<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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Current Report
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 1, 1998
Commission File Number: 001-13807
ElderTrust
(Exact name of registrant as specified in its declaration of trust)
Maryland 23-2932973
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
101 East State Street, Suite 100, Kennett Square, Pennsylvania 19348
(Address of principal executive offices)
(zip code)
(610) 925-4200
(Registrant's telephone number, including area code)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On December 1, 1998, ElderTrust (the "Company"), through its 94% owned
subsidiary, ElderTrust Operating Limited Partnership (the "Operating
Partnership"), acquired the sole interest in one newly-formed limited liability
company (ET Sub-Heritage Andover, LLC) and 99% member interests in three
newly-formed limited liability companies (ET Sub-Vernon Court, LLC, ET Sub-Cabot
Park, LLC, and ET Sub-Cleveland Circle, LLC; the three properties hereafter
referred to as the "MHFA LLC's" and all four entities collectively the "LLC's").
The 1% managing member interests in the MHFA LLC's are owned by limited
liability companies of which Edward B. Romanov, Jr., the Company's President and
Chief Executive Officer, is the sole member. Each LLC except ET Sub-Cabot Park,
LLC was formed to acquire one assisted living facility. ET Sub-Cabot Park, LLC
was formed to acquire one independent living facility. All four facilities were
acquired from National Development of New England and are located in the Boston
MA, metropolitan area.
Consideration paid by the Operating Partnership and the LLC's totaled
approximately $64 million and consisted of $23 million in cash, $38 million in
assumed existing mortgage financing and $3 million borrowed from the sellers in
the form of a seven-month promissory note for these assets. All of the
properties are leased to Genesis Eldercare Partnership of New England, L.P., an
entity whose majority owner is Genesis Health Ventures, Inc.
Of the total consideration paid, the Operating Partnership paid approximately
$41 million consisting of $23 million in cash, $15 million in assumed existing
mortgage financing and the aforementioned $3 million borrowed from the sellers.
In addition, the Operating Partnership acquired for nominal consideration an
option to acquire Mr. Romanov's interest in ET Sub Vernon exercisable at any
time within the period ending November 30, 1999 for an exercise price of $4,000.
ET Sub-Cabot Park, LLC, and ET Sub-Cleveland Circle, LLC are unconsolidated
subsidiaries of the Operating Partnership. Accordingly, the Operating
Partnership's combined $9.8 million cash investment through the Operating
Partnership in these entities are accounted for using the equity method of
accounting. The Operating Partnership's remaining investment totaling $31
million, representing its investment in ET Sub-Heritage Andover, LLC and ET
Vernon Court, LLC, will be consolidated with the Company's other operations.
In connection with the transaction the Operating Partnership and Mr.
Romanov made capital contributions to the LLC's totaling $1.7 million and
$20,000, respectively, in exchange for their LLC interests. The Operating
Partnership also made $15.4 million of subordinated demand loans, bearing
interest at 12% per annum, to the LLC's. The contributions and loans are
summarized as follows.
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Total
Entity Contribution Loan Investment
------ ------------ ---- ----------
ET Sub-Heritage
Andover, LLC $ 853,081 $ 7,677,729 $ 8,530,810
ET Sub-Vernon
Court, LLC 321,169 2,919,717 3,240,886
ET Sub-Cabot
Park, LLC 285,509 2,595,534 2,881,043
ET Sub-Cleveland
Circle, LLC 244,698 2,224,530 2,469,228
------------ ------------ ------------
Total $ 1,704,457 $ 15,417,510 $ 17,121,967
============ ============ ============
In addition, the Operating Partnership and Mr. Romanov contributed
capital of $900,000 and $47,000, respectively, and the Operating Partnership
made an additional loan of $3.8 million to, ET Capital Corporation. The
Operating Partnership and Mr. Romanov own 95% nonvoting and 5% voting interests,
respectively, in ET Capital Corp. ET Capital Corp. used these amounts to make
additional subordinated loans to the MHFA LLC's.
The funds used by the Operating Partnership to fund the purchase of its LLC
interests were borrowed by the Operating Partnership under its Bank Credit
Facility.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements.
Supplemental financial information for Genesis is included in
the Company's Form 10-Q for the quarter ended June 30, 1998,
in accordance with Staff Accounting Bulletin No. 71.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit No. Description of Exhibit
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2.1 Purchase and Sale Agreement dated as of June
12, 1998 by and among ElderTrust Operating
Limited Partnership, Genesis Health
Ventures, Inc., collectively "Purchasers"
and Cabot Park Limited Partnership,
Cleveland Circle Assisted Living Limited
Partnership, Heritage at the Falls Assisted
Living Limited Partnership, Vernon Court
Associated Limited Partnership, and North
Andover Assisted Living Limited Partnership,
collectively "Seller".
The Company agrees to furnish supplementally
to the Commission a copy of any omitted
schedule to the Purchase and Sale Agreement
upon request.
2.2 Amendment to the Purchase and Sale Agreement
dated July 22, 1998 by and among ElderTrust
Operating Limited Partnership, Genesis
Health Ventures, Inc. and Robert A. Fishman,
counsel for the Seller and the NDNE/ADS
Entities.
2.3 Second amendment to the Purchase and Sale
Agreement dated July 31, 1998 by and among
ElderTrust Operating Limited Partnership,
Genesis Health Ventures, Inc. and Robert A.
Fishman, counsel for the Seller and for the
NDNE/ADS Entities.
2.4 Amendment to the Purchase and Sale Agreement
dated November 30, 1998 by and among
ElderTrust Operating Limited Partnership,
Genesis Health Ventures, Inc. and Robert A.
Fishman, counsel for the Seller and for the
NDNE/ADS Entities.
2.5 Assignment and Assumption of the Purchase
and Sale Agreement by and between ElderTrust
Operating Limited Partnership and Genesis
Health Ventures, Inc. dated November 23,
1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ELDERTRUST
(Registrant)
/s/ D. Lee McCreary, Jr.
- ---------------------------------------------------
D. Lee McCreary, Jr.
Senior Vice President and Chief Financial Officer
Date: December 16, 1998
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit Page No.
2.1 Purchase and Sale Agreement dated as of June 12,
1998 by and among ElderTrust Operating Limited
Partnership, Genesis Health Ventures, Inc.,
collectively "Purchasers" and Cabot Park Limited
Partnership, Cleveland Circle Assisted Living
Limited Partnership, Heritage at the Falls
Assisted Living Limited Partnership, Vernon
Court Associated Limited Partnership, and North
Andover Assisted Living Limited Partnership,
collectively "Seller".
2.2 Amendment to the Purchase and Sale Agreement
dated July 22, 1998 by and among ElderTrust
Operating Limited Partnership, Genesis Health
Ventures, Inc. and Robert A. Fishman, counsel
for the Seller and the NDNE/ADS Entities.
2.3 Second amendment to the Purchase and Sale
Agreement dated July 31, 1998 by and among
ElderTrust Operating Limited Partnership,
Genesis Health Ventures, Inc. and Robert A.
Fishman, counsel for the Seller and for the
NDNE/ADS Entities.
2.4 Amendment to the Purchase and Sale Agreement
dated November 30, 1998 by and among ElderTrust
Operating Limited Partnership, Genesis Health
Ventures, Inc. and Robert A. Fishman, counsel
for the Seller and for the NDNE/ADS Entities.
2.5 Assignment and Assumption of the Purchase and
Sale Agreement by and between ElderTrust
Operating Limited Partnership and Genesis Health
Ventures, Inc. dated November 23, 1998.
<PAGE>
EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made and entered into
as of the 12th day of June, 1998 by and between ElderTrust Operating Limited
Partnership, a Delaware limited partnership ("ElderTrust") and Genesis Health
Ventures, Inc., a Pennsylvania corporation ("Genesis", and collectively, with
ElderTrust, the "Purchaser") and Cabot Park Limited Partnership, a Massachusetts
limited partnership ("Cabot Park LP"), Cleveland Circle Assisted Living Limited
Partnership, a Massachusetts limited partnership ("Cleveland Circle LP"),
Heritage at the Falls Assisted Living Limited Partnership, a Massachusetts
limited partnership ("Heritage at the Falls LP"), Vernon Court Associates
Limited Partnership, a Massachusetts limited partnership ("Vernon Court LP"),
and North Andover Assisted Living Limited Partnership, a Massachusetts limited
partnership ("North Andover LP", with North Andover LP, Cabot Park LP, Cleveland
Circle LP, Heritage at the Falls LP, and Vernon Court LP being herein referred
to collectively as "Seller").
W I T N E S S E T H T H A T:
WHEREAS, Cabot Park LP is the owner of certain property known as Cabot
Park Village, more particularly described in Paragraph 1(a) herein ("Cabot Park
Village"); and
WHEREAS, Cleveland Circle LP is the owner of certain property known as
Heritage at Cleveland Circle, more particularly described in Paragraph 1(a)
herein ("Heritage at Cleveland Circle"); and
WHEREAS, Heritage at the Falls LP is the owner of certain property
known as Heritage at the Falls, more particularly described in Paragraph 1(a)
herein ("Heritage at the Falls"); and
WHEREAS, Vernon Court LP is the owner of certain property known as
Heritage at Vernon Court, more particularly described in Paragraph 1(a) herein
("Heritage at Vernon Court"); and
WHEREAS, North Andover LP is the owner of certain property known as
Heritage at North Andover, more particularly described in Paragraph 1(a) herein
("Heritage at North Andover"); and
WHEREAS, Heritage at the Falls, Heritage at Cleveland Circle, Heritage
at Vernon Court, Cabot Park Village and Heritage at North Andover may be
referred to herein collectively as the "Facilities" and individually as a
"Facility", and Heritage at the Falls, Heritage at Cleveland Circle and Cabot
Park Village may be referred to herein collectively as the "MHFA Facilities";
and
WHEREAS, Seller owns certain tangible and intangible assets in
connection with the Facilities; and
WHEREAS, ElderTrust desires to purchase the Facilities and certain of
said assets on the terms and conditions set forth below, and then lease the
Facilities and said assets to Genesis, which will continue the operation of the
Facilities from and after the date of closing hereunder; and
WHEREAS, in connection with its proposed operation of the Facilities,
Genesis desires to purchase certain of said assets and to hire Seller's
employees at the Facilities, all on the terms and conditions set forth below;
and
WHEREAS, Seller desires to sell the Facilities and other real and
personal property to Purchaser on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
<PAGE>
1. Sale of Real Property and Personal Property.
Subject to the terms and conditions of this Agreement, each Seller
agrees to sell, convey, transfer and assign to each Purchaser, as applicable,
and each Purchaser, as applicable, agrees to purchase and acquire from each
Seller, all right, title and interest of each Seller, direct or indirect, fixed
or contingent, tangible or intangible, in, under and to the following assets:
(a) Real Property. Each Seller shall sell, convey, transfer and assign
to ElderTrust that certain real property owned by each Seller, as applicable,
(collectively, the "Real Property") described as follows:
(i) That certain real property owned by Heritage at the
Falls LP lying in Newton, Massachusetts, consisting of the
land and all buildings structures, fixtures and other
improvements, including all permits, easements, rights of way
and related appurtenances, located at 2300 Washington Street,
Newton, MA and known as Heritage at the Falls, as more fully
described on Exhibit A.
(ii) That certain real property owned by Cleveland Circle
LP lying in Boston, Massachusetts, consisting of the land and
all buildings, structures, fixtures and other improvements,
including all permits, easements, rights of way and related
appurtenances, located at 50 Sutherland Road, Boston, MA and
known as Heritage at Cleveland Circle, as more fully described
on Exhibit B.
(iii) That certain real property owned by Vernon Court LP
lying in Newton, Massachusetts, consisting of the land and all
buildings, structures, fixtures and other improvements,
including all permits, easements, rights of way and related
appurtenances, located at 430 Centre Street, Newton, MA and
known as Heritage at Vernon Court, as more fully described on
Exhibit C.
(iv) That certain real property owned by Cabot Park LP
lying in Newtonville, Massachusetts, consisting of the land
and all buildings, structures, fixtures and other
improvements, including all permits, easements, rights of way
and related appurtenances, located at 276-278 Newtonville
Avenue, Newtonville, MA and known as The Village at Cabot
Park, as more fully described on Exhibit D.
(v) That certain real property owned by North Andover LP
lying in North Andover, Massachusetts, consisting of the land
and all buildings, structures, fixtures and other
improvements, including all permits, easements, rights of way
and related appurtenances, located at 700 Chickering Road,
North Andover, MA and known as Heritage at North Andover, as
more fully described on Exhibit E.
Also, Seller's right, title and interest as landlord (whether named as
such therein, or by assignment or otherwise) in any leases and subleases, if
any, regarding the Facilities, existing or at any time hereafter made, and all
amendments, modifications, supplements, renewals and extensions thereof,
together with any refundable security deposits made by tenants of the Facilities
which are now in the possession of Seller and will be transferred to ElderTrust
or credited against the Purchase Price (as hereinafter defined) at Closing. A
schedule identifying each portion of the Facilities currently under lease,
together with a description of the leased portion, the applicable lease term,
the rental amount, deposits, common area maintenance charges, options and
renewal rights, is attached hereto as Exhibit F. Seller has not, and shall not
be required, to disclose the names of the occupants of such leased portions of
the Facilities prior to Closing (other than the name of the sole commercial
tenant at the Facilities); however, at Closing, Seller shall provide to
Purchaser a certified rent roll for each Facility, which shall include the
information described above, as well as the names of the residents.
At Purchaser's election, exercised in writing prior to Closing, said
leases and subleases, amendments, modifications, supplements, renewals,
extensions and security deposits shall be transferred to Genesis instead of
ElderTrust, and all provisions with respect thereto herein shall thereupon be
deemed amended accordingly.
(b) ElderTrust Personal Property. Each Seller shall sell, convey,
transfer, and assign to ElderTrust that certain personal property owned by each
Seller, as applicable, and described as follows (collectively, the "ElderTrust
Personal Property"):
<PAGE>
(i) Any and all furniture, fixtures, furnishings,
machinery and equipment now located on or used in connection
with each Facility (collectively, the "FFE"). After the
expiration of the Study Period (as that term is hereinafter
defined), ElderTrust may at its own expense prepare a list of
the FFE in each Facility, and shall forward a copy of such
list to Seller. ElderTrust agrees to coordinate with Seller
the preparation of such lists, to use discretion when in the
Facilities, and to make every effort not to unreasonably
disrupt the residents or staff of the Facilities.
(ii) Goodwill, going concern and all plans, permits and
records pertaining to each Facility and each lease affecting
any Facility, including but not limited to licenses and
various permits to the extent that they are transferable.
Seller agrees to cooperate reasonably in the transferring of
such licenses and permits to ElderTrust or, at Purchaser's
election, exercised in writing prior to Closing, to Genesis.
Seller's interest in all assignable contracts shall be
assigned to ElderTrust at Closing, except for such contracts
as to which ElderTrust has given notice to Seller, not later
than the end of the Study Period, of ElderTrust's election not
to take such an assignment. The names "The Village at Cabot
Park", "Heritage at North Andover," "Heritage at the Falls,"
"Heritage at Vernon Court," and "Heritage at Cleveland Circle"
shall be included in the ElderTrust Personal Property, but no
exclusivity with respect to the name "Heritage" is hereby
expressly granted or implied. Notwithstanding the foregoing,
the Seller agrees that Seller, National Development Associates
of New England, Inc., Thomas M. Alperin, Alan D. Solomont,
Susan S. Bailis, and Theodore R. Tye, or any company owned or
controlled, directly or indirectly, by any of them, shall not
use the name "Heritage" in any future health-care related
project (other than any such project already utilizing such
name which may hereafter be acquired by any of them or any
such company).
(c) Genesis Personal Property. Each Seller shall sell, convey,
transfer, and assign to Genesis that certain personal property owned by each
Seller, as applicable, and described as follows (collectively, the "Genesis
Personal Property"):
(i) All Working Capital Assets with respect to each
Facility. As used herein, the term "Working Capital Assets"
shall mean inventory, resident deposits, petty cash, supplies,
accounts receivable (for which Seller shall be paid by Genesis
pursuant to Paragraph 11(f) herein), and prepaid rentals by or
on behalf of residents and tenants. No later than ten (10)
days prior to the expiration of the Study Period, Seller
(through the Manager, as that term is hereinafter defined)
shall deliver to Genesis an accounting of resident deposits,
petty cash and accounts receivable for the Facilities.
