Exhibit 1.1
VENTAS REALTY, LIMITED
PARTNERSHIP
VENTAS CAPITAL
CORPORATION
$225,000,000 6
3
/ 4 % Senior Notes due 2017
UNDERWRITING
AGREEMENT
Dated September 12, 2006
Banc of America Securities
LLC
Citigroup Global Markets
Inc.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
UBS Securities LLC
BMO Capital Markets
Corp.
Deutsche Bank Securities
Inc.
KeyBanc Capital Markets, a
division of McDonald Investments Inc.
UNDERWRITING
AGREEMENT
September 12, 2006
BANC OF AMERICA SECURITIES
LLC
CITIGROUP GLOBAL MARKETS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
UBS SECURITIES LLC
BMO CAPITAL MARKETS CORP.
DEUTSCHE BANK SECURITIES INC.
KEYBANC CAPITAL MARKETS, A DIVISION OF
MCDONALD
INVESTMENTS
INC.
As
Underwriters
c/o Banc of America Securities LLC,
As Representative of the
Several Underwriters
9 West 57th Street
New York, New York 10019
Ladies and Gentlemen:
Ventas Realty, Limited Partnership,
a Delaware limited partnership (the “Operating
Partnership”), Ventas Capital Corporation, a Delaware
corporation and a wholly owned subsidiary of the Operating
Partnership (“Capital Corp.,” and together with the
Operating Partnership, the “Issuers”), Ventas, Inc., a
Delaware corporation (“Ventas”) and Ventas LP Realty,
L.L.C., a Delaware limited liability company (“LLC”),
agree with Banc of America Securities LLC, Citigroup Global Markets
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
UBS Securities LLC, BMO Capital Markets Corp., Deutsche Bank
Securities Inc., and KeyBanc Capital Markets, a division of
McDonald Investments Inc. (collectively, the
“Underwriters”) as set forth herein. The Operating
Partnership is wholly-owned, directly and indirectly through LLC,
by Ventas. The Operating Partnership, Capital Corp., Ventas and LLC
are referred to herein sometimes individually as a “Ventas
Entity” and collectively as the “Ventas
Entities.”
The Issuers propose to issue and
sell to the Underwriters $225,000,000 aggregate principal amount of
6 3
/ 4 % Senior Notes due 2017 (the
“Notes”). The Notes will be issued under an indenture,
as supplemented by a first supplemental indenture (as so
supplemented, the “Indenture”), among the Issuers,
Ventas, the guarantors party thereto and U.S. Bank National
Association, as trustee (the “Trustee”). The
Issuers’ obligations under the Notes and the Indenture will
be fully and unconditionally guaranteed, jointly and severally (the
“Guarantees”), at the Closing Time (as defined in
Section 2(b) hereof), by Ventas and its direct or indirect
subsidiaries identified as guarantors on Schedule B hereto
(Ventas, together with such direct and indirect subsidiaries, the
“Guarantors”). All references herein to the Notes
include the related guarantees, unless the context otherwise
requires.
The Company hereby confirms its
engagement of Banc of America Securities LLC (“Banc of
America”) as, and Banc of America hereby confirms its
agreement with the Company to render services as, a
“qualified independent underwriter”, within the meaning
of Section (b)(15) of Rule 2720 of the NASD, Inc. (the
“NASD”) with respect to the offering and sale of the
Notes. Banc of America Securities LLC, solely in its capacity as
the qualified independent underwriter and not otherwise, is
referred to herein as the “QIU”. The price at which the
Notes will be sold to the public shall not be higher than the
maximum price recommended by the QIU.
SECTION 1. Representations and
Warranties .
(a) Representations and
Warranties by the Ventas Entities. The Ventas Entities, jointly
and severally, represent and warrant to the Underwriters as of the
date hereof, as of the Closing Time referred to in
Section 2(b) hereof and agree with the Underwriters, as
follows:
(i) Registration Statement .
