Exhibit 5.2
BROBECK
PHLEGER &
Telephone: (213) 489-4060 HARRISON 550 South Hope Street
Facsimile: (213) 745-3345 LLP Los Angeles
Writer's Direct Dial: ATTORNEYS AT LAW California 90071-2604
September 4, 1998
Fountain View, Inc.
11900 W. Olympic Blvd., Suite 680
Los Angeles, CA 90064
Ladies and Gentlemen:
We have acted as special counsel to Fountain View, Inc., a Delaware
corporation (the "Company"), and certain of its subsidiaries as identified in
Schedule I attached hereto (the "Subsidiaries") in connection with the issuance
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and sale by the Company of $120,000,000 aggregate principal amount of its 11
1/4% Senior Subordinated Notes Due 2008, Series B (the "Exchange Notes") of the
Company, and related guarantees (the "Exchange Guarantees") by the Subsidiaries
and certain other subsidiaries of the Company as identified in Schedule II
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attached hereto (the "Delaware Subsidiaries") (the Subsidiaries and the
Delaware Subsidiaries are sometimes referred to collectively as the
"Guarantors"), in exchange for a like amount of 11 1/4% Senior Subordinated
Notes Due 2008 (the "Outstanding Notes") of the Company (such exchange, the
"Exchange Offer"), as contemplated by the Prospectus (the "Prospectus") included
as part of a Registration Statement on Form S-4 filed by the Company with
respect to the Exchange Notes and the Exchange Guarantees on June 19, 1998,
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act") (such Registration
Statement, as amended or supplemented, is hereinafter referred to as the
"Registration Statement").
In our capacity as special counsel to the Company and the
Subsidiaries, we have examined, among other things, originals, or copies
identified to our satisfaction as being true copies, of the following:
(i) The Registration Statement and the Prospectus contained
therein;
(ii) Resolutions of the boards of directors and general partner
of each of the Subsidiaries, as appropriately adopted,
authorizing the execution and delivery of the Indenture by
the Subsidiaries, authorizing the execution and delivery of
the Exchange Guarantees by the Subsidiaries, and certain
other actions with regard thereto;
San Francisco Palo Alto LosAngeles Orange County San Diego New York
Austin Denver London*
*Brobeck Hale and Dorr International Office
Fountain View, Inc.
September 4, 1998 Page 2
(iii) The Indenture (the "Indenture"), dated as of April 16,
1998, by and between the Company, the Guarantors and State
Street Bank and Trust Company of California, N.A., as
Trustee (the "Trustee");
(iv) The Officer's Certificate, a copy of which is attached
hereto as Exhibit A;
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(v) The legal opinion dated September 2, 1998 of Choate, Hall
& Stewart, counsel for the Company (the "Choate Opinion"),
addressed to you;
(vi) The Exchange Guarantees;
(vii) The Specimen Certificate for the Notes and the Exchange
Notes; and
(viii) The certificate of incorporation, articles of
incorporation, limited partnership agreement, bylaws, and
other governing documents of each of the Subsidiaries,
each as in effect on the date hereof;
In addition, we have obtained from public officials, officers and
other representatives of the Company and the Subsidiaries, and others such
certificates, documents and assurances as we considered necessary or
appropriate for purposes of rendering this opinion letter. In our
examination of the documents listed in subparagraphs (i) --- (viii) above and
the other certificates and documents referred to herein, we have assumed the
legal capacity of all natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as copies and the
authenticity of the originals of such documents. Regarding documents executed
by parties other than the Company or Subsidiaries, we have assumed (i) that each
such other party had the power to enter into and perform all its obligations
thereunder, (ii) the due authorization, execution and delivery of such documents
by each such party, and (iii) that such documents constitute the legal, valid,
binding and enforceable obligations of each such party.
This opinion letter relates solely to the laws of the States of
California, Texas, and New York, and we express no opinion as to the effect or
applicability of the laws of any other jurisdictions.
To the extent that our opinions in paragraphs 1, 2, and 3 below
involve the laws of the State of Delaware, we have relied, with their consent,
solely on the Choate Opinion. In addition, our opinions expressed in paragraphs
1, 2, and 3 below, to the extent covering the legal, valid and binding nature
against the Company and its Guarantors of obligations under the Indenture, the
Exchange Notes and the Exchange Guarantees, are only intended to cover the
nature of the Indenture, the Exchange Notes and the Exchange Guarantees as
contracts and obligations created under the laws of the State of New York.
Based upon and subject to the foregoing and on our consideration of
such other matters of fact and questions of law as we considered relevant in the
circumstances, we are of the opinion that:
Fountain View, Inc.
September 4, 1998 Page 3
1. The Indenture has been duly authorized, executed, and delivered
by the Subsidiaries, and constitutes a valid and legally binding instrument of
the Company and the Guarantors, enforceable in accordance with its terms.
2. The Exchange Guarantees have been duly authorized by each of the
Subsidiaries.
3. When, as and if (i) the Registration Statement shall have become
effective pursuant to the provisions of the Securities Act, (ii) the Indenture
shall have been qualified pursuant to the provisions of the Trust Indenture Act
of 1939, as amended, (iii) the Exchange Notes shall have been duly executed by
the Company, and (iv) the Exchange Notes shall have been issued and delivered in
exchange for the Outstanding Notes in accordance with the terms of the Exchange
Offer (as defined in the Registration Statement), then (a) the Exchange Notes
will be legally issued, fully paid and nonassessable, and will constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, and (b) each Exchange Guarantee will be legally
issued, fully paid and nonassessable and constitute a valid and binding
obligation of the applicable Guarantor, enforceable against such Guarantor in
accordance with its terms.
To the extent that the obligations of the Company or any Guarantor
under the Indenture may be dependent upon such matters, we have assumed for
purposes of this opinion that (i) the Trustee is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and is duly qualified to engage in the activities contemplated by the Indenture,
(ii) the Indenture has been duly authorized, executed and delivered by and
constitutes the legal, valid and binding obligation of the Trustee, (iii) the
Trustee is in compliance, generally and with respect to acting as Trustee, under
the Indenture, with all applicable laws and regulations and (iv) the Trustee has
the requisite organizational and legal power and authority to perform its
obligations under the Indenture.
The opinions set forth above are subject to the qualification that the
enforceability of the obligations of the Company and the Guarantors may be
subject to or limited by (i) bankruptcy, insolvency, reorganization,
arrangement, moratorium, fraudulent transfer and other similar laws affecting
the rights of creditors generally; and (ii) general equitable principles
(whether relief is sought in a proceeding at law or in equity), including,
without limitation, concepts of materiality, reasonableness, good faith, and
fair dealing.
We express no opinion as to the enforceability of provisions relating
to indemnification, contribution or exculpation, to the extent any such
provision is contrary to public policy or prohibited by law (including, without
limitation, federal and state securities laws). You should be aware that under
applicable New York law, a number of statutory and common law rights and
protections exist in favor of guarantors. We express no opinion herein as to
the enforceability of any waivers and other provisions of the Exchange
Guarantees which purport to waive or alter rights provided to any Guarantor by
statute or judicial decision.
Fountain View, Inc.
September 4, 1998 Page 4
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the reference to our firm under the
heading "Legal Matters" in the Registration Statement. In giving this consent,
we do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act or the rules and regulations of
the Commission thereunder.
This opinion letter is expressly limited to the matters set forth
above and we render no other opinion and express no other belief whether by
implication or otherwise, as to any other matters. This opinion letter is
rendered as of the date hereof, and we assume no obligation to advise you of any
facts, circumstances, events or developments that may be brought to our
attention in the future, which facts, circumstances, events or developments may
alter, affect or modify the opinions expressed herein.
Very truly yours,
/s/ Brobeck, Phleger & Harrison LLP
BROBECK, PHLEGER & HARRISON LLP
SCHEDULE I
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LIST OF SUBSIDIARIES
State of Foreign
Name Organization Qualifications
AIB Corp. California ---
Alexandria Convalescent Hospital, Inc. California ---
BIA Hotel Corp. California ---
Brier Oak Convalescent, Inc. California ---
Elmcrest Convalescent Hospital California ---
Fountainview Convalescent Hospital California ---
Fountain View Management, Inc. California ---
I.' n O., Inc. California ---
On-Track Therapy Center, Inc. California ---
Rio Hondo Nursing Center California ---
Summit Care Corporation California Arizona
Summit Care - California, Inc. California ---
Summit Care - Texas No. 2, Inc. Texas ---
Summit Care - Texas No. 3, Inc. Texas ---
Summit Care Pharmacy, Inc. California ---
Summit Care Texas, L.P. Texas ---
Summit Care Texas Equity, Inc. California ---
Summit Care Management Texas, Inc. Texas ---
Sycamore Park Convalescent Hospital California ---
SCHEDULE II
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LIST OF DELAWARE SUBSIDIARIES
Name State of Organization
Fountain View Holdings, Inc. Delaware
Locomotion Therapy, Inc. Delaware
Locomotion Holdings, Inc. Delaware
EXHIBIT A
OFFICER'S CERTIFICATE
FOUNTAIN VIEW, INC.
OFFICER'S CERTIFICATE
SEPTEMBER 4, 1998
The undersigned, Robert M. Snukal, does hereby certify as of this
September 4, 1998 that he is the Chief Executive Officer of Fountain View,
Inc., a Delaware corporation (the "Company") and that:
1. Attached hereto as Exhibit A is a true and correct copy of resolutions
adopted by the Board of Directors of the Company as of April 9, 1998 (the
"Resolutions"); the Resolutions have not been amended, rescinded or modified
since their adoption and remain in full force and effect as of the date hereof;
the Resolutions are the only resolutions adopted by the Board of Directors, or
any committee thereof pertaining to the subject matter described therein;
2. Each of the Purchase Agreement (dated April 9, 1998), the Indenture
(dated as of April 16, 1998), the Registration Rights Agreement (dated as of
April 16, 1998) and the Notes (as such term is defined in the Indenture),
including the Guarantors' endorsements therein, as executed and delivered on
behalf of the Company, has been approved by the Company, and each of them has
not been amended, rescinded or modified since their execution and remain in full
force and effect as of the date hereof. The Exchange Notes are in the same form
as attached to the Indenture and have not otherwise been altered, amended or
modified since April 16, 1998.
3. Brobeck, Phleger & Harrison LLP and Choate, Hall & Stewart are
entitled to rely on this certificate in connection with the opinions that such
firms are rendering in connection with the Registration Statement on Form S-4
filed with the Securities and Exchange Commission on June 19, 1998, as amended
from time to time.
In witness whereof, the undersigned has hereunto
1
signed this Certificate as of the date first above written.
By: /s/ Robert M. Snukal
-----------------------------
Robert M. Snukal
Chief Executive Officer
2
FOUNTAIN VIEW HOLDINGS, INC., SUMMIT CARE CORPORATION, AIB CORP., ALEXANDRIA
CONVALESCENT HOSPITAL, INC., BIA HOTEL CORP., BRIER OAK CONVALESCENT, INC.,
ELMCREST CONVALESCENT HOSPITAL, FOUNTAINVIEW CONVALESCENT HOSPITAL, FOUNTAIN
VIEW MANAGEMENT, INC., I.' N O., INC., LOCOMOTION THERAPY, INC., LOCOMOTION
HOLDINGS, INC., ON-TRACK THERAPY CENTER, INC., RIO HONDO NURSING CENTER,
SYCAMORE PARK CONVALESCENT HOSPITAL, SUMMIT CARE - CALIFORNIA, INC., SUMMIT CARE
- TEXAS, NO. 2, INC., SUMMIT CARE - TEXAS, NO. 3, INC., SUMMIT CARE PHARMACY,
INC., SUMMIT CARE TEXAS EQUITY, INC., SUMMIT CARE MANAGEMENT TEXAS, INC. AND
SUMMIT CARE TEXAS, L.P.,
OFFICER'S CERTIFICATE
SEPTEMBER 4, 1998
The undersigned, Robert M. Snukal, does hereby certify as of this
September 4, 1998 that he is the Chief Executive Officer of each of Fountain
View Holdings, Inc., Summit Care Corporation, AIB Corp., Alexandria Convalescent
Hospital, Inc., BIA Hotel Corp., Brier Oak Convalescent, Inc., Elmcrest
Convalescent Hospital, Fountainview Convalescent Hospital, Fountain View
Management, Inc., I.' n O., Inc., Locomotion Therapy, Inc., Locomotion Holdings,
Inc., On-track Therapy Center, Inc., Rio Hondo Nursing Center, Sycamore Park
Convalescent Hospital, Summit Care - California, Inc., Summit Care - Texas, No.
