<PAGE>
EXHIBIT 10.2
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
---------------------------------x
:
In re: Chapter 11
:
VENCOR, INC., et al., Case No. 99 3199(MFW)
-- -- : through 99-3327(MFW)
Debtors. : (Jointly Administered)
:
---------------------------------x
STIPULATION AND ORDER
---------------------
This stipulation and order (the "Stipulation and Order") is entered
into as of the date set forth below by and among the above-captioned debtors and
debtors-in-possession (collectively, the "Debtors"), and Ventas, Inc., on behalf
of itself and each of Ventas Realty, Limited Partnership and Ventas LP Realty,
L.L.C. (collectively, "Ventas," and, together with the Debtors, the "Parties").
WHEREAS, on May 1, 1998, Ventas, Inc. effected a corporate
reorganization (the "1998 Spin Off") pursuant to which Ventas, Inc. (then known
as Vencor, Inc.) was separated into two publicly held corporations. A new
corporation, subsequently renamed Vencor, Inc., was formed to operate the
hospital, nursing center and ancillary services businesses. The continuing
corporation, now known as Ventas, Inc., continued to hold title to substantially
all of the real property; and
WHEREAS, the 1998 Spin Off was effected through an Agreement and Plan
of Reorganization by and between Vencor, Inc. (now Ventas, Inc.) and Vencor
Healthcare, Inc. (now Vencor, Inc.)
<PAGE>
dated as of April 30, 1998 and related agreements (the "Reorganization
Agreements"); and
WHEREAS, the Debtors, Ventas, Inc. and Ventas Realty, Limited
Partnership are parties to a stipulation, dated September 13, 1999 (the "Rent
and Reorganization Stip"), governing, among other things, the payment of rent
and performance under the Reorganization Agreements by the Debtors during the
pendency of the chapter 11 cases and the period in which the Rent and
Reorganization Stip is in force and effect; and
WHEREAS, the Rent and Reorganization Stip remains in full force and
effect; and
WHEREAS, on September 15, 1999, Ventas, Inc. filed its 1998
consolidated federal income tax return (the "Consolidated Return"); and
WHEREAS, pursuant to the Consolidated Return, on February 3, 2000,
Ventas received a tax refund in the total amount of $26,609,865.60 (comprised of
$25,349,528.00 in tax and $1,260,337.60 in interest) (the "Federal Refund
Proceeds"); and
WHEREAS, the Tax Refunds1 received by Ventas prior to the date hereof
are listed on Exhibit A hereto (such Tax Refunds
--------
1 For purposes of this Stipulation and Order, "Tax Refunds" shall mean all
refunds received (including those endorsed over by one Party to the other
Party in which case such refund shall be deemed received by the Party to
which the refund was endorsed over) on or after September 13, 1999, in
respect of federal, state or local property, franchise, income, excise,
sales and use, and similar business taxes previously paid for tax years
ending prior to or including April 30, 1998; provided, however, that Tax
Refunds shall not include the refund of over payments or estimated taxes to
the extent such over payments or estimated taxes were paid by a Party after
April 30, 1998 and subsequently refunded by the applicable tax authority.
-2-
<PAGE>
listed on Exhibit A (which includes the Federal Refund Proceeds) and any Tax
Refunds received by Ventas on or after the date hereof, together with the
Interest Amount2 thereon, are collectively referred to herein as the "Ventas
Refund Proceeds"); and
WHEREAS, simultaneously with the execution hereof, Ventas has
delivered to the Debtors a list of the Pre-Spin Refunds3 received by Ventas; and
WHEREAS, the Tax Refunds received by the Debtors prior to the date
hereof are listed on Exhibit B hereof (such Tax Refunds listed on Exhibit B and
the Tax Refunds received by the Debtors on or after the date hereof, together
with the Interest Amount thereon, are collectively referred to herein as the
"Vencor Refund Proceeds" and together with the Ventas Refund Proceeds, are
referred to as the "Refund Proceeds"); and
---------------------
2 For purposes of this Stipulation and Order, "Interest Amount" shall mean,
with respect to a Tax Refund, interest on the Tax Refund computed at the
lesser of (a) the actual interest earned, and (b) 3% annual interest, for
the period during which such Tax Refund is deposited in a Ventas Account or
Vencor Account (as such terms are defined below) as the case may be.
