Documents...........................................30
(p) Termination of Agreement.......................................30
SECTION 6. Indemnification...........................................30
(a) Indemnification of the International Managers by the
Company and CHS................................................30
(b) Indemnification of the International Managers by the Forstmann
Little & Co. Selling Shareholders..............................32
(c) Indemnification of the International Managers by the Other
Selling Shareholders...........................................32
(d) Indemnification of Company, Directors and Officers and Selling
Shareholders...................................................33
(e) Actions against Parties; Notification..........................34
(f) Settlement without Consent if Failure to Reimburse.............34
SECTION 7. Contribution..............................................35
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery..................................................36
SECTION 9. Termination of Agreement..................................37
(a) Termination; General...........................................37
(b) Liabilities....................................................37
SECTION 10. Default by One or More of the International Managers......38
SECTION 11. Default by One or More of the Selling Shareholders or
the Company...............................................39
SECTION 12. Notices...................................................40
SECTION 13. Parties...................................................40
SECTION 14. GOVERNING LAW AND TIME....................................40
SECTION 15. Effect of Headings........................................40
SCHEDULES
Schedule A - List of Underwriters.................................
Schedule B - List of Selling Shareholders.........................
Schedule C - Pricing Information..................................
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Schedule D - List of Forstmann Little & Co. Selling Shareholders..
EXHIBITS
Exhibit A-1 - Form of Opinion of Company's General Counsel.......
Exhibit A-2 - Form of Opinion of Fried, Frank, Harris, Xxxxxxx
& Xxxxxxxx.........................................
Exhibit B - Form of Lock-up Letter................................
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COMMUNITY HEALTH SYSTEMS, INC.
(a Delaware corporation)
_ Shares of Common Stock
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
_, 2000
XXXXXXX XXXXX INTERNATIONAL
Credit Suisse First Boston (Europe) Limited
Bank of America International Limited
Chase Manhattan International Limited
Xxxxxxx Xxxxx International
Xxxxxx Xxxxxxx & Co. International Limited
as Lead Underwriters of the several International Managers
c/o Merrill Xxxxx International
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Community Health Systems, Inc., a Delaware corporation (the "Company"),
and CHS/Community Health Systems, Inc., a Delaware corporation ("CHS") and the
persons listed on Schedule B hereto under the heading "Selling Shareholders"
(the "Selling Shareholders"), confirm their respective agreements with Xxxxxxx
Xxxxx International and each of the other International Managers named in
Schedule A hereto (collectively, the "International Managers", which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx, Credit Suisse First Boston (Europe) Limited,
Bank of America International Limited, Chase Securities Inc., Xxxxxxx Xxxxx
International and Xxxxxx Xxxxxxx & Co. International Limited are acting as
representatives (in such capacity, the "Lead Managers"), with respect to the
issue and sale by the Company and the sale by the Selling Shareholders, acting
severally and not jointly, and the purchase by the International Managers,
acting severally and not jointly, of the respective numbers of shares of Common
Stock, par value $.01 per share, of the Company ("Common Stock") set forth in
Schedules A and B hereto, and with respect to the grant by certain Selling
Shareholders to the International Managers, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of up to
_ additional shares of Common Stock to cover over-allotments, if any. The
aforesaid _ shares of Common Stock (the "Initial International Securities") to
be
purchased by the International Managers and all or any part of the _ shares
of Common Stock subject to the option described in Section 2(b) hereof (the
"International Option Securities") are hereinafter called, collectively, the
"International Securities".
It is understood that the Company, CHS and the Selling Shareholders are
concurrently entering into an agreement dated the date hereof (the "U.S.
Purchase Agreement") providing for the offering by the Company of an aggregate
of _ shares of Common Stock (the "Initial U.S. Securities") through arrangements
with certain underwriters in the United States and Canada (the "U.S.
Underwriters") for which Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Credit Suisse First Boston Corporation,
Banc of America Securities LLC, Chase Securities Inc., Xxxxxxx, Xxxxx & Co. and
Xxxxxx Xxxxxxx & Co. Incorporated are acting as representatives (the "U.S.
Representatives") and the grant by certain Selling Shareholders to the U.S.
Underwriters, acting severally and not jointly, of an option to purchase all or
any part of the U.S. Underwriters' pro rata portion of up to _ additional shares
of Common Stock solely to cover overallotments, if any (the "U.S. Option
Securities" and, together with the International Option Securities, the "Option
Securities"). The Initial U.S. Securities and the U.S. Option Securities are
hereinafter called the "U.S. Securities". It is understood that the Company and
the Selling Shareholders are not obligated to sell, and the International
Managers are not obligated to purchase, any Initial International Securities
unless all of the Initial U.S. Securities are contemporaneously purchased by the
U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities", and the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities".
The Underwriters will concurrently enter into an Intersyndicate Agreement
dated the date hereof (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Xxxxxxx Xxxxx (in such capacity, the "Global Coordinator").
The Company, CHS and the Selling Shareholders understand that the
International Managers propose to make a public offering of the International
Securities as soon as the Lead Managers deem advisable after this Agreement has
been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-47354) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus
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in accordance with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations. Two
forms of prospectus are to be used in connection with the offering and sale of
the Securities: one relating to the International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. Prospectus"). The Form of U.S. Prospectus is identical to the Form of
International Prospectus, except for the front cover and back cover pages and
the information under the caption "Underwriting." The information included in
any such prospectus that was omitted from such registration statement at the
time it became effective but that is deemed to be part of such registration
statement at the time it became effective pursuant to paragraph (b) of Rule 430A
is referred to as "Rule 430A Information." Each Form of International Prospectus
and Form of U.S. Prospectus used before such registration statement became
effective, and any prospectus that omitted the Rule 430A Information that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto and schedules thereto at the time it
became effective and including the Rule 430A Information, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of
International Prospectus and the final Form of U.S. Prospectus in the forms
first furnished to the Underwriters for use in connection with the offering of
the Securities are herein called the "International Prospectus" and the "U.S.
Prospectus," respectively, and collectively, the "Prospectuses." For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. Prospectus or any amendment
or supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("XXXXX").
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company and CHS
represent and warrant to each International Manager as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and if any International
Option Securities are purchased, as of each Date of Delivery referred to in
Section 2(b) hereof, and agrees with each International Manager, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or
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are pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with in all material respects.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. Neither of the Prospectuses nor any
amendments or supplements thereto (including any prospectus wrapper), at
the time the Prospectuses or any amendments or supplements thereto were
issued and at the Closing Time (and, if any International Option
Securities are purchased, at each Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. The representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement or
the International Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any International
Manager through the Lead Managers expressly for use in the Registration
Statement or the International Prospectus.
Each preliminary prospectus and the prospectuses filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(ii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iii) FINANCIAL STATEMENTS. The consolidated financial statements
included in the Registration Statement and the Prospectuses, together with
the related schedules and notes, present fairly, in all material respects,
the financial
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position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and cash
flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied, except as set
forth in the notes to the financial statements, on a consistent basis
throughout the periods involved. The supporting schedules included in the
Registration Statement present fairly, in all material respects, in
accordance with GAAP the information required to be stated therein. The
selected consolidated financial and other data and the summary
consolidated financial and other data included in the Prospectuses present
fairly, in all material respects, the information shown therein and have
been compiled on a basis consistent with that of the audited consolidated
financial statements included in the Registration Statement. The pro forma
financial information included in the Registration Statement and the
Prospectuses present fairly, in all material respects, the information
shown therein, and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been
no material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business (a "Material Adverse Effect"), (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
(v) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing could not
result in a Material Adverse Effect.
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(vi) GOOD STANDING OF SUBSIDIARIES. (A) Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) and CHS, Community Health Investment Corporation, CHS
Professional Service Corporation and Hallmark Healthcare Corporation and
each other subsidiary which is a hospital holding company or an operating
hospital (each a "Subsidiary" and, collectively, the "Subsidiaries") has
been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectuses and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure so to qualify or to be in good
standing would not reasonably be expected to result in a Material Adverse
Effect. Except as otherwise disclosed in Exhibit 21 to the Registration
Statement, all of the issued and outstanding capital stock of each such
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity and none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such Subsidiary. The only
subsidiaries of the Company are (a) the subsidiaries listed on Exhibit 21
to the Registration Statement and (b) certain other subsidiaries which,
considered in the aggregate as a single Subsidiary, do not constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
(B) Except to the extent disclosed in Exhibit 21 to the Registration
Statement, each of the hospitals described in the Prospectuses as owned or
leased by the Company is owned or leased and operated by a Subsidiary of
which the Company directly or indirectly owns 100% of the outstanding
ownership interests. Except as disclosed in the Prospectuses, there are no
encumbrances or restrictions on the ability of any Subsidiary (i) to pay
any dividends or make any distributions on such Subsidiary's capital
stock, (ii) to make any loans or advances to, or investments in, the
Company, CHS or any other Subsidiary, or (iii) to transfer any of its
property or assets to the Company, CHS or any other Subsidiary.
(vii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses in the column
entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectuses or pursuant to the exercise of convertible securities or
options referred to in the Prospectuses). The shares of
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issued and outstanding capital stock of the Company including, without
limitation, the Securities to be sold by the Selling Shareholders have
been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights
of any securityholder of the Company. The shares of issued and outstanding
capital stock of the Company have been issued in compliance, in all
material respects, with all federal and state securities laws. Except as
disclosed in the Prospectuses, there are no outstanding options or
warrants to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of the
Company's capital stock or any such options, warrants, rights, convertible
securities or obligations. The description of the Company's stock option
and purchase plans and the options or other rights granted and exercised
thereunder set forth in the Prospectuses accurately and fairly describe,
in all material respects, the information required to be shown with
respect to such plans, arrangements, options and rights.
(viii) AUTHORIZATION OF AGREEMENT. This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(ix) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The Securities to
be purchased by the International Managers and the U.S. Underwriters from
the Company and the Selling Shareholders have been duly authorized for
issuance and sale to the International Managers pursuant to this Agreement
and the U.S. Underwriters pursuant to the U.S. Purchase Agreement,
respectively, and, when issued and delivered by the Company pursuant to
this Agreement and the U.S. Purchase Agreement, respectively, against
payment of the consideration set forth herein and the U.S. Purchase
Agreement, respectively, will be validly issued, fully paid and
non-assessable; the Common Stock conforms, in all material respects, to
all statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the Company's Restated
Certificate of Incorporation to be in effect following this offering, no
holder of the Securities will be subject to personal liability by reason
of being such a holder; and the issuance of the Securities is not subject
to the preemptive or other similar rights of any securityholder of the
Company.
(x) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which it or any of them may be bound, or to
7
which any of the property or assets of the Company or any subsidiary is
subject (collectively, "Agreements and Instruments"), except for such
defaults under Agreements and Instruments that would not reasonably be
expected to result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the U.S. Purchase Agreement
and the consummation of the transactions contemplated in this Agreement,
the U.S. Purchase Agreement and in the Registration Statement (including
the issuance and sale of the Securities and the use of the proceeds from
the sale of the Securities as described in the Prospectuses under the
caption "Use of Proceeds") and compliance by the Company and CHS with
their obligations under this Agreement and the U.S. Purchase Agreement
have been duly authorized by all necessary corporate action and, after
giving effect to the use of proceeds as contemplated in the Prospectuses
under the caption "Use of Proceeds," do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, CHS or any of
their subsidiaries pursuant to, the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not reasonably be expected to result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or by-laws of the Company, CHS or any of their subsidiaries
or, any applicable law, statute, rule, regulation, judgment, order, writ
or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company, CHS or any of their
subsidiaries or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company, CHS or any of their subsidiaries.
(xi) ABSENCE OF LABOR DISPUTE. No material labor dispute with the
employees of the Company, CHS or any of their subsidiaries exists or, to
the knowledge of the Company or CHS, is imminent, and neither the Company
nor CHS is aware of any existing or imminent labor disturbance by the
employees of any of their or any of their subsidiaries' principal
suppliers or contractors, which would reasonably be expected to result in
a Material Adverse Effect.
(xii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending (other than any sealed
"qui tam" actions of which neither the Company nor CHS has any knowledge),
or, to the knowledge of the Company or CHS, threatened, against or
affecting the Company, CHS or
8
any of their subsidiaries, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which would
reasonably be expected to result in a Material Adverse Effect, or which
could materially and adversely affect the properties or assets thereof or
the consummation of the transactions contemplated in this Agreement and
the U.S. Purchase Agreement, or the performance by the Company or CHS of
their obligations hereunder or thereunder; the aggregate of all pending
legal or governmental proceedings to which the Company, CHS or any of
their subsidiaries is a party or of which any of their respective property
or assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, would not reasonably be expected to result in a Material Adverse
Effect.
(xiii) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits to the Registration Statement
which have not been so described and/or filed as required.
(xiv) POSSESSION OF INTELLECTUAL PROPERTY. The Company, CHS and
their subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on in all
material respects the business now operated by them, and none of the
Company, CHS or any of their subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which could render any Intellectual Property invalid or
inadequate to protect the interest of the Company, CHS or any of their
subsidiaries therein, except for such infringements or conflicts (if the
subject of any unfavorable decision, ruling or finding) or invalidities or
inadequacies which would not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
(xv) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company or CHS of
their obligations hereunder, in connection with the offering, issuance or
sale of the Securities under this Agreement and the U.S. Purchase
Agreement, the consummation of the transactions contemplated by this
Agreement and the U.S. Purchase Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933 Act
Regulations and foreign or state securities or blue sky laws.
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(xvi) POSSESSION OF LICENSES AND PERMITS. The Company, CHS and their
subsidiaries possess such permits, licenses, provider numbers,
certificates, approvals (including, without limitation, certificate of
need approvals), consents, orders, certifications (including, without
limitation, certification under the Medicare and Medicaid programs),
accreditations (including, without limitation, accreditation by the Joint
Commission on Accreditation of Healthcare Organizations) and other
authorizations (collectively, "Governmental Licenses") issued by, and have
made all declarations and filings with, the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them (including, without limitation, Governmental
Licenses as are required (i) under such federal and state healthcare laws
as are applicable to the Company, CHS and their subsidiaries and (ii) with
respect to those facilities operated by the Company, CHS or any of their
subsidiaries that participate in the Medicare and/or Medicaid programs, to
receive reimbursement thereunder), except where the failure to poses such
Government Licenses or to make such declarations and filings would not
reasonably be expected to result in a Material Adverse Effect; the
Company, CHS and their subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, reasonably be expected to
result in a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be
in full force and effect would not reasonably be expected to result in a
Material Adverse Effect; and none of the Company, CHS or any of their
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to result in a Material Adverse
Effect. All of the hospitals operated by the Company, CHS and their
subsidiaries are "providers of services" as defined in the Social Security
Act and the regulations promulgated thereunder and are eligible to
participate in the Medicare and Medicaid programs (it being understood
that this representation and warranty is to the best of the Company's and
CHS's knowledge with respect to the three hospitals acquired by the
Company since June 1, 2000).
(xvii) ACCOUNTS RECEIVABLE. The accounts receivable of the Company,
CHS and their subsidiaries have been and will continue to be adjusted to
reflect material changes in the reimbursement policies of third party
payors such as Medicare, Medicaid, private insurance companies, health
maintenance organizations, preferred provider organizations, managed care
systems and other third party payors (including, without limitation, Blue
Cross plans). The accounts receivable, after giving effect to the
allowance for doubtful accounts, relating to
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such third party payors do not and shall not materially exceed amounts the
Company, CHS and their subsidiaries are entitled to receive.
(xviii) COMPLIANCE WITH SOCIAL SECURITY ACT AND OTHER FEDERAL
ENFORCEMENT INITIATIVES. Neither the Company and CHS nor, to the knowledge
of the Company and CHS, any officers, directors or stockholders, employees
or other agents of the Company, CHS or any of their subsidiaries or the
hospitals operated by them, has engaged in any activities which are
prohibited under Federal Medicare and Medicaid statutes including, but not
limited to, 42 U.S.C. xx.xx. 1320a-7 (Program Exclusion), 1320a-7a (Civil
Monetary Penalties), 1320a-7b (the Anti-kickback Statute), 42 U.S.C. ss.
