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
INTERNATIONAL PURCHASE AGREEMENT..................................................................1
SECTION 1. Representations and Warranties..................................................4
(a) Representations and Warranties by the Company...................................4
(b) Officer's Certificates.........................................................15
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing................................15
(a) Initial Securities.............................................................15
(b) Option Securities..............................................................15
(c) Payment........................................................................16
(d) Denominations; Registration....................................................16
SECTION 3. Covenants of the Company.......................................................17
(a) Compliance with Securities Regulations and
Commission Requests............................................................17
(b) Filing of Amendments...........................................................17
(c) Delivery of Registration Statements............................................17
(d) Delivery of Prospectuses.......................................................18
(e) Continued Compliance with Securities Laws......................................18
(f) Blue Sky Qualifications........................................................18
(g) Rule 158.......................................................................19
(h) Use of Proceeds................................................................19
(i) Listing........................................................................19
(j) Restriction on Sale of Securities..............................................19
(k) Reporting Requirements.........................................................19
(l) Compliance with NASD Rules.....................................................20
(m) Compliance with Rule 463.......................................................20
SECTION 4. Payment of Expenses ...........................................................20
(a) Expenses.......................................................................20
(b) Termination of Agreement.......................................................20
SECTION 5. Conditions of U.S. Underwriters' Obligations...................................21
(a) Effectiveness of Registration Statement........................................21
(b) Opinion of Counsel for the Company.............................................21
(c) Opinion of Counsel for the U.S. Underwriters...................................21
(d) Officers' Certificate..........................................................21
(e) Accountant's Comfort Letter....................................................22
(f) Bring-down Comfort Letter......................................................22
(g) Approval of Listing............................................................22
(h) No Objection...................................................................22
(i) Lock-up Agreements.............................................................22
(j) Purchase of Initial International Securities...................................22
(k) Recapitalization...............................................................23
(l) Conditions to Purchase of U.S. Option Securities...............................23
(m) Additional Documents...........................................................23
(n) Termination of Agreement.......................................................24
SECTION 6. Indemnification ...............................................................24
(a) Indemnification of the U.S. Underwriters.......................................24
(b) Indemnification of Company, Directors and Officers.............................25
(c) Actions against Parties; Notification..........................................26
(d) Settlement without Consent if Failure to Reimburse.............................26
(e) Indemnification for Reserved Securities........................................26
SECTION 7. Contribution ..................................................................27
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.................28
SECTION 9. Termination of Agreement.......................................................28
(a) Termination; General...........................................................28
(b) Liabilities....................................................................29
SECTION 10. Default by One or More of the U.S. Underwriters................. ..............29
SECTION 11. Notices .......................................................................30
SECTION 12. Parties .......................................................................30
SECTION 13. GOVERNING LAW AND TIME ........................................................30
SECTION 14. Effect of Headings ............................................................30
SCHEDULES
Schedule A - List of Underwriters......................................................Sch A-1
Schedule B - Pricing Information.......................................................Sch B-1
Schedule C - List of Persons subject to Lock-up........................................Sch C-1
EXHIBITS
Exhibit A-1 - Form of Opinion of Company's General Counsel.........................A-1-1
Exhibit A-2 - Form of Opinion of Fried, Frank, Harris, Xxxxxxx
& Xxxxxxxx.........................................................A-2-1
Exhibit B - Form of Lock-up Letter..........................................B-1-1
COMMUNITY HEALTH SYSTEMS, INC.
(a Delaware corporation)
_ Shares of Common Stock
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
_, 2000
XXXXXXX XXXXX INTERNATIONAL
Bank of America International Limited
Chase Manhattan International Limited
Credit Suisse First Boston (Europe) 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. (formerly known as Community
Health Systems Holding Corp.), a Delaware corporation (the "Company"), and
CHS/Community Health Systems, Inc. (formerly known as Community Health Systems,
Inc.), a Delaware corporation ("CHS"), confirm their agreement 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, Bank of America International Limited, Chase
Securities Inc., Credit Suisse First Boston (Europe) Limited, 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 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
said Schedule A, and with respect to the grant by the Company 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".
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It is understood that the Company and CHS 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
(AMerrill Xxxxx@), Banc of America Securities LLC, Chase Securities Inc., Credit
Suisse First Boston Corporation, Xxxxxxx, Xxxxx & Co. and Xxxxxx Xxxxxxx & Co.
Incorporated are acting as representatives (the "U.S. Representatives") and the
grant by the Company 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 is 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 and CHS 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, CHS and the International Managers agree that up to _
shares of the Initial International Securities to be purchased by the
International Managers and that up to _ shares of the Initial U.S. Securities to
be purchased by the U.S. Underwriters (collectively, the "Reserved Securities")
shall be reserved for sale by the Underwriters to some of the Company's
directors, officers, employees, business associates and related persons
(collectively, "Eligible Persons"), as part of the distribution of the
Securities by the Underwriters, subject to the terms of this Agreement, the U.S.
