AMENDMENT NUMBER 4 TO THE SECOND STANDSTILL AGREEMENT DATED
APRIL 12, 1999 AND AMENDMENT NUMBER 3 TO THE TOLLING AGREEMENT
DATED APRIL 12, 1999
These Amendments dated June 6, 1999 are made and entered into among
Vencor, Inc., a corporation organized under the laws of Delaware, for and on
behalf of itself and its various subsidiaries and affiliates, including, without
limitation, Vencor Operating, Inc., and for and on behalf of any of their
respective successors including, without limitation, any debtor or debtor-in-
possession in a bankruptcy case commenced under Title 11 of the United States
Bankruptcy Code (the "Bankruptcy Code") or any trustee appointed in any such
case (collectively, "Vencor"); and Ventas, Inc., a corporation organized under
the laws of Delaware, for and on behalf of itself and its various subsidiaries
and affiliates, including, without limitation, Ventas Realty, Limited
Partnership, and for and on behalf of any of their respective successors
including, without limitation, any debtor or debtor-in-possession in a
bankruptcy case commenced under the Bankruptcy Code or any trustee appointed in
any such case (collectively, "Ventas").
Xxxxxx Guaranty Trust Company of New York (the "Collateral Agent") is
a signatory hereto for the sole purpose of providing the confirmations and
agreements referred to in paragraph 1 hereof.
WHEREAS, Vencor and Ventas are in the process of attempting to resolve
any and all existing and potential claims that Vencor has asserted or might in
the future assert against Ventas (the "Vencor Claims"), the validity of which
Ventas has disputed, and any and all existing and potential claims that Ventas
has asserted or might in the future assert against Vencor
(the "Ventas Claims"), the validity of which Vencor has disputed (the Vencor
Claims and the Ventas Claims are collectively referred to herein as the
"Claims");
WHEREAS, to that end Vencor and Ventas are parties to that certain
Second Standstill Agreement dated April 12, 1999 (as modified and amended to
date, the "Second Standstill Agreement") and that certain Tolling Agreement
dated April 12, 1999 (as modified and amended to date, the "Tolling Agreement");
WHEREAS, on Friday May 7, 1999, after 5:00 p.m. Ventas, by letters of
T. Xxxxxxx Xxxxx, Vice President and General Counsel of Ventas, issued five
notices of non-payment of rent (the "May Non-Payment Notices") pursuant to
paragraph 16.1(b) of the agreements referenced in the first paragraph of each of
the May Non-Payment Notices, such agreements being collectively defined in the
Second Standstill Agreement as the Five Leases;
WHEREAS, the parties hereto wish to extend the cure period referred to
in Section 16.1 of the Five Leases with respect to the May Non-Payment Notices,
to extend certain other deadlines, to specify the cure period referred to in the
June Non-Payment Notices (as defined below), and to agree to certain other
matters to permit continued discussions concerning a consensual resolution of
their differences, subject to the conditions set forth below;
NOW, THEREFORE, in consideration of the premises and other good cause
and adequate consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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Extension of the Second Standstill Period and the Cure Period in the Five Leases
1. The fifth numbered paragraph of the Second Standstill Agreement
shall be deleted and replaced with the following paragraph:
(a) Other than Ventas' delivery on Friday May 7, 1999, after 5:00
p.m., by letters of T. Xxxxxxx Xxxxx, Vice President and General
Counsel of Ventas, of five notices of non-payment of rent (the "May
Non-Payment Notices") and other than the deemed delivery by Ventas of
similar notices of non-payment of rent as a result of Vencor's non-
payment or late payment of rent under the Five Leases for the month of
June 1999 (the "June Non-Payment Notices"), during the period from the
date of the Second Standstill Agreement, April 12, 1999, through and
including the earlier of (a) the commencement by or against Vencor, as
debtor, of a voluntary or involuntary bankruptcy case under Title 11
of the United States Code, or (b) 5:00 p.m. Eastern Daylight Savings
Time on July 6, 1999 (such period being referred to herein as the
"Second Standstill Period"), neither Vencor nor Ventas will file,
commence, serve, or otherwise initiate any civil action, arbitration
proceeding, or other similar action, litigation, case, or proceeding
of any kind, character, or nature whatsoever (an "Action") against the
other or any third party, including, without limitation, any of
Vencor's or Ventas' current or former officers, directors, or
employees, arising from or relating to the Reorganization Agreement,
any Ancillary Agreement, or any of the Five Leases, or with respect to
the various disputes identified in Vencor's March 18, 1999 letter; nor
shall Ventas exercise any rights or remedies it may have against
Vencor under any of the Five Leases (including the giving of notices
of termination pursuant to Section 16.1 of the Five Leases or any of
them) based on Vencor's late payment of the Rent (as that term is
defined in the Five Leases) due under the Five Leases, or based on any
default arising from or related to the disclosures made by Vencor to
Ventas commencing on or about March 30 and March 31, 1999 and
continuing to the date hereof.
