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Exhibit 1.1
HEALTH MANAGEMENT ASSOCIATES, INC.
$425,000,000
Principal Amount at Maturity
Convertible Senior Subordinated Debentures due 2020
Purchase Agreement
August 10, 2000
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
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HEALTH MANAGEMENT ASSOCIATES, INC.
Convertible Senior Subordinated Debentures due 2020
August 10, 2000
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
Health Management Associates, Inc., a Delaware corporation (the "Company"),
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proposes to issue and sell to Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ"), Merrill Lynch, Pierce, Fenner & Smith Incorporated and Banc
of America Securities LLC (each an "Initial Purchaser" and, collectively, the
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"Initial Purchasers") an aggregate of $425,000,000 in principal amount at
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maturity of its Convertible Senior Subordinated Debentures due 2020 (the "Firm
----
Debentures"), subject to the terms and conditions set forth herein. The Company
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also proposes to issue and sell to the Initial Purchasers not more than an
additional $63,750,000 principal amount at maturity of its Convertible Senior
Subordinated Debentures due 2020 (the "Additional Debentures"), if requested by
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the Initial Purchasers as provided in Section 2 hereof. The Firm Debentures and
the Additional Debentures are herein collectively referred to as the
"Debentures". The Debentures 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 Debentures, 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 Debentures and the Common Stock issuable upon conversion
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thereof are herein collectively referred to as the "Securities". The Securities
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and the 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 Debentures 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
Company has prepared a preliminary offering memorandum, dated August 2, 2000
(the "Preliminary Offering Memorandum") and a final offering memorandum, dated
August 10, 2000 (the "Offering Memorandum"), relating to the Debentures, and
such definitions include, in each case, the documents incorporated by reference
therein.
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Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Debentures (and all securities
issued in exchange therefor, in substitution thereof or upon conversion thereof)
shall bear the following legend:
"THIS DEBENTURE (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"), (B) IT HAS
ACQUIRED THIS DEBENTURE IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT (AN "IAI"), (2) AGREES THAT IT
WILL NOT RESELL OR OTHERWISE TRANSFER THIS
DEBENTURE 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) TO AN IAI
THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS DEBENTURE (THE FORM OF WHICH CAN
BE OBTAINED FROM THE TRUSTEE) AND, IF THE COMPANY
SO REQUESTS AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (F) 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 (G) 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
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(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS DEBENTURE 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 DEBENTURE 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 Debentures set forth opposite its name as set forth on Schedule
A hereto at a purchase price equal to 98.97% 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 Additional Debentures and (ii) the Initial
Purchasers shall have a right, but not the obligation, to purchase, severally
and not jointly, the Additional Debentures, from the Company at the Purchase
Price. Additional Debentures may be purchased solely for the purpose of covering
over-allotments made in connections with the Offering of the Firm Debentures.
The Initial Purchasers may exercise their right to purchase Additional
Debentures in whole or in part from time to time by giving written notice
thereof to the Company at any time within 30 days after the date of this
Agreement. Donaldson, Lufkin & Jenrette Securities Corporation shall give any
such notice on behalf of the Initial Purchasers and such notice shall specify
the aggregate principal amount at maturity of Additional Debentures 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 Debentures are
to be purchased, each Initial Purchaser, severally and not jointly, agrees to
purchase from the Company the principal amount at maturity of Additional
Debentures which bears the same proportion to the total principal amount at
maturity of Additional Debentures to be purchased from the Company as the
principal amount at maturity of Firm Debentures set forth opposite the name of
such Initial Purchaser in Schedule A bears to the total principal amount at
maturity of Firm Debentures.
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
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Debentures 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 "Eligible Purchasers"). The Initial Purchasers will offer the Debentures to
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Eligible Purchasers initially at a price equal to 58.866% 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
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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 Debentures, 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
Debentures 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
August 16, 2000, 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
Debentures are herein called the "Closing Date".
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(b) Delivery of, and payment for, any Additional Debentures 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 Donaldson,
Lufkin & Jenrette Securities Corporation 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 Debentures are hereinafter referred to as an "Option Closing Date".
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(c) Debentures sold by the Initial Purchasers will be
represented by one or more Debentures in definitive global form, registered in
the name of Cede & Co., as nominee of the Depository Trust Company ("DTC"),
---
having an aggregate principal amount corresponding to the aggregate principal
amount of the Debentures (the "Global Debenture"). The Global Debenture shall be
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delivered by the Company to the 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. The Global Debenture
shall be made available to the Initial Purchasers for inspection not later than
9:30 a.m., New York City time, on the business day immediately preceding the
Closing Date.
5. Agreements of the Company The Company hereby agrees with the Initial
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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 Debentures 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 Preliminary
Offering Memorandum or the Offering Memorandum untrue or that requires any
additions to or changes in the Preliminary Offering Memorandum or 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 Debentures 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 Debentures 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
Preliminary Offering Memorandum and 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 Preliminary Offering
Memorandum and the Offering Memorandum, any documents incorporated by reference
therein, and any
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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 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 Debentures 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 Debentures 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 Preliminary Offering Memorandum, the Offering Memorandum or
Exempt Resales, in any jurisdiction in which it is not now so subject.
(f) So long as the Debentures 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 Debentures 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 Debentures 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
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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 Debentures 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 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)
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under the Act.
(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 Debentures 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 Preliminary Offering
Memorandum, 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
Debentures 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
Debentures, (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
Debentures, (vi) all expenses and listing fees in connection with the
application for quotation of the Debentures and the Common Stock issuable upon
their conversion in the National Association of Securities Dealers, Inc.
("NASD") Automated Quotation System - PORTAL ("PORTAL"), (vii) the fees and
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expenses of the Trustee and the Trustee's counsel in connection with the
Indenture and the Debentures, (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 Debentures, (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
Debentures and the Common Stock issuable upon their conversion in PORTAL and to
maintain the listing of the Debentures on PORTAL for so long as the Debentures
are outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of
the Debentures, 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
Debentures by DTC for "book-entry" transfer.
(l) To cause the Common Stock issuable upon conversion of the
Debentures to be duly listed on the New York Stock Exchange (the "NYSE") prior
----
to the Firm Closing Date subject to notice of official issuance. The Company
will ensure that such Common Stock remain listed on the NYSE or any other
national securities exchange following the Firm Closing Date 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
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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 pursuant to this Agreement, for a
period of 90 days after the Closing Date without the prior written consent of
Donaldson, Lufkin & Jenrette Securities Corporation. 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 Donaldson, Lufkin & Jenrette
Securities Corporation.
(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 Debentures to the Initial Purchasers or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Debentures 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
Debentures.
(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 Debentures.
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 Preliminary Offering Memorandum and the Offering
Memorandum (including the information incorporated by reference therein (the
"Incorporated Documents") do not, and any supplement or amendment to them 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 Preliminary
Offering Memorandum or 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 Preliminary Offering Memorandum or 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 or 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 Preliminary Offering
Memorandum and 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").
----
(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.
(g) The Debentures have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by the Company. When the
Debentures 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 Debentures 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
Debentures will conform as to legal matters to the description thereof contained
in the Offering Memorandum.
(h) The Debentures are convertible into Common Stock in
accordance with the terms of the Indenture; the shares of Common Stock initially
issuable upon conversion of the Debentures 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
Debentures or the Common Stock issuable upon conversion of the Debentures.
(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 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
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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 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
9
<PAGE>
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.
(p) The accountants, Ernst & Young LLP, that have certified the
financial statements and supporting schedules included in the Preliminary
Offering Memorandum and 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 debentures 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 debentures 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 Debentures 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
Debentures 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 (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
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<PAGE>
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 Debentures are issued and delivered pursuant to
this Agreement, the Debentures 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 Debentures
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 Securities 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 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.
(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, that agree
that (x) the Securities purchased by them may be resold, pledged or otherwise
transferred within the
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<PAGE>
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) to an institutional "accredited investor" , as defined in
Rule 501(a)(1), (2), (3) or (7) under the Act (each, an "Accredited
Institution") that, prior to such transfer, furnishes the Trustee a signed
letter containing certain representations and agreements relating to the
registration of transfer of such Securities and, if requested by the Company, an
opinion of counsel acceptable to the Company that such transfer is in compliance
with the Act, (VI) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion of counsel acceptable to the
Company) or (VII) 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), the Preliminary Offering Memorandum 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 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; provided, however, that the foregoing
indemnity agreement with respect to any Preliminary Offering Memorandum shall
not inure to the benefit of any Initial Purchaser who failed to deliver a Final
Offering Memorandum, as then amended or supplemented, (so long as such Final
Offering Memorandum and any amendment or supplement thereto was provided by the
Company to the several Initial Purchasers in the requisite quantity and on a
timely basis to permit proper delivery on or prior to the Closing Date) to the
person asserting any losses, claims, damages, liabilities or judgments caused by
any untrue statement or alleged untrue statement of a material fact contained in
such Preliminary Offering Memorandum, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured
in the Final Offering Memorandum, as so amended or supplemented.
