Exhibit 99(a)
HEALTH MANAGEMENT ASSOCIATES, INC.
$330,000,000
Principal Amount at Maturity
Zero-Coupon Convertible Senior Subordinated Notes due 2022
Purchase Agreement
January 22, 2002
CREDIT SUISSE FIRST BOSTON CORPORATION
SALOMON SMITH BARNEY INC.
HEALTH MANAGEMENT ASSOCIATES, INC.
Zero-Coupon Convertible Senior Subordinated Notes due 2022
January 22, 2002
CREDIT SUISSE FIRST BOSTON CORPORATION
11 Madison Avenue
New York, NY 10010
SALOMON SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
As Representatives of the Several Initial Purchasers
Named in Schedule A hereof
Dear Sirs:
Health Management Associates, Inc., a Delaware corporation
(the "Company"), proposes to issue and sell to the several parties named in
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Schedule A hereto (the "Initial Purchasers") for whom you (the
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"Representatives") are acting as representatives an aggregate of $330,000,000 in
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principal amount at maturity of its Zero-Coupon Convertible Senior Subordinated
Notes due 2022 (the "Firm Notes"), subject to the terms and conditions set forth
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herein. The Company also proposes to issue and sell to the Initial Purchasers
not more than an additional $60,000,000 principal amount at maturity of its
Zero-Coupon Convertible Senior Subordinated Notes due 2022 (the "Additional
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Notes"), if requested by the Initial Purchasers as provided in Section 2 hereof.
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The Firm Notes and the Additional Notes are herein collectively referred to as
the "Notes". The Notes are to be issued pursuant to the provisions of an
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indenture (the "Indenture"), to be dated as of the Closing Date (as defined
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below), between the Company, and First Union National Bank, a national banking
association, having an office in Miami, Florida (in such capacity, together with
its successors in trust, the "Trustee"), pursuant to which the Notes, as
provided therein, will be convertible at the option of the holders thereof into
shares of the Company's Class A Common Stock, par value $0.01 per share (the
"Common Stock"). The Notes and the Common Stock issuable upon conversion thereof
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are herein collectively referred to as the "Securities". The Securities and the
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Indenture are more fully described in the Offering Memorandum (as hereinafter
defined). Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Indenture.
1. Offering Memorandum. The Notes will be offered and sold to the
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Initial Purchasers pursuant to one or more exemptions from the registration
requirements under the Securities Act of 1933, as amended (the "Act"). The
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Company has prepared a final offering memorandum, dated January 22, 2002 (the
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"Offering Memorandum"), relating to the Notes, and such definition includes the
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documents incorporated by reference therein.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Notes (and all securities issued
in exchange therefor, in substitution thereof or upon conversion thereof) shall
bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE
HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT)(A "QIB"), OR (B) IT HAS ACQUIRED THIS DEBENTURE IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION
OF THE FOREGOING."
2. Agreements to Sell and Purchase. (a) On the basis of the
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representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and the Initial Purchasers agree,
severally and not jointly, to purchase from the Company, the principal amount at
maturity of Firm Notes set forth opposite its name as set forth on Schedule A
hereto at a purchase price equal to 82.298% of the principal amount at maturity
thereof (the "Purchase Price").
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(b) On the basis of the representations and warranties
contained in this Agreement, and subject to its terms and conditions, (i) the
Company agrees to issue and sell the
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Additional Notes and (ii) the Initial Purchasers shall have a right, but not the
obligation, to purchase, severally and not jointly, the Additional Notes, from
the Company at the Purchase Price. Additional Notes may be purchased solely for
the purpose of covering over-allotments made in connections with the Offering of
the Firm Notes. The Initial Purchasers may exercise their right to purchase
Additional Notes in whole or in part from time to time by giving written notice
thereof to the Company at any time within 13 days after the date of this
Agreement. The Representatives shall give any such notice on behalf of the
Initial Purchasers and such notice shall specify the aggregate principal amount
at maturity of Additional Notes to be purchased pursuant to such exercise and
the date for payment and delivery thereof. The date specified in any such notice
shall be a business day (i) no earlier than the Closing Date (as hereinafter
defined), (ii) no later than five business days after such notice has been given
and (iii) no earlier than two business days after such notice has been given. If
any Additional Notes are to be purchased, each Initial Purchaser, severally and
not jointly, agrees to purchase from the Company the principal amount at
maturity of Additional Notes which bears the same proportion to the total
principal amount at maturity of Additional Notes to be purchased from the
Company as the principal amount at maturity of Firm Notes set forth opposite the
name of such Initial Purchaser in Schedule A bears to the total principal amount
at maturity of Firm Notes.
3. Terms of Offering. The Initial Purchasers have advised the Company
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that the Initial Purchasers will make offers (the "Exempt Resales") of the Notes
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purchased hereunder on the terms set forth in the Offering Memorandum, as
amended or supplemented, solely to persons whom the Initial Purchasers
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Act ("QIBs", such persons being also referred to herein as
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"Eligible Purchasers"), or to non-U.S. persons ("Regulation S Buyers") in
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accordance with Rule 903 under the Act. The Initial Purchasers will offer the
Notes to Eligible Purchasers and Regulation S Buyers initially at a price equal
to 83.978% of the principal amount at maturity thereof. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Securities will have
the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date, in substantially
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the form of Exhibit A hereto, for so long as such Securities constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
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Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "Commission")
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under the circumstances set forth therein, a shelf registration statement
pursuant to Rule 415 under the Act (the "Registration Statement") relating to
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the resale by certain holders of the Securities and to use its best efforts to
cause such Registration Statements to be declared and remain effective and
usable for the periods specified in the Registration Rights Agreement. This
Agreement, the Indenture, the Notes, and the Registration Rights Agreement are
hereinafter sometimes referred to collectively as the "Operative Documents".
