<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 12, 1999
--------------
Ventas, Inc.
------------
(Exact name of registrant as specified in its charter)
Delaware 1-10989 61-1055020
- ------------------------------ ----------- ------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4360 Brownsboro Road, Suite 115, Louisville, Kentucky 40207-1642
- ----------------------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (502) 357-9000
---------------
<PAGE>
Item 5. Other Events
On March 31, 1999, Ventas, Inc. ("Ventas" or the "Company") announced that
it had entered into an agreement (the "Original Standstill Agreement") with
Vencor, Inc. ("Vencor"), its principal tenant, whereby the Company agreed not
to exercise remedies for non-payment of rent due from Vencor on April 1, 1999
for a period ending April 12, 1999.
On April 13, 1999, Ventas announced that it entered into an agreement (the
"Second Standstill Agreement") with Vencor which provides that if Vencor pays
the full amount of April 1999 rent on the following schedule, the Company will
not exercise its remedies under its lease agreements with Vencor. The schedule
is $8.0 million on April 13, $4.3 million on April 20, $4.3 million on April 27
and $1.9 million on April 30. These payments, totaling approximately $18.5
million, represent the full amount of rent that is due for April under the lease
agreements. In addition, if Vencor fails to pay the full amount of rent for May
on or before May 5, 1999, the Company will have the right to exercise all
remedies available to it under the lease agreements. No other agreements have
been reached with Vencor with respect to the payment of rent.
The Company and Vencor also agreed to amend each of the lease agreements
between the companies to delete a provision that permitted the Company to
require Vencor to purchase a facility upon the occurrence of certain events of
default by Vencor.
Pursuant to the Second Standstill Agreement, each of the Company and Vencor
has agreed not to pursue any claims against the other or any third party
relating to the April 1998 reorganization as long as Vencor makes the full lease
payments for April 1999 and May 1999 under the specified schedule. In addition,
the Standstill Agreement will terminate on May 5, 1999 or on any date that a
voluntary or involuntary bankruptcy proceeding is commenced by or against
Vencor.
Finally, the Company and Vencor have entered into an agreement (the
"Tolling Agreement") pursuant to which they have agreed that any statutes of
limitations or other time constraints in a bankruptcy proceeding that might be
asserted by one party against the other will be extended or tolled from April
12, 1999 until May 5, 1999 or until the Standstill Agreement terminates due to
Vencor's failure to make the contemplated lease payments.
This Form 8-K includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All statements regarding the Company's expected future
financial position, results of operations, cash flows, financing plans, business
strategy, expected lease income, plans and objectives of management for future
operations and statements that include words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend," and other similar expressions are
forward-looking statements. Such forward-looking statements are inherently
uncertain, and stockholders must recognize that actual results may differ from
the Company's expectations.
-2-
<PAGE>
Factors that may affect the plans or results of the Company include,
without limitation, (i) the ability of the Company's operators to maintain the
financial strength and liquidity necessary to satisfy their obligations and
duties under leases and other agreements with the Company and their existing
credit agreements, (ii) the extent of future healthcare reform and regulation,
including cost containment measures and changes in reimbursement policies and
procedures, (iii) increases in the cost of borrowing for the Company, (iv) the
ability of the Company's operators to deliver high quality care and to attract
patients, and (v) the ability of the Company to pay and/or refinance its
indebtedness as it becomes due. Many of such factors are beyond the control of
the Company and its management.
In addition, please note that certain information contained in this Form 8-
K has been provided by the Company's primary tenant, Vencor. Vencor is subject
to the reporting requirements of the Securities and Exchange Commission (the
"Commission") and is required to file with the Commission annual reports
containing audited financial information and quarterly reports containing
unaudited financial information. Although Vencor has provided certain
information to the Company, the Company has not verified this information either
through an independent investigation or by reviewing Vencor's Annual Report on
Form 10-K for the year ended December 31, 1998. The Company has no reason to
believe that such information is inaccurate in any material respects, but there
can be no assurances that all such information is accurate.
A copy of the form of the amendment to the four master leases between the
Company and Vencor, the Second Standstill Agreement, the Tolling Agreement, the
Original Standstill Agreement and the press release issued by the Company on
April 13, 1999 are included as exhibits to this filing and are incorporated
herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits:
99.1 Form of Second Amendment to Master Lease, dated April
12, 1999, between the Company and Vencor, Inc.
99.2 Second Standstill Agreement, dated April 12, 1999,
between the Company and Vencor, Inc.
-3-
<PAGE>
99.3 Tolling Agreement, dated April 12, 1999, between the
Company and Vencor, Inc.
99.4 Standstill Agreement, dated March 31, 1999, between the
Company and Vencor, Inc.
99.5 Press Release dated April 13, 1999.
-4-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VENTAS, INC.
(Registrant)
Date: April 19, 1999 By: /s/ T. Richard Riney
-----------------------------------
T. Richard Riney
Vice President and General Counsel
-5-
<PAGE>
EXHIBIT INDEX
99.1 Form of Second Amendment to Master Lease, dated April 12, 1999,
between the Company and Vencor, Inc.
99.2 Second Standstill Agreement, dated April 12, 1999, between the
Company and Vencor, Inc.
99.3 Tolling Agreement, dated April 12, 1999, between the Company and
Vencor, Inc.
99.4 Standstill Agreement, dated March 31, 1999, between the Company
and Vencor, Inc.
99.5 Press Release dated April 13, 1999.
-6-
<PAGE>
Exhibit 99.1
SECOND STANDSTILL AGREEMENT
---------------------------
This Agreement dated April 12, 1999 is made and entered into between
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. (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 (collectively, "Ventas").
WHEREAS, Vencor and Ventas entered into an Agreement And Plan Of
Reorganization, dated as of April 30, 1998 (the "Reorganization Agreement"), and
other Ancillary Agreements (as defined in the Reorganization Agreement),
including four Master Lease Agreements, dated as of April 30, 1998 (the "Master
Leases");
WHEREAS, Vencor Nursing Centers Limited Partnership (an affiliate of
Vencor) and Ventas Realty, Limited Partnership (an affiliate of Ventas) entered
into a Lease Agreement dated as of August 7, 1998, concerning a facility
commonly known as the Corydon, Indiana Skilled Nursing Center (the "Indiana
Lease," and, collectively with the Master Leases, the "Five Leases");
WHEREAS, on March 18, 1999, Vencor sent a letter to Ventas, invoking
the dispute resolution provisions of Section 6.01 of the Reorganization
Agreement and seeking, inter alia, to negotiate a settlement concerning various
disputes;
WHEREAS, on March 22, 1999, Ventas sent a letter to Vencor, inter
alia, denying the allegations in Vencor's March 18, 1999 letter but agreeing to
engage in a constructive dialogue with Vencor regarding the issues raised in
Vencor's letter;
<PAGE>
WHEREAS, Vencor and Ventas entered into a Standstill Agreement dated
March 31, 1999 (the "First Standstill Agreement"), in which the parties agreed
not to take certain actions or to exercise certain rights or remedies against
one another during a period through and including April 12, 1999;
WHEREAS, the parties desire to continue negotiations and, in
connection therewith, to enter into certain arrangements more particularly
identified herein, including, without limitation, certain arrangements for the
payment in full of the rent due to Ventas under the Five Leases for the month of
April 1999, for the tolling or suspending of limitations or repose periods
applicable to certain alleged claims arising out of the Reorganization
Agreement, the Ancillary Agreements or the transactions contemplated by or in
those agreements, and for other matters;
NOW, THEREFORE, in consideration of the premises and the agreements
and undertakings of the parties contained herein, the parties agree as follows:
1. Except as explicitly set forth in the Tolling Agreement, neither
this Second Standstill Agreement, the Tolling Agreement by and between Ventas
and Vencor of even date herewith, the four Second Amendment to Master Lease
Agreements by and between Ventas and Vencor (and the other related parties to
the Master Lease Agreements) of even date herewith, nor the First Amendment to
Corydon, Indiana Lease Agreement by and between Ventas Realty, Limited
Partnership and Vencor Nursing Centers Limited Partnership of even date herewith
(the "Contemporaneous Agreements"), nor any discussions in pursuance hereof or
thereof, shall constitute a waiver by either party of any claim or defense that
may be asserted against the other party (including, without limitation, any
claim or defense with respect to the legality, validity, or
-2-
<PAGE>
enforceability of the Master Leases), an admission of liability by either party
or an admission by either party of the propriety or validity of any claims or
defenses asserted by either other party, and neither this Second Standstill
Agreement nor the Tolling Agreement shall be offered or received in evidence in
any arbitration or litigation between or among the parties except to enforce the
terms of such agreements or, where the intent of the parties is clearly stated
in such agreements, to demonstrate the intent of the parties.