2, Inc., Summit Care - Texas, No. 3, Inc., Summit Care Pharmacy, Inc., Summit
Care Texas Equity, Inc., Summit Care Management Texas, Inc. and Summit Care
Texas, L.P., (the "Guarantors") and that:
1. Attached hereto as Exhibit A is a true and correct copy of resolutions
adopted by the Board of Directors of each of the Guarantors as of April 9, 1998
(the "Resolutions"); the Resolutions have not been amended, rescinded or
modified since their adoption and remain in full force and effect as of the date
hereof; the Resolutions are the only resolutions adopted by the Board of
Directors, or any committee thereof pertaining to the subject matter described
therein; and
2. Each of the Purchase Agreement (dated April 9, 1998), the Indenture
(dated as of April 16, 1998), the Registration Rights Agreement (dated as of
April 16, 1998) and the Notes (as such term is defined in the Indenture),
including the Guarantors' endorsements therein, as executed and delivered on
behalf of each of the Guarantors, has been approved by each of the Guarantors,
and each of them has not been amended, rescinded or modified since their
execution and remain in full force and effect as of the date hereof. The
Exchange Guarantees are in the same form as attached to the Indenture and have
not otherwise been altered, amended or modified since April 16, 1998.
3. Brobeck, Phleger & Harrison LLP and Choate, Hall & Stewart are
entitled to rely on this certificate in connection with the opinions that such
firms are rendering in connection with the Registration Statement on Form S-4
filed with the Securities and
1
Exchange Commission on June 19, 1998, as amended from time to time.
In witness whereof, the undersigned has hereunto signed this Certificate as
of the date first above written.
By: /s/ Robert M. Snukal
-----------------------------
Robert M. Snukal
Chief Executive Officer
2
FOUNTAIN VIEW, INC.
MEETING OF THE BOARD OF DIRECTORS
APRIL 9, 1998
A meeting of the Board of Directors (the "Board") of Fountain View, Inc.
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(the "Corporation") was held by telephone conference on April 9, 1998. In
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attendance were Robert Snukal, Sheila Snukal, Mark Jrolf, Michel Reichert,
William Scott and Peter Hermann comprising a majority of the Board of the
Corporation. Each such person and each other director of the Corporation not in
attendance waived notice of the meeting. Also present were Stephen Cohen and
Joseph Centofanti.
After discussion, upon motions duly made and seconded, the following
resolutions were adopted.
I. SENIOR SECURED NOTE OFFERING
----------------------------
WHEREAS, it has been proposed that the Corporation authorize for issuance
$120,000,000 in aggregate principal amount of 11 1/4% Senior Subordinated Notes
due 2008 (the "Notes"), to Goldman, Sachs & Co., Nesbitt Burns Securities Inc.,
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Paribas Corporation and Sutro & Co. Incorporated, as initial purchasers
(collectively, the "Initial Purchasers"), and for resale by the Initial
------------------
Purchasers to Qualified Institutional Buyers ("QIBs"), as defined in Rule 144A
----
under the Securities Act of 1933, as amended (the "Act") or to non-U.S. persons
---
that acquire the Notes outside the United States in an offshore transaction
meeting the requirements of Rules 903 and 904 of Regulation S under the Act; and
WHEREAS, the Board has determined that it is in the best interests of the
Corporation to authorize the issuance and sale, as described above, of the Notes
(such transaction, the "Offering"); NOW, THEREFORE, be it
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RESOLVED: That the Board hereby authorizes and approves the Offering and
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the issuance and sale therein to the Initial Purchasers of the
Notes in an aggregate principal amount of $120,000,000.
FURTHER
RESOLVED: That Board hereby approves, ratifies and confirms the delivery of
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the Preliminary Offering Memorandum and the Offering Memorandum
(as defined in the Purchase Agreement (as defined below)) in
connection with the Offering to prospective purchasers of the
Notes, including the Initial Purchasers, and the terms of such
Notes (including, but not limited to, the interest rate and other
economic terms and conditions on which the Notes shall be sold by
the Corporation in the Offering) as set forth in the Offering
Memorandum and in the Indenture (as defined below).
FURTHER
RESOLVED: That the Board hereby authorizes each of the Chairman, the Chief
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Executive Officer, President, the Chief Financial Officer and
each Executive Vice President of the Corporation (each, an
"Authorized Officer") to negotiate the form, terms and provisions
------------------
of, and to execute, deliver and perform any and all agreements,
amendments to agreements, applications, certificates,
instruments, consents, acknowledgments and other documents
contemplated by or related to the Offering and to take such other
action or actions (including, without limitation, the making of
all payments and remittances on behalf of the Corporation) in the
name and on behalf of the Corporation as he, in his discretion,
shall deem necessary, appropriate or advisable to carry out the
intent and purpose of the foregoing resolutions, such
negotiation, execution and delivery or taking of any such action
or actions by any such Authorized Officer or Authorized Officers
to constitute conclusive evidence of his determination and
approval of such necessity, appropriateness or advisability; and
any action or actions previously taken or taken in the future by
such Authorized Officer or Authorized Officers in furtherance of
these objectives are hereby authorized, ratified and approved.