3 For purposes of this Stipulation and Order, "Pre-Spin Refunds" shall mean
all refunds received (including those endorsed over by one Party to the
other Party in which case such refund shall be deemed received by the Party
to which the refund was endorsed over) on or after January 1, 1999, but
prior to September 13, 1999, in respect of federal, state or local
property, franchise, income, excise, sales and use, and similar business
taxes previously paid for tax years ending prior to or including April 30,
1998; provided, however, that Pre-Spin Refunds shall not include the refund
of over payments or estimated taxes to the extent such over payments or
estimated taxes were paid by a Party after April 30, 1998 and subsequently
refunded by the applicable tax authority.
-3-
<PAGE>
WHEREAS, simultaneously with the execution hereof, the Debtors have
delivered to Ventas a list of the Pre-Spin Refunds received by the Debtors; and
WHEREAS, Ventas asserts that it is entitled to the Refund Proceeds on
various legal grounds, including, without limitation, pursuant to the express
terms of the Reorganization Agreements and, alternatively, that any claim of the
Debtors to the Refund Proceeds is subject to, without limitation, recoupment,
setoff and other defenses and claims of or by Ventas under the Reorganization
Agreements and the Rent and Reorganization Stip; and
WHEREAS, the Debtors assert that they are entitled to the Refund
Proceeds on various legal grounds; and
WHEREAS, each Party seeks to protect the Refund Proceeds pending
resolution of the rights of the Parties.
NOW, THEREFORE, IT IS STIPULATED AND AGREED by and between the Parties
that:
1. In the event that the Bankruptcy Court fails to approve this
Stipulation and Order on or before May 31, 2000, or such approval is
subsequently modified, rescinded or stayed, this Stipulation and Order shall
automatically terminate and be of no force and effect. Pending approval of the
Bankruptcy Court as referenced in the preceding sentence, either Party may
terminate this Stipulation and Order by providing one business day's notice
(which may be by facsimile transmission) to the other Party.
2. The Ventas Refund Proceeds shall be deposited in one or more
segregated interest-bearing accounts at a federally insured depository
institution in the name of Ventas, Inc. or
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<PAGE>
Ventas Realty, Limited Partnership; provided, however, that all or a portion of
the Ventas Refund Proceeds may be invested in a commercially reasonable manner
so long as any investment of the Ventas Refund Proceeds remains segregated from
the other investments of Ventas, Inc. and Ventas Realty, Limited Partnership
(any such depository or investment account or other investment of Ventas Refund
Proceeds, a "Ventas Account"). Ventas shall provide the Debtors with notice
within two business days after (a) the opening of a Ventas Account (which notice
shall specify the location of the Ventas Account, including the account number);
and/or (b) the receipt of a Tax Refund (which notice shall specify the amount of
the Tax Refund, the Ventas Account into which such Ventas Refund Proceeds have
been deposited and the facts and circumstances giving rise to the Tax Refund and
include a copy of the refund claim). Upon request of the Debtors, Ventas shall
promptly (which in no case shall exceed two business days) provide the Debtors
with the monthly written account statements received by Ventas for each of the
Ventas Accounts, it being understood that Ventas may redact any information that
is unrelated to the Ventas Accounts. If all or any portion of the Ventas Refund
Proceeds are transferred between Ventas Accounts, Ventas shall promptly provide
written notice (which in no case shall exceed two business days) to the Debtors
of the Ventas Account into which the Ventas Refund Proceeds (or portion thereof)
have been transferred. This Stipulation and Order and the terms and conditions
hereof, including the establishment and maintenance of a Ventas Account, shall
not be (a) deemed an admission by any Party in respect of any matter
-5-
<PAGE>
whatsoever; (b) probative of the Parties' respective rights, if any, to the
Refund Proceeds or any portion thereof, including any principal or interest
component thereof; or (c) otherwise affect or impair any rights of the Parties.
