EXECUTION
PLEDGE AGREEMENT
PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of March 13, 1997,
between GROVE OPERATING, L.P., a Delaware limited partnership (the "Pledgor")
and CITICORP REAL ESTATE, INC., a Delaware corporation (the "Lender").
WHEREAS, the Lender has made a mortgage loan in the amount of
$15,084,000 (the "Loan") to various affiliates of Pledgor listed on Schedule 1
annexed hereto (collectively, the "Borrowers") as evidenced by a Multi-Family
Note of the Borrowers of even date herewith (the "Note"), which Note provides
for the payment of interest at an interest rate calculated with reference to
monthly LIBOR;
WHEREAS, the Note is secured, inter alia, by a series of mortgages,
assignments of leases, environmental indemnity agreements, UCC-1 financing
statements and other documents and instruments executed in connection therewith,
collectively, the "Security Documents", the Note and the Security Documents are
collectively, the "Loan Documents");
WHEREAS, Pledgor as of the date hereof has entered into two (2)
interest rate swap agreements in the aggregate notional amount of $15,200,000
with First National Bank of Boston, copies of which are attached hereto as
Exhibit A (collectively, the "Swap Agreement") whereby Pledgor has agreed to pay
a fixed rate of interest on the notional amount, in exchange for the receipt of
payments calculated at one-month's LIBOR rate;
WHEREAS, Pledgor has agreed to pledge its rights under the Swap
Agreement to Lender to secure the Borrowers obligations under the Note and the
Loan Documents (collectively, the "Obligations");
WHEREAS, it is a condition precedent to the Lender's entering into the
Loan that the Pledgor pledge to the Lender the Collateral (as defined herein);
WHEREAS, considerable benefit will insure to the Pledgor in
connection with the making of the Loan to the Borrowers;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto mutually agree as follows:
SECTION Definitions. Except as otherwise defined herein, all
capitalized terms shall have the respective meanings given to such terms in the
Loan Documents.
SECTION Security Interest. As security for the payment and performance
of all of the Obligations, the Pledgor hereby pledges, grants and assigns to the
Lender and its successors and assigns, and creates in the Lender and its
successors and assigns, a security interest in and lien on all of its right,
title and interest in, to and under the following (hereafter, the "Collateral"):
All payments of money or other payments of other property due
and payable to the Pledgor under the Swap Agreement and
general intangibles for money due or to become due (as
described in Section 9-318(4) of the Uniform Commercial Code
as adopted in the State of New York) under the Swap Agreement,
and
Any and all proceeds of any of the foregoing.
SECTION Delivery of Certificates. The Pledgor shall promptly deliver to
the Lender, all certificates, instruments or other property representing or
constituting any Collateral received or receivable by the Pledgor after the date
of this Pledge Agreement. Any certificates or other instruments so delivered
shall be duly endorsed and subscribed by Pledgor or accompanied by appropriate
instruments of transfer or assignment duly executed in blank by the Pledgor. Any
such certificates, instruments or other property representing or constituting
any Collateral received by the Pledgor after the date of this Pledge Agreement
shall be held by the Pledgor in trust for the Lender and shall forthwith be
delivered by the Pledgor to the Lender as aforesaid. If at any time the Lender
notifies the Pledgor that additional endorsements
2
or other instruments of transfer or assignment with respect to any of the
Collateral held by the Lender are required, the Pledgor shall promptly execute
all of the same reasonably requested by Lender in blank and deliver such
endorsements or other instruments of transfer or assignment as the Lender may
reasonably request.
SECTION Power of Attorney. The Pledgor hereby constitutes and
irrevocably appoints the Lender, with full power of substitution and revocation
by the Lender, as the Pledgor's true and lawful attorney-in-fact, for the
purpose from time to time of carrying out the provisions of this Pledge
Agreement and taking any action and executing any instrument that the Lender
deems necessary or advisable to accomplish the purposes of this Pledge
Agreement. The power of attorney granted pursuant to this Pledge Agreement and
all authority hereby conferred are granted and conferred solely to protect the
Lender's interest in the Collateral and shall not impose any duty upon the
Lender to exercise any power. This power of attorney shall be irrevocable as one
coupled with an interest.
SECTION Representations and Warranties of Pledgor. Pledgor represents
and warrants that:
It has the power and authority under the laws of its jurisdiction
of organization to execute, deliver and perform this Pledge Agreement and to
grant the lien on the Collateral contemplated hereby in favor of the Lender.
Its execution, delivery and performance of this
Pledge Agreement and granting of the lien on the Collateral contemplated hereby
has been duly authorized by all necessary corporate or other action and does not
and will not (i) violate any applicable law, rule or regulation or any provision
of its organizational documents, (ii) conflict with, result in a breach of, or
constitute a default under any provision of any indenture, mortgage or other
material agreement or instrument to which it is a party, by which it or its
properties or assets is bound or subject or any license, judgment order or
decree of any governmental authority having jurisdiction over it or its
activities, properties or assets or (iii) result in or require the creation or
imposition of any lien upon or with respect to any properties or assets now or
hereafter owned by it (other than the Collateral).
3
This Pledge Agreement has been duly executed and
delivered by Pledgor and constitutes its legal, valid and binding obligation,
enforceable against such Pledgor in accordance with its terms.
No consent or authorization of, filing with, or
other act by or in respect of any governmental authority and no consent of any
other person is required that has not been obtained (i) for the execution,
delivery and performance of this Pledge Agreement by Pledgor, (ii) for the
pledge by such Pledgor of the Collateral to the Lender pursuant to this Pledge
Agreement, or (iii) for the exercise by the Lender of the rights provided for in
this Pledge Agreement or the remedies in respect of the Collateral pursuant to
this Pledge Agreement.
Such Pledgor is the sole legal and beneficial owner
of, and has valid and transferrable title to, the Collateral, free and clear of
all liens, other than the lien in favor of the Lender created by this Pledge
Agreement.
The principal place of business of Pledgor and the
books and records of such Pledgor are located at the address indicated for such
Pledgor set forth in Section 12 of this Pledge Agreement.
SECTION Obligations of Pledgor. Pledgor covenants to
the Lender that:
It shall not sell, transfer or convey any interest
in, or suffer or permit any lien to exist on or with respect to, any of the
Collateral except the lien created under this Pledge Agreement;
It shall defend the Lender's right, title and
interest in, to and under the Collateral against the claims and
demands of all persons whomsoever;
It hereby authorizes the Lender to file one or more
financing or continuation statements and amendments thereto relating to all or
part of the Collateral without the Pledgor's signatures. A photocopy or other
reproduction of this Pledge Agreement shall be sufficient as a financing
statement;
4
It shall not change its name or principal place of
business or the location of its records without providing at least
30 days' prior written notice thereof to the Lender;
It shall remain liable for all of its obligations
and liabilities under the Swap Agreement and agrees that the Lender shall not be
deemed to undertake any obligations or liabilities of any nature whatsoever
arising under or in connection with the Swap Agreement.