Purchase Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. (the "NASD"), the 1933 Act (as
defined below), the 1933 Act Regulations (as defined below) and all other
applicable laws, rules and regulations. To the extent that such Reserved
Securities are not orally confirmed for purchase by such Eligible Persons by the
end of the first business day after the date of this Agreement, such Reserved
Securities may be offered to the public as part of the public offering
contemplated hereby.
2
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-_) 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 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").
Immediately prior to the consummation of the offering of the
Securities, (I) each outstanding share of the Company's Class B common stock
will be exchanged pursuant to the Company's certificate of incorporation for _
shares of the Company's Class A common stock; (ii) each outstanding option to
purchase a share of the Company's Class C common stock will be exchanged for an
option to purchase _ shares of the Company's Class A common STOCK; (iii) the
Class A common stock will be redesignated as Common Stock; (IV) the Company will
effect a _-for-_ stock split with respect to the Common Stock; aNd (v) the
Company's certificate of incorporation will be amended and restaTED to reflect a
single class of common stock (which is the Common Stock), and to increase the
number of authorized shares of Common Stock and preferred stock (collectively,
(i) through (v) are referred to as the "Recapitalization").
3
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 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, and the Prospectuses, any preliminary
prospectuses and any supplement thereto or prospectus wrapper prepared
in connection therewith, at their respective times of issuance and at
the Closing Time, complied and will comply in all material respects
with any applicable laws or regulations of foreign jurisdictions in
which the Prospectuses and such preliminary prospectuses, as amended
or supplemented, if applicable, are distributed in connection with the
offer and sale of Reserved Securities. 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
4
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 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
5
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.
(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 issued and outstanding capital stock of the Company 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
6
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 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) The consummation of the Recapitalization has been duly
authorized by the Company's board of directors and security holders,
and no other corporate proceedings on the part of the Company are
needed to authorize the Recapitalization.
(xi) 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 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
7
from the sale of the Securities as described in the Prospectuses under
the caption "Use of Proceeds" and the completion of the
Recapitalization) 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.
(xii) 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.
(xiii) 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 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 Recapitalization, 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.
8
(xiv) 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.
(xv) 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.
(xvi) 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 Recapitalization or the
transactions contemplated by this Agreement and the U.S. Purchase
Agreement, except (i) 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 and (ii) such as have been obtained
under the laws and regulations of jurisdictions outside the United
States in which the Reserved Securities are offered.
(xvii) 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
9
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 five
hospitals acquired by the Company since September 1, 1999).
(xviii) 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 such third party payors do not and shall not
materially exceed amounts the Company, CHS and their subsidiaries are
entitled to receive.
(xix) 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. Sections
1320a-7 (Program Exclusion), 1320a-7a (Civil Monetary Penalties),
1320a-7b (the Anti-kickback Statute), 42 U.S.C. Section 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. Section 1071 ET SEQ., the Federal Civil False
Claims Act, 31 U.S.C. Sections 3729-32, Federal Criminal False Claims
Act, 18 U.S.C. Section 287, False Statements Relating to Health Care
Matters, 18 U.S.C. Section 1035, Health Care Fraud, 18 U.S.C. Section
1347, or the federal Food, Drug & Cosmetics Act, 21 U.S.C. Section
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
10
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
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.
(xx) 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 Prospectus, 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.
(xxi) 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
11
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.
(xxii) 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 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").
(xxiii) 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.
(xxiv) REGISTRATION RIGHTS. Except as disclosed in the
Prospectuses under the caption "Shares Eligible for Future
SaleBRegistration Rights," there are no persons with registration
rights or other similar rights to have any securities of the Company,
CHS or
12
any of their subsidiaries registered pursuant to the Registration
Statement or otherwise registered by the Company or any other person
under the 1933 Act.
(xxv) 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.
(xxvi) 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 States real property holding corporation"
within the meaning of Section 897(c)(2) of the Internal Revenue Code
of 1986, as amended (the "Code").
13
(xxvii) 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").
(xxviii) 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.
(xxix) 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.
(xxx) 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.
(xxxi) YEAR 2000. The Company and CHS have reviewed their
operations and those of the hospitals owned, leased or operated by
them to evaluate the extent to which the business or operations or any
of the hospitals owned, leased or operated by them will be affected by
the Year 2000 Problem. The Company does not anticipate incurring
operating expenses or costs material to the financial position or
results of operations of the Company and the hospitals owned, leased
or operated by it in connection the Year 2000 Problem. As a result of
the aforementioned review, the Company has no reason to believe that
the Year 2000 Problem would reasonably be expected to have a Material
Adverse Effect. The "Year 2000 Problem" as used herein means any risk
that computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1,
2000.
14
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Company, CHS or any of their subsidiaries delivered to 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.
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 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, at the price per share set forth in Schedule B,
the number of Initial International Securities set forth in Schedule A opposite
the name of such International Manager, 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 Company hereby grants an option to the
International Managers, severally and not jointly, to purchase up to an
additional _ shares of Common Stock at the price per share set forth in Schedule
B, 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 Company 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, 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,
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 the provisions of Section 10), or such
other time not later than ten business
15
days after such date as shall be agreed upon by the Global Coordinator and the
Company (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 Company, on each Date
of Delivery as specified in the notice from the Global Coordinator to the
Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, 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.