The ElderTrust Personal Property and the Genesis Personal Property may
be referred to herein collectively as the "Personal Property".
(d) The Real Property and the Personal Property may be referred to
herein collectively as the "Properties", and as to any one Facility and its
associated Personal Property, as a "Property" That portion of the Properties
described above which is to be conveyed hereunder to ElderTrust (being the Real
Property and the ElderTrust Personal Property) or to Genesis (being the Genesis
Personal Property) may be referred to herein as the "Applicable Property".
(e) It is the intention of each Seller to transfer, convey, sell and
assign unto Purchaser all assets of such Seller with regard to the Real
Property, of every kind and nature, whether or not the same may be specifically
described herein, except certain storage boxes and containers which are the
property of National Development Associates of New England, Inc. and which
contain materials unrelated to the Properties. Seller shall remove such boxes
and containers prior to Closing.
<PAGE>
(f) Each Purchaser acknowledges that such Purchaser's decision to
purchase the Applicable Property shall be based on such Purchaser's own
inspection and investigation of the Applicable Property and not upon any
information, data, statement or representation as to the physical condition or
state of repair of the Applicable Property given or made by Seller or its
representatives. Each Purchaser shall accept the Applicable Property in its
"AS-IS, WHERE IS" condition and state of repair, with all faults, if any, and
without warranty, express or implied, except as expressly set forth in this
Agreement. By accepting the Deeds (as that term is hereinafter defined) and
other documents of conveyance provided for herein and paying the Purchase Price,
and subject to the representations and warranties of Seller contained herein
which survive the Closing, each Purchaser will acknowledge that (a) it is
familiar with the Applicable Property and has had full opportunity, to the
extent it desired to do so, to fully inspect and review (i) the environmental
condition of the Applicable Property, if applicable, including any reports
delivered by Seller hereunder, (ii) the title to the Applicable Property, if
applicable, (iii) compliance of the Applicable Property with all applicable
laws, (iv) such other engineering, financial, and operational matters related to
the Applicable Property as each Purchaser has found appropriate, and (b) each
Purchaser is satisfied with each of the foregoing matters.
2. No Liabilities.
(a) Purchaser is assuming no liabilities attributable to Seller's
operation or ownership of the Real Property or Personal Property prior to
Closing, unless specifically assumed hereunder. Such liabilities assumed shall
be applicable solely to the assets acquired by each of ElderTrust and Genesis
and in no event shall such liabilities (or any other obligation of "Purchaser"
hereunder, including, without implied limitation, under Purchaser's
representations and warranties herein) be joint and several with respect to
Purchaser. Seller and Purchaser acknowledge that certain management personnel at
the Facilities, including, without implied limitation, the executive director
and marketing director, are employees of ADS Senior Housing, Inc., manager of
the Facilities (the "Manager"). Until Closing, Seller shall retain on its
payroll all of Seller's employees at the Facilities (collectively, the "Facility
Employees") other than those who resign or are terminated for "cause". Upon
execution and delivery of this Agreement, Seller shall promptly provide Genesis
with all employee records which are permitted by law, and assist Genesis in
lawfully obtaining employee information, including, without implied limitation,
copies of written employment agreements, and descriptions of oral employment
agreements with respect to Facility Employees, if any, and which extend beyond
the Closing Date. At Closing, Genesis shall hire all Facility Employees, and
upon such hiring, all Facility Employees shall be immediately eligible under
Genesis' health care benefits plan. Seller shall credit Genesis at Closing for
accrued vacation payroll amounts (including FUTA and SUTA taxes which will be
due and owing on such amounts) and accrued sick leave payroll amounts for those
Facility Employees hired by Genesis, and Genesis shall carry over such accrued
vacation and sick leave time for such hired Facility Employees.
<PAGE>
(b) Each Seller shall severally indemnify, defend, protect and hold
harmless each Purchaser, including its officers, directors, stockholders,
partners, employees and agents, from and against any and all damages,
liabilities, lawsuits, claims, causes of action, costs or expenses, including
reasonable attorneys' fees (collectively "Claims"), asserted against such
Purchaser by creditors of such Seller, by third parties (with regard to
contractual claims only) or by tenants of the Facility of such Seller, as a
result of actions or failures of such Seller which occurred prior to Closing,
regardless of whether such Claims are brought prior to or after Closing. In view
of the relationship between Genesis and the Manager, the foregoing indemnity
specifically excludes any Claims asserted against Genesis by any Facility
Employee, either before or after Closing, other than to the extent any such
Claims are the result of actions or failures of any Seller. In the event of any
such suit, claim, cause of action or other proceeding, such Seller shall
undertake and have responsibility for the full and complete defense thereof at
such Seller's sole cost and expense, with counsel reasonably acceptable to the
applicable Purchaser. The obligations of this Paragraph 2(b) shall survive the
Closing with regard to Claims of which the applicable Seller receives written
notice within a period of one (1) year after the Closing Date (as hereinafter
defined). In no event shall liability of any Seller hereunder exceed 20% of the
allocated net Purchase Price for the Applicable Property of such Seller which is
the subject of the Claim.
(c) Each Purchaser shall indemnify, defend, protect and hold harmless
Seller, including its officers, directors, stockholders, partners, employees and
agents, from and against any and all Claims asserted against any Seller by
employees or creditors of any Purchaser, by third parties or by tenants of the
Facilities, as a result of actions or failures of any Purchaser, each
Purchaser's employees, officers, directors, agents, managers, contractors and
any other party for whom each Purchaser is legally responsible (collectively,
"Representatives") which are based on circumstances first arising after Closing,
with regard to each Purchaser's purchase, ownership or operation of the
Applicable Property. In the event of any such suit, claim, cause of action or
other proceeding, the applicable Purchaser shall undertake and have
responsibility for the full and complete defense thereof at the applicable
Purchaser's sole cost and expense, with counsel reasonably acceptable to Seller.
(d) Seller agrees that Purchaser may initiate communication with
Facility Employees prior to the expiration of the Study Period in a cooperative
process with Seller and only so long as Purchaser shall be discreet in such
communications and shall reasonably endeavor not to reveal the existence of the
within transactions.
<PAGE>
3. Purchase Price and Deposit.
(a) The purchase price for the Real Property and the Personal Property
shall be Eighty Two Million and no/100 Dollars ($82,000,000.00) (the "Purchase
Price"). Seller and Purchaser have agreed upon the allocation of the Purchase
Price as to each Property as set forth in Schedule 1 attached hereto and
incorporated herein, and no later than fifteen (15) days prior to the end of the
Study Period, the Seller shall deliver to Purchaser an allocation of the
Purchase Price as to Personal Property and FFE (not to exceed with respect to
the FFE for each Property 10% of the allocated purchase price for such Property)
based on Seller's tax basis, and the portion of the Purchase Price to be paid by
each Purchaser for the Personal Property and FFE shall be fixed by such
determination. In no event shall the assets acquired by Genesis exceed an
allocation of Fifteen Million Dollars ($15,000,000). If the Seller shall deliver
said allocation later than five (5) days prior to the expiration of the Study
Period, then the Study Period shall be extended one (1) day for each day of
delay in such delivery. Subject to adjustments provided for herein, the Purchase
Price will be paid by Purchaser in cash or wire transfer of immediately
available federal funds at Closing, less the outstanding principal balance and
any accrued interest as of the Closing Date of any MHFA Debt (as hereinafter
defined) assumed by ElderTrust.
(b) At the expiration of the Study Period (as hereinafter defined), if
the Purchaser has not terminated this Agreement pursuant to the terms of
Paragraph 6 hereof, ElderTrust shall deposit with Commonwealth Land Title
Insurance Company ("Escrow Agent") a deposit in the amount of One Million and
no/100 Dollars ($1,000,000.00) (with all interest accrued thereon from time to
time, the "Deposit"). The Deposit will be refundable to ElderTrust hereunder
only as set forth herein.
(c) At Closing, the Deposit shall be applied to the Purchase Price.
Should the Closing not occur, the Escrow Agent shall distribute the Deposit in
accordance with the applicable provisions of this Agreement.
(d) To enable Seller to make the conveyances herein provided, Seller
may, at the time of delivery of the Deeds, use any portion of the Purchase Price
to clear title of any or all encumbrances or interests, provided that all
instruments so procured are recorded and filed simultaneously with the delivery
of the Deeds, or in the case of institutional mortgages, provided that
arrangements in accordance with customary conveyancing practices in the
Commonwealth of Massachusetts are made for a discharge to be promptly procured,
recorded or filed after the delivery of the Deeds, as applicable.
(e) If any Deed refers to a plan necessary to be recorded therewith,
the applicable Seller shall deliver such plan with the Deed in form adequate for
recording or registration.
4. Documents to Purchaser.
(a) Prior to the execution of this Agreement, Seller has caused to be
provided to the Purchaser, or made available to Purchaser through the Manager or
otherwise, and Purchaser acknowledges receipt or availability of, materials
which the Seller has identified as being all items requested on the attached
Exhibit G except as may be otherwise indicated thereon.
(b) In the event that Purchaser concludes that it has not received all
materials requested hereunder at any time, it shall give Seller notice of same
as soon as reasonably possible in order to attempt to avoid delays in Closing
and the inadvertent breach by Seller of any of its obligations hereunder.
5. Title.
(a) ElderTrust, at its sole cost and expense, shall obtain commitments
for title insurance (collectively, the "Title Commitments"), committing to
insure upon the payment of a requisite premium that ElderTrust shall own good
and indefeasible fee simple title to the Real Property, subject only to the
Permitted Exceptions, as defined herein. ElderTrust shall have until the
expiration of the Study Period, as defined hereinbelow, within which to object,
by written notice to Seller, to any exceptions to title set forth in the Title
Commitments specifying with particularity in such notice the basis of such
objection, and including copies of all documents necessary in connection
therewith. If ElderTrust fails to object to any such item by written notice to
Seller prior to the expiration of the Study Period, ElderTrust shall be deemed
to have approved such item. If ElderTrust objects to any such item by timely
written notice to Seller, Seller shall use reasonable efforts to cure
ElderTrust's objections to such item prior to the Closing Date. In no event
shall such reasonable efforts require the applicable Seller to expend in excess
of $50,000 with respect to its Facility, exclusive of liens securing the payment
of money. In the event any Seller is unable to cure any one or more of
ElderTrust's objections, such Seller may notify ElderTrust in writing of such
fact and request that ElderTrust waive ElderTrust's right to terminate this
Agreement due to such objections(s). If ElderTrust does not terminate this
Agreement within ten (10) days after receiving such notice from Seller,
ElderTrust shall be deemed to have waived its right to terminate this Agreement
due to such objections.
<PAGE>
(b) The term "Permitted Exceptions", as used herein, shall mean (i) the
lien of real estate taxes and other governmental charges not yet due and payable
and the lien of municipal betterments assessed after the date of this Agreement,
(ii) all liens and agreements of record in connection with the MHFA Debt, (iii)
all matters of record as of the date of this Agreement not objected to by
ElderTrust as set forth in Paragraph 5(a) herein, but excluding liens of debt
(other than MHFA Debt) to be paid off at Closing, (iv) all matters shown on
existing or new surveys not objected to by ElderTrust as set forth in Paragraph
5(d) herein, (v) all existing building, zoning and other city, state, county or
federal laws, codes and regulations affecting the Properties, (vi) rights of
tenants and residents of the Facilities, and (vii) any title exception created
directly by any act or omission of Purchaser or its Representatives. The term
"Permitted Exception", as used herein, shall not be deemed to preclude or limit
Purchaser's rights in connection with the breach of an express warranty,
covenant, or condition elsewhere set forth herein.
(c) Title to each Real Property shall be conveyed to ElderTrust by the
applicable Seller at Closing by Quitclaim Deed, free and clear of any and all
liens, mortgages, deeds of trust and security interests other than in connection
with the MHFA Debt, and free and clear of any and all covenants, conditions,
agreements and matters of record of any kind whatsoever, other than the
Permitted Exceptions.
(d) If ElderTrust elects to have made a survey of the Real Property,
then any objections to title based upon such survey shall be governed by the
above Paragraph 5(a). Any such objections shall be due to the Seller on the same
date as the title objections are due, and the failure to deliver objections
shall constitute a waiver thereof. ElderTrust shall bear the cost of the entire
premium and expenses for the Title Commitments, the owner's and lender's
policies of title insurance, if any, and any surveys.
6. Feasibility Study Period.
(a) During the period beginning on the date hereof and for thirty (30)
days thereafter (the "Study Period"), Purchaser shall have the right to review
and evaluate the Applicable Property and all relevant records relating thereto
in Seller's possession, at its sole cost and expense. Purchaser agrees that any
due diligence to be conducted at the Facilities shall be conducted after
forty-eight (48) hours' prior written notice of each entry, and between the
hours of 8:30 a.m. and 6:00 p.m., unless other times are mutually agreed upon.
Purchaser further agrees that it shall use care and consideration in connection
with any such entry, shall not unreasonably interfere with the residents, staff,
or operations of the Facilities, shall be discreet and shall reasonably endeavor
not to reveal that such entry is for the purpose of a prospective sale. Seller
and its representatives shall cooperate reasonably with Purchaser in conducting
its evaluation of the Applicable Property. Notwithstanding anything contained
herein to the contrary, Purchaser shall undertake no subsurface environmental
testing or drilling on any Facility without Seller's prior approval as to the
scope and timing of such testing, such approval not to be unreasonably withheld
or delayed. If Purchaser shall request Seller's approval in connection with such
testing or drilling or shall request access to such relevant records and Seller
shall fail to respond or provide access, as the case may be, within two (2)
Business Days after receipt of any such request in writing, then the Study
Period shall be extended by one (1) day for each day of delay by Seller.
(b) At any time during the Study Period, Purchaser shall have the
right, in its sole and absolute discretion, to terminate this Agreement by
providing written notice to Seller. Upon such notice, this Agreement shall
terminate and be of no further force and effect except as otherwise provided
herein. Purchaser shall promptly return to Seller all documents and materials
delivered by Seller to Purchaser (or its agents) in connection herewith, along
with copies of any or all land surveys, and all reports regarding environmental
conditions, title and physical inspection of the Facilities prepared by or for
any Purchaser, so long as Seller shall pay Purchaser's cost therefor. If
Purchaser shall fail to terminate this Agreement on or before the expiration of
the Study Period, then Purchaser shall be deemed to have approved the condition
of the Properties, as of the date of this Agreement, in all respects, including
without implied limitation title, survey, zoning compliance, financial and
operational matters, and environmental compliance, subject to the
representations and warranties of Seller contained herein.
(c) Each Purchaser agrees with respect to the exercise of the rights
granted by this Paragraph 6 to: (a) keep the Properties free and clear of any
lien associated therewith, (b) defend, indemnify and hold Seller harmless from
and against any loss, cost, claim, liability, or damage including, without
implied limitation, reasonable attorney's fees, arising from damage to any
person or property associated therewith, and (c) maintain and deliver
certificates of comprehensive public liability insurance with respect thereto
reasonably satisfactory to Seller and prior to any such exercise. This
indemnification shall survive the Closing or early termination of this
Agreement. ElderTrust shall promptly and reasonably restore the Real Property if
it is changed as a result of the exercise of any of the rights granted herein.
