Document:

lilmexh101.htm

Exhibit 10.1

SHARE PURCHASE AGREEMENT

by and among

Alewine Limited Liability Company,

A Nevada limited liability company

LILM, INC.

a Nevada Corporation

Kent Campbell,

Denis Espinoza

and

Legal & Compliance, LLC, as Escrow Agent

Dated as of September ___, 2013

 

 

  

  

  

	  	  	
PAGE

	
ARTICLE I REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE PURCHASERS

	  
	 	 
	
Section 1.01

	
Authority of the Purchasers; Execution of Agreement

	
1

	
Section 1.02

	
Purchaser’s Experience.

	
1

	 	 
	
ARTICLE II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE SELLER AND THE COMPANY

	  
	 	 
	
Section 2.01

	
Organization

	
2

	
Section 2.02

	
Capitalization

	
2

	
Section 2.03

	
Subsidiaries and Predecessor Corporations

	
2

	
Section 2.04

	
Financial Statements.

	
2

	
Section 2.05

	
Information

	
2

	
Section 2.06

	
Options or Warrants

	
2

	
Section 2.07

	
Absence of Certain Changes or Events

	
2

	
Section 2.08

	
Litigation and Proceedings

	
3

	
Section 2.09

	
Contracts.

	
3

	
Section 2.10

	
No Conflict With Other Instruments

	
4

	
Section 2.11

	
Compliance With Laws and Regulations

	
4

	
Section 2.12

	
Approval of Agreement

	
4

	
Section 2.13

	
Material Transactions or Affiliations

	
4

	
Section 2.14

	
The Company Schedules

	
4

	
Section 2.15

	
Bank Accounts; Power of Attorney

	
4

	
Section 2.16

	
Valid Obligation.

	
5

	
Section 2.17

	
SEC Filings

	
5

	
Section 2.18

	
OTC Markets Quotation and DTC.

	
5

	
Section 2.19

	
Exchange Act Compliance.

	
6

	
Section 2.20

	
Insurance Policies.

	
6

	
Section 2.21

	
Employee Benefit Plans and Agreements

	
6

 

  

  

  

 

	
ARTICLE III SHARE PURCHASE

	  
	 	 
	
Section 3.01

	
The Sale and Purchase.

	
6

	
Section 3.02

	
Closing

	
6

	
Section 3.03

	
Closing Events

	
7

	
Section 3.04

	
Termination

	
7

	
Section 3.05

	
Escrow Account

	
7

	 	 
	
ARTICLE IV SPECIAL COVENANTS

	  
	 	 
	
Section 4.01

	
Access to Properties and Records

	
9

	
Section 4.02

	
Delivery of Books and Records

	
9

	
Section 4.03

	
The Company SEC Filings.

	
9

	
Section 4.04

	
Designation of Directors and Officer.

	
9

	
Section 4.05

	
Indemnification.

	
9

	
Section 4.06

	
The Acquisition of the Company Common Stock

	
10

	
Section 4.07

	
Payment of Liabilities.

	
11

	
Section 4.08

	
Assistance with Post-Closing SEC Reports and Inquiries.

	
11

	 	 
	
ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER

	  
	 	 
	
Section 5.01

	
Accuracy of Representations and Performance of Covenants

	
11

	
Section 5.02

	
No Governmental Prohibition

	
12

	
Section 5.03

	
Consents

	
12

	 	 
	
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER

	  
	 	 
	
Section 6.01

	
Accuracy of Representations and Performance of Covenants

	
12

	
Section 6.02

	
Officer’s Certificate

	
12

	
Section 6.03

	
Good Standing

	
12

	
Section 6.04

	
No Governmental Prohibition

	
12

	
Section 6.05

	
Consents

	
13

	
Section 6.06

	
Shareholder Report

	
13

	
Section 6.07

	
Other Items

	
13

 

  

  

  

 

	
ARTICLE VII MISCELLANEOUS

	  
	 	 
	
Section 7.01

	
Brokers

	
13

	
Section 7.02

	
Governing Law

	
13

	
Section 7.03

	
Notices

	
13

	
Section 7.04

	
Attorney’s Fees

	
14

	
Section 7.05

	
Confidentiality

	
14

	
Section 7.06

	
Public Announcements and Filings

	
14

	
Section 7.07

	
Schedules; Knowledge

	
15

	
Section 7.08

	
Third Party Beneficiaries

	
15

	
Section 7.09

	
Expenses

	
15

	
Section 7.10

	
Entire Agreement

	
15

	
Section 7.11

	
Survival; Termination

	
15

	
Section 7.12

	
Counterparts

	
15

	
Section 7.13

	
Amendment or Waiver

	
15

	
Section 7.14

	
Best Efforts

	
15

	
Section 7.15

	
Role of Counsel

	
16

 

  

  

  

 

TABLE OF CONTENTS

 

SHARE PURCHASE AGREEMENT

 

THIS SHARE PURCHASE AGREEMENT (the “Agreement”) is entered into as of this 20th  day of September 2013, among Alewine Limited Liability Company, a Nevada limited liability company (the “Seller”), LILM, INC., a Nevada corporation (the “Company”), Kent Campbell (“Campbell”), Denis Espinoza (“Espinoza”) and Legal & Compliance, LLC, as Escrow Agent (the “Escrow Agent”).  Campbell and Espinoza may hereafter be referred to individually as “Purchaser” and collectively as “Purchasers”.

W I T N E S S E T H:

WHEREAS, Seller owns 1,863,475 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”); and

WHEREAS, the Purchasers desire to purchase an aggregate of 1,788,475 shares of the Common Stock (the “Shares”) from the Seller on the terms and conditions set forth in this Agreement; and

WHEREAS, the Seller desires to sell the Shares to the Purchasers on the terms and conditions set forth in this Agreement; and

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, and other good and valuable consideration, the receipt of which is hereby acknowledged, the Seller and the Purchasers hereby agree as follows:

ARTICLE I

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE PURCHASERS

As an inducement to, and to obtain the reliance of the Company, except as set forth in the Purchaser’s Schedules (as hereinafter defined), the Purchasers represent and warrant as of the Closing Date (as hereinafter defined), as follows:

Section 1.01 Authority of the Purchasers; Execution of Agreement

 

.  The Purchasers have all requisite power, authority, and capacity to enter into this Agreement and to perform the transactions and obligations to be performed by Purchasers hereunder.  No consent, authorization, approval, license, permit or order of, or filing with, any person or governmental authority is required in connection with the execution of the transactions and obligations to be performed by Purchasers hereunder.  This Agreement has been duly executed and delivered by the Purchasers and constitutes a valid and legally binding obligation of the Purchasers, enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws.

 

Section 1.02 Purchaser’s Experience.                                           

 

Each Purchaser is an experienced and sophisticated investors, able to fend for itself in the transactions contemplated by this Agreement, and has such knowledge and experience in financial and business matters that it is capable of evaluating the risks and merits of acquiring the Shares.

ARTICLE II

 

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE SELLER AND THE COMPANY

 

As an inducement to, and to obtain the reliance of the Purchasers, except as set forth in the Company Schedules (as hereinafter defined), the Company represents and warrants, as of the date hereof and as of the Closing Date, as follows:

 

  

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Section 2.01 Organization

 

.  The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted.  Included in the Company Schedules are complete and correct copies of the certificate of incorporation and bylaws of the Company as in effect on the date hereof. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of the Company’s certificate of incorporation or bylaws.  The Company has taken all action required by law, its certificate of incorporation, its bylaws, or otherwise to authorize the execution and delivery of this Agreement, and the Company has full power, authority, and legal right and has taken all action required by law, its certificate of incorporation, bylaws, or otherwise to consummate the transactions herein contemplated.

 

Section 2.02 Capitalization

 

.  The Company’s authorized capitalization consists of (a) 25,000,000 shares of common stock, par value $0.001 per share (“the Common Stock”), of which 2,633,750 shares are issued and outstanding.  All issued and outstanding shares are legally issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person.

 

Section 2.03 Subsidiaries and Predecessor Corporations

 

.  Except Lil Marc, Inc., the Company does not have any predecessor corporation(s), subsidiaries, and does not own, beneficially or of record, any shares of any other corporation. However, the Company is a subsidiary of its parent corporation.

 

Section 2.04 Financial Statements.

 

(a) All financial statements of the Company as filed with the SEC have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved. The Company balance sheets are true and accurate and present fairly as of their respective dates the financial condition of the Company.  As of the date of such balance sheets, except as and to the extent reflected or reserved against therein, the Company had no liabilities or obligations (absolute or contingent) which should be reflected in the balance sheets or the notes thereto prepared in accordance with generally accepted accounting principles, and all assets reflected therein are properly reported and present fairly the value of the assets of the Company, in accordance with generally accepted accounting principles. The statements of operations, stockholders’ equity and cash flows reflect fairly the information required to be set forth therein by generally accepted accounting principles.

 

(b) The Company has no liabilities with respect to the payment of any federal, state, county, local or other taxes (including any deficiencies, interest or penalties), except for taxes accrued but not yet due and payable.

 

(c) The Company has timely filed all state, federal or local income and/or franchise tax returns required to be filed by it from inception to the date hereof.  Each of such income tax returns reflects the taxes due for the period covered thereby, except for amounts which, in the aggregate, are immaterial.  In addition, all such tax returns are correct and complete in all material respects.  All taxes of the Company which are (i) shown as due on such tax returns, (ii) otherwise due and payable or (iii) claimed or asserted by any taxing authority to be due, have been paid, except for those taxes being contested in good faith and for which adequate reserves have been established in the financial statements included in the Financial Statements in accordance with GAAP.  There are no liens for any taxes upon the assets of the Company, other than statutory liens for taxes not yet due and payable.  The Company does not know of any proposed or threatened tax claims or assessments.

 

(d) The books and records, financial and otherwise, of the Company are in all material aspects complete and correct and have been maintained in accordance with good business and accounting practices

 

(e) All of the Company’s assets are reflected on its financial statements, and, except as set forth in the Company Schedules or the financial statements of the Company or the notes thereto, the Company has no liabilities, direct or indirect, matured or unmatured, contingent or otherwise.

 

Section 2.05 Information

 

.  The information concerning the Company set forth in this Agreement and the Company Schedules is complete and accurate in all material respects and does not contain any untrue statements of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading.

Section 2.06 Options or Warrants

 

.  Except as set forth in Schedule 2.06, there are no options, warrants, convertible securities, subscriptions, stock appreciation rights, phantom stock plans or stock equivalents or other rights, agreements, arrangements or commitments (contingent or otherwise) of any character issued or authorized by the Company relating to the issued or unissued capital stock of the Company (including, without limitation, rights the value of which is determined with reference to the capital stock or other securities of the Company) or obligating the Company to issue or sell any shares of capital stock of, or options, warrants, convertible securities, subscriptions or other equity interests in, the Company.  There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of the Company Common Stock of the Company or to pay any dividend or make any other distribution in respect thereof or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any person.

 

Section 2.07 Absence of Certain Changes or Events

 

.  Since the date of the most recent Company balance sheet included in the Company SEC Reports, as hereinafter defined:

 

(a) there has not been (i) any material adverse change in the business, operations, properties, assets or condition of the Company or (ii) any damage, destruction or loss to the Company (whether or not covered by insurance) materially and adversely affecting the business, operations, properties, assets or condition of the Company;

 

(b) except as reflected in the Company SEC Reports,  the Company has not (i) amended its certificate of incorporation or bylaws except as required by this Agreement; (ii) declared or made, or agreed to declare or make any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any of its capital stock; (iii) waived any rights of value which in the aggregate are outside of the ordinary course of business or material considering the business of the Company; (iv) made any material change in its method of management, operation, or accounting; (v) entered into any transactions or agreements other than in the ordinary course of business; (vi) made any accrual or arrangement for or payment of bonuses or special compensation of any kind or any severance or  termination pay to any present or former officer or employee; (vii) increased the rate of compensation payable or to become payable by it to any of its officers or directors or any of its salaried employees; or  (viii) made any increase in any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement, made to, for or with its officers, directors, or employees;

 

  

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(c) the Company has not (i) granted or agreed to grant any options, warrants, or other rights for its stock, bonds, or other corporate securities calling for the issuance thereof; (ii) borrowed or agreed to borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent) except liabilities incurred in the ordinary course of business; (iii) paid or agreed to pay any material obligations or liabilities (absolute or contingent) other than current liabilities reflected in or shown on the most recent the Company balance sheet and current liabilities incurred since that date in the ordinary course of business and professional and other fees and expenses in connection with the preparation of this Agreement and the consummation of the transaction contemplated hereby; (iv) sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights, or canceled, or agreed to cancel, any debts or claims; (v) made or permitted any amendment or termination of any contract, agreement, or license to which it is a party if such amendment or termination is material, considering the business of the Company; or (vi) issued, delivered or agreed to issue or deliver, any stock, bonds or other corporate securities including debentures (whether authorized and unissued or held as treasury stock), except in connection with this Agreement; and

 

(d) The Company has not become subject to any law or regulation which materially and adversely affects, or in the future, may adversely affect, the business, operations, properties, assets or condition of the Company.

 

Section 2.08 Litigation and Proceedings

 

There are no actions, suits, proceedings or investigations pending or, to the knowledge of the Company after reasonable investigation, threatened by or against the Company or affecting the Company or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind except as disclosed in the Company Schedules.  The Company has no knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator, or governmental agency or instrumentality or any circumstance which after reasonable investigation would result in the discovery of such default.

 

Section 2.09 Contracts.

 

(a) Except as set forth Schedule, the Company is not a party to, and its assets, products, technology and properties are not bound by, any leases, contract, franchise, license agreement, agreement, debt instrument, obligation, arrangement, understanding or other commitments whether such agreement is in writing or oral (“Contracts”).

 

(b) The Company is not a party to or bound by, and the properties of the Company are not subject to any Contract, agreement, other commitment or instrument; any charter or other corporate restriction; or any judgment, order, writ, injunction, decree, or award; and

 

(c) The Company is not a party to any oral or written (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (iii) agreement, contract, or indenture relating to the borrowing of money, (iv) guaranty of any obligation, (vi) collective bargaining agreement; or (vii) agreement with any present or former officer or director of the Company.

 

  

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Section 2.10 No Conflict With Other Instruments

 

.  The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of, any indenture, mortgage, deed of trust, or other material agreement or instrument to which the Company is a party or to which any of its assets, properties or operations are subject.

 

Section 2.11 Compliance With Laws and Regulations

 

.  The Company has complied with all United States federal, state or local or any applicable foreign statute, law, rule, regulation, ordinance, code, order, judgment, decree or any other applicable requirement or rule of law (a “Law”) applicable to the Company and the operation of its business.  This compliance includes, but is not limited to, the filing of all reports to date with federal and state securities authorities.

 

Section 2.12 Approval of Agreement

 

.  The Board of Directors of the Company has authorized the execution and delivery of this Agreement by the Company and has approved this Agreement and the transactions contemplated hereby.

 

Section 2.13 Material Transactions or Affiliations

 

.  Except as disclosed herein and in the Company Schedules, there exists no contract, agreement or arrangement between the Company and any predecessor and any person who was at the time of such contract, agreement or arrangement an officer, director, or person owning of record or known by the Company to own beneficially, 5% or more of the issued and outstanding common stock of the Company and which is to be performed in whole or in part after the date hereof or was entered into not more than three years prior to the date hereof.  Neither any officer, director, nor 5% Shareholders of the Company has, or has had since inception of the Company, any known interest, direct or indirect, in any such transaction with the Company which was material to the business of the Company.  The Company has no commitment, whether written or oral, to lend any funds to, borrow any money from, or enter into any other transaction with, any such affiliated person.

 

Section 2.14 The Company Schedules

 

.  The Company and Seller have delivered to the Purchasers the Company Schedules identified in this Agreement which are dated the date of this Agreement, all certified by the chief executive officer of the Company to be complete, true, and accurate in all material respects as of the date of this Agreement.  The Company shall cause the Company Schedules and the instruments and data delivered to the Purchasers hereunder to be promptly updated after the date hereof up to and including the Closing Date.

 

Section 2.15 Bank Accounts; Power of Attorney

 

.  Set forth in the Company Schedules is a true and complete list of (a) all accounts with banks, money market mutual funds or securities or other financial institutions maintained by the Company within the past twelve (12) months, the account numbers thereof, and all persons authorized to sign or act on behalf of the Company, (b) all safe deposit boxes and other similar custodial arrangements maintained by the Company within the past twelve (12) months, (c) the check ledger for the last 12 months, and (d) the names of all persons holding powers of attorney from the Company or who are otherwise authorized to act on behalf of the Company with respect to any matter, other than its officers and directors, and a summary of the terms of such powers or authorizations.

 

  

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Section 2.16 Valid Obligation.

 

  This Agreement and all agreements and other documents executed by the Company in connection herewith constitute the valid and binding obligation of the Company, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

 

Section 2.17 SEC Filings

 

Financial Statements. 

 

(a) The Company has made available to the Purchasers a correct and complete copy, or there has been available on EDGAR, copies of each report, registration statement and definitive proxy statement filed by the Company with the SEC since its initial filing on March 30, 2006 (the “the Company SEC Reports”), which are all the forms, reports and documents filed by the Company with the SEC from March 30, 2006 to the date of this Agreement. As of their respective dates, the Company SEC Reports: (i) were prepared in accordance and complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such the Company SEC Reports, and (ii) did not at the time they were filed (and if amended or superseded by a filing prior to the date of this Agreement then on the date of such filing and as so amended or superseded) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(b)  Each set of financial statements (including, in each case, any related notes thereto) contained in the Company SEC Reports comply as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, do not contain footnotes as permitted by Form 10-QSB promulgated under the Exchange Act) and each fairly presents in all material respects the financial position of the Company at the respective dates thereof and the results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were or are subject to normal adjustments which were not or are not expected to have a Material Adverse Effect on the Company taken as a whole.

 

Section 2.18 OTC Markets Quotation and DTC.

 

 The Company Common Stock is quoted on the QB Tier of the OTC Markets Group (“OTCQB”). There is no action or proceeding pending or, to the Company’s knowledge, threatened against the Company by The Financial Industry Regulatory Authority, Inc. ("FINRA") with respect to any intention by such entity to prohibit or terminate the quotation of the Company’s Common Stock on the OTCQB.  The Company’s common stock shall be Depository Trust Company (“DTC”) eligible and listed in transferable status and shall not be subject to any DTC “chills” or “locks.”

  

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Section 2.19 Exchange Act Compliance.

 

  The Company is in compliance with, and current in, all of the reporting, filing and other requirements under the Exchange Act, the shares of the Company Common Stock have been registered under Section 12(g) of the Exchange Act, and the Company is in compliance with all of the requirements under, and imposed by, Section 12(g) of the Exchange Act.

Section 2.20 Insurance Policies.

 

The Company has not received notice of any pending or threatened cancellation (retroactive or otherwise) with respect to any of the insurance policies in force naming the Company, any of its employees thereof as an insured or beneficiary or as a loss payable payee and the Company is in compliance in all material respects with all conditions contained therein.  There are no pending claims against such insurance policies by the Company as to which insurers are defending under reservation of rights or have denied liability, and there exists no claim under such insurance policies that has not been properly filed by the Company.  Set forth on Schedule 2.20 is a list of all of the Company’s insurance policies.

Section 2.21 Employee Benefit Plans and Agreements

 

                      The Company has no deferred compensation, pension, profit-sharing and retirement plans, or bonus, welfare, severance policies or programs or other “employee benefit plans” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), fringe benefit or stock option, stock ownership, stock appreciation, phantom stock or equity (or equity-based) plans, including individual contracts, severance agreements, employee agreements, consulting agreements with individuals, separation and change in control programs, agreements or arrangements, or employee retention agreements, providing the same or similar benefits, whether or not written, participated in or maintained by the Company or with respect to which contributions are made or obligations assumed by the Company in respect of the Company (including health, life insurance and other benefit plans maintained for former employees or retirees).

ARTICLE III

SHARE PURCHASE

 

Section 3.01 The Sale and Purchase.

 

  On the terms and subject to the conditions set forth in this Agreement, on the Closing Date (as defined in Section 3.03), the Seller shall sell, assign, transfer and deliver, free and clear of all liens, pledges, encumbrances, charges, restrictions or known claims of any kind, nature, or description, 1,788,475 Shares of the Company’s common stock held by Seller to the Purchasers in the following amounts: 1,466,225 Shares to Campbell and 322,250 Shares to Espinoza. In consideration of the transfer by Seller of the Shares to the Purchasers, the Purchasers shall deliver to the Seller the purchase price of Two Hundred Seventy Seven Thousand Five Hundred Dollars ($277,500) (the “Purchase Price”) as follows: (a) Espinoza shall pay $42,500 in cash (the “Espinoza Cash Payment”), (b) credit against the Purchase Price for the following Company debts in the amount of $77,992 owed to George I. Norman, III (the “Norman Note”) and $29,016 of general liabilities of the Company, totaling $107,008 (the “General Liabilities”)  and (c) Campbell shall pay $127,992 in cash (the “Campbell Cash Payment”). The 1,788,475 shares to be sold to Purchasers under this Agreement are deemed “restricted shares” within the meaning of Rule 144 promulgated under the Securities Act of 1933, as amended.

 

Section 3.02 Closing

 

.  The closing (“Closing”) of the transactions contemplated by this Agreement shall take place at the offices of the Escrow Agent (the “Closing”).  Subject to the terms and conditions of the Escrow Account set forth in Section 3.05 below and this Agreement, the date and time of the Closing shall be no later than September __, 2013 (or such later date as is mutually agreed to by the Company and the Purchasers), provided, that all of the conditions set forth herein and applicable to the Closing shall have been fulfilled or waived in accordance herewith (the “Closing Date”).

 

  

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(a) At or prior to Closing:

(i) the Purchasers shall deliver to the Escrow Agent: (A) the Espinoza Cash Payment, (B) the Campbell Cash Payment, (C) the obligation/promise to cause the Company to satisfy the Norman Note on or before September 30, 2013, subject to Norman shipping a blow mold at Purchaser’s expense to Blow Molders Products located in Glen Avon, California as directed by Campbell (Campbell will provide a credit card number to do this), (D) the obligation/promise to cause the Company to pay and satisfy the General Liabilities on or before October 24, 2013 and (E) and any other documents required to be delivered pursuant to this Agreement.

(ii) the Seller shall deliver to the Escrow Agent certificates for the Shares, together with medallion guarantees for transfer (the “Stock Certificates”) and any other documents required to be delivered pursuant to this Agreement and

(iii) Within 72 hours of the Closing, the Seller shall cause George Norman to be removed as signor on the Company bank accounts and Kent Campbell be named as the signor on same

Section 3.03 Closing Events

 

.  At such time that the Escrow Agent has received the items set forth in Section 3.02(a) above, the Closing shall occur and the Escrow Agent shall: (i) deliver to Seller the Espinoza Cash Payment and the Campbell Cash Payment, and (ii) deliver to the Purchasers their respective Stock Certificates.  The Seller, the Company and the Purchasers shall execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged, and delivered), any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably requested by the parties hereto and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby.

 

Section 3.04 Termination

 

.  Except as otherwise set forth in this Agreement, this Agreement may be terminated by the Purchaser or the Company only in the event that the Company or the Purchaser do not meet the conditions precedent set forth in Articles V and VI.  If this Agreement is terminated pursuant to this section, this Agreement shall be of no further force or effect, and no obligation, right or liability shall arise hereunder.

 

Section 3.05 Escrow Account.

 

(a)  Appointment of Escrow Agent.  The Escrow Agent is hereby appointed to act as escrow agent hereunder and the Escrow Agent agrees to act as such.

(b)  Escrow Fund.  The Escrow Fund shall be comprised of the items set forth in Section 3.02(a) above.

  

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(c)  Distribution of the Escrow Fund.  The Escrow Agent shall continue to hold the Escrow Fund until it has received notification signed by the Seller and the Purchasers directing distribution of all or part of the Escrow Fund.

(d)  Termination.  This Escrow Account may be terminated at any time and upon the receipt by the Escrow Agent of 10 days' prior written notice of termination executed by the Seller and the Purchasers directing the distribution of all items then held by the Escrow Agent hereto.  This Escrow Account shall automatically terminate if and when all items held in escrow shall have been distributed by the Escrow Agent in accordance with the terms hereof.

(e)           Escrow Agent.

(i)  Obligations.  The obligations of the Escrow Agent hereunder are those specifically provided in this Agreement and no other, and the Escrow Agent shall have no liability under, or duty to inquire into the terms and provisions of, any other agreement between or among the parties.  The duties of the Escrow Agent are purely ministerial in nature, and it shall not incur any liability hereunder whatsoever, except for willful misconduct or gross negligence.  The Escrow Agent may consult with counsel of its choice and shall not be liable for any action taken or not taken or suffered by it in accordance with the advice of such counsel.  The Escrow Agent shall have no responsibility for the genuineness or validity of any document or other item deposited with it or of any signature thereon and shall not have any liability for acting in accordance with any written instructions or certificates given to it hereunder and believed by it to be signed by the proper parties.

(ii)  Resignation and Removal.  The Escrow Agent may resign (and be discharged) from its duties hereunder at any time by giving at least 10 days' written notice of such resignation to the Seller and the Purchasers specifying the date upon which such resignation shall take effect.  Upon receipt of such written notice of resignation, a successor escrow agent shall be appointed by the Seller and Purchasers, such successor escrow agent to become the Escrow Agent hereunder on the resignation date specified in such notice.  If an instrument of acceptance by a successor escrow agent shall not have been delivered to the Escrow Agent within 10 days after the giving of such written notice of resignation, the resigning escrow agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent.  The Seller and the Purchasers may at any time substitute a new escrow agent by giving 10 days' written notice thereof to the current escrow agent and paying all fees and expenses of such current escrow agent.

(iii)  Indemnification.  The Seller and the Purchasers, jointly and severally, shall hold the Escrow Agent harmless from, and indemnify the Escrow Agent against, any loss, liability, expense (including reasonable attorneys' fees and expenses), claim or demand arising out of or in connection with the performance of its obligations in accordance with the provisions of this Agreement, except for any claim or demand arising out of the gross negligence or willful misconduct of the Escrow Agent.  The indemnities contained herein shall survive the resignation or substitution of the Escrow Agent and the termination of this Agreement.

(iv)  Fees and Expenses.  The Escrow Agent shall receive payment for services rendered at its normal hourly rates for legal services payable monthly in arrears, and reimbursement for out-of-pocket expenses, all of which amounts shall be deducted from the Escrow Fund if not timely paid upon request therefor made by the Escrow Agent to the Seller and Purchasers.  All fees and expenses related to the services provided by Escrow Agent hereunder will be paid by Purchasers.

(f) Disputes.  If any dispute should arise with respect to the payment or ownership or right of possession of the Escrow Fund, the Escrow Agent is authorized and directed to retain in its possession, without liability to anyone, all or any part of the Escrow Fund until such dispute shall have been settled either by mutual agreement of the parties concerned or by the final order, decree or judgment of a court of competent jurisdiction in the United States of America (the time for appeal having expired with no appeal having been taken) in a proceeding to which the Seller and Purchaser are parties, but the Escrow Agent shall be under no duty whatsoever to institute or defend any such proceedings.

  

8

  

ARTICLE IV

SPECIAL COVENANTS

 

Section 4.01 Access to Properties and Records

 

.  The Company will afford to the Purchaser full access to the properties, books and records of the Company.

 

Section 4.02 Delivery of Books and Records

 

.  At the Closing but in no event later than 14 days therefrom, the Company shall deliver to the Purchaser, the originals of the corporate minute books, books of account, contracts, records, and all other books or documents of the Company now in the possession of the Company or its representatives. The Company SEC Filings.

 

  On or before the Closing Date, the Company shall promptly file with the SEC all necessary disclosure statements required by federal securities law and, at the closing or immediately thereafter, the Company and Purchasers will cause to be filed with the SEC all reports and notifications as may be required by the SEC as a result of the transactions contemplated by this Agreement.

 

Designation of Directors and Officer.

 

  On the Closing Date: (a) Kent Campbell will take the position of Chief Executive Officer and Director with the Company, Denis Espinoza will take the position of President, Chief Operating Officer and Director with the Company (c) the existing officer, George I. Norman, III, shall tender his resignation from all officer positions, other than CFO and Mr. Norman shall remain as a member of the Company’s board of directors (d) Jessie Scott Bean shall have resigned as a Director of the Company and (e) Laurie Jo Norman shall resign as a Director of the Company.

 

Indemnification.

 

(a) The Company and the Seller, jointly and severally, agree to indemnify and hold harmless the Purchasers (the “the Purchasers Indemnitees”) against any Liabilities incurred or suffered by the Purchasers Indemnitees.  For this purpose, “Liabilities” shall mean all suits, proceedings, claims, expenses, losses, costs, liabilities, judgments, deficiencies, assessments, actions, investigations, penalties, fines, settlements, interest and damages (including reasonable attorneys' fees and expenses), whether suit is  instituted or not and, if instituted, whether at any trial or appellate level, and whether raised by the parties hereto or a third party, incurred or suffered by the Purchasers Indemnitees or any of them arising from, in connection with or as a result of (a) any false or inaccurate representation or warranty made by or on behalf of the Company in or pursuant to this Agreement; (b) any default or breach in the performance of any of the covenants or agreements made by the Company in or pursuant to this Agreement; (c) the operation of the Company’s business prior to the Closing; (d) any obligation or liability of the Company which is not included in the Company’s financial statements (e) any breach of the contracts prior to the Closing; and (f) any Liabilities arising out of the claims of creditors of the Company or any party claiming by, through or under such creditor, including, but not limited to, any bankruptcy trustee or debtor-in-possession.  The indemnification provided for in this section shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for two years following the Closing (the “Indemnification Period”).

 

  

9

  

 

(b) The Company and Purchasers agree to indemnify and hold harmless the Seller (the “Seller Indemnitees”) against any Liabilities incurred or suffered by the Seller Indemnitees.  For this purpose, “Liabilities” shall mean all suits, proceedings, claims, expenses, losses, costs, liabilities, judgments, deficiencies, assessments, actions, investigations, penalties, fines, settlements, interest and damages (including reasonable attorneys' fees and expenses), whether suit is  instituted or not and, if instituted, whether at any trial or appellate level, and whether raised by the parties hereto or a third party, incurred or suffered by the Seller Indemnitees or any of them arising from, in connection with or as a result of (a) the operation of the Company’s business following the Closing; (b) any breach of the contracts following the Closing; and (c) any Liabilities arising out of the claims of creditors of the Company or any party claiming by, through or under such creditor, including, but not limited to, any bankruptcy trustee or debtor-in-possession.  The indemnification provided for in this section shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for two years following the Closing (the “Indemnification Period”).

 

(c) Procedure for Indemnification.  In the event any person or entity not a party to this Agreement shall make any demand or claim or file or threaten to file or continue any lawsuit, which demand, claim or lawsuit may result in Liabilities, the indemnified party shall give written notice to such effect to the indemnifying party promptly upon becoming aware thereof.  In such event, within 20 days after written notice by the indemnified party (the “Notice”) of such demand, claim or lawsuit, the indemnifying party shall have the right, at its sole cost and expense, to take and assume full control of the defense thereof and to hire counsel (which counsel shall be reasonably satisfactory to the indemnified party) to defend any such demand, claim or lawsuit (provided, however, that the failure to give such Notice shall not relieve the indemnifying party of its obligations hereunder unless, and only to the extent that, such failure caused the damages for which the indemnifying party is obligated to be greater than they would otherwise have been had the indemnified party given prompt notice hereunder).  Thereafter, the indemnified party shall be permitted to participate in such defense at its sole cost and expense, provided that, if the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party or if the indemnifying party proposes that the same counsel represent both the indemnified party and the indemnifying party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them, then the indemnified party shall have the right to retain its own counsel at the cost and expense of the indemnifying party. In the event that the indemnifying party shall fail to respond within 20 days after receipt of the Notice from the indemnified party of any such demand, claim or lawsuit, then the indemnified party may retain counsel and conduct the defense of such demand, claim or lawsuit, as it may in its sole discretion deem proper, at the sole cost and expense of the indemnifying party.  With regard to claims of third parties for which indemnification is payable hereunder, such indemnification shall be paid in advance of settlement or final adjudication thereof on a current basis within 30 days of receipt from the indemnified party of such supporting documentation as the indemnifying party may reasonably request.

 

The Acquisition of the Company Common Stock

 

.  The Seller, the Company and the Purchasers understand and agree that the consummation of this Agreement including the sale, transfer and issuance of the Company common stock to the Purchasers as contemplated hereby constitutes the offer and sale of securities under the Securities Act and applicable state statutes.  The Company and the Purchasers agree that such transactions shall be consummated in reliance on exemptions from the registration and prospectus delivery requirements of such statutes, which depend, among other items, on the circumstances under which such securities are acquired.

 

  

10

  

 

(d) In order to provide documentation for reliance upon the exemptions from the registration and prospectus delivery requirements for such transactions, each Purchaser shall execute and deliver to the Company a Suitability Letter and an Investment Representation Letter in substantially the same form as that attached hereto as Exhibit A providing representations that the shares of the Company’s common stock to be acquired hereunder are, among other things:

 

(i) being acquired for investment purposes and not with a view to public resale;

 

(ii) being acquired for the Purchaser’s own account;

(iii) are restricted securities and may not be resold or otherwise transferred except pursuant to a registration statement or in reliance upon an exemption to registration under the Securities Act of 1933.

 

Payment of Liabilities.

 

  The Purchasers shall cause the Company to pay the Norman Note on or before September 30, 2013, subject to Norman first shipping the Company blow mold at expense of Purchasers to the Company at an address specified by Campbell.  The Purchasers shall cause the Company to pay the General Liabilities on or before October 24, 2013.

 

Assistance with Post-Closing SEC Reports and Inquiries.

 

 Upon the reasonable request of the Purchasers, after the Closing Date, the Seller shall use its reasonable best efforts to provide such information available to Seller, including information, filings, reports, financial statements or other circumstances of the Company occurring, reported or filed prior to the Closing, as may be necessary or required by the Company for the preparation of the reports that the Company is required to file after Closing with the SEC to remain in compliance and current with its reporting requirements under the Exchange Act, or filings required to address and resolve matters as may relate to the period prior to Closing and any SEC comments relating thereto or any SEC inquiry thereof.

 

ARTICLE V

CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER

 

The obligations of the Seller under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:

 

Section 5.01 Accuracy of Representations and Performance of Covenants

 

.  The representations and warranties made by the Purchasers in this Agreement were true when made and shall be true at the Closing Date with the same force and effect as if such representations and warranties were made at and as of the Closing Date (except for changes therein permitted by this Agreement).  The Purchasers shall have performed or complied with all covenants and conditions required by this Agreement to be performed or complied with by the Purchasers prior to or at the Closing.

 

  

11

  

 

Section 5.02 No Governmental Prohibition

 

.  No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.

 

Section 5.03 Consents

 

.  All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of the Purchasers after the Closing Date on the basis as presently operated shall have been obtained.

 

ARTICLE VI

CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASERS

 

 

The obligations of the Purchasers under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:

 

Section 6.01 Accuracy of Representations and Performance of Covenants

 

.  The representations and warranties made by the Company and the Seller in this Agreement were true when made and shall be true as of the Closing Date (except for changes therein permitted by this Agreement) with the same force and effect as if such representations and warranties were made at and as of the Closing Date.  Additionally, the Seller shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by the Seller.

 

Section 6.02 Officer’s Certificate

 

.  The Purchasers shall have been furnished with certificates dated the Closing Date and signed by the Seller and duly authorized executive officers of the Company, to the effect that no litigation, proceeding, investigation or inquiry is pending, or threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement  or, to the extent not disclosed in the Company Schedules, by or against the Company, which might result in any material adverse change in any of the assets, properties or operations of the Company.

 

Section 6.03 Good Standing

 

.  The Purchasers shall have received a certificate of good standing from the Secretary of State of Nevada or other appropriate office, dated as of a date within ten days prior to the Closing Date certifying that the Company is in good standing as a corporation in the State of Nevada and has filed all tax returns required to have been filed by it to date and has paid all taxes reported as due thereon.

 

Section 6.04 No Governmental Prohibition

 

.  No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.

 

  

12

  

 

Section 6.05 Consents

 

.  All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of the Company after the Closing Date on the basis as presently operated shall have been obtained.

 

Section 6.06 Shareholder Report

 

The Purchasers shall receive a shareholder’s report reflective of all the Company shareholder’s which does not exceed 2,633,750 shares of the Company common stock issued and outstanding as of the day prior to the Closing Date.

 

Section 6.07 Other Items

 

.  The Purchasers shall have received further opinions, documents, certificates, or instruments relating to the transactions contemplated hereby as the Purchasers may reasonably request.

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.01 Brokers

 

.  The Company and the Purchasers agree that, except as set out on Schedule 7.01 attached hereto, there were no finders or brokers involved in bringing the parties together or who were instrumental in the negotiation, execution or consummation of this Agreement.  The Company and the Purchasers each agree to indemnify the other against any claim by any third person other than those described above for any commission, brokerage, or finder’s fee arising from the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such third person, whether express or implied from the actions of the indemnifying party.

 

Section 7.02 Governing Law

 

.  This Agreement shall be governed by, enforced, and construed under and in accordance with the laws of the United States of America and, with respect to the matters of state law, with the laws of the State of Nevada.  Each of the parties (a) irrevocably consents and agrees that any legal or equitable action or proceedings arising under or in connection with this Agreement shall be brought exclusively in the federal courts of the United States. By execution and delivery of this Agreement, each party hereto irrevocably submits to and accepts, with respect to any such action or proceeding, generally and unconditionally, the jurisdiction of the aforesaid court, and irrevocably waives any and all rights such party may now or hereafter have to object to such jurisdiction.

 

Section 7.03 Notices

 

.  Any notice or other communications required or permitted hereunder shall  be in writing and shall be sufficiently given if personally delivered to it or sent by telecopy, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:

 

  

13

  

	
  

	
If to the Purchasers, to:

	
  

	
Kent Campbell

	
  

	
1007 Livingston Loop

	
  

	
The Villages, FL 32162

	
  

	
Denis Espinoza

	
  

	
110 Adams Ave.

	
  

	
Ladson, SC 29456

	
  

	
If to the Company and Seller, to:

	
  

	
George Norman

	
  

	
LILM, Inc.

	
  

	
1115 Gilmer Drive

	
  

	
Salt Lake City, Utah 84105

or such other addresses as shall be furnished in writing by any party in the manner for giving notices hereunder, and any such notice or communication shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3) days after mailing, if sent by registered or certified mail.

Section 7.04 Attorney’s Fees

 

.  In the event that either party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing party shall be reimbursed by the losing party for all costs, including reasonable attorney’s fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.

 

Section 7.05 Confidentiality

 

.  Each party hereto agrees with the other that, unless and until the transactions contemplated by this Agreement have been consummated, it and its representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal inspection, of such other party, and shall not use such data or information or disclose the same to others, except (i) to the extent such data or information is published, is a matter of public knowledge, or is required by law to be published; or (ii) to the extent that such data or information must be used or disclosed in order to consummate the transactions contemplated by this Agreement.  In the event of the termination of this Agreement, each party shall return to the other party all documents and other materials obtained by it or on its behalf and shall destroy all copies, digests, work papers, abstracts or other materials relating thereto, and each party will continue to comply with the confidentiality provisions set forth herein.

 

Section 7.06 Public Announcements and Filings

 

.  Unless required by applicable law or regulatory authority, none of the parties will issue any report, statement or press release to the general public, to the trade, to the general trade or trade press, or to any third party (other than its advisors and representatives in connection with the transactions contemplated hereby) or file any document, relating to this Agreement and the transactions contemplated hereby, except as may be mutually agreed by the parties.  Copies of any such filings, public announcements or disclosures, including any announcements or disclosures mandated by law or regulatory authorities, shall be delivered to each party at least one (1) business day prior to the release thereof.

 

  

14

  

 

Section 7.07 Schedules; Knowledge

 

.  Each party is presumed to have full knowledge of all information set forth in the other party’s schedules delivered pursuant to this Agreement.

 

Section 7.08 Third Party Beneficiaries

 

.  This contract is strictly between the Seller, the Company and the Purchasers, and, except as specifically provided, no director, officer, stockholder, employee, agent, independent contractor or any other person or entity shall be deemed to be a third party beneficiary of this Agreement.

 

Section 7.09 Expenses

 

.  Subject to Section 7.04 above, whether or not the sale of the Shares is consummated, each of the Seller, Company and the Purchasers will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with the sale of the Shares or any of the other transactions contemplated hereby.  The cost of delivering the Company inventory and assets to the Purchasers as directed by Campbell and delivering the books and records of the Company as set forth in Sections 3.02(a), 4.02 and 4.07 above shall be borne and paid by Purchasers.

 

Section 7.10 Entire Agreement

 

.  This Agreement represents the entire agreement between the parties relating to the subject matter thereof and supersedes all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.

 

Section 7.11 Survival; Termination

 

.  The representations, warranties, and covenants of the respective parties shall survive the Closing Date and the consummation of the transactions herein contemplated for a period of two years.

 

Section 7.12 Counterparts

 

.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument.

 

Section 7.13 Amendment or Waiver

 

.  Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing.  At any time prior to the Closing Date, this Agreement may by amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance may be extended by a writing signed by the party or parties for whose benefit the provision is intended.

 

Section 7.14 Best Efforts

 

.  Subject to the terms and conditions herein provided, each party shall use its best efforts to perform or fulfill all conditions and obligations to be performed or fulfilled by it under this Agreement so that the transactions contemplated hereby shall be consummated as soon as practicable.  Each party also agrees that it shall use its best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective this Agreement and the transactions contemplated herein.

 

  

15

  

 

Section 7.15 Role of Counsel

 

.  The Seller, Company and Purchasers acknowledge their understanding that this Agreement and other agreements entered into in connection with the Agreement were prepared at the request of the Purchasers by Legal & Compliance, LLC, counsel for the Purchasers and that such law firm or its attorneys did not represent the Company or the Seller in conjunction with this Agreement or any of the related transactions.  The Seller and the Company  acknowledge that they have had the opportunity to obtain the advice of independent counsel of their choosing prior to his execution of this Agreement and that they have availed themselves of this opportunity to the extent they deemed necessary and advisable.  By their signatures below, the Seller and the Company represent and warrant that they fully understand the terms and provisions of this Agreement.

 

[Signature Pages Follow]

 

  

16

  

 

IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to be executed by their respective officers, hereunto duly authorized, as of the date first-above written.

	
 

 

 

 

By:

	
THE COMPANY:

LILM, Inc.

	
  

	
Name: George I. Norman, III

	
  

	
Title:  President, CEO and Chairman

	
  

	
SELLER:

 

 

	
  

	
Alewine Limited Liability Company

	
By:

	 

	
  

	
Name: George I. Norman, III

	
  

	
Title:  General Manager

	
  

	 	
PURCHASER:

 

 

	
  

	
Kent Campbell

	
  

	 	
PURCHASER:

 

 

	
  

	
Denis Espinoza

	
  

	
ESCROW AGENT:

	
  

	
Legal & Compliance, LLC

	
By:

	 

	
  

	
Laura E. Anthony, for the firm

  

17

  

LILM, Inc. (“the Company”)

Share Purchase Agreement

Exhibit and Schedules

  

18

  

 

INVESTMENT LETTER

 

LILM, Inc.

 

Re:           Purchase of shares of Common Stock of the Company

 

Gentlemen:

 

In connection with the acquisition by the undersigned of shares of LILM, Inc.’s Common Stock (the “Securities”), the undersigned represents that the Securities are being acquired without a view to, or for, resale in connection with any distribution of such Securities or any interest therein without registration or other compliance under the Securities Act of 1933, as amended (the “Securities Act”), and that the undersigned has no direct or indirect participation in any such undertaking or in the underwriting of such an undertaking.

 

The undersigned understands that the Securities have not been registered, but are being acquired by reason of a specific exemption under the Securities Act as well as under certain state statutes for transactions by an issuer not involving any public offering and that any disposition of the subject Securities may, under certain circumstances, be inconsistent with this exemption and may make the undersigned an “underwriter” within the meaning of the Securities Act.  It is understood that the definition of an “underwriter” focuses on the concept of “distribution” and that any subsequent disposition of the subject Securities can only be effected in transactions which are not considered distributions.  Generally, the term “distribution” is considered synonymous with “public offering” or any other offer or sale involving general solicitation or general advertising.  Under present law, in determining whether a distribution occurs when securities are sold into the public market, under certain circumstances one must consider the availability of public information regarding the issuer, a holding period for the securities sufficient to assure that the persons desiring to sell the securities without registration first bear the economic risk of their investment, and a limitation on the number of securities which the stockholder is permitted to sell and on the manner of sale, thereby reducing the potential impact of the sale on the trading markets.  These criteria are set forth specifically in Rule 144 promulgated under the Securities Act.  After one year from the date the Securities are fully paid for and the subscription is accepted by the issuer, all as calculated in accordance with Rule 144(d), sales of the Securities in reliance on Rule 144 can only be made in limited amounts in accordance with the terms and conditions of that Rule.  After two year from the date the Securities are fully paid for, as calculated in accordance with Rule 144(d), it can generally be sold without meeting these conditions provided the holder is not (and has not been for the preceding three months) an affiliate of the issuer.

 

  

19

  

 

LILM, Inc.

Page Two

 

The undersigned acknowledges that the Securities must be held and may not be sold, transferred, or otherwise disposed of for value unless it is subsequently registered under the Securities Act or an exemption from such registration is available; the issuer is under no obligation to register the Securities under the Securities Act or under section 12 of the Securities Exchange Act of 1934, as amended, except as may be expressly agreed to by it in writing; if Rule 144 is available, and no assurance is given that it will be, initially only routine sales of such Securities in limited amounts can be made in reliance on Rule 144 in accordance with the terms and conditions of that Rule; the issuer is under no obligation to the undersigned to make Rule 144 available, except as may be expressly agreed to by it in writing; in the event Rule 144 is not available, compliance with Regulation A or some other exemption may be required before the undersigned can sell, transfer, or otherwise dispose of such Securities without registration under the Securities Act; the issuer’s registrar and transfer agent will maintain a stop transfer order against the registration of transfer of the Securities; and the certificate representing the Common Stock composing the Securities will bear a legend in substantially the following form so restricting the sale of such Securities.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ARE “RESTRICTED SECURITIES” WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT.  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.

 

The issuer may refuse to register transfer of the Securities in the absence of compliance with Rule 144 unless the undersigned furnishes the issuer with a “no-action” or interpretative letter from the Securities and Exchange Commission or an opinion of counsel reasonably acceptable to the issuer stating that the transfer is proper; further, unless such letter or opinion states that the Securities are free of any restrictions under the Securities Act, the issuer may refuse to transfer the Securities to any transferee who does not furnish in writing to the issuer the same representations and agree to the same conditions with respect to such Securities as are set forth herein.  The issuer may also refuse to transfer the Securities if any circumstances are present reasonably indicating that the transferee’s representations are not accurate.

 

Very truly yours,

Dated:                                

(Subscriber)

(Joint Subscriber)

 

 

20Exhibit 4.2

 

FIRST SUPPLEMENTAL INDENTURE

 

by and among

 

Ventas Realty, Limited Partnership,

Ventas, Inc., as Guarantor

 

and

 

U.S. Bank National Association,

as Trustee

 

$550,000,000

1.55% Senior Notes due 2016

 

 

Dated as of September 26, 2013

 

Supplement to Indenture dated as of September 26, 2013 (Senior Debt Securities)

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I
    
	
 
    
	
CREATION   OF THE SECURITIES
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Designation of the Series; Securities Guarantee
    	
2
    
	
Section 1.02
    	
Form of Notes
    	
2
    
	
Section 1.03
    	
No Limit on Amount of Notes
    	
2
    
	
Section 1.04
    	
Ranking
    	
2
    
	
Section 1.05
    	
Certificate of Authentication
    	
2
    
	
Section 1.06
    	
No Sinking Fund
    	
3
    
	
Section 1.07
    	
No Additional Amounts
    	
3
    
	
Section 1.08
    	
Definitions
    	
3
    
	
 
    
	
ARTICLE II
    
	
 
    
	
REDEMPTION
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
Amendment to Article 3
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    
	
 
    
	
COVENANTS
    
	
 
    	
 
    	
 
    
	
Section 3.01
    	
Amendments to Article 4
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    
	
 
    
	
SUCCESSORS
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
Amendments to Article 5
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    
	
 
    
	
DEFAULTS   AND REMEDIES
    
	
 
    	
 
    	
 
    
	
Section 5.01
    	
Amendments to Article 6
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE VI
    
	
 
    
	
TRUSTEE
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Amendments to Article 7
    	
19
    

 

 

	
ARTICLE VII
    
	
 
    
	
LEGAL   DEFEASANCE AND COVENANT DEFEASANCE
    
	
 
    	
 
    	
 
    
	
Section 7.01
    	
Applicability of Defeasance Provisions
    	
19
    
	
Section 7.02
    	
Determinations Under Section 8.03
    	
19
    
	
Section 7.03
    	
Determination Under Section 8.07
    	
19
    
	
Section 7.04
    	
Amendments to Article 8
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII
    
	
 
    
	
GUARANTEES
    
	
 
    	
 
    	
 
    
	
Section 8.01
    	
Applicability of Guarantee Provisions
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE IX
    
	
 
    
	
MISCELLANEOUS
    
	
 
    	
 
    	
 
    
	
Section 9.01
    	
Determination Under Section 13.10
    	
20
    
	
Section 9.02
    	
Application of First Supplemental Indenture; Ratification
    	
20
    
	
Section 9.03
    	
Benefits of First Supplemental Indenture
    	
20
    
	
Section 9.04
    	
Effective Date
    	
20
    
	
Section 9.05
    	
Governing Law
    	
21
    
	
Section 9.06
    	
Counterparts
    	
21
    
	
 
    	
 
    	
 
    
	
SCHEDULE   1
    	
Real   Estate Revenues
    	
 
    
	
 
    	
 
    	
 
    
	
EXHIBIT A
    	
Form of   Note
    	
 
    
	
EXHIBIT B
    	
Form of   Notation of Securities Guarantee
    	
 
    

 

 

THIS FIRST SUPPLEMENTAL INDENTURE, dated as of September 26, 2013 (the “First Supplemental Indenture”), is by and among Ventas Realty, Limited Partnership, a Delaware limited partnership (the “Issuer”), Ventas, Inc., a Delaware corporation, and U.S. Bank National Association, as trustee (the “Trustee”), having a Corporate Trust Office at 425 Walnut ML CN WN 06 CT, Cincinnati, Ohio 45202, as Trustee under the Indenture (defined below).

 

WHEREAS, Ventas, Inc., the Issuer, and the Trustee are parties to that certain indenture dated as of September 26, 2013 (the “Base Indenture” and, as amended and supplemented from time to time, the “Indenture”), providing for the issuance by Ventas, Inc. or by the Issuer together from time to time of their respective senior debt securities (the “Securities”);

 

WHEREAS, Sections 2.02 and 9.01 of the Base Indenture provide, among other things, that, without the consent of the Holders of the Securities, one or more indentures supplemental to the Base Indenture may be entered into to establish the form or terms of Securities of any series or to change or eliminate any of the provisions of the Base Indenture; provided that any such change or elimination shall become effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provisions;

 

WHEREAS, the Issuer, acting in its capacity as issuer under the Base Indenture, desires to issue a series of its Securities under the Base Indenture, and has duly authorized the creation and issuance of such Securities and the execution and delivery of this First Supplemental Indenture to modify the Base Indenture and to provide certain additional provisions in respect of such Securities as hereinafter described;

 

WHEREAS, the Issuer desires to issue such Securities with the benefit of a guarantee provided by Ventas, Inc. on the terms set forth in the Base Indenture, as supplemented by this First Supplemental Indenture;

 

WHEREAS, the Issuer, Ventas, Inc. and the Trustee deem it advisable to enter into this First Supplemental Indenture for the purposes of establishing the terms of such Securities and guarantee and providing for the rights, obligations and duties of the Trustee with respect to such Securities;

 

WHEREAS, concurrently with the execution hereof, the Issuer has delivered to the Trustee an Officers’ Certificate and has caused its counsel to deliver to the Trustee an Opinion of Counsel or a reliance letter upon an Opinion of Counsel satisfying the requirements of Section 2.03 of the Base Indenture; and

 

WHEREAS, all conditions and requirements of the Base Indenture necessary to make this First Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled by the parties hereto, and the execution and delivery hereof have been in all respects duly authorized by the parties hereto.

 

NOW, THEREFORE, for and in consideration of the premises and agreements herein contained, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of such Securities, as follows:

 

 

ARTICLE I

 

CREATION OF THE SECURITIES

 

Section 1.01                             Designation of the Series; Securities Guarantee.

 

(a)                                 The changes, modifications and supplements to the Base Indenture effected by this First Supplemental Indenture shall be applicable only with respect to, and govern the terms of, the Notes (as defined below), which shall not apply to any other Securities that have been or may be issued under the Base Indenture unless a supplemental indenture with respect to such other Securities specifically incorporates such changes, modifications and supplements. Pursuant to the terms hereof and Sections 2.01 and 2.02 of the Base Indenture, the Issuer hereby creates a series of Securities designated as the “1.55% Senior Notes due 2016” (the “Notes”), which Notes shall be deemed “Securities” for all purposes under the Base Indenture.  Except as otherwise provided in the Base Indenture, the Notes shall form their own series for voting purposes, and shall not be part of the same class or series as any other Securities issued by the Issuer or by Ventas, Inc.

 

(b)                                 Each of the Notes will be guaranteed by the Guarantor in accordance with Article 10 of the Base Indenture and Article VII of this First Supplemental Indenture.

 

Section 1.02                             Form of Notes.  The Notes will be issued in definitive form and the definitive form of the Notes shall be one or more Global Securities substantially in the form set forth in Exhibit A attached hereto, which is incorporated herein and made a part hereof.  The Notes shall bear interest, be payable and have such other terms as are stated in the form of definitive Note or in the Base Indenture, as supplemented by this First Supplemental Indenture.  The stated maturity of the principal of the Notes shall be September 26, 2016.

 

Section 1.03                             No Limit on Amount of Notes.  The Trustee shall authenticate and deliver on September 26, 2013, Notes for original issue in an aggregate principal amount of up to $550,000,000.  Notwithstanding the foregoing, the aggregate principal amount of the Notes shall be unlimited; provided, that the terms of all Notes issued under this First Supplemental Indenture (other than the date of issuance) shall be the same.  The Issuer may, upon the execution and delivery of this First Supplemental Indenture or from time to time thereafter, execute and deliver the Notes to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Notes upon an Authentication Order and delivery of an Officers’ Certificate and Opinion of Counsel as contemplated by Section 2.03 of the Base Indenture, without further action by the Issuer.

 

Section 1.04                             Ranking.  The Notes will be the Issuer’s unsecured and unsubordinated obligations and rank equal in right of payment with all of the Issuer’s existing and future unsecured and unsubordinated indebtedness.

 

Section 1.05                             Certificate of Authentication.  The Trustee’s certificate of authentication to be included on the Notes shall be substantially as provided in the form of Note attached hereto as Exhibit A.

 

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Section 1.06                             No Sinking Fund.  No sinking fund will be provided with respect to the Notes (notwithstanding any provisions of the Base Indenture with respect to sinking fund obligations).

 

Section 1.07                             No Additional Amounts.  No Additional Amounts will be payable with respect to the Notes (notwithstanding any provisions of the Base Indenture with respect to Additional Amount obligations).

 

Section 1.08                             Definitions.

 

(a)                                 Capitalized terms used herein and not otherwise defined herein shall have the respective meanings assigned thereto in the Base Indenture.

 

(b)                                 Solely for purposes of this First Supplemental Indenture and the Notes, the following definitions in Section 1.01 of the Base Indenture are hereby amended in their entirety to read as follows:

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

 

“Business Day” means any day other than a Saturday or Sunday or a day on which banking institutions in The City of New York are required or authorized to close.

 

“Debt” means, as of any date (without duplication), (1) all indebtedness and liabilities for borrowed money, secured or unsecured, of Ventas, Inc. and its Subsidiaries, including mortgages and other notes payable (including the Notes to the extent outstanding from time to time), but excluding any indebtedness, including mortgages and other notes payable, which is secured by cash, cash equivalents or marketable securities or defeased (it being understood that cash collateral shall be deemed to include cash deposited with a trustee with respect to third party indebtedness) and (2) all Contingent Liabilities of Ventas, Inc. and Subsidiaries, excluding in each of clauses (1) and (2) Intercompany Debt and all liabilities associated with customary exceptions to non-recourse indebtedness, such as for fraud, misapplication of funds, environmental indemnities, voluntary bankruptcy, collusive involuntary bankruptcy and other similar exceptions.

 

It is understood that Debt shall not include any redeemable equity interest in Ventas, Inc.

 

“Default” means, with respect to the Indenture and the Notes, any event that is, or with the passage of time or giving of notice would be, an Event of Default.

 

“GAAP” means generally accepted accounting principles in the United States, consistently applied, as in effect from time to time.

 

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“Incur” means, with respect to any Debt or other obligation of any Person, to create, assume, guarantee or otherwise become liable in respect of such Debt or other obligation, and “Incurrence” and “Incurred” have the meanings correlative to the foregoing.

 

“Interest Payment Date” has the meaning set forth in the Indenture and the Notes.

 

“Lien” means (without duplication) any lien, mortgage, trust deed, deed of trust, deed to secure debt, pledge, security interest, assignment for collateral purposes, deposit arrangement, or other security agreement, excluding any right of setoff but including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and any other like agreement granting or conveying a security interest; provided, that for purposes hereof, “Lien” shall not include any mortgage that has been defeased by Ventas, Inc. or any of its Subsidiaries in accordance with the provisions thereof through the deposit of cash, cash equivalents or marketable securities (it being understood that cash collateral shall be deemed to include cash deposited with a trustee with respect to third party indebtedness).

 

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

 

“Real Estate Assets” means, as of any date, the real estate assets of such Person and its Subsidiaries on such date, on a consolidated basis determined in accordance with GAAP.

 

“Significant Subsidiary” means each Subsidiary that is a “significant subsidiary”, if any, of Ventas, Inc., as such term is defined in Regulation S-X under the Securities Act.

 

(c)                                  Solely for purposes of this First Supplemental Indenture and the Notes, the following terms shall have the indicated meanings:

 

“Consolidated EBITDA” means, for any period of time, the net income (loss) of Ventas, Inc. and its Subsidiaries, determined on a consolidated basis in accordance with GAAP for such period, before deductions for (without duplication):

 

(1)                                 Interest Expense;

 

(2)                                 taxes;

 

(3)                                 depreciation, amortization, and all other non-cash items, as determined reasonably and in good faith by Ventas, Inc., deducted in arriving at net income (loss);

 

(4)                                 extraordinary items;

 

(5)                                 non-recurring items or other unusual items, as determined reasonably and in good faith by Ventas, Inc. (including, without limitation, all prepayment penalties and all costs or fees incurred in connection with any debt financing or amendment thereto, acquisition, disposition, recapitalization or similar transaction (regardless of whether such transaction is completed));

 

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(6)                                 noncontrolling interests;

 

(7)                                 income or expense attributable to transactions involving derivative instruments that do not qualify for hedge accounting in accordance with GAAP; and

 

(8)                                 gains or losses on dispositions of depreciable real estate investments, property valuation losses and impairment charges.

 

For purposes of calculating Consolidated EBITDA, all amounts shall be as determined reasonably and in good faith by Ventas, Inc., and in accordance with GAAP except to the extent that GAAP is not applicable with respect to the determination of all non-cash and non-recurring items.

 

“Consolidated Financial Statements” means, with respect to any Person, collectively, the consolidated financial statements and notes to those financial statements, of that Person and its subsidiaries prepared in accordance with GAAP.

 

“Contingent Liabilities of Ventas, Inc. and Subsidiaries” means, as of any date, those liabilities of Ventas, Inc. and its Subsidiaries consisting of (without duplication) indebtedness for borrowed money, as determined in accordance with GAAP, that are or would be stated and quantified as contingent liabilities in the notes to the Consolidated Financial Statements of Ventas, Inc. as of the date of determination.

 

“First Supplemental Indenture” has the meaning stated in the preamble.

 

“Guarantor” means Ventas, Inc. and its successors and assigns; provided, however, that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its Guarantee of the Notes is released in accordance with the terms of the Indenture.

 

“Intercompany Debt” means, as of any date, Debt to which the only parties are Ventas, Inc. and any of its Subsidiaries as of such date; provided, however, that with respect to any such Debt of which the Issuer or the Guarantor is the borrower, such Debt is subordinate in right of payment to the Notes.

 

“Interest Expense” means, for any period of time, the aggregate amount of interest recorded in accordance with GAAP for such period by Ventas, Inc. and its Subsidiaries, but excluding (i) interest reserves funded from the proceeds of any loan, (ii) prepayment penalties, (iii) amortization of deferred financing costs, and (iv) non-cash swap ineffectiveness charges, in all cases as reflected in the applicable Consolidated Financial Statements.

 

“Issue Date” means September 26, 2013.

 

“Issuer” has the meaning stated in the preamble.

 

“Latest Completed Quarter” means, as of any date, the then most recently ended fiscal quarter of Ventas, Inc. for which Consolidated Financial Statements of Ventas, Inc. have been completed, it being understood that at any time when Ventas, Inc. is subject to the

 

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informational requirements of the Exchange Act, and in accordance therewith files annual and quarterly reports with the Commission, the term “Latest Completed Quarter” shall be deemed to refer to the fiscal quarter covered by Ventas, Inc.’s most recently filed Quarterly Report on Form 10-Q, or, in the case of the last fiscal quarter of the year, Ventas, Inc.’s Annual Report on Form 10-K.

 

“Make-Whole Amount” means, in connection with any optional redemption of the Notes, the excess, if any, of:

 

(1)                                 the aggregate present value as of the date of such redemption of each dollar of principal being redeemed or paid and the amount of interest (exclusive of interest accrued to the date of redemption or accelerated payment) that would have been payable in respect of each such dollar if such redemption or accelerated payment had not been made, determined by discounting, on a semi-annual basis, such principal and interest at the Reinvestment Rate (determined on the third Business Day preceding the date a notice of redemption is given or declaration of acceleration is made) from the respective dates on which such principal and interest would have been payable if such redemption or payment had not been made, over

 

(2)                                 the aggregate principal amount of the Notes being redeemed or paid.

 

“Notes” has the meaning stated in Section 1.01 hereof.

 

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Debt.

 

“Property EBITDA” means for any property owned by Ventas, Inc. or any of its Subsidiaries as of the date of determination, for any period of time, the net income (loss) derived from such property for such period, before deductions for (without duplication):

 

(1)                                 Interest Expense;

 

(2)                                 taxes;

 

(3)                                 depreciation, amortization, and all other non-cash items, as determined reasonably and in good faith by Ventas, Inc., deducted in arriving at net income (loss);

 

(4)                                 general and administrative expenses that are not allocated by management to a property segment, as reflected in Ventas, Inc.’s Consolidated Financial Statements available for the four (4) consecutive fiscal quarters ending with the Latest Completed Quarter;

 

(5)                                 extraordinary items;

 

(6)                                 non-recurring items or other unusual items, as determined reasonably and in good faith by Ventas, Inc. (including, without limitation, all prepayment penalties and all costs or fees incurred in connection with any debt financing or amendment thereto, acquisition,

 

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disposition, recapitalization or similar transaction (regardless of whether such transaction is completed));

 

(7)                                 noncontrolling interests;

 

(8)                                 income or expense attributable to transactions involving derivative instruments that do not qualify for hedge accounting in accordance with GAAP; and

 

(9)                                 property valuation losses and impairment charges;

 

in each case attributable to such property.

 

For purposes of calculating Property EBITDA, all amounts shall be determined reasonably and in good faith by Ventas, Inc., and in accordance with GAAP except to the extent that GAAP is not applicable with respect to the determination of all non-cash and non-recurring items.

 

Property EBITDA shall be adjusted (without duplication) to give pro forma effect:

 

(x)                                 in the case of any assets having been placed-in-service or removed from service since the first day of the period to the date of determination, to include or exclude, as the case may be, any Property EBITDA earned or eliminated as a result of the placement of such assets in service or removal of such assets from service as if the placement of such assets in service or removal of such assets from service occurred as of the first day of the period; and

 

(y)                                 in the case of any acquisition or disposition of any asset or group of assets since the first day of the period to the date of determination, including, without limitation, by merger, or stock or asset purchase or sale, to include or exclude, as the case may be, any Property EBITDA earned or eliminated as a result of the acquisition or disposition of those assets as if the acquisition or disposition occurred as of the first day of the period.

 

“Reinvestment Rate” means 0.15% plus the arithmetic mean of the yields under the respective heading Week Ending published in the most recent Statistical Release under Treasury Constant Maturities for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity, as of the date of such redemption or payment, of the principal being redeemed or paid. If no maturity exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purpose of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used.

 

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“Secured Debt” means, as of any date, that portion of the aggregate principal amount of all outstanding Debt of Ventas, Inc. and its Subsidiaries as of that date that is secured by a Lien on properties or other assets of Ventas, Inc. or any of its Subsidiaries.

 

“Stabilized Development Asset” means, as of any date, a new construction or development Real Estate Asset at such date that, following the first four (4) consecutive fiscal quarters occurring after substantial completion of construction or development, either (i) an additional six (6) consecutive fiscal quarters have occurred or (ii) such Real Estate Asset is at least 90% leased, whichever shall first occur.

 

“Statistical Release” means that statistical release designated H.15(519) or any successor publication that is published weekly by the Federal Reserve System and that establishes annual yields on actively traded United States government securities adjusted to constant maturities, or, if such statistical release is not published at the time of any determination under the Indenture, then such other reasonably comparable index the Issuer designates.

 

“Subsidiary” means, with respect to any Person, a corporation, partnership association, joint venture, trust, limited liability company or other business entity which is required to be consolidated with such Person in accordance with GAAP.

 

“Total Assets” means, as of any date, in each case as determined reasonably and in good faith by Ventas, Inc., the sum of (without duplication):

 

(1)                                 with respect to Real Estate Assets that were owned by Ventas, Inc. and its Subsidiaries as of April 17, 2002 and that continue to be owned as of the date of determination, the annualized rental revenues specified for such Real Estate Assets on Schedule 1 attached to this First Supplemental Indenture, divided by 0.0900, plus any annualized incremental rental revenue generated by such Real Estate Assets as a result of, arising out of or in connection with annual rent escalations or rent reset rights of Ventas, Inc. and its Subsidiaries with respect to such Real Estate Assets (whether by agreement or exercise of such right or otherwise), divided by 0.0900; for the purpose of this clause (1), “annualized incremental rental revenue” in respect of a Real Estate Asset shall mean the increase in daily rental revenue generated by such Real Estate Asset as a result of, arising out of or in connection with such annual rent escalations or rent reset rights over the daily rental revenue generated by such Real Estate Asset immediately prior to the effective date of such increase, annualized by multiplying such daily increase by 365;

 

(2)                                 with respect to all other Real Estate Assets owned by Ventas, Inc. and its Subsidiaries as of the date of determination (except as set forth in clause (3) below), the cost (original cost plus capital improvements before depreciation and amortization) thereof, determined in accordance with GAAP;

 

(3)                                 with respect to Stabilized Development Assets owned by Ventas, Inc. and its Subsidiaries as of the date of determination, the aggregate sum of all Property EBITDA for such Stabilized Development Assets for the four (4) consecutive fiscal quarters ending with the Latest Completed Quarter divided by (i) 0.0900, in the case of a government reimbursed property and (ii) 0.0700 in all other cases; provided, however,

 

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that if the value of a particular Stabilized Development Asset calculated pursuant to this clause (3) is less than the cost (original cost plus capital improvements before depreciation and amortization) of such Real Estate Asset, as determined in accordance with GAAP, such cost shall be used in lieu thereof with respect to such Real Estate Asset;

 

(4)                                 the proceeds of the Debt, or the assets to be acquired in exchange for such proceeds, as the case may be, incurred since the end of the Latest Completed Quarter;

 

(5)                                 mortgages and other notes receivable of Ventas, Inc. and its Subsidiaries, determined in accordance with GAAP;

 

(6)                                 cash, cash equivalents and marketable securities of Ventas, Inc. and its Subsidiaries but excluding all cash, cash equivalents and marketable securities securing, or applied to defease or discharge, in each case as of that date, any indebtedness, including mortgages and other notes payable (including cash deposited with a trustee with respect to third party indebtedness), all determined in accordance with GAAP; and

 

(7)                                 all other assets of Ventas, Inc. and its Subsidiaries (excluding goodwill), determined in accordance with GAAP.

 

“Unencumbered Assets” means, as of any date, in each case as determined reasonably and in good faith by Ventas, Inc., the sum of (without duplication):

 

(1)                                 with respect to Real Estate Assets that were owned by Ventas, Inc. and its Subsidiaries as of April 17, 2002 and that continue to be owned as of the date of determination, but excluding any such Real Estate Assets that are serving as collateral for Secured Debt, the annualized rental revenues specified for such Real Estate Assets on Schedule 1 attached to this First Supplemental Indenture, divided by 0.0900, plus any annualized incremental rental revenue generated by such Real Estate Assets as a result of, arising out of or in connection with annual rent escalations or rent reset rights of Ventas, Inc. and its Subsidiaries with respect to such Real Estate Assets (whether by agreement or exercise of such right or otherwise), divided by 0.0900; for the purpose of this clause (1), “annualized incremental rental revenue” in respect of a Real Estate Asset shall mean the increase in daily rental revenue generated by such Real Estate Asset as a result of, arising out of or in connection with such annual rent escalations or rent reset rights over the daily rental revenue generated by such Real Estate Asset immediately prior to the effective date of such increase, annualized by multiplying such daily increase by 365;

 

(2)                                 with respect to all other Real Estate Assets owned by Ventas, Inc. and its Subsidiaries as of the date of determination (except as set forth in clause (3) below), but excluding any such Real Estate Assets that are serving as collateral for Secured Debt, the cost (original cost plus capital improvements before depreciation and amortization) thereof, determined in accordance with GAAP;

 

(3)                                 with respect to Stabilized Development Assets owned by Ventas, Inc. and its Subsidiaries as of the date of determination, excluding any such Stabilized

 

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Development Assets that are serving as collateral for Secured Debt, the aggregate sum of all Property EBITDA for such Stabilized Development Assets for the four (4) consecutive fiscal quarters ending with the Latest Completed Quarter divided by (i) 0.0900, in the case of a government reimbursed property and (ii) 0.0700 in all other cases; provided, however, that if the value of a particular Stabilized Development Asset calculated pursuant to this clause (3) is less than the cost (original cost plus capital improvements before depreciation and amortization) of such Real Estate Asset, as determined in accordance with GAAP, such cost shall be used in lieu thereof with respect to such Real Estate Asset;

 

(4)                                 the proceeds of the Debt, or the assets to be acquired in exchange for such proceeds, as the case may be, incurred since the end of the Latest Completed Quarter;

 

(5)                                 mortgages and other notes receivable of Ventas, Inc. and its Subsidiaries, except any mortgages or other notes receivable that are serving as collateral for Secured Debt, determined in accordance with GAAP;

 

(6)                                 cash, cash equivalents and marketable securities of Ventas, Inc. and its Subsidiaries but excluding all cash, cash equivalents and marketable securities securing, or applied to defease or discharge, in each case as of that date, any indebtedness, including mortgages and other notes payable (including cash deposited with a trustee with respect to third party indebtedness), all determined in accordance with GAAP; and

 

(7)                                 all other assets of Ventas, Inc. and its Subsidiaries (excluding goodwill), other than assets pledged to secure Debt, determined in accordance with GAAP; provided, however, that Unencumbered Assets shall not include net real estate investments in unconsolidated joint ventures of Ventas, Inc. and its Subsidiaries.

 

For the avoidance of doubt, cash held by a “qualified intermediary” in connection with proposed like-kind exchanges pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, which may be classified as “restricted” for GAAP purposes shall nonetheless be included in clause (6) above, so long as Ventas, Inc. or any of its Subsidiaries has the right to (i) direct the qualified intermediary to return such cash to Ventas, Inc. or such Subsidiary if and when Ventas, Inc. or such Subsidiary fails to identify or acquire the proposed like-kind property or at the end of the 180-day replacement period or (ii) direct the qualified intermediary to use such cash to acquire like-kind property.

 

“Unsecured Debt” means, as of any date, that portion of the aggregate principal amount of all outstanding Debt of Ventas, Inc. and its Subsidiaries as of that date that is neither Secured Debt nor Contingent Liabilities of Ventas, Inc. and its Subsidiaries.

 

“Ventas Capital” means Ventas Capital Corporation, a Delaware corporation.

 

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ARTICLE II

 

REDEMPTION

 

Section 2.01                             Amendment to Article 3.  Pursuant to Sections 2.02(7) and 2.02(8) of the Base Indenture, Article 3 of the Base Indenture is hereby amended with respect to the Notes by adding to the end the following new Sections 3.09 and 3.10, in each case to read as follows:

 

“Section 3.09  Optional Redemption.

 

(a)                                 The Issuer may, at its option, redeem the Notes at any time prior to maturity, in whole or from time to time in part.

 

(b)                                 The redemption price for any redemption of the Notes before September 26, 2016 shall be equal to the sum of (1) the principal amount of the Notes being redeemed, (2) accrued and unpaid interest thereon to the redemption date, and (3) the Make-Whole Amount, if any (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

 

(c)                                  Any redemption pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.07 of the Indenture.

 

Section 3.10  Mandatory Redemption.  The Issuer is not required to make mandatory redemption payments with respect to the Notes.”

 

ARTICLE III

 

COVENANTS

 

Section 3.01                             Amendments to Article 4.

 

(a)                                 Pursuant to Section 2.02(14) of the Base Indenture, Section 4.03 of the Base Indenture is hereby amended with respect to the Notes by deleting the text thereof in its entirety and inserting in its place the following:

 

“Section 4.03  Reports.  Whether or not required by the Commission, so long as any Notes are outstanding, Ventas, Inc. shall file with the Trustee, within 15 days after it files the same with the Commission (or if not subject to the periodic reporting requirements of the Exchange Act, within 15 days after it would have been required to file the same with the Commission had it been so subject):

 

(1)                                 all quarterly and annual financial information that is required to be contained in filings with the Commission on Forms 10-Q and 10-K, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information

 

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only, a report on the annual financial statements by Ventas, Inc.’s certified independent accountants; and

 

(2)                                 all current reports that are required to be filed with the Commission on Form 8-K.

 

For so long as any Notes remain outstanding, if at any time Ventas, Inc. is not required to file with the Commission the reports required by the preceding paragraph of this Section 4.03, Ventas, Inc. shall furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

The availability of the foregoing materials on the Commission’s website or on Ventas, Inc.’s website shall be deemed to satisfy the foregoing delivery obligations.”

 

(b)                                 Pursuant to Section 2.02(14) of the Base Indenture, Section 4.04 of the Base Indenture is hereby amended with respect to the Notes by deleting the text thereof in its entirety and inserting in its place the following:

 

“Section 4.04  Compliance Certificate.  “Ventas, Inc. shall deliver to the Trustee, within 120 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of Ventas, Inc. and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether Ventas, Inc. has kept, observed, performed and fulfilled its obligations under the Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge, Ventas, Inc. has kept, observed, performed and fulfilled each and every covenant contained in the Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of the Indenture (or, if a Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action Ventas, Inc. is taking or proposes to take with respect thereto) and that to the best of his or her knowledge, no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Securities of any series is prohibited or if such event has occurred, a description of the event and what action Ventas, Inc. is taking or proposes to take with respect thereto.  For purposes of this Section 4.04, such compliance shall be determined without regard to any period of grace or requirement of notice under the Indenture.”

 

(c)                                  Pursuant to Section 2.02(14) of the Base Indenture, Section 4.06 of the Base Indenture is hereby amended with respect to the Notes by deleting the text thereof in its entirety and inserting in its place the following:

 

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“Section 4.06  Corporate Existence.  Except as permitted by Article 5 and Section 10.04, Ventas, Inc. and the Issuer shall do all things necessary to preserve and keep their existence, rights and franchises; provided, however, that neither Ventas, Inc. nor the Issuer shall be required to preserve any such right or franchise if Ventas, Inc. or the Issuer, as applicable, shall determine reasonably and in good faith that the preservation thereof is no longer desirable in the conduct of its business.”

 

(d)                                 Pursuant to Section 2.02(14) of the Base Indenture, Article 4 of the Base Indenture is hereby amended with respect to the Notes by adding to the end the following new Sections 4.07 through 4.11, in each case to read as follows:

 

“Section 4.07  Taxes.  Ventas, Inc. will pay, and will cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

 

Section 4.08  Stay, Extension and Usury Laws.  Each of Ventas, Inc. and the Issuer covenants (to the extent that they may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of the Indenture; and each of Ventas, Inc. and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.

 

Section 4.09  Restrictions on Activities of Ventas Capital.  Ventas, Inc. and the Issuer shall not permit Ventas Capital to hold any material assets, become liable for any material obligations or engage in any significant business activities; provided, however, that Ventas Capital may be a co-obligor with respect to Debt if the Issuer is a primary obligor of such Debt and the net proceeds of such Debt are received by the Issuer or one or more of its Subsidiaries other than Ventas Capital.

 

Section 4.10  Limitations on Incurrence of Debt.

 

(a)                                 Ventas, Inc. shall not, and shall not permit any of its Subsidiaries to, Incur any Debt if, immediately after giving effect to the Incurrence of such additional Debt and any other Debt Incurred since the end of the Latest Completed Quarter and the application of the net proceeds therefrom, the aggregate principal amount of all outstanding Debt would exceed 60% of the sum of (without duplication) (i) Total Assets as of the end of the Latest Completed Quarter and (ii) the purchase price of any Real

 

13

 

Estate Assets or mortgages receivable acquired, and the amount of any securities offering proceeds received (to the extent such proceeds were not used to acquire Real Estate Assets or mortgages receivable or to reduce Debt), since the end of the Latest Completed Quarter.

 

(b)                                 Ventas, Inc. shall not, and shall not permit any of its Subsidiaries to, Incur any Secured Debt if, immediately after giving effect to the Incurrence of such additional Secured Debt and any other Secured Debt Incurred since the end of the Latest Completed Quarter and the application of the net proceeds therefrom, the aggregate principal amount of all outstanding Secured Debt would exceed 50% of the sum of (without duplication) (i) Total Assets as of the end of the Latest Completed Quarter and (ii) the purchase price of any Real Estate Assets or mortgages receivable acquired, and the amount of any securities offering proceeds received (to the extent such proceeds were not used to acquire Real Estate Assets or mortgages receivable or to reduce Debt), since the end of the Latest Completed Quarter.

 

(c)                                  Ventas, Inc. shall not, and shall not permit any of its Subsidiaries to, Incur any Debt if, immediately after giving effect to the Incurrence of such additional Debt and any other Debt Incurred since the end of the Latest Completed Quarter and the application of the net proceeds therefrom, the ratio of Consolidated EBITDA to Interest Expense for the four (4) consecutive fiscal quarters ending with the Latest Completed Quarter would be less than 1.50 to 1.00 on a pro forma basis and calculated on the assumption (without duplication) that:

 

(i)                                     the additional Debt and any other Debt Incurred by Ventas, Inc. or any of its Subsidiaries since the first day of such four-quarter period to the date of determination, which was outstanding at the date of determination, had been Incurred at the beginning of that period and continued to be outstanding throughout that period, and the application of the net proceeds of such Debt, including to refinance other Debt, had occurred at the beginning of such period; provided, that in determining the amount of Debt so Incurred, the amount of Debt under any revolving credit facility shall be computed based upon the average daily balance of such Debt during such period;

 

(ii)                                  the repayment or retirement of any other Debt repaid or retired by Ventas, Inc. or any of its Subsidiaries since the first day of such four-quarter period to the date of determination had occurred at the beginning of that period; provided, that in determining the amount of Debt so repaid or retired, the amount of Debt under any revolving credit facility shall be computed based upon the average daily balance of such Debt during such period; and

 

14

 

(iii)                               in the case of any acquisition or disposition of any asset or group of assets (including, without limitation, by merger, or stock or asset purchase or sale) or the placement of any assets in service or removal of any assets from service by Ventas, Inc. or any of its Subsidiaries since the first day of such four-quarter period to the date of determination, the acquisition, disposition, placement in service or removal from service and any related repayment or refinancing of Debt had occurred as of the first day of such period, with the appropriate adjustments to Consolidated EBITDA and Interest Expense with respect to the acquisition, disposition, placement in service or removal from service being included in that pro forma calculation.

 

Section 4.11  Maintenance of Unencumbered Assets. Ventas, Inc. and its Subsidiaries shall maintain at all times Unencumbered Assets of not less than 150% of the aggregate principal amount of all outstanding Unsecured Debt.”

 

ARTICLE IV

 

SUCCESSORS

 

Section 4.01                             Amendments to Article 5.

 

(a)                                 Pursuant to Section 2.02(14) of the Base Indenture, Section 5.01 of the Base Indenture is hereby amended with respect to the Notes by deleting the text thereof in its entirety and inserting in its place the following:

 

“Section 5.01                      Merger, Consolidation, or Sale of Assets.

 

Ventas, Inc. may not, directly or indirectly: (a) consolidate or merge with or into another Person (whether or not Ventas, Inc. is the surviving corporation); or (b) sell, assign, transfer, convey, lease (other than to an unaffiliated operator in the ordinary course of business) or otherwise dispose of all or substantially all of the properties or assets of Ventas, Inc. and its Subsidiaries taken as a whole, in one or more related transactions, to another Person, unless:

 

(1)                                 either:

 

(i)                                     Ventas, Inc. is the surviving corporation; or

 

(ii)                                  the Person formed by or surviving any such consolidation or merger (if other than Ventas, Inc.) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a corporation organized or existing under the laws of the United States, any state of the United States or the District of Columbia;

 

15

 

(2)                                 the Person formed by or surviving any such consolidation or merger (if other than Ventas, Inc.) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all of Ventas, Inc.’s obligations under the Notes and the Indenture pursuant to agreements reasonably satisfactory to the Trustee; and

 

(3)                                   immediately after such transaction, on a pro forma basis giving effect to such transaction or series of transactions (and treating any obligation of Ventas, Inc. or any Subsidiary incurred in connection with or as a result of such transaction or series of transactions as having been incurred at the time of such transaction), no Default or Event of Default exists under the Indenture.

 

Notwithstanding anything to the contrary in this Section 5.01, the Guarantor may consolidate or merge with or into the Issuer, or sell and/or transfer to the Issuer all or substantially all of its assets, in each case, without compliance with any of the requirements set forth in this Article 5.”

 

(b)                                 Pursuant to Sections 2.02(14) of the Base Indenture, Article 5 of the Base Indenture is hereby amended with respect to the Notes by adding to the end the following new Sections 5.03 and 5.04, in each case to read as follows:

 

“Section 5.03                      Assumption by the Guarantor.

 

The Guarantor, or a Subsidiary thereof that is organized and existing under the laws of the United States, any State of the United States or the District of Columbia, may directly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, the due and punctual payment of the principal of and interest on all the Notes and the performance of every covenant of the Indenture on the part of the Issuer to be performed or observed. Upon any such assumption, the Guarantor or such Subsidiary shall succeed to, and be substituted for and may exercise every right and power of, the Issuer under the Indenture with the same effect as if the Guarantor or such Subsidiary had been named as the Issuer herein and the Issuer shall be released from liability as obligor on the Notes.

 

Section 5.04                            Termination of the Guarantee.

 

The obligations of the Guarantor under the Indenture shall terminate at such time the Guarantor merges or consolidates with the Issuer or at such other time as the Issuer acquires all of the assets and partnership interests of the Guarantor.”

 

16

 

ARTICLE V

 

DEFAULTS AND REMEDIES

 

Section 5.01                             Amendments to Article 6.

 

(a)                                 Pursuant to Section 2.02(14) of the Base Indenture, Section 6.01 of the Base Indenture is hereby amended with respect to the Notes by deleting the text thereof in its entirety and inserting in its place the following:

 

“Section 6.01.  Events of Default.

 

Each of the following is an “Event of Default”:

 

(1)                                 Ventas, Inc. or the Issuer does not pay the principal or any premium on any Note when due and payable;

 

(2)                                 Ventas, Inc. or the Issuer does not pay interest on any Note within 30 days after the applicable due date;

 

(3)                                 Ventas, Inc. or its Subsidiaries remain in breach of any other term of the Indenture for 90 days after they receive a notice of Default stating they are in breach.  Either the Trustee or the Holders of more than 25% in aggregate principal amount of the Notes then Outstanding may send the notice;

 

(4)                                 except as permitted by the Indenture and the Notes, the Securities Guarantee by the Guarantor shall cease to be in full force and effect or the Guarantor shall deny or disaffirm its obligations with respect thereto;

 

(5)                                 the Issuer, Ventas, Inc. or any of its Significant Subsidiaries default under any of their indebtedness (including a default with respect to Securities of any series under the Indenture other than the Notes) in an aggregate principal amount exceeding $50.0 million after the expiration of any applicable grace period, which default results in the acceleration of the maturity of such indebtedness.  Such default is not an Event of Default if the other indebtedness is discharged, or the acceleration is rescinded or annulled, within a period of 30 days after the Issuer, Ventas, Inc. or any such Significant Subsidiary, as the case may be, receives notice specifying the default and requiring that they discharge the other indebtedness or cause the acceleration to be rescinded or annulled.  Either the Trustee or the Holders of more than 25% in aggregate principal amount of the Notes then Outstanding may send the notice;

 

(6)                                 the Issuer, Ventas, Inc. or any of its Significant Subsidiaries, or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary:

 

(i)                                     commence a voluntary case;

 

(ii)                                  consent to the entry of an order for relief against them in an involuntary case;

 

(iii)                               consent to the appointment of a custodian of them or for all or substantially all of their property;

 

17

 

(iv)                              make a general assignment for the benefit of their creditors; or

 

(v)                                 generally are not paying their debts as they become due; or

 

(7)                                 a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(i)                                     is for relief against the Issuer, Ventas, Inc. or any of its Significant Subsidiaries, or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, in an involuntary case;

 

(ii)                                  appoints a custodian of the Issuer, Ventas, Inc. or any of its Significant Subsidiaries, or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, or for all or substantially all of the property of the Issuer, Ventas, Inc. or any of its Significant Subsidiaries, or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; or

 

(iii)                               orders the liquidation of the Issuer, Ventas, Inc. or any of its Significant Subsidiaries, or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary;

 

and the order or decree remains unstayed and in effect for 60 consecutive days.”

 

(b)                                 Pursuant to Section 2.02(14) of the Base Indenture, Section 6.02 of the Base Indenture is hereby amended with respect to the Notes by (i) deleting the first sentence thereof in its entirety and inserting in its place the following:

 

“In the case of an Event of Default specified in clause (6) or (7) of Section 6.01, with respect to the Issuer, Ventas, Inc. or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, all Outstanding Notes will become due and payable immediately without further action or notice.”

 

and (ii) adding to the end of Section 6.02 the following:

 

“Notwithstanding anything to the contrary contained in the Indenture, the sole remedy for an Event of Default relating to a failure to comply with any of the provisions of Section 4.03 hereof shall consist exclusively of the right to receive additional interest on the Notes at an annual rate equal to 0.25% of the outstanding principal amount of the Notes.  This additional interest will be payable in the same manner and on the same dates as the stated interest payable on the Notes and will accrue on all Outstanding Notes from and including the date on which such Event of Default first occurs to, but not including, the date on which such Event of Default shall have been cured or waived.”

 

18

 

(c)                                  Pursuant to Section 2.02(14) of the Base Indenture, Section 6.08 of the Base Indenture is hereby amended with respect to the Notes by deleting from the first line thereof the reference to clause (3) of Section 6.01 of the Base Indenture.

 

ARTICLE VI

 

TRUSTEE

 

Section 6.01                             Amendments to Article 7.  Pursuant to Section 2.02(14) of the Base Indenture, Section 7.07(e) of the Base Indenture is hereby amended with respect to the Notes by changing the references to Section 6.01(7) or (8) therein to Section 6.01(6) or (7).

 

ARTICLE VII

 

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 7.01                             Applicability of Defeasance Provisions.  Pursuant to Sections 2.02(17) and 8.01 of the Base Indenture, so long as any of the Notes are Outstanding, Sections 8.02 and 8.03 of the Base Indenture shall be applicable to the Notes.

 

Section 7.02                             Determinations Under Section 8.03.  For the purposes of Sections 2.02(17) and 8.03 of the Base Indenture, Section 8.03 of the Base Indenture shall apply to Sections 4.09 through 4.11, inclusive.

 

Section 7.03                             Determination Under Section 8.07.  For the purposes of Sections 8.07 and 11.02 of the Base Indenture, the provisions of Section 8.07 of the Base Indenture shall apply to the Notes.

 

Section 7.04                             Amendments to Article 8.

 

(a)                                 Pursuant to Section 2.02(14) of the Base Indenture, the last sentence of Section 8.03 of the Base Indenture is hereby amended with respect to the Notes by changing the references to Sections 6.01(4) through 6.01(6) therein to Sections 6.01(3) through 6.01(5).

 

(b)                                 Pursuant to Section 2.02(14) of the Base Indenture, clause (5) of Section 8.04 of the Base Indenture is hereby amended with respect to the Notes by deleting the text thereof in its entirety and inserting in its place the following:

 

“(5)                             such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the Indenture in respect of the Notes) to which Ventas, Inc. or the Issuer is a party or by which Ventas, Inc. or the Issuer is bound;”

 

(c)                                  Pursuant to Section 2.02(14) of the Base Indenture, clause (2) of Section 8.07(c) of the Base Indenture is hereby amended with respect to the Notes by deleting the references to “Restricted Subsidiaries” and replacing such references with the word “Subsidiaries.”

 

19

 

ARTICLE VIII

 

GUARANTEES

 

Section 8.01                             Applicability of Guarantee Provisions.

 

(a)                                 Pursuant to Sections 2.02(1) and 10.01 of the Base Indenture, so long as any of the Notes are Outstanding, Article 10 shall be applicable to the Notes.

 

(b)                                 To evidence its Guarantee in accordance with Section 10.03 of the Indenture, the Guarantor agrees that a notation of such Guarantee substantially in the form attached as Exhibit B hereto will be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that the Indenture has been executed on behalf of such Guarantor by one of its Officers.

 

ARTICLE IX

 

MISCELLANEOUS

 

Section 9.01                             Determination Under Section 13.10.  For the purposes of Section 13.10 of the Base Indenture, the agreements of the Guarantor will bind its successors except as otherwise provided in Article 10 of the Base Indenture.

 

Section 9.02                             Application of First Supplemental Indenture; Ratification.

 

(a)                                 Each and every term and condition contained in this First Supplemental Indenture that modifies, amends or supplements the terms and conditions of the Base Indenture shall apply only to the Notes created hereby and not to any future series of Securities established under the Indenture.

 

(b)                                 The Base Indenture, as supplemented and amended by this First Supplemental Indenture, is in all respects ratified and confirmed, and the Base Indenture and this First Supplemental Indenture shall be read, taken and construed as the same instrument.

 

(c)                                  In the event of any conflict between this First Supplemental Indenture and the Base Indenture, the provisions of this First Supplemental Indenture shall prevail.

 

Section 9.03                             Benefits of First Supplemental Indenture.  Nothing contained in this First Supplemental Indenture shall or shall be construed to confer upon any Person other than a Holder of the Notes, the Issuer, the Guarantor or the Trustee any right or interest to avail itself of any benefit under any provision of the Base Indenture or this First Supplemental Indenture.

 

Section 9.04                             Effective Date.  This First Supplemental Indenture shall be effective as of the date first above written and upon the execution and delivery hereof by each of the parties hereto.

 

20

 

Section 9.05                             Governing Law.  This First Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflicts of laws principles thereof.

 

Section 9.06                             Counterparts.  This First Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

21

 

IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed by their respective officers hereunto duly authorized, all as of the day and year first above written.

 

	
 
    	
VENTAS   REALTY, LIMITED PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
By:
    	
Ventas, Inc.,   its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   T. Richard Riney
    
	
 
    	
 
    	
Name:
    	
T.   Richard Riney
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President,
    
	
 
    	
 
    	
 
    	
Chief   Administrative Officer and General Counsel
    
	
 
    	
 
    
	
 
    	
GUARANTOR
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
VENTAS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   T. Richard Riney
    
	
 
    	
 
    	
Name:
    	
T.   Richard Riney
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President,
    
	
 
    	
 
    	
Chief   Administrative Officer and General Counsel
    
							

 

[Signature Page to First Supplemental Indenture]

 

 

	
 
    	
TRUSTEE
    
	
 
    	
 
    
	
 
    	
U.S.   BANK NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert T. Jones
    
	
 
    	
 
    	
Name:   Robert T. Jones
    
	
 
    	
 
    	
Title:    Vice President
    

 

[Signature Page to First Supplemental Indenture]

 

 

SCHEDULE 1

 

[Intentionally Omitted]

 

1-1

 

EXHIBIT A

 

FORM OF NOTE

 

[Face of Note]

 

CUSIP # 92277G AA5

 

1.55% Senior Note due 2016

 

	
No.
    	
 
    	
$
    

 

VENTAS REALTY, LIMITED PARTNERSHIP

 

promises to pay to CEDE & CO. or registered assigns, the principal sum of                                  Dollars on September 26, 2016.

 

Interest Payment Dates:  March 26 and September 26

 

Record Dates:  March 11 and September 11

 

Dated:                           , 20

 

THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (2) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, (3) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (4) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A

 

A-1

 

SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

A-2

 

	
 
    	
VENTAS   REALTY, LIMITED PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
By:   Ventas, Inc., its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

A-3

 

	
This   is one of the Securities of the
    	
 
    
	
series   designated therein referred to
    	
 
    
	
in   the within-mentioned Indenture:
    	
 
    
	
 
    	
 
    
	
U.S.   BANK NATIONAL ASSOCIATION,
    	
 
    
	
as Trustee
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Signatory
    	
 
    

 

A-4

 

[Back of Note]

 

1.55% Senior Notes due 2016

 

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

(1)                                 Interest.  Ventas Realty, Limited Partnership (the “Issuer”) promises to pay interest on the principal amount of this Note at 1.55% per annum from September 26, 2013 until maturity.  The Issuer will pay interest semi-annually in arrears on March 26 and September 26 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”).  Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from September 26, 2013; provided, that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be March 26, 2014.  The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect; the Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

(2)                                 Method of Payment.  The Issuer will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the March 11 or September 11 (each, a “Record Date”) next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.13 of the Indenture with respect to defaulted interest.  The Notes will be payable as to principal, premium, if any, and interest at the office or agency of the Issuer maintained for such purpose within or without the City and State of New York, or, at the option of the Issuer, payment of interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided, that payment by wire transfer of immediately available funds will be required with respect to principal of and interest and premium, if any, on all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Issuer or the Paying Agent.  Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

 

(3)                                 Paying Agent and Registrar.  Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar.  The Issuer may

 

A-5

 

change any Paying Agent or Registrar without notice to any Holder.  The Issuer or any of its Subsidiaries may act in any such capacity.

 

(4)                                 Indenture.  The Issuer issued the Notes under an indenture, dated as of September 26, 2013 (the “Base Indenture”), as amended by the First Supplemental Indenture, dated as of September 26, 2013 (the “First Supplemental Indenture” and, together with the Base Indenture and as the Base Indenture and the First Supplemental Indenture may be further amended and supplemented from time to time, the “Indenture”), among the Issuer, the Guarantor named therein and the Trustee.  The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb).  The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms.  To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.  The Notes are unsecured obligations of the Issuer.

 

(5)                                 Optional Redemption.  (a) The Issuer may, at its option, redeem the Notes at any time prior to maturity, in whole or from time to time in part.

 

(b)                                 The redemption price for any redemption of the Notes before September 26, 2016 shall be equal to the sum of (i) the principal amount of the Notes being redeemed, (ii) accrued and unpaid interest thereon to the redemption date, and (iii) the Make-Whole Amount, if any (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

 

(c)                                  Any redemption of the Notes shall be made pursuant to the provisions of Sections 3.01 through 3.07 of the Indenture.

 

(6)                                 Mandatory Redemption.  The Issuer will not be required to make mandatory redemption payments with respect to the Notes.

 

(7)                                 Notice of Redemption.  Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address.  Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed.  On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption.

 

(8)                                 Denominations, Transfer, Exchange.  The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000.  The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any taxes and fees required by law or permitted by the Indenture.  The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part.  Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15

 

A-6

 

days before a selection of Notes to be redeemed or during the period between a Record Date and the corresponding Interest Payment Date.

 

(9)                                 Persons Deemed Owners.  The registered Holder of a Note may be treated as its owner for all purposes.

 

(10)                          Amendment, Supplement and Waiver.  Subject to certain exceptions, the Indenture, the Securities Guarantee or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then Outstanding Securities affected by such amendment or supplemental indenture voting as a single class, and any existing Default or Event of Default or compliance with any provision of the Indenture, the Securities Guarantee or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then Outstanding Securities affected thereby voting as a single class.  Without the consent of any Holder of a Note, the Indenture, the Securities Guarantee or the Notes may be amended or supplemented to, among other things, cure any ambiguity, defect or inconsistency; to provide for uncertificated Notes in addition to or in place of certificated Notes; to provide for the assumption of the Issuer’s obligations to Holders of Notes in the case of a merger or consolidation or sale of all or substantially all of the Issuer’s assets; add additional Guarantees with respect to the Notes; secure the Notes; to make any other change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the legal rights under the Indenture of any such Holder; or to comply with requirements of the Commission in order to effect or maintain the qualification of the applicable Indenture under the Trust Indenture Act.

 

(11)                          Defaults and Remedies.  Events of Default with respect to the Notes include:  (i) default in the payment of principal or any premium on the Notes when due and payable; (ii) default in the payment of interest on the Notes within 30 days after the applicable due date; (iii) breach of any other term of the Indenture for 90 days after receipt of a notice of Default stating the Issuer is in breach; (iv) default under any of certain Debt of the Issuer, Ventas, Inc. and its Significant Subsidiaries, which default results in the acceleration of the maturity of such indebtedness, unless such other Debt is discharged, or the acceleration is rescinded or annulled, within 30 days after the Issuer, Ventas, Inc. or its Significant Subsidiaries, as applicable, receive notice of the default; and (v) certain events in bankruptcy, insolvency or reorganization occur with respect to the Issuer, Ventas, Inc. or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary.  If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then Outstanding Notes may declare the entire principal amount of the Notes to be due and payable; provided, that the sole remedy for an Event of Default relating to a failure to comply with any of the provisions of Section 4.03 of the Indenture shall consist exclusively of the right to receive additional interest on the Notes in accordance with the terms set forth in the Indenture.  Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all Outstanding Notes will become due and payable without further action or notice.  Holders may not enforce the Indenture or the Notes except as provided in the Indenture.  Subject to certain limitations, the Holders of a majority in principal amount of the then Outstanding Notes

 

A-7

 

may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default in the payment of principal, premium, if any, or interest) if and so long as it determines that withholding notice is in the interest of the Holders of the Notes.  Subject to certain exceptions, the Holders of a majority in aggregate principal amount of the then Outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of principal of, premium, if any, or interest on the Notes.  The Issuer is required to deliver to the Trustee annually a statement regarding compliance with the Indenture.

 

(12)                          Trustee Dealings with Issuer.  The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuer or its Affiliates, and may otherwise deal with the Issuer or its Affiliates as if it were not the Trustee.

 

(13)                          No Recourse Against Others.  No director, officer, employee or stockholder of Ventas, Inc. or any of its Subsidiaries, as such, will have any liability for any obligations of Ventas, Inc. or any of its Subsidiaries under the Notes or the Indenture based on, in respect of, or by reason of such obligations or their creation.  Each Holder by accepting a Note waives and releases all such liability.  The foregoing waiver and release are an integral part of the consideration for the issuance of the Notes.

 

(14)                          Authentication.  This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

(15)                          Abbreviations.  Customary abbreviations may be used in the name of a Holder or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

(16)                          CUSIP Numbers.  Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

 

A-8

 

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture.  Requests may be made to:

 

Ventas Realty, Limited Partnership
 c/o Ventas, Inc.
 10350 Ormsby Park Place, Suite 300
 Louisville, Kentucky 40223
 Attention:  General Counsel

 

A-9

 

Assignment Form

 

	
To   assign this Note, fill in the form below:
    
	
 
    
	
(I) or   (we) assign and transfer this Note to:
    	
 
    
	
 
    	
(Insert assignee’s legal name)
    
	
 
    
	
(Insert assignee’s Soc. Sec. or Tax I.D. No.)
    
	
 
    
	
 
    
	
 
    
	
 
    
	
 
    
	
 
    
	
 
    
	
(Print or type assignee’s name, address and zip code)
    
	
 
    
	
and   irrevocably appoint
    	
 
    
	
to   transfer this Note on the books of the Issuer. The agent may substitute   another to act for him.
    
			

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Your   Signature:
    	
 
    
	
 
    	
 
    	
(Sign   exactly as your name appears on the face of this Note)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature   Guarantee*:
    	
 
    	
 
    	
 
    
						

 

*                 Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-10

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

 

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

 

	
Date of Exchange
    	
 
    	
Amount of
   decrease in
   Principal Amount
   of this Global
   Note
    	
 
    	
Amount of increase
   in Principal
   Amount of this
   Global Note
    	
 
    	
Principal Amount
   of this Global
   Note following
   such decrease
   (or increase)
    	
 
    	
Signature of
   authorized
   officer of Trustee
   or Custodian
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

A-11

 

EXHIBIT B

 

FORM OF NOTATION OF SECURITIES GUARANTEE

 

For value received, the Guarantor (which term includes any successor Person under the Indenture hereinafter referred to) has unconditionally guaranteed to the extent set forth in, and subject to the provisions of, an indenture dated as of September 26, 2013 (the “Base Indenture”), as amended by the First Supplemental Indenture, dated as of September 26, 2013 (the “First Supplemental Indenture” and, together with the Base Indenture and as the Base Indenture and the First Supplemental Indenture may be further amended and supplemented from time to time, the “Indenture”) among Ventas Realty, Limited Partnership (the “Issuer”), the Guarantor named therein and U.S. Bank National Association, as trustee (the “Trustee”), providing for the issuance of 1.55% Senior Notes due 2016, (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes (as defined in the Indenture), whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of and interest on the Notes, if any, if lawful, and the due and punctual performance of all other obligations of the Issuer to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.  The obligation of the Guarantor to the Holders of Notes and to the Trustee pursuant to the Securities Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Securities Guarantee. Each Holder of a Note, by accepting the same, agrees to and shall be bound by such provisions.

 

	
 
    	
VENTAS, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

B-1

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