16
(e) APPOINTMENT OF QUALIFIED INDEPENDENT UNDERWRITER. The Company
hereby confirms its engagement of Xxxxxxx Xxxxx as, and Xxxxxxx Xxxxx hereby
confirms its agreement with the Company to render services as, a "qualified
independent underwriter" within the meaning of Rule 2720 of the Conduct Rules of
the National Association of Securities Dealers, Inc. with respect to the
offering and sale of the International Securities. Xxxxxxx Xxxxx, solely in its
capacity as qualified independent underwriter and not otherwise, is referred to
herein as the "Independent Underwriter".
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
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
17
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.
(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
18
or to qualify as a foreign corporation or as a 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 180
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, or (E) the issuance by the Company of
shares of Common Stock pursuant to the Recapitalization.
(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
19
time periods required by the 1934 Act and the rules and regulations of
the Commission thereunder.
(l) COMPLIANCE WITH NASD RULES. The Company hereby agrees that it
will ensure that the Reserved Securities will be restricted as
required by the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of this
Agreement. The Underwriters will notify the Company as to which
persons will need to be so restricted. At the request of the
Underwriters, the Company will direct the transfer agent to place a
stop transfer restriction upon such securities for such period of
time. Should the Company release, or seek to release, from such
restrictions any of the Reserved Securities, the Company agrees to
reimburse the Underwriters for any reasonable expenses (including,
without limitation, legal expenses) they incur in connection with such
release.
(m) COMPLIANCE WITH RULE 463. The Company will comply with the
requirements of Rule 463 of the 1933 Act Regulations.
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.
20
(b) 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 and CHS 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.
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 and CHS contained
in Section 1 hereof or in certificates of any officer of the Company, CHS or any
of their subsidiaries 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 therefor 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
(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 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.
21
(d) 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.
(e) 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.
(f) 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.
(g) 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.
(h) 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.
(i) 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.
(j) PURCHASE OF INITIAL U.S. SECURITIES. Contemporaneously with the
purchase by the International Managers of the Initial International Securities
under this Agreement,
22
the U.S. Underwriters shall have purchased the Initial U.S. Securities under the
U.S. Purchase Agreement.
(k) RECAPITALIZATION. Prior to the purchase of the Securities by the
Underwriters, the Recapitalization shall have been consummated.
(l) 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 contained herein and the
statements in any certificates furnished by the Company or any subsidiary of the
Company 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) 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.
(iii) 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 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.
(iv) 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.
(m) 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
23
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company 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.
(n) 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. (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 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, arising out of (A) the violation of any applicable
laws or regulations of any jurisdiction where Reserved Securities have been
offered and (B) any untrue statement or alleged untrue statement of a
material fact included in the supplement or prospectus wrapper material
distributed in any jurisdiction in connection with the reservation and sale
of the Reserved Securities to employees, directors and other persons with
relationships with the Company who have expressed an interest in purchasing
the Reserved Securities or the omission or alleged omission therefrom of a
material fact necessary to make the statements therein, when considered in
conjunction with the Prospectuses or preliminary prospectuses, not
misleading;
(iii) 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
24
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, or any such alleged untrue statement or
omission or in connection with any violation of the nature referred to in
Section 6(a)(1)(ii)(A) hereof; provided that (subject to Section 6(d)
below) any such settlement is effected with the written consent of the
Company; and
(iv) 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 or
in connection with any violation of the nature referred to in Section
6(a)(1)(ii)(A) hereof, 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 (x) 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 (y) 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.
(2) In addition to and without limitation of the Company's obligation to
indemnify Xxxxxxx Xxxxx as an Underwriter, the Company also agrees to indemnify
and hold harmless the Independent Underwriter and each person, if any, who
controls the Independent Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, from and against any and all loss,
liability, claim, damage and expense whatsoever, as incurred, incurred as a
result of the Independent Underwriter's participation as a "qualified
independent underwriter" within the meaning of Rule 2720 of the Conduct Rules of
the National Association of Securities Dealers, Inc. in connection with the
offering of the International Securities.
(3) 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
25
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 COMPANY, DIRECTORS AND OFFICERS. 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 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 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).
(c) 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; provided, that, if indemnity is
sought pursuant to Section 6(a)(2), then, in addition to the fees and expenses
of such counsel for the indemnified parties, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one counsel (in
addition to any local counsel) separate from its own counsel and that of the
other indemnified parties for the Independent Underwriter in its capacity as a
"qualified independent underwriter" and all persons, if any, who control the
Independent Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of 1934 Act 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 if, in the reasonable judgment of the Independent
Underwriter, there may exist a conflict of interest between the Independent
Underwriter and the other indemnified parties. Any such separate counsel for the
Independent Underwriter and such control persons of the Independent Underwriter
shall be designated in writing by the Independent Underwriter. No indemnifying
party shall,
26
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.
