8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):

June 9, 2005

NEIGHBORCARE, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	0-33217	06-1132947
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
601 East Pratt Street, Third Floor Baltimore, MD		21202
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code   (410) 528-7300
N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement

Effective December 1, 2003, NeighborCare, Inc. (“NeighborCare”) spun off Genesis HealthCare Corporation (“Genesis”).  In connection with the spin-off, NeighborCare and Genesis entered into various contractual arrangements which are described in greater detail in NeighborCare’s annual report on Form 10-K for the fiscal year ended September 30, 2004.

Effective June 9, 2005, NeighborCare and Genesis amended (i) the Master Agreement for Pharmacy, Pharmacy Consulting and Related Products and Services, dated as of December 1, 2003 and amended on May 7, 2004, by and between NeighborCare Pharmacy Services, Inc., NeighborCare’s subsidiary, and Genesis (“Pharmacy Agreement”); (ii) the Tax Sharing Agreement, dated as of December 1, 2003, by and between NeighborCare and Genesis (“Tax Sharing Agreement”); and (iii) the Transition Services Agreement, dated as of December 1, 2003, by and between NeighborCare and Genesis (“Transition Services Agreement”), each as described below.  The below summary is qualified in its entirety by the full and complete text of the amendments to the Pharmacy Agreement, Tax Sharing Agreement and Transition Services Agreement, which are attached to this Current Report on Form 8-K as Exhibits 99.1, 99.2 and 99.3, respectively, and are incorporated by reference into this Item 1.01.

Amendment No. 2 to Pharmacy Agreement

The Pharmacy Agreement initially provided for a pricing adjustment after five years.  Amendment No. 1 to the Pharmacy Agreement, dated as of May 7, 2004, accelerated by nine months the ability to renegotiate pricing.  Pursuant to this Amendment No. 2, NeighborCare, through its subsidiary NeighborCare Pharmacy Services, Inc., and Genesis agreed to reinstate the provision of the original Pharmacy Agreement pursuant to which NeighborCare and Genesis agreed to negotiate any adjustments in pricing at least 180 days prior to December 1, 2008.

Amendment No. 1 to Tax Sharing Agreement

NeighborCare and Genesis amended the Tax Sharing Agreement pursuant to this Amendment No. 1 in order to (i) change the allocation of tax attributes between the parties, specifically to increase the percentage of net operating loss carryforward (“NOL”) to be allocated to Genesis; (ii) restrict the right of NeighborCare or its successors to amend or change combined tax returns for any period ending on or before September 30, 2001 without Genesis’ consent; and (iii) grant to Genesis the joint right in the event of a Change in Control of NeighborCare (as defined in Amendment No. 1) to represent members of combined Returns with respect to any tax proceeding directly relating to the NOL available to Genesis and pursuant to this joint right, neither party will file any amended tax returns, enter into any settlement agreement with the Internal Revenue Service or take any other action that could be reasonably expected to have an adverse impact on the other party without the other party’s consent, which consent shall not be unreasonably withheld or delayed.

Amendment No. 1 to Transition Services Agreement

NeighborCare and Genesis amended the Transition Services Agreement pursuant to this Amendment No. 1 in order to: (i) provide with specificity the amounts which NeighborCare will be obligated to pay for certain transition services, including the grant by Genesis of a discount to NeighborCare relating to the cost of transition services received during the five month period ending September 1, 2005, subject to NeighborCare’s satisfaction of certain conditions; (ii) provide when NeighborCare will be required to end transition services and set forth the economic

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consequences to NeighborCare should it fail to do so; and (iii) allocate to Genesis any severance costs associated with the termination of transition services.  Pursuant to this Amendment No. 1, each of NeighborCare and Genesis further agreed to release one another from any claims relating to adjustments for cash amounts due one another as of December 1, 2003.

Item 9.01Exhibits

The following exhibits are filed with this Current Report on Form 8-K:

Exhibit No.	Description
99.1	Amendment No. 2 to Master Agreement for Pharmacy, Pharmacy Consulting and Related Products and Services between NeighborCare Pharmacy Services, Inc. and Genesis HealthCare Corporation dated June 9, 2005.
99.2	Amendment No. 1 to Tax Sharing Agreement between NeighborCare, Inc. and Genesis HealthCare Corporation dated June 9, 2005.
99.3	Amendment No. 1 to Transition Services Agreement between NeighborCare, Inc. and Genesis HealthCare Corporation dated June 9, 2005.

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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 hereunto duly authorized.

	NEIGHBORCARE, INC.
Date: June 13, 2005	By:	/s/ John F. Gaither, Jr.
	John F. Gaither, Jr.
	Senior Vice President, General Counsel, and Secretary

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EX-99.1

Exhibit 99.1

Amendment No. 2 to
Master Agreement for Pharmacy,
Pharmacy Consulting and Related Products and Services

This Amendment No. 2 to Master Agreement for Pharmacy, Pharmacy Consulting and Related Products and Services is made effective as of June 9, 2005.

BACKGROUND

A.As of December 1, 2003, Genesis HealthCare Corporation, a Pennsylvania corporation (together with its Affiliates, “GHC”) and NeighborCare Pharmacy Services, Inc. d/b/a NeighborCare, a Delaware corporation (together with its Affiliates, “NeighborCare”), entered a Master Agreement for Pharmacy, Pharmacy Consulting and Related Products and Services (“Master Agreement”).

B.As of May 7, 2004, GHC and NeighborCare entered Amendment No. 1 to the Master Agreement (“Amendment No. 1”).

C.GHC and NeighborCare now desire to amend the Master Agreement and Amendment No. 1 as set forth in this Amendment No. 2 to Master Agreement for Pharmacy, Pharmacy Consulting and Related Products and Services (“Amendment No. 2”).