2. Any modifications to this Second Standstill Agreement shall be in
writing and signed by both parties hereto.
3. Each of the undersigned represents that he or she has the
authority to execute this Agreement on behalf of the party for whom it is
executed.
4. Simultaneously with the execution and delivery of this Second
Standstill Agreement, the parties shall execute and deliver the following
additional agreements: the Tolling Agreement set forth at Exhibit A hereto, the
four Second Amendment to Master Lease Agreements set forth at Exhibit B hereto,
and the First Amendment to Corydon, Indiana Lease Agreement set forth at Exhibit
C hereto. This Agreement shall not become effective prior to the execution and
delivery of all of the foregoing agreements.
5. During the period from the date hereof 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 May 5, 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
-3-
<PAGE>
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 based on Vencor's late payment of the rent due under the Five
Leases for the month of April 1999, based on Vencor's late payment of rent due
under the Five Leases for the month of May 1999, 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.
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 in the event that:
(i) prior to 5:00 p.m. Eastern Daylight Savings Time on April 13, 1999,
Vencor has not paid to Ventas, in immediately available funds, the
sum of $8,022,426.00, representing thirteen-thirtieths (13/30) of the
rent due to Ventas under the Five Leases for the month of April 1999;
or
(ii) prior to 5:00 p.m. Eastern Daylight Savings Time on April 20, 1999,
Vencor has not paid to Ventas, in immediately available funds, an
additional sum of $4,319,767.85, representing seven-thirtieths (7/30)
of the rent due to Ventas under the Five Leases; or
-4-
<PAGE>
(iii) prior to 5:00 p.m. Eastern Daylight Savings Time on April 27, 1999,
Vencor has not paid to Ventas, in immediately available funds, an
additional sum of $4,319,767.85, representing seven-thirtieths (7/30)
of the rent due to Ventas under the Five Leases; or
(iv) prior to 5:00 p.m. Eastern Daylight Savings Time on April 30, 1999,
Vencor has not paid to Ventas, in immediately available funds, an
additional sum of $1,851,329.07, representing three-thirtieths (3/30)
of the rent due to Ventas under the Five Leases.
6. Notwithstanding anything contained in this Second Standstill
Agreement to the contrary, Vencor, subsequent to 5:00 p.m. Eastern Daylight
Savings Time on April 26, 1999, may commence an Action against those of the
three individuals who are identified in the letter from counsel for Ventas to
counsel for Vencor of even date herewith and who, prior to 5:00 p.m. Eastern
Daylight Savings Time on April 26, 1999, fail to execute and deliver a tolling
agreement with Vencor covering claims of each against the other that is
reasonably satisfactory in form and substance to Vencor and to such individuals.
7. This Second Standstill Agreement is binding upon the undersigned
parties and on any representatives, successors, heirs, and assigns of the
parties hereto.
8. This Second Standstill Agreement may be executed in one or more
counterparts and by facsimile, each of which counterparts shall be deemed an
original hereof, but all of which together shall constitute one agreement.
9. This Second Standstill Agreement shall be construed pursuant to
the laws of the State of New York, without giving effect to the choice-of-law
rules of New York law.
-5-
<PAGE>
10. Payments of funds due from Vencor to Ventas hereunder, including
payment of rent due under the Five Leases, shall be made by wire transfer to
Ventas through the following wire instructions:
SunTrust Bank, Nashville
ABA Routing No.: 064000046
Account: 7020226622
Credit Ventas Realty, Limited Partnership
CONFIRMED AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN BY:
VENCOR, INC. VENTAS, INC.
By: /s/ Richard A. Schweinhart By: /s/ T. Richard Riney
--------------------------- -----------------------------
Name: Richard A. Schweinhart Name: T. Richard Riney
Title: Senior Vice President Title: Vice President
-6-
<PAGE>
Exhibit 99.2
SECOND AMENDMENT TO MASTER LEASE AGREEMENT NO.
------------------------------------------------
THIS SECOND AMENDMENT TO MASTER LEASE AGREEMENT NO. __, dated April
12, 1999 (the "Amendment"), is entered into by and among Ventas, Inc., formerly
known as Vencor, Inc., a Delaware corporation ("Ventas") and Ventas Realty,
Limited Partnership, a Delaware limited partnership ("Ventas LP", and together
with Ventas, "Lessor") and Vencor Operating, Inc. ("Current Tenant"), a Delaware
corporation and Vencor, Inc., formerly known as Vencor Healthcare, Inc., a
Delaware corporation ("Vencor").