(b) Notwithstanding the foregoing, the Second Standstill Period shall
immediately terminate, and Vencor and Ventas may proceed to file such
Actions as either may choose, and Ventas may proceed to exercise such
rights or remedies as it may choose under any of the Five Leases
(including the giving of notices of termination pursuant to Section
16.1 of the Five Leases or any of them) in the event that:
(i) prior to 5:00 p.m. Eastern Daylight Savings Time on June 10,
1999, Vencor has not paid to Ventas, in immediately available
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funds, the sum of $ 9.5 million, representing a portion of
the Rent due to Ventas under the Five Leases for the month
of May 1999; or
(ii) prior to 5:00 p.m. Eastern Daylight Savings Time on June
16, 1999, Vencor has not paid to Ventas, in immediately
available funds, the additional sum of $ 2.0 million,
representing an additional portion of the Rent due to
Ventas under the Five Leases for the month of May 1999; or
(iii) prior to 5:00 p.m. Eastern Daylight Savings Time on June
17, 1999, Vencor has not paid to Ventas, in immediately
available funds, the additional sum of $ 2.0 million,
representing an additional portion of the Rent due to
Ventas under the Five Leases for the month of May 1999; or
(iv) prior to 5:00 p.m. Eastern Daylight Savings Time on June
18, 1999, Vencor has not paid to Ventas, in immediately
available funds, the additional sum of $ 2.0 million,
representing an additional portion of the Rent due to
Ventas under the Five Leases for the month of May 1999; or
(v) prior to 5:00 p.m. Eastern Daylight Savings Time on June
21, 1999, Vencor has not paid to Ventas, in immediately
available funds, the additional sum of $ 2.0 million,
representing an additional portion of the Rent due to
Ventas under the Five Leases for the month of May 1999; or
(vi) prior to 5:00 p.m. Eastern Daylight Savings Time on June
22, 1999, Vencor has not paid to Ventas, in immediately
available funds, the additional sum of $ 1,382,526,
representing the balance of the Rent due to Ventas under
the Five Leases for the month of May 1999.
(c) Ventas further agrees that, subject to the acceleration provisions
provided for hereinbelow, if Vencor or the Leasehold Mortgagee (as
defined in the Five Leases) pays the Rent for the month of May 1999 in
the installment amounts and within five (5) days of the installment
dates provided for herein, then such payment shall be deemed to be a
timely cure, within the meaning of Section 16.1 of the Five Leases and
the May Non-Payment Notices, and that, in such event, no Event of
Default (as that term is used in the May Non-Payment Notices and
defined in the Five Leases) shall have occurred with respect to the
late payment or
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non-payment of Rent for the month of May 1999. Notwithstanding anything
to the contrary contained herein, Ventas shall not send a notice of
termination pursuant to paragraph 16.1 of the Five Leases, or any of
them, based upon Vencor's non-payment or late payment of Rent for the
month of May 1999 so long as Vencor or the Leasehold Mortgagee has a
right to cure or has cured such non-payment or late payment of Rent for
the month of May 1999. In addition, and notwithstanding anything to the
contrary contained herein, in the event Vencor shall fail to pay any
installment amount hereunder on the original installment date specified
herein, then that installment amount together with the balance of the
unpaid Rent for May 1999 shall become immediately due and payable on
and as of such date, without need for any further notice or demand, and
Vencor's and the Leasehold Mortgagee's right to cure the non-payment or
late payment of Rent for May 1999 is and shall be limited solely to the
right during the five days after such installment date to pay the full
amount of the total unpaid Rent for May 1999. This subparagraph 5(c)
shall only apply to the May Non-Payment Notices and to the non-payment
or late payment of the May 1999 Rent under the Five Leases.
(d) The Collateral Agent hereby confirms to Ventas and Vencor that it
is the collateral agent for the Leasehold Mortgagee and that it is
authorized to make the confirmations and agreements contained herein.
