EXHIBIT 10.5
[LOGO]
DEUTSCHE BANK
Aktiengesellschaft
REVISED AS OF JUNE 7, 2004
Date: May 6, 2004
To: Health Care Reit, Inc
Attention: Swaps Documentation Department
Facsimile NO: 1 419 247 2826
OUR REFERENCE: GLOBAL NO. N304066N
RE: INTEREST RATE SWAP TRANSACTION - THIS CONFIRMATION
SUPERSEDES AND REPLACES ALL PRIOR COMMUNICATION
BETWEEN THE PARTIES HERETO WITH RESPECT TO THE
TRANSACTION DESCRIBED BELOW
Ladies and Gentlemen:
The purpose of this letter agreement is to set forth the terms and conditions of
the Transaction entered into between Deutsche Bank AG ("DBAG") and Health Care
REIT, Inc ("Counterparty") on the Trade Date specified below (the
"Transaction"). This letter agreement constitutes a "Confirmation" as referred
to in the Agreement specified below.
The definitions and provisions contained in the 2000 ISDA Definitions (the
"Definitions") as published by the International Swaps and Derivatives
Association, Inc. are incorporated by reference herein. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern.
For the purpose of this Confirmation, all references in the Definitions or the
Agreement to a "Swap Transaction" shall be deemed to be references to this
Transaction.
1. This Confirmation evidences a complete and binding agreement between DBAG
("Party A") and Counterparty ("Party B") as to the terms of the Transaction to
which this Confirmation relates. In addition, Party A and Party B agree to use
all reasonable efforts to negotiate, execute and deliver an agreement in the
form of the ISDA Master Agreement (Multicurrency-Cross Border) (the "ISDA
Form") (as may be amended, modified or supplemented from time to time, the
"Agreement") with such modifications as Party A and Party B will in good faith
agree. Upon execution by the parties of such Agreement, this Confirmation will
supplement, form a part of and be subject to the Agreement. All provisions
contained or incorporated by reference in such Agreement upon its execution
shall govern this Confirmation except as expressly modified below. Until Party A
and Party B execute and deliver the Agreement, this Confirmation, together with
all other documents referring to the ISDA Form (each a "Confirmation")
confirming Transactions (each a "Transaction") entered into between us
(notwithstanding anything to the contrary in a Confirmation) shall supplement,
form a part of, and be subject to an agreement in the form of the ISDA Form as
if Party A and Party B had executed an agreement on the Trade Date of the first
such Transaction between us in such form, with the Schedule thereto (i)
specifying only that (a) the governing law is the laws of the State of New York,
without reference to choice of law doctrine, provided, that such choice of law
shall be superseded by any choice of law provision specified in the Agreement
upon its execution, and (b) the Termination Currency is U.S. Dollars and (ii)
incorporating the addition to the definition of "Indemnifiable Tax" contained in
(page 48 of) the ISDA "User's Guide to the 1992 ISDA Master Agreements". In the
event of any inconsistency between the terms of this Confirmation, and the terms
of the Agreement, this Confirmation will prevail for the purpose of this
Transaction.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: USD 50,000,000.00
Trade Date: May 6, 2004
Effective Date: May 7, 2004
Termination Date: November 15, 2013
FIXED AMOUNTS:
Fixed Rate Payer: DBAG
Fixed Rate Payer Period End Dates: The 15th day of May and November
of each year, commencing May 15,
2004, through and including the
Termination Date with No
Adjustment
Fixed Rate Payer Payment Dates: The 15th day of May and November
of each year, commencing May 15,
2004, through and including the
Termination Date
Fixed Rate: 6.00%
Fixed Rate Day Count Fraction: 30/360
FIXED RATE PAYER BUSINESS DAYS: NEW YORK
Fixed Rate Payer Business Day Modified Following
Convention:
FLOATING AMOUNTS:
Floating Rate Payer: Counterparty
Floating Rate Payer Period End Dates: The 15th day of May and November
of each year, commencing May 15,
2004, through and including the
Termination Date
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Floating Rate Payer Payment Dates: The 15th day of May and
November of each year,
commencing May 15, 2004,
through and including the
Termination Date
Floating Rate for initial Calculation Period: 1.78125%
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Six months
Spread: Plus 0.705%
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The last Floating Rate Payer
Business Day of each
Calculation Period or
Compounding Period, if
Compounding is applicable.
Compounding: Inapplicable
FLOATING RATE PAYER BUSINESS DAYS: NEW YORK
Floating Rate Payer Business Day
Convention: Modified Following
3. ACCOUNT DETAILS:
USD DBAG Payment Instructions:
Account With: Deutsche Bank AG, New York
SWIFT Code: XXXXXX00
Favor Of: Deutsche Bank AG, New York
Account Number: 100440170004
USD Counterparty Payment Instructions:
Account With: National City Bank
SWIFT Code: XXXXXX00
Favor Of: Health Care XXXXX, Inc, Ohio
Account Number: 10 57359
4. OFFICES:
The Office of DBAG for this Transaction is New York.
