WAIVER AND EXTENSION AGREEMENT
WAIVER AND EXTENSION AGREEMENT, dated as of October 29, 1999 (the
"Waiver"), to the CREDIT AGREEMENT (as defined below) among VENTAS REALTY,
LIMITED PARTNERSHIP, (the "Borrower"), BANK OF AMERICA, N.A. (F/K/A NATIONSBANK,
N.A.), as a Lender and as Administrative Agent for the Lenders under the Credit
Agreement (the "Administrative Agent"), XXXXXX GUARANTY TRUST COMPANY OF NEW
YORK, as a Lender and a Documentation Agent for the Lenders under the Credit
Agreement (the " Documentation Agent" and together with the Administrative
Agent, the "Agents") and each of the institutions party to the Credit Agreement
that has executed and delivered a counterpart signature page hereto (each a
"Consenting Lender"):
W I T N E S S E T H:
WHEREAS, the Borrower, each of the financial institutions from time to
time party thereto as lenders (together with their successors and assigns, the
"Lenders") and the Agents are parties to that certain Credit Agreement, dated as
of April 29, 1998 (as the same may be further amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit Agreement");
and
WHEREAS, the Borrower, Ventas, Inc. ("Ventas") and the Documentation
Agent (on behalf of itself and the Lenders) are parties to that certain Pledge
and Security Agreement dated as of April 29, 1998 (as the same may be amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Pledge Agreement"); and
WHEREAS, the Borrower has requested (i) an extension of the Maturity
Date with respect to the Tranche A Loans under the Credit Agreement and (ii)
certain waivers under the Credit Agreement, and, subject to the terms and
conditions hereof, the Consenting Lenders are willing to grant such extension
and waivers, but only upon the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. Definitions. Unless otherwise defined herein, all terms that
are defined in the Credit Agreement shall have the same meanings when used
herein. As used herein, the following additional terms have the following
meaning:
"Effective Date" shall have the meaning set forth in Section 7 of this
Waiver.
"Rent Stipulation" shall mean that certain "Stipulation and Order
pursuant to Section 365 of the Bankruptcy Code regarding Vencor, Inc.,
Vencor Operating, Inc., and Vencor Nursing Centers Limited
Partnership's performance of obligations under and extending the time
within which Vencor may accept or reject certain agreements among
Vencor, Inc., Vencor Operating, Inc., Vencor Nursing Centers Limited
Partnership, Ventas and the Borrower," dated September 13, 1999 and as
entered in Vencor's case under Chapter 11 of the U.S. Bankruptcy Code,
without reference to any amendment or modification thereof.
"Vencor" shall mean collectively Vencor, Inc. and each of its
subsidiaries which filed for protection under Title 11 of the United
States Bankruptcy Code on September 13, 1999.
"Waiver Period" shall mean the period commencing on the Effective Date
and extending through and including the earlier of: (i) an Event of
Default under the Credit Agreement (that is not herein specifically
waived) occurs and is continuing; (ii) Vencor's case under Chapter 11
of the U.S. Bankruptcy Case shall become a liquidating Chapter 11 or
shall be converted to a case under Chapter 7 of the Bankruptcy Code;
(iii) the Borrower's failure to comply with any covenant set forth in
Section 4 of this Waiver or (iv) 5:00 p.m. (eastern time) on February
28, 2000.
"Waiver Termination Date" shall mean the date upon which the Waiver
Period terminates.
Section 2.1 Extension of Maturity Date for the Tranche A Loan The
Tranche A Banks (the "Tranche A Lenders") party to this Waiver hereby extend the
Maturity Date of their Tranche A Loans through and including the Waiver
Termination Date.
Section 2.2 Waiver of Certain Defaults under the Credit Agreement. With
respect to all Loans and other Obligations, the Lenders hereby waive, for the
Waiver Period only, any Event of Default which:
(i) occurs or may have occurred and may be continuing as a
result of the Borrower's failure to comply with the provisions
of Sections 5.8(a)-(e) and (h) of the Credit Agreement;
(ii) occurs or may have occurred and may be continuing as a
result of the Borrower's failure to comply with the provisions
of Sections 5.15 of the Credit Agreement solely as a result of
the Borrower's participation, up to an aggregate amount not to
exceed $5 million, in a Vencor rights offering which is made
available to the Borrower and other classes of creditors of
Vencor, and provided that (A) the securities acquired by the
Borrower in the Vencor rights offering are to be distributed
to Ventas shareholders in full or partial satisfaction of
Ventas' minimum REIT dividend, and (B) the terms and
conditions of the Vencor rights offering and the Borrower's
participation therein shall be reasonably acceptable to the
Agents;
(iii) occurs or may have occurred and may be continuing under
Section 6.1(a) of the Credit Agreement solely as it relates to
the Borrower's failure to pay when due the principal of the
Tranche A Loans or amounts, if any, pursuant to Section 2.7(e)
of the Credit Agreement;
(iv) without conceding that such waiver is required, occurs or
may have occurred and may be continuing under Section 6.1(b)
of the Credit Agreement solely as its relates to the failure
to comply with Section 5.23 of the Credit Agreement arising
out of the Rent Stipulation and that certain Tolling
Agreement, dated April 12, 1999, as amended, and that certain
Second Standstill Agreement, dated April 12, 1999, as amended;
and
2
(v) occurs or may have occurred and may be continuing under
Section 6.1(e) of the Credit Agreement solely as it relates to
the Borrower's failure to pay when due the principal of the
Tranche A Loans.