(d) 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)(iii) 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.
(e) INDEMNIFICATION FOR RESERVED SECURITIES. In connection with the offer
and sale of the Reserved Securities, the Company and CHS jointly and severally
agree, promptly upon a request, in writing, to indemnify and hold harmless the
Underwriters from and against any and all losses, liabilities, claims, damages
and expenses incurred by them as a result of the failure of Eligible Persons who
have expressed an interest in purchasing the Reserved Securities to pay for and
accept delivery of Reserved Securities which, by the end of the first business
day following the date of this Agreement, were subject to a properly confirmed
agreement to purchase.
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 and CHS 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 and CHS on the one hand and of
the International Managers on the other hand in connection with the statements
or omissions, or in connection with any violation of the nature referred to in
Section 6(a)(1)(ii)(A) hereof, 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 and CHS 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
27
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 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, and CHS 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 or by the International Managers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission or any violation of the nature
referred to in Section 6(a)(1)(ii)(A) hereof.
The Company, CHS and the International Managers agree that Xxxxxxx Xxxxx
will not receive any additional benefits hereunder for serving as the
Independent Underwriter in connection with the offering and sale of the
International Securities.
The Company, CHS 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 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.
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 a
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 within the meaning of Section 15 of the 1933 Act or Section
20
28
of the 1934 Act shall have the same rights to contribution as the Company and
CHS. 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.
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 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, 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.
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
29
as may be agreed upon and upon the terms herein set forth; if, however, the Lead
Mangers 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 Company to
sell the 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.
SECTION 11. 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 or CHS 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 12. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the International Managers and the Company 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 their respective successors
and the controlling persons and officers and directors referred to in Sections 6
and 7
30
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 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 13. 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 14. 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.
31
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the International Managers, the Company and CHS in accordance with its terms.
Very truly yours,
COMMUNITY HEALTH SYSTEMS, INC.
By _____________________________
Name:
Title:
CHS/COMMUNITY HEALTH SYSTEMS, INC.
BY _____________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX INTERNATIONAL
BANK OF AMERICA INTERNATIONAL
LIMITED
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON (EUROPE)
LIMITED
XXXXXXX XXXXX INTERNATIONAL
XXXXXX XXXXXXX & CO.
INTERNATIONAL LIMITED
BY: XXXXXXX XXXXX INTERNATIONAL
By _____________________________
Authorized Signatory
For themselves and as Lead Mangers of the
other International Managers named in
Schedule A hereto.
SCHEDULE A
32
Number of
NAME OF Initial International
INTERNATIONAL SECURITIES
MANAGER
Xxxxxxx Xxxxx International
Bank of America International Limited
Chase Securities Inc.
Credit Suisse First Boston (Europe) Limited
Xxxxxxx Xxxxx International
Xxxxxx Xxxxxxx & Co. International Limited
----------
Total _
----------
Sch A - 2
SCHEDULE B
COMMUNITY HEALTH SYSTEMS, INC.
_ Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial 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 Managers
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.
Sch B - 1
SCHEDULE C
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
Xxxxxxx X. Xxxxxxx
All other Class B Stockholders
Sch C - 1
Exhibit A-1
FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(i)
_________________, 2000
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Banc of America Securities LLC
Chase Securities Inc.
Credit Suisse First Boston Corporation
Xxxxxxx, Xxxxx & Co.
Xxxxxx Xxxxxxx & Co. Incorporated
As U.S. Representatives of the several U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Xxxxxxx Xxxxx International
Bank of America International Limited
Chase Securities Inc.
Credit Suisse First Boston (Europe) Limited
Xxxxxxx Xxxxx International
Xxxxxx Xxxxxxx & Co. International Limited
As Lead Managers of the several International Managers
c/o Merrill Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx XX0X 0XX
Ladies and Gentlemen:
I am Vice President, Secretary and General Counsel of Community Health
Systems, Inc., a Delaware corporation (the "Company"), and CHS/Community Health
Systems, Inc., a Delaware corporation and a wholly owned subsidiary of the
Company ("CHS"). I am delivering this opinion pursuant to (i) Section 5(b)(i) of
the U.S. Purchase Agreement, dated __________, 2000 (the "U.S. Purchase
Agreement"), among the Company, CHS and Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, Banc of America Securities LLC, Chase
Securities Inc., Credit Suisse First Boston Corporation, Xxxxxxx, Xxxxx & Co.
and Xxxxxx Xxxxxxx & Co. Incorporated, as
Xxxxxxx Xxxxx & Co. et al.
