SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 6)
Under the Securities Exchange Act of 1934
THE HILLHAVEN CORPORATION
(Name of Issuer)
Common Stock, par value $.75 per share
(Title of Class of Securities)
431576 10 7
(CUSIP Number of Class of Securities)
Scott M. Brown, Esq.
Tenet Healthcare Corporation
(formerly known as National Medical Enterprises, Inc.)
2700 Colorado Avenue
Santa Monica, California 90404
(310) 998-8000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
with a copy to:
Brian J. McCarthy, Esq.
Skadden, Arps, Slate, Meagher & Flom
300 S. Grand Avenue
Los Angeles, California 90071
(213) 687-5070
August 22, 1995
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Statement because of Rule 13d-1(b)(3) or (4), check the
following: ___
/ /
Check the following box if a fee is being paid with this
Statement: ___
/ /
CUSIP No. 413576 10 7
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
TENET HEALTHCARE CORPORATION (formerly known as
National Medical Enterprises, Inc.) 95-2557091
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
___
(a)/ /
___
(b)/X /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS*
00
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ___
/X /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
: (7) SOLE VOTING POWER
:
: 8,878,147
:
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING
OWNED BY EACH REPORTING :
PERSON WITH : 0
:
:
: (9) SOLE DISPOSITIVE
:
: 8,878,147
:
:(10) SHARED DISPOSITIVE
:
0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,878,147
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 ___
EXCLUDES CERTAIN SHARES* / /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
23.4% -- See Item 5
(14) TYPE OF REPORTING PERSON*
CO
CUSIP No. 413576 10 7
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
NME PROPERTIES CORP. 62-0725891
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
___
(a)/ /
___
(b)/X /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS*
00
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ___
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Tennessee
: (7) SOLE VOTING POWER
:
: 8,878,147
:
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING
OWNED BY EACH REPORTING :
PERSON WITH : 0
:
:
: (9) SOLE DISPOSITIVE
:
: 8,878,147
:
:(10) SHARED DISPOSITIVE
:
0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,878,147
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 ___
EXCLUDES CERTAIN SHARES* / /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
23.4% -- See Item 5
(14) TYPE OF REPORTING PERSON*
CO
CUSIP No. 413576 10 7
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
NME PROPERTY HOLDING CO., INC. 91-1172506
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
___
(a)/ /
___
(b)/X /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS*
00
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ___
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: 0
:
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING
OWNED BY EACH REPORTING :
PERSON WITH : 0
:
: (9) SOLE DISPOSITIVE
:
: 0
:
:(10) SHARED DISPOSITIVE
:
: 0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 ___
EXCLUDES CERTAIN SHARES* / /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
0%
(14) TYPE OF REPORTING PERSON*
CO
CUSIP No. 413576 10 7
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
NME PROPERTIES, INC. 91-0628039
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
___
(a)/ /
___
(b)/X /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS*
00
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ___
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: 2,877,947
:
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING
OWNED BY EACH REPORTING :
PERSON WITH : 0
:
:
: (9) SOLE DISPOSITIVE
:
: 2,877,947
:
:(10) SHARED DISPOSITIVE
:
: 0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,877,947
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 ___
EXCLUDES CERTAIN SHARES* / /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
7.6% -- See Item 5
(14) TYPE OF REPORTING PERSON*
CO
This Amendment No. 6 (the "Amendment No. 6")
amends and supplements the Statement on Schedule 13D (the
"Schedule 13D"), dated January 31, 1990, Amendment No. 1
of Schedule 13D, dated February 28, 1994, Amendment No. 2
of Schedule 13D, dated December 19, 1994, Amendment No. 3
of Schedule 13D, dated January 25, 1995, Amendment No. 4
of Schedule 13D, dated February 15, 1995, and Amendment
No. 5 of Schedule 13D, dated
March 6, 1995, relating to the common stock, par value
$.75 per share (the "Common Stock"), issued by The
Hillhaven Corporation, a Nevada corporation (the
"Company"), and is being filed pursuant to Rule 13d-2
under the Securities Exchange Act of 1934, as amended
(the "Act").
Unless otherwise indicated, each capitalized
term used but not otherwise defined herein shall have the
meaning assigned to such term in the Schedule 13D. The
information set forth in the Exhibits attached hereto is
hereby expressly incorporated herein by reference and the
response to each item of this statement is qualified in
its entirety by the provisions of such Exhibits.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 is amended and supplemented as follows:
On May 16, 1995, Holding transferred all of the
shares of common stock of PropInc owned by it to
PropCorp. As a result, PropCorp owns all of the
outstanding shares of common stock of PropInc.