From and after the Waiver Termination Date, such Events of Defaults, if
any, shall be considered and treated as an Event of Default under the Credit
Agreement, and all rights, privileges and remedies of the Agents and the Lenders
relating thereto under the Credit Agreement and the Loan Documents shall be
fully effective and enforceable as if this Waiver had never been granted.
The Waivers set forth in this Section 2.2 shall not be binding with
respect to those Tranche A Loans held by Non-Consenting Tranche A Lenders (as
defined herein), if any.
Section 2.3 Waiver of Certain Defaults under the Pledge Agreement. The
Documentation Agent (on its own behalf and on behalf of the Lenders) hereby
waives, for the Waiver Period only, any "Event of Default" that has occurred and
is continuing under the Pledge Agreement solely as such defined term relates to
a default or Event of Default under the Credit Agreement or any other Loan
Document (as such term is defined in the Pledge Agreement) that is specifically
being waived by this Waiver. Except as set forth below, from and after the
Waiver Termination Date, such Event of Default, if any and if continuing, shall
be considered and treated as an Event of Default under the Pledge Agreement, and
all rights, privileges and remedies of the Documentation Agent relating thereto
under the Pledge Agreement shall be fully effective and enforceable as if this
Waiver had never been granted. Upon the occurrence of a Waiver Termination Date,
the Documentation Agent will not exercise its rights and remedies and no rights
will transfer under the Pledge Agreement for two (2) Business Days.
Section 3. Borrowings and Payment of Interest. (a) The Borrower hereby
agrees that (i) pursuant to and in accordance with Section 2.11(e) of the Credit
Agreement, it is hereby permanently canceling and terminating, as of the
Effective Date, that portion of the remaining Tranche B Commitment under the
Credit Agreement which is in excess of the outstanding principal amount of
Tranche B Loans currently outstanding under the Credit Agreement, and that this
Waiver shall constitute the notice to the Administrative Agent, the Lenders and
the Swing Lender which is required under Sections 2.11(e) of the Credit
Agreement and (ii) during the Waiver Period, it will not give any Notice of
Borrowing for Tranche B Loans or Swing Loans, it will not request the issuance
of a Letter of Credit, and the Lenders shall have no obligation to fund any such
Borrowing or to issue any such Letter of Credit.
(b) During the Waiver Period and at any time thereafter when any
Default or Event of Default has occurred and is continuing, and notwithstanding
anything in the Credit Agreement to the contrary, the Borrower may not elect any
Interest Period for a Euro-Dollar Loan other than one or three months, and
interest payable pursuant to Section 2.7(c) of the Credit Agreement shall be
payable on the last Business Day of each month, beginning on the Effective Date.
Section 4. Additional Covenants. The Borrower hereby agrees that,
during the Waiver Period:
3
(i) it will not further amend or modify, in a manner adverse
to the Lenders, the Rent Stipulation in any material way
except with the prior written consent of the Agents and the
Super-Majority Banks;
(ii) it will deliver to the Administrative Agent, notice by
facsimile, promptly, and in any event within 10 days, if the
Rent Stipulation is terminated or if Vencor fails to pay rent
to Ventas or the Borrower in accordance with the Rent
Stipulation;
(iii) it (or Ventas) shall not declare or pay any dividend or
make any other distribution of any kind to any holder of
Ventas equity; and
(iv) it shall not make any payment of principal (or amounts,
if any, required pursuant to Section 2.7(e) of the Credit
Agreement) to any Tranche A Lender, if any, that is not a
party to this Waiver (each a "Non-Consenting Lender");
provided, however, that if the Borrower makes any payment of
principal (or amounts, if any, required pursuant to Section
2.7(e) of the Credit Agreement) to Tranche A Lenders that are
parties to this Waiver, then the Borrower shall also be
permitted to make such payments to those Tranche A Lenders, if
any, that are not parties to this Waiver.
Section 5. Restructuring Fee. The Borrower hereby agrees to pay to the
Administrative Agent, by wire transfer of immediately available funds, for the
benefit of each of the Consenting Lenders which have executed and delivered
counterparts of this Waiver by 5:00 p.m. (eastern time) on the Effective Date,
and in consideration of the covenants set forth in Section 15 hereof, an
irrevocable and non-refundable restructuring fee in an aggregate amount equal to
one quarter of one percent (1/4 of 1%) of the sum of the principal aggregate
amount of all Loans outstanding under the Credit Agreement; provided, however,
that if all of the Tranche A Lenders shall have executed and delivered
counterparts of this Waiver by 5:00 p.m. (eastern time) on the Effective Date,
then, in lieu of the foregoing, an irrevocable and non-refundable restructuring
fee in an aggregate amount equal to two-fifths of one percent (2/5 of 1%) of the
sum of the principal aggregate amount of all Loans outstanding under the Credit
Agreement shall be payable to the Administrative Agent for the benefit of the
Consenting Lenders (the "Restructuring Fee").
