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TENET HEALTHCARE CORPORATION
(a Nevada corporation)
_____ Shares of Common Stock
PURCHASE AGREEMENT
Dated: April __, 1997
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TABLE OF CONTENTS
SECTION 1. Representations and Warranties. . . . . . . . . . . . . . . . 3
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY . . . . . . . . 3
(i) Compliance with Registration Requirements. . . . . . . 3
(ii) Incorporated Documents . . . . . . . . . . . . . . . . 3
(iii) Capitalization; Authorization and Description of
Securities . . . . . . . . . . . . . . . . . . . . . . 4
(iv) Authorization of Agreement . . . . . . . . . . . . . . 4
(v) Absence of Defaults and Conflicts. . . . . . . . . . . 4
(vi) Absence of Further Requirements. . . . . . . . . . . . 5
(vii) Listing. . . . . . . . . . . . . . . . . . . . . . . . 5
(viii) Good Standing of the Company.. . . . . . . . . . . . . 5
(ix) Subsidiaries . . . . . . . . . . . . . . . . . . . . . 5
(x) Absence of Proceedings . . . . . . . . . . . . . . . . 6
(xi) Independent Accountants. . . . . . . . . . . . . . . . 6
(xii) No Material Adverse Change in Business . . . . . . . . 6
(xiii) Possession of Licenses and Permits . . . . . . . . . . 7
(xiv) Investment Company Act . . . . . . . . . . . . . . . . 7
(xv) Accuracy of Exhibits . . . . . . . . . . . . . . . . . 7
(xvi) Title to Property. . . . . . . . . . . . . . . . . . . 7
(b) REPRESENTATIONS AND WARRANTIES BY THE SELLING SHAREHOLDERS. . 8
(i) Accurate Disclosure. . . . . . . . . . . . . . . . . . 8
(ii) Authorization of Agreements. . . . . . . . . . . . . . 8
(iii) Good and Valid Title . . . . . . . . . . . . . . . . . 8
(iv) Due Execution of Power of Attorney and Custody
Agreement. . . . . . . . . . . . . . . . . . . . . . . 8
(v) Absence of Manipulation. . . . . . . . . . . . . . . . 8
(vi) Absence of Further Requirements. . . . . . . . . . . . 9
(vii) Certificates Suitable for Transfer . . . . . . . . . . 9
(viii) No Association with NASD . . . . . . . . . . . . . . . 9
(ix) No Legal Proceedings Against Sale. . . . . . . . . . . 9
(x) No Violation of Charter. . . . . . . . . . . . . . . . 9
(xi) Due Execution of Agreement . . . . . . . . . . . . . . 9
(c) OFFICER'S CERTIFICATES. . . . . . . . . . . . . . . . . . . . 9
SECTION 2. Sale and Delivery to Underwriters; Closing . . . . . . . . . . 10
(a) SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . 10
(b) PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(c) DENOMINATIONS; REGISTRATION . . . . . . . . . . . . . . . . . 10
SECTION 3. Covenants of the Company . . . . . . . . . . . . . . . . . . . 11
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION
REQUESTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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(b) FILING OF AMENDMENTS. . . . . . . . . . . . . . . . . . . . . 11
(c) DELIVERY OF REGISTRATION STATEMENTS . . . . . . . . . . . . . 11
(d) DELIVERY OF PROSPECTUSES. . . . . . . . . . . . . . . . . . . 11
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS . . . . . . . . . . 12
(f) BLUE SKY QUALIFICATIONS . . . . . . . . . . . . . . . . . . . 12
(g) RULE 158. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(h) REPORTING REQUIREMENTS. . . . . . . . . . . . . . . . . . . . 12
SECTION 4. Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . 12
(a) EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) EXPENSES OF THE SELLING SHAREHOLDERS. . . . . . . . . . . . . 13
(c) TERMINATION OF AGREEMENT. . . . . . . . . . . . . . . . . . . 13
(d) ALLOCATION OF EXPENSES. . . . . . . . . . . . . . . . . . . . 13
SECTION 5. Conditions of Underwriters' Obligations. . . . . . . . . . . . 13
(a) EFFECTIVENESS OF REGISTRATION STATEMENT . . . . . . . . . . . 13
(b) OPINION OF COUNSEL FOR COMPANY. . . . . . . . . . . . . . . . 14
(c) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS . . . . . . . 14
(d) OPINION OF COUNSEL FOR UNDERWRITERS . . . . . . . . . . . . . 14
(e) OFFICERS' CERTIFICATE . . . . . . . . . . . . . . . . . . . . 14
(f) CERTIFICATE OF SELLING SHAREHOLDERS . . . . . . . . . . . . . 14
(g) ACCOUNTANT'S COMFORT LETTER . . . . . . . . . . . . . . . . . 14
(h) BRING-DOWN COMFORT LETTER . . . . . . . . . . . . . . . . . . 15
(i) NO OBJECTION. . . . . . . . . . . . . . . . . . . . . . . . . 15
(j) ADDITIONAL DOCUMENTS. . . . . . . . . . . . . . . . . . . . . 15
(k) TERMINATION OF AGREEMENT. . . . . . . . . . . . . . . . . . . 15
SECTION 6. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 15
(a) INDEMNIFICATION OF UNDERWRITERS . . . . . . . . . . . . . . . 15
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS
AND SELLING SHAREHOLDERS. . . . . . . . . . . . . . . . . . . 16
(c) ACTIONS AGAINST PARTIES; NOTIFICATION . . . . . . . . . . . . 17
(d) SELLING SHAREHOLDERS' LIMITATION. . . . . . . . . . . . . . . 17
(e) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. . . . . . 17