On June 23, 1995, NME filed an amendment to its
Articles of Incorporation changing its name to "Tenet
Healthcare Corporation" ("Tenet," and together with
PropCorp and PropInc, the "Reporting Persons").
ITEM 4. PURPOSE OF TRANSACTION
Item 4 is amended and supplemented as follows:
Tenet, the Company and Vencor, Inc., a Delaware
corporation ("Vencor"), have entered into an agreement
dated as of August 22, 1995, a copy of which is attached
hereto as Exhibit 35 (the "August Agreement"). Pursuant
to the August Agreement, Tenet has agreed, among other
things, to vote all of the shares of Class C Preferred
Stock and Class D Preferred Stock beneficially owned by
it, and to cause any holder of record of such shares to
vote, in favor of adoption and approval of the Amended
and Restated Agreement and Plan of Merger between the
Company and Vencor dated as of April 23, 1995 and as
amended and restated as of July 31, 1995 (the "Merger
Agreement") and the merger of the Company with and into
Vencor (the "Merger"). Notwithstanding the foregoing,
Tenet is free to vote its shares of Common Stock in its
sole discretion in connection with the Merger. Tenet
also agreed that unless the Company receives a proposal
for a merger that Tenet concludes is superior in its sole
discretion to the Merger to Tenet, Tenet will not solicit
proxies or become a "participant" in a "solicitation" in
opposition to or in competition with the consummation of
the Merger or become a member of a "group" with respect
to any voting securities of the Company for the purposes
of opposing or competing with the consummation of the
Merger. Tenet also agreed to certain restrictions on
transfer of the shares of Common Stock owned by it and to
provisions which, among other things, preclude Tenet from
acquiring any additional shares of Vencor common stock
for a period ending seven years following the
consummation of the Merger. Pursuant to the August
Agreement, Vencor agreed, among other things, after the
consummation of the Merger to provide Tenet with
registration rights for all shares of Vencor common stock
received in the Merger on the same terms and subject to
the same conditions as exist in the Warrant and
Registration Rights Agreement between the Company and
Tenet dated as of January 31, 1990. The description of
the August Agreement set forth herein is qualified in its
entirety by reference to the August Agreement.
Except as otherwise described in this Item 4,
none of Tenet, PropCorp or PropInc has any present
specific plans or proposals that relate to or would
result in any of the following: (i) the acquisition by
any person of additional securities of the Company or the
disposition of securities of the Company, (ii) an
extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Company or
any of its subsidiaries, (iii) a sale or transfer of a
material amount of assets of the Company or any of its
subsidiaries, (iv) any change in the present Board of
Directors or management of the Company, including any
plans or proposals to change the number or term of
directors or to fill any existing vacancies on the Board
of Directors, (v) any material change in the present
capitalization or dividend policy of the Company, (vi)
any other material change in the Company's business or
corporate structure, (vii) changes in the Company's
Amended and Restated Articles of Incorporation, Bylaws or
other instruments corresponding thereto or other actions
that may impede the acquisition of control of the Company
by any person, (viii) causing a class of securities of
the Company to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national
securities association, (ix) a class of equity securities
of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934, as amended, or (x) any
action similar to those enumerated above. Tenet,
PropCorp or PropInc may at any time, however, propose any
of the foregoing that it considers desirable.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 is amended and supplemented as follows:
PropInc may be deemed to be the beneficial
owner of the 2,877,947 shares of Common Stock owned by it
(the "PropInc Shares"), or approximately 7.6% of the
shares of Common Stock outstanding. PropInc has the sole
power to vote and the sole power to dispose of the
PropInc Shares.
PropCorp may be deemed to be the beneficial
owner of the 6,000,200 shares of Common Stock owned by it
(the "PropCorp Shares"), or approximately 15.8% of the
shares of Common Stock outstanding. PropCorp has the
sole power to vote and the sole power to dispose of the
PropCorp Shares. PropCorp, as the sole shareholder of
PropInc, may be deemed, for purposes of Rule 13d-3 under
the Act, to beneficially own indirectly the PropInc
Shares, for an aggregate of 8,878,147 shares of Common
Stock, or approximately 23.4% of the shares of Common
Stock outstanding.
