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EXHIBIT 1.1
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Draft of 8/15/94
ORNDA HEALTHCORP
(a Delaware corporation)
SUMMIT HEALTH LTD.
(a California corporation)
$125,000,000
____% Senior Subordinated Notes due 2004
PURCHASE AGREEMENT
Dated: August ___, 1994
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ORNDA HEALTHCORP
(a Delaware corporation)
SUMMIT HEALTH LTD.
(a California corporation)
$125,000,000
___% Senior Subordinated Notes due 2004
PURCHASE AGREEMENT
August , 1994
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MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
SALOMON BROTHERS INC
CITICORP SECURITIES, INC.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1201
Ladies and Gentlemen:
OrNda HealthCorp, a Delaware corporation (the "Company"), and
Summit Health Ltd., a California corporation and a wholly owned subsidiary of
the Company ("Summit" and, together with the Company, the "Issuers"), as joint
and several obligors, propose to issue and sell to you, as the several
underwriters (the "Underwriters"), $125,000,000 aggregate principal amount of
their _____% Senior Subordinated Notes due 2004 (the "Securities"). Such
Securities are to be sold to each Underwriter, acting severally and not
jointly, in the respective principal amounts set forth in Schedule A opposite
the name of such Underwriter. The Securities are to be issued pursuant to an
indenture to be dated as of __________, 1994 (the "Indenture") among the
Company, Summit and NationsBank of Tennessee, N.A. (the "Trustee"). The
Securities and the Indenture are more fully described in the Prospectus
referred to below.
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You have advised us that you, acting severally and not
jointly, desire to purchase the Securities and that you shall execute this
Agreement and the Price Determination Agreement referred to below.
The principal amount and certain terms of the Securities, the
purchase price of the Securities to be paid by the Underwriters, and the
underwriting commission to be paid to the Underwriters by the Issuers shall be
agreed upon by the Issuers and the Underwriters, and such agreement shall be
set forth in a separate written instrument substantially in the form of Exhibit
A hereto (the "Price Determination Agreement"). The Price Determination
Agreement may take the form of an exchange of any standard form of written
telecommunication between the Issuers and the Underwriters and shall specify
such applicable information as is indicated in Exhibit A hereto. The offering
of the Securities will be governed by this Agreement, as supplemented by the
Price Determination Agreement. From and after the date of the execution and
delivery of the Price Determination Agreement, this Agreement shall be deemed
to incorporate, and all references herein to "this Agreement" or "herein" shall
be deemed to include, the Price Determination Agreement. This Agreement, the
Securities and the Indenture are hereinafter referred to collectively as the
"Operative Documents."
The Issuers have prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(File No. 33-54651) covering the registration of the Securities under the
Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectus, or prospectuses, and either (A) have prepared and
propose to file, prior to the effective date of such registration statement, an
amendment to such registration statement, including a final prospectus, or (B)
if the Issuers have elected to rely upon Rule 430A ("Rule 430A") of the rules
and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"), will prepare and file a prospectus, in accordance with the
provisions of Rule 430A and Rule 424(b) ("Rule 424(b)") of the 1933 Act
Regulations, promptly after execution and delivery of the Price Determination
Agreement. The information, if any, included in such prospectus that was
omitted from the prospectus included in such registration statement at the time
it becomes effective but that is deemed, pursuant to Rule 430A(b), to be part
of such registration statement at the time it becomes effective is referred to
herein as the "Rule 430A Information." Each prospectus used before the time
such registration statement becomes effective, and any prospectus that omits
the Rule 430A Information that is used after such effectiveness and prior to
the execution and delivery of the Price
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Determination Agreement, is herein called a "preliminary prospectus." Any
reference to any preliminary prospectus shall be deemed to refer to and include
the documents incorporated by reference therein as of the date of such
preliminary prospectus. Such registration statement, including the exhibits
thereto and all documents incorporated or deemed to be incorporated by
reference therein, as amended at the time it becomes effective and including,
if applicable, the Rule 430A Information, is herein called the "Registration
Statement," and the prospectus included in the Registration Statement at the
time it becomes effective is herein called the "Prospectus," except that if the
final prospectus first furnished to the Underwriters after the execution of the
Price Determination Agreement for use in connection with the offering of the
Securities differs from the prospectus included in the Registration Statement
at the time it becomes effective (whether or not such prospectus is required to
be filed pursuant to Rule 424(b)), the term "Prospectus" shall refer to the
final prospectus first furnished to the Underwriters for such use.
The Issuers understand that the Underwriters propose to make a
public offering of the Securities as soon as you deem advisable after the
Registration Statement becomes effective, the Price Determination Agreement has
been executed and delivered and the Indenture has been qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act"), and the rules and
regulations of the Commission thereunder (collectively, the "1939 Act
Regulations").
Section 1. Representations and Warranties.
(a) The Company and Summit jointly and severally
represent and warrant to and agree with each of the Underwriters that:
(i) The Issuers meet the requirements for use of Form
S-3 under the 1933 Act. When the Registration Statement shall become
effective, if the Issuers have elected to rely upon Rule 430A, on the date
of the Price Determination Agreement, on the effective or issue date of
each amendment or supplement to the Registration Statement or the
Prospectus and at the Closing Time referred to below the Registration
Statement and any amendments and supplements thereto will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations. When the Registration Statement shall become effective, if
the Issuers have elected to rely upon Rule 430A, on the date of the Price
Determination Agreement and on the effective or issue date of each
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amendment or supplement to the Registration Statement or the Prospectus,
neither the Registration Statement nor any amendment or supplement thereto
will 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
amendment or supplement thereto, on the issue date thereof, on the date of
the Price Determination Agreement and at the Closing Time, will include an
untrue statement of a material fact or 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. Notwithstanding
the foregoing, this representation and warranty does not apply to
statements or omissions from the Registration Statement or the Prospectus
made in reliance upon and in conformity with information furnished in
writing to the Issuers by or on behalf of any Underwriters expressly for
use in the Registration Statement or the Prospectus or to the Statement of
Eligibility of the Trustee on Form T-1 filed with the Commission as part
of the Registration Statement.
(ii) Each preliminary prospectus 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.
(iii) Ernst & Young, which is reporting upon the audited
financial statements and schedules of the Company and Summit included or
incorporated by reference in the Registration Statement, and BDO Seidman,
which is reporting upon the audited financial statements and schedules of
Fountain Valley (as hereinafter defined), are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) This Agreement has been, and the Price Determination
Agreement on the date thereof will be, duly authorized, executed and
delivered by the Issuers.
(v) The consolidated financial statements of the Company
included or incorporated by reference in the Registration Statement and
the Prospectus, together with the related schedules and notes, present
fairly the consolidated financial position of the Company and its
Subsidiaries (as hereinafter defined) as of the dates indicated, and the
consolidated statements of operations, shareholders' equity and cash flows
of the Company and its Subsidiaries, for the periods
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specified. Except as otherwise stated in the Registration Statement, such
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The financial statement schedules, if
any, included in the Registration Statement present fairly in accordance
with GAAP the information required to be stated therein. The selected
historical financial data included in the Prospectus present fairly in
accordance with GAAP the information shown therein and have been compiled
on a basis consistent with that of the audited consolidated financial
statements included or incorporated by reference in the Registration
Statement. The other financial and statistical information and data set
forth in the Registration Statement is, in all material respects,
accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company and Summit.
The pro forma financial statements and other pro forma financial
information included in the Prospectus present fairly the information
shown therein in accordance with the adjustments and assumptions described
therein, have been prepared in all material respects in accordance with
the Commission's rules and guidelines with respect to pro forma financial
statements, have been properly compiled on the pro forma basis described
therein and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred
to therein.
