EXHIBIT 1.1
EXECUTION COPY
HH ACQUISITION CORP.
11% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2008
13 1/2% EXCHANGEABLE PREFERRED STOCK
PLACEMENT AGREEMENT
July 29, 1998
July 29, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Chase Securities Inc.
BT Alex. Xxxxx Incorporated
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
HH ACQUISITION CORP., a Delaware corporation ("ACQUISITION"), proposes
to issue and sell to the several purchasers named in Schedule I hereto (the
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"PLACEMENT AGENTS") (i) $170,000,000 principal amount at maturity of its 11%
Senior Subordinated Discount Notes Due 2008 (the "NOTES") to be issued pursuant
to the provisions of an Indenture to be dated as of July 31, 1998 (the
"INDENTURE") between Acquisition, as issuer, and United States Trust Company of
New York, as Trustee (the "TRUSTEE"), and (ii) 40,000 shares of its 13 1/2%
Exchangeable Preferred Stock (the "PREFERRED STOCK") which will be exchangeable,
at the option of Acquisition or, after the Merger (as defined below), Harborside
Healthcare Corporation, a Delaware corporation (the "COMPANY"), in whole but not
in part, into Subordinated Exchange Debentures due 2008 (the "EXCHANGE
DEBENTURES") to be issued, if applicable, pursuant to an indenture to be dated
as of the date of such exchange (the "EXCHANGE INDENTURE" and, together with the
Indenture, the "INDENTURES").
The Notes and the Preferred Stock (collectively the "SECURITIES") will
be offered and sold to the Placement Agents without being registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), to qualified
institutional buyers in compliance with the exemption from registration provided
by Rule 144A under the Securities Act, and, in the case of the Notes only, in
offshore transactions in reliance on Regulation S under the Securities Act
("REGULATION S").
The Placement Agents and their direct and indirect transferees will be
entitled to the benefits of (i) a Registration Rights Agreement with respect to
the Notes (the "NOTES REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing
Date (as defined below) and (ii) a Registration Rights Agreement with respect to
the Preferred Stock (the "PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT" and,
together with the Notes Registration Rights Agreement, the "REGISTRATION RIGHTS
AGREEMENTS"), to be dated the Closing Date.
The Securities are being sold in connection with the recapitalization
of the Company pursuant to an Agreement and Plan of Merger dated as of April 15,
1998 (the "MERGER AGREEMENT") between Acquisition and the Company, pursuant to
which Acquisition will merge with and into the Company (the "MERGER"), and the
Company will be the surviving corporation. Upon consummation of the Merger, the
obligations of Acquisition under the Notes and the Indenture will be guaranteed
on an unsecured senior subordinated basis pursuant
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to the terms of the Indenture (collectively, the "NOTE GUARANTEES") by the
subsidiaries of the Company specified on Schedule II hereto (collectively, the
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"GUARANTORS").
The net proceeds from the issuance of the Notes and the Preferred
Stock will be delivered to and held by United States Trust Company of New York,
as collateral agent (the "COLLATERAL AGENT"), pursuant to collateral pledge
security agreements to be dated as of the Closing Date (the "PLEDGE
AGREEMENTS"). In connection with the consummation of the Merger and the
satisfaction of certain conditions set forth in the Pledge Agreements, the
Collateral Agent will release the Collateral (as defined in each Pledge
Agreement) to or upon the order of Acquisition. In the event the Merger is not
consummated prior to the earlier to occur of (i) January 10, 1999 and (ii) if it
appears in the sole judgment of Acquisition that the Merger will not be
consummated, the date on which notice of same is delivered by Acquisition to the
Collateral Agent, Acquisition will be required to redeem the Securities in
accordance with their terms.
As a result of the Merger, all of Acquisition's obligations under this
Agreement, the Registration Rights Agreements, the Indenture, the Exchange
Debentures, the Exchange Indenture and the Securities will, by operation of law,
become obligations of the Company. In connection with the release of the
Collateral in connection with the consummation of the Merger and after
consummation of the Merger, the Company will enter into a supplemental indenture
relating to the Indenture (the "SUPPLEMENTAL INDENTURE").
In connection with the sale of the Securities, Acquisition has
prepared a preliminary offering memorandum (the "PRELIMINARY MEMORANDUM") and
will prepare a final offering memorandum (the "FINAL MEMORANDUM" and, with the
Preliminary Memorandum, each a "MEMORANDUM") including a description of the
terms of the Securities, the terms of the offering and a description of the
Company.