(f) OTHER AGREEMENTS WITH RESPECT TO INDEMNIFICATION. . . . . . . 18
SECTION 7. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 8. Representations, Warranties and Agreements to Survive Delivery 20
SECTION 9. Termination of Agreement . . . . . . . . . . . . . . . . . . . 20
(a) TERMINATION; GENERAL. . . . . . . . . . . . . . . . . . . . . 20
(b) LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . 21
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SECTION 10. Default by One or More of the Underwriters. . . . . . . . . . 21
SECTION 11. Default by one or more of the Selling Shareholders. . . . . . 21
SECTION 12. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 13. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 14. GOVERNING LAW AND TIME. . . . . . . . . . . . . . . . . . . . 22
SECTION 15. Effect of Headings. . . . . . . . . . . . . . . . . . . . . . 22
SCHEDULES
Schedule A - List of Underwriters...................................Sch A-1
Schedule B - List of Selling Shareholders...........................Sch B-1
Schedule C - Pricing Information....................................Sch C-1
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TENET HEALTHCARE CORPORATION
(a Nevada corporation)
______________ Shares of Common Stock
(Par Value $0.075 Per Share)
PURCHASE AGREEMENT
April __, 1997
MERRILL LYNCH & CO.
MERRILL LYNCH PIERCE, FENNER
& SMITH INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Tenet Healthcare Corporation (the "Company") and the persons and entities
listed in Schedule B hereto (the "Selling Shareholders") confirm their
respective agreements with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ"), Goldman, Sachs & Co. ("Goldman, Sachs"), J.P. Morgan
Securities Inc. ("J.P. Morgan") and each of the other Underwriters, if any,
named in Schedule A hereto (collectively, the "Underwriters," which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, DLJ, Goldman, Sachs and J.P. Morgan are acting
as representatives (in such capacity, the "Representatives"), with respect
to the sale by the Selling Shareholders, acting severally and not jointly, and
the purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $0.075 per share, of the
Company ("Common Stock") set forth in Schedules A and B hereto. The aforesaid
_________ shares of Common Stock to be purchased by the Underwriters are
hereinafter called the "Securities."
The Company and the Selling Shareholders understand that the Underwriters
propose to make a public offering of the Securities as soon as the
Representatives deem it advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-24955) covering the
registration of the Securities (which
registration may include certain additional securities) under the Securities Act
of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses. Promptly after execution and delivery of this
Agreement, the Company will either (i) prepare and file a prospectus in
accordance with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or
(ii) if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933
Act Regulations, prepare and file a term sheet (a "Term Sheet") in accordance
with the provisions of Rule 434 and Rule 424(b) or (iii) prepare and file a
prospectus, including a prospectus supplement describing the terms of offer and
distribution of the Securities, if the Registration Statement is already
effective and if the offer and distribution of the Securities are to proceed on
a "shelf" registration basis. The information included in such prospectus or in
such Term Sheet, as the case may be, that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective (a) pursuant to paragraph
(b) of Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to
paragraph (d) of Rule 434 is referred to as "Rule 434 Information." Each
prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the
Rule 434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto,
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus, including any prospectus supplement, and
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriters for
use in connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to
the preliminary prospectus dated April __, 1997, together with the Term Sheet
and all references in this Agreement to the date of the Prospectus shall mean
the date of the Term Sheet. For purposes of this Agreement, all references to
any preliminary prospectus or the Prospectus shall include any prospectus
supplement that is or was included and distributed therewith. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
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SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time , the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement was
issued and at the Closing Time, included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through Merrill Lynch expressly for
use in the Registration Statement or Prospectus.