3. The Vencor Refund Proceeds shall be deposited in one or more
segregated interest-bearing accounts at a federally insured depository
institution in the name of Vencor, Inc.; provided, however, that all or a
portion of the Vencor Refund Proceeds may be invested in a commercially
reasonable manner so long as investment of the Vencor Refund Proceeds remains
segregated from other investments of Vencor, Inc. and any of the other Debtors
(any such depository or investment account or other investment of Vencor Refund
Proceeds, a "Vencor Account"). The Debtors shall provide Ventas with notice
within two business days after (a) the opening of a Vencor Account (which notice
shall specify the location of the Vencor Account, including the account number);
and (b) the receipt of a Tax Refund (which notice shall specify the amount of
the Tax Refund, the Vencor Account into which such Vencor Refund Proceeds have
been deposited and the facts and circumstances giving rise to the Tax Refund and
include a copy of the refund claim). Upon request of Ventas, the Debtors shall
promptly (which in no case shall exceed two business days) provide Ventas with
the monthly written account statements received by the Debtors for each of the
Vencor Accounts, it being understood that the Debtors may redact any information
that is unrelated to the Vencor Accounts. If all or any portion of the Vencor
Refund Proceeds are transferred between Vencor Accounts, the Debtors shall
promptly provide written notice (which in no
-6-
<PAGE>
case shall exceed two business days) to Ventas of the Vencor Account into which
the Vencor Refund Proceeds (or portion thereof) have been transferred. This
Stipulation and Order and the terms and conditions hereof, including the
establishment and maintenance of a Vencor Account, shall not be (a) deemed an
admission by any Party in respect of any matter whatsoever; (b) probative of the
Parties' respective rights, if any, to the Refund Proceeds or any portion
thereof, including any principal or interest component thereof; or (c) otherwise
affect or impair any rights of the Parties.
4. Ventas or the Debtors, as the case may be, shall provide notice
(a "Notice") to the parties listed on Exhibit C by facsimile (receipt confirmed)
and overnight mail at least five (5) business days prior to withdrawing the
Refund Proceeds or any portion thereof (the "Waiting Period") from a Ventas
Account (in the case of Ventas) or a Vencor Account (in the case of the
Debtors); provided, however, that the foregoing shall not apply to the extent
that the Refund Proceeds are being transferred from one Ventas Account to
another Ventas Account or from one Vencor Account to another Vencor Account, in
which case paragraphs 2 and 3 hereof respectively shall govern; provided,
further, that the foregoing shall apply as modified below in the case of a Tax
Payment Withdrawal. A "Tax Payment Withdrawal" is a withdrawal by Ventas from a
Ventas Account or by the Debtors from a Vencor Account if such withdrawal is
made for the sole purpose of applying such amounts in payment of federal, state
or local property, franchise, income, excise, sales and use, withholding, or
similar tax liability, including interest and penalties, if
-7-
<PAGE>
any, for tax years ending prior to or including April 30, 1998, up to the amount
of the Refund Proceeds then contained in the applicable Ventas or Vencor
Account. Ventas shall be permitted to make Tax Payment Withdrawals from Ventas
Accounts and the Debtors shall be permitted to make Tax Payment Withdrawals from
Vencor Accounts upon such withdrawing Party's delivery of Notice regarding any
such withdrawal, which shall include a copy of any applicable notice or other
related documents and any return or other form filed with the taxing authority
in respect of the payment made using the Tax Payment Withdrawal. Upon the expiry
of any applicable Waiting Period, the Party providing the Notice shall have no
further obligations pursuant to this Stipulation and Order respecting the use,
maintenance, deposit or investment of any portion of the Refund Proceeds that is
the subject of such Notice.
5. The Parties reserve all rights with respect to their claims,
defenses and contentions regarding the Refund Proceeds except as expressly
provided in paragraph 6 hereof.
6. Nothing in this Stipulation and Order shall constitute admissions
by any of the Parties or shall be used in any subsequent litigation by the
Parties or any other person or entity other than for the purpose of enforcement
of this Stipulation and Order.
7. Without limiting the provisions of paragraph 4 hereof, any
notices to be sent in accordance with this Stipulation and Order will not be
effective unless sent to the following:
-8-
<PAGE>
To Ventas:
General Counsel
Ventas, Inc.
4360 Brownsboro Road, Suite 115
Louisville, KY 40207-1642
Fax (502) 357-9029
David Peress, Esq.
Young Conaway Stargatt & Taylor
Rodney Square North, 11th Floor
Wilmington, DE 19899-0391
Fax (302) 571-1253
Myron Trepper, Esq. and
Michael J. Kelly, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
Fax (212) 728-8111
To the Debtors:
M. Suzanne Riedman, Esq., General Counsel
Vencor, Inc.
680 South Fourth Street
Louisville, KY 40202
Fax (502) 596-4075
William H. Sudell, Jr., Esq.
