EXHIBIT 5.1
[LETTERHEAD OF XXXXXX, XXXX & XXXXXXXX LLP]
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October 27, 1998
(000) 000-0000 C 41441-00004
Harborside Healthcare Corporation
and the Guarantors (as defined herein)
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Exchange of 11% Senior Subordinated Discount Notes Due 2008 and
13 1/2% Exchangeable Preferred Stock Mandatorily Redeemable 2010
Ladies and Gentlemen:
We have acted as counsel for Harborside Healthcare Corporation, a Delaware
corporation (the "Company"), and the Guarantors (as defined below), which are
wholly-owned subsidiaries of the Company, in connection with the proposed offer
by the Company (the "Exchange Offer") to exchange (i) $170,000,000 aggregate
principal amount at maturity of new 11% Senior Subordinated Discount Notes Due
2008 (the "New Notes") of the Company which have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), for a like aggregate
principal amount at maturity of outstanding privately placed 11% Senior
Subordinated Discount Notes Due 2008 (the "Old Notes") and (ii) up to 41,365 new
shares of 13 1/2% Exchangeable Preferred Stock Mandatorily Redeemable 2010 (the
"New Preferred Stock") of the Company which have been registered under the
Securities Act for a like number of shares of privately placed 13 1/2%
Exchangeable Preferred Stock Mandatorily Redeemable 2010 of the Company
outstanding on the date hereof or to be paid as dividends on such outstanding
shares on November 1, 1998 (the "Old Preferred Stock," and together with the New
Preferred Stock, the "Preferred Stock").
For the purposes of this opinion, the following terms shall have the
following meanings:
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October 27, 1998
Page 2
"Guarantors" shall mean Harborside Healthcare Limited Partnership, a
Massachusetts limited partnership ("Harborside LP"), Belmont Nursing Center
Corp., a Massachusetts corporation ("Belmont"), Orchard Ridge Nursing Center
Corp., a Massachusetts corporation ("Orchard Ridge"), Oakhurst Manor Nursing
Center Corp., a Massachusetts corporation ("Oakhurst Manor"), Riverside
Retirement Limited Partnership, a Massachusetts limited partnership ("Riverside
Retirement"), Harborside Toledo Limited Partnership, a Massachusetts limited
partnership ("Harborside Toledo"), Harborside Connecticut Limited Partnership, a
Massachusetts limited partnership ("Harborside Connecticut"), Harborside of
Florida Limited Partnership, a Florida limited partnership ("Harborside
Florida"), Harborside of Ohio Limited Partnership, a Massachusetts limited
partnership ("Harborside Ohio"), Harborside Healthcare Baltimore Limited
Partnership, a Massachusetts limited partnership ("Harborside Baltimore"),
Harborside of Cleveland Limited Partnership, a Massachusetts limited partnership
("Harborside Cleveland"), Harborside of Dayton Limited Partnership, a
Massachusetts limited partnership ("Harborside Dayton"), Harborside
Massachusetts Limited Partnership, a Massachusetts limited partnership
("Harborside Massachusetts"), Harborside Rhode Island Limited Partnership, a
Massachusetts limited partnership ("Harborside Rhode Island"), Harborside North
Toledo Limited Partnership, a Massachusetts limited partnership ("Harborside
North Toledo"), Harborside Healthcare Advisors Limited Partnership, a
Massachusetts limited partnership ("Harborside Advisors"), Harborside Toledo
Corporation, a Massachusetts corporation ("Harborside Toledo Corp."), KHI
Corporation, a Delaware corporation ("KHI"), Harborside Danbury Limited
Partnership, a Massachusetts limited partnership ("Harborside IV"), Harborside
Acquisition Limited Partnership V, a Massachusetts limited partnership
("Harborside V"), Harborside Acquisition Limited Partnership VI, a Massachusetts
limited partnership ("Harborside VI"), Harborside Acquisition Limited
Partnership VII, a Massachusetts limited partnership ("Harborside VII"),
Harborside Acquisition Limited Partnership VIII, a Massachusetts limited
partnership ("Harborside VIII"), Harborside Acquisition Limited Partnership IX,
a Massachusetts limited partnership ("Harborside IX"), Harborside Acquisition
Limited Partnership X, a Massachusetts limited partnership ("Harborside X"),
Sailors, Inc., a Delaware corporation ("Sailors"), New Jersey Harborside
Corporation, a Massachusetts corporation ("NJ Harborside"), Bridgewater Assisted
Living Limited Partnership, a New Jersey limited partnership ("Bridgewater"),
Maryland Harborside Corporation, a Massachusetts corporation ("Harborside
Maryland"), Harborside Homecare Limited Partnership, a Massachusetts limited
partnership ("Harborside Homecare"), Harborside Rehabilitation Limited
Partnership, a Massachusetts limited partnership ("Harborside Rehabilitation"),
Harborside Healthcare Network Limited Partnership, a Florida limited partnership
("Harborside Network"), and Harborside Health I Corporation, a Delaware
corporation ("Harborside Health").
"Delaware Guarantors" shall mean KHI, Sailors and Harborside Health.