<PAGE>
7. Actions Pending Closing.
(a) During the Study Period and prior to Closing, Seller undertakes and
hereby covenants and agrees as follows:
(i) It will not enter into or modify any lease or any of
the other Contracts (as defined herein) with respect to the
Properties, or make any commitment or enter into any contract,
without the prior written consent of Purchaser, except for
those leases, commitments or Contracts which are entered into
in the ordinary course of business and for a duration of one
(1) year or less and which, except with respect to resident
leases, can be terminated with thirty (30) days' notice;
(ii) Seller will maintain the Real Property and the
Personal Property in substantially their present condition,
except for ordinary wear and tear, damage or casualty as set
forth in Paragraph 12 hereinbelow, and the use and consumption
of inventory and other items of Personal Property at customary
levels;
(iii) Seller will not sell or dispose of, or cause to be
sold or disposed of, all or any portion of the Real Property
or the Personal Property other than in the ordinary course of
business;
(iv) Immediately after the execution of this Agreement by
all parties, Seller shall cooperate reasonably with Purchaser
to obtain consents of governmental officials and others
regarding acquisition by Purchaser of necessary licenses and
permits, and the approvals of MHFA and HUD, and Seller shall
have the right to have a representative present at all
meetings and on all substantive telephone calls with such
governmental officials and representatives of MHFA, HUD and
EOEA;
(v) Seller shall conduct its business pending the
Closing only in the ordinary and usual course of business
consistent with past practice; and
(vi) No Seller will enter into a purchase and sale
agreement for the sale of any of the Properties during the
pendency of this Agreement; provided, however, that Seller may
discuss the potential sale of any of the Properties with third
parties.
8. Conditions Precedent to Closing.
(a) The obligation of Seller to consummate the transactions
contemplated herein shall be subject to the occurrence, satisfaction or waiver
of: (i) timely receipt of all necessary consents and approvals as set forth in
Paragraph 13(a)(i) herein; (ii) the representations and warranties made by
Purchaser hereunder being true and correct in all material respects and
confirmed in writing on the date of Closing, as of the date of Closing, (iii)
the termination, concurrent with the Closing, of all guaranties related to the
MHFA Debt, and (iv) all other documents hereunder for Closing shall have been
executed by Seller and Purchaser, as applicable.
(b) The obligation of Purchaser to consummate the transactions
contemplated herein shall be subject to the occurrence, satisfaction or waiver
of the following conditions:
(i) timely receipt of all necessary consents and
approvals as set forth in Paragraph 14(a)(i) herein;
(ii) the representations and warranties made by Seller
hereunder being true and correct in all material respects and
confirmed in writing on the date of Closing, as of the date
of Closing;
(iii) Purchaser shall have obtained all licenses and
permits necessary to complete the legal transfer to Purchaser
of all of the Properties (other than Cabot Park Village) as
operating assisted living facilities, and of Cabot Park
Village as an operating independent living facility.
Purchaser agrees to use diligent good faith efforts to obtain
all such licenses and permits and to keep Seller advised
regarding such efforts and progress in connection therewith;
(iv) The Real Property and the Personal Property shall
not have been materially and adversely destroyed or damaged,
as defined in Paragraph 12 hereinbelow;
<PAGE>
(v) The Massachusetts Housing Finance Agency ("MHFA")
and the Department of Housing and Urban Development ("HUD"),
if necessary, shall have approved in writing the sale of the
MHFA Facilities to Purchaser and ElderTrust's assumption of
all of the Seller's then existing debts and obligations
(without material modification except as may be reasonably
customary in connection with sales and assumptions of similar
MHFA transactions) to MHFA with respect to the MHFA
Facilities (collectively, the "MHFA Debt"), and any other
requirements under the loan documents in connection with the
MHFA Debt shall have been met in order to allow the sale of
the MHFA Facilities and the assumption of the MHFA Debt by
ElderTrust, with Purchaser at all times using diligent good
faith efforts to achieve such approval and meet such
requirements. If, during the Study Period, Purchaser shall
discover that material modifications to the documents in
connection with the MHFA Debt will be reasonably necessary in
order for Purchaser to achieve such approval and meet such
requirements, then not later than five (5) Business Days
prior to the end of the Study Period, Purchaser may propose
the addition of such modifications as additional conditions
precedent to the Closing hereunder. In such event, no later
than two (2) Business Days after its receipt of such
proposal, Seller shall notify Purchaser whether Seller will
agree to any or all of such additional conditions precedent
to Closing which agreement Seller may withhold in its sole
and absolute discretion;
(vi) The Properties shall be in substantially the same
condition as they were at the end of the Study Period,
reasonable wear and tear and casualty and taking as permitted
herein excepted, and also excepting conditions first arising
after the date hereof with respect to title, survey, zoning
and environmental matters, costing in the aggregate less than
One Hundred Thousand Dollars ($100,000) to remedy, in which
event, at Purchaser's election, Seller either shall remedy
the same prior to Closing (which, if such remedy cannot be
cured prior to the original Closing Date, shall be extended
for up to ninety (90) days in connection therewith as set
forth in Paragraph 9 herein) or, at the election of the
Purchaser in writing, the parties shall close and appropriate
financial adjustments shall be made; and
(vii) All other documents required hereunder for Closing
shall have been executed and delivered by Seller and
Purchaser, as applicable.
9. Closing.
(a) Closing of the transactions contemplated herein (the "Closing")
shall take place on the date which is thirty (30) days after the expiration of
the Study Period, provided the conditions precedent contained in Paragraph 8,
and the conditions contained in Paragraph 5, are met or satisfied in their
entirety, subject to extension (i) for thirty (30) days by Purchaser in the
event Purchaser has applied for but has not yet received the necessary permits
and licenses as set forth in Paragraph 8(b)(iii) above, in their entirety,
including, without implied limitation, approval of the Executive Office of Elder
Affairs ("EOEA") with respect to the transfer of the Facilities which are
assisted living facilities or the approval by MHFA and/or HUD as set forth in
Paragraph 8(b)(v) above, with one (1) additional extension period of thirty (30)
days if any of the foregoing remain outstanding at the end of the first thirty
(30) day extension period, Purchaser having used diligent good faith efforts at
all times in connection therewith, or (ii) for ninety (90) days by Seller for
Seller to cure any title objections, or, at Seller's election, zoning or
environmental issues raised by Purchaser, or, at Seller's election, to satisfy
any conditions precedent or requirements of sale whatsoever, including, without
implied limitation, issues which may arise with MHFA, HUD, and/or EOEA (such
date, as it may be extended as aforesaid, is referred to herein as the "Closing
Date"). Both parties, to the extent they are required to do so hereunder, shall
diligently pursue any outstanding items during such extension periods. In the
event of an extension by either party as aforesaid, the Closing shall take place
upon the earlier to occur of (i) seven (7) days after the completion of the
matter for which the extension was obtained, and (ii) the end of the extension
period. In the event any condition precedent set forth in Paragraph 8 is not
satisfied in full as of the Closing Date or the end of the extension period, as
applicable, the party in favor of whom such condition precedent is made may, in
its sole discretion, (i) waive the condition or (ii) declare this Agreement to
be terminated, whereupon the Deposit shall be delivered to the Purchaser, and
neither party shall have any further obligation hereunder except as expressly
set forth herein; provided, however, that nothing herein contained shall be
deemed to restrict any right or remedy of Seller or Purchaser contained in
Paragraph 21 herein as a result of the default of the other party under this
Agreement. TIME IS OF THE ESSENCE OF THIS AGREEMENT.
<PAGE>
(b) At Closing, each Seller, as applicable, shall execute (or cause to
be executed) and deliver the following documents to Purchaser:
(i) The confirmation of the representations and
warranties of Seller, updated as of Closing;
(ii) a Bill of Sale pursuant to which the applicable
Seller transfers, assigns and conveys all of its right, title
and interest in and to the ElderTrust Personal Property to
ElderTrust, and the Genesis Personal Property to Genesis;
(iii) Quitclaim Deed for each Facility from the
applicable Seller in recordable form conveying the Real
Property to ElderTrust (collectively, the "Deeds");
(iv) Fully executed assignment and assumption agreements
pursuant to which each Seller transfers, assigns and conveys
to ElderTrust (or Genesis, as the case may be) all of such
Seller's right, title and interest in, to and under all
leases, tenancies and occupancy agreements relating to the
applicable Real Property as well as any refundable security
deposits made by tenants of the applicable Real Property
which are now in the possession of the Seller, all assumed by
the applicable Purchaser from and after the Closing Date;
(v) Fully executed assignment and assumption agreements
pursuant to which each Seller transfers, assigns and conveys
to ElderTrust (or Genesis, as the case may be) all of such
Seller's right, title and interest in, to and under any
governmental permits and licenses, to the extent assignable;
service and repair warranties; guaranties; contract rights
and agreements to be assumed by Purchaser hereunder; and all
telephone exchange numbers;
(vi) A properly completed letter to each tenant under
the leases from each applicable Seller (or a joint letter
from the applicable Seller and ElderTrust at the option of
ElderTrust) advising each such tenant of the transfer of the
ownership of the Real Property and meeting applicable legal
and regulatory requirements;
(vii) The certified rent roll required by Paragraph 1(a)
herein;
(viii) A closing statement executed by Seller;
(ix) Owner's Affidavit in the form customarily required
by ElderTrust's title insurance company;
(x) Keys to all improvements and to any lock which
exists for the Facilities;
(xi) Title to all motor vehicles owned by each Seller
and used in connection with the Facilities, transferred to
ElderTrust;
(xii) Such books, records, copies of contracts and other
documents regarding the operation of the Facilities which are
in the possession of Seller and which ElderTrust reasonably
requires be provided to it, consistent with applicable law;
(xiii) An estoppel certificate from Jewish Community
Centers of Greater Boston, Inc. ("JCC") in favor of Cleveland
Circle LP in conformity with the requirements of the lease
between Cleveland Circle LP, as Landlord, and JCC, as Tenant,
affecting Heritage at Cleveland Circle (the "JCC Lease") and
disclosing no adverse monetary matters or material adverse
matters;
(xiv) A confirmation in writing from Combined Jewish
Philanthropies of Greater Boston, Inc. ("CJP") of CJP's
consent to the assignment to ElderTrust (or Genesis if the
Purchaser shall so elect) by Cleveland Circle LP and/or
National Development Associates, Inc. ("NDA"), as applicable,
of all of its or their rights and obligations in, to and
under the following documents:
<PAGE>
(A) Escrow Agreement dated as of December 28,
1993, by and among Massachusetts Housing
Financing Agency, CJP, Cleveland Circle LP,
and GZA GeoEnvironmental, Inc.; and
(B) Purchase and Sale Agreement dated as of
January 10, 1992 by and between CJP and
NDA; and
(xv) A confirmation in writing from CJP that the
Guarantee of CJP dated December 23, 1993 in favor of Cleveland
Circle LP and MHFA in connection with the JCC Lease runs to
the benefit of any assignee of the landlord's interest in the
JCC Lease; and
(xvi) Any and all other documents, instruments
and agreements in form and content reasonably acceptable to
Seller, which are necessary and appropriate in the reasonable
opinion of Purchaser's counsel to transfer and convey the Real
Property and the Personal Property and all interests therein
to Purchaser and effect other matters provided for herein in
accordance with this Agreement.
(c) At Closing, Purchaser shall deliver the following:
(i) The Purchase Price, in cash, less application of the
Deposit and any adjustment as provided herein;
(ii) The confirmation of the representations and
warranties of each Purchaser in form and content acceptable
to Seller in its reasonable discretion, updated as of
Closing;
(iii) Acceptance of the assignments set forth in
subsections (b)(iv) and (b)(v) of this Paragraph 9, together
with an assumption of the obligations and matters assigned
thereunder executed by Purchaser, and indemnification from
Purchaser of Seller with respect thereto including reasonable
attorneys' fees incurred by Seller in connection therewith;
(iv) A closing statement executed by Purchaser; and
(v) Any and all other documents, instruments and
agreements in form and content reasonably acceptable to
Purchaser, which are necessary and appropriate in the
reasonable opinion of Seller's counsel to transfer and convey
the Real Property and the Personal Property and all interests
therein to Purchaser and effect other matters provided for
herein in accordance with this Agreement.
10. Certain Credits, Charges and Prorations.
(a) All general real estate taxes and personal property taxes for the
current year with respect to the Real Property and the Personal Property shall
be prorated through the Closing Date between Seller and Purchaser, as
applicable, and all general real estate taxes and personal property taxes for
all prior years shall be paid in full by Seller prior to Closing. Seller shall
pay, or credit to the Purchase Price at the option of ElderTrust, all
assessments, if any, prorated through the Closing Date that pertain in any way
to the Real Property or the Personal Property as of the Closing Date, except as
set forth in Paragraph 5(b) herein.
(b) Seller shall pay any and all taxes payable upon transfer of the
Personal Property, all recording fees for title clearing instruments and
transfer taxes payable upon transfer of the Real Property, the cost of preparing
the Deeds, and Seller's attorneys' fees and costs and fees to MHFA associated
with Purchaser's assumption of the MHFA Debt. Purchaser shall pay the cost of
recording the Deeds, all costs of the surveys and other due diligence reviews,
studies and reports, costs and premiums to the title company selected by
Purchaser to insure title, and Purchaser's attorneys' fees and costs.
(c) At Closing, any and all termination fees due to the Manager under
those certain Management Agreements (as the same may have been amended by
certain letter agreements dated December 11, 1996 and as of June 12, 1998) by
and between each Seller, as applicable, and Manager with respect to the
Facilities (the "Management Agreements") shall, at Seller's option, be paid: (i)
by Seller from the closing proceeds, or (ii) by ElderTrust directly to Manager,
for which ElderTrust shall receive a credit against the Purchase Price in the
amount of such payment.
<PAGE>
(d) At or prior to Closing, as part of its assumption of the MHFA Debt,
ElderTrust shall either reimburse each Seller which owns an MHFA Facility for
all deposits and reserves held as security (plus all interest earned thereon as
set forth in the applicable MHFA Debt loan documents to the date of
reimbursement) in connection with the MHFA Debt on such Facility, or shall
substitute cash or other collateral for such deposits or reserves, in which case
MHFA shall reimburse such deposits and reserves (plus such interest, if any, to
the date of return) to each such Seller at Closing. The obligations under any
guaranty relating to the MHFA Debt, including, without implied limitation, the
guaranties relating to Heritage at Cleveland Circle, and Cabot Park Village,
shall be assigned to ElderTrust, or ElderTrust shall provide a substitute
therefor, and in any event the present guarantor thereof shall be released from
all liability and obligations thereunder.
(e) At Closing, the parties shall adjust vacation payroll amounts and
accrued sick leave payroll amounts for Facility Employees hired by Genesis as
set forth in Paragraph 2(a) herein.
11. Income and Expenses.
(a) All income and expenses of the Real Property shall be prorated on a daily
basis between the Seller and the Purchaser as of 12:01 a.m. of the Closing Date
or such other date as the parties agree to in writing (the "Proration Date")
(i) Rents and income, if any, including prepaid rents
and security deposits (with Genesis);
(ii) Utility charges, if any (with ElderTrust);
(iii) Payments under service agreements, if any (with
Genesis);
(iv) Monthly payments under the Management Agreements
with the Manager (if the Purchaser elects to continue the
Management Agreements);
(v) Periodic charges or fees assessed by any
governmental authority, if any (with ElderTrust);
(vi) Petty Cash (with Genesis); and
(vii) Accrued Vacation and Sick Leave (with Genesis).
Purchaser and Seller shall prepare a Proration Schedule prior to Closing,
including the items listed above and any other items the parties determine
necessary, including but not limited to adjustments for MHFA Debt payments and
resident security deposits.
(b) Any escrow accounts held by any utility companies shall be either
paid to the Seller or, if assigned to ElderTrust, Seller shall receive a credit
at Closing for any such deposit.
(c) Genesis shall receive all income from the Real Property
attributable to the period after the Proration Date and shall be responsible for
all expenses of the Real Property attributable to the period after the Proration
Date. In the event Seller receives any payment from a resident for rent due for
any period after midnight on the Closing Date, Seller shall forward such payment
to Genesis. In addition, in the event Seller has received any pre-paid rent or
any security deposits from a resident for any period after midnight on the
Closing Date, Seller shall forward such pre-paid rent and or security deposits
to Genesis.
(d) If the amount of any taxes or assessments is not known at Closing,
they shall be apportioned on the basis of 105% of the amounts for the preceding
year, with reapportionment as hereinafter set forth as soon as the true amounts
can be ascertained.