NME, as the sole stockholder of PropCorp, may
be deemed, for purposes of Rule 13d-3 under the Act, to
beneficially own indirectly the PropCorp Shares and the
PropInc Shares, for an aggregate of 8,878,147 shares of
Common Stock, or approximately 23.4% of the shares of
Common Stock outstanding.
The Reporting Persons, in the aggregate, may be
deemed to beneficially own 8,878,147 shares of Common
Stock, or approximately 23.4% of the shares of Common
Stock outstanding. The percentage of shares of Common
Stock outstanding reported as beneficially owned herein
on the date hereof is based upon 37,899,375 shares of
Common Stock outstanding as of August 1, 1995, as
reported in the Joint Proxy Statement/Prospectus of the
Company and Vencor dated August 11, 1995.
Holding is the beneficial owner of no shares of
Common Stock.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE
ISSUER
Item 6 is amended and supplemented as follows:
The information set forth in Item 4 is
incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 34 Joint Filing Agreement
Exhibit 35 Agreement among Tenet, Vencor and the
Company dated as of August 22, 1995
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
Date: August 22, 1995
TENET HEALTHCARE CORPORATION
By: /s/ Scott M. Brown
_____________________________
Scott M. Brown
Senior Vice President and Secretary
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
Date: August 22, 1995
NME PROPERTIES CORP.
By: /s/ Scott M. Brown
________________________
Scott M. Brown
Vice President
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
Date: August 22, 1995
NME PROPERTY HOLDING CO., INC.
By: /s/ Scott M. Brown
___________________________
Scott M. Brown
Vice President
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
Date: August 22, 1995
NME PROPERTIES, INC.
By: /s/ Scott M. Brown
____________________________
Scott M. Brown
Vice President
EXHIBIT INDEX
Exhibit No. Description Page No.
Exhibit 34 Joint Filing Agreement
Exhibit 35 Agreement among Tenet, Vencor
and the Company dated August
22, 1995
_______________________________________________________________________________
EXHIBIT 34
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities
Exchange Act of 1934, as amended, each of the persons named
below agrees to the joint filing on behalf of each of them
of a Statement on Schedule 13D (including amendments
thereto) with respect to the common stock, par value $.75
per share, of The Hillhaven Corporation, a Nevada
corporation, and further agrees that this Joint Filing
Agreement be included as an exhibit to such filings provided
that, as contemplated by Section 13d-1(f)(l)(ii), no person
shall be responsible for the completeness or accuracy of the
information concerning the other persons making the filing,
unless such person knows or has reason to believe that such
information is inaccurate. This Joint Filing Agreement may
be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument.
Date: August 22, 1995
TENET HEALTHCARE NME PROPERTIES CORP.
CORPORATION
By:/s/ Scott M. Brown
By:/s/ Scott M. Brown _________________________
________________________ Scott M. Brown
Scott M. Brown Vice President
Senior Vice President
and Secretary
NME PROPERTY HOLDING NME PROPERTIES, INC.
CO., INC.
By: /s/ Scott M. Brown
By:/s/ Scott M. Brown ___________________________
_________________________ Scott M. Brown
Scott M. Brown Vice President
Vice President
_____________________________________________________________________________
EXHIBIT 35
AGREEMENT
AGREEMENT (the "Agreement"), dated as of
August 22, 1995, between Tenet Healthcare Corporation, a
Nevada corporation and stockholder ("Stockholder") of The
Hillhaven Corporation, a Nevada corporation ("Hillhaven"),
Hillhaven and Vencor, Inc., a Delaware corporation (the
"Company").
WHEREAS, the Company and Hillhaven have entered
into an Amended and Restated Agreement and Plan of Merger,
dated as of April 23, 1995 and as amended and restated as of
July 31, 1995 (as the same may be further amended from time
to time, the "Merger Agreement"), providing for the merger
(the "Merger") of Hillhaven with and into the Company
pursuant to the terms and conditions of the Merger
Agreement, and setting forth certain representations,
warranties, covenants and agreements of the parties thereto
in connection with the Merger; and
WHEREAS, to facilitate the transactions
contemplated by the Merger Agreement, Stockholder, Hillhaven
and the Company have agreed to the matters set forth herein.
