Item 1.01.
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Entry into a Material Definitive Agreement
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On February 6, 2020, CHS/Community Health Systems, Inc. (the Issuer), a direct, wholly owned subsidiary of Community Health
Systems, Inc. (the Company), completed its previously announced offering of $1,462,000,000 aggregate principal amount of its 6.625% Senior Secured Notes due 2025 (the Notes). The terms of the Notes are governed by an
indenture, dated as of February 6, 2020, among the Issuer, the Company, the subsidiary guarantors party thereto, Regions Bank, as trustee (the Trustee), and Credit Suisse AG, as collateral agent (the Collateral Agent)
(the Indenture).
The Notes bear interest at a rate of 6.625% per year payable semi-annually in arrears on February 15
and August 15 of each year, commencing on August 15, 2020.
The Notes are unconditionally guaranteed on a senior-priority
secured basis by the Company and each of the Issuers current and future domestic subsidiaries that provide guarantees under the Issuers ABL facility (the ABL Facility), any capital market debt securities of the Issuer
(including the Issuers outstanding senior notes) and certain other long-term debt of the Issuer and the guarantors.
The Notes and
the related guarantees are secured by (i) first-priority liens on the collateral (the Non-ABL Priority Collateral) that also secures on a first-priority basis the Issuers existing
senior-priority secured notes (the Existing Senior-Priority Secured Notes) and (ii) second-priority liens on the collateral (the ABL-Priority Collateral and together with the Non-ABL Priority Collateral, the Collateral) that secures on a first-priority basis the ABL Facility (and also secures on a second-priority basis the Existing Senior-Priority Secured Notes), in each case
subject to permitted liens described in the Indenture. The Notes are subject to the terms of three intercreditor agreements: (1) the intercreditor agreement which governs the relative rights of the secured parties in respect of the ABL
Facility, the Existing Senior-Priority Secured Notes, the Issuers existing junior-priority secured notes (the Existing Junior-Priority Secured Notes) and the Notes (the ABL Intercreditor Agreement), (2) the
intercreditor agreement which governs the relative rights of the secured parties in respect of the Existing Senior-Priority Secured Notes, the Existing Junior-Priority Secured Notes and the Notes (the Senior-Junior Intercreditor
Agreement) and (3) the intercreditor agreement which governs the relative rights of holders of the Notes, holders of the Existing Senior-Priority Secured Notes and holders of any future obligations secured on a pari passu basis with the
Notes (the Pari Passu Intercreditor Agreement and, together with the ABL Intercreditor Agreement and the Senior-Junior Intercreditor Agreement, the Intercreditor Agreements). Each of the Intercreditor Agreements restrict the
actions permitted to be taken by the Collateral Agent with respect to the Collateral on behalf of the holders of the Notes.
At any time
prior to February 15, 2022, the Issuer may redeem some or all of the Notes at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date plus a
make-whole premium, as described in the Indenture. On or after February 15, 2022, the Issuer may redeem some or all of the Notes at any time and from time to time at the redemption prices set forth in the Indenture, plus accrued and
unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, at any time prior to February 15, 2022, the Issuer may redeem up to 40% of the aggregate principal amount of the Notes with the proceeds of certain equity
offerings at the redemption price set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.
If the Company or the Issuer experiences a Change of Control (as defined in the Indenture), the Issuer is required to offer to repurchase the
Notes at 101% of the principal amount of such Notes plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.
The Indenture contains covenants that, among other things, limit the Issuers ability and the ability of its restricted subsidiaries to
incur or guarantee additional indebtedness, pay dividends or make other restricted payments, make certain investments, incur restrictions on the ability of the Issuers restricted subsidiaries that are not guarantors to pay dividends or make
certain other payments, create or incur certain liens, sell assets and subsidiary stock, impair the security interests, transfer all or substantially all of the Issuers assets or enter into merger or consolidation transactions, and enter into
transactions with affiliates. The Indenture provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or interest, breach of other agreements in the
Indenture, failure to pay certain other
indebtedness, failure to pay certain final judgments, failure of certain guarantees to be enforceable, failure to
perfect certain collateral securing the Notes and certain events of bankruptcy or insolvency.