1. Representations and Warranties. Acquisition represents and
warrants to, and agrees with, you that:
(a) The Preliminary Memorandum does not contain and the Final
Memorandum, in the form used by the Placement Agents to confirm sales and
on the Closing Date, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in either Memorandum
based upon information relating to any Placement Agent furnished to
Acquisition in writing by such Placement Agent through you expressly for
use therein as set forth in a letter delivered by the Placement Agents to
the Issuer prior to the date hereof.
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(b) Each of Acquisition and the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in each
Memorandum and is duly qualified to transact business and is in good
standing as foreign corporations in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on Acquisition
or on the Company and its subsidiaries, taken as a whole.
(c) Each subsidiary of the Company has been duly formed, is validly
existing as a corporation or partnership in good standing under the laws of
the jurisdiction of its formation, has the corporate or other requisite
organizational power and authority to own its property and to conduct its
business as described in each Memorandum and is duly qualified to transact
business and is in good standing as a foreign corporation or partnership in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole (a "COMPANY MATERIAL ADVERSE EFFECT"); all of the issued shares of
capital stock of each corporate subsidiary of the Company and all issued
partnership interests of each partnership subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-
assessable and are owned directly or indirectly by the Company, except as
set forth in the Final Memorandum or with respect to the Company's existing
financing arrangements, free and clear of all liens, encumbrances, equities
or claims.
(d) This Agreement has been duly authorized, executed and delivered
by Acquisition.
(e) The Certificate of Designation creating the Preferred Stock and
the Additional Preferred Stock (as defined below), the proposed form of
which has been furnished to you, will have been duly filed with the
Secretary of State of the State of Delaware and with all other offices
where such filing is required to be made under the General Corporation Law
of the State of Delaware, on or before the Closing Date.
(f) The Notes have been duly authorized by Acquisition and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Placement Agents in
accordance with the terms of this Agreement, will be valid and binding
obligations of Acquisition (and, after the Merger, the Company),
enforceable against Acquisition (and, after the Merger, the Company) in
accordance with their terms, subject to applicable bankruptcy, insolvency
or similar
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laws affecting creditors' rights generally and general principles of
equity, and will be entitled to the benefits of the Indenture and the Notes
Registration Rights Agreement.
(g) The Preferred Stock has been duly authorized by Acquisition and,
when issued and delivered in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable and entitled to the
benefits of the Preferred Stock Registration Rights Agreement, and the
issuance of such Preferred Stock will not be subject to any preemptive or
similar rights.
(h) The additional shares of Preferred Stock (the "ADDITIONAL
PREFERRED STOCK") that may be issued in payment of dividends in respect of
the Preferred Stock have been duly authorized and reserved by Acquisition
and, when issued and delivered in accordance with the Certificate of
Designation, will be validly issued, fully paid and non-assessable and
entitled to the benefits of the Preferred Stock Registration Rights
Agreement, and the issuance of such Additional Preferred Stock will not be
subject to any preemptive or similar rights.
(i) Prior to the issuance thereof, the Exchange Debentures will have
been duly authorized by the Company and, when executed, authenticated and
delivered in accordance with the Exchange Indenture and the Certificate of
Designation, will (i) be valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and general principles of equity and (ii) be entitled to
the benefits of the Exchange Indenture.
(j) The Indenture has been duly authorized by Acquisition and, when
executed and delivered by each of the parties thereto in accordance with
its terms, will be a valid and binding agreement of Acquisition (and, after
the Merger, the Company), enforceable against Acquisition (and, after the
Merger, the Company) in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity.
(k) Prior to the issuance of the Exchange Debentures, the Exchange
Indenture will have been duly authorized by the Company and, when executed
and delivered by each of the parties thereto in accordance with its terms,
will be a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
general principles of equity.
(l) The Supplemental Indenture when duly authorized, executed and
delivered by the Company, each Guarantor and each other party thereto, will
be a valid and binding agreement of the Company, enforceable against the
Company and each
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Guarantor in accordance with its terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
general principles of equity.
(m) Immediately upon consummation of the Merger, each Note Guarantee
will have been duly authorized by each Guarantor and, when the Supplemental
Indenture is executed and delivered by each Guarantor and each of the other
parties thereto, each Note Guarantee will be a valid and binding agreement
of such Guarantor enforceable against such Guarantor in accordance with its
terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles of equity, and
will be entitled to the benefits of the Indenture.
(n) Each of the Registration Rights Agreements has been duly
authorized by Acquisition, and, when executed and delivered by Acquisition,
will be a valid and binding agreement of Acquisition (and, after the
Merger, the Company), enforceable against Acquisition (and, after the
Merger, the Company) in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity and except as rights to
indemnification and contribution under either of the Registration Rights
Agreements may be limited under applicable law and public policy
considerations.