NOW, THEREFORE, for good and valuable
consideration, the receipt, sufficiency and adequacy of
which is hereby acknowledged, the parties hereto agree as
follows:
1. Representations of the Parties. (a)
Stockholder represents and warrants to the Company and
Hillhaven that (i) Stockholder owns beneficially (as such
term is defined in the Securities Exchange Act of 1934, as
amended (the "1934 Act")) 8,878,147 shares of Hillhaven's
Common Stock, par value $0.75 per share (the "Hillhaven
Common Stock"), 35,000 shares of Series C Preferred Stock,
par value $.15 per share (the "Series C Preferred Stock"),
of Hillhaven and 65,430 shares of Series D Preferred Stock,
par value $.15 per share (the "Series D Preferred Stock"),
of Hillhaven (collectively, the Series C Preferred Stock and
the Series D Preferred Stock the "Shares") free and clear of
all liens, claims, charges, security interests or other
encumbrances and, except for this Agreement and the Merger
Agreement and except as set forth in publicly available
documents prior to the date hereof, there are no options,
warrants or other rights, agreements, arrangements or
commitments of any character to which Stockholder is a party
relating to the pledge, disposition or voting of any shares
of capital stock of Hillhaven and there are no voting trusts
or voting agreements with respect to such Shares,
(ii) Stockholder does not beneficially own any shares of
Hillhaven Common Stock or Shares other than as set forth
above and does not have any options, warrants or other
rights to acquire any additional shares of capital stock of
Hillhaven or any security exercisable for or convertible
into shares of capital stock of Hillhaven, and
(iii) Stockholder has full power and authority to enter
into, execute and deliver this Agreement and to perform
fully its obligations hereunder. This Agreement has been
duly executed and delivered by Stockholder and constitutes
the legal, valid and binding obligation of Stockholder in
accordance with its terms.
(b) The Company represents and warrants to
Stockholder and Hillhaven that the Company has full power
and authority to enter into, execute and deliver this
Agreement and to perform fully its obligations hereunder.
This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding
obligation of the Company in accordance with its terms.
(c) Hillhaven represents and warrants to the
Company and Stockholder that (i) Hillhaven has full power
and authority to enter into, execute and deliver this
Agreement and to perform its obligations hereunder and (ii)
Hillhaven has taken all action, including, without
limitation, any action required by its Board of Directors,
so that this Agreement will not cause any "fair price",
"moratorium", "control share acquisition" or other similar
antitakeover statute or regulation enacted under any state
or federal laws in the United States applicable to Hillhaven
(including, without limitation, the Nevada Control Share
Acquisition Act) to be applicable to the Merger or the
transaction contemplated by the Merger Agreement. This
Agreement has been duly executed and delivered by Hillhaven
and constitutes the legal, valid and binding obligation of
Hillhaven in accordance with its terms.
2. Agreement to Vote Shares. Subject to the
terms and conditions of this Agreement, Stockholder agrees
during the term of this Agreement to vote the Shares, and to
cause any holder of record of such Shares to vote, in favor
of adoption and approval of the Merger Agreement and the
Merger at every meeting of the stockholders of Hillhaven at
which such matters are considered and at every adjournment
thereof. Notwithstanding the foregoing, Stockholder shall
be free to vote its Hillhaven Common Stock in its sole
discretion in connection with the Merger.
3. No Voting Trusts. Stockholder agrees that it
will not, nor will it permit any entity under its control
to, deposit any of the Shares in a voting trust or subject
any of the Shares to any arrangement with respect to the
voting of such Shares other than agreements entered into
with the Company.
4. No Proxy Solicitations. (a) Stockholder
agrees that unless Hillhaven receives a proposal for a
merger or consolidation that Stockholder concludes is
superior in its sole discretion to the Merger to
Stockholder, Stockholder will not, nor will it permit any
entity under its control to, (i) solicit proxies or become a
"participant" in a "solicitation" (as such terms are defined
in Regulation 14A under the 1934 Act) in opposition to or
competition with the consummation of the Merger or
(ii) become a member of a "group" (as such term is used in
Section 13(d) of the 1934 Act) with respect to any voting
securities of Hillhaven for the purpose of opposing or
competing with the consummation of the Merger.
(b) In consideration for the undertaking in 4(a)
above, Hillhaven agrees (i) not to set a record date or
meeting date for a meeting (whether annual or special) of
stockholders for the election of directors prior to the
meeting of Hillhaven stockholders to consider the Merger
Agreement and the Merger and (ii) if the Agreement is not
approved by Hillhaven shareholders or the Merger Agreement
is terminated, at the option of Hillhaven, to (x) waive the
existing advance notice provisions of Sections 1.10 and 1.11
of Hillhaven's Amended and Restated By-Laws in connection
with the next annual meeting of Hillhaven stockholders for
the election of directors and apply the provisions relating
to advance notice in connection with a special meeting for
the election of directors to such annual meeting or (y)
provide Stockholder with sufficient advance notice (whether
orally or in writing) of the date of the next annual meeting
of Hillhaven's stockholders to permit Stockholder to comply
with such By-law Sections.
