EXHIBIT 10.3.5
MEZZANINE PLEDGE AND SECURITY AGREEMENT
THIS MEZZANINE PLEDGE AND SECURITY AGREEMENT, dated as of November 1,
2002 (as amended, restated, replaced, supplemented or otherwise modified from
time to time, the "Security Agreement"), is made by THI OF OHIO SNFS, LLC (the
"Ohio Pledgor"), THI OF MARYLAND SNFS I, LLC (the "Maryland I Pledgor") and THI
OF MARYLAND SNFS II, LLC (the "Maryland II Pledgor"), each a Delaware limited
liability company, and each having an address at 0000 Xxxxxxx Xxxx, Xxxxx 000,
Xxxx Xxxx, Xxxxxxxxxxxx 00000 (each a "Pledgor" and collectively, the
"Pledgors"), in favor of VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware limited
partnership (together with its successors and assigns, "Secured Party").
RECITALS
A. WHEREAS, Ventas Realty, Limited Partnership, a Delaware limited
partnership, in its capacity as the mortgage lender, is making a first-priority
mortgage loan (the "Mortgage Loan") to those entities listed as a "Mortgage
Borrower" on Schedule I attached hereto, each a Delaware limited liability
company (each a "Mortgage Borrower" and collectively the "Mortgage Borrowers")
in the maximum principal amount of $55,000,000;
B. WHEREAS, the Ohio Pledgor owns one hundred percent (100%) of the
membership interests in each of the Mortgage Borrowers listed under its name on
Schedule I attached hereto (each, an "Ohio Mortgage Borrower" and collectively
the "Ohio Mortgage Borrowers");
C. WHEREAS, the Maryland I Pledgor owns one hundred percent (100%) of the
membership interests in each of the Mortgage Borrowers listed under its name on
Schedule I attached hereto (each, a "Maryland Mortgage Borrower" and
collectively the "Maryland Mortgage Borrowers");
D. WHEREAS, the Maryland II Pledgor owns one hundred percent (100%) of the
membership interests in each of THI of Maryland at Franklin Square, LLC and THI
of Maryland at Fort Washington, LLC (each, a "Maryland Leasehold Entity" and
collectively, the "Maryland Leasehold Entities"; the Maryland Leasehold Entities
and the Mortgage Borrowers are referred to herein individually as, an "Existing
Company" and collectively as, the "Existing Companies" and each corporation,
limited liability company, limited partnership, general partnership or other
entity which may hereafter be formed by any Pledgor, together with each Existing
Company is referred to herein as, a "Company" and collectively as, the
"Companies");
E. WHEREAS, concurrently with the mortgage loan referred to in Recital A
above, Secured Party is making a mezzanine loan (the "Mezzanine Loan") to the
Pledgors and the Other Mezzanine Borrowers (as hereinafter defined) in the
initial principal amount of $22,000,000;
F. WHEREAS, all of the agreements, instruments and other documents which
govern, evidence and/or secure the Mezzanine Loan, as the same may from time to
time hereafter be modified, supplemented or amended, are hereinafter referred to
as the "Mezzanine Loan Documents", and capitalized terms used herein, unless
otherwise defined herein, shall have the meanings ascribed thereto in that
certain Mezzanine Loan Agreement by and among the Pledgors, the Other Mezzanine
Borrowers and Secured Party executed concurrently herewith (as the same may from
time to time hereafter be modified, supplemented or amended, the "Mezzanine Loan
Agreement"); and
G. WHEREAS, as a condition precedent to making the Mezzanine Loan, Secured
Party has required, among other things, that this Security Agreement be executed
and delivered by each of the Pledgors;
NOW THEREFORE, in consideration of the foregoing, and in order to
induce the Secured Party to make the Mezzanine Loan to the Pledgors and the
Other Mezzanine Borrowers, and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, each of the
Pledgors and Secured Party, intending to be legally bound, do hereby agree as
follows:
1. Definitions. As used in this Security Agreement, the following
terms have the meanings set forth in or incorporated by reference below:
(a) "Code" means the Uniform Commercial Code from time to time in
effect in the State of New York
(b) "Other Mezzanine Borrowers" means, collectively, THI of Ohio
ALFs I, LLC; THI of Ohio at Kent, LLC; THI of Ohio at Cortland, LLC; THI of Ohio
at Berea, LLC; THI of Maryland at Franklin Square, LLC and THI of Maryland at
Fort Washington, LLC, each a Delaware limited liability company.
(c) "Pledged Company Interests" means the regular membership
interests, limited partnership interests or general partnership interests of any
Pledgor in each Company, together with all membership or partnership interest
certificates, options or rights of any nature whatsoever which may be issued or
granted by such Company, while this Security Agreement is in effect.
(d) "Proceeds" means all "proceeds" as such term is defined in
Section 9-306(1) of the Code on the date hereof and, in any event, shall
include, without limitation, all dividends or other income from the Pledged
Company Interests, collections thereon or distributions with respect thereto.
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2. Pledge, Security Interest And Assignment of Limited Liability
Company Distributions.