(o) Each Pledge Agreement has been duly authorized by Acquisition
and, when executed and delivered by each of the parties thereto in
accordance with its terms, will be a valid and binding agreement of
Acquisition, enforceable against Acquisition in accordance with its terms,
subject to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and general principles of equity; and upon the
Closing Date, the pledge of Collateral (as defined in each such Pledge
Agreement) securing the payment of the Obligations (as defined in each such
Pledge Agreement) for the benefit of the Trustee and the holders of the
Securities will constitute a first priority perfected security interest in
such Collateral, enforceable against all creditors of Acquisition.
(p) The Merger Agreement has been duly authorized, executed and
delivered by each of Acquisition and the Company. The Merger Agreement is a
valid and binding agreement of each of Acquisition and the Company,
enforceable as to each in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity.
(q) Except as disclosed in the Final Memorandum, neither the
execution and delivery by Acquisition of, and the performance by
Acquisition (and, after the Merger, the Company and the Guarantors) of its
obligations under, this Agreement, the Indenture, the Registration Rights
Agreements, the Certificate of Designation, the Preferred Stock, the
Additional Preferred Stock, the Pledge Agreements, the Supplemental
Indenture and the Securities nor the consummation of the Merger will
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contravene (i) any provision of applicable law, (ii) the certificate of
incorporation or by-laws of Acquisition, the Company or the Guarantors,
(iii) any agreement or other instrument binding upon Acquisition or the
Company or any of its subsidiaries that is material to Acquisition or to
the Company and its subsidiaries, taken as a whole, or (iv) any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over Acquisition or the Company or any of its subsidiaries,
except, with respect to clauses (i), (iii) and (iv), for such
contraventions which would not have a Company Material Adverse Effect, and
no consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by Acquisition,
any Guarantor or the Company of their respective obligations (both before
and after the Merger) under this Agreement, the Indenture, the Registration
Rights Agreements, the Certificate of Designation, the Preferred Stock, the
Additional Preferred Stock, the Pledge Agreements, the Supplemental
Indenture or the Securities, except such as (x) may be required by the
securities or Blue Sky laws of the various states in connection with the
offer and sale of the Securities and by federal and state securities laws
with respect to the Company's obligations (after the Merger) under the
Registration Rights Agreements, (y) have been obtained or, with respect to
the Company and any of the Guarantors, will be obtained prior to
consummation of the Merger or (z) if not obtained, would not have a Company
Material Adverse Effect or a material adverse effect on Acquisition. Each
of Acquisition and the Company has full corporate power and authority to
consummate the Merger.
(r) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of Acquisition or the Company and its subsidiaries, taken as a
whole, from that set forth in the Final Memorandum.
(s) There are no legal or governmental proceedings pending or, to
Acquisition's knowledge, threatened to which Acquisition or the Company or
any of its subsidiaries is a party or to which any of the properties of
Acquisition or the Company or any of its subsidiaries is subject other than
proceedings accurately described in all material respects in each
Memorandum and proceedings that would not have a Company Material Adverse
Effect or a material adverse effect on Acquisition, or on the power or
ability of Acquisition or the Company to perform their respective
obligations (both before and after the Merger) under this Agreement, the
Indenture, the Registration Rights Agreements, the Certificate of
Designation, the Preferred Stock, the Additional Preferred Stock, the
Exchange Debentures, the Exchange Indenture, the Pledge Agreement, the
Supplemental Indenture or the Securities or to consummate the
Recapitalization (as defined in the Offering Memorandum).
(t) The Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic
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substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"),
(ii) have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the aggregate, have
a Company Material Adverse Effect.
(u) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a Company Material
Adverse Effect.
(v) Acquisition (and after the Merger, the Company and each
Guarantor) is not, and after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the
Final Memorandum will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(w) None of Acquisition, the Guarantors, the Company or any of their
respective affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act, each, an "AFFILIATE") has directly, or through any agent,
(i) sold, offered for sale, solicited offers to buy or otherwise negotiated
in respect of, any security (as defined in the Securities Act) which is or
will be integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the Securities or (ii)
engaged in any form of general solicitation or general advertising in
connection with the offering of the Securities (as those terms are used in
Regulation D under the Securities Act), or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
(x) None of Acquisition, the Guarantors, the Company, their
respective Affiliates or any person acting on its or their behalf has
engaged or will engage in any directed selling efforts (within the meaning
of Regulation S) with respect to the Securities and Acquisition, the
Guarantors, the Company and their respective Affiliates and any person
acting on its or their behalf have complied and will comply with the
offering restrictions requirement of Regulation S.
(y) Assuming the accuracy of the representations and warranties of
the Placement Agents and compliance by them of their agreements contained
herein, it is not necessary in connection with the offer, sale and delivery
of the Securities to the
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Placement Agents in the manner contemplated by this Agreement to register
the Securities under the Securities Act or to qualify the Indenture under
the Trust Indenture Act of 1939, as amended.