The Office of Counterparty for this Transaction is Toledo.
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5. CALCULATION AGENT: The party specified as such in the Agreement, or if
not specified therein, DBAG.
6. REPRESENTATIONS
Counterparty, if it is a nonresident alien individual, foreign corporation,
foreign partnership, foreign trust, or foreign estate, represents that it
is a foreign person for purposes of US Treasury regulations relating to
information reporting and backup withholding.
Each party will be deemed to represent to the other party on the date on
which it enters into this Transaction that (absent a written agreement
between the parties that expressly imposes affirmative obligations to the
contrary for this Transaction):
(i) NON-RELIANCE. It is acting for its own account, and it has made its own
independent decisions to enter into this Transaction and as to whether this
Transaction is appropriate or proper for it based upon its own judgement
and upon advice from such advisers 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 this Transaction; it
being understood that information and explanations related to the terms and
conditions of this Transaction shall not be considered investment advice or
a recommendation to enter into this 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 this Transaction.
(ii) 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
this Transaction. It is also capable of assuming, and assumes, the risks of
this Transaction.
(iii) STATUS OF PARTIES. The other party is not acting as a fiduciary for,
or an adviser to it in respect of this Transaction.
7. OTHER PROVISIONS
a) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to Party A
and will apply to Party B.
In connection therewith, "Specified Indebtedness" will have the meaning
specified in Section 14, provided, however, that indebtedness or
obligations in respect of deposits received in the ordinary course of the
banking business of such person shall not constitute Specified
Indebtedness.
"THRESHOLD AMOUNT" means with respect to Party A an amount equal to three
percent (3%) of Shareholders' Equity and with respect to Party B, the
amount specified from time to time in Section 8.4, "Other Defaults" of the
Credit Agreement, which amount is currently $1,500,000
"CREDIT AGREEMENT" means the Amended and Restated Loan Agreement dated as
of August 23, 2002, among Party B, Keybank National Association, as
Administrative Agent, Deutsche Bank Securities Inc., as Syndication Agent,
UBS Warburg LLC, as Documentation Agent, and the other lenders party
thereto, as the same has been amended and may be amended, modified,
supplemented or replaced from time to time.
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b) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will apply to
Party A and to Party B. Provided, however, with respect to Party B, Credit
Event Upon Merger shall not apply if (a) Party B is the surviving entity,
(b) the consideration paid in connection with any such merger or
acquisition does not exceed an amount equal to fifteen percent (15%) of
Party B'S Consolidated Total Assets (as defined in the Credit Agreement) at
the date of the consummation of such transaction, prior to giving effect to
such transaction.
8. SET OFF.
Section 6 of this Agreement is amended by the addition of the following
Section 6(f):
"(f) Upon the designation of any Early Termination Date, the party that is
not the Defaulting Party or Affected Party ("X") may, without prior notice
to the Defaulting or Affected Party ("Y"), set off any sum or obligation
(whether or not arising under this Agreement, whether matured or unmatured,
whether or not contingent and irrespective of the currency, place of
payment or booking office of the sum or obligation) owed by Y to X or any
Affiliate of X (the "X Set Off Amount") against any sum or obligation
(whether or not arising under this Agreement, whether matured or unmatured,
whether or not contingent and irrespective of the currency, place of
payment or booking office of the sum or obligation) owed by X or any
Affiliate of X to Y (the "Y Set Off Amount"). X will give notice to the
other party of any set off effected under this Section 6(f).
For this purpose, either the X Set Off Amount or the Y Set Off Amount (or
the relevant portion of such set off amounts) may be converted by X into
the currency in which the other set off amount is denominated at the rate
of exchange at which X would be able, acting in a reasonable manner and in
good faith, to purchase the relevant amount of such currency.
If a sum or 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 6(f) shall be effective to create a charge or other
security interest. This Section 6(f) shall be without prejudice and in
addition to any right of set-off, combination of accounts, lien or other
rights to which any party is at anytime otherwise entitled (whether by
operation of law, contract or otherwise)."
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9. Please confirm that the foregoing correctly sets forth the terms of our
agreement by having an authorized officer sign this Confirmation and return
it via facsimile or e-mail to:
Attention: Derivative Documentation
Telephone: 00 00 0000 0000
Facsimile: 44 20 7545 9761
E-mail: Xxxxxxxxxx.Xxxxxxxxxxxxx@xx.xxx
This message will be the only form of Confirmation dispatched by us. If you
wish to exchange hard copy forms of this Confirmation, please contact us.
Yours sincerely,
Deutsche Bank AG
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Authorized Signatory
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Authorized Signatory
Confirmed as of the date first written above:
Health Care REIT, Inc
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer
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