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TENET HEALTHCARE CORPORATION
and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
J.P. MORGAN SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
______________________
UNDERWRITING AGREEMENT
______________________
Dated as of October ___, 1995
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TENET HEALTHCARE CORPORATION
__% SENIOR NOTES DUE 2003
UNDERWRITING AGREEMENT
October ___, 1995
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J.P. MORGAN SECURITIES INC.
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, New York 10005
Ladies and Gentlemen:
Subject to the terms and conditions herein contained, Tenet
Healthcare Corporation, a Nevada corporation (the "Company"), proposes to
issue and sell to Donaldson, Lufkin & Jenrette Securities Corporation
("DLJ"), J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Morgan Stanley & Co. Incorporated (collectively with DLJ,
the "Underwriters") an aggregate of $300.0 million principal amount of its
__% Senior Notes due 2003 (the "Securities"). The Securities are to be
issued pursuant to the provisions of an Indenture (the "Indenture") to be
dated as of October ___, 1995, by and between the Company and The Bank of New
York, as Trustee (the "Trustee").
This Agreement, the Securities and the Indenture are collectively
referred to herein as the "Transaction Documents."
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission promulgated
pursuant thereto (collectively, the
"Act"), a registration statement on Form S-3 (No. 33-_____), with respect to
the Securities, including a preliminary prospectus, subject to completion,
relating to the Securities. The registration statement, as amended at the
time it becomes effective or, if a post-effective amendment is filed with
respect thereto, as amended by such post-effective amendment at the time of
its effectiveness (including in each case all documents incorporated or
deemed to be incorporated by reference therein, if any, all financial
statements and exhibits, and the information, if any, contained in a
prospectus subsequently filed with the Commission pursuant to Rule 424(b)
under the Act and deemed to be a part of the registration statement at the
time of its effectiveness pursuant to Rule 430A of the Act) is hereinafter
referred to as the "Registration Statement;" and the prospectus constituting
a part of the Registration Statement at the time it became effective, or such
revised prospectus as shall be provided to the Underwriters for use in
connection with the offering of the Securities that differs from the
prospectus on file with the Commission at the time the Registration Statement
became effective (including, in each case, all documents incorporated or
deemed to be incorporated by reference therein, if any), whether or not filed
with the Commission pursuant to Rule 424(b) under the Act, is hereinafter
referred to as the "Prospectus." Any reference herein to the Registration
Statement, the Prospectus, any amendment or supplement thereto or any
preliminary prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration
Statement or Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission deemed to be
incorporated by reference therein.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations and warranties contained in this Agreement, and subject to
its terms and conditions, the Company agrees to issue and sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Company, the Securities in the respective principal amounts
set forth opposite their names on Schedule I hereto, plus such amount as they
may individually become obligated to purchase pursuant to Section 8 hereof,
at a purchase price equal to ______% of the principal amount of the
Securities together with accrued interest, if any, to the Closing Date (the
"Purchase Price").
3. DELIVERY AND PAYMENT. Delivery to you of and payment for
the Securities shall be made at 10:00 A.M., New York City time, on October
___, 1995 (such time and date being referred to as the "Closing Date"), at
the offices of DLJ at 140 Broadway, New York, New York 10005 (Cashier's
Window, Main Level), or such other place as you shall reasonably designate.
The Securities in definitive form shall be registered in
such names and issued in such denominations as you shall request in writing
not later than two full business days prior to the Closing Date, and shall be
made available to you at the offices of DLJ (or at such other place as shall
be acceptable to you) for inspection not later than
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10:00 A.M., New York City time, on the business day next preceding the
Closing Date. The Securities shall be delivered to you on the Closing Date
with any transfer taxes payable upon initial issuance thereof duly paid by
the Company, for your respective accounts against payment of the appropriate
Purchase Price by [wire transfer of immediately available funds] to an
account designated by the Company; PROVIDED, HOWEVER, that, to the extent you
are not paid for the Securities in immediately available funds, the Company
will promptly reimburse you for the cost of your delivering the Purchase
Price in immediately available funds upon your presentation of an invoice.
The Closing Date and the location of delivery of, and the form of payment
for, the Securities may be varied by agreement between DLJ and the Company.
4. AGREEMENTS OF THE COMPANY. The Company agrees with each
of you that:
(a) It will, if the Registration Statement has not
heretofore become effective under the Act, and if otherwise necessary or
required by law, file an amendment to the Registration Statement or, if
necessary pursuant to Rule 430A of the Act, a post-effective amendment to the
Registration Statement, in each case as soon as practicable after the
execution and delivery of this Agreement, and it will use its best efforts to
cause the Registration Statement or such post-effective amendment to become
effective at the earliest possible time. If the Registration Statement has
become effective and the Company, omitting from the Prospectus certain
information in reliance upon Rule 430A of the Act, elects not to file a
post-effective amendment pursuant to Rule 430A of the Act, it will file the
form of Prospectus required by Rule 424(b) of the Act within the time period
specified by Rule 430A and Rule 424(b) of the Act. The Company will
otherwise comply in a timely manner with all applicable provisions of Rule
424 and Rule 430A of the Act.
(b) It will advise DLJ promptly and, if requested by
DLJ, confirm such advice in writing, (i) when the Registration Statement has
become effective, if and when the Prospectus is sent for filing pursuant to
Rule 424 of the Act and when any post-effective amendment to the Registration
Statement becomes effective, (ii) of the receipt of any comments from the
Commission or any state securities commission or any other regulatory
authority that relate to the Registration Statement or requests by the
Commission or any state securities commission or any other regulatory
authority for any amendment or supplement to the Registration Statement or
any amendment or supplements to the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or of the suspension of
qualification of the Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purpose by the Commission or any
state securities commission or any other regulatory authority and (iv) of the
happening of any event during the period referred to in paragraph (d), below,
which makes any statement of a material fact made in the Registration
Statement untrue or which requires the making of any additions to or changes
in the Registration Statement
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in order to make the statements therein not misleading or that makes any
statement of a material fact made in the Prospectus untrue or which requires
the making of any addition to or change in the Prospectus in order to make
the statements therein, in light of the circumstances under which they were
made, 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 the Securities under any Federal or state securities or Blue Sky laws,
and, if at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or any other regulatory authority shall issue an order suspending
the qualification or exemption of the Securities under any state securities
or Blue Sky laws, the Company shall use every reasonable effort to obtain the
withdrawal or lifting of such order at the earliest possible time.
(c) Promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as in your
reasonable judgment a prospectus is required to be delivered in connection
with sales of the Securities by an Underwriter or a dealer, it will furnish
to each Underwriter and each dealer, without charge, as many copies of the
Prospectus, including all documents incorporated by reference therein, (and
of any amendment or supplement to the Prospectus) as you may reasonably
request.
(d) If during the period specified in paragraph (c) of
this Section 4 any event shall occur as a result of which it becomes
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing as of the date
the Prospectus is delivered to an offeree or a purchaser, not misleading, or
if it is necessary to amend or supplement the Prospectus to comply with any
law, it will promptly prepare and file with the Commission an appropriate
amendment or supplement to the Prospectus so that the statements in the
Prospectus, as so amended or supplemented, will not, in the light of the
circumstances existing as of the date the Prospectus is so delivered, be
misleading, and will comply with applicable law, and will promptly notify you
of such event and amendment or supplement and furnish to you without charge
such number of copies thereof as you may reasonably request.
(e) It will make generally available to its security
holders, as soon as practicable and for the time period specified by Rule 158
under the Act, a consolidated earnings statement which shall satisfy the
provision of Section 11(a) and Rule 158 of the Act.