(e) The parties agree that any other amounts which may become due under
this Paragraph 11 shall be paid at Closing as can best be determined. A
post-Closing reconciliation of such pro-rated items shall be made by the parties
one hundred and twenty (120) days after Closing, and any additional amounts
determined to be owing shall be promptly forwarded to the respective party in a
lump sum payment. Any additional amounts which may become due after the
post-closing reconciliation shall be forwarded at the time they are received.
<PAGE>
(f) Genesis shall pay to Seller at Closing an amount equal to Seller's
outstanding receivables which Seller reasonably believes may be collected for
each Facility as reported in a certified statement from the applicable Seller.
After Closing, Genesis will use diligent good faith efforts to collect said
receivables, and sixty (60) days after Closing the parties shall review the
collectability of the receivables and mutually adjust the same, if necessary,
acting reasonably and in good faith.
12. Risk of Loss.
(a) Risk of loss shall remain with Seller until delivery of the Deeds
and Bills of Sale at Closing. Seller shall immediately notify Purchaser of any
damage or destruction of all or any substantial portion of any Facility or any
condemnation or taking by eminent domain of any substantial portion of the Real
Property. Within seven (7) days after such notification, ElderTrust shall have
the option to declare this Agreement null and void and receive return of the
Deposit, otherwise Purchaser shall be obligated to consummate this transaction.
In the event of any damage to the Real Property or any condemnation or taking by
eminent domain of the Real Property, Purchaser, provided it proceeds to Closing
and there is no reduction in the Purchase Price, shall be entitled to all
condemnation awards or insurance proceeds received by Seller on account of such
condemnation, damage or destruction if proceeds are payable after Closing, as
the same relate to the Applicable Property. If proceeds are paid before Closing,
said proceeds shall be deducted from the Purchase Price at Closing and Purchaser
shall purchase the Real Property and the Personal Property subject to said
damage or diminution. Any proceedings with respect to condemnation or insurance
matters pending prior to Closing shall be undertaken by Seller exclusively, and
Seller shall make reasonable efforts to maximize awards or proceeds; provided,
however, in the event Purchaser shall be entitled to condemnation or insurance
proceeds, the pending condemnation or insurance proceedings shall become the
responsibility of Purchaser from and after Closing. Any proceedings with respect
to condemnation or insurance matters pending at Closing will be assigned to
Purchaser, as applicable, with liabilities therefor delegated to Purchaser, as
applicable, at Closing. Any such proceedings commenced after Closing will be
Purchaser's responsibility. Purchaser shall have the further right to insure its
equitable interest prior to Closing in the amounts and to the extent it deems
necessary.
(b) For the purposes of the above Paragraph 12(a), a "substantial
portion" of the Real Property shall be deemed to include any taking or damage
equal to or greater than One Million Dollars ($1,000,000) per Facility and shall
not include any taking or damage of less than One Million Dollars ($1,000,000)
per Facility. If less than a substantial portion of the Real Property shall be
damaged or destroyed by a casualty or taken in condemnation or under the right
of eminent domain before the Closing Date, then the parties shall proceed to
close the transaction contemplated herein, and any proceeds actually received by
the Seller attributable to the Real Property from such casualty (plus the amount
of any applicable deductible), condemnation or eminent domain and any right the
Seller may have to receive proceeds attributable to the Real Property from such
casualty, condemnation or eminent domain shall be delivered or assigned to the
Purchaser at Closing or as soon as available, and there shall be no reduction in
the Purchase Price.
13. Representations and Warranties of Seller.
(a) Except as set forth on Exhibit I attached hereto, and with the
express recognition by all parties hereto that the Manager is an affiliate of
Genesis and that the Purchaser may have the same access as Seller to the
Manager's knowledge concerning the Facilities, the Seller (either jointly and
severally, or severally and with respect only to such Seller and the Property
owned by it, as specified in subsection (b) of this Paragraph 13) hereby
represents and warrants to Purchaser as follows:
(i) Seller shall attempt to obtain, within ten (10) days
after the full execution of this Agreement, the consent and
approval to the within transaction from all necessary parties
(failing which, the Seller shall give prompt notice to
Purchaser whereupon Purchaser may elect to extend the time in
which Seller shall obtain such consent and approval, or to
terminate this Agreement), and thereupon Seller shall have
full power and authority to execute this Agreement and to
transfer the Real Property and the Personal Property;
(ii) Each Seller is, and on the Closing Date will be, a
limited partnership duly organized, validly existing and in
good standing under the laws of the Commonwealth of
Massachusetts. Each Seller has all requisite power to own its
property and to carry on its business as presently conducted.
Each Seller is the sole owner of its Facility. After consent
and approval as noted in subsection (i) above, each Seller
will have complete and unrestricted power to perform this
Agreement and to sell, assign, transfer, convey and deliver
the Facilities, as contemplated by this Agreement;
<PAGE>
(iii) This Agreement and all other agreements, documents
and instruments executed pursuant hereto, after consent and
approval as noted in subsection (i) above, will be the valid
and binding obligations of each Seller, enforceable in
accordance with their terms, and the execution, delivery and
performance of this Agreement, and such other agreements,
documents and instruments and the transactions contemplated
hereunder, will be duly and validly authorized as evidenced by
a Secretary's Certificate of the corporate general partner of
each Seller delivered at Closing;
(iv) The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby does not,
and will not, constitute a violation of, and is not, and will
not be, a default under or conflict with the terms of (i) the
limited partnership agreement of each of Seller (after consent
and approval as noted in subsection (i) above) or (ii) any
contract, lease, indenture, agreement, order, judgment or
decree to which any Seller is a party or by which any of them
are bound or to which any of the Facilities being transferred
hereunder are subject (so long as applicable MHFA, HUD and
EOEA approvals are obtained), and, does not, and to the best
of Seller's knowledge and belief, without independent
investigation, will not, violate or constitute a default under
any statute, rule, regulation, order, or ordinance of any
governmental, judicial or arbitral body (so long as applicable
MHFA, HUD and EOEA approvals are obtained).
(v) To the best of Seller's knowledge and belief,
without independent investigation, there will be as of Closing
no contingent or other liabilities of Seller, whether as
maker, obligor, guarantor, surety or otherwise, which could
affect the Real Property or the Personal Property following
Closing, except in connection with the Permitted Encumbrances
and the MHFA Debt;
(vi) Except as otherwise specifically provided herein
(including, without implied limitation, in Paragraph
1(b)(ii)), all contracts and leasing agreements relating to
the Real Property, the Personal Property, or the operation of
the Facilities, to which Seller is a party or is bound (except
resident agreements and leases), will be terminated by Seller
prior to Closing or are terminable by Purchaser upon
assignment by Seller with not more than thirty (30) days
written notice and are, to the best of Seller's knowledge and
belief, without independent investigation, currently in full
force and effect and are assignable to Purchaser, except as
identified on Exhibit H;
(vii) To Seller's knowledge and belief, without
independent investigation, Seller is not a party to any
collective bargaining agreement of any type. To the best of
Seller's knowledge and belief, without independent
investigation, Seller has received no actual notice of any
pending or threatened labor problems at the Facilities or any
written claims by Facility Employees;
(viii) To the best of Seller's knowledge and belief,
without independent investigation, there is no suit, action or
legal, administrative, arbitration or other proceeding, change
in regulatory requirements, or other matter of any nature
pending or threatened against any Seller or against or
affecting any Facility, which would likely materially and
adversely affect the legality or validity of this Agreement,
the transactions contemplated hereby, the financial
performance or the continued operations of the business
presently conducted by Seller at the Facilities. To the best
of Seller's knowledge and belief, without independent
investigation, Seller is not in default in any respect of any
order or any decree of any court which may have jurisdiction
over Seller or any Facility. To the best of Seller's knowledge
and belief, without independent investigation, Seller
possesses all permits and licenses as necessary for the
conduct of its business and otherwise conducts its business in
compliance with all applicable laws and regulations;
(ix) All Federal, state and town income, sales, use,
property, excise or other taxes due in connection with the
Properties or each Seller's business have been fully paid or
shall be fully paid as of the Closing Date or thereafter when
due;
(x) Seller will continue the insurance coverage currently
maintained between the date hereof and the Closing Date;
<PAGE>
(xi) To the best of Seller's knowledge and belief,
without independent investigation, Seller has not received
written notice and is not otherwise aware of any condemnation
proceeding pending or threatened against all or any part of
the Real Property;
(xii) Seller shall take no action during the period from
the date of this Agreement up to and including the Closing
Date that would cause any violation of any Hazardous Waste
Laws at any Facility or on any of the Real Property, and
Seller shall promptly notify Buyer in writing if any such
violation occurs;
(xiii) To the best of Seller's knowledge and belief,
without independent investigation, Seller has received no
written notice from any local, state or federal governmental
authority or agency, or any third party, that any Real
Property is currently in violation of any zoning, subdivision,
building, health, assisted living, safety, environmental or
other applicable rules, regulations, ordinances or statutes;
(xiv) To the best of Seller's knowledge and belief,
without independent investigation, the operating statements
and other financial records which Seller has delivered to
Purchaser are true and correct in all material respects and
present fairly the financial condition and results of the
operation of the Facilities for the respective periods then
ended in conformity with generally-accepted accounting
principles. To the best of Seller's knowledge and belief,
without independent investigation, since the date of the
operating statements, Seller has conducted its business only
in the ordinary course of business consistent with past
practice;
(xv) To the best of Seller's knowledge and belief,
without independent investigation, Seller has received no
written notice of any increase in the assessed valuation of
the Real Property or the Personal Property from the assessed
values thereof for fiscal year 1998;
(xvi) To the best of Seller's knowledge and belief,
without independent investigation, Seller is not in material
default of any of the terms and provisions of the MHFA Debt
and, to the best of Seller's knowledge and belief, without
independent investigation, MHFA is not in default of any of
the terms and provisions of the MHFA Debt;
<PAGE>
(xvii) To the best of Seller's knowledge and belief, it has
delivered to Purchaser copies of all reports and studies
relating to the Real Property conducted by environmental
consultants retained by Seller and/or in the possession or
control of Seller (collectively, the "Environmental Reports")
and that, to the best of Seller's actual knowledge, without
independent investigation, there has been no discharge,
spillage, controlled loss, seepage, filtration, storage (other
than in conformity with Hazardous Waste Laws, as hereinafter
defined), disposal (other than in conformity with Hazardous
Waste Laws), or treatment (a "Spill") of oil, petroleum or
chemical liquids or solids, liquid or gaseous products or any
hazardous waste or hazardous substance, as those terms are
used in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 ("CERCLA") or in any other federal,
state or local law governing hazardous substances, as such
laws may be amended from time to time (collectively, the
"Hazardous Waste Laws") at, upon, under, within or affecting
any of the Properties, or any threat of a Spill outstanding,
except as disclosed in the Environmental Reports which have
been delivered to Purchaser for information purposes only,
shall not constitute representations or warranties of the
Seller whatsoever, and Seller shall have no liability to
Purchaser or any other party for the accuracy or completeness
of the Environmental Reports;
(xviii) To the best of Seller's knowledge and belief,
without any independent investigation, there are no rights or
claims of third parties to the use of any of the trade names,
trade marks or other rights listed on Exhibit J hereto other
than in connection with the MHFA Debt as to matters relating
to the MHFA Facilities, and in connection with financing to be
paid off at Closing with respect to the balance of the
Facilities;
(xix) Seller shall deliver to Purchaser, within ten (10)
days after the date hereof, a description of any plans
providing pensions, insurance benefits or any other similar
type of fringe benefits to Facility Employees, and to which
Seller is a party or committed either orally or in writing
together with true and complete copies of any such plans, or,
if oral, a description thereof, and including all employee
benefit plans ("Employee Benefit Plans"), as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), established by Seller or to which
Seller contributes or its required to contribute, all to the
best of Seller's knowledge and belief, without independent
investigation;
<PAGE>
To the best of Seller's knowledge and belief, without
independent investigation, the Employee Benefit Plans and the
related trusts comply with the provisions of ERISA and all
other applicable laws, rules and regulations, and all
necessary governmental approvals for the Employee Benefit
Plans have been obtained, including, but not limited to,
qualification of the Employee Benefit Plans under the Internal
Revenue Code of 1986, as amended. To the best of Seller's
knowledge and belief, without independent investigation, the
Employee Benefit Plans have been administered to date in
compliance with the requirements of ERISA;
(xx) To the best of Seller's knowledge and belief,
without independent investigation, Seller has delivered to
Purchaser a complete list and summary description, and an
exact copy of, all contracts, agreements, equipment leases,
resident agreements, and commercial leases affecting the
Properties (collectively "Contracts"), extending beyond the
Closing Date to which Seller is a party or by which, to the
best of Seller's knowledge and belief, without independent
investigation, Seller is bound. To the best of Seller's
knowledge and belief, without any independent investigation,
neither Seller nor any other contracting party is in default
in the performance of any of its obligations under any of the
Contracts, except as set forth in Exhibit I. Seller shall not
fail to reasonably perform its obligations under such
Contracts arising before the Closing Date. In the event any of
said Contracts are modified, other than in the Seller's
ordinary course of business, prior to the Closing Date,
Purchaser have no obligation to assume such Contract;
(xxi) To the best of Seller's knowledge and belief,
without independent investigation, all of Seller's inventory
and supplies consist of items of a quality and quantity usable
or saleable in the ordinary course of Seller's business. To
the best of Seller's knowledge and belief, without independent
investigation, Seller's inventory and supplies are on the date
hereof, and will be on the Closing Date, at normal and
adequate levels for the continuation of the business of Seller
in the ordinary course of business consistent with past
practice;
(xxii) To the best of Seller's knowledge and belief,
without independent investigation, Seller has good and
marketable title to the Personal Property owned or leased by
Seller free and clear of all claims; and
(xxiii) To the best of Seller's knowledge and belief, the
amount of the MHFA Debt related deposits, reserves and accrued
dividends with respect to each Facility (as of the date set
forth in parenthesis after each such amount) are as set forth
on Schedule 2 attached hereto, except that Purchaser
understands and agrees that these amounts are approximate only
and Purchaser will confirm such amounts with MHFA during the
Study Period and thereafter shall rely on MHFA's response and
not on this representation by Seller. MHFA's determination of
such amounts shall be conclusive for all purposes under this
Agreement.
(b) Notwithstanding anything contained in this Paragraph 13 to the
contrary:
(i) the representations and warranties contained in
subparagraphs (vii), (xi), (xiii), (xv), (xvii), and (xx) of
Paragraph 13(a) herein are made jointly and severally by the
Seller and shall survive the Closing hereunder for a period of
two (2) years;
(ii) the representations and warranties contained in
subparagraphs (i) through (v) inclusive, (vi) (but only to the
extent such contracts or agreements were entered into directly
by the applicable Seller), and (viii), (ix), (xii), (xiv),
(xviii), (xix), and (xxi) through (xxiii) inclusive of
Paragraph 13(a) herein are made severally by each Seller and
only with respect to the Property owned by it and shall
survive the Closing hereunder for a period of two years,
except that the representation contained in subsection (xxiii)
shall not survive the Study Period; and
<PAGE>
(iii) the representations and warranties contained in
subparagraphs (vi) (but only to the extent such contracts or
agreements were entered into directly by the Manager, either
for itself, as manager, or on behalf of the applicable
Seller), (x), and (xvi), of Paragraph 13(a) herein are made
severally by each Seller and only with respect to the Property
owned by it, and shall not survive the Closing hereunder.
(c) Any material breach of any representation or warranty contained
herein which is not cured prior to the Closing shall constitute a breach of this
Agreement, entitling Purchaser to exercise the rights and remedies contained in
Paragraph 21 hereof.
(d) Each of the foregoing representations and warranties shall be
reconfirmed as of Closing by the execution of a confirmation of representations
and warranties.
(e) As set forth in this Agreement, "to the best of Seller's knowledge
and belief" or other references to Seller's knowledge shall mean and be limited
to the actual knowledge of the following individuals: Thomas M. Alperin,
Theodore R. Tye, Michael Jacobs, Alan D. Solomont, and Susan S. Bailis.
