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EXHIBIT 4.9
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF OCTOBER 23, 1997
AMONG
ALTERATIVE LIVING SERVICES, INC.,
STERLING HOUSE CORPORATION
AND
STATE STREET BANK AND TRUST COMPANY,
AS SUCCESSOR TRUSTEE
TO
INDENTURE
DATED AS OF MAY 23, 1996
BETWEEN
STERLING HOUSE CORPORATION
AND
FLEET NATIONAL BANK,
AS TRUSTEE
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6.75% CONVERTIBLE SUBORDINATED DEBENTURES
DUE 2006
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FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of October 23, 1997 (this
"Supplemental Indenture"), among Alternative Living Services, Inc., a Delaware
corporation ("ALS"), Sterling House Corporation, a Kansas corporation (the
"Company"), and State Street Bank and Trust Company, a Massachusetts trust
company, as successor to Fleet National Bank, as Trustee (the "Trustee"), to
that certain Indenture, dated as of May 23, 1996 (the "Indenture"), between the
Company and Fleet National Bank, as Trustee.
WHEREAS, the Company has heretofore executed and delivered to the
Trustee the Indenture providing for the issuance by the Company of up to
$35,000,000 in aggregate principal amount of 6.75% Convertible Subordinated
Debentures Due 2006 (the "Securities");
WHEREAS, contemporaneously with the delivery hereof Tango Merger
Corporation, a Kansas corporation and a wholly owned subsidiary of ALS ("Merger
Sub"), has been merged with and into the Company (the "Merger") pursuant to the
provisions of that certain Agreement and Plan of Merger, dated as of July 30,
1997, among ALS, Merger Sub and the Company, as amended as of September 2, 1997
(the "Merger Agreement"); and
WHEREAS, Section 10.10 of the Indenture requires that the merger of any
corporation with or into the Company shall be conditioned upon the execution and
delivery to the Trustee of a supplemental indenture which provides that the
holder of each Security then outstanding shall have the right thereafter, during
the period such Security shall be convertible as specified in Section 10.1 of
the Indenture, to convert such Security into the kind and amount of securities,
cash and other property receivable upon such merger by a holder of the number of
shares of common stock into which such Security might have been converted
immediately prior to such merger.
NOW, THEREFORE, this Supplemental Indenture witnesseth:
In order to comply with the requirements of the Indenture, ALS
covenants and agrees with the Trustee for the equal and proportionate benefit,
security and protection of the respective holders from time to time of the
Securities, as follows:
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ARTICLE ONE
Assumption and Substitution
Section 1.01. The Successor hereby represents and warrants to the
Trustee and to the holders of the Securities as follows:
(a) ALS is a corporation organized and existing under the laws
of Delaware.
(b) On the date hereof Merger Sub has been merged with and
into the Company, said merger hereinafter referred to as the "Merger."
(c) Immediately after giving effect to the Merger no Event of
Default and no event which, after notice or lapse of time, or both,
would become an Event of Default has happened and is continuing.
Section 1.02. In accordance with Section 10.10 of the Indenture and
Section 5.7(c) of the Merger Agreement, ALS hereby expressly assumes the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Securities, according to their tenor, and the due and punctual performance
and observance of all of the terms, covenants and conditions of the Indenture to
be kept or performed by the Company.
Section 1.03. The Holder of each $1,000 in aggregate principal amount
of the Securities outstanding on the date hereof shall hereafter have the right
to convert such $1,000 in aggregate principal amount of the Securities only into
shares of common stock, par value $0.01 per share, of ALS ("ALS Common Stock"),
and cash in lieu of fractional shares of ALS Common Stock, which is the kind and
amount of stock, securities and other property receivable upon the Merger by a
holder of the number of shares of common stock into which such $1,000 in
aggregate principal amount of the Securities might have been converted
immediately prior to the Merger, subject to adjustments which shall be as nearly
equivalent as practicable to the adjustments provided for in Section 10.4 of the
Indenture. Accordingly, each Security will become convertible only into ALS
Common Stock at an initial conversion price equal to the quotient of the
conversion price in effect for the Securities immediately prior to the Merger
($22.42) divided by the Exchange Ratio (as defined in the Merger Agreement).
