TENET HEALTHCARE CORP, S-3/A, 1997-04-17

TENET HEALTHCARE CORP
S-3/A, 1997-04-17
GENERAL MEDICAL & SURGICAL HOSPITALS, NEC

Previous: TENET HEALTHCARE CORP, 8-K, 1997-04-17

Next: ENRON CORP, S-3/A, 1997-04-17

<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 17, 1997

REGISTRATION NO. 333-24955

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

------------------------

TENET HEALTHCARE CORPORATION

(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
NEVADA 8062 95-2557091
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
</TABLE>

3820 STATE STREET
SANTA BARBARA, CALIFORNIA 93105
(805) 563-7000

(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

SCOTT M. BROWN, ESQ.
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
TENET HEALTHCARE CORPORATION
3820 STATE STREET
SANTA BARBARA, CALIFORNIA 93105
(805) 563-7000

(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------

WITH COPIES TO:

ALISON S. RESSLER, ESQ. PAUL S. BIRD, ESQ.
Sullivan & Cromwell Debevoise & Plimpton
444 South Flower Street, 12th Floor 875 Third Avenue
Los Angeles, California 90071 New York, New York 10022
(213) 955-8000 (212) 909-6000

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time, as determined by market conditions, after this Registration
Statement becomes effective.

------------------------

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE(1)
<S> <C> <C> <C> <C>
COMMON STOCK, PAR VALUE $0.075 PER SHARE... 9,580,644 $26.50 $253,887,066.00 $76,935.00
PREFERRED STOCK PURCHASE RIGHTS............ (2) N/A N/A N/A
</TABLE>

(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) of the Securities Act of 1933, as amended. Pursuant to Rule
457, the maximum offering price of the shares of Tenet Common Stock being
registered is $26.50 per share, the average of the high and low reported
sales prices of a share of Tenet Common Stock reported on the New York Stock
Exchange Composite Tape on April 8, 1997, and the maximum aggregate offering
price is the product of $26.50 and 9,580,644, the number of shares of Tenet
Common Stock being registered. The Registration Fee was paid on April 9,
1997.

(2) Represents the right to 0.0005 of a share of Series A Junior Participating
Preferred Stock of Tenet.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT WILL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

SUBJECT TO COMPLETION, DATED APRIL 17, 1997

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL , 1997

[LOGO]

TENET HEALTHCARE CORPORATION

6,653,474 SHARES OF COMMON STOCK
(PAR VALUE $0.075)

--------------

This Prospectus Supplement relates to 6,653,474 shares (the "Shares") of par
value $0.075 Common Stock (the "Common Stock") of Tenet Healthcare Corporation
("Tenet," the "Registrant" or the "Company") to be offered in an underwritten
public offering by the persons listed under the heading "Selling Shareholders"
(the "Selling Shareholders"). The Shares originally were issued to Joseph
Littlejohn & Levy Fund, L.P. ("JLL") in connection with the acquisition of OrNda
HealthCorp by Tenet in January 1997. Prior to the consummation of the offering,
JLL will distribute the Shares to the Selling Shareholders who are limited
partners of JLL. See "Underwriting" and "Selling Shareholders." The Company will
not receive any of the proceeds from the sale of the Shares made hereunder. See
"Use of Proceeds."

The Common Stock and the Shares offered hereby currently are listed on the
New York Stock Exchange and the Pacific Stock Exchange under the symbol "THC."
On April , 1997, the closing price of the Common Stock on the New York Stock
Exchange Composite Tape was $ .

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS TO
TO THE DISCOUNTS AND SELLING
PUBLIC COMMISSIONS(1) SHAREHOLDERS(2)
<S> <C> <C> <C>
Per Share..........................................
Total..............................................
</TABLE>

(1) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters (as defined herein) against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities
Act"). See "Underwriting."

(2) Estimated expenses of $200,000 will be paid by the Company.

-------------------

The Shares offered hereby are offered by the Underwriters, subject to prior
sale, when, as and if delivered to and accepted by them and subject to various
prior conditions, including the right to reject any order in whole or in part.
It is expected that delivery of the Shares will be made in New York, New York on
or about April , 1997.
-------------------

MERRILL LYNCH & CO.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.

April , 1997
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SHARES OFFERED
HEREBY. SUCH TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF COMMON STOCK
TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITIONS OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

THE COMPANY

Tenet is the second largest investor-owned healthcare services company in
the United States. At February 28, 1997, Tenet's subsidiaries owned or leased
and operated 127 general hospitals (with 27,366 licensed beds) and related
healthcare facilities serving urban and rural communities in 22 states. Tenet's
subsidiaries and affiliates also owned or leased and operated various ancillary
healthcare businesses, including outpatient surgery centers, home healthcare
programs, ambulatory, occupational and rural healthcare clinics, a health
maintenance organization, a preferred provider organization and a managed care
insurance company as well as a small number of rehabilitation hospitals,
specialty hospitals, long-term care facilities and psychiatric facilities. In
addition, Tenet's subsidiaries hold the following investments in other
healthcare companies: (i) an approximately 12.1% interest in Vencor, Inc., which
operates nursing homes and other healthcare businesses, (ii) an approximately
11.3% interest in Total Renal Care Holdings, Inc., which operates kidney
dialysis units and certain related healthcare businesses and (iii) an
approximately 23% interest in Health Care Property Partners.

On January 30, 1997, Tenet completed its acquisition (the "Merger") of OrNda
HealthCorp ("OrNda"), which, with 49 general hospitals (9,599 licensed beds) at
November 30, 1996, was the third largest investor-owned healthcare services
company in the United States. Many of the hospitals acquired in the Merger are
located in geographic areas where Tenet was already operating hospitals,
including southern California and south Florida. The Merger also expanded
Tenet's operations into several new geographic areas, including Arizona, Iowa,
Massachusetts, Mississippi, Nevada, Oregon, Washington, West Virginia and
Wyoming. The Merger was accounted for on a pooling of interests basis. OrNda
(now known as Tenet HealthSystem HealthCorp) is now a wholly owned subsidiary of
Tenet.

The Company's principal executive offices are located at 3820 State Street,
Santa Barbara, California 93105, and its telephone number is (805) 563-7000.

USE OF PROCEEDS

All of the Shares offered hereby are being offered by the Selling
Shareholders. The Company will not receive any proceeds from the sale of the
Shares. See "Selling Shareholders."

SELLING SHAREHOLDERS

The following table sets forth information with respect to the number of
Shares owned by each of the Selling Shareholders and the number of Shares that
may be offered hereby by each Selling Shareholder. The Company has agreed to pay
the fees and expenses of registration, including the fees and expenses (not to
exceed $50,000) for one counsel on behalf of the Selling Shareholders, in
connection with the sale of the

S-2
<PAGE>
Shares offered hereby (other than underwriting discounts and commissions, which
will be paid by the Selling Shareholders).

<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES OWNED SHARES NUMBER OF
PRIOR TO BEING SHARES OWNED
NAME OFFERING(1) OFFERED(1) AFTER THE OFFFERING
- ------------------------------------------------------------- ------------- --------------- -----------------------
<S> <C> <C> <C>
California Public Employees' Retirement System (2)........... 1,835,930 1,835,930 0
New York State Common Retirement Fund (3).................... 815,034 815,034 0
Pension Reserves Investment Management Board................. 734,402 734,402 0
The Rockefeller Foundation................................... 367,275 367,275 0
State of Wisconsin Investment Board.......................... 367,275 367,275 0
Virginia Retirement System................................... 734,402 734,402 0
Yale University.............................................. 367,275 367,275 0
Oregon Public Employees' Retirement System................... 1,101,528 1,101,528 0
EES Distressed Securities Fund L.P........................... 183,563 183,563 0
Montana Board of Investments................................. 18,312 18,312 0
State Universities Retirement System......................... 55,084 55,084 0
Orange County Employees Retirement System.................... 73,396 73,396 0
-
------------- ---------------
Total.................................................... 6,653,474 6,653,474 0
</TABLE>

- ------------------------

1. Estimated amounts assuming a distribution to such Selling Shareholders by
JLL calculated using a price per share of Common Stock of $24.50, the
closing price of the Common Stock as reported on the New York Stock Exchange
Composite Tape on April 15, 1997. The actual amounts to be sold by such
Selling Shareholders will be determined on the basis of the price to the
public less the underwriting discount at the time of the sale of the Shares
by such Selling Shareholders in the offering made hereby.

2. Does not include approximately 4,080,012 shares owned as of the date hereof
by California Public Employees' Retirement System in addition to the shares
received in the distribution from JLL.

3. Does not include approximately 2,731,000 shares of Common Stock owned as of
the date hereof by the New York State Common Retirement Fund in addition to
the shares received in the distribution from JLL.

S-3
<PAGE>
UNDERWRITING

Subject to the terms and conditions set forth in the purchase agreement (the
"Purchase Agreement") among the Company, the Selling Shareholders and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ"), Goldman, Sachs & Co. and J.P. Morgan Securities
Inc. ("JPMSI") (collectively, the "Underwriters"), the Selling Shareholders
severally have agreed to sell to each of the Underwriters, and each of the
Underwriters has agreed to purchase from the Selling Shareholders the Shares, at
the public offering price set forth on the cover page of this Prospectus
Supplement, less the underwriting discounts and commissions. The respective
number of Shares that each Underwriter has agreed to purchase is set forth
opposite its name:

<TABLE>
<CAPTION>
UNDERWRITER SHARES PURCHASED
- ------------------------------------------------------------------------------------------------ ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated..............................................
Donaldson, Lufkin & Jenrette Securities Corporation.............................................
Goldman, Sachs & Co.............................................................................
J.P. Morgan Securities Inc......................................................................
-------
Total.......................................................................................
-------
-------
</TABLE>

In the Purchase Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth in the Purchase Agreement, to purchase all of the
Shares being sold pursuant to the Purchase Agreement if any of such Shares being
sold pursuant to the Purchase Agreement are purchased.

The Underwriters have advised the Selling Shareholders that they propose to
offer the Shares offered hereby to the public initially at the public offering
price set forth on the cover page of this Prospectus Supplement and to certain
dealers at such price less a concession not in excess of $. per Share. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of $. per Share on sales to certain other dealers. After the offering, the
public offering price, concession and discount may be changed.

The Common Stock is traded on the New York Stock Exchange and the Pacific
Stock Exchange.

The Underwriters are permitted to engage in certain transactions that
stabilize the price of the Common Stock. Such transactions consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of the
Common Stock.

If the Underwriters create a short position in the Common Stock in
connection with the offering, i.e., if, they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus Supplement, the
Underwriters may reduce that short position by purchasing Common Stock in the
open market.

The Underwriters may also impose a penalty bid on certain selling group
members. This means that if the Underwriters purchase shares of Common Stock in
the open market to reduce the Underwriters short position or to stabilize the
price of the Common Stock, they may reclaim the amount of the selling concession
from the selling group members who sold those shares as part of the offering.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.

Neither the Company nor the Underwriters make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common

S-4
<PAGE>
Stock. In addition, neither the Company nor the Underwriters make any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.

DLJ has provided and is currently retained to provide certain investment
banking services to the Company for which it has received and is entitled to
receive usual and customary fees.

JPMSI and certain of its affiliates have provided and are expected to
continue to provide certain investment banking and commercial banking services
to the Company for which they have received or will receive usual and customary
fees. Morgan Guaranty, an affiliate of JPMSI, was the arranging agent for the
Company's existing credit facility.

The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act.

LEGAL MATTERS

Certain legal matters with respect to the Shares offered hereby will be
passed upon for the Company by Scott M. Brown, Senior Vice President, Secretary
and General Counsel of the Company. As of March 31, 1997, Mr. Brown owned 2,794
shares of Common Stock and had outstanding options to purchase 201,634 shares of
Common Stock pursuant to Company benefit plans. The validity of the Shares
offered hereby will be passed upon for the Underwriters by Sullivan & Cromwell,
Los Angeles, California.

S-5
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>

SUBJECT TO COMPLETION, DATED APRIL 17, 1997

PROSPECTUS

APRIL , 1997

[LOGO]

TENET HEALTHCARE CORPORATION

9,580,644 SHARES OF COMMON STOCK

(PAR VALUE $0.075)

------------------

This Prospectus relates to 9,580,644 shares (the "Shares") of par value
$0.075 Common Stock (the "Common Stock") of Tenet Healthcare Corporation
("Tenet," the "Registrant" or the "Company") to be offered for sale by the
persons listed under the heading "Selling Shareholders" (the "Selling
Shareholders"). The Shares originally were issued by Tenet to Joseph Littlejohn
& Levy Fund, L.P. ("JLL") in connection with the acquisition of OrNda HealthCorp
("OrNda") by Tenet in January 1997 (the "Merger") and are being registered under
the Securities Act of 1933, as amended (the "Securities Act") pursuant to a
registration rights agreement entered into between JLL and Tenet at that time.
The Selling Shareholders may include JLL and partners in JLL who receive
distributions of Shares from JLL. See "Selling Shareholders." The distribution
of the Shares by the Selling Shareholders may be effected from time to time in
underwritten public offerings, in ordinary brokerage transactions on the New
York Stock Exchange or the Pacific Stock Exchange (collectively, the
"Exchanges") at market prices prevailing at the time of sale or in one or more
negotiated transactions at prices acceptable to the Selling Shareholders. In
addition, the Selling Shareholders may sell the Shares through or to brokers in
the over-the-counter market. The brokers or dealers through or to whom the
Shares may be sold may be deemed underwriters of the Shares within the meaning
of the Securities Act, in which event all brokerage commissions or discounts and
other compensation received by such brokers or dealers may be deemed to be
underwriting compensation. To the extent required, the names of any underwriter
and applicable commissions or discounts and any other required information with
respect to any particular offer will be set forth in an accompanying Prospectus
Supplement. See "Plan of Distribution." The Company will not receive any of the
proceeds from sales of the Shares made hereunder. See "Use of Proceeds."

The Common Stock and the Shares offered hereby currently are listed on the
Exchanges under the symbol "THC." On April , 1997, the closing price of the
Common Stock on the New York Stock Exchange Composite Tape was $ .

SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS IN EVALUATING AN INVESTMENT
IN THE COMMON STOCK.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements, registration statements and other information filed by the Company
with the Commission may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: New York
Regional Office, Seven World Trade Center, New York, New York 10048; and Chicago
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. The Commission also maintains a Web site at http://
www.sec.gov that contains reports, proxy statements and other information
regarding registrants that file electronically with the Commission. The reports,
proxy statements and other information filed by the Company also may be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005, and at the offices of the Pacific Stock Exchange
Incorporated, 301 Pine Street, San Francisco, California 94104. The Common Stock
is listed on such Exchanges.