WHEREAS, in connection with the Offering, the Board has determined that it
is in the best interests of the Corporation to enter into the Indenture (the
"Indenture") among the Corporation, the subsidiaries of the Corporation party
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thereto and State Street Bank and Trust Company of California, N.A., as trustee
(the "Notes Trustee"), providing for the issuance of the Notes and the rights of
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the holders thereof, substantially in the form provided to the Board and with
any such revisions, modifications or supplements as an Authorized Officer may
deem necessary, appropriate or advisable;
NOW, THEREFORE, be it
RESOLVED: That the Board hereby authorizes each Authorized Officer to
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negotiate, execute,
2
deliver and perform the Indenture in the name of and on behalf of
the Corporation in such form as such Authorized Officer or
Authorized Officers executing the Indenture shall approve, such
approval to be conclusively evidenced by the execution on behalf
of the Corporation of the Indenture.
FURTHER
RESOLVED: That the Board hereby authorizes each Authorized Officer to
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effect any filing with the Securities and Exchange Commission
(the "Commission") that is contemplated by the Registration
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Rights Agreement (as defined below) which is necessary to qualify
the Indenture under the Trust Indenture Act of 1939, as amended.
FURTHER
RESOLVED: That the Board hereby authorizes each Authorized Officer (i) to
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negotiate the forms of Note (in certificated and global form, as
any Authorized Officer may determine), to be included in the
Indenture, which forms shall comply with the requirements of any
stock exchange or automated quotation system on which the Notes
will be listed or traded, if any, (ii) when the Indenture shall
have been duly executed and delivered by the Corporation and the
Notes Trustee, to execute the Notes (which execution may be by
facsimile signatures), substantially in the form set forth in the
Indenture, with such changes additions thereto and deletions
therefrom as shall be reflected in or authorized under the
Indenture as executed and delivered, and (iii) to deliver or
cause to be delivered to the Notes Trustee for authentication not
more than $120,000,000 in aggregate principal amount of the Notes
as provided in the Indenture and the Notes Trustee is hereby
authorized and requested to authenticate the Notes when so
executed and delivered and to deliver the same to or on the
written order of the Company signed by one or more Authorized
Officers.
FURTHER
RESOLVED: That the Board hereby authorizes the Secretary or Assistant
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Secretary of the Corporation to affix or cause to be affixed the
corporate seal of the Corporation, or a facsimile thereof, to the
Notes and to any of the other instruments authorized by these
resolutions to
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be executed by any Authorized Officer and to attest the same.
FURTHER
RESOLVED: That the Board hereby approves, confirms and ratifies that in the
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event any Authorized Officer who shall have signed any of the
Notes (manually or by facsimile) shall cease to be an officer of
the Corporation before the Notes so signed shall be authenticated
and delivered by the Notes Trustee or disposed of by the
Corporation, such Notes nevertheless may be authenticated and
delivered or disposed of as though the person who signed such
Notes (manually or by facsimile) had not ceased to be an officer
of the Corporation, and any of the Notes may be signed, by
facsimile or otherwise, on behalf of the Corporation, by any
person who shall become the Chairman, Chief Executive Officer,
President, Chief Financial Officer or an Executive Vice President
of the Corporation, although at the date of such Notes or of the
Indenture such person shall not have been an officer of the
Corporation.
FURTHER
RESOLVED: That the Board hereby authorizes each Authorized Officer to
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negotiate the form, terms and provisions of, and to execute,
deliver and perform, any and all agreements, amendments to
agreements, applications, certificates, instruments, consents,
acknowledgments and other documents contemplated by or related to
the Indenture and to take such other action or actions
(including, without limitation, the making of all payments and
remittances on behalf of the Corporation) as he, in his
discretion, shall deem necessary, appropriate or advisable to
carry out the intent and purpose of the foregoing resolutions,
such negotiation, execution and delivery or taking of any such
action or actions by any such Authorized Officer to constitute
conclusive evidence of his determination and approval of such
necessity, appropriateness or advisability; and any action or
actions previously taken or taken in the future by such
Authorized Officer or Authorized Officers in furtherance of these
objective are hereby authorized, ratified and approved.
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FURTHER
RESOLVED: That, in connection with the issuance of the Notes, the Board
--------
authorizes each Authorized Officer, in the name and on behalf of
the Corporation, to take any and all action that they may deem
necessary, appropriate or advisable in order to obtain a permit,
register or qualify the Notes for issuance and sale, request an
exemption from registration of the Notes, or to register or
obtain a license for the Corporation as a dealer or broker under
the "blue sky" or any other securities laws of the states of the
United States of America or other jurisdiction as such Authorized
Officer may deem necessary, appropriate or advisable, and, in
connection with such registration, permits, licenses,
qualification and exemptions, to execute, acknowledge, verify,
deliver, file and publish all such applications, reports,
issuer's covenants, resolutions, powers of attorney and other
papers and instruments that may be required under such laws that
may be deemed by such Authorized Officer to be necessary,
appropriate or advisable to be filed thereunder, and that the
form of any and all resolutions required by any such state or
authority in connection with such applications, reports, issuer's
covenants, powers of attorney and other papers and instruments
are hereby adopted and approved, and hereby authorize the
Authorized Officers to take any and all further actions as they
deem necessary, appropriate or advisable in order to maintain
such registrations in effect for as long as they may deem to be
in the best interests of the Corporation.
