UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
December 13, 2006 (December 13, 2006)
Date of Report (date of earliest event reported)
COMMUNITY HEALTH SYSTEMS, INC.
(Exact name of Registrant as specified in charter)
| Delaware | 001-15925 | 13-3893191 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
4000 Meridian Boulevard
Franklin, Tennessee 37067
(Address of principal executive offices)
Registrant’s telephone number, including area code: (615) 465-7000
Franklin, Tennessee 37067
(Address of principal executive offices)
Registrant’s telephone number, including area code: (615) 465-7000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (l7 CFR 240.13e-4(c)) |
ITEM 1.01 Entry into (Modification of) a Material Definitive Agreement
On December 13, 2006, the registrant, Community Health Systems, Inc. (the “Company”) entered into
two amendments to the $1.625 billion Amended and Restated Credit Agreement, dated as of August 19,
2004, as amended as of December 16, 2004, and as of July 8, 2005 (the “Credit Agreement”), among
the Company’s wholly owned subsidiary, CHS/CHS Community Health Systems, Inc. (the “Borrower”), the
Company, the several lenders parties thereto from time to time, JP Morgan Chase Bank, as
Administrative Agent, Wachovia Bank, National Association, as Syndication Agent, and Bank of
America, National Association, as Documentation Agent.
The First Incremental Facility Amendment, dated as of December 13, 2006, provides for an additional
tranche of term loans to the Credit Agreement in an aggregate principal amount of $400,000,000
(the “Incremental Term Loan Facility”). The full amount of the Incremental Term Loan Facility was
funded on December 13, 2006, and the proceeds were used to repay the full outstanding amount
(approximately $326 million) of the revolving credit facility under the Credit Agreement (which
will remain available for general corporate purposes ) and the balance is available to be used for
general corporate purposes. The Incremental Term Loan Facility has the same interest rate margins
as the other term loans under the Credit Agreement (at the Borrower’s option, 1.75% for Eurodollar
loans or 0.75% for alternate base rate loans) and matures on February 29, 2012.
A copy of the First Incremental Facility Amendment is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
The Third Amendment to the Credit Agreement, dated as of December 13, 2006, provides the Borrower
with flexibility to use the proceeds of any future subordinated debt offerings to repay either the
revolving credit facility and/or the term loans under the Credit Agreement, increases the basket
for dividends or stock repurchases to $300,000,000 (plus proceeds from employee stock issuances)
after the date of such amendment, refreshes certain negative covenants and prepayment thresholds
and amends certain other negative covenants.
A copy of the Third Amendment is attached hereto as Exhibit 10.2 and is incorporated herein by
reference.
Certain of the agents and lenders under the Credit Agreement and their affiliates have performed
various financial advisory, investment banking and commercial banking services from time to time
for the Company and its affiliates for which they have received
customary fees and expenses. Such
persons may in the future from time to time engage in transactions with and perform services for
the Company and its affiliates in the ordinary course of their respective businesses.
The Company issued a press release on December 13, 2006, making this announcement; a copy of this
press release is filed as Exhibit 99.1 to this Report and is incorporated by reference into this
Item 1.01.
ITEM 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant
The disclosures under Item 1.01 of this report relating to the Incremental Term Loan Facility are
also responsive to Item 2.03 of this report and are incorporated by reference into this Item 2.03.
ITEM 8.01 Other Events
On December 13, 2006, the Company announced an open market share repurchase program of up to five
million (5,000,000) shares of the Company’s common stock, par value $.01 per share, not to exceed
total purchases under the program of $200,000,000.
The Company issued a press release on December 13, 2006, making this announcement; a copy of this
press release is filed as Exhibit 99.2 to this Report and is incorporated by reference into this
Item 8.01.
ITEM 9.01 Financial Statements and Exhibits
(c) Exhibits.
| 10.1 | First Incremental Facility Amendment, dated as of December 13, 2006, among CHS/CHS Community Health Systems, Inc., Community Health Systems, Inc., the several banks and other financial institutions lenders parties thereto, JP Morgan Chase Bank, as Administrative Agent, Wachovia Bank, National Association, as Syndication Agent, and Bank of America, National Association, as Documentation Agent. (Credit Agreement) | ||
| 10.2 | Third Amendment, dated December 13, 2006, among CHS/CHS Community Health Systems, Inc., Community Health Systems, Inc., the several the several banks and other financial institutions lenders parties thereto, JP Morgan Chase Bank, as Administrative Agent, Wachovia Bank, National Association, as Syndication Agent, and Bank of America, National Association, as Documentation Agent. (Credit Agreement) | ||
| 99.1 | Press Release dated December 13, 2006 (Credit Agreement) | ||
| 99.2 | Press Release dated December 13, 2006 (Share Repurchase Program) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: December 13, 2006 | COMMUNITY HEALTH SYSTEMS, INC. (Registrant) |
|||
| By: | /s/ Wayne T. Smith | |||
| Wayne T. Smith | ||||
| Chairman of the Board, President and Chief Executive Officer (principal executive officer) | ||||
| By: | /s/ W. Larry Cash | |||
| W. Larry Cash | ||||
| Executive Vice President, Chief Financial Officer and Director (principal financial officer) | ||||
Exhibit 10.1
EXECUTION COPY
Up To $400,000,000
FIRST INCREMENTAL FACILITY AMENDMENT
dated as of December 13, 2006
to the
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of August 19, 2004
among
CHS/COMMUNITY HEALTH SYSTEMS, INC.,
COMMUNITY HEALTH SYSTEMS, INC.