Section 6. Representations and Warranties. The Borrower represents and
warrants to the Agents and the Lenders that:
(a) the execution, delivery and performance by the Borrower of this
Waiver and the performance by the Borrower of the Credit Agreement as modified
by this Waiver (i) have been duly authorized by all requisite corporate action
on the part of the Borrower; and (ii) will not (x) violate (A) any provision of
any statute, rule or regulation or the Certificate of Incorporation or By-laws
(or similar governing documents) of the Borrower, (B) any applicable order of
any court or any rule, regulation or order of any other agency of government or
(C) any indenture, agreement or other instrument to which the Borrower is a
party or by which it or any of its property is bound, (y) be in conflict with,
result in a breach of or constitute (with notice or lapse of time or both) a
default under any such indenture, agreement or other instrument and (z) result
in the creation or imposition of any Lien upon any property or assets of the
Borrower except as contemplated by the Pledge Agreement or
4
any of the other Loan Documents executed in connection with the Credit Agreement
in favor of the Agents or the Lenders;
(b) upon the occurrence of the Effective Date (as hereinafter defined),
this Waiver will constitute the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and by general
equitable principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law);
(c) after giving effect to this Waiver, no Event of Default has
occurred and is continuing (except for the nonpayment to the Tranche A Lenders
not party to this Waiver).
Section 7. Effective Date. This Waiver shall not become effective until
the date (the "Effective Date") on which this Waiver shall have been executed by
the Borrower, the Agents, Tranche A Lenders holding at least 51% of the
outstanding Tranche A Loans and Lenders representing the Required Banks (as
defined in the Credit Agreement), and the following conditions precedent shall
have been satisfied:
(i) Receipt by the Agents of fully executed original counterparts
of this Waiver executed by the Borrower, the Agents, Tranche A
Lenders representing at least 51% of the outstanding Tranche A
Loans and Lenders representing the Required Banks, and such Waiver
shall be accepted and agreed to by Ventas, Inc.
(ii) The Borrowers shall have paid the Restructuring Fee to the
Administrative Agent, by wire transfer of immediately available
funds, for distribution pro rata, based upon the aggregate
principal amount of all outstanding Loans under the Credit
Agreement of each such Consenting Lender, to the Consenting
Lenders which shall have executed and delivered counterparts in
accordance with Section 5 of this Waiver.
Section 8. Legal Details. The Agents and their counsel shall have
received all the information, and such counterpart originals or such certified
or other copies of such materials, as the Agents or their counsel may reasonably
request, and all legal matters incident to the effectiveness of this Waiver
shall be satisfactory to the Agents and their counsel. All documents executed or
submitted pursuant hereto or in connection herewith shall be satisfactory in
form and substance to the Agents and their counsel.
Section 9. Miscellaneous Other Provisions. Without limiting the
generality of Section 9.3(a) of the Credit Agreement, the Borrower hereby agrees
that it will pay on presentation (i) all statements for fees and expenses of any
financial, accounting or valuation advisors or special counsel retained by the
Agents (including, but not limited to, Xxxxxx, Xxxxx & Xxxxxxx LLP and Xxxxxx,
Del Genio, Xxxxx & Co., LLP), as well as all out-of-pocket expenses incurred by
the Agents in connection with their duty as Agents and (ii) all reasonable
out-of pocket expenses of members of the steering committee for the Lenders
(other than the Agents), including reasonable fees and expenses of counsel
retained by individual members of the steering committee; provided, however,
that the aggregate amount of such out-of-pocket fees and expenses of the
individual steering committee members shall not exceed $150,000. The Borrower
also agrees that its obligations set forth in Section 9.3 of the
5
Credit Agreement shall extend to the preparation, execution and delivery of this
Waiver, including the reasonable fees and disbursements of counsel to the
Agents.
(b) The right of the Borrower pursuant to Section 9.6(c) of
the Credit Agreement to consent to any Assignee and the related assignment shall
be determined without giving effect to this Waiver, and any Assignee and the
related assignment shall always (including any time after expiration of the
Waiver Period) be subject to the consent of the Agents regardless of whether any
Event of Default has occurred and is continuing; provided, however, that the
Administrative Agent shall provide written notice to the Borrower of the
identity of any such Assignee which is a new Lender, and the amount of Loans
held by such Assignee, within a reasonable time within which such Assignee
becomes a new Lender.
Section 10. Lapse of Waiver. The Borrower agrees that its
failure to comply with any provision of this Waiver shall cause the waivers
granted hereby to cease to be in effect immediately and without the requirement
of any prior notice from or further action on the part of any Lender or the
Agents.
Section 11. Limited Waiver; Ratification of Credit Agreement. (i)
Except to the extent hereby waived or modified, the Credit Agreement and each of
the Loan Documents remain in full force and effect and are hereby ratified and
affirmed.
(ii) This Waiver shall be limited precisely as written and shall not be
deemed (a) to be a consent granted pursuant to, or a waiver or modification of,
any other term or condition of the Credit Agreement or any of the instruments or
agreements referred to therein or (b) to prejudice any other right or rights
which the Agents or the Lenders may now have or have in the future under or in
connection with the Credit Agreement or any of the instruments or agreements
referred to therein. Whenever the Credit Agreement is referred to in the Credit
Agreement or any of the instruments, agreements or other documents or papers
executed or delivered in connection therewith, such reference shall be deemed to
mean the Credit Agreement as modified by this Waiver.
Section 12. Counterparts. This Waiver may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page of this Waiver by
facsimile shall be effective as delivery of a manually executed counterpart of
this Waiver.
Section 13. Loan Document. This Waiver is a Loan Document pursuant to
the Credit Agreement and shall (unless expressly indicated therein) be
construed, administered, and applied in accordance with all of the terms and
provisions of the Credit Agreement.
Section 14. GOVERNING LAW. THIS WAIVER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Section 15. Restructuring. The parties hereby agree that, as soon as
practicable, but by no later than January 31, 2000, the parties shall close a
restructured Credit Agreement (and related
6
documents), to be reasonably agreed upon among the Borrower, the Agents and the
Lenders, which will contain the terms on Exhibit A hereto and which Exhibit A is
made a part hereof (the "Restructuring Proposal"). The parties further agree
that any payments made under Section 5 hereof shall be credited against such
payments due with respect to the "Restructuring Fee" required under the
Restructuring Proposal.
Section 16. Successors and Assigns. The provisions of this Waiver shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
[The remainder of this page intentionally left blank]
7
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
duly executed as of the day and the year first above written.
VENTAS REALTY, LIMITED PARTNERSHIP (BY
ITS GENERAL PARTNER VENTAS, INC.)
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Title: Executive VP and CFO
BANK OF AMERICA, NA, as a Bank and as
Administrative Agent
By: /s/ Xxx X. Xxxxxxx
--------------------------
Title: Managing Director
XXXXXX GUARANTY TRUST COMPANY OF NEW
YORK, as a Bank and as Documentation
Agent
By: /s/ Xxxx Xxxxx Xxxxxx
--------------------------
Title: Vice President
AG CAPITAL FUNDING PARTNERS, L.P.
By: Xxxxxx, Xxxxxx & Co., L.P. as
Investment Adviser
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Title: Authorized Signatory
AMSOUTH BANK OF ALABAMA
By: /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------------
Title: Senior Vice President
APPALOOSA INVESTMENT LIMITED
PARTNERSHIP I
By:/s/ Xxxxx X. Xxxxx
-------------------------
Title: Vice President
8
BANK OF LOUISVILLE
By: /s/ Xxxx Xxxx
----------------------------
Title: Senior Vice President
BANK OF NY NATS 14
(AMERICAN MONEY MANAGEMENT)
By: /s/ Xxxxx X. Xxxxxxx
----------------------------
Title: Assistant Vice President
BANKERS TRUST
By: /s/Xxxxx Xxxxxxxxxx
----------------------------
Title: Vice President
PARIBAS (f/k/a Banque Paribas)
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Title: Director
By: /s/ Xxxxx Xxxxxxx
----------------------------
Title: Managing Director
BEAR, XXXXXXX & CO. INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Title: Senior Managing Director
BLACK DIAMOND CLO 1998-1, LTD.
By:_____________________________
Title:
9
BLACK DIAMOND INTERNATIONAL FUNDING LTD
By:_____________________________
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
By:_____________________________
Title:
CHASE SECURITIES INC. as agent for
THE CHASE MANHATTAN BANK
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Title: Authorized Signatory
COMERICA BANK
By: /s/ Xxxx X. Xxxxx
----------------------------
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxx Xxxxxxx
----------------------------
Title: Senior Vice President
BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------
Title: Vice President
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Title: Executive Vice President
10
DELANO COMPANY
By: Pacific Investment Management
Company, as its Investment Advisor
By: /s/ Xxxxxxx Xxxxxxx
----------------------------
Title: Senior Vice President
DEPARTMENT OF PENSIONS CITY OF LOS
ANGELES
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Title: Managing Director
DLJ CAPITAL FUNDING INC.
