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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): September 3, 1999
VENTAS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-10989 61-1055020
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
4360 Brownsboro Road, Suite 115,
Louisville, Kentucky 40207-1642
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(Address of principal executive offices) (Zip Code)
(502) 357-9000
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
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On April 12, 1999, Ventas, Inc. ("Ventas" or the "Company") entered into a
Second Standstill Agreement (the "Second Standstill Agreement") with Vencor,
Inc. ("Vencor"), its principal tenant, pursuant to which each of the Company and
Vencor agreed during a specified period of time (the "Standstill Period") not to
pursue any claims against the other or any third party relating to the April
1998 reorganization of the Company or any claims relating to certain defaults
under Vencor's lease agreements with the Company. On April 12, 1999, the Company
and Vencor also entered into an agreement (the "Tolling Agreement") pursuant to
which they agreed that any statutes of limitations or other time constraints in
a bankruptcy proceeding that might be asserted by one party against the other
would be extended or tolled from April 12, 1999 until a specified date or until
the Second Standstill Agreement terminates due to Vencor's failure to make
certain contemplated lease payments.
On September 7, 1999, Ventas announced that it entered into a seventh
amendment to the Second Standstill Agreement which extends the Standstill
Period. The Standstill Period will now terminate on the earlier to occur of
September 9, 1999 or any date that a voluntary or involuntary bankruptcy case is
commenced by or against Vencor. The Amended Second Standstill Agreement also
provides that the Company will be entitled to exercise its remedies under its
lease agreements with Vencor with respect to the late payment of August rent,
unless Vencor or its bank lenders pay the full amount of unpaid August rent by
5:00 P.M. on September 14, 1999.
In addition, the Company and Vencor agreed to extend the Tolling Agreement
until September 9, 1999.
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.
Factors that may affect the plans or results of the Company include,
without limitation, (i) the ability of
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Vencor to restructure its obligations so that it will have the financial
strength and liquidity necessary to satisfy its obligations and duties under
leases and other agreements with the Company, (ii) the Company's success in
implementing its business strategy, (iii) the nature and extent of future
competition, (iv) the extent of future healthcare reform and regulation,
including cost containment measures and changes in reimbursement policies and
procedures, (v) increases in cost of borrowing for the Company, (vi) the ability
of the Company's operators to deliver high quality care and to attract patients,
(vii) the results of the ongoing investigation of the Company by the U.S.
Department of Justice and other litigation affecting the Company, (viii) the
Company's ability to acquire additional properties, (ix) changes in general
economic conditions and/or in the markets in which the Company may, from time to
time, compete, (x) the ability of the Company to pay down, refinance,
restructure and/or extend its indebtedness as it becomes due and (xi) the
ability of the Company and Vencor and other third parties to replace, modify or
upgrade computer systems in ways that adequately address the year 2000 issue.
Many of such factors are beyond the control of the Company and its management.
A copy of the Amendment to the Second Standstill Agreement and the Tolling
Agreement and the press release issued by the Company on September 7, 1999 are
included as exhibits to this filing and are incorporated herein by reference.
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Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits:
10.1 Amendment Number 7 to the Second Standstill Agreement dated
April 12, 1999 and Amendment Number 6 to the Tolling
Agreement dated April 12, 1999, by and between the Company
and Vencor, Inc., dated as of September 3, 1999.
99.1 Press Release dated September 7, 1999.
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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: September 10, 1999
By: /s/ T. Richard Riney
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Name: T. Richard Riney
Title: Executive Vice President
and General Counsel
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EXHIBIT INDEX
10.1 Amendment Number 7 to the Second Standstill Agreement dated April
12, 1999 and Amendment Number 6 to the Tolling Agreement dated
April 12, 1999 by and between the Company and Vencor, Inc., dated
as of September 3, 1999.
99.1 Press Release dated September 7, 1999.
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AMENDMENT NUMBER 7 TO THE SECOND STANDSTILL AGREEMENT
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DATED APRIL 12, 1999 AND
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AMENDMENT NUMBER 6 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").
Morgan 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
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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. Richard Riney, 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 (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
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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
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.
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(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 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:
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Any Vencor Claim, including, without limitation, those arising or
available under the Bankruptcy Avoidance Provisions (defined below)
that Vencor could otherwise assert against Ventas if Vencor were a
debtor in a case under the Bankruptcy Code commenced on April 12, 1999,
and whether arising under the Bankruptcy Code or under other applicable
federal or state law, shall not be prejudiced, impaired, or waived by
Vencor's failure to commence such a bankruptcy case, and any and all
statutes of limitations, repose, or other legal or equitable
constraints on the time by which such a bankruptcy case or pleading
initiating any Vencor Claim (including, without limitation, a cause of
action under ss. 548 of the Bankruptcy Code) shall be tolled during the
period of time from April 12, 1999 to and including the earlier of (i)
5:00 p.m. Eastern Daylight Savings Time on September 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: /s/ Richard A. Schweinhart By: /s/ T. Richard Riney
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Name: Richard A. Schweinhart Name: T. Richard Riney
Title: Senior Vice President and Title: Vice President
Chief Financial Officer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral Agent for the
Leasehold Mortgagee
By: /s/ Unn Boucher
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Name: Unn Boucher
Title: Vice President
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Contact: Steven T. Downey
Executive Vice President
and Chief Financial Officer
(502) 357-9030
FOR IMMEDIATE RELEASE
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VENTAS AND VENCOR AMEND STANDSTILL AND TOLLING AGREEMENTS
LOUISVILLE, KY. (September 7, 1999) -- Ventas, Inc. (NYSE:VTR) (the "Company")
announced today that the Company and Vencor, Inc. (OTC:VCRI) ("Vencor"), its
principal tenant, have agreed to amend the standstill agreement which the
parties entered into on April 12, 1999.
In order to continue discussions among the parties regarding a global
restructuring, the amended standstill agreement will extend for three business
days, until 5:00 p.m. on September 9, 1999, the obligations of each of the
Company and Vencor to refrain from pursuing any claims against the other or any
third party relating to the April 1998 reorganization or the Company's agreement
not to exercise its remedies under its lease agreements with Vencor, other than
its delivery of notice of non-payment of September rent. The standstill period
will terminate on the earlier to occur of September 9, 1999 or any date that a
voluntary or involuntary bankruptcy case is commenced by or against Vencor. The
Company will be entitled to exercise its remedies under its lease agreements
with Vencor with respect to the late payment of August rent, unless Vencor or
its bank lenders pay the full amount of unpaid August rent by 5:00 P.M. on
September 14, 1999.
The Company and Vencor also agreed to renew an agreement between the parties
that any statutes of limitations or other time constraints in a bankruptcy
proceeding that might be asserted by one party against the other would be
extended or tolled from April 12, 1999, until September 9, 1999.
The Company 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 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
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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, primarily Vencor, Inc.,
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, (v) the ability of the Company to pay down,
refinance, restructure and/or extend its indebtedness as it becomes due, (vi)
the results of the ongoing investigation of the Company by the U.S. Department
of Justice and other litigation affecting the Company, and (vii) the success of
the Company in implementing its business strategy and the nature and extent of
future competition. Many of such factors are beyond the control of the Company
and its management.