Accordingly, following the Merger the Securities will be convertible into shares
of ALS
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Common Stock at a conversion price of approximately $20.38 per share.
Section 1.04. Pursuant to Section 10.10 of the Indenture, ALS shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under the Indenture with the same effect as if ALS had been named as
the Company therein.
Section 1.05. Securities authenticated and delivered on and after the
date hereof shall bear the following notation which may be stamped or
typewritten thereon:
"On October 23, 1997, pursuant to a definitive merger
agreement, Sterling House Corporation became a wholly owned subsidiary
of Alternative Living Services, Inc. ("ALS") which issued 1.1 shares of
its common stock, par value $0.01 per share ("ALS Common Stock"), in
exchange for each outstanding share of Sterling House Corporation
common stock, no par value, said merger hereinafter referred to as the
"Merger." ALS has assumed the due and punctual payment of the principal
of and premium, if any, and interest on this Security and the
performance of every covenant of the Indenture on the part of Sterling
House Corporation to be performed or observed. On and after October 23,
1997, each holder of $1,000 in aggregate principal amount of Securities
outstanding shall have the right to convert such $1,000 in aggregate
principal amount of the Securities only into shares of ALS Common
Stock, and cash in lieu of fractional shares of ALS Common Stock, which
is the kind and amount of stock, securities and other property
receivable upon the Merger by a holder of the number of shares of
common stock into which such $1,000 in aggregate principal amount of
the Securities might have been converted immediately prior to the
Merger, subject to adjustments which shall be as nearly equivalent as
practicable to the adjustments provided for in Section 10.4 of the
Indenture."
If ALS shall so determine, new Securities so modified as to conform to
the Indenture as hereby supplemented, in form satisfactory to the Trustee, may
at any time hereafter be prepared and executed by ALS and authenticated and
delivered by the Trustee in exchange for Securities then outstanding, and
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thereafter the notation herein provided shall no longer be required. Anything
herein or in the Indenture to the contrary notwithstanding, the failure to affix
the notation herein provided to any Security or to exchange any Security for a
new Security modified as herein provided shall not affect any of the rights of
the holder of such Security.
ARTICLE TWO
Miscellaneous
Section 2.01. The Trustee accepts the trusts in this Supplemental
Indenture declared and provided upon the terms and conditions set forth in the
Indenture. The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Supplemental Indenture or the
due execution hereof by ALS or for or in respect of the recitals and statements
contained herein, all of which recitals and statements are made solely by ALS.
Section 2.02. Except as hereby expressly modified, the Indenture and
the Securities issued thereunder are in all respects ratified and confirmed and
all of the terms, conditions and provisions thereof shall remain in full force
and effect.
Section 2.03. The recitals contained herein shall be taken as the
statement of ALS and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Supplemental Indenture.
Section 2.04. This Supplemental Indenture shall be effective as of the
date and time of the effectiveness of the Merger.
Section 2.05. Unless otherwise defined herein, or unless the context
otherwise requires, the terms used herein shall have the respective meanings
assigned to them in the Indenture.
Section 2.06. The parties may sign multiple counterparts of this
Supplemental Indenture. Each signed counterpart shall be deemed an original, but
all of them together represent the same agreement.
Section 2.07. The laws of the State of New York shall govern this
Supplemental Indenture without regard to principles of conflicts of laws.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
ALTERNATIVE LIVING SERVICES, INC.
By:/s/ XXXXXX X. XXXXXX
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Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
STERLING HOUSE CORPORATION
By:/s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
STATE STREET BANK AND TRUST COMPANY,
as successor Trustee
By: /s/ XXXX XXX XXXXXX
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Name: Xxxx Xxx Xxxxxx
Title: Vice President