By: /s/ Xxxxxx Xxxxx
----------------------------
Title: Vice President
FC CBO II LTD (BANK OF MONTREAL)
By: /s/ Xxxx Xxxxxxxxxx
----------------------------
Title: Director
FERNWOOD ASSOCIATES LP
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Title: General Partner
FIRST AMERICAN NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxxxxxx
----------------------------
Title: Senior Vice President
FIRST DOMINION FUNDING I
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Title: Authorized Signatory
11
FIRSTAR BANK N.A. (STAR BANK)
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Title: Vice President
FOOTHILL INCOME TRUST By FIT GP, its
General Partner
By: /s/ M.E. Xxxxxxx
----------------------------
Title: Managing Member
FOOTHILL PARTNERS III LP
By: /s/ M.E. Xxxxxxx
----------------------------
Title: Managing General Partner
FRANKLIN FLOATING RATE TRUST
By: /s/ Xxxxxxxx Xxxxxx
----------------------------
Title: Vice President
FRANKLIN MUTUAL ADVISERS, LLC
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------------
Title: Assistant Vice President
XXXXXXX SACHS CREDIT PARTNERS LP
By: /s/ Xxxx Xxxxx
----------------------------
Title: Partner
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
NEW YORK BRANCH
By: /s/ Takuya Honjo
----------------------------
Title: Senior Vice President
12
XXXXXX COMMERCIAL PAPER INC.
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------------
Title: Authorized Signature
MICHIGAN NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Title: Vice President, Asset Structuring
Manager
ML CLO XII PILGRIM AMERICA (CAYMAN) LTD.
By: Pilgrim Investment, Inc., as its
Investment Manager
By: /s/ Xxxxxx Tiffen
----------------------------
Title: Authorized Signatory
ML CLO XX PILGRIM AMERICA (CAYMAN) LTD.
By: Pilgrim Investment, Inc., as its
Investment Manager
By: /s/ Xxxxxx Tiffen
----------------------------
Title: Authorized Signatory
NATIONAL WESTMINSTER BANK PLC
By: NatWest Capital Markets Limited; its
Agent
By: Greenwich Capital Markets, Inc., its
Agent
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Title: Assistant Vice President
NORTHWOODS CAPITAL LIMITED
By: Xxxxxx, Xxxxxx & Co., L.P., its
collateral manager
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Title: Authorized Signatory
13
ORIX USA CORPORATION
By: /s/ Xxxxxxxx Xxxxxxxx
----------------------------
Title: Executive Vice President
PERRY PARTNERS INTERNATIONAL, INC.
By: /s/ Xxxx Xxxx
----------------------------
Title: Senior Managing Director
PERRY PARTNERS LP
By: /s/ Xxxx Xxxx
----------------------------
Title: Senior Managing Director
PILGRIM AMERICA PRIME RATE TRUST
By: Pilgrim Investments, Inc., as its
investment manager
By: /s/ Xxxxxx Tiffen
----------------------------
Title: Authorized Signatory
XXXXXX XXXXXXX XXXX XXXXXX
PRIME INCOME TRUST
By: /s/ Xxxxxx Xxxxxxxx
----------------------------
Title: Vice President
ROYALTON COMPANY
By: Pacific Investment Management
Company, as its Investment Advisor
By: /s/ Xxxxxxx Xxxxxxx
----------------------------
Title: Senior Vice President
00
XXXXXX XXX CAPITAL LLC
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Title: Authorized Signatory
SOCIETE GENERALE
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Title: Director
THE TORONTO DOMINION BANK
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Title: Mgr. Cr. Admin.
TYLER TRADING, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Title: President
U.S. BANCORP INVESTMENTS INC.
By: /s/ Xxxxxxx Xxxxxxxxxx
----------------------------
Title: EVP
XXX XXXXXX PRIME RATE INCOME TRUST
By: Xxx Xxxxxx Investment Advisory Corp.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Title: Vice President
XXX XXXXXX SENIOR INCOME TRUST
By: Xxx Xxxxxx Investment Advisory Corp.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Title: Vice President
15
XXX XXXXXX CLO I, Limited
By: Xxx Xxxxxx Management Inc.,
as Collateral Manager
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Title: Vice President
WACHOVIA BANK, NA
By: /s/ Xxxx Xxxxxx
----------------------------
Title: Senior Vice President
WHIPPORWILL ASSOCIATES
By:_____________________________
Title:
DK ACQUISITION PARTNERS, L.P.
By: /s/ Xxxxxx Xxxxxxx Xx.
----------------------------
Title: Partner
MORGENS WATERFALL, VINTIADIS & COMPANY,
INC., acting on behalf of certain
investment advisory clients
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------
Title: Authorized Agent
Agreed to and Consented to
by: VENTAS, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Title: Executive VP and CFO
16
Exhibit A
to Waiver and Extension Agreement
---------------------------------
VENTAS REALTY, LIMITED PARTNERSHIP
----------------------
OUTLINE OF PRINCIPAL TERMS OF PROPOSED RESTRUCTURING
OF THAT CERTAIN CREDIT AGREEMENT
DATED AS OF APRIL 29, 1998
The following is a summary of the principal terms and conditions upon
which the Borrower (as hereinafter defined) and the lenders have agreed to amend
that certain Credit Agreement, dated as of April 29, 1998 (the "Credit
Agreement"), among Ventas Realty, Limited Partnership (the "Borrower"), each of
the financial institutions from time to time party thereto as lenders (together
with their successors and assigns, the "Existing Lenders"), NationsBank, N.A.
(now known as Bank of America, N.A.) as Administrative Agent and Xxxxxx Guaranty
Trust Company of New York as Documentation Agent (together with the
Administrative Agent, the "Agents").