SECTION Distributions. Notwithstanding anything to the contrary
contained elsewhere in this Pledge Agreement, so long as no default has occurred
and is continuing beyond the expiration of any applicable grace period under the
Loan Documents, the Pledgor shall be entitled to collect all payments due
Pledgor under the Swap Agreement. Upon the occurrence and during the continuance
of any default beyond the expiration of any applicable grace period under the
Loan Documents, the Lender shall have the exclusive right to receive all
payments due Pledgor under the Swap Agreement.
SECTION Rights of the Lender. (a) If the Pledgor shall fail to perform
in any material respect any agreement contained herein and such failure
continues for 10 days after notice from Lender, the Lender may (but shall not be
obligated or required to) perform, or cause the performance, of such agreement.
(b) At any time upon and during the continuance of a default
beyond any applicable grace period under the Loan Documents, the Lender may (but
shall not be obligated or required to):
Cause the Collateral to be transferred to its name or to the
name of its nominee or nominees and thereafter exercise as to such
Collateral all of the rights, powers and remedies of an owner;
Ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittances and receipts for monies due or to become
due under or in respect of any of the Collateral and hold the same as
part of the Collateral, or apply the same to any of the Obligations in
such manner as the Lender may direct in its sole discretion; and
5
File any claims or take any actions or institute any
proceedings that the Lender may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce compliance
with the rights of the Lender with respect to any of the Collateral;
SECTION Default; Remedies. Upon and during the continuance of any
default beyond the expiration of any applicable grace period under the Loan
Documents or upon the occurrence of any default under this Pledge Agreement that
continues for 10 days after notice from Lender:
The Lender shall have all the rights and remedies of a secured
party under the Uniform Commercial Code, as in effect in any applicable
jurisdiction or otherwise available at law or equity. All rights to
distributions of any kind to which the Pledgor is entitled under the Collateral
shall automatically vest in the Lender, and if any such payments are received by
the Pledgor, they shall be held in trust by the Pledgor for the Lender,
segregated from all other funds of the Pledgor and promptly paid over to the
Lender. In addition, the Lender shall have the right, without demand of
performance or other demand, advertisement or notice of any kind, except as
specified below, to or upon the Pledgor or any other person (all and each of
which demands, advertisements and/or notices are hereby expressly waived), to
proceed forthwith to collect, receive, appropriate and realize upon the
Collateral, or any part thereof and to proceed forthwith to sell, assign, or
otherwise dispose of and deliver the Collateral or any part thereof at public or
private sale at such prices and on such terms and restrictions as the Lender may
deem appropriate without any liability for any loss due to decrease in the
market value of the Collateral during the period held. If any notification to
the Pledgor of the intended disposition of the Collateral is required by law,
such notification shall be deemed reasonable and properly given if hand
delivered or sent by recognized overnight courier at least ten business days'
prior to such disposition to the address of the Pledgor indicated below. Any
disposition of the Collateral or any part thereof may be for cash or on credit
or for future delivery without assumption of any credit risk, with the right to
the Lender to purchase all or any part of the Collateral so sold at any such
sale or sales, public or
6
private, free of any equity or right of redemption, which right or equity is
hereby expressly waived and released by the Pledgor.
All of the Lender's rights and remedies under this
Pledge Agreement and under applicable law, including but not limited to the
foregoing, shall be cumulative and not exclusive and shall be enforceable
alternatively, successively or concurrently as the Lender may deem expedient.
The Pledgor specifically waives all rights of stay
or appraisal which the Pledgor had or may have under any rule of law or statute
now existing or hereafter adopted.
The Lender shall not be obligated to make any sale
or other disposition unless the terms thereof shall be satisfactory to it. The
Lender may, without notice or publication, adjourn any private or public sale,
and, upon ten business days' prior notice to the Pledgor, hold such sale at any
time or place to which the same may be so adjourned. In case of any sale of all
or any part of the Collateral, on credit or future delivery, the Collateral so
sold may be retained by the Lender until the selling price is paid by the
purchaser thereof, but the Lender shall incur no liability in case of the
failure of such purchaser to take up and pay for the property so sold and, in
case of any such failure, such property may again be sold as herein provided.
SECTION Disposition of Proceeds. The proceeds of any sale or
disposition of all or any part of the Collateral shall be applied by the Lender
to the payment of the Obligations in such order as the Lender may elect. Any
surplus thereafter remaining shall be paid to the Pledgor, or as otherwise may
be required by applicable law.
SECTION Termination. This Pledge Agreement shall:
create a continuing security interest in the
Collateral;
remain in full force and effect for so long as any
of the Obligations are outstanding;
7
be binding upon the Pledgor and its permitted
successors and assigns; and
inure to the benefit of the Lender and its
successors, transferees and assigns including any transferee or
assignee of the Loan.
Without limiting the foregoing, the Lender may assign or otherwise transfer the
Loan held by it to any other person, and such other person shall thereupon
become vested with all the benefits in respect thereof granted herein or
otherwise. The Pledgor may not assign its rights or obligations under this
Pledge Agreement without the prior written consent of the Lender.
SECTION General Provisions. No failure on the part of the Lender to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise by the
Lender of any right, power or remedy hereunder preclude any other or future
exercise thereof, or the exercise of any other right, power or remedy. The
representations, covenants and agreements of the Pledgor herein contained shall
survive the date hereof.
No amendment or waiver of any provision of this
Pledge Agreement nor consent to any departure by the Pledgor herefrom nor
release of all or any part of the Collateral shall in any event be effective
unless the same shall be in writing, signed by the party against whom
enforcement of such amendment, waiver, consent, departure or release is sought.
Any such waiver or consent or release shall be effective only in the specific
instance and for the specific purpose for which it is given.
Except as expressly otherwise provided herein, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing, and shall be deemed to have been duly given or
made when delivered by hand, or one business day after being sent by overnight
mail, or when received if sent by certified mail, postage prepaid, return
receipt requested addressed as follows, or to such other address as may be
hereafter notified by the respective parties hereto:
8
The Lender: Citicorp Real Estate, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: CitiMae Conduit (MC-2)
The Pledgor: c/o Grove Property Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xx. Xxxxxx X. XxXxxxxx
provided that any notice, request or demand to or upon the Lender shall not be
effective until actually received.
Pledgor hereby consents to the non-exclusive
jurisdiction of the Supreme Court of the State of New York for New York County
and the United States District Court for the Southern District of New York with
respect to any suit, claim, action or proceeding arising out of or related to
this Pledge Agreement or the transactions contemplated hereby and hereby waives
any objection which it may have now or hereafter to the venue of any suit,
claim, action or proceeding arising out of or related to this Pledge Agreement
or the transactions contemplated hereby and brought in the courts specified
above and also hereby waives any claim that any such suit, claim, action or
proceeding has been brought in an inconvenient forum.