Morris, Nichols, Arscht & Tunnell
1201 North Market Street
P.O. Box 1347
Wilmington, Delaware 19899
Fax (302) 658-9200
Thomas J. Moloney, Esq. and
Lindsee P. Granfield, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Fax (212) 225-3999
8. This Stipulation and Order shall be automatically terminated,
without further order of the Bankruptcy Court, on the earlier of the dates on
which: (a) the Rent and Reorganization Stip is terminated; and (b) the Debtors
provide notice pursuant to Paragraph 4(b) of the Rent and Reorganization Stip.
-9-
<PAGE>
Dated: New York, New York
May 23, 2000
CLEARY, GOTTLIEB, STEEN & HAMILTON
One Liberty Plaza
New York, New York 10006
(212) 225-2000
By: /s/ Lindsee P. Granfield
--------------------------------
Attorneys for Debtors
and Debtors in Possession
WILLKIE FARR & GALLAGHER
787 Seventh Avenue
New York, New York 10019
(212) 728-8000
By: /s/ Michael Kelly
--------------------------------
Attorneys for Ventas, Inc.
SO ORDERED this 31st day of
May 2000:
/s/ Mary F. Walrath
------------------------------
UNITED STATES BANKRUPTCY JUDGE
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<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Date From Regarding Federal ID Type AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
27-Sep-99 Marietta, Ohio Nationwide Care, Inc. 35-1871185 Marietta Income Tax Return 1,508.00
------------------------------------------------------------------------------------------------------------------------------------
18-Oct-99 Bowling Green, KY Vencor Kentucky, Inc. 61-1258030 City Net Profit License Fee Return 737.00
------------------------------------------------------------------------------------------------------------------------------------
20-Oct-99 McCracken County, KY Vencor Kentucky, Inc. 61-1258030 Annual License Fee Return 851.00
------------------------------------------------------------------------------------------------------------------------------------
20-Oct-99 McCracken County, KY First Healthcare 04-2432780 Annual License Fee Return 475.00
Corporation
------------------------------------------------------------------------------------------------------------------------------------
21-Oct-99 Ashland, KY Vencor Kentucky, Inc. 61-1258030 Net Profit License Fee Return 2,073.00
------------------------------------------------------------------------------------------------------------------------------------
21-Oct-99 Elizabethtown, KY First Healthcare Net Profits License Fee Return 301.00
Corporation
------------------------------------------------------------------------------------------------------------------------------------
22-Oct-99 Chillipothe, OH First Healthcare 04-2432780 Income Tax Return 859.00
Corporation
------------------------------------------------------------------------------------------------------------------------------------
2-Nov-99 Madisonville, KY Vencor Kentucky, Inc. 61-1258030 Net Profit License Fee Return 478.00
------------------------------------------------------------------------------------------------------------------------------------
3-Nov-99 Village of Whitehouse First Healthcare 04-2432760 Income Tax Return 600.00
Corporation
------------------------------------------------------------------------------------------------------------------------------------
3-Nov-99 Hancock County, Kentucky Vencor Kentucky, Inc. Net Profit License Fee Return 25.00
------------------------------------------------------------------------------------------------------------------------------------
5-Nov-99 Cambridge, OH Ventas, Inc. 61-1055020 Income Tax Return 45.00
------------------------------------------------------------------------------------------------------------------------------------
8-Nov-99 Akron, Ohio First Healthcare 04-2432780 Income Tax Return 1,600.00
Corporation
------------------------------------------------------------------------------------------------------------------------------------
8-Nov-99 Cambridge, OH Nationwide Care, Inc. 35-1871185 Income Tax Return 1,030.00
------------------------------------------------------------------------------------------------------------------------------------
9-Nov-99 Mercer County, KY Vencor Kentucky, Inc. Net Profits License Fee Return 157.19
------------------------------------------------------------------------------------------------------------------------------------
10-Nov-99 Logan, Ohio First Healthcare 04-2432780 Income Tax Return 1,113.00
Corporation
------------------------------------------------------------------------------------------------------------------------------------
10-Nov-99 Logan, Ohio Ventas, Inc. (fka 61-1055020 Income Tax Return 111.00
Vencor, Inc.)