(f) Whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, it will pay and be
responsible for all costs, charges, expenses, fees and taxes incurred in
connection with or incident to (i) the preparation, printing, filing,
distribution and delivery under the Act of the Registration Statement
(including financial statements and exhibits), each preliminary prospectus,
the Prospectus and all amendments and supplements thereto, (ii) the
registration with the
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Commission and the issuance and delivery of the Securities, (iii) the
printing and delivery of this Agreement, the Indenture and all other
agreements, memoranda, reports, correspondence and other documents printed,
distributed and delivered in connection with the offering of the Securities,
(iv) the registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of the jurisdictions referred to in
paragraph (i) below (including, in each case, the reasonable fees and
disbursements of counsel relating to such registration or qualification and
memoranda relating thereto and any filing fees in connection therewith), (v)
furnishing such copies of the Registration Statement (including exhibits),
Prospectus and preliminary prospectuses, and all amendments and supplements
to any of them, including any document incorporated by reference therein, as
may be reasonably requested by the Underwriters or by dealers to whom
Securities may be sold, (vi) any filing with the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the offering of the
Securities (including, without limitation, any filing fees in connection
therewith but excluding the fees of Davis Polk & Wardwell, legal counsel to
the Underwriters ("Underwriters' Counsel")), (vii) the listing of the
Securities on the New York Stock Exchange (the "NYSE"), (viii) the rating of
the Securities by investment rating agencies, (ix) any "qualified independent
underwriter" as required by Schedule E of the Bylaws of the NASD (including
fees and disbursements of counsel for such qualified independent underwriter)
and (x) the performance by the Company of its other obligations under this
Agreement, including (without limitation) the fees of the Trustees, the cost
of its personnel and other internal costs, the cost of printing and engraving
the certificates representing the Securities, and all expenses incident to
the sale and delivery of the Securities to the Underwriters.
(g) It will furnish to DLJ, without charge, one signed
copy (plus one additional signed copy to Underwriters' Counsel) of the
Registration Statement as first filed with the Commission and of each
amendment or supplement to it, including each post-effective amendment, all
exhibits filed therewith and all documents incorporated by reference therein,
and such number of conformed copies of the Registration Statement as so filed
and of each amendment to it, including each post-effective amendment, but
without exhibits, as you may reasonably request.
(h) It will not file any amendment or supplement to the
Registration Statement, whether before or after the time when it becomes
effective, or make any amendment or supplement to the Prospectus (other than
any document required to be filed under the Securities Exchange Act of 1934,
as amended, including the rules and regulations thereunder (collectively, the
"Exchange Act") that upon filing is deemed to be incorporated by reference
therein) of which you shall not previously have been advised and provided a
copy prior to the filing thereof or to which you shall reasonably object
unless in the opinion of legal counsel to the Company such amendment or
supplement is required by law to be filed; it will furnish to you at or prior
to the filing thereof a copy of any document that upon filing is deemed to be
incorporated by reference in the Registration Statement or Prospectus; and it
will prepare and file with the Commission, promptly upon your reasonable
request, any amendment or supplement
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to the Registration Statement or amendment or supplement to the Prospectus
which may be necessary or advisable in connection with the distribution of
the Securities by you, and will use its best efforts to cause the same to
become effective as promptly as possible.
(i) Prior to any public offering of the Securities, it
will cooperate with you and Underwriters' Counsel in connection with the
registration or qualification of the Securities for offer and sale by the
Underwriters under the state securities or Blue Sky laws of such United
States jurisdictions as you may request. The Company will continue such
qualification in effect so long as required by law for distribution of the
Securities and will file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification (PROVIDED, that the Company shall not be obligated to qualify
as a foreign corporation in any jurisdiction in which it is not so qualified
nor to take any action that would subject it to general consent to service of
process in any jurisdiction in which it is not now so subject).
(j) It timely will complete all required filings and
otherwise comply fully in a timely manner with all provisions of the Exchange
Act to effect the registration of the securities pursuant thereto, and,
during the period specified in paragraph (c) of this Section 4, will file
timely all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act and it will use its best
efforts to cause the Securities to be listed on the NYSE.
(k) So long as any of the Securities are outstanding, it
will mail to each of the Underwriters, without charge, a copy of each report
or other publicly available information furnished to holders of the
Securities, or filed with the Commission, whether or not required by law or
pursuant to the Indenture, and such other publicly available information
concerning the Company and its subsidiaries as you may reasonably request, at
the same time as such reports or other information are furnished to such
holders.
(l) To the extent permitted by law, it will not
voluntarily claim, and will actively resist any attempts to claim, the
benefit of any usury laws against the holders of the Securities.
(m) It will use the proceeds from the sale of the
Securities in the manner described in the Prospectus under the caption "Use
of Proceeds."
(n) During the period beginning on the date of this
Agreement and continuing to and including the Closing Date, it will not
offer, sell, contract to sell or otherwise dispose of any debt securities of
the Company or warrants, rights, or options to purchase debt securities of
the Company (other than (i) the Securities and (ii)
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commercial paper issued in the ordinary course of business), without your
prior written consent.
(o) It will use its best efforts to do and perform all
things required to be done and performed under this Agreement by it prior to
or after the Closing Date and will use its reasonable best efforts to satisfy
all conditions precedent on its part to be satisfied prior to the delivery of
the Securities.
5. REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to each Underwriter that:
(a) When the Registration Statement becomes effective,
including on the date of effectiveness of any post-effective amendment, at
the date of the Prospectus (if different) and at the Closing Date, the
Registration Statement will comply in all material respects with the
provisions of the Act, and 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 not misleading; at the
date of the Prospectus, at the date of any supplement or amendment to the
Prospectus and at the Closing Date, the Prospectus and each supplement or
amendment thereto will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order 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
Registration Statement or the Prospectus (or any supplement or amendment to
them) made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through DLJ expressly for use therein. The Company acknowledges
for all purposes under this Agreement (including this paragraph and Section 6
hereof) that the statements set forth in the last paragraph on the cover page
and the third paragraph under the caption "Underwriting" in the Prospectus
constitute the only written information furnished to the Company by or on
behalf of any Underwriter through DLJ expressly for use in the Registration
Statement, the preliminary prospectus, or the Prospectus (or any amendment or
supplement to any of them) and that the Underwriters shall not be deemed to
have provided any information (and therefore are not responsible for any
statements or omissions) pertaining to any arrangement or agreement with
respect to any party other than the Underwriters. When the Registration
Statement becomes effective, the Indenture will be deemed to have been
qualified under and will conform in all material respects to the requirements
of the Trust Indenture Act of 1939, as amended, and the rules and regulations
promulgated pursuant thereto (collectively, the "TIA"). At the date of any
post-effective amendment to the Registration Statement, at the date of the
Prospectus and any amendment or supplement thereto (if different) and at the
Closing Date, the qualification of the Indenture under the TIA will not have
been suspended and the Indenture will conform in all material respects to the
requirements of the TIA. No contract or document of a character required to
be described in the Registration Statement, the Prospectus or any of the
documents
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incorporated by reference therein or to be filed as an exhibit to the
Registration Statement or to any of the documents incorporated by reference
therein has not been described and filed as required.
(b) Each preliminary prospectus and the Prospectus,
filed as part of the Registration Statement as originally filed or as part of
any amendment or supplement thereto, or filed pursuant to Rule 424 or 430A
under the Act, complied when so filed in all material respects with the Act.