(vi) The consolidated financial statements of Summit
incorporated by reference in the Registration Statement and the
Prospectus, together with the related schedules and notes, present fairly
the consolidated financial position of Summit and its subsidiaries as of
the dates indicated, and the consolidated statements of income,
shareholders' equity and cash flows of Summit and its subsidiaries, for
the periods specified. Except as otherwise stated in the Registration
Statement, such financial statements have been prepared in conformity with
GAAP applied on a consistent basis throughout the periods involved.
(vii) The consolidated financial statements of Fountain Valley
Medical Development Company ("Fountain Valley") included in the
Registration Statement present fairly the consolidated financial position
of Fountain Valley as of the dates indicated and the consolidated
statements of income, partners' equity and cash flows of Fountain Valley
for the periods specified. Except
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as otherwise stated in the Registration Statement, such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved.
(viii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and
to enter into and perform its obligations under this Agreement and the
Price Determination Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or conduct of business,
except where the failure to be so qualified or be in good standing would
not have a material adverse effect on the Company and its Subsidiaries,
considered as one enterprise.
(ix) Each corporation greater than 50% of whose securities
having ordinary voting power are directly or indirectly owned by the
Company, and each partnership or joint venture (a "partnership") greater
than 50% of the equity ownership of which is directly or indirectly owned
by the Company, or of which the Company directly or indirectly controls
the controlling general partner, whether in the form of a general,
special, or limited partnership (each such corporation or other entity, a
"Subsidiary"), other than Inactive Subsidiaries (as defined below), has
been duly incorporated (in the case of corporate Subsidiaries) or duly
formed (in the case of partnership Subsidiaries) and is validly existing
as a corporation in good standing or is validly existing as a partnership,
as the case may be, under the laws of its jurisdiction of organization,
with the corporate power or partnership power, as the case may be, and
authority to own, lease and operate its properties and conduct its
business as described in the Prospectus and each is duly qualified to do
business as a foreign corporation in good standing or as a foreign
partnership, as the case may be, in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or conduct of business, except where the failure to be so
qualified or be in good standing would not have a material adverse effect
on the condition (financial or otherwise), earnings or business affairs of
the Company and its Subsidiaries, considered as one enterprise. Each of
the Company's Subsidiaries (including the Inactive Subsidiaries, which are
identified as such)
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are listed on Schedule B hereto. For purposes of this paragraph (ix),
"Inactive Subsidiary" means each corporation greater than 50% of whose
securities having ordinary voting power or each partnership greater than
50% of the equity ownership of which is directly or indirectly owned by
the Company which (a) does not have assets exceeding $25,000 at any time
and (b) does not engage in any business activity other than those business
activities directly related to the maintenance of its corporate or
partnership existence; provided, however, that the aggregate fair market
value of all the assets of all Inactive Subsidiaries shall not exceed
$500,000 at any time.
(x) All of the issued and outstanding shares of capital stock
of the Company's corporate Subsidiaries and equity interests in the
Company's partnership Subsidiaries have been duly authorized and validly
issued, and are fully paid and non-assessable, and except for shares or
interests owned by the Company's joint venture partners, are owned by the
Company, directly or through one or more Subsidiaries, free and clear of
any pledge, lien, security interest, charge, claim, mortgage or
encumbrance of any kind (a "Lien"), except for Liens created pursuant to
the Credit, Security, Guaranty and Pledge Agreement, dated as of April 19,
1994, among the Company, Summit and AHM Acquisition Co., Inc., the
guarantors named therein, the Lenders named therein, The Bank of Nova
Scotia and Citicorp USA Inc., as Managing Agents for the Lenders, (the
"Bank Credit Facility").
(xi) The Company had at the date indicated in the Prospectus a
duly authorized and outstanding consolidated capitalization as set forth
in the Prospectus in the column entitled "Actual" under the caption
"Capitalization."
(xii) The Issuers have all of the requisite corporate power and
authority to execute, issue and deliver the Securities and to incur and
perform their obligations thereunder, the Securities have been duly
authorized by the Issuers and, when executed, authenticated and issued in
the manner provided for in the Indenture and delivered against payment of
the purchase price therefor as provided in this Agreement, will constitute
valid and binding obligations of the Issuers entitled to the benefits of
the Indenture and enforceable against the Issuers in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting enforcement of
creditors' rights generally or by general principles of equity
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(regardless of whether enforcement is considered in a proceeding in equity
or at law); and the Securities will conform in all material respects to
the descriptions thereof contained in the Prospectus.
(xiii) The Issuers have all of the requisite corporate power and
authority to execute, deliver and perform their obligations under the
Indenture, the Indenture has been duly authorized by the Issuers, will be
substantially in the form heretofore delivered to you, and when executed
and delivered by the Issuers and, assuming due execution by the Trustee,
will constitute a valid and binding obligation of the Issuers, enforceable
against the Issuers in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting enforcement of creditors' rights generally or by
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law); and the Indenture
conforms in all material respects to the description thereof contained in
the Prospectus. At the Closing Time, the Indenture will have been duly
qualified under the 1939 Act.
(xiv) All of the outstanding shares of capital stock of the
Company have been duly authorized and are validly issued, fully paid and
non-assessable; no holder thereof is subject to personal liability by
reason of being such a holder; and none of the outstanding shares of
capital stock of the Company was issued in violation of any preemptive or
similar rights of any stockholder of the Company arising by operation of
law, under the charter and bylaws of the Company or under any agreement to
which the Company or any of its Subsidiaries is a party.
(xv) There are no holders of securities (debt or equity) of
the Company or any of its Subsidiaries, or holders of rights (including,
without limitation, preemptive rights), warrants or options to obtain
securities of the Company or any of its Subsidiaries, who have the right
to request the Company or any of the Subsidiaries to register securities
held by them pursuant to the Registration Statement, other than holders
who have been given the opportunity to exercise such rights and have not
informed the Company that they wish to exercise such rights.
(xvi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein or contemplated thereby, there has not been (A)
any
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material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
earnings or business affairs of the Company and its Subsidiaries,
considered as one enterprise, whether or not arising in the ordinary
course of business, (B) any transaction entered into by the Company or any
of its Subsidiaries, whether or not arising in the ordinary course of
business, which is material with respect to the Company and its
Subsidiaries, considered as one enterprise or (C) any dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock, except with respect to the Company's Payable
in Kind Cumulative Redeemable Convertible Preferred Stock.
(xvii) Neither the Company nor any Subsidiary is in violation of
its charter, by-laws or other governing document, as the case may be, or
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, bond, debenture, note, lease or other
agreement or instrument to which it is a party or to which any of them or
any of its respective properties may be bound or to which any of its
property or assets is subject, except for such violations or defaults that
would not have a material adverse effect on the condition (financial or
otherwise), earnings or business affairs of the Company and its
Subsidiaries, considered as one enterprise.
(xviii) The issuance, sale and delivery of the Securities, the
execution, delivery and performance of this Agreement and the other
Operative Documents, the consummation by the Issuers of the transactions
contemplated by the Operative Documents and compliance by the Issuers with
the terms of the foregoing have been duly authorized by all necessary
corporate action on the part of the Issuers and do not, and at the Closing
Time will not, conflict with, or result in a breach or violation of any of
the terms or provisions of the charter, by-laws or governing documents of
the Company or any Subsidiary and do not, and at the Closing Time will
not, conflict with, or result in a breach or violation of any of the terms
or provisions of, or constitute a default or result in the creation or
imposition of any Lien upon any property or assets of the Company or its
Subsidiaries under, (A) any contract, indenture, mortgage, deed of trust,
loan or credit agreement, bond, debenture, note, lease or other agreement
or instrument to which any of the Company or any Subsidiary is a party or
by which any of them may be bound or to which any of their properties or
assets
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is subject or (B) any existing applicable law, statute, rule, regulation
or any judgment, order, writ or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any Subsidiary or any of the Company's or any of the
Subsidiaries, properties, assets or operations, in each case with respect
to (A) and (B) above, except for such conflicts, breaches, violations or
defaults or Liens that would not, singly or in the aggregate, have a
material adverse effect on the condition (financial or otherwise),
earnings or business affairs of the Company and its Subsidiaries,
considered as one enterprise.