5. Transfer and Encumbrance. (a) Stockholder
agrees not to transfer, sell, offer, exchange, pledge or
otherwise dispose of or encumber (i) any of the Shares, or
any shares of common stock, par value $.25 per share, of the
Company (or any security into which such stock is converted
or exchanged) (the "Company Common Stock"), from and after
the date hereof or (ii) any shares of Hillhaven Common Stock
from and after the date 30 days prior to the meeting of
Hillhaven stockholders to consider the Merger Agreement and,
in each case, until such time following the Merger as
results covering at least 30 days of combined operations of
Hillhaven and the Company (the "Combined Operations
Results") have been published by the Company in the form of
a quarterly earnings report, an effective registration
statement filed with the Securities and Exchange Commission
(the "Commission"), a report to the Commission on Form 10-K,
10-Q or 8-K, or any other public filing or announcement
which includes such combined results of operations (the
"Expiration Date"). The Company agrees that if requested to
do so by Stockholder within five business days after the
Effective Date of the Merger, the Company will publish the
Combined Operations Results not later than 90 days after the
Effective Date of the Merger (such request shall be a
"Request Event" for purposes of this agreement).
Notwithstanding the foregoing, Stockholder may tender its
shares of Hillhaven Common Stock into a tender offer that
Stockholder concludes is superior in its sole discretion to
the Merger to Stockholder. Stockholder agrees not to
exercise in connection with the Merger any appraisal or
similar rights with respect to any Hillhaven Common Stock.
(b) Stockholder agrees that after the time of any
Request Event and for so long as it is the beneficial owner
of more than 5% of the issued and outstanding Company Common
Stock it shall not transfer, sell, offer, exchange, or
otherwise dispose of any of the Company Common Stock except
pursuant to (i) a bona fide public offering of the Company
Common Stock, registered under the Securities Act of 1933,
as amended (the "1933 Act"), with the lead manager of such
public offering being selected by Stockholder and the co-
manager of such public offering being selected by the
Company, if such offering shall be an underwritten offering;
(ii) a private placement exempt from registration under
federal securities laws, and (iii) the issuance by
Stockholder (or an affiliate of Stockholder or an entity
established by or at the request of Stockholder) of debt or
equity securities of Stockholder (or an affiliate of
Stockholder or an entity established by or at the request of
Stockholder) that would be exchangeable or convertible into
shares of Company Common Stock in a transaction in which the
lead manager or lead placement agent is selected by the
Stockholder and the co-manager or co-placement agent shall
be selected by the Company; provided, however, that no sales
or series of sales of more than 2.5% of the voting power of
the then outstanding Company Common Stock shall be made to
any person or related group of persons who would immediately
thereafter own or have the right to acquire more than 5% of
the voting power of the then outstanding Company Common
Stock. Stockholder agrees that after the time of any
Request Event it will not pledge or encumber any shares of
Company Common Stock except in a bona fide financing
transaction with a person or persons who are regularly
engaged in the business of entering into such transaction.
6. Additional Purchases. Stockholder agrees
that it will not purchase or otherwise acquire (except for
shares of Series D Preferred Stock acquired as a dividend
from Hillhaven in accordance with the terms hereof)
beneficial ownership of any shares of Series C Preferred
Stock or Series D Preferred Stock after the execution of
this Agreement ("New Shares"). Stockholder also agrees that
any New Shares acquired or purchased by it shall be subject
to the terms of this Agreement to the same extent as if they
constituted Shares.
7. Litigation. Stockholder and Hillhaven are
parties to Stipulation re: Stay of Present Action in
National Medical Enterprises, Inc. v. The Hillhaven
Corporation (Case No. BC 122083, Los Angeles County Superior
Court), filed March 24, 1995 (the "Stipulation").