The Several Banks And Other Financial Institutions
From Time To Time Parties Thereto,
From Time To Time Parties Thereto,
BANK OF AMERICA, N.A.,
as Documentation Agent,
as Documentation Agent,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Syndication Agent,
as Syndication Agent,
and
JPMORGAN CHASE BANK, N.A.
as Administrative Agent for the Lenders Thereunder
as Administrative Agent for the Lenders Thereunder
FIRST INCREMENTAL FACILITY AMENDMENT dated as of December 13, 2006 (this “First
Incremental Facility Amendment”), to the Amended and Restated Credit Agreement, dated as of
August 19, 2004, as amended (the “Credit Agreement”), among CHS/Community Health Systems,
Inc. (the “Borrower”), Community Health Systems, Inc. (“Parent”), the several banks
and other financial institutions from time to time parties thereto (the “Lenders”), Bank of
America, N.A., as documentation agent, Wachovia Bank, National Association, as syndication agent,
and JPMorgan Chase Bank, N.A., as administrative agent for the Lenders thereunder (in such
capacity, the “Administrative Agent”).
WITNESSETH:
WHEREAS, the Borrower, Parent, the Administrative Agent and the Lenders are parties to the
Credit Agreement;
WHEREAS, subsection 2.4 of the Credit Agreement provides that the Borrower and the
Administrative Agent may amend the Credit Agreement to provide for one or more additional tranches
of term loans with the consent of the Lenders (which may be new Lenders) providing such additional
term loans, subject to the limitations and restrictions therein;
WHEREAS, the Borrower desires to add an additional tranche of term loans to the Credit
Agreement in an aggregate amount of up to $400,000,000, and the Administrative Agent is willing to
enter into this First Incremental Facility Amendment to provide for such additional tranche of term
loans; and
WHEREAS, the Lenders (including the new Lenders) parties to this First Incremental Facility
Amendment are willing to commit to make, and to make, term loans under the additional tranche
desired by the Borrower in the respective principal amounts set forth with their signatures to this
First Incremental Facility Amendment;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in consideration of the premises contained herein, the parties hereto agree as
follows:
1. Definitions. Unless otherwise defined herein, terms defined in the Credit
Agreement shall have their defined meanings when used herein.
2. Amendment to Subsection 1.1. Subsection 1.1 of the Credit Agreement is hereby
amended by inserting the following definition in appropriate alphabetical order:
“Incremental Term Loan Maturity Date”: February 29, 2012.
3. Additional Term Loan Commitments. Subject to the terms and conditions of the
Credit Agreement and this First Incremental Facility Amendment, each
2
Lender (including each new Lender) party hereto severally agrees to make a term loan (a
“First Incremental Facility Term Loan”) to the Borrower in a single drawing on the First
Incremental Facility Amendment Effective Date (as defined below) in the amount set forth with its
signature to this First Incremental Facility Amendment (the “First Incremental Facility Term
Commitment” of such Lender). The First Incremental Facility Term Loans shall have the terms
set forth below and, except as set forth below, shall otherwise be treated as “Term Loans” under
the Credit Agreement (including for purposes of sharing on a ratable basis in prepayments of Term
Loans):
(a) Applicable Margin. The Applicable Margin for each First Incremental
Facility Term Loan for each day shall be the rate per annum for the relevant Type of such
First Incremental Facility Term Loan set forth below:
| ABR Loan | Eurodollar Loan | |
0.75%
|
1.75% |
(b) Repayment. The First Incremental Facility Term Loan of each Lender shall
mature in 22 consecutive installments, each of which shall be in an amount equal to the
percentage that such Lender’s First Incremental Term Commitment bears of the First
Incremental Term Commitments of all the Lenders (such percentage, the “First
Incremental Term Commitment Percentage” of such Lender) multiplied by the amount set
forth below opposite the date of such installment:
| Installment | Principal Amount | |||
December 31, 2006 |
$ | 1,000,000 | ||
March 31, 2007 |
$ | 1,000,000 | ||
June 30, 2007 |
$ | 1,000,000 | ||
September 30, 2007 |
$ | 1,000,000 | ||
December 31, 2007 |
$ | 1,000,000 | ||
March 31, 2008 |
$ | 1,000,000 | ||
June 30, 2008 |
$ | 1,000,000 | ||
September 30, 2008 |
$ | 1,000,000 | ||
December 31, 2008 |
$ | 1,000,000 | ||
March 31, 2009 |
$ | 1,000,000 | ||
June 30, 2009 |
$ | 1,000,000 | ||
September 30, 2009 |
$ | 1,000,000 | ||
December 31, 2009 |
$ | 1,000,000 | ||
March 31, 2010 |
$ | 1,000,000 | ||
June 30, 2010 |
$ | 1,000,000 | ||
September 30, 2010 |
$ | 1,000,000 | ||
December 31, 2010 |
$ | 1,000,000 | ||
March 31, 2011 |
$ | 1,000,000 | ||
June 30, 2011 |
$ | 1,000,000 | ||
September 30, 2011 |
$ | 1,000,000 | ||
December 31, 2011 |
$ | 1,000,000 | ||
Incremental Term Loan Maturity Date |
$ | 379,000,000 | ||
3
(c) Amendment to Subsection 8.1. Subsection 8.1 of the Credit Agreement with
respect to the First Incremental Term Loan is hereby deleted in its entirety and
substituting in lieu thereof the following:
(a) Consolidated Total Indebtedness to Annualized Consolidated EBITDA. Permit
for any period of four consecutive fiscal quarters ending during any fiscal year listed
below, commencing with the fiscal quarter ending December 31, 2006, the ratio of
Consolidated Total Indebtedness as of the end of such period to Annualized Consolidated
EBITDA for such period to be more than the ratio set forth opposite the fiscal year below:
| Fiscal Year Ending | Ratio | |||
December 31, 2006 |
4.25 to 1 | |||
December 31, 2007 |
4.25 to 1 | |||
December 31, 2008 |
4.00 to 1 | |||
December 31, 2009 |
4.00 to 1 | |||
December 31, 2010 |
3.75 to 1 | |||
December 31, 2011 |
3.75 to 1 | |||
Thereafter |
3.75 to 1 | |||
(b) Interest Coverage Ratio. Permit for any period of four consecutive fiscal
quarters ending during any fiscal year listed below, commencing with the fiscal quarter
ending December 31, 2006, the ratio of (i) Annualized Consolidated EBITDA for such period
to (ii) Consolidated Interest Expense for such period to be less than the ratio set forth
opposite the fiscal year below:
| Fiscal Year Ending | Ratio | |||
December 31, 2006 |
3.25 to 1 | |||
December 31, 2007 |
3.25 to 1 | |||
December 31, 2008 |
3.25 to 1 | |||
December 31, 2009 |
3.25 to 1 | |||
December 31, 2010 |
3.25 to 1 | |||
December 31, 2011 |
3.25 to 1 | |||
Thereafter |
3.25 to 1 | |||
4
(c) Fixed Charge Coverage Ratio. Permit for any period of four consecutive
fiscal quarters ending during any fiscal year listed below, commencing with the fiscal
quarter ending December 31, 2006, the ratio of (i) Annualized Consolidated EBITDA for such
period minus Principal Debt Payments minus Capital Expenditures (other than Replacement
Capital Expenditures) made during such period to (ii) Consolidated Interest Expense (such
ratio for any such period, the “Fixed Charge Coverage Ratio”) to be less than the
ratio set forth opposite the fiscal year below:
| Fiscal Year Ending | Ratio | |||
December 31, 2006 |
1.50 to 1 | |||
December 31, 2007 |
1.50 to 1 | |||
December 31, 2008 |
1.50 to 1 | |||
December 31, 2009 |
1.50 to 1 | |||
December 31, 2010 |
1.50 to 1 | |||
December 31, 2011 |
1.50 to 1 | |||
Thereafter |
1.50 to 1 | |||
(d) Amendment to Subsection 8.8. Subsection 8.8 of the Credit Agreement with
respect to the First Incremental Term Loan is hereby deleted in its entirety and
substituting in lieu thereof the following:
“8.8 Capital Expenditures. Make or commit to make Capital Expenditures (other
than Replacement Capital Expenditures) in any fiscal year exceeding (i) $325,000,000 for
fiscal year 2006 of the Borrower, (ii) $350,000,000 for fiscal year 2007 of the Borrower,
(iii) $375,000,000 for fiscal year 2008 of the Borrower, (iv) $425,000,000 for fiscal year
2009 of the Borrower, (v) $475,000,000 for fiscal year 2010 of the Borrower, (vi)
$525,000,000 for fiscal year 2011 of the Borrower, and (vii) $575,000,000 for fiscal year
2012 of the Borrower, plus, in each case an amount equal to (A) 5% of the excess, if any,
of (i) net revenues generated during the immediately preceding fiscal year from Permitted
Acquisitions since January 1, 2002 (with such net revenues to be annualized for any
Permitted Acquisition made during such immediately preceding fiscal year based upon the
period during such fiscal year commencing on the date of such Permitted Acquisition) over
(ii) $120,000,000 times the number of completed fiscal years since January 1, 2002 and (B)
up to 50% of Capital Expenditures permitted to be made in a fiscal year pursuant to the
terms of this subsection (including this sentence) not expended in the fiscal year for
which they are permitted (which amount may be carried over for expenditure in following
fiscal years). For the avoidance of doubt, the Company and its Subsidiaries may incur
Replacement Capital Expenditures without being subject to the limitations contained in this
subsection 8.8.”