------------------------------------------------------------------------------------------------------------------------------------
11-Nov-99 Bowling Green, KY First Healthcare 04-2432780 City Net Profit License Fee Return 620.00
Corporation
------------------------------------------------------------------------------------------------------------------------------------
12-Nov-99 Owensboro, KY First Healthcare 04-2432780 Net Profit License Fee Return 506.00
Corporation
------------------------------------------------------------------------------------------------------------------------------------
12-Nov-99 Elizabethtown, KY Vencor Kentucky, Inc. Net Profits License Fee Return 69.00
------------------------------------------------------------------------------------------------------------------------------------
15-Nov-99 Coshocton Ventas, Inc. 61-1055020 Income Tax Return 85.00
------------------------------------------------------------------------------------------------------------------------------------
18-Nov-99 Morgantown Vencor Kentucky, Inc. License Fee Division 727.00
------------------------------------------------------------------------------------------------------------------------------------
22-Nov-99 Springfield, OH Ventas, Inc. 61-1055020 Business Income Tax Return 396.00
------------------------------------------------------------------------------------------------------------------------------------
22-Nov-99 Marion, OH First Healthcare 04-2432780 Income Tax Return 1,074.00
Corporation
------------------------------------------------------------------------------------------------------------------------------------
22-Nov-99 Marion, OH Ventas, Inc. (fka 2100009359 Income Tax Return 200.00
Vencor, Inc.)
------------------------------------------------------------------------------------------------------------------------------------
23-Nov-99 Summitt County Facility - Property Taxes 73,816.04
Property Tax Refund
From Protest
------------------------------------------------------------------------------------------------------------------------------------
23-Nov-99 Loss Fee for Property Fee paid consultant for lowering (36,854.10)
Tax Protest to Ambassador taxes related to above facility
Research
------------------------------------------------------------------------------------------------------------------------------------
24-Nov-99 Toledo, OH First Healthcare 42-43-2780 Income Tax Return 1,000.00
Corporation
------------------------------------------------------------------------------------------------------------------------------------
26-Nov-99 Connecticut Ventas, Inc. (FKA 61-1055020 Combined Corporation 18,331.00
Vencor, Inc.) Business Tax Return
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2-Dec-99 Maryland Vencor Hospitals East, 61-1251013 Corporation Income Tax Return 1,151.00
Inc.
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6-Dec-99 Lansing, MI First Healthcare 04-2432780 Income Tax - 403.00
Corporation 1998 Corporation Return
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13-Dec-99 Lexington-Fayette
Board of Ed. Vencor Kentucky, Inc. 61-1258030 Net Profits License Fee Return 478.00
------------------------------------------------------------------------------------------------------------------------------------
15-Dec-99 Dayton, OH Ventas, Inc. 61-1055020 City Income Tax Return 185.00
------------------------------------------------------------------------------------------------------------------------------------
15-Dec-99 Coshocion Nationwide Care, Inc. 35-1871185 Income Tax Return 1,600.17
------------------------------------------------------------------------------------------------------------------------------------
20-Dec-99 Louisiana First Healthcare 04-2432780 Corporation Income Tax Return 1,925.00
Corporation
------------------------------------------------------------------------------------------------------------------------------------
20-Dec-99 Cincinnati, OH Ventas, Inc. (fka 61-1055020 Income Tax Return 16.00
Vencor, Inc.)