FURTHER
RESOLVED: That the Board authorizes each of the Authorized Officers to
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take, or cause to be taken, all actions necessary, appropriate or
advisable to effect the listing and trading of the Notes and, if
applicable, the Exchange Notes, in the National Association of
Securities Dealers, Inc.'s Private Offerings, Resales and Trading
through Automated Linkages ("PORTAL") market or any other
securities exchange or automated quotation system selected by
such Authorized Officers (each, an "Exchange"), including, but
not limited to, the preparation, execution and filing of all
necessary applications, documents, forms and
5
agreements with the PORTAL market or such other Exchange, the
payment of filing, listing or application fees, the preparation
of temporary and permanent Notes and, if applicable, Exchange
Notes, and the appearance of any such Authorized Officer before
officials of such Exchange.
FURTHER
RESOLVED: That the Board hereby authorizes each Authorized Officer to
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negotiate the form, terms and provisions of, and to execute,
deliver and perform, any and all agreements, amendments to
agreements, applications, certificates, instruments, consents,
acknowledgments and other documents contemplated by or related to
the listing and trading of the Notes and, if applicable, the
Exchange Notes, in the PORTAL market or on any other Exchange and
to take such other action or actions (including, without
limitation, the making of all payments and remittances on behalf
of the Corporation) as he, in his discretion, shall deem
necessary, appropriate or advisable to carry out the intent and
purpose of the foregoing resolutions, such negotiation, execution
and delivery or taking of any such action or actions by any such
Authorized Officer to constitute conclusive evidence of his
determination and approval of such necessity, appropriateness or
advisability; and any action or actions previously taken or taken
in the future by such Authorized Officer or Authorized Officers
in furtherance of these objective are hereby authorized, ratified
and approved.
FURTHER
RESOLVED: That the Board hereby authorizes the Corporation to cause each of
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its subsidiaries that is a Subsidiary Guarantor (as defined in
the Preliminary Offering Memorandum) to execute, deliver and
perform a guarantee of the obligations of the Corporation with
respect to the Notes (the "Note Guarantees") in such form as any
Authorized Officer shall approve, such approval to be
conclusively evidenced by the execution on behalf of each
Subsidiary Guarantor of a Note Guarantee.
FURTHER
RESOLVED: That the Board hereby authorizes each authorized officer to
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negotiate the form,
6
terms and provisions of, and to execute, deliver and perform, any
and all agreements, amendments to agreements, applications,
certificates, instruments, acknowledgments and other documents
contemplated by or related to the Note Guarantees as he, in his
discretion, shall deem necessary, appropriate or advisable to
carry out the intent and purpose of the foregoing resolution,
such negotiation, execution and delivery or taking of any such
action or actions by any such Authorized Officer to constitute
conclusive evidence of his determination and approval of such
necessity, appropriateness or advisability; and any action or
actions previously taken or taken in the future by such
Authorized Officer or Authorized Officers in furtherance of these
objectives are hereby authorized, ratified and approved.
FURTHER
RESOLVED: That the Board hereby appoints and authorizes (i) State Street
-------- -
Bank and Trust Company of California, N.A. to act as the Notes
Trustee under the Indenture, and (ii) State Street Bank and Trust
Company of California, N.A. or any affiliate thereof to act as
registrar (the "Registrar"), paying agent (the "Paying Agent")
and custodian (the "Custodian") under the Indenture; and that the
appointment of the Notes Trustee, the Registrar, the Paying Agent
and the Custodian, for the registration, transfer and exchange of
the Notes and the custody of the Notes in global form, is hereby
authorized, ratified and approved; and the Notes Trustee, the
Registrar, the Paying Agent and the Custodian are hereby
authorized to take such action in accordance with the provisions
of the Indenture and as may be customary in connection with such
registration, transfer, exchange and custody, subject to such
instructions as may be issued from time to time by any Authorized
Officer.
FURTHER
RESOLVED: That the Board hereby approves, ratifies and confirms that the
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principal office of a bank or trust company, as agent of the
Notes Trustee may be designated as the office or agency at which
the Notes may be presented for registration, transfer and
exchange as provided in the Indenture and at which notice and
demands to or upon the Corporation in
7
respect of the Notes or the Indenture may be served, and at which
the Notes may be presented for payment, for registration and for
transfer.
FURTHER
RESOLVED: That the Board hereby authorizes each Authorized Officer to
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negotiate the form, terms and provisions of, and to execute,
deliver and perform, any and all agreements, amendments to
agreements, applications, certificates, instruments, consents,
acknowledgments and other documents contemplated by or related to
the appointment of the Trustee, the Registrar, the Paying Agent
and the Custodian and to take such other action or actions
(including, without limitation, the making of all payments and
remittances on behalf of the Corporation) as he, in his
discretion, shall deem necessary, appropriate or advisable to
carry out the intent and purpose of the foregoing resolutions,
such negotiation, execution and delivery or taking of any such
action or actions by any such Authorized Officer to constitute
conclusive evidence of his determination and approval of such
necessity, appropriateness or advisability; and any action or
actions previously taken or to be taken in the future by such
Authorized Officer or Authorized Officers in furtherance of these
objective are hereby authorized, ratified and approved.
WHEREAS, in connection with the Offering, the Board has determined that it
is in the best interests of the Corporation to enter into the Purchase Agreement
among the Corporation, the subsidiaries of the Corporation party thereto and the
Initial Purchasers (the "Purchase Agreement"), substantially in the form
------------------
provided to the Board and with any such revisions, modifications or supplements
as an Authorized Officer may deem necessary, appropriate or advisable;
NOW, THEREFORE, be it
RESOLVED: That the Board hereby authorizes each Authorized Officer to
--------
negotiate, execute, deliver and perform the Purchase Agreement in
the name and on behalf of the Corporation in such form as such
Authorized Officer or Authorized Officers executing the Purchase
Agreement shall approve, such approval to be conclusively
evidenced by the execution on
8
behalf of the Corporation of the Purchase Agreement.