2
_________________, 2000
U.S. Representatives of the several U.S. Underwriters named in Schedule A
thereto, and (ii) Section 5(b)(i) of the International Purchase Agreement, dated
_________, 2000 (the "International Purchase Agreement," and together with the
U.S. Purchase Agreement, the "Purchase Agreements"), among the Company, CHS and
Xxxxxxx Xxxxx International, Bank of America International Limited, Chase
Securities Inc., Credit Suisse First Boston (Europe) Limited, Xxxxxxx Xxxxx
International and Xxxxxx Xxxxxxx & Co. International Limited, as Lead Managers
of the several International Managers named in Schedule A thereto. All
capitalized terms used herein that are defined in, or by reference in, the
Purchase Agreements have the meanings assigned to such terms therein, or by
reference therein, unless otherwise defined herein. With your permission, all
assumptions and statements of reliance expressly set forth herein have been made
without any independent investigation or verification on my part except to the
extent otherwise expressly stated, and, except to the extent otherwise expressly
stated, I express no opinion with respect to the subject matter or accuracy of
such assumptions or items relied upon.
In connection with this opinion, I have (i) investigated such
questions of law, (ii) examined originals or certified, conformed or
reproduction copies of such agreements, instruments, documents and records of
the Company and CHS, such certificates of public officials and such other
documents and (iii) received such information from officers and representatives
of the Company, CHS and others, in each case as I have deemed necessary or
appropriate for the purposes of this opinion.
In all such examinations, I have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of original
and certified documents and the conformity to original or certified copies of
all copies submitted to me as conformed or reproduction copies. As to various
questions of fact relevant to the opinions expressed herein, I have relied upon,
and assume the accuracy of, the representations and warranties contained in the
Purchase Agreements and certificates and oral or written statements and other
information of or from public officials, officers or representatives of the
Company, CHS and others and assume compliance on the part of all parties to the
Purchase Agreements with the covenants and agreements contained therein.
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, I am of the opinion that:
1. The Company 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 result in a Material Adverse Effect.
2. Each subsidiary of the Company has been duly incorporated 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
Xxxxxxx Xxxxx & Co. et al.
3
_________________, 2000
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 result in a
Material Adverse Effect.
3. Except as otherwise disclosed in the Registration Statement, all of
the issued and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and, to the best
of my knowledge, is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; 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.
4. All descriptions in the Prospectuses of contracts and other
documents to which the Company, CHS or their subsidiaries are a party are
accurate in all material respects; to the best of my knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto, and the descriptions thereof
or references thereto are correct in all material respects.
5. None of the Company or CHS is in violation of its charter or
by-laws.
6. The Company, CHS and each of their subsidiaries and each of the
hospitals owned, leased or operated by any of them have all necessary permits,
licenses, certificates, approvals (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 ("Governmental Licenses") (except where
the failure to have such Governmental Licenses, individually or in the
aggregate, would not reasonably be expected to have a material adverse effect on
the business, operations or financial condition of the Company, CHS and their
subsidiaries taken as a whole), to own their respective properties and to
conduct their respective businesses as now being conducted.
7. No filing, consent, approval, authorization, order, registration or
qualification of or with any Tennessee court or governmental agency or body is
required by or on behalf of the Company for the sale of the Securities or the
consummation by the Company and CHS of the transactions contemplated by the
Purchase Agreements, expect for such consents, approvals, authorizations,
orders, registrations or qualifications as may be required under state or
foreign securities or Blue Sky laws, rules and regulations in connection with
the purchase and distribution of the Securities by the Underwriters.
Xxxxxxx Xxxxx & Co. et al.
4
_________________, 2000
8. There is not pending or, to my knowledge, threatened any
action, suit, proceeding, inquiry or investigation to which the Company or any
subsidiary is a party, or to which the property of the Company or any subsidiary
is subject, before or brought by any court or governmental agency or body,
domestic or foreign, which would reasonably result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely affect the
consummation of the Recapitalization, the transactions contemplated in the
Purchase Agreements or the performance by the Company of its obligations
thereunder; it being understood that I express no opinion with respect to any
"qui tam" action as to which I have no knowledge of its pendency.
9. The statements in the Prospectuses under "Business - Legal
Proceedings," "Business - Government Regulations", Business - Payment" and
"Business - Compliance Program," in so far as they constitute summaries of legal
matters or documents referred to therein, fairly summarize in all material
respects the matters referred to therein.
In the course of the preparation by the Company of the Registration
Statement and the Prospectuses, I attended conferences with certain of the
officers and representatives of the Company and CHS, representatives of the
independent public accountants for the Company and CHS and representatives of
the Underwriter, at which the contents of the Registration Statement and the
Prospectuses were discussed. Between the date of effectiveness of the
Registration Statement and the time of delivery of this opinion, I attended
additional conferences with certain of the officers and representatives of, and
the independent public accountants for, the Company and CHS, at which the
contents of the Prospectuses were discussed to a limited extent. Given the
limitations inherent in the independent verification of factual matters and the
character of determinations involved in the registration process, I am not
passing upon and do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement and the
Prospectuses, other than as set forth in paragraph 5 above. Subject to the
foregoing and on the basis of the information I gained in the performance of the
services referred to above, including information obtained from officers and
other representatives of, and the independent accountants for, the Company and
CHS, nothing has come to my attention that causes me to believe that, as of the
time it became effective, the Registration Statement contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectuses as of their dates contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Also, subject to the
foregoing, nothing has come to my attention in the course of proceedings
described in the second sentence of this paragraph that causes me to believe
that the Prospectuses on the date and time of delivery of this letter contain an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under
Xxxxxxx Xxxxx & Co. et al.