(z) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
(aa) The Notes conform in all material respects to the description
thereof contained in the Final Memorandum under the heading "Description of
the Notes".
(bb) The Preferred Stock conforms in all material respects to the
description thereof contained in the Final Memorandum under the heading
"Description of the Exchangeable Preferred Stock".
(cc) Upon issuance, the Exchange Debentures will conform in all
material respects to the description thereof contained in the Final
Memorandum under the heading "Description of the Exchange Debentures".
(dd) Acquisition has no subsidiaries and has conducted no business
prior to the date hereof other than in connection with the transactions
contemplated by this Agreement and the Final Memorandum, including the
Merger.
2. Agreements to Sell and Purchase. Acquisition hereby agrees to
sell to the several Placement Agents, and each Placement Agent, upon the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from Acquisition (i) the Notes at a purchase price of $96,507,725.00 for the
Notes plus accrued original issue discount, if any, from July 31, 1998 to the
date of payment and delivery and (ii) the Preferred Stock at a purchase price of
$38,600,000.00 for the Preferred Stock, plus accumulated dividends, if any, from
July 31, 1998 to the date of payment and delivery, in each case, in the amounts
set forth opposite its respective name on Schedule I hereto.
Acquisition hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Placement Agents, it will
not, during the period beginning on the date hereof and continuing to and
including the Closing Date, offer, sell, contract to sell or otherwise dispose
of any debt or preferred stock of Acquisition or warrants to purchase debt or
preferred stock of substantially similar to the Securities (other than the sale
of the Securities under this Agreement).
3. Terms of Offering. You have advised the Company that the
Placement Agents will make an offering of the Securities purchased by the
Placement Agents hereunder on the terms to be set forth in the Final Memorandum,
as soon as practicable after this Agreement is entered into as in your judgment
is advisable.
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4. Payment and Delivery. Payment for the Securities shall be made
in federal or other funds immediately available in New York City against
delivery of such Securities for the respective accounts of the several Placement
Agents at 10:00 a.m., New York City time, on July 31, 1998, or at such other
time on the same or such other date, not later than August 7, 1998, as shall be
designated in writing by you, and agreed upon by Acquisition (provided that such
agreement will not be unreasonably withheld). The time and date of such payment
are hereinafter referred to as the "CLOSING DATE".
Certificates for the Securities shall be in definitive form or global
form, as specified by you, and registered in such names and in such
denominations as permitted under the Indenture as you shall request in writing
not later than one full business day prior to the Closing Date. The certificates
evidencing the Securities shall be delivered to you on the Closing Date for the
respective accounts of the several Placement Agents, with any transfer taxes
payable in connection with the transfer of the Securities to the Placement
Agents duly paid, against payment of the purchase price therefor.
5. Conditions to the Placement Agents' Obligations. The several
obligations of the Placement Agents to purchase and pay for the Securities on
the Closing Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
Acquisition or the Company and its subsidiaries, taken as a whole,
from that set forth in the Final Memorandum (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is so material and adverse that it
makes it, in your judgment, impracticable to market the Securities on
the terms and in the manner contemplated in the Final Memorandum.
(b) The Placement Agents shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
Acquisition, to the effect set forth in Section 5(a)(i) and to the effect
that the representations and warranties of Acquisition contained in this
Agreement are true and correct in all
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material respects (except with respect to proceedings threatened, as to
which such officer may certify to the best of such officer's knowledge) as
of the Closing Date and that Acquisition has complied in all material
respects with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before the Closing
Date.
(c) The Placement Agents shall have received on the Closing Date (i)
an opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP, outside counsel for Acquisition,
dated the Closing Date, substantially to the effect set forth in Exhibit A
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and (ii) an opinion of the office of the General Counsel of the Company,
dated the Closing Date, to the effect set forth in Exhibit B. Such opinions
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shall be rendered to the Placement Agents at the request of Acquisition and
shall so state therein.
(d) The Placement Agents shall have received on the Closing Date (i)
an opinion of XxXxxxxxx, Will & Xxxxx, regulatory counsel to Acquisition,
dated the Closing Date, substantially to the effect set forth in Exhibit C,
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and (ii) an opinion of local regulatory counsel to Acquisition for each of
the states in which the Company and each of its subsidiaries conduct their
respective long-term care facility businesses, dated the Closing Date,
substantially to the effect set forth in Exhibit D. Such opinions shall be
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rendered to the Placement Agents at the request of Acquisition and shall so
state therein.
(e) The Placement Agents shall have received on the Closing Date an
opinion of Shearman & Sterling, counsel for the Placement Agents, dated the
Closing Date, in form and substance satisfactory to you.