(xix) No authorization, approval, consent or license of any
government, governmental instrumentality or court is necessary in
connection with the due authorization, execution, delivery and performance
by the Issuers of each of the Operative Documents, and the valid
authorization, issuance, sale and delivery of the Securities, except such
as may be required under the 1933 Act, the 1933 Act Regulations, the 1939
Act, the 1939 Act Regulations or the securities or blue sky laws of the
various states in connection with the offer and sale of the Securities.
(xx) Except as disclosed in the Prospectus, there are no
actions, suits or proceedings before or by any government, governmental
instrumentality or court, now pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries
which, singly or in the aggregate, are required to be disclosed in the
Registration Statement or Prospectus or that could reasonably be expected
to result in any material adverse change in the condition (financial or
otherwise), earnings or business affairs of the Company and its
Subsidiaries, considered as one enterprise, or could reasonably be
expected to materially and adversely affect the properties or assets of
the Company and its Subsidiaries, considered as one enterprise, or could
reasonably be expected to materially and adversely affect the consummation
of the transactions contemplated by the Registration Statement.
(xxi) There are no contracts or documents of a character
required by the 1933 Act or the 1933 Act Regulations to be described in
the Registration Statement or the Prospectus or to be filed as exhibits
to, or incorporated by reference in, the Registration Statement that are
not described or filed or incorporated by reference as required.
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(xxii) Each of the Company and its Subsidiaries has fee simple
title to all properties and assets described in the Prospectus as owned by
it, in each case free and clear of all Liens, except (A) as described in
the Prospectus, (B) as do not materially impair or interfere with the use
made and proposed to be made of such properties, (C) liens in favor of the
lenders under the Bank Credit Facility or (D) as could not be expected to
materially adversely affect the condition (financial or otherwise),
earnings or business affairs of the Company and its Subsidiaries,
considered as one enterprise. 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 of its Subsidiaries has any notice of any
claim of any sort that has been asserted by anyone adverse to the rights
of the Company or any of its Subsidiaries under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or any of the Subsidiaries to the continued possession of the
leased or subleased premises under any such lease or sublease, which
claims, in the aggregate, could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), earnings or
business affairs of the Company and its Subsidiaries, considered as one
enterprise.
(xxiii) The Company and each Subsidiary is in compliance
with, and each such entity has not received any notice of any outstanding
violation of, any laws, regulations, ordinances and rules applicable to it
and its operations, except, in either case, where any failure by the
Company or any Subsidiary to comply with any such law, regulation,
ordinance or rule would not have, individually, or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
earnings, or business affairs of the Company and its Subsidiaries,
considered as one enterprise.
(xxiv) Each of the Company and its Subsidiaries owns or
possesses all governmental licenses, permits, certificates (including,
without limitation, certificates of need and Medicare and Medicaid
approvals), consents, orders, approvals and other authorizations necessary
to own or lease, as the case may be, and to operate its properties and to
conduct its business as presently conducted by it, except where the
failure to possess such licenses, permits, certificates, consents, orders,
approvals and other
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authorizations would not have a material adverse effect on the condition
(financial or otherwise), earnings or business affairs of the Company and
its Subsidiaries, considered as one enterprise (collectively, "Material
Licenses"); all of the Material Licenses are valid and in full force and
effect; and there are no pending or, to the knowledge of the Company,
threatened actions, suits, claims, or proceedings against the Company or
any Subsidiary before any court, governmental agency or body, or otherwise
that, if successful, would limit, revoke, cancel, suspend, or cause not to
be renewed any Material License, or that, if successful, would limit,
revoke, cancel, suspend, or cause not to be renewed any right of the
Company or any Subsidiary to receive reimbursement from the federal
government or any agency thereof, any state government or agency thereof,
or any other body for services rendered by the Company or any Subsidiary.
Each of the hospitals operated by any of the Company and its Subsidiaries
has received accreditation by the Joint Commission on Accreditation of
Health Care Organizations (except for one hospital which has received
accreditation by the American Osteopathic Association). All of the
hospitals operated by the Company and its Subsidiaries are licensed under
appropriate state laws to conduct the business as described in the
Prospectus and are "providers of services" as defined in the Social
Security Act and the regulations promulgated thereunder, and are eligible
to participate in, and are certified to receive reimbursement under, the
Medicare program.
(xxv) Neither the Company nor any of its Subsidiaries is an
investment company within the meaning of the Investment Company Act of
1940, as amended.
(xxvi) The Company and its Subsidiaries and their properties,
assets and operations comply with all Environmental Laws (as defined
below), except to the extent that failure to comply with such
Environmental Laws would not have a material adverse effect on the
condition (financial or otherwise), earnings or business affairs of the
Company and its Subsidiaries, considered as one enterprise. There are no
past, present or, to the knowledge of the Company, reasonably anticipated
future events, conditions, circumstances, practices, plans or legal
requirements that could reasonably be expected to prevent compliance with
Environmental Laws by the Company or any of its Subsidiaries or any of
their properties, assets or operations, except where such noncompliance
would not have a material adverse effect on the condition
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(financial or otherwise), earnings or business affairs of the Company and
its Subsidiaries, considered as one enterprise. Neither the Company nor
any of its Subsidiaries nor any of their properties, assets or operations
is the subject of any pending or, to the knowledge of the Company,
threatened federal, state or local investigation relating to any violation
or potential violation of any Environmental Law or any release or
threatened release of, or cleanup of, any Hazardous Materials (as defined
below) that could reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), earnings or business affairs of
the Company and its Subsidiaries, considered as one enterprise. Neither
the Company nor any of its Subsidiaries has received any notice or claim,
nor are there pending or, to the knowledge of the Company, threatened
actions, suits or proceedings against any of them, with respect to
violations of any Environmental Law or in connection with any release or
threatened release of, or cleanup of, any Hazardous Materials that, in the
aggregate, could reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), earnings or business affairs of
the Company and the Subsidiaries, considered as one enterprise. As used
herein, "Environmental Laws" means any federal, state or local law,
regulation, common law principle, order, decree, judgment, injunction,
permit or license applicable to the Company or any of its Subsidiaries or
any of their properties, assets or operations relating to human health or
the environment, and "Hazardous Materials" means those substances that are
regulated by or form the basis of liability under any Environmental Laws.
(xxvii) To the knowledge of the Company, no labor dispute exists
with the employees of the Company or any of its Subsidiaries or is
imminent that, in either case, could reasonably be expected to materially
and adversely affect the condition (financial or otherwise), earnings or
business affairs of the Company and its Subsidiaries, considered as one
enterprise.
(xxviii) Except as disclosed in the Prospectus, all
United States federal income tax returns of the Company and its
Subsidiaries required by law to be filed have been filed and all taxes
shown by such returns or otherwise assessed, which are due and payable,
have been paid, except for such, if any, as are being contested in good
faith and as to which adequate reserves have been provided. Except as
disclosed in the Prospectus, all other corporate franchise and income tax
returns of the Company and its Subsidiaries
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required to be filed pursuant to applicable foreign, state or local law
have been filed, except insofar as the failure to file such returns would
not have a material adverse effect on the condition (financial or
otherwise), earnings or business affairs of the Company and its
Subsidiaries, considered as one enterprise, and all taxes shown on such
returns or otherwise assessed which are due and payable have been paid,
except for such taxes, if any, as are being contested in good faith and as
to which adequate reserves have been provided. To the best of the
Company's knowledge, the charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of any income and corporate
franchise tax liability for any years not finally determined are adequate
to meet any assessments or re-assessments for additional income or
corporate franchise tax for any years not finally determined, except as
disclosed in the Prospectus and except to the extent of any inadequacy
that would not have a material adverse effect on the condition (financial
or otherwise), earnings or business affairs of the Company and the
Subsidiaries, considered as one enterprise.