(c) The documents incorporated by reference in the
Registration Statement, the Prospectus, any amendment or supplement thereto
or any preliminary prospectus, when they became or become effective under the
Act or were or are filed with the Commission under the Exchange Act, as the
case may be, conformed or will conform in all material respects with the
requirements of the Act or the Exchange Act, as applicable.
(d) No action has been taken and no statute, rule,
regulation or order has been enacted, adopted or issued by any United States
Federal or state governmental body, agency or official which prevents the
issuance of the Securities, suspends the effectiveness of the Registration
Statement, prevents or suspends the use of any preliminary prospectus or
suspends the sale of the Securities in any jurisdiction referred to in
Section 4(i) hereof; no injunction, restraining order, or order of any nature
by any Federal or state court has been issued with respect to the Company or
any of its subsidiaries which would prevent the issuance or sale of the
Securities, suspend the effectiveness of the Registration Statement, or
prevent or suspend the use of any preliminary prospectus or Prospectus in any
jurisdiction referred to in Section 4(i) hereof.
(e) The capitalization table set forth in the Prospectus
under the caption "Historical and Pro Forma Capitalization" identifies in
reasonable detail all outstanding short-term and long-term indebtedness and
shareholders' equity of the Company and its subsidiaries, prior to and after
giving PRO FORMA effect to the consummation of the offering of the
Securities, the application of the net proceeds therefrom as described in the
Prospectus and certain other transactions described in the Prospectus.
(f) The Indenture has been duly authorized by the
Company and, when duly executed and delivered in accordance with its terms,
will be a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement is sought in
a proceeding at law or in equity) and except to the extent that a waiver of
rights under any usury laws may be unenforceable.
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(g) The Securities have been duly authorized by the
Company and, when executed and delivered by the Company and authenticated by
the Trustee in accordance with the Indenture and paid for in accordance with
the terms of this Agreement, will constitute legal, valid and binding
obligations of the Company, enforceable against the Company according to
their terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws affecting creditors' rights
and remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity) and except
to the extent that a waiver of rights under any usury laws may be
unenforceable, will be entitled to the benefits of the Indenture and will
conform in all material respects to the description thereof in the Prospectus.
(h) This Agreement has been duly authorized and validly
executed and delivered by the Company and constitutes a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws affecting
creditors' rights and remedies generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity) and except to the extent that rights to indemnification and
contribution with respect to liability in connection with Federal or state
securities laws may be unenforceable under such laws or the policies
underlying such laws and except to the extent that a waiver of rights under
any usury laws may be unenforceable.
(i) The execution and delivery of this Agreement by the
Company, the execution and delivery of the Indenture and the Securities by
the Company, the issuance and sale of the Securities, the performance of this
Agreement, the Securities and the Indenture and the consummation of the
transactions contemplated by this Agreement and the Indenture will not
conflict with or result in a breach or violation of any of the respective
charters or bylaws of the Company or any of its subsidiaries (each, a
"Subsidiary" and collectively, the "Subsidiaries") or any of the terms or
provisions of, or constitute a default or cause an acceleration of any
obligation under or result in the imposition or creation of (or the
obligation to create or impose) any security interest, mortgage, pledge,
claim, lien, encumbrance or adverse interest of any nature (each, a "Lien")
with respect to, any of the Transaction Documents or any other obligation,
bond, agreement, note, debenture, or other evidence of indebtedness, or any
indenture, mortgage, deed of trust or other agreement, lease or instrument
(collectively, "Agreement") to which the Company or any of the Subsidiaries
is a party or by which it or any of them is bound, or to which any properties
of the Company or any of the Subsidiaries is or may be subject, or any order
of any court or governmental agency, body or official having jurisdiction
over the Company or any of the Subsidiaries or any of their properties, or
violate or conflict with any statute, rule or regulation or administrative
regulation or decree or court decree applicable to the Company or any of the
Subsidiaries, or any of their respective assets or properties, where, in any
such instance, such conflict, breach, violation, default, acceleration of
indebtedness or Lien
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would have, singly or in the aggregate, a material adverse effect on the
assets, liabilities, results of operations, financial condition or prospects
of the Company and the Subsidiaries, taken as a whole (a "Material Adverse
Effect").
(j) No authorization, approval or consent or order of,
or filing with, any court or governmental body, agency or official is
necessary in connection with the transactions contemplated by this Agreement,
except such as may be required by the NASD or have been obtained and made
under the Act, the Exchange Act, the TIA or state securities or Blue Sky laws
or regulations. Neither the Company nor, to the best of the Company's
knowledge, any of its affiliates is presently doing business with the
government of Cuba or with any person or affiliate located in Cuba.
(k) The Securities have been approved for listing on the
NYSE, subject to official notice of issuance.
(l) The Company has been duly organized, is validly
existing as a corporation in good standing under the laws of the State of
Nevada and has the requisite power and authority to carry on its business as
it is currently being conducted, to own, lease and operate its properties and
to authorize the offering of the Securities, to execute, deliver and perform
this Agreement and to issue, sell and deliver the Securities, and is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction where the operation, ownership or leasing of
property or the conduct of its business requires such qualification and where
failure to be so qualified or in good standing would have a Material Adverse
Effect. Each of the Subsidiaries of the Company that (i) directly or
indirectly own or lease any interest in any hospitals, healthcare facilities
or medical office buildings, (ii) directly or indirectly conduct any
insurance activities or (iii) are otherwise material to the Company and the
Subsidiaries, taken as a whole (collectively, the "Significant
Subsidiaries"), has been duly organized, is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation and has
the requisite power and authority to carry on its business as it is currently
being conducted 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 where the operation, ownership or leasing of
property or the conduct of its business requires such qualifications and
where failure to be so qualified or in good standing would have a Material
Adverse Effect.
(m) All of the issued and outstanding shares of capital
stock of, or other ownership interests in, each of the Significant
Subsidiaries have been duly authorized and validly issued, and all of the
shares of capital stock of, or other ownership interests in, each of the
Significant Subsidiaries [other than Australian Medical Enterprises, Ltd.
("AME")] are owned, directly or through subsidiaries, by the Company. All
such shares of capital stock are fully paid and nonassessable, and are owned
free and clear of any Lien, except Liens securing indebtedness under the
Credit Agreement (as defined in the Prospectus), and there are no outstanding
subscriptions,
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rights, warrants, options, calls, convertible or exchangeable securities,
commitments of sale, or Liens related to or entitling any person to purchase
or otherwise to acquire any shares of the capital stock of, or other
ownership interest in, any of the Subsidiaries, [except that shareholders
of AME have certain preemptive rights with respect to rights offerings by
AME].
(n) Neither the Company nor the Significant Subsidiaries
is in violation of its respective charter or bylaws and neither the Company
nor the Subsidiaries is in default in the performance of any obligation,
bond, agreement, debenture, note or any other evidence of indebtedness, or
any indenture, mortgage, deed of trust or other contract, lease or other
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them is bound, or to which any of the property or assets of the
Company or any of the Subsidiaries is subject, except as would not have,
singly or in the aggregate, a Material Adverse Effect.
(o) Except as disclosed in the Registration Statement or
the Prospectus, there is no action, suit, proceeding or investigation before
or by any court, governmental agency or body, arbitration board or tribunal,
or governmental or private accrediting body, domestic or foreign, pending
against or affecting the Company or any of the Subsidiaries, or any of their
respective assets or properties, which is required to be disclosed in the
Registration Statement or the Prospectus, or in which there is a reasonable
possibility of adverse decisions which in the aggregate could reasonably be
expected to have a Material Adverse Effect, or which might materially and
adversely affect the Company's or any of its Subsidiaries' performance of its
obligations, as applicable, pursuant to this Agreement (including, without
limitation, the issuance of the Securities), the Indenture or the
transactions contemplated hereby and thereby, and to the best of the
Company's knowledge, after due inquiry, no such action, suit, or proceeding
is contemplated or threatened.