(f) The Placement Agents shall have received on each of the date
hereof and the Closing Date a letter, dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Placement Agents, from PricewaterhouseCoopers LLP, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information, including the
pro forma financial information, contained the Final Memorandum; provided
that the letter delivered on the Closing Date shall use a "cut-off date"
not earlier than the date hereof.
(g) The Merger Agreement shall be in full force and effect on the
Closing Date and the Placement Agents shall have received a true and
correct copy of all final agreements pertaining thereto.
(h) The Pledge Agreements shall have been duly executed and delivered
by all the parties thereto.
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(i) The Placement Agents shall have received on the Closing Date a
copy of each final solvency certificate or opinion with respect to the
Company received by Acquisition, if such final solvency certificate or
opinion shall have been delivered to Acquisition on or prior to the Closing
Date.
(j) The Placement Agents shall have received such other documents and
certificates as are reasonably requested by you or your counsel.
6. Covenants of Acquisition. In further consideration of the
agreements of the Placement Agents contained in this Agreement, Acquisition
(and, after the Merger, the Company) covenants with each Placement Agent as
follows:
(a) To furnish to you in New York City, without charge, as soon as
practicable, and in no event later than 12:00 noon, New York time, on the
second business day next succeeding the date of this Agreement and during
the period mentioned in Section 6(c), as many copies of the Final
Memorandum and any supplements and amendments thereto as you may reasonably
request.
(b) Before amending or supplementing either Memorandum, to furnish to
you a copy of each such proposed amendment or supplement and not to use any
such proposed amendment or supplement to which you reasonably object.
(c) If, during such period after the date hereof and prior to the
date on which all of the Securities shall have been sold by the Placement
Agents, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Final Memorandum in order to make the
statements therein, in the light of the circumstances when the Final
Memorandum is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Placement Agents, it is necessary to amend or
supplement the Final Memorandum to comply with applicable law, forthwith to
prepare and furnish, at its own expense, to the Placement Agents, either
amendments or supplements to the Final Memorandum so that the statements in
the Final Memorandum as so amended or supplemented will not, in the light
of the circumstances when the Final Memorandum is delivered to a purchaser,
be misleading or so that the Final Memorandum, as amended or supplemented,
will comply with applicable law.
(d) To endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request, provided that in no event shall Acquisition or the
Company or any of its subsidiaries be obligated to qualify to do business
in any jurisdiction in which they are not so qualified or to take any
action which would subject any of them to (i) service of process in suits,
other than those arising out of the sale of the Securities, or (ii)
taxation in excess of a nominal amount, in each case where any of them is
not now so subject.
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(e) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of its
counsel and accountants in connection with the issuance and sale of the
Securities and all other fees or expenses of Acquisition in connection with
the preparation of each Memorandum and all amendments and supplements
thereto, including all printing costs associated therewith, and the
delivering of copies thereof to the Placement Agents, in the quantities
herein above specified, (ii) all costs and expenses related to the transfer
and delivery of the Securities to the Placement Agents, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or legal investment memorandum in connection with
the offer and sale of the Securities under state securities laws and all
expenses in connection with the qualification of the Securities for offer
and sale under state securities laws as provided in Section 6(d) hereof,
including filing fees and the reasonable fees and disbursements of counsel
for the Placement Agents in connection with such qualification and in
connection with the Blue Sky or legal investment memorandum, (iv) any fees
charged by rating agencies for the rating of the Securities, (v) the fees
and expenses, if any, incurred in connection with the admission of the
Securities for trading in PORTAL or any appropriate market system, (vi) the
costs and charges of the Trustee and any transfer agent, registrar or
depositary, (vii) the cost of the preparation, issuance and delivery of the
Securities, (viii) the costs and expenses of Acquisition and the Company
relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Securities, including,
without limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of
Acquisition, travel and lodging expenses of the representatives and
officers of Acquisition and the Company and any such consultants, and 50
percent of the cost of any aircraft chartered in connection with the road
show, and (ix) all other costs and expenses incident to the performance of
the obligations of Acquisition and the Company hereunder for which
provision is not otherwise made in this Section. It is understood, however,
that except as provided in this Section 6(e), Section 8 and the last
paragraph of Section 10, the Placement Agents will pay all of their costs
and expenses, including fees and disbursements of their counsel, transfer
taxes payable on resale of any of the Securities by them, 50 percent of the
cost of any aircraft chartered in connection with the road show and any
advertising expenses connected with any offers they may make.
(f) None of Acquisition, the Company or any of their respective
Affiliates will sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act)
which could be integrated with the sale of the Securities in a manner which
would require the registration under the Securities Act of the Securities
or the Exchange Debentures.