The Ventas Entities and the Guarantors have prepared and filed with
the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3
(File No. 333-133115), which contains a base prospectus (the
“Base Prospectus”), to be used in connection with the
public offering and sale of the Notes. Such registration statement,
as amended, including the financial statements, exhibits and
schedules thereto, at each time of effectiveness under the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (collectively, the “Securities
Act”), including any required information deemed to be a part
thereof at the time of effectiveness pursuant to Rule 430B under
the Securities Act or the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder
(collectively, the “Exchange Act”), is called the
“Registration Statement.” Any preliminary prospectus
supplement that describes the Notes and the offering thereof and is
used prior to the filing of the Prospectus is hereafter called,
together with the Base Prospectus, a “preliminary
prospectus.” The term “Prospectus” shall mean the
final prospectus supplement relating to the Notes that is first
filed pursuant to Rule 424(b) after the date and time that this
Agreement is executed and delivered by the parties hereto (the
“Execution Time”), together with the Base Prospectus.
Any reference herein to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act; any reference to
any amendment or supplement to any preliminary prospectus or the
Prospectus shall be deemed to refer to and include any documents
filed after the date of such preliminary prospectus or Prospectus,
as the case may be, under the Exchange Act, and incorporated by
reference in such preliminary prospectus or Prospectus, as the case
may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report
of the Ventas Entities or the Guarantors filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective
date of the Registration Statement that is incorporated by
reference in the Registration Statement.
(ii) Compliance with Registration
Requirements . The Registration Statement has become effective
upon filing with the Commission under the Securities Act. No stop
order suspending the effectiveness of the Registration Statement is
in effect, the Commission
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has not issued any order or notice
preventing or suspending the use of the Registration Statement, any
preliminary prospectus or the Prospectus and no proceedings for
such purpose have been instituted or are pending or, to the
knowledge of the Ventas Entities, are contemplated or threatened by
the Commission.
Each of the preliminary prospectus
and the Prospectus when filed complied in all material respects
with the Securities Act and the rules thereunder. Each of the
Registration Statement and any post-effective amendment thereto, at
each time of effectiveness and at the date hereof, complied and
will comply in all material respects with the Securities Act and
did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not
misleading. The Prospectus, as amended or supplemented, as of its
date, at the date hereof, at the time of any filing pursuant to
Rule 424(b) and, at the Closing Time (as defined herein), did not
and will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. The representations and warranties
set forth in the two immediately preceding sentences do not apply
to statements in or omissions from the Registration Statement or
any post-effective amendment thereto, or the Prospectus, or any
amendments or supplements thereto, made in reliance upon and in
conformity with information relating to any Underwriter furnished
to the Ventas Entities in writing by the Representative expressly
for use therein, it being understood and agreed that the only such
information furnished by the Representative consists of the
Underwriter Information described as such in Section 6 hereof.
There is no contract or other document required to be described in
the Prospectus or to be filed as an exhibit to the Registration
Statement that has not been described or filed as
required.
The documents incorporated by
reference in the Prospectus, when they became effective or were
filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the Securities Act or the
Exchange Act, as applicable. Any further documents so filed and
incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable.
(iii) Well-Known Seasoned
Issuer . (i) At the time of filing the Registration
Statement and, (ii) at the time of the most recent amendment
thereto, if applicable, for the purposes of complying with
Section 10(a)(3) of the Securities Act (whether such amendment
was by post-effective amendment, incorporated report filed pursuant
to Section 13 or 15(d) of the Exchange Act or form of
prospectus) or determining compliance under Rule 405 of the
Securities Act, and (iii) at the time Ventas or any person
acting on its behalf (within the meaning, for this clause only, of
Rule 163(c) of the Securities Act) made any offer relating to
the Notes in reliance on the exemption of Rule 163 of the
Securities Act, Ventas was and is a “well-known seasoned
issuer” as defined in Rule 405 of the Securities Act. The
Registration Statement is an “automatic shelf registration
statement”, as defined in Rule 405 of the Securities
Act, and Ventas has not received from the Commission any notice
pursuant to Rule 401(g)(2) of the Securities Act objecting to use
of the automatic shelf registration statement form.