WHEREAS, First Healthcare Corporation, a Delaware corporation,
Nationwide Care, Inc., an Indiana corporation, Northwest Health Care, Inc., an
Idaho corporation, Hillhaven of Central Florida, Inc., a Delaware corporation,
Vencor Hospitals East, Inc., a Delaware corporation, Hahnemann Hospital, Inc., a
Delaware corporation, Hillhaven/Indiana Partnership, a Washington general
partnership, Carrollwood Care Center, a Tennessee general partnership, New Pond
Village Associates, a Massachusetts general partnership, St. George Nursing Home
Limited Partnership, an Oregon limited partnership, San Marcos Nursing Home
Partnership, a California general partnership, Vencor Hospitals Illinois, Inc.,
a Delaware corporation, Windsor Woods Nursing Home Partnership, a Washington
general partnership, Health Haven Associates, L.P., a Rhode Island limited
partnership, Oak Hill Nursing Associates, L.P., a Rhode Island limited
partnership (collectively, the "Subsidiaries") and Lessor (the Subsidiaries
together with Lessor referred to herein as "Original Lessor"), as lessor, and
Vencor, together with its permitted assigns, including Current Tenant (Vencor
together with Current Tenant referred to herein as "Original Tenant"), as
tenant, entered into that certain Master Lease Agreement, dated April 30, 1998,
and commonly known as Master Lease No. __ (the "Master Lease Agreement")
pursuant
<PAGE>
to which, inter alia, Original Lessor leased to Original Tenant and Original
Tenant leased from Original Lessor the Leased Properties (as defined in the
Master Lease Agreement) (capitalized terms used herein but not defined herein
shall have the meanings assigned to them in the Master Lease Agreement); and
WHEREAS, Ventas claims that pursuant to that certain Assignment and
Assumption of Master Lease, dated April 30, 1998, by and between Vencor, as
assignor, and Current Tenant, as assignee, Vencor assigned all of its right,
title, and interest in, to, and under the Master Lease Agreement to Current
Tenant; and
WHEREAS, Ventas claims that it is the successor by merger to each of
the Subsidiaries, and Ventas LP now has title to the Leased Properties; and
WHEREAS, Ventas claims that Vencor and Current Tenant executed and
delivered that certain Guaranty of Lease, dated as of April 30, 1998; and
WHEREAS, Ventas claims that it, Ventas LP, Current Tenant, and Vencor
entered into that certain First Amendment to Master Lease Agreement, dated as of
December 31, 1998 but effective as of April 30, 1998, pursuant to which the
Master Lease Agreement was amended in several respects; and
WHEREAS, simultaneously with the execution of this Amendment, Ventas
and Vencor shall execute and deliver that certain Second Standstill Agreement;
that certain Tolling Agreement; and Amendments to the other Master Leases and to
the Lease Agreement for the facility commonly known as the Corydon, Indiana
Skilled Nursing Center, each containing substantive terms identical to the terms
of this Amendment (collectively, the "Contemporaneous Agreements"); and
-2-
<PAGE>
WHEREAS, the parties hereto desire to further amend the Master Lease
Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree to amend the aforementioned Master Lease
Agreement as follows:
1. Section 16.4, entitled "Tenant's Obligation to Purchase," is
hereby deleted from the Master Lease Agreement, as of April 30, 1998, as fully
as if such Section had never been contained in such Master Lease Agreement.
2. The parties hereto intend that this Amendment shall become
effective simultaneously with the execution and delivery of the Contemporaneous
Agreements.
3. Except to the extent expressly modified herein, all other terms,
covenants, and conditions of the Master Lease Agreement shall remain unchanged.
4. Each of the undersigned represents that he or she has the
authority to execute this Amendment on behalf of the party or parties for whom
it is executed.
5. This Amendment 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.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and their respective corporate seals to be hereunto affixed and
attested by their respective officers hereunto duly authorized.
LESSOR:
------
WITNESS VENTAS, INC.
By: /s/ T. Richard Riney
- -------------------------- --------------------------------
Name Name: T. Richard Riney
Title: Vice President
- --------------------------
Name
VENTAS REALTY, LIMITED PARTNERSHIP
WITNESS By: Ventas, Inc., its general partner
By: /s/ T. Richard Riney
- -------------------------- --------------------------------
Name Name: T. Richard Riney
Title: Vice President
- --------------------------
Name
ORIGINAL TENANT:
---------------
WITNESS VENCOR, INC.
By: /s/ Richard A. Schweinhart
- -------------------------- --------------------------------
Name Name: Richard A. Schweinhart
Title: Senior Vice President
- --------------------------
Name
WITNESS VENCOR OPERATING, INC.
By: /s/ Richard A. Schweinhart
- -------------------------- --------------------------------
Name Name: Richard A. Schweinhart
Title: Senior Vice President
- --------------------------
Name
-4-
<PAGE>
Exhibit 99.3
TOLLING AGREEMENT
-----------------
This Agreement dated April 12, 1999 is made and entered into between
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
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").
WHEREAS, the parties to this Agreement 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"); and
WHEREAS, the parties desire to toll or suspend the limitations or
repose periods applicable to the Claims for the Tolling Period (defined below).
NOW, THEREFORE, for good cause and adequate consideration, including
forbearance by both Vencor and Ventas from pursuing certain remedies at this
time, the parties
<PAGE>
hereto agree as follows:
1. Any Vencor Claims, including, without limitation, those arising
or available under the Bankruptcy Avoidance Provisions (defined below) that
Vencor could otherwise assert against Ventas if Vencor were a debtor in a case
under the Bankruptcy Code commenced on the date hereof, and whether arising
under the Bankruptcy Code or under other applicable federal or state law, shall
not be prejudiced, impaired, or waived by Vencor's failure to commence such a
bankruptcy case, and any and all statutes of limitations, repose, or other legal
or equitable constraints on the time by which such a bankruptcy case or pleading
initiating any Vencor Claim must be filed to assert such a 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 the date hereof
to and including the earlier of (i) 5:00 p.m. Eastern Daylight Savings Time on
May 5, 1999, or (ii) the earlier time and date on which the Second Standstill
Period (as defined in the Second Standstill Agreement) shall automatically and
immediately terminate as a result of Vencor's nonpayment of rent (as provided 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 the last day of the Tolling Period shall be deemed to
be contained in the Tolling Period.
2. Without limiting the generality of the foregoing, Ventas shall
not assert against any Vencor Claim brought by Vencor any statute of
limitations, laches, or other time-related defense or claim, including, but not
limited to the defense or claim that the limitations periods or other time
periods set forth in 11 U.S.C. (S)(S) 544, 546, 547, 548, 550, 551 or 553 (the
"Bankruptcy Avoidance Provisions") or Section 10(b) of the Securities Exchange
Act of 1934
-2-
<PAGE>
have expired, to the extent that such defenses or claims depend on the passage
of time during the Tolling Period. Additionally, for purposes of any action
pursuant to the Bankruptcy Avoidance Provisions, Vencor shall be deemed to have
commenced its bankruptcy case on the date that is calculated by going back in
time from the date it actually commenced such case by the number of days
contained in the Tolling Period.
3. Any Ventas Claims, including, without limitation, those arising
or available under the Bankruptcy Avoidance Provisions (defined below) that
Ventas could otherwise assert against Vencor if Ventas were a debtor in a case
under the Bankruptcy Code commenced on the date hereof, and whether arising
under the Bankruptcy Code or under other applicable federal or state law, shall
not be prejudiced, impaired, or waived by Ventas' 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 Ventas Claim must be filed to assert such a Ventas Claim
(including, without limitation, a cause of action under (S) 548 of the
Bankruptcy Code) shall be tolled during the Tolling Period.
4. Without limiting the generality of the foregoing, Vencor shall
not assert against any Ventas Claim brought by Ventas any statute of
limitations, laches, or other time-related defense or claim, including, but not
limited to the defense or claim that the limitations periods or other time
periods set forth in the Bankruptcy Avoidance Provisions or Section 10(b) of the
Securities Exchange Act of 1934 have expired, to the extent that such defenses
or claims depend on the passage of time during the Tolling Period.
Additionally, for purposes of any action pursuant to the Bankruptcy Avoidance
Provisions, Ventas shall be deemed to have commenced its bankruptcy case on the
date that is calculated by going back in time from the date
-3-
<PAGE>
it actually commenced such case by the number of days contained in the Tolling
Period.