If any provision of this Pledge Agreement is
determined by a court of competent jurisdiction to be unenforceable, such
provision shall be automatically reformed and construed so as to be valid,
operative and enforceable to the maximum extent permitted by the law while most
nearly preserving its original intent. The invalidity of any part of this Pledge
Agreement shall not render invalid the remainder of this Pledge Agreement.
This Pledge Agreement may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts taken together shall constitute but one and
the same instrument.
9
The section headings in this Pledge Agreement are
for convenience of reference only and shall not affect the
interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.
GROVE OPERATING, L.P.,
as Pledgor
By:Grove Property Trust, General Partner
By: /s/ Xxxxxx XxXxxxxx
Name: Xxxxxx XxXxxxxx
Title: Chief Financial Officer
CITICORP REAL ESTATE, INC.,
as Lender
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
10
Schedule 1
List of Borrowers
1. GR-Properties III Limited Partnership
2. Foxwoodburg, L.P.
3. Grove-Westfield Associates Limited Partnership
4. GR-Westwynd Associates Limited Partnership
5. Grove-West Springfield Associates Limited Partnership
Exhibit A
Swap Agreements
MASTER AGREEMENT
dated as of December 6, 1996
THE FIRST NATIONAL BANK OF BOSTON and GROVE OPERATING, L.P. 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
1. Definitions. The terms defined in Section 14 and in the Schedule will
have the
meaning therein specified for the purpose of this Master
Agreement.
2. 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.
3. 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
1. General Conditions.
1. 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.
2. 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.
3. 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.
2. 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.
3.Netting. If on any date amounts would otherwise be payable:--
1. in the same currency; and
2. 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 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 Offices through which the
parties make and receive payments or deliveries.
4. Deduction or Withholding for Tax.
1. Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such deduction or
withholding is required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, then in effect. If a party is so
required to deduct or withhold, then that party ("X") will:--
(1) promptly notify the other party ("Y") of such
requirement;
(2) pay to the relevant authorities the full
amount required to be deducted or withheld
(including the full amount required to be
deducted or withheld from any additional
amount paid by X to Y under this Section
2(d)) promptly upon the earlier of
determining that such deduction or
withholding is required or receiving notice
that such amount has been assessed against
Y;
(3) promptly forward to Y an official receipt
(or a certified copy), or other
documentation reasonable acceptable to Y,
evidencing such payment to such authorities;
and
(4) if such Tax is an Indemnifiable Tax, pay to
Y, in addition to the payment to which Y is
otherwise entitled under this Agreement,
such additional amount as is necessary to
ensure that the net amount actually received
by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal
the full amount Y would have received had no
such deduction or withholding been required.
However, X will not be required to pay any
additional amount to Y to the extent that it
would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement contained in
Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made
by Y pursuant to Section 3(f) to be
accurate and true unless such
failure would not have occurred but
for (I) any action taken by a taxing
authority, or brought in a court of
competent jurisdiction, on or after
the date on which a Transaction is
entered into (regardless of whether
such action is taken or brought with
respect to a party to this
Agreement) or (II) a Change in Tax
Law.
2. Liability. If:--
(1) X is required by any applicable law, as
modified by the practice of any relevant
governmental revenue authority, to make any
deduction or withholding in respect of which
X would not be required to pay an additional
amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is
assessed directly against X,
then, except to the extent Y has satisfied or then satisfies
the liability resulting from such Tax, Y will promptly pay to
X the amount of such liability (including any related
liability for interest, but including any related liability
for penalties only if Y has failed to comply with or perform
any agreement contained in Section (4)(i), 4(a)(iii) or 4(d)).
5. 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.
1. Basic Representations.
1. 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;
2. 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;
3. 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;
5. 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
6. 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)).
2. 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.
3. 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.
4. 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.
5. Payer Tax Representation. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(e) is accurate and true.
6. Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.
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:--
1. Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
1. any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
2. any other documents specified in the Schedule or any Confirmation; and
3. upon reasonable demand by such other party, any form or document that
may be required or reasonably requested in writing in order to allow such other
party or its Credit Support Provider to make a payment under this Agreement or
any applicable Credit Support Document without any deduction or withholding for
or on account of any Tax or with such deduction or withholding at a reduced rate
(so long as the completion, execution or submission of such form or document
would not materially prejudice the legal or commercial position of the party in
receipt of such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and to be
executed and to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
2. 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.
3. 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.
4. Tax Agreement. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.
5. Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organized, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. Events of Default and Termination Event
1. 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:--
1. 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(e)
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;
2. 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(e)
or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) 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;
3. 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;
4. Misrepresentation. A representation
(other than a representation under Section 3(e) or
(f)) 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;
5. 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);
6. 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);
7. 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 solvency 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 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,
or indicating its consent to, approval of,
of acquiescence in, any of the foregoing
acts; or
8. Merger Without Assumption. The party or any Credit Support Provider or
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 of 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.
2. Termination Events. The occurrence at any time with
respect to a party or, if applicable, any Credit Support
Provider of such party or any Specific Entity of such party of
any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is
specified in (ii) below or a Tax Event Upon Merger if the
event is specified in (iii) below, and, if specified to be
applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination
Event if the event is specified pursuant to (v) below:--
1. 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;
2. Tax Event. Due to (x) any action taken
by a taxing authority, or brought in a court of
competent jurisdiction, on or after the date on which
a Transaction is entered into (regardless of whether
such action is taken or brought with respect to a
party to this Agreement) or (y) a Change in Tax Law,
the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on
the next succeeding Scheduled Payment Date (1) be
required to pay to the other party an additional
amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest
under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive
a payment from which an amount is required to be
deducted or withheld for or on account of a Tax
(except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is
required to be paid in respect of such Tax under
Section 2(d)(i)(4) (other than by reason of Section
2(d)(i)(4)(A) or (B));
3. Tax Event Upon Merger. The party (the
"Burdened Party") on the next succeeding Scheduled
Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax
under Section 2(d)(i)(4) (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) or (2)
receive a payment from which an amount has been
deducted or withheld for or on account of any
Indemnifiable Tax in respect of which the other party
is not required to pay an additional amount (other
than by reason of Section 2(d)(i)(4)(A) or (B)), in
either case as a result of a party consolidating or
amalgamating with, or merging with or into, or
transferring all or substantially all its assets to,
another entity (which will be the Affected Party)
where such action does not constitute an event
described in Section 5(a)(viii);
4. 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, 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
5. 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).
3. 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
1. 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 Default 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).
2. Right to Terminate Following Termination Event.
59. 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.
60. Transfer to Avoid Termination Event. If
either an Illegality under Section 5(b)(i)(1) or a
Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the
Burdened Party is the Affected Party, the Affected
Party will, as a condition to its right to designate
an Early Termination Date under Section 6(b)(iv), use
all reasonable efforts (which will not require such
party to incur a loss, excluding immaterial,
incidental expenses) to transfer within 20 days after
it gives notice under Section 6(b)(i) all its rights
and obligations under this Agreement in respect of
the Affected Transactions to another of its Officers
or Affiliates so that such Termination Event ceases
to exist.