Stockholder and Hillhaven agree to extend the Stipulation
during the term of this Agreement, provided that all parties
in all actions pending against Hillhaven and certain of its
directors in other courts in other jurisdictions as well as
an action by Hillhaven pending against Horizon Healthcare
Corporation in Nevada Federal District Court agree to stay
all litigation against and by Hillhaven and its directors on
the terms set forth in the Stipulation. Stockholder and
Hillhaven further agree that upon consummation of the Merger
each shall voluntarily dismiss with prejudice any and all
pending claims, litigation or court proceedings it may have
against the other or any of its respective subsidiaries,
directors or executive officers with respect to the matters
relating to the acquisition proposal of Horizon Healthcare
Corporation or the Merger.
8. Certain Actions. Stockholder agrees that
after any Request Event, subject to the terms and conditions
of this Agreement, for the period ending seven years
following the consummation of the Merger neither it nor any
of its Affiliates (as such term is defined in Rule 12b-2
under the 1934 Act) at such time, regardless of whether such
person or entity is an Affiliate on the date hereof, will,
directly or indirectly, alone or in concert with others (a)
acquire, offer to acquire, or agree to acquire, by purchase,
gift or otherwise, any Company Common Stock or direct or
indirect rights, securities or options to acquire (through
purchase, exchange, conversion or otherwise) any Company
Common Stock (collectively, including such rights,
securities and options, the "Voting Securities") or seek to
advise, encourage or influence any person or entity with
respect to the acquisition of Voting Securities of the
Company, (b) make, or in any way participate in, any
"solicitation" of "proxies" (as such terms are defined in
Regulation 14A promulgated by the Commission pursuant to
Section 14 of the 1934 Act) to vote, or communicate with or
seek to advise, encourage or influence any person or entity
with respect to the voting of, any Voting Securities, (c)
form, join or in any way participate in a "group" within the
meaning of Section 13(d)(3) of the 1934 Act with respect to
any Voting Securities, (d) deposit any Voting Securities
into a voting trust or subject any such securities to any
arrangement or agreement with respect to the voting thereof,
except as provided herein, (e) otherwise act to seek, or to
assist or encourage in any respect any other person or
entity to seek, to control or influence in any manner the
management, Board of Directors, policies or affairs of the
Company, or (f) request that the Company waive or amend any
provisions of this Section 8. Notwithstanding the
foregoing, if Stockholder acquires Voting Securities as a
result of the acquisition of an entity that beneficially
owns Voting Securities, then Stockholder shall be permitted
to dispose of such Voting Securities as promptly as is
practicable.
9. Consent. (a) At the effective time of the
Merger (the "Effective Time"), (i) the Company hereby agrees
to assume all of the obligations of Hillhaven under the
Guarantee Reimbursement Agreement, dated as of January 31,
1990, as amended from time to time, between Stockholder and
Hillhaven (the "Guarantee Agreement") and to deliver to
Stockholder a certificate of the Chief Financial Officer of
the Company to the effect that no Default (as such term is
defined in the Guarantee Agreement) or Event of Default (as
such term is defined in the Guarantee Agreement) has
occurred or is continuing or shall have occurred after
giving effect to the Merger, and (ii) Stockholder hereby
agrees (A) to consent to the assignment of the Guarantee
Agreement to the Company, (B) that such assignment will not
constitute an Event of Default under the Guarantee
Agreement, (C) to waive any rights it may have to terminate
the Guarantee Agreement as a consequence of the Merger or
such assignment and (D) to consent to the Company's entering
into a credit facility pursuant to which the Company will
incur indebtedness secured by a first lien on certain assets
and properties of the Company, as described in the
Registration Statement on Form S-4 (File No. 33-59345).
(b) At the Effective Time, (i) the Company hereby
agrees to assume all of the obligations of Hillhaven under
the Services Agreement, dated as of January 31, 1990, as
amended from time to time, between Stockholder and Hillhaven
(the "Services Agreement") and (ii) Stockholder hereby
agrees (A) to consent to the assignment of the Services
Agreement to the Company and (B) to waive any rights it may
have to terminate the Services Agreement as a consequence of
the Merger or such assignment.
10. Specific Performance. Each party hereto
acknowledges that it will be impossible to measure in money
the damage to the other party if a party hereto fails to
comply with any of the obligations imposed by this Agree-
ment, that every such obligation is material and that, in
the event of any such failure, the other party will not have
an adequate remedy at law or damages. Accordingly, each
party hereto agrees that injunctive relief or any other
equitable remedy, in addition to remedies at law or damages,
is the appropriate remedy for any such failure and will not
oppose the granting of such relief on the basis that the
other party has an adequate remedy at law.