5. For purposes of facilitating aspects of the foregoing, Ventas and
Vencor agree and stipulate that this Agreement shall create claims in favor of
Vencor, the substantive elements of which and the case law applicable to which
are in all respects identical to the Vencor Claims that would have arisen under
the Bankruptcy Avoidance Provisions had Vencor been a debtor in a bankruptcy
case commenced under the Bankruptcy Code on April 29, 1999. Any such claim may
be asserted by Vencor only in connection with and subsequent to a bankruptcy
case commenced by or against it, as debtor, under the Bankruptcy Code on or
before the date established by taking April 29, 1999 and adding to it the actual
number of days contained in the Tolling Period. For purposes of each such claim
created in this paragraph, Vencor shall be conclusively and irrebuttably
presumed to have commenced its bankruptcy case within one year of April 29,
1998, if such case is, in fact, commenced on or before the date established by
taking April 29, 1999 and adding to it the actual number of days contained in
the Tolling Period.
6. For purposes of facilitating aspects of the foregoing, Ventas and
Vencor agree and stipulate that this Agreement shall create claims in favor of
Ventas, the substantive elements of which and the case law applicable to which
are in all respects identical to the Ventas Claims that would have arisen under
the Bankruptcy Avoidance Provisions had Ventas been a debtor in a bankruptcy
case commenced under the Bankruptcy Code on April 29, 1999. Any such claim may
be asserted by Ventas only in connection with and subsequent to a bankruptcy
case commenced by or against it, as debtor, under the Bankruptcy Code on or
before the date established by taking April 29, 1999 and adding to it the actual
number of days contained in the Tolling Period. For purposes of each such claim
created in this paragraph, Ventas shall be
-4-
<PAGE>
conclusively and irrebuttably presumed to have commenced its bankruptcy case
within one year of April 29, 1998, if such case is, in fact, commenced on or
before the date established by taking April 29, 1999 and adding to it the actual
number of days contained in the Tolling Period.
7. Ventas and Vencor agree that the stipulations in this Agreement
are binding and irrevocable, and either party shall have the right to introduce
a copy of this Agreement into evidence to enforce such stipulations in any
litigation or arbitration proceeding between Ventas and Vencor. Ventas
acknowledges that Vencor's forbearance from commencing a bankruptcy case prior
to April 29, 1999, will serve as sound, adequate, fair and sufficient
consideration for the foregoing agreements and stipulations. Vencor
acknowledges that Ventas' forbearance from commencing a bankruptcy case prior to
April 29, 1999, will serve as sound, adequate, fair and sufficient consideration
for the foregoing agreements and stipulations.
8. Neither this Agreement nor the circumstances leading to its
execution shall be construed to vitiate or waive (a) any statute of limitations,
laches, or other time-related defenses that are available prior to or after the
Tolling Period, provided that the passage of time during the Tolling Period is
not taken into account, or (b) any non-time-related defenses to any Vencor
Claim, Ventas Claim, or claim created by paragraph 5 or 6 of this Agreement.
9. Each of the undersigned represents that he or she has the
authority to execute this Agreement on behalf of the party or parties for whom
it is executed.
10. Any modifications to this Tolling Agreement shall be in writing
and signed by both parties hereto.
11. Simultaneously with the execution and delivery of this Agreement,
the parties shall execute and deliver that certain Second Standstill Agreement,
those four certain
-5-
<PAGE>
Second Amendment to Master Lease Agreements, and that certain First Amendment to
Corydon, Indiana Lease Agreement (collectively, the "Contemporaneous
Agreements"). This Agreement shall not become effective prior to the execution
and delivery of each of the foregoing Contemporaneous Agreements.
12. Paragraphs 1, 2, and 5 of this Agreement shall be void and
without effect in the event Vencor commences a voluntary bankruptcy case under
the Bankruptcy Code prior to April 29, 1999, and paragraphs 3, 4, and 6 of this
Agreement shall be void and without effect in the event Ventas commences a
voluntary bankruptcy case under the Bankruptcy Code prior to April 29, 1999.
13. This Agreement is binding on the undersigned parties and on the
representatives, successors, heirs, and assigns of the parties hereto.
14. This Agreement may be executed in one or more counterparts and by
facsimile, each of which counterparts shall be deemed an original hereof, but
all of which together shall constitute one agreement.
15. This Tolling Agreement shall be construed pursuant to the laws of
the State of New York, without giving effect to the choice-of-law rules of New
York law.
[INTENTIONALLY LEFT BLANK]
-6-
<PAGE>
CONFIRMED AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN BY:
VENCOR, INC. VENTAS, INC.
By: /s/ Richard A. Schweinhart By: /s/ T. Richard Riney
-------------------------- --------------------
Name: Richard A. Schweinhart Name: T. Richard Riney
Title: Senior Vice President Title: Vice President
-7-
<PAGE>
Exhibit 99.4
STANDSTILL AGREEMENT
--------------------
The Agreement dated March 31, 1999 (the "Agreement") is made and entered
into between Vencor, Inc., a corporation organized under the laws of Delaware,
on behalf of itself and its various subsidiaries and affiliates including,
without limitation Vencor Operating, Inc. (collectively, "Vencor") and Ventas,
Inc., a corporation organized under the laws of Delaware, on behalf of itself
and its various subsidiaries and affiliates, including without limitation all
parties designated as "Lessor" in the Master Leases (as defined below)
(collectively, "Ventas").
WHEREAS Vencor and Ventas entered into an Agreement And Plan Of
Reorganization, dated as of April 30, 1998 (the "Reorganization Agreement"), and
other Ancillary Agreements (as defined in the Reorganization Agreement),
including four Master Lease Agreements, dated as of April 30, 1998 (the "Master
Leases");
WHEREAS on March 18, 1999 Vencor sent a letter to Ventas, invoking the
dispute resolution provisions of Section 6.01 of the Reorganization Agreement
and seeking, inter alia, to negotiate a settlement of various disputes;
WHEREAS on March 22, 1999 Ventas sent a letter to Vencor, inter alia,
denying the allegations in Vencor's March 18, 1999 letter but agreeing to engage
in a constructive dialogue with Vencor regarding the issues raised in Vencor's
letter;
WHEREAS the parties have met and, in connection with that meeting, Ventas
received various information and interim proposals from Vencor; and
<PAGE>
WHEREAS, Ventas and Vencor wish to maintain the status quo for a limited
period of time to enable Ventas to consider more fully the information and
interim proposals received from Vencor.
NOW THEREFORE, in consideration of the premises, and the agreements and
undertakings of the parties contained herein, the parties agree as follows:
1. During the period from the date hereof through and including April 12,
1999 (the "Standstill Period"), Ventas will not exercise any rights or remedies
it may have against Vencor under the Reorganization Agreement, any Ancillary
Agreement, or any of the Master Leases in the event of nonpayment by Vencor of
amounts due under the Master Leases on April 1, 1999, or based on any default
arising from or related to the disclosures made by Vencor to Ventas prior to the
date hereof. Without limiting the generality of the foregoing, during the
Standstill Period Ventas will not send a notice of nonpayment pursuant to
Section 16.1(b) of the Master Leases and Ventas hereby suspends all such rights
or remedies during the Standstill Period.
2. During the Standstill Period, neither Ventas nor Vencor 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 parties,
including, without limitation, any of Vencor's or Ventas' current or former
officers, directors or employees, including any Action arising from or relating
to the Reorganization Agreement, any Ancillary Agreement, or any of the Master
Leases or with respect to the various disputes identified in Vencor's March 18,
1999 letter.
3. Neither this Agreement nor any discussions in pursuance hereof shall
constitute a waiver by either party of any claim or defense that may be asserted
against the other party, an
2
<PAGE>
admission of liability by either party or an admission by either party of the
propriety or validity of any claims or defenses asserted by the other party, and
this Agreement shall not be offered or received in evidence in any arbitration
or litigation between or among the parties except to enforce the terms of this
Agreement.
4. Any modifications to this Agreement shall be in writing and signed by
both parties hereto.
5. Each of the undersigned represents that s/he has the authority to
execute this Agreement on behalf of the party or parties for whom it is
executed.
6. This Agreement is binding upon the undersigned parties and on any
representatives, successors, heirs and assigns of the parties hereto.
7. This Agreement may be executed in one or more counterparts and by
facsimile, each of which counterparts shall be deemed an original hereof, but
all of which together shall constitute one agreement.
8. This Agreement shall be construed pursuant to the laws of the State of
New York, without giving effect to the choice-of-law rules of New York law.
CONFIRMED AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN BY:
VENCOR, INC. VENTAS, INC.