Except as disclosed in the Registration Statement or
the Prospectus, neither the Company nor the Subsidiaries is subject to any
judgment, order or decree of any court, governmental authority or arbitration
board or tribunal which has had or which can reasonably be expected to have,
a Material Adverse Effect.
(p) The firms of accountants that have certified or
shall certify the applicable consolidated financial statements and supporting
schedules and the notes thereto of the Company and American Medical Holdings,
Inc., a Delaware corporation ("AMH"), filed or to be filed with the
Commission as part of the Registration Statement and the Prospectus or
incorporated therein by reference are, to the best of the Company's
knowledge, independent public accountants with respect to the Company and its
Subsidiaries and AMH and its Subsidiaries, as the case may be, as required by
the Act. The consolidated financial statements, together with related
schedules and notes, set forth or incorporated by reference in the Prospectus
and the Registration Statement, comply as to form in all material respects
with the requirements of the Act and fairly present the
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consolidated financial position of the Company and its Subsidiaries and AMH
and its Subsidiaries, as the case may be, at the respective dates indicated
and the results of their operations and their cash flows for the respective
periods indicated, in accordance with generally accepted accounting
principles in the United States of America ("GAAP") consistently applied
throughout such periods and in accordance with Regulation S-X. The PRO FORMA
financial statements contained in the Registration Statement have been
prepared in conformity with the standards set forth in Rule 11-02 of
Regulation S-X and on a basis consistent with such historical statements and
give effect to assumptions made on a reasonable basis and present fairly the
historical and proposed transactions contemplated by the Prospectus and this
Agreement. [The Company's ratio of earnings to fixed charges (actual and
PRO FORMA) included in the Prospectus under the captions "Prospectus
Summary--Summary Pro Forma Financial Information," "Pro Forma Financial
Information," "Selected Historical Financial Information" and in Exhibits
12.1 and 12.2 to the Registration Statement have been calculated in
compliance with Item 503(d) of the Commission's Regulation S-K. The other
financial and statistical information and data of the Company included or
incorporated by reference in the Prospectus and in the Registration
Statement, historical and PRO FORMA, are in all material respects accurately
presented and prepared on a basis consistent with the books and records of
the Company.
(q) The projected amount of operating synergies and
other cost reductions resulting from the Merger included in the Registration
Statement was determined by the Company with a reasonable basis and in good
faith and the assumptions used in the determination of the amount of such
projected operating synergies and other cost reductions are all those the
Company believes are significant in projecting the amount of such synergies
and other cost reductions. Notwithstanding the foregoing, no assurance can
be made as to the amount of cost savings, if any, that actually will be
realized.
(r) Except as contemplated by the Registration Statement
and the Prospectus, subsequent to the respective dates as of which
information is presented in the Registration Statement and the Prospectus and
up to the Closing Date (i) neither the Company nor the Subsidiaries has
incurred any liabilities or obligations, direct or contingent, which are
material to the Company and the Subsidiaries, taken as a whole, or entered
into any transaction not in the ordinary course of business, (ii) there has
been no decision or judgment in the nature of litigation or arbitration that
could reasonably be expected to have a Material Adverse Effect, (iii) there
has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock and (iv) there has not been any
material adverse change, or any development which could involve a material
adverse change, in the results of operations, assets, liabilities, financial
condition or prospects of the Company or its Subsidiaries, taken as a whole
(any of the items set forth in clauses (i), (ii), (iii) or (iv) above, a
"Material Adverse Change").
-12-
(s) (i) Except as described in the Registration
Statement or Prospectus or as could not reasonably be expected to have a
Material Adverse Effect, each of the Company and the Subsidiaries has all
certificates, consents, exemptions, orders, permits, licenses,
authorizations, accreditations or other approvals or rights (each, an
"Authorization") of and from, and has made all declarations and filings with,
all Federal, state, local and other governmental authorities, all
self-regulatory organizations, all governmental and private accrediting
bodies and all courts and other tribunals, necessary or required to own,
lease, license and use its properties and assets and to conduct its business
in the manner described in the Prospectus, (ii) all such Authorizations are
valid and in full force and effect, except as could not reasonably be
expected to have, singly or in the aggregate, a Material Adverse Effect,
(iii) the Company and the Subsidiaries are in compliance with the terms and
conditions of all such Authorizations and with the rules and regulations of
the regulatory authorities and governing bodies having jurisdiction with
respect thereto except as could not reasonably be expected to have a Material
Adverse Effect and (iv) neither the Company nor the Subsidiaries has received
any notice of proceedings relating to the revocation or modification of any
such Authorization.
(t) Neither the Company nor any agent acting on its
behalf has taken or will take any action that is reasonably likely to cause
the issuance or sale of the Securities to violate Regulation G, T, U, or X of
the Board of Governors of the Federal Reserve System, in each case as in
effect, on the date hereof.
(u) Neither the Company nor the Significant Subsidiaries
is (i) an "investment company" or a company "controlled" by an investment
company within the meaning of the Investment Company Act of 1940, as amended,
or (ii) a "holding company" or a "subsidiary company" of a holding company,
or an "affiliate" thereof within the meaning of the Public Utility Holding
Company Act of 1934, as amended.
(v) Each certificate signed by any officer of the
Company and delivered to the Underwriters or the Underwriters' Counsel shall
be deemed to be a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
(w) Immediately after consummation of the transactions
contemplated by the Transaction Documents, the fair value and present fair
saleable value of the assets of the Company will exceed the sum of its stated
liabilities and identified contingent liabilities; the Company will not be,
after giving effect to the execution, delivery and performance of the
Transaction Documents, and the consummation of the transactions contemplated
thereby, (i) left with unreasonably small capital with which to carry on its
business as it is proposed to be conducted or (ii) unable to pay its debts
(contingent or otherwise) as they mature.