Each preliminary prospectus and the Prospectus, including any
prospectus supplement, filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the 1933 Act, complied when so filed in all material
respects with the 1933 Act Regulations and each preliminary prospectus and
the Prospectus, including any prospectus supplement, delivered to the
Underwriters for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations or the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), as applicable, and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus
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was issued and at the Closing Time, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(iii) CAPITALIZATION; AUTHORIZATION AND DESCRIPTION OF SECURITIES.
The shares of issued and outstanding capital stock, including the
Securities to be purchased by the Underwriters from the Selling
Shareholders, have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital stock,
including the Securities to be purchased by the Underwriters from the
Selling Shareholders, was issued in violation of the preemptive or other
similar rights of any security holder of the Company. The Common Stock
conforms to all statements relating thereto contained in the Prospectus and
such description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the
Securities is not subject to the preemptive or other similar rights of any
security holder of the Company.
(iv) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.
(v) ABSENCE OF DEFAULTS AND CONFLICTS. The execution and delivery
of this Agreement and the sale of the Securities by the Selling
Shareholders, the performance by the Company of this Agreement and the
consummation of the transactions contemplated by this Agreement will not
conflict with or result in a breach or violation of any of the respective
charters or by-laws of the Company or any of the Company's 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 obligation, bond, agreement, note, debenture, or other
evidence of indebtedness, or any indenture, mortgage, deed of trust or
other agreement, lease or instrument (collectively, "Agreements") 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 would have, singly or in the aggregate, a material
adverse effect on the business, financial condition, results of operations
or prospects of the Company and the Subsidiaries, taken as a whole (a
"Material Adverse Effect").
None of the Company or the Significant Subsidiaries is in violation of
its respective charter or by-laws and none of the Company or 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
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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.
(vi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the sale of the Securities
hereunder or the consummation of the transactions contemplated by this
Agreement, except such as have been already obtained or as may be required
under the 1933 Act or the 1933 Act Regulations or state securities laws.
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 persons of affiliates located in Cuba.
(vii) LISTING. The Securities have been listed on the New York and
Pacific Stock Exchanges.
(viii) GOOD STANDING OF THE COMPANY. 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 execute, deliver and perform this Agreement,
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 that
(i) directly or indirectly own or lease any interest in any general
hospitals or (ii) 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.
(ix) SUBSIDIARIES. Except as otherwise disclosed in the
Registration Statement, 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 (over 80% in the case of Healthcare Underwriting
Group) 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, and, except as disclosed in a certificate
or opinion delivered to the Underwriters, there are no outstanding
subscriptions, 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.
-5-
(x) ABSENCE OF PROCEEDINGS. 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 the Subsidiaries' performance of its obligations, as
applicable, pursuant to this Agreement or the transactions contemplated
hereby, 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,
none of the Company or 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.
(xi) INDEPENDENT ACCOUNTANTS. 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 OrNda
HealthCorp, a Delaware Corporation ("OrNda"), 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 OrNda 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
consolidated financial position of the Company and its Subsidiaries and
OrNda 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 and the related notes thereto incorporated
in the Registration Statement present fairly the information shown therein,
have been prepared in conformity with the Commission's rules and guidelines
with respect to PRO FORMA financial statements and have been properly
compiled on the basis described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred
to therein. 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.
(xii) NO MATERIAL ADVERSE CHANGE IN BUSINESS. 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 (i) none of the Company or the
Subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any transaction not in the ordinary course of
business, which could reasonably be expected to have a Material Adverse
Effect, (ii) there has been no decision or judgment in the
-6-
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 business, financial condition, results of operations or prospects of
the Company and its Subsidiaries, taken as a whole (any of the items set
forth in clauses (i), (ii), (iii) or (iv) above, a "Material Adverse
Change").
(xiii) POSSESSION OF LICENSES AND PERMITS. (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) none of the Company or
the Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Authorization.
(xiv) INVESTMENT COMPANY ACT. The Company is not an "investment
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xv) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xvi) TITLE TO PROPERTY. The Company and its Subsidiaries have good
and marketable title to all real property owned by the Company and its
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its Subsidiaries; and all of the leases and subleases material to the
business of the Company and its Subsidiaries, considered as one enterprise,
and under which the Company or any of its Subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any Subsidiary has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company
or any Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.