By /s/ Edward L. Kuntz By /s/ Debra A. Cafaro
----------------------- -------------------------
Name: Edward L. Kuntz Name: Debra A. Cafaro
Title: Chief Executive Officer Title: Chief Executive Officer
3
<PAGE>
Exhibit 99.5
Contact: Ventas Inc., Louisville
Steven T. Downey, 502/357-9030
VENTAS AND VENCOR REACH AGREEMENT ON CERTAIN MATTERS
LOUISVILLE, Ky.--(BUSINESS WIRE)--April 13, 1999--Ventas, Inc. (NYSE: VTR -
news) announced today that it has entered into an agreement with Vencor, Inc.
(NYSE: VC - news), its principal tenant, which provides that if Vencor pays the
full amount of April 1999 rent on the following schedule, the Company will not
exercise its remedies under its lease agreements with Vencor. The schedule is
$8.0 million on April 13, $4.3 million on April 20, $4.3 million on April 27 and
$1.9 million on April 30. These payments totaling approximately $18.5 million
represent the full amount of rent that is due for April under the lease
agreements. In addition, if Vencor fails to pay the full amount of rent for May
on or before May 5, 1999, the Company will have the right to exercise all
remedies available to it under the lease agreements. No other agreements have
been reached with Vencor with respect to the payment of rent.
The Company and Vencor also agreed to amend each of the four Master Leases,
effective as of April 30, 1998, to delete a provision that permitted the Company
to require Vencor to purchase a facility upon the occurrence of certain events
of default by Vencor. It is the Company's expectation that, as a result of these
amendments, Vencor will reflect the four Master Leases as operating leases for
financial accounting purposes in its consolidated financial statements to be
included in its Annual Report on Form 10-K for the year ended December 31, 1998.
In connection with these agreements, each of the Company and Vencor has agreed
not to pursue any claims against the other or any third party relating to the
April 1998 reorganization as long as Vencor makes the full lease payments for
April 1999 and May 1999 under the specified schedule. In addition, the
standstill arrangement will terminate on May 5, 1999 or on any date that a
voluntary or involuntary bankruptcy proceeding is commenced by or against
Vencor.
Finally, the Company and Vencor have agreed that any statutes of limitations or
other time constraints in a bankruptcy proceeding that might be asserted by one
party against the other will be extended or tolled from April 12, 1999 until May
5, 1999 or until the standstill period terminates due to Vencor's failure to
make the contemplated lease payments.
Debra A. Cafaro, President and Chief Executive Officer of the Company, said,
"We are pleased with this outcome, which does not reduce the payments due under
the leases but provides Vencor with some financial flexibility. We expect to
continue our discussions with Vencor regarding Vencor's need to modify its
capital structure, and we will continue to consider proposals from Vencor and
take actions that are in the best interests of the Ventas shareholders."
Ventas, Inc. is a real estate company whose properties include 219 nursing
centers, 45 hospitals and eight personal care facilities operated in 36 states.
This press release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities
<PAGE>
Exchange Act of 1934, as amended (the "Exchange Act"). All statements regarding
the Company's expected future financial position, results of operations, cash
flows, financing plans, business strategy, expected lease income, plans and
objectives of management for future operations and statements that include words
such as "anticipate," "believe," "plan," "estimate," "expect," "intend,"
and other similar expressions are forward-looking statements. Such forward-
looking statements are inherently uncertain, and stockholders must recognize
that actual results may differ from the Company's expectations.
Factors that may affect the plans or results of the Company include, without
limitation, (i) the ability of the Company's operators to maintain the financial
strength and liquidity necessary to satisfy their obligations and duties under
leases and other agreements with the Company and their existing credit
agreements, (ii) the extent of future healthcare reform and regulation,
including cost containment measures and changes in reimbursement policies and
procedures, (iii) increases in the cost of borrowing for the Company, (iv) the
ability of the Company's operators to deliver high quality care and to attract
patients, and (v) the ability of the Company to pay and/or refinance its
indebtedness as it becomes due. Many of such factors are beyond the control of
the Company and its management.
In addition, please note that certain information contained in this press
release has been provided by the Company's primary tenant, Vencor. Vencor is
subject to the reporting requirements of the Securities and Exchange Commission
(the "Commission") and is required to file with the Commission annual reports
containing audited financial information and quarterly reports containing
unaudited financial information. Although Vencor has provided certain
information to the Company, the Company has not verified this information either
through an independent investigation or by reviewing Vencor's Annual Report on
Form 10-K for the year ended December 31, 1998, which as of April 12, 1999 had
not been filed with the Commission. The Company has no reason to believe that
such information is inaccurate in any material respects, but there can be no
assurances that all such information is accurate.