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4. Delivery and Payment
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(a) Delivery of, and payment of the Purchase Price for, the
Firm Notes shall be made at the offices of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, NY 10017 or such other location as may be mutually acceptable.
Such delivery and payment shall be made at 9:00 a.m. New York City time, on
January 28, 2002, or at such other time on the same date or such other date as
shall be agreed upon by the Initial Purchasers and the Company shall agree in
writing. The time and date of such delivery and the payment for the Firm Notes
are herein called the "Closing Date".
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(b) Delivery of, and payment for, any Additional Notes to be
purchased by the Initial Purchasers shall be made at the offices of Davis Polk &
Wardwell, 450 Lexington Avenue, New York, NY 10017 at 9:00 a.m. New York City
time, on the date specified in the exercise notice given by the Representatives
pursuant to Section 2(b) or such other time on the same or such other date as
the Initial Purchasers and the Company shall agree in writing. The time and date
of delivery and payment for any Additional Notes are hereinafter referred to as
an "Option Closing Date".
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(c) Notes sold by the Initial Purchasers will be represented
by one or more Notes in definitive global form, registered in the name of Cede &
Co., as nominee of The Depository Trust Company ("DTC"), having an aggregate
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principal amount corresponding to the aggregate principal amount of the Notes
(the "Global Note"). The Global Note shall be delivered by the Company to the
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Initial Purchasers (or as the Initial Purchasers direct) in each case with any
transfer taxes thereon duly paid by the Company against payment by the Initial
Purchasers of the Purchase Price thereof by wire transfer in same day funds to
the order of the Company.
5. Agreements of the Company The Company hereby agrees with the
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Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing, (i) of the
issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Notes for offering or sale
in any jurisdiction designated by the Initial Purchasers pursuant to Section
5(e) hereof, or the initiation of any proceeding by any state securities
commission or any other federal or state regulatory authority for such purpose
and (ii) of the happening of any event during the period referred to in Section
5(c) below that makes any statement of a material fact made in the Offering
Memorandum untrue or that requires any additions to or changes in the Offering
Memorandum in order to make the statements therein not misleading. The Company
shall use its best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption of any Notes under any state
securities or Blue Sky laws and, if at any time any state securities commission
or other federal or state regulatory authority shall issue an order suspending
the qualification or exemption of any Notes under any state securities or Blue
Sky laws, the Company shall use its best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company as many copies of the
Offering Memorandum, and any amendments or supplements thereto, as the Initial
Purchasers may reasonably request for the time period specified in Section 5(c).
Subject to the Initial Purchasers' compliance with its representations and
warranties and agreements set forth in Section 7 hereof, the Company consents to
the use of the Offering Memorandum, any documents incorporated by reference
therein, and any amendments and supplements thereto required pursuant hereto, by
the Initial Purchasers in connection with Exempt Resales.
(c) During such period as in the opinion of counsel for the
Initial Purchasers an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers (i) not to make any
amendment or supplement to the Offering Memorandum of which the Initial
Purchasers shall not previously have been advised or to which the Initial
Purchasers shall reasonably object
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after being so advised and (ii) to prepare promptly upon the Initial Purchasers'
reasonable request, any amendment or supplement to the Offering Memorandum which
may be necessary or advisable in connection with such Exempt Resales.
(d) If, during the period referred to in Section
5(c) above, any event shall occur or condition shall exist as a result of which,
in the opinion of counsel to the Initial Purchasers, it becomes necessary to
amend or supplement the Offering Memorandum in order to make the statements
therein, in the light of the circumstances when such Offering Memorandum is
delivered to an Eligible Purchaser, not misleading, or if, in the opinion of
counsel to the Initial Purchasers, it is necessary to amend or supplement the
Offering Memorandum to comply with any applicable law, forthwith to prepare an
appropriate amendment or supplement to such Offering Memorandum so that the
statements therein, as so amended or supplemented, will not, in the light of the
circumstances when it is so delivered, be misleading, or so that such Offering
Memorandum will comply with applicable law, and to furnish to the Initial
Purchasers and such other persons as the Initial Purchasers may designate such
number of copies thereof as the Initial Purchasers may reasonably request.
(e) Prior to the sale of all Notes pursuant to
Exempt Resales as contemplated hereby, to cooperate with the Initial Purchasers
and counsel to the Initial Purchasers in connection with the registration or
qualification of the Notes for offer and sale to the Initial Purchasers and
pursuant to Exempt Resales under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
and to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided,
however, that the Company shall not be required in connection therewith to
qualify as a foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general consent to
service of process or taxation other than as to matters and transactions
relating to the Offering Memorandum or Exempt Resales, in any jurisdiction in
which it is not now so subject.
(f) So long as the Notes are outstanding, (i) to
mail and make generally available as soon as practicable after the end of each
fiscal year to the record holders of the Notes a financial report of the Company
and its subsidiaries on a consolidated basis (and a similar financial report of
all unconsolidated subsidiaries, if any), all such financial reports to include
a consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
the Company's independent public accountants and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year, it being understood that, so long as the Company files
reports under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), it may satisfy the requirements of this paragraph (f) by delivering
periodic Exchange Act reports.
(g) So long as the Notes are outstanding, to
furnish to the Initial Purchasers as soon as available, copies of all reports or
other communications furnished by the Company to its security holders or
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed and such other publicly
available information concerning the Company and/or its subsidiaries as the
Initial Purchasers may reasonably request.
(h) So long as any of the Notes remain outstanding
and during any period in which the Company is not subject to Section 13 or 15(d)
of the Exchange Act, to make available to any
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holder of Securities in connection with any sale thereof and any prospective
purchaser of such Securities from such holder, the information ("Rule 144A
Information") required by Rule 144A(d)(4) under the Act. ---------
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(i) Whether or not the transactions contemplated
in this Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of the obligations of
the Company under this Agreement, including: (i) the fees, disbursements and
expenses of counsel to the Company and accountants of the Company in connection
with the sale and delivery of the Notes to the Initial Purchasers and pursuant
to Exempt Resales, and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Offering Memorandum, any
documents incorporated by reference and all amendments and supplements to any of
the foregoing (including financial statements), including the mailing and
delivering of copies thereof to the Initial Purchasers and persons designated by
them in the quantities specified herein, (ii) all costs and expenses related to
the transfer and delivery of the Notes to the Initial Purchasers and pursuant to
Exempt Resales, including any transfer or other taxes payable thereon, (iii) all
costs of printing or producing this Agreement, the other Operative Documents and
any other agreements or documents in connection with the offering, purchase,
sale or delivery of the Notes, (iv) all expenses in connection with the
registration or qualification of the Securities for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or
producing any preliminary and supplemental Blue Sky memoranda in connection
therewith (including the filing fees and fees and disbursements of counsel for
the Initial Purchasers in connection with such registration or qualification and
memoranda relating thereto), (v) the cost of printing certificates representing
the Notes, (vi) all expenses and listing fees in connection with the application
for quotation of the Notes and the Common Stock issuable upon their conversion
in The PortalSM Market ("PORTAL"), a subsidiary of The Nasdaq Stock Market,
Inc., (vii) the fees and expenses of the Trustee and the Trustee's counsel in
connection with the Indenture and the Notes, (viii) the costs and charges of any
transfer agent, registrar and/or depositary (including DTC), (ix) any fees
charged by rating agencies for the rating of the Notes, (x) all costs and
expenses of the Registration Statement, as set forth in the Registration Rights
Agreement, (xi) all expenses and listing fees in connection with the application
for listing the Common Stock on the New York Stock Exchange and (xii) and all
other costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section.
(j) To use its best efforts to effect the
inclusion of the Notes and the Common Stock issuable upon their conversion in
PORTAL and to maintain the listing of the Notes on PORTAL for so long as the
Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry"
transfer of the Notes, and to comply with all of its agreements set forth in the
representation letters of the Company to DTC relating to the approval of the
Notes by DTC for "book-entry" transfer.
(l) To cause the Common Stock issuable upon
conversion of the Notes to be duly listed on the New York Stock Exchange (the
"NYSE") after the Closing Date subject to notice of official issuance. The
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Company will ensure that such Common Stock remain listed on the NYSE or any
other national securities exchange for so long as any shares of Common Stock
remain registered under the Exchange Act.
(m) The Company shall not (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Common Stock (regardless of whether any of the transactions described in clause
(i) or (ii) is to be settled by the delivery of Common Stock, or such other
securities, in cash or otherwise), except to the Initial Purchasers
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pursuant to this Agreement, for a period of 90 days after the Closing Date
without the prior written consent of the Representatives. Notwithstanding the
foregoing, during such period (i) the Company may grant stock options pursuant
to the Company's existing stock option plan and (ii) the Company may issue
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof. The Company also agrees
not to file any registration statement (other than filings on Form S-8) with
respect to any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock for a period of 90 days after the
Closing Date without the prior written consent of the Representatives.
(n) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Notes to the Initial Purchasers or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Notes under the Act.
(o) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Notes.
(p) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(q) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it prior
to the Closing Date and to satisfy all conditions precedent to the delivery of
the Notes.
6. Representations, Warranties and Agreements of the Company. As of the
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date hereof, the Company represents and warrants to, and agrees with, the
Initial Purchasers that:
(a) The Offering Memorandum (including the information
incorporated by reference therein (the "Incorporated Documents") does not, and
any supplement or amendment to it will not, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties contained in this paragraph (a) shall not apply to statements in or
omissions from the Offering Memorandum (or any supplement or amendment thereto)
based upon information relating to the Initial Purchasers furnished to the
Company in writing by the Initial Purchasers expressly for use therein. No stop
order preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act, has been received by the Company, and, to the knowledge of the Company,
no such stop order or other order has been issued. The Incorporated Documents,
at the time they were or hereafter are filed or last amended, as the case may
be, with the Commission, complied and will comply in all material respects with
the requirements of the Exchange Act.
(b) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Offering Memorandum and
to own, lease and operate its properties, and each is duly qualified and is in
good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect").
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(c) All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights.
(d) The entities listed on Schedule B(1) hereto are the only
subsidiaries, direct or indirect, of the Company. All of the outstanding shares
of capital stock of each of the Company's subsidiaries have been duly authorized
and validly issued and are fully paid and non-assessable, and, except as set
forth on Schedule B(1), are owned by the Company, directly or indirectly through
one or more subsidiaries, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature (each, a "Lien").
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(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The Indenture has been duly authorized by the Company
and, on the Closing Date, will have been validly executed and delivered by the
Company. When the Indenture has been duly executed and delivered by the Company
and the Trustee, the Indenture will be a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the
Indenture will conform in all material respects to the requirements of the Trust
Indenture Act of 1939, as amended (the "TIA" or "Trust Indenture Act"), and the
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rules and regulations of the Commission applicable to an indenture which is
qualified thereunder, assuming that there exists no "conflicting interest" (as
that term is defined in Section 310(b)(3) of the TIA).
(g) The Notes have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by the Company. When the
Notes have been issued, executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Notes will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the Notes
will conform as to legal matters to the description thereof contained in the
Offering Memorandum.
(h) The Notes are convertible into Common Stock in accordance
with the terms of the Indenture; the shares of Common Stock initially issuable
upon conversion of the Notes have been duly authorized and reserved for issuance
upon such conversion and, when issued upon such conversion, will be validly
issued, fully paid and nonassessable, will conform to the description thereof
contained in the Offering Memorandum and will be duly authorized for listing on
the NYSE, subject to notice of official issuance; the Company has the authorized
and outstanding capital stock as set forth in the Offering Memorandum; and the
stockholders of the Company or other holders of the Company's securities have no
pre-emptive or similar rights with respect to the Notes or the Common Stock
issuable upon conversion of the Notes.