1395nn and 1396b (the "Xxxxx" law, prohibiting certain self-referrals), or
any other federal law, including, but not limited to, the federal TRICARE
statute, 10 U.S.C. ss.1071 ET Seq., the Federal Civil False Claims Act, 31
U.S.C. xx.xx. 3729-32, Federal Criminal False Claims Act, 18 U.S.C. ss.
287, False Statements Relating to Health Care Matters, 18 U.S.C. ss. 1035,
Health Care Fraud, 18 U.S.C. ss. 1347, or the federal Food, Drug &
Cosmetics Act, 21 U.S.C. ss. 360aaa, or any regulations promulgated
pursuant to such statutes, or related state or local statutes or
regulations or any rules of professional conduct, including but not
limited to the following: (i) knowingly and willfully making or causing to
be made a false statement or representation of a material fact in any
applications for any benefit or payment under the Medicare or Medicaid
program or from any third party (where applicable federal or state law
prohibits such payments to third parties); (ii) knowingly and willfully
making or causing to be made any false statement or representation of a
material fact for use in determining rights to any benefit or payment
under the Medicare or Medicaid program or from any third party (where
applicable federal or state law prohibits such payments to third parties);
(iii) failing to disclose knowledge by a claimant of the occurrence of any
event affecting the initial or continued right to any benefit or payment
under the Medicare or Medicaid program or from any third party (where
applicable federal or state law prohibits such payments to third parties)
on its own behalf or on behalf of another, with intent to secure such
benefit or payment fraudulently; (iv) knowingly and willfully offering,
paying, soliciting or receiving any remuneration (including any kickback,
bribe or rebate), directly or indirectly, overtly or covertly, in cash or
in kind (a) in return for referring an individual to a Person for the
furnishing or arranging for the furnishing of any item or service for
which payment may be made in whole or in part by Medicare or Medicaid or
any third party (where applicable federal or state law prohibits such
payments to third parties), or (b) in return for purchasing, leasing or
ordering or arranging for or recommending the purchasing, leasing or
ordering of any good, facility, service, or item for which payment may be
made in whole or in part by Medicare or Medicaid or any third party (where
applicable federal or state law prohibits such payments to third parties);
(v) knowingly and willfully referring an individual to a person with which
they have ownership or
11
certain other financial arrangements (where applicable federal law
prohibits such referrals); and (vi) knowingly and willfully violating any
enforcement initiative instituted by any governmental agency (including,
without limitation, the Office of the Inspector General and the Department
of Justice), except for any such activities which are specifically
described in the Prospectus or which would not, singly or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
(xix) REGULATORY FILINGS. None of the Company, CHS or any of their
subsidiaries or any of the hospitals operated by any of them has failed to
file with applicable regulatory authorities any statement, report,
information or form required by any applicable law, regulation or order,
except where the failure to be so in compliance could not, individually or
in the aggregate, have a Material Adverse Effect. Except as described in
the Prospectuses, all such filings or submissions were in compliance with
applicable laws when filed and no deficiencies have been asserted by any
regulatory commission, agency or authority with respect to any such
filings or submissions, except for any such failures to be in compliance
or deficiencies which would not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(xx) TITLE TO PROPERTY. The Company, CHS and their subsidiaries
have good and marketable title to all real property owned by them and good
title to all other properties owned by them, in each case, free and clear
of all mortgages, pledges, liens, security interests, claims, restrictions
or encumbrances of any kind except such as (a) are described in the
Prospectuses or (b) do not, singly or in the aggregate, in a manner that
would reasonably be expected to result in a Material Adverse Effect,
affect the value of such property or interfere with the use made or
proposed to be made of such property by the Company, CHS or any of their
subsidiaries; and all of the leases and subleases of the Company and their
subsidiaries, considered as one enterprise, and under which the Company,
CHS or any of their subsidiaries holds properties described in the
Prospectuses, are in full force and effect, and none of the Company, CHS
or any of their subsidiaries has any notice of any claim of any sort that
has been asserted by anyone adverse to the rights of the Company, CHS or
any of their subsidiaries under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company, CHS or such
subsidiary to the continued possession of the leased or subleased premises
under any such lease or sublease, except where the failure to be in full
force and effect or such claim would not reasonably be expected to have a
Material Adverse Effect.
(xxi) INVESTMENT COMPANY ACT. None of the Company, CHS or their
subsidiaries is, and upon the issuance and sale of the Securities as
herein contemplated and the application of the net proceeds therefrom as
described in the
12
Prospectuses none of them will be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxii) ENVIRONMENTAL LAWS. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, reasonably
be expected to result in a Material Adverse Effect, (A) none of the
Company, CHS, their subsidiaries or any of the hospitals owned, leased or
operated by them is in violation of any federal, state, local or foreign
statute, law, rule, regulation, standard, guide, ordinance, code, policy
or rule of common law or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent, decree
or judgment, relating to pollution or protection of human health or
safety, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to
the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances (including, without
limitation, asbestos, polychlorinated biphenyls, urea-formaldehyde
insulation, petroleum or petroleum products) (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling, release or threatened
release of Hazardous Materials (collectively, "Environmental Laws"), (B)
the Company, CHS, their subsidiaries and each of the hospitals owned,
leased or operated by them have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company, CHS, their subsidiaries or any of the hospitals owned, leased or
operated by them and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company, CHS, any of
their subsidiaries or any of the hospitals owned, leased or operated by
them relating to Hazardous Materials or any Environmental Laws.
(xxiii) REGISTRATION RIGHTS. Except as disclosed in the Prospectuses
under the caption "Shares Eligible for Future Sale-Registration Rights,"
there are no persons with registration rights or other similar rights to
have any securities of the Company, CHS or any of their subsidiaries
registered pursuant to the Registration Statement or otherwise registered
by the Company or any other person under the 1933 Act.
13
(xxiv) INSURANCE. The Company, CHS and each of their subsidiaries
and each of the hospitals owned, leased or operated by them are insured by
insurers of recognized financial responsibility against such loses and
risks and in such amounts as are prudent and customary in the healthcare
industry; none of the Company, CHS, their subsidiaries or any of the
hospitals owned, leased or operated by them has been refused any material
insurance coverage sought or applied for since January 1, 1999; and
neither the Company nor CHS has any reason to believe that it or any of
the hospitals owned, leased or operated by them, will not be able to renew
its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its operations except where the failure to renew or maintain such
coverage would not reasonably be expected to result in a Material Adverse
Effect. The officers and directors of the Company are insured by insurers
of recognized financial responsibility against such losses and risks and
in such amounts as the Company believes are prudent and customary for
officers' and directors' liability insurance of a public company and as
the Company believes would cover claims which would reasonably be expected
to be made in connection with the issuance of the Securities; and the
Company has no reason to believe that it will not be able to renew its
existing directors' and officers' liability insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to cover its officers and directors.
(xxv) TAX RETURNS AND PAYMENT OF TAXES. The Company, CHS and their
subsidiaries have timely filed all federal, state, local and foreign tax
returns that are required to be filed or has duly requested extensions
thereof and all such tax returns are true, correct and complete, except to
the extent that any failure to file or request an extension, or any
incorrectness would not reasonably be expected to result in a Material
Adverse Effect. The Company, CHS and their subsidiaries have timely paid
all taxes shown as due on such filed tax returns (including any related
assessments, fines or penalties), except to the extent that any such taxes
are being contested in good faith and by appropriate proceedings, or to
the extent that any failure to pay would not reasonably be expected to
result in a Material Adverse Effect; and adequate charges, accruals and
reserves have been provided for in the financial statements referred to in
Section 1(a)(iii) above in accordance with GAAP in respect of all Federal,
state, local and foreign taxes for all periods as to which the tax
liability of the Company, CHS and their subsidiaries has not been finally
determined or remains open to examination by applicable taxing authorities
except (A) for taxes incurred after the date of the financial statements
referred to in Section 1(a)(iii) or (B) where the failure to provide for
such charges, accruals and reserves would not reasonably be expected to
result in a Material Adverse Effect. None of the Company, CHS or their
subsidiaries is a "United
14
States real property holding corporation" within the meaning of Section
897(c)(2) of the Internal Revenue Code of 1986, as amended (the "Code").
