Exhibit 10.15
AMENDMENT NUMBER 6 TO THE SECOND STANDSTILL AGREEMENT
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DATED APRIL 12, 1999 AND
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AMENDMENT NUMBER 5 TO THE TOLLING AGREEMENT
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DATED APRIL 12, 1999
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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 nonpayment 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,
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
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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 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
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(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 nonpayment 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 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.
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(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 (S) 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 S
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:_______________________ By:________________________
Name: Name:
Title: Title:
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral Agent for the
Leasehold Mortgagee
By:_______________________
Name:
Title:
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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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