14. Representations and Warranties of Purchaser.
(a) Purchaser represents and warrants to Seller as follows:
(i) Purchaser shall attempt to obtain, within ten (10)
days after the full execution of this Agreement, the consent
and approval to the within transaction from all necessary
parties (failing which, the Purchaser shall give prompt notice
to Seller whereupon Seller may elect to extend the time in
which Purchaser shall obtain such consent and approval, or to
terminate this Agreement), and thereupon Purchaser shall have
full power and authority to execute this Agreement and to
accept transfer of the Real Property and the Personal
Property;
(ii) The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby does not,
and will not, constitute a violation of, and is not, and will
not be, a default under or conflict with the terms of (i) the
instrument of formation of each Purchaser (after consent and
approval as noted in subsection (i) above) or (ii) any
contract, lease, indenture, agreement, order, judgment or
decree to which any Purchaser is a party, or by which either
of them is bound and, does not, and, to the best of
Purchaser's knowledge, will not, violate or constitute a
default under any statute, rule, regulation, order or
ordinance of any governmental, judicial or arbitral body;
(iii) Purchaser shall use diligent good faith efforts in
pursuing its due diligence under this Agreement; and
(iv) To the best of each Purchaser's knowledge and
belief, without any independent investigation, each Purchaser
is unaware of any reasons which would prevent each Purchaser
from being approved by MHFA, HUD and EOEA as new owners of the
Applicable Property with respect to issues of
creditworthiness, violations of law, or reputation.
(b) Any material breach of any representation or warranty contained
herein which is not cured prior to the Closing shall constitute a breach of this
Agreement, entitling Seller to receive the Deposit, if then received by the
Escrow Agent, and to exercise the rights and remedies contained in Paragraph 21
hereof.
(c) Each of the foregoing representations and warranties shall be
reconfirmed as of the Closing by the execution of a confirmation of
representations and warranties.
15. Contribution Agreement.
Prior to the expiration of the Study Period, Purchaser and Seller shall
negotiate in good faith to amend this Agreement in accordance with the general
terms outlined on Exhibit K attached hereto. In the event that agreement is
reached on or before the expiration of the Study Period, then this Agreement
shall be amended (and restated if necessary) as a Contribution Agreement with
ElderTrust Operating Partnership (as to Heritage at North Andover and Cabot Park
only), and shall continue as a Purchase and Sale Agreement as to the balance of
the Facilities. In the event that agreement is not reached by the expiration of
the Study Period, if the Purchaser shall not terminate this Agreement as set
forth in Paragraph 6 herein, then this Agreement shall continue unamended.
<PAGE>
16. Costs.
Each party shall pay the costs and expenses of its legal counsel,
accountants and other agents and personnel in respect to all aspects of the
transaction contemplated hereby.
17. Brokers.
Seller and Purchaser warrant to each other that no broker/agent has
been involved in negotiations leading to the execution of this Agreement and
that no commission is owed to any broker or agent as a result of the action of
such party. Each party agrees to defend, indemnify, and hold the other harmless
from any loss, cost or charge (including reasonable attorneys' fees), arising
from the assertion by any broker or agent that any fee or commission is owed
because of the acts or agreement of such indemnifying party.
This paragraph shall survive the Closing or the termination of this Agreement.
18. Notices.
All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if (a) delivered by
hand, (b) sent by recognized overnight courier service, (c) sent by facsimile
machine or (d) mailed, certified or registered mail, return receipt requested,
with first class postage prepaid as follows:
If to Seller: Mr. Thomas M. Alperin
National Development of New England
2310 Washington Street
Newton Lower Falls, MA 02162
Telephone: (617) 527-9800 x 120
Telecopier: (617) 965-7361
and Mr. Alan D. Solomont
400 Centre Street
Newton, MA 02158
Telephone: (617) 332-5522
Telecopier: (617) 332-2196
With a copy to: Robert A. Fishman, Esquire
Nutter, McClennen & Fish, LLP
One International Place
Boston, MA 02110-2699
Telephone: (617) 439-2000
Telecopier: (617) 973-9748
If to Purchaser:
To ElderTrust: ElderTrust
100 East State Street
Suite 100
Kennett Square, Pennsylvania 19348
Attention: Edward B. Romonov, Jr., President and
Chief Executive Officer
Telephone: (610) 925-4206
Telecopier: (610) 925-4351
With a copy to: John Haas, Esquire
ElderTrust
100 East State Street
Suite 100
Kennett Square, PA 19348
Telephone: (610) 925-4206
Telecopier: (610) 925-4351
<PAGE>
With a copy to: Joshua Davis, Esquire
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Telephone: (617) 348-1629
Telecopier: (617) 542-2241
And to Genesis: Mr. Richard R. Howard
Genesis Health Ventures
101 East State Street
Kennett Square, PA 19348
Telephone: (610) 444-6350
Telecopier: (610) 925-4100
and
Attention: Law Dept.
Genesis Health Ventures, Inc.
101 East State Street
Kennett Square, PA 19348
Telephone: (610) 444-6350
Telecopier: (610) 925-4100
With a copy to: Stephen E. Luongo, Esq.
Blank, Rome, Comisky & McCauley
One Logan Square
Philadelphia, PA 19103
Telephone: (215) 569-5500
Telecopier: (215) 569-5555
or to such other person or place as the parties hereto shall furnish in writing
to each of the other parties hereto. All notices shall be deemed to have been
timely given if hand-delivered or sent by facsimile (with proof of transmission)
to the addressee prior to the close of business or deposited with the United
States Postal Service or recognized overnight courier service on or before the
date on which such notice is required to be given.
19. Further Assurance.
Each of the parties hereto will, at the Closing or at such other time
as a party may reasonably request, without any cost or expense to the party so
requesting, execute and deliver, or cause to be executed and delivered, to such
other party such further instruments of transfer and conveyance and will take
such other actions without cost to the performing party as may reasonably be
requested to more effectively consummate the transactions contemplated by this
Agreement.
20. Assignment; Recording.
This Agreement may not be assigned, in whole or in part, by any of the
parties hereto without the written consent of all other parties except, in the
case of either Purchaser, to a non-consolidated off balance sheet entity at
least 50% owned by such Purchaser, or an entity controlling, controlled by, or
in common control with either Purchaser, and in any event only so long as an
entity controlling, controlled by, or in common control with Genesis shall
initially manage each Facility, except as the same may materially impair any
agreements for contribution as set forth in Paragraph 15 herein. In the event of
an assignment, the assignee shall then become a party to and be bound by this
Agreement, with all rights, privileges and protections afforded hereunder. Any
unauthorized assignment of this Agreement by any Purchaser shall be considered a
breach of this Agreement entitling Seller to the remedies set forth in Paragraph
21(b) herein.
<PAGE>
This Agreement shall not be recorded with any Registry of Deeds or Land
Court Registry District, within the Commonwealth of Massachusetts. If Purchaser
shall record this Agreement or cause the same to be recorded, Seller may, at its
option, elect to treat such as a default by Purchaser under this Agreement
entitling Seller to the remedies set forth in Paragraph 21(b) herein.
21. Remedies Upon Default.
(a) If Seller materially defaults on any of its obligations hereunder,
the Purchaser may, as its sole remedy hereunder, by serving notice in writing
upon the Seller in the manner provided in this Agreement:
(i) Terminate this Agreement and declare it null and
void and ElderTrust shall receive a refund of the Deposit, and
Purchaser shall receive reimbursement for out-of-pocket third
party costs for which Purchaser has presented Seller with
supporting documentation, not to exceed in the aggregate for
all Facilities the sum of One Hundred Twenty-Five Thousand
Dollars ($125,000); or
(ii) Seek specific performance against the Seller with
respect to the Applicable Property; or
(iii) Waive any such default and consummate the
transaction contemplated by this Agreement in the same manner
as if there had been no default without any reduction in the
Purchase Price and without any further claim against the
Seller therefor.
(b) If ElderTrust shall default in the performance of any of its
obligations hereunder, then the Seller shall, as its sole remedy hereunder, by
serving notice in writing upon the Purchaser in the manner provided in this
Agreement, retain the Deposit as its complete liquidated damages and not as a
penalty or forfeiture (actual damages being difficult or impossible to measure),
Purchaser shall promptly return to Seller all documents and materials delivered
by Seller to Purchaser (or its agents) in connection herewith, along with, at
Seller's election, copies of any or all land surveys, and all reports regarding
environmental conditions, title and physical inspection of the Facilities
prepaid by or for any Purchaser so long as Seller shall pay Purchaser's costs
therefor, and neither party shall have any further claim against the other,
except for those matters which are specifically stated herein to survive the
Closing or termination of this Agreement. Said liquidated damages are the
parties' best estimate of such damages. In no event shall Genesis have any
further rights hereunder with respect to the purchase of the Genesis Personal
Property in the event that ElderTrust shall default hereunder and Seller shall
retain the Deposit as aforesaid.
If Genesis shall default in the performance of any of its obligations
hereunder, then the transaction hereunder shall nonetheless proceed as if this
Agreement were solely between ElderTrust and Seller, and ElderTrust shall
identify a replacement entity to perform each and every obligation of Genesis
hereunder, which entity shall be reasonably acceptable to Seller.
(c) A failure by either party to perform any act required by it under
this Agreement, other than the requirement to close if all conditions have been
met, or waived in writing, shall not be deemed a default under this Agreement
until such party has received written notice from the other party setting forth
the alleged failure, and such failure has not been cured within five (5) days
after receipt of such notice.
<PAGE>
22. Confidentiality.
No press release or public dissemination of the transaction
contemplated herein shall be made by or on behalf of Seller or Purchaser before
the Closing has occurred, unless upon the prior written agreement of the parties
hereto, or as may be required by applicable regulatory authorities, after review
and comment by Seller, but Seller shall not have right of approval with respect
thereto. Notwithstanding anything herein to the contrary, Seller shall have the
right at any time to disclose this transaction to any of the Facility Employees
or to certain key management personnel at the Facilities in order to effect
continuity of business and a smooth transition to Purchaser. Purchaser shall
provide Seller with a copy of any press release to be issued by Purchaser as
required under the securities laws, as soon as reasonably possible prior to such
release so that Seller may comment thereon, but Seller shall not have the right
of approval with respect thereto. The parties shall issue a mutually agreed upon
press release at Closing, and either party may issue press releases or public
dissemination of the transaction after such agreed upon release, without the
consent of the other. Until Closing, Purchaser and its Representatives shall
maintain the confidentiality of all information (the "Information") obtained
from the Seller, the Manager, past or present employees and representatives with
respect to the Properties and the ownership, operation and management thereof,
shall not directly or indirectly disclose any of the Information or permit the
disclosure of any of the Information to any person or entity except professional
advisers who have agreed to maintain such confidentiality, and shall not use the
Information for any purpose other than evaluating the purchase and sale
contemplated by this Agreement. Nothing contained herein shall prevent
Purchaser's producing the Information pursuant to any court order or subpoena
that Purchaser, on advice of counsel, believes to be bona fide, and in such
event Purchaser shall give the Seller immediate written notice of receipt of
such order or subpoena, detailing the specific Information sought and for whom
it is to be produced, so that Seller may seek a protective order or other
appropriate remedy. Purchaser shall produce only that portion of the Information
that Purchaser is advised by counsel that it is required to disclose and will
exercise its best efforts to obtain reliable assurances that confidential
treatment will be accorded to any Information so released.
<PAGE>
23. Advice of Counsel and Construction.
All parties to this Agreement have been represented by counsel or have
had the opportunity to be so represented. Accordingly, the rule of construction
of contract language against the drafting party is hereby waived by both
parties.
24. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire agreement
between the parties, and all prior oral discussions or agreements are merged
herein.
(b) Survival. Acceptance of the Deeds and other closing documents by
Purchaser shall be deemed a full performance and discharge of every agreement
and obligation herein contained or expressed to be performed by Seller except
such as are by the terms hereof to be performed after the delivery of the Deeds
and other closing documents or which expressly survive the delivery of the
Deeds.
(c) Singular and Plural, Genders. The singular shall be substituted for
the plural, and vice versa, and any gender or the neuter for any other gender,
as appropriate.
(d) Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only, and shall not constitute a part of or limit the
content of any paragraph.
(e) Parties in Interest. This Agreement shall be binding upon and inure
to the benefit of the parties hereto, and their respective successors and
assigns.
(f) Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the Commonwealth of Massachusetts.
(g) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(h) Waivers. No purported waiver of any provision of this Agreement
shall be valid unless in writing signed by the person against whom such waiver
is sought to be enforced.
(i) Severability. In the event one or more of the provisions hereof
shall be held to be illegal, invalid or unenforceable, such provision(s) shall
be deemed severable and the remaining provisions shall continue in full force
and effect.
(j) Calculation of Time. If any time period under this Agreement ends
on a day other than a Business Day, then such time period shall be extended
until the next Business Day. The term "Business Day" (or, in the plural,
"Business Days") shall mean Monday through Friday excluding holidays recognized
by the Commonwealth of Massachusetts.
(k) Non-Compete. Prior to December 31, 1999, National Development
Associates of New England, Inc. ("NDNE"), Thomas M. Alperin, Theodore R. Tye, or
any company owned or controlled, directly or indirectly, by any of them, shall
not obtain permits and start construction for its or his own account of a new
assisted living Facility within a fifteen (15) mile radius of any Facility.
<PAGE>
The foregoing restriction shall not apply to: (i) the provision of
development consulting services, corporate real estate services and construction
services to an unaffiliated third party; (ii) any existing projects involving
ElderTrust and/or Genesis Health Ventures; (iii) ownership in any project which
is managed by ADS Senior Housing, Inc. or by Genesis Health Ventures; and (iv)
permitting and land acquisition activities if marketing and construction on such
a new assisted living facility has not commenced by December 31, 1999.
Except as specifically provided in this Paragraph 24(k), there shall be
no restriction on competition by the Seller or its affiliates with the
Properties.
(l) The parties hereto recognize and acknowledge that the Manager is an
affiliate of Genesis, and the Purchaser may have the same access as Seller to
the Manager's knowledge regarding the Facilities. In light of the foregoing,
Purchaser agrees, notwithstanding anything contained in this Agreement to the
contrary, that no negligent act (or failure to act) on the part of the Manager,
either before or after the expiration of the Study Period (unless the Seller
knew of same and took no action with respect thereto) shall be the basis for any
claim of breach of Seller's obligations hereunder by any Purchaser for any
purpose whatsoever, including, without implied limitation, a breach of any
representation or warranty hereunder, entitling Purchaser to exercise its rights
and remedies contained in Paragraph 21 hereof, but excluding the payment of all
taxes and other financial obligations for which Seller is responsible with
respect to the Properties in the normal course of Seller's business.
(m) Escrow Agent. Commonwealth Land Title Insurance Company shall hold
the Deposit in an interest bearing FDIC insured account. The duties of the
Escrow Agent are determined solely by this Agreement and are purely ministerial
in nature.
If for any reason a Closing does not occur as set forth in this
Agreement and either party gives notice to Escrow Agent demanding payment of the
Deposit, then Escrow Agent shall give prompt notice to the other party of such
demand. If Escrow Agent does not receive notice of objection from such other
party to the proposed payment within five (5) business days after receipt by
such other party of Escrow Agent's notice, then Escrow Agent is hereby
authorized and directed to make such payment. If Escrow Agent does receive such
notice of objection within said five (5) day period, Escrow Agent is not
obligated to make any delivery, but may hold the funds until receipt of a
written authorization signed by all persons having an interest in the dispute,
directing the disposition of the funds. In the absence of a written
authorization, the Escrow Agent may hold the funds until the rights of the
parties have been finally determined in an appropriate proceeding. Moreover, the
Escrow Agent may bring an appropriate proceeding for leave to deposit the funds
pending a determination of the rights of the parties. If threatened with
litigation, the Escrow Agent may interplead all interested parties in an
appropriate action and may deposit the funds with the clerk of the court;
thereupon the Escrow Agent will have no further liability under this Agreement.
The Escrow Agent may retain counsel in any action under this Agreement. Seller
and Purchaser shall reimburse the Escrow Agent for all costs and expenses
incurred by it in connection with any court proceeding under this Agreement in
an amount sufficient to pay these costs and expenses.