5
(e) Use of Proceeds. The proceeds of the First Incremental Facility Term
Loans shall be used for general corporate purposes of the Borrower and its Subsidiaries,
including repayment of Revolving Credit Loans.
For the avoidance of doubt, the definitions of the terms “Commitment Percentage” and “Commitments”
in subsection 1.1 of the Credit Agreement shall be deemed modified to refer as appropriate to the
First Incremental Facility Term Percentage of each Lender and the First Incremental Facility
Commitments, respectively.
4. Conditions. This First Incremental Facility Amendment shall become effective, and
the agreement of each Lender to make a First Incremental Facility Term Loan in the amount of its
First Incremental Facility Term Commitment is conditioned, upon the satisfaction of the following
conditions precedent (the effective date of this Amendment, the “First Incremental Facility
Amendment Effective Date”):
(a) Amendment. The Administrative Agent shall have received counterparts of
this First Incremental Facility Amendment executed by the Borrower and the Administrative
Agent and consented to by each Lender set forth on the signature page hereof as of the date
hereof.
(b) Reaffirmation of Guarantees and Pledges. The Administrative Agent shall
have received a reaffirmation of the Parent Guarantee, the Parent Pledge Agreement, the
Subsidiary Guarantees and the Subsidiary Pledge Agreement with reference to the Credit
Agreement as amended by this First Incremental Facility Amendment (the
“Reaffirmation”), executed and delivered by an authorized officer of Parent, the
Borrower and each other Credit Party signatory to the Parent Guarantee, the Parent Pledge
Agreement, the Subsidiary Guarantees and/or the Subsidiary Pledge Agreement, substantially
in the form attached to the Credit Agreement as Exhibit J, mutatis
mutandis, which Reaffirmation shall include a confirmation that such guarantees
shall rank senior to any obligations of such Credit Parties in respect of or related to the
High Yield Subordinated Notes.
(c) Representations and Warranties. Each of the representations and
warranties made by the Borrower in or pursuant to this First Incremental Facility Amendment
shall be true and correct in all material respects on and as of the First Incremental
Facility Amendment Effective Date.
(d) Administrative Agent. The Administrative Agent shall have received (i)
opinions and closing certificates similar to those delivered under the Credit Agreement on
the Closing Date (with such changes thereto as the Administrative Agent may agree) and (ii)
reasonable evidence of the creation and perfection (including by the filing of UCC
financing statements) of all of the security interests granted under the Pledge Agreements
or required to be granted thereunder pursuant to the Credit Agreement.
5. Representations And Warranties. In order to induce the Administrative Agent and
the Lenders to enter into this First Incremental Facility
6
Amendment, the Borrower hereby represents and warrants to the Administrative Agent and the
Lenders the following:
(a) Representations in the Credit Agreement. The representations and
warranties contained in the Credit Documents are true and correct in all material respects
on and as of the First Incremental Facility Amendment Effective Date (after giving effect
hereto) as if made on and as of the First Incremental Facility Amendment Effective Date
(except where such representations and warranties expressly relate to an earlier date in
which case such representations and warranties were true and correct in all material
respects as of such earlier date); provided that all references to the “Credit
Agreement” in any Credit Document shall be and are deemed to refer to this First
Incremental Facility Amendment and the Credit Agreement as amended hereby;
(b) Subsidiaries. The Subsidiaries of the Borrower listed on Schedule 5.11(c)
constitute all of the Domestic Subsidiaries of the Borrower, and the Subsidiaries listed on
Schedule 5.11(d) constitute all of the Foreign Subsidiaries of the Borrower as of the First
Incremental Facility Amendment Effective Date. Each Domestic Subsidiary that, as of the
First Incremental Facility Amendment Effective Date, is a Non-Significant Subsidiary, a
Syndication Subsidiary or a Permitted Joint Venture Subsidiary is indicated as such (or in
the case of a Permitted Joint Venture Subsidiary, is indicated as either a “Restricted
Joint Venture Subsidiary” or a “Non-Restricted Joint Venture Subsidiary”) on Schedule
5.11(c).
6. Miscellaneous. (a) Counterparts and Consent to Third Amendment. This
First Incremental Facility Amendment may be executed by one or more of the parties to this First
Incremental Facility Amendment on any number of separate counterparts (including by telecopy), and
all of said counterparts taken together shall be deemed to constitute one and the same instrument.
A set of the copies of this First Incremental Facility Amendment signed by the parties hereto shall
be delivered to the Borrower and the Administrative Agent. Each new Lender that is a party hereto
acknowledges and agrees that from and after the First Incremental Facility Amendment Effective Date
such new Lender shall be a party to and be bound by the provisions of, and shall make the
representations provided for by each Lender in, the Credit Agreement and have the rights and
obligations of a Lender thereunder. Each new Lender shall provide an administrative questionnaire
and tax forms as required by the Credit Agreement or reasonably requested by the Administrative
Agent. Each Lender party hereto hereby consents to the execution and delivery of the Third
Amendment, dated as of December 13, 2006, to the Credit Agreement to the same extent as if it were
a direct signatory thereto.
(b) Fees and Expenses. The Borrower agrees to pay or reimburse the Administrative
Agent for all of its reasonable out-of-pocket costs and expenses in connection with the
negotiation, preparation, execution and delivery of this First Incremental Facility Amendment,
including without limitation the reasonable fees and expenses of Simpson Thacher & Bartlett LLP.
7
(c) Continuing Effect, No Other Amendments or Waivers. Except as expressly set forth
in this First Incremental Facility Amendment, all of the terms and provisions of the Credit
Agreement are and shall remain in full force and effect and the Borrower shall continue to be bound
by all of such terms and provisions. The amendments provided for herein are limited to the
specific subsections of the Credit Agreement specified herein and shall not constitute an amendment
or waiver of, or an indication of the Administrative Agent’s or the Lenders’ willingness to amend
or waive, any other provisions of the Credit Agreement or the same subsections for any other date
or purpose.
(d) GOVERNING LAW. THIS FIRST INCREMENTAL FACILITY AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS FIRST INCREMENTAL FACILITY AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties have caused this First Incremental Facility Amendment to be
executed and delivered by their respective duly authorized officers as of the day and year first
above written.
| CHS/COMMUNITY HEALTH SYSTEMS, INC. |
||||
| By: | /s/ | |||
| Title: Executive Vice President & CFO | ||||
| COMMUNITY HEALTH SYSTEMS, INC. |
||||
| By: | /s/ | |||
| Title: Executive Vice President & CFO | ||||
| [Lender Signature Pages Omitted] |
||||
| JPMORGAN CHASE BANK, N.A. individually and as Administrative Agent |
||||
| BANK OF AMERICA, N.A., individually and as Documentation Agent |
||||
| , | ||||
| as a Lender | ||||
Exhibit 10.2
EXECUTION COPY
THIRD AMENDMENT
THIRD AMENDMENT, dated as of December 13, 2006 (this “Third Amendment”), representing
an amendment to the Amended and Restated Credit Agreement, dated as of August 19, 2004 (as amended
by the First Amendment and Waiver dated as of December 16, 2004 and the Second Amendment dated as
of July 8, 2005, the “Credit Agreement”), among CHS/COMMUNITY HEALTH SYSTEMS, INC., a
Delaware corporation (the “Borrower” or “CHS”), COMMUNITY HEALTH SYSTEMS, INC., a
Delaware corporation (“Parent”), the several lenders from time to time parties thereto (the
“Lenders”), WACHOVIA BANK, NATIONAL ASSOCIATION, as syndication agent (in such capacity,
the “Syndication Agent”), BANK OF AMERICA, N.A., as documentation agent (in such capacity,
the “Documentation Agent”) and JPMORGAN CHASE BANK, N.A. (f/k/a JPMorgan Chase Bank), as
administrative agent for the Lenders (in such capacity, the “Administrative Agent”).
WITNESSETH:
WHEREAS, the Borrower, Parent, the Syndication Agent, the Documentation Agent, the
Administrative Agent and the Lenders are parties to the Credit Agreement;
WHEREAS, the Borrower and Parent have requested that the Administrative Agent and the Required
Lenders agree to amend certain provisions of the Credit Agreement;
WHEREAS, the Administrative Agent and the Lenders parties hereto are willing to agree to the
requested amendments, but only upon the terms and conditions set forth herein; and
WHEREAS, it is expected that substantially contemporaneous with this Third Amendment becoming
effective the Credit Agreement will be amended, as contemplated in subsection 2.4 of the Credit
Agreement, to provide for an additional tranche of term loans, in the aggregate principal amount of
$400,000,000, with such amendment to be executed and delivered by the Borrower, the Administrative
Agent and the Lenders (including new Lenders) committing to make such term loans;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in consideration of the premises contained herein, the parties hereto agree as
follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms which are
defined in the Credit Agreement are used herein as defined therein.
2. Amendment to Definition of “Asset Sale Prepayment Trigger” in Subsection 1.1. The
definition of “Asset Sale Prepayment Trigger” in subsection 1.1 of the Credit Agreement is hereby
amended by inserting after the amount “$75,000,000” in the fifth line thereof the parenthetical
phrase “(or, in the case of an Asset Sale after the effective date of
2
the Third Amendment to this Agreement, the aggregate cash Net Proceeds received in connection
with all such Asset Sales on and after the effective date of the Third Amendment to this Agreement
exceed $75,000,000)”.
3. Amendment to the Definition of “Contingent Obligation” in Subsection 1.1. The
definition of “Contingent Obligation” in subsection 1.1 of the Credit Agreement is hereby amended
by inserting after the word “dividends” in the second line thereof the parenthetical phrase “(other
than stock dividends of the Parent)”.