Purpose: To modify the terms of the Credit Agreement, as set
------- forth herein. Capitalized terms used herein and not
otherwise defined shall have the meanings assigned
to them in the Credit Agreement.
Restructuring of Loans: The Existing Lenders agree that as soon as practic-
---------------------- able and in any event no later than January 31, 2000,
and upon the satisfaction of certain conditions
precedent set forth below (the "Closing Date"),
the Existing Lenders will convert their existing
Loans under the Credit Agreement (the "Existing
Loans") into one (or more) of three tranches (the
"Restructured Loans") of a New Credit Facility (as
defined herein) as follows (such Lenders being here-
inafter referred to as the "Restructured Lenders"):
Principal Interest Final
Amount Rate Maturity Minimum Amortization
--------- -------- -------- --------------------
($'s in millions)
Tranche A $200 LIBOR + 12/31/02 $50 payable on the Closing
275 bps Date.
$50 payable within 30 days
after effective date of
Vencor, Inc's plan of
reorganization (the "Vencor
Effective Date").
Thereafter, Monthly Cash
Sweep (as defined herein).
Tranche B $300 LIBOR + 375 12/31/05 One-time application of
(interest rate Excess Cash held by Ventas
decrease to 30 days after the Vencor
LIBOR + 325 Effective Date (after $50
after $150 payment to Tranche A),
million pay applied to Tranche B Loans
down of Tranche in inverse order of maturity
B Loans) (the "Tranche B Payment").
$50 in 2003
$50 in 2004
Balance in 2005
Balance
of
Existing
Tranche C Loans LIBOR + 425 12/31/07 None
(approx.
$475)
Revolving Credit Facility: In addition to the $975 million of restructured
------------------------- debt, the New Credit Facility will also include a
$25 million Revolving Credit Facility to be provided
by interested Existing Lenders (the "Revolving
Lenders") upon pricing and terms to be agreed upon.
The New Credit Facility shall be comprised of the
Restructured Loans and new Revolving Credit Facility
(collectively, the "New Credit Facility").
If an Event of Default occurs and is continuing, all
proceeds of Collateral (as herein defined) shall be
paid first to repay the loans made under the
Revolving Credit Facility, then to repay pro rata
the Restructured Loans.
Exchange Offer: To the extent that Tranche A or B of the New Credit
-------------- Facility is oversubscribed, it will be allocated as
follows:
First, to the holders of Tranche A Loans
under the Credit Agreement (the "Bridge
Lenders"), pro rata based on each Bridge
Lender's principal amount outstanding of
Tranche A Loans under the Credit
Agreement (the "Bridge Loans").
Second, to the holders of the Tranche B
Loans under the Credit Agreement (the
"Revolving Lenders"), pro rata based on
each Revolving Lender's principal amount
outstanding of Tranche B Loans under the
Credit Agreement (the "Revolving Loans").
Third, to the remaining Existing Lenders,
pro rata based on principal amount
outstanding of non-Bridge Loan and
non-Revolving Loan facilities under the
Credit Agreement.
2
Mandatory Prepayments So long as no Event of Default haS
Under New Credit Facility: occurred and is continuing, all mandatory
------------------------- prepayments (other than the Tranche B
Payment) will be applied: first, to
Tranche A Loans; second, to Tranche B
Loans; and third, to Tranche C Loans, to
be applied in order of maturity within
each separate Tranche.
Excess Cash Until there has been a total of $200 million oF
Flow: amortization (including the Minimum Amortization)
and/or prepayments with respect to the Restructured
Loans under the New Credit Facility (the "$200
Million Pay Down"), (i) there will be a monthly
sweep of "Excess Cash Flow" to prepay/amortize such
Tranche A Loans (the "Monthly Cash Sweep") and (ii)
the Revolving Credit Facility will remain in place.
During the periods when minimum REIT dividends may
be paid, "Excess Cash Flow" shall be defined to mean
cash receipts (other than borrowings under the
Revolving Credit Facility or Net Cash Proceeds (as
defined herein)) less cash disbursements less
reasonable reserves for (i) specific non-monthly
cash disbursements to be enumerated in the New
Credit Facility which shall include dividends and
required taxes and (ii) other non-monthly cash
disbursements which shall be reasonably acceptable
to the Agents.
Asset Sales and So long as no Event of Default has occurred or is
Refinancings: continuing, 100% of the net cash proceeds (i.e.,
after deduction for allowable REIT dividends and
payment of required taxes and other related costs
(the "Net Cash Proceeds")) from (i) the sale of
any Collateral, (ii) any refinancing, (iii) an
equity investment, (iv) a Commercial Mortgage Backed
Securities transaction, (v) the entry into a joint
venture or (vi) any other such similar transaction
which generates Net Cash Proceeds, shall be paid to
the Administrative Agent for the benefit of the
Restructured Lenders.
The Borrower may prepay the Restructured Loans
without penalty.