If the Affected Party is not able to make such a
transfer it will give notice to the other party to
that effect within such 20 day period, whereupon the
other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section
6(b)(ii) will be subject to and conditional upon the
prior written consent of the other party, which
consent will not be withheld if such other party's
policies in effect at such time would permit it to
enter into transactions with the transferee on the
terms proposed.
3. Two Affected Parties. If an Illegality
under Section 5(b)(i)(1) or a Tax Event 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.
4. Right to Terminate. If:--
(1) a transfer under Section 6(b)(ii) or an
agreement under Section 6(b)(iii), as the
case may be, 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 under Section 5(b)(i)(2),
a Credit Event Upon Merger or an
Additional Termination Event occurs, or a
Tax Event Upon Merger occurs and the
Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party
in the case of a Tax Event Upon Merger, any Affected Party in
the case of a Tax Event or 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.
3. Effect of Designation.
1. 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.
2. Upon the occurrence or effective
designation of an Early Termination Date, no further
payments or deliveries under Section 2(a)(i) or 2(e)
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).
4. Calculations.
1. 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.
2. 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) in the
Termination Currency, 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.
5. 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 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.
1. 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 Termination
Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party over (B)
the Termination Currency Equivalent of 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 Termination
Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party less (B)
the Termination Currency Equivalent of 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 Party; if it is
a negative number, the Non-defaulting Party
will pay the absolute value of that amount
to the Defaulting Party.
2. 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:--
1. 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 will the higher Settlement Amount
("X") and the Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of the Unpaid
Amounts owing to X less (II) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y; and
2. 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.
3. 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).
4. 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
Subject to Section 6(b)(ii), 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:--
6. 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
7. 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. Contractual Currency
1. Payment in the Contractual Currency. Each payment under
this Agreement will be made in the relevant currency specified
in this Agreement for that payment (the "Contractual
Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the
Contractual Currency will not be discharged or satisfied by
any tender in any currency other than the Contractual
Currency, except to the extent such tender results in the
actual receipt by the party to which payment is owed, acting
in a reasonable manner and in good faith in converting the
currency so tendered into the Contractual Currency, of the
full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in
the Contractual Currency so received falls short of the amount
in the Contractual Currency payable in respect of this
Agreement, the party required to make the payment will, to the
extent permitted by applicable law, immediately pay such
additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason
the amount in the Contractual Currency so received exceeds the
amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund
promptly the amount of such excess.
2. Judgments. To the extent permitted by applicable law, if
any judgment or order expressed in a currency other than the
Contractual Currency is rendered (i) for the payment of any
amount owing in respect of this Agreement, (ii) for the
payment of any amount relating to any early termination in
respect of this Agreement or (iii) in respect of a judgment or
order of another court for the payment of any amount described
in (i) or (ii) above, the party seeking recovery, after
recovery in full of the aggregate amount to which such party
is entitled pursuant to the judgment or order, will be
entitled to receive immediately from the other party the
amount of any shortfall of the Contractual Currency received
by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any
excess of the Contractual Currency received by such party as a
consequence of sums paid in such other currency if such
shortfall or such excess arises or results from any variation
between the rate of exchange at which the Contractual Currency
is converted into the currency of the judgment or order for
the purposes of such judgment or order and the rate of
exchange at which such party is able, acting in a reasonable
manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual
Currency with the amount of the currency of the judgment or
order actually received by such party. 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 Contractual Currency.
3. Separate Indemnities. To the extent permitted by
applicable law, these indemnities constitute separate and
independent obligations from the other obligations in this
Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence
granted by the party to which any payment is owed and will not
be affected by judgment being obtained or claim or proof being
made for any other sums payable in respect of this Agreement.
4. Evidence of Loss. For the purpose of this
Section 8, it will be sufficient for a
party to demonstrate that it would have suffered a loss had
an actual exchange or purchase been
made.
9. Miscellaneous
1. 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.
2. Amendments. 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 an exchange of telexes or electronic messages
on an electronic messaging system.
3. 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.
4. 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.
5. Counterparts and Confirmations.
1. 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.
2. 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.
6. 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.
7. 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.
10. Offices; Multibranch Parties
1. If Section 10(a) is specified in the Schedule as applying,
each party that enters into a Transaction through an Office
other than its head or home office represents to the other
party that, notwithstanding the place of booking office or
jurisdiction of incorporation or organisation of such party,
the obligations of such party are the same as if it had
entered into the Transaction through its head or home office.
This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
2. Neither party may change the Office through which it makes
and receives payments or deliveries for the purpose of a
Transaction without the prior written consent of the other
party.
3. If a party is specified as a Multibranch Party in the
Schedule, such Multibranch Party may make and receive payments
or deliveries under any Transaction through any Office listed
in the Schedule, and the Office through which it makes and
receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. 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 and Stamp Tax, 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.
12. Notices
1. 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:--
1. if in writing and delivered in
person or by courier, on the date it
is delivered;
2. if sent by telex, on the date the
recipient's answerback is received;
3. 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);
4. if sent by certified or registered mail
(airmail, if overseas) or the
equivalent (return receipt requested), on the
date that mail is
delivered or delivery is attempted; or
5. 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.
2. 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.
13. Governing Law and Jurisdiction
1. Governing Law. This Agreement will be governed by
and construed in accordance with
the law specified in the Schedule.
2. Jurisdiction. With respect to any suit, action
or proceedings relating to this
Agreement ("Proceedings"), each party irrevocably:--
1. 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
2. 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 Xxx
0000 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.
3. Service of Process. Each party irrevocably appoints the
Process Agent (if any) specified opposite its name in the
Schedule to receive, for it and on its behalf, service of
process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a
substitute process agent acceptable to the other party. The
parties irrevocably consent to service of process given in the
manner provided for notices in Section 12. Nothing in this
Agreement will affect the right of either party to serve
process in any other manner permitted by law.
4. 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.
14. 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, Tax Event or Tax Event Upon Merger, 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:--
1. 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;
2. 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;
3. 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
4. in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or
after the date on which the relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation,
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)(iv).
"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).
"Indemnifiable Tax" means any Tax other than a Tax that would not be
imposed in respect of a payment under this Agreement but for a present
or former connection between the jurisdiction of the government or
taxation authority imposing such Tax and the recipient of such payment
or a person related to such recipient (including, without limitation, a
connection arising from such recipient or related person being or
having been a citizen or resident of such jurisdiction, or being or
having been organised, present or engaged in a trade or business in
such jurisdiction, but excluding a connection arising solely from such
recipient or related person having executed, delivered, performed its
obligations or received a payment under, or enforced, this Agreement or
a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the
case of tax matters, by the practice of any relevant governmental
revenue authority) 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 and,
if different, in the principal financial centre, if any, of the
currency of such payment, (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, the Termination Currency
Equivalent of 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
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 11. 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).