-7-
(B) REPRESENTATIONS AND WARRANTIES BY THE SELLING SHAREHOLDERS. Each
Selling Shareholder severally represents and warrants to each Underwriter as of
the date hereof and as of the Closing Time, and agrees with each Underwriter as
follows:
(i) ACCURATE DISCLOSURE. To the best knowledge of such Selling
Shareholder, the information with respect to such Selling Shareholder
contained in the Registration Statement and the Prospectus and in the
prospectus supplement relating to the pricing of the offering and sale of
the Securities, in each case under the caption "Selling Shareholders,"
complies in all material respects with the requirements of Item 507 of the
Commission's Regulation S-K. Such Selling Shareholder hereby agrees that
it has provided, or shall be deemed to have provided, such information
pertaining to it in writing to the Company for use in preparing such
documents.
(ii) AUTHORIZATION OF AGREEMENTS. Such Selling Shareholder has the
full right, power and authority to enter into this Agreement, a Power of
Attorney (the "Power of Attorney") and a Custody Agreement (the "Custody
Agreement") and to sell, transfer and deliver the Securities to be sold by
such Selling Shareholder hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have
been duly authorized by such Selling Shareholder.
(iii) GOOD AND VALID TITLE. Such Selling Shareholder has and will
at the Closing Time have good and valid title to the Securities to be sold
by such Selling Shareholder hereunder, free and clear of any security
interest, mortgage, pledge, lien, charge, claim, equity or encumbrance of
any kind, other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as herein
contemplated, assuming each such Underwriter has no notice of any adverse
claim, each of the Underwriters will receive good and valid title to the
Securities purchased by it from such Selling Shareholder, free and clear of
any security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
(iv) DUE EXECUTION OF POWER OF ATTORNEY AND CUSTODY AGREEMENT.
Such Selling Shareholder has duly executed and delivered, in the form
heretofore furnished to the Representatives, the Power of Attorney with
Joseph Littlejohn & Levy, Inc., as attorney-in-fact (through one or more
of Peter A. Joseph or Paul S. Levy, (each of Messrs. Joseph and Levy, a
"Proxy")) (the "Attorney-in-Fact") and such Selling Shareholder, acting
through its Attorney-in-Fact, has duly executed and delivered the Custody
Agreement with The Bank of New York, as custodian (the "Custodian"); the
Custodian is authorized to deliver the Securities to be sold by such
Selling Shareholder hereunder and to accept payment therefor; and each
Attorney-in-Fact is authorized to execute and deliver this Agreement and
the certificate referred to in Section 5(f) or that may be required
pursuant to Section 5(j) on behalf of such Selling Shareholder, to sell,
assign and transfer to the Underwriters the Securities to be sold by such
Selling Shareholder hereunder, to determine the purchase price to be paid
by the Underwriters to such Selling Shareholder, as provided in
Section 2(a) hereof, and otherwise to act on behalf of such Selling
Shareholder in connection with this Agreement.
(v) ABSENCE OF MANIPULATION. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which
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might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(vi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or consent,
approval authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the execution and delivery by such Selling
Shareholder of this Agreement or the Power of Attorney or the Custody
Agreement, or for the valid sale and delivery of the Securities hereunder
by such Selling Shareholder, except such as may have previously been made
or obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities or blue sky laws.
(vii) CERTIFICATES SUITABLE FOR TRANSFER. If the delivery of the
Securities to be sold by such Selling Shareholder pursuant to this
Agreement to the Underwriters takes place in certificated form (as opposed
to a book-entry transfer), then the certificates for such Securities so
delivered as part of the closing procedures will be in suitable form for
transfer by delivery or be accompanied by duly executed instruments of
transfer or assignment in blank with signatures guaranteed.
(viii) NO ASSOCIATION WITH NASD. Except as previously disclosed in
writing to Merrill Lynch on behalf of the Underwriters, neither such
Selling Shareholder nor any of its affiliates directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is
under common control with, or has any other association with any member
firm of the National Association of Securities Dealers, Inc.
