SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of April 23,
2009 (this “ Agreement ”), is granted by ACSIA
LONG TERM CARE, INC., a Delaware corporation (the “
Grantor ”), to PENN TREATY AMERICAN CORPORATION, a
Pennsylvania corporation (together with its successors and assigns,
the “ Secured Party ”).
Preliminary
Statements
On the date hereof, the LTC Global, Inc., a
Nevada corporation (the “ Debtor ”), has issued
a $5,000,000 Limited Recourse Secured Promissory Note (as amended,
supplemented or modified from time to time, the “
Promissory Note ”) to the Secured Party. To
induce the Secured Party to accept the Promissory Note and to make
the loans and/or financial accommodations to the Debtor
contemplated thereunder, the Grantor, a wholly-owned subsidiary of
the Debtor, is entering into this Agreement with the Secured
Party.
NOW, THEREFORE, in consideration of the premises
and mutual covenants herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
1.
Grant of Security Interest .
1.1 The
Grantor hereby grants to the Secured Party a security interest in
the personal property listed on Schedule A hereto and all proceeds
thereof (the “ Collateral ”) as security for the
prompt and complete payment when due of all Obligations (as defined
in the Promissory Note).
1.2 The
Grantor hereby irrevocably authorizes the Secured Party at any time
and from time to time to file in any filing office in any Uniform
Commercial Code jurisdiction any financing statements and
amendments thereto that contain any information required by part 5
of Article 9 of the Uniform Commercial Code for the sufficiency or
filing office acceptance of any financing statement or amendment,
including (i) whether the Grantor is an organization, the type of
organization and any organization identification number issued to
the Grantor, and (ii) in the case of a financing statement filed as
a fixture filing or indicating Collateral as as-extracted
collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. The Grantor
agrees to furnish any such information to the Secured Party
promptly upon request. The Grantor also ratifies its
authorization for the Secured Party to have filed in any Uniform
Commercial Code jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.
1.3 At
any time and from time to time, upon the written request of the
Secured Party and at the sole expense of the Grantor, the Grantor
shall promptly and duly execute and deliver any and all such
further instruments and documents and take such further actions as
the Secured Party may deem desirable to obtain the full benefits of
this Agreement and of the rights and powers herein granted,
including filing any financing or continuation statements under the
UCC with respect to the liens granted hereunder as to those
jurisdictions that are not Uniform Commercial Code
jurisdictions.
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2.
Enforcement of Security Interest . Upon the
occurrence of an “Event of Default” as set forth in the
Promissory Note, the Secured Party shall have all of the rights and
remedies of a secured party against a defaulting debtor provided in
the Delaware Uniform Commercial Code for the enforcement of the
Secured Party’s security interest in the
Collateral.
3.
Representations and Warranties .
3.1. Except
as permitted under the Termination and Limited Release Agreement,
dated as of the date hereof, between the Secured Party and the
Debtor (the &ldqu