"Office" means a branch or office of a party, which may be such party's
head or home office.
"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.
"Relevant Jurisdiction" means, with respect to a party, the
jurisdictions (a) in which the party is incorporated, organised,
managed and controlled or considered to have its seat, (b) where an
Office through which the party is acting for purposes of this Agreement
is located, (c) in which the party executes this Agreement and (d) in
relation to any payment, from or through which such payment is made.
"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 Termination Currency Equivalent of 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.
"Stamp Tax" means any stamp, registration, documentation or similar
tax.
"Tax" means any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and
additions thereto) that is imposed by any government or other taxing
authority in respect of any payment under this Agreement other than a
stamp, registration, documentation or similar tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transaction" 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 Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount
denominated in the Termination Currency, such Termination Currency
amount and, in respect of any amount denominated in a currency other
than the Termination Currency (the "Other Currency"), the amount in the
Termination Currency determined by the party making the relevant
determination as being required to purchase such amount of such Other
Currency as at the relevant Early Termination Date, or, if the relevant
Market Quotation or Loss (as the case may be), is determined as of a
later date, that later date, with the Termination Currency at the rate
equal to the spot exchange rate of the foreign exchange agent (selected
as provided below) for the purchase of such Other Currency with the
Termination Currency at or about 11:00 a.m. (in the city in which such
foreign exchange agent is located) on such date as would be customary
for the determination of such a rate for the purchase of such Other
Currency for value on the relevant Early Termination Date or that later
date. The foreign exchange agent will, if only one party is obliged to
make a determination under Section 6(e), be selected in good faith by
that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event
Upon Merger 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 Termination Currency Equivalents 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.
THE FIRST NATIONAL BANK OF BOSTON GROVE OPERATING, L.P.
(Name of Party)
By: /s/ Xxxxxxx X. XxXxxx By: /s/ Xxxxxx X. XxXxxxxx
Name: Xxxxxxx X. XxXxxx Name:
Title: Managing Director Title:
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President/Team Executive
(Multicurrency - Cross Border) Execution Copy
ISDA(R)
International Swaps and Derivatives Association, Inc.
SCHEDULE
to the
Master Agreement
dated as of December 6, 1996
between
THE FIRST NATIONAL BANK OF BOSTON
("Party A")
and
GROVE OPERATING, L.P.
("Party B")
Part 1. Termination Provisions.
1. "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)(iv): Not Applicable
and in relation to Party B 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)(iv): Not Applicable
2. "Specified Transaction" will have the meaning specified in Section 14.
3. The "Cross Default" provisions of Section 5(a)(vi)
will not apply to Party A
will apply to Party B
If such provisions apply:-
"Specified Indebtedness" will have the meaning specified in Section 14.
"Threshold Amount" means an amount equal to US$1,000,000.
4. The "Credit Event Upon Merger" provisions of Section 5(b)(iv)
will apply to Party A
will apply to Party B
5. The "Automatic Early Termination provision of Section 6(a)
will not apply to Party A
will not apply to Party B
6. Payments on Early Termination. For the purpose of Section 6(e) of
this Agreement:-
1. Market Quotation will apply.
2. The Second Method will apply.
7. "Termination Currency" means United States Dollars.
8. Additional Event of Default.
Breach of the following covenants, terms and provisions by Party B
shall constitute an additional Event of Default with respect to Party
B:-
Party B hereby agrees, during the period commencing with the date of
this Agreement through and including the date on which all of Party B's
obligations under this Agreement are fully performed, Party B shall
observe, perform and fulfill each and every covenant, term and
provision applicable to Party B and contained in the Revolving Loan
Agreement, Term Note, Mortgage and Guaranty dated as of March [ ], 1997
as amended and/or restated from time to time (the "Credit Agreement")
by and among Party A and Party B, provided that in the event the Credit
Agreement terminates prior to the termination of this Agreement, these
sections will continue to apply: 7(b), (c), (g), 8(d), 9(c), and
12.1(e), (f), (h), (i) and (j). The aforementioned covenants, terms,
and provisions of the Credit Agreement are hereby incorporated into
this Agreement by reference.
Part 2. Tax Representations
1. Payor Representations. For the purpose of Section 3(e), Party A
and Party B will make the following
representation:-
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any tax from any payment (other than interest under Sections 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party
under this Agreement. In making this representation, it may rely on:-
1. the accuracy of any representation made by the other party pursuant
to Section 3(f); 2. the satisfaction of the agreement of the other
party contained in Section 4(a)(i) or 4(a)(iii) and the accuracy and
effectiveness of any document provided by the other party pursuant to
Section 4(a)(i) or 4(a)(iii); and 3. the satisfaction of the agreement
of the other party contained in Section 4(D), provided that it shall
not be a breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
2. Payee Representations. For the purpose of Section 3(f) of this
Agreement, Party A and Party B make the representations specified
below, if any:
Party A represents that it is a national banking association organized
under the laws of the United States of America.
Party B represents that it is a Delaware limited partnership.
Part 3. Agreement to Deliver Documents
1. Party B shall have delivered to Party A, prior to the execution of this
Agreement (unless otherwise provided herein): A certified copy of the
Partnership Agreement and Certificate of limited partnership of Party
B.
2. Party B shall deliver to Party A on an ongoing basis for as long as
there are outstandings hereunder:
1. the audited balance sheet of Party B and as at and for each fiscal
year end beginning 12/31/97, and the related statements of income and
cash flows of Party B for such year, certified by independent public
accountants satisfactory to Party A; 2. the balance sheet of Party B as
at and for each fiscal quarter end beginning 6/30/97, and the related
statements of income and cash flows of Party B for the portion of the
fiscal year then ending, together with a certificate of the principal
financial or accounting officer of Party B certifying that the
information contained in such financial statements is true and accurate
(subject to audit and year-end adjustments); 3. a Certificate of the
principal financial or accounting officer of Party B certifying as of
the end of each quarter or year, as the case may be, the Absence of
Certain Events with respect to Party B and the full performance and
compliance of Party B with all of its agreements under Section 4(a)
(or, if an event has occurred or exists, the nature and period of
existence thereof), and setting forth in reasonable detail the
calculations required to determine compliance by Party B with all of
its agreements under Section 4(a).
3. Party B shall deliver to Party A concurrent with execution of this
Agreement:- 1. a certified copy (substantially in the form of Exhibit B
attached hereto) of the resolution of the partnership authorizing the
execution by an officer of Party B and the performance by Party B of the
transactions contemplated hereby, and specifying the names and specimen
signatures of each person authorized to execute this Agreement on behalf of
Party B; and 2. an opinion of legal counsel to Party B substantially in the
form of Exhibit A attached hereto.
Part 4. Miscellaneous.
1. Address for Notices. For the purpose of Section 12(a) of this
Agreement:-
Address for notices or communications to Party A:-
Address: 000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Arbitrage Operations, Swap Desk, 01-12-02
Facsimile No: (000) 000-0000
Address for notices or communications to Party B:-
Address: 000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxx XxXxxxxx
Chief Financial Officer
Facsimile No.: 000-000-0000
Telephone No.: 000-000-0000, Ext. 137
2. Process Agent. For the purpose of Section 13(c) of this Agreement:-
Party A appoints as its Process Agent: Not Applicable.
Party B appoints as its Process Agent: Not Applicable.
3. Offices. The provisions of Section 10(a) will apply to this Agreement.
4. Multibranch Party. For the purpose of Section 10(c) of this
Agreement:-
Party A is not a Multibranch Party. Party B is not a Multibranch Party.
5. Calculation Agent. The Calculation Agent is Party A, unless
otherwise specified in a Confirmation in
relation to the relevant Transaction.
6. Credit Support Document. Details of any Credit Support Document:-
Guaranty.
7. Credit Support Provider. Credit Support Provider means in relation
to Party B:- Grove Property Trust, a Maryland corporation and sole
General Partner.
8. 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).
9. Netting of Payments. Subparagraph (ii) of Section 2(c) of this
Agreement will not apply to any
Transactions under this Agreement.
10. "Affiliate" will have the meaning specified in Section 14.
Part 5. Other Provisions
1. Definitions.
This Agreement, each Confirmation and each Transaction are subject to
the 1991 ISDA Definitions (as published by the International Swaps and
Derivatives Association, Inc.) (the "Definitions"), and will be governed in all
respects by the provisions set forth in the Definitions. The provisions of the
Definitions are incorporated by reference in, and shall be deemed to be part of,
this Agreement and each Confirmation, as if set forth in full in this Agreement
or in that Confirmation. In the event of any inconsistency between the
provisions of this Agreement and the Definitions, this Agreement will prevail.
In the event of any inconsistency between the provisions of any Confirmation and
this Agreement, such Confirmation will prevail for the purpose of the relevant
Transaction.
2. Procedures for Entering Into Transactions.
(i) With respect to each Transaction entered into pursuant hereto,
Party A shall, on or promptly after the Trade Date thereof, send Party B a
Confirmation substantially in the form of Exhibit C confirming such Transaction,
and Party B shall promptly thereafter confirm the accuracy of or request the
correction of such Confirmation.
(ii) Notwithstanding the terms of Sections 5 and 6 of this Agreement,
if at any time and so long as one of the parties to this Agreement ("X") shall
have satisfied in full all its payment obligations under Sections 2(a)(i) of
this Agreement and shall at the time have no future payment obligations, whether
absolute or contingent, under such Section, then unless the other party ("Y") is
required pursuant to appropriate proceedings to return to X or otherwise returns
to X upon demand of X any portion of any such payment, (a) the occurrence of an
event described in Section 5(A) of this Agreement with respect to X, any Credit
Support Provider of X, or any Specified entity of X shall not constitute an
Event of Default or a Potential Event of Default with respect to X as the
Defaulting Party and (b) Y shall be entitled to designate an Early Termination
Date pursuant to Section 6 of this Agreement as a result of the occurrence of a
Termination Event set forth in (i) either Section 5(b)(i) or 5(b)(ii) of this
Agreement with respect to Y as the Affected Party or (ii) Section 5(b)(iii) of
this Agreement with respect to Y as the Burdened Party.
3. Additional Representations.
For purposes of Section 3 of this Agreement, the following shall be
added, immediately following paragraph (f) thereof:
"(g) This Agreement and each Transaction constitutes a "swap
agreement" within the meaning of Commodity Futures Trading
Commission ("CFTC") regulations Section 35.1(b)(1).
(h) It is an "eligible swap participant" within
the meaning of CFTC Regulations
Section 35.1(b)(2).
(i) Neither this Agreement nor any Transaction is one of a
fungible class of agreements that are standardized as to their
material economic terms, within the meaning of CFTC
Regulations Section 35.2(b).
(j) The creditworthiness of the other party was or will be a
material consideration in entering into or determining the
terms of this Agreement and each Transaction, including
pricing, cost or credit enhancement terms of the Agreement or
Transaction, within the meaning of CFTC Regulations 35.2(c).
(k) It has entered into this Agreement (including each
Transaction evidenced hereby) in conjunction with its line of
business (including financial intermediation services) or the
financing of its business.
(l) Relationship Between Parties. Each party will be deemed to
represent to the other party on the date on which it enters
into a Transaction that (absent a written agreement between
the parties that expressly imposes affirmative obligations to
the contrary for the Transaction):
(i) 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. It
has not received from the other party any assurance or
guarantee as to the expected results of that 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 that
Transaction. It is also capable of assuming, and assumes, the
risks of that Transaction.
(iii) Status of Parties. The other party is not
acting as a fiduciary for or as an
advisor to it in respect of that Transaction.
4. Recording.
Each party hereto consents to the monitoring or recording, at any time
and from time to time, by the other party of any and all communications between
officers or employees of the parties, waives any further notice of such
monitoring or recording, and agrees to notify its officers and employees of such
monitoring or recording.
IN WITNESS WHEREOF, the parties have executed this document as of the
date specified on the first page hereof.
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Xxxxxxx X. XxXxxx By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. XxXxxx Name: Xxxxxxx X. Xxxxxx
Title: Managing Director Title: Vice President/Team Executive
GROVE OPERATING, L.P.
By: GROVE PROPERTY TRUST
f.k.a. GROVE REAL ESTATE ASSET TRUST
By: /s/ Xxxxxx X. XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: Treasurer
EXHIBIT A
[LETTERHEAD OF COUNSEL TO PARTY B]
[Date]
The First National Bank of Boston
Global Financial Markets, 12th Floor
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Dear Sirs:
Re: [Counterparty Name]
This opinion is furnished to you pursuant to Part 3 of the
Schedule to the Master Agreement dated as of the _________ day of
_________________, 199__ and the Transactions entered into pursuant thereto (the
"Agreement") made between ______________________ (the "Counterparty") and The
First National Bank of Boston.
We have acted as counsel to the Counterparty in connection
with the preparation, execution and delivery of the Agreement. In that
connection we have examined such documents and considered such questions of law
as we have deemed necessary or appropriate for the opinion expressed herein.
Based on the foregoing we are of the opinion that:
1. The Counterparty is a duly organized limited partnership,
validly existing under the laws of its jurisdiction of
incorporation and has full partnership power and authority to
execute and deliver the Agreement and to perform its
obligations thereunder. The general partner of the
Counterparty is duly incorporated and organized and validly
existing under the laws of its jurisdiction of incorporation
and has full corporate power and authority to execute and
deliver the Agreement on behalf of the Counterparty.