This Prospectus constitutes part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Commission under the Securities Act.
This Prospectus does not contain all of the information contained in the
Registration Statement and the exhibits and schedules thereto, and reference is
hereby made to the Registration Statement for further information with respect
to the Company and the Shares offered hereby. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed. Each such statement is qualified in its entirety by such
reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission pursuant to
the Exchange Act (File No. I-7293) are incorporated in this Prospectus by
reference and are made a part hereof: (i) Annual Report on Form 10-K for the
fiscal year ended May 31, 1996, filed with the Commission on August 26, 1996
(the "Tenet 10-K"); (ii) Quarterly Report on Form 10-Q for the quarterly period
ended August 31, 1996, filed with the Commission on October 11, 1996; (iii)
Quarterly Report on Form 10-Q for the quarterly period ended November 30, 1996,
filed with the Commission on January 13, 1997; (iv) Quarterly Report on Form
10-Q for the quarterly period ended February 28, 1997, filed with the Commission
on April 15, 1997; (v) Current Report on Form 8-K, dated November 5, 1996, filed
with the Commission on November 5, 1996; (vi) Current Report on Form 8-K, dated
February 12, 1997, filed with the Commission on February 13, 1997; (vii) Current
Report on Form 8-K, dated April 10, 1997, filed with the Commission on April 11,
1997; (viii) Current Report on Form 8-K, dated April 16, 1997, filed with the
Commission on April 17, 1997; (ix) the description of the Common Stock of the
Company, which is contained in the Company's Registration Statement on Form 8-A
filed with the Commission on April 8, 1971, including any amendments or reports
filed for the purpose of updating such description; and (x) the description of
certain preferred stock purchase rights that have attached to the Common Stock,
which is contained in the Company's Registration Statement on Form 8-A filed
with the Commission on December 9, 1988, including any amendments or reports
filed for the purpose of updating such description.

All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering hereby of the Common
Stock, shall be deemed to be incorporated by reference in this Prospectus and to
be a part hereof from the date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified

2
<PAGE>
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.

This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. Copies of all documents incorporated by reference
in this Prospectus (other than exhibits to such documents unless such exhibits
are specifically incorporated by reference into such documents) will be provided
without charge to each person to whom a copy of this Prospectus is delivered,
upon written or oral request of such person. Request for such copies should be
directed to Scott M. Brown, Secretary, Tenet Healthcare Corporation, P.O. Box
31907, Santa Barbara, California 93130, telephone number (805) 563-7000.

RISK FACTORS

IN ADDITION TO THE OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS, PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE
FOLLOWING FACTORS BEFORE PURCHASING THE COMMON STOCK OFFERED HEREBY.

CERTAIN FINANCING CONSIDERATIONS; LEVERAGE

As of February 28, 1997, Tenet had $4.9 billion of outstanding indebtedness,
which amounted to approximately 58.5% of its total capitalization including
short-term borrowings and notes and the current portion of long-term debt.

In connection with the Merger, on January 30, 1997, Tenet entered into a new
$2.3 billion credit agreement (the "New Credit Facility"). The New Credit
Facility includes covenants limiting, among other things, borrowings by, and
liens on the assets of, Tenet and its subsidiaries, investments, the sale of all
or substantially all assets and prepayment of subordinated debt, and prohibiting
the repurchase of Tenet stock or the payment of dividends, in addition to a
minimum consolidated net worth requirement and certain coverage ratio tests. In
addition, the indentures governing Tenet's outstanding public debt include,
among other things, covenants limiting the incurrence of additional debt and
liens and the payment of dividends. Tenet's failure to comply with any of these
covenants could result in an event of default under the New Credit Facility or
the public debt indentures, which in turn could cause an event of default to
occur under substantially all of Tenet's debt. An event of default could have a
material adverse effect on Tenet's business, financial condition and results of
operations.

The degree to which Tenet is leveraged and the covenants applicable to its
outstanding indebtedness may adversely affect Tenet's ability to finance its
future operations and could limit its ability to pursue business opportunities
that may be in the interests of Tenet and its securityholders. In particular,
changes in medical technology, existing, proposed and future legislation,
regulations and the interpretation thereof, and the increasing importance of
managed care contracts and integrated healthcare delivery systems may require
significant investment in facilities, equipment, personnel or services. Although
Tenet believes that cash generated from operations, amounts available under its
New Credit Facility and its ability to access capital markets will be sufficient
to allow it to make such investments, there can be no assurance that Tenet will
be able to obtain the funds necessary to make such investments. Furthermore,
tax-exempt or government-owned competitors have certain financial advantages
such as endowments, charitable contributions, tax-exempt financing and exemption
from sales, property and income taxes not available to Tenet, providing them
with a potential competitive advantage in making such investments.

RISKS ASSOCIATED WITH ACQUISITION STRATEGY

Tenet's ability to continue to compete successfully for managed care
contracts or to expand and enhance its integrated healthcare delivery systems
may depend upon, among other things, Tenet's ability to increase the number of
its facilities and services offered. Part of Tenet's business strategy is to
expand its

3
<PAGE>

healthcare delivery systems and services through the acquisition of and
partnerships with hospitals, groups of hospitals, other healthcare businesses,
ancillary healthcare providers, physician practices and physician practice
assets. There can be no assurance that suitable acquisitions and partnerships
can be consummated on terms favorable to Tenet or that financing, if necessary,
can be obtained for such acquisitions. Further, there is no assurance that, as
Tenet continues to acquire or enter into partnerships with additional facilities
and related healthcare service providers in the geographic areas in which it
currently operates, it will not face constraints on its ability to grow from
Federal and state regulatory agencies. In addition, there can be no assurance
that Tenet will be able to operate profitably any hospitals, facilities,
businesses or other assets it may acquire or enter into partnerships with,
effectively integrate the operations of such acquisitions or partnerships or
otherwise achieve the intended benefits of such acquisitions and partnerships.
While management believes that certain cost savings may be realized as a result
of the Merger, there can be no assurance that any such savings will actually be
realized or as to the timing thereof.

COMPETITION

The healthcare industry has been characterized in recent years by increased
competition for patients and staff physicians, excess capacity at general
hospitals, a shift from inpatient to outpatient treatment settings and increased
consolidation. New competitive strategies of hospitals and other healthcare
providers place increasing emphasis on the use of alternative healthcare
delivery systems (such as home health services, outpatient surgery and emergency
and diagnostic centers) that eliminate or reduce lengths of hospital stays. The
principal factors contributing to these trends are advances in medical
technology and pharmaceuticals, cost-containment efforts by managed care payors,
employers and traditional health insurers, changes in regulations and
reimbursement policies, increases in the number and type of competing healthcare
providers and changes in physician practice patterns. The revenues and operating
results of most of Tenet's hospitals are significantly affected by the
hospitals' ability to negotiate favorable contracts with managed care payors.
Tenet's future success will depend, in part, on the ability of Tenet's hospitals
to continue to attract and retain staff physicians, to enter into managed care
contracts and to organize and structure integrated healthcare delivery systems
with other healthcare providers and physician practice groups. There can be no
assurance that Tenet's hospitals will continue to be able to, on terms favorable
to Tenet, attract and retain physicians to their staffs, enter into managed care
contracts or organize and structure integrated healthcare delivery systems, for
which other healthcare companies with greater financial resources or a wider
range of services may be competing.

LIMITS ON REIMBURSEMENT

Tenet derives a substantial portion of its net operating revenues from
third-party payors, including the Medicare and Medicaid programs. Changes in
government reimbursement programs have resulted in limitations on, increases in,
and in some cases reduced levels of, reimbursement for healthcare services, and
additional changes are anticipated. Such changes are likely to result in further
limitations on reimbursement levels especially because, in order to reach a
balanced budget, the U.S. Congress and the President are in favor of legislating
savings under both the Medicare and Medicaid programs. In addition, private
payors, including managed care payors, increasingly are demanding discounted fee
structures or the assumption by healthcare providers of all or a portion of the
financial risk through prepaid capitation arrangements. Inpatient utilization,
average lengths of stay and occupancy rates continue to be negatively affected
by payor-required pre-admission authorization and utilization review and by
payor pressure to maximize outpatient and alternative healthcare delivery
services for less acutely ill patients. In addition, efforts to impose reduced
allowances, greater discounts and more stringent cost controls by government and
other payors are expected to continue. Although Tenet is unable to predict the
effect these changes will have on its operations, as the number of patients
covered by managed care payors increases, significant limits on the scope of
services reimbursed and on reimbursement rates and fees could have a material
adverse effect on its business, financial condition and results of operations.

4
<PAGE>
EXTENSIVE REGULATION

The healthcare industry is subject to extensive Federal, state and local
regulation relating to licensure, conduct of operations, ownership of
facilities, addition of facilities and services and prices for services. In
particular, Medicare and Medicaid antikickback, antifraud and abuse amendments
codified under Section 1128B(b) of the Social Security Act (the "Antikickback
Amendments") prohibit certain business practices and relationships that might
affect the provision and cost of healthcare services reimbursable under Medicare
and Medicaid, including the payment or receipt of remuneration for the referral
of patients whose care will be paid for by Medicare or other governmental
programs. Sanctions for violating the Antikickback Amendments include criminal
penalties and civil sanctions, including fines and possible exclusion from
government programs such as the Medicare and Medicaid programs. Pursuant to the
Medicare and Medicaid Patient and Program Protection Act of 1987, the Department
of Health and Human Services ("HHS") has issued regulations that describe some
of the conduct and business relationships permissible under the Antikickback
Amendments ("Safe Harbors"). The fact that a given business arrangement does not
fall within a Safe Harbor does not render the arrangement PER SE illegal.
Business arrangements of healthcare service providers that fail to satisfy the
applicable Safe Harbor criteria, however, risk increased scrutiny by enforcement
authorities. Because Tenet may be less willing than some of its competitors to
enter into business arrangements that do not clearly satisfy the Safe Harbors,
it could be at a competitive disadvantage in entering into certain transactions
and arrangements with physicians and other healthcare providers. See "--Certain
Legal Proceedings."

The "Health Insurance Portability and Accountability Act of 1996," which
became effective January 1, 1997, amends, among other things, Title XI (42
U.S.C. 1301 ET SEQ.) to broaden the scope of current fraud and abuse laws to
include all health plans, whether or not they are reimbursed as a Federal
program.

In addition, Section 1877 of the Social Security Act, which restricts
referrals by physicians of Medicare and other government-program patients to
providers of a broad range of designated health services with which they have
ownership or certain other financial arrangements, was amended effective January
1, 1995, to significantly broaden the scope of prohibited physician referrals
under the Medicare and Medicaid programs to providers with which they have
ownership or certain other financial arrangements (the "Self-Referral
Prohibitions"). Many states have adopted or are considering similar legislative
proposals, some of which extend beyond the Medicaid program to prohibit the
payment or receipt of remuneration for the referral of patients and physician
self-referrals regardless of the source of the payment for the care. Tenet's
participation in and development of joint ventures and other financial
relationships with physicians and others could be adversely affected by these
amendments and similar state enactments. The Company systematically reviews all
of its operations to ensure that it complies with the Social Security Act and
similar state statutes.

Both Federal and state government agencies have announced heightened and
coordinated civil and criminal enforcement efforts. One pilot project, Operation
Restore Trust, is focused on investigating healthcare providers in the home
health and nursing home industries as well as on medical suppliers to these
providers in California, Florida, Texas, Illinois and New York. Tenet provides
home health and nursing home care in California, Florida and Texas.

Some states require state approval for construction and expansion of
healthcare facilities, including findings of need for additional or expanded
healthcare facilities or services. Certificates of Need, which are issued by
governmental agencies with jurisdiction over healthcare facilities, are at times
required for capital expenditures exceeding a prescribed amount, changes in bed
capacity or services and certain other matters. Following a number of years of
decline, the number of states requiring Certificates of Need is once again on
the rise as state legislators once again are looking at the Certificate of Need
process as a way to contain rising healthcare costs. At February 28, 1997, Tenet
operated hospitals in 18 states that require state approval under Certificate of
Need programs. Tenet is unable to predict whether it will be able to obtain any
Certificates of Need in any jurisdiction where such Certificates of Need are
required.

5
<PAGE>
Tenet is unable to predict the future course of Federal, state and local
regulation or legislation, including Medicare and Medicaid statutes and
regulations. Further changes in the regulatory framework could have a material
adverse effect on Tenet's business, financial condition and results of
operations.

HEALTHCARE REFORM LEGISLATION

Healthcare is one of the largest industries in the United States and
continues to attract much legislative interest and public attention. Medicare,
Medicaid, mandatory and other public and private hospital cost-containment
programs, proposals to limit healthcare spending, proposals to limit prices and
industry competitive factors are highly significant to the healthcare industry.
In addition, the healthcare industry is governed by a framework of Federal and
state laws, rules and regulations that are extremely complex and for which the
industry has the benefit of little or no regulatory or judicial interpretation.
Although Tenet believes it is in compliance in all material respects with such
laws, rules and regulations, if a determination is made that the Company was in
material violation of such laws, rules or regulations, its business, financial
condition and results of operations could be materially adversely affected.

There continue to be Federal and state proposals that would, and actions
that do, impose more limitations on government and private payments to providers
such as Tenet and proposals to increase co-payments and deductibles from program
and private patients. At the Federal level, both Congress and the President have
in the past, and are expected to in the future, propose healthcare budgets that
substantially reduce payments under the Medicare and Medicaid programs. For
example, in May 1996, both houses of Congress passed bills that would have
significantly reduced Medicare and Medicaid funding by limiting future increases
to the funding for such programs. Although President Clinton vetoed those bills,
the President's own proposals also propose to limit or reduce increases in
future Medicare and Medicaid payments.

Many states have enacted or are considering enacting measures that are
designed to reduce their Medicaid expenditures and to make certain changes to
private healthcare insurance. Various states have applied, or are considering
applying, for a Federal waiver from current Medicaid regulations to allow them
to serve some of their Medicaid participants through managed care providers.
Tennessee has implemented such a revision and Texas has passed a law mandating
the state to apply for such a waiver. Louisiana also is considering wider use of
managed care for its Medicaid populations. California has created a voluntary
health insurance purchasing cooperative that seeks to make healthcare coverage
more affordable for businesses with five to 50 employees and, effective January
1, 1995, began changing the payment system for participants in its Medicaid
program in certain counties from fee-for-service arrangements to managed care
plans. Florida limits the amount by which a hospital's net revenues per
admission may be increased each year, has enacted a program creating a system of
local purchasing cooperatives and has proposed other changes that have not yet
been enacted. Florida has adopted, and other states are considering adopting,
legislation imposing a tax on revenues of hospitals to help finance or expand
those states' Medicaid systems. A number of other states are considering the
enactment of managed care initiatives designed to provide universal low-cost
coverage. These proposals also may attempt to include coverage for some people
who presently are uninsured.

While Tenet anticipates that payments to hospitals will be reduced as a
result of future federal and state legislation, it is uncertain at this time
what legislation regarding healthcare reform may ultimately be enacted or
whether other changes in the administration or interpretation of governmental
healthcare programs will occur. There can be no assurance that future healthcare
legislation or other changes in the administration or interpretation of
governmental healthcare programs will not have a material adverse effect on
Tenet's business, financial condition and results of operations. A significant
reduction in the amount of payments received by hospitals under government
programs such as Medicare and Medicaid could have a material adverse effect on
Tenet's business, financial condition and results of operations.