(xxvi) NO STABILIZATION OR MANIPULATION. None of the Company, CHS or
their subsidiaries or, to the best of their knowledge, any of their
directors, officers or affiliates has taken or will take, directly or
indirectly, any action designed to, or that could be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Securities in violation of Regulation M under the Securities Exchange Act
of 1934, as amended (the "1934 Act").
(xxvii) CERTAIN TRANSACTIONS. Except as disclosed in the
Prospectuses, there are no outstanding loans, advances, or guarantees of
indebtedness by the Company, CHS or any of their subsidiaries to or for
the benefit of any of the executive officers or directors of the Company
or any of the members of the families of any of them that would be
required to be so disclosed under the 1933 Act, the 1933 Act Regulations
or Form S-1.
(xxviii) STATISTICAL AND MARKET DATA. The statistical and
market-related data included in the Prospectuses are derived from sources
which the Company and CHS reasonably and in good faith believe to be
accurate, reasonable and reliable in all material respects and the
statistical and market-related data included in the Prospectuses agrees
with the sources from which it was derived in all material respects.
(xxix) ACCOUNTING AND OTHER CONTROLS. The Company has established a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions were, are and will be executed in
accordance with management's general or specific authorization; (ii)
transactions were, are and will be recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets was, is and
will be permitted only in accordance with a management's general or
specific authorizations; and (iv) the recorded accountability for assets
was, is and will be compared with existing assets at reasonable intervals
and appropriate action was, is and will be taken with respect to any
differences.
(b) REPRESENTATIONS AND WARRANTIES BY THE SELLING SHAREHOLDERS. Each
Selling Shareholder severally represents and warrants to each International
Manager as of the date hereof, as of the Closing Time, and, if the Selling
Shareholder is selling Option Securities on a Date of Delivery, as of each such
Date of Delivery, and agrees with each International Manager, as follows:
(i) ACCURATE DISCLOSURE. With respect to each Selling Shareholder,
to the extent that any statements or omissions made in the Registration
Statement,
15
any preliminary prospectus, the Prospectuses or any amendment or
supplement thereto are made in reliance upon and in conformity with
written information furnished to the Company by such Selling Shareholder
expressly for use therein, such preliminary prospectus and the
Registration Statement did, and the Prospectuses and any further
amendments or supplements to the Registration Statement and the
Prospectuses, when they become effective or are filed with the Commission,
as the case may be, will conform in all material respects to the
requirements of the 1933 Act and the rules and regulations of the
Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(ii) AUTHORIZATION OF AGREEMENTS. Such Selling Shareholder has the
full right, power and authority to enter into this Agreement, the U.S.
Purchase Agreement, the Power of Attorney (the "Power of Attorney") and
the Custody Agreement (the "Custody Agreement"), and to sell, transfer and
deliver the Securities to be sold by such Selling Shareholder under this
Agreement and the U.S. Purchase Agreement. The execution and delivery of
this Agreement, the U.S. Purchase Agreement, the Power of Attorney and the
Custody Agreement, the sale and delivery of the Securities to be sold by
such Selling Shareholder, the consummation by such Selling Shareholder of
the transactions contemplated under this Agreement and the U.S. Purchase
Agreement and compliance by such Selling Shareholder with its obligations
under this Agreement and the U.S. Purchase Agreement have been duly
authorized by such Selling Shareholder and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default under, or result in the
creation or imposition of any tax, lien, charge or encumbrance upon the
Securities to be sold by such Selling Shareholder or any property or
assets of such Selling Shareholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license, lease or
other agreement or instrument to which such Selling Shareholder is a party
or by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is subject, nor will such
action result in any violation of the provisions of the charter or by-laws
or other organizational instrument of such Selling Shareholder, if
applicable, or any applicable treaty, law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
such Selling Shareholder or any of its properties.
(iii) VALID AND MARKETABLE TITLE. Such Selling Shareholder (i) has
at the date hereof valid and marketable title to the Securities to be sold
by such Selling Shareholder under this Agreement and the U.S. Purchase
Agreement or to the options that will be exercised for such Securities
prior to the Closing Time, in
16
each case free and clear of any security interest, mortgage, pledge, lien,
charge, claim, equity or encumbrance of any kind (collectively, "Liens"),
other than pursuant to this Agreement and the U.S. Purchase Agreement, and
(ii) will at the Closing Time and, if any Option Securities are purchased
from such Selling Shareholder, on the Date of Delivery, have valid and
marketable title to the Securities to be sold by such Selling Shareholder
under this Agreement and the U.S. Purchase Agreement, including any
Securities received as a result of exercises of options, in each case free
and clear of any Lien, other than pursuant to this Agreement and the U.S.
Purchase Agreement; and upon delivery of such Securities and payment of
the purchase price therefore as contemplated in this Agreement and the
U.S. Purchase Agreement (assuming each such Underwriter has no notice of
any adverse claim, as defined in Uniform Commercial Code as adopted in the
State of New York (the "UCC")), each of the Underwriters will receive
valid and marketable title to the Securities purchased by it from such
Selling Shareholder, free and clear of any Lien.
(iv) DUE EXECUTION OF POWER OF ATTORNEY AND CUSTODY AGREEMENT. Such
Selling Shareholder has duly executed and delivered, in the form
heretofore furnished to the International Managers, the Power of Attorney
with Xxxxx X. Xxxxx, W. Xxxxx Xxxx and Xxxxxx Xxxxxxx, as
attorneys-in-fact (the "Attorneys-in-Fact") and the Custody Agreement with
the Company, as custodian (the "Custodian"); the Custodian is authorized
to deliver the Securities to be sold by such Selling Shareholder under
this Agreement and the U.S. Purchase Agreement and to accept payment
therefore; and each Attorney-in-Fact is authorized to execute and deliver
this Agreement and the U.S. Purchase Agreement and the certificate
referred to in Section 5(f) of this Agreement or Section 5(f) of the U.S.
Purchase Agreement or that may be required pursuant to Sections 5(n) and
5(o) of this Agreement or Sections 5(n) and 5(o) of the U.S. Purchase
Agreement on behalf of such Selling Shareholder, to sell, assign and
transfer to the Underwriters the Securities to be sold by such Selling
Shareholder under this Agreement and the U.S. Purchase Agreement, to
determine the purchase price to be paid by the Underwriters and to such
Selling Shareholder, as provided in Section 2(a) of this Agreement and
Section 2(a) of the U.S. Purchase Agreement, to authorize the delivery of
the Securities to be sold by such Selling Shareholder under this Agreement
and the U.S. Purchase Agreement, to accept payment therefore, and
otherwise to act on behalf of such Selling Shareholder in connection with
this Agreement and the U.S. Purchase Agreement.
(v) ABSENCE OF MANIPULATION. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action designed to,
or that might reasonably be expected to cause or result in stabilization
or manipulation of the price of the Securities in violation of Regulation
M under the 1934 Act.
17
(vi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by such Selling Shareholder
of its obligations under this Agreement and the U.S. Purchase Agreement or
in the Power of Attorney or the Custody Agreement, or in connection with
the offer, sale and delivery by such Selling Shareholder of the Securities
under this Agreement and the U.S. Purchase Agreement or the consummation
by such Selling Shareholder of the transactions contemplated by this
Agreement and the U.S. Purchase Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933 Act
Regulations and state securities laws.
(vii) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the Prospectus, such Selling Shareholder (except as
otherwise set forth in Schedule B hereto) will not, without the prior
written consent of Xxxxxxx Xxxxx, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise lend, transfer or dispose of, directly or indirectly, any share
of Common Stock whether now owned or hereafter acquired by such Selling
Shareholder or with respect to which such Selling Shareholder has or
hereafter acquires the power of disposition, or file, or request or demand
that the Company file, any registration statement under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock, in cash or otherwise. The
foregoing sentence shall not apply to the Securities to be sold under this
Agreement and the U.S. Purchase Agreement. Notwithstanding the foregoing,
such Selling Shareholders may transfer shares of Common Stock (i) as a
bona fide gift or gifts, provided that prior to such transfer the donee or
donees thereof agree in writing to be bound by the restrictions set forth
in this Section 1(b)(vii), (ii) to any trust for the direct or indirect
benefit of such Selling Shareholder or the immediate family of the such
Selling Shareholder, provided that prior to such transfer the trustee of
the trust agrees in writing to be bound by the restrictions set forth in
this Section 1(b)(vii), and provided further that any such transfer shall
not involve a disposition for value or (iii) if such transfer occurs by
operation of law, such as rules of descent and distribution, statutes
governing the effects of a merger or a qualified domestic order, provided
that prior to such transfer the transferee executes an agreement stating
that the transferee is receiving and holding the shares subject to this
Section 1(b)(vii).