(a) As security for the full and punctual payment when due
(whether upon stated maturity, by acceleration or otherwise) of the Mezzanine
Loan and the full and faithful payment, performance and observance by each
Pledgor of all obligations to be paid, performed or observed by such Pledgor
under the Mezzanine Loan Documents (collectively, the "Secured Obligations"),
each Pledgor hereby grants and pledges to Secured Party, as pledgee, a first
priority and continuing lien on, and a first priority and continuing security
interest in, and, in furtherance of such grant and pledge, hereby transfers and
assigns to Secured Party as collateral security, all of its right, title and
interest in, to and under, and/or with respect to, and/or arising from or out
of, the following, whether now owned or hereafter acquired, whether now existing
or hereafter arising and wherever located (collectively, the "Pledged
Collateral"):
(i) all of Pledgor's right, title and interest in and to the
Pledged Company Interests;
(ii) all rights, privileges, authority and power arising
from Pledgor's interest in each Company (provided, however, that, so long as no
Event of Default exists, Pledgor may exercise such rights, privileges, authority
and power vested in Pledgor as a member of such Company);
(iii) the capital of Pledgor in each Company and any and all
profits, losses, distributions and allocations attributable thereto as well as
the proceeds of any distribution thereof, whether arising under the terms of any
of the following documents, as applicable (each an "Organizational Document" and
collectively, the "Organizational Documents"): articles of incorporation,
certificate of formation, certificate of organization, by-laws, limited
partnership agreement, limited liability company agreement, stock certificates,
certificates of limited partnership interests or general partnership interests
(if any), certificates of limited liability company membership interests (if
any), and all amendments or modifications of any of the foregoing, and all other
agreements, instruments and/or other organizational or governing documents of or
relating to each Company;
(iv) all other payments, if any, due or to become due to
Pledgor in respect of the Pledged Collateral, under or arising out of any
Organizational Document of any Company, or otherwise, whether as contractual
obligations, damages, insurance proceeds, condemnation awards or otherwise
(including, without limitation, all amounts deposited and/or to be deposited in
the Cash Management Account (as defined in the Mezzanine Loan Agreement) and all
other cash collateral for the Mezzanine Loan);
(v) all of Pledgor's claims, rights, powers, privileges,
authority, options, security interests, Liens and remedies, if any, under or
arising out of the ownership of the Pledged Collateral;
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(vi) all present and future claims, if any, of Pledgor
against any Company for monies loaned or advanced, for services rendered or
otherwise;
(vii) all of Pledgor's rights pursuant to any Organizational
Document of any Company or at law, to exercise and enforce every right, power,
remedy, authority, option and privilege of Pledgor relating to the Pledged
Company Interests, including the right to execute any instruments and to take
any and all other action on behalf of and in the name of Pledgor in respect of
the Pledged Company Interests and/or such Company to make determinations, to
exercise any election (including, but not limited to, election of remedies) or
option or to give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive, enforce or collect
any of the foregoing or any property of such Company, to enforce or execute any
checks, or other instruments or orders and to file any claims and to take any
action in connection with any of the foregoing;
(viii) all Investment Property (as such term is defined in
the Code) issued by, or relating to, any Company, as applicable;
(ix) all equity interests or other property now owned or
hereafter acquired by Pledgor as a result of exchange offers, recapitalizations
of any type, contributions to capital, options or other rights relating to the
Pledged Collateral; and
(x) to the extent not otherwise included, all Proceeds of
any or all of the foregoing, as applicable.
(b) Concurrently with the execution of this Security Agreement,
(i) each of the Pledgors shall deliver to Secured Party, for filing, all UCC-1
financing statements in proper form necessary to perfect the security interests
granted hereunder in all jurisdictions deemed relevant by Secured Party
(collectively, the "Financing Statements"), and each of the Pledgors agrees to
pay any and all fees or other charges relating to the filing of the Financing
Statements and hereby authorizes and instructs Secured Party to make such
payments by deducting from the proceeds of the Mezzanine Loan advanced to the
Pledgors the full amount of such fees or other charges.
(c) (i) With respect to each Ohio Mortgage Borrower, the Ohio
Pledgor shall deliver to Secured Party a sole original executed certificated
security in registered form which represents the sole limited liability company
membership interest in such Ohio Mortgage Borrower, (ii) with respect to each
Maryland Mortgage Borrower, the Maryland I Pledgor shall deliver to Secured
Party a sole original executed certificated security in registered form which
represents the sole limited liability company membership interest in such
Maryland Mortgage Borrower, and (iii) with respect to each Maryland Leasehold
Entity, the Maryland II Pledgor shall deliver to Secured Party a sole original
executed certificated security in registered form which represents the sole
limited liability company membership interest in such Maryland Leasehold Entity.
Attached hereto as Exhibit A is a copy of each of the certificates to be
delivered to Secured Party pursuant to the immediately preceding sentence (each,
a "Certificate" and collectively, the "Certificates"). Each Certificate shall be
duly "indorsed in blank" within
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the meaning of the Code in a manner sufficient to provide Secured Party with
"control" of such certificated security within the meaning of Section 8-106 of
the Code.
(d) That portion of the Pledged Collateral which is comprised of
all distributions or other payments or receipts of cash or other property
(including, but not limited to, Investment Property or other property described
in Section 2(a)(viii) or Section 2(a)(ix) hereof) received by any Pledgor
directly or indirectly from any Company is referred to hereinafter sometimes as
the "Distributions". Notwithstanding anything to the contrary set forth in this
Security Agreement, with respect to the Distributions, subject to the other
provisions of the Mezzanine Loan Documents, this Security Agreement constitutes
a present, and current assignment of the Distributions effective upon the
execution and delivery hereof. Accordingly, if any Pledgor shall at any time
during a Cash Management Period receive, irrespective of whether or not such
receipt occurs before or after an Event of Default, one or more Distributions
(including, but not limited to, any distribution of the items of Pledged
Collateral referred to in Section 2(a)(viii) or Section 2(a)(ix) above), such
funds or property shall be held by such Pledgor in trust for Secured Party and
delivered within three (3) Business Days to Secured Party (duly endorsed in
blank in the case of certificated securities in registered form (within the
meaning of relevant Sections of the Code)) for application by Secured Party in
accordance with Section 11 hereof.
3. Representations and Warranties. Each Pledgor represents and
warrants as of the date hereof that:
(a) no authorization, consent of or notice to any other Person
(including, without limitation, any member, partner, shareholder or creditor of
Pledgor, or of any Company) that has not been obtained, is required in
connection with the execution, delivery, performance, validity or enforceability
of this Security Agreement including, without limitation, the assignment and
transfer by Pledgor of any of the Pledged Collateral to Secured Party or the
subsequent transfer thereof by Secured Party pursuant to the terms hereof;
(b) the Pledged Company Interests constitute all the issued and
outstanding equity, membership interests, limited partnership interests, general
partnership interests or capital stock, as the case may be, in each Company;
(c) Pledgor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Company Interests pledged by it, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the Lien created by this Security Agreement;
(d) upon the filing of the UCC-1 financing statements referred to
in Section 2(b) and delivery of the Certificates referred to in Section 2(c),
the Lien granted pursuant to this Security Agreement will constitute a valid,
perfected first priority Lien on the Pledged Company Interests and related
Proceeds, enforceable as a valid, perfected first priority Lien against all
creditors of Pledgor and any Persons purporting to purchase any Pledged Company
Interests and related Proceeds from Pledgor;
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(e) the exact name of Pledgor is as set forth in the introductory
paragraph of this Security Agreement;
(f) Pledgor is organized under the laws of the State of Delaware;
(g) the principal place of business and chief executive office of
Pledgor is located at 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxxxxxxx
00000; and
(h) the Ohio Mortgage Borrowers represent all the existing direct
and indirect subsidiaries of the Ohio Pledgor, the Maryland Mortgage Borrowers
represent all the existing direct and indirect subsidiaries of the Maryland I
Pledgor and the Maryland Leasehold Entities represent all the existing direct
and indirect subsidiaries of the Maryland II Pledgor ; and
(i) there are no shareholder, partnership or member agreements or
other Organizational Documents, as applicable, which limit the rights of any
Pledgor to pledge the Pledged Collateral or limit the ability of Lender to
exercise any of its rights with respect to the Pledged Collateral.
4. Covenants. Each Pledgor covenants and agrees with Secured Party
that, from and after the date of this Security Agreement until the Mezzanine
Loan (exclusive of any indemnification or other obligations which are expressly
stated in any of the Mezzanine Loan Documents to survive satisfaction of the
Mezzanine Loan Documents) is paid in full:
(a) if Pledgor shall, as a result of its ownership of the Pledged
Company Interests, become entitled to receive or shall receive any stock
certificate, limited partnership or general partnership certificate, or regular
membership certificate, as applicable (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights, whether in addition to,
in substitution of, as a conversion of, or in exchange for any of the Pledged
Company Interests, or otherwise in respect thereof, Pledgor shall accept the
same as Secured Party's agent, hold the same in trust for Secured Party and
deliver the same forthwith to Secured Party in the exact form received, duly
endorsed by Pledgor to Secured Party, if required, together with an undated
stock, regular limited partnership or general partnership interest, or
membership interest power covering such certificate duly executed in blank and
with signature guaranteed if Secured Party shall so request, to be held by
Secured Party hereunder as additional security for the Mezzanine Loan. Any sums
paid upon or in respect of the Pledged Company Interests upon the liquidation or
dissolution of any Company shall be paid over to Secured Party to be held by it
hereunder as additional security for the Mezzanine Loan, and in case any
distribution of capital shall be made on or in respect of the Pledged Company
Interests or any property shall be distributed upon or with respect to the
Pledged Company Interests pursuant to the recapitalization or reclassification
of the capital of any Company or pursuant to the reorganization thereof, the
property so distributed shall be delivered to Secured Party to be held by it,
subject to the terms hereof, as additional security for the Mezzanine Loan. If
any sums of money or property so paid or distributed in respect of the Pledged
Company Interests shall be received by Pledgor, Pledgor shall, until such money
or property is paid or delivered to Secured Party, hold such
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money or property in trust for Lender, segregated from other funds of Pledgor,
as additional security for the Mezzanine Loan.
(b) Without the prior written consent of Secured Party, Pledgor
shall not, directly or indirectly, (i) vote to enable, or take any other action
to permit, any Company to issue any limited or general partnership interests,
membership interests or shares, as applicable, or to issue any other securities
convertible into, or to grant the right to purchase or exchange for, any limited
or general partnership interests or membership interests, as applicable, in any
Company, or (ii) except as permitted by the Mezzanine Loan Agreement, sell,
assign, transfer, exchange or otherwise dispose of, or grant any option with
respect to, the Pledged Collateral, or (iii) create, incur, authorize or permit
to exist any Lien or option in favor of, or any claim of any Person with respect
to, any of the Pledged Collateral, or any interest therein, except for the Lien
provided for by this Security Agreement. Pledgor shall defend the right, title
and interest of Secured Party in and to the Pledged Collateral against the
claims and demands of all Persons whomsoever.
(c) If any amount payable under or in connection with any of the
Pledged Collateral shall be or become evidenced by any promissory note, other
instrument or chattel paper, such note, instrument or chattel paper shall be
promptly delivered to Secured Party, duly endorsed in a manner satisfactory to
Secured Party, to be held as Pledged Collateral pursuant to this Security
Agreement.
(d) Pledgor (i) will not, and will not permit any Company to,
create, incur or permit to exist, (ii) will, and will cause each Company to,
defend the Pledged Company Interests against, and (iii) will, and will cause
each Company to, take all such other action as is necessary to remove, any Lien
or claim on or to the Pledged Company Interests, other than the Liens created
hereby. Pledgor will, and will cause each Company to, defend the right, title
and interest of Secured Party in, to and under the Pledged Company Interests
against the claims and demands of all Persons whomsoever.
(e) Pledgor will furnish and will cause each Company to furnish
to Secured Party from time to time statements and schedules further identifying
and describing the Pledged Company Interests and such other reports in
connection with the Pledged Company Interests as Secured Party may reasonably
request, all in reasonable detail.
(f) Pledgor will not, and will not permit any Company to (unless
(i) it shall have given thirty (30) days' prior written notice to such effect to
Secured Party and (ii) all action necessary or advisable, in Secured Party's
opinion, to protect and perfect the Liens and security interests intended to be
created hereunder with respect to the Pledged Company Interests shall have been
taken): (A) change the location of its chief executive office or principal place
of business from that specified in Section 3 above, or (B) change its name,
identity or structure, or (c) reorganize or reincorporate under the laws of
another jurisdiction.
(g) Pledgor shall pay, and save Secured Party harmless from, any
and all liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise,
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sales or other taxes which may be payable or determined to be payable with
respect to any of the Pledged Collateral or in connection with any of the
transactions contemplated by this Security Agreement.
5. Indemnification.
(a) Each Pledgor shall indemnify and hold harmless Secured Party
and its directors, officers, employees, agents and contractors from and against
any and all liability, loss, expense, cost or damage which any of them may
suffer or incur and which arises out of or results from:
(i) this Security Agreement, the grant, pledge and
assignment of security hereunder, the receipt of Distributions, and/or the
exercise of any right, remedy or power hereunder, except to the extent that it
is finally judicially determined that any such liability, loss, expense, cost or
damage resulted from the gross negligence, fraud or willful misconduct of any
indemnified person; or
(ii) any claim or any alleged obligation, liability or duty
on the part of Secured Party to perform or discharge on behalf of Pledgor any
obligation, liability or duty of Pledgor which arises or accrues prior to the
date, if ever, on which Secured Party acquires title to the Pledged Collateral
by foreclosure, assignment in lieu of foreclosure or otherwise.
(b) Each Pledgor shall reimburse each person indemnified under
this Section 5 within ten (10) Business Days after demand by Secured Party or
such indemnified person for the full amount of any indemnity to which such
person may be entitled hereunder, which shall include all of such person's
reasonable costs and expenses with respect thereto (including, without
limitation, court costs and reasonable attorneys' fees and related expenses as
and when incurred), and the full amount of Pledgor's indemnity obligation shall
be considered to be a Secured Obligation and shall be secured hereby. The
indemnity set forth in this Section 5 shall survive the termination of this
Security Agreement.
(c) Notwithstanding anything contained herein or in any of the
other Mezzanine Loan Documents to the contrary, no Pledgor will be liable for
any losses described in this Section 5, which occur following the effective date
of a transfer of title to the Pledged Collateral to Secured Party or its
Affiliates, in foreclosure or otherwise.
(d) The occurrence of an "Event of Default" under and as defined
in the Mezzanine Loan Agreement or in any of the other Mezzanine Loan Documents
shall constitute an event of default by each Pledgor hereunder (an "Event of
Default").
6. Remedies. If an Event of Default shall occur and be continuing:
(a) Secured Party, without obligation to resort to any other
security, right or remedy granted under any other agreement or instrument, shall
have the right, in addition
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to all rights, powers and remedies of a secured party pursuant to the Code
and/or any other applicable laws, to, at any time and from time to time, (i)
cause any part or all of the Pledged Collateral to be registered in or
transferred into the name of Secured Party or into the name of a nominee or
nominees, or designee or designees, of Secured Party, and/or (ii) apply the
cash, if any, then held by it as Pledged Collateral in reduction of the Secured
Obligations in accordance with the terms of the Mezzanine Loan Agreement, and/or
(iii) sell, resell, assign and deliver, in its sole and absolute discretion, any
or all of the Pledged Collateral (whether in whole or in part and at the same or
different times) and all right, title and interest, claim and demand therein and
right of redemption thereof, at public or private sale, for cash and/or with
credit provided by Secured Party, and in connection therewith Secured Party may
grant options and may impose conditions such as requiring any purchaser to
represent that any "securities" (within the meaning of the Federal securities
laws) constituting any part of the Pledged Collateral are being purchased for
investment only, and in connection with any of the foregoing described in clause
(iii), each Pledgor hereby irrevocably waives and releases any and all rights of
redemption. If all or any part of the Pledged Collateral is sold by Secured
Party upon credit provided by Secured Party, Secured Party shall not be liable
for the failure of the purchaser to purchase or pay for the same and, in the
event of any such failure, Secured Party may freely resell such Pledged
Collateral. Secured Party may exercise its rights with respect to less than all
of the Pledged Collateral, leaving unexercised its rights with respect to the
remainder of the Pledged Collateral; such partial exercise shall in no way
restrict or jeopardize Secured Party's right to exercise its rights with respect
to all or any part of the remaining Pledged Collateral at a later time or times.
Secured Party may, instead of the power of sale herein conferred upon it,
proceed by a suit or suits at law or in equity to foreclose all or any part of
the security interests in the Pledged Collateral and sell the Pledged
Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.
(b) Secured Party may exercise, either by itself or by its
nominee or designee, in the name and place of any Pledgor, the rights, powers
and remedies granted to Secured Party under Section 2(a) hereof, including but
not limited to Section 2(a)(ii) hereof, in respect of the Pledged Collateral.
Such rights, powers and remedies shall include, without limitation, the right to
exercise all voting, consent, managerial and other rights relating to the
Pledged Collateral, whether in such Pledgor's name or otherwise, and the right
to exercise such Pledgor's rights, if any, of conversion, exchange, subscription
or any other rights, privileges or options pertaining to any of the Pledged
Collateral, including, without limitation, the right to exchange, at its
discretion, any and all of the Pledged Collateral upon the merger,
consolidation, reorganization, recapitalization or other readjustment of any
Company, all without liability, except to account for property actually received
by Secured Party.
(c) Each Pledgor hereby irrevocably authorizes and empowers
Secured Party, and assigns and transfers to Secured Party, and constitutes and
appoints Secured Party and any of its assigns, its true and lawful
attorney-in-fact, and as its agent, irrevocably, with full power of substitution
for it and in its name, in order to more fully vest in Secured Party the rights
and remedies provided for herein, and each Pledgor, further authorizes and
empowers Secured Party and any of its assigns, as its attorney-in-fact, and as
its agent, irrevocably, with full
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power of substitution for it and in its name, to proceed from time to time in
Pledgor's name in any statutory or non-statutory legal or other proceeding,
including but not limited to any bankruptcy proceeding, affecting Pledgor or the
Pledged Collateral, and Secured Party, any of its assigns or their respective
nominees or designees, may in connection herewith (i) execute and file proofs of
claims relating to the Pledged Collateral and vote such claims for all or any
portion of the Pledged Collateral (x) for or against any proposal or resolution,
(y) for a trustee or trustees or for a receiver or receivers or for a committee
of creditors and/or (z) for the acceptance or rejection of any proposed
arrangement, plan or reorganization, composition or extension, and Secured Party
or its nominee or designee may receive any payment or distribution and give
acquittance therefor and may exchange or release any portion or all of the
Pledged Collateral; and (ii) endorse any draft or other instrument for the
payment of money, execute releases and negotiate settlements. Nothing contained
in the foregoing provisions of this Section 6(c) shall be deemed or construed to
be a limitation on, or waiver by Secured Party of, any of Secured Party's other
rights or remedies hereunder or under any of the other Mezzanine Loan Documents,
including, without limitation, pursuant to the provisions of the Mezzanine Loan
Agreement. Secured Party shall have no duty to exercise any of the aforesaid
rights, privileges or options and shall not be responsible for any failure to do
so or delay in so doing. The foregoing powers of attorney are irrevocable and
coupled with an interest, and any similar or dissimilar powers heretofore given
by any Pledgor in respect of the Pledged Collateral to any other person other
than Secured Party are hereby revoked. The power of attorney granted herein
shall terminate automatically upon the termination of this Security Agreement in
accordance with Section 15 hereof.
(d) Secured Party may at any time and from time to time, without
notice to, or assent by, any Pledgor or any other person, but without affecting
any of the Secured Obligations, in the name of such Pledgor or in the name of
Secured Party (i) notify any other party to make payment and performance with
respect to any item of Pledged Collateral directly to Secured Party, (ii) extend
the time of payment and performance of, compromise or settle for cash, credit or
otherwise, and upon any terms and conditions, any obligations owing to such
Pledgor, or claims of such Pledgor under any of the Organizational Documents of
any Company, (iii) file any claims, and/or commence, maintain or discontinue any
actions, suits or other proceedings deemed by Secured Party to be necessary or
advisable for the purpose of collecting upon or enforcing any of the
Organizational Documents of any Company, and (iv) execute any instrument and do
all other things deemed necessary and proper by Secured Party to protect and
preserve and realize upon the Pledged Collateral or any portion thereof and the
other rights contemplated hereby.
(e) Secured Party may without notice to, or the consent of, any
Pledgor require (i) that any and all Distributions, and/or other distributions
or payments of any type payable to such Pledgor with respect to all or any part
of the Pledged Collateral be paid to Secured Party and/or its nominees, and/or
(ii) that Secured Party or its nominee, designee, agent or assignee be
substituted for such Pledgor or any of its nominees or designees, as officers
and/or directors and/or other agents or representatives of any Company.
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(f) Pursuant to the powers of attorney provided for by Section
6(c) hereof, Secured Party may reasonably take any action and exercise and
execute any instrument which it may deem necessary or advisable to accomplish
the purposes of this Security Agreement. Without limiting the generality of the
foregoing, Secured Party shall have the right and power to receive, endorse and
collect all checks and other orders for the payment of money made payable to any
Pledgor representing any Distribution, interest, payment of principal or other
distribution or payment payable in respect of the Pledged Collateral or any part
thereof, and for and in the name, place and stead of such Pledgor, to execute
endorsements, assignments or other instruments of conveyance or transfer in
respect of the Pledged Collateral and any other property which is or may become
a part of the Pledged Collateral hereunder.
(g) Without limiting any other provision of this Security
Agreement, and without waiving or releasing any Pledgor from any obligation or
default hereunder, Secured Party shall have the right, but not the obligation,
to perform any act or take any action, as it, in its judgment, may deem
necessary to cure any Event of Default, cause any term, covenant, condition or
obligation required under this Security Agreement to be performed or observed by
any Pledgor to be promptly performed or observed on behalf of such Pledgor, or
protect the security provided to Secured Party under this Security Agreement.
All amounts advanced by, or on behalf of, Secured Party in exercising its rights
under this Section 6(g) (including, but not limited to, reasonable legal
expenses and disbursements incurred in connection therewith as and when
incurred), together with interest thereon at the Default Rate (as defined in the
Mezzanine Loan Agreement) from the date of each such advance, shall be payable
by the Pledgors to Secured Party within fifteen (15) days after written demand
therefor and shall be Secured Obligations under this Security Agreement.
7. Sales of the Pledged Collateral; Strict Foreclosure.
(a) To the extent permitted by law, no demand, advertisement or
notice, all of which are hereby expressly waived by each Pledgor, shall be
required in connection with any sale or other disposition of all or any part of
the Pledged Collateral pursuant to Section 6 hereof, except that Secured Party
shall give such Pledgor at least ten (10) days' prior written notice of the time
and place of any public sale or of the time and the place at which any private
sale or other disposition is to be made, which notice such Pledgor hereby agrees
is reasonable, and all other demands, advertisements and notices are hereby
irrevocably waived by such Pledgor. To the extent permitted by law, Secured
Party shall not be obligated to make any sale of the Pledged Collateral if it
shall determine not to do so, regardless of the fact that notice of sale may
have been given, and Secured Party may without notice or publication adjourn any
public or private sale, and such sale may, without further notice, be made at
the time and place to which such sale is so adjourned. Subject only to
provisions of applicable law which cannot be waived, upon each public or private
sale of any portion of or all of the Pledged Collateral, Secured Party (or its
nominee or designee) may purchase any or all of the Pledged Collateral being
sold, free and clear of and discharged from any trusts, claims, equity or right
of redemption of any Pledgor, all of which are hereby waived and released to the
extent permitted by law, and may make payment therefor by credit against any of
the Secured Obligations in lieu of cash or
11
any other obligations. In the case of any sale, public or private, of any
portion of or all of the Pledged Collateral, each Pledgor shall be responsible
for, and shall pay within fifteen (15) days after demand therefore, all costs
and expenses of every kind relating to the sale and delivery of the Pledged
Collateral, including, without limitation, brokers' and reasonable attorneys'
fees and disbursements and any tax imposed thereon and such obligation to pay
such costs and expenses shall be a Secured Obligation.
(b) To the extent permitted under applicable law, Secured Party
shall not be required to conduct any foreclosure sale of any part of the Pledged
Collateral. Secured Party may, in its sole and absolute discretion, retain and
acquire for itself and/or its designees or nominees, the Pledged Collateral by,
as contemplated by Section 6(a)(i) hereof, instructing each Pledgor to register
on its ledgers and books Secured Party's acquisition of the Pledged Collateral
and the Certificate which embodies the Pledged Collateral, subject to any rights
of such Pledgor to object in accordance with the Code, if such Pledgor has not
renounced or waived such rights in accordance with the Code. In connection
therewith, Secured Party shall have the right to complete any endorsements in
its favor on the Certificates or any other certificated securities or
instruments which at any time are part of the Pledged Collateral.
8. Securities Laws.
If an Event of Default shall have occurred, Secured Party may, in its
sole and absolute discretion, sell all of the Pledged Collateral or any part
thereof by private sale in such manner and under such circumstances as Secured
Party may deem necessary or advisable in order that such sale may legally be
effected without registration pursuant to the Securities Act of 1933 or any
other Federal, state or local law governing the offering or sale of securities,
provided that at least ten (10) days' prior written notice of the time and place
of any such sale shall be given to the applicable Pledgor. Without limiting the
generality of the foregoing, in any such event Secured Party, in its sole and
absolute discretion (i) may proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such Pledged
Collateral or part thereof shall not have been filed or shall not have become
effective such Securities Act, (ii) may approach and negotiate with a single
potential purchaser to effect such sale, and (iii) may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment, and not with a view to the distribution or sale of
such Pledged Collateral or part thereof. In the event of any such sale, Secured
Party shall incur no responsibility or liability for selling all or any part of
the Pledged Collateral at a price which Secured Party may in good xxxxx xxxx
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred until
after registration as aforesaid.
9. Receipt of Sale Proceeds.
Upon any sale of the Pledged Collateral, or any portion thereof, by
Secured Party hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of Secured Party or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Pledged Collateral so sold, and such purchaser or
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purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to Secured Party or such officer or be answerable in
any way for the misapplication or nonapplication thereof.
10. Costs and Expenses.
(a) Each Pledgor agrees that it shall pay to Secured Party:
(i) within fifteen (15) days after receipt of an invoice
therefor (accompanied by customary supporting material), the amount of any taxes
Secured Party may have been required to pay by reason of the security interests
created in the Pledged Collateral hereunder (excluding any income taxes,
franchise taxes or other taxes based upon Secured Party's income) or any amount
necessary to free any of the Pledged Collateral from any lien not created in
favor of Secured Party thereon, and
(ii) within fifteen (15) days after receipt of an invoice
therefor (accompanied by customary supporting material), the amount of any and
all reasonable expenses, including the reasonable fees and disbursements of
counsel as and when incurred and of any other agents or experts and any transfer
taxes or other taxes or governmental charges or fees (whether now existing or
hereinafter enacted), Secured Party may incur in connection with (a) the
enforcement of this Security Agreement, including such reasonable expenses as
are incurred to preserve the value of the Pledged Collateral or the validity,
effectiveness, enforceability, perfection, priority or value of any security
interest, (b) after the occurrence of an Event of Default, the collection, sale
or other disposition of any of the Pledged Collateral, (c) the exercise by
Secured Party of any of the rights and/or remedies conferred upon it hereunder,
or (d) any Event of Default.
(b) Any amount required to be paid by any Pledgor under Section
10(a) above which is not paid when due shall bear interest for each day from the
date advanced by or on behalf of the Secured Party until repaid by such Pledgor
at the Default Rate. All obligations and liabilities of each Pledgor under
Section 10(a) above and this Section 10(b) shall be Secured Obligations under
this Security Agreement.
11. Application of Pledgor's Pledged Collateral.
The Pledged Collateral and any proceeds thereof (including, without
limitation, any proceeds from the sale of all or any portion of the Pledged
Collateral and all Distributions) now or at any time hereafter received or
retained by Secured Party pursuant to the provisions of this Security Agreement
shall, after the occurrence of an Event of Default and acceleration of the
Mezzanine Loan, be applied by Secured Party in the following order of priority:
first, to the payment of all costs and expenses incurred in connection with the
administration and enforcement of, or the preservation of any rights under, this
Security Agreement (including, without limitation, reasonable attorneys' fees)
and, second, to the payment of the Secured
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Obligations in such order and manner as Secured Party may determine in its sole
and absolute discretion.
12. Further Assurances.
Each Pledgor agrees that, at its sole expense and in such manner and
form as Secured Party reasonably may require at any time and from time to time,
it shall execute, deliver, file and/or record any financing statement, specific
assignment or other writing or instrument, and take any other action that
Secured Party may deem reasonably necessary or desirable, or that Secured Party
may reasonably request, in order to create, preserve or validate any security
interests created hereunder or the priority thereof or to enable Secured Party
to exercise and enforce its rights hereunder with respect to any of the Pledged
Collateral. Each Pledgor hereby authorizes Secured Party to execute and file at
any time or from time to time, in the name of such Pledgor, such UCC financing
statements and other similar instruments as Secured Party in its sole discretion
may deem necessary or desirable to perfect and continue the security interests
created hereunder.
13. Attorney-In-Fact.
Secured Party is hereby appointed the attorney-in-fact, with full
power of substitution, of each Pledgor for the purpose of carrying out the
provisions hereof from time to time, after an Event of Default, in Secured
Party's discretion, and taking any action and executing any instruments
(including, without limitation, financing or continuation statements,
conveyances, assignments and transfers) which Secured Party may deem necessary
or advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is coupled with an interest and is irrevocable. Each Pledgor
shall indemnify and hold harmless Secured Party from and against any liability,
loss, cost, expense and/or damage which it may incur in the exercise and
performance, in good faith, of any of Secured Party's powers and/or duties
specifically set forth herein.
14. Waivers.
No Pledgor shall be entitled to any notices of any nature whatsoever
from Secured Party except with respect to matters for which this Security
Agreement or the other Mezzanine Loan Documents specifically and expressly
provide for the giving of notice by Secured Party to Pledgor and except with
respect to matters for which Pledgor is not, pursuant to applicable Legal
Requirements, permitted to waive the giving of notice. To extent permitted by
law, Pledgor hereby expressly waives the right to receive any notice from
Secured Party with respect to any matter for which this Security Agreement or
the other Mezzanine Loan Documents does not specifically and expressly provide
for the giving of notice by Secured Party to Pledgor. No delay or omission on
the part of Secured Party in exercising any right hereunder shall operate as a
waiver of that right or of any other right hereunder. Any waiver of any right on
any one occasion shall not be construed as a bar to or waiver of that or any
other right on any future occasion. No course of dealing between any Pledgor and
Secured Party nor any failure to exercise, nor any delay in exercising, on the
part of Secured Party, any right, power or privilege hereunder or with
14
respect to any of the Secured Obligations shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege hereunder
or otherwise with respect to the Secured Obligations preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
15. Termination.
This Security Agreement and the security interests in and lien on each
Pledgor's Pledged Collateral created hereby shall terminate upon the
indefeasible payment and satisfaction in full of all of the Secured Obligations,
except contingent indemnity obligations not then due and payable.
16. Integration Clause.
This Security Agreement, together with all of the other Mezzanine Loan
Documents, represents the entire agreement between the parties with respect to
the subject matter hereof, and all prior or contemporaneous agreements,
understandings or other communications, oral or written, regarding the subject
matter which are not expressed herein or therein shall be of no force and
effect.
17. Amendments and Waivers In Writing Only.
This Security Agreement shall not be amended or otherwise modified
except by a further written agreement executed and delivered by all of the
parties hereto. No waiver, express or implied, of any of the provisions hereof
shall be effective unless embodied in a written document executed by the party
hereto who is charged with such waiver.
18. Successors and Assigns.
Except as may be expressly permitted in the Mezzanine Loan Agreement,
neither this Security Agreement, nor any right title and/or interest herein,
shall be assigned or otherwise transferred by any Pledgor without the prior
written consent of Secured Party. Subject to the preceding sentence, this
Security Agreement shall inure to the benefit of the parties hereto and their
respective successors and assigns.
19. Notices.
All notices, demands, requests, consents, approvals or other
communications (collectively, "Notices") required or permitted to be given
hereunder to Secured Party or any Pledgor or which are given to Secured Party or
any Pledgor with respect to this Security Agreement shall be in writing and
otherwise given in accordance with Section 11.6 of the Mezzanine Loan Agreement.
15
20. No Duty to Preserve Pledgor's Pledged Collateral.
To the extent permitted by applicable law, Secured Party shall not
have any duty as to the collection or protection of the Pledged Collateral or
any income thereon or payments with respect thereto, or as to the preservation
of any rights pertaining thereto, beyond exercising reasonable care with respect
to any cash or any Certificate that is actually in Secured Party's possession
pursuant hereto.
21. No Release.
The obligations of each Pledgor under this Security Agreement shall be
absolute and unconditional and shall remain in full force and effect without
regard to, and, subject to Section 15 hereof, shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstances or occurrence
whatsoever, including, without limitation: (a) any renewal, extension, amendment
or modification of, or addition or supplement to or deletion from, any of the
Mezzanine Loan Documents or the Mortgage Loan Documents or any other instrument
or agreement referred to therein, or any assignment or transfer of any thereof;
(b) any waiver, consent, extension, indulgence or other action or inaction under
or in respect of any of the Mezzanine Loan Documents or the Mortgage Loan
Documents or any exercise or non-exercise of any right, remedy, power or
privilege under or in respect of any of the Mezzanine Loan Documents or the
Mortgage Loan Documents, respectively; (c) any furnishing of any additional
security to Secured Party or any acceptance thereof or any sale, exchange,
release, surrender or realization of or upon any security by Secured Party; or
(d) any invalidity, irregularity or unenforceability of all or part of the
Secured Obligations or of any security therefor.
22. Waiver of Marshalling of Assets Defense.
To the fullest extent that each Pledgor may legally do so, each
Pledgor hereby waives all rights to a marshalling of the assets of Pledgor,
and/or any others with interests in Pledgor, and/or of the Pledged Collateral,
or to a sale in inverse order of alienation in the event of foreclosure of the
interests hereby created, and agree not to assert any right under any laws
pertaining to the marshalling of assets, sales in inverse order of alienation or
any other matters whatsoever to defeat, reduce or affect the right of Secured
Party to a sale of the Pledged Collateral for the collection of the Secured
Obligations without any prior or different resort for collection.
23. General Provisions Relating To Secured Party's Remedies.
Without limitation of any right or remedy of Secured Party in this
Security Agreement, each Pledgor acknowledges and agrees that upon the
occurrence and during the continuance of an Event of Default (i) the rights and
remedies of Secured Party herein provided or provided under any of the other
Mezzanine Loan Documents shall be cumulative, and shall be in addition to and
not exclusive of or in limitation of any rights and remedies provided by
applicable law, including, without limitation, the rights and remedies of a
secured party under the Code or any other applicable laws or in an equity
proceeding, (ii) Secured Party shall have the
16
right to pursue all of its rights and remedies in one proceeding, or separately
and independently in separate proceedings, in each case as Secured Party, in its
sole and absolute discretion, shall determine from time to time, (iii) Secured
Party shall not be required to either marshal assets or sell the Pledged
Collateral in any inverse order of alienation, and shall not be subjected to any
"one action" or "election of remedies" law or rule, (iv) the exercise by Secured
Party of any remedies against any of the Pledged Collateral shall not impede
Secured Party from subsequently or simultaneously exercising remedies against
any other collateral or security, and (v), subject to Section 15 hereof, all
liens and other rights, remedies and privileges provided to Secured Party in
this Security Agreement and the other Mezzanine Loan Documents or otherwise
shall remain in full force and effect and shall in no event terminate prior to
the exhaustion by Secured Party of all of its remedies against the Pledged
Collateral and Secured Party's foreclosure, sale and/or other realization upon
all of the Pledged Collateral.
24. Limited Recourse.
Notwithstanding anything herein to the contrary, each Pledgor's
recourse liability under or with respect to this Security Agreement shall be
limited to the identical extent provided in Section 11.22 of the Mezzanine Loan
Agreement.
25. Governing Law.
This Security Agreement shall be governed and construed in accordance
with the internal laws of the State of New York, without regard to its conflicts
of law principles.
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IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the date first above written.
PLEDGOR:
THI OF OHIO SNFS, LLC,
a Delaware limited liability company
By: /s/ XXXX X. XXXXX
----------------------------------
Name: Xxxx X. Xxxxx
Title: Vice-President
THI OF MARYLAND SNFS I, LLC,
a Delaware limited liability company
By: /s/ XXXXXXX X. XXXXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice-President
THI OF MARYLAND SNFS II, LLC,
a Delaware limited liability company
By: /s/ XXXXXXX X. XXXXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice-President
[Signatures continued on next page]
SECURED PARTY:
VENTAS REALTY, LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Ventas, Inc.
a Delaware corporation,
its sole general partner
By: /s/ T. XXXXXXX XXXXX
------------------------------
Name: T. Xxxxxxx Xxxxx
Title: Executive Vice
President/General
Counsel