Change in Control: In the event of a change in control, the obligations
----------------- owing with respect to the New Credit Facility will
accelerate unless the Required Lenders (51%) consent
to such change in control, such consent not to be
unreasonably withheld.
3
Payment of REIT
Dividends:
---------
Dividend for Limited to minimum REIT dividend. Borrower may
1999 Taxable Year: elect to make distributions to Ventas, Inc.
("Ventas") to enable it to pay the dividend through
the distribution of cash, Vencor common stock, or a
combination of the two, so long as the required
Minimum Amortization is achieved.
Other Prior to the $200 Million Pay Down, Borrower will
Dividends: make distributions to Ventas to enable it to pay
only the minimum REIT dividend. After the $200
Million Pay Down, the dividend restriction will be
lifted at which time the Borrower shall be
permitted to make distributions to Ventas to enable
it to pay a dividend equal to a standard REIT
dividend. Dividends shall be payable no more
frequently than quarterly except for payments with
respect to the balance of the minimum REIT dividend
payable for the 1999 tax year (expected to be paid
in 2000) which may be paid more frequently in order
to reduce or minimize tax penalties.
No dividend during the occurrence of a default in
the payment of principal or interest under the New
Credit Facility.
Additional Collateral: The Borrower and Guarantor (Ventas) must pledge to
--------------------- the Documentation Agent, on behalf of itself, the
Restructured Lenders and the Revolving Lenders
(collectively, the "Lenders") and, if necessary,
on behalf of the holders of other Debt, if any, in
an aggregate amount not to exceed $110 million
(provided that such amount shall be permanently
decreased dollar for dollar as such Debt is
repaid), (i) all unencumbered real property and
real property related assets (including an assign-
ment of leases and rents), (ii) all encumbered real
property, personal property, and related assets
(subject to any prior lien on such property), (iii)
all of the Guarantor's interest in any other entity
which has not already been pledged to the Documen-
tation Agent for its benefit and the benefit of the
Lenders and (iv) a first lien on all unencumbered
personal property of the Borrower located at or
used in connection with the Borrower's real
property being pledged pursuant to clauses (i) and
(ii) hereof, together with all of the proceeds and
products of all of the foregoing (collectively, the
"Additional Collateral"; and together with the
existing collateral, the "Collateral"). Any
interest rate protection agreements or Vencor stock
held by Borrower or Ventas shall not constitute
Additional Collateral.
4
Restructuring Fee: In accordance with the Waiver and Extension Agree-
------------------ ment dated as of October 29, 1999 (the "Waiver"),
1% of outstanding principal amount of all Loans,
one quarter of one percent (1/4 of 1%) of which
shall be payable in cash upon the Effective Date of
the Waiver to all Existing Lenders which timely
executed and delivered the Waiver in accordance
with the terms thereof, and the balance of which
shall be payable in cash on the Closing Date;
provided, however, that if all of the existing
Bridge Lenders execute and deliver counterpart
signatures to the Waiver in accordance therewith,
then, in lieu of the foregoing, two-fifths of one
percent (2/5 of 1%) of the outstanding principal
amount of all Existing Loans shall be payable in
cash upon the Effective Date of the Waiver to all
Existing Lenders which timely executed and
delivered the Waiver in accordance with the terms
thereof, and the balance of which shall be payable
in cash on the Closing Date (the "Restructuring
Fee"). The balance of the Restructuring Fee shall
be distributed pro rata to the Restructured Lenders
based upon the principal amount of outstanding
Existing Loans under the Credit Agreement.
Interest Rates and The Interest Period (as defined in the Credit
Payment of Interest: Agreement) for Euro-Dollar Loans shall be
------------------- restricted to one, two or three months. Interest
on all Loans under the New Credit Facility shall be
payable monthly.
Covenants in effect In an effort to simplify Article V of the Credit
after Vencor Agreement, many of the financial covenants of the
Effective Date: type contained in Section 5.8 therein shall be
-------------- modified, replaced or eliminated. In addition, as
of the Closing Date, it will be necessary to reset
covenants and modify other provisions of the Credit
Agreement taking into account the proposed Vencor
restructuring, the Government's proposed settlement
(the "Government Settlement") and Borrower's
financial condition (reasonably taking into account
potential modifications to the terms of each
thereof).
5
Covenants in Except as otherwise provided herein, affirmative
effect at all times: and negative covenants of the type contained in the
------------------- following sections of the Credit Agreement will be
included in the New Credit Facility with modifi-
cations consistent with the terms hereof: 5.1-5.7,
5.9-5.14, 5.21-5.22, and 5.24. In addition, the
following covenants will be included:
1. Asset sales and refinancings will be permitted
to the extent Net Cash Proceeds are used to
repay the New Credit Facility.
2. Joint ventures will be permitted (a) upon
consent of a majority of the Lenders and (b)
to the extent joint venture interest is
pledged to secure the Borrower's obligations
under the New Credit Facility.