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23-Dec-99 Wisconsin First Healthcare 04-2432780 Corporation Franchise or 82,617.00
Corporation Income Tax Return
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27-Dec-99 Utah Vencor Inc. & 61-1055020 06-95 to 05-96 Corporate Franchise 33,829.00
Subsidiaries Tax Resulting From Automatic NOL
Carryback
------------------------------------------------------------------------------------------------------------------------------------
27-Dec-99 Utah Ventas, Inc. & 61-1055020 06-96 to 12-96 Corporate Franchise 15,306.00
Subsidiaries Tax Resulting From Automatic NOL
Carryback
------------------------------------------------------------------------------------------------------------------------------------
27-Dec-99 West Virginia Vencor Kentucky, Inc. 61-1258030 Business Franchise Tax Return 11.00
------------------------------------------------------------------------------------------------------------------------------------
29-Dec-99 Michigan First Healthcare 04-2432780 Single Business Tax Annual Return 43,644.91
Corporation
------------------------------------------------------------------------------------------------------------------------------------
5-Jan-00 Newark, OH First Healthcare 04-2432780 Business Tax Return 1,947.00
Corporation
------------------------------------------------------------------------------------------------------------------------------------
10-Jan-00 Iowa First Healthcare 04-2432780 Iowa Corporate Income Tax Return 152.40
Corporation
------------------------------------------------------------------------------------------------------------------------------------
11-Jan-00 Louisiana Vencor Properties, Inc. 51-0352067 Louisiana Corporation 626.00
Income Tax Return
------------------------------------------------------------------------------------------------------------------------------------
21-Jan-00 Columbus/Canal First Healthcare 04-2432780 City Income Tax 1,921.00
Winchester, Ohio Corporation Return/Business Return
------------------------------------------------------------------------------------------------------------------------------------
21-Jan-00 Columbus, Ohio Vencor Hospital East, 61-1251013 City Income Tax 3,500.00
Inc. Return/Business Return
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21-Jan-00 Indiana Nationwide Care, Inc. Sales Tax Audit 15,638.64
------------------------------------------------------------------------------------------------------------------------------------
4-Feb-00 Alabama First Healthcare 04-2432780 Corporation Income Tax Return 18,693.15
Corporation
------------------------------------------------------------------------------------------------------------------------------------
16-Feb-00 Missouri First Healthcare 04-2432780 Corporation Income Tax Return 9,350.25
Corporation
------------------------------------------------------------------------------------------------------------------------------------
8-Mar-00 Georgia Ventas, Inc. (FKA 61-1055020 Corporation Tax Returns 9,770.00
Vencor, Inc.)
------------------------------------------------------------------------------------------------------------------------------------
13-Mar-00 Lexington-Fayette Vencor Kentucky, Inc. 61-1258030 Net Profits License Fee Return 1,625.00
Urban Co. Govt
------------------------------------------------------------------------------------------------------------------------------------
30-Mar-00 Vermont Ventas, Inc. & 61-1055020 57,662.00
Affiliates
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</TABLE>
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Date From Regarding Federal ID Type AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
3-Apr-00 North Carolina Ventas, Inc. 1998 Corporate Income Tax Refund 141.34
------------------------------------------------------------------------------------------------------------------------------------
3-Apr-00 Maryland Vencor Hospital East, 61-1251013 1998 Withholding 70.52
Inc.
------------------------------------------------------------------------------------------------------------------------------------
3-Apr-00 Village of West Lafayette First Healthcare 04-2432780 Corporation, Partnership or 400.00