-13-
(x) The Company will deliver to the Underwriters a true
and correct copy of each of the Transaction Documents in the form
substantially as they will be executed and delivered on or prior to the
Closing Date, together with all related agreements and all schedules and
exhibits thereto, and there have been no amendments, alterations,
modifications or waivers of any of the provisions of any of the Transaction
Documents from the form in which they have been delivered to the
Underwriters; there exists as of the date hereof (after giving effect to the
transactions contemplated by the Transaction Documents) no event or condition
which would constitute a default or an event of default (in each case as
defined in the Credit Agreement) under the Credit Agreement and no event or
condition which would constitute a default or an event of default (in each
case as defined in each of the Transaction Documents) under any of the
Transaction Documents which would reasonably be expected to result in a
Material Adverse Effect.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless
(i) each of the Underwriters and their respective affiliates, (ii) each
person, if any, who controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) any of the Underwriters or any of their
respective affiliates (any of the persons referred to in this clause (ii)
being hereinafter referred to as a "Controlling Person"), and (iii) each of
the respective officers, directors, partners, employees, representatives and
agents of any of the Underwriters or any Controlling Person, and each of
their respective officers, directors, partners, employees, representatives
and agents (any person referred to in clause (i), (ii) or (iii) of this
Section 6(a) may hereinafter be referred to as an "Indemnified Person") to
the fullest extent lawful, from and against any and all losses, claims,
damages, judgments, actions, costs, assessments, expenses and other
liabilities (collectively, "Liabilities"), including without limitation and
as incurred, reimbursement of all reasonable costs of investigating,
preparing, pursuing or defending any claim or action, or any investigation or
proceeding by any foreign, Federal, state or local authority, regulatory
body, administrative agency, court or other governmental or
quasi-governmental body, commenced or threatened, including the reasonable
fees and expenses of counsel to any Indemnified Person, to the extent such
Liabilities are directly or indirectly caused by, related to, based upon or
arising out of, or in connection with, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
supplement or amendment thereto), or the Prospectus (including any amendment
or supplement thereto) or any preliminary prospectus, or any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading, except insofar as such Liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission that is (x)
made in reliance upon and in conformity with information relating to any of
the Underwriters furnished in writing to the Company by or on behalf of the
Underwriter through DLJ expressly for use in the Registration
-14-
Statement (or any amendment or supplement thereto) or the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus or (y) with
respect to the Underwriter from whom the person asserting the Liabilities
purchased Securities, made in any preliminary prospectus if a copy of the
Prospectus (as amended or supplemented, if the Company shall have furnished
the Underwriters with such amendments or supplements thereto on a timely
basis) was not delivered by or on behalf of such Underwriter to the person
asserting the Liabilities, if required by law to have been so delivered by
the Underwriter seeking indemnification, at or prior to the written
confirmation of the sale of the Securities, and it shall be finally
determined by a court of competent jurisdiction, in a judgment not subject to
appeal or review, that the Prospectus (as so amended or supplemented) would
have completely corrected such untrue statement or omission. The foregoing
indemnity shall be in addition to any liability that the Company might
otherwise have to any of the Underwriters and such other Indemnified Persons.
The Company shall notify you promptly of the institution, threat or
assertion of any claim, proceeding (including any governmental investigation)
or litigation in connection with the matters addressed by this Agreement
which involves the Company or an Indemnified Person.
(b) In case any action or proceeding (for all purposes
of this Section 6, including any governmental or quasi-governmental
investigation) shall be brought or asserted against any of the Indemnified
Persons with respect to which indemnity under this Section 6 may be sought
against the Company, such Underwriter (or the Underwriter controlled by such
Controlling Person) promptly shall notify the Company in writing and the
Company shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to such Underwriter and payment of all fees and
expenses; PROVIDED, that the delay or failure to give such notice shall not
relieve the Company from any liability that it may have on account of the
indemnity under this Section 6, unless and only to the extent that such delay
or omission materially adversely affects the ability of the Company to defend
or assume the defense of such action or proceeding. Upon receiving such
notice, the Company shall be entitled to participate in any such action or
proceeding and to assume, at its sole expense, the defense thereof, with
counsel reasonably satisfactory to such Indemnified Person (who shall not,
except with the consent of the Indemnified Person to be represented, be
counsel to the Company or any of the Subsidiaries) and, after written notice
from the Company to such Indemnified Person of its election so to assume the
defense thereof within five business days after receipt of the notice from
the Indemnified Person of such action or proceeding, the Company shall not be
liable to such Indemnified Person hereunder for legal expenses of other
counsel subsequently incurred by such Indemnified Person in connection with
the defense thereof, other than reasonable costs of investigation, unless (i)
the Company agrees in writing to pay such fees and expenses, or (ii) the
Company fails promptly to assume such defense or fails to employ counsel
reasonably satisfactory to such Indemnified Person, or (iii) the named
parties to any such action or proceeding (including any impleaded parties)
include both such Indemnified Person and the Company or an affiliate of the
Company, and that Indemnified Person shall have been advised in writing
-15-
by counsel, with a copy of such writing to the Company, that either (x) there
may be one or more legal defenses available to such Indemnified Person that
are different from or additional to those available to the Company or such
affiliate or (y) a conflict may exist between such Indemnified Person and the
Company or such affiliate. In the event of any of clause (i), (ii) and (iii)
of the immediately preceding sentence, the Company shall not have the right
to assume the defense thereof on behalf of the Indemnified Person and such
Indemnified Person shall have the right to employ its own counsel in any such
action and the fees and expenses of such counsel shall be paid, as incurred,
by the Company, subject to repayment to the Company if it is ultimately
determined that an Indemnified Person is not entitled to indemnification
hereunder, it being understood, however, that the Company shall not, in
connection with any one such action or proceeding 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 of the Indemnified Persons which firm shall be
designated in writing by DLJ. The Company shall not be liable for any
settlement of any such action or proceeding effected without the Company's
written consent, which consent may not be unreasonably withheld, but if
settled with the written consent of the Company, the Company agrees to
indemnify and hold harmless any Indemnified Person from and against any loss
or liability by reason of such settlement. The Company shall not, without
the prior written consent of each Indemnified Person, settle, compromise or
consent to the entry of any judgment in or otherwise seek to terminate any
pending or threatened action, claim, suit, investigation or other proceeding
in respect of which any Indemnified Person is or could have been a party and
indemnification or contribution could have been sought hereunder by such
Indemnified Person, unless such settlement, compromise, consent or
termination includes an unconditional release of each Indemnified Person from
all liability on claims that are the subject matter of such proceeding.
(c) Each of the Underwriters agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement, and any person controlling
(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 each of the Indemnified Persons, but only with respect to claims
and actions based on information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through DLJ expressly for use in
the Registration Statement, Prospectus or preliminary prospectus, as
applicable. In case any action shall be brought against the Company, any of
its directors, any such officer, or any such controlling person based on the
Registration Statement, the Prospectus or any preliminary prospectus in
respect of which indemnity is sought against any Underwriter pursuant to the
foregoing sentence, the Underwriter shall have the rights and duties given to
the Company (except that if the Company shall have assumed the defense
thereof, such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Underwriter),
and the Company, its directors, any such officers, and
-16-
each such controlling person shall have the rights and duties given to the
Indemnified Person by Section 6(b) above.
(d) If the indemnification provided for in this Section
6 is finally determined by a court of competent jurisdiction to be
unavailable to an Indemnified Person in respect of any Liabilities referred
to herein, then the Company, in lieu of indemnifying such Indemnified Person,
shall contribute to the amount paid or payable by such Indemnified Person as
a result of such Liabilities: (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Indemnified Person on the other hand from the offering of the Securities,or
(ii) if the allocation provided by clause (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 (i), above, but also the relative
fault of the Company and the Indemnified Person in connection with the
actions, statements or omissions that resulted in such Liabilities, as well
as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and any of the Underwriters (and
its related Indemnified Persons), on the other hand, shall be deemed to be in
the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by such Underwriter, in each case as set forth in the
Prospectus. The relative fault of the Company and the Underwriter 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 related to information supplied by the Company or the
Underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The indemnity and contribution obligations of the Company set forth herein
shall be in addition to any liability or obligation the Company may otherwise
have to any Indemnified Person.
The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 6(d) were
determined by PRO RATA allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that 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 Liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 6, none
of the Underwriters (and its related Indemnified Persons referred to in
Section 6 above) shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the total underwriting discount
applicable to the Securities purchased by such underwriter exceeds the amount
of any damages or liabilities which such Underwriter (and its related
Indemnified Persons referred to in Section 6 above) has otherwise been
required to pay
-17-
or incur by reason of such untrue or alleged untrue statement or omission or
alleged omission or other indemnified action or proceeding. Notwithstanding
anything to the contrary contained herein, 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 Underwriters' obligations to contribute
pursuant to this Section 6(d) are several in proportion to the respective
aggregate principal amount of Securities purchased by each of the
Underwriters hereunder and not joint.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The
respective obligations of the several Underwriters to purchase any Securities
under this Agreement are subject to the satisfaction or waiver by the several
underwriters of each of the following conditions on the Closing Date:
(a) All the representations and warranties of the
Company contained or incorporated by reference in this Agreement shall be
true and correct on the Closing Date after giving effect to the transactions
contemplated by the Transaction Documents, with the same force and effect as
if made on and as of the Closing Date. The Company and its Subsidiaries shall
have performed or complied with all of their obligations and agreements
herein contained and required to be performed or complied with by it at or
prior to the Closing Date.