6
<PAGE>
CERTAIN LEGAL PROCEEDINGS

Tenet continues to defend a greater than normal level of litigation relating
to its subsidiaries' former psychiatric operations. The majority of the lawsuits
filed contain allegations of medical malpractice as well as allegations of fraud
and conspiracy against Tenet and certain of its subsidiaries and former
employees. Also named as defendants are numerous doctors and other healthcare
professionals. Tenet believes that the increase in litigation arose primarily
from advertisements made by certain lawyers seeking former psychiatric patients
in order to file claims against Tenet and certain of its subsidiaries. The
advertisements focused, in many instances, on Tenet's settlement of past
disputes involving the operations of its discontinued psychiatric business,
including Tenet's 1994 resolution of the Federal government's investigation and
a corresponding criminal plea agreement involving such discontinued psychiatric
business of Tenet. Among the suits filed during fiscal 1995 were two lawsuits in
Texas state court with approximately 740 individual plaintiffs at present who
purport to have been patients in certain Texas psychiatric facilities. During
fiscal 1996, 64 plaintiffs voluntarily withdrew from one of the lawsuits and
Tenet's motion to recuse the original trial judge in that lawsuit has been
granted. The cases of three of the 740 individual plaintiffs within one of the
lawsuits currently are set for trial in April 1997.

During fiscal 1995 and 1996, lawsuits with approximately 210 plaintiffs at
present who purport to have been patients in certain Washington, D.C.
psychiatric facilities, containing allegations similar to those contained in the
Texas cases described above, were filed in the District of Columbia.

In addition to the above, a purported class action was filed in Texas state
court in May 1995, containing allegations of fraud and conspiracy similar to
those described in the preceding paragraphs. The plaintiff purports to represent
all persons who were voluntarily admitted to one of 11 psychiatric hospitals in
Texas between January 1, 1981 and December 31, 1991, and satisfied certain other
criteria. In February 1996, this case was removed to Federal court. A motion by
the plaintiff to remand the case to Texas state court has been denied. A class
has not been certified and Tenet believes that a class is not capable of being
certified.

Tenet expects that additional lawsuits with similar allegations will be
filed. Tenet believes it has a number of defenses to each of these actions and
will defend these and any additional lawsuits vigorously. Until the lawsuits are
resolved, however, Tenet will continue to incur substantial legal expenses.
Although, based upon information currently available to it, management believes
that the amount of damages, if any, in excess of the reserves Tenet has recorded
for unusual litigation costs that may be awarded in any of the foregoing
unresolved legal proceedings cannot reasonably be estimated, management does not
believe it is likely that any such damages will have a material adverse effect
on Tenet's business, financial condition and results of operations. There can be
no assurance, however, that the ultimate liability will not exceed such
reserves, which primarily represent the estimated costs of defending the
actions.

Two additional Federal class actions filed in August 1993 were consolidated
into one action pending in the U.S. District Court in the Central District of
California captioned In re: National Medical Enterprises Securities Litigation
II. These consolidated actions are on behalf of a purported class of
shareholders who purchased or sold stock of Tenet between January 14, 1993 and
August 26, 1993, and allege that each of the defendants violated Section 10(b)
of the Exchange Act. Based on these claims, plaintiffs seek compensatory
damages, injunctive relief, attorneys' fees, interest and costs. Tenet believes
it has meritorious defenses to this action and will defend this litigation
vigorously.

7
<PAGE>
THE COMPANY

On January 30, 1997, Tenet completed its acquisition of OrNda, which, with
49 general hospitals (9,599 licensed beds) at November 30, 1996, was the third
largest investor-owned healthcare services company in the United States. Many of
the hospitals acquired in the Merger are located in geographic areas where Tenet
was already operating hospitals, including southern California and south
Florida. The Merger also expanded Tenet's operations into several new geographic
areas, including Arizona, Iowa, Massachusetts, Mississippi, Nevada, Oregon,
Washington, West Virginia and Wyoming. The Merger was accounted for on a pooling
of interests basis. OrNda (now known as Tenet HealthSystem HealthCorp) is now a
wholly owned subsidiary of Tenet.

The Company's principal executive offices are located at 3820 State Street,
Santa Barbara, California 93105, and its telephone number is (805) 563-7000.

USE OF PROCEEDS

All of the Shares offered hereby are being offered by the Selling
Shareholders. The Company will not receive any proceeds from the sale of the
Shares. See "Selling Shareholders."

BUSINESS STRATEGY

The Company's strategic objective is to provide quality healthcare services
responsive to the current managed care environment. Tenet believes that
competition among healthcare providers occurs primarily at the local level.
Accordingly, the Company tailors its local strategies to address the specific
competitive characteristics of the geographic areas in which it operates,
including the number of facilities operated by Tenet, the nature and structure
of physician practices and physician groups, the extent of managed care
penetration, the number and size of competitors and the demographic
characteristics of the area. Key elements of the Company's strategy are:

- to develop integrated healthcare delivery systems by coordinating the
operations and services of the Company's facilities with other hospitals
and ancillary care providers and through alliances with physicians and
physician groups;

- to reduce costs through enhanced operating efficiencies while improving
the quality of care provided;

- to develop and maintain its strong relationships with physicians and
generally to foster a physician-friendly culture;

- to enter into discounted fee for service arrangements, capitated contracts
and other managed care contracts with third party payors; and

8
<PAGE>
- to acquire and enter into strategic partnerships with hospitals, groups of
hospitals, other healthcare businesses, ancillary healthcare providers,
physician practices and physician practice assets where appropriate to
expand and enhance quality integrated healthcare delivery systems
responsive to the current managed care environment.

BUSINESS DESCRIPTION

The Company's subsidiaries own or lease and operate 127 general hospitals
(27,366 licensed beds) serving communities in 22 states. In addition, the
Company's subsidiaries own or lease and operate numerous ancillary healthcare
facilities, including a small number of rehabilitation hospitals, long-term care
facilities and psychiatric facilities located on the same campus as, or nearby,
their general hospitals, and operated all or a substantial part of 145 medical
office buildings as of February 28, 1997. With the exception of one general
hospital that was acquired in fiscal 1996 and is in the process of becoming
accredited for the first time, each of the Company's facilities that is eligible
for accreditation is fully accredited by the Joint Commission on Accreditation
of Healthcare Organizations ("JCAHO"), or another appropriate accreditation
agency. With such accreditation, the Company's hospitals are eligible to
participate in the Medicare and Medicaid programs.

Each of Tenet's general hospitals offers acute care services and most offer
operating and recovery rooms, radiology services, intensive care and coronary
care nursing units, pharmacies, clinical laboratories, respiratory therapy
services, physical therapy services and outpatient facilities. A number of the
hospitals also offer tertiary care services such as open heart surgery, neonatal
intensive care, neuroscience, orthopedics services and oncology services. Three
of the Company's hospitals, Memorial Medical Center (formerly known as
MercyBaptist Medical Center), USC University Hospital and Sierra Medical Center,
offer quartenary care in such areas as heart, lung, liver and kidney transplants
and USC University Hospital and Sierra Medical Center also offer gamma knife
brain surgery.

Technological developments permitting more procedures to be performed on an
outpatient basis, in conjunction with pressures to contain healthcare costs,
have led to a shift from inpatient care to ambulatory or outpatient care. Tenet
has responded to this trend by enhancing its hospitals' outpatient service
capabilities, including (i) establishing freestanding outpatient surgery centers
at or near certain of its hospital facilities, (ii) reconfiguring certain
hospitals to more effectively accommodate outpatient treatment by, among other
things, providing more convenient registration procedures and separate
entrances, and (iii) restructuring existing surgical capacity to allow a greater
number and range of procedures to be performed on an outpatient basis. Tenet's
facilities will continue to emphasize those outpatient services that can be
provided on a quality, cost-effective basis and that the Company believes will
experience increased demand. The patient volumes and net operating revenues at
both the Company's general hospitals and its outpatient surgery centers are
subject to seasonal variations caused by a number of factors, including but not
necessarily limited to, seasonal cycles of illness, climate and weather
conditions, vacation patterns of both patients and physicians and other factors
relating to the timing of elective procedures.

In addition, inpatient care is continuing to move from acute care to
sub-acute care, where a less-intensive level of care is provided. Tenet has been
proactive in the development of a variety of sub-acute inpatient services to
utilize a portion of its unused capacity, thereby retaining a larger share of
overall healthcare expenditures. By offering cost-effective ancillary services
in appropriate circumstances, Tenet is able to provide a continuum of care where
the demand for such services exists. For example, in certain hospitals the
Company has developed transitional care, rehabilitation and long-term care
sub-acute units. Such units utilize less intensive staffing levels to provide
the range of services sought by payers with a lower cost structure.

Tenet's subsidiaries, including OrNda, have acquired 17 general hospitals
(or interests in general hospitals) since June 1, 1995: (1) in July 1995, a
one-third interest (which subsequently was increased to a

9
<PAGE>

50% interest) in the 82-bed St. Clair Hospital located outside of Birmingham,
Alabama, which formerly was a not-for-profit general hospital; (2 and 3) in
August 1995, Memorial Medical Center (formerly known as MercyBaptist Medical
Center), formerly a not-for-profit system, consisting of two general hospitals
with an aggregate of 759 licensed beds located in New Orleans, Louisiana, and
related physician practices; (4) in September 1995, Providence Memorial Hospital
located in El Paso, Texas, which also was a not-for-profit general hospital.
Providence is licensed for 471 general hospital beds (34 of which may be used as
skilled nursing beds) and is licensed for 30 additional rehabilitation and
subacute care beds; (5) in October 1995, a long-term lease of the 49-bed Medical
Center of Manchester and its home health business, in central Tennessee; (6) in
November 1995, the 104-bed Methodist Hospital of Jonesboro, a not-for-profit
general hospital located in Jonesboro, Arkansas. That hospital now is owned by a
limited liability company of which Tenet owns 95% and is the manager and Tenet's
not-for-profit partner St. Vincent TotalHealth Corporation, owns 5%; (7) in
November 1995, the 202-bed University Medical Center (subsequently re-named
Florida Medical Center--South) located in Plantation, Florida; (8) in January
1996, the 498-bed Houston Northwest Medical Center located in Houston, Texas;
(9) in June 1996, the 378-bed Hialeah Hospital located in Hialeah, Florida; (10)
in July 1996, the 136-bed Cypress Fairbanks Medical Center located in Houston,
Texas; (11) in August 1996, the 400-bed Centinela Hospital Medical Center
located in Inglewood, California; (12) in September 1996, the 329-bed Saint
Vincent Hospital located in Worcester, Massachusetts; (13) in October 1996, the
319-bed Lloyd Noland Hospital located in Birmingham, Alabama; (14 and 15) in
December 1996, the 296-bed Western Medical Center located in Santa Ana,
California and the 193-bed Western Medical Center-Anaheim located in Anaheim,
California; (16 and 17) in January 1997, the 357-bed North Shore Medical Center
located in Miami, Florida and a long-term lease of the 312-bed Brookside
Hospital located in San Pablo, California.

In addition, in August 1995, Tenet entered into an agreement with the
Cleveland Clinic Florida to develop a new 150-bed general hospital in western
Broward County, Florida. Completion of that project is subject to governmental
approvals. In the fourth quarter of fiscal 1996, Tenet converted the Jo Ellen
Smith general hospital in New Orleans, Louisiana, into a specialty hospital. In
April 1997, Tenet signed a definitive agreement for a long-term lease of the
398-bed Desert Hospital located in Palm Springs, California. That transaction is
expected to close by the end of May.

KEY ELEMENTS OF TENET'S STRATEGY

DEVELOP INTEGRATED HEALTHCARE DELIVERY SYSTEMS. In most geographic areas it
serves, Tenet has established or is developing an integrated healthcare delivery
system to offer a full range of quality patient care responsive to the current
managed care environment by coordinating the services offered by its hospitals
and related facilities with the services offered by other providers. The Company
believes that general hospitals will serve as the hubs for the development of
integrated healthcare delivery systems due to their highly developed
infrastructure, extensive service base, sophisticated equipment and skilled
personnel.

The Company's strategy is implemented in a number of ways depending upon the
characteristics of the local area. In areas where there is significant managed
care penetration or in which the Company anticipates such penetration, the
Company encourages physicians practicing at its hospitals to form independent
physician associations ("IPAs"). As part of its strategy, the Company intends to
form physician hospital organizations ("PHOs") that bring together its hospitals
and IPAs, physicians or physician groups under a variety of arrangements to
negotiate for managed care contracts, including capitated contracts. Tenet has
formed a PHO for the New Orleans area and is in the process of forming PHOs in
several other geographic areas. The Company also has formed management service
organizations ("MSOs"), which provide management and administrative services to
physicians, physician group practices and IPAs, and which enter into managed
care contracts on behalf of these groups and, in certain circumstances in the
future, PHOs. Where appropriate, the Company also purchases physician and
physician group practices and employs such physicians or purchases the assets of
those practices and manages such practices through its MSOs or otherwise.

10
<PAGE>
The Company uses various combinations of one or all of the foregoing methods
in each geographic area to create a community of interest between its hospitals
and the physicians who practice there, to which it adds additional resources,
where necessary, to create an integrated healthcare delivery system capable of
providing a full range of healthcare services to the community. In areas where
the Company has a significant presence, such as southern California, south
Florida, and the greater New Orleans area, it uses its own resources to
establish and expand its integrated healthcare delivery systems.

For example, in California, the Company is developing the Tenet California
HealthSystem, an integrated healthcare delivery system linking Tenet's 45
general hospitals (33 of which are in southern California) and other health care
facilities in California with physicians and other healthcare professionals as
well as other healthcare providers' facilities in geographic areas throughout
the state. In south Florida, the Company has created the Tenet South Florida
HealthSystem, an integrated healthcare delivery system consisting of 12 general
hospitals (six of which are tertiary care hospitals), and numerous related
healthcare operations. In the greater New Orleans area the Company has
established and is expanding the Tenet Louisiana HealthSystem, an integrated
healthcare delivery system with eight general hospitals, several specialty care
hospitals and numerous other healthcare operations.

Another example of how this integrated delivery strategy is being
implemented is the Company's Redding Medical Center, a tertiary care hospital
located in a primarily rural area in northern California, around which hospital
the Company is developing such a system, with the hospital itself acting as the
hub. Affiliations with physician practices, non-Tenet primary care hospitals, an
outpatient surgery center developed in partnership with local physicians and
affiliated ancillary care providers in the surrounding area enable this system
to provide a full range of healthcare services. In addition, the Company has
introduced its HMO product to this geographic area. The Company believes that
the development of such integrated healthcare delivery systems will enhance its
ability to contract with payors in those areas that have experienced or will
experience a high degree of managed care penetration.

