EXHIBIT 2.2
July 22, 1998
11878-340
BY FACSIMILE
ElderTrust Operating Limited Partnership
c/o Xxxxxx X. Xxxxxxx, Xx.
ElderTrust
000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Genesis Health Ventures, Inc.
c/o Xxxxxxx X. Xxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx, XX 00000
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)."
"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
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.
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.
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,
Xxxxxx X. Xxxxxxx
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/ Xxxxxx X. Xxxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
Genesis Health Ventures, Inc.
By: /s/ Xxx X. Xxxxxxxxx
-------------------------------
Name: Xxx X. Xxxxxxxxx
Title: President
ADS Senior Housing, Inc.
By: /s/ Xxx X. Xxxxxxxxx
-------------------------------
Name: Xxx X. Xxxxxxxxx
Title: President
ADS/Multicare, Inc.
By: /s/ Xxx X. Xxxxxxxxx
-------------------------------
Name: Xxx X. Xxxxxxxxx
Title: President
The Multicare Companies, Inc.
By: /s/ Xxx X. Xxxxxxxxx
-------------------------------
Name: Xxx X. Xxxxxxxxx
Title: President
cc: (By Telefax)
Xxxx Xxxx, Esquire
Xxx Xxxxxxxx, Esquire
Xxxxxx Xxxxx, Esquire
Xxxxxxx Xxxxxxx, Esquire
Xx. Xxxxxx X. Xxxxxxx
Mr. Xxxxxxx Xxxxxx
Xx. Xxxx X. Xxxxxxxx
Xx. Xxxxx X. Xxxxxx
Xxxxxxxx Xxxxxxxxxx-Xxxxx, Esquire
510683
