OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Agreement") is made as of the 25th day
of September 2002, by and between D. Lee McCreary, Jr., an individual
residing in Wilmington, Delaware ("Optionor"), and ElderTrust Operating
Limited Partnership, a Delaware limited partnership ("Optionee").
1. Grant of Option. Optionor, in consideration of the sum of Ten
Dollars ($10) Dollars (the "Option Price"), receipt and sufficiency of
which are hereby acknowledged, hereby grants to Optionee the exclusive
right and option (the "Option") to purchase all of Optionor's right,
title and interest in and to Cleveland ALF, L.L.C. ("Cleveland ALF
Ownership Interest"). Good and clear title to the Cleveland ALF
Ownership Interest, free and clear of all liens and encumbrances except
as may be acceptable to Optionee, is to be conveyed upon exercise of the
Option. Optionor and Optionee hereby acknowledge that the approval of
the Massachusetts Housing Finance Agency (the "MHFA") is required before
Optionor may convey the Cleveland ALF Ownership Interest to Optionee.
Upon exercise of the Option by Optionee, Optionor and Optionee agree to
take all steps necessary or appropriate, at the expense of Optionee, to
obtain the consent of the MHFA. In the event that the MHFA is not
willing to grant such consent, Optionor shall have no obligation to
convey the Cleveland ALF Ownership Interest to Optionee hereunder.
2. Exercise of the Option. The Option may be exercised by
Optionee at any time prior to December 31, 2003 by providing written
notice of such election to Optionor. Upon exercise of the Option by
Optionee, the closing of transfer of the Cleveland ALF Ownership Interest
shall take place as promptly as possible thereafter but, in any event,
not later than June 30, 2004. Nothing herein shall be construed to
obligate Optionor to exercise the Option and Optionor hereby acknowledge
and agree that the Option may be exercised by Optionee at Optionee's
sole and absolute discretion.
3. Purchase Price. If Optionor exercises the Option as herein
provided, Optionee shall pay to Optionor a purchase price for the
Optionor's Cleveland ALF Ownership Interest in the amount of One Dollar
($1.00) (the "Purchase Price").
4. Representations and Warranties. Optionor hereby represents
and warrants to Optionee that Optionor is the sole owner of the Cleveland
ALF Ownership Interest and, subject to obtaining the consent of the MHFA
described in Paragraph 1 above, has the full and complete authority to
enter into this Agreement and convey the Cleveland ALF Ownership Interest
free and clear of any lien, claim or encumbrance. Optionee and Optionor
agree to execute such other documentation and take such other action as
may be commercially reasonable to effectuate this Agreement.
5. Assignment. Optionee shall have the right to assign this
Option, or any of Optionee's Rights hereunder, or to name nominees to
take title to the Cleveland ALF Ownership Interest.
6. Successors and Assigns. This Agreement shall be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.
7. Notices. Wherever in this Agreement it shall be required or
permitted that notice or demand be given or served by either party to or
on the other, such notice or demand shall be deemed duly given or served if,
and shall not be deemed duly given or served unless, in writing and mailed
by certified mail, return receipt requested, or sent by Federal Express
or comparable private delivery service which provides proof of delivery,
addressed as follows:
If given to Optionor:
D. Lee McCreary, Jr.
110 Stone Tower Road
Wilmington, DE 19803
If given to Optionee:
c/o ElderTrust
101 East State Street
Kennett Square, Pennsylvania 19348
Attn: Controller
The time at which any notice or demand shall be deemed given or
served shall be the time at which such notice or demand is mailed or
delivered, whether or not such delivery is refused. Any notice may also
be delivered personally but only if delivered personally to the
individuals to whom notice is required to be given as set forth above.
-2-
IN WITNESS WHEREOF, Optionor and Optionee have executed this
Agreement as of the date first above written.
OPTIONOR: OPTIONEE:
/s/ D. Lee McCreary, Jr.
- -------------------------
D. Lee McCreary, Jr. ELDERTRUST OPERATING LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: ElderTrust, its general partner
By:/s/ Steven P. Seifred
_______________________
Name: Steven P. Seifred
Title: Controller
-3-