EXHIBIT 10.85.1
(Local Currency -- Single Jurisdiction)
ISDA(x)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
DATED AS OF MARCH 18, 2005
LASALLE BANK NATIONAL ASSOCIATION AND BROOKDALE LIVING COMMUNITIES, INC.
have entered and/or anticipate entering into the one or more transactions (each
a "Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows: --
1. INTERPRETATION
(a) Definitions. The terms defined in Section 12 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement'), and the parties
would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable: --
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of branches or offices through which the parties make
and receive payments or deliveries.
(d) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered
into) that: --
(a) Basic Representation
(i) Status. It is duly organized and validly existing under the laws of
the jurisdiction of its organization or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary
action to authorize such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision of
its constitutional documents, any order or judgment of any court
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or other agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party: --
(a) Furnish Specified Information. It will deliver to the other party any forms,
documents or certificates specified in the Schedule or any Confirmation by the
date specified in the Schedule or such Confirmation or, if none is specified, as
soon as reasonably practicable.
(b) Maintain Authorizations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party: --
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(d)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
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(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(d) or to give
notice of a Termination Event) to be complied with or performed by the
party in accordance with this Agreement if such failure is not remedied on
or before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction
of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of, such Credit Support Document;
(iv) Misrepresentation. A representation made or repeated or deemed to
have been made or repeated by the party or any Credit Support Provider of
such party in this Agreement or any Credit Support Document proves to have
been incorrect or misleading in any material respect when made or repeated
or deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(l) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however described) in
respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has
resulted in such Specified Indebtedness becoming, or becoming capable at
such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they became due; (3) makes a general assignment,
arrangement or composition
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with or for the benefit of its creditors; (4) institutes or has
instituted against it a proceeding seeking a judgment of insolvency
or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors' rights, or a petition
is presented for its winding-up or liquidation, and, in the case of
any such proceeding or petition instituted or presented against it,
such proceeding or petition (A) results in a judgment of insolvency
or bankruptcy or the entry of an order for relief or the making of
an order for its winding-up or liquidation or (B) is not dismissed,
discharged, stayed or restrained in each case within 30 days of the
Institution or presentation thereof; (5) has a resolution passed for
its winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (6) seeks or
becomes subject to the appointment or an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any
of the events specified in clauses (1) to (7) (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer: --
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement,
(b) Termination Events. The occurrence to at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, and, if specified to be applicable, a
Credit Event Upon Merger if the event is specified pursuant to (ii) below or an
Additional Termination Event if the event is specified pursuant to (iii) below:
--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets
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to, another entity and such action does not constitute an event described
in Section 5(a)(viii) but the creditworthiness of the resulting, surviving
or transferee entity is materially weaker than that of X, such Credit
Support Provider or such Specified Entity, as the case may be, immediately
prior to such action (and, in such event, X or its successor or
transferee, as appropriate, will be the Affected Party); or
(iii) Additional Termination Event. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. EARLY TERMINATION
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of' an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii) Two Affected Parties. If an Illegality under Section 5(b)(i)(l)
occurs and there are two Affected Parties, each party will use all
reasonable efforts to reach agreement within 30 days after notice thereof
is given under Section 6(b)(i) on action to avoid that Termination Event.
(iii) Right to Terminate. If : --
(1) an agreement under Section 6(b)(ii) has not been effected with
respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality other than that referred to in Section 6(b)(ii), a
Credit Event Upon Merger or an Additional Termination Event occurs,
either party in the case of an Illegality, any Affected Party in the
case of an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the
case of a Credit Event Upon Merger or an Additional Termination
Event if there is only one Affected Party may, by not more than 20
days notice to the other party and provided that the relevant
Termination Event is then continuing, designate a day not earlier
than the day such notice is effective as an Early Termination Date
in respect of all Affected Transactions.
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(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(d) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(c).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(c) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event),
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment), from
(and including) the relevant Early Termination Date to (but excluding) the
date such amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event
of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Unpaid
Amounts owing to the Non-defaulting Party over the (B) Unpaid
Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Unpaid
Amounts owing to the Non-defaulting Party less (B) the Unpaid
Amounts owing to the Defaulting Party. If that amount is a positive
number, the Defaulting Party will pay it to the Non-defaulting
Party; if it
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is a negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if is a
negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(a)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Unpaid Amounts owing to X less (II)
the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the data for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
7. TRANSFER
Neither this Agreement nor any interest at obligation in or under this Agreement
may be transferred (whether by way of security or otherwise) by either party
without the prior written consent of the other party, except that: --
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(a) a party may make such a transfer of this Agreement pursuant to a
consolidation amalgamation with, or merger with or into, or transfer of all or
substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void
8. MISCELLANEOUS
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendment. No amendment, modification or waiver in respect of this Agreement
will be effective unless in writing (including a writing evidenced by a
facsimile transmission) and executed by each of the parties or confirmed by on
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
9. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees,
incurred by such other party by reason of the enforcement and protection of its
rights under this Agreement or any Credit Support Document to which the
Defaulting Party is a party or by reason of the early termination of any
Transaction, including, but not limited to, costs of collection.
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10. NOTICES
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated: --
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day,
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
11. GOVERNING LAW AND JURISDICTION
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably: --
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments ▇▇▇ ▇▇▇▇ or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Waiver of Immunities. Each party irrevocably waives; to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order
10
for specific performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or enforcement of
any judgment to which it or its revenues or assets might otherwise be entitled
in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to
the extent permitted by applicable law, that it will not claim any such Immunity
in any Proceedings.
12. DEFINITIONS
As used in this Agreement: --
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, all Transactions affected by the occurrence of such
Termination Event and (b) with respect to any other Termination Event, all
Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means: --
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all ether cases, the Termination Rate.
"consent" includes a consent, approval, action, authorization, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iii).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
11
"law" includes any treaty, law, rule or regulation and "lawful" and "unlawful"
will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located, (e) in
relation to any notice or other communication, including notice contemplated
under Section 5(a)(i), in the city specified in the address for notice provided
by the recipient and, in the case of a notice contemplated by Section 2(b), in
the place where the relevant new account is to be located and (d) in relation to
Section 5(a)(v)(2), in the relevant locations for performance with respect to
such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, an amount that party reasonably
determines in ▇▇▇▇ ▇▇▇▇▇ to be its total losses and costs (or gain, in which
case expressed as a negative number) in connection with this Agreement or that
Terminated Transaction or group of Terminated Transactions, as the case may be,
including any loss of bargain, cost of funding or, at the election of such party
but without duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or reestablishing any hedge or related trading position
(or any gain resulting from any of them). Loss includes losses and costs (or
gains) in respect of any payment or delivery required to have been made
(assuming satisfaction of each applicable condition precedent) on or before the
relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(l) or (3) or 6(e)(ii)(2)(A) applies. Loss does
not include a party's legal fees and out-of-pocket expenses referred to under
Section 9. A party will determine its Loss as of the relevant Early Termination
Date, or, if that is not reasonably practicable, as of the earliest date
thereafter as is reasonably practicable. A party may (but need not) determine
its Loss by reference to quotations of relevant rates or prices from one or more
leading dealers in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
12
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --
(a) the Market Quotations (whether positive or negative) for each Terminated
Transaction or group of Terminated Transactions for which a Market Quotation is
determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination date).
"Termination Event" means an illegality or, if specified to be applicable, a
Credit Event Upon Merger or an Additional Termination Event.
"Termination Rate" means a rate per annum, equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each
13
obligation under Section 2(a)(i) which was (or would have been but for Section
2(a)(iii)) required to be settled by delivery to such party on or prior to such
Early Termination Date and which has not been so settled as at such Early
Termination Date, an amount equal to the fair market value of that which was (or
would have been) required to be delivered as of the originally scheduled date
for delivery, in each case together with (to the extent permitted under
applicable law) interest, in the currency of such amounts, from (and including)
the date such amounts or obligations were or would have been required to have
been paid or performed to (but excluding) such Early Termination Date, at the
Applicable Rate. Such amounts of interest will be calculated on the basis of
daily compounding and the actual number of days elapsed. The fair market value
of any obligation referred to in clause (b) above shall be reasonably determined
by the party obliged to make the determination under Section 6(e) or, if each
party is so obliged, it shall be the average of the fair market values
reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Date: 3/30/05
BROOKDALE LIVING COMMUNITIES, INC.
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: EVP & CFO
Date: 3/30/05
14
SCHEDULE
TO THE
MASTER AGREEMENT
DATED AS OF MARCH 18, 2005
BETWEEN
LASALLE BANK NATIONAL ASSOCIATION ("PARTY A")
AND
BROOKDALE LIVING COMMUNITIES, INC. ("PARTY B")
PART 1
TERMINATION PROVISIONS
In this Agreement:-
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of: --
Section 5(a)(v), Not applicable
Section 5(a)(vi), Not applicable
Section 5(a)(vii), Not applicable
Section 5(b)(ii), Not applicable
in relation to Party B for the purpose of: --
Section 5(a)(v), All Affiliates
Section 5(a)(vi), AH Battery Park Owner, LLC, (an Ohio limited liability
company), KG Missouri -- CC owner, LLC (a Delaware limited liability company),
AH Illinois Owner, LLC (a Delaware limited liability company), AH North Carolina
Owner, LLC (a Delaware limited liability company) and AH Ohio-Columbus Owner,
LLC (a Delaware limited liability company)
Section 5(a)(vii), All Affiliates
Section 5(b)(ii), All Affiliates
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 12 of
this Agreement.
(c) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will not apply to Party A
and will apply to Party B, provided, however, that it shall not constitute an
Event of Default under this Section 5(a)(vi) if (i) such event, condition or
failure arises in the ordinary course of business by mistake, oversight or
transfer difficulties in the payment of money, (ii) such event, condition or
failure is remedied on or before the third Business Day after the occurrence or
existence of such event, condition or failure, and (iii) no Specified
Indebtedness in an aggregate amount equal to or in excess of the Threshold
Amount is accelerated as a result of such event, condition or failure; and
provided, further, that the phrase ", or becoming capable at such time of being
declared," is deleted from the seventh line thereof.
"SPECIFIED INDEBTEDNESS" shall mean any obligation (whether present or
future, contingent or otherwise, as principal or surety or otherwise) (i)
in respect of borrowed money (which, for the avoidance of doubt, shall
include, without limitation, bonds, notes, commercial paper or similar
instruments issued or guaranteed by the relevant party; and shall exclude
deposits received), (ii) any amount due and payable in respect of any
Specified Transaction (except that, for this purpose only, the words "and
any other entity" shall be substituted for the words "and the other party
to this Agreement (or any Credit Support Provider of such other party or
any applicable Specified Entity of such other party)" where they appear in
the definition of Specified Transaction), any repo transaction, any
reverse repo transaction and any stock loan transaction and (iii) with
respect to
1
Party B shall include, without limitation, and without regard to the
Threshold Amount the obligations of Party B under that certain Loan
Agreement dated as of October 19, 2004, and amended by the First Amendment
to Loan Agreement dated as of March 1, 2005, by and between Party B and
Party A, as the same may be amended, modified or supplemented from time to
time (the "Credit Agreement").
"THRESHOLD AMOUNT" means, in relation to Party A, not applicable, and in
relation to Party B, zero.
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(ii) will not apply
to Party A and will apply to Party B, provided, however, that in relation to
Party A, "Credit Event Upon Merger" shall not have its meaning as defined in
Section 5(b)(iv), but shall mean, that (i) such Party ("X"), any Credit Support
Provider of X or any applicable Specified Entity of X consolidates or
amalgamates with, or merges into, or transfers all or substantially all its
assets to, another entity ("Y") or Y merges into X, any Credit Support Provider
of X or any applicable Specified Entity of X, (ii) such action does not
constitute an event described in Section 5(a)(viii), and (iii) Standard and
Poor's Ratings Group, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc. or any
successor organization ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc. or any
successor organization ("Moody's") rates the creditworthiness of the resulting,
surviving or transferee entity immediately after such action at least three
modifiers (a modifier being 1, 2, or 3 for Moody's; plus, neutral or minus for
S&P) lower than that of X, any Credit Support Provider of X or any applicable
Specified Entity of X immediately prior to such action or such rating is below
investment grade (investment grade being at least BBB- for S&P and Baa3 for
▇▇▇▇▇'▇). For the purpose of the forgoing Termination Event, the Affected Party
will be either Party A or Party B, as the case may be.
(e) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not apply
to either party.
(f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement: --
(i) Market Quotation will apply,
(ii) The Second Method will apply.
(g) ADDITIONAL TERMINATION EVENT will not apply.
PART 2
DOCUMENTS TO BE DELIVERED
For the purpose of Section 4(a): --
Documents to be delivered are:
(i) Each party shall promptly deliver to the other party, certified
evidence of the authority, incumbency and specimen signature of each
authorized person executing any document on its behalf in connection
with this Agreement upon execution of each document by any person.
Covered by Section 3(d) representation.
(ii) Each party upon request shall promptly deliver to the other party, a
copy of its most recent Annual Report containing consolidated
financial statements, prepared in accordance with accounting
principles that are generally accepted for institutions of its type
in the jurisdiction of its organization and certified by independent
public accountants. Covered by Section 3(d) representation.
(iii) Each party upon request shall promptly deliver to the other party, a
copy of its most recent unaudited interim consolidated financial
statements prepared in accordance with accounting principles that
are generally accepted for institutions of its type in the
2
jurisdiction of its organization in each case consistently applied.
Covered by Section 3(d) representation.
(iv) Party B shall promptly deliver to Party A such other information
with respect to its condition, or operations, financial or
otherwise, as Party A may reasonably request from time to time.
Covered by Section 3(d) representation.
PART 3
MISCELLANEOUS
(a) ADDRESSES FOR NOTICES. For the purpose of Section 10(a): --
Address for notices or communications to Party A:
Address: LaSalle Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasury Operations
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Address for notices or communications to Party B:
Address: Brookdale Living Communities, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention.: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) CALCULATION AGENT. The Calculation Agent shall be Party A.
(c) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document: Credit
Support Document means, in relation to Party A and Party B, the 1994 NY Law ISDA
Credit Support Annex attached hereto and made a part hereof.
(d) CREDIT SUPPORT PROVIDER. Credit Support Provider means, in relation to Party
A and Party B, none.
(e) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to choice
of law doctrine, except for Section 5-1401 of the New York General Obligations
Law).
(f) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this Agreement
will not apply to any Transactions.
(g) "AFFILIATE" will have the meaning specified in Section 12.
3
PART 4
OTHER PROVISIONS
(a) ISDA DEFINITIONS. The 2000 ISDA Definitions, as supplemented by the
Supplement to the 2000 ISDA Definitions (the "Definitions"), as published by the
International Swaps and Derivatives Association, Inc., shall be deemed a part of
this Agreement as if fully set forth herein. The Definitions and the provisions
of Section 12 of this Agreement shall be deemed a part of each Confirmation as
if set forth in full therein.
(b) INTERPRETATION. In the event of any inconsistency between the provisions of
this Schedule and the Definitions, this Schedule will prevail. In the event of
any inconsistency between the provisions of this Schedule and the printed
Agreement of which it forms a part, this Schedule will prevail. In the event of
any inconsistency between the provisions of any Confirmation and this Schedule,
such Confirmation will prevail for the purpose of the relevant Transaction.
(c) FINANCIAL CONDITION. Party B represents and warrants to Party A (which
representation will be deemed to be repeated on each date on which a Transaction
is entered into) that, except as disclosed to Party A, there has been no
material adverse change in its financial condition since the last day of the one
year period covered by its most recently prepared year end financial statement
that is likely to affect its ability to perform its obligations under this
Agreement.
(d) AFFECTED PARTIES. For the purposes of Section 6(e) (Payments on Early
Termination), both parties shall be deemed to be Affected Parties in connection
with the Termination Events described in Section 5(b)(i), so that payments on
early termination shall be calculated us provided in Section 6(e)(ii).
(e) ADDITIONAL REPRESENTATIONS. Each party represents and warrants to the other
that (i) it is entering into this Agreement, any Credit Support Document to
which it is a party, each Transaction, and any other documentation relating to
this Agreement that it is required by the Agreement to deliver as principal (and
not as agent or in any other capacity, fiduciary or otherwise) and (ii) it is an
"eligible contract participant" under, and as defined in, Section 1A of the
Commodity Exchange Act (7 USC 1a), amended from time to time.
(f) CONSENT TO RECORDING. Each party consents to the recording of the telephone
conversations of trading, marketing and other relevant personnel of the parties
in connection with this Agreement or any potential Transaction.
(g) TRANSFER. Each party agrees that with regard to the transfer provisions set
forth in Section 7, consent to any such transfer shall not be unreasonably
withheld.
(h) WAIVER OF JURY TRIAL. Each Party irrevocably waives any and all right to
trial by jury in any legal proceeding instituted in connection with this
Agreement or any Transaction to the fullest extent permitted by law. As to any
matter for which a jury trial cannot be waived, each party agrees not to assert
any such matter as a cross claim or counterclaim in, nor move to consolidate the
same with, any legal proceeding in which a jury trial is waived,
(i) SETOFF. Each party agrees that the following provision shall be added as
Section 6(f) of this Agreement:
"(f) SETOFF. Any amount (the "Early Termination Amount") payable to
one party (the "Payee") by the other party (the "Payer") under Section
6(e) of this Agreement, in circumstances where there is a Defaulting Party
or one Affected Party in the case where a Termination Event under this
Agreement has occurred, will, at the option of the party ("X") other than
the Defaulting Party or the Affected Party (and without prior notice to
the Defaulting Party or the Affected Party), be reduced by its setoff
against any amount(s) (the "Other Agreement Amount") payable (whether at
such time or in the future or upon the occurrence of a contingency) by the
Payee to the Payer
4
(irrespective of the currency, place of payment or booking office of the
obligation) under any other agreement(s) between the Payee and the Payer
or instrument(s) or undertaking(s) issued or executed by one party to, or
in favor of, the other party (and the Other Agreement Amount will be
discharged promptly and in all respects to the extent it is so setoff). X
will give notice to the other party of any setoff effected under this
Section 6(f).
For this purpose, either the Early Termination Amount or the Other
Agreement Amount (or the relevant portion of such amounts) may be
converted by X into currency in which the other is denominated at the rate
of exchange at which such party would be able, acting in a reasonable
manner and in good faith, to purchase the relevant amount of such
currency. The term "rate of exchange" includes, without limitation, any
premiums and costs of exchange payable in connection with the purchase of
or conversion into the relevant currency.
If an obligation is unascertained, X may in good faith estimate that
obligation and setoff in respect of the estimate, subject to the relevant
party accounting to the other when the obligation is ascertained.
Nothing in Section 6(f) shall be effective to create a charge or
other security interest. This Section shall be, without prejudice and in
addition to any right set-off, combination of accounts, lien or other
right to which any party is at any time otherwise entitled (whether by
operation of law, coarser or otherwise)."
(j) RELATIONSHIP BETWEEN THE PARTIES. This Agreement is hereby amended by the
addition of a new Section 13 as follows:
"13. Relationship between the Parties.
Each party will be deemed to represent to the other party on the
date on which it enters into a Transaction (absent a written agreement
between the parties that expressly imposes affirmative obligations to the
contrary for that Transaction):
(a) Non Reliance. It is acting for its own account, and it has made
its own independent decisions to enter into that Transaction and as to
whether that Transaction is appropriate or proper for it based upon its
own judgment and upon advice from such advisors as it has deemed
necessary. It is not relying on any communication (written or oral) of the
other party as investment advice or as a recommendation to enter into that
Transaction; it being understood that information and explanations related
to the terms and conditions of a Transaction shall not be considered
investment advice or a recommendation to enter into that Transaction. No
communication (written or oral) received from the other party shall be
deemed to be an assurance or guarantee as to the expected results of that
Transaction.
(b) Assessment and Understanding. It is capable of assessing the
merits of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms, conditions
and risks of that Transaction.
(c) Status of Parties. The other party is not acting as a fiduciary
for or an advisor to it in respect of that Transaction."
(k) INCORPORATION BY REFERENCE OF COVENANTS. Party B covenants and agrees that,
from and after the date hereof and thereafter until all obligations of Party B
hereunder are paid in full and this Agreement is terminated, it shall duly keep,
perform and observe each and every covenant set forth in the Credit Agreement.
All of such covenants, together with related definitions and ancillary
provisions, are hereby incorporated into this Agreement by reference, mutatis
mutandis, as if such terms were set forth in this Agreement in full, without
regard to any termination of such Credit Agreement, without regard to any
expiration of any commitment thereunder and without regard to the final payment
in full of any obligations
5
of Party B or any other person or entity thereunder, provided, that no such
covenant set forth above shall be incorporated herein by reference if such
incorporation, by itself, would be a breach of the Credit Agreement. If an event
is the subject of both a covenant incorporated herein by reference and another
covenant set forth in this Agreement, Party B shall comply with the covenant
that imposes on it the stricter requirement. To the extent that any covenant
incorporated herein by reference is inconsistent with the other terms of this
Agreement, Party A shall not be deemed to have waived any rights hereunder by
virtue of such inconsistency. If the Credit Agreement terminates, any commitment
thereunder expires or any obligations of Party B thereunder are paid in full and
any covenant incorporated herein by reference requires Party B to obtain the
consent of any agent, lender or lenders, then, for the purpose of this
Agreement, Party B shall be required to obtain the consent of Party A.
(l) PRIOR AGREEMENT. This Agreement amends and restates in its entirety the
ISDA Master Agreement between Party A, as successor to LaSalle National Bank,
and Party B, as successor to Old Brookdale (defined below), dated as of July 14,
1998 (the "Prior Agreement"). All references to Brookdale Living Communities,
Inc., "Old Brookdale") in the Prior Agreement shall be replaced by reference to
Brookdale Living Communities, Inc., a Delaware corporation, whose State of
Delaware identification number is 3791519 and F.E.I.N. is ▇▇-▇▇▇▇▇▇▇ in this
Agreement. All references to LaSalle National Bank in the Prior Agreement shall
be replaced by reference to LaSalle Bank National Association in this Agreement.
All Transactions that were entered into pursuant to the Prior Agreement and any
Confirmation made supplement to the Prior Agreement, shall be governed by and
construed in accordance with this Agreement. Each agreement or Confirmation
governing any Transaction entered into prior to the date hereof shall constitute
a supplement to, and form a part of, this Agreement, and will be read and
construed as one with this Agreement, and all such agreements and Confirmations
along with this Agreement constitute a single agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized officers as of the date hereof.
LASALLE BANK NATIONAL ASSOCIATION BROOKDALE LIVING COMMUNITIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------- -----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President Title: EVP & CFO
6
ANNEX A
[SUGGESTED FORM OF [COUNTERPARTY] BOARD OF DIRECTORS' RESOLUTIONS]
I, _______________, do hereby certify that I am the duly (insert
"appointed" or "elected", as appropriate) and qualified Secretary and the keeper
of the records and corporate seal of [COUNTERPARTY], a ___________ organized and
existing under the laws of the State of ______________, and that the following
is a true and correct copy of certain resolutions duly adopted at a meeting of
the Board of Directors thereof, convened and held in accordance with law and the
by-laws of said corporation on the ___day of ________, 2003, and that such
resolutions are now in full force and effect, unamended, unaltered, and
unrepealed:
WHEREAS, there has been presented to this meeting a form of ISDA Master
Agreement with Schedule thereto, between this Corporation and LaSalle Bank
National Association governing interest rate, currency exchange, commodity price
and equity index transactions this Corporation may from time to time enter into
with such Bank;
NOW, THEREFORE, BE IT RESOLVED, that the [insert officers and the number
necessary to act] Corporation be and [he/she/they] hereby [is/are] authorized to
execute, in the name and on behalf of this Corporation, and deliver an ISDA
Master Agreement (with Schedule) substantially in the form presented to this
meeting, except for such changes, additions and deletions as to any or all of
the terms and provisions thereof as the officer(s) executing such ISDA Master
Agreement an behalf of this Corporation shall deem proper, such execution by
such officer(s) of an ISDA Master Agreement to be conclusive evidence that such
officer(s) deem(s) all of the terms aria provisions thereof to be proper;
FURTHER RESOLVED, that any one of the [Insert officers] of this
Corporation be and [he/she] hereby is authorized to enter into interest rate,
currency exchange, commodity price and equity index transactions on behalf of
this Corporation from time to time under the terms of the ISDA Master Agreement
executed by this Corporation pursuant to these resolutions, to issue
instructions by telephone or other means of communication to said Bank in
connection with any of the foregoing and to execute, in the name and on behalf
of this Corporation, and deliver written confirmations of any such transactions
and instructions, and to execute, in the name and on behalf of this Corporation,
and deliver schedules of officers and employees of this Corporation authorized
to enter into interest rate, currency exchange, commodity price and equity index
transactions on behalf of this Corporation from time to time under such ISDA
Master Agreement;
FURTHER RESOLVED, that each and every officer of this Corporation be and
he or she hereby is authorized to take such action from time to time on behalf
of this Corporation as he or she may deem necessary, advisable or proper in
order to carry out and perform the obligations of this Corporation under the
ISDA Master Agreement executed by this Corporation pursuant to these resolutions
and under any other confirmations, agreements and documents executed and
delivered by this Corporation pursuant to or in connection with such ISDA Master
Agreement;
FURTHER RESOLVED, that all authority conferred by these resolutions shall
be deemed retroactive and any and all acts authorized hereunder performed prior
to the adoption of this resolution are hereby ratified, affirmed and approved;
FURTHER RESOLVED, that the Secretary or any other officer of this
Corporation be and he or she hereby is authorized to certify to said Bank a copy
of these resolutions and the names and signatures of this Corporation's officers
or employees hereby authorized to act in the premises, and said Bank is hereby
authorized to rely upon such certificate until formally advised by a like
certificate of any change therein, and is hereby authorized to rely on any such
additional certificates.
7
I FURTHER CERTIFY THAT the following persons have been appointed or
elected and are now acting as officers or employees of said corporation in the
capacity set before their respective names and that the signatures set after
their respective names are their genuine signatures:
TITLE NAME SIGNATURE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, I have subscribed my name as Secretary and have caused
the corporate seal of said Corporation to be hereunto affixed this ____day of
_______, 2005.
-----------------------------
Secretary
8
ISDA
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
Dated as of March 18, 2005
to the Schedule to the ISDA Master Agreement dated as of March 18, 2005
between
LASALLE BANK NATIONAL ASSOCIATION AND BROOKDALE LIVING COMMUNITIES, INC.
This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.
Accordingly, the parties agree as follows: -
PARAGRAPH 1. INTERPRETATION
(a) DEFINITIONS AND INCONSISTENCY. Capitalized terms not otherwise defined
herein or elsewhere in this Agreement have the meanings specified pursuant to
Paragraph 12, and all references in this Annex to Paragraphs are to Paragraphs
of this Annex. In the event of any inconsistency between this Annex and the
other provisions of this Schedule, this Annex will prevail, and in the event of
any inconsistency between Paragraph 13 and the other provisions of this Annex,
Paragraph 13 will prevail.
(b) SECURED PARTY AND PLEDGOR. All references in this Annex to the "Secured
Party" will be to either party when ailing in that capacity and all
corresponding references to the "Pledgor" will be to the other party when acting
in that capacity; provided, however, that if Other Posted Support is held by a
party to this Annex, all references herein to that party as the Secured Party
with respect to that Other Posted Support will be to that party as the
beneficiary thereof and will not subject that support or that party as the
beneficiary thereof to provisions of law generally relating to security
interests and secured parties.
PARAGRAPH 2. SECURITY INTEREST
Each party, as the Pledgor, hereby pledges to the other party, as the Secured
Party, as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against
all Posted Collateral Transferred to or received by the Secured Party hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the
security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without any further action by
either party.
PARAGRAPH 3. CREDIT SUPPORT OBLIGATIONS
(a) DELIVERY AMOUNT. Subject to Paragraphs 4 and 5, upon a demand made by the
Secured Party on or promptly following a Valuation Date, if the Delivery Amount
for that Valuation Date equals or exceeds the Pledgor's Minimum Transfer Amount,
then the Pledgor will Transfer to the Secured Party Eligible Credit Support
having a Value as of the date of Transfer at least equal to the applicable
Delivery Amount (rounded pursuant to Paragraph 13). Unless otherwise spaded in
Paragraph 13, the "Delivery Amount" applicable to the Pledgor for any Valuation
Date will equal the amount by which:
1
(i) the Credit Support Amount
exceeds
(ii) the Value as of that Valuation Date of all Posted Credit Support held
by the Secured Party.
(b) RETURN AMOUNT. Subject to Paragraphs 4 and 5, upon a demand made by the
Pledgor on or promptly following a Valuation Date, if the Return Amount for that
Valuation Date equals or exceeds the Secured Party's Minimum Transfer Amount,
then the Secured Party will Transfer to the Pledgor Posted Credit Support
specified by the Pledgor in that demand having a Value as of the date of
Transfer as close as practicable to the applicable Return Amount (rounded
pursuant to Paragraph 13). Unless otherwise specified in Paragraph 13, the
"Return Amount" applicable to the Secured Party for any Valuation Date will
equal the amount by which:
(i) the Value as of that Valuation Date of all Posted Credit Support held
by the Secured Party
exceeds
(ii) the Credit Support Amount.
"Credit Support Amount" means, unless otherwise specified in Paragraph 13, for
any Valuation Date (i) the Secured Party's Exposure for that Valuation Date plus
(ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any,
minus (iii) all Independent Amounts applicable to the Secured Party, if any
minus (iv) the Pledgor's Threshold; provided, however, that the Credit Support
Amount will be deemed to be zero whenever the calculation of Credit Support
Amount yields a number less than zero.
PARAGRAPH 4. CONDITIONS PRECEDENT, TRANSFER TIMING, CALCULATIONS AND
SUBSTITUTIONS
(a) CONDITIONS PRECEDENT. Each Transfer obligation of the Pledgor under
Paragraphs 3 and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii), 5 and
6(d) is subject to the conditions precedent that:
(i) no Event of Default, Potential Event of Default or Specified
Condition has occurred and is continuing with respect to the other party;
and
(ii) no Early Termination Date for which any unsatisfied payment
obligations exist has occurred or been designated as the result of an
Event of Default or Specified Condition with respect to the other party.
(b) TRANSFER TIMING. Subject to Paragraphs 4(a) and 5 and unless otherwise
specified, if a demand for the Transfer of Eligible Credit Support or Posted
Credit Support is made by the Notification Time, then the relevant Transfer will
be made not later than the close of business on the next Local Business Day; if
a demand is made after the Notification Time, than the relevant Transfer will be
made not later than the close of business on the second local Business Day
thereafter.
(c) CALCULATIONS. All calculations of Value and Exposure for purposes of
Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the Valuation
Time, The Valuation Agent will notify each party (or the other party, if the
Valuation Agent is a party) of its calculations not later than the Notification
Time on the Local Business Day following the applicable Valuation Date (or in
the case of Paragraph 6(d), following the date of calculation).
2
(d) SUBSTITUTIONS.
(i) Unless otherwise specified in Paragraph 13, upon notice to the Secured
Party specifying the items of Posted Credit Support to be exchanged, the
Pledgor may, on any Local Business Day, Transfer to the Secured Party
substitute Eligible Credit Support (the "Substitute Credit Support"); and
(ii) subject to Paragraph 4(a), the Secured Party will Transfer to the
Pledgor the items of Posted Credit Support specified by the Pledgor in its
notice not later than the Local Business Day following the date on which
the Secured Party receives the Substitute Credit Support, unless otherwise
specified in Paragraph 13 (the "Substitution Date"); provided that the
Secured Party will only be obligated to Transfer Posted Credit Support
with a Value as of the date of Transfer of that Posted Credit Support
equal to the Value as of that date of the Substitute Credit Support.
PARAGRAPH 5. DISPUTE RESOLUTION
If a party (a "Disputing Party") disputes (I) the Valuation Agent's calculation
of a Delivery Amount or a Return Amount or (II) the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, then (1) the Disputing Party
will notify the other party and the Valuation Agent (if the Valuation Agent is
not the other party) not later than the close of business on the Local Business
Day following (X) the date that the demand is made under Paragraph 3 in the case
of (I) above or (Y) the date of Transfer in the case of (II) above, (2) subject
to Paragraph 4(a), the appropriate party will Transfer the undisputed amount to
the other party not later than the close of business an the Local Business Day
following (X) the date that the demand is made under Paragraph 3 in the case of
(I) above or (Y) the date of Transfer in the case of (II) above, (3) the parties
will consult with each other in an attempt to resolve the dispute and (4) if
they fail to resolve the dispute by the Resolution Time, then;
(i) In the case of a dispute involving a Delivery Amount or Return Amount,
unless otherwise specified in Paragraph 13, the Valuation Agent will
recalculate the Exposure and the Value as of the Recalculation Date by;
(A) utilizing any calculations of Exposure for the Transactions (or
Swap Transactions) that the parties have agreed are not in dispute;
(B) calculating the Exposure for the Transactions (or Swap
Transactions) in dispute by seeking four actual quotations at
mid-market from Reference Market-makers for purposes of calculating
Market Quotation, and taking the arithmetic average of those
obtained; provided that if four quotations are not available for a
particular Transaction (or Swap Transaction), then fewer than four
quotations may be used for that Transaction (or Swap Transaction);
and if no quotations are available for a particular Transaction (or
Swap Transaction), then the Valuation Agent's original calculations
will be used for that Transaction (or Swap Transaction); and
(C) utilizing the procedures specified in Paragraph 13 for
calculating the Value, if disputed, of Posted Credit Support.
(ii) In the case of a dispute involving the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, the Valuation Agent will
recalculate the Value as of the date of Transfer pursuant to Paragraph 13.
Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) not
later than the Notification Time on the Local Business Day following the
Resolution Time. The appropriate party will, upon demand following that notice
by the Valuation Agent or a resolution pursuant to (3) above and subject to
Paragraphs 4(a) and 4(b), make the appropriate Transfer.
3
PARAGRAPH 6. HOLDING AND USING POSTED COLLATERAL
(a) CARE OF POSTED COLLATERAL. Without limiting the Secured Party's rights under
Paragraph 6(c), the Secured Party will exercise reasonable care to assure the
safe custody of all Posted Collateral to the extent required by applicable law,
and in any event the Secured Party will be deemed to have exercised reasonable
care if it exercises at least the same degree of care as it would exercise with
respect to its own property. Except as specified in the preceding sentence, the
Secured Party will have no duty with respect to Posted Collateral, including,
without limitation, any duty to collect any Distributions, or enforce or
preserve any rights pertaining thereto.
(b) ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS.
(i) GENERAL. Subject to the satisfaction of any conditions specified in
Paragraph 13 for holding Posted Collateral, the Secured Party will be
entitled to hold Posted Collateral or to appoint an agent (a "Custodian")
to hold Posted Collateral for the Secured Party. Upon notice by the
Secured Party to the Pledgor of the appointment of a Custodian, the
Pledgor's obligations to make any Transfer will be discharged by making
the Transfer to that Custodian. The holding of Posted Collateral by a
Custodian will be deemed to be the holding of that Posted Collateral by
the Secured Party for which the Custodian is acting.
(ii) FAILURE TO SATISFY CONDITIONS. If the Secured Party or its Custodian
fails to satisfy any conditions for holding Posted Collateral, then upon a
demand made by the Pledgor, the Secured Party will, not later than five
Local Business Days after the demand, Transfer or cause its Custodian to
Transfer all Posted Collateral held by it to a Custodian that satisfies
those conditions or to the Secured Party if it satisfies those conditions.
(iii) LIABILITY. The Secured Party will be liable for the acts or
omissions of its Custodian to the same extent that the Secured Party would
be liable hereunder for its own acts or omissions.
(c) USE OF POSTED COLLATERAL. Unless otherwise specified in Paragraph 13 and
without limiting the rights and obligations of the parties under Paragraphs 3,
4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a Defaulting Party or an
Affected Party with respect to a Specified Condition and no Early Termination
Date has occurred or been designated as the result of an Event of Default or
Specified Condition with respect to the Secured Party, then the Secured Party
will, notwithstanding Section 9-207 of the New York Uniform Commercial Code,
have the right to:
(i) sell, pledge, rehypothecate, assign, invest, use, commingle or
otherwise dispose of, or otherwise use in its business any Posted
Collateral it holds, free from any claim or right of any nature whatsoever
of the Pledgor, including any equity or right of redemption by the
Pledgor, and
(ii) register any Posted Collateral in the name of the Secured Party, its
Custodian or a nominee for either.
For purposes of the obligation to Transfer Eligible Credit Support or Posted
Credit Support pursuant to Paragraphs 3 and 5 and any rights at remedies
authorized under this Agreement, the Secured Party will be deemed to continue to
hold all Posted Collateral and to receive Distributions made thereon, regardless
of whether the Secured Party has exercised any rights with respect to any Posted
Collateral pursuant to (i) or (ii) above.
(d) DISTRIBUTIONS AND INTEREST AMOUNT.
(i) DISTRIBUTIONS. Subject to Paragraph 4(a), if the Secured Party
receives or is deemed to receive Distributions on a Local Business Day, it
will Transfer to the Pledgor not later than the following Local Business
Day any Distributions it receives or is deemed to receive to the extent
that a Delivery Amount would not be created or increased by that Transfer,
as calculated by the
4
Valuation Agent (and the date of calculation will be deemed to be a
Valuation Date for this purpose).
(ii) INTEREST AMOUNT. Unless otherwise specified in Paragraph 13 and
subject to Paragraph 4(a), in lieu of any interest, dividends or other
amounts paid or deemed to have been paid with respect to Posted Collateral
in the form of Cash (all of which may be retained by the Secured Party),
the Secured Party will Transfer to the Pledgor at the times specified in
Paragraph 13 the Interest Amount to the extent that a Delivery Amount
would not be created or increased by that Transfer, as calculated by the
Valuation Agent (and the date of calculation will be deemed to be a
Valuation Date for this purpose). The interest Amount or portion thereof
not Transferred pursuant to this Paragraph will constitute Posted
Collateral in the form of Cash and will be subject to the security
interest granted under Paragraph 2.
PARAGRAPH 7. EVENTS OF DEFAULT
For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will
exist with respect to a party if:
(i) that party fails (or fails to cause its Custodian) to make, when due,
any Transfer of Eligible Collateral, Posted Collateral or the Interest
Amount, as applicable, required to be made by it and that failure
continues for two Local Business Days after notice of that failure is
given to that party;
(ii) that party fails to comply with any restriction or prohibition
specified in this Annex with respect to any of the rights specified in
Paragraph 6(c) and that failure continues for five Local Business Days
after notice of that failure is given to that party; or
(iii) that party fails to comply with or perform any agreement or
obligation other than those specified in Paragraphs 7(i) and 7(ii) and
that failure continues for 30 days after notice of that failure is given
to that party.
PARAGRAPH 8. CERTAIN RIGHTS AND REMEDIES
(a) SECURED PARTY'S RIGHTS AND REMEDIES. If at any time (1) an Event of Default
or Specified Condition with respect to the Pledgor has occurred and is
continuing or (2) an Early Termination Date has occurred or been designated as
the result of an Event of Default or Specified Condition with respect to the
Pledgor, then, unless the Pledgor has paid in full all of its Obligations that
are then due, the Secured Party may exercise one or more of the following rights
and remedies:
(i) all rights and remedies available to a secured party under applicable
law with respect to Posted Collateral held by the Secured Party;
(ii) any other rights and remedies available to the Secured Party under
the terms of Other Posted Support, if any;
(iii) the right to Set-off any amounts payable by the Pledgor with respect
to any Obligations against any Posted Collateral or the Cash equivalent of
any Posted Collateral held by the Secured Party (or any obligation of the
Secured Party to Transfer that Posted Collateral); and
(iv) the right to liquidate any Posted Collateral held by the Secured
Party through one or more public or private sales or other dispositions
with such notice, if any, as may be required under applicable law, free
from any claim or right of any nature whatsoever of the Pledgor, including
any equity or right of redemption by the Pledgor (with the Secured Party
having the right to purchase any or all of the Posted Collateral to be
sold) and to apply the proceeds (or the Cash
5
equivalent thereof) from the liquidation of the Posted Collateral to any
amounts payable by the Pledgor with respect to any Obligations in that
order as the Secured Party may elect.
Each party acknowledges and agrees that Posted Collateral in the form of
securities may decline speedily in value and is of a type customarily sold on a
recognized market, and, accordingly, the Pledgor is not entitled to prior notice
of any sale of that Posted Collateral by the Secured Party, except any notice
that is required under applicable law and cannot be waived.
(b) PLEDGOR'S RIGHTS AND REMEDIES. If at any time an Early Termination Date has
occurred or been designated as the result of as Event of Default or Specified
Condition with respect to the Secured Party, then (except in the case of an
Early Termination Date relating to less than all Transactions (or Swap
Transactions) where the Secured Party has paid in full all of its obligations
that are then due under Section 6(e) of this Agreement):
(i) the Pledgor may exercise all rights and remedies available to a
pledgor under applicable law with respect to Posted Collateral held by the
Secured Party;
(ii) the Pledgor may exercise any other rights and remedies available to
the Pledgor under the terms of Other Posted Support, if any;
(iii) the Secured Party will be obligated immediately to transfer all
Posted Collateral and the Interest Amount to the Pledgor, and
(iv) to the extent that Posted Collateral or the Interest Amount is not so
Transferred pursuant to (iii) above, the Pledgor may:
(A) Set-off any amounts payable by the Pledgor with respect to any
Obligations against any Posted Collateral or the Cash equivalent of
any Posted Collateral held by the Secured Party (or any obligation
of the Secured Party to Transfer that Posted Collateral); and
(B) to the extent that the Pledgor does not Set-off under (iv)(A)
above, withhold payment of any remaining amounts payable by the
Pledgor with respect to any Obligations, up to the Value of any
remaining Posted Collateral held by the Secured Party, until that
Posted Collateral is Transferred to the Pledgor.
(c) DEFICIENCIES AND EXCESS PROCEEDS. The Secured Party will Transfer to the
Pledgor any proceeds and Posted Credit Support remaining after liquidation.
Set-off and/or application under Paragraphs 8(a) and 8(b) after satisfaction in
full of all amounts payable by the Pledgor with respect to any Obligations; the
Pledgor in all events will remain liable for any amounts remaining unpaid after
any liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b).
(d) FINAL RETURNS. When no amounts are or thereafter may become payable by the
Pledgor with respect to any Obligations (except for any potential liability
under Section 2(d) of this Agreement), the Secured Party will Transfer to the
Pledgor all Posted Credit Support and the Interest Amount, if any.
PARAGRAPH 9. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that:
(i) it has the power to grant a security interest in and lien on any
Eligible Collateral it Transfers as the Pledgor and has taken all
necessary actions to authorize the granting of that security interest and
lien;
6
(ii) it is the sole owner of or otherwise has the right to Transfer all
Eligible Collateral it Transfers to the Secured Party hereunder, free and
clear of any security interest, lien, encumbrance or other restrictions
other than the security interest end lien granted under Paragraph 2;
(iii) upon the Transfer deny Eligible Collateral to the Secured Party
under the terms of this Annex, the Secured Party will have a valid and
perfected first priority security interest therein (assuming that any
central clearing corporation or any third-party financial intermediary or
other entity not within the control of the Pledgor involved in the
Transfer of that Eligible Collateral gives the notices and takes the
action required of it under applicable law for perfection of that
interest); and
(iv) the performance by it of its obligations under this Annex will not
result in the creation of any security interest, lien or other encumbrance
on any Posted Collateral other than the security interest and lien granted
under Paragraph 2.
PARAGRAPH 10. EXPENSES
(a) GENERAL. Except as otherwise provided in Paragraphs 10(b) and 10(c), each
party will pay its own costs and expenses in connection with performing its
obligations under this Annex and neither party will be liable for any costs and
expenses incurred by the other party in connection herewith.
(b) POSTED CREDIT SUPPORT. The Pledgor will promptly pay when due all taxes,
assessments or charges of any nature that are imposed with respect to Posted
Credit Support held by the Secured Party upon becoming aware of the same,
regardless of whether any portion of that Posted Credit Support is subsequently
disposed of under Paragraph 6(c), except for those taxes, assessments and
charges that result from the exercise of the Secured Party's rights under
Paragraph 6(c).
(c) LIQUIDATION/APPLICATION OF POSTED CREDIT SUPPORT. All reasonable costs and
expenses incurred by or on behalf of the Secured Party or the Pledgor in
connection with the liquidation and/or application of any Posted Credit Support
under Paragraph 8 will be payable, on demand and pursuant to the Expenses
Section of this Agreement, by the Defaulting Party or, if there is no Defaulting
Party, equally by the parties.
PARAGRAPH 11. MISCELLANEOUS
(a) DEFAULT INTEREST. A Secured Party that fails to make, when due, any Transfer
of Posted Collateral or the Interest Amount will be obligated to pay the Pledgor
(to the extent permitted under applicable law) an amount equal to interest at
the Default; Rate multiplied by the Value of the items of property that were
required to be Transferred, from (and including) the date that Posted Collateral
or Interest Amount was required to be Transferred to (but excluding) the date of
Transfer of that Posted Collateral or Interest Amount. This interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed.
(b) FURTHER ASSURANCES. Promptly following a demand made by a party, the other
party will execute, deliver, file and record any financing statement, specific
assignment or other document and take any other action that may be necessary or
desirable and reasonably requested by that party to create, preserve, perfect or
validate any security interest or lien granted under Paragraph 2, to enable that
party to exercise or enforce its rights under this Annex with respect to Posted
Credit Support or an Interest Amount or to effect or document a release of a
security interest on Posted Collateral or an Interest Amount.
(c) FURTHER PROTECTION. The Pledgor will promptly give notice to the Secured
Party of, and defend against, any suit, action, proceeding or lien that involves
Posted Credit Support Transferred by the Pledgor or that could adversely affect
the security interest and lien granted by it under Paragraph 2, unless that
suit, action, proceeding or lien results from the exercise of the Secured
Party's rights under Paragraph 6(c).
7
(d) GOOD FAITH AND COMMERCIALLY REASONABLE MANNER. Performance of all
obligations under this Annex, including, but not limited to, all calculations,
valuations and determinations made by either party, will be made in good faith
and in a commercially reasonable manner.
(e) DEMANDS AND NOTICES. All demands and notices made by a party under this
Annex will be made as specified in the Notices Section of this Agreement, except
as otherwise provided in Paragraph 13.
(f) SPECIFICATIONS OF CERTAIN MATTERS. Anything referred to in this Annex as
being specified in Paragraph 13 also may be specified in one or more
Confirmations or other documents and this Annex will be construed accordingly.
PARAGRAPH 12. DEFINITIONS
As used in this Annex: --
"CASH" means the lawful currency of the United States of America.
"CREDIT SUPPORT AMOUNT" has the meaning specified in Paragraph 3.
"CUSTODIAN" has the meaning specified in Paragraphs 6(b)(i) and 13.
"DELIVERY AMOUNT" has the meaning specified in Paragraph 3(a).
"DISPUTING PARTY" has the meaning specified in Paragraph 5.
"DISTRIBUTIONS" means with respect to Posted Collateral other than Cash, all
principal, interest and other payments and distributions of cash or other
property with respect thereto, regardless of whether the Secured Party has
disposed of that Posted Collateral under Paragraph 6(c). Distributions will not
include any item of property acquired by the Secured Party upon any disposition
or liquidation of Posted Collateral or, with respect to any Posted Collateral in
the form of Cash, any distributions on that collateral, unless otherwise
specified herein.
"ELIGIBLE COLLATERAL" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"ELIGIBLE CREDIT SUPPORT" means Eligible Collateral and Other Eligible Support.
"EXPOSURE" means for any Valuation Date or other date for which Exposure is
calculated and subject to Paragraph 5 in the case of a dispute, the amount, if
any, that would be payable to a party that is the Secured Party by the other
party (expressed as a positive number) or by a party that is the Secured Party
to the other party (expressed as a negative number) pursuant to Section
6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions)
were being terminated as of the relevant Valuation Time; provided that Market
Quotation will be determined by the Valuation Agent using its estimates at
mid-market of the amounts that would be paid for Replacement Transactions (as
that term is defined in the definition of "Market Quotation").
"INDEPENDENT AMOUNT" means, with upset to a party, the amount specified as such
for that party in Paragraph 13; if no amount is specified, zero.
"INTEREST AMOUNT" means, with respect to an Interest Period, the aggregate sum
of the amounts of interest calculated for each day in that Interest Period on
the principal amount of Posted Collateral in the form of Cash held by the
Secured Party on that day, determined by the Secured Party for each such day as
follows:
(x) the amount of that Cash on that day; multiplied by
8
(y) the Interest Rate in effect for that day; divided by
(z) 360.
"INTEREST PERIOD" means the period from (and including) the last Local Business
Day on which an Interest Amount was Transferred (or, if no Interest Amount has
yet been Transferred, the Local Business Day on which Posted Collateral in the
form of Cash was Transferred to or received by the Secured Party) to (but
excluding) the Local Business Day on which the current Interest Amount is to be
Transferred.
"INTEREST RATE" means the rate specified in Paragraph 13.
"LOCAL BUSINESS DAY", unless otherwise specified in Paragraph 13, has the
meaning specified in the Definitions Section of this Agreement, except that
references to a payment in clause (b) thereof will be deemed to include a
Transfer under this Annex.
"MINIMUM TRANSFER AMOUNT" means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.
"NOTIFICATION TIME" has the meaning specified in Paragraph 13,
"OBLIGATIONS" means, with respect to a party, all present and future obligations
of that party under this Agreement and any additional obligations specified for
that party in Paragraph 13.
"OTHER ELIGIBLE SUPPORT" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"OTHER POSTED SUPPORT" means all Other Eligible Support Transferred to the
Secured Party that remains in effect for the benefit of that Secured Party.
"PLEDGOR" means either party, when that party (i) receives a demand for or is
required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has
Transferred Eligible Credit Support under Paragraph 3(a).
"POSTED COLLATERAL" means all Eligible Collateral, other property, Distribution,
and all proceeds thereof that have been Transferred to or received by the
Secured Party under this Annex and not Transferred to the Pledgor pursuant to
Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the Secured Party under
Paragraph 8. Any Interest Amount or portion thereof not Transferred pursuant to
Paragraph 6(d)(ii) will constitute Posted Collateral in the form of Cash.
"POSTED CREDIT SUPPORT" means Posted Collateral and Other Posted Support.
"RECALCULATION DATE" means the Valuation Date that gives rise to the dispute
under Paragraph 5; provided, however, that if a subsequent Valuation Date occurs
under Paragraph 3 prior to the resolution of the dispute, then the
"Recalculation Date" means the most recent Valuation Date under Paragraph 3.
"RESOLUTION TIME" has the meaning specified in Paragraph 13.
"RETURN AMOUNT" has the meaning specified in Paragraph 3(b).
"SECURED PARTY" means either party, when that party (i) makes a demand for or is
entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) holds
or is deemed to hold Posted Credit Support.
"SPECIFIED CONDITION" means, with respect to a party, any event specified as
such for that party in Paragraph 13.
"SUBSTITUTE CREDIT SUPPORT" has the meaning specified in Paragraph 4(d)(i).
9
"SUBSTITUTION DATE" has the meaning specified in Paragraph 4(d)(ii).
"THRESHOLD" means, with respect to a party, the amount specified as such for
that party in Paragraph 13; if no amount is specified, zero.
"TRANSFER" means, with respect to any Eligible Credit Support, Posted Credit
Support or Interest Amount, and in accordance with the instructions of the
Secured Party, Pledgor or Custodian, as applicable:
(i) in the case of Cash, payment or delivery by wire transfer into one or
more bank accounts specified by the recipient;
(ii) In the case of certificated securities that cannot be paid or
delivered by book-entry, payment or delivery in appropriate physical form
to the recipient or its account accompanied by any duly executed
instruments of transfer, assignments in blank, transfer tax stamps and any
other documents necessary to constitute a legally valid transfer to the
recipient;
(iii) in the case of securities that can be paid or delivered by
book-entry, the giving of written instructions to the relevant depository
institution or other entity specified by the recipient, together with a
written copy thereof to the recipient, sufficient if complied with to
result in a legally effective transfer of the relevant interest to the
recipient; and
(iv) in the case of Other Eligible Support or Other Posted Support, as
specified in Paragraph 13.
"VALUATION AGENT" has the meaning specified in Paragraph 13.
"VALUATION DATE" means each date specified in or otherwise determined pursuant
to Paragraph 13.
"VALUATION PERCENTAGE" means, for any item of Eligible Collateral, the
percentage specified in Paragraph 13.
"VALUATION TIME" has the meaning specified in Paragraph 13.
"VALUE" means for any Valuation Date or other date for which Value is calculated
and subject to Paragraph 5 in the case of a dispute, with respect to:
(i) Eligible Collateral or Posted Collateral that is:
(A) Cash, the amount thereof; and
(B) a security, the bid price obtained by the Valuation Agent
multiplied by the applicable Valuation Percentage, if any;
(ii) Posted Collateral that consists of items that are not specified as
Eligible Collateral, zero; and
(iii) Other Eligible Support and Other Posted Support, as specified in
Paragraph 13.
PARAGRAPH 13. ELECTIONS AND VARIABLES
(a) Security Interest for "Obligations". The Item "Obligations" as used in this
Annex does not include any additional obligations with respect to Party A or
Party B.
10
(b) Credit Support Obligations.
(i) Delivery Amount Return Amount and Credit Support Amount.
(A) "Delivery Amount" has the meaning specified in Paragraph 3(a).
(B) "Return Amount" has the meaning specified in Paragraph 3(b).
(C) "Credit Support Amount" means, for any Valuation Date (i) the
Secured Party's Exposure for that Valuation Date plus (ii) the
aggregate of all Independent Amounts applicable to the Pledgor, if
any, minus (iii) the Pledgor's Threshold; provided, however, that
(x) in the case where the sum of the Independent Amounts applicable
to the Pledgor exceeds zero, the Credit Support Amount will not be
less than the sum of all Independent Amounts applicable to the
Pledgor and (y) in all other cases, the Credit Support Amount will
be deemed to be zero whenever the calculation of Credit Support
Amount yields an amount less than zero.
(ii) Eligible Collateral. The following items will qualify as "Eligible
Collateral":
VALUATION
PERCENTAGE
----------
(A) USD cash 100%
(B) Negotiable debt obligations 98%
issued by the U.S. Treasury
Department having a remaining
life of not more than one year
(C) Negotiable debt obligations 95%
issued by the U.S. Treasury
Department having a remaining
life of more than one year but
not mere than 10 years
(D) Negotiable debt obligations 90%
issued by the U.S. Treasury
Department having a remaining
life of more than 10 years
(iii) Other Eligible Support. The following items will qualify as "Other
Eligible Support": As determined from time to time in the sole discretion
of Party A.
(iv) Thresholds.
(A) "Independent Amount" means, at any time, with respect to Party
A, not applicable, and with respect Party B: the sum of any
Independent Amounts specified as applicable to such party in the
Confirmations for Transactions outstanding at such time.
(B) The "Threshold" for Party A is not applicable and for Party B at
any time shall be zero.
(C) "Minimum Transfer Amount" means with respect to Party A and
Party B: shall be $500,000; provided that, if an Event of Default or
Specified Condition has occurred and is continuing with respect to a
party, such party's Minimum Transfer Amount shall be zero.
(D) Rounding. The Delivery Amount will, if a positive number but not
an integral multiple of $10,000, be rounded up to the nearest
integral multiple of $10,000, and the Return Amount, if a positive
number but not an integral multiple of $10,000, will be rounded down
to the nearest integral multiple of $ 10,000 or to zero, if the
Return Amount is less than $10,000.
11
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A.
(ii) "Valuation Date" means each Local Business Day.
(iii) "Valuation Time" means the close of business on the Local Business
Day before the Valuation Date or date of calculation, as applicable,
provided that the calculation of Value and Exposure will be made as of
approximately the same time on the same date.
(iv) "Notification Time" means 1:00 p.m. New York time on a Local Business
Day,
(d) Conditions Precedent and Secured Party's Rights and Remedies. The following
Termination Event(s) will be a "Specified Condition" for the Pledgor (that party
being the Affected Party if the Termination Event occurs with respect to that
party): Illegality, Credit Event Upon Merger, and Additional Termination Event.
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
(ii) Consent. Party B must obtain the Party A's consent for any
substitution pursuant to Paragraph 4(d).
(f) Dispute Resolution.
(i) "Resolution Time" means 1:00 p.m., New York time, on the Local
Business Day following the date on which the notice of the dispute is
given pursuant to Paragraph 13(f)(iii) below.
(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), in the event
of a dispute involving the Value of any Posted Credit Support and/or
Transfer of Eligible Credit Support or Posted Credit Support, Value shall
be calculated as provided in Paragraph 5: provided however that the
references in Paragraph 5(i)(B) to four mid-market quotations shall be
deemed to be replaced (for purposes of this subparagraph (ii) only) with
references to three bid quotations.
(iii) Alternative. The provisions of Paragraph 5 will apply.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians. The Secured Party
and its Custodian will be entitled to hold Posted Collateral pursuant to
Paragraph 6(b); provided that the following conditions applicable to it
are satisfied;
(A) The Secured Party is not a Defaulting Party or an Affected Party
in connection with a Specified Condition, and neither a Specified
Condition nor an Event of Default with respect to the Secured Party
has led to the occurrence or effective designation of an Early
Termination Date.
(B) Posted Collateral may be held only in the following
jurisdictions: United States of America.
(C) Any Custodian for the Secured Party must (i) be appointed
pursuant to a written custodial agreement between the Secured Party
and the Custodian, (ii) be a trust company or commercial bank with
trust powers, (iii) have a combined capital and surplus of at
12
least USD 500,000,000 and (iv) have unsecured, unguaranteed general
short-term obligations rated at lease "P-1" by ▇▇▇▇▇'▇ or "A-l" by
S&P.
Initially, the Custodian for Party A is: As determined by Party A.
Initially, the Custodian for Party B is: As determined by Party B.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(e) are
applicable; provided, however, that, if (and for so long as) a Secured
Party is a Defaulting Party or an Affected Party in connection with a
Specified Condition, or the rating for a Secured Party's long term
unsecured, unenhanced senior debt by ▇▇▇▇▇'▇ or S&P, falls below Baa3 or
BBB-, respectively, or if a Secured Party shall have no such ratings, the
provisions of Paragraph 6(c) shall not be applicable to such Secured
Party.
(h) Distribution of Interest Amount.
(i) Interest Rate. The "interest Rate" will be the federal funds overnight
rate as published by the Board of Governors of the Federal Reserve System
in H.15 (519) or its successor publication minus 15 basis points, or such
other rate as the parties may agree from time to time.
(ii) Transfer of Interest Amount. The interest Amount on any Cash
Transferred pursuant to Paragraph 3(b) shall be paid only on the first
Local Business Day of each calendar month for the preceding month and on
any Local Business Day that a Return Amount consisting wholly or partially
of cash is Transferred to the Pledgor pursuant to Paragraph 3(b) and only
on the amount of Cash so Transferred.
(iii) Alternative Interest Amount. The provisions of paragraph 6(d)(ii)
will apply.
(i) Other Eligible Support and Other Posted Support.
(i) "Value" with respect to Other Eligible Support and Other Posted
Support means: Not Applicable.
(ii) "Transfer" with respect to Other Eligible Support and Other Posted
Support means: Not Applicable.
(j) Demands and Notices.
All demands, specifications and notices under this Annex will be made
pursuant to the Notices Section of this Agreement, unless otherwise
specified here:
Party A: LaSalle Sank National Association
▇/▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Global Collateral Management
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Party B: As specified in Part 4 of the Schedule to the Matter Agreement
13
(k) Addresses for Transfers.
Party A: As specified by Party A upon Transfer.
Party B: As specified by Party B upon Transfer.
(l) Other Provisions.
(i) Parties. Paragraph 1(b) of the Annex is hereby amended to provide that
all references in this Annex to "Secured Party" mean Party A and all
corresponding references to the Pledgor mean Party B.
(ii) Negative Pledge; Power of Attorney. Party B will not (i) create,
incur or suffer to exist any security interest, lien, encumbrance or ether
restriction upon any Posted Collateral Transferred to Party A hereunder,
except for the security interest, lien and right of set-all in favor of
Party A granted by Party B under Paragraph 2 or by reason of Party A's
exercise of its rights under Paragraph 6(c), or (ii) file or suffer to be
on file any financing statement or like instrument with respect to the
Posted Collateral Transferred by Party B in which Party A is not named as
the sole secured party. Party B, as Pledgor, hereby appoints Party A, as
the Secured Party, as its attorney-in-fact for the purpose, (x) while an
Event of Default or Specified Condition with respect to Party B has
occurred and is continuing or (y) after an Early Termination Date has
occurred or been designated as the result of an Event of Default or
Specified Condition with respect to Party B, of carrying out the
provisions of this Annex and taking any action and executing any
instruments, in the name, place and stead of Party B or otherwise, which
Party A may deem necessary or advisable to enforce or protect its rights
under this Annex, which appointment as attorney-in-fact is irrevocable and
coupled with an interest.
(iii) Non-Reliance. Party B acknowledges that it has the means to monitor
all material relating to all valuations, payments, defaults and rights
without need to rely on Party A, and that, given the provisions of this
Annex on substitution, responsibility for the preservation of the rights
of Party B with respect to all such matters is reasonably allocated to
Party B.
(iv) Transfer. Without limiting the generality of the definition of
"Transfer" in Paragraph 12, any Transfer to a party to this Agreement of
an interest in securities required to be effected under this Annex will he
deemed to be effective only if such Transfer constitutes a "transfer" of
such interest to such party within the meaning of the New York Uniform
Commercial Code.
IN WITNESS WHEREOF the parties have executed this Credit Support Annex on
the respective dates specified below with effect from the dates specified on the
first page of this Credit Support Annex.
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
BROOKDALE LIVING COMMUNITIES, INC.
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President, Chief
Financial Officer & Treasurer
14