FURTHER
RESOLVED: That the Board hereby authorizes each Authorized Officer to
--------
negotiate the form, terms and provisions of, and to execute,
deliver and perform, any and all agreements, amendments to
agreements, applications, certificates, instruments, consents,
acknowledgments and other documents contemplated by or related to
the Purchase Agreement and to take such other action or actions
as he, in his discretion, shall deem necessary, appropriate or
advisable to carry out the intent and purpose of the foregoing
resolutions, such negotiation, execution and delivery or taking
of any such action or actions by any such Authorized Officer to
constitute conclusive evidence of his determination and approval
of such necessity, appropriateness or advisability; and any
action or actions previously taken or taken by such Authorized
Officer or Authorized Officers in furtherance of these objective
are hereby authorized, ratified and approved.
FURTHER
RESOLVED: That the Board authorizes each Authorized Officer to negotiate,
--------
execute, deliver and perform in the name and on behalf of the
Corporation the Registration Rights Agreement (the "Registration
Rights Agreement") among the Corporation, the subsidiaries of the
Corporation party thereto and the Initial Purchasers, in
substantially the form attached as an exhibit to the Purchase
Agreement, with any such revisions, modifications or supplements
as any Authorized Officer may deem necessary, appropriate or
advisable, such approval to be conclusively evidenced by the
execution on behalf of the Corporation of the Registration Rights
Agreement.
FURTHER
RESOLVED: That the Board hereby authorizes each Authorized Officer to
--------
negotiate the form, terms and provisions of, and to execute,
deliver and perform, any and all agreements, amendments to
agreements, applications, certificates, instruments, consents,
acknowledgments and other documents contemplated by or related to
the Registration
9
Rights Agreement and to take such other action or actions as he,
in his discretion, shall deem necessary, appropriate or advisable
to carry out the intent and purpose of the foregoing resolutions,
such negotiation, execution and delivery or taking of any such
action or actions by any such Authorized Officer to constitute
conclusive evidence of his determination and approval of such
necessity, appropriateness or advisability; and any action or
actions previously taken or taken in the future by such
Authorized Officer or Authorized Officers in furtherance of these
objective are hereby authorized, ratified and approved.
FURTHER
RESOLVED: That the Board authorizes each Authorized Officer to prepare and
--------
execute each registration statement, to cause the same to be
filed, together with exhibits thereto, with the Commission in
accordance with the Act, with such additions, deletions or
modifications as they, acting in his discretion, may determine to
be necessary or advisable, such determination to be conclusively
evidenced by the execution and filing of such registration
statement, and to take any and all action necessary to cause each
registration statement to become effective and issue the Exchange
Notes in exchange for the Notes pursuant to the Exchange Offer
Registration Statement.
FURTHER
RESOLVED: That the Board authorizes each Authorized Officer to prepare,
--------
execute in the name and on behalf of the Corporation, procure all
necessary signatures to, and file with the Commission, any
amendment(s) or post-effective amendment(s) to each registration
statement deemed by any such Authorized Officer to be necessary
or advisable to effect the registration of the Exchange Notes or
the Notes covered by such registration statement, the approval of
such amendment(s) or post-effective amendment(s) to be
conclusively evidenced by the execution thereof, and to appear on
behalf of the Corporation before the Commission in connection
with any matter relating to each registration statement and any
amendment(s) or post-effective amendment(s) thereto.
10
WHEREAS, in connection with the Offering, the Board has determined that it
is in the best interests of the Corporation to deposit the Notes with the
Depositary Trust Company ("DTC") to facilitate trading of the Notes;
---
NOW, THEREFORE, be it
RESOLVED: That the Board authorizes each Authorized Officer to negotiate
--------
the form, terms and provisions of and to execute, deliver and
perform any and all agreements, amendments to agreements,
applications, certificates, instruments, consents,
acknowledgments and other documents, including, but not limited
to, a letter of representations to be executed by the Corporation
and any eligibility statement required in connection therewith,
contemplated by or related to the trading of the Notes by way of
DTC by book-entry and to take such other action or actions
(including, without limitation, the making of all payments and
remittances on behalf of the Corporation) as he, in his
discretion, shall deem necessary, appropriate or advisable to
carry out the intent and purpose of the foregoing resolutions,
such negotiation, execution and delivery or taking of any such
action or actions by any such Authorized Officer to constitute
conclusive evidence of his approval of such necessity,
appropriateness or advisability; and any action or actions
previously taken or taken in the future by such Authorized
Officer in furtherance of these objectives are hereby authorized,
ratified and approved.
II. DEBT REPAYMENT
-------------------
WHEREAS, in connection with the transactions contemplated by the Purchase
Agreement, the Corporation is to repay certain of its indebtedness with the
proceeds of the issuance and sale of the Notes;
NOW, THEREFORE, be it
RESOLVED: That the Corporation use the proceeds of the issuance and sale of
--------
the Notes to repay Summit Care Corporation's obligations,
including principal, accrued interest thereon and any prepayment
premiums associated therewith, under each of the following
agreements and for other corporate purposes:
11
the Third Amended and Restated Credit Agreement, dated December
15, 1995, among The Bank of Montreal, Union Bank, The Long-Term
Credit Bank of Japan, LTD., Banque Paribas and The First National
Bank of Chicago;
the Note Purchase Agreement, dated December 15, 1995, with John
Hancock Mutual Life Insurance Company, John Hancock Variable Life
Insurance Company, Mellon Bank, N.A., as Trustee for AT&T Master
Pension Trust, Massachusetts Mutual Life Insurance Company and
Principal Mutual Life Insurance Company; and
the Amended and Restated Note Purchase Agreement, dated December
15, 1995, with Northwestern National Life Insurance Company,
Northern Life Insurance Company, The North Atlantic Life
Insurance Company of America, John Hancock Mutual Life Insurance
Company and USG Annuity & Life Company.
After the consideration of further resolutions not relating to the matters
described above, there being no further business, upon motion duly made and
seconded, it was
RESOLVED: To adjourn.