(viii) CERTIFICATES SUITABLE FOR TRANSFER. Except as provided in the
immediately following sentence, certificates for all of the Securities to
be sold by
18
such Selling Shareholder pursuant to this Agreement and the U.S. Purchase
Agreement, in suitable form for transfer by delivery or accompanied by
duly executed instruments of transfer or assignment in blank with
signatures guaranteed, have been placed in custody with the Custodian with
irrevocable conditional instructions to deliver such Securities to the
International Managers pursuant to this Agreement and the U.S. Purchase
Agreement. With respect to any Securities to be sold by any such Selling
Shareholder as a result of exercise of options, such Selling Shareholder
has placed in custody with the Custodian an irrevocable Notice of Exercise
with respect to the Securities to be sold, and certificates representing
such shares in suitable form for transfer by delivery or accompanied by
duly executed instruments of transfer or assignment in blank with
signatures guaranteed, shall be placed in custody with the Custodian with
irrevocable conditional instructions to deliver such Securities to the
Underwriters pursuant to this Agreement and the International Purchase
Agreement immediately prior to Closing Time.
(ix) NO ASSOCIATION WITH NASD. Except as specifically set forth in
the Prospectus with regard to Xxxxxxx X. Xxxxx, the Chairman of the Board
of the Company, under the caption "Underwriting - Other Relationships",
neither such Selling Shareholder, nor any of its affiliates directly, or
indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with, or has any other association with
(within the meaning of Article I, Section (ee) of the By-laws of the
National Association of Securities Dealers, Inc. (the "NASD") any member
firm of the NASD.
(c) OFFICER'S CERTIFICATES, SELLING SHAREHOLDER CERTIFICATES. Any
certificate signed by any officer of the Company delivered to Xxxxxxx Xxxxx, the
Global Coordinator, the Lead Managers or to counsel for the International
Managers shall be deemed a representation and warranty by the Company to each
International Manager as to the matters covered thereby; and any certificate
signed by or on behalf of the Selling Shareholders as such and delivered to
Xxxxxxx Xxxxx, the Global Coordinator, the Lead Managers or to counsel for the
International Managers shall be deemed a representation and warranty by such
Selling Shareholder to each International Manager as to the matters covered
thereby.
SECTION 2. SALE AND DELIVERY TO U.S. UNDERWRITERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and each Selling Shareholder, severally and not jointly,
agrees to sell to each International Manager, severally and not jointly, and
each International Manager, severally and not jointly, agrees to purchase from
the Company and each Selling Shareholder, at the price per share set forth in
Schedule C, the number of Initial
19
International Securities set forth in Schedule A or B opposite the name of such
International Manager, Selling Shareholder or the Company, as the case may be,
plus any additional number of Initial International Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) OPTION SECURITIES. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Shareholders that will be selling U.S. Option Securities,
as indicated by a corresponding amount opposite such Selling Shareholders' names
in the column titled "Maximum Number of Option Securities" in Schedule B, acting
severally and not jointly, hereby grant an option to the International Managers,
severally and not jointly, to purchase up to an additional _ shares of Common
Stock, as set forth in Schedule A or Schedule B, as the case may be, at the
price per share set forth in Schedule C, less an amount per share equal to any
dividends or distributions declared by the Company and payable on the Initial
International Securities but not payable on the International Option Securities.
The option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial International Securities upon notice by the Global
Coordinator to the certain Selling Shareholders setting forth the number of
International Option Securities as to which the several International Managers
are then exercising the option and the time and date of payment and delivery for
such International Option Securities. Any such time and date of delivery for the
International Option Securities (a "Date of Delivery") shall be determined by
the Global Coordinator, but shall not be later than seven full business days
after the exercise of said option, nor in any event prior to the Closing Time,
as hereinafter defined. If the option is exercised as to all or any portion of
the International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase that proportion of the total number of
International Option Securities then being purchased which the number of Initial
International Securities set forth in Schedule A opposite the name of such
International Manager bears to the total number of Initial International
Securities and, as to each Selling Shareholder, that proportion which the total
number of securities in Schedule B in the column titled "Maximum Number of
Option Securities" opposite the name of such Selling Shareholder bears to the
total number of International Option Securities to be sold by Selling
Shareholders, subject in each case to such adjustments as the Global Coordinator
in its discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as shall be agreed upon by the Global Coordinator and the Company
and the Selling Shareholders, at 9:00 A.M. (Eastern time) on the third (fourth,
if the pricing occurs after 4:30 P.M. (Eastern time) on any given day) business
day after the date hereof (unless postponed in accordance with
20
the provisions of Section 10), or such other time not later than ten business
days after such date as shall be agreed upon by the Global Coordinator and the
Company and the Selling Shareholders (such time and date of payment and delivery
being herein called "Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Selling Shareholders,
on each Date of Delivery as specified in the notice from the Global Coordinator
to the Selling Shareholders.
Payment shall be made to the Company and the Selling Shareholders by wire
transfer of immediately available funds to bank accounts designated by the
Company and the Custodian pursuant to each Selling Shareholder's Power of
Attorney and Custody Agreement, as the case may be, against delivery to the Lead
Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Managers, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. Xxxxxxx Xxxxx,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such International Manager from its obligations
hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
International Manager as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION
REQUESTS. The Company, subject to Section 3(b), will comply with the
21
requirements of Rule 430A and will notify the Global Coordinator
immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)), or
any amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the
Prospectuses, will furnish the Global Coordinator with copies of any such
documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to
which the Global Coordinator or counsel for the International Managers
shall reasonably object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished
or will deliver to the Lead Managers and counsel for the International
Managers, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Lead
Managers, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for
each of the International Managers. The copies of the Registration
Statement and each amendment thereto furnished to the U.S. Underwriters
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
22
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted
by the 1933 Act. The Company will furnish to each International Manager,
without charge, during the period when the International Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number
of copies of the International Prospectus (as amended or supplemented) as
such International Manager may reasonably request. The International
Prospectus and any amendments or supplements thereto furnished to the
International Manager will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement, the U.S. Purchase Agreement and in the Prospectuses. If at any
time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion
of counsel for the International Managers or for the Company, to amend the
Registration Statement or amend or supplement any Prospectus in order that
the Prospectuses will not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement any Prospectus in order to comply with
the requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will furnish
to the International Managers such number of copies of such amendment or
supplement as the International Managers may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best
efforts, in cooperation with the International Managers, to qualify the
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions (domestic or foreign) as the Global
Coordinator may designate and to maintain such qualifications in effect
for a period of not less than one year from the later of the effective
date of the Registration Statement and any Rule 462(b) Registration
Statement; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a
23
dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction
in which the Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification of the Securities in effect for a period of
not less than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement.
(g) RULE 158. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to
its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) USE OF PROCEEDS. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in
the Prospectuses under "Use of Proceeds".
(i) LISTING. The Company will use its best efforts to effect and
maintain the quotation of the Common Stock (including the Securities) on
the New York Stock Exchange.
(j) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Securities to be sold hereunder or under the U.S. Purchase
Agreement, (B) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security
outstanding on the date hereof and referred to in the Prospectuses, (C)
any shares of Common Stock issued or options to purchase Common Stock
granted pursuant to employee benefit plans of the Company referred to in
the Prospectuses, (D) any shares of Common Stock issued pursuant to any
non-employee director stock plan or dividend reinvestment plan.