2. The execution, delivery and performance of the Agreement by
the general partner of the Counterparty has been duly
authorized by all necessary corporate action of the general
partner of the Counterparty and all partnership action of the
Counterparty and will not conflict with or result in a breach
of the articles or by-laws of the general partner of the
Counterparty or the certificate of limited partnership or the
partnership agreement of the Counterparty.
Yours truly,
EXHIBIT B
[NAME OF LIMITED PARTNERSHIP]
CERTIFICATE
I, _______________________, the duly appointed, qualified and acting
General Partner of ........[Name of Limited Partnership]........(the "Limited
Partnership"), a Limited Partnership duly organized and existing under the laws
of _____________________, hereby certify that:
I. The Limited Partnership is hereby authorized to enter into with The First
National Bank of Boston (the "Bank") any and all interest rate and currency swap
transactions, interest rate cap, collar and floor transactions, interest rate
and currency option transactions, and any and all similar derivative products
("Swap Transactions") and any borrowing or lending transactions related to any
of the foregoing (such borrowing and lending transactions together with the Swap
Transactions being hereafter collectively referred to as the "Transactions");
and
II. That the execution, delivery and performance of the Interest Rate Agreement,
and any and all documents executed in connection therewith, entered into by the
Limited Partnership in connection with the Transactions contemplated by
Paragraph I above are within the authority of the Limited Partnership, have been
authorized by proper partnership proceedings and do not and will not contravene
any provision of law, applicable governmental rule or regulation or its limited
partnership agreement; and
III. Each of the following persons whose names appear below is
authorized to execute and deliver for and on
behalf of the Limited Partnership confirmations, agreements, contracts,
instruments and other documentation evidencing the Transactions described in
Paragraph I above; and
IV. The signature set forth opposite each of the following persons is the
genuine signature of the person sonamed with which I am familiar.
Name Position Signature
IN WITNESS WHEREOF, I have hereunto set my hand this ________ day of
__________, 19__.
------------------------------
General Partner
EXHIBIT C
DATE:
TO:
ATT:
FAX:
FROM: The First National Bank of Boston ("FNBB")
FAX: (000) 000-0000 (Treasury Operations)
RE: INTEREST RATE SWAP TRANSACTION
[Our Ref:SW / ]
The purpose of this letter is to set forth the terms and conditions of the
interest rate swap transaction entered into between us on the Trade Date
specified below (the "Swap Transaction"). This letter constitutes a
"Confirmation" as referred to in the Master Agreement specified below.
The definitions and provisions contained in the 1991 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc.) are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions in this Confirmation, this Confirmation will
govern.
1. This Confirmation evidences a complete binding agreement between you
and us as to the terms of the Swap Transaction to which this Confirmation
relates. This Confirmation supplements, forms a part of, and is subject to the
Master Agreement, dated as of , as amended and supplemented from time to time
(the "Agreement"). All provisions contained or incorporated by reference in such
Agreement upon its execution shall govern this Confirmation except as expressly
modified below.
2. The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
Notional Amount:
Trade Date:
Effective Date:
Termination Date:
FIXED PAYMENTS:
Fixed Rate Payer:
Fixed Rate:
Fixed Rate
Payment Date(s): The of in
each year
beginning and
ending the
Termination Date, subject to
adjustment in accordance with
the Modified Following Business Day convention.
Fixed Rate Day
Court Fraction:
FLOATING PAYMENTS:
Floating Rate Payer:
Floating Rate
Payment Dates: The of in
each year
beginning and
ending the
Termination Date, subject to
adjustment in accordance with
the Modified Following Business Day convention.
Floating Rate for
Initial Calculation
Period:
Floating Rate Day
Count Fraction:
Floating Rate Option:
Designated Maturity:
Method of Averaging: Weighted/Unweighted Average.
Spread: N/A
Floating Rate
Reset Dates: The first day of each Calculation Period.
Compounding: Inapplicable/Applicable
Calculation Agent: FNBB
Business Day Convention: New York and London
Governing Law: New York law.
Documentation: ISDA's Master Agreement to be provided by FNBB.
3. ACCOUNT DETAILS:
PAYMENT TO FNBB: The First National Bank of Boston,
Routing No. ABA 000000000, for Arbitrage
Settlement Account #295032,
Attn: Swap Desk, 01-12-02.
PAYMENTS TO [COUNTERPARTY]
4. CONTACT INSTRUCTIONS:
FNBB: Swap Desk (Resets/Payments): Tel: (000) 000-0000
FAX: (000) 000-0000
Documentation (Confirms): Tel: (000) 000-0000
FAX: (000) 000-0000
[COUNTERPARTY]: PLEASE ADVISE
Very truly yours,
THE FIRST NATIONAL BANK OF BOSTON
Traded by: Approved by:
By: By:
Name: Name:
Title: Title:
PLEASE COUNTERSIGN BELOW AND FAX TO (000) 000-0000 ATTN.: XXXXX XXXX, OR
REQUEST CORRECTION BY TELEPHONING (000)000-0000.
Agreed and accepted as of the date first above written:
[COUNTERPARTY NAME]
By:
Name:
Title:
As of December 6, 1996
First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: SWAP Transaction [SW2839/66139]
SWAP Transaction [SW2842/66155]
Gentlemen:
We refer to (i) the two referenced swap transactions, each in
the notional amount of U.S. $7,600,000 between The First National Bank of Boston
("FNBB") and Grove Real Estate Asset Trust ("GREAT"), dated December 5, 1996 and
December 6, 1996, respectively (copies of the Confirmations of which are
attached hereto) and (ii) that certain ISDA Master Agreement dated as of
December 6, 1996 between FNBB and Grove Operating L.P., a Delaware limited
partnership ("OP") and the Schedule thereto (the "Master Agreement").
This will confirm the agreement of FNBB, GREAT and OP as
follows:
1. Great has transferred all its rights and
obligations under such swap transactions toOP. FNBB has consented to such
transfer.
2. Great, OP and FNBB agree that such swap transactions shall
be deemed to be Transactions (as defined in the Master Agreement) directly
between FNBB and OP for all purposes, and shall be governed by the Master
Agreement.
Please execute this letter in the place provided below to
evidence your agreement with the foregoing.
Very truly yours,
GROVE REAL ESTATE ASSET TRUST
By: /s/Xxxxxx X. XxXxxxxx
Xxxxxx X. XxXxxxxx
Treasurer
GROVE OPERATING, L.P.
By: Grove Real Estate Asset Trust
General Partner
By: /s/Xxxxxx X. XxXxxxxx
Xxxxxx X. XxXxxxxx
Treasurer
AGREED TO:
THE FIRST NATIONAL BANK OF BOSTON
By: /s/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Team Executive
DATE: December 5, 1996
TO: Grove Real Estate Asset Trust
ATT: Xxx Xxxxxxxx
FAX: 000-000-0000
FROM: The First National Bank of Boston ("FNBB")
FAX: (000) 000-0000 (Confirmation)
RE: SWAP TRANSACTION
[Our Ref: SW2839/66139]
The purpose of this letter agreement is to confirm the terms and conditions of
the Swap Transaction entered into between us on the Trade Date specified below
(the "Swap Transaction"). This letter constitutes a "Confirmation" as referred
to in the Master Agreement specified below.