5
_________________, 2000
which they were made, not misleading. I express no view or belief, however, with
respect to the financial statements, related notes and schedules thereto and
other financial data included in or omitted from the Registration Statement or
the Prospectuses.
The opinions expressed herein are limited to the federal laws of the
United States of America, the laws of the State of Tennessee and, to the extent
relevant to the opinions expressed herein, the General Corporation Law of the
State of Delaware, each as currently in effect. The opinions expressed herein
are given as of the date hereof, and I undertake no obligation to supplement
this letter if any applicable laws change after the date hereof or if I become
aware of any facts that might change the opinions expressed herein after the
date hereof or for any other reason.
The opinions expressed herein are solely for your benefit in
connection with the Purchase Agreements and may not be relied on in any manner
or for any purpose by any other person or entity and may not be quoted in whole
or in part without my prior written consent.
Very truly yours,
Xxxxxx X. Xxxxxxx
Vice President, Secretary
and General Counsel
Exhibit A-2
FORM OF OPINION OF FRIED, FRANK,
HARRIS, XXXXXXX & XXXXXXXX
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(ii)
212-859-8136
(FAX: 000-000-0000)
_________, 2000
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Banc of America Securities LLC
Chase Securities Inc.
Credit Suisse First Boston Corporation
Xxxxxxx, Xxxxx & Co.
Xxxxxx Xxxxxxx & Co. Incorporated
As U.S. Representatives of the several U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Xxxxxxx Xxxxx International
Bank of America International Limited
Chase Securities Inc.
Credit Suisse First Boston (Europe) Limited
Xxxxxxx Xxxxx International
Xxxxxx Xxxxxxx & Co. International Limited
As Lead Managers of the several International Managers
c/o Merrill Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx XX0X 0XX
A-2-4
Ladies and Gentlemen:
We are acting as special counsel to Community Health Systems, Inc., a
Delaware corporation (the "Company"), and CHS/Community Health Systems, Inc., a
Delaware corporation and a wholly owned subsidiary of
the Company ("CHS"), in connection with the underwritten public offering of
________ shares (the "Securities") of common stock, par value $.01 per share
(the "Common Stock"), of the Company. This opinion is delivered to you at the
Company's request pursuant to (i) Section 5(b)(ii) of the U.S. Purchase
Agreement, dated __________, 2000 (the "U.S. Purchase Agreement"), among the
Company, CHS and Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Banc of America Securities LLC, Chase Securities Inc., Credit
Suisse First Boston Corporation, Xxxxxxx, Xxxxx & Co. and Xxxxxx Xxxxxxx & Co.
Incorporated, as U.S. Representatives of the several U.S. Underwriters named in
Schedule A thereto, and (ii) Section 5(b)(ii) of the International Purchase
Agreement, dated _________, 2000 (the "International Purchase Agreement," and
together with the U.S. Purchase Agreement, the "Purchase Agreements"), among the
Company, CHS and Xxxxxxx Xxxxx International, Bank of America International
Limited, Chase Securities Inc., Credit Suisse First Boston (Europe) Limited,
Xxxxxxx Xxxxx International and Xxxxxx Xxxxxxx & Co. International Limited, as
Lead Managers of the several International Managers named in Schedule A thereto.
All capitalized terms used herein that are defined in, or by reference in, the
Purchase Agreements have the meanings assigned to such terms therein, or by
reference therein, unless otherwise defined herein. With your permission, all
assumptions and statements of reliance expressly set forth herein have been made
without any independent investigation or verification on our part except to the
extent otherwise expressly stated, and, except to the extent otherwise expressly
stated, we express no opinion with respect to the subject matter or accuracy of
such assumptions or items relied upon.
In connection with this opinion, we have (i) investigated such questions of
law, (ii) examined originals or certified, conformed or reproduction copies of
such agreements, instruments, documents and records of the Company and CHS, such
certificates of public officials and such other documents and (iii) received
such information from officers and representatives of the Company, CHS and
others, in each case as we have deemed necessary or appropriate for the purposes
of this opinion.
In all such examinations, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of original and
certified documents and the conformity to original or certified copies of all
copies submitted to us as conformed or reproduction copies. As to various
questions of fact relevant to the opinions expressed herein, we have relied
upon, and assume the accuracy of, the representations and warranties contained
in the Purchase Agreements and certificates and oral or written statements and
other information of or from public officials, officers or representatives of
the Company, CHS and others, and assume compliance on the part of all parties to
the Purchase Agreements with the covenants and agreements contained therein.
Insofar as statements herein are based upon our knowledge, such phrase means and
is limited to the conscious awareness of facts or other information by lawyers
in this Firm who gave substantive attention to the representation of the Company
and CHS in connection with the Purchase Agreements.