24
(k) REPORTING REQUIREMENTS. The Company, during the period when
the Prospectuses are required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the rules and regulations of the Commission thereunder.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company and CHS will pay all expenses incident to the
performance of their obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters and the transfer of
the Securities between the International Managers and the U.S. Underwriters,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus and of the Prospectuses
and any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any supplement
thereto, (viii) the fees and expenses of any transfer agent or registrar for the
Securities, (ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the NASD of the terms of the sale of the Securities, (x) the fees and expenses
incurred in connection with the listing of the Securities on the New York Stock
Exchange, (xi) all costs and expenses of the Underwriters, including the fees
and disbursements of counsel for the Underwriters, in connection with matters
related to the Reserved Securities which are designated by the Company for sale
to Eligible Persons who have expressed an interest in purchasing the Reserved
Securities and (xii) the expenses of the Independent Underwriter.
(b) EXPENSES OF THE SELLING SHAREHOLDERS. The Selling Shareholders,
jointly and severally, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by this Agreement and the U.S. Purchase Agreement, including (i)
any stamp duties, capital duties and stock transfer taxes, if any, payable upon
the sale of the Securities to the Underwriters, and their transfer between the
Underwriters pursuant to an agreement
25
between such Underwriters and (ii) the fees and disbursements of their
respective counsel and accountants.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Lead Managers in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company, CHS and the Selling Shareholders shall reimburse the
International Manager for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the International Managers.
(d) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholders may make for
the sharing of such costs and expenses.
SECTION 5. CONDITIONS OF INTERNATIONAL MANAGERS' OBLIGATIONS. The
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of the Company, CHS and the
Selling Shareholders contained in Section 1 hereof or in certificates of any
officer of the Company, CHS or any of their subsidiaries or on behalf of any
Selling Shareholder delivered pursuant to the provisions hereof, to the
performance by the Company of their covenants and other obligations hereunder,
and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefore initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall
have been complied with to the reasonable satisfaction of counsel to the
International Managers. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in accordance with Rule 424(b)
(or a post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of Rule
430A).
(b) OPINION OF COUNSEL FOR THE COMPANY. At Closing Time, the
International Managers shall have received the favorable opinion, dated as
of Closing Time, of:
(i) Xxxxxx X. Xxxxxxx, Vice President, Secretary and General
Counsel of the Company, in form and substance reasonably
satisfactory to counsel for the International Managers, together
with signed or reproduced copies of such letter for each of the
other International Managers to the effect set forth in Exhibit A-1
hereto and to such further effect as counsel to the International
Managers may reasonably request; and
26
(ii) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, special counsel
for the Company, in form and substance reasonably satisfactory to
counsel for the International Managers, together with signed or
reproduced copies of such letter for each of the other International
Managers to the effect set forth in Exhibit A-2 hereto and to such
further effect as counsel to the International Managers may
reasonably request.
(c) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS. At Closing
Time, the International Managers shall have received the favorable
opinion, dated as of Closing Time, of each counsel for the other Selling
Shareholders (which counsel shall be satisfactory to the International
Managers), each in form and substance satisfactory to counsel for the
International Managers, together with signed or reproduced copies of such
letters for each of the other U.S. Underwriters to the effect set forth in
Exhibit A-3 hereto and to such other effect as counsel for the
International Managers may reasonably request.
(d) OPINION OF COUNSEL FOR THE INTERNATIONAL MANAGERS. At Closing
Time, the Lead Managers shall have received the favorable opinion, dated
as of Closing Time, of Debevoise & Xxxxxxxx, counsel for the International
Managers, together with signed or reproduced copies of such letter for
each of the other International Managers in form and substance reasonably
satisfactory to the International Managers.
(e) OFFICERS' CERTIFICATE. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company, CHS and their subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, and the Lead Managers shall have received a
certificate of the President and Chief Executive Officer and the Executive
Vice President and Chief Financial Officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1(a)
hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company and CHS have
complied with all agreements and satisfied all conditions on their part to
be performed or satisfied at or prior to Closing Time, and (iv) no stop
order suspending the effectiveness of the Registration Statement has been
issued and, to such person's knowledge after due inquiry, no proceedings
for that purpose have been instituted or are pending or are contemplated
by the Commission.
(f) CERTIFICATE OF THE SELLING SHAREHOLDER. At Closing Time, the
International Managers shall have received a certificate of each Selling
27
Shareholder, dated as of the Closing Time, to the effect that (i) the
representations and warranties of each Selling Shareholder contained in
Section 1(b) hereof are true and correct in all respects with the same
force and effect as though expressly made at and as of Closing Time and
(ii) each Selling Shareholder has complied in all material respects with
all agreements and all conditions on its part to be performed under this
Agreement at or prior to Closing Time.
(g) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of
this Agreement, the Lead Managers shall have received from Deloitte &
Touche LLP a letter, dated such date, in form and substance reasonably
satisfactory to the Lead Managers, together with signed or reproduced
copies of such letter for each of the other International Managers,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectuses.
(h) BRING-DOWN COMFORT LETTER. At Closing Time, the
Representatives shall have received from Deloitte & Touche LLP a letter,
dated as of Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (e) of this Section,
except that the specified date referred to shall be a date not more than
three business days prior to Closing Time.
(i) APPROVAL OF LISTING. At Closing Time, the Securities shall
have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(j) NO OBJECTION. The NASD has confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements with respect to the Securities.
(k) LOCK-UP AGREEMENTS. At the date of this Agreement, the Lead
Managers shall have received an agreement substantially in the form of
Exhibit B hereto signed by the persons listed on Schedule C hereto.
(l) PURCHASE OF INITIAL U.S. SECURITIES. Contemporaneously with
the purchase by the International Managers of the Initial International
Securities under this Agreement, the U.S. Underwriters shall have
purchased the Initial U.S. Securities under the U.S. Purchase Agreement.
(m) FORM W-8 OR W-9. At the date of this Agreement, the Lead
Managers shall have received Form W-8 or W-9, as required, signed by each
Selling Shareholder.
28
(n) CONDITIONS TO PURCHASE OF INTERNATIONAL OPTION SECURITIES. In
the event that the International Managers exercise their option provided
in Section 2(b) hereof to purchase all or any portion of the International
Option Securities, the representations and warranties of the Company and
the Selling Shareholders contained herein and the statements in any
certificates furnished by the Company or any subsidiary of the Company and
the Selling Shareholders hereunder shall be true and correct as of each
Date of Delivery and, at the relevant Date of Delivery, the U.S.
Representatives shall have received:
(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of
Delivery, of the President and Chief Executive Officer, and of the
Executive Vice President and Chief Financial Officer of the Company,
confirming that the certificate delivered at the Closing Time
pursuant to Section 5(d) hereof remains true and correct as of such
Date of Delivery.
(ii) CERTIFICATE OF SELLING SHAREHOLDERS. A certificate, dated
such Date of Delivery, of each Selling Shareholder selling
International Option Securities confirming that the certificate
delivered at Closing Time pursuant to Section 5(f) remains true and
correct as of such Date of Delivery.
(iii) OPINION OF COUNSEL FOR COMPANY. The favorable opinion of
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, special counsel for the
Company, together with the favorable opinion of Xxxxxx X. Xxxxxxx,
Vice President, Secretary and General Counsel of the Company, each
in form and substance reasonably satisfactory to counsel for the
International Managers, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinions required
by Section 5(b) hereof.
(iv) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS. The
favorable opinion of each counsel for the Selling Shareholders
selling International Option Securities (which counsel shall be
satisfactory to the International Managers), each in form and
substance satisfactory to counsel for the International Managers,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(c) hereof.
(v) OPINION OF COUNSEL FOR INTERNATIONAL MANAGERS. The
favorable opinion of Debevoise & Xxxxxxxx, counsel for the
International Managers, dated such Date of Delivery, relating to the
International
29
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(c)
hereof.
(vi) BRING-DOWN COMFORT LETTER. A letter from Deloitte &
Touche LLP, in form and substance reasonably satisfactory to the
Lead Managers and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Lead Managers
pursuant to Section 5(f) hereof, except that the "specified date" in
the letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(o) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of
Delivery, counsel for the International Managers shall have been furnished
with such documents and opinions as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company and
the Selling Shareholders in connection with the issuance and sale of the
Securities as herein contemplated shall be reasonably satisfactory in form
and substance to the Lead Managers and counsel for the International
Managers.