(xxix) The Company and each of its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance
with management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(b) Any certificate signed by any officer of the Company or
any Subsidiary and delivered to you or to counsel for the Underwriters at or
prior to the Closing Time pursuant to this Agreement or the transactions
contemplated hereby shall be deemed a representation and warranty by the
Company or such Subsidiary, as the case may be, to each Underwriter as to the
matters covered thereby.
Section 2. Sale and Delivery to the Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained, and
subject to the terms and conditions herein set forth, the Issuers agree to sell
to each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Issuers, the Securities at
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the purchase price to be agreed upon by you and the Issuers in accordance with
Section 2(b) or 2(c) and as set forth in the Price Determination Agreement, the
principal amount of Securities set forth opposite the name of such Underwriter
in Schedule A (plus any additional principal amount of Securities which such
Underwriters may become obligated to purchase pursuant to the provisions of
Section 10 hereof). If the Issuers elect to rely on Rule 430A, Schedule A may
be attached to the Price Determination Agreement.
(b) If the Issuers have elected not to rely upon Rule 430A,
then the initial public offering price of the Securities, the purchase price of
the Securities to be paid by the Underwriters and certain other principal terms
of the Securities shall be agreed upon and set forth in the Price Determination
Agreement, dated the date hereof, and an amendment to the Registration
Statement containing such information will be filed before the Registration
Statement becomes effective.
(c) If the Issuers have elected to rely upon Rule 430A,
then the initial public offering price of the Securities, the purchase price of
the Securities to be paid by the Underwriters and certain other principal terms
of the Securities shall be agreed upon and set forth in the Price Determination
Agreement. In the event that the Price Determination Agreement has not been
executed by the close of business on the fourth business day following the date
on which the Registration Statement becomes effective, this Agreement shall
terminate forthwith, without liability of either party to the other party
except that Sections 6 and 7 shall remain in effect.
(d) Payment of the purchase price for, and delivery of,
the Securities shall be made at the offices of Dewey Ballantine, 1301 Avenue of
the Americas, New York, New York 10019, or at such other place as shall be
agreed upon by the Company and you, at 10:00 A.M., New York City time, either
(i) on the fifth full business day after the effective date of the Registration
Statement or (ii) if the Issuers have elected to rely upon Rule 430A, on the
fifth full business day after execution of the Price Determination Agreement
(unless, in either case, postponed pursuant to Section 10), or at such other
time not more than ten full business days thereafter as you and the Company
shall determine (such date and time of payment and delivery being herein called
the "Closing Time"). Payment shall be made to the Company by certified or
official bank check or checks in New York Clearing House funds payable to the
order of the Company, against delivery of the Securities to you for the
respective accounts of the Underwriters.
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(e) The Securities shall be in such denominations ($1,000
or an integral multiple thereof) and registered in such names as you may
request in writing at least two full business days prior to the Closing Time.
The Securities, which may be in temporary form, will be made available in New
York City for examination and packaging by you not later than 10:00 A.M., New
York City time, on the business day prior to the Closing Time.
Section 3. Certain Covenants of the Issuers. The Company and
Summit jointly and severally covenant with each Underwriter as follows:
(a) The Issuers will use their best efforts to cause the
Registration Statement to become effective and, if the Issuers elect to rely
upon Rule 430A and subject to Section 3(b), will comply with the requirements
of Rule 430A and will notify you immediately, and confirm the notice in
writing, (i) when the Registration Statement, or any post-effective amendment
to the Registration Statement, shall have 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 to amend the Registration Statement, to amend or supplement 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 institution or threatening of
any proceedings for any of such purposes. The Issuers will use every
reasonable effort to prevent the issuance of any such stop order or of any
order preventing or suspending such use and, if any such order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) The Issuers will not at any time file or make any
amendment to the Registration Statement, or any amendment or supplement (i) if
the Issuers have not elected to rely upon Rule 430A, to the Prospectus
(including amendments of the documents incorporated by reference into the
Prospectus) or (ii) if the Issuers have elected to rely upon Rule 430A, to
either the prospectus included in the Registration Statement at the time it
becomes effective or to the Prospectus (including amendments of the documents
incorporated by reference into the Prospectus), of which you shall not have
previously been advised and furnished a copy or to which you or your counsel
shall object in writing.
(c) The Issuers have furnished or will furnish to you and
your counsel, without charge, as many signed copies
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(as reasonably requested) of the Registration Statement (as originally filed)
and all amendments thereto, whether filed before or after the Registration
Statement becomes effective, including exhibits and documents filed therewith
or incorporated by reference into the Prospectus pursuant to Item 12 of Form
S-3 under the 1933 Act, and signed copies of all consents and certificates of
experts (as reasonably requested) and, during the period mentioned in paragraph
(d) below, as many copies of the Prospectus and any supplements and amendments
thereto as you may reasonably request and has furnished or will furnish to you
for each other Underwriters, one conformed copy of the Registration Statement
as originally filed and each amendment thereto.
(d) The Issuers will deliver to each Underwriter, without
charge, from time to time until the effective date of the Registration
Statement (or, if the Issuers have elected to rely upon Rule 430A, until the
time the Price Determination Agreement is executed and delivered), as many
copies of each preliminary prospectus as such Underwriter may reasonably
request, and the Issuers hereby consent to the use of such copies for purposes
permitted by the 1933 Act. The Issuers will deliver to each Underwriter,
without charge, as soon as the Registration Statement shall have become
effective (or, if the Issuers have elected to rely upon Rule 430A, as soon as
practicable after the Price Determination Agreement has been executed and
delivered) and thereafter from time to time as requested during the period when
the Prospectus is required to be delivered under the 1933 Act, such number of
copies of the Prospectus (as supplemented or amended) as such Underwriter may
reasonably request.
(e) The Issuers will comply to the best of their ability
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934
Act Regulations and the 1939 Act and the 1939 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 exist as a result of which it is necessary, in
the reasonable opinion of your counsel, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the reasonable opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement any Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
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Regulations, the Issuers will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such untrue statement or omission or to make the Registration statement
or the Prospectus comply with such requirements.
(f) The Issuers will endeavor, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states or other jurisdictions as you may
designate and to maintain such qualifications in effect from the effective date
of the Registration Statement for as long as may be required for the
distribution of the Securities; provided, however, that neither the Issuers nor
any of its Subsidiaries shall 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. The Issuers will file such statements and reports
as may be required by the laws of each state or other jurisdiction in which the
Securities have been qualified as above provided.
(g) The Issuers will make generally available to their
securityholders as soon as practicable, but in any event not later than 90 days
after the close of the period covered thereby, an earnings statement (which
need not be certified by independent certified public accountants unless
required by the 1933 Act or the 1933 Act Regulations) of the Issuers (in form
complying with the provisions of Section 11(a) of the 1933 Act and Rule 158 of
the 1933 Act Regulations), covering a period of 12 months beginning after the
effective date of the Registration Statement but not later than the first day
of the Company's fiscal quarter next following such effective date.
(h) The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
the heading "Use of Proceeds."
(i) The Issuers, during the period when the Prospectus is
required to be delivered under the 1933 Act, will file promptly all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of
the 1934 Act subsequent to the time the Registration Statement becomes
effective.
(j) If the Issuers have elected to rely upon Rule 430A,
they will take such steps as they deem necessary to ascertain promptly whether
the form of prospectus transmitted for filing under Rule 424(b) was received
for
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filing by the Commission and, in the event that it was not, they will promptly
file such prospectus.
(k) The Issuers have complied, and will comply, with all
of the provisions of Florida H.B. 1771, as codified in Sec. 517.075 Florida
Statutes, 1987, as amended, and all regulations promulgated thereunder relating
to issuers or their affiliates doing business with the government of Cuba or
with any person or affiliate located in Cuba.
