Interest Rate Swap Confirmation Agreement between Merrill Lynch Capital Services, Inc. and Alterra Healthcare Corporation (March 2005)

Summary

This agreement confirms the terms of an interest rate swap transaction between Merrill Lynch Capital Services, Inc. and Alterra Healthcare Corporation. Alterra will pay a fixed interest rate of 4.7% per year on a notional amount of $70 million, while Merrill Lynch will pay a floating rate based on one-month USD LIBOR. The agreement includes collateral requirements and is governed by New York law. The swap is effective from March 22, 2005, to March 22, 2012. Both parties agree to negotiate a formal ISDA Master Agreement to govern this and future transactions.

EX-10.84.2 22 y10687a1exv10w84w2.txt EX-10.84.2 Exhibit 10.84.2 MERRILL LYNCH DATE: MARCH 28, 2005 TO: ALTERRA HEALTHCARE CORPORATION ("Counterparty") ATTENTION: AKHIL SHARMA TEL: 212 ###-###-#### FAX: 212 ###-###-#### FROM: MERRILL LYNCH CAPITAL SERVICES, INC. ("MLCS") CONTACT: ANNE WON EMAIL: ***@*** TEL: 212 ###-###-#### FAX: 917 ###-###-#### RE: SWAP TRANSACTION ML REF: 05DL04157, 2057792 Dear Sir or Madam: The purpose of this communication is to confirm the terms and conditions of the transaction entered into between us on the Trade Date specified below (the "Transaction"). This communication constitutes a "Confirmation" as referred to in the Agreement specified below. The definitions and provisions contained in the 2000 ISDA Definitions as published by the International Swaps and Derivatives Association, Inc. (the "Definitions") are incorporated into this Confirmation. For these purposes, all references in those Definitions to a "Swap Transaction" shall be deemed to apply to the Transaction referred to herein. In the event of any inconsistency between the Definitions and this Confirmation, the terms of this Confirmation shall govern. This Confirmation evidences a complete and binding agreement between you and us as to the terms of the Transaction to which this Confirmation relates. In addition, you and we agree to use all reasonable efforts promptly to negotiate, execute and deliver an agreement in the form of the ISDA Master Agreement (Multicurrency-Cross Border) (the "Master Form"), with such modifications as you and we will in good faith agree (the "Agreement"). Upon the execution by you and us of the Agreement, this Confirmation will supplement, form a part of, and be subject to the Agreement. All provisions contained in or incorporated by reference in the Agreement upon its execution will govern this Confirmation except as expressly modified below. Until we execute and deliver the Agreement, this Confirmation, together with all other documents referring to the Master Form (each a "Confirmation") confirming transactions (each a "Transaction") entered into between us (notwithstanding anything to the contrary in a Confirmation), shall supplement, form a part of, and subject to, an agreement in the form of the Master Form as if we had executed an agreement in such form (but without any Schedule except for the election of the laws of the State of New York as the governing law and US Dollars as the Termination Currency) on the Trade Date of the first such Transaction between us. MERRILL LYNCH In the event of any inconsistency between the provisions of that agreement and this Confirmation, this Confirmation will prevail for the purpose of this Transaction. The terms of the particular Transaction to which the Confirmation relates are as follows: Notional Amount: USD 70,000,000.00 Trade Date: March 18, 2005 Effective Date: March 22, 2005 Termination Date: March 22, 2012 Fixed Amounts: Fixed Rate Payer: Counterparty Fixed Rate Payer Payment Date: The 22nd day of each month in each year, commencing on April 22, 2005 and ending on the Termination Date, inclusive, subject to adjustment in accordance with the Modified Following Business Day Convention. Fixed Rate: 4.700000% per annum Fixed Rate Payer Day Count Fraction: 30/360 No Adjustment of Period End Dates: Inapplicable Floating Amounts: Floating Rate Payer: MLCS Floating Rate Payer Payment Date: The 22nd day of each month in each year, commencing on April 22, 2005 and ending on the Termination Date, inclusive, subject to adjustment in accordance with the Modified Following Business Day Convention.

MERRILL LYNCH Floating Rate for initial Calculation Period: 2.850000% Floating Rate Option: USD-LIBOR-BBA Designated Maturity: One Month Spread: Inapplicable Floating Rate Payer Day Count Fraction: Actual/360 No Adjustment of Period End Dates: Inapplicable Reset Dates: The first day of each Floating Rate Payer Calculation Period Rate Cut-Off Dates: Inapplicable Averaging: Inapplicable Compounding: Inapplicable Business Days: New York and London Calculation Agent: MLCS, unless otherwise specified in the Agreement Collateral: (a) Until the execution of a Credit Support Annex between the parties, this Confirmation shall constitute a pledge agreement (and a Credit Support Document under the Agreement) securing the payment and performance of Counterparty's obligations to MLCS under this and any other Transaction between the parties. Promptly after the execution hereof, MLCS and Counterparty agree to execute a Credit Support Annex in form and substance reasonably satisfactory to the parties. Upon execution, the Credit Support Annex shall supersede and replace the pledge agreement created hereby. (b) If at any time a Required Amount (as defined below) exists, Counterparty, as security for its obligations to MLCS, shall, promptly upon

MERRILL LYNCH demand by MLCS, pledge, transfer and deliver to MLCS, and grant MLCS a first priority continuing security interest in and right of set-off against, Eligible Collateral (as defined below) having a minimum market value equal to the Required Amount. (c) Upon any default by Counterparty in the performance of its obligations to MLCS hereunder or under any other Transaction with MLCS, MLCS shall have all rights of a secured creditor under the New York Uniform Commercial Code. (d) The term "Eligible Collateral" means U.S. denominated cash, U.S. Treasury Securities and any other form of collateral agreed to between the parties. The term "Required Amount" means the amount by which the value of any positive "Net Market Quotation" (as defined below) exceeds USD 0/USD 0. A positive Net Market Quotation shall mean that MLCS is exposed to Counterparty and a negative Net Market Quotation shall mean that Counterparty is exposed to MLCS. The term "Net Market Quotation" means an amount equal to the sum of all Market Quotations (both positive and negative) for all Transactions between the parties assuming all such Transactions were being terminated as of the relevant date of valuation; provided, however, that Market Quotation will be determined by MLCS using its mid-market estimates of the amounts that would be paid for Replacement Transactions (as such term is defined in the definition of "Market Quotation"). Please contact Collateral Management, at telephone: (212) 449-3782, facsimile: (212) 738-1492, for delivery instructions for securities. Non-Reliance: Each party represents to the other party that it is acting for its own account, and has made its own independent decisions to enter into this

MERRILL LYNCH Transaction and as to whether this Transaction is appropriate or proper for it based on its own judgement 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 this Transaction, it being understood that information and explanations related to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of this Transaction. Account Details: USD payments to MLCS: DEUTSCHE BANK TRUST COMPANY AMERICAS (NEW YORK, NY: 021001033) FAO: MERRILL LYNCH CAPITAL SERVICES, INC., NEW YORK., NY Acct: 00-811-874 USD payments to Counterparty: Please Advise

MERRILL LYNCH Please confirm that the foregoing correctly sets the terms of our agreement by executing this Confirmation and returning it to us by facsimile transmission. Yours sincerely, MERRILL LYNCH CAPITAL SERVICES, INC. By: /s/ Angelina Lopes -------------------------------- Authorized Signatory Accepted and confirmed as of the Trade Date written above: ALTERRA HEALTHCARE CORPORATION By: /s/ Kristin A. Ferge -------------------------------- Authorized Signatory Name: Kristin A. Ferge ------------------------------ Title: CFO/VP -----------------------------