(p) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of International Option Securities on a Date of Delivery which is
after the Closing Time, the obligations of the several International
Managers to purchase the relevant Option Securities, may be terminated by
the Lead Managers by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE INTERNATIONAL MANAGERS BY THE COMPANY AND
CHS. (1) The Company and CHS jointly and severally agree to indemnify and hold
harmless each International Manager and each person, if any, who controls any
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue
30
statement of a material fact contained in the Registration Statement (or
any amendment thereto), including the Rule 430A Information, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission; provided that
(subject to Section 6(e) below) any such settlement is effected with the
written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i), or
(ii) or (iii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent (A) arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the International Prospectus (or
any amendment or supplement thereto) or (B) resulting from the fact that a court
of competent jurisdiction shall have made a final, non-appealable determination
that (1) the untrue statement or omission was corrected in the International
Prospectus, (2) that at a time sufficiently prior to the Closing Time, the
Company furnished copies of the International Prospectus in sufficient
quantities to such International Manager, (3) that such International Manager
failed to send or give a copy of the International Prospectus to the person
asserting such loss, liability, claim, damage or expense prior to the written
confirmation or the sale of Securities to such person by such International
Manager as required by the 1933 Act or the 1933 Act Regulations, and (4) that
the sending of the International Prospectus to the person asserting such loss,
liability, claim, damage or expense would have constituted a defense to the
claim asserted by such person or persons.
31
(2) Insofar as this indemnity agreement may permit indemnification for
liabilities under the 1933 Act of any person who is a partner of a International
Manager or who controls an underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act and who, at the date of this Agreement,
is a director or officer of the Company or controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, such
indemnity agreement is subject to the undertaking of the Company in the
Registration Statement under Item.
(b) INDEMNIFICATION OF THE INTERNATIONAL MANAGERS BY THE FORSTMANN
LITTLE & CO. SELLING SHAREHOLDERS. The Selling Shareholders listed on Schedule E
hereto severally in proportion to the number of Shares to be sold by such
Selling Shareholders hereunder, agree to indemnify and hold harmless each
International Manager and each person, if any, who controls any International
Manager within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a)(1) of this Section, as
incurred; provided, HOWEVER, that, notwithstanding any provisions in Section
6(a), the aggregate liability of any such Selling Shareholder pursuant to this
Section 6(b) shall be limited to the net proceeds received by such Selling
Shareholder from the Securities purchased by the International Managers from
such Selling Shareholder pursuant to this Agreement; PROVIDED, HOWEVER, that
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent (A) arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any International Manager
through the Lead Managers expressly for use in the Registration Statement (or
any amendment thereto), including the Rule 430A Information, or any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto) or (B) resulting from the fact that a court of competent jurisdiction
shall have made a final, non-appealable determination that (1) the untrue
statement or omission was corrected in the International Prospectus, (2) that at
a time sufficiently prior to the Closing Time, the Company furnished copies of
the International Prospectus in sufficient quantities to such Underwriter, (3)
that such International Manager failed to send or give a copy of the
International Prospectus to the person asserting such loss, liability, claim,
damage or expense prior to the written confirmation or the sale of Securities to
such person by such International Manager as required by the 1933 Act or the
1933 Act Regulations, and (4) that the sending of the International Prospectus
to the person asserting such loss, liability, claim, damage or expense would
have constituted a defense to the claim asserted by such person or persons.
(c) INDEMNIFICATION OF THE INTERNATIONAL MANAGERS BY THE OTHER
SELLING SHAREHOLDERS. The Selling Shareholders not listed on Schedule E hereto
severally in proportion to the number of Shares to be sold by such Selling
Shareholders hereunder, agree to indemnify and hold harmless each International
Manager and each person, if any, who controls any International Manager within
the meaning of Section 15 of the
32
1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a)(1) of this Section, as incurred, but only with reference to information
furnished in writing by or on behalf of such Selling Shareholder expressly for
use in the Registration Statement (or any amendment thereto), any preliminary
prospectuses or the Prospectuses (or any amendment or supplement thereto) or any
preliminary prospectus. Notwithstanding the foregoing and any provisions in
Section 6(a), the aggregate liability of any such Selling Shareholder pursuant
to this Section 6(c) shall be limited to the net proceeds received by such
Selling Shareholder from the Securities purchased by the International Manager
from such Selling Shareholder pursuant to this Agreement; PROVIDED, HOWEVER,
that this indemnity agreement shall not apply to any loss, liability, claim,
damage or expense to the extent (A) arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the International Prospectus (or
any amendment or supplement thereto) or (B) resulting from the fact that a court
of competent jurisdiction shall have made a final, non-appealable determination
that (1) the untrue statement or omission was corrected in the International
Prospectus, (2) that at a time sufficiently prior to the Closing Time, the
Company furnished copies of the International Prospectus in sufficient
quantities to such International Manager, (3) that such International Manager
failed to send or give a copy of the International Prospectus to the person
asserting such loss, liability, claim, damage or expense prior to the written
confirmation or the sale of Securities to such person by such International
Manager as required by the 1933 Act or the 1933 Act Regulations, and (4) that
the sending of the International Prospectus to the person asserting such loss,
liability, claim, damage or expense would have constituted a defense to the
claim asserted by such person or persons.
(d) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS AND SELLING
SHAREHOLDERS. Each International Manager severally agrees to indemnify and hold
harmless the Company, CHS and their respective directors, each of the officers
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act and each Selling Shareholder and each person, if any,
who controls each Selling Shareholder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a)(1) of this Section, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary International prospectus or the International
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such
International Manager through the
33
Lead Managers expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the International Prospectus (or any
amendment or supplement thereto).
(e) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a)(1) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(f) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(1)(ii), 6(b) and 6(c) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
34
(g) OTHER AGREEMENTS WITH RESPECT TO INDEMNIFICATION. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Shareholders with respect to indemnification.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, CHS and
the Selling Shareholders, on the one hand and the International Managers on the
other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company, CHS and the Selling Shareholders on the one hand and of the
International Managers on the other hand in connection with the statements or
omissions, which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, CHS and the Selling
Shareholders on the one hand and the International Managers on the other hand in
connection with the offering of the International Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the International Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the Selling
Shareholders and the total underwriting discount received by the International
Managers, in each case as set forth on the cover of the International Prospectus
bear to the aggregate initial public offering price of the International
Securities as set forth on such cover.
The relative fault of the Company, CHS and the Selling Shareholders on the
one hand and the International Managers on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Selling Shareholders or
by the International Managers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, CHS, the Selling Shareholders and the International Managers
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the International
Managers were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified
35
party and referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the International Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such International Manager has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission and (ii) no Selling Shareholder shall be required to contribute any
amount in excess of the amount of the total net proceeds received by such
Selling Shareholder from the sale of the Securities pursuant to this Agreement
or on a basis other than as specified in Section 6(b) or 6(c) as the case may
be.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company or CHS, each officer of
the Company who signed the Registration Statement, and each person, if any, who
controls the Company or any Selling Shareholder within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company and CHS or such Selling Shareholder, as the case may
be. The International Managers' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial International
Securities set forth opposite their respective names in Schedule A hereto and
not joint. The Selling Shareholders' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of initial
U.S. securities set forth opposite their respective names in Schedule B hereto
and not joint.
The provision of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company, CHS or any of their subsidiaries
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any
36
investigation made by or on behalf of any International Manager or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the International Managers.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Lead Managers may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the International Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Lead Managers, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
37
SECTION 10. DEFAULT BY ONE OR MORE OF THE INTERNATIONAL MANAGERS. If one
or more of the International Managers shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Lead Managers shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting International Managers, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the Lead
Managers shall not have completed such arrangements within such 24-hour period,
then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of International Securities to be purchased on such date, each
of the non-defaulting International Managers shall be obligated, severally
and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of International Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after
Closing Time, the obligation of the International Managers to purchase and
of the Selling Shareholders to sell the International Option Securities to
be purchased and sold on such Date of Delivery, shall terminate without
liability on the part of any non-defaulting International Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which occurs after Closing
Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the Lead Managers or
the Company shall have the right to postpone Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "International
Manager" includes any person substituted for a International Manager under this
Section 10.
38
SECTION 11. DEFAULT BY ONE OR MORE OF THE SELLING SHAREHOLDERS OR THE
COMPANY.