3. Section 5.15 of the Credit Agreement will be
modified to permit the Borrower to
participate, up to an aggregate amount not to
exceed $5 million, in a Vencor rights offering
which is made available to the Borrower and
other classes of creditors of Vencor;
provided, that (i) the securities acquired by
the Borrower in the Vencor rights offering are
distributed to Ventas shareholders in full or
partial satisfaction of Ventas' minimum REIT
dividend, and (ii) the terms and conditions of
the Vencor rights offering and the Borrower's
participation therein shall be reasonably
acceptable to the Agents.
4. Payment of principal and interest on all
obligations under New Credit Facility.
Additional Covenants
in effect prior to
Vencor Effective Date:
--------------------- 1. No dividend other than minimum REIT dividend.
2. The incurrence of additional debt (over that
outstanding under the New Credit Facility, the
obligations to the U.S. Government in
connection with the proposed Government
Settlement, and existing debt) shall be
prohibited (except refinancing debt (the
proceeds of which are used to pay down the New
Credit Facility) and de minimis capital
leases, etc.).
Prior to the Vencor Effective Date, there will be
no financial covenants.
Events of Default: Section 6.1 of the Credit Agreement shall be
----------------- amended to include
6
the following additional Events of Default: (i) the
Vencor Effective Date shall not have occurred by
12/31/00; (ii) after the Vencor Effective Date, the
continuing failure by Vencor to make three (3)
consecutive payments of monthly rent under the
revised Master Leases; and (iii) a default by
Ventas in the payment of its obligations under the
Government Settlement and an acceleration of its
obligations thereunder.
Upon the occurrence and during the continuance of a
"payment" Event of Default under the New Credit
Facility, the Borrower's (or Guarantor's) payment
of dividends to its shareholders shall be
suspended.
Modification of Other Certain other definitions or sections of the Credit
Credit Agreement Agreement (including, but not limited to,
Provisions: representations and warranties) shall be modified
---------- to reflect the terms and conditions set forth
herein.
Costs and On or prior to the Closing Date, all out-of-pocket
Expenses: expenses incurred by the Agents, including (without
-------- limitation) the reasonable fees and disbursements
of, among others, Xxxxxx, Xxxxx & Xxxxxxx LLP
("MLB"), counsel to the Agents and Conway,
DelGenio, Xxxxx & Co., LLP, financial advisors to
MLB, incurred in connection with the Credit
Agreement and the transactions contemplated by this
Term Sheet shall be paid by the Borrower whether or
not such transactions are consummated. In
addition, all reasonable out-of-pocket expenses of
the members of the lender group steering committee
(other than the Agents), including reasonable fees
and expenses of counsel retained by individual
members of the steering committee, shall be paid by
the Borrower on or prior to the Closing Date;
provided, however, that the aggregate amount of
such out-of-pocket fees and expenses of the lender
group steering committee shall not exceed $150,000.
Closing Date: New Credit Facility shall close as soon as
------------ practicable, and in any event no later than
January 31, 2000. Parties shall use their best
efforts to execute and deliver all ancillary
documents and Security Documents (as defined
herein) by January 31, 2000, but in no event shall
such documents be delivered later than February 28,
2000.
Closing Conditions: To include (without limitation):
------------------
1. Execution and delivery to the Agents of a New
Credit Facility,
7
which amends and restates the Credit
Agreement to incorporate the terms and
conditions set forth herein and provides
for the Revolving Credit Facility, which New
Credit Facility shall be in form and
substance reasonably satisfactory to the
Agents and the Borrower.
2. Execution and delivery to the Documentation
Agent, on behalf of itself and the Lenders, of
an amended and restated Pledge and Security
Agreement, which amends and restates the
Pledge and Security Agreement dated as of
April 29, 1998 among Ventas, Inc., the
Borrower and the Documentation Agent to
incorporate the terms and conditions set forth
herein with respect to the Borrower's pledge
of the Additional Collateral to the
Documentation Agent on behalf of itself and
the Lenders, which amended and restated Pledge
and Security Agreement shall be in form and
substance reasonably satisfactory to the
Agents and the Borrower.
3. Execution and delivery of all documents
("Security Documents") required to create and
perfect the security interests in the
Additional Collateral in favor of Documenta-
tion Agent on behalf of itself and the Lenders
by no later than February 28, 2000, together
with reasonable and appropriate local real
estate counsel opinions with respect to local
law issues, all in form and substance
reasonably satisfactory to the Agents and the
Borrower. In connection with the creation
and perfection of the liens in the Additional
Collateral, the Borrower will provide copies
of its existing documents, instruments and
files relating to the Additional Collateral
reasonably in advance of the Closing Date.
4. Payment to the Administrative Agent, in full
in cash, for payment to the Restructured
Lenders, the balance of the Restructuring Fee.
5. Borrower shall have obtained all necessary
consents and waivers necessary to permit the
transactions contemplated hereby.
6. After giving effect to the New Credit Facility
no Default or Event of Default thereunder
(which has not been waived in writing) shall
have occurred and be continuing.
7. Payment of all outstanding fees and expenses.
8
8. Other usual and customary conditions to
closing, including an opinion of Borrower's
counsel which shall be reasonably satisfactory
to the Agents.
Governing Law: New York.
-------------
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