(b) (i) The Registration Statement shall have
become effective (or, if a post-effective amendment is required to be filed
pursuant to Rule 430A of the Act, such post-effective amendment shall have
become effective (or, if any Securities are sold in reliance upon Rule 430A
of the Act and no post-effective amendment is so required to be filed, the
Prospectus shall have been timely filed with the Commission in accordance
with Section 4(a) hereof)) on the date of this Agreement or at such later
date and time as you may approve in writing, (ii) at the Closing Date, no
stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
commenced or shall be pending before or contemplated by the Commission and
every request for additional information on the part of the Commission shall
have been complied with in all respects, (iii) no stop order suspending the
sale of the Securities in any jurisdiction referred to in Section 4(i) shall
have been issued and no proceeding for that purpose shall have been commenced
or shall be pending or threatened, and (iv) since the effective date of the
Registration Statement, there shall not have occurred any event required to
be set forth in an amendment or supplement to the Registration Statement or
Prospectus that has not been set forth, and there shall not have been any
document required to be filed under the Exchange Act that upon such filing
would be deemed to be incorporated by reference in the Prospectus that has
not been so filed.
(c) No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any
governmental
-18-
agency, body or official which would, as of the Closing Date, prevent the
issuance of the Securities; and no injunction, restraining order or order of
any nature by any Federal or state court shall have been issued as of the
Closing Date which would prevent the issuance of the Securities. Subsequent
to the execution and delivery of this Agreement and prior to the Closing
Date, there shall not have been any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) of the Act.
(d) (i) Since the earlier of the date hereof or the
dates as of which information is given in the Registration Statement and the
Prospectus, there shall not have been any Material Adverse Change, (ii) since
the date of the latest balance sheet included in the Registration Statement
and the Prospectus, there shall not have been any material adverse change, or
development involving a prospective material adverse change, in the capital
stock or debt, of the Company and the Subsidiaries, taken as a whole, and
(iii) neither the Company nor any of its Subsidiaries shall have any
liability or obligation, direct or contingent, that is material to the
Company and the Subsidiaries, taken as a whole, and which is not disclosed in
the Registration Statement and the Prospectus.
(e) You shall have received a certificate of the
Company, dated the Closing Date, executed on behalf of the Company, by an
executive officer and a financial officer of the Company satisfactory to you
confirming, as of the Closing Date, the matters set forth in paragraphs (a),
(b), (c), (d) and (k) of this Section 7.
(f) On the Closing Date, you shall have received:
(1) an opinion (satisfactory to you and
your counsel), dated the Closing Date, of Skadden,
Arps, Slate, Meagher & Flom, counsel for the Company
("Skadden, Arps"), to the effect that:
(i) the Company has the corporate power
and corporate authority to enter into and
perform its obligations under this Agreement;
and this Agreement has been duly authorized and
validly executed and delivered by the Company;
(ii) the Registration Statement, at the
time it became effective and on the Closing
Date, complied as to form in all material
respects with the applicable requirements of
the Act and the TIA (except for financial
statements, the notes thereto and related
schedules and other financial, numerical,
statistical and accounting data included
therein and the Statement of Eligibility
-19-
and Qualification of the Trustee on Form T-1 (the
"Form T-1"), as to which no opinion need be
expressed);
(iii) each document filed pursuant to the
Exchange Act and incorporated by reference in
the Prospectus, at the time it was filed or
last amended, complied as to form in all
material respects to the applicable
requirements of the Exchange Act (except for
financial statements, the notes thereto and
related schedules and other financial,
numerical, statistical and accounting data
included or incorporated by reference therein
or omitted therefrom, as to which no opinion
need be expressed);
(iv) the Securities have been duly
authorized and executed by the Company and,
when authenticated in accordance with the terms
of the Indenture and delivered to and paid for
by the Underwriters in accordance with the
terms of this Agreement, will be valid and
binding obligations of the Company, enforceable
against the Company in accordance with their
terms and entitled to the benefits of the
Indenture under which they are being issued,
except to the extent that the enforceability
thereof may be limited by (A) bankruptcy,
insolvency, fraudulent conveyance,
reorganization, moratorium and other similar
laws in effect as of the date of the opinion or
thereafter relating to or affecting creditors'
rights generally and (B) general principles of
equity (regardless of whether enforcement is
sought in a proceeding at law or in equity) and
except that such counsel need express no
opinion as to the enforceability or effect of
the waiver of rights under any usury laws
pursuant to the Indenture;
(v) the Indenture has been
duly authorized, executed and delivered by the
Company and, assuming due authorization,
execution and delivery thereof by the Trustee,
is a valid and binding agreement of the
Company, enforceable against the Company in
accordance with its terms, except to the extent
that the enforceability thereof may be limited
by (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and
other similar laws in effect as of the date of
the opinion or thereafter relating to or
affecting creditors' rights generally and (B)
general principles of equity (regardless of
whether enforcement is sought in a proceeding
at law or in equity) and except that such
counsel need express no opinion as to the
enforceability or effect of the waiver of
rights under any usuary laws pursuant to the
Indenture;
-20-
(vi) the Securities and the
Indenture conform in all material respects to
the descriptions thereof contained in the
Prospectus;
(vii) the Company and each
of its Significant Subsidiaries (as identified
by the Company on a schedule to such opinion)
is a corporation existing and in good standing
under the laws of its jurisdiction or
organization;
(viii) neither the Company
nor any of its Significant Subsidiaries is (a)
an "investment company" or a company
"controlled" by an investment company within
the meaning of the Investment Company Act of
1940, as amended, or (b) a "holding company" or
a "subsidiary company" of a holding company, or
an "affiliate" therefor within the meaning of
the Public Utility Holding Company Act of 1934,
as amended;
(ix) no consent, approval,
authorization or other order of, or filing
with, any Federal, Delaware or New York
executive, legislative, judicial,
administrative or regulatory body, including,
without limitation, the Commission (each, a
"Governmental Authority"), is legally required
under any laws, rules and regulations of the
State of Delaware, the State of New York and
the United States of America that, in the
experience of such counsel, are normally
applicable to transactions of the type
contemplated by this Agreement and the
Indenture (provided that no opinion need be
expressed as to the "blue sky" or state
securities laws of any jurisdiction)
(collectively, the "Applicable Laws") for the
issuance or sale to the Underwriters of the
Securities as contemplated by this Agreement
except such as may be required under the Act,
the Exchange Act and the TIA;
(x) the execution and
delivery by the Company of this Agreement and
the Indenture and the issuance and sale of the
Securities to you as contemplated thereby and
the performance of its obligations pursuant to
this Agreement and the Indenture (A) will not
conflict with or result in a breach or
violation of any of the terms or provisions of,
or constitute a default under the charter or
bylaws of the Company; (B) will not conflict
with or result in a breach or violation of any
of the terms or provisions of, or constitute a
default (with the passage of time or otherwise)
under, or result in the imposition of a Lien on
any properties of the Company or any of its
Subsidiaries or an acceleration of indebtedness
pursuant to any of the agreements
-21-
listed on a schedule attached to such opinion,
where, in any such instance, such breach,
default, lien, acceleration of indebtedness or
conflict could have, singly or in the
aggregate, a material adverse effect or a
prospective material adverse effect on the
assets, liabilities, results of operations or
financial condition of the Company and its
Subsidiaries, taken as a whole; and (C) will
not conflict with or violate any Applicable Law
or any order or decree of Delaware, New York or
Federal Governmental Authorities by which the
Company or any of its Subsidiaries is bound,
the existence of which is actually known to
such counsel or has been specifically disclosed
to such counsel in writing by the Company;
(xi) the Credit Agreement
conforms in all material respects to the
descriptions thereof contained in the
Prospectus;
(xii) the Staff of the
Commission has orally advised such counsel that
the Registration Statement was declared
effective under the Act and the Indenture was
qualified under the TIA, in each case, at 5:00
p.m., Washington, D.C. time, on October __,
1995, and, to the best of such counsel's
knowledge, no stop order suspending the
effectiveness of the Registration Statement or
the qualification of Indenture has been issued
and no proceedings for that purpose are
pending; and the Prospectus has been sent for
filing with the Commission pursuant to Rule
425(b) within the time period required by such
Rule.
