Document:

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                                                                   EXHIBIT 10.12

                           CREDIT SUISSE FIRST BOSTON
                              Eleven Madison Avenue
                               New York, NY 10010

                                                                October 11, 2000

Oil States International, Inc.
Three Allen Center
333 Clay Street, Suite 3460
Houston, TX 77002

Attention of Cindy B. Taylor

                         Oil States International, Inc.
                   $150,000,000 Senior Secured Credit Facility
                                Commitment Letter

Ladies and Gentlemen:

         You have advised Credit Suisse First Boston ("CSFB") that, in
connection with its proposed initial public offering of common stock (the
"IPO"), Oil States International, Inc. ("you" or the "Borrower") intends to
combine (the "Combination"), through a series of mergers and acquisitions, its
business with the businesses of Sooner Inc., HWC Energy Services, Inc., PTI
Group Inc. and their respective subsidiaries. Capitalized terms used but not
defined herein have the meanings assigned in the Summary of Principal Terms and
Conditions attached hereto as Exhibit A (the "Term Sheet"). Unless otherwise
specifically provided, all references herein and in the Term Sheet to "$" or
"dollars" refer to US dollars.

         You have further advised us that, in connection with the Combination
and the IPO, the Borrower will obtain the senior secured credit facility (the
"Facility") described in the Term Sheet, in an aggregate principal amount of up
to $150,000,000.

         In connection with the foregoing, you have requested that CSFB (a)
agree to structure, arrange and syndicate the Facility and (b) commit to provide
the Facility and to serve as administrative agent, sole book manager and sole
lead arranger therefor.

         CSFB is pleased to advise you of its commitment to provide the entire
principal amount of the Facility, upon the terms and subject to the conditions
set forth or referred to in this commitment letter (the "Commitment Letter") and
in the Term Sheet.

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         It is agreed that CSFB will act as the sole and exclusive
administrative agent, sole book manager and sole lead arranger for the Facility,
and that it will, in such capacities, perform the duties and exercise the
authority customarily performed and exercised by it in such roles. You agree
that no other titles will be awarded and no compensation (other than that
expressly contemplated by the Term Sheet and the Fee Letter referred to below)
will be paid in connection with the Facility unless you and we shall so agree.

         We intend to syndicate the Facility to a group of financial
institutions (together with CSFB, the "Lenders") identified by us in
consultation with you. We intend to commence syndication efforts promptly upon
the execution of this Commitment Letter, and you agree actively to assist us in
our syndication efforts. Such assistance shall include (a) your using
commercially reasonable efforts to ensure that the syndication efforts benefit
materially from your existing lending relationships, (b) direct contact between
senior management, representatives and advisors of the Borrower and the proposed
Lenders, (c) assistance by the Borrower in the preparation of a Confidential
Information Memorandum for the Facility and other marketing materials to be used
in connection with the syndication and (d) the hosting, with CSFB, of one or
more meetings of prospective Lenders.

         CSFB will manage all aspects of the syndication, including decisions as
to the selection of institutions to be approached and when they will be
approached, when their commitments will be accepted, which institutions will
participate, the allocation of the commitments among the Lenders and the amount
and distribution of fees among the Lenders. To assist CSFB in its syndication
efforts, you agree promptly to prepare and provide to CSFB all information with
respect to the Borrower and its subsidiaries, the Transactions and the other
transactions contemplated hereby, including all financial information and
projections (the "Projections"), as we may reasonably request. You hereby
represent and covenant that (a) all information other than the Projections (the
"Information") that has been or will be made available to CSFB by you or any of
your representatives is or will be, when furnished, complete and correct in all
material respects and does not or will not, when furnished, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not materially misleading in light of
the circumstances under which such statements are made and (b) the Projections
that have been or will be made available to CSFB by you or any of your
representatives have been or will be prepared in good faith based upon
assumptions that are reasonable at the time made and at the time the related
Projections are made available to CSFB. You agree that if at any time prior to
the closing of the Facility any of the representations in the preceding sentence
would be incorrect if the Information and Projections were being furnished, and
such representations were being made, at such time, then you will promptly
supplement the Information and the Projections so that such representations will
be correct under those circumstances. In arranging and syndicating the Facility,
we will be entitled to use and rely primarily on the

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                                                                               3

Information and the Projections without responsibility for independent
verification thereof.

         As consideration for CSFB's commitment hereunder and agreement to
perform the services described herein, you agree to pay to CSFB the
nonrefundable fees set forth in the Term Sheet and in the Fee Letter dated the
date hereof and delivered herewith with respect to the Facility (the "Fee
Letter").

          CSFB shall be entitled, after consultation with you, to change the
amount, pricing, terms and structure of the Facility if the syndication has not
been completed and if CSFB determines that such changes are advisable in order
to ensure a syndication of the Facility that results in CSFB's commitment in
respect thereof being reduced to $20,000,000 or less; provided that the
aggregate amount of the Facility remains sufficient to consummate the
Transactions. CSFB's commitment hereunder is subject to your agreement set forth
in this paragraph.

         CSFB's commitment hereunder and agreement to perform the services
described herein are further subject to (a) our not having discovered or
otherwise become aware of any information not previously disclosed to us that we
believe to be inconsistent in a material and adverse manner with our
understanding, based on the information provided to us prior to the date hereof,
of the business, assets, operations, condition (financial or otherwise), or
prospects of the Borrower and its subsidiaries on a consolidated basis after
giving effect to the Combination, (b) there not having occurred any material
adverse change or material adverse condition in the business, assets,
operations, condition (financial or otherwise) or prospects of the Borrower and
its subsidiaries (after giving effect to the Combination), taken as a whole,
since December 31, 1999, (c) there not having occurred after the date hereof a
material disruption of or material adverse change in financial, banking or
capital market conditions that, in CSFB's judgment, could adversely affect the
syndication of the Facility, (d) our satisfaction that, prior to and during the
syndication of the Facility, there shall be no competing issues of debt
securities or commercial bank or other credit facilities of the Borrower or its
subsidiaries being offered, placed or arranged, (e) the negotiation, execution
and delivery of definitive documentation with respect to the Facility reasonably
satisfactory to CSFB and its counsel, (f) CSFB's having been afforded a period
of at least 30 days following the date the Confidential Information Memorandum
for the Facility is distributed to potential syndicate members to syndicate the
Facility and (g) the other conditions set forth in the Term Sheet. The terms and
conditions of CSFB's commitment hereunder and of the Facility are not limited to
those set forth herein and in the Term Sheet. Those matters that are not covered
by or made clear under the provisions hereof and of the Term Sheet are subject
to the approval and agreement of CSFB and the Borrower.

         You agree (a) to indemnify and hold harmless CSFB and its affiliates
and their respective officers, directors, employees, agents and controlling
persons from and against

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any and all losses, claims, damages, liabilities and related expenses, joint or
several, to which any such persons may become subject arising out of or in
connection with this Commitment Letter, the Fee Letter, the Term Sheet, the
Transactions, the Facility or any related transaction or any claim, litigation,
investigation or proceeding relating to any of the foregoing, regardless of
whether any of such indemnified persons is a party thereto, and to reimburse
each of such indemnified persons upon demand for any reasonable legal or other
expenses incurred in connection with investigating or defending any of the
foregoing, provided that the foregoing indemnity will not, as to any indemnified
person, apply to losses, claims, damages, liabilities or related expenses to the
extent they are found in a final judgment of a court to have resulted from the
willful misconduct or gross negligence of such indemnified person, and (b) to
reimburse CSFB from time to time, upon presentation of a reasonably detailed
summary statement, for all reasonable out-of-pocket expenses (including but not
limited to expenses of CSFB's due diligence investigation, consultants' fees,
syndication expenses, travel expenses and reasonable fees, disbursements and
other charges of counsel), in each case incurred in connection with the Facility
and the preparation of this Commitment Letter, the Term Sheet, the Fee Letter,
the definitive documentation for the Facility and any security arrangements in
connection therewith. Notwithstanding any other provision of this Commitment
Letter, no indemnified person shall be liable for any indirect or consequential
damages in connection with its activities related to the Facility.

         You acknowledge that CSFB may be providing debt financing, equity
capital or other services (including financial advisory services) to other
companies in respect of which you may have conflicting interests regarding the
transactions described herein and otherwise. CSFB will not use confidential
information obtained from you by virtue of the transactions contemplated by this
Commitment Letter or its other relationships with you in connection with the
performance by CSFB of services for other companies, and CSFB will not furnish
any such information to other companies. You also acknowledge that CSFB has no
obligation to use in connection with the transactions contemplated by this
Commitment Letter, or to furnish to you, confidential information obtained by
CSFB from other companies.

         This Commitment Letter and CSFB's commitment hereunder shall not be
assignable by you without the prior written consent of CSFB (and any attempted
assignment without such consent shall be null and void), is intended to be
solely for the benefit of the parties hereto (and indemnified persons), is not
intended to confer any benefits upon, or create any rights in favor of, any
person other than the parties hereto (and indemnified persons) and is not
intended to create a fiduciary relationship between the parties hereto. CSFB may
assign its commitment hereunder to any of its affiliates or any Lender. Any such
assignment to an affiliate will not relieve CSFB from any of its obligations
hereunder unless and until such affiliate shall have funded the portion of the
commitment so assigned. Any assignment to a Lender shall be by novation and
shall release CSFB from the portion of its commitment hereunder so assigned.
This

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Commitment Letter may not be amended or any provision hereof waived or modified
except by an instrument in writing signed by CSFB and you. This Commitment
Letter may be executed in any number of counterparts, each of which shall be an
original and all of which, when taken together, shall constitute one agreement.
Delivery of an executed counterpart of a signature page of this Commitment
Letter by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. This Commitment Letter and the Fee Letter are the
only agreements that have been entered into between us with respect to the
Facility and set forth the entire understanding of the parties with respect
thereto. THIS COMMITMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF
ANY PARTY RELATED TO OR ARISING OUT OF THIS COMMITMENT LETTER OR THE PERFORMANCE
OF SERVICES HEREUNDER.

         This Commitment Letter is delivered to you on the understanding that
neither this Commitment Letter, the Term Sheet or the Fee Letter nor any of
their terms or substance shall be disclosed, directly or indirectly, to any
other person except (a) to your officers, employees, attorneys, accountants and
advisors on a confidential and need-to-know basis, or (b) as required by
applicable law or compulsory legal process (in which case you agree to inform us
promptly thereof); provided that, after your acceptance of this Commitment
Letter and the Fee Letter, this Commitment Letter and the Term Sheet and the
contents hereof and thereof (but not the Fee Letter or the contents thereof) may
be disclosed in any public filing relating to the IPO.

         The compensation, reimbursement, indemnification and confidentiality
provisions contained herein and in the Fee Letter shall remain in full force and
effect regardless of whether definitive financing documentation shall be
executed and delivered and notwith standing the termination of this Commitment
Letter or CSFB's commitment hereunder.

         If the foregoing correctly sets forth our agreement, please indicate
your acceptance of the terms hereof and of the Term Sheet and the Fee Letter by
returning to us executed counterparts hereof and of the Fee Letter not later
than 5:00 p.m., New York City time, on October 12, 2000. CSFB's commitment
hereunder and agreements contained herein will expire at such time in the event
that CSFB has not received such executed counterparts in accordance with the
immediately preceding sentence. In the event that the initial borrowing in
respect of the Facility does not occur on or before November 30, 2000, then this
Commitment Letter and CSFB's commitment and undertakings hereunder shall
automatically terminate unless CSFB shall, in its discretion, agree to an
extension. Before such date, CSFB may terminate this Commitment Letter if any
event occurs or

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information becomes available that, in its judgment, results or is likely to
result in the failure to satisfy any condition precedent set forth herein or in
the Term Sheet; provided that such failure could not reasonably be expected to
be cured prior to the expiration of this Commitment Letter.

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         CSFB is pleased to have been given the opportunity to assist you in
connection with this important financing.

                                         Very truly yours,

                                         CREDIT SUISSE FIRST BOSTON,

                                         by  /s/ JAMES S. FINCH
                                             -----------------------
                                             Name:  James S. Finch
                                             Title: Director

                                         by  /s/ JAMES P. MORGAN
                                             -----------------------
                                             Name:  James P. Morgan
                                             Title: Director

Accepted and agreed to as of
the date first above written:

OIL STATES INTERNATIONAL, INC.,

by  /s/ CINDY B. TAYLOR
    ---------------------------
    Name:  Cindy B. Taylor
    Title: Senior Vice President - CFO

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CONFIDENTIAL
October 11, 2000                                                       EXHIBIT A

                         Oil States International, Inc.
                   $150,000,000 Senior Secured Credit Facility
                    Summary of Principal Terms and Conditions

Borrower:                           Oil States International, Inc., a Delaware
                                    corporation (the "Borrower").

Transactions:                       The Borrower intends to consummate a series
                                    of transactions (the "Combination") pursuant
                                    to which (a) Sooner Inc. ("Sooner"), HWC
                                    Energy Services, Inc. ("HWC") and PTI Group
                                    Inc. ("PTI" and, together with Sooner and
                                    HWC, the "Acquired Companies") will merge
                                    with and into wholly owned subsidiaries of
                                    the Borrower and (b) the existing minority
                                    interests in each of the Acquired Companies
                                    will be acquired, with the result that each
                                    Acquired Company will become a wholly owned
                                    subsidiary of the Borrower. Concurrent with
                                    the consummation of the Combination, the
                                    Borrower intends to issue common stock in an
                                    initial public offering (the "IPO") and to
                                    receive therefrom not less than $120,000,000
                                    in gross cash proceeds. In connection with
                                    the Combination and the IPO, (a) the
                                    Borrower and the Acquired Companies will
                                    repay all amounts outstanding under their
                                    existing bank credit agreements (the
                                    "Existing Credit Agreements") and certain
                                    other indebtedness and preferred stock, (b)
                                    the Borrower will obtain the senior secured
                                    credit facility described below under the
                                    caption "Facility" and (c) fees and expenses
                                    incurred in connection with the foregoing
                                    will be paid. The transactions described in
                                    this paragraph, together with the
                                    Combination and the IPO, are collectively
                                    referred to herein as the "Transactions".

Sources and Uses:                   The approximate sources and uses of the
                                    funds necessary to consummate the
                                    Transactions are set forth in Annex II
                                    hereto.

Agent:                              Credit Suisse First Boston ("CSFB") will act
                                    as sole and exclusive administrative agent
                                    and collateral agent (collectively, the
                                    "Agent") for a syndicate of financial
                                    institutions (together with CSFB, the

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                                    "Lenders"), and will perform the duties
                                    customarily associated with such roles.

Sole Book Manager and Sole          CSFB will act as sole book manager and sole
Lead Arranger:                      lead arranger for the Facility (the
                                    "Arranger"), and will perform the duties
                                    customarily associated with such roles.

Co-Arrangers, Syndication Agent
and Documentation Agent:            To be determined by CSFB and the Borrower.

Facility:                           A Senior Secured Revolving Credit Facility
                                    in an aggregate principal amount of up to
                                    $150,000,000 (the "Facility"), of which up
                                    to an amount to be agreed upon will be
                                    available in the form of letters of credit.

Purpose:                            The proceeds of loans under the Facility
                                    will be used by the Borrower solely (a) to
                                    refinance the Existing Credit Agreements and
                                    certain other outstanding indebtedness and
                                    preferred stock of the Borrower and the
                                    Acquired Companies, (b) to pay fees and
                                    expenses relating to the Transactions and
                                    the Facility and (c) for general corporate
                                    purposes, including Permitted Acquisitions
                                    (to be defined).

Availability:                       Loans under the Facility will be available
                                    on a revolving basis on and after the date
                                    of execution and delivery of the definitive
                                    credit agreement for the Facility (the
                                    "Closing Date") and at any time prior to the
                                    final maturity of the Facility, in minimum
                                    principal amounts to be agreed upon.

                                    Up to the Canadian dollar equivalent of
                                    $45,000,000 of the Facility will be made
                                    available in the form of loans denominated
                                    in Canadian dollars ("Canadian Loans").
                                    Canadian Loans may be made by all the
                                    Lenders under the Facility to the Borrower
                                    or, if requested by the Borrower and agreed
                                    to by the Agent, Canadian Loans may be made
                                    to the Borrower's principal Canadian
                                    operating subsidiary (the "Canadian
                                    Borrower") by a subset of Lenders (the
                                    "Canadian Lenders") that

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                                    are not non-residents of Canada within the
                                    meaning of the Income Tax Act (Canada). The
                                    commitments, if any, of the Canadian Lenders
                                    to provide Canadian Loans to the Canadian
                                    Borrower (the "Canadian Facility") will be
                                    documented under the same definitive credit
                                    agreement (the "Credit Agreement") as the
                                    Facility, and the commitments to make US
                                    dollar denominated loans to the Borrower
                                    under the Facility. To the extent the
                                    Canadian Lenders are also able to make loans
                                    to the Borrower in US dollars without
                                    attracting withholding tax, the portion of
                                    the Canadian Facility not used to make
                                    Canadian Loans to the Canadian Borrower may
                                    be used to make loans denominated in US
                                    dollars to the Borrower.

Interest Rates and Fees:            As set forth on Annex I hereto.

Default Rate:                       Defaulted amounts will bear interest at the
                                    applicable interest rate plus 2% per annum.

Letters of Credit:                  Letters of credit under the Facility will be
                                    issued by CSFB or another Lender (the
                                    "Issuing Bank"). Each letter of credit shall
                                    expire not later than the earlier of (a) 12
                                    months after its date of issuance and (b)
                                    the fifth business day prior to the final
                                    maturity of the Facility.

                                    Drawings under any letter of credit shall be
                                    reimbursed by the Borrower on the same
                                    business day. To the extent that the
                                    Borrower does not reimburse the Issuing Bank
                                    on the same business day, the Lenders shall
                                    be irrevocably obligated to reimburse the
                                    Issuing Bank pro rata based upon their
                                    respective Facility commitments.

                                    The issuance of all letters of credit shall
                                    be subject to the customary procedures of
                                    the Issuing Bank.

Final Maturity:                     The Facility will mature on the third
                                    anniversary of the Closing Date; provided,
                                    however, that, with the consent of each
                                    Lender, the final maturity of the

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                                    Facility may be extended for up to two
                                    additional one-year periods upon the
                                    Borrower's request.

Guarantees:                         All obligations of the Borrower (the
                                    "Borrower Obligations") under the Facility
                                    and under any interest rate protection or
                                    other hedging arrangements entered into with
                                    a Lender or any affiliate thereof ("Hedging
                                    Arrangements") will be unconditionally
                                    guaranteed by each existing and subsequently
                                    acquired or organized domestic and, to the
                                    extent no adverse tax consequences to the
                                    Borrower would result therefrom, foreign
                                    subsidiary of the Borrower, other than
                                    Inactive Subsidiaries (to be defined) (the
                                    "US Guarantors"). All obligations of the
                                    Canadian Borrower (the "Canadian Borrower
                                    Obligations") under the Canadian Facility,
                                    if any, will be unconditionally guaranteed
                                    (together with the guarantees referred to in
                                    the preceding sentence (the "Guarantees"))
                                    by each existing and subsequently acquired
                                    or organized subsidiary (other than Inactive
                                    Subsidiaries) of the Canadian Borrower (the
                                    "Canadian Guarantors") and by the Borrower
                                    and the US Guarantors.

Security:                           The Borrower Obligations will be secured by
                                    a first-priority perfected lien on all
                                    currently owned or hereafter acquired
                                    inventory, accounts receivable and other
                                    material tangible and intangible assets of
                                    the Borrower and the US Guarantors; provided
                                    that not more than 65% of the voting stock
                                    of any foreign subsidiary shall be required
                                    to be pledged to the extent the pledge of
                                    any greater percentage would result in
                                    adverse tax consequences to the Borrower.
                                    The Canadian Borrower Obligations will be
                                    secured by a first-priority perfected lien
                                    on all currently owned or hereafter acquired
                                    inventory, accounts receivable and other
                                    material tangible and intangible assets of
                                    the Canadian Borrower and the Canadian
                                    Guarantors (collectively, with the
                                    collateral described in the preceding
                                    sentence, the "Collateral").

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                                    All the above-described liens shall be
                                    created on terms, and pursuant to
                                    documentation, reasonably satisfactory to
                                    the Lenders.

                                    The Credit Agreement will provide that, to
                                    the extent the proceeds of the Collateral
                                    are insufficient to pay all the obligations
                                    intended to be secured thereby, the Agent
                                    will be authorized to allocate and
                                    reallocate such proceeds among the Lenders
                                    under the Facility and the Lenders under the
                                    Canadian Facility to ensure a ratable
                                    recovery by each such class of Lenders.

Mandatory Reductions in             Commitments under the Facility will be
Commitments:                        permanently reduced, and loans thereunder
                                    prepaid, by an amount equal to 100% of the
                                    net cash proceeds of (a) all non-ordinary
                                    course asset sales, (b) the issuance of
                                    additional debt and (c) 75% of the issuance
                                    of equity securities, in each case subject
                                    to exceptions (including, in the case of
                                    certain asset sales, reinvestment
                                    provisions) to be agreed upon. Mandatory
                                    commitment reductions shall be allocated pro
                                    rata between the Facility and the Canadian
                                    Facility, if any.

Voluntary Reductions in             Voluntary reductions of the unutilized
Commitments:                        portion of the Facility commitments and
                                    prepayments of borrowings will be permitted
                                    at any time, in minimum principal amounts to
                                    be agreed upon, without premium or penalty,
                                    subject to reimbursement of the Lenders'
                                    redeployment costs in the case of a
                                    prepayment of Adjusted LIBOR borrowings
                                    other than on the last day of the relevant
                                    interest period.

Representations and Warranties:     Usual for facilities and transactions of
                                    this type and others to be reasonably
                                    specified by the Agent, including, without
                                    limitation, accuracy of financial statements
                                    and other information; no material adverse
                                    change; absence of material litigation; no
                                    violation of agreements or instruments;
                                    compliance with laws (including ERISA,
                                    margin regulations and environmental laws);
                                    payment of taxes; ownership

<PAGE>   13
                                                                               6

                                    of properties; inapplicability of the
                                    Investment Company Act and the Public
                                    Utility Holding Company Act; solvency;
                                    effectiveness of governmental approvals;
                                    labor matters; environ mental matters; and
                                    validity, priority and perfection of
                                    security interests in the Collateral.

Conditions Precedent to Initial     Usual for facilities and transactions of
Borrowing:                          this type, those specified below and others
                                    to be reasonably specified by the Agent,
                                    including, without limitation, delivery of
                                    satisfactory legal opinions, audited
                                    financial statements and other financial
                                    information; first-priority perfected
                                    security interests in the Collateral
                                    (subject to customary qualifications);
                                    execution of the Guarantees, which shall be
                                    in full force and effect; accuracy of
                                    representations and warranties; absence of
                                    defaults, prepayment events or creation of
                                    liens under debt instruments or other
                                    agreements; evidence of authority; absence
                                    of material adverse change; payment of fees
                                    and expenses; and obtaining of satisfactory
                                    insurance.

                                    The Combination and the IPO shall be
                                    consummated prior to or contemporaneously
                                    with the closing under the Facility in
                                    accordance with applicable law and on the
                                    terms described herein; and the Lenders
                                    shall be satisfied with the capitalization,
                                    structure and equity ownership of the
                                    Borrower and its Subsidiaries after giving
                                    effect to the Transactions.

                                    All principal, interest, fees and other
                                    amounts due or outstanding under the
                                    Existing Credit Agreements shall have been
                                    paid in full with the proceeds of the IPO
                                    and the initial loans under the Facility,
                                    the commitments thereunder shall be
                                    terminated and, contemporaneously with the
                                    closing under the Facility, all guarantees
                                    (if any) thereof and security (if any)
                                    therefor shall be released and discharged,
                                    and the Agent shall have received reasonably
                                    satisfactory evidence thereof.

<PAGE>   14
                                                                               7

                                    After giving effect to the Transactions and
                                    the other transactions contemplated hereby,
                                    the Borrower and its subsidiaries shall have
                                    outstanding no indebtedness or preferred
                                    stock other than (a) the loans and other
                                    extensions of credit under the Facility and
                                    (b) other limited indebtedness to be agreed
                                    upon.

                                    The Lenders shall have received unaudited
                                    combined pro forma balance sheets and
                                    related statements of income, stockholders'
                                    equity and cash flows of the Borrower and
                                    the Acquired Companies as of and for the
                                    12-month period ending December 31, 1999 and
                                    the 9-month period ending September 30,
                                    2000, which financial statements shall not
                                    be materially inconsistent with the
                                    financial statements or forecasts previously
                                    provided to the Lenders.

                                    The Lenders shall have received a pro forma
                                    consolidated balance sheet of the Borrower
                                    as of the Closing Date, after giving effect
                                    to the Transactions and the other
                                    transactions contemplated hereby, which
                                    balance sheet shall not be materially
                                    inconsistent with the forecasts previously
                                    provided to the Lenders.

                                    The Lenders shall be reasonably satisfied as
                                    to the amount and nature of any
                                    environmental and employee health and safety
                                    exposures to which the Borrower and its
                                    subsidiaries may be subject after giving
                                    effect to the Transactions, and with the
                                    plans of the Borrower or such subsidiaries
                                    with respect thereto.

                                    The Lenders shall be reasonably satisfied in
                                    all respects with the tax position and the
                                    contingent tax and other liabilities of, and
                                    with any tax sharing arrangements among, the
                                    Borrower and its subsidiaries after giving
                                    effect to the Transactions.

                                    The Lenders shall have received a detailed
                                    business plan of the Borrower and its
                                    subsidiaries for the

<PAGE>   15
                                                                               8

                                    years 2001 through 2005 in form and
                                    substance reasonably satisfactory to the
                                    Agent.

                                    All requisite governmental authorities and
                                    third parties shall have approved or
                                    consented to the Transactions and the other
                                    transactions contemplated hereby to the
                                    extent required, all applicable appeal
                                    periods shall have expired and there shall
                                    be no litigation, governmental,
                                    administrative or judicial action, actual or
                                    threatened, that could reasonably be
                                    expected to restrain, prevent or impose
                                    burdensome conditions on the Transactions or
                                    the other transactions contemplated hereby.

Conditions Precedent to all         Delivery of notice, accuracy of
Borrowings:                         representations and warranties and absence
                                    of defaults.

Affirmative Covenants:              Usual for facilities and transactions of
                                    this type and others to be reasonably
                                    specified by the Agent (to be applicable to
                                    the Borrower and its subsidiaries),
                                    including, without limitation, maintenance
                                    of corporate existence and rights;
                                    performance of obligations; delivery of
                                    financial statements and other financial
                                    information; delivery of notices of default,
                                    litigation and material adverse change;
                                    maintenance of properties in good working
                                    order; maintenance of satisfactory
                                    insurance; compliance with laws; inspection
                                    of books and properties; further assurances;
                                    and payment of taxes.

Negative Covenants:                 Usual for facilities and transactions of
                                    this type and others to be reasonably
                                    specified by the Agent (to be applicable to
                                    the Borrower and its subsidiaries),
                                    including, without limitation, limitations
                                    on dividends on, and redemptions and
                                    repurchases of, capital stock; limitations
                                    on prepayments, redemptions and repurchases
                                    of debt (other than loans under the
                                    Facility); limitations on liens and
                                    sale-leaseback transactions; limitations on
                                    loans and investments; limitations on debt
                                    and hedging arrangements; limitations on
                                    mergers, acquisitions (other than Permitted
                                    Acquisitions) and asset sales;

<PAGE>   16
                                                                               9

                                    limitations on transactions with affiliates;
                                    limitations on changes in business conducted
                                    by the Borrower and its subsidiaries;
                                    limitations on amendments of debt and other
                                    material agreements.

Selected Financial Covenants:       Usual for facilities and transactions of
                                    this type (with financial definitions and
                                    levels to be agreed upon), including,
                                    without limitation, (a) maximum ratios of
                                    Total Debt to EBITDA, (b) minimum interest
                                    coverage ratios and (c) minimum net worth.

Events of Default:                  Usual for facilities and transactions of
                                    this type and others to be reasonably
                                    specified by the Agent, including, without
                                    limitation, nonpayment of principal or
                                    interest, violation of covenants,
                                    incorrectness of representations and
                                    warranties in any material respect, cross
                                    default and cross acceleration, bankruptcy,
                                    material judgments, ERISA, actual or
                                    asserted invalidity of guarantees or
                                    security documents and Change in Control (to
                                    be defined).

Voting:                             Amendments and waivers of the definitive
                                    credit documentation will require the
                                    approval of Lenders holding more than 50% of
                                    the aggregate amount of the loans and
                                    commitments under the Facility, except that
                                    the consent of each Lender adversely
                                    affected thereby shall be required with
                                    respect to, among other things, (a)
                                    increases in the commitment of such Lender,
                                    (b) reductions of principal, interest or
                                    fees, (c) extensions of final maturity and
                                    (d) releases of guarantors or all or any
                                    substantial part of the Collateral (other
                                    than in connection with any sale of
                                    Collateral permitted by the definitive
                                    credit documentation).

Cost and Yield Protection:          Usual for facilities and transactions of
                                    this type.

Assignments and Participations:     The Lenders will be permitted to assign
                                    loans and commitments to other Lenders (or
                                    their affiliates) without restriction, or to
                                    other financial institutions with the
                                    consent of the Borrower and the Agent, in
                                    each case not to be unreasonably withheld.
                                    Each

<PAGE>   17
                                                                              10

                                    assignment (except to other Lenders or their
                                    affiliates) will be in a minimum amount of
                                    $5,000,000. The Agent will receive a
                                    processing and recordation fee of $3,500,
                                    payable by the assignor and/or the assignee,
                                    with each assignment. Assignments will be by
                                    novation.

                                    The Lenders will be permitted to participate
                                    loans and commitments without restriction to
                                    other financial institutions. Voting rights
                                    of participants shall be limited to matters
                                    in respect of (a) increases in commitments,
                                    (b) reductions of principal, interest or
                                    fees, (c) extensions of final maturity and
                                    (d) releases of guarantors or all or any
                                    substantial part of the Collateral (other
                                    than in connection with any sale or
                                    collateral permitted by the definitive
                                    credit documentation).

Expenses and Indemnification:       The Borrower will indemnify the Arranger,
                                    the Agent and the other Lenders and hold
                                    them harmless from and against all costs,
                                    expenses (including reasonable fees,
                                    disbursements and other charges of counsel)
                                    and liabilities of the Arranger, the Agent
                                    and the other Lenders arising out of or
                                    relating to any claim or any litigation or
                                    other proceeding (regardless of whether the
                                    Arranger, the Agent or any other Lender is a
                                    party thereto but excluding any such claim,
                                    litigation or proceeding brought by a Lender
                                    against any other Lender (other than an
                                    agent or arranger in its capacity as such))
                                    that relates to the Transactions, including
                                    the financing contemplated hereby, the
                                    Combination, the IPO or any transactions
                                    connected therewith, provided that none of
                                    the Arranger, the Agent or any other Lender
                                    will be indemnified for any cost, expense or
                                    liability to the extent determined in the
                                    final judgment of a court of competent
                                    jurisdiction to have resulted from its gross
                                    negligence or willful misconduct. In
                                    addition, all reasonable out-of-pocket
                                    expenses of the Lenders for enforcement
                                    costs and all documentary taxes associated
                                    with the Facility are to be paid by the
                                    Borrower.

<PAGE>   18
                                                                              11

Governing Law and Forum:            New York.

Counsel to Agent and Arranger:      Cravath, Swaine & Moore.

<PAGE>   19

                                                                         ANNEX I

Interest Rates:                     The interest rates under the Facility will
                                    be, at the Borrower's option, the Alternate
                                    Base Rate or LIBOR (or, in the case of
                                    Canadian Loans under the Canadian Facility,
                                    the Canadian Prime Rate or the Bankers'
                                    Acceptance discount rate) plus the
                                    indicative Applicable Margin set forth
                                    below, in each case based upon the
                                    Borrower's ratio of Total Debt to EBITDA, as
                                    set forth in the table below:

<TABLE>
<CAPTION>
                                            ABR/ Canadian
             Total Debt/       LIBOR/BA +    Prime Rate +   Commitment
LEVEL          EBITDA            (BPS)         (BPS)         Fee (BPS)
-----   --------------------   ----------   -------------   ----------
<S>     <C>                    <C>          <C>             <C>
  1                    <1.5x      150            50             25
  2     > or = 1.5  -  <2.0x      175            75           37.5
  3     > or = 2.0  - <2.75x      200           100             50
  4     > or = 2.75 -  <3.5x      225           125             50
  5     > or =          3.5x      250           150             50
</TABLE>

                                    ; PROVIDED that until delivery of the
                                    Borrower's financial statements for the
                                    period ended September 30, 2001, the
                                    Borrower's ratio of Total Debt to EBITDA
                                    shall be deemed to be greater than 2x.

                                    The Borrower may elect interest periods of
                                    1, 2, 3 or 6 months for Adjusted LIBOR
                                    borrowings. The Canadian Borrower may elect
                                    interest periods of 30, 60 or 90 days for
                                    Bankers Acceptances.

                                    Calculation of interest shall be on the
                                    basis of the actual days elapsed in a year
                                    of 360 days (or 365 or 366 days, as the case
                                    may be, in the case of Canadian Prime Rate
                                    loans or ABR loans based on the Prime Rate)
                                    and interest shall be payable at the end of
                                    each interest period and, in any event, at
                                    least every 3 months.

                                    ABR is the Alternate Base Rate, which is the
                                    higher of CSFB's Prime Rate and the Federal
                                    Funds Effective Rate plus 1/2 of 1%.

<PAGE>   20
                                                                               2

                                    Adjusted LIBOR will at all times include
                                    statutory reserves.

                                    Canadian Prime Rate is the higher of (i) the
                                    Agent's reference rate from time to time in
                                    effect for determining interest rates on
                                    commercial loans in Canadian dollars made in
                                    Canada and (ii) the CDOR Rate for one month
                                    plus 1%.

                                    The discount rate for Bankers' Acceptances
                                    shall be the rate determined by the Agent in
                                    accordance with its normal banking practices
                                    at or around 10:00 a.m., Toronto time, on
                                    the date of issue and acceptance of the
                                    Bankers' Acceptances as the percentage
                                    discount rate at which the principal Toronto
                                    office of the Agent would be prepared to
                                    purchase bankers' acceptances having a face
                                    amount and term comparable to such Bankers'
                                    Acceptances.

Letter of Credit Fee:               A per annum fee equal to the spread over
                                    Adjusted LIBOR under the Facility will
                                    accrue on the aggregate face amount of
                                    outstanding letters of credit under the
                                    Facility, payable in arrears at the end of
                                    each quarter and upon the termination of the
                                    Facility, in each case for the actual number
                                    of days elapsed over a 360-day year. Such
                                    fees shall be distributed to the Lenders
                                    participating in the Facility pro rata in
                                    accordance with the amount of each such
                                    Lender's commitment. In addition, the
                                    Borrower shall pay to the Issuing Bank, for
                                    its own account, (a) a fronting fee to be
                                    agreed upon by the Borrower and the Issuing
                                    Bank and (b) customary issuance and
                                    administration fees.

Commitment Fees:                    0.50% per annum on the undrawn portion of
                                    the commitments in respect of the Facility,
                                    commencing to accrue upon the execution and
                                    delivery of the Credit Agreement and payable
                                    quarterly in arrears thereafter and upon the
                                    termination of the commitments, calculated
                                    based on the number of days elapsed in a
                                    360-day year, subject to change based upon
                                    the Borrower's ratio of Total Debt to
                                    EBITDA, as set forth in the table above.

<PAGE>   21
                                                                        ANNEX II

                            Sources and Uses of Funds
                           (in millions of US dollars)
                          (all figures are approximate)

<TABLE>
<S>                                             <C>
SOURCES OF FUNDS
Facility 1/                                     $ 70.7

Net IPO Proceeds                                 136.8
                                                ------

TOTAL SOURCES                                   $207.5
                                                ======

USES OF FUNDS

Refinance Existing                              $201.1
Debt and Accrued
Interest
Repurchase Shares of
Unaccredited Investors                             3.4
Transaction Costs                                  3.0
                                                ------

TOTAL USES                                      $207.5
                                                ======
</TABLE>

----------

         1/ Represents amount to be drawn under the $150,000,000 Facility on the
Closing Date.<PAGE>

                                                                     EXHIBIT 4.1

                         [LETTERHEAD OF VENTAS, INC.]

October 27, 1999

Seth Klarman
President
The Baupost Group, L.L.C.
44 Brattle Street
P.O. Box 381288
Cambridge, Massachusetts  02238

Re:  Request by The Baupost Group, L.L.C. ("TBG") for a Waiver of Certain
     Provisions of Article XII of the Certificate of Incorporation of Ventas,
     Inc. (the "Company")

Dear Mr. Klarman:

          This letter is in response to the request by TBG for an amendment of
the previously granted waiver of certain provisions of Article XII of the
Certificate of Incorporation of the Company with respect to TBG and its Advisory
Clients as described in the letter from TBG to the Company dated October 26,
1999, which is attached hereto (the "Request Letter").  Terms used herein with
an initial capital letter and not otherwise defined shall have the meaning
specified in said Article XII.

          Based upon the representations, warranties and covenants set forth in
the Request Letter, the Company hereby confirms that, effective as of April 15,
1999, the term "Ownership Limit" with respect to Common Shares shall mean,
solely as applied to TBG, its Advisory Clients, and any other person who, in
combination with TBG or the Advisory Clients, would comprise a "group" as that
term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of
1934, Beneficial Ownership of 14.9%, in number of shares or value, of the Common
Shares.

          Notwithstanding the foregoing, the ownership of the Company's Common
Shares by TBG or any of its Advisory Clients shall remain subject to the
otherwise applicable 9.0% Ownership Limit in the event that such ownership
should result in (i) any "individual" (within the meaning of Section 542(a)(2)
of the Internal Revenue Code of 1986, as amended (the "Code"), as modified by
Section 856(h) of the Code) owning (after taking into account the constructive
ownership rules of Section 544 of the Code, as modified by Section 856(h) of the
Code) in excess of 9.0% of the Common Shares or (ii) any 10.0% Company
Shareholder, alone or in combination with other 10.0% Company Shareholders,
owning (either directly or by operation of the attribution rules of Section 318
of the Code, as modified by Section 856(d)(5) of the Code), a 10.0% or greater
interest in the stock of Vencor, Inc. or in the stock, assets, or net profits of
any other present or future tenant of the Company.  For purposes of the
preceding sentence, the term "10.0% Company Shareholder" means a person who
beneficially owns 10.0% or more of the total combined voting power or total
number of shares of stock of the Company,
<PAGE>

either directly or by operation of the attribution rules of Section 318 of the
Code, as modified by Section 856(d)(5) of the Code.

          Without limiting the foregoing, the breach of any representation,
warranty or covenant contained in the Request Letter, or the failure to comply
with the covenants and undertakings in the Request Letter, shall cause the
waiver granted in this letter to become null and void, and shall cause any
Common Shares owned by TBG or its Advisory Clients in excess of the otherwise
applicable 9.0% Ownership Limit to become designated as Excess Shares under
Article XII, in addition to any other remedy available to the Company.

          Nothing in this letter shall be deemed to grant any person, other than
TBG or its Advisory Clients, permission to own securities in excess of the
Company's otherwise applicable 9.0% investment limit.

          If this letter accurately sets forth our understanding, please sign
the letter where indicated below and return a signed copy to me. This letter
shall be of no force and effect, and may be revoked at any point in time prior
to the Company's receipt of a signed copy from TBG.

                                        Very truly yours,

                                        VENTAS, INC.
                                        By: /s/ T. Richard Riney
                                            --------------------
                                            Name:  T. Richard Riney
                                            Title: Executive Vice President and
                                                   General Counsel

ACCEPTED AND AGREED
This 2nd day of
November, 2000

THE BAUPOST GROUP, L.L.C.
on behalf of itself and on behalf of its
Beneficial Owners and the Advisory Clients

By /s/ Seth Klarman
   ----------------
   Name:  Seth Klarman
   Title: President

attachment
<PAGE>

                     [LETTERHEAD OF BAUPOST GROUP, L.L.C.]

October 26, 2000

Board of Directors
Ventas, Inc.
4360 Brownsboro Road
Suite 115
Louisville, Kentucky 40207-1642

Re:  Request by The Baupost Group, L.L.C. for Waiver to Provisions of Article
     XII of the Certificate of Incorporation of Ventas, Inc. (the "Company")

To the Directors of Ventas, Inc.:

     The Baupost Group, L.L.C. ("TBG") is an investment advisor registered under
the Investment Advisers Act of 1940.  The "Advisory Clients" listed in Exhibit A
hereto, together with TBG, currently own, in the aggregate, 7,138,546 shares of
the outstanding common stock, (the "Common Shares") of the Company (the
"Shares").  Pursuant to advisory contracts with the Advisory Clients, TBG
exercises sole voting and investment discretion over such shares.  No other
person who would constitute, along with TBG or with any one or more of the
Advisory Clients, a "group" as that term is used for purposes of Section
13(d)(3) ("Section 13(d)") of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") owns any shares of the Company.  Because that portion of
the Shares which exceed the Ownership Limit (capitalized terms in this letter
are used as defined in Article XII of the Certificate of Incorporation of the
Company) is subject to being designated as Excess Shares under Article XII, TBG
requests that the Board of Directors of the Company (the "Board") grant a waiver
to TBG and the Advisory Clients from certain of the provisions of Article XII
that relate to limitations upon ownership of Common Shares, so that TBG, its
Advisory Clients, and any other Person who would constitute, along with TBG or
any Advisory Client, a "group" as that term is used for purposes of Section
13(d) of the Exchange Act may Beneficially Own, in the aggregate, up to 14.9%,
in number of shares or value, of the Common Shares.

     In consideration and as a condition to such waiver, each of TBG and the
Advisory Clients agree that it shall not take any of the actions described below
with respect to any Additional Shares for so long as such shares shall
constitute Additional Shares or until any of the Events (as defined below) shall
occur. "Additional Shares" shall mean the number of Common Shares owned by all
of TBG, the Advisory Clients and any other persons who would constitute, along
with TBG or any Advisory Client, a "group" under Section 13(d), that exceeds
9.0% of the Common Shares of the Company outstanding. The undersigned has the
legal authority to bind each Advisory Client and the Beneficial Owners of TBG to
the terms of this letter and the related Waiver. With respect to Additional
Shares, TBG shall not, and it shall not permit any Advisory Clients to:

     (a)  Solicit proxies from stockholders of the Company, the power to vote,
become a "participant" in any "election contest" (as such terms are used in Rule
14a-11 of the Exchange Act), with respect to the Company, or make any
communication (other than as required by law)
<PAGE>

referred to in Rule 14a-1(l)(2)(iv) of the Exchange Act in connection with any
election contest or other vote by stockholders of the Company or otherwise that
is contrary to or conflicts with actions taken or omitted or to be omitted by
the Board;

     (b) Seek or vote for the removal of any member of the Board, except removal
"for cause" as such term is used under the Delaware General Corporation Law;

     (c) Vote for any individual nominated for election to the Board other than
those individuals nominated by the Board or a committee thereof;

     (d) Call or seek to have called any meeting of the stockholders of the
Company; or

     (e) Otherwise act, alone or in concert with others (i) by voting to
solicit, propose, or approve any business combination with the Company, (ii) by
voting to solicit, propose or approve any tender offer or exchange offer for any
voting securities of the Company, or (iii) by voting in a manner which would
otherwise assist or facilitate any effort or attempt by any persons to do or
seek to do any of the foregoing.

     Notwithstanding anything herein to the contrary, with respect to Additional
Shares, TBG and its Advisory Clients shall not be prohibited from engaging in
the activities set forth in sections (a) through (e) above at any time after any
of the following events (the "Events") shall occur:

     (a) either Douglas Crocker II or Debra A. Cafaro shall cease to serve as a
director of the Company;

     (b) Debra A. Cafaro shall cease to serve as Chief Executive Officer of the
Company;

     (c) a voluntary or involuntary bankruptcy proceeding shall be commenced by
or against the Company; or

     (d) the average "closing price" of the Company's Common Shares for any
twenty consecutive trading day period shall be less than $2.25 per share
("closing price" shall mean the last sale price, regular way, as reported in the
principal consolidated transaction reporting system where the Common Shares are
listed or admitted to trading or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, the last quoted price,
or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System, or if the Common Shares are not
traded, such amount as an independent investment banking firm, mutually selected
by the Company and TBG, determines to be the value of a Common Share).

     In support of its request, TBG hereby makes the following representations,
warranties and covenants:

     1.  The name and taxpayer identification number ("TIN") of each Advisory
Client of TBG is set forth in Exhibit A. Exhibit A shows, as of the date hereof,
the amount of
<PAGE>

Common Shares purchased on behalf of each such Advisory Client and the number of
shares beneficially owned by TBG, none of which exceeds 9.0%.

     2.  In excess of 99% of the ownership interest in each of HB, PB, and YB
respectively, is owned by a single (but different with respect to each of HB, PB
and YB) educational organization described in Section 170(b)(1)(A)(ii) of the
Code, or its affiliated support organization described in Section 509(a)(3) of
the Code. No Person (as defined in Article XII) Beneficially Owns, or is
believed by TBG to be likely to Beneficially Own in the future, 5% or more of
the outstanding shares (or other ownership interest) of any of the other
Advisory Clients.

     3.  TBG is a limited liability company organized under Massachusetts law.
Seth A. Klarman beneficially owns an approximate 65% interest in TBG. William J.
Poorvu owns an approximate 16.66% interest in TBG. No interests in TBG are owned
by any member of Seth Klarman's Family, any member of Mr. Poorvu's Family, any
Klarman-Related Entities, or any Poorvu-Related Entities. For this purpose,
members of an individual's "Family" include the individual's spouse, siblings,
half-siblings, ancestors, and lineal descendants, and the term "Related
Entities," when used with respect to an individual, includes any trust, estate,
partnership, limited liability company, or corporation in which such individual
and/or a member of such individual's Family is a beneficiary, partner, member or
shareholder owning a 5% or greater interest. No person or entity beneficially
owns an interest in TBG of 5% or more except as specifically described in this
paragraph.

     4.  Neither the Beneficial Owners of TBG, TBG, nor any of its Advisory
Clients, taken separately or taken together in any combination, are, and will
not in the future be, partners in any partnership between or among any two or
more of them as determined for federal income tax purposes which partnership
Beneficially Owns any of the Company's Common Stock. TBG currently does not
Beneficially Own (within the meaning of Article XII), and will not at any time
in the future Beneficially Own, more than 9.0% of the Company's Common Shares
(excluding for this purpose its Beneficial Ownership of Common Shares in excess
of such amounts to the extent such Beneficial Ownership results solely from its
being treated, along with the Advisory Clients, as a "group" under Section 13(d)
of the Exchange Act).

     5.  TBG currently does not own, either actually or under the constructive
ownership rules of Section 318 of the Code, as modified by Section 856(d)(5) of
the Code, any stock of Vencor, Inc. ("Vencor"). In the future, the TBG will not
Beneficially Own and no Advisory Client will Beneficially Own more than 9.0% of
any stock of Vencor or any options to acquire any stock of Vencor (including
convertible debt) while Beneficially Owning more than 9.0% of the Company's
common stock. In addition, TBG will not acquire, on behalf of itself or any of
the Advisory Clients, an interest representing 5% or more of (i) the voting
power, value or total number of shares of the stock of any tenant of the Company
that is a corporation or (ii) the assets or net profits of any tenant of the
Company that is an entity other than a corporation.

     6.  Seth Klarman, together with members of his Family and all Klarman-
Related Entities, currently do not Beneficially Own, and will not at any time in
the future
<PAGE>

Beneficially Own, more than 9.0% of the Common Shares (excluding for this
purpose their Beneficial Ownership of Common Shares in excess of such amounts to
the extent such Beneficial Ownership results solely from their being treated,
along with TBG and its Advisory Clients, as a "group" under Section 13(d) of the
Exchange Act).

     7.  Seth Klarman, together with members of his Family and all Klarman-
Related Entities, currently do not beneficially own, either actually or under
the constructive ownership rules of Section 318 of the Code, as modified by
Section 856(d)(5) of the Code, any stock of Vencor. In the future, Seth Klarman
will not acquire, on behalf of himself, any member of his Family, or any
Klarman-Related Entity which he controls, any stock of Vencor or any options to
acquire any stock of Vencor (including convertible debt). In addition, Mr.
Klarman, together with members of his Family and all Klarman-Related Entities
which he controls, will not acquire any interest representing 5% or more of (i)
the voting power, value or total number of shares of the stock of any tenant of
the Company that is a corporation or (ii) the assets or net profits of any
tenant of the Company that is an entity other than a corporation.

     8.  TBG will limit the aggregate Beneficial Ownership (as defined in
Article XII) by it and any Person who would constitute, along with TBG or any
Advisory Client, a "group," as that term is used for purposes of Section 13(d)
of the Exchange Act, of the Common Shares to no more than 14.9%, in number of
shares or value, of the Common Shares.

     9.  To the best of TBG's knowledge: (i) no single Advisory Client or
combination of Advisory Clients with a mutual 10.0% or greater owner,
Beneficially Owns more than 9.0% of the Common Shares, (ii) no single Advisory
Client currently beneficially owns (either directly or under the attribution
rules of Section 318 of the Code, as modified by Section 856(d)(5) of the Code)
any shares of stock of Vencor, and (iii) none of the educational organizations
or affiliated support organizations described in paragraph 2 currently
beneficially owns (either directly or under the attribution rules of Section 318
of the Code, as modified by Section 856(d)(5) of the Code), 5% or more of the
outstanding shares of stock of Vencor.

     10. Notwithstanding any other provision of this letter or the related
waiver, if any 10.0% or greater Beneficial Owners of TBG, TBG, its Advisory
Clients, or any other person would, along with TBG or any of them, either
constitute a "group" under Section 13(d)(3) or a partnership for federal income
tax purposes, Beneficially Owns (excluding for this purpose Beneficial Ownership
of Common Stock that results solely from being treated as part of a "group"
under Section 13(d)) more than 9.0% of the stock of the Company while
Beneficially Owning, singly or taken together in any combination, more than 9%
of the stock, warrants, options, convertible debt or any other rights to acquire
the stock of Vencor, Inc. or any other tenant of the Company, the Additional
Shares owned will be automatically designated as "Excess Shares" under Article
XII. Such designation will be effective as of the close of business on the
business day prior to the date of the relevant event.

     11. TBG and any Person who would constitute, along with TBG or any Advisory
Client, a "group" under Section 13(d) of the Exchange Act, will comply with the
terms of Article XII, except as expressly waived by the Board.
<PAGE>

     TBG understands that the breach of any representation, warranty or covenant
contained herein or the failure to comply with its covenants and undertakings in
this letter, in addition to any other remedy available to the Company, subjects
the Additional Shares to being designated as "Excess Shares" under Article XII.
In such event, any waiver granted by the Board shall terminate and the Company
may proceed in any manner permitted under Article XII.

     Upon acceptance of this letter by you, this letter shall supersede our
letter dated April 15, 1999, which was accepted by you on April 15, 1999, which
shall be of no further force and effect.

                                        Very truly yours,

                                        THE BAUPOST GROUP, L.L.C.
                                        on behalf of itself and on behalf of its
                                        Beneficial Owners and the Advisory
                                        Clients

                                        By: /s/ Seth Klarman
                                            ----------------
                                            Name:  Seth Klarman
                                            Title: President
<PAGE>

                                   EXHIBIT A

<TABLE>
<CAPTION>
                                                                                   Number of
                                                                                   Common
Name of Advisory Client                                      T.I.N.                Shares
-------------------------------------------------------      -------------         ---------
<S>                                                          <C>                   <C>
1.  The Baupost Fund (the "Fund")/1/                         04-6655157              496,850
2.  Baupost Limited Partnership 1983 A-1 ("A")               04-2780320              768,400
3.  Baupost Limited Partnership 1983 B-1 ("B")               04-2780324              362,500
4.  Baupost Limited Partnership 1983 C-1 ("C")               04-2780321            2,356,696
5.  Baupost Limited Partnership 1987 F-1 ("F")               04-2982721                    0
6.  HB Institutional Limited Partnership ("HB")              04-3425685            1,973,250
7.  PB Institutional Limited Partnership ("PB")              04-3425688              821,550
8.  YB Institutional Limited Partnership ("YB")              04-3431530              359,300

Investment Adviser
------------------
The Baupost Group, L.L.C. ("TBG")                            04-3402144                    0
</TABLE>

___________________

/1/  The Fund, a Massachusetts business trust, is an open-end management
     investment company registered under the Investment Company Act of 1940, as
     amended that has elected to be taxed as a regulated investment company
     under the Code.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}]]