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<PAGE>
(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 expressly for use in the Preliminary Offering
Memorandum or 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 Donaldson, Lufkin & Jenrette Securities Corporation, 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.
(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
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<PAGE>
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 Debentures under this Agreement on the
Closing Date and the Additional Debentures, 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.
(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
14
<PAGE>
organization shall have given notice that it has assigned (or is considering
assigning) a lower rating to the Debentures than that on which the Debentures
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 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 Debentures 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 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 Debentures are convertible into Common
Stock in accordance with the terms of the Indenture; the shares
of Common Stock initially issuable upon conversion of the
Debentures 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 thereo f 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
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<PAGE>
have no pre-emptive or similar rights with respect to the
Debentures or the Common Stock issuable upon the Debentures.
(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 Debentures" and "Registration Rights" 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) such counsel is of the opinion ascribed to it
in the Offering Memorandum under the caption "Federal Income Tax
Considerations";
(ix) the Company is not in violation of its charter
or by-laws and, 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;
(x) 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;
(xi) the Company is not and, after giving effect to
the offering and sale of the Debentures 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;
(xii) 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 Debentures 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;
(xiii) 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
16
<PAGE>
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
(xiv) 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)(xiv), 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 fully paid and non-assessable, and are
owned by the Company, free and clear of any Lien;
(v) the Debentures 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;
17
<PAGE>
(viii) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company;
(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) 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 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 time this
Agreement is executed and at the Closing Date and each Option Closing Date,
letters dated the date hereof or the Closing Date or
18
<PAGE>
an Option Closing Date, as the case may be, in the 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 the Initial Purchasers
with respect to the Initial Purchasers with respect to the financial statements
and certain financial information contained in the Offering Memorandum.
(i) The Debentures and the Common Stock issuable upon their
conversion shall have been approved by the NASD for trading and duly listed 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 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 and, in the Initial Purchasers' judgment, makes it
impracticable to market the Securities on the terms and in the manner
contemplated in the Offering Memorandum, (ii) the suspension or material
limitation of trading 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, (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
Debentures which it or they have agreed to purchase hereunder on such date and
the aggregate principal amount at maturity of the Debentures 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 the aggregate
principal amount at maturity of the Debentures 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
Debentures set forth opposite its name in Schedule A bears to the aggregate
principal amount at maturity of the Debentures 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 Debentures 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 Debentures 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 Debentures 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 Debentures and the aggregate principal amount at maturity
of the
19
<PAGE>
Debentures with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of the Debentures to be purchased by all Initial
Purchasers and arrangements satisfactory to the Initial Purchasers and the
Company for purchase of such the Debentures 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 Donaldson, Lufkin &
Jenrette Securities Corporation, 277 Park Avenue, New York, New York 10172,
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 Debentures 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
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Initial Purchasers.
Very truly yours,
HEALTH MANAGEMENT ASSOCIATES INC.
By: _____________________________
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: __________________________________
Name:
Title:
21
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Principal Amount
at maturity of
Initial Purchaser Debentures
-----------------
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation................................... $255,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.................................... 127,500,000
Banc of America Securities LLC........................................................ 42,500,000
--------------------------
Total.............................................................................. $425,000,000
==========================
</TABLE>
22
<PAGE>
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.
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.
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.
Midwest City, OK... Midwest City H.M.A., 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
Punta Gorda, FL.... Punta Gorda H.M.A., Inc.
Sebastian, FL...... Sebastian Hospital, inc.
Sebring, FL........ Sebring Hospital Management Associates, Inc.
23
<PAGE>
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.
(1) HMA owns approximately 99% of the outstanding common stock of River Oaks
Hospital.
As of 8/10/00
SCHEDULE B
2. Liens
Approximate Amount
------------------
A. Lancaster Regional Medical Center $ 9,000,000
B. River Oaks Hospital Inc. 35,000,000
C. Gadsden 7,500,000
-----------
Total $51,500,000
===========
24