(2) In giving their opinion required by
subsection (f)(1) of this Section 7, such counsel may
state that such opinions are limited to matters
governed by the Federal laws of the United States of
America, the laws of the State of New York and the laws
of the State of Delaware.
In addition, such counsel shall state
that such counsel has participated in conferences with
officers and other representatives of the Company,
representatives of the independent public accountants
for the Company, your representatives and your counsel
at which the contents of the Registration Statement
and the Prospectus and related matters were discussed
and, although such counsel is not passing upon, and
does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in
the Registration Statement or the Prospectus on the
basis of the foregoing, no fact has come to the
attention of such counsel that leads it to believe that
the Registration Statement, at the time it became
effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, as of its date
-22-
and as of the Closing Date, contained an
untrue statement of a material fact or omitted to state
a material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading, except that such counsel need not express
any opinion or belief with respect to the financial
statements, schedules and other financial, numerical,
statistical and accounting data included in or excluded
from the Registration Statement or the Prospectus, the
exhibits to the Registration Statement or the Form T-1.
In rendering the foregoing opinions,
Skadden, Arps may rely as to matters of Nevada law on
the opinion of Woodburn & Wedge, Nevada counsel to the
Company, or such other counsel as is reasonably
satisfactory to the Underwriters' Counsel.
(3) an opinion (satisfactory to you and
Underwriters' Counsel), dated the Closing Date, of
Scott M. Brown, Esq., Senior Vice President and General
Counsel of the Company, to the effect that:
(i) the descriptions in the
Registration Statement and the Prospectus of
statutes, legal and governmental proceedings,
contracts and other documents and regulatory
matters, including, without limitation, those
described in the Prospectus under the
captions "Risk Factors--Limits on
Reimbursement," "--Extensive Regulation,"
"--Healthcare Reform Legislation,"
"Business--Medicare, Medicaid and other
Revenues," and "--Healthcare Reform,
Regulation and Licensing," and in the
Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1995 under the
captions "Medicare, Medicaid and Other
Revenues" and "Health Care Reform, Regulation
and Licensing" insofar as such statements
constitute summaries of legal matters,
documents or proceedings referred to therein
are accurate in all material respects and
such counsel does not know of any contracts
or documents of a character required to be
described in the Registration Statement or
Prospectus (or required to be filed under the
Exchange Act if upon such filing they would
be incorporated by reference therein) or to
be filed as exhibits to the Registration
Statement which are not described and filed
as required; it being understood that such
counsel need express no opinion as to the
financial statements, notes or schedules or
other financial data included therein or
those parts of the Registration Statement
that constitute the Form T-1);
(ii) each of the Company and
its Significant Subsidiaries has such
Authorizations from all regulatory
-23-
or governmental officials, bodies and tribunals
as are necessary to own, lease and operate
its respective properties and to conduct its
business in the manner described in the
Prospectus;
(iii) to the best of such
counsel's knowledge, there is no current,
pending or threatened action, suit or
proceeding before any court or governmental
agency, authority or body or any arbitrator
involving the Company or any of its
Subsidiaries or to which any of their
respective property is subject of a character
required to be disclosed in the Registration
Statement which is not adequately disclosed
in the Prospectus;
(iv) all of the issued and
outstanding shares of capital stock of, or
other ownership interests in, each
Significant Subsidiary of the Company have
been duly and validly authorized and issued,
and the shares of capital stock of, or other
ownership interests in, each such subsidiary
are owned of record, directly or through
subsidiaries, by the Company, are fully paid
and nonassessable, and to the best knowledge
of such counsel are owned free and clear of
any material, consensual Lien, other than
Liens arising under the Credit Agreement; and
(v) the Company and each of
its significant subsidiaries (as defined
under the Commission's Regulation S-X and
identified on a schedule to such opinion) is
a duly organized corporation, has the
requisite corporate power and authority to
own, lease and operate its properties and to
conduct its business as described in the
Registration Statement and the Prospectus,
and, to the extent each is a party thereto,
to execute, deliver and perform its
obligations pursuant to the Indenture and
this Agreement, and is duly qualified as a
foreign corporation and in good standing in
each jurisdiction where the ownership,
leasing or operation of property or the
conduct of its business requires such
qualification, except where the failure so to
be qualified could not have, singly or in the
aggregate, a Material Adverse Effect.
(4) In giving their opinion required by
subsection f(3) of this Section 7, such counsel shall
state that no fact has come to the attention of such
counsel that leads it to believe that the descriptions
of statutes, legal and governmental proceedings,
contracts and other documents and regulatory matters
described in the Registration Statement and the
Prospectus under the captions set forth in subsection
(f)(3)(i) of this Section 7 contained an untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or
-24-
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading.
(g) You shall have received an opinion, dated the
Closing Date, of Davis Polk & Wardwell counsel for the Underwriters, in form
and substance reasonably satisfactory to you.
(h) You shall have received complete sets of all closing
documents, including without limitation all opinions, required to be
delivered under any of the other Transaction Documents.
(i) You shall have received letters on and as of the
date hereof as well as on and as of the Closing Date, in the latter case
constituting an affirmation of the statements set forth in the earlier
letters, in form and substance satisfactory to you, from KPMG Peat Marwick
LLP and Price Waterhouse LLP, independent public accountants to the Company
and AMH, respectively, with respect to the financial statements and certain
financial information contained or incorporated by reference in the
Registration Statement and the Prospectus as you shall reasonably require.
(j) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the
Securities, the Registration Statement and the Prospectus, and all other
legal matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory to Davis Polk & Wardwell and such
counsel shall have been furnished with such documents and opinions, in
addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in
this Section 7, in order to evidence the accuracy, completeness and
satisfaction in all material respects of any of the representations,
warranties or conditions herein contained and to render the opinion referred
to in Section 7(g) hereof.
(k) There shall have been no amendments, alterations,
modifications, or waivers of any provisions of the Transaction Documents
since the date of the execution and delivery thereof by the parties thereto
other than those which are disclosed in the Registration Statement or the
Prospectus or any supplement thereto or which under the Act are not required
to be disclosed in the Prospectus or any supplement thereto and which have
been disclosed to the Underwriters prior to the date hereof.