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(iv) Disclosure Package . The
term “Disclosure Package” shall mean (i) the Base
Prospectus and the preliminary prospectus, if any, as amended or
supplemented, (ii) the issuer free writing prospectuses as
defined in Rule 433 of the Securities Act (each, an “Issuer
Free Writing Prospectus”), if any, identified in
Schedule C hereto, (iii) any other free writing
prospectus that the parties hereto shall hereafter expressly agree
in writing to treat as part of the Disclosure Package and
(iv) the Final Term Sheet (as defined herein), which also
shall be identified in Schedule C hereto. As of 5:00 p.m.
(Eastern time) on the date of this Agreement (the “Applicable
Time”), the Disclosure Package did not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions
from the Disclosure Package based upon and in conformity with
written information furnished to Ventas by or on behalf of any
Underwriter through the Representative specifically for use
therein, it being understood and agreed that the only such
information furnished by or on behalf of any Underwriter through
the Representative consists of the Underwriter Information (as
defined below).
(v) Issuers Not Ineligible
Issuers . (i) At the earliest time after the filing of the
Registration Statement relating to the Notes that the Issuers or
another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2)) of the Securities Act) and
(ii) at the time of the most recent amendment thereto, if
applicable, for the purposes of (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to
Section 13 or 15(d) of the Exchange Act or form of prospectus)
determining compliance under Rule 405 of the Securities Act, the
Issuers were not and neither are an Ineligible Issuer (as defined
in Rule 405 of the Securities Act), without taking account of any
determination by the Commission pursuant to Rule 405 of the
Securities Act that it is not necessary that either Issuer be
considered an Ineligible Issuer.
(vi) Issuer Free Writing
Prospectuses . Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of
the offering of Notes under this Agreement or until any earlier
date that Ventas notified or notifies the Representative as
described in the next sentence, did not, does not and will not
include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement. If at
any time following issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of
which such Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration
Statement, Ventas has promptly notified or will promptly notify the
Representative and has promptly amended or supplemented or will
promptly amend or supplement, at its own expense, such Issuer Free
Writing Prospectus to eliminate or correct such conflict. The
foregoing two sentences do not apply to statements in or omissions
from any Issuer Free Writing Prospectus based upon and in
conformity with written information furnished to Ventas by any
Underwriter through the Representative specifically for use
therein, it being understood and agreed that the only such
information furnished by or on behalf of any Underwriter consists
of the Underwriter Information.
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(vii) Distribution of Offering
Material by Ventas . Ventas has not distributed and will not
distribute, prior to the later of the Closing Time (as defined
below) and the completion of the Underwriters’ distribution
of the Notes, any offering material in connection with the offering
and sale of the Notes other than the preliminary prospectus, the
Prospectus, the Disclosure Package, and any Issuer Free Writing
Prospectus reviewed and consented to by the Representative or
included in Schedule C hereto or the Registration
Statement.
(viii) No Applicable Registration
or Other Similar Rights . There are no persons with
registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement, except for
such rights as have been duly waived.
(ix) Capitalization . All of
the issued and outstanding shares of capital stock or other equity
interests of Ventas have been duly authorized and validly issued,
are fully paid and nonassessable and were not issued in violation
of any preemptive or similar right. Attached as Schedule B is
a true and complete list identifying each subsidiary (as defined in
the Securities Act) of Ventas, its jurisdiction of incorporation or
formation, its direct or indirect percentage equity ownership by
Ventas (all such entities, including the Issuers, the
“Subsidiaries”). All of the issued and outstanding
shares of capital stock or other equity interests of each of the
Subsidiaries have been duly and validly authorized and issued, are
fully paid and (except in the case of general partnership
interests) nonassessable, were not issued in violation of any
preemptive or similar right and, except as set forth in each of the
Disclosure Package and the Prospectus or on Schedule B, are
owned by Ventas, directly or indirectly through one or more
Subsidiaries, free and clear of all Liens other than Liens
(i) that will be discharged on or prior to the Closing Time or
(ii) that are described in each of the Disclosure Package and
the Prospectus and secure indebtedness described in each of the
Disclosure Package and the Prospectus. Except as set forth on
Schedule B, there are no outstanding options, warrants or
other rights to acquire or purchase, or instruments convertible
into or exchangeable for, any shares of capital stock of any of the
Significant Subsidiaries. For purposes of this Agreement,
“Significant Subsidiary” means any Subsidiary whose
total assets or annualized revenues (when aggregated with that of
its Subsidiaries) as of the date of this Agreement exceeds 5% of
the consolidated total assets or consolidated annualized revenues
of Ventas and the Subsidiaries as of the date of this Agreement).