4. Amendment to the Definition of “Replacement Capital Expenditures” in Subsection
1.1. The definition of “Replacement Capital Expenditures” in subsection 1.1 of the Credit
Agreement is hereby amended by inserting after the word “of” in the second line thereto the
parenthetical numeral “(i)” and by inserting after the word “thereafter” in the fifth line thereto
the phrase “or (ii) the Hospital in Barstow, California (owned, leased or operated by the Borrower
or any of its Subsidiaries or in which the Borrower or any of its Subsidiaries owns an equity
interest as of the effective date of the Third Amendment) and the Hospital in Lindenhurst,
Illinois”.
5. Amendment to Subsection 2.4. Subsection 2.4 of the Credit Agreement is hereby
amended by replacing the phrase “Closing Date” with the phrase “First Incremental Amendment
Effective Date”.
6. Amendment to Subsection 4.6(d)(i). Subsection 4.6(d)(i) of the Credit Agreement is
hereby deleted in its entirety and inserting in lieu thereof the following:
“(i) Amounts to be applied in connection with prepayments made pursuant to paragraph (a) or
(b) above other than from proceeds from issuance of Convertible Subordinated Debt or High Yield
Subordinated Debt shall be applied, first, to the ratable prepayment of the Term Loans (in
the manner set forth in clause (ii) of this paragraph (d)) and second, to the prepayment of
Revolving Credit Loans then outstanding (without any accompanying reduction of the Revolving Credit
Commitments). Amounts to be applied in connection with prepayments made pursuant to paragraph (a)
above in connection with proceeds from issuance of Convertible Subordinated Debt or High Yield
Subordinated Debt shall be applied to the ratable prepayment of the Term Loans (in the manner set
forth in clause (ii) of this paragraph (d)) or to the prepayment of Revolving Credit Loans then
outstanding (without any accompanying reduction of the Revolving Credit Commitments) in an order to
be determined as specified by the Borrower in a notice to the Administrative Agent. Amounts to be
applied in connection with prepayments made pursuant to paragraph (c) above shall be applied,
first, to the ratable prepayment of the Term Loan installments scheduled to be paid during
the next twelve months after the date of such prepayment, in the order that such installments are
scheduled to be paid; second, to the prepayment of Revolving Credit Loans then outstanding
(without any accompanying reduction of the Revolving Credit Commitments); and third, to the
prepayment of the remaining installments of the Term Loans on a pro rata basis.”
7. Amendment to Subsection 8.2(h). Subsection 8.2(h) is hereby amended by inserting
at the end of clause (iii)(B) thereof, immediately before the word “and”, the parenthetical phrase
"(excluding any such payment in the form of a cash net settlement payment
3
in connection with the exercise of the conversion right under any Convertible Subordinated
Debt, provided that the aggregate principal amount of such payments shall at no time exceed
$350,000,000).”
8. Amendment to Subsection 8.7. Subsection 8.7 is hereby amended by (i) deleting the
“and” at the end of paragraph (n) thereof, (ii) deleting the period and inserting in lieu thereof
”; and” at the end of paragraph (o) thereof; and inserting after paragraph (n) thereof the
following:
“(p) the Borrower and its Subsidiaries may make Investments in securities convertible into,
exchangeable for or exercisable into the shares of capital stock or other equity interests of the
Parent.”
9. Amendment to Subsection 8.9. Subsection 8.9 of the Credit Agreement is hereby
amended by:
(a) inserting after the phrase “any class of stock” in the fourth line thereof the
parenthetical phrase “(other than in exchange for or out of the net cash proceeds to Parent from
the substantially concurrent issue or sale of other shares of capital stock or other equity
interests of Parent, or warrants, options or rights to purchase or acquire any shares of capital
stock or other equity interest of Parent)”.
(b) deleting paragraph (c) thereof in its entirety and inserting in lieu thereof:
“(c) so long as no Default or Event of Default has occurred or would occur after giving effect
to such declaration or payment, the Borrower may, from time to time, declare and pay cash dividends
or make other distributions to Parent on the common stock of the Borrower (including, without
limitation, payments made for the purchase, redemption, retirement or other acquisition of any
shares of any class of stock (including, without limitation, the outstanding capital stock of
Parent); provided that the proceeds of such dividends shall be used within 30 days of the
receipt of such dividends by Parent to repurchase, or pay dividends on, Parent stock and,
provided further, that the amount of such cash dividends and other distributions or
payments paid or made from and after the effective date of the Third Amendment does not exceed in
the aggregate $300,000,000 plus (to the extent not previously used) the net cash proceeds received
by the Parent in respect of any Employee Issuances after the Closing Date; and”.
10. Amendment to Subsection 8.11. Subsection 8.11 of the Credit Agreement is hereby
amended by inserting “(i)” after the word “transactions” in the third line thereof and inserting
after the word “inventory” in the last line thereof “or (ii) relating to or on the shares of
capital stock or other equity interests of the Parent”.
11. Amendment to Subsection 8.15. Subsection 8.15 of the Credit Agreement is hereby
amended by replacing the term “24 months” with the term “30 months” and by replacing the amount
“$50,000,000” with the amount “$75,000,000”.
