Exhibit 11(c)(7)
GENESIS HEALTH VENTURES, INC.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000
June 16, 1997
CONFIDENTIAL
Xxxxxx Associates
c/o Xxxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Re: Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxx
Gentlemen:
The following confirms an agreement between Genesis Health
Ventures, Inc., a Pennsylvania corporation located in Kennett Square,
Pennsylvania, or its designee (hereinafter referred to as "Buyer") and Xxxxxx
Associates, a New York partnership with its principal place of business in
Hackensack, New Jersey ( the "Partnership") for Buyer to acquire the land and
buildings owned by the Partnership located on Xxxxxxxxxx Court, Colchester,
County of New London, Connecticut, as more particularly described on Schedule A
attached hereto and made a part hereof (collectively, the land, building,
fixtures and personalty, being the "Facility").
1. Structure of Transaction. Buyer will purchase the Facility
through an asset purchase.
2. Consideration. In consideration for the Facility, on the
Closing Date, Buyer agrees to pay the Partnership Eight
Million Four Hundred Thousand Dollars ($8,400,000) (the
"Purchase Price") which shall be paid in cash on the Closing
Date.
3. Facility Lease. The Facility is subject to that certain Lease,
made as of November 14th, 1986, by and between the Partnership
and Health Resources of Colchester, Inc., a Connecticut
corporation, as amended by those certain Amendments of Lease,
made as of November 18, 1992 and December 17, 1993
(collectively, the "Lease"). Buyer agrees that the Lease will
be assumed by Buyer on the Closing Date on the same economic
Xxxxxx Associates
June 16, 1997
Page 2
terms existing on the Closing Date; provided, that the amount
of annual rent payable to Buyer pursuant to Section 2.1 of the
Lease will be fixed to equal the annual debt service payments
under the indebtedness described in such section.
4. Access. The Partnership will provide Buyer, its accountants,
counsel, and other representatives reasonable access to all
the properties, books, contracts and other records of the
Facility.
5. Conduct of Business. From the date of this letter until
definitive agreements are executed and the transactions
described herein are consummated, the Partnership will
continue to operate the Facility in the usual, regular and
ordinary manner consistent with past practices, and to comply
with all applicable laws, rules and regulations.
6. Limited Representations and Warranties. The Partnership hereby
represents and warrants to Buyer (i) attached as Exhibit A
hereto is a complete and correct copy of the Lease as in
effect on the date hereof, (ii) no person has an option to
acquire the Facility and (iii) attached as Exhibit B hereto is
a summary presentation of the operating results of the
Facility for the fiscal years ended December 31, 1995, 1996
and for the fiscal quarter ended March 31, 1997.
7. Conditions. The parties agree that this agreement is subject
to the following conditions:
(a) Execution by the parties of customary real estate
transfer documents at the closing.
(b) The parties receiving all necessary governmental and
third party licenses, permits, regulatory approvals
and consents for the Transaction;
(c) The Facility being transferred free and clear of all
liens, encumbrances and restrictions, except the
Lease and except for other imperfections which do not
materially adversely affect the value of the Facility
as a skilled nursing facility;
(d) Compliance with all laws applicable to the proposed
transaction; and
(e) Consummation of the Merger (as defined in the
Agreement and Plan of Merger (the "Merger Agreement")
by and among The Multicare Companies, Inc., Waltz
Acquisition Corp. and the other parties who are
signatories thereto).
Xxxxxx Associates
June 16, 1997
Page 3
8. Closing. Buyer and the Partnership shall close the
transactions described herein contemporaneously with the
Effective Time (as defined in the Merger Agreement) (such
date, the "Closing Date").
9. Assignment. Buyer may assign its rights under this agreement
to any designee; provided that Buyer shall remain obligated
hereunder regardless of any such assignment.
10. Termination. This agreement shall terminate upon the earlier
of (a) the Closing Date and (b) the date the Merger Agreement
is terminated.
Please indicate your acceptance of the terms and conditions of
this agreement by executing it in the space provided below, and returning one
executed copy to Genesis. Once executed and returned to Genesis, this letter
will constitute a binding agreement between the parties. Upon our receipt
thereof, Genesis will undertake the preparation of the proposed definitive
agreements covering the transactions described herein.
Very truly yours,
GENESIS HEALTH VENTURES, INC.
By: /S/ Xxxxxxx X. Xxxxxx
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The foregoing is agreed to by the undersigned.
XXXXXX ASSOCIATES
By: Xxxxxx X. Xxxxxx , its general partner
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Name:
