Exhibit 10.6
AMENDMENT NUMBER 7 TO THE SECOND STANDSTILL AGREEMENT
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DATED APRIL 12, 1999 AND
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AMENDMENT NUMBER 6
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TO THE TOLLING AGREEMENT
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DATED APRIL 12, 1999
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These Amendments dated as of September 3, 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 Thursday, August 5, 1999, by agreement of the parties, Ventas
was deemed to have delivered five notices of non-payment of rent (the "August
Non-Payment
Notices") pursuant to paragraph 16.1(b) of the agreements referenced in the
first paragraph of each of the August 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 August Non-Payment Notices,
to extend certain other deadlines, to specify the cure period referred to in the
September 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 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") (which are now moot as a result of Vencor's payment
of Rent for the month of July 1999, in the manner agreed to by the
parties); (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"); and
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(v) 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 September 1999 (the "September 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 9, 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) [intentionally left blank]
(c) If Vencor or the Leasehold Mortgagee (as defined in the Five Leases)
pays the Rent for the month of August 1999 prior to 5:00 p.m. Eastern
Daylight Savings Time on September 14, 1999, 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
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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(c) 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.
(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 August 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
September 14, 1999.
(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, (iii) the August Non-Payment Notices, copies of
which are 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, and (iv) the
September Non-Payment Notices, which will be provided by Ventas and be
substantially in the form of the August Non-Payment Notices, are to be
attached hereto as Exhibits P through T, are hereby
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deemed for all purposes to have been given by Ventas and received by
Vencor and the Collateral Agent on and as of September 3, 1999,
without need for any further act or delivery by Ventas (except for
delivery of Exhibits P through T).
(f) Ventas further agrees that if Vencor or the Leasehold Mortgagee pays
the Rent for the month of September 1999 on or before September 14,
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 September Non-Payment Notices, and
that, in such event, no Event of Default (as that term is used in the
September 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 September 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 September 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 September 1999. This subparagraph 5(f) shall
only apply to the September Non-Payment Notices and to the non-payment
or late payment of the September 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 September 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 14, 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
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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 9, 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:______________________ 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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