(ix) NO LEGAL PROCEEDINGS AGAINST SALE. Except as set forth in the
Registration Statement, there is no action, suit, investigation (of which
such Selling Shareholder has received written notice) or proceeding before
or by any government, governmental instrumentality or court, domestic or
foreign, now pending or, to the knowledge of such Selling Shareholder,
threatened, to which such Selling Shareholder is a party or to which the
property of such Selling Shareholder is subject, that (i) seeks to
restrain, enjoin, prevent the consummation of or otherwise challenge the
sale of the Securities by such Selling Shareholder or any of the other
transactions contemplated hereby or (ii) questions the legality or
validity of any such transactions or seeks to recover damages or obtain
other relief in connection with any such transactions.
(x) NO VIOLATION OF CHARTER. The execution and delivery of this
Agreement, and the consummation of the transactions contemplated herein,
including the sale to the Underwriters of the Securities, will not result
in a violation of the charter, by-laws or other governing document (if any)
of such Selling Shareholder.
(xi) DUE EXECUTION OF AGREEMENT. Such Selling Shareholder has duly
executed and delivered this Agreement by and through its Attorney-in-Fact
as appointed under the Power of Attorney.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company or any of the Subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby; and
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any certificate signed by or on behalf of the Selling Shareholders as such and
delivered to the Representatives or to counsel for the Underwriters pursuant to
the terms of this Agreement shall be deemed a representation and warranty by
such Selling Shareholder to the Underwriters as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) SECURITIES. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, each Selling
Shareholder, severally and not jointly, agrees to sell to each Underwriter,
severally and not jointly, and each Underwriter, severally and not jointly,
agrees to purchase from each Selling Shareholder, at the price per share set
forth in Schedule C, that proportion of the number of Securities being sold by
each such Selling Shareholder set forth in Schedule B opposite the name of such
Selling Shareholder which the number of Securities set forth in Schedule A
opposite the name of such Underwriter (plus any additional number of Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof) bears to the total number of Securities,
subject, in each case, to such adjustments among the Underwriters as the
Representatives in their sole discretion shall make to eliminate any sales or
purchase of fractional securities.
(b) PAYMENT. The closing of the payment of the purchase price for, and
delivery of certificates for, the Securities shall be made at the offices of
Sullivan & Cromwell in Los Angeles, or at such other place as shall be agreed
upon by the Representatives and the Company and the Selling Shareholders, at
7:00 A.M. (California time) on the third business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten (10) business days after such date as shall be
agreed upon by the Representatives and the Company and the Selling Shareholders
(such time and date of payment and delivery being herein called "Closing Time").
Payment shall be made to the Selling Shareholders by wire transfer of
immediately available funds to a bank account or accounts designated by the
Custodian pursuant to the Custody Agreement, against delivery to the
Representatives for the respective accounts of the Underwriters of the
Securities to be purchased by them. It is understood that each Underwriter has
authorized the Representatives, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Securities which it has
agreed to purchase. Merrill Lynch, individually and not as representative of
the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Securities to be purchased by any Underwriter whose funds
have not been received by the Closing Time, but such payment shall not relieve
such Underwriter from its obligations hereunder.
(c) DENOMINATIONS; REGISTRATION. Certificates for the Securities shall
be in such denominations and registered in such names as the Representatives may
request in writing at least one full business day before the Closing Time. The
certificates for the Securities will be made available for examination and
packaging by the Representatives in the City of New York not later than 10:00
A.M. (Eastern time) on the business day prior to the Closing Time, and upon the
closing such certificates will be delivered in the City of New York.
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SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any such purposes. The Company will promptly effect the filings
necessary pursuant to Rule 424(b) and will take such steps as it deems necessary
to ascertain promptly whether the form of prospectus transmitted for filing
under Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus. The Company will make
every reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or the Prospectus,
whether pursuant to the 1933 Act, or the 1934 Act or otherwise, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall reasonably object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibit) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically
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transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) RULE 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of
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the Registration Statement (including financial statements and exhibits) as
originally filed and each amendment thereto, (ii) the preparation, printing and
delivery to the Underwriters of this Agreement, any Agreement among Underwriters
and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities, (iii) except for any
expenses paid by the Selling Shareholders pursuant to clause (b) below, the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors and the fees and expenses (not to exceed $50,000)
for one counsel for the Selling Shareholders, (v) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus, any
Term Sheets and of the Prospectus and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the Underwriters of copies of
the Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of
any transfer agent or registrar for the Securities, and (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Securities.
(b) EXPENSES OF THE SELLING SHAREHOLDERS. Each of the Selling
Shareholders will pay (i) transfer taxes attributable to the sale by such
Selling Shareholder of the Securities, (ii) the fees and disbursements of such
Selling Shareholder's counsel and accountants, if any, not paid or payable by
the Company pursuant to Section 4(a) or otherwise and (iii) the fees and
expenses of the Custodian under the Custody Agreement.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters or, in the case of any termination pursuant to
Section 11 hereof, the defaulting Selling Shareholder(s) causing the same shall
reimburse the Underwriters for such out-of-pocket expenses.