Corporation Fiduciary Income Tax Return
------------------------------------------------------------------------------------------------------------------------------------
3-Apr-00 Board of Commissioners - Ventas Realty 99014053 Refund of Solid Waste Refund for 53.26
Pasco Co. 1999 (Pasco County,
Dade City, Florida)
------------------------------------------------------------------------------------------------------------------------------------
17-Apr-00 North Carolina First Healthcare 04-2432780 Corporate Franchise and 129,460.22
Corporation Income Tax Return
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL 504,079.99
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
3-Feb-00 Federal Tax Refund 26,609,865.60
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
TOTAL 27,113,945.59
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT B
REFUND ANALYSIS
Refunds From Tax Return Periods 5/1/98 and Prior
September 13, 1999 through May 22, 2000
<TABLE>
<CAPTION>
REFUNDS REFUNDS REFUNDS REFUNDS REFUNDS REFUNDS
RECEIVED RECEIVED RECEIVED RECEIVED RECEIVED RECEIVED
DESCRIPTION @ 9/13-9/30/99 @ 10/31/99 @ 11/30/99 @ 12/31/99 @ 01/31/00 @ 02/28/00
--------------------------------------- -------------- ---------- ---------- ---------- ---------- ----------
Washington - First Healthcare 37,909
Corporation
Washington - First Healthcare 3,009
Corporation
Washington - First Healthcare 10,074
Corporation
Tennessee
Tennessee 240
-------------- ---------- ---------- ---------- ---------- ----------
Total Property Tax Refunds Received 125,008 4,703 0 0 240 16,210
-------------- ---------- ---------- ---------- ---------- ----------
Total Tax Refunds Received 497,601 26,029 5,961 74,116 41,161 1,346,892
============== ========== ========== ========== ========== ==========
<CAPTION>
REFUNDS
REFUNDS REFUNDS RECEIVED Total Refunds
RECEIVED RECEIVED @ 05/01- Rec'd 09/13/99 to
DESCRIPTION @ 03/31/00 @ 04/30/00 05/22/00 05/22/00
--------------------------------------- ---------- ------------ ---------- -----------------
<S> <C> <C> <C> <C>
Washington - First Healthcare 37,909
Corporation
Washington - First Healthcare 3,009
Corporation
Washington - First Healthcare 10,074
Corporation
Tennessee 16,390 16,390
Tennessee 16,843 17,083
---------- ------------ ---------- -----------------
Total Property Tax Refunds Received 0 33,233 0 179,394
---------- ------------ ---------- -----------------
Total Tax Refunds Received 0 247,831 97,165 2,336,756
========== ============ ========== =================
</TABLE>
<PAGE>
REFUND ANALYSIS
Refunds From Tax Return Periods 5/1/98 and Prior
September 13, 1999 through May 22, 2000
<TABLE>
<CAPTION>
REFUNDS REFUNDS REFUNDS REFUNDS REFUNDS
RECEIVED RECEIVED RECEIVED RECEIVED RECEIVED
DESCRIPTION @ 9/13-9/30/99 @ 10/31/99 @ 11/30/99 @ 12/31/99 @ 01/31/00
--------------------------------------------- -------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INCOME/FRANCHISE TAX REFUNDS
IRS - Hillhaven Corp 33 0 0 0 0
IRS - Transitional Hospitals 143,067 0 0 0 0
Corporation
IRS - TheraTx, Inc. 0 0 0 0 0
HAWAII - Theratx, Inc. 0 0 0 825 0
HAWAII - VenCare, Inc. 0 0 0 300 0
INDIANA - Vencor Home Hospice 0 0 0 15,281 0
INDIANA - Vencor Insurance Company 0 0 1,346 0 0
INDIANA - Ventech Systems, Inc. 451 0 0 0 0
IOWA - Vencare, Inc. 0 0 0 49,848 0
LOUISIANA - CPC of Louisiana, Inc. 4,888 0 0 0 0
LOUISIANA - Medisave Pharmacies, Inc. 0 0 0 0 39,970
ARIZONA - American X-Rays, Inc. Refund 178 0 0 0 0
INDIANA - Ventech Systems, Inc. 31 0 0 0 0
Interest
LOUISIANA - CPC of La., Inc. - Interest 10 0 0 0 0
LOUISIANA - CPC of La., Inc. - Refund 223,935 0 0 0 0
TEXAS - Respiratory Care Services, 0 489 0 0 0
Inc. - Refund
LOUISIANA - CPC of La., Inc. - Refund 0 1,289 0 0 0
TEXAS - Medisave Pharmacy, Inc. - 0 0 31 0 0
Refund
MISSISSIPPI - CPC Properties of Ms.,
Inc. - Refund 0 0 4,584 0 0
HAWAII - Vencare, Inc. - Interest 0 0 0 2 0
HAWAII - Theratx, Inc. - Interest 0 0 0 6 0
INDIANA - Vencor Hospice, Inc. - 0 0 0 2,670 0
Interest
IOWA - Vencare, Inc. - Interest 0 0 0 5,184 0
LOUISIANA - Medisave Pharmacy, Inc. -
Interest 0 0 0 0 951
SOUTH CAROLINA - Vencare, Inc. - 0 0 0 0 0
Interest
-------------- ------------ ------------ ------------ ------------