"Florida Guarantors" shall mean Harborside Florida and Harborside Network.
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"Massachusetts Guarantors" shall mean Harborside LP, Belmont, Orchard
Ridge, Oakhurst Manor, Riverside Retirement, Harborside Toledo, Harborside
Connecticut, Harborside Ohio, Harborside Baltimore, Harborside Cleveland,
Harborside Dayton, Harborside Massachusetts, Harborside Rhode Island, Harborside
North Toledo, Harborside Advisors, Harborside Toledo Corp., Harborside IV,
Harborside V, Harborside VI, Harborside VII, Harborside VIII, Harborside IX,
Harborside X, NJ Harborside, Harborside Maryland, Harborside Homecare and
Harborside Rehabilitation.
"New Jersey Guarantor" shall mean Bridgewater.
"Other Guarantors" shall mean the Massachusetts Guarantors, the Florida
Guarantors and the New Jersey Guarantor.
The New Notes will be guaranteed pursuant to the terms of the Indenture (as
defined below) on a subordinated basis (each, a "Guarantee") by each of the
Guarantors. The New Notes will be issued pursuant to an Indenture dated as of
July 31, 1998 (the "Indenture") by and among the Company (as successor to HH
Acquisition Corp.) and United States Trust Company of New York (the "Trustee"),
as amended and supplemented by the First Supplemental Indenture dated as of
August 11, 1998 (the "Supplemental Indenture") by and among the Company, the
Guarantors and the Trustee. The shares of New Preferred Stock will be issued
pursuant to the Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of the Preferred
Stock and Qualifications, Limitations and Restrictions Thereof of the Company
(the "Certificate of Designation") effective as of August 11, 1998.
As such counsel, we have examined, among other things, (i) the Registration
Statement on Form S-4 (File No. 333-64679) and Amendment No. 1 thereto (the
"Registration Statement") filed by the Company and the Guarantors with the
Securities and Exchange Commission (the "Commission") to register under the
Securities Act the issuance of the New Notes, the Guarantees and the New
Preferred Stock, (ii) the Indenture and the Supplemental Indenture, (iii) the
Certificate of Designation, (iv) the form of the New Notes to be issued pursuant
to the Indenture, (v) the form of stock certificates for the New Preferred Stock
to be issued pursuant to the Certificate of Designation and (vi) the Certificate
of Incorporation and Bylaws of the Company and the Delaware Guarantors. The
Indenture (which contains the Guarantees), the Supplemental Indenture and the
New Notes are sometimes referred to herein collectively as the "Note Documents."
We have also examined the proceedings and other actions taken by the Company and
the Delaware Guarantors in connection with the authorization, execution and
delivery of the Indenture and the Supplemental Indenture, the authorization,
execution and filing of the Certificate of Designation, the issuance of the New
Notes and the Guarantees thereunder and the issuance of the New Preferred Stock.
We have also made such other inquiries and examined, among other things,
originals or copies, certified or
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October 27, 1998
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otherwise identified to our satisfaction, of such records, agreements,
certificates, instruments and other documents as we have considered necessary or
appropriate for the purposes of this opinion.
In rendering this opinion, we have assumed:
(a) The Guarantee of each of the Massachusetts Guarantors has been
legally issued, and the Supplemental Indenture constitutes the binding
agreement (and, as a result, the Indenture constitutes the binding
agreement) of each of the Massachusetts Guarantors to the extent the
binding nature of the Supplemental Indenture and the Indenture involves
matters governed by the laws of the Commonwealth of Massachusetts;
(b) The Guarantee of each of the Florida Guarantors has been legally
issued, and the Supplemental Indenture constitutes the binding agreement
(and, as a result, the Indenture constitutes the binding agreement) of each
of the Florida Guarantors to the extent the binding nature of the
Supplemental Indenture and the Indenture involves matters governed by the
laws of the State of Florida;
(c) The Guarantee of the New Jersey Guarantor has been legally issued,
and the Supplemental Indenture constitutes the binding agreement (and, as a
result, the Indenture constitutes the binding agreement) of the New Jersey
Guarantor to the extent the binding nature of the Supplemental Indenture
and the Indenture involves matters governed by the laws of the State of New
Jersey;
(d) The due and valid execution and delivery of the Indenture and the
Supplemental Indenture by the Trustee, and that the Indenture and the
Supplemental Indenture each constitutes the legal, valid and binding
agreement of the Trustee; and
(e) The genuineness of all signatures, the legal capacity of all
natural persons, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies and the authenticity of the
originals of such latter documents.
Based upon the foregoing, and in reliance thereon, and subject to receipt
by the Company and the Guarantors from the Commission of an order declaring the
Registration Statement effective, we are of the opinion that:
1. The New Notes, when issued and delivered in exchange for the Old Notes
in accordance with the terms of the Exchange Offer and when executed and
authenticated as specified in the Indenture, will be legally issued and will
constitute binding obligations of the Company.
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2. The New Preferred Stock, when issued and delivered in exchange for the
Old Preferred Stock in accordance with the terms of the Exchange Offer, will be
legally issued, fully paid and nonassessable.