(d) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholders may make for
the payment of such costs and expenses.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
or any Subsidiary of the Company or on behalf of any Selling Shareholder
delivered pursuant to the provisions hereof, to the performance by the Company
and the Selling Shareholders of their respective covenants and other obligations
hereunder, and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for
-13-
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance with
Rule 424(b) (or a post-effective amendment providing such information shall have
been filed and declared effective in accordance with the requirements of Rule
430A) or, if the Company has elected to rely upon Rule 434, a Term Sheet shall
have been filed with the Commission in accordance with Rule 424(b) or, if the
offer and distribution of the Securities are to proceed on a "shelf"
registration basis, a prospectus, including a prospectus supplement describing
the terms of offer and distribution of the Securities, shall have been filed
with the Commission in accordance with Rule 424(b).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the Representatives
shall have received the favorable opinions, dated as of Closing Time, of
Scott M. Brown, Esq. and of Woodburn and Wedge, respectively, counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters.
(c) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Debevoise & Plimpton, counsel for the Selling Shareholders, in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters.
(d) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Underwriters shall have received an opinion, dated the Closing Date, of Sullivan
& Cromwell, counsel for the Underwriters, in form and substance reasonably
satisfactory to the Underwriters.
(e) OFFICERS' CERTIFICATE. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for the purpose have been
instituted or are pending or are contemplated by the Commission.
(f) CERTIFICATE OF SELLING SHAREHOLDERS. At Closing Time, the
Representatives shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Shareholder, dated as of Closing Time, to the effect that
(i) the representations and warranties of each Selling Shareholder contained in
Section 1(b) hereof are true and correct in all respects with the same force and
effect as though expressly made at and as of Closing Time and (ii) each Selling
Shareholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.
(g) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the Representatives shall have received from KPMG Peat Marwick LLP
and Ernst & Young LLP, independent public accountants to the Company and OrNda,
respectively, letters dated such date, in form and
-14-
substance satisfactory to the Representatives, together with signed or
reproduced copies of such letter for each of the other Underwriters containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statement and
certain financial information contained in the Registration Statement and the
Prospectus.
(h) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives shall
have received from KPMG Peat Marwick LLP and Ernst & Young LLP letters, dated as
of Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (g) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to Closing Time.
(i) NO OBJECTION. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(j) ADDITIONAL DOCUMENTS. At Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the sale of the
Securities as herein contemplated, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company and the
Selling Shareholders at or prior to the Closing Time in connection with the
issuance and sale of the Securities as herein contemplated shall be satisfactory
in form and substance to the Representatives and counsel for the Underwriters.
(k) TERMINATION OF AGREEMENT. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Company and
the Selling Shareholders at any time at or prior to Closing Time and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 6 and 7 shall survive any such
termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF UNDERWRITERS. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act to the extent and in the manner set forth in clauses (i), (ii) and
(iii) below. In addition, subject to subsection (d), and subject to the other
limitations mentioned below, each Selling Shareholder, severally and not jointly
(in the proportion that the number of Securities being sold by such Selling
Shareholder bears to the total number of Securities and to the extent permitted
by law), agrees to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or
-15-
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission provided that (subject to Section 6(e)
below) any such settlement is effected with the written consent of the
Company and the Selling Shareholders; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to the sixth sentence of Section 6(c), the fees and
disbursements of counsel chosen by Merrill Lynch), reasonably incurred
in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that (x) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), (y) such
indemnity with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter (or any persons controlling such Underwriter) from
whom the person asserting such loss, claim, damage or liability purchased the
Securities which are the subject thereof if such person did not receive a copy
of the Prospectus (or the Prospectus as amended or supplemented) at or prior to
the confirmation of the sale of such Securities to such person in any case where
such delivery is required by the 1933 Act and the untrue statement or omission
or alleged untrue statement or omission of a material fact contained in such
preliminary prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented), and (z) with respect to the indemnity by each
Selling Shareholder, the indemnity shall, in each case, apply only to the extent
that any untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement (or any amendment thereto) in
reliance upon and in conformity with written information furnished by or on
behalf of such Selling Shareholder to the Company expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS AND SELLING
SHAREHOLDERS. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each Selling
Shareholder and each person, if any, who controls any Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred,
-16-
but only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Merrill Lynch expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have otherwise than on
account of this indemnity agreement. If it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving the notice required under the first sentence
hereof, may assume the defense of such action with counsel chosen by it and
approved by the indemnified parties defendant in such action, unless such
indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them which are different from or in
addition to those available to such indemnifying party. In the absence of such
an election by an indemnifying party within a reasonable time after receipt of
such notice to assume the defense of such an action, in the case of parties
indemnified pursuant to Section 6(a) above, counsel to the indemnified parties
shall be selected by Merrill Lynch, and, in the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties shall be
selected by the Company. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or
Section 7 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability for all
claims that were or could have been made by all parties to such claims arising
out of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) SELLING SHAREHOLDERS' LIMITATION. No Selling Shareholder shall be
responsible for the payment of an amount, pursuant to this Section 6, which
exceeds the net proceeds (I.E., net of the underwriting discount) received by
the Selling Shareholder from the sale of the Securities by such Selling
Shareholder hereunder.
(e) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. Subject to
Section 6(c) and, in the case of the Selling Shareholders, Section 6(d), if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
-17-
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a) (ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(f) OTHER AGREEMENTS WITH RESPECT TO INDEMNIFICATION. (i) Each Selling
Shareholder, subject to Section 6(d), severally and not jointly (in the
proportion that the number of Securities being sold by such Selling
Shareholder bears to the total number of Securities and to the extent
permitted by law) agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statement or omissions, made in
the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information
furnished to the Company by such Selling Shareholder expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(ii) The Company agrees to indemnify and hold harmless each Selling
Shareholder, and each person, if any, who controls such Selling Shareholder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, PROVIDED,
however, that this indemnity agreement shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any such Selling
Shareholder expressly for use in the Registration Statement (or any amendment
thereto) including the Rule 430 Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
SECTION 7. CONTRIBUTION. (a) If the indemnification provided for in
Sections 6(a) or (b) hereof is for any reason unavailable to or insufficient to
hold harmless an indemnified party in respect of any losses, liabilities,
claims, damages or expenses referred to therein, then each indemnifying party
thereunder shall severally contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party, as
incurred (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders on the one hand
and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) 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 Selling Shareholders on the one hand and
of the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Shareholders
on the one hand and the Underwriters on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the
-18-
offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Shareholders and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus (or the applicable prospectus supplement), or, if
Rule 434 is used, the corresponding location on the Term Sheet bear to the
aggregate initial public offering price of the Securities as set forth on such
cover.
The relative fault of the Company and the Selling Shareholders on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Shareholders or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7(a)
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 which does not
take account of the equitable considerations referred to above in this
Section 7(a). The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this
Section 7(a) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who signed the
Registration Statement, each Selling Shareholder and each director, officer
or employee thereof and each person, if any, who controls the Company or any
Selling Shareholder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company or such Selling Shareholder, as the case may be. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several
in proportion to the number of Securities set forth opposite their
respective names in Schedule A hereto and not joint. Notwithstanding the
provisions of this Section 7 or Section 6(a) or 6(f), no Selling Shareholder
shall be required to contribute any amount under this Section 7 in excess of
the amount by which the net proceeds received by such Selling Shareholder in
connection herewith exceed the aggregate amount such Selling Shareholder has
otherwise paid pursuant to Section 6(a) and 6(f), and no Selling Shareholder
shall be required to contribute except to the
-19-
extent that such Selling Shareholder would have been liable to indemnify under
Section 6(a) if such indemnification were enforceable under applicable law.