13
(g) None of Acquisition, the Company or any of their respective
Affiliates will solicit any offer to buy or offer or sell the Securities by
means of any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(h) While any of the Securities remain "restricted securities" within
the meaning of the Securities Act, to make available, upon request, to any
seller of the Securities the information specified in Rule 144A(d)(4) under
the Securities Act, unless the Company is then subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT").
(i) To use its reasonable best efforts to permit the Securities to be
designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating to
trading in the PORTAL Market.
(j) None of Acquisition, the Company, their respective Affiliates or
any person acting on its or their behalf (other than the Placement Agents
and persons acting on their behalf) will engage in any directed selling
efforts (as that term is defined in Regulation S) with respect to the
Notes, and Acquisition, the Company and their respective Affiliates and
each person acting on its or their behalf (other than the Placement Agents
and persons acting on their behalf) will comply with the offering
restrictions requirement of Regulation S.
(k) During the period of two years after the Closing Date, neither
Acquisition nor the Company will, nor will Acquisition or the Company
permit any of their respective affiliates (as defined in Rule 144 under the
Securities Act) to, resell any of the Securities which constitute
"restricted securities" under Rule 144 that have been reacquired by any of
them.
(l) To use the net proceeds from the sale of the Securities as
described in the Final Memorandum.
7. Offering of Securities; Restrictions on Transfer. (a) Each
Placement Agent, severally and not jointly, represents and warrants that such
Placement Agent is a qualified institutional buyer as defined in Rule 144A under
the Securities Act (a "QIB"). Each Placement Agent, severally and not jointly,
agrees with Acquisition that (i) it will not solicit offers for, or offer or
sell, such Securities by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act and (ii) it will solicit offers for such Securities only from,
and will offer such Securities only to, persons that it reasonably believes to
be (A) in the case of offers inside the United States,
14
QIBs, and (B) with respect to the Notes only, in the case of offers outside the
United States, to persons other than U.S. persons ("FOREIGN PURCHASERS", which
term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)) in reliance upon Regulation S under the Securities Act
that, in each case, in purchasing such Securities are deemed to have represented
and agreed as provided in the Final Memorandum under the caption "TRANSFER
RESTRICTIONS".
(b) Each Placement Agent, severally and not jointly, represents,
warrants to Acquisition and the Company, and agrees with respect to offers and
sales outside the United States that:
(i) such Placement Agent understands that no action has been or will
be taken in any jurisdiction by Acquisition or the Company that would
permit a public offering of the Notes, or possession or distribution of
either Memorandum or any other offering or publicity material relating to
the Notes, in any country or jurisdiction where action for that purpose is
required;
(ii) such Placement Agent will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers, sells or
delivers Notes or has in its possession or distributes either Memorandum or
any such other material, in all cases at its own expense;
(iii) the Notes have not been registered under the Securities Act and
may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Rule 144A or
Regulation S under the Securities Act or pursuant to another exemption from
the registration requirements of the Securities Act;
(iv) such Placement Agent has offered the Notes and will offer and
sell the Notes (A) as part of its distribution at any time, (B) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S or as
otherwise permitted in Section 7(a) or (C) pursuant to another exemption
from the registration requirements of the Securities Act; accordingly, none
of such Placement Agent, its Affiliates or any persons acting on its or
their behalf have engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to the Notes, and any
such Placement Agent, its Affiliates and any such persons have complied and
will comply with the offering restrictions requirement of Regulation S;
(v) such Placement Agent has (A) not offered or sold and, prior to
the date six months after the Closing Date, will not offer or sell any
Notes to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes
15
of their businesses or otherwise in circumstances which have not resulted
and will not result in an offer to the public in the United Kingdom within
the meaning of the Public Offers of Securities Regulations 1995; (B)
complied and will comply with all applicable provisions of the Financial
Services Xxx 0000 with respect to anything done by it in relation to the
Notes in, from or otherwise involving the United Kingdom, and (C) only
issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issue of the Notes to a
person who is of a kind described in Article 11(3) of the Financial
Services Xxx 0000 (Investment Advertisements) (Exemptions) Order 1996 or is
a person to whom such document may otherwise lawfully be issued or passed
on;
(vi) such Placement Agent understands that the Notes have not been
and will not be registered under the Securities and Exchange Law of Japan,
and represents that it has not offered or sold, and agrees not to offer or
sell, directly or indirectly, any Notes in Japan or for the account of any
resident thereof except pursuant to any exemption from the registration
requirements of the Securities and Exchange Law of Japan and otherwise in
compliance with applicable provisions of Japanese law; and
(vii) such Placement Agent agrees that, at or prior to confirmation of
sales of the Notes, it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Notes from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Notes covered hereby have not been registered
under the U.S. Securities Act of 1933, as amended (the
"SECURITIES ACT"), and may not be offered and sold within
the United States or to, or for the account or benefit of,
U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the
commencement of the offering and the closing date, except
in either case in accordance with Regulation S (or Rule
144A if available) under the Securities Act. Terms used
above have the meaning given to them by Regulation S."