“Lien” means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law, including any conditional
sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction.
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(x) Authorization of
Indenture . The Indenture has been duly authorized by the
Issuers and each of the Guarantors and, at the Closing Time, will
have been duly executed and delivered by the Issuers and each of
the Guarantors and will be a legally binding and valid obligation
of the Issuers and each of the Guarantors (assuming the due
authorization, execution and delivery thereof by the Trustee),
enforceable against the Issuers and each of the Guarantors in
accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general principles of
equity and the discretion of the court before which any proceedings
therefor may be brought.
(xi) Authorization of the
Notes . The Notes to be purchased by the Underwriters from the
Issuers are in the form contemplated by the Indenture, have been
duly authorized by the Issuers for issuance and sale pursuant to
this Agreement and the Indenture, and at the Closing Time, will
have been duly executed by the Issuers and, when authenticated in
the manner provided for in the Indenture and delivered by the
Issuers against payment by the Underwriters in accordance with the
terms of this Agreement, will be legally binding and valid
obligations of the Issuers (assuming the due authorization,
execution and delivery of the Indenture by the Trustee and the due
authorization and delivery of the Notes by the Trustee in
accordance with the Indenture), entitled to the benefits of the
Indenture and enforceable against the Issuers in accordance with
their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general principles of
equity and the discretion of the court before which any proceedings
therefor may be brought.
(xii) Authorization of the
Guarantees . The Guarantees are in the form contemplated by the
Indenture, have been duly authorized by the Guarantors and, at the
Closing Time, will have been executed by each of the Guarantors
and, when the Notes are authenticated in the manner provided for in
the Indenture and delivered by the Issuers against payment by the
Underwriters in accordance with the terms of this Agreement and the
Indenture, will be legally binding and valid obligations of Ventas
and each other Guarantor, as the case may be (assuming the due
authorization, execution and delivery of the Indenture by the
Trustee and the due authorization and delivery of the Notes by the
Trustee in accordance with the Indenture), enforceable against each
of them in accordance with their terms, except that enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general
principles of equity and the discretion of the court before which
any proceedings therefor may be brought.
(xiii) Good Standing of Ventas
and Its Subsidiaries; Power and Authority . Each of Ventas and
its (a) Significant Subsidiaries is a corporation,
partnership, limited liability company or real estate investment
trust duly organized and validly existing under the laws of the
jurisdiction of its organization, (b) Subsidiaries has all
requisite corporate, partnership, limited liability company or
trust power and authority, and has all governmental licenses,
authorizations, consents and approvals, necessary to own its
property and
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carry on its business as now being
conducted, except where the failure to obtain any such license,
authorization, consent and approval is not reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect
(as defined below) and (c) Subsidiaries is qualified to do
business and is in good standing in all jurisdictions in which the
nature of the business conducted by it makes such qualification
necessary except where failure to be so qualified and in good
standing is not reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect (as defined below).
Each Ventas Entity and Guarantor has all requisite corporate,
partnership, limited liability company or trust power and authority
to execute, deliver and perform all of its obligations under this
Agreement, the Notes and the Indenture (collectively, the
“Note Documents”) to which it is a party and to
consummate the transactions contemplated thereby to be consummated
on its part, including, without limitation, the authority to issue,
sell and deliver the Notes and to execute, deliver and perform all
its obligations under the Guarantees. A “Material Adverse
Effect” means any material adverse effect on the business,
condition (financial or other), results of operations, performance
or properties of Ventas and the Subsidiaries, taken as a
whole.
(xiv) Authorization of
Agreement . This Agreement has been duly and validly
authorized, executed and delivered by each of the Ventas
Entities.
(xv) Absence of Defaults and
Conflicts . Neither Ventas nor any Subsidiary is in violation
of its charter, bylaws or other constitutive documents. Except as
described in each of the Disclosure Package and the Prospectus,
none of Ventas or any Subsidiary is (A) in default (or, with
notice or lapse of time or both, would be in default) in the
performance or observance of any obligation, agreement, covenant or
condition contained in any bond, debenture, note, indenture,
mortgage, deed of trust, loan or credit agreement, lease, license,
franchise agreement, authorization, permit, certificate or other
agreement or instrument to which any of them is a party or by which
any of them is bound or to which any of their assets or properties
is subject (collectively, “Agreements and Instruments”)
or (B) in violation of any law, statute, rule, regulation,
judgment, order or decree of any domestic or foreign court with
jurisdiction over any of them or any of their assets or properties
or other governmental or regulatory authority, agency or other
body, which, in the case of clauses (A) and (B), individually
or in the aggregate, is reasonably likely to have a Material
Adverse Effect. There exists no condition that, with notice, the
passage of time or otherwise, would constitute a default by Ventas
or any Subsidiary under any such document or instrument or result
in the imposition of any penalty or the acceleration of any
indebtedness, other than penalties, defaults or conditions that,
individually or in the aggregate, are not reasonably likely to have
a Material Adverse Effect.
(xvi) Absence of Defaults and
Conflicts upon Consummation of Offering . None of the issuance,
offer and sale of the Notes by the Issuers, the execution, delivery
and performance of the Note Documents by the Ventas Entities and
Guarantors, as applicable, or the consummation by the Ventas
Entities and Guarantors, as applicable, of the transactions
contemplated by the Note Documents and in each of the Disclosure
Package and the Prospectus violate or will violate, conflict with
or constitute a breach of any of the terms or provisions of or a
default under (or an event that with notice or the lapse
of
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time, or both, would constitute a
default), or require consent under, or result in the creation or
imposition of a lien, charge, or encumbrance on any property or
assets of Ventas or any Subsidiary pursuant to, (i) the
charter, bylaws or other constitutive documents of Ventas or any
Subsidiary, (ii) any law, statute, rule or regulation
applicable to Ventas or any Subsidiary or their respective assets
or properties, (iii) any judgment, order or decree of any
domestic or foreign court or governmental agency or authority
having jurisdiction over Ventas or any Subsidiary or their
respective assets or properties or (iv) any Agreements or
Instruments and except in the case of clauses (ii) and (iv),
for such violations, conflicts, breaches, defaults, consents,
liens, charges or encumbrances that, individually or in the
aggregate, are not reasonably likely to have a Material Adverse
Effect and, in the case of clauses (i), (ii), (iii) and (iv),
consents that have been obtained. Assuming the accuracy of the
representations and warranties of the Underwriters in
Section 2 of this Agreement and the compliance by the
Underwriters with their covenants in such section, no consent,
approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, any court or
governmental agency, body or administrative agency, domestic or
foreign, is required to be obtained or made by Ventas or any
Subsidiary for the execution, delivery and performance by the
Ventas Entities and the Guarantors of the Note Documents to which
they are a party, including the consummation of any of the
transactions contemplated thereby, except such as have been or will
be obtained or made on or prior to the Closing Time, including,
without limitation, such as may be required by the Securities Act,
state securities laws, blue sky laws and the NASD Inc. (the
“NASD”).
(xvii) Absence of Proceedings
. Except as set forth in each of the Disclosure Package and the
Prospectus, there is no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official,
domestic or foreign, now pending or, to the knowledge of the Ventas
Entities, threatened or contemplated, to which Ventas or any
Subsidiary is or may be a party or to which the business, assets or
property of such person is or may be subject, that is, individually
or in the aggregate, reasonably likely (a) to have a Material
Adverse Effect, or (b) to interfere with or adversely affect
the issuance of the Notes in any jurisdiction or adversely affect
the consummation of the transactions contemplated by any of the
Note Documents and each of the Disclosure Package and the
Prospectus. Except as set forth in each of the Disclosure Package
and the Prospectus, there is (A) no statute, rule, regulation
or order that has been enacted, adopted or issued or, to the
knowledge of any Ventas Entity, that has been proposed by any
governmental body or agency, domestic or foreign and (B) no
injunction, restraining order or order of any nature by a federal
or state court or foreign court of competent jurisdiction to which
Ventas or any Subsidiary is or may be subject that in the case of
clauses (A) and (B), is, individually or in the aggregate,
(x) reasonably likely to have a Material Adverse Effect, or
(y) reasonably likely to interfere with or adversely affect
the issuance of the Notes in any jurisdiction or adversely affect
the consummation of the transactions contemplated by any of the
Note Documents. Every request of any securities authority or agency
of any jurisdiction for additional information with respect to the
Notes that has been received by Ventas or any Subsidiary or their
counsel prior to the date hereof has been, or will prior to the
Closing Time be, complied with in all material respects.
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(xviii) Exchange Act
Compliance . Ventas is subject to and in compliance in all
material respects with the reporting requirements of
Section 13 or 15(d) of the Exchange Act.
(xix) Absence of Labor
Dispute . Except as is not reasonably likely to have a Material
Adverse Effect, no labor disturbance by the employees of Ventas or
any Subsidiary exists or, to the knowledge of any Ventas Entity, is
imminent. Ventas is not aware of any existing or imminent labor
disturbance by the employees of Kindred Healthcare, Inc. which may
reasonably be expected to result in a Material Adverse
Effect.
(xx) Environmental Laws .
Except as described in each of the Disclosure Package and the
Prospectus, Ventas and each Subsidiary (A) is in compliance
with, or not subject to costs or liabilities under, laws,
regulations, rules of common law, orders and decrees, as in effect
as of the date hereof, and any present judgments and injunctions
issued or promulgated thereunder relating to pollution or
protection of public and employee health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants applicable to it or its business or operations or
ownership or use of its property (“Environmental
Laws”), other than noncompliance or such costs or liabilities
that, individually or in the aggregate, is not reasonably likely to
have a Material Adverse Effect, and (B) possesses all permits,
licenses or other approvals required under applicable Environmental
Laws, except where the failure to possess any such permit, license
or other approval is not reasonably likely to have, either
individually or in the aggregate, a Material Adverse Effect. All
currently pending and, to the knowledge of the Ventas Entities,
threatened proceedings, notices of violation, demands, notices of
potential responsibility or liability, suits and existing
environmental conditions by any governmental authority to which any
of the Ventas Entities is subject that are reasonably likely to
result in a Material Adverse Effect are fully and accurately
described in all material respects in each of the Disclosure
Package and the Prospectus.
(xxi) Possession of Licenses and
Permits . Ventas and each Subsidiary has (A) all licenses,
certificates, permits, authorizations, approvals, franchises and
other rights from, and has made all declarations and filings with,
all applicable authorities, all self-regulatory authorities and all
courts and other tribunals (each, an “Authorization”)
necessary to engage in the business conducted by it in the manner
described in each of the Disclosure Package and the Prospectus,
except where failure to hold such Authorizations is not,
individually or in the aggregate, reasonably likely to have a
Material Adverse Effect and (B) no knowledge that any
governmental body or agency, domestic or foreign, is considering
limiting, suspending or revoking any such Authorization, except
where any such limitations, suspensions or revocations is not,
individually or in the aggregate, reasonably likely to have a
Material Adverse Effect. All such Authorizations are valid and in
full force and effect, and Ventas and each Subsidiary is in
compliance with the terms and conditions of all such Authorizations
and with the rules and regulations of the regulatory authorities
having jurisdiction with respect to such Authorizations, except for
any invalidity, failure to be in full force and effect or
noncompliance with any Authorization that is not, individually or
in the aggregate, reasonably likely to have a Material Adverse
Effect.
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(xxii) Title to Property .
Ventas and each Subsidiary has good and marketable title in fee
simple or a ground leasehold interest in all items of real property
and good and marketable title to all personal property owned by
each of them, in each case free and clear of all Liens, except
(i) for Liens described in each of the Disclosure Package and
the Prospectus and (ii) to the extent that the failure to have
such title or the presence of such Liens is not, individually or in
the aggregate, reasonably likely to result in a Material Adverse
Effect. Any real property and buildings held under lease by Ventas
or any Subsidiary are held under valid, subsisting and enforceable
leases, except to the extent that the failure to so hold such real
property and buildings is not, individually or in the aggregate,
reasonably likely to result in a Material Adverse
Effect.
(xxiii) Authorization, etc. of
Leases . Each of Ventas’ and the Subsidiaries’
leases, including the Master Leases (as defined below) has been
duly authorized by one or more of Ventas and its Subsidiaries, as
applicable, and is a valid and binding agreement of Ventas and/or
any such Subsidiary, and, to the knowledge of Ventas and/or any
such Subsidiary, each other party thereto, enforceable in
accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general principles of
equity and the discretion of the court before which any proceedings
therefor may be brought and except, with respect to Ventas’
and the Subsidiaries’ leases (other than the Master Leases),
as would not individually or in the aggregate, be reasonably likely
to have a Material Adverse Effect. To the knowledge of the Ventas
Entities, no lessee or sublessee of any portion of any of the
properties owned or leased by Ventas and/or any Subsidiary is in
default under its respective lease and there is no event which, but
for the passage of time or the giving of notice or both, would
constitute a default under any such lease, except as described in
each of the Disclosure Package and the Prospectus and except for
such defaults that are not, individually or in the aggregate,
reasonably likely to have a Material Adverse Effect. The term
“Master Leases” refers to the four amended and restated
master lease agreements, dated as of April 20, 2001, between
the Operating Partnership and Kindred Healthcare Inc. and Kindred
Healthcare Operating, Inc., in each case, as heretofore
amended.
(xxiv) Qualification as a
REIT . Ventas meets the requirements for qualification and
taxation as a real estate investment trust (“REIT”)
under the Internal Revenue Code of 1986 (the “Code”).
ElderTrust is a “qualified REIT subsidiary” within the
meaning of Section 856(i)(2) of the Code.
(xxv) Possession of Intellectual
Property . Each of Ventas and each Significant Subsidiary owns,
possesses or has the right to employ all patents, patent rights,
licenses, inventions, copyrights, know-how, trademarks, service
marks, trade names and other intellectual property (collectively,
the “Intellectual Property”) necessary to conduct the
businesses operated by it as described in each of the Disclosure
Package and the Prospectus, except where the failure to own,
possess or have the right to employ such Intellectual Property is
not reasonably likely to have a Material Adverse Effect. None of
Ventas or any Subsidiary has received any notice of infringement of
or conflict with (and neither knows of any such infringement or a
conflict with) asserted rights of others with respect
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to any of the foregoing that, if
such assertion of infringement or conflict were sustained, is
reasonably likely to have a Material Adverse Effect. To the
knowledge of the Ventas Entities, the use of the Intellectual
Property in connection with the business and operations of Ventas
and the Subsidiaries does not infringe on the rights of any person,
except for such infringement as is not reasonably likely to have a
Material Adverse Effect, and neither Ventas nor any Subsidiary has
received any notice of, and otherwise has no knowledge of, any
threatened or existing action, suit, proceeding or claim by any
person challenging use of the Intellectual Property by Ventas and
the Subsidiaries.
(xxvi) Tax Returns and Payment of
Taxes . All tax returns required to be filed by Ventas and each
Subsidiary have been filed in all jurisdictions where such returns
are required to be filed; and all taxes, including withholding
taxes, value added and franchise taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from
such entities or that are due and payable have been paid, other
than those being contested in good faith and for which reserves
have been provided in accordance with generally accepted accounting
principles or those currently payable without penalty or interest
and except where the failure to make such required filings or
payments is not, individually or in the aggregate, reasonably
likely to have a Material Adverse Effect. Except as described in
each of the Disclosure Package and the Prospectus, none of Ventas
or any Subsidiary has knowledge of any material proposed additional
tax assessments against Ventas or any of the Subsidiaries or their
assets or property.
(xxvii) Certain ERISA Matters
. None of Ventas or any of the Subsidiaries has any liability for
any prohibited transaction or accumulated funding deficiency
(within the meaning of Section 412 of the Code) or any
complete or partial withdrawal liability with respect to any
pension, profit sharing or other plan which is subject to the
Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), to which Ventas or any Subsidiary makes or
ever has made a contribution and in which any employee of Ventas or
any Subsidiary is or has ever been a participant. With respect to
such plans, Ventas and each Subsidiary is in compliance in all
material respects with all applicable provisions of
ERISA.
(xxviii) Investment Company
Act . No Ventas Entity or any Guarantor is, nor upon the
issuance and sale of the Notes as herein contemplated and any
application of the net proceeds therefrom as described in each of
the Disclosure Package and the Prospectus will be, an
“investment company” or a company
“controlled” by an “investment company” as
such terms are defined in the Investment Company Act of 1940, as
amended (the “1940 Act”).
(xxix) Insurance for Leased
Properties . Each of Ventas and each Subsidiary maintains or
causes to be maintained by the lessee under the leases for its
properties insurance covering its properties (including title to
its properties), assets, operations, personnel and businesses, and
such insurance is of such type and in such amounts in accordance
with customary industry practice and in Ventas’ reasonable
judgment sufficient to protect Ventas and the Subsidiaries and
their businesses.
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(xxx) Accounting and Other
Controls . Ventas maintains effective internal control over
financial reporting as defined in the Exchange Act. Each of Ventas
and each Subsidiary maintains a system of internal accounting
controls sufficient to provide reasonable assurance that:
(A) transactions are executed in accordance with
management’s general or specific authorizations;
(B) transactions are recorded as necessary to permit
preparation of its financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted
only in accordance with management’s general or specific
authorization; and (D) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences.
(xxxi) No Material Weakness in
Internal Controls . Except as disclosed in each of the
Disclosure Package and the Prospectus or in any document
incorporated by reference therein, since the end of Ventas’
most recent audited fiscal year, there has been (i) no
material weakness in Ventas’ internal control over financial
reporting (whether or not remediated) and (ii) no change in
Ventas’ internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect,
Ventas’ internal control over financial reporting.
(xxxii) No Material Adverse
Change in Business . As of June 30, 2006, none of Ventas
or any Subsidiary had any material liabilities or obligations,
direct or contingent, that were not set forth in Ventas’
consolidated balance sheet as of June 30, 2006, or in the
notes thereto, set forth in each of the Disclosure Package and the
Prospectus, or otherwise described therein, other than the
performance by Ventas of its obligations under ordinary course
executory contracts that are not in default, that could not
reasonably be expected to have a Material Adverse Effect and that
are not required by GAAP, as modified by the Securities Act and the
rules and regulations of the Commission thereunder (the
“Securities Act Regulations”), the Exchange Act and the
rules and regulations of the Commission thereunder (the
“Exchange Act Regulations”), to be disclosed on a
regularly prepared balance sheet or in the notes thereto. Since the
respective dates as of which information is given in each of the
Registration Statement, Disclosure Package and the Prospectus,
except as otherwise stated therein, (a) none of Ventas or any
Subsidiary has (1) incurred any liability or obligation,
direct or contingent, that is, individuall