Section 4. Payment of Expenses. (i) The Company agrees to
pay all expenses incident to the performance of the Company's and Summit's
obligations under this Agreement, including (a) the printing and filing of the
Registration Statement (including financial statements and exhibits), as
originally filed and as amended, the preliminary prospectuses and the
Prospectus and any amendments or supplements thereto, and the cost of
furnishing copies thereof to the Underwriters, (b) the copying or printing, as
applicable, and distribution of this Agreement (including the Price
Determination Agreement), the Securities, the other Operative Documents and a
survey of state securities or blue sky laws (the "Blue Sky Survey"), (c) the
delivery of the Securities to the Underwriters, (d) the fees and disbursements
of counsel and accountants for the Issuers, (e) the qualification of the
Securities under the applicable securities laws in accordance with Section 3(f)
and any filing for review of the offering with the National Association of
Securities Dealers, Inc. ("NASD"), including filing fees and fees and
reasonable disbursements of counsel for the Underwriters in connection with the
NASD review and in connection with the Blue Sky Survey, (f) any fees charged by
rating agencies for rating the Securities and (g) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee, in
connection with the Indenture and the Securities.
(ii) If this Agreement is terminated by you in
accordance with the provisions of Section 5, 9(a)(i) or 11, the Issuers shall
reimburse the Underwriters for all of their reasonable out-of-pocket expenses,
including the fees and disbursements of counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. In
addition to the execution and delivery of the Price Determination Agreement,
the obligations of the Underwriters to purchase and pay for the Securities
that they have respectively agreed to purchase hereunder are subject to the
accuracy of the representations and warranties of the Issuers contained herein
(including those contained in the Price Determination Agreement) or in
certificates of any officer of the Company or any Subsidiary delivered
pursuant to the provisions hereof, to the
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performance by the Issuers of their respective obligations hereunder, and to
the following further conditions:
(a) The Registration Statement shall have become effective
not later than 5:30 P.M. on the date of this Agreement or, with your consent,
at a later time and date, but not later than 5:30 P.M. on the first business
day following the date hereof, or at such later time or on such later date as
you may agree to in writing; and at the Closing Time, no stop order suspending
the effectiveness of the Registration Statement shall have been issued under
the 1933 Act and no proceedings for that purpose shall have been instituted or
shall be pending or, to your knowledge or the knowledge of the Issuers, shall
have been threatened by the Commission; and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. If the Issuers have
elected to rely upon Rule 430A, 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).
(b) At the Closing Time, you shall have received a signed
opinion of Skadden, Arps, Slate, Meagher & Flom, counsel for the Issuers, dated
as of the Closing Time, together with reproduced copies of such opinion for
each of the Underwriters, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) Each of the Company and Summit is duly incorporated and
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to carry on its business as described in the Prospectus. Each
of the Company and Summit has the requisite corporate power and authority
to enter into and perform its obligations under this Agreement, the Price
Determination Agreement, the Securities and the Indenture. This Agreement
and the Price Determination Agreement have been duly authorized, executed
and delivered by the Company and Summit.
(ii) The Indenture has been qualified under the 1939 Act; the
Indenture has been duly authorized, executed and delivered by each of the
Company and Summit and (assuming due authorization, execution and delivery
of the Indenture by the Trustee) constitutes a valid and binding agreement
of each of the Company and Summit enforceable against each of the Company
and Summit in accordance with its terms, except to the extent that the
enforceability thereof may be limited
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by (a) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity).
(iii) The Securities have been duly authorized by the
requisite corporate action on the part of each of the Company and Summit,
and, when executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be valid and binding
obligations of each of the Company and Summit entitled to the benefits of
the Indenture and enforceable against each of the Company and Summit in
accordance with their terms except to the extent that the enforceability
thereof may be limited by (a) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(iv) The execution, delivery and performance of this
Agreement and the Indenture by each of the Company and Summit will not
contravene (a) the charter or by-laws of the Company, (b) the charter or
by-laws of Summit, (c) Applicable Law (as defined below) or (d) any
contract, agreement or other instrument binding upon the Company or
Summit, as the case may be, that is set forth on a schedule attached to
the opinion of such counsel (which schedule, to the knowledge of such
counsel, sets forth all contracts, agreements and instruments that are
material to the Company and its Subsidiaries, taken as a whole), except
that such counsel need not express any opinion as to the existence of any
default under any financial ratios or tests which may be contained in any
contract, agreement or other instrument listed on such schedule. Based
upon the review of such counsel of Applicable Law, but without such
counsel having made any special investigation concerning any other laws,
rules or regulations, no consent, approval, authorization or order of or
qualification with any governmental body or agency (the "Governmental
Approvals") which has not been obtained, taken or made (other than
pursuant to any state securities laws, as to which such counsel need not
express any opinion) is required for performance by the Company or Summit
of its obligations under this Agreement (including the execution, delivery
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and performance of the Indenture). The opinion of such counsel pursuant
to this paragraph (iv) need relate only to Governmental Approvals required
under Applicable Law and those court orders and judgments specifically
identified to such counsel by the Company, after inquiries of responsible
officers of the Company, as being judgments or court orders to which the
Company or Summit or any of their respective assets or operations is
subject. For purposes of this opinion, the term "Applicable Law" shall
mean those laws, rules and regulations of the United States of America,
the State of Delaware, the State of New York and the State of California,
in each case which, in the experience of such counsel, are normally
applicable to transactions of the type contemplated by this Agreement.
For purposes of the opinion of such counsel pursuant to this paragraph
(iv), such counsel need express no opinion as to any statutes, rules,
regulations and requirements (Federal, state and local) relating to the
certification, licensing, authorization, ownership, operation and/or
transfer of healthcare facilities or providers, or to Medicare/Medicaid or
other third-party reimbursement or payments to such facilities or
providers.
(v) Neither the Company nor Summit is 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.
(vi) The Indenture and the Securities conform in all material
respects to the descriptions thereof contained in the Prospectus.
(vii) The Registration Statement, the Prospectus and each
amendment or supplement to the Registration Statement and Prospectus as of
their respective effective or issue dates (in each case, except for the
financial statements, schedules and other financial data included therein
or omitted therefrom and the Statement of Eligibility of the Trustee on
Form T-1, as to which such counsel need express no opinion), comply as to
form in all material respects to the requirements of the 1933 Act and the
1933 Act Regulations.
Such counsel shall also state that such counsel has been
advised by the Commission that the Registration Statement was declared
effective under the 1933 Act, and, to the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act and no proceedings
therefor have been initiated or threatened by the Commission. Such
counsel shall also state that
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any required filing of the Prospectus or any supplement thereto
pursuant to Rule 424(b) of the 1933 Act Regulations has been made in
the manner and within the time period required by Rule 424(b).
In addition, such opinion shall state that such counsel has
participated in the preparation of the Registration Statement and Prospectus
and in conferences with officers and other representatives of the Issuers,
representatives of the independent public accountants for the Issuers, and your
representatives and your counsel at which the contents of the Registration
Statement, the Prospectus and related matters were discussed and, although such
counsel need not undertake to determine independently nor pass upon or assume
any responsibility, explicitly or implicitly, for the accuracy, completeness of
fairness of the statements contained in the Registration Statement or the
Prospectus, on the basis of and subject to the foregoing, no facts have come to
the attention of such counsel to lead such counsel to believe (i) that the
Registration Statement (including the Rule 430A Information, if applicable) or
any amendment thereto (except for the financial statements, schedules and other
financial data included therein or omitted therefrom and the Statement of
Eligibility of the Trustee on Form T-1, as to which such counsel need express
no opinion) as of the date the Registration Statement or any such amendment
became effective, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading or (ii) that the Prospectus or any
amendment or supplement thereto (except for the financial statements, schedules
and other financial data included therein or omitted therefrom, as to which
such counsel need express no opinion), at the time the Prospectus was issued,
at the time any such amended or supplemented prospectus was issued or at the
Closing Time, contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its Subsidiaries and
certificates of public officials.