(a) If a Selling Shareholder shall fail at Closing Time or at a Date of
Delivery to sell and deliver the number of Securities which such Selling
Shareholder or Selling Shareholders are obligated to sell hereunder, and the
remaining Selling Shareholders do not exercise the right hereby granted to
increase, pro rata or otherwise (including, without limitation, solely by the
Forstmann Little & Co. Selling Shareholders listed on Schedule E hereto), the
number of Securities to be sold by them hereunder to the total number to be sold
by all Selling Shareholders as set forth in Schedule B hereto, then the
International Managers may, at option of the Lead Managers, by notice from the
International Managers to the Company and the non-defaulting Selling
Shareholders, either (a) terminate this Agreement without any liability on the
fault of any non-defaulting party except that the provisions of Sections 1, 4,
6, 7 and 8 shall remain in full force and effect or (b) elect to purchase the
Securities which the non-defaulting Selling Shareholders and the Company have
agreed to sell hereunder. No action taken pursuant to this Section 11 shall
relieve any Selling Shareholder so defaulting from liability, if any, in respect
of such default.
In the event of a default by any Selling Shareholder as referred to in
this Section 11, each of the Lead Managers, the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing Time or Date of
Delivery for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectus or in any other documents or
arrangements.
(b) If the Company shall fail at Closing Time or at the Date of Delivery
to sell the number of Securities that it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any
nondefaulting party; provided, however, that the provisions of Sections 1, 4, 6,
7 and 8 shall remain in full force and effect. No action taken pursuant to this
Section shall relieve the Company form liability, if any, in respect of such
default.
39
SECTION 12. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at North Tower,
World Financial Center, New York, New York 10281-1201, attention of Syndicate
Operations, with a copy to Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, attention of Xxxxxxx X. Xxxxx; and notices to the Company, CHS or the
Selling Shareholders shall be directed to them at 000 Xxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxx 00000, attention of Xxxxxx X. Xxxxxxx, Vice President,
Secretary and General Counsel, with a copy to Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxxxxx
Xxxxxx.
SECTION 13. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the International Managers and the Company and the Selling
Shareholders and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the International Managers and the Company and CHS and
the Selling Shareholders and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the International Managers and the Company and the
Selling Shareholders and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any International Manager shall be deemed to be a successor by
reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES THEREOF. EXCEPT AS OTHERWISE SET
FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
40
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Shareholders a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement between the International Managers, the Company, CHS
and the Selling Shareholders in accordance with its terms.
Very truly yours,
COMMUNITY HEALTH SYSTEMS, INC.
By _________________________________
Name:
Title:
CHS/COMMUNITY HEALTH SYSTEMS, INC.
By: ________________________________
Name:
Title:
SELLING SHAREHOLDERS
[Names To Come]
By: ________________________________
Name:
As Attorney-in-Fact acting on behalf of
the Selling Shareholders named in Schedule B
hereto.
CONFIRMED AND ACCEPTED,
as of the date first above written:
41
XXXXXXX XXXXX INTERNATIONAL
CREDIT SUISSE FIRST BOSTON
(EUROPE) LIMITED
BANK OF AMERICA INTERNATIONAL
LIMITED
CHASE MANHATTAN INTERNATIONAL
LIMITED
XXXXXXX XXXXX INTERNATIONAL
XXXXXX XXXXXXX & CO.
INTERNATIONAL LIMITED
BY: XXXXXXX XXXXX
INTERNATIONAL
By: _______________________________
Authorized Signatory
For themselves and as Lead Managers of the
other International Managers named in
Schedule A hereto.
42
SCHEDULE A
Number of
Initial
International
Name of International Manager Securities
----------------------------- ---------
Xxxxxxx Xxxxx International..................
Credit Suisse First Boston (Europe) Limited..
Bank of America International Limited........
Chase Securities International Limited.......
Xxxxxxx Xxxxx International..................
Xxxxxx Xxxxxxx & Co. International Limited...
Total........................................
===========
43
SCHEDULE B
Maximum
Number of Number of
Initial U.S. Option
Securities Securities
---------- ----------
Community Health Systems, Inc. *
Selling Shareholders
--------------------
[Name]
[Name]
[Name]
Total.......................................
* No Option Securities.
44
SCHEDULE C
COMMUNITY HEALTH SYSTEMS, INC.
_ Shares of Common Stock
(Par Value $.01 Per Share)
1. The public offering price per share for the Securities, determined
as provided in said Section 2, shall be $___.
2. The purchase price per share for the International Securities to be
paid by the several International Underwriters shall be $___, being an amount
equal to the initial public offering price set forth above less $.__ per share;
provided that the purchase price per share for any International Option
Securities purchased upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial International
Securities but not payable on the International Option Securities.
45
SCHEDULE D
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxx
J. Xxxxxxx Xxxxxxxxx
Xxxxxxxx X. Xxxxxxxxx
Xxxxxxxx X. Xxxxxxxxx
Xxxx X. Xxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxx
Xxxxx X. Xxxxx
W. Xxxxx Xxxx
Xxxx Xxxxxxxx
Xxxxx Xxxxxx
Xxxx Xxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxxxxx
T. Xxxx Xxxxxx
Xxxxxxx X. Xxxxxxx
46
Exhibit A-1
FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(i)
[to come]
47
Exhibit A-2
FORM OF OPINION OF FRIED, FRANK,
HARRIS, XXXXXXX & XXXXXXXX
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(ii)
[to come]
48
[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO
SECTION 5(K)]
Exhibit B
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Credit Suisse First Boston Corporation
Banc of America Securities LLC
Chase Securities Inc.
Xxxxxxx, Xxxxx & Co.
Xxxxxx Xxxxxxx & Co. Incorporated
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
Xxxxxxx Xxxxx International
Credit Suisse First Boston (Europe) Limited
Bank of America International Limited
Chase Manhattan International Limited
Xxxxxxx Xxxxx International
Xxxxxx Xxxxxxx & Co. International Limited
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Proposed Public Offering by Community Health Systems
Dear Sirs:
The undersigned, a stockholder and/or an officer and/or a director of Community
Health Systems, Inc. a Delaware corporation (the "Company"), understands that
(i) Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), Credit Suisse First Boston Corporation, and Banc of America
Securities LLC, Chase Securities Inc., Xxxxxxx, Xxxxx & Co. and Xxxxxx Xxxxxxx &
Co. Incorporated propose to enter into a U.S. Purchase Agreement (the "U.S.
Purchase Agreement") with the Company and the selling shareholders listed in
Schedule B to the U.S. Purchase Agreement (the "Selling Shareholders") providing
for the public offering of shares (the "Securities") of the Company's common
stock, par value $.01 per share (the "Common Stock") and (ii) Xxxxxxx Xxxxx
International, Credit Suisse First Boston (Europe) Limited,
49
Bank of America International Limited, Chase Manhattan International Limited,
Xxxxxxx Xxxxx International and Xxxxxx Xxxxxxx & Co. International Limited
propose to enter into an International Purchase Agreement with the Company
providing for the public offering of the Common Stock of the Company (together
with the U.S. Purchase Agreement, the "Purchase Agreements"). In recognition of
the benefit that such an offering will confer upon the undersigned as a
stockholder and/or an officer and/or a director of the Company, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Purchase Agreements that, during a period of 180 days from the date of the
Purchase Agreements, the undersigned will not, without the prior written consent
of Xxxxxxx Xxxxx, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise. [The foregoing restriction will not
apply to Securities to be sold by the Selling Shareholders under the Purchase
Agreements.]1
Notwithstanding the foregoing, the undersigned may transfer shares of Common
Stock (i) as a bona fide gift or gifts, provided that prior to such transfer the
donee or donees thereof agree in writing to be bound by the restrictions set
forth herein, (ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, provided that prior to
such transfer the trustee of the trust agrees in writing to be bound by the
restrictions set forth herein, and provided further that any such transfer shall
not involve a disposition for value or (iii) if such transfer occurs by
operation of law, such as rules of descent and distribution, statutes governing
the effects of a merger or a qualified domestic order, provided that prior to
such transfer the transferee executes an agreement stating that the transferee
is receiving and holding the shares subject to the provisions of this agreement.
For purposes of this Lock-Up Agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
----------
1 To be included in the lock-up agreements to be signed by the Selling
Shareholders.
50
Very truly yours,
Signature: _________________________
Print Name
51