Terms used in this Section 7(b) have the meanings given to them by Regulation S.
In addition to the foregoing, each Placement Agent acknowledges and
agrees that Acquisition and, for purposes of the opinions to be delivered to the
Placement Agents pursuant to Sections 5(c), (d) and (e), counsel for
Acquisition, the Company and the Placement Agents, respectively, may rely upon
the accuracy and truth of the representations and warranties of the Placement
Agents and their compliance with their agreements contained in this Section 7,
and each Placement Agent hereby consents to such reliance.
16
8. Indemnity and Contribution. (a) Acquisition (and, after the
Merger, the Company) agrees to indemnify and hold harmless each Placement Agent
and each person, if any, who controls any Placement Agent within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
either Memorandum (as amended or supplemented if Acquisition shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or alleged omission based upon information relating to any Placement Agent
furnished to Acquisition in writing by such Placement Agent through you
expressly for use therein; provided, however, that the foregoing indemnity
agreement with respect to any Preliminary Memorandum shall not inure to the
benefit of any Placement Agent from whom the person asserting any such losses,
claims, damages or liabilities purchased Securities, or any person controlling
such Placement Agent, if a copy of the Final Memorandum (as then amended or
supplemented if Acquisition or any of its agents or advisors shall have
furnished any amendments or supplements thereto) was not sent or given by or on
behalf of such Placement Agent to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Securities to such person, and if the Final Memorandum (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities, unless such failure is the result of noncompliance by
Acquisition with Section 6(a) hereof.
(b) Each Placement Agent agrees, severally and not jointly, to
indemnify and hold harmless Acquisition (and, after the Merger, the Company),
its directors, its officers and each person, if any, who controls Acquisition
(and, after the Merger, the Company) within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from Acquisition (and, after the Merger, the Company) to
such Placement Agent, but only with reference to information relating to such
Placement Agent furnished to Acquisition in writing by such Placement Agent
through you expressly for use in either Memorandum or any amendments or
supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 8(a) or 8(b), such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party
17
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and, based upon advice of the indemnified party's counsel,
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by Xxxxxx Xxxxxxx & Co.
Incorporated, in the case of parties indemnified pursuant to Section 8(a), and
by Acquisition (and, after the Merger, the Company) in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not
unreasonably be withheld), effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or
8(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by Acquisition and the Company on the one hand and the
Placement Agents on the other hand from the offering of the Securities or (ii)
if the allocation provided by clause 8(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(d)(i) above but also the relative
fault of Acquisition and the Company on the one hand and of the Placement Agents
on the other hand in connection with the
18
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by Acquisition and the Company on the one hand and
the Placement Agents on the other hand in connection with the offering of the
Securities shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Securities (before deducting expenses)
received by Acquisition and the Company and the total discounts and commissions
received by the Placement Agents in respect thereof, bear to the aggregate
offering price of the Securities. The relative fault of Acquisition and the
Company on the one hand and of the Placement Agents on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by Acquisition and the Company
or by the Placement Agents and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Placement Agents' respective obligations to contribute pursuant to this
Section 8 are several in proportion to the respective amount of Securities they
have purchased hereunder, and not joint.
(e) Acquisition (and, after the Merger, the Company) and the
Placement Agents agree that it would not be just or equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation (even if the
Placement Agents were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in Section 8(d). The amount paid or payable by an indemnified party
as a result of the losses, claims, damages and liabilities referred to in
Section 8(d) shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Placement Agent shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities resold by it in the initial placement of such
Securities were offered to investors exceeds the amount of any damages that such
Placement Agent has otherwise been required to pay by reason of 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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 8 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of
Acquisition contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Placement Agent or any person
controlling any Placement Agent or by or on behalf of Acquisition or the
Company, their respective officers or directors or any person controlling
Acquisition or the Company and (iii) acceptance of and payment for any of the
Securities.
19
9. Termination. This Agreement shall be subject to termination by
notice given by you to Acquisition, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 9(a)(i) through 9(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Securities on the terms and in the manner contemplated in the Final
Memorandum.
