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AMENDMENT
NO. 2
TO THE
AGREEMENT AND PLAN OF
MERGER
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This AMENDMENT NO. 2 (this "
Amendment ") is made and entered into as of April 19, 2007
by and among FC-GEN ACQUISITION, INC., a Delaware corporation
(“ Parent ”), GEN ACQUISITION CORP., a
Pennsylvania corporation and wholly-owned subsidiary of Parent
(“ Merger Sub ”), and GENESIS HEALTHCARE
CORPORATION, a Pennsylvania corporation (the “ Company
”), to amend that certain AGREEMENT AND PLAN OF MERGER, dated
as of January 15, 2007, as amended as of January 25, 2007, by and
among Parent, Merger Sub and the Company (as amended hereby, and as
it may have been and may be further amended from time to time, the
“ Merger Agreement ”).
WHEREAS, Section 10.4 of the Merger Agreement provides for the
amendment of the Merger Agreement in accordance with the terms set
forth therein;
WHEREAS, the Board of Directors of the Company has unanimously (i)
determined that it is in the best interests of the Company to enter
into this Amendment, (ii) approved the execution, delivery and
performance of this Amendment and the consummation of the
transactions contemplated hereby, including the Merger, and (iii)
resolved to recommend adoption of the Merger Agreement, as amended
by this Amendment, by the shareholders of the Company;
WHEREAS, the Board of Directors of Parent has unanimously approved
this Amendment and declared it advisable for Parent to enter into
this Amendment; and
WHEREAS, the parties hereto desire to amend the Merger Agreement as
set forth below.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties
hereto do hereby agree as follows:
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1.
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Merger
Consideration. Section
3.1(c) of the Merger Agreement is hereby amended by replacing the
phrase “$63 in cash, without interest (the “Merger
Consideration”)” therein by the phrase “$64.25 in
cash, without interest (the “Merger
Consideration”)”.
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2.
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Amendment
to Section 1.1. The
definition of “Termination Fee” set forth in Section
1.1 of the Merger Agreement is hereby amended by replacing the
phrase “$50 million” therein by the phrase “$15
million.”
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3.
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Amendment
to Section 4.16. Section
4.16 of the Merger Agreement is hereby amended by restating Section
4.16 in its entirety to read as follows:
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“On January 15, 2007, Goldman, Sachs & Co. delivered to
the Board of Directors of the Company an opinion to the effect
that, as of January 15, 2007, the $63 per Share in cash to be
received by holders of Shares pursuant to the Merger Agreement (as
in effect on January 15, 2007) was fair, from a financial point of
view, to such holders. On April 19, 2007, Goldman, Sachs & Co.
delivered to the Board of Directors of the Company an opinion to
the effect that, as of April 19, 2007, the $64.25 per Share in cash
to be received by holders of Shares pursuant to this Agreement
(upon giving effect to Amendment No. 2 to the Merger Agreement) was
fair, from a financial point of view, to such
holders.”
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4.
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Amendments
to Section 5.7. Section
5.7 of the Merger Agreement is hereby amended by adding the
following sentence at the end of Section 5.7:
“Notwithstanding the foregoing, the Equity Financing
Commitment was amended as of April 18, 2007, with the consent of
the Company.”
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5.
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Amendments
to Section 9.2 .
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(a)
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Section
9.2(b)(I) of the Merger Agreement is hereby amended by replacing
the term “$50 million” occurring in the third sentence
thereof with the term “$15 million”.
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(b)
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Section
9.2(b)(I) of the Merger Agreement is hereby amended by adding the
following sentence at the end thereof:
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“If this
Agreement is terminated by Parent, on the one hand, or the Company,
on the other hand, pursuant to Section 9.1(b)(iii) , then
the Company shall pay to Parent, within two days of Parent’s
delivery to the Company of a written statement of its expenses, the
Break-Up Expenses in accordance with Section 9.2(d);
provided , however , that the Company shall not be
obligated to pay Break-Up Expenses to Parent pursuant to this
sentence if the Company is also obligated to pay and actually pays
to Parent (x) Break-Up Expenses pursuant to the third sentence of
this Section 9.1(b)(I) or (y) the Termination Fee pursuant to the
first sentence of this Section 9.1(b)(I).”
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(c)
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Section
9.2(b)(II) of the Merger Agreement is hereby amended by replacing
the term “$50 million” occurring in the third sentence
thereof with the term “$15 million”.
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(d)
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Section 9.2(f)
of the Merger Agreement is hereby amended by replacing the term
“$5 million” therein with the term “$7.5
million”.
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6.
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Financing. Parent has delivered to the Company the
executed amendment to the Equity Financing Commitment attached
hereto as Annex A, and the Company hereby consents to such
amendment of the Equity Financing Commitment. The Equity Financing
Commitment, as so amended, shall be deemed to be the “Equity
Financing Commitment” referred to in the Merger Agreement and
the commitment of the pa
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