The Escrow Agent is not liable for any mistake of fact or error of
judgment, or for any acts or omissions, unless caused by its gross negligence or
willful misconduct. The parties to this Agreement each release the Escrow Agent
from any act done or omitted to be done by the Escrow Agent in good faith in
performance of its obligations under this Agreement. The Escrow Agent is
entitled to rely on any document or signature believed by it to be genuine and
may assume that any person purporting to give any writing or instruction in
connection with this Agreement is duly authorized to do so by the party on whose
behalf such writing or instruction is given.
The undersigned jointly and severally indemnify and protect the Escrow
Agent from and hold it harmless against any loss, liability, or expense incurred
without gross negligence or willful misconduct on the part of the Escrow Agent,
arising out of its duties under this Agreement, as well as the costs and
expenses of defending against any claim or liability arising under this
Agreement.
<PAGE>
25. Heritage at the Falls-Right of First Opportunity.
Right of First Opportunity Purchaser, or any entity which shall
take title at Closing to the Heritage at the Falls Facility (the "Falls
Facility") as permitted hereunder (the "Falls Facility Seller") shall not sell
all or substantially all of its ownership interest in the Falls Facility,
without first offering the same to NDNE Washington Street Limited Partnership
("Washington LP"), a Massachusetts limited partnership, owner of the adjoining
property at 2310 Washington Street, Newton Lower Falls, Massachusetts, or any
successor or assign thereof owned and controlled, directly or indirectly, by
NDNE ("NDNE Buyer") for purchase as provided in this Section 25, provided that
this right of first opportunity shall not apply to (a) any transfer to an
affiliate of any Purchaser (including any affiliate of ElderTrust and/or
Genesis, and whether pursuant to Genesis' lease of the Falls Facility or
otherwise), in which event the right shall survive such transfer and apply to
any such successor, or (b) any sale of multiple health care and/or assisted
living facilities which includes the Falls Facility, or (c) any sale following
which Genesis will continue to be the operator or manager of the Falls Facility.
If the Falls Facility Seller desires to sell all or substantially all
of its ownership interest in the Falls Facility, and an NDNE Buyer then shall be
the owner of said adjoining property, then the Falls Facility Seller shall
deliver notice (a "Sale Notice") to the NDNE Buyer. Within seven (7) Business
Days after its receipt of the Sale Notice, the NDNE Buyer shall deliver a notice
to the Falls Facility Seller as to whether or not it elects to enter into
negotiations for the purchase of the Falls Facility. If the NDNE Buyer shall
indicate in such notice that it does elect to enter into negotiations, then the
parties shall negotiate the terms of such sale and of a Purchase and Sale
Agreement therefor, at all times acting reasonably and in good faith. Falls
Facility Seller shall have the right to negotiate the sale of the Falls Facility
with third parties during the period of negotiation with NDNE Buyer hereunder.
If the parties shall fail to come to an agreement concerning the sale of the
Falls Facility within thirty (30) days after Falls Facility Seller's receipt of
NDNE Buyer's notice, or if NDNE Buyer shall fail to give Falls Facility Seller
timely notice as aforesaid, then NDNE Buyer's right hereunder shall irrevocably
terminate and be of no further force and effect, and neither NDNE Buyer nor any
Seller hereunder shall have any claim or right of action with respect to such
failure against any Falls Facility Seller or Purchaser hereunder.
Notwithstanding anything contained herein to the contrary, the right
granted to the NDNE Buyer hereunder shall terminate absolutely in the event of
the foreclosure of, or delivery of a deed-in-lieu of foreclosure with respect
to, the Falls Facility, so long as such foreclosure or deed-in-lieu shall be
with respect to bona fide third party financing.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written for the uses and
purposes herein contained.
SELLER:
CLEVELAND CIRCLE ASSISTED
LIVING LIMITED PARTNERSHIP
By: NDNE Assisted Living, Inc., General Partner
By: /s/ Thomas M. Alperin
------------------------------
Name: Thomas M. Alperin
------------------------------
Title: President
------------------------------
Date: June 22, 1998
------------------------------
By: ADS Brookline Newton Assisted Living,
Inc., General Partner
By: /s/ Alan D. Solomont
------------------------------
Name: Alan D. Solomont
------------------------------
Title: President
------------------------------
Date: June 22, 1998
------------------------------
CABOT PARK LIMITED PARTNERSHIP
By: ADS Independent Living, Inc., General Partner
By: /s/ Alan D. Solomont
------------------------------
Name: Alan D. Solomont
------------------------------
Title: President
------------------------------
Date: June 22, 1998
------------------------------
By: NDNE Assisted Living, Inc., General Partner
By: /s/ Thomas M. Alperin
------------------------------
Name: Thomas M. Alperin
------------------------------
Title: President
------------------------------
Date: June 22, 1998
------------------------------
<PAGE>
VERNON COURT ASSOCIATES LIMITED PARTNERSHIP
By: NDNE Assisted Living, Inc., General Partner
By: /s/ Thomas M. Alperin
------------------------------
Name: Thomas M. Alperin
------------------------------
Title: President
------------------------------
Date: June 22, 1998
------------------------------
By: ADS Brookline Newton Assisted Living, Inc.,
General Partner
By: /s/ Alan D. Solomont
------------------------------
Name: Alan D. Solomont
------------------------------
Title: President
------------------------------
Date: June 22, 1998
------------------------------
NORTH ANDOVER ASSISTED LIVING LIMITED PARTNERSHIP
By: North Andover Assisted Living, Inc., sole
General Partner
By: /s/ Alan D. Solomont
------------------------------
Name: Alan D. Solomont
------------------------------
Title: President
------------------------------
Date: June 22, 1998
------------------------------
<PAGE>
HERITAGE AT THE FALLS ASSISTED LIVING LIMITED PARTNERSHIP
By: ADS Assisted Living, Inc., General Partner
By: /s/ Alan D. Solomont
------------------------------
Name: Alan D. Solomont
------------------------------
Title: President
------------------------------
Date: June 22, 1998
------------------------------
By: NDNE Assisted Living, Inc., General Partner
By: /s/ Thomas M. Alperin
------------------------------
Name: Thomas M. Alperin
------------------------------
Title: President
------------------------------
Date: June 22, 1998
------------------------------
PURCHASER:
ELDERTRUST OPERATING LIMITED PARTNERSHIP
a Delaware limited partnership
By: ElderTrust, its sole general partner
By: /s/ Edward B. Romanov, Jr.
------------------------------
Name: Edward B. Romanov, Jr.
------------------------------
Title: President
------------------------------
Date: June 22, 1998
------------------------------
GENESIS HEALTH VENTURES, INC.,
a Pennsylvania corporation
By: /s/ Richard R. Howard
------------------------------
Name: Richard R. Howard
------------------------------
Title: President
------------------------------
Date:
------------------------------
Agreed to and Accepted solely as Escrow Agent hereunder as set forth in
Paragraph 3 and 24(m) herein:
COMMONWEALTH LAND TITLE INSURANCE COMPANY
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Date:
------------------------------
<PAGE>
LIMITED JOINDER
The undersigned, being the Manager specified in the within Agreement,
has reviewed the Agreement, and joins therein not as a party, but for the
limited purpose of evidencing its agreement with Seller: (a) to cooperate
promptly with Seller and Purchaser in connection with Purchaser's due diligence
review of the Properties in order to effect the transaction contemplated under
the Agreement, (b) to deliver at Seller's request such documents, agreements,
reports and further information relating to the Properties as are within the
control of the undersigned, including, without implied limitation, assistance
with financial records and calculations, (including the accounting described in
Paragraph 1(c)(i) herein) and the preparation of closing adjustments in
connection with each of the Facilities, (c) to conduct its business in
connection with the Facilities pending the Closing only in the ordinary and
usual course of business consistent with past practice, such that the optimal
performance of the Facilities shall be achieved during the pendency of the
Agreement, and the undersigned acknowledges and agrees that Seller may provide
suggestions and comments in connection therewith, (d) to hire and fire Facility
Employees only in the ordinary course of business prior to Closing, in
accordance with the customary management practices of the undersigned and in
accordance with the terms of the Management Agreements between the undersigned
and the applicable Seller with respect to each Facility, and (e) that the
incentive management fees with respect to the Facilities shall be addressed and
calculated as set forth in the Memorandum dated June 15, 1998 from Michael
Jacobs to Kevin Breslin attached hereto as Schedule 3.
ADS SENIOR HOUSING, INC.
By: /s/ Richard R. Howard
------------------------------
Name: Richard R. Howard
------------------------------
Title: President
------------------------------
Date: June 22, 1998
------------------------------
<PAGE>
LIMITED JOINDER
The undersigned joins in the within Agreement not as a party, but for
the limited purpose of evidencing their agreement with Purchaser to the terms
contained SOLELY in Paragraph 24(k) (Non-Compete) herein.
NATIONAL DEVELOPMENT ASSOCIATES OF NEW ENGLAND, INC.
By: /s/ Thomas M. Alperin
------------------------------
Name: Thomas M. Alperin
------------------------------
Title: President
------------------------------
Date: June 22, 1998
------------------------------
/s/ Thomas M. Alperin
-------------------------------
Thomas M. Alperin
/s/ Theodore R. Tye
-------------------------------
Theodore R. Tye
LIMITED JOINDER
The undersigned join in the within Agreement not as parties, but for
the limited purpose of evidencing their agreement with Purchaser to the terms
contained SOLELY in Paragraph 1(b)(ii) herein concerning the future use of the
Facility names and the name "Heritage" by the undersigned as set forth therein.
/s/ Thomas M. Alperin
-------------------------------
Thomas M. Alperin
/s/ Theodore R. Tye
-------------------------------
Theodore R. Tye
/s/ Alan D. Solomont
-------------------------------
Alan D. Solomont
/s/ Susan S. Bailis
-------------------------------
Susan S. Bailis
LIMITED JOINDER
<PAGE>
The undersigned joins in the within Agreement, not as a party, but for
the limited purpose of evidencing its agreement with Purchaser to the terms
contained SOLELY in Paragraph 25 herein.
NDNE WASHINGTON STREET
LIMITED PARTNERSHIP
By: TNT Real Estate Holdings, Inc.,
its general partner
By: /s/ Thomas M. Alperin
-------------------------------
Name: Thomas M. Alperin
Title: President
<PAGE>
SCHEDULE OF EXHIBITS
Exhibit A Legal Description of Heritage at the Falls
Exhibit B Legal Description of Heritage at Cleveland Circle
Exhibit C Legal Description of Heritage at Vernon Court
Exhibit D Legal Description of Cabot Park Village
Exhibit E Legal Description of Heritage at North Andover
Exhibit F Schedule of leases for each Facility
Exhibit G List of Due Diligence Documents
Exhibit H List of all Facility contracts in effect, designating those
contracts which are not assignable to Purchaser
Exhibit I Exceptions to Seller's Representations and Warranties
Exhibit J Trade Names, Trade Marks, Etc.
Exhibit K Terms of Proposed Contribution Agreement
Schedule 1 Purchase Price Allocation as to Properties
Schedule 2 MHFA Deposits, Reserves and Accrued Dividends
Schedule 3 Jacobs Memorandum
<PAGE>
EXHIBIT 2.2
July 22, 1998
11878-340
BY FACSIMILE
ElderTrust Operating Limited Partnership
c/o Edward B. Romanov, Jr.
ElderTrust
101 East State Street
Suite 100
Kennett Square, PA 19348
Genesis Health Ventures, Inc.
c/o Richard R. Howard
148 West State Street
Kennett Square, PA 19348
Re: Purchase and Sale Agreement dated as of June 12, 1998
(the "Agreement")
Gentlemen:
This letter will confirm our agreement further to amend the Agreement
and the Amendment to Agreement also dated as of June 12, 1998 in the following
respects:
1. The Study Period under the Agreement shall be
extended from 5:00 p.m. on July 15, 1998 until 5:00
p.m. on July 24, 1998;
2. On or before 5:00 p.m. on July 22, 1998, the
Purchaser under the Agreement shall deposit the
$1,000,000 Deposit with the Escrow Agent at a Boston
depository acceptable to both the Seller and the
Purchaser (the parties hereby approving State Street
Bank and Trust Company). The entire Deposit shall be
refundable if the Purchaser terminates the Agreement
for any reason on or before 5:00 p.m. on July 24,
1998.
3. Section 8(b)(v) of the Agreement is modified by
deleting the text thereof following the words "debts
and obligations" and inserting after the words "debts
and obligations" the following: "subject to
Satisfactory MHFA Financing Arrangements (hereinafter
defined)."
<PAGE>
"Satisfactory MHFA Financing Arrangements" means the
assignment and assumption of the MHFA Debt such that
the terms and conditions set forth in the loan
documents presently evidencing and securing the MHFA
Debt (the "MHFA Loan Documents") shall apply to
ElderTrust or its designee substantially in the same
manner as they currently apply to each Seller,
provided, however, that Satisfactory MHFA Financing
Arrangements also means the modification of the MHFA
Loan Documents to reflect the triple net leasing of
each MHFA Property by ElderTrust to a Genesis-related
entity having a capitalization of approximately
$6,000,000 (of which $2,000,000 will be comprised of
security deposits and working capital assets) and the
borrowing of some of the acquisition costs pursuant
to a Secondary Unsecured Loan (hereinafter defined),
in each case in a manner which limits the application
of the so-called limited dividend restriction
analysis (the "Limited Dividend Rules") to that
portion of the stated rent under each triple net
lease which is not applied to debt service with
respect to the MHFA Debt and debt service with
respect to the Secondary Unsecured Loan. "Secondary
Unsecured Loan" means an unsecured loan fully
subordinate to the MHFA Debt in a principal amount
not to exceed 15% of the Purchase Price allocated to
the applicable Property with a debt constant not in
excess of 14% from ET Capital, a lending entity in
which ElderTrust has a 95% beneficial ownership. If
required by MHFA, ElderTrust or an affiliate will
contribute a 10% equity of the value of each asset in
addition to the Secondary Unsecured Loan.
Satisfactory MHFA Financing Arrangements also means
the approval of the foregoing by the MHFA Board
and/or staff, as applicable without a material,
adverse change in the terms and conditions of the
MHFA Loan Documents from the perspective of the
Purchaser. For purposes hereof, a material, adverse
change would be one which involves an economic impact
of $1,000,000 or more.
Satisfactory MHFA Financing Arrangements shall not
include any other material changes to the MHFA Loan
Documents. Subject to the provision below regarding
Additional MHFA Arrangements, the risk of securing
MHFA approval of any other material changes to the
MHFA Loan Documents shall be borne by the Purchaser
and securing approvals for such other changes shall
not be a condition precedent to Closing.
Purchaser shall use diligent, good faith efforts to
achieve approval of the Satisfactory MHFA Financing
Arrangements and to obtain MHFA Board Meeting
consideration on August 11, 1998.
Seller also shall use diligent, good faith efforts to
assist Purchaser in obtaining the Satisfactory MHFA
Financing Arrangements, as well as the following
arrangements:
1. The Secondary Unsecured Loan may provide for
an acceleration of principal payment by any
amount received by ElderTrust as rent in
amounts in excess of amounts which can be
distributed or accrued for future
distribution under the Limited Dividend
Rules;
2. "Equity" for purposes of the application of
the Limited Dividend Rules will be based
upon a valuation of equity by MHFA based
upon the allocable Purchase Price (with the
right to revaluation five years following
Closing);
3. The lease of each Property shall be
subordinated to the lien of the MHFA Debt,
but shall be subject to non-disturbance
provisions reasonably satisfactory to
Purchaser; and
<PAGE>
4. MHFA will allow the lessee to operate and to
manage each Property, in all events subject
to and in conformance with all existing MHFA
Loan Documents, customary regulatory
requirements, and compensation, affirmative
action and affordable housing guidelines and
related requirements; provided, however,
there shall be no termination of the lease
by MHFA without cause.
Seller shall not communicate to MHFA the fact of any
distinction under this Agreement between the
Satisfactory MHFA Financing Arrangements and the
provisions listed as 1 through 4 above (the
"Additional MHFA Arrangements").