The definitions and provisions contained in the 1991 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc.) are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions in this Confirmation, this Confirmation will
govern.
1. This Confirmation evidences a complete binding agreement between you
and us as to the terms of the Swap Transaction to which this Confirmation
relates. In addition, you and we agree to use our best efforts promptly to
negotiate, execute and deliver a Master Agreement in the form published by the
International Swaps and Derivatives Association, Inc. ("ISDA"), with such
modifications as you and we shall in good faith agree. Upon the execution by you
and us of such a Master Agreement (the "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. Prior to
execution of the Agreement the provisions of Section 3 and Section 5 of the
Agreement are deemed to be incorporated by reference herein and form a part of
this Confirmation. In the event of any inconsistency between those provisions
and this Confirmation, this Confirmation will govern.
2. The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
NOTIONAL AMOUNT: USD 7,600,000.
TRADE DATE: December 5, 1996
EFFECTIVE DATE: October 1, 1997
TERMINATION DATE: October 1, 2007
FIXED AMOUNTS:
FIXED RATE PAYER: Grove Real Estate Asset Trust
FIXED RATE: 6.53%
FIXED RATE
PAYMENT DATES: The 1st of each
month in each year
beginning November 1, 1997
and ending on the
Termination Date, subject
to adjustment in accordance
with the Modified Following
Business Day convention.
FIXED RATE DAY
COUNT FRACTION: Actual/360
FLOATING AMOUNTS:
FLOATING PAYOR: FNBB
FLOATING RATE
PAYMENT DATES: The 1st of each
month beginning November 1,
1997 and ending on the
Termination Date, subject
to adjustment in accordance
with the Modified Following
Business Day convention.
FLOATING RATE FOR
INITIAL CALCULATION
PERIOD: To be determined two Business Days prior to Effective Date.
FLOATING RATE DAY
COUNT FRACTION: Actual/360
FLOATING RATE OPTION: USD-LIBOR-BBA
DESIGNATED MATURITY: One month
SPREAD: None
RESET DATES: The first day of each Calculation Period.
COMPOUNDING: Inapplicable
BUSINESS DAYS: New York and London
BUSINESS DAY CONVENTION: Modified Following.
CALCULATION AGENT: FNBB
GOVERNING LAW: New York law.
DOCUMENTATION: ISDA's Master Agreement to be provided by FNBB.
3. ACCOUNT DETAILS:
PAYMENT TO FNBB: Through the Federal Reserve Bank, Boston, Routing No.
ABA 000000000, for A/C FNB, Boston, for credit to Arbitrage
Settlement Account #295032, Attn: Swap
Desk, 01-12-02.
PAYMENTS TO
Grove Real Estate Asset Trust PLEASE ADVISE
4. CONTACT INSTRUCTIONS:
FNBB: Swap Desk (Resets/Payments): Tel: (000) 000-0000
FAX: (000) 000-0000
Confirmations: Tel: (000) 000-0000
FAX: (000) 000-0000
Grove Real Estate Asset Trust: PLEASE ADVISE
Very truly yours,
THE FIRST NATIONAL BANK OF BOSTON
Traded by: Approved by:
By: /s/ X. Xxxxxxxx By: X. Xxxxxx
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxx Xxxxxx
Title: Director Title: Director
PLEASE COUNTERSIGN BELOW AND FAX TO (000) 000-0000 ATTN.: XXXXX XXXX, OR
REQUEST CORRECTION BY TELEPHONING (000)000-0000.
Agreed and accepted as of the date first above written:
GROVE REAL ESTATE ASSET TRUST
By:/s/Xxxxxx X. XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: Chief Financial Officer
DATE: December 6, 1996
TO: Grove Real Estate Asset Trust
ATT: Xxx Xxxxxxxx
FAX: 000-000-0000
FROM: The First National Bank of Boston ("FNBB")
FAX: (000) 000-0000 (Confirmation)
RE: SWAP TRANSACTION
[Our Ref: SW2839/66139]
The purpose of this letter agreement is to confirm the terms and conditions of
the Swap Transaction entered into between us on the Trade Date specified below
(the "Swap Transaction"). This letter constitutes a "Confirmation" as referred
to in the Master Agreement specified below.
The definitions and provisions contained in the 1991 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc.) are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions in this Confirmation, this Confirmation will
govern.
1. This Confirmation evidences a complete binding agreement between you
and us as to the terms of the Swap Transaction to which this Confirmation
relates. In addition, you and we agree to use our best efforts promptly to
negotiate, execute and deliver a Master Agreement in the form published by the
International Swaps and Derivatives Association, Inc. ("ISDA"), with such
modifications as you and we shall in good faith agree. Upon the execution by you
and us of such a Master Agreement (the "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. Prior to
execution of the Agreement the provisions of Section 3 and Section 5 of the
Agreement are deemed to be incorporated by reference herein and form a part of
this Confirmation. In the event of any inconsistency between those provisions
and this Confirmation, this Confirmation will govern.
2. The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
NOTIONAL AMOUNT: USD 7,600,000.
TRADE DATE: December 6, 1996
EFFECTIVE DATE: October 1, 1997
TERMINATION DATE: January 4, 2005
FIXED AMOUNTS:
FIXED RATE PAYER: Grove Real Estate Asset
Trust
FIXED RATE: 6.54%
FIXED RATE
PAYMENT DATES: The 1st of each
month in each year
beginning November 1, 1997
and ending on the
Termination Date, subject
to adjustment in accordance
with the Modified Following
Business Day convention.
FIXED RATE DAY
COUNT FRACTION: Actual/360
FLOATING AMOUNTS:
FLOATING PAYOR: FNBB
FLOATING RATE
PAYMENT DATES: The 1st of each
month beginning November 1,
1997 and ending on the
Termination Date, subject
to adjustment in accordance
with the Modified Following
Business Day convention.
FLOATING RATE FOR
INITIAL CALCULATION
PERIOD: To be determined two Business Days prior to Effective Date.
FLOATING RATE DAY
COUNT FRACTION: Actual/360
FLOATING RATE OPTION: USD-LIBOR-BBA
DESIGNATED MATURITY: One month
SPREAD: None
RESET DATES: The first day of each
Calculation Period.
COMPOUNDING: Inapplicable
BUSINESS DAYS: New York and London
BUSINESS DAY CONVENTION: Modified Following.
CALCULATION AGENT: FNBB
GOVERNING LAW: New York law.
DOCUMENTATION: ISDA's Master Agreement to be provided by FNBB.