Total Income/Franchise Tax Refunds Rec. 372,593 1,778 5,961 74,116 40,921
-------------- ------------ ------------ ------------ ------------
SALES/USE TAX REFUNDS:
Indiana - Ventas 19,548
-------------- ------------ ------------ ------------ ------------
<CAPTION>
REFUNDS Total Refunds
REFUNDS REFUNDS REFUNDS RECEIVED Rec'd 09/13/99
RECEIVED RECEIVED RECEIVED @ 05/01- to
DESCRIPTION @ 02/28/00 @ 03/31/00 @ 04/30/00 05/22/00 05/22/00
--------------------------------------------- ------------ ------------ ----------- ------------ ----------------
INCOME/FRANCHISE TAX REFUNDS
IRS - Hillhaven Corp 0 0 0 0 33
IRS - Transitional Hospitals Corporation 0 0 213,255 97,165 453,487
IRS - TheraTx, Inc. 1,330,682 0 0 0 1,330,682
HAWAII - Theratx, Inc. 0 0 0 0 825
HAWAII - VenCare, Inc. 0 0 0 0 300
INDIANA - Vencor Home Hospice 0 0 0 0 15,281
INDIANA - Vencor Insurance Company 0 0 0 0 1,346
INDIANA - Ventech Systems, Inc. 0 0 0 0 451
IOWA - Vencare, Inc. 0 0 0 0 49,848
LOUISIANA - CPC of Louisiana, Inc. 0 0 0 0 4,888
LOUISIANA - Medisave Pharmacies, Inc. 0 0 0 0 39,970
ARIZONA - American X-Rays, Inc. Refund 0 0 0 0 178
INDIANA - Ventech Systems, Inc. 0 0 0 0 31
Interest
LOUISIANA - CPC of La., Inc. - Interest 0 0 0 0 10
LOUISIANA - CPC of La., Inc. - Refund 0 0 0 0 223,935
TEXAS - Respiratory Care Services, 0 0 0 0 489
Inc. - Refund
LOUISIANA - CPC of La., Inc. - Refund 0 0 0 0 1,289
TEXAS - Medisave Pharmacy, Inc. - 0 0 0 0 31
Refund
MISSISSIPPI - CPC Properties of Ms.,
Inc. - Refund 0 0 0 0 4,584
HAWAII - Vencare, Inc. - Interest 0 0 0 0 2
HAWAII - Theratx, Inc. - Interest 0 0 0 0 6
INDIANA - Vencor Hospice, Inc. - 0 0 0 0 2,670
Interest
IOWA - Vencare, Inc. - Interest 0 0 0 0 5,184
LOUISIANA - Medisave Pharmacy, Inc. -
Interest 0 0 0 0 951
SOUTH CAROLINA - Vencare, Inc. - 0 0 1,343 0 1,343
Interest
-------------- ------------ ------------ ------------ ------------
Total Income/Franchise Tax Refunds Rec. 1,330,682 0 214,598 97,165 2,137,814
-------------- ------------ ------------ ------------ ------------
SALES/USE TAX REFUNDS:
Indiana - Ventas 19,548
-------------- ------------ ------------ ------------ ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REFUNDS REFUNDS REFUNDS REFUNDS REFUNDS
RECEIVED RECEIVED RECEIVED RECEIVED RECEIVED
DESCRIPTION @ 9/13-9/30/99 @ 10/31/99 @ 11/30/99 @ 12/31/99 @ 01/31/00
------------------------------------------- -------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Total Sales/Use Tax Refunds Received 0 19,548 0 0 0
PROPERTY TAX REFUNDS:
Kentucky - TheraTx, Inc.
Illinois - Vencor Hospitals Illinois,
Inc.
Massachusetts
Texas 15
Colorado 82
Colorado 1,704
Colorado 273
Colorado 4,430
Washington - First Healthcare 29,947
Corporation
Washington - First Healthcare 31,687
Corporation
Washington - First Healthcare 10,581
Corporation
<CAPTION>
REFUNDS Total Refunds
REFUNDS REFUNDS REFUNDS RECEIVED Rec'd 09/13/99
RECEIVED RECEIVED RECEIVED @ 05/01- to
DESCRIPTION @ 02/28/00 @ 03/31/00 @ 04/30/00 05/22/00 05/22/00
--------------------------------------------- ------------ ------------ ----------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Total Sales/Use Tax Refunds Received 0 0 0 0 19,548
PROPERTY TAX REFUNDS:
Kentucky - TheraTx, Inc.
Illinois - Vencor Hospitals Illinois, 11,127 11,127
Inc.
Massachusetts 5,083 5,083
Texas 15
Colorado 82
Colorado 1,704
Colorado 273
Colorado 4,430
Washington - First Healthcare 29,947
Corporation
Washington - First Healthcare 31,687
Corporation
Washington - First Healthcare 10,581
Corporation
</TABLE>
<PAGE>
Exhibit C
---------
Vencor Bank Group
-----------------
Mr. Houston Stebbins
Morgan Guaranty Trust Company
DIP Agent
60 Wall Street, 23rd floor
New York, New York 10260
Karen Wagner, Esq.
Davis, Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Joel B. Zweibel, Esq.
O'Melveny & Myers, LLP
Citicorp Center
153 E. 53rd Street
New York, New York 10022
Official Committee of Unsecured Creditors
-----------------------------------------
Chaim J. Fortgang, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
The Office of the United States Trustee
---------------------------------------
John D. McLaughlin, Jr., Esq
Office of the U.S. Trustee
601 Walnut Street
The Curtis Center
Suite 950 West
Philadelphia, PA 19106