- --------
12
FOUNTAIN VIEW HOLDINGS, INC., SUMMIT CARE CORPORATION, FV-SCC ACQUISITION
CORP., AIB CORP., ALEXANDRIA CONVALESCENT HOSPITAL, INC., BIA HOTEL CORP., BRIER
OAK CONVALESCENT, INC., ELMCREST CONVALESCENT HOSPITAL, FOUNTAINVIEW
CONVALESCENT HOSPITAL, FOUNTAIN VIEW MANAGEMENT, INC., I.' N O., INC.,
LOCOMOTION THERAPY, INC., LOCOMOTION HOLDINGS, INC., ON-TRACK THERAPY CENTER,
INC., RIO HONDO NURSING CENTER, SYCAMORE PARK CONVALESCENT HOSPITAL, SUMMIT
CARE - CALIFORNIA, INC., SUMMIT CARE - TEXAS, NO. 2, INC., SUMMIT CARE - TEXAS,
NO. 3, INC., SUMMIT CARE PHARMACY, INC., SUMMIT CARE TEXAS EQUITY, INC., SUMMIT
CARE MANAGEMENT TEXAS, INC., SUMMIT CARE TEXAS, L.P., SKILLED CARE NETWORK, SNF
PHARMACY, INC.
JOINT MEETING OF THE BOARDS OF DIRECTORS
----------------------------------------
APRIL 9, 1998
A joint meeting of the Boards of Directors (each, a "Board") of Fountain
-----
View, Inc., Fountain View Holdings, Inc., Summit Care Corporation, FV-SCC
Acquisition Corp., AIB Corp., Alexandria Convalescent Hospital, Inc., BIA Hotel
Corp., Brier Oak Convalescent, Inc., Elmcrest Convalescent Hospital,
Fountainview Convalescent Hospital, Fountain View Management, Inc., I.' n O.,
Inc., Locomotion Therapy, Inc., Locomotion Holdings, Inc., On-Track Therapy
Center, Inc., Rio Hondo Nursing Center, Sycamore Park Convalescent Hospital,
Summit Care - California, Summit Care - Texas, No. 2, Inc., Summit Care - Texas,
No. 3, Inc., Summit Care Pharmacy, Inc., Summit Care Texas Equity, Inc., Summit
Care Management Texas, Inc., Summit Care Texas, L.P., Skilled Care Network, and
SNF Pharmacy, Inc. (each a "Corporation", and collectively, the "Corporations"),
----------- ------------
was held by telephone conference on April 9, 1998. In attendance were Robert
Snukal, Sheila Snukal, Mark Jrolf, Michel Reichert, William Scott, Peter
Hermann, and Gary Massimino, comprising a majority of the Board of each Company.
Each such person and each other director of each Company not in attendance
waived notice of the meetings. Also present were Stephen M. L. Cohen and Joseph
Centofanti. With regard to Summit Care Corporation, Gary Massimino abstained
from the following resolutions.
SENIOR SECURED NOTE OFFERING
----------------------------
WHEREAS, it has been proposed that the Corporation guarantee the
obligations of Fountain View, Inc. ("Fountain View") with respect to the
issuance of $120,000,000 in aggregate principal amount of 11 1/4% Senior
Subordinated Notes due 2008 (the "Notes") by Fountain View to Goldman, Sachs &
-----
Co., Nesbitt Burns Securities Inc., Paribas Corporation and Sutro & Co.
Incorporated, as initial purchasers (collectively, the "Initial Purchasers"),
------------------
and for resale by the Initial Purchasers to Qualified Institutional Buyers, as
defined in Rule 144A under the Securities Act of 1933, as amended (the "Act"),
---
or to non-U.S. persons that acquire the Notes outside the United States in an
offshore transaction meeting the requirements of Rules 903 and 904 of Regulation
S under the Act (such transaction, the "Offering");
--------
WHEREAS, in connection with the Offering, the Board has determined that it
is in the best interests of the Corporation to enter into the Indenture (the
"Indenture") among Fountain View, the Corporation, the other subsidiaries of
- ----------
Fountain View party thereto and State Street Bank and Trust Company of
California, N.A., as trustee (the "Notes Trustee"), providing for the issuance
-------------
of the Notes and the rights of the holders thereof, substantially in the form
provided to the Board and with any such revisions, modifications or supplements
as an Authorized Officer (as defined below) may deem necessary, appropriate or
advisable; and
WHEREAS, Summit Care Management Texas, Inc. is the General Partner of
Summit Care Texas, L.P. (the "L.P.") and is acting herein on its own behalf as
well as on behalf of the L.P.;
WHEREAS, the Board has determined that it is in the best interests of the
Corporation to guarantee the obligations of Fountain View under the Notes;
NOW, THEREFORE, be it
RESOLVED: That the Board hereby authorizes each of the Chairman, the Chief
--------
Executive Officer, the President, the Chief Financial Officer and
each Executive Vice President of the Corporation (each, an
"Authorized Officer") to negotiate, execute, deliver and perform
the Indenture in the name of and on behalf of the Corporation in
such form as such Authorized Officer or Authorized Officers
executing the Indenture shall approve, such approval to be
conclusively evidenced by the execution on behalf of the
Corporation of the Indenture.
FURTHER
RESOLVED: That the Board hereby authorizes each Authorized Officer to
--------
effect any filing with the Securities and Exchange Commission
(the "Commission") that is contemplated by the Registration
Rights Agreement (as defined below) which is necessary to qualify
the Indenture under the Trust Indenture Act of 1939, as amended.
2
FURTHER
RESOLVED: That the Board hereby authorizes each Authorized Officer (i) to
-------- -
negotiate the form of Subordinated Subsidiary Guarantee, to be
included in the Indenture (the "Guarantee") and the form of
subordinated subsidiary guarantee to be issued in exchange for
the Guaranty pursuant to the Indenture (the "Exchange
Guarantee"), (ii) when the Indenture shall have been duly
executed and delivered by Fountain View, the Corporation, the
other subsidiaries of Fountain View party thereto and the Notes
Trustee, to execute the Guarantee and the Exchange Guaranty
(which execution may be by facsimile signature), with each
substantially in the respective form set forth in the Indenture,
with such changes additions thereto and deletions therefrom as
shall be reflected in or authorized under the Indenture as
executed and delivered, and (iii) to deliver or cause to be
delivered to the Notes Trustee the Guarantee and the Exchange
Guaranty.