12. Amendment to Section 11. Section 11 of the Credit Agreement is hereby amended by
inserting the following new Subsection 11.14 in its entirety after Subsection 11.13:
4
“11.14 Confidentiality. Each of the Administrative Agent and each Lender agrees to
keep confidential all non-public information provided to it by any Credit Party, the Administrative
Agent or any Lender pursuant to or in connection with this Agreement that is designated by the
provider thereof as confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the Administrative Agent, any other
Lender or any affiliate thereof, (b) subject to an agreement to comply with the provisions of this
Section, to any actual or prospective Assignee, (c) to its employees, directors, agents, attorneys,
accountants and other professional advisors or those of any of its affiliates, (d) upon the request
or demand of any Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (f) if
requested or required to do so in connection with any litigation or similar proceeding, (g) that
has been publicly disclosed, (h) to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires access to information
about a Lender’s investment portfolio in connection with ratings issued with respect to such
Lender, or (i) in connection with the exercise of any remedy hereunder or under any other Credit
Document.
“Each Lender acknowledges that information furnished to it pursuant to this Agreement or the
other Credit Documents may include material non-public information concerning the Borrower and its
Affiliates and their related parties or their respective securities, and confirms that it has
developed compliance procedures regarding the use of material non-public information and that it
will handle such material non-public information in accordance with those procedures and applicable
law, including Federal and state securities laws.
“All information, including requests for waivers and amendments, furnished by the Borrower or
the Administrative Agent pursuant to, or in the course of administering, this Agreement or the
other Credit Documents will be syndicate-level information, which may contain material non-public
information about the Borrower and its Affiliates and their related parties or their respective
securities. Accordingly, each Lender represents to the Borrower and the Administrative Agent that
it has identified in its administrative questionnaire a credit contact who may receive information
that may contain material non-public information in accordance with its compliance procedures and
applicable law, including Federal and state securities laws.”
13. Conditions to Effectiveness of this Third Amendment. This Third Amendment
shall become effective upon receipt by the Administrative Agent of (i) counterparts of this Third
Amendment duly executed by each of the Borrower, Parent and the Administrative Agent and consented
to by the Required Lenders (such date, the “Third Amendment Effective Date”) and (ii) a fee
for each Lender that has executed and delivered to the Administrative Agent an executed signature
page of this Third Amendment by 5:00 p.m., New York time, on December 6, 2006 of 0.05% of the sum
of the outstanding principal amount of the Term Loan and the amount of the Revolving Credit
Commitment of such Lender.
14. Representations and Warranties. On and as of the date hereof and after giving
effect to this Third Amendment, the Borrower hereby confirms, reaffirms and restates the
representations and warranties set forth in Section 5 of the Credit Agreement mutatis
mutandis, except to the extent that such representations and warranties expressly relate to
a specific earlier
5
date in which case the Borrower hereby confirms, reaffirms and restates such representations
and warranties as of such earlier date, provided that the references to the Credit
Agreement in such representations and warranties shall be deemed to refer to the Credit Agreement
as amended pursuant to this Amendment.
15. Continuing Effect; No Other Amendments. Except as expressly set forth in this
Third Amendment, all of the terms and provisions of the Credit Agreement are and shall remain in
full force and effect and the Borrower shall continue to be bound by all of such terms and
provisions. The amendments provided for herein are limited to the specific subsections of the
Credit Agreement specified herein and shall not constitute an amendment of, or an indication of the
Administrative Agent’s or the Lenders’ willingness to amend or waive, any other provisions of the
Credit Agreement or the same subsections for any other date or purpose.
16. Expenses. The Borrower agrees to pay and reimburse the Administrative Agent for
all its reasonable costs and expenses incurred in connection with the preparation and delivery of
this Third Amendment, including, without limitation, the reasonable fees and disbursements of
counsel to the Administrative Agent.
17. Counterparts. This Third Amendment may be executed by one or more of the parties
to this Third Amendment on any number of separate counterparts (including by telecopy), and all of
said counterparts taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Third Amendment signed by the parties hereto shall be delivered to the
Borrower and the Administrative Agent. The execution and delivery of this Third Amendment by any
Lender shall be binding upon each of its successors and assigns (including transferees of its
Commitments and Loans in whole or in part prior to effectiveness hereof) and binding in respect of
all of its Commitments and Loans, including any acquired subsequent to its execution and delivery
hereof and prior to the effectiveness hereof.
18. GOVERNING LAW. THIS THIRD AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be executed and
delivered by their respective duly authorized officers as of the date first above written.
| CHS/COMMUNITY HEALTH SYSTEMS, INC. |
||||
| By: | /s/ | |||
| Name: | W. Larry Cash | |||
| Title: | Executive Vice President & CFO | |||
| COMMUNITY HEALTH SYSTEMS, INC. |
||||
| By: | /s/ | |||
| Name: | W. Larry Cash | |||
| Title: | Executive Vice President & CFO | |||
| [Lender Signature Pages Omitted] JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a Lender [ ], as a Lender |
||||
Exhibit 99.1
COMMUNITY HEALTH SYSTEMS ANNOUNCES
NEW 5 MILLION SHARE OPEN MARKET SHARE REPURCHASE
NEW 5 MILLION SHARE OPEN MARKET SHARE REPURCHASE
FRANKLIN, Tenn. — (December 13, 2006) — Community Health Systems, Inc. (NYSE: CYH) today
announced its Board of Directors has approved a new open market share repurchase program for up to
five million (5,000,000) shares of the Company’s Common Stock.