(c) At the Closing Time, you shall have received a signed
opinion of Ronald P. Soltman, Esq., General Counsel for the Issuers, dated as
of the Closing Time, together with reproduced copies of such opinion for each
of the
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Underwriters, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) Each corporate Subsidiary (other than Summit) is duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to carry on its business as described in the Prospectus and each
of the partnership Subsidiaries is validly existing under the laws of its
jurisdiction of formation and has the partnership power and authority
required to carry on its business as described in the Prospectus; except
where failure to be in good standing or to be validly existing would not
have a material adverse effect on the Company and Subsidiaries, taken as
a whole. For purposes of this paragraph (i), such counsel need express no
opinion with respect to the incorporation, existence, good standing, power
or authority of any Inactive Subsidiary.
(ii) Each of the Company, Summit and the Subsidiaries is duly
qualified as a foreign corporation or partnership, as the case may be,
authorized to do business in each jurisdiction in which the Company has
certified to such counsel that it conducts business or owns or leases
property, except where the failure to be so qualified would not have a
material adverse effect on the Company and the Subsidiaries, taken as a
whole.
(iii) Each of the Company and Summit has the corporate power
and authority to enter into this Agreement and the Price Determination
Agreement and this Agreement and the Price Determination Agreement have
been duly authorized, executed and delivered by each of the Company and
Summit.
(iv) The Indenture has been duly authorized, executed and
delivered by each of the Company and Summit and (assuming due
authorization, execution and delivery of the Indenture by the Trustee)
constitutes a legal, valid and binding agreement of each of the Company
and Summit, enforceable against each of the Company and Summit in
accordance with its terms, except to the extent that the enforceability
thereof may be limited by (a) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(v) The Securities have been duly authorized by the requisite
corporate action on the part of each of
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the Company and Summit, and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be valid
and binding obligations of the Company and Summit entitled to the benefits
of the Indenture and enforceable against each of the Company and Summit in
accordance with their terms, except to the extent that enforceability may
be limited by (a) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (b) general principles
of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).
(vi) All of the issued and outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are fully
paid and non-assessable, and none of the outstanding shares of capital
stock was issued in violation of any preemptive rights or other similar
rights with respect to any stockholder of the Company. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus in the column entitled "Actual" under the caption entitled
"Capitalization."
(vii) To the knowledge of such counsel, all of the outstanding
shares of capital stock of the corporate Subsidiaries have been duly and
validly authorized and issued and are fully paid and non-assessable and
are owned, directly or indirectly, by the Company; to the knowledge of
such counsel, all of the outstanding shares of capital stock of the
corporate Subsidiaries or other ownership interests in the partnership
Subsidiaries are owned free and clear of any security interest, claim,
lien or encumbrance, except for the pledges securing obligations in the
Bank Credit Facility; to the knowledge of such counsel, and except as
disclosed in the Prospectus, there are no preemptive rights or other
similar rights with respect to the capital stock or interests of any of
the Subsidiaries.
(viii) Neither the Company nor any of its Subsidiaries is in
violation of its respective charter, by-laws or organizational documents
and, to the knowledge of such counsel, neither the Company nor any of its
Subsidiaries is in default under any material bond, debenture, note or any
other evidence of material indebtedness or under any other agreement,
indenture or instrument material to the conduct of business of the Company
or the Subsidiaries, considered as one
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enterprise, to which the Company or any of its Subsidiaries is a party or
by which it or any of its Subsidiaries or their respective property is
bound.
(ix) The execution, delivery and performance of this Agreement
and the Indenture by each of the Company and Summit do not and will not
contravene the charter, bylaws or governing documents of any Subsidiary
(other than Summit), and, to the knowledge of such counsel, do not and
will not conflict with, or result in a breach or violation of any of the
terms or provisions of, or constitute a default or result in the creation
or imposition of any Lien upon any property or assets of the Company or
its Subsidiaries under, (A) any contract, indenture, mortgage, deed of
trust, loan or credit agreement, bond, debenture, note, lease or other
agreement or instrument to which any Subsidiary (other than Summit) is a
party or by which any of them may be bound or to which any of their
properties or assets is subject, (B) any existing applicable law, statute,
rule or regulation (other than the securities or blue sky laws of the
various states, as to which such counsel need express no opinion), or (C)
or any judgment, order, writ or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any Subsidiary or any of the Company's or any of the
Subsidiaries' properties, assets or operations, in each case, except for
such conflicts, breaches, violations or defaults or Liens that would not,
singly or in the aggregate, have a material adverse effect on the
condition (finacial or otherwise), earnings or business affairs of the
Company and its Subsidaries, taken as a whole.
(x) No authorization, approval, consent or license of any
government, governmental instrumentality or court is necessary in
connection with the due authorization, execution, delivery and performance
by the Issuers of each of the Operative Documents, and the valid
authorization, issuance, sale and delivery of the Securities, except such
as may be required under the 1933 Act, the 1933 Act Regulations, the 1939
Act, the 1939 Act Regulations or the securities or blue sky laws of the
various states in connection with the offer and sale of the Securities.
(xi) To the knowledge of such counsel, there is no legal or
governmental proceeding pending or threatened which the Company or any of
its Subsidiaries is a party or to which any of the properties of the
Company or Summit is subject that is required to be described in the
Registration Statement or the Prospectus and is not so described as
required therein
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and no contract or other document that is required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement that is not so described or filed as required.
(xii) All of the hospitals operated by the Company and its
Subsidiaries are licensed under appropriate state laws to conduct the
business as described in the Prospectus and are "providers of services" as
defined in the Social Security Act and the regulations promulgated
thereunder, and are eligible to participate in, and are certified to
receive reimbursement under, the Medicare program.
(xiii) To the best knowledge of such counsel, there are no
holders of securities (debt or equity) of the Company or any of its
Subsidiaries, or holders of rights (including, without limitation,
preemptive rights), warrants or options to obtain securities of the
Company or any of its Subsidiaries, who have the right to request the
Company or any of the Subsidiaries to register securities held by them
pursuant to the Registration Statement, other than holders who have been
given the opportunity to exercise such rights and have not informed the
Company that they wish to exercise such rights.
(xiv) The statements made in the Prospectus under "Investment
Considerations -- Reimbursement and Regulation," and in the Company's
Annual Report on Form 10-K for the fiscal year ended August 31, 1993, as
amended, under the captions "Item 1: Business - Regulation and Other
Factors and - Revenues," and in Summit's Annual Report on Form 10-K for
the fiscal year ended June 30, 1993 under the captions "Item 1. Business -
Medicare, Medicaid and Other Sources of Revenue and - Regulation" to the
extent that they constitute matters of law or legal conclusions, have been
reviewed by such counsel and fairly present, as of their respective dates,
the information disclosed therein.
Such counsel shall also state that such counsel has been
advised by the Commission that the Registration Statement was declared
effective under the 1933 Act, and, to the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act and no proceedings
therefor have been initiated or threatened by the Commission.
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In addition, such opinion shall state that such counsel has
participated in the preparation of the Registration Statement and Prospectus
and in conferences with officers and other representatives of the Issuers,
representatives of the independent public accountants for the Issuers, and your
representatives and your counsel at which the contents of the Registration
Statement, the Prospectus and related matters were discussed and, although such
counsel need not undertake to determine independently nor pass upon or assume
any responsibility, explicitly or implicitly, for the accuracy, completeness of
fairness of the statements contained in the Registration Statement or the
Prospectus, on the basis of and subject to the foregoing, no facts have come to
the attention of such counsel to lead such counsel to believe (i) that the
Registration Statement (including the Rule 430A Information, if applicable) or
any amendment thereto (except for the financial statements and other financial
data included therein or omitted therefrom and the Statement of Eligibility of
the Trustee on Form T-1, as to which such counsel need express no opinion), as
of the date the Registration Statement or any such amendment became effective,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) that the Prospectus or any amendment or
supplement thereto (except for the financial statements and other financial
data included therein or omitted therefrom, as to which such counsel need
express no opinion), at the time the Prospectus was issued, at the time any
such amended or supplemented prospectus was issued or at the Closing Time,
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Such counsel may also state that, insofar as such opinion
involves factual matters, he has relied, to the extent he deems proper, upon
certificates of officers of the Company and its Subsidiaries and certificates
of public officials.