With respect to the opinion expressed in the second sentence
of paragraph 3 below, we have relied solely on the stock transfer books of the
Company. With respect to the opinions expressed in paragraphs 10 and 11 below,
our opinions are is limited to our review of only those laws and
A-2-5
regulations that, in our experience, are normally applicable to transactions of
the type contemplated in the Purchase Agreements. With respect to the opinion
expressed in paragraph 7, we have relied solely on the oral advice of the Staff
of the Securities and Exchange Commission (the "Commission") that the Commission
has issued an order declaring the registration under the 1933 Act of the U.S.
Securities effective and as to the absence of any stop order or any proceeding
relating thereto.
Based upon the foregoing, and subject to the limitations, qualifications
and assumptions set forth herein, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware. CHS has
been incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware.
2. Each of the Company and CHS has the 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 the
Purchase Agreements.
3. The Company has an authorized capitalization as set forth in the
Prospectuses under the caption "Capitalization". The outstanding shares of
Common Stock have been duly authorized and validly issued and are fully paid and
non-assessable. None of the outstanding shares of Common Stock were issued in
violation of the preemptive or other similar rights of any securityholder of the
Company.
4. The Securities to be purchased by the Underwriters from the Company
pursuant to the Purchase Agreements have been duly authorized for issuance and
sale to the Underwriters and, when issued and delivered by the Company pursuant
to the Purchase Agreements against payment of the consideration set forth in the
Purchase Agreements, will be duly authorized, validly issued, fully paid and
non-assessable and no holder of the Securities will be subject to personal
liability under the Delaware General Corporation Law by reason of being such a
holder.
5. The issuance and sale of the Securities by the Company is not subject
to preemptive or other similar rights arising under (i) the Delaware General
Corporation Law, (ii) the Restated Certificate of Incorporation or By-laws of
the Company, or (iii) any indenture, mortgage, deed of trust, loan agreement,
other agreement or instrument, or court decree or order (including, without
limitation, any settlement agreement) which has been filed as an exhibit to the
Registration Statement or otherwise identified to us in a certificate provided
by the Chief Financial Officer and the General Counsel of the Company as
material to the Company and its subsidiaries taken as a whole (collectively, the
"Identified Documents").
6. Each of the Purchase Agreements has been duly authorized, executed and
delivered by the Company and CHS.
7. The Registration Statement[, including any Rule 462(b) Registration
Statement,] has been declared effective under the 1933 Act and no stop order
suspending the effectiveness of the
A-2-6
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or threatened by the
Commission. Any required filing of the Prospectuses pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule 424(b).
8. The Registration Statement[, including any Rule 462(b) Registration
Statement,] the Prospectuses[, and each amendment or supplement to the
Registration Statement and the Prospectuses,] as of their respective effective
or issue dates (other than the financial statements, related notes, supporting
schedules and other financial data included therein or omitted therefrom, as to
which we express no opinion) appeared on their face to be responsive as to form
in all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
9. The statements in the Prospectuses under "Description of Capital Stock,"
"Description of our Indebtedness," "Shares Eligible for Future Sale" and "United
States Federal Income Tax Considerations for Non-United States Holders" and the
statements in the Registration Statement under Item 14, in so far as they
constitute summaries of legal matters or documents referred to therein, fairly
summarize in all material respects the matters referred to therein.
10. No filing, consent, approval, authorization, order, registration or
qualification of or with any United States, New York or, with respect to matters
arising under the Delaware General Corporation Law, Delaware court or
governmental agency or body is required by or on behalf of the Company for the
sale of the Securities or the consummation by the Company and CHS of the
transactions contemplated by the Purchase Agreements, except the registration
under the 1933 Act of the Securities and such consents, approvals,
authorizations, orders, registrations or qualifications as may be required under
state or foreign securities or Blue Sky laws, rules and regulations in
connection with the purchase and distribution of the Securities by the
Underwriters.
11. The execution, delivery and performance by the Company and CHS with all
of the provisions of the Purchase Agreements and the consummation of the
transactions contemplated by the Purchase Agreements and the Recapitalization do
not and will not conflict with, or result in a breach or violation of, any of
the terms or provisions of, or constitute a default or a Repayment Event 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, (i) any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries is
subject, (ii) the provisions of the Restated Certificate of Incorporation or
By-laws of the Company, (iii) the Delaware General Corporation Law or any
present law, or present regulation of any government agency or authority, of the
State of New York or the United States of America known by us to be applicable
to the Company or any of its subsidiaries or their respective properties or (iv)
any court decree or order binding upon the Company or any of its subsidiaries or
their respective properties (it being understood that with respect to the
opinions in clauses (i) and (iv) of this paragraph, such opinions are limited to
the Identified Documents.
A-2-7
12. Other than as disclosed in the Prospectuses, to our knowledge, there
are no persons with registration rights or other similar rights to have any
securities of the Company registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act.
13. The Company is not an "investment company," as such term is defined in
the Investment Company Act of 1940, as amended.