REDUCE COSTS THROUGH ENHANCED OPERATING EFFICIENCY WHILE IMPROVING THE
QUALITY OF CARE. The Company continues to position itself as a provider of
quality healthcare services responsive to the current managed care environment
by enhancing operating efficiencies at the hospital, regional and corporate
levels. For example, the Company has implemented programs at the hospital level
to monitor and adjust staffing levels in response to patient acuity and hospital
census, and to improve service and the quality of outcomes while reducing
operating expenses through the reengineering of the delivery of patient care in
its hospitals. At several of the Company's hospitals, job functions have been
redefined and services have been moved directly to the patient floors. Tenet
believes that increasing the amount of patient care delivered at the bedside
will increase patient satisfaction while reducing costs. This initiative also
has enhanced the ability of professionals to focus their attention on higher
levels of patient care.

In order to reduce costs and achieve economies of scale at the regional
level, the Company has combined the hospital business offices of facilities
located in close geographic proximity. Consolidating business offices allows the
Company's hospitals to reduce staffing levels while enhancing the effectiveness
of their billing and collection efforts. The Company also has reduced costs and
achieved economies of scale at the hospital, regional and corporate levels by
consolidating the collection of accounts receivable through its Syndicated
Office Systems debt collection subsidiary and negotiating purchase contracts
that take greater advantage of its group purchasing program. In addition,
management believes that certain cost savings may be realized following the
Merger. No assurances can be made as to the amount of cost savings, if any, that
actually will be realized.

DEVELOP AND MAINTAIN STRONG RELATIONSHIPS WITH PHYSICIANS. Tenet believes
that its success will depend in large part on maintaining strong relationships
with physicians. To better serve the needs of its patients, Tenet has devoted
substantial management effort and resources to establishing and maintaining such
relationships and to fostering a physician-friendly culture at each of its
hospitals. The Company attracts physicians to its hospitals by equipping its
hospitals with technologically advanced equipment, sponsoring

11
<PAGE>
training programs to educate physicians on advanced medical procedures, using
governing boards for each hospital, the primary voting members of which are
physicians and community members and otherwise creating an environment within
which physicians prefer to practice. The Company often is at the forefront in
introducing new services, medical equipment and medical technologies designed to
improve patient care and assist physicians. These efforts serve the dual
purposes of developing and maintaining strong relationships with physicians and
better serving the needs of patients.

The Company looks to physicians to play an active role in the governance of
its hospitals. For example, each of the Company's hospitals has a governing
board, the members of which primarily are physicians who are members of the
medical staff and local community members. These boards develop short and
long-term plans for the hospitals and review and approve, as appropriate,
actions of the medical staff, including staff appointments, credentialing, peer
review and quality assurance. The Company also maintains a physician advisory
board that provides advice to the Company with respect to long-term strategy,
emerging technologies, training programs and significant hospital operational
issues. This advisory board serves as another vehicle through which physicians
on the staffs of the Company's hospitals can communicate their views to the
Company.

ENTER INTO MANAGED CARE CONTRACTS. The Company believes that its extensive
experience operating in California, which has a high degree of managed care
penetration, will enhance its ability to compete successfully in other
geographic areas that are experiencing an increase in managed care. Pressures to
control healthcare costs have resulted in a continuing increase in the
percentage of the United States population that is covered by managed healthcare
plans. To increase the cost-effectiveness of healthcare delivery, managed care
payors have introduced new utilization review systems, increased the use of
discounted and capitated fee arrangements and have attempted, where appropriate,
to direct patients to less intensive alternatives along the continuum of patient
care. Managed care payors typically require members or provide financial
incentives for members to utilize only those healthcare providers that have
contracted with such payors to provide care on a discounted or capitated basis.
Accordingly, in order to maintain and increase their patient base as managed
care penetration increases, it is important for providers to enter into such
contracts. In determining with which providers to contract, payors consider,
among other factors, the quality of care provided, the range of services, the
geographic coverage and the cost-effectiveness of the care provided. Tenet
believes that the development and expansion of its integrated healthcare
delivery systems will enable it to better compete for managed care contracts,
which, in turn, should allow it to expand its patient volume and cash flow,
notwithstanding the reduced rates at which services may be provided under such
contracts.

PURSUE STRATEGIC ACQUISITIONS AND PARTNERSHIPS. The Company intends to
continue to pursue aggressively strategic acquisitions of and partnerships with
hospitals, other healthcare businesses, ancillary healthcare providers,
physician practices and physician practice assets, where appropriate, to expand
and enhance its integrated healthcare delivery systems. Examples of recent
strategic acquisitions are the Company's June 1996 acquisition of Hialeah
Hospital, a 378-bed general hospital located in Hialeah, Florida and the January
1997 acquisition of North Shore Medical Center, a 357-bed general hospital
located in Miami, Florida. Hialeah Hospital's location in Hialeah and North
Shore Medical Center's location in Miami, both in north Dade County, have
enhanced the geographic coverage of the Tenet South Florida HealthSystem and
increased the number of general hospitals in that system to 12. Tenet believes
that significant opportunities exist to enter into additional partnerships and
make strategic acquisitions, where appropriate, in the furtherance of its
strategy.

12
<PAGE>
DOMESTIC PROPERTIES

The following table sets forth certain information relating to each of the
127 hospitals (27,366 licensed beds) operated by the Company at February 28,
1997. Two of those hospitals currently are being independently managed pursuant
to an agreement entered into with the Federal Trade Commission in connection
with the Merger, one of which the Company expects to sell by August 1, 1997, and
the other of which will resume being managed by the Company upon the sale of the
first.

<TABLE>
<CAPTION>
LICENSED
GEOGRAPHIC AREA/STATE FACILITY LOCATION BEDS
- ------------------------------- --------------------------------------------------- --------------------- -------------
<S> <C> <C> <C>
Southern California Alvarado Hospital Medical Center San Diego 231
Brotman Medical Center Culver City 438
Centinela Hospital Medical Center Inglewood 400
Century City Hospital (1) Los Angeles 190
Chapman Medical Center (1) Orange 135
Coastal Communities Hospital (2) Santa Ana 177
Community Hospital of Huntington Park (1) Huntington Park 99
Encino Hospital (1)(3) Encino 151
Fountain Valley Regional Hospital and Medical
Center Fountain Valley 413
Garden Grove Hospital and Medical Center Garden Grove 167
Garfield Medical Center Monterey Park 211
Greater El Monte Community Hospital South El Monte 113
Harbor View Medical Center San Diego 156
Irvine Medical Center (1) Irvine 176
John F. Kennedy Memorial Hospital Indio 130
Lakewood Regional Medical Center Lakewood 161
Los Alamitos Medical Center Los Alamitos 173
Medical Center of North Hollywood North Hollywood 160
Midway Hospital Medical Center Los Angeles 225
Mission Hospital of Huntington Park Huntington Park 127
Monterey Park Hospital Monterey Park 102
Placentia Linda Community Hospital Placentia 114
San Dimas Community Hospital San Dimas 93
Santa Ana Hospital Medical Center (1) Santa Ana 90
South Bay Medical Center (1) Redondo Beach 201
St. Luke Medical Center Pasadena 165
Suburban Medical Center (1) Paramount 184
Tarzana Regional Medical Center (1)(3) Tarzana 233
USC University Hospital (4) Los Angeles 286
Western Medical Center--Anaheim Anaheim 193
Western Medical Center Santa Ana 296
Whittier Hospital Medical Center Whittier 159
Woodruff Community Hospital Long Beach 96
Northern and Other California Brookside Hospital (1) San Pablo 312
Community Hospital & Rehabilitation Center of Los
Gatos (1) Los Gatos 164
Doctors Hospital of Manteca Manteca 73
Doctors Medical Center of Modesto Modesto 433
Doctors Hospital of Pinole (1) Pinole 137
French Hospital Medical Center (5) San Luis Obispo 147
Redding Medical Center Redding 185
San Ramon Regional Medical Center San Ramon 123
Sierra Vista Regional Medical Center San Luis Obispo 199
Twin Cities Community Hospital Templeton 84
Valley Community Hospital (1)(6) Santa Maria 70
South Florida Coral Gables Hospital (7) Coral Gables 273
Delray Community Hospital Delray Beach 224
Florida Medical Center (8) Ft. Lauderdale 459
Florida Medical Center, South (8) Plantation 202

GEOGRAPHIC AREA/STATE STATUS
- ------------------------------- ---------
<S> <C>
Southern California Owned
Owned
Owned
Leased
Leased
Owned
Leased
Leased

Owned
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Leased
Leased
Owned
Leased
Leased
Leased
Owned
Owned
Owned
Owned
Northern and Other California Leased

Leased
Owned
Owned
Leased
Owned
Owned
Owned
Owned
Owned
Leased
South Florida Owned
Owned
Owned
Owned
</TABLE>

13
<PAGE>
<TABLE>
<CAPTION>
LICENSED
GEOGRAPHIC AREA/STATE FACILITY LOCATION BEDS
- ------------------------------- --------------------------------------------------- --------------------- -------------
<S> <C> <C> <C>
Hialeah Hospital Hialeah 378
Hollywood Medical Center Hollywood 324
North Ridge Medical Center Ft. Lauderdale 391
North Shore Medical Center Miami 357
Palm Beach Gardens Medical Center (1) Palm Beach Gardens 204
Palmetto General Hospital Hialeah 360
Parkway Regional Medical Center (9) North Miami 689
West Boca Medical Center Boca Raton 185
Tampa/St. Petersburg, Florida Memorial Hospital of Tampa Area Tampa 174
North Bay Medical Center New Port Richey 122
Palms of Pasadena Hospital St. Petersburg 310
Seven Rivers Community Hospital Crystal River 128
Town and Country Hospital Tampa 201
New Orleans, Louisiana Area Doctors Hospital of Jefferson (1) Metairie 138
Kenner Regional Medical Center Kenner 300
Meadowcrest Hospital Gretna 200
Memorial Medical Center Mid-City New Orleans 272
Memorial Medical Center Uptown New Orleans 526
Northshore Regional Medical Center (1) Slidell 174
St. Charles General Hospital New Orleans 173
Phoenix/Tucson, Arizona Community Hospital Medical Center Phoenix 43
Mesa General Hospital Medical Center (1) Mesa 125
St. Luke's Medical Center (1) Phoenix 276
Tempe St. Luke's Hospital (1) Tempe 110
Tucson General Hospital Tucson 119
Dallas, Texas Area Doctors Hospital Dallas 268
Garland Community Hospital Garland 113
Lake Pointe Medical Center (10) Rowlett 92
RHD Memorial Medical Center (1) Dallas 190
Trinity Medical Center (1) Carrollton 149
Houston, Texas Area Cypress Fairbanks Medical Center Houston 149
Houston Northwest Medical Center (11) Houston 498
Park Plaza Hospital (12) Houston 468
Sharpstown General Hospital Houston 190
Twelve Oaks Hospital Houston 336
Other Texas Brownsville Medical Center Brownsville 177
Mid-Jefferson Hospital Nederland 138
Nacogdoches Medical Center Nacogdoches 150
Odessa Regional Hospital (13) Odessa 100
Park Place Medical Center Port Arthur 244
Providence Memorial Hospital El Paso 471
Sierra Medical Center El Paso 365
South Park Hospital and Medical Center Lubbock 101
Southwest General Hospital San Antonio 286
Trinity Valley Medical Center Palestine 150
Alabama Brookwood Medical Center Birmingham 586
Lloyd Noland Hospital Birmingham 319
St. Clair Hospital (1)(14) Birmingham 82
Arkansas Central Arkansas Hospital Searcy 193
Methodist Hospital of Jonesboro (15) Jonesboro 104
National Park Medical Center Hot Springs 165
St. Mary's Regional Hospital Russellville 170
Georgia North Fulton Regional Hospital (1) Roswell 167
Spalding Regional Hospital Griffin 160
Indiana Culver Union Hospital Crawfordsville 120
Winona Memorial Hospital Indianapolis 148
Missouri Columbia Regional Hospital (16) Columbia 265
Lucy Lee Hospital (1) Poplar Bluff 201
Lutheran Medical Center St. Louis 408

GEOGRAPHIC AREA/STATE STATUS
- ------------------------------- ---------
<S> <C>
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Owned
Tampa/St. Petersburg, Florida Owned
Owned
Owned
Owned
Owned
New Orleans, Louisiana Area Leased
Owned
Owned
Owned
Owned
Leased
Owned
Phoenix/Tucson, Arizona Owned
Leased
Leased
Leased
Owned
Dallas, Texas Area Owned
Owned
Owned
Leased
Leased
Houston, Texas Area Owned
Owned
Owned
Owned
Owned
Other Texas Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Alabama Owned
Owned
Leased
Arkansas Owned
Owned
Owned
Owned
Georgia Leased
Owned
Indiana Owned
Owned
Missouri Owned
Leased
Owned
</TABLE>

14
<PAGE>

<TABLE>
<CAPTION>
LICENSED
GEOGRAPHIC AREA/STATE FACILITY LOCATION BEDS
- ------------------------------- --------------------------------------------------- --------------------- -------------
<S> <C> <C> <C>
Twin Rivers Regional Medical Center Kennett 118
North Carolina Central Carolina Hospital Sanford 137
Frye Regional Medical Center (1) Hickory 355
Oregon Eastmoreland Hospital Portland 100
Woodland Park Hospital (4) Portland 209
South Carolina East Cooper Community Hospital Mount Pleasant 100
Hilton Head Hospital (17) Hilton Head 64
Piedmont Medical Center Rock Hill 268
Tennessee John W. Harton Regional Medical Center Tullahoma 137
Medical Center of Manchester (1) Manchester 49
Saint Francis Hospital Memphis 693
University Medical Center Lebanon 261
Nine additional states Davenport Medical Center Davenport, IA 150
Gulf Coast Medical Center Biloxi, MI 189
Lake Meade Hospital Medical Center North Las Vegas, NV 198
Lander Valley Medical Center Lander, WY 102
Minden Medical Center Minden, LA 121
Plateau Medical Center Oak Hill, WV 91
Puget Sound Hospital Tacoma, WA 160
Saint Joseph Hospital (18) Omaha, NE 374
Saint Vincent Hospital Worcester, MA 329

GEOGRAPHIC AREA/STATE STATUS
- ------------------------------- ---------
<S> <C>
Owned
North Carolina Owned
Leased
Oregon Owned
Leased
South Carolina Owned
Owned
Owned
Tennessee Owned
Leased
Owned
Owned
Nine additional states Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
</TABLE>

- ------------------------------

(1) Leased from a third party.

(2) Owned by a partnership in which a Tenet subsidiary owns 50% and is the
managing general partner and individual physicians own the remaining
interests.

(3) Leased by a partnership in which Tenet's subsidiaries own a 75% interest.

(4) On leased land.

(5) Independently managed and being held for sale.

(6) Independently managed until French Hospital Medical Center is sold, at which
time Valley Community Hospital will resume being managed by a Tenet
subsidiary.

(7) Owned by a partnership in which Tenet's subsidiaries own a 94% interest and
individual physicians own the remaining interests.

(8) Owned by a partnership in which Tenet's subsidiaries own an 95% interest and
individual physicians own the remaining interests.

(9) Effective September 1, 1996, the 352 bed license of Golden Glades Medical
Center was combined with the license of this nearby hospital resulting in
this hospital's licensed beds increasing to 689 licensed beds.

(10) Owned by a partnership in which Tenet's subsidiaries own an 80% interest
and individual physicians own the remaining interests.

(11) Owned by a partnership in which Tenet's subsidiaries own a 70% interest and
individual physicians own the remaining interests.

(12) Excludes the 38-bed Plaza Specialty Hospital in Houston, Texas, the
financial results of which are combined with Park Plaza Hospital.

(13) Owned by a partnership in which Tenet's subsidiaries own an 78% interest
and individual physicians own the remaining interests.

(14) A Tenet subsidiary owns a 50% interest in the limited liability company
that leases this hospital. This hospital's financial results are not
consolidated with Tenet's financial results and it is not included in the
count of the total number of hospitals owned or leased by Tenet because
Tenet does not manage or control the management of this hospital.

(15) Owned by a limited liability company of which a Tenet subsidiary owns 95%
and is the managing member.

(16) Excludes the 64-bed Keller Memorial Hospital in Columbia, Missouri, the
financial results of which were combined with the Columbia Regional
Hospital. The lease for Keller Memorial Hospital was terminated during the
first quarter of fiscal 1996.

(17) Owned by a partnership in which Tenet's subsidiaries own a 70% interest.

(18) Owned by a limited liability company in which a Tenet subsidiary owns a 74%
interest and is the managing member.

15
<PAGE>
SELLING SHAREHOLDERS

The following table sets forth information with respect to the number of
Shares owned by each of the Selling Shareholders and the number of Shares that
may be offered hereby by each Selling Shareholder. The number of Shares set
forth for each Selling Shareholder other than JLL is based on the maximum number
of Shares that may be distributed to such Selling Shareholder by JLL assuming a
price per share of Tenet Common Stock of $26, the closing price of Tenet Common
Stock as reported on the New York Stock Exchange Composite Tape on April 8,
1997. In connection with any offering and sale of the Shares, the names of the
Selling Shareholders participating in such offering and the respective number of
Shares being offered by each Selling Shareholder will be set forth in an
accompanying Prospectus Supplement and will be determined on the basis of the
price to the public and the underwriting discount, if any, at the time of the
sale of such Shares. The aggregate number of shares of Common Stock held by the
Selling Shareholders is 9,580,644. The Company has agreed to pay the fees and
expenses of registration, including the fees and expenses (not to exceed
$50,000) for one counsel on behalf of the Selling Shareholders, in connection
with the sale of the Shares offered hereby (other than underwriting discounts
and commissions, which will be paid by the Selling Shareholders).

<TABLE>
<CAPTION>
NUMBER OF
SHARES OWNED NUMBER OF NUMBER OF
PRIOR TO SHARES SHARES OWNED
NAME OFFERING BEING OFFERED AFTER THE OFFERING
- --------------------------------------------------------------- --------------- ------------- -----------------------
<S> <C> <C> <C>
Joseph Littlejohn & Levy Fund, L.P.(1)......................... 9,580,644 9,580,644 0

JLL Partners:
- -----------

California Public Employees' Retirement System(2)(3)........... 1,835,930 1,835,930 0
New York State Common Retirement Fund(2)(4).................... 815,034 815,034 0
Pension Reserves Investment Management Board(2)................ 734,402 734,402 0
The Rockefeller Foundation(2).................................. 367,275 367,275 0
State of Wisconsin Investment Board(2)......................... 367,275 367,275 0
Virginia Retirement System(2).................................. 734,402 734,402 0
Yale University(2)............................................. 367,275 367,275 0
Oregon Public Employees' Retirement System(2).................. 1,101,528 1,101,528 0
EES Distressed Securities Fund L.P.(2)......................... 183,563 183,563 0
Montana Board of Investments(2)................................ 18,312 18,312 0
State Universities Retirement System(2)........................ 55,084 55,084 0
Orange County Employees Retirement System(2)................... 73,396 73,396 0
Public Employees' Retirement Association of Colorado(2)(5)..... 1,101,528 1,101,528 0
JLL Associates, L.P.(1)(2)..................................... 1,825,641 1,825,641 0
-
--------------- -------------
Total.......................................................... 9,580,644 9,580,644 0
</TABLE>

- ------------------------

1. Peter A. Joseph and Paul S. Levy, the general partners of JLL Associates,
L.P., the general partners of JLL, were members of the Company's Board of
Directors from January 30, 1997 until April 9, 1997.

2. Estimated amounts assuming a distribution to such Selling Shareholders by
JLL calculated using a price per share of Common Stock of $24.50, the
closing price of the Common Stock as reported on the New York Stock Exchange
Composite Tape on April 15, 1997. The actual amounts to be sold by such
Selling Shareholders will be determined on the basis of the price to the
public less the underwriting discount at the time of the sale of the Shares
by such Selling Shareholders.

3. Does not include approximately 4,080,012 shares owned as of the date hereof
by California Public Employees' Retirement System in addition to such shares
as may be received in a distribution from JLL.

16
<PAGE>

4. Does not include approximately 2,731,000 shares of Common Stock owned as of
the date hereof by the New York State Common Retirement Fund in addition to
such shares as may be received in a distribution from JLL.

5. Does not include approximately 12,200 shares of Common Stock owned as of the
date hereof by the Public Employees' Retirement Association of Colorado in
addition to such shares as may be received in a distribution from JLL.

PLAN OF DISTRIBUTION

The shares may be sold from time to time by the Selling Shareholders in
underwritten public offerings, in any one or more transactions (which may
involve block transactions) on the Exchanges, in the over-the-counter market, on
NASDAQ, on any exchange on which the Common Stock may then be listed or
otherwise in negotiated transactions, or a combination of such methods of sale,
at market prices prevailing at the time of sale or at negotiated prices. The
Selling Shareholders may effect such transactions by selling shares to or
through broker-dealers, and such broker-dealers may sell the shares as agent or
may purchase such shares as principal and resell them for their own account
pursuant to this Prospectus. Such broker-dealers may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Shareholders and/or purchasers of shares for whom they may act as agent (which
compensation may be in excess of customary commissions). To the extent required,
the names of any underwriter and applicable commissions or discounts and any
other required information with respect to any particular offer will be set
forth in an accompanying Prospectus Supplement.

In connection with such sales, the Selling Shareholders and any
participating brokers or dealers may be deemed to be "underwriters" as defined
in the Securities Act, in which event all brokerage commissions or discounts and
other compensation received by such brokers or dealers may be deemed
underwriting compensation under the Securities Act. In addition, any of the
securities that qualify for sale pursuant to Rule 144 may be sold under Rule 144
rather than pursuant to this Prospectus.

LEGAL MATTERS

EXPERTS

The supplemental consolidated financial statements and the consolidated
financial statements and schedule of Tenet Healthcare Corporation as of May 31,
1996 and 1995, and for each of the years in the three-year period ended May 31,
1996, have been incorporated by reference herein and in the Registration
Statement in reliance upon the reports of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing. The reports of
KPMG Peat Marwick LLP covering the supplemental consolidated financial
statements and the consolidated financial statements refer to a change in the
method of accounting for income taxes in 1994.

The consolidated financial statements of OrNda HealthCorp at August 31, 1996
and 1995, and for each of the three years in the period ended August 31, 1996,
incorporated by reference in the Tenet Healthcare Corporation Current Report on
Form 8-K dated February 12, 1997 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon and incorporated by
reference therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.

17
<PAGE>
FORWARD LOOKING STATEMENTS

Prospective investors are cautioned that the statements in this Prospectus
and in documents incorporated by reference herein that are not descriptions of
historical facts constitute forward looking statements that are subject to risks
and uncertainties. The Company's actual results could differ materially from
those currently anticipated in these forward looking statements due to, among
other things, certain factors described in documents incorporated by reference
herein, including, without limitation, the Tenet 10-K.

18
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED
BY THIS PROSPECTUS SUPPLEMENT. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE SELLING SHAREHOLDERS. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE COMMON
STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
FACTS SET FORTH IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS OR IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

-------------------

TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Company............................................................... S-2
Use of Proceeds........................................................... S-2
Selling Stockholders...................................................... S-2
Underwriting.............................................................. S-4
Legal Matters............................................................. S-5
</TABLE>

PROSPECTUS

<TABLE>
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
Risk Factors.............................................................. 3
The Company............................................................... 8
Use of Proceeds........................................................... 8
Business Strategy......................................................... 8
Business Description...................................................... 9
Key Elements of Tenet's Strategy.......................................... 10
Domestic Properties....................................................... 13
Selling Shareholders...................................................... 16
Plan of Distribution...................................................... 17
Legal Matters............................................................. 17
Experts................................................................... 17
Forward Looking Statements................................................ 18
</TABLE>

TENET HEALTHCARE
CORPORATION

COMMON STOCK
(PAR VALUE $0.075)

---------------------

PROSPECTUS SUPPLEMENT

---------------------

MERRILL LYNCH & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.

APRIL , 1997

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>
<S> <C>
Securities and Exchange Commission fee............................................ $ 76,935
Printing and Engraving fees....................................................... $ 40,000
Accounting fees and expenses...................................................... $ 15,000
Legal fees and expenses........................................................... $ 60,000
Blue sky fees and expenses........................................................ $ 1,000
Miscellaneous fees and expenses................................................... $ 7,065
Total fees and expenses........................................... $ 200,000
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 78.751 of the Nevada General Corporation Law ("Nevada Law") provides
generally and in pertinent part that a Nevada corporation may indemnify its
directors and officers against expenses, judgments, fines, and settlements
actually and reasonably incurred by them in connection with any civil suit or
action, except actions by or in the right of the corporation, or any
administrative or investigative proceeding if, in connection with the matters in
issue, they acted in good faith and in a manner they reasonably believed to be
in, or not opposed to, the best interests of the corporation, and in connection
with any criminal suit or proceeding, if in connection with the matters in
issue, they had no reasonable cause to believe their conduct was unlawful.
Section 78.751 further provides that, in connection with the defense or
settlement of any action by or in the right of the corporation, a Nevada
corporation may indemnify its directors and officers against expenses actually
and reasonably incurred by them if, in connection with the matters in issue,
they acted in good faith, in a manner they reasonably believed to be in, or not
opposed to, the best interest of the corporation. Section 78.751 further permits
a Nevada corporation to grant its directors and officers additional rights of
indemnification through by-law provisions and otherwise.

Article X of the Restated Articles of Incorporation, as amended, of the
Registrant (the Restated Articles") and Article IX of the Restated By-Laws, as
amended, of the Registrant (the "Restated Bylaws") provide that the Registrant
shall indemnify its directors and officers to the fullest extent permitted by
Nevada Law. The Registrant has entered into indemnification agreements with each
of its directors and executive officers. Such indemnification agreements are
intended to provide a contractual right to indemnification, to the maximum
extent permitted by law, for expenses (including attorneys' fees), judgments,
penalties, fines, and amounts paid in settlement actually and reasonably
incurred by the person to be indemnified in connection with any proceeding
(including, to the extent permitted by applicable law, any derivative action) to
which they are, or are threatened to be made, a party by reason of their status
in such positions. Such indemnification agreements do not change the basic legal
standards for indemnification set forth under Nevada Law, the Restated Articles
or the Restated Bylaws. Such agreements are intended to be in furtherance, and
not in limitation of, the general right to indemnification provided in the
Restated Articles and Restated Bylaws. Section 78.037 of the Nevada Law provides
that the articles of incorporation may contain, and Tenet's Restated Articles do
contain, a provision eliminating or limiting the personal liability of a
director or officer to the corporation or its shareholders for monetary damages
for breach of fiduciary duty as a director provided that such provision shall
not eliminate or limit the liability of a director or officer (i) for acts or
omissions which involve intentional misconduct or a knowing violation of law, or
(ii) under Section 78.300 of the Nevada Law (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on, capital stock).
The Company's Restated Articles and Restated Bylaws

II-1
<PAGE>
permit indemnification of directors and officers in terms sufficiently broad to
indemnify officers and directors under certain circumstances for liabilities
(including expense reimbursement) arising under the Securities Act. The Company
also maintains an indemnification agreement with each of its Directors and any
officer designated by the Company's Board of Directors insuring them against
certain liabilities incurred by them in the performance of their duties,
including liabilities under the Securities Act. In addition, the Company has
directors and officers liability insurance policies.

ITEM 16. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------ --------------------------------------------------------------------------
<C> <S>
1.1 Form of Purchase Agreement among Tenet Healthcare Corporation, the Selling
Shareholders and the Underwriters
*5.1 Opinion of Scott M. Brown
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Ernst & Young LLP
*23.3 Consent of Scott M. Brown (included in his opinion filed as Exhibit 5.1)
*24.1 Power of Attorney (included on page II-4 of this Registration Statement)
</TABLE>

- ------------------------

* Previously filed.

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

(a) (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities

II-2
<PAGE>
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(b) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at the time shall be deemed to be the
initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
the Nevada Law, the Restated Articles of Incorporation, and the Restated
Bylaws, as amended, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(d) (i) For purposes of determining liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(ii) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

II-3
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, in the City of Santa Barbara, State of
California on April 17, 1997.

TENET HEALTHCARE CORPORATION

By: /s/ SCOTT M. BROWN
-----------------------------------------
Scott M. Brown
SENIOR VICE PRESIDENT

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to the Registration Statement has been signed below on April 17,
1997, by the following persons in the capacities indicated:

Tenet Healthcare Corporation

<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------

<C> <S> <C>
Executive Vice President
TREVOR FETTER* Chief Financial Officer
- ------------------------------ (Principal Financial
Trevor Fetter Officer)

Senior Vice President and
RAYMOND L. MATHIASEN* Chief Accounting Officer
- ------------------------------ (Principal Accounting
Raymond L. Mathiasen Officer)

/s/ SCOTT M. BROWN
- ------------------------------ Senior Vice President
Scott M. Brown

Chairman, Chief Executive
JEFFREY C. BARBAKOW* Officer and Director
- ------------------------------ (Principal Executive
Jeffrey C. Barbakow Officer)

MICHAEL H. FOCHT, SR.*
- ------------------------------ President, Chief Operating
Michael H. Focht, Sr. Officer and Director
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
NAME TITLE
- ------------------------------ --------------------------

<C> <S> <C>
BERNICE BRATTER*
- ------------------------------ Director
Bernice Bratter

MAURICE J. DEWALD*
- ------------------------------ Director
Maurice J. DeWald

PETER DE WETTER*
- ------------------------------ Director
Peter de Wetter

EDWARD EGBERT, M.D.*
- ------------------------------ Director
Edward Egbert, M.D.

RAYMOND A. HAY*
- ------------------------------ Director
Raymond A. Hay

JAMES P. LIVINGSTON*
- ------------------------------ Director
James P. Livingston

RICHARD S. SCHWEIKER*
- ------------------------------ Director
Richard S. Schweiker

*By: /s/ SCOTT M.
BROWN
- ------------------------------
Scott M. Brown
Attorney-in-Fact
</TABLE>

II-5
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ----------- ----------------------------------------------------------------------------------------- --------------
<C> <S> <C>
1.1 Form of Purchase Agreement among Tenet Healthcare Corporation, the Selling Shareholders
and the Underwriters

*5.1 Opinion of Scott M. Brown

23.1 Consent of KPMG Peat Marwick LLP

23.2 Consent of Ernst & Young LLP

*23.3 Consent of Scott M. Brown (included in his opinion filed as Exhibit 5.1)

*24.1 Power of Attorney (included on page II-4 of this Registration Statement)
</TABLE>

- ------------------------

* Previously filed.

<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

TENET HEALTHCARE CORPORATION

(a Nevada corporation)

_____ Shares of Common Stock

PURCHASE AGREEMENT

Dated: April __, 1997

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<PAGE>

TABLE OF CONTENTS

SECTION 1. Representations and Warranties. . . . . . . . . . . . . . . . 3
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY . . . . . . . . 3
(i) Compliance with Registration Requirements. . . . . . . 3
(ii) Incorporated Documents . . . . . . . . . . . . . . . . 3
(iii) Capitalization; Authorization and Description of
Securities . . . . . . . . . . . . . . . . . . . . . . 4
(iv) Authorization of Agreement . . . . . . . . . . . . . . 4
(v) Absence of Defaults and Conflicts. . . . . . . . . . . 4
(vi) Absence of Further Requirements. . . . . . . . . . . . 5
(vii) Listing. . . . . . . . . . . . . . . . . . . . . . . . 5
(viii) Good Standing of the Company.. . . . . . . . . . . . . 5
(ix) Subsidiaries . . . . . . . . . . . . . . . . . . . . . 5
(x) Absence of Proceedings . . . . . . . . . . . . . . . . 6
(xi) Independent Accountants. . . . . . . . . . . . . . . . 6
(xii) No Material Adverse Change in Business . . . . . . . . 6
(xiii) Possession of Licenses and Permits . . . . . . . . . . 7
(xiv) Investment Company Act . . . . . . . . . . . . . . . . 7
(xv) Accuracy of Exhibits . . . . . . . . . . . . . . . . . 7
(xvi) Title to Property. . . . . . . . . . . . . . . . . . . 7
(b) REPRESENTATIONS AND WARRANTIES BY THE SELLING SHAREHOLDERS. . 8
(i) Accurate Disclosure. . . . . . . . . . . . . . . . . . 8
(ii) Authorization of Agreements. . . . . . . . . . . . . . 8
(iii) Good and Valid Title . . . . . . . . . . . . . . . . . 8
(iv) Due Execution of Power of Attorney and Custody
Agreement. . . . . . . . . . . . . . . . . . . . . . . 8
(v) Absence of Manipulation. . . . . . . . . . . . . . . . 8
(vi) Absence of Further Requirements. . . . . . . . . . . . 9
(vii) Certificates Suitable for Transfer . . . . . . . . . . 9
(viii) No Association with NASD . . . . . . . . . . . . . . . 9
(ix) No Legal Proceedings Against Sale. . . . . . . . . . . 9
(x) No Violation of Charter. . . . . . . . . . . . . . . . 9
(xi) Due Execution of Agreement . . . . . . . . . . . . . . 9
(c) OFFICER'S CERTIFICATES. . . . . . . . . . . . . . . . . . . . 9

SECTION 2. Sale and Delivery to Underwriters; Closing . . . . . . . . . . 10
(a) SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . 10
(b) PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(c) DENOMINATIONS; REGISTRATION . . . . . . . . . . . . . . . . . 10

SECTION 3. Covenants of the Company . . . . . . . . . . . . . . . . . . . 11
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION
REQUESTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 11

-i-

<PAGE>

(b) FILING OF AMENDMENTS. . . . . . . . . . . . . . . . . . . . . 11
(c) DELIVERY OF REGISTRATION STATEMENTS . . . . . . . . . . . . . 11
(d) DELIVERY OF PROSPECTUSES. . . . . . . . . . . . . . . . . . . 11
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS . . . . . . . . . . 12
(f) BLUE SKY QUALIFICATIONS . . . . . . . . . . . . . . . . . . . 12
(g) RULE 158. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(h) REPORTING REQUIREMENTS. . . . . . . . . . . . . . . . . . . . 12

SECTION 4. Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . 12
(a) EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) EXPENSES OF THE SELLING SHAREHOLDERS. . . . . . . . . . . . . 13
(c) TERMINATION OF AGREEMENT. . . . . . . . . . . . . . . . . . . 13
(d) ALLOCATION OF EXPENSES. . . . . . . . . . . . . . . . . . . . 13

SECTION 5. Conditions of Underwriters' Obligations. . . . . . . . . . . . 13
(a) EFFECTIVENESS OF REGISTRATION STATEMENT . . . . . . . . . . . 13
(b) OPINION OF COUNSEL FOR COMPANY. . . . . . . . . . . . . . . . 14
(c) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS . . . . . . . 14
(d) OPINION OF COUNSEL FOR UNDERWRITERS . . . . . . . . . . . . . 14
(e) OFFICERS' CERTIFICATE . . . . . . . . . . . . . . . . . . . . 14
(f) CERTIFICATE OF SELLING SHAREHOLDERS . . . . . . . . . . . . . 14
(g) ACCOUNTANT'S COMFORT LETTER . . . . . . . . . . . . . . . . . 14
(h) BRING-DOWN COMFORT LETTER . . . . . . . . . . . . . . . . . . 15
(i) NO OBJECTION. . . . . . . . . . . . . . . . . . . . . . . . . 15
(j) ADDITIONAL DOCUMENTS. . . . . . . . . . . . . . . . . . . . . 15
(k) TERMINATION OF AGREEMENT. . . . . . . . . . . . . . . . . . . 15

SECTION 6. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 15
(a) INDEMNIFICATION OF UNDERWRITERS . . . . . . . . . . . . . . . 15
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS
AND SELLING SHAREHOLDERS. . . . . . . . . . . . . . . . . . . 16
(c) ACTIONS AGAINST PARTIES; NOTIFICATION . . . . . . . . . . . . 17
(d) SELLING SHAREHOLDERS' LIMITATION. . . . . . . . . . . . . . . 17
(e) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. . . . . . 17
(f) OTHER AGREEMENTS WITH RESPECT TO INDEMNIFICATION. . . . . . . 18

SECTION 7. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . 18

SECTION 8. Representations, Warranties and Agreements to Survive Delivery 20

SECTION 9. Termination of Agreement . . . . . . . . . . . . . . . . . . . 20
(a) TERMINATION; GENERAL. . . . . . . . . . . . . . . . . . . . . 20
(b) LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . 21

-ii-

<PAGE>

SECTION 10. Default by One or More of the Underwriters. . . . . . . . . . 21

SECTION 11. Default by one or more of the Selling Shareholders. . . . . . 21

SECTION 12. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

SECTION 13. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

SECTION 14. GOVERNING LAW AND TIME. . . . . . . . . . . . . . . . . . . . 22

SECTION 15. Effect of Headings. . . . . . . . . . . . . . . . . . . . . . 22

SCHEDULES
Schedule A - List of Underwriters...................................Sch A-1
Schedule B - List of Selling Shareholders...........................Sch B-1
Schedule C - Pricing Information....................................Sch C-1

-iii-

<PAGE>

TENET HEALTHCARE CORPORATION
(a Nevada corporation)

______________ Shares of Common Stock

(Par Value $0.075 Per Share)

PURCHASE AGREEMENT

April __, 1997

MERRILL LYNCH & CO.
MERRILL LYNCH PIERCE, FENNER
& SMITH INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209

Ladies and Gentlemen:

Tenet Healthcare Corporation (the "Company") and the persons and entities
listed in Schedule B hereto (the "Selling Shareholders") confirm their
respective agreements with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ"), Goldman, Sachs & Co. ("Goldman, Sachs"), J.P. Morgan
Securities Inc. ("J.P. Morgan") and each of the other Underwriters, if any,
named in Schedule A hereto (collectively, the "Underwriters," which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, DLJ, Goldman, Sachs and J.P. Morgan are acting
as representatives (in such capacity, the "Representatives"), with respect
to the sale by the Selling Shareholders, acting severally and not jointly, and
the purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $0.075 per share, of the
Company ("Common Stock") set forth in Schedules A and B hereto. The aforesaid
_________ shares of Common Stock to be purchased by the Underwriters are
hereinafter called the "Securities."

The Company and the Selling Shareholders understand that the Underwriters
propose to make a public offering of the Securities as soon as the
Representatives deem it advisable after this Agreement has been executed and
delivered.

The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-24955) covering the
registration of the Securities (which

<PAGE>

registration may include certain additional securities) under the Securities Act
of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses. Promptly after execution and delivery of this
Agreement, the Company will either (i) prepare and file a prospectus in
accordance with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or
(ii) if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933
Act Regulations, prepare and file a term sheet (a "Term Sheet") in accordance
with the provisions of Rule 434 and Rule 424(b) or (iii) prepare and file a
prospectus, including a prospectus supplement describing the terms of offer and
distribution of the Securities, if the Registration Statement is already
effective and if the offer and distribution of the Securities are to proceed on
a "shelf" registration basis. The information included in such prospectus or in
such Term Sheet, as the case may be, that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective (a) pursuant to paragraph
(b) of Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to
paragraph (d) of Rule 434 is referred to as "Rule 434 Information." Each
prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the
Rule 434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto,
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus, including any prospectus supplement, and
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriters for
use in connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to
the preliminary prospectus dated April __, 1997, together with the Term Sheet
and all references in this Agreement to the date of the Prospectus shall mean
the date of the Term Sheet. For purposes of this Agreement, all references to
any preliminary prospectus or the Prospectus shall include any prospectus
supplement that is or was included and distributed therewith. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR").

All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.

-2-

<PAGE>

SECTION 1. REPRESENTATIONS AND WARRANTIES.

(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:

(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.

At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time , the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement was
issued and at the Closing Time, included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through Merrill Lynch expressly for
use in the Registration Statement or Prospectus.

Each preliminary prospectus and the Prospectus, including any
prospectus supplement, filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the 1933 Act, complied when so filed in all material
respects with the 1933 Act Regulations and each preliminary prospectus and
the Prospectus, including any prospectus supplement, delivered to the
Underwriters for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations or the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), as applicable, and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus

-3-

<PAGE>

was issued and at the Closing Time, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.

(iii) CAPITALIZATION; AUTHORIZATION AND DESCRIPTION OF SECURITIES.
The shares of issued and outstanding capital stock, including the
Securities to be purchased by the Underwriters from the Selling
Shareholders, have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital stock,
including the Securities to be purchased by the Underwriters from the
Selling Shareholders, was issued in violation of the preemptive or other
similar rights of any security holder of the Company. The Common Stock
conforms to all statements relating thereto contained in the Prospectus and
such description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the
Securities is not subject to the preemptive or other similar rights of any
security holder of the Company.

(iv) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.

(v) ABSENCE OF DEFAULTS AND CONFLICTS. The execution and delivery
of this Agreement and the sale of the Securities by the Selling
Shareholders, the performance by the Company of this Agreement and the
consummation of the transactions contemplated by this Agreement will not
conflict with or result in a breach or violation of any of the respective
charters or by-laws of the Company or any of the Company's subsidiaries
(each, a "Subsidiary" and collectively, the "Subsidiaries") or any of the
terms or provisions of, or constitute a default or cause an acceleration of
any obligation under or result in the imposition or creation of (or the
obligation to create or impose) any security interest, mortgage, pledge,
claim, lien, encumbrance or adverse interest of any nature (each, a "Lien")
with respect to, any obligation, bond, agreement, note, debenture, or other
evidence of indebtedness, or any indenture, mortgage, deed of trust or
other agreement, lease or instrument (collectively, "Agreements") to which
the Company or any of the Subsidiaries is a party or by which it or any of
them is bound, or to which any properties of the Company or any of the
Subsidiaries is or may be subject, or any order of any court or
governmental agency, body or official having jurisdiction over the Company
or any of the Subsidiaries or any of their properties, or violate or
conflict with any statute, rule or regulation or administrative regulation
or decree or court decree applicable to the Company or any of the
Subsidiaries, or any of their respective assets or properties, where, in
any such instance, such conflict, breach, violation, default, acceleration
of indebtedness or Lien would have, singly or in the aggregate, a material
adverse effect on the business, financial condition, results of operations
or prospects of the Company and the Subsidiaries, taken as a whole (a
"Material Adverse Effect").

None of the Company or the Significant Subsidiaries is in violation of
its respective charter or by-laws and none of the Company or the
Subsidiaries is in default in the performance of any obligation, bond,
agreement, debenture, note or any other evidence of indebtedness, or any
indenture, mortgage, deed of trust or other contract, lease or other
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them is bound, or to which any

-4-

<PAGE>

of the property or assets of the Company or any of the Subsidiaries is
subject, except as would not have, singly or in the aggregate, a Material
Adverse Effect.

(vi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the sale of the Securities
hereunder or the consummation of the transactions contemplated by this
Agreement, except such as have been already obtained or as may be required
under the 1933 Act or the 1933 Act Regulations or state securities laws.
Neither the Company nor, to the best of the Company's knowledge, any of its
affiliates is presently doing business with the government of Cuba or with
any persons of affiliates located in Cuba.

(vii) LISTING. The Securities have been listed on the New York and
Pacific Stock Exchanges.

(viii) GOOD STANDING OF THE COMPANY. The Company has been duly
organized, is validly existing as a corporation in good standing under the
laws of the State of Nevada and has the requisite power and authority to
carry on its business as it is currently being conducted, to own, lease and
operate its properties and to execute, deliver and perform this Agreement,
and is duly qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction where the operation,
ownership or leasing of property or the conduct of its business requires
such qualification and where failure to be so qualified or in good standing
would have a Material Adverse Effect. Each of the Subsidiaries that
(i) directly or indirectly own or lease any interest in any general
hospitals or (ii) are otherwise material to the Company and the
Subsidiaries, taken as a whole (collectively, the "Significant
Subsidiaries"), has been duly organized, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has the requisite power and authority to carry on its
business as it is currently being conducted and to own, lease and operate
its properties and each is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction where
the operation, ownership or leasing of property or the conduct of its
business requires such qualifications and where failure to be so qualified
or in good standing would have a Material Adverse Effect.

(ix) SUBSIDIARIES. Except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding shares of capital
stock of, or other ownership interests in, each of the Significant
Subsidiaries have been duly authorized and validly issued, and all of the
shares of capital stock of, or other ownership interests in, each of the
Significant Subsidiaries (over 80% in the case of Healthcare Underwriting
Group) are owned, directly or through Subsidiaries, by the Company. All
such shares of capital stock are fully paid and nonassessable, and are
owned free and clear of any Lien, and, except as disclosed in a certificate
or opinion delivered to the Underwriters, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible or
exchangeable securities, commitments of sale, or Liens related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, any of the Subsidiaries.

-5-

<PAGE>

(x) ABSENCE OF PROCEEDINGS. Except as disclosed in the
Registration Statement or the Prospectus, there is no action, suit,
proceeding or investigation before or by any court, governmental agency or
body, arbitration board or tribunal, or governmental or private accrediting
body, domestic or foreign, pending against or affecting the Company or any
of the Subsidiaries, or any of their respective assets or properties, which
is required to be disclosed in the Registration Statement or the
Prospectus, or in which there is a reasonable possibility of adverse
decisions which in the aggregate could reasonably be expected to have a
Material Adverse Effect, or which might materially and adversely affect the
Company's or any of the Subsidiaries' performance of its obligations, as
applicable, pursuant to this Agreement or the transactions contemplated
hereby, and to the best of the Company's knowledge, after due inquiry, no
such action, suit, or proceeding is contemplated or threatened.

Except as disclosed in the Registration Statement or the Prospectus,
none of the Company or the Subsidiaries is subject to any judgment, order
or decree of any court, governmental authority or arbitration board or
tribunal which has had, or which can reasonably be expected to have, a
Material Adverse Effect.

(xi) INDEPENDENT ACCOUNTANTS. The firms of accountants that have
certified or shall certify the applicable consolidated financial statements
and supporting schedules and the notes thereto of the Company and OrNda
HealthCorp, a Delaware Corporation ("OrNda"), filed or to be filed with the
Commission as part of the Registration Statement and the Prospectus or
incorporated therein by reference are, to the best of the Company's
knowledge, independent public accountants with respect to the Company and
its Subsidiaries and OrNda and its Subsidiaries, as the case may be, as
required by the Act. The consolidated financial statements, together with
related schedules and notes, set forth or incorporated by reference in the
Prospectus and the Registration Statement, comply as to form in all
material respects with the requirements of the Act and fairly present the
consolidated financial position of the Company and its Subsidiaries and
OrNda and its Subsidiaries, as the case may be, at the respective dates
indicated, and the results of their operations and their cash flows for the
respective periods indicated, in accordance with generally accepted
accounting principles in the United States of America ("GAAP") consistently
applied throughout such periods and in accordance with Regulation S-X. The
PRO FORMA financial statements and the related notes thereto incorporated
in the Registration Statement present fairly the information shown therein,
have been prepared in conformity with the Commission's rules and guidelines
with respect to PRO FORMA financial statements and have been properly
compiled on the basis described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred
to therein. The other financial and statistical information and data of
the Company included or incorporated by reference in the Prospectus and in
the Registration Statement, historical and PRO FORMA, are in all material
respects accurately presented and prepared on a basis consistent with the
books and records of the Company.

(xii) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Except as
contemplated by the Registration Statement and the Prospectus, subsequent
to the respective dates as of which information is presented in the
Registration Statement and the Prospectus (i) none of the Company or the
Subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any transaction not in the ordinary course of
business, which could reasonably be expected to have a Material Adverse
Effect, (ii) there has been no decision or judgment in the

-6-

<PAGE>

nature of litigation or arbitration that could reasonably be expected to
have a Material Adverse Effect, (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock and (iv) there has not been any material adverse
change, or any development which could involve a material adverse change,
in the business, financial condition, results of operations or prospects of
the Company and its Subsidiaries, taken as a whole (any of the items set
forth in clauses (i), (ii), (iii) or (iv) above, a "Material Adverse
Change").

(xiii) POSSESSION OF LICENSES AND PERMITS. (i) Except as described
in the Registration Statement or Prospectus or as could not reasonably be
expected to have a Material Adverse Effect, each of the Company and the
Subsidiaries has all certificates, consents, exemptions, orders, permits,
licenses, authorizations, accreditations or other approvals or rights
(each, an "Authorization") of and from, and has made all declarations and
filings with, all Federal, state, local and other governmental authorities,
all self-regulatory organizations, all governmental and private accrediting
bodies and all courts and other tribunals, necessary or required to own,
lease, license, and use its properties and assets and to conduct its
business in the manner described in the Prospectus, (ii) all such
Authorizations are valid and in full force and effect, except as could not
reasonably be expected to have, singly or in the aggregate, a Material
Adverse Effect, (iii) the Company and the Subsidiaries are in compliance
with the terms and conditions of all such Authorizations and with the rules
and regulations of the regulatory authorities and governing bodies having
jurisdiction with respect thereto except as could not reasonably be
expected to have a Material Adverse Effect and (iv) none of the Company or
the Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Authorization.

(xiv) INVESTMENT COMPANY ACT. The Company is not an "investment
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended (the "1940
Act").

(xv) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.

(xvi) TITLE TO PROPERTY. The Company and its Subsidiaries have good
and marketable title to all real property owned by the Company and its
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its Subsidiaries; and all of the leases and subleases material to the
business of the Company and its Subsidiaries, considered as one enterprise,
and under which the Company or any of its Subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any Subsidiary has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company
or any Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.

-7-

<PAGE>

(B) REPRESENTATIONS AND WARRANTIES BY THE SELLING SHAREHOLDERS. Each
Selling Shareholder severally represents and warrants to each Underwriter as of
the date hereof and as of the Closing Time, and agrees with each Underwriter as
follows:

(i) ACCURATE DISCLOSURE. To the best knowledge of such Selling
Shareholder, the information with respect to such Selling Shareholder
contained in the Registration Statement and the Prospectus and in the
prospectus supplement relating to the pricing of the offering and sale of
the Securities, in each case under the caption "Selling Shareholders,"
complies in all material respects with the requirements of Item 507 of the
Commission's Regulation S-K. Such Selling Shareholder hereby agrees that
it has provided, or shall be deemed to have provided, such information
pertaining to it in writing to the Company for use in preparing such
documents.

(ii) AUTHORIZATION OF AGREEMENTS. Such Selling Shareholder has the
full right, power and authority to enter into this Agreement, a Power of
Attorney (the "Power of Attorney") and a Custody Agreement (the "Custody
Agreement") and to sell, transfer and deliver the Securities to be sold by
such Selling Shareholder hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have
been duly authorized by such Selling Shareholder.

(iii) GOOD AND VALID TITLE. Such Selling Shareholder has and will
at the Closing Time have good and valid title to the Securities to be sold
by such Selling Shareholder hereunder, free and clear of any security
interest, mortgage, pledge, lien, charge, claim, equity or encumbrance of
any kind, other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as herein
contemplated, assuming each such Underwriter has no notice of any adverse
claim, each of the Underwriters will receive good and valid title to the
Securities purchased by it from such Selling Shareholder, free and clear of
any security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.

(iv) DUE EXECUTION OF POWER OF ATTORNEY AND CUSTODY AGREEMENT.
Such Selling Shareholder has duly executed and delivered, in the form
heretofore furnished to the Representatives, the Power of Attorney with
Joseph Littlejohn & Levy, Inc., as attorney-in-fact (through one or more
of Peter A. Joseph or Paul S. Levy, (each of Messrs. Joseph and Levy, a
"Proxy")) (the "Attorney-in-Fact") and such Selling Shareholder, acting
through its Attorney-in-Fact, has duly executed and delivered the Custody
Agreement with The Bank of New York, as custodian (the "Custodian"); the
Custodian is authorized to deliver the Securities to be sold by such
Selling Shareholder hereunder and to accept payment therefor; and each
Attorney-in-Fact is authorized to execute and deliver this Agreement and
the certificate referred to in Section 5(f) or that may be required
pursuant to Section 5(j) on behalf of such Selling Shareholder, to sell,
assign and transfer to the Underwriters the Securities to be sold by such
Selling Shareholder hereunder, to determine the purchase price to be paid
by the Underwriters to such Selling Shareholder, as provided in
Section 2(a) hereof, and otherwise to act on behalf of such Selling
Shareholder in connection with this Agreement.

(v) ABSENCE OF MANIPULATION. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which

-8-

<PAGE>

might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.

(vi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or consent,
approval authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the execution and delivery by such Selling
Shareholder of this Agreement or the Power of Attorney or the Custody
Agreement, or for the valid sale and delivery of the Securities hereunder
by such Selling Shareholder, except such as may have previously been made
or obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities or blue sky laws.

(vii) CERTIFICATES SUITABLE FOR TRANSFER. If the delivery of the
Securities to be sold by such Selling Shareholder pursuant to this
Agreement to the Underwriters takes place in certificated form (as opposed
to a book-entry transfer), then the certificates for such Securities so
delivered as part of the closing procedures will be in suitable form for
transfer by delivery or be accompanied by duly executed instruments of
transfer or assignment in blank with signatures guaranteed.

(viii) NO ASSOCIATION WITH NASD. Except as previously disclosed in
writing to Merrill Lynch on behalf of the Underwriters, neither such
Selling Shareholder nor any of its affiliates directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is
under common control with, or has any other association with any member
firm of the National Association of Securities Dealers, Inc.

(ix) NO LEGAL PROCEEDINGS AGAINST SALE. Except as set forth in the
Registration Statement, there is no action, suit, investigation (of which
such Selling Shareholder has received written notice) or proceeding before
or by any government, governmental instrumentality or court, domestic or
foreign, now pending or, to the knowledge of such Selling Shareholder,
threatened, to which such Selling Shareholder is a party or to which the
property of such Selling Shareholder is subject, that (i) seeks to
restrain, enjoin, prevent the consummation of or otherwise challenge the
sale of the Securities by such Selling Shareholder or any of the other
transactions contemplated hereby or (ii) questions the legality or
validity of any such transactions or seeks to recover damages or obtain
other relief in connection with any such transactions.

(x) NO VIOLATION OF CHARTER. The execution and delivery of this
Agreement, and the consummation of the transactions contemplated herein,
including the sale to the Underwriters of the Securities, will not result
in a violation of the charter, by-laws or other governing document (if any)
of such Selling Shareholder.

(xi) DUE EXECUTION OF AGREEMENT. Such Selling Shareholder has duly
executed and delivered this Agreement by and through its Attorney-in-Fact
as appointed under the Power of Attorney.

(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company or any of the Subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby; and

-9-

<PAGE>

any certificate signed by or on behalf of the Selling Shareholders as such and
delivered to the Representatives or to counsel for the Underwriters pursuant to
the terms of this Agreement shall be deemed a representation and warranty by
such Selling Shareholder to the Underwriters as to the matters covered thereby.

SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.

(a) SECURITIES. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, each Selling
Shareholder, severally and not jointly, agrees to sell to each Underwriter,
severally and not jointly, and each Underwriter, severally and not jointly,
agrees to purchase from each Selling Shareholder, at the price per share set
forth in Schedule C, that proportion of the number of Securities being sold by
each such Selling Shareholder set forth in Schedule B opposite the name of such
Selling Shareholder which the number of Securities set forth in Schedule A
opposite the name of such Underwriter (plus any additional number of Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof) bears to the total number of Securities,
subject, in each case, to such adjustments among the Underwriters as the
Representatives in their sole discretion shall make to eliminate any sales or
purchase of fractional securities.

(b) PAYMENT. The closing of the payment of the purchase price for, and
delivery of certificates for, the Securities shall be made at the offices of
Sullivan & Cromwell in Los Angeles, or at such other place as shall be agreed
upon by the Representatives and the Company and the Selling Shareholders, at
7:00 A.M. (California time) on the third business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten (10) business days after such date as shall be
agreed upon by the Representatives and the Company and the Selling Shareholders
(such time and date of payment and delivery being herein called "Closing Time").

Payment shall be made to the Selling Shareholders by wire transfer of
immediately available funds to a bank account or accounts designated by the
Custodian pursuant to the Custody Agreement, against delivery to the
Representatives for the respective accounts of the Underwriters of the
Securities to be purchased by them. It is understood that each Underwriter has
authorized the Representatives, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Securities which it has
agreed to purchase. Merrill Lynch, individually and not as representative of
the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Securities to be purchased by any Underwriter whose funds
have not been received by the Closing Time, but such payment shall not relieve
such Underwriter from its obligations hereunder.

(c) DENOMINATIONS; REGISTRATION. Certificates for the Securities shall
be in such denominations and registered in such names as the Representatives may
request in writing at least one full business day before the Closing Time. The
certificates for the Securities will be made available for examination and
packaging by the Representatives in the City of New York not later than 10:00
A.M. (Eastern time) on the business day prior to the Closing Time, and upon the
closing such certificates will be delivered in the City of New York.

-10-

<PAGE>

SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:

(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any such purposes. The Company will promptly effect the filings
necessary pursuant to Rule 424(b) and will take such steps as it deems necessary
to ascertain promptly whether the form of prospectus transmitted for filing
under Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus. The Company will make
every reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest possible
moment.

(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or the Prospectus,
whether pursuant to the 1933 Act, or the 1934 Act or otherwise, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall reasonably object.

(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibit) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.

(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically

-11-

<PAGE>

transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.

(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request.

(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.

(g) RULE 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.

(h) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.

SECTION 4. PAYMENT OF EXPENSES.

(a) EXPENSES. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of

-12-

<PAGE>

the Registration Statement (including financial statements and exhibits) as
originally filed and each amendment thereto, (ii) the preparation, printing and
delivery to the Underwriters of this Agreement, any Agreement among Underwriters
and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities, (iii) except for any
expenses paid by the Selling Shareholders pursuant to clause (b) below, the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors and the fees and expenses (not to exceed $50,000)
for one counsel for the Selling Shareholders, (v) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus, any
Term Sheets and of the Prospectus and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the Underwriters of copies of
the Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of
any transfer agent or registrar for the Securities, and (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Securities.

(b) EXPENSES OF THE SELLING SHAREHOLDERS. Each of the Selling
Shareholders will pay (i) transfer taxes attributable to the sale by such
Selling Shareholder of the Securities, (ii) the fees and disbursements of such
Selling Shareholder's counsel and accountants, if any, not paid or payable by
the Company pursuant to Section 4(a) or otherwise and (iii) the fees and
expenses of the Custodian under the Custody Agreement.

(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters or, in the case of any termination pursuant to
Section 11 hereof, the defaulting Selling Shareholder(s) causing the same shall
reimburse the Underwriters for such out-of-pocket expenses.

(d) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholders may make for
the payment of such costs and expenses.

SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
or any Subsidiary of the Company or on behalf of any Selling Shareholder
delivered pursuant to the provisions hereof, to the performance by the Company
and the Selling Shareholders of their respective covenants and other obligations
hereunder, and to the following further conditions:

(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for

-13-

<PAGE>

additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance with
Rule 424(b) (or a post-effective amendment providing such information shall have
been filed and declared effective in accordance with the requirements of Rule
430A) or, if the Company has elected to rely upon Rule 434, a Term Sheet shall
have been filed with the Commission in accordance with Rule 424(b) or, if the
offer and distribution of the Securities are to proceed on a "shelf"
registration basis, a prospectus, including a prospectus supplement describing
the terms of offer and distribution of the Securities, shall have been filed
with the Commission in accordance with Rule 424(b).

(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the Representatives
shall have received the favorable opinions, dated as of Closing Time, of
Scott M. Brown, Esq. and of Woodburn and Wedge, respectively, counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters.

(c) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Debevoise & Plimpton, counsel for the Selling Shareholders, in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters.

(d) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Underwriters shall have received an opinion, dated the Closing Date, of Sullivan
& Cromwell, counsel for the Underwriters, in form and substance reasonably
satisfactory to the Underwriters.

(e) OFFICERS' CERTIFICATE. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for the purpose have been
instituted or are pending or are contemplated by the Commission.

(f) CERTIFICATE OF SELLING SHAREHOLDERS. At Closing Time, the
Representatives shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Shareholder, dated as of Closing Time, to the effect that
(i) the representations and warranties of each Selling Shareholder contained in
Section 1(b) hereof are true and correct in all respects with the same force and
effect as though expressly made at and as of Closing Time and (ii) each Selling
Shareholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.

(g) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the Representatives shall have received from KPMG Peat Marwick LLP
and Ernst & Young LLP, independent public accountants to the Company and OrNda,
respectively, letters dated such date, in form and

-14-

<PAGE>

substance satisfactory to the Representatives, together with signed or
reproduced copies of such letter for each of the other Underwriters containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statement and
certain financial information contained in the Registration Statement and the
Prospectus.

(h) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives shall
have received from KPMG Peat Marwick LLP and Ernst & Young LLP letters, dated as
of Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (g) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to Closing Time.

(i) NO OBJECTION. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.

(j) ADDITIONAL DOCUMENTS. At Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the sale of the
Securities as herein contemplated, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company and the
Selling Shareholders at or prior to the Closing Time in connection with the
issuance and sale of the Securities as herein contemplated shall be satisfactory
in form and substance to the Representatives and counsel for the Underwriters.

(k) TERMINATION OF AGREEMENT. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Company and
the Selling Shareholders at any time at or prior to Closing Time and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 6 and 7 shall survive any such
termination and remain in full force and effect.

SECTION 6. INDEMNIFICATION.

(a) INDEMNIFICATION OF UNDERWRITERS. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act to the extent and in the manner set forth in clauses (i), (ii) and
(iii) below. In addition, subject to subsection (d), and subject to the other
limitations mentioned below, each Selling Shareholder, severally and not jointly
(in the proportion that the number of Securities being sold by such Selling
Shareholder bears to the total number of Securities and to the extent permitted
by law), agrees to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:

(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or

-15-

<PAGE>

supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission provided that (subject to Section 6(e)
below) any such settlement is effected with the written consent of the
Company and the Selling Shareholders; and

(iii) against any and all expense whatsoever, as incurred
(including, subject to the sixth sentence of Section 6(c), the fees and
disbursements of counsel chosen by Merrill Lynch), reasonably incurred
in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above;

PROVIDED, HOWEVER, that (x) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), (y) such
indemnity with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter (or any persons controlling such Underwriter) from
whom the person asserting such loss, claim, damage or liability purchased the
Securities which are the subject thereof if such person did not receive a copy
of the Prospectus (or the Prospectus as amended or supplemented) at or prior to
the confirmation of the sale of such Securities to such person in any case where
such delivery is required by the 1933 Act and the untrue statement or omission
or alleged untrue statement or omission of a material fact contained in such
preliminary prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented), and (z) with respect to the indemnity by each
Selling Shareholder, the indemnity shall, in each case, apply only to the extent
that any untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement (or any amendment thereto) in
reliance upon and in conformity with written information furnished by or on
behalf of such Selling Shareholder to the Company expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).

(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS AND SELLING
SHAREHOLDERS. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each Selling
Shareholder and each person, if any, who controls any Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred,

-16-

<PAGE>

but only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Merrill Lynch expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).

(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have otherwise than on
account of this indemnity agreement. If it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving the notice required under the first sentence
hereof, may assume the defense of such action with counsel chosen by it and
approved by the indemnified parties defendant in such action, unless such
indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them which are different from or in
addition to those available to such indemnifying party. In the absence of such
an election by an indemnifying party within a reasonable time after receipt of
such notice to assume the defense of such an action, in the case of parties
indemnified pursuant to Section 6(a) above, counsel to the indemnified parties
shall be selected by Merrill Lynch, and, in the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties shall be
selected by the Company. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or
Section 7 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability for all
claims that were or could have been made by all parties to such claims arising
out of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.

(d) SELLING SHAREHOLDERS' LIMITATION. No Selling Shareholder shall be
responsible for the payment of an amount, pursuant to this Section 6, which
exceeds the net proceeds (I.E., net of the underwriting discount) received by
the Selling Shareholder from the sale of the Securities by such Selling
Shareholder hereunder.

(e) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. Subject to
Section 6(c) and, in the case of the Selling Shareholders, Section 6(d), if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such

-17-

<PAGE>

indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a) (ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.

(f) OTHER AGREEMENTS WITH RESPECT TO INDEMNIFICATION. (i) Each Selling
Shareholder, subject to Section 6(d), severally and not jointly (in the
proportion that the number of Securities being sold by such Selling
Shareholder bears to the total number of Securities and to the extent
permitted by law) agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statement or omissions, made in
the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information
furnished to the Company by such Selling Shareholder expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).

(ii) The Company agrees to indemnify and hold harmless each Selling
Shareholder, and each person, if any, who controls such Selling Shareholder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, PROVIDED,
however, that this indemnity agreement shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any such Selling
Shareholder expressly for use in the Registration Statement (or any amendment
thereto) including the Rule 430 Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).

SECTION 7. CONTRIBUTION. (a) If the indemnification provided for in
Sections 6(a) or (b) hereof is for any reason unavailable to or insufficient to
hold harmless an indemnified party in respect of any losses, liabilities,
claims, damages or expenses referred to therein, then each indemnifying party
thereunder shall severally contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party, as
incurred (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders on the one hand
and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Selling Shareholders on the one hand and
of the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

The relative benefits received by the Company and the Selling Shareholders
on the one hand and the Underwriters on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the

-18-

<PAGE>

offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Shareholders and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus (or the applicable prospectus supplement), or, if
Rule 434 is used, the corresponding location on the Term Sheet bear to the
aggregate initial public offering price of the Securities as set forth on such
cover.

The relative fault of the Company and the Selling Shareholders on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Shareholders or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.

The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7(a)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
Section 7(a). The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this
Section 7(a) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.

Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.

No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who signed the
Registration Statement, each Selling Shareholder and each director, officer
or employee thereof and each person, if any, who controls the Company or any
Selling Shareholder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company or such Selling Shareholder, as the case may be. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several
in proportion to the number of Securities set forth opposite their
respective names in Schedule A hereto and not joint. Notwithstanding the
provisions of this Section 7 or Section 6(a) or 6(f), no Selling Shareholder
shall be required to contribute any amount under this Section 7 in excess of
the amount by which the net proceeds received by such Selling Shareholder in
connection herewith exceed the aggregate amount such Selling Shareholder has
otherwise paid pursuant to Section 6(a) and 6(f), and no Selling Shareholder
shall be required to contribute except to the

-19-

<PAGE>

extent that such Selling Shareholder would have been liable to indemnify under
Section 6(a) if such indemnification were enforceable under applicable law.

(b) If the indemnification provided for in Section 6(f) hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party thereunder shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative benefits to and faults of the indemnifying
party on the one hand and the indemnified party on the other in connection with
the offering of Securities pursuant to this Agreement and the statements or
omissions or alleged statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statements or omissions.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. No party shall be
liable for contribution under this Section 7(b) except to the extent and under
such circumstances as such party would have been liable to indemnify under
Section 6(f) if such indemnification were enforceable under applicable law.

SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its Subsidiaries or the
Selling Shareholders submitted pursuant hereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company or the
Selling Shareholders, and shall survive delivery of the Securities to the
Underwriters.

SECTION 9. TERMINATION OF AGREEMENT.

(a) TERMINATION; GENERAL. The Representatives may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York or Pacific Stock Exchanges, or if trading generally on the American Stock
Exchange or the New York Stock Exchange or in the Nasdaq National Market has
been suspended or materially limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal, California

-20-

<PAGE>

or New York authorities, or (v) any Securities of the Company or any of its
subsidiaries shall have been downgraded or placed on any "watch list" for
possible downgrading or reviewed for a possible negative change by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) of the 1993 Act.

(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
6 and 7 shall survive such termination and remain in full force and effect.

SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of
the Underwriters shall fail at Closing Time to purchase the Securities which it
or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:

(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or

(b) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.

No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.

In the event of any such default which does not result in a termination of
this Agreement, either (i) the Representatives or (ii) the Company or the
Selling Shareholders shall have the right to postpone Closing Time for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.

SECTION 11. DEFAULT BY ONE OR MORE OF THE SELLING SHAREHOLDERS. (a) If
one or more Selling Shareholders holding in the aggregate more than 10% of the
Securities to be sold pursuant to this Agreement shall fail at Closing Time to
sell and deliver the number of Securities which such Selling Shareholder or
Selling Shareholders are obligated to sell hereunder, then the Underwriters may,
at the option of the Representatives, by notice from the Representatives to the
Company and the non-defaulting Selling Shareholders, either (a) terminate this
Agreement without any liability on the fault of any non-defaulting party except
that the provisions of Sections 4, 6 and 7 shall remain in full force and effect
or (b) elect to purchase the Securities which the non-defaulting Selling
Shareholders have agreed to sell hereunder. No action taken pursuant to this
Section 11 shall relieve any Selling Shareholder so defaulting from liability,
if any, in respect of such default.

-21-

<PAGE>

In the event of a default by any Selling Shareholder as referred to in this
Section 11, each of the Representatives, the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing Time for a period
not exceeding seven days in order to effect any required change in the
Registration Statement or Prospectus or in any other documents or arrangements.

SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of Mr. Raymond
Wong with copies to 10900 Wilshire Boulevard, Suite 900, Los Angeles,
California 90024, attention of Mr. Matt Pendo; notices to the Company shall
be directed to it at 3820 State Street, Santa Barbara, California 93105,
attention of Chief Financial Officer with a copy to the attention of General
Counsel; and notices to the Selling Shareholders shall be directed to Joseph
Littlejohn & Levy, Inc., 450 Lexington Avenue, Suite 3350, New York, NY
10017, attention of Mr. Peter A. Joseph or Mr. Paul S. Levy.

SECTION 13. PARTIES. This Agreement shall each inure to the benefit of
and binding upon the Underwriters, the Company and the Selling Shareholders and
their respective successors. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and the Selling Shareholders and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and the Selling Shareholders and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.

SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

SECTION 15. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.

-22-

<PAGE>

If the foregoing is in accordance with your understanding of your
agreement, please sign and return to the Company and the Attorney-in-Fact for
the Selling Shareholders a counterpart hereof, whereupon this instrument, along
with all counterparts, will be come a binding agreement among the Underwriters,
the Company and the Selling Shareholders in accordance with its terms.

Very truly yours,

TENET HEALTHCARE CORPORATION

By
--------------------------
Title:
----------------------

THE SELLING SHAREHOLDERS

By
--------------------------
Name:
---------------------
As Attorney-in-Fact acting on behalf of the
Selling Shareholders named in Schedule B
hereto

CONFIRMED AND ACCEPTED,
As of the date first above written:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.

By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED

By
---------------------------------
Authorized Signatory

For themselves and as Representatives of the other Underwriters, if any, named
in Schedule A hereto.

-23-

<PAGE>

SCHEDULE A

Name of Underwriter Number of
------------------- Securities
----------

Merrill Lynch, Pierce, Fenner & Smith Incorporated . . . . . .

Donaldson, Lufkin & Jenrette Securities Corporation. . . . . .

Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . .

J.P. Morgan Securities Inc.. . . . . . . . . . . . . . . . . . ---------

Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ---------

Sch A-1

<PAGE>

SCHEDULE B

Name of Selling Shareholder Number of
--------------------------- Securities
----------

California Public Employees' Retirement System . . . . . . . .

New York State Common Retirement Fund. . . . . . . . . . . . .

Pension Reserves Investment Management Board . . . . . . . . .

The Rockefeller Foundation . . . . . . . . . . . . . . . . . .

State of Wisconsin Investment Board. . . . . . . . . . . . . .

Virginia Retirement System . . . . . . . . . . . . . . . . . .

Yale University. . . . . . . . . . . . . . . . . . . . . . . .

Oregon Public Employees' Retirement System . . . . . . . . . .

EES Distressed Securities Fund L.P. . . . . . . . . . . . . .

Montana Board of Investments . . . . . . . . . . . . . . . . .

State Universities Retirement System . . . . . . . . . . . . .

Orange County Employees Retirement System. . . . . . . . . . . ----------

Total . . . . . . . . . . . . . . . . . . . . . . . . ----------
----------

Sch B-1

<PAGE>

SCHEDULE C

TENET HEALTHCARE CORPORATION
_________ Shares of Common Stock
(Par Value $0.075 Per Share)

1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $______.

2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $_____, being an amount equal to the initial
public offering price set forth above less $_____ per share.

Sch C-1

<PAGE>
EXHIBIT 23.1

AUDITORS' CONSENT

The Board of Directors
Tenet Healthcare Corporation:

We consent to the incorporation by reference in the registration statement
on Form S-3 of Tenet Healthcare Corporation of our report dated February 1,
1997, with respect to the supplemental consolidated balance sheets of Tenet
Healthcare Corporation and subsidiaries as of May 31, 1995 and 1996, and the
related supplemental consolidated statements of operations, changes in
shareholders' equity and cash flows for each of the years in the three-year
period ended May 31, 1996 and to the incorporation by reference in the
Registration Statement on Form S-3 of Tenet Healthcare Corporation of our report
dated July 25, 1996, with respect to the consolidated balance sheets of Tenet
Healthcare Corporation and subsidiaries as of May 31, 1996 and 1995, and the
related consolidated statements of operations, changes in shareholders' equity
and cash flows for each of the years in the three-year period ended May 31,
1996, and the related schedule, and to the reference to our firm under the
heading "Experts" in the prospectus. Our reports on the supplemental
consolidated financial statements and on the consolidated financial statements
refer to a change in the method of accounting for income taxes in 1994.

KPMG PEAT MARWICK LLP

Los Angeles, California
April 16, 1997

<PAGE>
EXHIBIT 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3) and related Prospectus
of Tenet Healthcare Corporation for the registration of 9,580,644 shares of the
common stock of Tenet Healthcare Corporation and to the incorporation by
reference of our report dated October 25, 1996 with respect to the consolidated
financial statement of OrNda HealthCorp at August 31, 1996 and 1995, and for
each of the three years in the period ended August 31, 1996, incorporated by
reference in the Tenet Healthcare Corporation Current Report on Form 8-K dated
February 12, 1997.

ERNST & YOUNG LLP

Nashville, Tennessee
April 16, 1997