The open market repurchase program succeeds an existing share repurchase program for up to
five million (5,000,000) shares of the Company’s Common Stock, which program was initiated on
January 13, 2006 and was concluded on November 8, 2006, when the aggregate number of shares of
Common Stock repurchased equaled five million (5,000,000). The total cost of purchases (including
commissions) pursuant to that program was $176,315,468, of which 1,175,200 shares at an aggregate
cost of $38,650,090 were repurchased in the fourth quarter of 2006.
The new open market repurchase program will commence on December 13, 2006, and will terminate
on the earlier to occur of the purchase of an aggregate of five million (5,000,000) shares of
Common Stock under the new open market stock repurchase program, not to exceed total purchases of
$200,000,000, or December 12, 2009. The Company had
approximately 94,996,199 million shares
outstanding as of December 13, 2006.
Located in the Nashville, Tennessee, suburb of Franklin, Community Health Systems is a leading
operator of general acute care hospitals in non-urban communities throughout the country. Through
its subsidiaries, the company currently owns, leases or operates 77 hospitals in 21 states. Its
hospitals offer a broad range of inpatient medical and surgical services, outpatient treatment and
skilled nursing care. Shares in Community Health Systems, Inc. are traded on the New York Stock
Exchange under the symbol “CYH.”
Statements contained in this news release regarding expected stock transactions, acquisition transactions and other events are forward-looking statements that
involve risk and uncertainties. Actual future events or results may differ materially from these
statements. Readers are referred to the documents filed by Community Health Systems, Inc. with the
Securities and Exchange Commission, including the Company’s annual reports on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K. These filings identify important risk factors
and other uncertainties that could cause actual results to differ from those contained in the
forward-looking statements. The Company undertakes no obligation to revise or update any
forward-looking statements, or to make any other forward-looking statements, whether as a result of
new information, future events or otherwise.
###
Investor Contact:
|
W. Larry Cash | |
| Executive Vice President | ||
| and Chief Financial Officer | ||
| (615) 465-7000 |
Exhibit 99.2
COMMUNITY HEALTH SYSTEMS, INC. ANNOUNCES
APPROVAL OF AMENDMENTS TO ITS CREDIT AGREEMENT
APPROVAL OF AMENDMENTS TO ITS CREDIT AGREEMENT
FRANKLIN, Tenn. (December 13, 2006) — Community Health Systems, Inc. (NYSE:CYH) today announced
the approval of amendments to the existing $1.625 billion Credit Facility. The Company’s
wholly-owned subsidiary, CHS/Community Health Systems, Inc., is the borrower under the Credit
Facility and the Company is a guarantor. The Credit Facility is syndicated with a group of lenders
led by J. P. Morgan Securities Inc. and Banc of America Securities LLC, as joint bookrunners and
joint lead arrangers, and Wachovia Bank, National Association, as syndication agent,. The
amendments add an Incremental Term Loan Facility in the amount of $400 million with a maturity of
February 2012, and also refresh the thresholds of the negative covenants and the prepayment
requirements under the Credit Facility. The Incremental Term Loan Facility has been funded and the
proceeds were used to repay amounts outstanding under the Credit Facility’s revolving credit
facility, which may be redrawn to fund general corporate purposes including the acquisition and
other capital needs of the Company and its subsidiaries, and the balance will be used for general
corporate purposes. The Credit Facility’s accordion feature allowing an additional $400 million in
new debt remains in place.
Located in the Nashville, Tennessee suburb of Franklin, Community Health Systems is a leading
operator of general acute care hospitals in non-urban communities throughout the country. Through
its subsidiaries, the company currently owns, leases, or operates 77 hospitals in 22 states. Its
hospitals offer a broad range of inpatient medical and surgical services, outpatient treatment and
skilled nursing care. Shares in Community Health Systems, Inc. are traded on the New York Stock
Exchange under the symbol “CYH.”
Statements contained in this news release regarding credit agreement amendments, their impact
on the Company, and other events may include forward-looking statements that involve risks and
uncertainties. Actual future events or results may differ materially from these statements.
Readers are referred to the documents filed by Community Health Systems, Inc. with the Securities
and Exchange Commission, specifically the most recent filings which identify important risk factors
that could cause actual results to differ from those contained in the forward-looking statements,
including execution of our growth, acquisition, and business strategies. These and other
applicable risks are summarized under the caption “risk factors” in the Company’s Securities and
Exchange Commission filings. The Company undertakes no obligation to revise or update any
forward-looking statements, or to make any other forward-looking statements, whether as a result of
new information, future events or otherwise.
###
Investor Contact:
|
W. Larry Cash | |
| Executive Vice President | ||
| And Chief Financial Officer | ||
| (615) 465-7000 |