11. Other Agreements. (a) Tax Matters. (i) With
respect to the Tax Sharing Agreement between Stockholder and
Hillhaven dated as of January 31, 1990 (the "Tax Sharing
Agreement"), Stockholder agrees that:
(A) Sections 2.1, 2.2 3.2(b) and 4.1 of the Tax
Sharing Agreement shall have no effect with
respect to any Taxes or Tax Returns (as such terms
are defined in the Tax Sharing Agreement) for any
taxable period that ends after the closing date of
the Merger Agreement,
(B) anything in the Tax Sharing Agreement to the
contrary notwithstanding, the Tax Sharing
Agreement shall not restrict the Surviving
Corporation (as defined in the Merger Agreement)
from taking or omitting to take any action with
respect to the Surviving Corporation's Taxes or
Tax Returns for any taxable period that ends after
the closing date of the Merger Agreement,
(C) unless otherwise required by applicable law
or pursuant to a settlement with any Tax
authority, Stockholder shall not, on or after the
date hereof, change any election referred to in
Section 2.1 of the Tax Sharing Agreement or make
any additional elections thereunder,
(D) to the extent that any refund claim or suit
referred to in Section 3.2(b) of the Tax Sharing
Agreement as modified by Section 11(a)(i)(A)
hereof, effects any material Tax Item (as defined
in the Tax Sharing Agreement) of the Surviving
Corporation, Stockholder agrees to consult in good
faith with, and keep reasonably informed, the
Surviving Corporation and the Company, in regard
to such refund claims, or suits; provided,
however, that any such refund claims or suits
shall be contested, negotiated, and settled under
the control, and at the sole discretion, of
Stockholder, and
(E) anything in Section 4.1(b) of the Tax Sharing
Agreement to the contrary notwithstanding, the
Company or Surviving Corporation shall not be
liable for any outside professional fees or
similar third party costs reasonably incurred in
the course of any Tax controversy which is
controlled by Stockholder, provided that
(w) Surviving Corporation shall, and the Company
shall cause Surviving Corporation to, make its
records available to Stockholder during normal
business hours and permit Stockholder to make
copies thereof to the extent reasonably necessary
to contest, negotiate, and settle such Tax
controversy, (x) the Company and Surviving
Corporation shall make their employees available
to render any assistance during normal business
hours that may be reasonably requested by
Stockholder in preparation for or during the
course of such Tax controversy at no charge to
Stockholder, (y) Stockholder shall have the
opportunity to review and approve any material
outside professional fees or similar third party
costs, as described above, that are proposed to be
incurred by the Company or Surviving Corporation,
which approval shall not be unreasonably withheld,
and (z) the Company and Surviving Corporation
shall not be entitled to any reimbursement from
Stockholder pursuant to this Section 11(a)(i)(E)
for any outside professional fees or similar third
party costs incurred in connection with services
that could be reasonably rendered by employees of
the Company or Surviving Corporation.
(ii) Stockholder agrees to permit the Surviving
Corporation and its representatives reasonable access to the
records (other than records that are subject to an
attorney-client privilege) of Stockholder to facilitate an
understanding of matters relating to the spin-off of
Hillhaven from Stockholder, provided that the Surviving
Corporation executes a customary form of confidentiality
agreement.
(b) Registration Rights. The Company agrees
after the Effective Time of the Merger to provide
Stockholder with registration rights for all shares of
Company Common Stock received by Stockholder (or its
subsidiaries) in the Merger (whether offered for sale
directly or in connection with the issuance of debt or
equity securities of Stockholder (or an affiliate of
Stockholder or an entity established by or at the request of
Stockholder) that would be exchangeable or convertible into
shares of Company Common Stock) on (except as contemplated
by Section 5(b) of this Agreement) the same terms and
subject to the same conditions as exist in the Warrant and
Registration Rights Agreement, dated as of January 30, 1990,
between Hillhaven and Stockholder. In addition to its
obligations under the Warrant and Registration Rights
Agreement, the Company agrees upon the request of
Stockholder to cause its executive officers to be available
for a reasonable period of time for meetings with investors
and potential investors in any such offering of Company
Common Stock and to otherwise use its reasonable efforts to
assist in the orderly distribution of Company Common Stock
received in the Merger (any such request shall be a "Request
Event" for purposes of this Agreement).
12. Representation Letter. Stockholder agrees to
provide the Company and Hillhaven, at or before the
Effective Time of the Merger, with the representation letter
previously agreed upon between the parties stating that
Stockholder has no present plan or intention to dispose of
any Company Common Stock which Stockholder receives in the
Merger, if such letter will be required in order for the
Company's or Hillhaven's counsel to provide the tax opinion
required under Section 8 of the Merger Agreement.
13. Entire Agreement. This Agreement supersedes
all prior agreements, written or oral, among the parties
hereto with respect to the Merger Agreement and the Merger
and contains the entire agreement among the parties with
respect to the Merger Agreement and the Merger. This
Agreement may not be amended, supplemented or modified, and
no provisions hereof may be modified or waived, except by an
instrument in writing signed by all the parties hereto. No
waiver of any provisions hereof by any party shall be deemed
a waiver of any other provisions hereof by any such party,
nor shall any such waiver be deemed a continuing waiver of
any provision hereof by such party.
14. Notices. All notices, requests, claims,
demands or other communications hereunder shall be in
writing and shall be deemed given when delivered personally,
upon receipt of a transmission confirmation if sent by
telecopy or like transmission and on the next business day
when sent by Federal Express, Express Mail or other
reputable overnight courier service to the parties at the
following addresses (or at such other address for a party as
shall be specified by like notice):
If to the Company:
Vencor, Inc.
1300 Providian Center
4000 West Market Street
Louisville, Kentucky 40202
Attention: Jill L. Force
Telecopy: (502) 569-1104
With a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Joseph B. Frumkin
Telecopy: (212) 558-3588
If to Stockholder:
Tenet Healthcare Corporation
2700 Colorado Avenue
Santa Monica, California 90404
Attention: General Counsel
Telecopy: (310) 998-6956
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Los Angeles, California 90071
Attention: Brian J. McCarthy
Telecopy: (213) 687-5600
If to Hillhaven:
1148 Broadway Plaza
Tacoma, Washington 98402
Attention: Richard P. Adcock, Sr. V.P. and
General Counsel
Telecopy: (206) 502-3623
With a copy to:
Fried, Frank, Harris, Shriver & Jacobson
1 New York Plaza
New York, New York 10004
Attention: Peter Golden
Telecopy: (212) 859-4000
15. Miscellaneous.
(a) This Agreement shall be deemed a
contract made under, and for all purposes shall be construed
in accordance with, the laws of the State of Delaware.
(b) If any provision of this Agreement or
the application of such provision to any person or circum-
stances shall be held invalid or unenforceable by a court of
competent jurisdiction, such provision or application shall
be unenforceable only to the extent of such invalidity or
unenforceability and the remainder of the provision held
invalid or unenforceable and the application of such
provision to persons or circumstances, other than the party
as to which it is held invalid, and the remainder of this
Agreement, shall not be affected.
(c) This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and
the same instrument.
(d) This Agreement shall terminate upon the
earlier to occur of (i) termination of the Merger Agreement
in accordance with its terms, (ii) by Stockholder, if the
Merger has not been consummated by December 31, 1995, (iii)
by Stockholder, if the product of the Parent Average Price
(as defined in the Merger Agreement) times the Conversion
Number (as defined in the Merger Agreement) is less than $31
per share, provided, however, that Stockholder may not
terminate if Hillhaven has been advised in writing by the
Company that the Conversion Number shall be determined by
dividing $31 by the Parent Average price (without regard to
any maximum imposed on the Conversion Number absent this
clause by Section 1.02(b) of the Merger Agreement), (iv)
when Stockholder no longer owns Voting Securities, and (v)
the date specified in a written agreement duly executed and
delivered by the Company, Hillhaven and Stockholder;
provided that Sections 8 and 11(a) of this Agreement shall
survive any termination of this Agreement pursuant to clause
(iv) above.
(e) All Section headings herein are for
convenience of reference only and are not part of this
Agreement, and no construction or reference shall be derived
therefrom.
(f) The parties agree that there is not and
has not been any other agreement, arrangement or
understanding between the parties hereto with respect to the
matters set forth herein.
IN WITNESS WHEREOF, the parties hereto have
executed and delivered this Agreement as of the date first
written above.
VENCOR, INC.
By: /s/ W. EARL REED, III
W. Earl Reed, III
Vice President, Finance
and Development
TENET HEALTHCARE CORPORATION
By: /s/ RAYMOND L. MATHIASEN
Raymond L. Mathiasen
Senior Vice President
THE HILLHAVEN CORPORATION
By:/s/ BRUCE L. BUSBY
Bruce L. Busby
Chairman and Chief
Executive Officer
