AMENDMENT NUMBER 6 TO THE SECOND STANDSTILL AGREEMENT
DATED APRIL 12, 1999 AND
AMENDMENT NUMBER 5 TO THE TOLLING AGREEMENT
DATED APRIL 12, 1999
These Amendments dated as of August 5, 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 Tuesday, July 6, 1999, by agreement of the parties, Ventas was
deemed to have delivered five notices of non-payment of rent (the "July
Non-Payment Notices")
pursuant to paragraph 16.1(b) of the agreements referenced in the first
paragraph of each of the July 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 July Non-Payment Notices, to
extend certain other deadlines, to specify the cure period referred to in the
August 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:
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 (i) 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") (which are now moot as a result of Vencor's
payment of Rent for the month of May 1999, in the manner agreed to by
the parties); (ii) the deemed delivery by Ventas of 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") (which are now moot as a result of
Vencor's payment of Rent for the month of June 1999, in the manner
agreed to by the parties); (iii) 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 July 1999 (the "July Non-Payment Notices"); and (iv) 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 August 1999 (the "August 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 September 3, 1999
(such period being referred to herein as the "Second Standstill
Period"), neither Vencor nor Ventas will file,
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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 each
date set forth on Schedule I hereto, Vencor has not paid
to Ventas, in immediately available funds, the amount set
forth on Schedule I, representing a portion of the Rent
due to Ventas under the Five Leases for the month of July
1999; or
(ii) prior to 5:00 p.m. Eastern Daylight Savings Time on August
26, 1999 and on each Business Day thereafter to and
including August 31, 1999, Vencor has not paid to Ventas
the amount, if any, by which the sum of (x) Vencor's
"total cash on hand and availability" as set forth on
Vencor's receipts and disbursement reports determined in
good faith and in accordance with Vencor's past reporting
practices to Ventas and (y) to the extent not included in
(x), Vencor's available revolving credit borrowings,
exceeds $12 million as of the end of the immediately
preceding Business Day; provided, however, that this
subparagraph (ii) shall be of no further force and effect
at such time as the total payments made by Vencor pursuant
to this subparagraph (ii) equals $3,682,525.77 (the "Final
Payment Amount"); for purposes of this agreement,
"Business Day" means a day, other than a Saturday or a
Sunday, on which commercial banks are not required or
authorized to close in the City of New York; Ventas and
Vencor acknowledge that Vencor has asserted certain claims
in excess of $1 million related to the Final Payment
Amount against Ventas, and that the parties will use their
commercially reasonable efforts to resolve such claims,
and that if, but only if, such claims are resolved, any
adjustment to the
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Final Payment Amount in favor of Vencor shall reduce the
amount of the Final Payment Amount; provided, however,
that such adjustment shall not exceed $1 million; and
provided further, that if such claims are not so resolved
or if the adjustment exceeds $1 million, the parties shall
reserve their rights with respect to such claims; or
(iii) prior to 5:00 p.m. Eastern Daylight Savings Time on August
31, 1999, Vencor has not paid to Ventas, in immediately
available funds, an amount equal to the Final Payment
Amount (as adjusted pursuant to subparagraph (ii) above)
less all payments made pursuant to subparagraph (ii)
above; or
(iv) prior to 5:00 p.m. Eastern Daylight Savings Time on each
Business Day of the Second Standstill Period occurring
after August 5, 1999, Vencor has not provided to Ventas a
daily cash flow statement for the month of August 1999
reflecting Vencor's daily and cumulative cash receipts,
daily and cumulative cash disbursements and cash position
and outstanding aggregate borrowings and availability
under Vencor's Revolving Credit Facility, all as of the
prior Business Day, and such failure continues for more
than one Business Day after written demand therefor by
Ventas, unless such required delivery is expressly waived
in writing by Ventas within one Business Day of the time
the report was otherwise due.
(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 July 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 July Non-Payment Notices, and that, in such event, no Event of
Default (as that term is used in the July 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 July 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 July 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 July 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
July 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 July 1999 is and shall be limited solely to the
right during the five days after such installment date to pay the full
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amount of the total unpaid Rent for July 1999. This subparagraph 5(c)
shall only apply to the July Non-Payment Notices and to the
non-payment or late payment of the July 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 July 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 (i) 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 and the Collateral Agent as of June 6,
1999 without need for any further act or delivery by Ventas, (ii) the
July Non-Payment Notices, copies of which are attached hereto as
Exhibits F through J, are hereby deemed for all purposes to have been
given by Ventas and received by Vencor and the Collateral Agent on and
as of July 6, 1999, and (iii) the August Non-Payment Notices, which
will be provided by Ventas and be substantially in the form of the
July Non-Payment Notices, are to be attached hereto as Exhibits K
through O, are hereby deemed for all purposes to have been given by
Ventas and received by Vencor and the Collateral Agent on and as of
August 5, 1999, without need for any further act or delivery by Ventas
(except for delivery of Exhibits K through O).
(f) Ventas further agrees that if Vencor or the Leasehold Mortgagee pays
the Rent for the month of August 1999 on or before September 10, 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 August Non-Payment Notices, and that, in such
event, no Event of Default (as that term is used in the August
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 August 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
August 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 August 1999. This subparagraph 5(f) shall only apply to the
August Non-Payment Notices and to the non-payment or late payment of
the August 1999 Rent under the Five Leases.
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(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 August 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
September 10, 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 April 12,
1999, 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 ss. 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 September 3, 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
or failure to deliver certain reports (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.
[Remainder of Page Intentionally left blank].
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Counterparts
3. These Amendments 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
------------------------------- -------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx Name: T. Xxxxxxx Xxxxx
Title: Senior Vice President and Title: Executive Vice President
Chief Financial Officer
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral Agent for the
Leasehold Mortgagee
By: /s/ Houston Xxxxxxxx
-------------------------------
Name: Houston Xxxxxxxx
Title: Vice President
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Schedule I
Schedule of Payments
Date Amount of Payment
---- -----------------
August 5, 1999 $5,000,000
August 13, 1999 $5,000,000
August 19, 1999 $5,200,000
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