If MHFA staff or the MHFA Board state in writing that
MHFA will not approve or recommend approval of the
Satisfactory MHFA Financing Arrangements, then Seller
or Purchaser may terminate the Agreement upon five
(5) days notice to the other party. If either Seller
or Purchaser terminates as aforesaid, either party,
by notice to the other given within three (3) days of
such termination, may suspend such termination for up
to thirty (30) days in order to attempt to obtain
MHFA approval of the Satisfactory MHFA Financing
Arrangements or, in Purchaser's case, to waive such
closing condition. Further, Purchaser agrees promptly
to notify Seller upon Purchaser's receiving
notification from MHFA staff that they will not
recommend approval of one or more aspects of
Satisfactory MHFA Financing Arrangements or that the
MHFA Board has not granted such approval.
In the event Seller or Purchaser elects to terminate
pursuant to the foregoing paragraph or in the event
the Satisfactory MHFA Financing Arrangements are not
satisfied at Closing (as the same may be extended
pursuant to Section 9 hereof), Purchaser shall be
entitled to the return of the entire Deposit.
In the event that, prior to August 13, 1998
(intending to be the date two (2) days following the
August MHFA Board meeting), MHFA staff states in
writing that MHFA will not approve or recommend
approval of the Additional MHFA Arrangements, then
Purchaser may terminate the Agreement upon five (5)
days notice to Seller, whereupon Seller shall receive
one-half of the Deposit and Purchaser shall be
entitled to return of one-half of the Deposit. If
Purchaser does not terminate the Agreement prior to
August 13, 1998 on account of failure to obtain
approval of the Additional MHFA Arrangements, then
the entire Deposit shall be paid to Seller if, prior
to Closing, Purchaser obtains approval of the
Satisfactory MHFA Financing Arrangements but not the
Additional MHFA Arrangements and still fails to
close. Notwithstanding the foregoing, nothing herein
shall be deemed to modify Purchaser's right to
receive the return of the entire Deposit pursuant to
other provisions of the Agreement unrelated to the
Additional MHFA Arrangements.
4. Under the Amendment to Agreement dated June 12, 1998,
the undersigned (a) immediately waive any and all
reasons for the restoration of $200,000 of the
$400,000 reduction in the Base Termination Fees in
the event the Purchaser fails to purchase the
Properties under the Agreement for any reason other
than the Seller's default under the Agreement; and
(b) after July 24, 1998, waives any and all reasons
for the restoration of the remaining $200,000
reduction in the Base Termination Fees and waives the
right of first opportunity in the event the Purchaser
fails to purchase the Properties under the Agreement
for any reason other than (a) the Purchaser's failure
to obtain Satisfactory MHFA Financing Arrangements
prior to Closing; (b) the Purchaser's failure to
obtain MHFA approval of the Additional MHFA
Arrangements prior to August 13, 1998; (c) the
Seller's failure to satisfy any outstanding
environmental and physical inspection contingencies
upon which the Seller and the Purchaser shall agree
prior to the expiration of the Study Period; or (d)
the Seller's default under the Agreement.
<PAGE>
With respect to the assignment and assumption of the
MHFA Debt, if the Purchaser does not terminate the
Agreement prior to August 13, 1998, on account of
failure to obtain approval of the Additional MHFA
Arrangements, then there shall be no restoration of
the remaining $200,000 reduction in the Base
Termination Fees if, prior to Closing, the Purchaser
obtains approval of the Satisfactory MHFA Financing
Arrangements but not the Additional MHFA Arrangements
and still fails to close.
5. Exhibit K to the Agreement is revised in the form
attached hereto.
<PAGE>
Please confirm your agreement to the foregoing by signing, or having
your counsel sign, a copy of this letter and returning a faxed copy of the same
to me prior to 5:00 p.m. on July 22, 1998, together with written evidence that
the Escrow Agent has received the Deposit.
Very truly yours,
Robert A. Fishman
Counsel for the Seller and for
the NDNE/ADS Entities
RAF/em
The foregoing amendments are confirmed and agreed.
ElderTrust Operating Limited Partnership
By: ElderTrust
By: /s/ Edward B. Romanov, Jr.
-------------------------------
Name: Edward B. Romanov, Jr.
Title: President
Genesis Health Ventures, Inc.
By: /s/ Ira C. Gubernick
-------------------------------
Name: Ira C. Gubernick
Title: President
ADS Senior Housing, Inc.
By: /s/ Ira C. Gubernick
-------------------------------
Name: Ira C. Gubernick
Title: President
ADS/Multicare, Inc.
By: /s/ Ira C. Gubernick
-------------------------------
Name: Ira C. Gubernick
Title: President
The Multicare Companies, Inc.
By: /s/ Ira C. Gubernick
-------------------------------
Name: Ira C. Gubernick
Title: President
cc: (By Telefax)
John Haas, Esquire
Ira Gubernik, Esquire
Joshua Davis, Esquire
Michael Pollack, Esquire
Mr. Thomas M. Alperin
Mr. Michael Jacobs
Mr. Alan D. Solomont
Ms. Susan S. Bailis
Geoffrey Hargreaves-Heald, Esquire
510683
Exhibit 2.3
July 31, 1998
11878-340
BY FACSIMILE
ElderTrust Operating Limited Partnership
c/o Edward B. Romanov, Jr.
ElderTrust
101 East State Street
Suite 100
Kennett Square, PA 19348
Genesis Health Ventures, Inc.
c/o Richard R. Howard
148 West State Street
Kennett Square, PA 19348
Re: Purchase and Sale Agreement dated as of June 12, 1998, as
Amended by First Amendment dated as of July 22, 1998
(collectively, the "Agreement")
Gentlemen:
This letter will constitute a Second Amendment to the Agreement.
Pursuant to Sections 5 and 6 of the Agreement, the Study Period has
most recently been extended until 5:00 p.m. on July 31, 1998. In addition,
pursuant to Section 6(a) of the Agreement, the Purchaser has requested
permission to undertake certain additional environmental testing at Heritage at
Cleveland Circle, Heritage at the Falls, and Heritage at Vernon Court as
outlined in the letter from the Purchaser's counsel dated July 23, 1998 attached
hereto as Exhibit A outlining additional testing to be performed by Ransom
Environmental Consultants, Inc. ("Ransom") (the "Purchaser's Additional
Environmental Testing").
The Seller agrees to Purchaser's Additional Environmental Testing on
the following conditions:
1. With respect to Heritage at Cleveland Circle, Ransom shall
coordinate such work with CJP's consultant, GZA
GeoEnvironmental, Inc. ("GZA").
2. With respect to Heritage at the Falls, if not already
forwarded, the Seller shall provide the Purchaser with
pressure test results of the existing underground storage tank
located on the adjoining Gregorian property by July 31, 1998.
Ransom shall coordinate its additional testing with the
Seller's consultant, Sanborn Head & Associates.
3. With respect to Heritage at Vernon Court, the Purchaser may
perform the additional testing described in Exhibit A.
4. All of the Purchaser's Additional Environmental Testing shall
be performed with reasonable prior notice to the Seller. The
Purchaser specifically also shall comply with the insurance
and restoration provisions of Section 6(c) of the Agreement.
The Purchaser promptly shall provide the Seller with copies of
all such test results.
5. Subject to the price adjustment set forth in Section 6 below,
the Purchaser shall have no right to terminate the Agreement
on account of the results of Purchaser's Additional
Environmental Testing. Further, with the exception of
Purchaser's Additional Environmental Testing, the Purchaser
has accepted the environmental condition of the Properties as
of the date of the Agreement.
<PAGE>
6. The Purchaser shall notify the Seller by 5:00 p.m. on August
7, 1998, whether the Purchaser accepts the environmental
condition of the three Properties affected by the Purchaser's
Additional Environmental Testing or whether, in any instance,
a Licensed Site Professional ("LSP") has certified that
additional remediation of specific matters (beyond that
already being performed) is required by applicable law,
including the nature, scope, estimated cost for, and the
likely degree of interference at the Property as a result of
such remediation work. In such latter event, the Seller and
the Purchaser promptly shall consult with each other
concerning the nature of such recommendations and whether any
price adjustment is appropriate (at a minimum, a price
adjustment will be made in the amount of the estimated cost).
If there is additional remediation required by law and if the
estimated cost and any losses reasonably anticipated as a
result of such interference is less than $250,000.00, then (a)
the Seller and the Purchaser shall proceed with the
transaction and the Purchaser shall be afforded a credit
against the purchase price in the amount of such estimated
cost and the aforesaid losses, or (b) if the estimated cost
and the aforesaid losses exceed $250,000.00, then, at the
Seller's election exercised by notice to the Purchaser within
five (5) business days of receipt of the LSP certification,
the Seller either (i) may terminate the Agreement and return
the Deposit, or (ii) may afford the Purchaser a credit against
the purchase price for the amount of such estimated cost and
the aforesaid losses; provided, however, that if the Seller
elects to terminate the Agreement pursuant to (i) above, the
Purchaser may elect to proceed with the closing with a credit
of only $250,000 against the purchase price.
7. With respect to physical, title, survey and zoning/permitting
compliance matters, the Purchaser accepts the status of such
matters as of the date of the Agreement except for those
matters (the "Remaining Due Diligence Matters") set forth or
referenced in the letter dated July 24, 1998 from Joshua
Davis, Esquire, on behalf of the Purchaser, attached hereto as
Exhibit B. Subject to the price adjustment set forth below,
the Purchaser shall have no right to terminate the Agreement
on account of the Remaining Due Diligence Matters.
The Seller and the Purchaser agree also to extend the Study
Period until 5:00 p.m. on August 10, 1998 for the sole and
limited purpose of permitting the parties further to review
and to agree on the necessity for and/or manner in which the
Seller will address the Remaining Due Diligence Matters.
Between the date hereof and August 10, 1998, the Seller shall
work cooperatively with the Purchaser to provide any
additional information in the Seller's possession or to answer
the Purchaser's outstanding questions with respect to the
Remaining Due Diligence Matters. The Seller already has
provided a significant amount of such additional information
and certain additional undertakings as set forth in (a) the
letter dated July 28, 1998 from Robert A. Fishman, Esquire to
Joshua Davis, Esquire, attached hereto as Exhibit C, and (b)
the letter dated July 29, 1998 from Joshua Davis, Esquire, to
Robert A. Fishman, Esquire, countersigned by Theodore R. Tye
on behalf of the Seller, attached hereto as Exhibit D.
<PAGE>
In addition, prior to the Closing, the Seller shall arrange
for the execution and recording of an Amended and Restated
Reciprocal Easement Agreement affecting Heritage at the Falls
incorporating the substantive changes set forth in the
progress draft dated July 31, 1998 attached hereto as Exhibit
E, with only such remaining administrative changes to be made
as are required to reflect current addresses, prior recording
information, and similar updating or clerical changes.
If, by 5:00 p.m. on August 10, 1998, there are any Remaining
Due Diligence Matters which: (i) are required by law
(including regulatory or permitting compliance) to be
effectuated; (ii) require affirmative title insurance by the
Purchaser or its lender; or (iii) will materially interfere
with the operation of any Property for its present use, then
(a) if the estimated aggregate cost to address the same
(including environmental under Section 6) is less than the
same $250,000 referenced in Section 6 above, the Seller and
the Purchaser shall proceed with the transaction and the
Purchaser shall be afforded a credit against the purchase
price in the amount required so to comply with law, to obtain
such title insurance or to cure such problem, or (b) if the
estimated aggregate cost to address all such items (including
environmental under Section 6) exceeds $250,000.00, then, at
the Seller's election exercised by notice to the Purchaser
within five (5) business days of the Purchaser's notifying the
Seller that such costs exceed $250,000.00, the Seller either
(i) may terminate the Agreement and return the Deposit, or
(ii) may afford the Purchaser a credit against the purchase
price for the amount of such estimated cost; provided,
however, that if the Seller elects to terminate the Agreement
pursuant to (i) above, the Purchaser may elect to proceed with
the closing with a credit of only $250,000 against the
purchase price.
<PAGE>
8. Except for the matters specifically addressed herein and
except for the MHFA-related matters addressed in the First
Amendment, the Purchaser has accepted all other aspects of the
Properties as of the date of the Agreement, including, without
limitation, the physical, financial and operational aspects or
condition.
9. The sixth WHEREAS clause on Page 1 of the Agreement is amended
to delete Heritage at the Falls and to substitute Heritage at
Vernon Court as one of the "MHFA Facilities".
10. The First Amendment is re-confirmed and ratified in all respects.
Except for the matters addressed in this Second Amendment, the
Agreement remains in full force and effect and unmodified.
<PAGE>
Please confirm your agreement to the foregoing by signing, or having
your counsel sign, a copy of this letter and returning a faxed copy of the same
to me prior to 5:00 p.m. on July 31, 1998.
Very truly yours,
Robert A. Fishman
Counsel for the Seller and for
the NDNE/ADS Entities
RAF/em
<PAGE>
Exhibits
A - Mintz, Levin letter dated July 23, 1998 regarding Purchaser's Additional
Environmental Testing.
B - Mintz, Levin letter dated July 24, 1998 regarding Remaining Due Diligence
Matters.
C - NMF due diligence response letter dated July 28, 1998.
D - Mintz, Levin due diligence letter dated July 29, 1998, countersigned by
Theodore R. Tye.
E - Draft dated July 31, 1998 of Amended and Restated Reciprocal Easement
Agreement.
The foregoing amendments are confirmed and agreed.
ElderTrust Operating Limited Partnership
By: ElderTrust
By:
---------------------------------
Name:
Title:
Genesis Health Ventures, Inc.
By:
---------------------------------
Name:
Title:
cc: (By Telefax)
John Haas, Esquire
Ira Gubernik, Esquire
Joshua Davis, Esquire
Michael Pollack, Esquire
Mr. Thomas M. Alperin
Mr. Theodore R. Tye
Mr. Michael Jacobs
Mr. Alan D. Solomont
Ms. Susan S. Bailis
Geoffrey Hargreaves-Heald, Esquire
514015
<PAGE>
EXHIBIT 2.4
November 30, 1998
Edward B. Romanov, Jr., President
and Chief Executive Officer
ElderTrust
101 East State Street, Suite 100
Kennett Square, PA 19348
Richard R. Howard, President
Genesis Health Ventures
101 East State Street
Kennett Square, PA 19348
Re: Purchase and Sale Agreement (the "Agreement") dated as of June
12, 1998, as amended, by and between ElderTrust Operating
Limited Partnership and Genesis Health Ventures, Inc.
(collectively, "Purchaser") and Cabot Park Limited
Partnership, et. al. (collectively, "Seller
Gentlemen:
This letter will confirm the agreement of Seller and Purchaser further
to amend the Agreement and the Amendment to Agreement also dated as of June 12,
1998, in the following respects, such amendment to become effective
simultaneously with the consummation of the closing of the three (3) MHFA
Facilities and Heritage at North Andover:
1. Heritage at the Falls.
(a) The Closing Date for Heritage at the Falls (the "Falls")
only shall be extended to June 30, 1999 at 10:00 a.m. at the offices of Nutter,
McClennen & Fish, LLP, One International Place, Boston, Massachusetts 02110,
16th Floor Conference Center, unless otherwise mutually agreed in writing by the
parties.
(b) Seller acknowledges and consents to Purchaser's assignment
of its rights and obligations under the Agreement to Genesis Health Ventures,
Inc., a Pennsylvania corporation ("Assignee") or to any Affiliate or subsidiary
thereof, or to Genesis ElderCare Partnership of New England, Limited
Partnership. Upon Purchaser's acquisition of North Andover (as defined below)
and the three (3) MHFA facilities, Purchaser shall be released from any and all
obligations to Seller with respect to the Falls, except for those obligations,
if any, which expressly survive any termination or expiration of the Agreement.
(c) Assignee may purchase the Falls on an earlier date upon
twenty (20) days advance written notice to Seller. The parties shall use
reasonable efforts to coordinate the exact timing of the closing to attempt to
pay off the outstanding bonds on a Thursday.