14. The Recapitalization was duly authorized by the Company's Board of
Directors and stockholders and has been consummated in accordance with its
terms.
In the course of our engagement to represent or to advise the Company, we
have not become aware of any pending legal proceeding before, or pending
investigation by, any court or administrative agency or authority or any
arbitration tribunal of the United States or the State of New York against or
directly affecting the Company, CHS or any of their respective subsidiaries or
properties which seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief in connection with or which would
materially adversely affect the legality, validity or enforceability of, the
Purchase Agreements, the Recapitalization or the transactions contemplated
thereby. In making the foregoing statement, we have endeavored, to the extent we
have believed necessary, to determine from lawyers currently in our Firm who
have performed substantive legal services for the Company, whether such services
involved substantive attention in the form of legal representation concerning
pending legal proceedings or pending investigations of the nature referred to
above. Beyond that, we have not made any review, search or investigation of
public files or records or files or records of the Company, CHS or any of their
respective subsidiaries or of their transactions, or any other investigation or
inquiry with respect to the foregoing statement.
In the course of the preparation by the Company of the Registration
Statement and the Prospectuses, we attended conferences with certain of the
officers and other representatives of the Company and CHS, representatives of
the independent public accountants for the Company and CHS and representatives
of the Underwriters, at which the contents of the Registration Statement and the
Prospectuses were discussed. Between the date of effectiveness of the
Registration Statement and the time of delivery of this opinion, we attended
additional conferences with certain of the officers and representatives of, and
the independent public accountants for, the Company and CHS, at which the
contents of the Prospectuses were discussed to a limited extent. Given the
limitations inherent in the independent verification of factual matters and the
character of determinations involved in the registration process, we are not
passing upon and do not assume any responsibility for the accuracy,
completenesss or fairness of the statements contained in the Registration
Statement and the Prospectuses, other than as set forth in paragraph 9 above.
Subject to the foregoing and on the basis of the information we gained in the
performance of the services referred to above, including information obtained
from officers and other representatives of, and the independent accountants for,
the Company and CHS, nothing has come to our attention that causes us to believe
that, as of the time it became effective, the Registration Statement contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectuses as of their dates contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Also, subject to
the foregoing, nothing
A-2-8
has come to our attention in the course of proceedings described in the second
sentence of this paragraph that causes us to believe that the Prospectuses on
the date and time of delivery of this letter contain an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. We express no view or belief, however, with respect to the financial
statements, related notes and schedules thereto and other financial data
included in or omitted from the Registration Statement or the Prospectuses.
The opinions set forth above are subject to the following qualifications:
A. With respect to the opinion expressed in paragraph 11 above: (i) we have
made no independent investigation as to whether the Identified Documents
identified to us in the Officer's Certificate, which are governed by the laws of
any jurisdiction other than the State of New York, will be enforced as written
under the laws of such jurisdiction; and (ii) we express no opinion with respect
to any conflict with or any breach or violation of, or default under, any
Identified Document (x) not readily ascertainable from the face of such
document, (y) arising under or based upon any cross-default provisions insofar
as such conflict, breach, violation or default relates to a default under a
document which is not an Identified Document, or (z) arising under or based upon
any covenant of a financial or numerical nature or which requires arithmetic
computation.
B. We express no opinion as to the indemnity, contribution or governing law
provisions of any agreement.
C. The opinions expressed above are subject to the effect of, and we
express no opinions herein as to, the application of state or foreign securities
or Blue Sky laws or any rules and regulations thereunder. The opinions expressed
herein are limited to the federal laws of the United States of America, the laws
of the State of New York and, to the extent relevant to the opinions expressed
herein, the General Corporation Law of the State of Delaware, each as currently
in effect. The opinions expressed herein are given as of the date hereof, and we
undertake no obligation to supplement this letter if any applicable laws change
after the date hereof or if we become aware of any facts that might change the
opinions expressed herein after the date hereof or for any other reason.
A-2-9
The opinions expressed herein are solely for your benefit in connection
with the Purchase Agreements and may not be relied on in any manner or for any
purpose by any other person or entity and may not be quoted in whole or in part
without our prior written consent.
Very truly yours,
FRIED, FRANK, HARRIS, XXXXXXX & XXXXXXXX
By:______________________________________
Xxxxxxx Xxxxxx
[FORM OF LOCK-UP AGREEMENT FROM DIRECTORS, OFFICERS OR
OTHER STOCKHOLDERS PURSUANT TO SECTION 5(I)]
Exhibit B
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Banc of America Securities LLC
Chase Securities Inc.
Credit Suisse First Boston Corporation
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
Bank of America International Limited
Chase Manhattan International Limited
Credit Suisse First Boston (Europe) 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") and Banc of America Securities LLC,
Chase Securities Inc., Credit Suisse First Boston Corporation, 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
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, Bank of America International Limited,
Chase Manhattan International Limited, Credit Suisse First Boston (Europe)
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.
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.
Very truly yours,
Signature:
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Print Name:
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