Ventas, Vencor, and the Collateral Agent (for and on behalf of the
Leasehold Mortgagee) confirm and agree that the period of time within
which Vencor or the Leasehold Mortgagee is entitled to cure the failure
of Vencor to pay Rent for the month of May 1999 under this agreement
and the Five Leases in order to prevent a termination of the Five
Leases will expire at 5:00 p.m. Eastern Daylight Savings Time on the
fifth day after the first to occur, if any, of the installment dates
set forth above on which the prescribed installment amount of Rent is
not timely paid.
(e) Ventas, Vencor and the Collateral Agent hereby agree that the
June Non-Payment Notices, copies of which are attached hereto as
Exhibits A through E, are hereby deemed for all purposes to have been
given by Ventas and received by Vencor as of the date of these
Amendments without need for any further act or delivery by Ventas.
(f) Ventas further agrees that if Vencor or the Leasehold Mortgagee
pays the Rent for the month of June 1999 on or before July 12, 1999, at
5:00 p.m. Eastern Daylight Savings Time, then such payment shall be
deemed to be a timely cure, within the meaning of Section 16.1 of the
Five Leases and the June Non-Payment Notices, and that, in such event,
no Event of Default (as that term is used in the June Non-Payment
Notices and defined in the Five Leases) shall have occurred with
respect to the late payment or non-payment of Rent for the month of
June
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1999. Notwithstanding anything to the contrary contained herein, Ventas
shall not send a notice of termination pursuant to paragraph 16.1 of
the Five Leases, or any of them, based upon Vencor's non-payment or
late payment of Rent for the month of June 1999 so long as Vencor or
the Leasehold Mortgagee has a right to cure or has cured such non-
payment or late payment of Rent for the month of June 1999. This
subparagraph 5(f) shall only apply to the June Non-Payment Notices and
to the non-payment or late payment of the June 1999 Rent under the Five
Leases.
(g) Ventas, Vencor, and the Collateral Agent (for and on behalf of the
Leasehold Mortgagee) confirm and agree that the period of time by which
Vencor or the Leasehold Mortgagee is entitled to cure the failure of
Vencor to pay Rent for the month of June 1999 under this Amendment and
the Five Leases in order to prevent a termination of the Five Leases
will expire at 5:00 p.m. Eastern Daylight Savings Time on July 12,
1999.
Amendment to Tolling Agreement
2. The first numbered paragraph of the Tolling Agreement shall be
deleted and replaced with the following paragraph:
Any Vencor Claim, including, without limitation, those arising or
available under the Bankruptcy Avoidance Provisions (defined below)
that Vencor could otherwise assert against Ventas if Vencor were a
debtor in a case under the Bankruptcy Code commenced on the date
hereof, and whether arising under the Bankruptcy Code or under other
applicable federal or state law, shall not be prejudiced, impaired, or
waived by Vencor's failure to commence such a bankruptcy case, and any
and all statutes of limitations, repose, or other legal or equitable
constraints on the time by which such a bankruptcy case or pleading
initiating any Vencor Claim (including, without limitation, a cause of
action under ' 548 of the Bankruptcy Code) shall be tolled during the
period of time from April 12, 1999 to and including the earlier of (i)
5:00 p.m. Eastern Daylight Savings Time on July 6, 1999, or (ii) the
earlier time and date on which the Second Standstill Period (as defined
in the Second Standstill Agreement) shall automatically terminate as a
result of Vencor's nonpayment or late payment of rent (as provided for
in paragraph 5 of the Second Standstill Agreement, the provisions of
which are hereby incorporated by reference) (the "Tolling Period"). For
all purposes herein, both the first and last day of the Tolling Period
shall be deemed to be contained in the Tolling Period.
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Counterparts
3. This Second Standstill Agreement may be executed in one or more
counterparts and by facsimile, each of which counterparts shall be deemed an
original hereof, but all of which together shall constitute one agreement.
Choice of Law
4. These Amendments adopt the ninth numbered paragraph of the Second
Standstill Agreement as the choice of law provision for these Amendments.
CONFIRMED AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN BY:
VENCOR, INC. VENTAS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx By: /s/ T. Xxxxxxx Xxxxx
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Name: Xxxxxxx X. Xxxxxxxxxxx Name: T. Xxxxxxx Xxxxx
Title: Title:
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral Agent for the
Leasehold Mortgagee
By: /s/ Houston X. Xxxxxxxx
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Name: Houston X. Xxxxxxxx
Title:
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