(i) The Registration Rights Agreement has been duly
authorized by the Company and, on the Closing Date, will have been duly executed
and delivered by the Company. When the Registration Rights Agreement has been
duly executed and delivered by the Company and the other parties thereto, the
Registration Rights Agreement will be a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general
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applicability. On the Closing Date, the Registration Rights Agreement
will conform as to legal matters to the description thereof in the Offering
Memorandum.
(j) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the performance
of any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound.
(k) The Company and its subsidiaries have good and marketable
title to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
subsidiaries, taken as in whole, in each case free and clear of all Liens and
defects, except such as are described on Schedule B(2) hereto, or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the Offering
Memorandum.
(l) The execution, delivery and performance of the Operative
Documents by the Company, compliance by the Company with all provisions hereof
and thereof and the consummation of the transactions contemplated hereby and
thereby will not (i) require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency (except such
as may be required under the securities or Blue Sky laws of the various states),
(ii) conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company or any of its
subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective property is
bound, (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Company, any of its subsidiaries or their
respective property, (iv) result in the imposition or creation of (or the
obligation to create or impose) a Lien under, any 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 or their respective property is bound, or (v) result
in the termination, suspension or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or result in any other
impairment of the rights of the holder of any such Authorization.
(m) There are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened to which the Company or any of
its subsidiaries is or could be a party or to which any of their respective
property is or could be subject, which might result, singly or in the aggregate,
in a Material Adverse Effect.
(n) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), any
------------------
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any provisions of the Foreign Corrupt Practices Act or the rules
-----
and regulations promulgated thereunder, except for such violations which, singly
or in the aggregate, would not have a Material Adverse Effect.
(o) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of
9
properties or compliance with Environmental Laws or any Authorization, any
related constraints on operating activities and any potential liabilities to
third parties) which would, singly or in the aggregate, have a Material Adverse
Effect.
(p) Each of the Company and its subsidiaries has such
permits, licenses, consents, exemptions, franchises, authorizations and other
approvals (each, an "Authorization") of, and has made all filings with and
-------------
notices to, all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including without limitation,
under any applicable Environmental Laws, as are necessary to own, lease, license
and operate its respective properties and to conduct its business, except where
the failure to have any such Authorization or to make any such filing or notice
would not, singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
(q) The accountants, Ernst & Young LLP, that have certified
the financial statements and supporting schedules included in the Offering
Memorandum are independent public accountants with respect to the Company, as
required by the Act and the Exchange Act.
(r) The historical financial statements, together with
related schedules and notes forming part of the Offering Memorandum (and any
amendment or supplement thereto), present fairly the consolidated financial
position, results of operations and statement of cash flows of the Company and
its subsidiaries on the basis stated or incorporated by reference in the
Offering Memorandum at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set forth
or incorporated by reference in the Offering Memorandum (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(s) The Company is not and, after giving effect to the
offering and sale of the Notes and the application of the net proceeds thereof
as described in the Offering Memorandum, will not be, an "investment company,"
as such term is defined in the Investment Company Act of 1940, as amended.
(t) Neither the Company nor any of its subsidiaries nor any
agent thereof acting on the behalf of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of the
Notes to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part
220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve System.
(u) Except as otherwise disclosed to the Initial Purchasers,
no "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act (i) has imposed (or has
informed the Company that it is considering imposing) any condition (financial
or otherwise) on the Company's retaining any rating assigned to the Company, any
securities of the Company or
10
(ii) has indicated to the Company that it is considering (a) the downgrading,
suspension, or withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating so assigned or (b)
any change in the outlook for any rating of the Company, or any securities of
the Company.
(v) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there has not occurred any material adverse change
or any development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries, taken as a whole, (ii) there has
not been any material adverse change or any development involving a prospective
material adverse change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries has incurred any material liability or obligation, direct or
contingent.
(w) When the Notes are issued and delivered pursuant to this
Agreement, the Notes will not be of the same class (within the meaning of Rule
144A under the Act) as any security of the Company that is listed on a national
securities exchange registered under Section 6 of the Exchange Act or that is
quoted in a United States automated inter-dealer quotation system.
(x) No form of general solicitation or general advertising
(as defined in Regulation D under the Act) was used by the Company, or any of
its representatives (other than the Initial Purchasers, as to whom the Company
makes no representation) in connection with the offer and sale of the Notes
contemplated hereby, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising. No
securities of the same class as the Notes have been issued and sold by the
Company within the six-month period immediately prior to the date hereof.
(y) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the TIA.
(z) No registration under the Act of the Securities is
required for the sale of the Securities to the Initial Purchasers as
contemplated hereby or for the Exempt Resales assuming the accuracy of the
Initial Purchasers' representations and warranties and agreements set forth in
Section 7 hereof.
Each certificate signed by any officer of the Company and delivered to
the Initial Purchasers or counsel for the Initial Purchasers shall be deemed to
be a representation and warranty by the Company to the Initial Purchasers as to
the matters covered thereby.
The Company acknowledges that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance.
7. Initial Purchasers' Representations and Warranties. Each Initial
--------------------------------------------------
Purchaser, severally and not jointly, represents and warrants to, and agrees
with, the Company:
(a) Such Initial Purchaser is a QIB.
(b) Such Initial Purchaser (A) is not acquiring the
Securities with a view to any distribution thereof or with any present intention
of offering or selling any of the Securities in a transaction
11
that would violate the Act or the securities laws of any state of the United
States or any other applicable jurisdiction and (B) will be reoffering and
reselling the Securities only to QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A and to Regulation S
Buyers in accordance with Rule 903 under the Act.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Securities pursuant
hereto, including, but not limited to, articles, notices or other communications
published in any newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with
Exempt Resales, such Initial Purchaser will solicit offers to buy the Securities
only from, and will offer to sell the Securities only to, Eligible Purchasers.
Each Initial Purchaser further agrees that it will offer to sell the Securities
only to, and will solicit offers to buy the Securities only from Eligible
Purchasers that such Initial Purchaser reasonably believes are QIBs, or
Regulation S Buyers, in each case that agree that (x) the Securities purchased
by them may be resold, pledged or otherwise transferred within the time period
referred to under Rule 144(k) (taking into account the provisions of Rule 144(d)
under the Act, if applicable) under the Act, as in effect on the date of the
transfer of such Securities, only (I) to the Company or any of its subsidiaries,
(II) to a person whom the seller reasonably believes is a QIB purchasing for its
own account or for the account of a QIB in a transaction meeting the
requirements of Rule 144A under the Act, (III) in an offshore transaction (as
defined in Rule 902 under the Act) meeting the requirements of Rule 904 of the
Act, (IV) in a transaction meeting the requirements of Rule 144 under the Act,
(V) in accordance with another exemption from the registration requirements of
the Act (and based upon an opinion of counsel acceptable to the Company) or (VI)
pursuant to an effective registration statement and, in each case, in accordance
with the applicable securities laws of any state of the United States or any
other applicable jurisdiction and (y) they will deliver to each person to whom
such Securities or an interest therein is transferred a notice substantially to
the effect of the foregoing.
(e) Such Initial Purchaser agrees that it will not offer,
sell or deliver any of the Securities in any jurisdiction outside the United
States except under circumstances that will result in compliance with the
applicable laws thereof, and that it will take at its own expense whatever
action is required to permit its purchase and resale of the Securities in such
jurisdictions. Such Initial Purchaser understands that no action has been taken
to permit a public offering in any jurisdiction outside the United States where
action would be required for such purpose.
Each Initial Purchaser acknowledges that the Company, for
purposes of the opinions to be delivered to each Initial Purchaser pursuant to
Section 9 hereof, counsel to the Company and counsel to the Initial Purchasers
will rely upon the accuracy and truth of the foregoing representations and each
Initial Purchaser hereby consents to such reliance.
8. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each
Initial Purchaser, its directors, its officers and each person, if any, who
controls such Initial Purchaser (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act), from and against any and all losses, claims,
damages, liabilities and judgments (including, without limitation, any legal or
other expenses incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), or any Rule 144A Information provided by the
Company to any holder or prospective purchaser of Securities pursuant to Section
5(h) or caused by any omission or alleged omission to state therein a material
12
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Initial Purchaser
furnished in writing to the Company by such Initial Purchaser through the
Representatives expressly for use in the Offering Memorandum.
(b) Each Initial Purchaser, severally and not jointly, agrees
to indemnify and hold harmless the Company and its directors and officers and
each person, if any, who controls (within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act) the Company to the same extent as the
foregoing indemnity from the Company to the Initial Purchasers but only with
reference to information relating to such Initial Purchaser furnished in writing
to the Company by such Initial Purchaser through the Representatives expressly
for use in the Offering Memorandum.
(c) In case any action shall be commenced involving any
person in respect of which indemnity may be sought pursuant to Section 8(a) or
8(b) (the "indemnified party"), the indemnified party shall promptly notify the
----------------------
person against whom such indemnity may be sought (the "indemnifying party") in
-------------------
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), the Initial Purchasers shall not
be required to assume the defense of such action pursuant to this Section 8(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of the Initial Purchasers). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by the Representatives, in the case of the
parties indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action (i) effected with its written consent or (ii) effected without its
written consent if the settlement is entered into more than twenty business days
after the indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party) and, prior
to the date of such settlement, the indemnifying party shall have failed to
comply with such reimbursement request. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action 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 the indemnified party.
13
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchasers, on the other hand, from
the offering of the Securities or (ii) if the allocation provided by clause
8(d)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company, on the one hand, and
the Initial Purchasers, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Initial Purchasers,
on the other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities (after Initial Purchaser's
discounts or commissions, but before deducting expenses) received by the
Company, and the total discounts and commissions received by the Initial
Purchasers bear to the total price to investors of the Securities, in each case
as set forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Company, on the one hand, and the Initial Purchasers, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Initial Purchasers, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Initial Purchasers 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 in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
indemnified party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, the Initial Purchasers shall not be required to contribute any amount
in excess of the amount by which the total discounts and commissions received by
such Initial Purchasers exceeds the amount of any damages which the Initial
Purchasers has otherwise been required to pay by reason of 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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount at maturity of Securities purchased by each of the Initial
Purchasers hereunder, and not joint.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. Conditions of Initial Purchaser's Obligations. The obligations of the
---------------------------------------------
Initial Purchasers to purchase the Firm Notes under this Agreement on the
Closing Date and the Additional Notes, if any, on any Option Closing Date are
subject to the satisfaction of each of the following conditions.
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date, or on
each Option Closing Date, if any, with the same force and effect as if made on
and as of the Closing Date or on each Option Closing Date, if any.
14
(b) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Company or any securities of the Company (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have
occurred any change, nor shall any notice have been given of any potential or
intended change, in the outlook for any rating of the Company or any securities
of the Company by any such rating organization and (iii) no such rating
organization shall have given notice that it has assigned (or is considering
assigning) a lower rating to the Notes than that on which the Notes were
marketed.
(c) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there shall not have occurred any change or any
development involving a prospective change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, (ii) there shall not have been any
change or any development involving a prospective change in the capital stock or
in the long-term debt of the Company or any of its subsidiaries and (iii)
neither the Company nor any of its subsidiaries shall have incurred any
liability or obligation, direct or contingent, the effect of which, in any such
case described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable or
inadvisable to market the Securities on the terms and in the manner contemplated
in the Offering Memorandum.
(d) You shall have received on the Closing Date a
certificate, dated the Closing Date, and on an Option Closing Date, if any,
dated such Option Closing Date, signed by the President and the Chief Financial
Officer of the Company, confirming the matters set forth in Sections 6(v), 9(a)
and 9(b) and stating that the Company has complied with all the agreements and
satisfied all of the conditions herein contained and required to be complied
with or satisfied on or prior to the Closing Date or Option Closing Date, as the
case may be.
(e) You shall have received on the Closing Date and each
Option Closing Date, if any, an opinion (satisfactory to you and counsel for the
Initial Purchasers), dated the Closing Date or such Option Closing Date, as the
case may be, of Harter, Secrest & Emery LLP, counsel for the Company, to the
effect that:
(i) the Company has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation
and has the corporate power and authority to carry on its
business as described in the Offering Memorandum and to own,
lease and operate its properties;
(ii) the Notes have been duly authorized
and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Initial Purchasers in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (x) the
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and availability of
equitable remedies may be limited by equitable principles of
general applicability;
(iii) the Indenture has been duly
authorized, executed and delivered by the Company and is a
valid and binding agreement of the
15
Company, enforceable against the Company in accordance with
its terms except as (x) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (y) rights of acceleration
and the availability of equitable remedies may be limited by
equitable principles of general applicability;
(iv) the Notes are convertible into
Common Stock in accordance with the terms of the Indenture;
the shares of Common Stock initially issuable upon conversion
of the Notes have been duly authorized and reserved for
issuance upon such conversion and, when issued upon such
conversion, will be validly issued, fully paid and
nonassessable, will conform to the description thereof
contained in the Offering Memorandum; the Company has the
authorized and outstanding capital stock as set forth in the
Offering Memorandum; and the stockholders of the Company have
no pre-emptive or similar rights with respect to the Notes or
the Common Stock issuable upon the Notes.
(v) this Agreement has been duly
authorized, executed and delivered by the Company;
(vi) The Registration Rights Agreement
has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms,
except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (y) rights of acceleration and the
availability of equitable remedies may be limited by
equitable principles of general applicability;
(vii) the statements under the captions
"Description of Notes" and "Registration Rights" (other than
any reference therein to tax matters, as to which no opinion
is expressed) in the Offering Memorandum, insofar as such
statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present
in all material respects such legal matters, documents and
proceedings;
(viii) to the best of such counsel's
knowledge after due inquiry, the Company is not in default in
the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a
whole, to which the Company is a party or by which the
Company or its property is bound;
(ix) the execution, delivery and
performance of this Agreement and the other Operative
Documents by the Company, the compliance by the Company with
all provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i)
require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or
agency (except such as may be required under the securities
or Blue Sky laws of the various states), (ii) conflict with
or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company, or
(iii) violate or conflict with any applicable law or any
rule, regulation, judgment, order or decree of any court or
any governmental body or agency having jurisdiction over the
Company or its property;
(x) the Company is not and, after giving
effect to the offering and sale of the Notes and the
application of the net proceeds thereof as described in the
Offering Memorandum, will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940,
as amended;
16
(xi) the Indenture complies as to form
in all material respects with the requirements of the TIA,
and the rules and regulations of the Commission applicable to
an indenture which is qualified thereunder. It is not
necessary in connection with the offer, sale and delivery of
the Notes to the Initial Purchasers in the manner
contemplated by this Agreement or in connection with the
Exempt Resales to qualify the Indenture under the TIA;
(xii) no registration under the Act of
the Securities is required for the sale of the Securities to
the Initial Purchasers as contemplated by this Agreement or
for the Exempt Resales assuming (i) the accuracy of, and
compliance with, the Initial Purchasers' representations and
agreements contained in Section 7 of this Agreement, and (ii)
the accuracy of the representations of the Company set forth
in Sections 6(w) and 6(x) of this Agreement; and
(xiii) no facts have come to such
counsel's attention which lead it to believe that, as of the
date of the Offering Memorandum or as of the Closing Date or
the Option Closing Date, as the case may be, the Offering
Memorandum and any information incorporated by reference
therein, as amended or supplemented, if applicable (except
for the financial statements and other financial data
included or incorporated by reference therein, as to which
such counsel need not express any belief) contains any untrue
statement of a material fact or omits 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 opinion of Harter, Secrest & Emery LLP described in Section
9(e) above shall be rendered to you at the request of the Company and shall so
state therein. In giving such opinion with respect to the matters covered by
Section 9(e)(xiii), Harter, Secrest & Emery LLP may state that their opinion and
belief are based solely upon their participation in the preparation of the
Offering Memorandum and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
(f) You shall have received on the Closing Date and each Option
Closing Date, if any, an opinion (satisfactory to you and counsel for the
Initial Purchasers), dated the Closing Date or such Option Closing Date, as the
case may be, of Timothy R. Parry, Esq., Vice President and General Counsel of
the Company, to the effect that:
(i) each of the Company and its subsidiaries has been
duly incorporated, is validly existing as a corporation in
good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to
carry on its business as described in the Offering Memorandum
and to own, lease and operate its properties;
(ii) each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of
property requires such qualification, except where the
failure to be so qualified would not have a Material Adverse
Effect;
(iii) all the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are
fully paid, non-assessable and not subject to any preemptive
or similar rights;
(iv) all of the outstanding shares of capital stock of
each of the Company's subsidiaries have been duly authorized
and validly issued and are
17
fully paid and non-assessable, and are owned by the Company, free and
clear of any Lien;
(v) the Notes have been duly authorized and executed by the
Company;
(vi) the Indenture has been duly authorized and executed by the
Company;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the Company is not in violation of its charter or by-laws,
and the execution, delivery and performance of this Agreement and the
other Operative Documents by the Company, the compliance by the
Company with all provisions hereof and thereof and the consummation of
the transactions contemplated hereby and thereby will not (i) conflict
with or constitute a breach of any of the terms or provisions of, or a
default under any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, (ii) result in the
imposition or creation of (or the obligation to create or impose) a
Lien under, any 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 or their respective property is bound, (iii) result in
the termination, suspension or revocation of any Authorization (as
defined above) of the Company or any of its subsidiaries or result in
any other impairment of the rights of the holder of any such
Authorization, or (iv) violate or conflict with any applicable law or
any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company, any
of its subsidiaries or their respective property;
(x) each of the Company and its subsidiaries has such
Authorizations of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including without
limitation, under any applicable Environmental Laws, as are necessary
to own, lease, license and operate its respective properties and to
conduct its business, except where the failure to have any such
Authorization or to make any such filing or notice would not, singly
or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the
Company and its subsidiaries is in compliance with all the terms and
conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect
thereto; and no event has occurred (including the receipt of any
notice from any authority or governing body) which allows or, after
notice or lapse of time or both, would allow, revocation, suspension
or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the
rights of the holder of any such Authorization; and such
Authorizations contain no restrictions that are burdensome to the
Company or any of its subsidiaries; except where such failure to be
valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a Material Adverse Effect;
and
(xi) after due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which the Company
or any of its subsidiaries is or could be a party or to which any of
their respective
18
property is or could be subject, which might result, singly or in the
aggregate, in a Material Adverse Effect.
(g) The Initial Purchasers shall have received on the Closing Date and
on each Option Closing Date, an opinion, dated the Closing Date, of Davis Polk &
Wardwell, counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers.
(h) The Initial Purchasers shall have received, at the Closing Date
and on each Option Closing Date, letters dated the Closing Date or the Option
Closing Date, as the case may be, in form and substance satisfactory to the
Initial Purchasers from Ernst & Young LLP, independent public accountants,
containing the information and statements of the type ordinarily included in
accountants' "comfort letters" to Initial Purchasers with respect to the
financial statements and certain financial information contained in the Offering
Memorandum.
(i) The Notes and the Common Stock issuable upon their conversion
shall have been approved for trading in PORTAL.
(j) The Initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company and the Trustee.
(k) The Company shall have executed the Registration Rights Agreement
and the Initial Purchasers shall have received an original copy thereof, duly
executed by the Company.
(l) The Company shall not have failed at or prior to the Closing Date
or any Option Closing Date, as the case may be, to perform or comply with any of
the agreements herein contained and required to be performed or complied with by
the Company at or prior to the Closing Date or Option Closing Date, as the case
may be.
10. Effectiveness of Agreement and Termination. This Agreement may be
------------------------------------------
terminated at any time on or prior to the Closing Date by the Initial Purchasers
by written notice to the Company if any of the following has occurred: (i) any
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war, or other national or international calamity or crisis
or change in economic conditions or in the financial markets of the United
States or elsewhere that, in the Initial Purchasers' judgment, is material and
adverse, (ii) the suspension or limitation of trading generally in securities or
other instruments on the New York Stock Exchange, the American Stock Exchange,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the
Chicago Board of Trade or the Nasdaq National Market or limitation on prices for
securities or other instruments on any such exchange or the Nasdaq National
Market, and, in the case of (i) or (ii) above, the occurrence of the event in
question, in the Initial Purchasers' judgment, makes it impracticable or
inadvisable to market the Securities on the terms and in the manner contemplated
in the Offering Memorandum, (iii) the suspension of trading of any securities of
the Company on any exchange or in the over-the-counter market, (iv) the
enactment, publication, decree or other promulgation of any federal or state
statute, regulation, rule or order of any court or other governmental authority
which in your opinion materially and adversely affects, or will materially and
adversely affect, the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, (v) the
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date or an Option Closing Date, as the case may be,
any one or more of the Initial Purchasers shall fail or refuse to purchase the
Notes which it or they have agreed to purchase hereunder on such date and the
aggregate principal amount at maturity of the Notes which such defaulting
Initial Purchaser or Initial Purchasers, as the case may be, agreed but failed
or refused to purchase is not more than one-tenth of
19
the aggregate principal amount at maturity of the Notes to be purchased on such
date by all Initial Purchasers, each non-defaulting Initial Purchaser shall be
obligated severally, in the proportion which the principal amount at maturity of
the Notes set forth opposite its name in Schedule A bears to the aggregate
principal amount at maturity of the Notes which all the non-defaulting Initial
Purchasers, as the case may be, have agreed to purchase, or in such other
proportion as you may specify, to purchase the Notes which such defaulting
Initial Purchaser or Initial Purchasers, as the case may be, agreed but failed
or refused to purchase on such date; provided that in no event shall the
aggregate principal amount at maturity of the Notes which any Initial Purchaser
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such principal amount at
maturity of the Notes without the written consent of such Initial Purchaser. If
on the Closing Date, or an Option Closing Date, as the case may be, any Initial
Purchaser or Initial Purchasers shall fail or refuse to purchase the Notes and
the aggregate principal amount at maturity of the Notes with respect to which
such default occurs is more than one-tenth of the aggregate principal amount of
the Notes to be purchased by all Initial Purchasers and arrangements
satisfactory to the Initial Purchasers and the Company for purchase of such
Notes are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Initial Purchaser
and the Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, or such Option Closing Date, as the case may be, but in no event
for longer than seven days, in order that the required changes, if any, in the
Offering Memorandum or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Initial
Purchaser from liability in respect of any default of any such Initial Purchaser
under this Agreement.
11. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (i) if to the Company to Health
Management Associates, Inc., 5811 Pelican Bay Boulevard, Suite 500, Naples,
Florida 34108-2710 and (ii) if to the Initial Purchasers to Credit Suisse First
Boston Corporation, 11 Madison Avenue, New York, NY 10010, Attention:
Transaction Advisory Group, and Salomon Smith Barney Inc., 388 Greenwich Street,
New York, NY 10013, Attention: Syndicate Department, or in any case to such
other address as the person to be notified may have requested in writing
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company and the Initial
Purchasers set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Securities regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of the Initial Purchasers; the officers or
directors of the Initial Purchasers, any person controlling the Initial
Purchasers, the Company, the officers or directors of the Company, or any person
controlling the Company, (ii) acceptance of the Securities and payment for them
hereunder and (iii) termination of the Agreement.
If for any reason the Notes are not delivered by or on behalf of the
Company as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 10), the Company agrees to reimburse the Initial
Purchasers for all out-of-pocket expenses (including the fees and disbursements
of counsel) incurred by them Notwithstanding any termination of this Agreement,
the Company shall be liable for all expenses which it has agreed to pay pursuant
to Section 5(i) hereof.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Initial
Purchasers, the Initial Purchasers' directors and officers, any controlling
persons referred to herein, the directors of the Company and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Securities from the Initial Purchasers merely because of such
purchase.
This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
20
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the Initial Purchasers.
Very truly yours,
HEALTH MANAGEMENT ASSOCIATES, INC.
/s/ Robert E. Farnham
By: _____________________________
Name: Robert E. Farnham
Title: Sr. V. Pres. - Finance
CREDIT SUISSE FIRST BOSTON CORPORATION
/s/ Benjamin C. Adams
By:__________________________________
Name: Benjamin C. Adams
Title: Director
SALOMON SMITH BARNEY INC.
/s/ Richard Landgarten
By:__________________________________
Name: Richard Landgarten
Title: Managing Director
SCHEDULE A
Principal Amount
Initial Purchasers at maturity of Notes
------------------
Credit Suisse First Boston Corporation .................... $140,250,000
Salomon Smith Barney Inc. ................................. $140,250,000
Banc of America Securities LLC ............................ $ 16,500,000
First Union Securities Inc. ............................... $ 16,500,000
J.P. Morgan Securities Inc. ............................... $ 16,500,000
==============
Total ..................................... $330,000,000
SCHEDULE B
1. Subsidiaries
- --------------------------------------------------------------------------------
SUBSIDIARIES OF HEALTH MANAGEMENT ASSOCIATES, INC.
- --------------------------------------------------------------------------------
HMA (SUB) ................. Health Management Associates, Inc. (Kentucky)
Hospital .................. Hospital Management Associates, Inc. (Kentucky)
Investment ................ Health Management Investments, Inc. (Delaware)
Anniston, AL .............. Anniston H.M.A., Inc.
Biloxi, MS ................ Biloxi H.M.A., Inc.
Brandon, MS ............... Brandon H.M.A., Inc.
Brooksville, FL ........... Hernando HMA, Inc.
Carlisle, PA .............. Carlisle HMA, Inc.
Clarksdale, MS ............ Clarksdale H.M.A., Inc.
Dade City, FL ............. Pasco HMA, Inc.
Durant, OK ................ Durant H.M.A., Inc.
Durant HMA Surgical Center, Inc.
Flowood, MS ............... River Oaks Hospital, Inc.
ROH, Inc. (Woman's Hospital at River Oaks)
River Oaks Management Company, Inc.
River Oaks Medical Office Building, Inc.
Gadsden, AL ............... Riverview Regional Medical Center, Inc.
Gaffney, SC ............... Gaffney H.M.A., Inc.
Haines City, FL ........... Haines City H.M.A., Inc.
Green Clinic, Inc.
Hamlet, NC ................ Hamlet H.M.A., Inc.
Hartsville, SC ............ Hartsville H.M.A., Inc.
Jackson, MS ............... Jackson HMA, Inc.
Jackson HMA North Medical Office Building, Inc.
Key West, FL .............. Key West HMA, Inc.
Key West HMA Physician Management, Inc.
Lakeland, FL .............. Polk HMA, Inc.
Lancaster, PA ............. Lancaster HMA, Inc.
Lancaster HMA Physician Management, Inc.
Rose City HMA, Inc.
Lehigh Acres, FL .......... Lehigh HMA, Inc.
Little Rock, AR ........... Little Rock HMA, Inc.
Louisburg, NC ............. Louisburg H.M.A., Inc.
Marathon, FL .............. Marathon H.M.A., Inc.
Meridian, MS .............. Meridian HMA, Inc.
Meridian HMA Nursing Home, Inc.
Meridian HMA Clinic Management, Inc.
Mesquite, TX .............. Paracelsus Mesquite Hospital, Inc.
Midwest City, OK .......... Midwest City H.M.A., Inc.
Milton, FL ................ Paracelsus Santa Rosa Medical Center, Inc.
Mooresville, NC ........... Mooresville Hospital Management Associates Inc.
Natchez, MS ............... Natchez Community Hospital, Inc.
Orlando, FL ............... Orlando H.M.A., Inc.
Paintsville, KY ........... Paintsville Hospital Company
Pennington Gap, VA ........ Pennington Gap HMA, Inc.
Punta Gorda, FL ........... Punta Gorda H.M.A., Inc.
Sebastian, FL ............. Sebastian Hospital, inc.
Sebring, FL ............... Sebring Hospital Management Associates, Inc.
Statesboro, GA ............ Statesboro H.M.A., Inc.
Statesville, NC ........... Statesville HMA, Inc.
Tequesta, FL .............. Tequesta HMA, Inc.
Topeka, KS ................ Topeka H.M.A., Inc.
Van Buren, AR ............. Van Buren H.M.A., Inc.
Williamson, WV ............ Health Management Associates of West Virginia, Inc.
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JOINT VENTURES
--------------
- --------------------------------------------------------------------------------
The Surgery Center at Durant, L.L.C.
As of February 11, 2002
* HMA owns approximately 99% of the outstanding common stock of River Oaks
Hospital, Inc.
2. Liens
Approximate Amount
-------------------
A. Lancaster Regional Medical Center $ 8,000,000
B. River Oaks Hospital Inc. 45,000,000
C. Gadsden 4,000,000
D. Carlisle Regional Medical Center 13,320,000
-----------
Total $70,320,000
===========
EXHIBIT A
Form of Registration Rights Agreement