<PAGE>
(d) To secure Assignee's performance with respect to the
Falls: (i) Assignee simultaneously has deposited the sum of Eight Hundred
Thousand Dollars ($800,000.00) (the "Cash Deposit") with Nutter, McClennen &
Fish, LLP (the "Falls Escrow Agent"), which shall act as "Escrow Agent" with
respect to the Falls Facility pursuant to Section 24(m) of the Agreement, and
(ii) the agreed Management Agreement Termination Fees for the Falls (the "Falls
Management Termination Fees") as set forth on Exhibit A attached hereto shall
only be payable at the time of the purchase of the Falls by Assignee. If
Assignee defaults in its obligations to purchase under the Agreement with
respect to the Falls, the Cash Deposit shall be forfeited to Seller as
liquidated damages pursuant to Section 21(b) of the Agreement and the Falls
Management Termination Fees shall be void and of no effect. Notwithstanding the
foregoing in this Paragraph 1(d), if the sum of the Cash Deposit and the Falls
Management Termination Fees exceed One Million Dollars ($1,000,000.00), then the
maximum liquidated damages hereunder shall be One Million Dollars
($1,000,000.00) and Seller shall pay any excess amount to Assignee. The Falls
Escrow Agent agrees that at all times there shall remain no less than Fifty
Thousand Dollars ($50,000.00) in escrow as part of the Cash Deposit.
(e) Assignee and Seller agree that the purchase price for the
Falls Facility is $16,477,128.00, which is to be allocated as follows: (i)
$15,730,531.00 allocated to the real property, and (ii) $746,597 allocated to
the personal property.
(f) Upon Seller's written request to Assignee and the Falls
Escrow Agent, the Falls Escrow Agent shall pay to Seller from the Cash Deposit:
(1) up to Seventy-Five Thousand Dollars ($75,000.00) in the aggregate to defray
third party costs of this transaction incurred by Seller prior to the date
hereof which are allocable to the Falls (e.g., legal, accounting); (2) the sum
of Twenty-Five Thousand Dollars ($25,000.00) per month; and (3) additional
amounts in excess of Twenty-Five Thousand Dollars ($25,000.00) per month that
the Seller requires to eliminate any cash flow deficits as identified on the
monthly financial statement provided by the manager at the Falls Facility to
Seller or in a notice of default from the mortgage lender for the Falls
Facility. Each request which Seller makes to Escrow Agent shall state the amount
to be withdrawn, the account balance of the Cash Deposit (excluding interest)
and the revised purchase price resulting from such draw (and, in the case of
subparagraph 1(f)(3) above, shall also require applicable third party supporting
documentation). The Falls Escrow Agent may conclusively rely upon the financial
information and documentation submitted by Seller or said manager as aforesaid.
The foregoing amounts paid from the Cash Deposit shall be set off against the
purchase price for the Falls if closing occurs hereunder; if closing under the
Falls does not occur and Assignee is otherwise entitled to a refund of the Cash
Deposit, then the Falls Escrow Agent shall immediately refund to Assignee the
portion of the Cash Deposit in its possession, and Seller shall immediately
refund to Assignee any drawdowns on the Cash Deposit. If Seller fails or refuses
to refund such amounts to Assignee, then Assignee shall be entitled to seek
redress against National Development Associates of New England Limited
Partnership for the entire unpaid amount pursuant to the terms and provisions of
a certain guaranty in the form attached hereto as Exhibit B (the "NDNE
Guaranty").
(g) Except as provided in Section 1(h) below, Assignee shall
not have the right to purchase the Falls unless, on or before the Closing Date,
ET Sub-Heritage Andover, L.L.C. pays in full all of its obligations under the
North Andover Purchase Money Promissory Note described in Section 2 below.
(h) If, prior to the Closing Date, there is a monetary default
or other material default under the mortgage loan documentation affecting the
Falls Facility attributable to reasons other than Seller's own actions or
omissions, Seller may, by written notice to Assignee (the "Acceleration
Notice"), require Assignee to accelerate the Closing Date hereunder and to
purchase the Falls within sixty (60) days of the Acceleration Notice, in which
case the provisions of Section 1(g) above shall be inapplicable to this
transaction as a condition precedent to such closing. If Assignee thereafter
fails to purchase the Falls within the foregoing sixty (60) day period after
receipt of the Acceleration Notice, then Assignee's purchase right hereunder
shall immediately become null and void, and so long as the conditions precedent
to closing described in Section 1(l) below are satisfied, then the entire Cash
Deposit shall be disbursed to Seller, Seller shall be relieved of its obligation
to pay the Falls Management Termination Fees and neither party shall have any
further obligation to the other with respect to the purchase and sale of the
Falls Facility, unless the parties otherwise agree in writing to an extension of
the foregoing sixty (60) day period for closing.
(i) If Assignee is adjudicated as bankrupt or if it files a
voluntary petition for relief under the U.S. Bankruptcy Code, then Seller may
require Assignee to purchase the Falls within thirty (30) days of notice from
Seller. If Assignee fails to purchase, then Seller may terminate this Agreement,
in which case Seller shall retain the Cash Deposit and be released of any
obligation to pay the Management Termination Fees for the Falls, collectively as
the liquidated and agreed-upon damages, and neither Assignee nor Seller shall
have any further liability to the other under the Agreement.
<PAGE>
(j) Notwithstanding Sections 1(b)(ii) and 24(k) of the
Agreement, until Assignee purchases the Falls, Seller may continue to operate
the same and to use the name "Heritage at the Falls" in all marketing and
related activities relating to the Falls.
(k) Seller and Assignee, in anticipation of a closing
scheduled for this date, acknowledge that, as of the date hereof, they have
agreed upon the form of the conveyancing documents, including the Amended and
Restated Reciprocal Easement Agreement, a copy of which is attached hereto as
Exhibit C.
(l) Assignee acknowledges that the remaining conditions
precedent to closing which will need to be satisfied contemporaneously with the
closing of the Falls Facility will be limited to the following: (i) the delivery
of good and marketable and insurable title as provided in Section 5 of the
Agreement, provided that Assignee acknowledges that it is satisfied with the
current status of title as negotiated by Purchaser during the term of the
Agreement, (ii) the satisfaction of those matters set forth in Sections
8(b)(ii), (iv), (vi) and (vii) of the Agreement, and (iii) Seller's compliance
with its continuing obligations under the Agreement, including, without
limitation, the delivery of closing documents as set forth in the Agreement.
(m) The provisions of this Agreement shall be paramount to
those of the Termination Fee Agreement (as defined in Section 2(a) below) and
shall govern.
2. Heritage at North Andover.
(a) Seller acknowledges that attached hereto as Exhibit A-1 is
a true, correct and complete copy of that certain letter agreement dated
December 11, 1996, as amended by Amendment to Agreement dated June 12, 1998,
between The Multicare Companies, Inc., ADS/Multicare, Inc. and NDNE/ADS entities
(as identified in Exhibit A-1) (the "Termination Fee Agreement") with regard to
the payment of Management Agreement Termination Fees.
(b) Purchaser will acquire Heritage at North Andover ("North
Andover") simultaneously with its acquisition of the MHFA facilities; provided,
however, that the purchase price of $12,407,997.00 required by the Agreement
(subject to adjustments) shall be paid $9,407,997.00 at closing and
$3,000,000.00 by the execution and delivery this date of five (5) Purchase Money
Promissory Notes (collectively, the "PMP Notes") from ET Sub-Heritage Andover,
L.L.C. to the parties and in the amounts listed on Exhibit D in the form
attached hereto as Exhibit E, and the execution and delivery this date of the
Guaranty of Payment from ElderTrust Operating Limited Partnership to the
foregoing parties in the form attached hereto as Exhibit F. North Andover
Assisted Living Limited Partnership (ANAALLP@) shall provide at closing such
additional funds as are required to discharge the existing mortgage liens on
North Andover (the "Shortfall"). If NAALLP or its partners subsequently borrow
funds to reimburse itself or themselves for having funded the Shortfall, the
Purchaser shall execute an acknowledgment of a collateral pledge of one or more
of the PMP Notes and such other documents as may reasonably be required to
evidence such acknowledgment.
(c) (i) The parties hereto agree that: (A) the Management
Agreement Termination Fees for North Andover under Section 4(c) of the
Termination Fee Agreement shall be fixed at $299,245.00 ("North Andover
Management Termination Fees"), (B) shall only be payable by Seller if, as and
when the PMP Notes are paid in full, and (C) with respect to the North Andover
Management Termination Fees, the provisions of this Agreement shall be paramount
to those of the Termination Fee Agreement and shall govern. If the maker and/or
guarantor default in the payment of the PMP Notes, the North Andover Management
Termination Fees shall be void and of no effect. Seller represents that the
North Andover Seller's obligation to pay the North Andover Management
Termination Fees is not and shall not be subject to any condition or defense
other than payment of the PMP Notes.
(ii) Contemporaneously with the closing of
North Andover by ET Sub-Heritage Andover, L.L.C.,
Purchaser shall pay to The Multicare Companies, Inc., the manager of North
Andover, an amount equal to Two Hundred Ninety-Nine Thousand Two Hundred
Forty-Five Dollars ($299,245.00), and the manager of North Andover shall assign
to Purchaser all of its right, title and interest in and to the North Andover
Management Termination Fees.
<PAGE>
3. References to Seller. With respect to any matters addressed herein
concerning the Falls, Seller shall refer only to the present owner thereof,
Heritage at the Falls Assisted Living Limited Partnership. With respect to any
matters addressed herein concerning North Andover, Seller shall refer only to
the present owner thereof, North Andover Assisted Living Limited Partnership.
4. Remainder of Agreement. In all other respects, the Agreement remains
in full force and effect and unmodified. This Amendment is intended to take
effect as a sealed instrument.
Very truly yours,
Robert A. Fishman, Esquire
Counsel for the Seller and
for the NDNE/ADS Entities
NDNE Assisted Living, Inc.,
as General Partner of the
Seller Partnerships
By: /s/ Thomas M. Alperin
---------------------------------
Thomas M. Alperin, President
ADS Assisted Living, Inc.
ADS North Andover Assisted
Living, Inc., as General
Partner of the Seller Partnerships
By: /s/ Alan D. Solomont
---------------------------------
duly authorized
<PAGE>
The foregoing amendment is confirmed and agreed:
ElderTrust Operating Limited Partnership
By: ElderTrust
By: /s/ D. Lee McCreary, Jr.
-------------------------------
Name:
Title: Senior Vice President and Chief Financial Officer
Genesis Health Ventures, Inc.
By: /s/ Ira C. Gubernick
-------------------------------
Name:
Title: Vice President
ADS Senior Housing, Inc.
By: /s/ Ira C. Gubernick
-------------------------------
Name:
Title: Vice President
ADS/Multicare, Inc.
By: /s/ Ira C. Gubernick
-------------------------------
Name:
Title: Vice President
The Multicare Companies, Inc.
By: /s/ Ira C. Gubernick
-------------------------------
Name:
Title: Vice President
ACKNOWLEDGED AND AGREED:
Nutter, McClennen & Fish, LLP,
as the Falls Escrow Agent
By: /s/ Robert A. Fishman
-------------------------------
Name:
Title:
<PAGE>
EXHIBIT 2.5
Assignment and Assumption
of
Purchase and Sale Agreement
ElderTrust Operating Limited Partnership, a Delaware limited
partnership (the "Assignor"), for and in consideration of the sum of TEN DOLLARS
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, does hereby unconditionally assign, set over,
convey and transfer to Genesis Health Ventures, Inc., a Pennsylvania corporation
("Assignee"), all of Assignor's right, title and interest in and to that certain
Purchase and Sale Agreement dated as of June 12, 1998, as amended, by and
between Assignor and Assignee, collectively as purchaser, and Cabot Park Limited
Partnership, Cleveland Circle Assisted Living Limited Partnership, Heritage at
the Falls Assisted Living Limited Partnership, Vernon Court Associates Limited
Partnership and North Andover Assisted Living Limited Partnership, collectively
as seller, as amended (the "Purchase and Sale Agreement") limited exclusively to
the purchase and sale of the assisted living facility known as The Heritage at
the Falls ("The Falls").
Capitalized terms used herein and not expressly defined shall have the
meaning ascribed to them in the Purchase and Sale Agreement.
The provisions of this Assignment and Assumption Agreement shall be
effective upon the execution and delivery of the amendment of even date herewith
to the Purchase and Sale Agreement (the "Heritage at The Falls Amendment"),
which amendment shall be considered part of the Purchase and Sale Agreement for
purposes of this instrument.
Assignee hereby assumes the rights and prospective obligations of
Assignor under Purchase and Sale Agreement with respect to The Falls only, and
the performance of all of the terms, covenants, conditions, payments and
agreements imposed by the Purchase and Sale Agreement with respect to The Falls
which first arise upon or after the execution and deliver of the Heritage at The
Falls Amendment; Assignee agrees to indemnify and hold harmless Assignor from
and against all costs, expenses, claims and losses, including, without
limitation, reasonable attorneys' fees, arising out of or in connection with
Assignee's performance of, or failure to perform any of Assignee's obligations
under the Purchase and Sale Agreement with respect to The Falls upon and after
the execution and delivery of the Heritage at The Falls Amendment and from and
against all costs, expenses, claims and losses, including, without limitation,
reasonable attorneys' fees, arising out of or in connection with any claim made
or action commenced by Seller based upon Assignee's performance of, or
Assignee's failure to perform any of Purchaser's obligations under the Purchase
and Sale Agreement prior to the execution and delivery of the Heritage at The
Falls Amendment.
<PAGE>
Assignor hereby agrees to indemnify and hold harmless Assignee
from and against all costs, expenses, claims and losses, including, without
limitation, reasonable attorneys' fees, arising out of or in connection with any
claim made or action commenced by Seller based upon Assignor's performance of,
or Assignor's failure to perform any of Purchaser's obligations under the
Purchase and Sale Agreement prior to the execution and delivery of the Heritage
at The Falls Amendment.
Notwithstanding anything to the contrary herein contained,
Assignor reserves the rights and benefits accruing upon the breach of
representation and warranties of Seller under the Purchase and Sale Agreement.
Concurrently with the execution and delivery of the Heritage at
The Falls Amendment, Assignee shall cause the existing deposit of One Million
Dollars ($1,000,000) under the Purchase and Sale Agreement to be refunded to
Assignor and to effect the substitution of Assignee's funds for Assignor's funds
as the Cash Escrow (as defined in the Heritage at the Falls Amendment).
Assignor and Assignee agree that the due diligence fees and
expenses allocable to The Falls are $142,756.00 (the "Falls Due Diligence
Expenses"). Concurrently with the execution and delivery of the Heritage at The
Falls Amendment, Assignee shall cause one half of the Falls Due Diligence
Expenses to be reimbursed to Assignor. In the event the The Falls is acquired in
a transaction in which Assignor or an affiliate or subsidiary of Assignor
acquires an ownership interest and Assignee or an affiliate or subsidiary of
Assignee acquires a leasehold interest, Assignor shall repay Assignee an amount
equal to the portion of the Falls Due Diligence Expenses previously paid to
Assignor by Assignee and the Falls Due Diligence Expenses shall be included in
the so-called "Acquisition Costs" for purposes of determining the rent to be
paid in consideration of such leasehold interest. In the event The Falls is
acquired in a transaction following which Assignee or an affiliate or subsidiary
of Assignee will own, lease or operate the Heritage at The Falls and Assignor or
an affiliate or subsidiary of Assignor will not have any ownership interest,
Assignee shall pay to Assignor the remaining one half of the Falls Due Diligence
Expenses concurrently with the consummation of such transaction.
[intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the said Assignor and Assignee have hereunto
set their hands and seals as of the 23rd day of November, 1998.
ASSIGNOR: ASSIGNEE:
ELDERTRUST OPERATING GENESIS HEALTH VENTURES, INC.,
LIMITED PARTNERHIP
By: ElderTrust, By: /s/ Ira C. Gubernick
its General Partner --------------------------------
Name:
Title: Vice President
By: /s/ D. Lee McCreary, Jr.
-------------------------------------
Name:
Title:
