EXHIBIT 10.8
(LOCAL CURRENCY - SINGLE JURISDICTION)
[ISDA(R) LOGO]
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of April 16, 2004
U.S. Bank National Association and Extendicare Health Services, Inc. have
entered and/or anticipate entering into 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
provision of the Schedule and the other provisions of this Master
Agreement, the Schedule will prevail. In the event of any inconsistency
between the provision 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.
(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.
Copyright(C)1992 by International Swap Dealers Association, Inc.
(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 REPRESENTATIONS.
(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 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;
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(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;
(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
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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 (1) 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
become due; (3) makes a general assignment,
arrangement or composition 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
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creditors' rights, or a petition is present 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 of 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, 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 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 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,
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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 thereof, (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)(1) 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.
(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 is then
continuing.
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(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(e).
(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(e) 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 (B) the
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 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
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Party; if it 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(e)(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 date 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 or 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:
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or 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.
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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) AMENDMENTS. No amendment modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing
evidence by a facsimile transmission) and executed by each of the
parties or confirmed by an exchange of telexes or electronic messages
on an electric 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.
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 day the recipient's answerback is
received;
9
(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 Act
1982 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 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).
10
"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 other 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).
"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, (c) 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 good faith 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
11
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)(1) 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).
"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
12
(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
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 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.
[SIGNATURE PAGE TO FOLLOW]
13
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.
U.S. BANK EXTENDICARE HEALTH SERVICES, INC.
NATIONAL ASSOCIATION
By: By:
--------------------------------------- ---------------------------------
Name: Name:
--------------------------------- -------------------------------
Title: Title:
--------------------------------- ------------------------------
Date: Date:
--------------------------------- -------------------------------
14
(Local Currency-Single Jurisdiction)
SCHEDULE TO THE MASTER AGREEMENT
DATED AS OF APRIL 16, 2004
BETWEEN
U.S. BANK NATIONAL ASSOCIATION ("PARTY A")
AND
EXTENDICARE HEALTH SERVICES, INC. ("PARTY B")
Part 1: TERMINATION PROVISIONS AND CERTAIN OTHER MATTERS
(a) "SPECIFIED ENTITY" means, in relation to Party A, for the
purpose of:
SECTION 5(a)(v), none;
SECTION 5(a)(vi), none;
SECTION 5(a)(vii), none; and
SECTION 5(b)(ii), none;
and, in relation to Party B, for the purpose of:
SECTION 5(a)(v), All Affiliates;
SECTION 5(a)(vi), All Affiliates;
SECTION 5(a)(vii), All Affiliates; and
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 apply
to Party A and Party B. In connection therewith,
"SPECIFIED INDEBTEDNESS" will have the meaning specified in
Section 12, except that such term shall not include
obligations in respect of deposits received in the ordinary
course of a party's banking business, and
"THRESHOLD AMOUNT" means, in relation to Party A an amount
equal to Ten Million Dollars ($10,000,000.00), and in relation
to Party B an amount equal to ($0.00).
1
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(ii)
will apply to Party A and Party B; provided, however, that the
phrase "materially weaker" means that the actual or implied
Credit Rating of (A) the senior long-term debt of the
resulting, surviving or transferee entity is rated less than
BBB- by Standard & Poor's Corporation or Baa3 by Moody's
Investors Service Inc., or (B) in the event that there are no
such Standard & Poor's Corporation or Moody's Investors
Service, Inc. ratings, the Policies (as defined below) in
effect at the time, of the party which is not the Affected
Party, would lead such non-Affected Party, solely as a result
of a change in the nature, character, identity or condition of
the Affected Party from its state (as a party to this
Agreement) prior to such consolidation, amalgamation, merger
or transfer, to decline to make an extension of credit to, or
enter into a Transaction with, the resulting, surviving or
transferee entity. "Policies", for the purposes of this
definition means: (x)(i) internal credit limits applicable to
individual entities or (ii) other limits on doing business
with entities domiciled or doing business in certain
jurisdictions or engaging in certain activities, or (y)
internal restrictions on doing business with entities with
whom the party which is not the Affected Party has had prior
adverse business relations.
In addition, Section 5(b)(ii) is hereby amended by:
(i) deleting in the fourth line thereof
the words "another entity" and
replacing them with the words "or
receives all or substantially all
of the assets of another entity or
reorganizes, incorporates,
reincorporates, or reconstitutes
into or as, another entity or X,
such Credit Support Provider, or
such Specified Entity, as the case
may be, effects a recapitalization,
liquidating dividend, leveraged
buy-out, other similar
highly-leveraged transaction,
redemption of indebtedness, or
stock buy-back or similar call on
equity or enters into any agreement
providing for the foregoing."
(ii) deleting in the fifth line thereof
the words "the resulting, surviving
or transferee" and replacing them
with the words "X or any resulting,
surviving, transferee, reorganized,
or recapitalized", and
(iii) deleting in the seventh line
thereof the words "its successor or
transferee" and replacing them with
the words " any resulting,
surviving, transferee, reorganized,
or recapitalized entity."
(e) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a)
will not apply to Party A. As to Party B, Automatic Early
Termination shall apply.
(f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section
6(e) of this Agreement:
2
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) ADDITIONAL TERMINATION EVENT will not apply to Party A. As to
Party B, an Additional Termination Event shall occur upon (i)
termination of any agreements between Party A (or any
Affiliate of Party A) and Party B (or any Specified Entity of
or Credit Support Provider for Party B), or (ii) any demand
for payment under any agreements between Party A (or any
Affiliate of Party A) and Party B (or any Specified Entity of
or Credit Support Provider for Party B). For the purpose of
the foregoing Termination Event, the Affected Party shall be
Party B and the non-Affected Party shall be Party A.
Part 2: AGREEMENT TO DELIVER DOCUMENTS
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO BE COVERED BY SECTION 3(d)
DELIVER DOCUMENT CERTIFICATE DELIVERED REPRESENTATION
Party B Certified copies of all Upon execution and Yes
resolutions and authorizations and delivery of this Agreement
any other documents with respect
to the execution, delivery and
performance of this Agreement
satisfactory to Party A
Party B Certificate of authority and Upon execution and Yes
specimen signatures of individuals delivery of this Agreement
executing this Agreement and and thereafter, upon
Confirmations request of the other Party
Party B Consolidated and consolidating Upon request of Party A Yes
balance sheet and income
statements -- quarterly
(unaudited) and annually (audited)
Party B A cross-collateralization Upon execution and Yes
agreement satisfactory to Party A delivery of this Agreement
from Party B and any Credit Support
Providers for Party B, plus all other
agreements deemed necessary by Party A
to evidence such cross-collateralization
satisfactory to Party A
3
Part 3. MISCELLANEOUS
(a) ADDRESS FOR NOTICES. For the Purpose of Section 10(a) of this
Agreement:
Any notice shall be delivered to the address or facsimile or telex number
specified in the relevant Confirmation of a Transaction. For Purposes of
Sections 5 and 6 of this Agreement, any notice shall also be delivered to the
following address:
Address for notice or communications to Party A:
U.S. Bank National Association
ATTN: Randy Bailey / Derivative Operations
800 Nicollet Mall
Mail Location: BC-MN-H18S
Minneapolis, Minnesota 55402
(612) 303-4128 Phone
(612) 303-1353 Fax
Address for notice or communications to Party B:
Extendicare Health Services, Inc.
ATTN: Janet L. Kreilein
111 West Michigan Street
Milwaukee, Wisconsin 53203
(414) 908-8000 Phone
(414) 908-8088 Fax
(b) CALCULATION AGENT. The Calculation Agent is Party A.
(c) CREDIT SUPPORT DOCUMENT. Credit Support Document is not
applicable in relation to Party A. Credit Support Document is
applicable in relation to Party B and shall mean each
agreement and instrument, now or hereafter existing, of any
kind or nature which secures, guarantees or otherwise provides
direct or indirect assurance of payment or performance of any
existing or future obligation of Party B under this Agreement,
made by or on behalf of any person or entity (including,
without limiting the generality of the foregoing, any credit
or loan agreement, note, reimbursement agreement, security
agreement, mortgage, pledge agreement, assignment of rents or
any other agreement or instrument granting any lien, security
interest, assignment, charge or encumbrance to secure any such
obligation, any guaranty, suretyship, letter of credit or
subordination agreement relating to any such obligation and
any "keep well" or other financial support agreement relating
to Party B or any Credit Support Provider) in favor of Party A
or any of its Affiliates.