FURTHER
RESOLVED: That the Board hereby authorizes the Secretary or Assistant
--------
Secretary of the Corporation to affix or cause to be affixed the
corporate seal of the Corporation, or a facsimile thereof, to any
of the instruments authorized by these resolutions to be executed
by any Authorized Officer and to attest the same.
FURTHER
RESOLVED: That the Board hereby authorizes each Authorized Officer to
--------
negotiate the form, terms and provisions of, and to execute,
deliver and perform, any and all agreements, amendments to
agreements, applications, certificates, instruments, consents,
acknowledgments and other documents contemplated by or related to
the Indenture and to take such other action or actions
(including, without limitation, the making of all payments and
remittances on behalf of the Corporation) as he, in his
discretion, shall deem necessary, appropriate or advisable to
carry out the intent and purpose of the foregoing resolutions,
such negotiation, execution and delivery or taking of any such
action or actions by any such Authorized Officer to constitute
conclusive evidence of his determination and approval of such
3
necessity, appropriateness or advisability; and any action or
actions previously taken or taken in the future by such
Authorized Officer or Authorized Officers in furtherance of these
objective are hereby authorized, ratified and approved.
FURTHER
RESOLVED: That the Board hereby authorizes each authorized officer to
--------
negotiate the form, terms and provisions of, and to execute,
deliver and perform, any and all agreements, amendments to
agreements, applications, certificates, instruments,
acknowledgments and other documents contemplated by or related to
the Guarantee or the Exchange Guaranty as he, in his discretion,
shall deem necessary, appropriate or advisable to carry out the
intent and purpose of the foregoing resolutions, such
negotiation, execution and delivery or taking of any such action
or actions by any such Authorized Officer to constitute
conclusive evidence of his determination and approval of such
necessity, appropriateness or advisability; and any action or
actions previously taken or taken in the future by such
Authorized Officer or Authorized Officers in furtherance of these
objectives are hereby authorized, ratified and approved.
WHEREAS, in connection with the Offering, the Board has determined that it
is in the best interests of the Corporation to enter into the Purchase Agreement
among Fountain View, the Corporation, the other subsidiaries of Fountain View
party thereto and the Initial Purchasers (the "Purchase Agreement"),
------------------
substantially in the form provided to the Board and with any such revisions,
modifications or supplements as an Authorized Officer may deem necessary,
appropriate or advisable;
NOW, THEREFORE, be it
RESOLVED: That the Board hereby authorizes each Authorized Officer to
--------
negotiate, execute, deliver and perform the Purchase Agreement in
the name and on behalf of the Corporation in such form as such
Authorized Officer or Authorized Officers executing the Purchase
Agreement shall approve, such approval to be conclusively
evidenced by the execution on behalf of the Corporation of the
Purchase Agreement.
4
FURTHER
RESOLVED: That the Board hereby authorizes each Authorized Officer to
--------
negotiate the form, terms and provisions of, and to execute,
deliver and perform, any and all agreements, amendments to
agreements, applications, certificates, instruments, consents,
acknowledgments and other documents contemplated by or related to
the Purchase Agreement and to take such other action or actions
as he, in his discretion, shall deem necessary, appropriate or
advisable to carry out the intent and purpose of the foregoing
resolutions, such negotiation, execution and delivery or taking
of any such action or actions by any such Authorized Officer to
constitute conclusive evidence of his determination and approval
of such necessity, appropriateness or advisability; and any
action or actions previously taken or taken by such Authorized
Officer or Authorized Officers in furtherance of these objective
are hereby authorized, ratified and approved.
FURTHER
RESOLVED: That the Board authorizes each Authorized Officer to negotiate,
--------
execute, deliver and perform in the name and on behalf of the
Corporation the Registration Rights Agreement (the "Registration
Rights Agreement") among Fountain View, the Corporation, the
other subsidiaries of Fountain View party thereto and the Initial
Purchasers, in substantially the form attached as an exhibit to
the Purchase Agreement, with any such revisions, modifications or
supplements as any Authorized Officer may deem necessary,
appropriate or advisable, such approval to be conclusively
evidenced by the execution on behalf of the Corporation of the
Registration Rights Agreement.
FURTHER
RESOLVED: That the Board hereby authorizes each Authorized Officer to
--------
negotiate the form, terms and provisions of, and to execute,
deliver and perform, any and all agreements, amendments to
agreements, applications, certificates, instruments, consents,
acknowledgments and other documents contemplated by or related to
the Registration Rights Agreement and to take such other action
or actions as he, in his discretion, shall
5
deem necessary, appropriate or advisable to carry out the intent
and purpose of the foregoing resolutions, such negotiation,
execution and delivery or taking of any such action or actions by
any such Authorized Officer to constitute conclusive evidence of
his determination and approval of such necessity, appropriateness
or advisability; and any action or actions previously taken or
taken in the future by such Authorized Officer or Authorized
Officers in furtherance of these objective are hereby authorized,
ratified and approved.
FURTHER
RESOLVED: That Summit Care Management Texas, Inc., acting in its capacity
--------
as the General Partner of the L.P., hereby adopts and approves,
to the extent applicable, all of the above resolutions on behalf
of the L.P.
After the consideration of further resolutions not relating to the matters
described above, there being no further business, upon motion duly made and
seconded, it was
[REMAINDER OF PAGE INTENTIONALLY BLANK]
6
RESOLVED: To adjourn.
- --------
/s/ Sheila Snukal
-----------------
Sheila Snukal, Secretary
7