3. The additional shares of 13 1/2% Exchangeable Preferred Stock
Mandatorily Redeemable 2010 of the Issuer that may be issued in payment of
dividends with respect to the New Preferred Stock, when issued and delivered in
accordance with the terms of the Certificate of Designation, will be legally
issued, fully paid and nonassessable.
4. Each Guarantee of a Delaware Guarantor, when issued and delivered in
connection with the exchange of the Old Notes in the manner described in the
Registration Statement and when the New Notes and all of the Guarantees have
been executed and, in the case of the New Notes, authenticated, as specified in
the Indenture, will be legally issued and will constitute a binding obligation
of such Delaware Guarantor.
5. Each Guarantee of an Other Guarantor, when issued and delivered in
connection with the exchange of the Old Notes in the manner described in the
Registration Statement and when the New Notes and all of the Guarantees have
been executed and, in the case of the New Notes, authenticated, as specified in
the Indenture, will be legally issued and will constitute a binding obligation
of such Other Guarantor to the extent the legal issuance and binding nature of
such Guarantee involves matters governed by the laws of the State of New York or
the General Corporation Law of the State of Delaware.
The foregoing opinions are subject to the following exceptions,
qualifications and limitations:
A. We render no opinion as to matters involving the laws of any
jurisdiction other than the State of New York and the General Corporation Law of
the State of Delaware. This opinion is limited to the effect of the present
state of the laws of the States of New York and Delaware and the facts as they
presently exist. We assume no obligation to revise or supplement this opinion
in the event of changes in such laws or the interpretations thereof or in the
event of changes in such facts.
B. Our opinions set forth herein are subject to (i) the effect of any
bankruptcy, insolvency, reorganization, moratorium, arrangement or similar laws
affecting the enforcement of creditors' rights generally (including, without
limitation, the effect of statutory or other laws regarding fraudulent transfers
or preferential transfers) and (ii) general principles of equity, regardless of
whether a matter is considered in a proceeding in equity or at law, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing. Without limitation, we express no opinion as to the ability to obtain
specific performance, injunctive relief or other equitable relief as a remedy
for noncompliance with any of the Note Documents.
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C. We express no opinion with respect to the validity, binding nature or
enforceability of any provision of the Note Documents to the effect that rights
or remedies are not exclusive, that every right or remedy is cumulative and may
be exercised in addition to any other right or remedy, that the election of some
particular remedy does not preclude recourse to one or more others or that
failure to exercise or delay in exercising rights or remedies will not operate
as a waiver of any such right or remedy.
D. We express no opinion as to the effect on the enforceability of the
Guarantees against any Guarantor of any facts or circumstances that would
constitute a defense to the obligation of a guarantor or surety, unless such
defense has been waived effectively by such Guarantor.
E. We express no opinion as to the validity, binding nature or
enforceability (i) of provisions in the Note Documents providing for
indemnification or contribution or (ii) of any provision of any Note Document
insofar as it provides for the payment or reimbursement of costs and expenses or
indemnification for claims, losses or liabilities in excess of a reasonable
amount determined by any court or other tribunal.
F. We express no opinion with respect to the validity, binding nature or
enforceability of (i) any waivers of unknown future rights or waivers of rights
existing, or duties owed, that are broadly or vaguely stated or do not describe
the right or duty purportedly waived with reasonable specificity, (ii) any
waivers or consents (whether or not characterized as a waiver or consent in the
Note Documents) relating to the rights of the Company or any Guarantor or duties
owing to any of them existing as a matter of law, to the extent such waivers or
consents are found to be against public policy or are ineffective pursuant to
applicable statutes or judicial decisions, (iii) any waivers or variations of
rights of a debtor, including a guarantor, (iv) provisions in the Note Documents
imposing late payment charges or an increase in interest rate, upon delinquency
in payment or the occurrence of a default, to the extent that such provisions
are found to constitute a forfeiture or impose a penalty, (vi) covenants (other
than covenants relating to the payment of money, including payment of principal,
interest, indemnities and expenses) to the extent they are construed to be
independent requirements as distinguished from conditions precedent to the
occurrence of an event of default, and (vii) any rights of setoff (other than
such rights provided by Section 151 of the New York Debtor and Creditor Law Code
as interpreted by applicable judicial decisions).
G. We express no opinion as to any provisions of the Note Documents
requiring written amendments or waivers of such documents insofar as it suggests
that oral or other modifications, amendments or waivers could not be effectively
agreed upon by the parties or that the doctrine of promissory estoppel might not
apply.
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October 27, 1998
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H. We express no opinion as to the application of the securities or "blue
sky" laws of the various states to the issuance of the New Notes, the Guarantees
or the New Preferred Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and we further consent to the use of our name under the
caption "Legal Matters" in the Prospectus forming a part of the Registration
Statement. In giving this consent, we do not admit that we are within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the Rules and Regulations of the Commission
promulgated thereunder.
Very truly yours,
/s/ XXXXXX, XXXX & XXXXXXXX LLP
XXXXXX, XXXX & XXXXXXXX LLP