(d) CREDIT SUPPORT PROVIDER. Credit Support Provider is not
applicable in relation to Party A. Credit Support Provider is
applicable in relation to Party B and means any
4
person or entity (other than Party B), that now or hereafter
secures, guarantees or otherwise provides direct or indirect
assurance of payment or performance of any existing or future
obligation of Party B under this Agreement or any Credit
Support Document, including but not limited to the following
persons and/or entities: Extendicare Holdings, Inc.
(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).
(f) "AFFILIATE" will have the meaning specified in Section 12 of
this Agreement.
Part 4. OTHER PROVISIONS
(a) SET-OFF. Any amount (the "Early Termination Amount") payable to one
party (the "Payee") by the other party (the "Payer") under Section 6(e), in
circumstances where there is a Defaulting Party or one Affected Party in the
case where a Termination Event under Section 5(b)(ii) 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 set-off 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 (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 set-off). X will give notice to the other party of any set-off effected
under this section.
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 the
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.
If an obligation is unascertained, X may in good faith estimate that obligation
and set-off in respect of the estimate, subject to the relevant party accounting
to the other when the obligation is ascertained.
Nothing in this section shall be effective to create a charge or other security
interest. This section shall be without prejudice and in addition to any right
of set-off, combination of accounts, lien or other right to which a party is at
any time otherwise entitled (whether by operation of law, contract or
otherwise).
(b) EXCHANGE OF CONFIRMATIONS. For each Transaction entered into
hereunder, Party A shall promptly send to Party B a Confirmation, via telex or
facsimile transmission. Party B agrees to respond to such Confirmation within 5
Business Days, either confirming agreement thereto or requesting a correction of
any error(s) contained therein. Failure by party B to respond within such period
shall not affect the validity or enforceability of such Transaction and shall be
deemed to be an
5
affirmation of the terms contained in such Confirmation, absent manifest error.
The parties agree that any such exchange of telexes or facsimile transmissions
shall constitute a Confirmation for all purposes hereunder.
(c) WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(d) TELEPHONIC RECORDING. Each party (i) consents to the recording of
the telephone conversations of trading and marketing personnel of the parties
and their Affiliates in connection with this Agreement or any potential
Transaction and (ii) agrees to obtain any necessary consent of, and give notice
of such recording to, such personnel of it and its Affiliates.
(e) RELATIONSHIP BETWEEN PARTIES. Section 3 of the Agreement is amended
by adding the following as subsection (e):
"(e) RELATIONSHIP BETWEEN PARTIES. Absent a written agreement to
the contrary:
(i) It is not relying on any advice (whether written or
oral) of the other party regarding any Transaction, other than
the representations expressly made by that other party in this
Agreement and in the Confirmation in respect of that
Transaction;
(ii) In respect of each Transaction under this Agreement,
(l) it has the capacity to evaluate (internally
or through independent professional advice) that
Transaction and has made its own decision to enter
into that Transaction;
(2) it understands the terms, conditions and
risks of that Transaction and is willing to accept
those terms and conditions and to assume (financially
and otherwise) those risks; and
(3) the other party (a) is not acting as a
investment or commodity trading advisor for it; (b)
has not given to it (directly or indirectly through
any other person) any assurance, guaranty or
representation whatsoever as to the merits (either
legal, regulatory, tax, financial, accounting or
otherwise) of that Transaction or any documentation
related thereto; and (c) has not committed to unwind
that Transaction."
(f) FDIC REQUIREMENTS.
(i) Corporate Authority. Each party ("X") hereby
represents and warrants at all times until termination of this
Agreement that X, by appropriate corporate action, is authorized under
applicable law to enter into this Agreement, as evidenced by the
execution
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hereof by an officer of X of the level of vice president or higher.
(ii) FIRREA Qualified Financial Contract. Each party
recognizes and intends that each Transaction entered into under this
Agreement is, and shall constitute, a "qualified financial contract" as
that term is defined in Section 212 of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as the same may be
amended, modified, or supplemented from time to time.
ACCEPTED AND AGREED:
U.S. BANK EXTENDICARE HEALTH SERVICES,
NATIONAL ASSOCIATION INC.
By: By:
-------------------------------- ---------------------------------
Name: Name:
------------------------------ -------------------------------
Title: Title:
----------------------------- ------------------------------
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