(b) If the indemnification provided for in Section 6(f) hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party thereunder shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative benefits to and faults of the indemnifying
party on the one hand and the indemnified party on the other in connection with
the offering of Securities pursuant to this Agreement and the statements or
omissions or alleged statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statements or omissions.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. No party shall be
liable for contribution under this Section 7(b) except to the extent and under
such circumstances as such party would have been liable to indemnify under
Section 6(f) if such indemnification were enforceable under applicable law.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its Subsidiaries or the
Selling Shareholders submitted pursuant hereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company or the
Selling Shareholders, and shall survive delivery of the Securities to the
Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Representatives may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York or Pacific Stock Exchanges, or if trading generally on the American Stock
Exchange or the New York Stock Exchange or in the Nasdaq National Market has
been suspended or materially limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal, California
-20-
or New York authorities, or (v) 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 negative change by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) of the 1993 Act.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
6 and 7 shall survive such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of
the Underwriters shall fail at Closing Time to purchase the Securities which it
or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either (i) the Representatives or (ii) the Company or the
Selling Shareholders shall have the right to postpone Closing Time for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. DEFAULT BY ONE OR MORE OF THE SELLING SHAREHOLDERS. (a) If
one or more Selling Shareholders holding in the aggregate more than 10% of the
Securities to be sold pursuant to this Agreement shall fail at Closing Time to
sell and deliver the number of Securities which such Selling Shareholder or
Selling Shareholders are obligated to sell hereunder, then the Underwriters may,
at the option of the Representatives, by notice from the Representatives to the
Company and the non-defaulting Selling Shareholders, either (a) terminate this
Agreement without any liability on the fault of any non-defaulting party except
that the provisions of Sections 4, 6 and 7 shall remain in full force and effect
or (b) elect to purchase the Securities which the non-defaulting Selling
Shareholders have agreed to sell hereunder. No action taken pursuant to this
Section 11 shall relieve any Selling Shareholder so defaulting from liability,
if any, in respect of such default.
-21-
In the event of a default by any Selling Shareholder as referred to in this
Section 11, each of the Representatives, the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing Time for a period
not exceeding seven days in order to effect any required change in the
Registration Statement or Prospectus or in any other documents or arrangements.
SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of Mr. Raymond
Wong with copies to 10900 Wilshire Boulevard, Suite 900, Los Angeles,
California 90024, attention of Mr. Matt Pendo; notices to the Company shall
be directed to it at 3820 State Street, Santa Barbara, California 93105,
attention of Chief Financial Officer with a copy to the attention of General
Counsel; and notices to the Selling Shareholders shall be directed to Joseph
Littlejohn & Levy, Inc., 450 Lexington Avenue, Suite 3350, New York, NY
10017, attention of Mr. Peter A. Joseph or Mr. Paul S. Levy.
SECTION 13. PARTIES. This Agreement shall each inure to the benefit of
and binding upon the Underwriters, the Company and the Selling Shareholders and
their respective successors. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and the Selling Shareholders and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and the Selling Shareholders and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
-22-
If the foregoing is in accordance with your understanding of your
agreement, please sign and return to the Company and the Attorney-in-Fact for
the Selling Shareholders a counterpart hereof, whereupon this instrument, along
with all counterparts, will be come a binding agreement among the Underwriters,
the Company and the Selling Shareholders in accordance with its terms.
Very truly yours,
TENET HEALTHCARE CORPORATION
By
--------------------------
Title:
----------------------
THE SELLING SHAREHOLDERS
By
--------------------------
Name:
---------------------
As Attorney-in-Fact acting on behalf of the
Selling Shareholders named in Schedule B
hereto
CONFIRMED AND ACCEPTED,
As of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
---------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters, if any, named
in Schedule A hereto.
-23-
SCHEDULE A
Name of Underwriter Number of
------------------- Securities
----------
Merrill Lynch, Pierce, Fenner & Smith Incorporated . . . . . .
Donaldson, Lufkin & Jenrette Securities Corporation. . . . . .
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . .
J.P. Morgan Securities Inc.. . . . . . . . . . . . . . . . . . ---------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ---------
Sch A-1
SCHEDULE B
Name of Selling Shareholder Number of
--------------------------- Securities
----------
California Public Employees' Retirement System . . . . . . . .
New York State Common Retirement Fund. . . . . . . . . . . . .
Pension Reserves Investment Management Board . . . . . . . . .
The Rockefeller Foundation . . . . . . . . . . . . . . . . . .
State of Wisconsin Investment Board. . . . . . . . . . . . . .
Virginia Retirement System . . . . . . . . . . . . . . . . . .
Yale University. . . . . . . . . . . . . . . . . . . . . . . .
Oregon Public Employees' Retirement System . . . . . . . . . .
EES Distressed Securities Fund L.P. . . . . . . . . . . . . .
Montana Board of Investments . . . . . . . . . . . . . . . . .
State Universities Retirement System . . . . . . . . . . . . .
Orange County Employees Retirement System. . . . . . . . . . . ----------
Total . . . . . . . . . . . . . . . . . . . . . . . . ----------
----------
Sch B-1
SCHEDULE C
TENET HEALTHCARE CORPORATION
_________ Shares of Common Stock
(Par Value $0.075 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $______.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $_____, being an amount equal to the initial
public offering price set forth above less $_____ per share.
Sch C-1