AGREEMENT

NOW THEREFORE, in consideration of the foregoing and the mutual promises set forth in this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree that Amendment No. 1 and the Master Agreement are amended as follows:

1.Item 1 in Amendment No. 1, relating to an amendment to Section 2.6 of the Master Agreement, is canceled and of no continuing effect such that the Master Agreement reverts to its original terms relating to the matters referenced in Item 1.

2.Item 2 in Amendment No. 1, relating to references in the Master Agreement to the “Five Year Price Adjustment,” is canceled and of no continuing effect such that the Master Agreement reverts to its original terms relating to the matters referenced in Item 2.

3.Capitalized terms not otherwise defined in this Amendment have the meaning defined in the Master Agreement.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have duly executed this Amendment as of the day and year first written above.

NEIGHBORCARE PHARMACY SERVICES, INC.		GENESIS HEALTHCARE CORPORATION
By:	/s/ John J. Arlotta	By:	/s/ George V. Hager, Jr.
	John Arlotta		George V. Hager, Jr.
	Chairman, President and Chief Executive Officer		Chairman and  Chief Executive Officer

EX-99.2

Exhibit 99.2

Amendment No. 1 to Tax Sharing Agreement

This Amendment No. 1 to Tax Sharing Agreement is made effective as of June 9, 2005.

BACKGROUND

A.As of December 1, 2003, Genesis HealthCare Corporation, a Pennsylvania corporation (“GHC”), and NeighborCare, Inc. (f/k/a Genesis Health Ventures, Inc.), a Delaware corporation (“NeighborCare”), entered a Tax Sharing Agreement (“Tax Sharing Agreement”).

B.GHC and NeighborCare now desire to amend the Tax Sharing Agreement as set forth in this Amendment No. 1 (“Amendment”).

AGREEMENT

NOW THEREFORE, in consideration of the foregoing and the mutual promises set forth in this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree that the Tax Sharing Agreement is amended as follows:

1.Section 7(a)(iv) of the Tax Sharing agreement is modified by replacing 40 percent with 70 percent.

2.No changes or amendments will be made by NeighborCare or its successors to any combined Returns as defined in the Tax Sharing Agreement for periods ending on or before September 30, 2001 without the consent of Genesis.

3.In the event of a Change in Control of NeighborCare, Genesis is granted  the joint right to represent members of combined Returns with respect to any tax proceeding directly relating to the NOL available to Genesis.  Pursuant to this joint right, neither party will file any amended tax returns, enter any settlement agreement with the Internal Revenue Service, or take any other action that could be reasonably expected to have an adverse impact on the other without the other’s consent, such consent not to be unreasonably withheld or delayed.  A “Change of Control” will be deemed to have occurred any time at which individuals who, as of the date of this agreement, constitute the Board of NeighborCare, Inc. (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board.

4.Capitalized terms not otherwise defined in this Amendment have the meaning defined in the Tax Sharing Agreement.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have duly executed this Amendment as of the day and year first written above.

NEIGHBORCARE, INC.		GENESIS HEALTHCARE CORPORATION
By:	/s/ John J. Arlotta	By:	/s/ George V. Hager, Jr.
	John Arlotta		George V. Hager, Jr.
	Chairman, President and Chief Executive Officer		Chairman and  Chief Executive Officer

EX-99.3

Exhibit 99.3

Amendment No. 1 to
Transition Services Agreement

This Amendment No. 1 to Transition Services Agreement is made effective as of June 9, 2005.

BACKGROUND

As of December 1, 2003, Genesis HealthCare Corporation, a Pennsylvania corporation (“GHC”), and NeighborCare, Inc. f/k/a Genesis Health Ventures, Inc., a Pennsylvania corporation (“NeighborCare”), entered a Transition Services Agreement (“Agreement”).

GHC and NeighborCare now desire to amend the Agreement as set forth in this Amendment No. 1 (“Amendment”).

AGREEMENT

NOW THEREFORE, in consideration of the foregoing and the mutual promises set forth in this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree that the Agreement is amended such that notwithstanding anything else in the Agreement to the contrary:

1.Genesis will not invoice, and NeighborCare will not be obligated to pay, any additional amounts with respect to transition services rendered prior to January 1, 2005.

2.The cost of transition services provided by Genesis to NeighborCare during the three month period ended March 31, 2005, will be discounted by $250,000.  In any event, such discounted billings will not exceed $250,000.

3.The cost of transition services provided by Genesis to NeighborCare during the five month period ended September 1, 2005, will be discounted by $600,000 but not more than actual costs.  Should NeighborCare fail to exit and transition away from all services covered under the Transition Services Agreement including but limited to vacating the data center owned by Genesis by September 15, 2005,  NeighborCare will forfeit $300,000 of the discount; should NeighborCare fail to vacate the data center by November 15, 2005, NeighborCare will forfeit and additional $200,000; should NeighborCare fail to vacate the data center by February 1, 2006, NeighborCare will forfeit an additional $100,000.

4.Genesis will bear the full cost of severance, with no sharing by NeighborCare, relating to terminations of employment resulting from termination of transition services by NeighborCare.

5.NeighborCare and Genesis each release the other from any claims related to adjustments for cash amounts due one to the other as of December 1, 2003.

6.Capitalized terms not otherwise defined in this Amendment have the meaning defined in the Agreement.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have duly executed this Amendment as of the day and year first written above.

NEIGHBORCARE, INC.		GENESIS HEALTHCARE CORPORATION
By:	/s/ John J. Arlotta	By:	/s/ George V. Hager, Jr.
	John Arlotta		George V. Hager, Jr.
	Chairman, President and Chief Executive Officer		Chairman and  Chief Executive Officer