10. Effectiveness; Defaulting Placement Agents. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Placement Agents shall
fail or refuse to purchase Securities that it or they have agreed to purchase
hereunder on such date, and the aggregate amount of Securities which such
defaulting Placement Agent or Placement Agents agreed but failed or refused to
purchase is not more than one-tenth of the aggregate amount of Securities to be
purchased on such date, the other Placement Agents shall be obligated severally
in the proportions that the amount of Securities set forth opposite their
respective names in Schedule I bears to the aggregate amount of Securities set
forth opposite the names of all such non-defaulting Placement Agents, or in such
other proportions as you may specify, to purchase the Securities which such
defaulting Placement Agent or Placement Agents agreed but failed or refused to
purchase on such date; provided that in no event shall the amount of Securities
that any Placement Agent has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such amount of Securities without the written consent of such Placement Agent.
If, on the Closing Date any Placement Agent or Placement Agents shall fail or
refuse to purchase Securities which it or they have agreed to purchase hereunder
on such date and the aggregate amount of Securities with respect to which such
default occurs is more than one-tenth of the aggregate amount of Securities to
be purchased on such date, and arrangements satisfactory to you and Acquisition
for the purchase of such Securities are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Placement Agent or of Acquisition or the Company. In any such
case, either you or Acquisition shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Final Memorandum or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Placement Agent from liability in respect of any default
of such Placement Agent under this Agreement.
20
If this Agreement shall be terminated by the Placement Agents, or any
of them, because of any failure or refusal on the part of Acquisition to comply
with the terms or to fulfill any of the conditions of this Agreement on its part
to be fulfilled, or if for any reason Acquisition shall be unable to perform its
obligations under this Agreement, Acquisition will reimburse the Placement
Agents or such Placement Agents as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such Placement
Agents in connection with this Agreement or the offering contemplated hereunder.
Notwithstanding any provision contained herein to the contrary, if this
Agreement is terminated by reason of the default of one or more of the Placement
Agents, neither Acquisition nor the Company shall be obligated to reimburse any
defaulting Placement Agent or its counsel on account of such expenses.
11. Notices. All notices and other communications under this
Agreement shall be in writing and mailed, delivered or sent by facsimile
transmission to: if sent to the Placement Agents, Xxxxxx Xxxxxxx & Co.
Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: High Yield
New Issues Group, facsimile number (000) 000-0000, and if sent to Acquisition,
to 000 Xxxx Xxxxxx, 00/xx/ Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, x/x Xxxxxx Xxxx &
Xxxxxxxx XXX, Xxxxxxxxx: Xxxxx X. Xxxxxx, facsimile number (000) 000-0000.
12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. The parties
hereto hereby submit to the non-exclusive jurisdiction of the federal and state
courts in the Borough of Manhattan in The City of New York in any suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
14. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
Very truly yours,
HH ACQUISITION CORP.
By: /s/ Xxxxxxxxxxx X. X'Xxxxx
_____________________________
Name: Xxxxxxxxxxx X. X'Xxxxx
Title: President
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
CHASE SECURITIES INC.
BT ALEX. XXXXX INCORPORATED
Acting severally on behalf of themselves and
the several Placement Agents named in
Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By: /s/ Xxxxxx Xxxxxxxx
____________________________
Name: Xxxxxx Xxxxxxxx
Title: President
SCHEDULE I
PRINCIPAL AMOUNT AT NUMBER OF SHARES OF
MATURITY OF NOTES PREFERRED STOCK
PLACEMENT AGENT TO BE PURCHASED TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. 68,000,000 16,000
Incorporated
Chase Securities Inc. 68,000,000 16,000
BT Alex. Xxxxx
Incorporated 34,000,000 8,000
Total: ................ 170,000,000 40,000
SCHEDULE II
GUARANTORS
Harborside Healthcare LP
Belmont Nursing Center Corp.
Orchard Ridge Nursing Center Corp.
Oakhurst Manor Nursing Center Corp.
Riverside Retirement L.P.
Harborside Toledo L.P.
Harborside Connecticut L.P.
Harborside of Florida L.P.
Harborside of Ohio L.P.
Harborside Healthcare Baltimore L.P.
Harborside of Cleveland L.P.
Harborside of Dayton L.P.
Harborside Massachusetts L.P.
Harborside of Rhode Island L.P.
Harborside of North Toledo L.P.
HH Advisors L.P.
Harborside Toledo Corp.
KHI Corp.
Harborside Acquisition Limited Partnership IV
Harborside Acquisition Limited Partnership V
Harborside Acquisition Limited Partnership VI
Harborside Acquisition Limited Partnership VII
Harborside Acquisition Limited Partnership VIII
Harborside Acquisition Limited Partnership IX
Harborside Acquisition Limited Partnership X
Sailors, Inc.
New Jersey Harborside Corp.
Bridgewater Assisted Living L.P.
Maryland Harborside Corp.
Harborside Homecare L.P.
Harborside Rehabilitation L.P.
Harborside Healthcare Network L.P.
Harborside Health I Corp.