8. EFFECTIVE DATE OF AGREEMENT, DEFAULT AND TERMINATION.
This Agreement shall become effective upon the later of (i) the execution and
delivery of this Agreement by the parties hereto, (ii) the effectiveness of
the Registration Statement, and (iii) if a post-effective amendment is
required to be filed pursuant to Rule 430A under the Act, the effectiveness
of such post-effective amendment.
-25-
This Agreement may be terminated at any time on or prior
to the Closing Date by you by notice to the Company if any of the following
has occurred: (i) subsequent to the date the Registration Statement is
declared effective or the date of this Agreement, any Material Adverse Change
which, in your judgment, impairs the investment quality of the Securities,
(ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or material adverse change in the financial
markets of the United States or elsewhere, or any other substantial national
or international calamity or emergency if the effect of such outbreak,
escalation, calamity, crisis or emergency would, in your judgment make it
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, (iii) any suspension or limitation of trading
generally in securities, or in any securities of the Company, on the New
York, American or Pacific Stock Exchanges, the National Association of
Securities Dealers Automated Quotation National Market, or the
over-the-counter markets or any setting of minimum prices for trading on such
exchanges or markets, (iv) any declaration of a general banking moratorium by
either Federal or New York authorities, (v) the taking of any action by any
Federal, state or local government or agency in respect of its monetary or
fiscal affairs that in your judgment has a material adverse effect on the
financial markets in the United States, and would, in your judgment, make it
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, (vi) any securities of the Company or any of
its Subsidiaries shall have been downgraded or placed on any "watch list" for
possible downgrading or reviewed for a possible change that does not indicate
the direction of the possible change by any "nationally recognized
statistical rating organization," as such term is defined for purposes of
Rule 436(g)(2) of the Act, or (vii) the enactment, publication, decree or
other promulgation of any Federal or state statute, regulation, or rule or
order of any court or other governmental authority which in your judgment
could have a Material Adverse Effect.
If this Agreement shall be terminated by you pursuant to
clause (i), (vi) or, in the case of a statute, regulation, rule or order
specifically addressing the Company, and not affecting its industry
generally, (vii) of the second paragraph of this Section 8 or because of the
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company agrees to
reimburse you for all reasonable out-of-pocket expenses (including the
reasonable fees and disbursements of counsel) incurred by you.
Notwithstanding any termination of this Agreement, the Company shall be
liable for all expenses which it has agreed to pay pursuant to Section 4(f)
hereof. If this Agreement is terminated pursuant to this Section 8, such
termination shall be without liability of any Underwriter to the Company or
any of its Subsidiaries.
If on the Closing Date any of the Underwriters shall fail
or refuse to purchase the Securities which it has agreed to purchase
hereunder on such date, and the aggregate principal amount of such Securities
that such defaulting Underwriter or Underwriters, as the case may be, agreed
but failed or refused to purchase does not
-26-
exceed 20% of the total principal amount of such Securities to be purchased
on such date by all Underwriters, each non-defaulting Underwriter shall be
obligated severally, in the proportion which the amount of Securities set
forth opposite its name in Schedule I and Schedule II, respectively, hereto
bears to the aggregate principal amount of Securities which all the
non-defaulting Underwriters, as the case may be, have agreed to purchase, or
in such other proportion as you (at your option) may specify, to purchase the
Securities that such defaulting Underwriter or Underwriters, 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 of Securities that any
Underwriter has agreed to purchase pursuant to Section 2 hereof be increased
pursuant to this Section 8 by an amount in excess of one-ninth of such
principal amount of Securities without the written consent of such
Underwriter. If, on the Closing Date any of the Underwriters shall fail or
refuse to purchase the Securities, as the case may be, and the total
principal amount of Securities with respect to which such default occurs
exceeds 20% of the total amount of Securities to be purchased on such date by
all Underwriters and arrangements satisfactory to you and the Company for the
purchase of such Securities are not made within 48 hours after such default,
this Agreement shall terminate without liability on the part of the
non-defaulting Underwriters and the Company, except as otherwise provided in
this Section 8. In any such case that does not result in termination of this
Agreement, either you or the Company may postpone the Closing Date for not
longer than seven (7) days, in order that the required changes, if any, in
the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall
not relieve a defaulting Underwriter from liability in respect of any default
of any such Underwriter under this Agreement.
9. NOTICES. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (a) if to the Company, to it at
2700 Colorado Avenue, Santa Monica, California 90404, Attention: Treasurer,
with copies to Attention: General Counsel and to Skadden, Arps, Slate,
Meagher & Flom, 300 South Grand Avenue, Suite 3400, Los Angeles, California
90071, Attention: Thomas C. Janson, Jr. and (b) if to any Underwriter, to
Donaldson, Lufkin & Jenrette Securities Corporation, 140 Broadway, New York,
New York 10005, Attention: Syndicate Department, and, in each case, with a
copy to Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York
10017, Attention : Richard D. Truesdell, Jr., or in any case to such other
address as the person to be notified may have requested in writing.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPALS OF CONFLICTS OF LAW. THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK
STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY SUIT,
ACTION OR PROCEEDING RELATED
-27-
TO THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY
WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION AND IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
11. SEVERABILITY. Any determination that any provision
of this Agreement may be, or is, unenforceable shall not affect the
enforceability of the remainder of this Agreement.
12. SUCCESSORS. Except as otherwise provided, this
Agreement has been and is made solely for the benefit of and shall be binding
upon the Company, the Underwriters, any Indemnified Person referred to herein
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 terms "successors and
assigns" shall not include a purchaser of any of the Securities from any of
the Underwriters merely because of such purchase.
13. CERTAIN DEFINITIONS. For purposes of this
Agreement, (a) "business day", means any day on which the NYSE is open for
trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the Act.
14. COUNTERPARTS. This Agreement may be executed in one
or more counterparts and, if executed in one or more counterparts, the
executed counterparts shall each be deemed to be an original, not all such
counterparts shall together constitute one and the same instrument.
15. HEADINGS. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to
affect the meaning or interpretation of, this Agreement.
16. SURVIVAL. The indemnities and contribution
provisions and the other agreements, representations and warranties of the
Company, its officers and directors and of the Underwriters 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 any of the Underwriters or by or on behalf of the
Company, the officers or directors of the Company or any controlling person
of the
-28-
Company, (ii) acceptance of the Securities and payment for them hereunder and
(iii) termination of this Agreement.
-29-
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument. Please confirm that
the foregoing correctly sets forth the agreement among the Company and you.
Very truly yours,
TENET HEALTHCARE CORPORATION
By:_____________________________
Name: Terence P. McMullen
Title: Senior Vice President
-30-
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J.P. MORGAN SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
Acting on behalf of themselves
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:___________________________________
Name: David L. Dennis
Title: Managing Director
J.P. MORGAN SECURITIES INC.
By:___________________________________
Name: Erik R. Oken
Title: Attorney-in-fact for
J.P. Morgan Securities Inc.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By:___________________________________
Name: Mathew M. Pendo
Title: Vice President
-31-
MORGAN STANLEY & CO. INCORPORATED
By:___________________________________
Name: Joel P.Feldmann
Title: Principal
-32-
SCHEDULE I
UNDERWRITER PRINCIPAL PERCENTAGE
AMOUNT OF TOTAL
--------- ----------
Donaldson, Lufkin & Jenrette Securities Corporation. . . $ %
J.P. Morgan Securities Inc. . . . . . . . . . . . . . .
Merrill Lynch, Pierce, Fenner & Smith Incorporated . . .
Morgan Stanley & Co. Incorporated. . . . . . . . . . . .
Total. . . . . . . . . . . . $ %
I-1