(d) At the Closing Time, you shall have received the
favorable opinion of Dewey Ballantine, counsel for the Underwriters, dated as
of the Closing Time, to the effect that the opinions delivered pursuant to
Section 5(b) and (c) appear on their face to be appropriately responsive to the
requirements of this Agreement except, specifying the same, to the extent
waived by you, and with respect to the Securities, this Agreement, the
Indenture, the Registration Statement, the Prospectus, the incorporation and
legal existence of the Company and such other related matters as
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30
you may require. In giving such opinion, such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the federal law of the
United States, the law of the State of New York and the General Corporation Law
of the State of Delaware, upon the opinions of counsel satisfactory to you.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of
officers or other appropriate representatives of the Company and its
Subsidiaries and certificates of public officials.
(e) At the Closing Time, (i) the Registration Statement
and the Prospectus, as they may then be amended or supplemented, shall conform
in all material respects to the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the 1939 Act Regulations, the Issuers shall
have complied in all material respects with Rule 430A (if they shall have
elected to rely thereon), the Registration Statement, as it may then be amended
or supplemented, shall 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 and the Prospectus, as it may then
be amended or supplemented, shall 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, in light of the circumstances under
which they were made, not misleading; (ii) there shall not have been, since the
date as of which information is given in the Prospectus, any material adverse
change or any development involving a prospective material adverse change, in
the condition (financial or otherwise), 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; (iii) no action,
suit or proceeding at law or in equity shall be pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries that
would be required to be set forth in the Prospectus other than as set forth
therein and no proceedings shall be pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries before or by
any federal, state or other commission, board or administrative agency that
could reasonably be expected to materially adversely affect the condition
(financial or otherwise), earnings or business affairs of the Company and its
Subsidiaries, considered as one enterprise, other than as set forth in the
Prospectus; (iv) the Issuers shall have complied in all material respects with
all agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Time; (v) no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
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31
proceedings for that purpose shall have been initiated or threatened by the
Commission; and (vi) the other representations and warranties of the Issuers
set forth in Section 1(a) shall be accurate as though expressly made at and as
of the Closing Time. At the Closing Time, you shall have received a
certificate of the President or a Senior Vice President of each of the Company
and Summit and the Chief Financial Officer or Treasurer of each of the Company
and Summit, dated as of the Closing Time, to such effect. As used in this
Section 5(e), the term "Prospectus" means the Prospectus in the form first used
to confirm sales of the Securities.
(f) At the time that this Agreement is executed by the
Issuers and at the Closing Time, you shall have received from Ernst & Young,
independent public accounts for the Issuers, a letter, dated the respective
dates of delivery thereof, in form and substance satisfactory to you,
containing statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information included or incorporated by the
reference in the Registration Statement and the Prospectus.
(g) At the time that this Agreement is executed by the
Company and at the Closing Time, you shall have received from BDO Seidman,
independent public accountants for Fountain Valley, a letter, dated the
respective dates of delivery thereof, in form and substance satisfactory to you
containing statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information included in the Registration
Statement and the Prospectus.
(h) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Time, there shall not have been any
downgrading, nor any notice given of any intended or potential downgrading or
of a possible change that does not indicate the direction of the possible
change, in the rating accorded any of the Company's or any of its Subsidiaries'
securities, including the Securities, by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule 436(g)(2)
under the 1933 Act.
(i) At the Closing Time, counsel for the Underwriters
shall have been furnished with all such documents, certificates and opinions as
they may reasonably request for the purpose of enabling them to pass upon the
issuance and sale of the Securities as contemplated in this Agreement and the
matters referred to in Section 5(d) and in
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32
order to evidence the accuracy and completeness of any of the representations,
warranties or statements of the Issuers, the performance of the covenants of
the Issuers, or the fulfillment of any of the conditions herein contained; and
all proceedings taken by the Issuers at or prior to the Closing Time in
connection with the authorization, issuance and sale of the Securities, and by
the Issuers at or prior to the Closing Time in connection with the
authorization and delivery of the other Operative Documents, each as
contemplated in this Agreement, shall be reasonably satisfactory in form and
substance to you and to counsel for the Underwriters.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement to be fulfilled,
this Agreement may be terminated by you on notice to the Issuers at any time at
or prior to the Closing Time, and such termination shall be without liability
of either party to any other party, except as provided in Section 4.
Notwithstanding any such termination, the provisions of Sections 6 and 7 shall
remain in effect.
Section 6. Indemnification. (a) The Company and Summit,
jointly and severally, agree 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 as follows:
(i) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, arising out of an
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto),
including the Rule 430A Information, if applicable, and all documents
incorporated therein by reference, 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 an untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any
amendment or 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
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever
31
33
based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, if such settlement is effected with the
written consent of the Company; and
(iii) against any and all expense whatsoever, as
incurred (including, subject to the last sentence of Section 6(c),
fees and disbursements of counsel chosen by you) reasonably incurred
in investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever, in each case, 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 subparagraph (i) or (ii) above;
provided, however, that (i) the Issuers' obligation under this indemnity does
not apply to any loss, liability, claim, damage or expense to the extent
arising out of an untrue statement or omission or alleged untrue statement or
omission made in the Registration Statement (or any amendment thereto),
including the Rule 430A 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
Issuers by any Underwriter expressly for use in the Registration Statement (or
any amendment thereto), including the Rule 430A Information, if applicable, or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) and (ii) such indemnity with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter (or any person controlling
such Underwriter) from whom the person asserting such loss, claim, damage or
liability or expense 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).
(b) Each Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company and Summit, their respective
directors, their respective officers who signed the Registration Statement, and
each person, if any, who controls the Issuers within the meaning of Section 15
of the 1933 Act, against any and all loss, liability, claim, damage and expense
described in the
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34
indemnity contained in Section 6(a), as incurred, 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, 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 Issuers by such
Underwriter expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information, if applicable, or such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give prompt notice 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 it from any liability which it may have otherwise than
on account of this indemnity agreement. Any indemnifying party may participate
at its own expense in the defense of such action. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdictions arising out
of the same general allegations or circumstances.
Section 7. Contribution. In order to provide for just and
equitable contribution in circumstances under which the indemnity provided for
in Section 6 is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Issuers and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity incurred by
the Issuers and one or more of the Underwriters, as incurred, in such
proportions that (a) the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectus bears to the initial public offering price
appearing thereon and (b) the Issuers are responsible for the balance;
provided, however, that 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 shall
have the same rights to contribution as the Underwriter, and each director of
the Issuers, each officer of the Issuers who signed the Registration Statement,
and each person, if any, who controls the Issuers within the meaning of Section
15 of the
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1933 Act shall have the same rights to contribution as the Issuers.
Section 8. Representations, Warranties and Agreements to
Survive Delivery. The representations, warranties, indemnities, agreements and
other statements of the Issuers or their respective officers set forth in or
made pursuant to this Agreement will remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Issuers or
any Underwriter or controlling person and will survive delivery of and payment
for the Securities.
Section 9. Termination of Agreement. (a) You may terminate
this Agreement, by notice to the Issuers, at any time at or prior to the
Closing Time (i) if there has been, since the respective dates as of which
information is given in the Prospectus, any material adverse change or any
development involving a prospective material adverse change, in the condition
(financial or otherwise), 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, (ii) if there has occurred any
material adverse change in the financial markets in the United States or any
outbreak of hostilities or escalation thereof or other calamity or crisis the
effect of which in each case is such as to make it, in your reasonable
judgment, impracticable to market the Securities or enforce contracts for the
sale of the Securities, (iii) if trading in any securities of the Issuers have
been suspended by the Commission or if trading generally on the New York Stock
Exchange or in the over-the-counter market has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either such exchanges 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 or New York authorities. As used in this Section 9(a), the term
"Prospectus" means the Prospectus in the form first used to confirm sales of
the Securities.
(b) If this Agreement is terminated pursuant to this
Section 9, such termination shall be without liability of any party to any
other party, except to the extent provided in Section 4 hereof.
Notwithstanding any such termination, the provisions of Sections 6 and 7 shall
remain in effect.
(c) This Agreement may also terminate pursuant to the
provisions of Section 2 and Section 5, with the effect stated in such Section.
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36
Section 10. Default by One Or More of the Underwriters. If
one or more of the Underwriters shall fail at the Closing Time to purchase the
Securities that it or they are obligated to purchase pursuant to this Agreement
(the "Defaulted Securities"), you 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 set forth in this Agreement; if, however, you have not completed such
arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of
Defaulted Securities does not exceed 10% of the aggregate
principal amount of the Securities to be purchased pursuant to
this Agreement, the non-defaulting Underwriters shall be
obligated to purchase the full amount thereof in the
proportions that their respective underwriting obligation
proportions bear to the underwriting obligation proportions of
all non-defaulting Underwriters, or
(b) if the aggregate principal amount of
Defaulted Securities exceeds 10% of the aggregate principal
amount of the Securities to be purchased pursuant to this
Agreement, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default that does not result in a
termination of this Agreement, either you or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for a Underwriter pursuant to this Section 10.
Section 11. Default by the Issuers. If the Issuers shall
fail at the Closing Time to sell and deliver the aggregate principal amount of
Securities that it is obligated to sell, then this Agreement shall terminate
without any liability on the part of any non-defaulting party except to the
extent provided in Section 4 and except that the provisions of Sections 6 and 7
shall remain in effect.
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No action taken pursuant to this Section shall relieve the
Issuers from liability, if any, in respect of such default.
Section 12. Notices. All notices and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered, mailed or transmitted by any standard form of
telecommunication. Notices to you shall be directed to you, c/o Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, at Merrill Lynch
World Headquarters, North Tower, World Financial Center, New York, New York
10281, attention of Christopher A. Johnson, with a copy to Dewey Ballantine,
1301 Avenue of the Americas, New York, New York 10019, attention of Morton A.
Pierce, Esq.; notices to the Issuers shall be directed to them c/o OrNda
HealthCorp, 3401 West End Avenue, Suite 700, Nashville, Tennessee 37203,
Attention of General Counsel, with a copy to Skadden, Arps, Slate, Meagher &
Flom, 919 Third Avenue, New York, New York 10022, Attention of Mark C. Smith,
Esq.
Section 13. Parties. This Agreement is made solely for the
benefit of the several Underwriters, the Issuers and, to the extent expressed,
any person controlling the Issuers, or any of the Underwriters, and the
directors of the Issuers, the officers of the Issuers who have signed the
Registration Statement, and the executors, administrators, successors and
assigns of such persons and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" shall
not include any purchaser, as such purchaser, from any of the several
Underwriters of the Shares. All of the obligations of the Underwriters
hereunder are several and not joint.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF THE DAY
REFER TO NEW YORK CITY TIME.
Section 15. Counterparts. This Agreement may be executed in
one or more counterparts and when a counterpart has been executed by each
party, all such counterparts taken together shall constitute one and the same
agreement.
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38
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof, whereupon
this instrument will become a binding agreement among the Issuers and the
several Underwriters in accordance with its terms.
Very truly yours,
ORNDA HEALTHCORP
By:
-----------------------------------
Name:
Title:
SUMMIT HEALTH LTD.
By:
-----------------------------------
Name
Title:
Confirmed and accepted as of the date
first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
CITICORP SECURITIES, INC.
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
By:
-----------------------------
Name:
Title:
37
39
SCHEDULE A
Principal Amount of
Securities
Underwriter to be Purchased
----------- -----------------
MERRILL LYNCH, PIERCE FENNER & SMITH
INCORPORATED . . . . . . . . . . . . . . . . . .
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION . . . . . . . . . . . . . . . . . . .
SALOMON BROTHERS INC . . . . . . . . . . . . . . . . . . . .
CITICORP SECURITIES, INC . . . . . . . . . . . . . . . . . .
------------------------
Total . . . . . . . . . . . . . . . $125,000,000
40
EXHIBIT A
ORNDA HEALTHCORP
(a Delaware corporation)
Summit Health Ltd.
(a California corporation)
$125,000,000
% Senior Subordinated Notes due 2004
---
PRICE DETERMINATION AGREEMENT
, 1994
--------------
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
CITICORP SECURITIES, INC.
c/o Merrill Lynch & Co.
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1201
Dear Sirs:
Reference is made to the Purchase Agreement, dated
___________,1994 (the "Purchase Agreement"), among OrNda HealthCorp, a Delaware
corporation (the "Company"), Summit Health Ltd., a California corporation and a
wholly owned subsidiary of the Company ("Summit" and, together with the
Company, the "Issuers"), Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation,
Salomon Brothers Inc and Citicorp Securities, Inc. (the "Underwriters"). The
Purchase Agreement provides for the purchase by the Underwriters from the
Issuers, subject to the terms and conditions set forth therein, of $125,000,000
aggregate principal amount of the Issuers' ___% Senior Subordinated Notes due
2004 (the "Securities"). This Agreement is the Price Determination Agreement
referred to in the Purchase Agreement.
41
Pursuant to Section 2 of the Purchase Agreement, the
undersigned agree with the Underwriters as follows:
(1) The initial public offering price of the Securities
shall be ___% of the principal amount thereof, plus accrued interest
from ________, 1994 to the Closing Time;
(2) The purchase price of the Securities to be paid by
the Underwriters shall be ____% of the principal amount thereof, plus
accrued interest from __________, 1994 to the Closing Time;
(3) The interest rate to be borne by the Securities shall
be ___% per annum; and
(4) The Securities will mature on ________, 2004.
The Issuers represent and warrant to each of the Underwriters that the
representations and warranties of the Issuers set forth in Section 1(a) of the
Purchase Agreement are accurate as though expressly made at and as of the date
hereof.
As contemplated by Section 2 of the Purchase Agreement,
attached as Schedule A hereto is a completed list which sets forth the
principal amount of Securities to be purchased by each of the Underwriters.
This Agreement shall be governed by the laws of the State of
New York.
42
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Issuers a counterpart hereof,
whereupon this instrument along with all counterparts and together with the
Purchase Agreement shall be a binding agreement among the Underwriters and the
Issuers in accordance with its terms and the terms of the Purchase Agreement.
Very truly yours,
ORNDA HEALTHCORP
By:
------------------------------
Name:
Title:
SUMMIT HEALTH LTD.
By:
------------------------------
Name:
Title:
Confirmed and accepted as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
CITICORP SECURITIES, INC.
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
By:
----------------------------
Name:
Title:
43
SCHEDULE A
Principal Amount of
Securities
Underwriter to be Purchased
----------- -----------------
MERRILL LYNCH, PIERCE FENNER & SMITH
INCORPORATED . . . . . . . . . . . . . . . . . .
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION . . . . . . . . . . . . . . . . . . .
SALOMON BROTHERS INC . . . . . . . . . . . . . . . . . . . .
CITICORP SECURITIES, INC . . . . . . . . . . . . . . . . . .
---------------------
Total . . . . . . . . . . . . . . . $125,000,000
44
SCHEDULE B
SUBSIDIARIES OF THE COMPANY
[To Come]